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FINANCING RECEIVABLES

3 Months Ended

Jan. 29, 2023

(8) Financing Receivables

The Company monitors the credit quality of financing receivables based on delinquency status. Past due balances of financing receivables still accruing finance income represent the total balance held (principal plus accrued interest) with any payment amounts 30 days or more past the contractual payment due date. Non-performing financing receivables represent receivables for which the Company has ceased accruing finance income. The Company ceases accruing finance income when these receivables are generally 90 days delinquent. Generally, when receivables are 120 days delinquent the estimated uncollectible amount from the customer is written off to the allowance for credit losses. Finance income for non-performing receivables is recognized on a cash basis. Accrual of finance income is generally resumed when the receivable becomes contractually current and collections are reasonably assured.

The credit quality analysis of retail notes, financing leases, and revolving charge accounts (collectively, retail customer receivables) by year of origination was as follows in millions of dollars:


	January 29, 2023
	2023		2022		2021		2020		2019		Prior Years		Revolving Charge Accounts		Total
Retail customer receivables:
Agriculture and turf
Current	$	2,939	$	12,435	$	7,228	$	3,660	$	1,600	$	823	$	2,753	$	31,438
30-59 days past due		2		39		39		54		13		44		28		219
60-89 days past due		1		15		14		20		5		15		6		76
90+ days past due				1				3		1						5
Non-performing				40		58		41		27		34		8		208
Construction and forestry
Current		674		2,692		1,702		684		224		80		99		6,155
30-59 days past due		2		18		29		36		16		52		5		158
60-89 days past due				9		17		18		8		24		2		78
90+ days past due				1		2		1		2		1				7
Non-performing				46		58		30		16		7		1		158
Total retail customer receivables	$	3,618	$	15,296	$	9,147	$	4,547	$	1,912	$	1,080	$	2,902	$	38,502


	October 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving Charge Accounts		Total
Retail customer receivables:
Agriculture and turf
Current	$	13,500	$	7,984	$	4,091	$	1,875	$	785	$	200	$	4,111	$	32,546
30-59 days past due		46		63		36		17		7		3		19		191
60-89 days past due		14		25		13		6		2		1		5		66
90+ days past due		1														1
Non-performing		27		60		44		28		18		19		8		204
Construction and forestry
Current		2,964		1,974		842		292		73		12		108		6,265
30-59 days past due		53		52		23		9		2		1		3		143
60-89 days past due		19		16		7		3		1				1		47
90+ days past due		1		4		1		3				1				10
Non-performing		25		61		34		19		7		3				149
Total retail customer receivables	$	16,650	$	10,239	$	5,091	$	2,252	$	895	$	240	$	4,255	$	39,622


	January 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving Charge Accounts		Total
Retail customer receivables:
Agriculture and turf
Current	$	2,492	$	11,580	$	5,988	$	3,038	$	1,440	$	761	$	2,634	$	27,933
30-59 days past due		5		82		52		30		15		6		25		215
60-89 days past due		1		23		18		10		5		3		5		65
90+ days past due				1												1
Non-performing		1		33		58		52		31		36		6		217
Construction and forestry
Current		764		2,795		1,376		615		204		49		81		5,884
30-59 days past due		8		68		35		21		6		2		3		143
60-89 days past due				30		17		7		3		1		1		59
90+ days past due				2		3		3		1		8				17
Non-performing				33		48		37		14		7		1		140
Total retail customer receivables	$	3,271	$	14,647	$	7,595	$	3,813	$	1,719	$	873	$	2,756	$	34,674

The credit quality analysis of wholesale receivables by year of origination was as follows in millions of dollars:


	January 29, 2023
	2023		2022		2021		2020		2019		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	115	$	285	$	48	$	21	$	4	$	1	$	2,654	$	3,128
30+ days past due
Non-performing								1								1
Construction and forestry
Current		7		7		24		2				1		459		500
30+ days past due
Non-performing
Total wholesale receivables	$	122	$	292	$	72	$	24	$	4	$	2	$	3,113	$	3,629


	October 30, 2022
	2022		2021		2020		2019		2018	Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	387	$	64	$	27	$	4		$	2	$	2,371	$	2,855
30+ days past due
Non-performing								1							1
Construction and forestry
Current		7		29		2		1			1		377		417
30+ days past due
Non-performing
Total wholesale receivables	$	394	$	93	$	29	$	6		$	3	$	2,748	$	3,273


	January 30, 2022
	2022		2021		2020		2019		2018		Prior Years		Revolving		Total
Wholesale receivables:
Agriculture and turf
Current	$	101	$	244	$	56	$	11	$	7	$	2	$	1,426	$	1,847
30+ days past due
Non-performing								7								7
Construction and forestry
Current		5		38		4		3				1		285		336
30+ days past due												1				1
Non-performing
Total wholesale receivables	$	106	$	282	$	60	$	21	$	7	$	4	$	1,711	$	2,191

An analysis of the allowance for credit losses and investment in financing receivables in millions of dollars during the periods follows:


	Three Months Ended January 29, 2023
	Retail Notes		Revolving
	& Financing		Charge		Wholesale
	Leases		Accounts		Receivables		Total
Allowance:
Beginning of period balance	$	299	$	22	$	4	$	325
Provision (credit)		15		(4)				11
Provision transferred to held for sale		(142)						(142)
Provision (credit) subtotal		(127)		(4)				(131)
Write-offs		(18)		(7)				(25)
Recoveries		4		5		1		10
Translation adjustments		(18)				(1)		(19)
End of period balance	$	140	$	16	$	4	$	160

Financing receivables:
End of period balance	$	35,600	$	2,902	$	3,629	$	42,131


	Three Months Ended January 30, 2022
	Retail Notes		Revolving
	& Financing		Charge		Wholesale
	Leases		Accounts		Receivables		Total
Allowance:
Beginning of period balance	$	138	$	21	$	7	$	166
Provision (credit)		13		(9)		(2)		2
Write-offs		(17)		(5)				(22)
Recoveries		4		8				12
End of period balance	$	138	$	15	$	5	$	158

Financing receivables:
End of period balance	$	31,918	$	2,756	$	2,191	$	36,865

In the first quarter of 2023, the Company determined that the financial services business in Russia met the held for sale criteria. The financing receivables in Russia were reclassified to “Other assets” and the associated allowance for credit losses was reversed (see Note 20). Excluding the portfolio in Russia, the allowance for credit losses decreased during the first quarter of 2023, as the financing receivables continue to benefit from strong fundamentals within the agricultural market.