FINANCING RECEIVABLES

6 Months Ended

Apr. 27, 2025

(8) Financing Receivables

We monitor the credit quality of financing receivables based on delinquency status, defined as follows:

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Past due balances represent any payments 30 days or more past the due date.

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Non-performing financing receivables represent receivables for which we have stopped accruing finance income. This generally occurs when receivables are 90 days delinquent.

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Write-offs generally occur when receivables are 120 days delinquent. In these situations, the estimated uncollectible amount is written off to the allowance for credit losses.

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


	April 27, 2025
	2025		2024		2023		2022		2021		Prior Years		Revolving Charge Accounts		Total
Retail customer receivables:
Agriculture and turf
Current	$	5,772	$	10,981	$	6,652	$	4,014	$	1,981	$	654	$	3,893	$	33,947
30-59 days past due		26		121		77		45		22		9		30		330
60-89 days past due		11		53		32		18		8		4		13		139
90+ days past due				1		2		1		3						7
Non-performing		4		102		111		73		45		29		86		450
Construction and forestry
Current		1,561		2,583		1,425		732		266		46		109		6,722
30-59 days past due		24		70		47		21		9		3		5		179
60-89 days past due		8		27		17		8		3				2		65
90+ days past due				6		1		3								10
Non-performing		6		86		93		55		28		12		2		282
Total retail customer receivables	$	7,412	$	14,030	$	8,457	$	4,970	$	2,365	$	757	$	4,140	$	42,131

Write-offs for the six months ended April 27, 2025:
Agriculture and turf	$	1	$	16	$	21	$	12	$	4	$	5	$	49	$	108
Construction and forestry				18		17		7		2		1		4		49
Total	$	1	$	34	$	38	$	19	$	6	$	6	$	53	$	157


	October 27, 2024
	2024		2023		2022		2021		2020		Prior Years		Revolving Charge Accounts		Total
Retail customer receivables:
Agriculture and turf
Current	$	14,394	$	8,305	$	5,191	$	2,833	$	992	$	253	$	4,465	$	36,433
30-59 days past due		44		101		55		27		11		4		40		282
60-89 days past due		22		50		21		10		8		2		13		126
90+ days past due		1		1		1		2								5
Non-performing		23		91		76		50		20		13		15		288
Construction and forestry
Current		3,100		1,841		1,064		458		102		45		114		6,724
30-59 days past due		54		47		25		10		3		2		4		145
60-89 days past due		25		28		10		7		2				2		74
90+ days past due		1		4		3		1								9
Non-performing		40		94		67		32		9		5		1		248
Total retail customer receivables	$	17,704	$	10,562	$	6,513	$	3,430	$	1,147	$	324	$	4,654	$	44,334

Write-offs for the twelve months ended October 27, 2024:
Agriculture and turf	$	5	$	33	$	25	$	11	$	11	$	5	$	87	$	177
Construction and forestry		9		38		30		11		5		3		8		104
Total	$	14	$	71	$	55	$	22	$	16	$	8	$	95	$	281


	April 28, 2024
	2024		2023		2022		2021		2020		Prior Years		Revolving Charge Accounts		Total
Retail customer receivables:
Agriculture and turf
Current	$	7,393	$	11,869	$	6,934	$	3,987	$	1,682	$	696	$	3,662	$	36,223
30-59 days past due		32		99		55		35		15		6		27		269
60-89 days past due		7		44		23		11		6		3		12		106
90+ days past due				3		1		3		5						12
Non-performing		3		83		90		63		31		35		70		375
Construction and forestry
Current		1,619		2,415		1,514		744		207		79		107		6,685
30-59 days past due		25		61		38		20		7		3		5		159
60-89 days past due		7		34		14		10		3		2		2		72
90+ days past due				4		9		1				1				15
Non-performing		5		100		85		47		17		8		2		264
Total retail customer receivables	$	9,091	$	14,712	$	8,763	$	4,921	$	1,973	$	833	$	3,887	$	44,180

Write-offs for the six months ended April 28, 2024:
Agriculture and turf	$	1	$	9	$	10	$	5	$	6	$	2	$	30	$	63
Construction and forestry				12		13		5		3		2		4		39
Total	$	1	$	21	$	23	$	10	$	9	$	4	$	34	$	102

The credit quality and aging analysis of wholesale receivables was as follows:


	April 27		October 27		April 28
	2025		2024		2024
Wholesale receivables:
Agriculture and turf
Current	$	7,372	$	7,568	$	7,384
30+ days past due		1
Non-performing		1		1		1
Construction and forestry
Current		1,547		1,358		1,205
30+ days past due
Non-performing
Total wholesale receivables	$	8,921	$	8,927	$	8,590

An analysis of the allowance for credit losses and investment in financing receivables follows:


	Retail Notes		Revolving
	& Financing		Charge		Wholesale
	Leases		Accounts		Receivables		Total

Three Months Ended April 27, 2025
Allowance:
Beginning of period balance	$	240	$	6	$	2	$	248
Provision		55		39				94
Write-offs		(56)		(40)				(96)
Recoveries		3		8				11
Translation adjustments		1						1
End of period balance	$	243	$	13	$	2	$	258

Six Months Ended April 27, 2025
Allowance:
Beginning of period balance	$	219	$	8	$	2	$	229
Provision		122		41				163
Write-offs		(104)		(53)				(157)
Recoveries		6		17				23
End of period balance	$	243	$	13	$	2	$	258

Financing receivables:
End of period balance	$	37,991	$	4,140	$	8,921	$	51,052


	Retail Notes		Revolving
	& Financing		Charge		Wholesale
	Leases		Accounts		Receivables		Total

Three Months Ended April 28, 2024
Allowance:
Beginning of period balance	$	177	$	16	$	2	$	195
Provision		64		23				87
Write-offs		(36)		(23)				(59)
Recoveries		4		5				9
Translation adjustments		(2)						(2)
End of period balance	$	207	$	21	$	2	$	230

Six Months Ended April 28, 2024
Allowance:
Beginning of period balance	$	172	$	21	$	4	$	197
Provision		99		21				120
Write-offs		(68)		(34)				(102)
Recoveries		5		13				18
Translation adjustments		(1)				(2)		(3)
End of period balance	$	207	$	21	$	2	$	230

Financing receivables:
End of period balance	$	40,293	$	3,887	$	8,590	$	52,770

The allowance for credit losses increased in the second quarter and first six months of 2025, primarily due to higher expected losses on agriculture and turf customer accounts as a result of elevated delinquencies and a decline in market conditions.

Modifications

We occasionally grant contractual modifications to customers experiencing financial difficulties. Before offering a modification, we evaluate the ability of the customer to meet the modified payment terms. Modifications offered include payment deferrals, term extensions, or a combination thereof. Finance charges continue to accrue during the deferral or extension period with the exception of modifications related to bankruptcy proceedings. Our allowance for credit losses incorporates historical loss information, including the effects of loan modifications with customers. Therefore, additional adjustments to the allowance are generally not recorded upon modification of a loan.

The ending amortized cost of financing receivables modified with borrowers experiencing financial difficulty were as follows:


	Three Months Ended				Six Months Ended
	April 27		April 28		April 27		April 28
	2025		2024		2025		2024
Modified financing receivables	$	48	$	36	$	75	$	53
Percentage of financing receivables portfolio		0.09%		0.07%		0.15%		0.10%

The financial effects of payment deferrals with borrowers experiencing financial difficulty resulted in a weighted average payment deferral of 8 months to the modified contracts. Term extensions provided to borrowers experiencing financial difficulty added a weighted average of 11 months to the modified contracts. Additionally, modifications with a combination of both payment deferrals and term extensions resulted in a weighted average payment deferral of 5 months and a weighted average term extension of 8 months.

We continue to monitor the performance of financing receivables that are modified with borrowers experiencing financial difficulty. The ending amortized cost and performance of financing receivables modified during the prior twelve months ended April 27, 2025 and April 28, 2024 were as follows:


	April 27		April 28
	2025		2024*
Current	$	100	$	48
30-59 days past due		6		3
60-89 days past due		2
90+ days past due		1
Non-performing		14		2
Total	$	123	$	53

* In accordance with the adoption date of the accounting modification guidance, this period includes receivables modified during the prior six months.

Defaults and subsequent write-offs of loans modified in the prior twelve months were not significant during the three months or the six months ended April 27, 2025. In addition, at April 27, 2025, commitments to provide additional financing to these customers were not significant.