John Deere 2009 Annual Report Download - page 37

37
2009 2008
________________ _________________
Unrestricted/Restricted Unrestricted/Restricted
Less:
Unearned fi nance income:
Equipment notes ............... $ 191 $ 1 $ 197 $ 5
Sales-type leases .............. 57 61
Total ............................. 248 1 258 5
Financing receivables
related to the company’s
sales of equipment ............ $ 4,215 $ 23 $ 3,566 $ 64
Financing receivable installments, including unearned
fi nance income, at October 31 are scheduled as follows in
millions of dollars:
2009 2008
________________ _________________
Unrestricted/Restricted Unrestricted/Restricted
Due in months:
0 – 12 .............................. $ 8,320 $ 1,286 $ 8,223 $ 743
13 – 24 .............................. 3,264 1,045 3,864 581
25 – 36 .............................. 2,174 699 2,712 326
37 – 48 .............................. 1,365 395 1,665 133
49 – 60 .............................. 874 125 917 29
Thereafter .......................... 323 8 276 2
_______ ______ ______ ______
Total ..................................... $ 16,320 $ 3,558 $ 17,657 $ 1,814
_______ ______ ______ ______
_______ ______ ______ ______
The maximum terms for retail notes are generally seven
years for agriculture and turf equipment and fi ve years for
construction and forestry equipment. The maximum term for
fi nancing leases is generally fi ve years, while the average term
for wholesale notes is less than twelve months.
At October 31, 2009 and 2008, the unpaid balances of
receivables administered but not owned were $292 million
and $326 million, respectively. At October 31, 2009 and 2008,
worldwide fi nancing receivables administered, which include
fi nancing receivables administered but not owned, totaled
$18,656 million and $17,988 million, respectively.
Generally when fi nancing receivables are approximately
120 days delinquent, accrual of fi nance income has been
suspended and the estimated uncollectible amount has been
written off to the allowance for credit losses. Accrual of fi nance
income is resumed when the receivable becomes contractually
current and collection doubts are removed. Investments in
fi nancing receivables on non-accrual status at October 31, 2009
and 2008 were $284 million and $88 million, respectively.
Total fi nancing receivable amounts 60 days or more
past due were $67 million at October 31, 2009, compared
with $45 million at October 31, 2008. These past-due amounts
represented .36 percent and .25 percent of the receivables
fi nanced at October 31, 2009 and 2008, respectively.
The allowance for doubtful fi nancing receivables represented
1.28 percent and .95 percent of fi nancing receivables outstanding
at October 31, 2009 and 2008, respectively. In addition, at
October 31, 2009 and 2008, the company’s credit operations
had $181 million and $189 million, respectively, of deposits
withheld from dealers and merchants available for potential
credit losses.
Financing Receivables
Financing receivables at October 31 consisted of the following
in millions of dollars:
2009 2008
________________ ________________
Unrestricted/Restricted Unrestricted/Restricted
Retail notes:
Equipment:
Agriculture and turf ........ $ 9,687 $ 2,934 $ 11,026 $ 1,380
Construction and
forestry ...................... 1,084 624 2,011 434
Recreational products ......... 8 16
________ ______ ______ ______
Total .............................. 10,779 3,558 13,053 1,814
Wholesale notes ..................... 1,986 1,336
Revolving charge accounts ...... 2,265 1,905
Financing leases
(direct and sales-type) ........ 993 1,005
Operating loans ...................... 297 358
________ ______ ______ ______
Total fi nancing receivables .. 16,320 3,558 17,657 1,814
________ ______ ______ ______
Less:
Unearned fi nance income:
Equipment notes ............ 738 425 1,361 158
Recreational product
notes ......................... 3
Financing leases ............ 113 117
________ ______ ______ ______
Total .......................... 851 425 1,481 158
________ ______ ______ ______
Allowance for doubtful
receivables .................... 214 25 159 11
________ ______ ______ ______
Financing
receivables – net............. $ 15,255 $ 3,108 $ 16,017 $ 1,645
________ ______ ______ ______
________ ______ ______ ______
The residual values for investments in fi nancing leases at
October 31, 2009 and 2008 totaled $59 million and $63 million,
respectively.
Financing receivables have signifi cant concentrations of
credit risk in the agriculture and turf sector and construction and
forestry sector as shown in the previous table. On a geographic
basis, there is not a disproportionate concentration of credit risk
in any area. The company retains as collateral a security interest
in the equipment associated with retail notes, wholesale notes
and fi nancing leases.
Financing receivables at October 31 related to the
company’s sales of equipment that were included in the table
above consisted of the following in millions of dollars:
2009 2008
________________ _________________
Unrestricted/Restricted Unrestricted/Restricted
Retail notes*:
Equipment:
Agriculture and turf ........... $ 1,505 $ 22 $ 1,391 $ 60
Construction and forestry .. 389 2 513 9
Total ............................. 1,894 24 1,904 69
Wholesale notes ........................ 1,986 1,336
Sales-type leases ...................... 583 584
Total ................................. $ 4,463 $ 24 $ 3,824 $ 69
* These retail notes generally arise from sales of equipment by company-owned
dealers or through direct sales.
(continued)