John Deere 2014 Annual Report Download - page 47

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Financing Receivables
Financing receivables at October 31 consisted of the following
in millions of dollars:
2014 2013
________________ ________________
Unrestricted/Securitized Unrestricted/Securitized
Retail notes:
Equipment:
Agriculture and turf .......... $ 16,970 $ 3,975 $ 16,209 $ 3,602
Construction and
forestry ........................ 1,951 697 1,449 607
Total ................................ 18,921 4,672 17,6 58 4,209
Wholesale notes ....................... 5,390 4,802
Revolving charge accounts ........ 2,603 2,593
Financing leases
(direct and sales-type) .......... 1,558 1,513
Operating loans ........................ 32
Total financing receivables .... 28,472 4,672 26,598 4,209
Less:
Unearned finance income:
Equipment notes .............. 753 56 665 42
Financing leases .............. 136 141
Total ............................ 889 56 806 42
Allowance for credit losses ... 161 14 159 14
Financing
receivables – net............... $ 27,42 2 $ 4,602 $ 25,633 $ 4,153
The residual values for investments in financing leases
at October 31, 2014 and 2013 totaled $112 million and
$94 million, respectively.
Financing receivables have significant 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 generally retains as collateral a
security interest in the equipment associated with retail notes,
wholesale notes and financing 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:
2014 2013
Unrestricted Unrestricted
Retail notes*:
Equipment:
Agriculture and turf ...................... $ 2,125 $ 2,042
Construction and forestry ............. 403 364
Total ........................................ 2,528 2,406
Wholesale notes ................................... 5,390 4,802
Sales-type leases ................................. 844 826
Total ............................................ $ 8,762 $ 8,034
* These retail notes generally arise from sales of equipment by company-owned
dealers or through direct sales.
(continued)
2014 2013
Unrestricted Unrestricted
Less:
Unearned finance income:
Equipment notes .......................... $ 212 $ 191
Sales-type leases ......................... 57 58
Total ........................................ 269 249
Financing receivables
related to the company’s
sales of equipment ....................... $ 8,493 $ 7,78 5
Financing receivable installments, including unearned
finance income, at October 31 are scheduled as follows in
millions of dollars:
2014 2013
________________ _________________
Unrestricted/Securitized Unrestricted/Securitized
Due in months:
0 – 12 ............................. $ 14,357 $ 1,878 $ 13,343 $ 1,663
13 – 24 ............................. 5,254 1,331 4,879 1,177
25 – 36 ............................. 4,053 880 3,750 808
37 – 48 ............................. 2,819 457 2,620 422
49 – 60 ............................. 1,575 120 1,610 130
Thereafter .......................... 414 6 396 9
Total ..................................... $ 28,472 $ 4,672 $ 26,598 $ 4,209
The maximum terms for retail notes are generally seven
years for agriculture and turf equipment and five years for
construction and forestry equipment. The maximum term for
financing leases is generally five years, while the average term
for wholesale notes is less than twelve months.
At October 31, 2014 and 2013, the unpaid balances of
receivables administered but not owned were $54 million
and $82 million, respectively. At October 31, 2014 and 2013,
worldwide financing receivables administered, which include
financing receivables administered but not owned, totaled
$32,078 million and $29,868 million, respectively.
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 loans for which the company has
ceased accruing finance income. These receivables are generally
120 days delinquent and the estimated uncollectible amount,
after charging the dealer’s withholding account, has been
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.