Financing Activities

12 Months Ended

Dec. 31, 2014

Receivables [Abstract]

Financing Activities

FINANCING ACTIVITIES

A. Contractual Maturities of Finance Receivables

The contractual maturities and future scheduled payments of outstanding receivables, as of December 31, 2014, were:

(Millions of dollars)
Amounts due in	Retail Installment Sale Contracts			Wholesale Installment Sale  Contracts		Retail Finance  Leases			Wholesale Finance  Leases			Retail Notes			Wholesale Notes			Total
2015	$	2,420		$	88	$	2,999		$	67		$	3,984		$	4,033		$	13,591
2016	1,828			17		2,096			54			2,238			262			6,495
2017	1,246			8		1,184			33			1,896			202			4,569
2018	623			3		524			16			1,069			17			2,252
2019	189			—		213			3			848			—			1,253
Thereafter	13			—		132			2			970			—			1,117
	6,319			116		7,148			175			11,005			4,514			29,277
Guaranteed residual value	—			—		352			69			—			—			421
Unguaranteed residual value	—			—		636			24			—			—			660
Less: Unearned income	(113		)	—		(639		)	(20		)	(87		)	(24		)	(883		)
Total	$	6,206		$	116	$	7,497		$	248		$	10,918		$	4,490		$	29,475
Less: Allowance for credit losses																		(401		)
Total net finance receivables																		$	29,074

Receivables generally may be repaid or refinanced without penalty prior to contractual maturity, and we also sell receivables.  Accordingly, this presentation should not be regarded as a forecast of future cash collections.

B. Credit Quality of Financing Receivables and Allowance for Credit Losses

We apply a systematic methodology to determine the Allowance for credit losses for finance receivables. Based upon our analysis of credit losses and risk factors, our portfolio segments are as follows:

• Customer - Finance receivables with retail customers.

• Dealer - Finance receivables with Caterpillar dealers.

• Caterpillar Purchased Receivables - Trade receivables purchased from Caterpillar entities.

We further evaluate our portfolio segments by the class of finance receivables, which is defined as a level of information (below a portfolio segment) in which the finance receivables have the same initial measurement attribute and a similar method for assessing and monitoring credit risk. Typically, our finance receivables within a geographic area have similar credit risk profiles and methods for assessing and monitoring credit risk. Our classes, which align with management reporting for credit losses, are as follows:

• North America - Finance receivables originated in the United States or Canada.

• Europe - Finance receivables originated in Europe, Africa, Middle East and the Commonwealth of Independent States.

• Asia/Pacific - Finance receivables originated in Australia, New Zealand, China, Japan, South Korea and Southeast Asia.

• Mining - Finance receivables related to large mining customers worldwide.

• Latin America - Finance receivables originated in Central and South American countries and Mexico.

• Caterpillar Power Finance - Finance receivables related to marine vessels with Caterpillar engines worldwide and Caterpillar electrical power generation, gas compression and co-generation systems and non-Caterpillar equipment that is powered by these systems worldwide.

Impaired loans and finance leases

For all classes, a loan or finance lease is considered impaired, based on current information and events, if it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan or finance lease. Loans and finance leases reviewed for impairment include loans and finance leases that are past due, non-performing or in bankruptcy. Recognition of income is suspended and the loan or finance lease is placed on non-accrual status when management determines that collection of future income is not probable (generally after 120 days past due except in locations where local regulatory requirements dictate a different method, or instances in which relevant information is known that warrants placing the loan or finance lease on non-accrual status). Accrual is resumed and previously suspended income is recognized, when the loan or finance lease becomes contractually current and/or collection doubts are removed. Cash receipts on impaired loans or finance leases are recorded against the receivable and then to any unrecognized income.

There were no impaired loans or finance leases as of December 31, 2014, 2013 and 2012, for the Dealer and Caterpillar Purchased Receivables portfolio segments.  The average recorded investment for impaired loans and finance leases for the Dealer and Caterpillar Purchased Receivables portfolio segments was zero during 2014, 2013 and 2012.

Individually impaired loans and finance leases for the Customer portfolio segment were as follows:

(Millions of dollars)
	As of December 31, 2014						As of December 31, 2013
Impaired Loans and Finance Leases With No Allowance Recorded	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Customer
North America	$	14	$	14	$	—	$	23	$	22	$	—
Europe	44		43		—		48		47		—
Asia/Pacific	2		2		—		7		7		—
Mining	29		29		—		134		134		—
Latin America	34		34		—		11		11		—
Caterpillar Power Finance	129		128		—		223		222		—
Total	$	252	$	250	$	—	$	446	$	443	$	—
Impaired Loans and Finance Leases With An Allowance Recorded
Customer
North America	$	6	$	6	$	1	$	13	$	13	$	4
Europe	12		12		4		20		19		7
Asia/Pacific	29		29		8		17		17		2
Mining	138		137		9		—		—		—
Latin America	42		42		12		33		33		9
Caterpillar Power Finance	135		134		41		110		106		51
Total	$	362	$	360	$	75	$	193	$	188	$	73
Total Impaired Loans and Finance Leases
Customer
North America	$	20	$	20	$	1	$	36	$	35	$	4
Europe	56		55		4		68		66		7
Asia/Pacific	31		31		8		24		24		2
Mining	167		166		9		134		134		—
Latin America	76		76		12		44		44		9
Caterpillar Power Finance	264		262		41		333		328		51
Total	$	614	$	610	$	75	$	639	$	631	$	73

(Millions of dollars)
	As of December 31, 2012
Impaired Loans and Finance Leases With No Allowance Recorded	Recorded Investment		Unpaid Principal Balance		Related Allowance
Customer
North America	$	28	$	27	$	—
Europe	45		45		—
Asia/Pacific	2		2		—
Mining	1		1		—
Latin America	7		7		—
Caterpillar Power Finance	295		295		—
Total	$	378	$	377	$	—
Impaired Loans and Finance Leases With An Allowance Recorded
Customer
North America	$	25	$	23	$	7
Europe	28		26		11
Asia/Pacific	19		19		4
Mining	—		—		—
Latin America	36		36		10
Caterpillar Power Finance	113		109		24
Total	$	221	$	213	$	56
Total Impaired Loans and Finance Leases
Customer
North America	$	53	$	50	$	7
Europe	73		71		11
Asia/Pacific	21		21		4
Mining	1		1		—
Latin America	43		43		10
Caterpillar Power Finance	408		404		24
Total	$	599	$	590	$	56

(Millions of dollars)
	Year Ended December 31, 2014				Year Ended December 31, 2013				Year Ended December 31, 2012
Impaired Loans and Finance Leases With No Allowance Recorded	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Customer
North America	$	20	$	1	$	25	$	3	$	50	$	3
Europe	47		1		49		1		45		1
Asia/Pacific	3		—		4		—		3		—
Mining	69		3		61		3		8		—
Latin America	30		—		11		—		6		—
Caterpillar Power Finance	164		6		271		5		220		2
Total	$	333	$	11	$	421	$	12	$	332	$	6
Impaired Loans and Finance Leases With An Allowance Recorded
Customer
North America	$	9	$	—	$	18	$	1	$	25	$	1
Europe	21		1		22		1		27		1
Asia/Pacific	23		1		18		1		15		1
Mining	90		7		1		—		—		—
Latin America	36		1		52		2		32		2
Caterpillar Power Finance	96		2		135		1		94		—
Total	$	275	$	12	$	246	$	6	$	193	$	5
Total Impaired Loans and Finance Leases
Customer
North America	$	29	$	1	$	43	$	4	$	75	$	4
Europe	68		2		71		2		72		2
Asia/Pacific	26		1		22		1		18		1
Mining	159		10		62		3		8		—
Latin America	66		1		63		2		38		2
Caterpillar Power Finance	260		8		406		6		314		2
Total	$	608	$	23	$	667	$	18	$	525	$	11

Non-accrual and past due loans and finance leases

For all classes, we consider a loan or finance lease past due if any portion of a contractual payment is due and unpaid for more than 30 days.  Recognition of income is suspended and the loan or finance lease is placed on non-accrual status when management determines that collection of future income is not probable (generally after 120 days past due except in locations where local regulatory requirements dictate a different method, or instances in which relevant information is known that warrants placing the loan or finance lease on non-accrual status). Accrual is resumed and previously suspended income is recognized, when the loan or finance lease becomes contractually current and/or collection doubts are removed.

As of December 31, 2014, 2013 and 2012, there were no loans or finance leases on non-accrual status for the Dealer portfolio segment. As of December 31, 2014, there was $4 million in loans or finance leases on non-accrual status for the Caterpillar Purchased Receivables portfolio segment, all of which was in the Europe finance receivable class. As of December 31, 2013 and 2012, there were no loans or finance leases on non-accrual status for the Caterpillar Purchased Receivables portfolio segment.

The investment in customer loans and finance leases on non-accrual status as of December 31, was as follows: 

(Millions of dollars)
	2014		2013		2012
Customer
North America	$	27	$	26	$	59
Europe	28		28		38
Asia/Pacific	54		50		36
Mining	62		23		12
Latin America	201		210		163
Caterpillar Power Finance	96		119		220
Total	$	468	$	456	$	528

Aging related to loans and finance leases was as follows:

(Millions of dollars)
	December 31, 2014
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables		91+ Still Accruing
Customer
North America	$	46	$	8	$	27	$	81	$	7,291	$	7,372	$	4
Europe	16		23		29		68		2,607		2,675		6
Asia/Pacific	29		22		69		120		2,773		2,893		16
Mining	28		—		11		39		2,084		2,123		—
Latin America	55		23		196		274		2,583		2,857		8
Caterpillar Power Finance	1		4		64		69		3,079		3,148		1
Dealer
North America	—		—		—		—		3,209		3,209		—
Europe	—		—		—		—		467		467		—
Asia/Pacific	—		—		—		—		637		637		—
Mining	—		—		—		—		3		3		—
Latin America	—		—		—		—		853		853		—
Caterpillar Power Finance	—		—		—		—		—		—		—
Caterpillar Purchased Receivables
North America	23		5		1		29		1,916		1,945		1
Europe	4		1		5		10		429		439		1
Asia/Pacific	—		—		—		—		401		401		—
Mining	—		—		—		—		—		—		—
Latin America	6		5		—		11		420		431		—
Caterpillar Power Finance	—		—		1		1		21		22		1
Total	$	208	$	91	$	403	$	702	$	28,773	$	29,475	$	38

(Millions of dollars)
	December 31, 2013
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables		91+ Still Accruing
Customer
North America	$	37	$	12	$	24	$	73	$	6,507	$	6,580	$	6
Europe	26		15		29		70		2,805		2,875		8
Asia/Pacific	55		46		59		160		3,158		3,318		11
Mining	3		—		12		15		2,128		2,143		—
Latin America	54		25		196		275		2,438		2,713		5
Caterpillar Power Finance	55		30		60		145		2,946		3,091		—
Dealer
North America	—		—		—		—		3,034		3,034		—
Europe	—		—		—		—		569		569		—
Asia/Pacific	—		—		—		—		706		706		—
Mining	—		—		—		—		5		5		—
Latin America	—		—		—		—		940		940		—
Caterpillar Power Finance	—		—		—		—		—		—		—
Caterpillar Purchased Receivables
North America	26		5		2		33		1,539		1,572		2
Europe	2		1		1		4		423		427		—
Asia/Pacific	—		—		—		—		468		468		—
Mining	—		—		—		—		—		—		—
Latin America	—		—		—		—		616		616		—
Caterpillar Power Finance	—		—		1		1		8		9		1
Total	$	258	$	134	$	384	$	776	$	28,290	$	29,066	$	33

(Millions of dollars)
	December 31, 2012
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables		91+ Still Accruing
Customer
North America	$	35	$	8	$	52	$	95	$	5,889	$	5,984	$	3
Europe	23		9		36		68		2,487		2,555		9
Asia/Pacific	53		19		54		126		3,343		3,469		18
Mining	—		1		12		13		1,960		1,973		—
Latin America	62		19		153		234		2,481		2,715		—
Caterpillar Power Finance	15		14		126		155		3,017		3,172		4
Dealer
North America	—		—		—		—		2,931		2,931		—
Europe	—		—		—		—		652		652		—
Asia/Pacific	—		—		—		—		945		945		—
Mining	—		—		—		—		1		1		—
Latin America	—		—		—		—		1,057		1,057		—
Caterpillar Power Finance	—		—		—		—		—		—		—
Caterpillar Purchased Receivables
North America	17		3		2		22		1,334		1,356		2
Europe	1		—		—		1		331		332		—
Asia/Pacific	—		—		—		—		868		868		—
Mining	—		—		—		—		—		—		—
Latin America	—		—		—		—		547		547		—
Caterpillar Power Finance	—		—		1		1		10		11		1
Total	$	206	$	73	$	436	$	715	$	27,853	$	28,568	$	37

Allowance for credit losses

An analysis of the Allowance for credit losses was as follows:

(Millions of dollars)
	December 31, 2014
Allowance for Credit Losses:	Customer			Dealer		Caterpillar Purchased Receivables		Total
Balance at beginning of year	$	374		$	10	$	3	$	387
Receivables written off	(146		)	—		—		(146		)
Recoveries on receivables previously written off	47			—		—		47
Provision for credit losses	136			—		—		136
Adjustment due to sale of receivables	(3		)	—		—		(3		)
Foreign currency translation adjustment	(20		)	—		—		(20		)
Balance at end of year	$	388		$	10	$	3	$	401
Individually evaluated for impairment	$	75		$	—	$	—	$	75
Collectively evaluated for impairment	313			10		3		326
Ending Balance	$	388		$	10	$	3	$	401
Recorded Investment in Finance Receivables:
Individually evaluated for impairment	$	614		$	—	$	—	$	614
Collectively evaluated for impairment	20,454			5,169		3,238		28,861
Ending Balance	$	21,068		$	5,169	$	3,238	$	29,475

(Millions of dollars)
	December 31, 2013
Allowance for Credit Losses:	Customer			Dealer		Caterpillar Purchased Receivables		Total
Balance at beginning of year	$	417		$	9	$	3	$	429
Receivables written off	(180		)	—		—		(180		)
Recoveries on receivables previously written off	56			—		—		56
Provision for credit losses	90			1		—		91
Adjustment due to sale of receivables	(3		)	—		—		(3		)
Foreign currency translation adjustment	(6		)	—		—		(6		)
Balance at end of year	$	374		$	10	$	3	$	387
Individually evaluated for impairment	$	73		$	—	$	—	$	73
Collectively evaluated for impairment	301			10		3		314
Ending Balance	$	374		$	10	$	3	$	387
Recorded Investment in Finance Receivables:
Individually evaluated for impairment	$	639		$	—	$	—	$	639
Collectively evaluated for impairment	20,081			5,254		3,092		28,427
Ending Balance	$	20,720		$	5,254	$	3,092	$	29,066

(Millions of dollars)
	December 31, 2012
Allowance for Credit Losses:	Customer			Dealer		Caterpillar Purchased Receivables		Total
Balance at beginning of year	$	362		$	6	$	3	$	371
Receivables written off	(150		)	—		—		(150		)
Recoveries on receivables previously written off	47			—		—		47
Provision for credit losses	159			3		—		162
Adjustment due to sale of receivables	(2		)	—		—		(2		)
Foreign currency translation adjustment	1			—		—		1
Balance at end of year	$	417		$	9	$	3	$	429
Individually evaluated for impairment	$	56		$	—	$	—	$	56
Collectively evaluated for impairment	361			9		3		373
Ending Balance	$	417		$	9	$	3	$	429
Recorded Investment in Finance Receivables:
Individually evaluated for impairment	$	599		$	—	$	—	$	599
Collectively evaluated for impairment	19,269			5,586		3,114		27,969
Ending Balance	$	19,868		$	5,586	$	3,114	$	28,568

Credit quality of finance receivables

The credit quality of finance receivables is reviewed on a monthly basis. Credit quality indicators include performing and non-performing. Non-performing is defined as finance receivables currently over 120 days past due and/or on non-accrual status or in bankruptcy. Finance receivables not meeting the criteria listed above are considered performing. Non-performing receivables have the highest probability for credit loss. The Allowance for credit losses attributable to non-performing receivables is based on the most probable source of repayment, which is normally the liquidation of collateral. In determining collateral value, we estimate the current fair market value of the collateral less selling costs. In addition, consideration is given to credit enhancements such as additional collateral and contractual third-party guarantees in determining the Allowance for credit losses attributable to non-performing receivables.

The recorded investment in performing and non-performing finance receivables was as follows:

(Millions of dollars)
	December 31, 2014
	Customer		Dealer		Caterpillar Purchased Receivables		Total
Performing
North America	$	7,345	$	3,209	$	1,945	$	12,499
Europe	2,647		467		435		3,549
Asia/Pacific	2,839		637		401		3,877
Mining	2,061		3		—		2,064
Latin America	2,656		853		431		3,940
Caterpillar Power Finance	3,052		—		22		3,074
Total Performing	$	20,600	$	5,169	$	3,234	$	29,003
Non-Performing
North America	$	27	$	—	$	—	$	27
Europe	28		—		4		32
Asia/Pacific	54		—		—		54
Mining	62		—		—		62
Latin America	201		—		—		201
Caterpillar Power Finance	96		—		—		96
Total Non-Performing	$	468	$	—	$	4	$	472
Total Performing and Non-Performing
North America	$	7,372	$	3,209	$	1,945	$	12,526
Europe	2,675		467		439		3,581
Asia/Pacific	2,893		637		401		3,931
Mining	2,123		3		—		2,126
Latin America	2,857		853		431		4,141
Caterpillar Power Finance	3,148		—		22		3,170
Total	$	21,068	$	5,169	$	3,238	$	29,475

(Millions of dollars)
	December 31, 2013
	Customer		Dealer		Caterpillar Purchased Receivables		Total
Performing
North America	$	6,554	$	3,034	$	1,572	$	11,160
Europe	2,847		569		427		3,843
Asia/Pacific	3,268		706		468		4,442
Mining	2,120		5		—		2,125
Latin America	2,503		940		616		4,059
Caterpillar Power Finance	2,972		—		9		2,981
Total Performing	$	20,264	$	5,254	$	3,092	$	28,610
Non-Performing
North America	$	26	$	—	$	—	$	26
Europe	28		—		—		28
Asia/Pacific	50		—		—		50
Mining	23		—		—		23
Latin America	210		—		—		210
Caterpillar Power Finance	119		—		—		119
Total Non-Performing	$	456	$	—	$	—	$	456
Total Performing and Non-Performing
North America	$	6,580	$	3,034	$	1,572	$	11,186
Europe	2,875		569		427		3,871
Asia/Pacific	3,318		706		468		4,492
Mining	2,143		5		—		2,148
Latin America	2,713		940		616		4,269
Caterpillar Power Finance	3,091		—		9		3,100
Total	$	20,720	$	5,254	$	3,092	$	29,066

(Millions of dollars)
	December 31, 2012
	Customer		Dealer		Caterpillar Purchased Receivables		Total
Performing
North America	$	5,925	$	2,931	$	1,356	$	10,212
Europe	2,517		652		332		3,501
Asia/Pacific	3,433		945		868		5,246
Mining	1,961		1		—		1,962
Latin America	2,552		1,057		547		4,156
Caterpillar Power Finance	2,952		—		11		2,963
Total Performing	$	19,340	$	5,586	$	3,114	$	28,040
Non-Performing
North America	$	59	$	—	$	—	$	59
Europe	38		—		—		38
Asia/Pacific	36		—		—		36
Mining	12		—		—		12
Latin America	163		—		—		163
Caterpillar Power Finance	220		—		—		220
Total Non-Performing	$	528	$	—	$	—	$	528
Total Performing and Non-Performing
North America	$	5,984	$	2,931	$	1,356	$	10,271
Europe	2,555		652		332		3,539
Asia/Pacific	3,469		945		868		5,282
Mining	1,973		1		—		1,974
Latin America	2,715		1,057		547		4,319
Caterpillar Power Finance	3,172		—		11		3,183
Total	$	19,868	$	5,586	$	3,114	$	28,568

Troubled debt restructurings

A restructuring of a loan or finance lease receivable constitutes a troubled debt restructuring (TDR) when the lender grants a concession it would not otherwise consider to a borrower experiencing financial difficulties. Concessions granted may include extended contract maturities, inclusion of interest only periods, below market interest rates, extended skip payment periods and reduction of principal and/or accrued interest.

TDRs are reviewed along with other receivables as part of management’s ongoing evaluation of the adequacy of the Allowance for credit losses. The Allowance for credit losses attributable to TDRs is based on the most probable source of repayment, which is normally the liquidation of collateral. In determining collateral value, we estimate the current fair market value of the collateral less selling costs. In addition, consideration is given to credit enhancements such as additional collateral and contractual third-party guarantees in determining the Allowance for credit losses attributable to TDRs.

There were no loans or finance lease receivables modified as TDRs during the years ended December 31, 2014, 2013 and 2012 for the Dealer or Caterpillar Purchased Receivables portfolio segments.

Loans and finance lease receivables in the Customer portfolio segment modified as TDRs during the years ended December 31, 2014, 2013 and 2012, were as follows:

(Dollars in millions)
	Year Ended December 31, 2014
	Number of Contracts	Pre-TDR Outstanding Recorded Investment		Post-TDR Outstanding Recorded Investment
Customer
North America	34	$	12	$	7
Europe	8	7		7
Asia/Pacific	2	—		—
Mining	51	185		176
Latin America	35	31		30
Caterpillar Power Finance(1)	18	137		139
Total(2)	148	$	372	$	359
	Year Ended December 31, 2013
	Number of Contracts	Pre-TDR Outstanding Recorded Investment		Post-TDR Outstanding Recorded Investment
Customer
North America	62	$	9	$	9
Europe	51	7		7
Asia/Pacific	3	1		1
Mining	45	123		123
Latin America	32	3		3
Caterpillar Power Finance(1)	17	153		157
Total(2)	210	$	296	$	300
	Year Ended December 31, 2012
	Number of Contracts	Pre-TDR Outstanding Recorded Investment		Post-TDR Outstanding Recorded Investment
Customer
North America	98	$	15	$	15
Europe	21	8		8
Asia/Pacific	12	3		3
Latin America	41	5		5
Caterpillar Power Finance(1)	27	253		253
Total(2)	199	$	284	$	284

⁽¹⁾ During the year ended December 31, 2014, no additional funds were subsequently loaned to a borrower whose terms had been modified in a TDR. During the years ended December 31, 2013 and 2012, $25 million and $24 million, respectively, of additional funds were subsequently loaned to a borrower whose terms had been modified in a TDR.  The $25 million and $24 million, respectively, of additional funds are not reflected in the tables above as no incremental modifications have been made with the borrower during the periods presented.  At December 31, 2014, there were no remaining commitments to lend additional funds to a borrower whose terms have been modified in a TDR.

⁽²⁾ Modifications include extended contract maturities, inclusion of interest only periods, below market interest rates, extended skip payment periods and reduction of principal and/or accrued interest.

TDRs in the Customer portfolio segment with a payment default during the years ended December 31, 2014, 2013 and 2012, which had been modified within twelve months prior to the default date, were as follows:

(Dollars in millions)
	Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
	Number of Contracts	Post-TDR Recorded Investment		Number of Contracts	Post-TDR Recorded Investment		Number of Contracts	Post-TDR Recorded Investment
Customer
North America	11	$	1	19	$	4	49	$	4
Europe	46	2		5	—		—	—
Asia/Pacific	—	—		—	—		2	1
Latin America	11	1		—	—		—	—
Caterpillar Power Finance	—	—		2	3		16	21
Total	68	$	4	26	$	7	67	$	26

C. Transfers of Receivables

Off-balance sheet managed assets

Certain finance receivables and equipment on operating leases are sold to third parties with limited or no recourse to us to mitigate the concentration of credit risk with certain customers and are generally accounted for as sales. In 2014, 2013 and 2012, we received $244 million, $243 million and $206 million, respectively, of cash proceeds and recognized pre-tax gains of $7 million, $4 million and $3 million, respectively, from the sale of such assets.  We typically maintain servicing responsibilities for these third-party assets, which totaled $316 million, $322 million and $291 million as of December 31, 2014, 2013 and 2012, respectively.  Because we do not receive a servicing fee for these assets, a servicing liability is recorded.  As of December 31, 2014, 2013 and 2012, these liabilities were $1 million, $2 million and $1 million, respectively. These assets are not available to pay our creditors.

Total off-balance sheet managed assets as of December 31, were as follows:

(Millions of dollars)
	2014		2013		2012
Retail notes receivable	$	121	$	126	$	49
Operating leases	93		61		60
Retail finance leases	59		103		116
Retail installment sale contracts	43		32		66
Total off-balance sheet managed assets	$	316	$	322	$	291

D. Purchases of Trade Receivables from Caterpillar Entities

We purchase trade receivables from Caterpillar entities at a discount. The discount is an estimate of the amount of financing revenue that would be earned at a market rate on these trade receivables over their expected life. The discount is amortized into revenue on an effective yield basis over the life of the receivables and recognized as Wholesale finance revenue. For the years ended December 31, 2014, 2013 and 2012, amortized discounts for the trade receivables were $243 million, $233 million and $241 million, respectively.  In the Consolidated Statements of Cash Flows, collection of the discount is included in investing activities as the receivables are collected.