Finance Receivables (Tables)

12 Months Ended

Dec. 31, 2015

Summary of finance receivables included in the Consolidated Statements of Financial Position

A summary of finance receivables included in the Consolidated Statements of Financial Position as of December 31, was as follows:



(Millions of dollars)
	2015			2014
Finance leases and installment sale contracts – Retail	$	13,728		$	14,455
Retail notes receivable	10,616			11,005
Wholesale notes receivable	3,887			4,514
Finance leases and installment sale contracts – Wholesale	289			384
	28,520			30,358
Less: Unearned income	(794		)	(883		)
Less: Allowance for credit losses	(338		)	(401		)
Total finance receivables, net	$	27,388		$	29,074

Maturities of finance receivables

Maturities of our finance receivables, as of December 31, 2015, reflect contractual repayments due from borrowers and were as follows:



(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
2016	$	2,597	$	48	$	2,543	$	53	$	4,297	$	3,495	$	13,033
2017	2,015		7		1,661		52		1,940		232		5,907
2018	1,368		3		939		38		1,450		158		3,956
2019	699		1		425		18		1,024		2		2,169
2020	202		—		170		6		929		—		1,307
Thereafter	11		—		98		2		976		—		1,087
Total	6,892		59		5,836		169		10,616		3,887		27,459
Guaranteed residual value	—		—		334		35		—		—		369
Unguaranteed residual value	—		—		666		26		—		—		692
Total	$	6,892	$	59	$	6,836	$	230	$	10,616	$	3,887	$	28,520

Allowance for credit losses and recorded investment in finance receivables

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



(Millions of dollars)
	December 31, 2015
Allowance for Credit Losses:	Customer			Dealer			Caterpillar Purchased Receivables			Total
Balance at beginning of year	$	388		$	10		$	3		$	401
Receivables written off	(196		)	—			—			(196		)
Recoveries on receivables previously written off	41			—			—			41
Provision for credit losses	119			(1		)	(1		)	117
Adjustment due to sale of receivables	(2		)	—			—			(2		)
Foreign currency translation adjustment	(23		)	—			—			(23		)
Balance at end of year	$	327		$	9		$	2		$	338

Individually evaluated for impairment	$	65		$	—		$	—		$	65
Collectively evaluated for impairment	262			9			2			273
Ending Balance	$	327		$	9		$	2		$	338

Recorded Investment in Finance Receivables:
Individually evaluated for impairment	$	601		$	—		$	—		$	601
Collectively evaluated for impairment	19,431			5,093			2,601			27,125
Ending Balance	$	20,032		$	5,093		$	2,601		$	27,726



(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

Aging related to finance receivables

In determining past-due status, we consider the entire finance receivable balance past due when any installment is over 30 days past due. The tables below summarize our recorded investment of finance receivables by aging category.



(Millions of dollars)
	December 31, 2015
	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	$	45	$	12	$	30	$	87	$	8,031	$	8,118	$	4
Europe	18		7		44		69		2,358		2,427		9
Asia/Pacific	22		12		21		55		2,108		2,163		6
Mining	6		1		68		75		1,793		1,868		1
Latin America	45		31		199		275		1,998		2,273		—
Caterpillar Power Finance	—		1		35		36		3,147		3,183		2
Dealer
North America	—		—		—		—		3,387		3,387		—
Europe	—		—		—		—		330		330		—
Asia/Pacific	—		—		—		—		611		611		—
Mining	—		—		—		—		4		4		—
Latin America	—		—		—		—		758		758		—
Caterpillar Power Finance	—		—		—		—		3		3		—
Caterpillar Purchased Receivables
North America	16		5		1		22		1,386		1,408		1
Europe	4		—		4		8		307		315		3
Asia/Pacific	—		—		—		—		407		407		—
Mining	—		—		—		—		—		—		—
Latin America	—		—		—		—		454		454		—
Caterpillar Power Finance	—		1		—		1		16		17		—
Total	$	156	$	70	$	402	$	628	$	27,098	$	27,726	$	26



(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

Impaired finance receivables

Our recorded investment in impaired finance receivables and the related unpaid principal balances and allowance for the Customer portfolio segment were as follows:



(Millions of dollars)
	As of December 31, 2015						As of December 31, 2014
Impaired Finance Receivables With No Allowance Recorded	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
North America	$	12	$	12	$	—	$	14	$	14	$	—
Europe	41		41		—		44		43		—
Asia/Pacific	1		1		—		2		2		—
Mining	84		84		—		29		29		—
Latin America	28		28		—		34		34		—
Caterpillar Power Finance	242		241		—		129		128		—
Total	$	408	$	407	$	—	$	252	$	250	$	—
Impaired Finance Receivables With An Allowance Recorded
North America	$	14	$	13	$	4	$	6	$	6	$	1
Europe	11		10		5		12		12		4
Asia/Pacific	34		34		4		29		29		8
Mining	11		11		3		138		137		9
Latin America	53		53		21		42		42		12
Caterpillar Power Finance	70		70		28		135		134		41
Total	$	193	$	191	$	65	$	362	$	360	$	75
Total Impaired Finance Receivables
North America	$	26	$	25	$	4	$	20	$	20	$	1
Europe	52		51		5		56		55		4
Asia/Pacific	35		35		4		31		31		8
Mining	95		95		3		167		166		9
Latin America	81		81		21		76		76		12
Caterpillar Power Finance	312		311		28		264		262		41
Total	$	601	$	598	$	65	$	614	$	610	$	75



(Millions of dollars)
	Year Ended December 31, 2015				Year Ended December 31, 2014				Year Ended December 31, 2013
Impaired Finance Receivables With No Allowance Recorded	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
North America	$	12	$	1	$	20	$	1	$	25	$	3
Europe	42		1		47		1		49		1
Asia/Pacific	2		—		3		—		4		—
Mining	75		3		69		3		61		3
Latin America	31		—		30		—		11		—
Caterpillar Power Finance	170		5		164		6		271		5
Total	$	332	$	10	$	333	$	11	$	421	$	12
Impaired Finance Receivables With An Allowance Recorded
North America	$	9	$	—	$	9	$	—	$	18	$	1
Europe	14		1		21		1		22		1
Asia/Pacific	44		2		23		1		18		1
Mining	39		1		90		7		1		—
Latin America	56		3		36		1		52		2
Caterpillar Power Finance	115		3		96		2		135		1
Total	$	277	$	10	$	275	$	12	$	246	$	6
Total Impaired Finance Receivables
North America	$	21	$	1	$	29	$	1	$	43	$	4
Europe	56		2		68		2		71		2
Asia/Pacific	46		2		26		1		22		1
Mining	114		4		159		10		62		3
Latin America	87		3		66		1		63		2
Caterpillar Power Finance	285		8		260		8		406		6
Total	$	609	$	20	$	608	$	23	$	667	$	18

Investment in Customer finance receivables on non-accrual status

The investment in Customer finance receivables on non-accrual status as of December 31, was as follows:



(Millions of dollars)
	2015		2014
North America	$	31	$	27
Europe	39		28
Asia/Pacific	15		54
Mining	106		62
Latin America	217		201
Caterpillar Power Finance	77		96
Total	$	485	$	468

Finance receivables modified as TDRs

Finance receivables in the Customer portfolio segment modified as TDRs during the years ended December 31, 2015, 2014 and 2013, were as follows:



(Dollars in millions)	Year Ended December 31, 2015
	Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	14	$	1	$	1
Europe	23	2		2
Asia/Pacific	21	26		26
Mining	4	65		65
Latin America	11	1		2
Caterpillar Power Finance	21	259		242
Total	94	$	354	$	338

	Year Ended December 31, 2014
	Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	34	$	12	$	7
Europe	8	7		7
Asia/Pacific	2	—		—
Mining	51	185		176
Latin America	35	31		30
Caterpillar Power Finance	18	137		139
Total	148	$	372	$	359

	Year Ended December 31, 2013
	Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
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	17	153		157
Total	210	$	296	$	300

During the years ended December 31, 2015 and 2013, $4 million and $25 million, respectively, of additional funds were subsequently loaned to a borrower whose terms had been modified in a TDR. The $4 million and $25 million of additional funds are not reflected in the tables above as no incremental modifications have been made with those borrowers during the periods presented. During the year ended December 31, 2014, no additional funds were subsequently loaned to a borrower whose terms had been modified in a TDR.

TDRs in the Customer portfolio segment with a payment default during the years ended December 31, 2015, 2014 and 2013, which had been modified within twelve months prior to the default date, were as follows:



(Dollars in millions)	Year Ended December 31, 2015			Year Ended December 31, 2014			Year Ended December 31, 2013
	Number of Contracts	Post-TDR Recorded Investment		Number of Contracts	Post-TDR Recorded Investment		Number of Contracts	Post-TDR Recorded Investment
North America	12	$	1	11	$	1	19	$	4
Europe	—	—		46	2		5	—
Latin America	12	1		11	1		—	—
Caterpillar Power Finance	—	—		—	—		2	3
Total	24	$	2	68	$	4	26	$	7