Finance Receivables (Tables)

3 Months Ended

Mar. 31, 2016

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 was as follows:



(Millions of dollars)
	March 31, 2016			December 31, 2015
Finance leases and installment sale contracts – Retail	$	13,829		$	13,728
Retail notes receivable	10,602			10,616
Wholesale notes receivable	4,207			3,887
Finance leases and installment sale contracts – Wholesale	272			289
	28,910			28,520
Less: Unearned income	(776		)	(794		)
Recorded investment in finance receivables	28,134			27,726
Less: Allowance for credit losses	(340		)	(338		)
Total finance receivables, net	$	27,794		$	27,388

Allowance for credit losses and recorded investment in finance receivables

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



(Millions of dollars)
	March 31, 2016
Allowance for Credit Losses:	Customer			Dealer			Caterpillar Purchased Receivables		Total
Balance at beginning of year	$	327		$	9		$	2	$	338
Receivables written off	(38		)	—			—		(38		)
Recoveries on receivables previously written off	7			—			—		7
Provision for credit losses	29			(1		)	—		28
Adjustment due to sale of receivables	—			—			—		—
Foreign currency translation adjustment	5			—			—		5
Balance at end of period	$	330		$	8		$	2	$	340

Individually evaluated for impairment	$	58		$	—		$	—	$	58
Collectively evaluated for impairment	272			8			2		282
Ending Balance	$	330		$	8		$	2	$	340

Recorded Investment in Finance Receivables:
Individually evaluated for impairment	$	606		$	—		$	—	$	606
Collectively evaluated for impairment	19,498			5,101			2,929		27,528
Ending Balance	$	20,104		$	5,101		$	2,929	$	28,134



(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

Aging related to finance receivables

The tables below summarize our recorded investment of finance receivables by aging category.



(Millions of dollars)
	March 31, 2016
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Recorded Investment in Finance Receivables		91+ Still Accruing
Customer
North America	$	62	$	29	$	30	$	121	$	8,038	$	8,159	$	5
Europe	15		11		64		90		2,364		2,454		12
Asia/Pacific	36		22		29		87		2,089		2,176		12
Mining	16		13		62		91		1,691		1,782		1
Latin America	54		114		243		411		1,916		2,327		1
Caterpillar Power Finance	5		14		28		47		3,159		3,206		—
Dealer
North America	—		—		—		—		3,358		3,358		—
Europe	—		—		—		—		329		329		—
Asia/Pacific	—		—		—		—		676		676		—
Mining	—		—		—		—		8		8		—
Latin America	—		—		—		—		727		727		—
Caterpillar Power Finance	—		—		—		—		3		3		—
Caterpillar Purchased Receivables
North America	13		3		1		17		1,651		1,668		1
Europe	1		—		4		5		368		373		—
Asia/Pacific	1		—		—		1		470		471		—
Mining	—		—		—		—		—		—		—
Latin America	—		—		—		—		411		411		—
Caterpillar Power Finance	—		—		—		—		6		6		—
Total	$	203	$	206	$	461	$	870	$	27,264	$	28,134	$	32



(Millions of dollars)
	December 31, 2015
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Recorded Investment in 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

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 March 31, 2016						As of December 31, 2015
Impaired Finance Receivables With No Allowance Recorded	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
North America	$	20	$	20	$	—	$	12	$	12	$	—
Europe	39		39		—		41		41		—
Asia/Pacific	4		4		—		1		1		—
Mining	79		79		—		84		84		—
Latin America	27		27		—		28		28		—
Caterpillar Power Finance	268		267		—		242		241		—
Total	$	437	$	436	$	—	$	408	$	407	$	—
Impaired Finance Receivables With An Allowance Recorded
North America	$	15	$	13	$	4	$	14	$	13	$	4
Europe	11		11		6		11		10		5
Asia/Pacific	35		35		5		34		34		4
Mining	11		11		4		11		11		3
Latin America	53		53		22		53		53		21
Caterpillar Power Finance	44		44		17		70		70		28
Total	$	169	$	167	$	58	$	193	$	191	$	65
Total Impaired Finance Receivables
North America	$	35	$	33	$	4	$	26	$	25	$	4
Europe	50		50		6		52		51		5
Asia/Pacific	39		39		5		35		35		4
Mining	90		90		4		95		95		3
Latin America	80		80		22		81		81		21
Caterpillar Power Finance	312		311		17		312		311		28
Total	$	606	$	603	$	58	$	601	$	598	$	65



(Millions of dollars)
	Three Months Ended March 31, 2016				Three Months Ended March 31, 2015
Impaired Finance Receivables With No Allowance Recorded	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
North America	$	14	$	—	$	14	$	—
Europe	40		—		44		—
Asia/Pacific	2		—		4		—
Mining	81		1		102		2
Latin America	27		—		32		—
Caterpillar Power Finance	253		3		135		1
Total	$	417	$	4	$	331	$	3
Impaired Finance Receivables With An Allowance Recorded
North America	$	14	$	—	$	6	$	—
Europe	12		—		14		—
Asia/Pacific	33		1		26		—
Mining	11		—		63		1
Latin America	51		1		46		1
Caterpillar Power Finance	59		—		128		—
Total	$	180	$	2	$	283	$	2
Total Impaired Finance Receivables
North America	$	28	$	—	$	20	$	—
Europe	52		—		58		—
Asia/Pacific	35		1		30		—
Mining	92		1		165		3
Latin America	78		1		78		1
Caterpillar Power Finance	312		3		263		1
Total	$	597	$	6	$	614	$	5

Investment in customer finance receivables on non-accrual status

The investment in Customer finance receivables on non-accrual status was as follows:



(Millions of dollars)
	March 31, 2016		December 31, 2015
North America	$	40	$	31
Europe	56		39
Asia/Pacific	18		15
Mining	135		106
Latin America	262		217
Caterpillar Power Finance	57		77
Total	$	568	$	485

Finance receivables modified as TDRs

Finance receivables in the Customer portfolio segment modified as TDRs were as follows:



(Dollars in millions)	Three Months Ended March 31, 2016					Three Months Ended March 31, 2015
	Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment		Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	11	$	10	$	10	3	$	1	$	1
Asia/Pacific	4	3		3		—	—		—
Latin America	2	—		—		—	—		—
Caterpillar Power Finance	4	39		27		2	83		80
Total	21	$	52	$	40	5	$	84	$	81

During the three months ended March 31, 2016, $1 million of additional funds were subsequently loaned to a borrower whose terms had been modified in a TDR. The $1 million of additional funds is not reflected in the table above as no incremental modifications have been made with the borrower during the periods presented. During the three months ended March 31, 2015, 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 three months ended March 31, 2016 and 2015, which had been modified within twelve months prior to the default date, were as follows:



(Dollars in millions)	Three Months Ended March 31, 2016			Three Months Ended March 31, 2015
	Number of Contracts	Post-TDR Recorded Investment		Number of Contracts	Post-TDR Recorded Investment
North America	4	$	—	4	$	1
Europe	13	1		—	—
Asia/Pacific	3	—		—	—
Latin America	1	—		1	—
Total	21	$	1	5	$	1