Finance Receivables (Tables)

12 Months Ended

Dec. 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 as of December 31, was as follows:



(Millions of dollars)
	2016			2015
Finance leases and installment sale contracts – Retail ⁽¹⁾	$	13,565		$	13,728
Retail notes receivable	10,195			10,616
Wholesale notes receivable	3,457			3,887
Finance leases and installment sale contracts – Wholesale	103			289
	27,320			28,520
Less: Unearned income	(765		)	(794		)
Recorded investment in finance receivables	26,555			27,726
Less: Allowance for credit losses	(343		)	(338		)
Total finance receivables, net	$	26,212		$	27,388

⁽¹⁾ Includes $4 million of finance receivables classified as held for sale as of December 31, 2016.

Maturities of finance receivables

Maturities of our finance receivables, as of December 31, 2016, 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
2017	$	2,730	$	9	$	2,374	$	18	$	3,774	$	3,133	$	12,038
2018	2,058		6		1,577		12		1,899		199		5,751
2019	1,331		4		907		7		1,351		121		3,721
2020	637		1		418		3		1,132		3		2,194
2021	175		—		173		2		1,017		1		1,368
Thereafter	9		—		78		1		1,022		—		1,110
Total	6,940		20		5,527		43		10,195		3,457		26,182
Guaranteed residual value	—		—		318		35		—		—		353
Unguaranteed residual value	—		—		780		5		—		—		785
Total	$	6,940	$	20	$	6,625	$	83	$	10,195	$	3,457	$	27,320

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, 2016
Allowance for Credit Losses:	Customer			Dealer		Caterpillar Purchased Receivables		Total
Balance at beginning of year	$	327		$	9	$	2	$	338
Receivables written off	(158		)	—		—		(158		)
Recoveries on receivables previously written off	35			—		—		35
Provision for credit losses	132			1		—		133
Adjustment due to sale of receivables	(8		)	—		—		(8		)
Foreign currency translation adjustment	3			—		—		3
Balance at end of year	$	331		$	10	$	2	$	343

Individually evaluated for impairment	$	85		$	—	$	—	$	85
Collectively evaluated for impairment	246			10		2		258
Ending Balance	$	331		$	10	$	2	$	343

Recorded Investment in Finance Receivables:
Individually evaluated for impairment	$	786		$	—	$	—	$	786
Collectively evaluated for impairment	18,859			4,479		2,431		25,769
Ending Balance	$	19,645		$	4,479	$	2,431	$	26,555



(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

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, 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	$	50	$	16	$	59	$	125	$	8,051	$	8,176	$	5
Europe	16		12		39		67		2,388		2,455		6
Asia/Pacific	18		7		15		40		1,944		1,984		4
Mining	3		2		63		68		1,756		1,824		2
Latin America	40		33		214		287		1,808		2,095		—
Caterpillar Power Finance	11		9		73		93		3,018		3,111		1
Dealer
North America	—		—		—		—		2,705		2,705		—
Europe	—		—		—		—		336		336		—
Asia/Pacific	—		—		—		—		582		582		—
Mining	—		—		—		—		6		6		—
Latin America	—		—		—		—		848		848		—
Caterpillar Power Finance	—		—		—		—		2		2		—
Caterpillar Purchased Receivables
North America	11		3		1		15		1,303		1,318		1
Europe	—		—		1		1		268		269		—
Asia/Pacific	—		—		—		—		475		475		—
Mining	—		—		—		—		—		—		—
Latin America	—		—		—		—		366		366		—
Caterpillar Power Finance	—		—		—		—		3		3		—
Total	$	149	$	82	$	465	$	696	$	25,859	$	26,555	$	19



(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 December 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	$	10	$	10	$	—	$	12	$	12	$	—
Europe	49		48		—		41		41		—
Asia/Pacific	3		2		—		1		1		—
Mining	129		129		—		84		84		—
Latin America	68		68		—		28		28		—
Caterpillar Power Finance	271		271		—		242		241		—
Total	$	530	$	528	$	—	$	408	$	407	$	—
Impaired Finance Receivables With An Allowance Recorded
North America	$	61	$	60	$	22	$	14	$	13	$	4
Europe	7		7		3		11		10		5
Asia/Pacific	50		50		8		34		34		4
Mining	—		—		—		11		11		3
Latin America	93		104		34		53		53		21
Caterpillar Power Finance	45		44		18		70		70		28
Total	$	256	$	265	$	85	$	193	$	191	$	65
Total Impaired Finance Receivables
North America	$	71	$	70	$	22	$	26	$	25	$	4
Europe	56		55		3		52		51		5
Asia/Pacific	53		52		8		35		35		4
Mining	129		129		—		95		95		3
Latin America	161		172		34		81		81		21
Caterpillar Power Finance	316		315		18		312		311		28
Total	$	786	$	793	$	85	$	601	$	598	$	65



(Millions of dollars)
	Year Ended December 31, 2016				Year Ended December 31, 2015				Year Ended December 31, 2014
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	$	18	$	1	$	12	$	1	$	20	$	1
Europe	46		1		42		1		47		1
Asia/Pacific	2		—		2		—		3		—
Mining	98		4		75		3		69		3
Latin America	47		1		31		—		30		—
Caterpillar Power Finance	270		11		170		5		164		6
Total	$	481	$	18	$	332	$	10	$	333	$	11
Impaired Finance Receivables With An Allowance Recorded
North America	$	34	$	—	$	9	$	—	$	9	$	—
Europe	11		1		14		1		21		1
Asia/Pacific	37		3		44		2		23		1
Mining	13		—		39		1		90		7
Latin America	66		2		56		3		36		1
Caterpillar Power Finance	50		1		115		3		96		2
Total	$	211	$	7	$	277	$	10	$	275	$	12
Total Impaired Finance Receivables
North America	$	52	$	1	$	21	$	1	$	29	$	1
Europe	57		2		56		2		68		2
Asia/Pacific	39		3		46		2		26		1
Mining	111		4		114		4		159		10
Latin America	113		3		87		3		66		1
Caterpillar Power Finance	320		12		285		8		260		8
Total	$	692	$	25	$	609	$	20	$	608	$	23

Recorded investment in Customer finance receivables on non-accrual status

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



(Millions of dollars)
	2016		2015
North America	$	66	$	31
Europe	35		39
Asia/Pacific	12		15
Mining	69		106
Latin America	307		217
Caterpillar Power Finance	90		77
Total	$	579	$	485

Finance receivables modified as TDRs

Finance receivables in the Customer portfolio segment modified as TDRs during the years ended December 31, 2016, 2015 and 2014, were as follows:



(Dollars in millions)	Year Ended December 31, 2016
	Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	25	$	25	$	25
Europe	43	12		9
Asia/Pacific	31	29		28
Mining	4	74		66
Latin America⁽¹⁾	437	118		82
Caterpillar Power Finance	34	196		177
Total	574	$	454	$	387

	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

⁽¹⁾ In Latin America, 321 contracts with a pre-TDR recorded investment of $94 million and a post-TDR recorded investment of $64 million are related to four customers.

TDRs in the Customer portfolio segment with a payment default during the years ended December 31, 2016, 2015 and 2014, which had been modified within twelve months prior to the default date, were as follows:



(Dollars in millions)	Year Ended December 31, 2016			Year Ended December 31, 2015			Year Ended December 31, 2014
	Number of Contracts	Post-TDR Recorded Investment		Number of Contracts	Post-TDR Recorded Investment		Number of Contracts	Post-TDR Recorded Investment
North America	17	$	3	12	$	1	11	$	1
Europe	16	9		—	—		46	2
Asia/Pacific	3	—		—	—		—	—
Latin America	7	3		12	1		11	1
Total	43	$	15	24	$	2	68	$	4