Finance Receivables (Tables)

3 Months Ended

Mar. 31, 2017

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, 2017			December 31, 2016
Finance leases and installment sale contracts – Retail ⁽¹⁾	$	13,715		$	13,565
Retail notes receivable	10,107			10,195
Wholesale notes receivable	3,897			3,457
Finance leases and installment sale contracts – Wholesale	92			103
	27,811			27,320
Less: Unearned income	(780		)	(765		)
Recorded investment in finance receivables	27,031			26,555
Less: Allowance for credit losses	(346		)	(343		)
Total finance receivables, net	$	26,685		$	26,212

⁽¹⁾ Includes $18 million and $4 million of finance receivables classified as held for sale as of March 31, 2017 and December 31, 2016, respectively.

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, 2017
Allowance for Credit Losses:	Customer			Dealer		Caterpillar Purchased Receivables		Total
Balance at beginning of year	$	331		$	10	$	2	$	343
Receivables written off	(24		)	—		—		(24		)
Recoveries on receivables previously written off	9			—		—		9
Provision for credit losses	12			2		1		15
Adjustment due to sale of receivables	—			—		—		—
Foreign currency translation adjustment	3			—		—		3
Balance at end of period	$	331		$	12	$	3	$	346

Individually evaluated for impairment	$	98		$	—	$	—	$	98
Collectively evaluated for impairment	233			12		3		248
Ending Balance	$	331		$	12	$	3	$	346

Recorded Investment in Finance Receivables:
Individually evaluated for impairment	$	858		$	—	$	—	$	858
Collectively evaluated for impairment	18,673			4,539		2,961		26,173
Ending Balance	$	19,531		$	4,539	$	2,961	$	27,031



(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

Aging related to finance receivables

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



(Millions of dollars)
	March 31, 2017
	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	$	56	$	17	$	61	$	134	$	7,960	$	8,094	$	7
Europe	23		18		46		87		2,361		2,448		10
Asia/Pacific	22		9		15		46		2,050		2,096		5
Mining	13		5		53		71		1,818		1,889		—
Latin America	67		47		215		329		1,767		2,096		—
Caterpillar Power Finance	30		7		66		103		2,805		2,908		6
Dealer
North America	—		—		—		—		2,793		2,793		—
Europe	—		—		—		—		307		307		—
Asia/Pacific	—		—		—		—		603		603		—
Mining	—		—		—		—		6		6		—
Latin America	—		—		—		—		828		828		—
Caterpillar Power Finance	—		—		—		—		2		2		—
Caterpillar Purchased Receivables
North America	7		7		2		16		1,703		1,719		2
Europe	1		—		1		2		343		345		—
Asia/Pacific	1		—		—		1		510		511		—
Mining	—		—		—		—		—		—		—
Latin America	—		—		—		—		382		382		—
Caterpillar Power Finance	—		—		—		—		4		4		—
Total	$	220	$	110	$	459	$	789	$	26,242	$	27,031	$	30



(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

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, 2017						As of December 31, 2016
Impaired Finance Receivables With No Allowance Recorded	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
North America	$	11	$	11	$	—	$	10	$	10	$	—
Europe	48		47		—		49		48		—
Asia/Pacific	30		29		—		3		2		—
Mining	133		132		—		129		129		—
Latin America	67		67		—		68		68		—
Caterpillar Power Finance	289		289		—		271		271		—
Total	$	578	$	575	$	—	$	530	$	528	$	—
Impaired Finance Receivables With An Allowance Recorded
North America	$	56	$	54	$	22	$	61	$	60	$	22
Europe	4		4		2		7		7		3
Asia/Pacific	31		31		4		50		50		8
Mining	—		—		—		—		—		—
Latin America	110		121		39		93		104		34
Caterpillar Power Finance	79		78		31		45		44		18
Total	$	280	$	288	$	98	$	256	$	265	$	85
Total Impaired Finance Receivables
North America	$	67	$	65	$	22	$	71	$	70	$	22
Europe	52		51		2		56		55		3
Asia/Pacific	61		60		4		53		52		8
Mining	133		132		—		129		129		—
Latin America	177		188		39		161		172		34
Caterpillar Power Finance	368		367		31		316		315		18
Total	$	858	$	863	$	98	$	786	$	793	$	85



(Millions of dollars)
	Three Months Ended March 31, 2017				Three Months Ended March 31, 2016
Impaired Finance Receivables With No Allowance Recorded	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
North America	$	10	$	—	$	14	$	—
Europe	49		—		40		—
Asia/Pacific	9		—		2		—
Mining	128		1		81		1
Latin America	72		1		27		—
Caterpillar Power Finance	267		3		253		3
Total	$	535	$	5	$	417	$	4
Impaired Finance Receivables With An Allowance Recorded
North America	$	61	$	—	$	14	$	—
Europe	6		—		12		—
Asia/Pacific	45		1		33		1
Mining	—		—		11		—
Latin America	96		1		51		1
Caterpillar Power Finance	63		1		59		—
Total	$	271	$	3	$	180	$	2
Total Impaired Finance Receivables
North America	$	71	$	—	$	28	$	—
Europe	55		—		52		—
Asia/Pacific	54		1		35		1
Mining	128		1		92		1
Latin America	168		2		78		1
Caterpillar Power Finance	330		4		312		3
Total	$	806	$	8	$	597	$	6

Recorded investment in customer finance receivables on non-accrual status

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



(Millions of dollars)
	March 31, 2017		December 31, 2016
North America	$	66	$	66
Europe	37		35
Asia/Pacific	15		12
Mining	56		69
Latin America	308		307
Caterpillar Power Finance	70		90
Total	$	552	$	579

Finance receivables modified as TDRs

Our recorded investment in finance receivables in the Customer portfolio segment modified as TDRs were as follows:



(Dollars in millions)	Three Months Ended March 31, 2017					Three Months Ended March 31, 2016
	Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment		Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	9	$	1	$	1	11	$	10	$	10
Europe	1	—		—		—	—		—
Asia/Pacific	5	39		30		4	3		3
Mining	2	57		56		—	—		—
Latin America	7	2		2		2	—		—
Caterpillar Power Finance	6	25		24		4	39		27
Total	30	$	124	$	113	21	$	52	$	40