Finance Receivables (Tables)

12 Months Ended

Dec. 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 as of December 31, was as follows:



(Millions of dollars)
	2017			2016
Finance leases and installment sale contracts – Retail ⁽¹⁾	$	14,647		$	13,565
Retail notes receivable	9,417			10,195
Wholesale notes receivable	4,161			3,457
Finance leases and installment sale contracts – Wholesale	119			103
	28,344			27,320
Less: Unearned income	(853		)	(765		)
Recorded investment in finance receivables	27,491			26,555
Less: Allowance for credit losses	(365		)	(343		)
Total finance receivables, net	$	27,126		$	26,212

⁽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, 2017, 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
2018	$	2,798	$	10	$	2,758	$	22	$	3,578	$	3,955	$	13,121
2019	2,031		8		1,920		16		1,510		121		5,606
2020	1,281		6		1,078		9		1,445		77		3,896
2021	629		2		444		5		1,160		6		2,246
2022	212		—		153		2		867		2		1,236
Thereafter	26		—		57		2		857		—		942
Total	6,977		26		6,410		56		9,417		4,161		27,047
Guaranteed residual value	—		—		425		31		—		—		456
Unguaranteed residual value	—		—		835		6		—		—		841
Total	$	6,977	$	26	$	7,670	$	93	$	9,417	$	4,161	$	28,344

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, 2017
Allowance for Credit Losses:	Customer			Dealer			Caterpillar Purchased Receivables		Total
Balance at beginning of year	$	331		$	10		$	2	$	343
Receivables written off	(157		)	—			—		(157		)
Recoveries on receivables previously written off	43			—			—		43
Provision for credit losses	129			(1		)	1		129
Adjustment due to sale of receivables	(1		)	—			—		(1		)
Foreign currency translation adjustment	8			—			—		8
Balance at end of year	$	353		$	9		$	3	$	365

Individually evaluated for impairment	$	149		$	—		$	—	$	149
Collectively evaluated for impairment	204			9			3		216
Ending Balance	$	353		$	9		$	3	$	365

Recorded Investment in Finance Receivables:
Individually evaluated for impairment	$	942		$	—		$	—	$	942
Collectively evaluated for impairment	18,847			4,241			3,461		26,549
Ending Balance	$	19,789		$	4,241		$	3,461	$	27,491



(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 of finance receivables by aging category.



(Millions of dollars)
	December 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	$	71	$	15	$	42	$	128	$	8,040	$	8,168	$	8
Europe	21		10		46		77		2,718		2,795		13
Asia/Pacific	18		7		14		39		2,520		2,559		5
Mining	3		1		60		64		1,751		1,815		9
Latin America	37		55		142		234		1,546		1,780		—
Caterpillar Power Finance	20		32		144		196		2,476		2,672		1
Dealer
North America	—		—		—		—		2,394		2,394		—
Europe	—		—		—		—		417		417		—
Asia/Pacific	—		—		—		—		578		578		—
Mining	—		—		—		—		5		5		—
Latin America	—		72		—		72		773		845		—
Caterpillar Power Finance	—		—		—		—		2		2		—
Caterpillar Purchased Receivables
North America	24		5		2		31		2,010		2,041		2
Europe	1		2		1		4		344		348		—
Asia/Pacific	—		—		—		—		630		630		—
Mining	—		—		—		—		—		—		—
Latin America	—		—		—		—		437		437		—
Caterpillar Power Finance	—		—		—		—		5		5		—
Total	$	195	$	199	$	451	$	845	$	26,646	$	27,491	$	38



(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 December 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	$	19	$	19	$	—	$	10	$	10	$	—
Europe	45		45		—		49		48		—
Asia/Pacific	34		33		—		3		2		—
Mining	121		121		—		129		129		—
Latin America	45		45		—		68		68		—
Caterpillar Power Finance	160		172		—		271		271		—
Total	$	424	$	435	$	—	$	530	$	528	$	—
Impaired Finance Receivables With An Allowance Recorded
North America	$	44	$	43	$	17	$	61	$	60	$	22
Europe	9		8		5		7		7		3
Asia/Pacific	8		8		2		50		50		8
Mining	—		—		—		—		—		—
Latin America	95		106		42		93		104		34
Caterpillar Power Finance	362		365		83		45		44		18
Total	$	518	$	530	$	149	$	256	$	265	$	85
Total Impaired Finance Receivables
North America	$	63	$	62	$	17	$	71	$	70	$	22
Europe	54		53		5		56		55		3
Asia/Pacific	42		41		2		53		52		8
Mining	121		121		—		129		129		—
Latin America	140		151		42		161		172		34
Caterpillar Power Finance	522		537		83		316		315		18
Total	$	942	$	965	$	149	$	786	$	793	$	85



(Millions of dollars)
	Year Ended December 31, 2017				Year Ended December 31, 2016				Year Ended December 31, 2015
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	$	13	$	1	$	18	$	1	$	12	$	1
Europe	48		1		46		1		42		1
Asia/Pacific	24		2		2		—		2		—
Mining	126		7		98		4		75		3
Latin America	64		3		47		1		31		—
Caterpillar Power Finance	221		9		270		11		170		5
Total	$	496	$	23	$	481	$	18	$	332	$	10
Impaired Finance Receivables With An Allowance Recorded
North America	$	49	$	1	$	34	$	—	$	9	$	—
Europe	6		—		11		1		14		1
Asia/Pacific	31		2		37		3		44		2
Mining	—		—		13		—		39		1
Latin America	99		4		66		2		56		3
Caterpillar Power Finance	180		6		50		1		115		3
Total	$	365	$	13	$	211	$	7	$	277	$	10
Total Impaired Finance Receivables
North America	$	62	$	2	$	52	$	1	$	21	$	1
Europe	54		1		57		2		56		2
Asia/Pacific	55		4		39		3		46		2
Mining	126		7		111		4		114		4
Latin America	163		7		113		3		87		3
Caterpillar Power Finance	401		15		320		12		285		8
Total	$	861	$	36	$	692	$	25	$	609	$	20

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)
	2017		2016
North America	$	38	$	66
Europe	37		35
Asia/Pacific	10		12
Mining	63		69
Latin America	192		307
Caterpillar Power Finance	343		90
Total	$	683	$	579

Finance receivables modified as TDRs

Our recorded investment in finance receivables in the Customer portfolio segment modified as TDRs during the years ended December 31, 2017, 2016 and 2015, were as follows:



(Dollars in millions)	Year Ended December 31, 2017
	Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	43	$	34	$	35
Europe	4	1		1
Asia/Pacific	10	39		31
Mining	2	57		56
Latin America	17	26		27
Caterpillar Power Finance⁽¹⁾	68	422		407
Total	144	$	579	$	557

	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⁽²⁾	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

⁽¹⁾ In Caterpillar Power Finance, 48 contracts with a pre-TDR recorded investment of $265 million and a post-TDR recorded investment of $258 million are related to six customers.

⁽²⁾ 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 (defined as 91+ days past due) during the years ended December 31, 2017, 2016 and 2015, which had been modified within twelve months prior to the default date, were as follows:



(Dollars in millions)	Year Ended December 31, 2017			Year Ended December 31, 2016			Year Ended December 31, 2015
	Number of Contracts	Post-TDR Recorded Investment		Number of Contracts	Post-TDR Recorded Investment		Number of Contracts	Post-TDR Recorded Investment
North America	4	$	3	5	$	2	7	$	1
Europe	1	—		5	2		—	—
Asia/Pacific	4	1		1	—		—	—
Latin America⁽¹⁾	243	17		4	1		12	1
Total	252	$	21	15	$	5	19	$	2

⁽¹⁾ In Latin America, 238 contracts with a post-TDR recorded investment of $16 million are related to two customers for the year ended December 31, 2017.