Finance Receivables (Tables)

3 Months Ended

Mar. 31, 2018

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, 2018			December 31, 2017
Finance leases and installment sale contracts – Retail	$	14,855		$	14,647
Retail notes receivable⁽¹⁾	9,082			9,417
Wholesale notes receivable	4,633			4,161
Finance leases and installment sale contracts – Wholesale	120			119
	28,690			28,344
Less: Unearned income	(854		)	(853		)
Recorded investment in finance receivables	27,836			27,491
Less: Allowance for credit losses	(403		)	(365		)
Total finance receivables, net	$	27,433		$	27,126

⁽¹⁾ Includes $221 million of finance receivables classified as held for sale as of March 31, 2018.

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, 2018
Allowance for Credit Losses:	Customer			Dealer		Caterpillar Purchased Receivables		Total
Balance at beginning of year	$	353		$	9	$	3	$	365
Receivables written off	(40		)	—		—		(40		)
Recoveries on receivables previously written off	10			—		—		10
Provision for credit losses	66			—		1		67
Adjustment due to sale of receivables	(2		)	—		—		(2		)
Foreign currency translation adjustment	3			—		—		3
Balance at end of period	$	390		$	9	$	4	$	403

Individually evaluated for impairment	$	194		$	—	$	—	$	194
Collectively evaluated for impairment	196			9		4		209
Ending Balance	$	390		$	9	$	4	$	403

Recorded Investment in Finance Receivables:
Individually evaluated for impairment	$	973		$	—	$	—	$	973
Collectively evaluated for impairment	18,787			4,061		4,015		26,863
Ending Balance	$	19,760		$	4,061	$	4,015	$	27,836



(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

Aging related to finance receivables

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



(Millions of dollars)
	March 31, 2018
	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	$	73	$	28	$	38	$	139	$	8,001	$	8,140	$	6
Europe	20		23		54		97		2,759		2,856		10
Asia/Pacific	25		11		14		50		2,653		2,703		6
Mining	7		1		12		20		1,755		1,775		1
Latin America	49		43		143		235		1,476		1,711		3
Caterpillar Power Finance	41		57		209		307		2,268		2,575		28
Dealer
North America	—		—		—		—		2,277		2,277		—
Europe	—		—		—		—		385		385		—
Asia/Pacific	—		—		—		—		526		526		—
Mining	—		—		—		—		4		4		—
Latin America	1		2		73		76		791		867		—
Caterpillar Power Finance	—		—		—		—		2		2		—
Caterpillar Purchased Receivables
North America	11		13		5		29		2,458		2,487		5
Europe	1		—		2		3		444		447		1
Asia/Pacific	2		1		1		4		708		712		1
Mining	—		—		—		—		—		—		—
Latin America	—		—		—		—		363		363		—
Caterpillar Power Finance	—		—		—		—		6		6		—
Total	$	230	$	179	$	551	$	960	$	26,876	$	27,836	$	61



(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

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, 2018						As of December 31, 2017
Impaired Finance Receivables With No Allowance Recorded	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
North America	$	16	$	16	$	—	$	19	$	19	$	—
Europe	7		7		—		45		45		—
Asia/Pacific	28		28		—		34		33		—
Mining	50		50		—		121		121		—
Latin America	46		46		—		45		45		—
Caterpillar Power Finance	195		207		—		160		172		—
Total	$	342	$	354	$	—	$	424	$	435	$	—
Impaired Finance Receivables With An Allowance Recorded
North America	$	60	$	58	$	21	$	44	$	43	$	17
Europe	49		49		13		9		8		5
Asia/Pacific	5		5		1		8		8		2
Mining	67		67		18		—		—		—
Latin America	71		71		40		95		106		42
Caterpillar Power Finance	379		381		101		362		365		83
Total	$	631	$	631	$	194	$	518	$	530	$	149
Total Impaired Finance Receivables
North America	$	76	$	74	$	21	$	63	$	62	$	17
Europe	56		56		13		54		53		5
Asia/Pacific	33		33		1		42		41		2
Mining	117		117		18		121		121		—
Latin America	117		117		40		140		151		42
Caterpillar Power Finance	574		588		101		522		537		83
Total	$	973	$	985	$	194	$	942	$	965	$	149



(Millions of dollars)
	Three Months Ended March 31, 2018				Three Months Ended March 31, 2017
Impaired Finance Receivables With No Allowance Recorded	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
North America	$	17	$	—	$	10	$	—
Europe	36		—		49		—
Asia/Pacific	32		1		9		—
Mining	103		1		128		1
Latin America	45		1		72		1
Caterpillar Power Finance	172		2		267		3
Total	$	405	$	5	$	535	$	5
Impaired Finance Receivables With An Allowance Recorded
North America	$	51	$	1	$	61	$	—
Europe	19		—		6		—
Asia/Pacific	7		—		45		1
Mining	17		—		—		—
Latin America	87		1		96		1
Caterpillar Power Finance	360		1		63		1
Total	$	541	$	3	$	271	$	3
Total Impaired Finance Receivables
North America	$	68	$	1	$	71	$	—
Europe	55		—		55		—
Asia/Pacific	39		1		54		1
Mining	120		1		128		1
Latin America	132		2		168		2
Caterpillar Power Finance	532		3		330		4
Total	$	946	$	8	$	806	$	8

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, 2018		December 31, 2017
North America	$	50	$	38
Europe	50		37
Asia/Pacific	8		10
Mining	14		63
Latin America	174		192
Caterpillar Power Finance	339		343
Total	$	635	$	683

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, 2018					Three Months Ended March 31, 2017
	Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment		Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	13	$	6	$	6	9	$	1	$	1
Europe	—	—		—		1	—		—
Asia/Pacific	—	—		—		5	39		30
Mining	1	29		29		2	57		56
Latin America	1	3		3		7	2		2
Caterpillar Power Finance	3	3		3		6	25		24
Total	18	$	41	$	41	30	$	124	$	113