Finance Receivables (Tables)

3 Months Ended

Mar. 31, 2020

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, 2020			December 31, 2019
Retail loans, net⁽¹⁾	$	15,061		$	15,424
Retail leases, net	7,207			7,660
Caterpillar purchased receivables, net	4,055			4,448
Wholesale loans, net⁽¹⁾	655			664
Wholesale leases, net	49			60
Total finance receivables	27,027			28,256
Less: Allowance for credit losses	(457		)	(424		)
Total finance receivables, net	$	26,570		$	27,832

⁽¹⁾Includes failed sale leasebacks.

Allowance for credit losses and total finance receivables

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



(Millions of dollars)	March 31, 2020
Allowance for Credit Losses:	Customer			Dealer		Caterpillar Purchased Receivables		Total
Balance at beginning of year	$	375		$	45	$	4	$	424
Adjustment to adopt new accounting guidance⁽¹⁾	12			—		—		12
Receivables written off	(37		)	—		—		(37		)
Recoveries on receivables previously written off	7			—		—		7
Provision for credit losses	60			—		—		60
Foreign currency translation adjustment	(9		)	—		—		(9		)
Balance at end of period	$	408		$	45	$	4	$	457

Individually evaluated	$	176		$	39	$	—	$	215
Collectively evaluated	232			6		4		242
Ending Balance	$	408		$	45	$	4	$	457

Finance Receivables:
Individually evaluated	$	570		$	78	$	—	$	648
Collectively evaluated	18,111			4,213		4,055		26,379
Ending Balance	$	18,681		$	4,291	$	4,055	$	27,027

⁽¹⁾See Note 2 regarding new accounting guidance related to credit losses.



(Millions of dollars)	December 31, 2019
Allowance for Credit Losses:	Customer			Dealer		Caterpillar Purchased Receivables		Total
Balance at beginning of year	$	486		$	21	$	4	$	511
Receivables written off	(281		)	—		—		(281		)
Recoveries on receivables previously written off	44			—		—		44
Provision for credit losses	138			24		—		162
Adjustment due to sale of receivables	(11		)	—		—		(11		)
Foreign currency translation adjustment	(1		)	—		—		(1		)
Balance at end of year	$	375		$	45	$	4	$	424

Individually evaluated	$	178		$	39	$	—	$	217
Collectively evaluated	197			6		4		207
Ending Balance	$	375		$	45	$	4	$	424

Finance Receivables:
Individually evaluated	$	594		$	78	$	—	$	672
Collectively evaluated	18,770			4,366		4,448		27,584
Ending Balance	$	19,364		$	4,444	$	4,448	$	28,256

Amortized cost of finance receivables in the Customer portfolio segment by origination year

The table below summarizes the aging category of our amortized cost of finance receivables in the Customer portfolio segment by origination year.



(Millions of dollars)	March 31, 2020
	2020		2019		2018		2017		2016		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	934	$	3,277	$	2,015	$	952	$	455	$	155	$	157	$	7,945
31-60 days past due	6		55		52		29		21		5		—		168
61-90 days past due	—		11		11		10		3		1		—		36
91+ days past due	—		14		21		15		10		6		—		66
EAME
Current	249		1,164		773		358		133		44		—		2,721
31-60 days past due	2		11		5		4		2		—		—		24
61-90 days past due	—		7		3		2		1		1		—		14
91+ days past due	—		8		22		23		53		61		—		167
Asia/Pacific
Current	259		1,249		688		240		61		30		32		2,559
31-60 days past due	2		26		25		9		—		1		—		63
61-90 days past due	—		14		14		5		1		—		—		34
91+ days past due	—		15		17		8		1		—		—		41
Mining
Current	85		711		413		267		139		217		199		2,031
31-60 days past due	—		—		1		—		—		1		—		2
61-90 days past due	—		3		12		6		—		—		—		21
91+ days past due	—		12		12		23		—		—		1		48
Latin America
Current	175		483		253		88		23		49		—		1,071
31-60 days past due	—		15		10		8		4		2		—		39
61-90 days past due	—		5		7		5		2		—		—		19
91+ days past due	—		11		29		24		9		7		—		80
Caterpillar Power Finance
Current	3		301		221		287		158		158		160		1,288
31-60 days past due	—		—		11		—		4		11		—		26
61-90 days past due	—		—		—		1		—		—		—		1
91+ days past due	—		—		20		11		37		149		—		217
Total	$	1,715	$	7,392	$	4,635	$	2,375	$	1,117	$	898	$	549	$	18,681

Aging related to finance receivables

The table below summarizes the aging category of our amortized cost of finance receivables in the Caterpillar Purchased Receivables portfolio segment.



(Millions of dollars)
	March 31, 2020
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables
North America	$	16	$	9	$	18	$	43	$	2,290	$	2,333
EAME	1		—		1		2		587		589
Asia/Pacific	2		1		1		4		686		690
Mining	—		—		—		—		—		—
Latin America	—		—		—		—		425		425
Caterpillar Power Finance	2		2		1		5		13		18
Total	$	21	$	12	$	21	$	54	$	4,001	$	4,055

The table below summarizes our recorded investment in finance receivables by aging category.



(Millions of dollars)
	December 31, 2019
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables
Customer
North America	$	72	$	23	$	55	$	150	$	8,085	$	8,235
EAME	30		31		141		202		2,882		3,084
Asia/Pacific	40		14		29		83		2,733		2,816
Mining	5		—		19		24		2,266		2,290
Latin America	41		23		80		144		1,131		1,275
Caterpillar Power Finance	10		10		225		245		1,419		1,664
Dealer
North America	—		—		—		—		2,514		2,514
EAME	—		—		—		—		600		600
Asia/Pacific	—		—		—		—		487		487
Mining	—		—		—		—		4		4
Latin America	—		—		78		78		758		836
Caterpillar Power Finance	—		—		—		—		3		3
Caterpillar Purchased Receivables
North America	15		6		18		39		2,450		2,489
EAME	1		—		2		3		574		577
Asia/Pacific	1		—		—		1		891		892
Mining	—		—		—		—		—		—
Latin America	—		—		—		—		475		475
Caterpillar Power Finance	—		—		—		—		15		15
Total	$	215	$	107	$	647	$	969	$	27,287	$	28,256

Impaired finance receivables

In our Customer portfolio segment, impaired finance receivables and the related unpaid principal balances and allowance were as follows:



(Millions of dollars)
	As of December 31, 2019
Impaired Finance Receivables With No Allowance Recorded	Recorded Investment		Unpaid Principal Balance		Related Allowance
North America	$	6	$	6	$	—
EAME	—		—		—
Asia/Pacific	—		—		—
Mining	22		22		—
Latin America	8		8		—
Caterpillar Power Finance	58		58		—
Total	$	94	$	94	$	—
Impaired Finance Receivables With An Allowance Recorded
North America	$	30	$	30	$	11
EAME	61		61		29
Asia/Pacific	8		8		2
Mining	37		36		9
Latin America	58		58		20
Caterpillar Power Finance	306		319		107
Total	$	500	$	512	$	178
Total Impaired Finance Receivables
North America	$	36	$	36	$	11
EAME	61		61		29
Asia/Pacific	8		8		2
Mining	59		58		9
Latin America	66		66		20
Caterpillar Power Finance	364		377		107
Total	$	594	$	606	$	178



(Millions of dollars)
	Three Months Ended March 31, 2019
Impaired Finance Receivables With No Allowance Recorded	Average Recorded Investment		Interest Income Recognized
North America	$	10	$	—
EAME	1		—
Asia/Pacific	—		—
Mining	31		—
Latin America	24		—
Caterpillar Power Finance	60		1
Total	$	126	$	1
Impaired Finance Receivables With An Allowance Recorded
North America	$	40	$	1
EAME	94		1
Asia/Pacific	7		—
Mining	43		1
Latin America	77		1
Caterpillar Power Finance	451		3
Total	$	712	$	7
Total Impaired Finance Receivables
North America	$	50	$	1
EAME	95		1
Asia/Pacific	7		—
Mining	74		1
Latin America	101		1
Caterpillar Power Finance	511		4
Total	$	838	$	8

Finance receivables on non-accrual status

In our Customer portfolio segment, finance receivables which were on non-accrual status and finance receivables over 90 days past due and still accruing income were as follows:



(Millions of dollars)	March 31, 2020
	Amortized Cost
	Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing
North America	$	50	$	—	$	20
EAME	168		1		5
Asia/Pacific	29		—		12
Mining	40		—		9
Latin America	87		—		—
Caterpillar Power Finance	329		—		7
Total	$	703	$	1	$	53

There was less than $1 million of interest income recognized during the three months ended March 31, 2020 for customer finance receivables on non-accrual status.



(Millions of dollars)	December 31, 2019
	Recorded Investment
	Non-accrual Finance Receivables		91+ Still Accruing
North America	$	44	$	15
EAME	165		4
Asia/Pacific	21		8
Mining	47		—
Latin America	89		2
Caterpillar Power Finance	361		—
Total	$	727	$	29

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, 2020					Three Months Ended March 31, 2019
	Number of Contracts	Pre-TDR Amortized Cost		Post-TDR Amortized Cost		Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
EAME	—	$	—	$	—	17	$	7	$	7
Latin America	5	2		2		—	—		—
Caterpillar Power Finance	—	—		—		8	51		50
Total	5	$	2	$	2	25	$	58	$	57

TDRs in the Customer portfolio segment with a payment default (defined as 91+ days past due) which had been modified within twelve months prior to the default date, were as follows:



(Dollars in millions)	Three Months Ended March 31, 2020			Three Months Ended March 31, 2019
	Number of Contracts	Post-TDR Amortized Cost		Number of Contracts	Post-TDR Recorded Investment
EAME	2	$	10	—	$	—
Latin America	3	1		—	—
Total	5	$	11	—	$	—