
(Millions of dollars)	2021		2020
Retail loans, net(1)	$	14,817	$	15,037
Retail leases, net	7,818		7,812
Caterpillar purchased receivables, net	4,462		3,646
Wholesale loans, net(1)	406		533
Wholesale leases, net	11		26
Total finance receivables	27,514		27,054
Less: Allowance for credit losses	(337)		(479)
Total finance receivables, net	$	27,177	$	26,575


(Millions of dollars)
Amounts due in	Retail loans		Retail leases		Caterpillar purchased receivables		Wholesale loans		Wholesale leases		Total
2022	$	6,047	$	3,187	$	4,488	$	213	$	3	$	13,938
2023	4,055		2,113		—		74		2		6,244
2024	2,651		1,135		—		37		2		3,825
2025	1,493		535		—		11		1		2,040
2026	665		227		—		3		—		895
Thereafter	198		35		—		2		—		235
Total	15,109		7,232		4,488		340		8		27,177
Guaranteed residual value(1)	16		411		—		68		2		497
Unguaranteed residual value(1)	3		750		—		2		2		757
Unearned income	(311)		(575)		(26)		(4)		(1)		(917)
Total	$	14,817	$	7,818	$	4,462	$	406	$	11	$	27,514

Revenues from finance leases were $481 million, $491 million and $518 million for the years ended December 31, 2021, 2020, and 2019 respectively, and are included in retail and wholesale finance revenue in the Consolidated Statements of Profit. The residual values for finance leases are included in Finance receivables, net in the Consolidated Statements of Financial Position. Residual value adjustments are recognized through a reduction of finance revenue over the remaining lease term.

We provide loans and finance leases to end-user customers primarily for the purpose of financing new and used Caterpillar machinery, engines and equipment for commercial use, the majority of which operate in construction-related industries. We also provide financing for vehicles, power generation facilities and marine vessels that, in most cases, incorporate Caterpillar products. The average original term of our customer finance receivable portfolio was approximately 50 months with an average remaining term of approximately 27 months as of December 31, 2021.

We typically maintain a security interest in financed equipment and we require physical damage insurance coverage on the financed equipment, both of which provide us with certain rights and protections. If our collection efforts fail to bring a defaulted account current, we generally can repossess the financed equipment, after satisfying local legal requirements, and sell it within the Caterpillar dealer network or through third-party auctions.

We estimate the allowance for credit losses related to our customer finance receivables based on loss forecast models utilizing probabilities of default and our estimated loss given default based on past loss experience adjusted for current conditions and reasonable and supportable forecasts capturing country and industry-specific economic factors.

During the year ended December 31, 2021, our forecasts for the markets in which we operate reflected a general improvement in economic conditions, which had deteriorated due to the COVID-19 pandemic, resulting from a growing economy, improved unemployment rates and a decrease in delinquencies. We believe the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long-term trends.

We provide financing to Caterpillar dealers in the form of wholesale financing plans. Our wholesale financing plans provide assistance to dealers by financing their mostly new Caterpillar equipment inventory and rental fleets on a secured and unsecured basis. In addition, we provide a variety of secured and unsecured loans to Caterpillar dealers.

In general, our Dealer portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to our close working relationships with the dealers and their financial strength. Therefore, we made no adjustments to historical loss rates during the year ended December 31, 2021.

In general, our Caterpillar Purchased Receivables portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to the short-term maturities of the receivables, our close working relationships with the dealers and their financial strength. Therefore, we made no adjustments to historical loss rates during the year ended December 31, 2021.

We further evaluate our portfolio segments by the class of finance receivables, which is defined as a level of information (below a portfolio segment) in which the finance receivables have the same initial measurement attribute and a similar method for assessing and monitoring credit risk. Our classes, which align with management reporting for credit losses, are as follows:

•Caterpillar Power Finance - Finance receivables originated worldwide related to marine vessels with Caterpillar engines and Caterpillar electrical power generation, gas compression and co-generation systems and non-Caterpillar equipment that is powered by these systems.


(Millions of dollars)	December 31, 2021								December 31, 2020
Allowance for Credit Losses:	Customer		Dealer		Caterpillar Purchased Receivables		Total		Customer		Dealer		Caterpillar Purchased Receivables		Total
Beginning Balance	$	431	$	44	$	4	$	479	$	375	$	45	$	4	$	424
Adjustment to adopt new accounting guidance(1)	—		—		—		—		12		—		—		12
Write-offs	(256)		—		—		(256)		(263)		—		—		(263)
Recoveries	51		—		—		51		41		—		—		41
Provision for credit losses	30		38		—		68		262		(1)		—		261
Other	(5)		—		—		(5)		4		—		—		4
Ending Balance	$	251	$	82	$	4	$	337	$	431	$	44	$	4	$	479








Finance Receivables	$	20,842	$	2,210	$	4,462	$	27,514	$	19,927	$	3,481	$	3,646	$	27,054

(1) On January 1, 2020, we adopted ASU 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments, which replaced the incurred loss impairment method with a method that reflects lifetime expected credit losses. We recognized the cumulative effect as a pre-tax adjustment to retained earnings as of January 1, 2020.

At origination, we evaluate credit risk based on a variety of credit quality factors including prior payment experience, customer financial information, credit ratings, loan-to-value ratios, probabilities of default, industry trends, macroeconomic factors and other internal metrics. On an ongoing basis, we monitor credit quality based on past-due status as there is a meaningful correlation between the past-due status of customers and the risk of loss. In determining past-due status, we consider the entire finance receivable past due when any installment is over 30 days past due.


(Millions of dollars)	December 31, 2021
	2021		2020		2019		2018		2017		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	4,792	$	2,596	$	1,426	$	630	$	182	$	32	$	182	$	9,840
31-60 days past due	27		32		20		12		4		1		5		101
61-90 days past due	7		8		5		3		1		1		5		30
91+ days past due	9		17		12		13		5		4		5		65

EAME
Current	1,499		836		577		352		140		26		—		3,430
31-60 days past due	5		4		3		1		1		—		—		14
61-90 days past due	3		3		3		1		—		—		—		10
91+ days past due	3		11		2		2		—		2		—		20

Asia/Pacific
Current	1,456		943		420		119		40		3		36		3,017
31-60 days past due	10		14		10		2		—		—		—		36
61-90 days past due	3		7		4		1		—		—		—		15
91+ days past due	2		10		10		3		—		—		—		25

Mining
Current	944		356		332		194		36		161		36		2,059
31-60 days past due	6		—		—		—		—		—		—		6
61-90 days past due	1		—		—		—		4		—		—		5
91+ days past due	—		1		8		9		3		1		—		22

Latin America
Current	617		299		160		70		17		18		—		1,181
31-60 days past due	4		7		3		3		1		—		—		18
61-90 days past due	3		3		1		1		—		—		—		8
91+ days past due	4		9		9		7		7		14		—		50

Caterpillar Power Finance
Current	120		152		119		70		180		104		101		846
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		44		—		44

Total	$	9,515	$	5,308	$	3,124	$	1,493	$	621	$	411	$	370	$	20,842


(Millions of dollars)	December 31, 2020
	2020		2019		2018		2017		2016		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,780	$	2,423	$	1,344	$	522	$	212	$	27	$	89	$	8,397
31-60 days past due	52		49		33		16		7		2		—		159
61-90 days past due	22		25		16		9		2		1		—		75
91+ days past due	14		35		31		20		9		4		2		115

EAME
Current	1,605		931		501		203		60		18		—		3,318
31-60 days past due	5		15		3		2		—		—		—		25
61-90 days past due	1		1		2		1		—		—		—		5
91+ days past due	7		7		12		4		39		43		—		112

Asia/Pacific
Current	1,583		933		412		115		32		6		32		3,113
31-60 days past due	13		23		13		6		—		—		—		55
61-90 days past due	7		11		7		1		—		—		—		26
91+ days past due	4		10		9		3		—		—		—		26

Mining
Current	515		574		289		181		92		151		137		1,939
31-60 days past due	5		—		5		1		—		—		—		11
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		11		8		2		—		—		1		22

Latin America
Current	561		348		151		48		13		34		—		1,155
31-60 days past due	3		6		4		3		—		—		—		16
61-90 days past due	1		7		6		3		2		—		—		19
91+ days past due	2		14		11		24		5		4		—		60

Caterpillar Power Finance
Current	217		199		111		273		99		117		119		1,135
31-60 days past due	—		—		6		—		—		—		—		6
61-90 days past due	—		—		—		—		—		9		—		9
91+ days past due	2		—		20		3		25		79		—		129

Total	$	8,399	$	5,622	$	2,994	$	1,440	$	597	$	495	$	380	$	19,927

Finance receivables in the Customer portfolio segment are substantially secured by collateral, primarily in the form of Caterpillar and other equipment. For those contracts where the borrower is experiencing financial difficulty, repayment of the outstanding amounts is generally expected to be provided through the operation or repossession and sale of the equipment.

As of December 31, 2021, our total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $78 million that was 91+ days past due in Latin America, all of which was originated in 2017. As of December 31, 2020, our total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $81 million that was 91+ days past due in Latin America. Of these past due receivables, $78 million were originated in 2017 and $3 million were originated prior to 2016.


(Millions of dollars)
	December 31, 2021
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables
North America	$	8	$	6	$	5	$	19	$	2,499	$	2,518
EAME	1		—		1		2		844		846
Asia/Pacific	—		—		1		1		620		621
Mining	—		—		—		—		—		—
Latin America	1		1		—		2		472		474
Caterpillar Power Finance	—		—		—		—		3		3
Total	$	10	$	7	$	7	$	24	$	4,438	$	4,462


(Millions of dollars)
	December 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	$	14	$	11	$	6	$	31	$	1,889	$	1,920
EAME	1		—		1		2		632		634
Asia/Pacific	2		1		1		4		581		585
Mining	—		—		—		—		—		—
Latin America	—		—		—		—		501		501
Caterpillar Power Finance	—		—		—		—		6		6
Total	$	17	$	12	$	8	$	37	$	3,609	$	3,646

Recognition of income is suspended and the finance receivable is placed on non-accrual status when management determines that collection of future income is not probable. Contracts on non-accrual status are generally more than 120 days past due or have been restructured in a troubled debt restructuring (TDR). Recognition is resumed and previously suspended income is recognized when the collection of remaining amounts is considered probable. Payments received while the finance receivable is on non-accrual status are applied to interest and principal in accordance with the contractual terms. Interest earned but uncollected prior to the receivable being placed on non-accrual status is written off through Provision for credit losses when, in the judgment of management, it is considered uncollectible.


(Millions of dollars)	December 31, 2021						December 31, 2020
	Amortized Cost						Amortized Cost
	Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing		Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing
North America	$	47	$	9	$	12	$	86	$	1	$	34
EAME	18		1		2		113		1		1
Asia/Pacific	19		—		7		13		—		13
Mining	8		1		14		21		1		—
Latin America	52		4		1		63		—		1
Caterpillar Power Finance	40		11		—		170		17		—
Total	$	184	$	26	$	36	$	466	$	20	$	49

As of December 31, 2021 and 2020, finance receivables in our Dealer portfolio segment on non-accrual status were $78 million and $81 million, respectively, all of which was in Latin America. There were no finance receivables in our Dealer portfolio segment more than 90 days past due and still accruing income as of December 31, 2021 and 2020 and no interest income was recognized on dealer finance receivables on non-accrual status during the years ended December 31, 2021, 2020 and 2019.

A restructuring of a finance receivable constitutes a TDR when the lender grants a concession it would not otherwise consider to a borrower experiencing financial difficulties. Concessions granted may include extended contract maturities, inclusion of interest only periods, below market interest rates, payment deferrals and reduction of principal and/or accrued interest. We individually evaluate TDR contracts and establish an allowance based on the present value of expected future cash flows discounted at the receivable’s effective interest rate, the fair value of the collateral for collateral-dependent receivables or the observable market price of the receivable.

There were no finance receivables modified as TDRs during the years ended December 31, 2021, 2020 and 2019 for the Dealer or Caterpillar Purchased Receivables portfolio segments. Finance receivables in the Customer portfolio segment modified as TDRs for the years ended December 31, were as follows:


(Dollars in millions)	2021				2020				2019
	Pre-TDR Amortized Cost		Post-TDR Amortized Cost		Pre-TDR Amortized Cost		Post-TDR Amortized Cost		Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	$	6	$	6	$	13	$	13	$	11	$	11
EAME	3		3		—		—		17		17
Asia/Pacific	4		4		12		12		—		—
Mining	11		5		35		35		8		8
Latin America	12		12		45		45		5		3
Caterpillar Power Finance	26		22		115		115		168		165
Total	$	62	$	52	$	220	$	220	$	209	$	204


(Dollars in millions)	2021		2020		2019
	Post-TDR Amortized Cost		Post-TDR Amortized Cost		Post-TDR Recorded Investment
North America	$	1	$	8	$	5
EAME	—		10		—
Asia/Pacific	6		2		—
Mining	—		10		—
Latin America	15		1		—
Caterpillar Power Finance	7		18		10
Total	$	29	$	49	$	15