Finance Receivables (Tables)

9 Months Ended

Sep. 30, 2016

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]



	September 30, 2016			December 31, 2015
Retail finance receivables
Retail finance receivables, collectively evaluated for impairment, net of fees^(a)	$	30,408		$	27,512
Retail finance receivables, individually evaluated for impairment, net of fees	1,838			1,612
Total retail finance receivables^(b)	32,246			29,124
Less: allowance for loan losses - collective	(566		)	(515		)
Less: allowance for loan losses - specific	(256		)	(220		)
Total retail finance receivables, net	31,424			28,389
Commercial finance receivables
Commercial finance receivables, collectively evaluated for impairment, net of fees	9,704			8,357
Commercial finance receivables, individually evaluated for impairment, net of fees	56			82
Total commercial finance receivables	9,760			8,439
Less: allowance for loan losses - collective	(46		)	(38		)
Less: allowance for loan losses - specific	(6		)	(9		)
Total commercial finance receivables, net	9,708			8,392
Total finance receivables, net	$	41,132		$	36,781
Fair value of finance receivables	$	41,530		$	36,937

________________

(a) Includes $1.3 billion and $1.1 billion of direct-financing leases at September 30, 2016 and December 31, 2015.

(b) Net of unearned income, unamortized premiums and discounts, and deferred fees and costs of $200 million and $179 million at September 30, 2016 and December 31, 2015.

Finance Receivables Summary



Retail Finance Receivables	Nine Months Ended September 30,
	2016			2015
Retail finance receivables beginning balance	$	29,124		$	25,623
Purchases of retail finance receivables	13,397			13,107
Principal collections and other	(9,479		)	(8,136		)
Charge-offs	(853		)	(710		)
Foreign currency translation	57			(1,897		)
Retail finance receivables ending balance	$	32,246		$	27,987

Allowance for Credit Losses on Financing Receivables



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Allowance for retail loan losses beginning balance	$	814		$	721		$	735		$	655
Provision for loan losses	170			141			515			437
Charge-offs	(294		)	(256		)	(853		)	(710		)
Recoveries	134			124			417			357
Foreign currency translation	(2		)	(12		)	8			(21		)
Allowance for retail loan losses ending balance	$	822		$	718		$	822		$	718

Financing Receivable Credit Quality Indicators

A summary of the credit risk profile by FICO score band or equivalent scores, determined at origination, of the retail finance receivables in the North America Segment is as follows:



	September 30, 2016				December 31, 2015
	Amount		Percent		Amount		Percent
Prime - FICO Score 680 and greater	$	6,902	33.2	%	$	4,418	24.4	%
Near-prime - FICO Score 620 to 679	3,305		15.9		2,890		15.9
Sub-prime - FICO Score less than 620	10,559		50.9		10,840		59.7
Balance at end of period	$	20,766	100.0	%	$	18,148	100.0	%

Past Due Financing Receivables

The following is a consolidated summary of the contractual amounts of retail finance receivables, which is not significantly different than recorded investment, that are (i) more than 30 days delinquent, but not yet in repossession, and (ii) in repossession, but not yet charged off:



	September 30, 2016				September 30, 2015
	Total		Percent of Contractual Amount Due		Total		Percent of Contractual Amount Due
31 - 60 days	$	1,127	3.5	%	$	1,137	4.0	%
Greater than 60 days	503		1.5		454		1.6
Total finance receivables more than 30 days delinquent	1,630		5.0		1,591		5.6
In repossession	60		0.2		53		0.2
Total finance receivables more than 30 days delinquent or in repossession	$	1,690	5.2	%	$	1,644	5.8	%

Troubled Debt Restructurings on Financing Receivables

At September 30, 2016 and December 31, 2015, the outstanding balance of retail finance receivables in the International Segment determined to be TDRs was insignificant; therefore, the following information is presented with regard to the TDRs in the North America Segment only. The outstanding recorded investment for retail finance receivables that are considered to be TDRs and the related allowance is presented below:



	September 30, 2016			December 31, 2015
Outstanding recorded investment	$	1,837		$	1,612
Less: allowance for loan losses	(256		)	(220		)
Outstanding recorded investment, net of allowance	$	1,581		$	1,392
Unpaid principal balance	$	1,884		$	1,642

Additional information about loans classified as TDRs is presented below:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Average outstanding recorded investment	$	1,785	$	1,403	$	1,725	$	1,361
Finance charge income recognized	$	55	$	41	$	156	$	122
Number of loans classified as TDRs during the period	18,548		16,122		49,327		42,246
Recorded investment of loans classified as TDRs during the period	$	315	$	270	$	846	$	716

Summary of Activity in Commercial Finance Receivable Portfolio



Commercial Finance Receivables	Nine Months Ended September 30,
	2016			2015
Commercial finance receivables beginning balance	$	8,439		$	8,072
Net funding	1,411			292
Charge-offs	—			—
Foreign currency translation	(90		)	(519		)
Commercial finance receivables ending balance	$	9,760		$	7,845

Financing Receivable Credit Quality Indicators for Commercial Lending

A summary of the credit risk profile by dealer risk rating of the commercial finance receivables is as follows:



			September 30, 2016				December 31, 2015
			Amount		Percent		Amount		Percent
Group I	-	Dealers with superior financial metrics	$	1,531	15.7	%	$	1,299	15.4	%
Group II	-	Dealers with strong financial metrics	3,026		31.0		2,648		31.4
Group III	-	Dealers with fair financial metrics	3,282		33.6		2,703		32.0
Group IV	-	Dealers with weak financial metrics	1,164		11.9		1,100		13.0
Group V	-	Dealers warranting special mention due to potential weaknesses	611		6.3		505		6.0
Group VI	-	Dealers with loans classified as substandard, doubtful or impaired	146		1.5		184		2.2
Ending balance			$	9,760	100.0	%	$	8,439	100.0	%