Finance Receivables (Tables)

3 Months Ended

Mar. 31, 2017

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



	March 31, 2017			December 31, 2016
Retail finance receivables
Retail finance receivables, collectively evaluated for impairment, net of fees^(a)	$	34,047		$	30,989
Retail finance receivables, individually evaluated for impairment, net of fees	1,957			1,921
Total retail finance receivables, net of fees^(b)	36,004			32,910
Less: allowance for loan losses - collective	(568		)	(517		)
Less: allowance for loan losses - specific	(284		)	(276		)
Total retail finance receivables, net	35,152			32,117
Commercial finance receivables
Commercial finance receivables, collectively evaluated for impairment, net of fees	11,725			11,053
Commercial finance receivables, individually evaluated for impairment, net of fees	87			70
Total commercial finance receivables, net of fees	11,812			11,123
Less: allowance for loan losses - collective	(46		)	(43		)
Less: allowance for loan losses - specific	(8		)	(7		)
Total commercial finance receivables, net	11,758			11,073
Total finance receivables, net	$	46,910		$	43,190
Fair value of finance receivables	$	46,722		$	43,140

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(a) Includes $1.6 billion and $1.3 billion of direct-finance leases at March 31, 2017 and December 31, 2016.

(b) Net of unearned income, unamortized premiums and discounts, and deferred fees and costs of $199 million and $191 million at March 31, 2017 and December 31, 2016.

Allowance for Credit Losses on Financing Receivables



Retail Finance Receivables	Three Months Ended March 31,
	2017			2016
Allowance for retail loan losses beginning balance	$	793		$	735
Provision for loan losses	213			197
Charge-offs	(307		)	(293		)
Recoveries	147			150
Foreign currency translation	6			7
Allowance for retail loan losses ending balance	$	852		$	796

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:



	March 31, 2017				December 31, 2016
	Amount		Percent		Amount		Percent
Prime - FICO Score 680 and greater	$	10,062	41.3	%	$	7,923	36.4	%
Near-prime - FICO Score 620 to 679	3,742		15.4		3,468		15.9
Sub-prime - FICO Score less than 620	10,550		43.3		10,395		47.7
Balance at end of period	$	24,354	100.0	%	$	21,786	100.0	%

Past Due Financing Receivables

The following is a consolidated summary of the contractual amounts of delinquent retail finance receivables, which is not significantly different than the recorded investment for such receivables.



	March 31, 2017				March 31, 2016
	Total		Percent of Contractual Amount Due		Total		Percent of Contractual Amount Due
31 - 60 days	$	1,006	2.8	%	$	963	3.1	%
Greater than 60 days	441		1.2		421		1.4
Total finance receivables more than 30 days delinquent	1,447		4.0		1,384		4.5
In repossession	51		0.1		48		0.2
Total finance receivables more than 30 days delinquent or in repossession	$	1,498	4.1	%	$	1,432	4.7	%

Troubled Debt Restructurings on Financing Receivables

At March 31, 2017 and December 31, 2016, 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:



	March 31, 2017			December 31, 2016
Outstanding recorded investment	$	1,957		$	1,920
Less: allowance for loan losses	(284		)	(276		)
Outstanding recorded investment, net of allowance	$	1,673		$	1,644
Unpaid principal balance	$	1,998		$	1,967

Additional information about loans classified as TDRs is presented below:



	Three Months Ended March 31,
	2017		2016
Average outstanding recorded investment	$	1,939	$	1,636
Finance charge income recognized	$	60	$	51
Number of loans classified as TDRs during the period	16,474		14,646
Recorded investment of loans classified as TDRs during the period	$	287	$	254

Financing Receivable Credit Quality Indicators for Commercial Lending

The following table summarizes the credit risk profile by dealer risk rating of commercial finance receivables:



			March 31, 2017				December 31, 2016
			Amount		Percent		Amount		Percent
Group I	-	Dealers with superior financial metrics	$	1,664	14.1	%	$	1,596	14.3	%
Group II	-	Dealers with strong financial metrics	3,804		32.2		3,445		31.0
Group III	-	Dealers with fair financial metrics	4,171		35.3		4,039		36.3
Group IV	-	Dealers with weak financial metrics	1,441		12.2		1,231		11.1
Group V	-	Dealers warranting special mention due to potential weaknesses	548		4.6		642		5.8
Group VI	-	Dealers with loans classified as substandard, doubtful or impaired	184		1.6		170		1.5
Balance at end of period			$	11,812	100.0	%	$	11,123	100.0	%