Cat Financial Financing Activities (Tables)

12 Months Ended

Dec. 31, 2017

Contractual maturities of outstanding wholesale inventory receivables



Contractual maturities of outstanding wholesale inventory receivables:
(Millions of dollars)	December 31, 2017
Amounts Due In	Wholesale Installment Contracts			Wholesale Finance Leases			Wholesale Notes			Total
2018	$	164		$	67		$	527		$	758
2019	114			49			127			290
2020	75			28			83			186
2021	36			17			9			62
2022	11			7			5			23
Thereafter	—			3			11			14
	400			171			762			1,333
Guaranteed residual value	—			54			—			54
Unguaranteed residual value	—			37			—			37
Less: Unearned income	(7		)	(17		)	(2		)	(26		)
Total	$	393		$	245		$	760		$	1,398

Contractual maturities of outstanding finance receivables

Finance receivables are receivables of Cat Financial and are reported in Statement 3 net of an allowance for credit losses.



Contractual maturities of outstanding finance receivables:
(Millions of dollars)	December 31, 2017
Amounts Due In	Retail Installment Contracts			Retail Finance Leases			Retail Notes			Total
2018	$	2,644		$	2,713		$	3,511		$	8,868
2019	1,925			1,887			1,504			5,316
2020	1,212			1,059			1,439			3,710
2021	595			432			1,157			2,184
2022	201			148			864			1,213
Thereafter	26			56			846			928
	6,603			6,295			9,321			22,219
Guaranteed residual value	—			402			—			402
Unguaranteed residual value	—			804			—			804
Less: Unearned income	(145		)	(588		)	(60		)	(793		)
Total	$	6,458		$	6,913		$	9,261		$	22,632

Allowance for credit losses and recorded investment in finance receivables

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



(Millions of dollars)	December 31, 2017
	Customer			Dealer			Total
Allowance for Credit Losses:
Balance at beginning of year	$	331		$	10		$	341
Receivables written off	(157		)	—			(157		)
Recoveries on receivables previously written off	43			—			43
Provision for credit losses	129			(1		)	128
Other	7			—			7
Balance at end of year	$	353		$	9		$	362

Individually evaluated for impairment	$	149		$	—		$	149
Collectively evaluated for impairment	204			9			213
Ending Balance	$	353		$	9		$	362

Recorded Investment in Finance Receivables:
Individually evaluated for impairment	$	942		$	—		$	942
Collectively evaluated for impairment	18,226			3,464			21,690
Ending Balance	$	19,168		$	3,464		$	22,632



(Millions of dollars)	December 31, 2016
	Customer			Dealer		Total
Allowance for Credit Losses:
Balance at beginning of year	$	327		$	9	$	336
Receivables written off	(158		)	—		(158		)
Recoveries on receivables previously written off	35			—		35
Provision for credit losses	132			1		133
Other	(5		)	—		(5		)
Balance at end of year	$	331		$	10	$	341

Individually evaluated for impairment	$	85		$	—	$	85
Collectively evaluated for impairment	246			10		256
Ending Balance	$	331		$	10	$	341

Recorded Investment in Finance Receivables:
Individually evaluated for impairment	$	786		$	—	$	786
Collectively evaluated for impairment	18,236			3,375		21,611
Ending Balance	$	19,022		$	3,375	$	22,397

In determining past-due status, Cat Financial considers the entire recorded investment in finance receivable past due when any installment is over 30 days past due. The tables below summarize the recorded investment of finance receivables by aging category.



(Millions of dollars)	December 31, 2017
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables		91+ Still Accruing
Customer
North America	$	71	$	15	$	42	$	128	$	7,950	$	8,078	$	8
Europe	21		10		46		77		2,718		2,795		13
Asia Pacific	13		7		14		34		2,009		2,043		5
Mining	3		1		60		64		1,751		1,815		9
Latin America	37		55		142		234		1,531		1,765		—
Caterpillar Power Finance	20		32		144		196		2,476		2,672		1
Dealer
North America	—		—		—		—		1,920		1,920		—
Europe	—		—		—		—		222		222		—
Asia Pacific	—		—		—		—		553		553		—
Mining	—		—		—		—		4		4		—
Latin America	—		72		—		72		691		763		—
Caterpillar Power Finance	—		—		—		—		2		2		—
Total	$	165	$	192	$	448	$	805	$	21,827	$	22,632	$	36



(Millions of dollars)	December 31, 2016
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables		91+ Still Accruing
Customer
North America	$	50	$	16	$	59	$	125	$	7,938	$	8,063	$	5
Europe	16		12		39		67		2,388		2,455		6
Asia Pacific	17		7		15		39		1,435		1,474		4
Mining	3		2		63		68		1,756		1,824		2
Latin America	40		33		214		287		1,808		2,095		—
Caterpillar Power Finance	11		9		73		93		3,018		3,111		1
Dealer
North America	—		—		—		—		1,916		1,916		—
Europe	—		—		—		—		161		161		—
Asia Pacific	—		—		—		—		541		541		—
Mining	—		—		—		—		3		3		—
Latin America	—		—		—		—		752		752		—
Caterpillar Power Finance	—		—		—		—		2		2		—
Total	$	137	$	79	$	463	$	679	$	21,718	$	22,397	$	18

Impaired finance receivables

Cat Financial’s recorded investment in impaired finance receivables and the related unpaid principal balances and allowance for the Customer portfolio segment were as follows:



	December 31, 2017						December 31, 2016
(Millions of dollars)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Impaired Finance Receivables With No Allowance Recorded
North America	$	19	$	19	$	—	$	10	$	10	$	—
Europe	45		45		—		49		48		—
Asia Pacific	34		33		—		3		2		—
Mining	121		121		—		129		129		—
Latin America	45		45		—		68		68		—
Caterpillar Power Finance	160		172		—		271		271		—
Total	$	424	$	435	$	—	$	530	$	528	$	—

Impaired Finance Receivables With An Allowance Recorded
North America	$	44	$	43	$	17	$	61	$	60	$	22
Europe	9		8		5		7		7		3
Asia Pacific	8		8		2		50		50		8
Mining	—		—		—		—		—		—
Latin America	95		106		42		93		104		34
Caterpillar Power Finance	362		365		83		45		44		18
Total	$	518	$	530	$	149	$	256	$	265	$	85

Total Impaired Finance Receivables
North America	$	63	$	62	$	17	$	71	$	70	$	22
Europe	54		53		5		56		55		3
Asia Pacific	42		41		2		53		52		8
Mining	121		121		—		129		129		—
Latin America	140		151		42		161		172		34
Caterpillar Power Finance	522		537		83		316		315		18
Total	$	942	$	965	$	149	$	786	$	793	$	85



	Years ended December 31,
	2017				2016				2015
(Millions of dollars)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Impaired Finance Receivables With No Allowance Recorded
North America	$	13	$	1	$	18	$	1	$	12	$	1
Europe	48		1		46		1		42		1
Asia Pacific	24		2		2		—		2		—
Mining	126		7		98		4		75		3
Latin America	64		3		47		1		31		—
Caterpillar Power Finance	221		9		270		11		170		5
Total	$	496	$	23	$	481	$	18	$	332	$	10

Impaired Finance Receivables With An Allowance Recorded
North America	$	49	$	1	$	34	$	—	$	9	$	—
Europe	6		—		11		1		14		1
Asia Pacific	31		2		37		3		35		2
Mining	—		—		13		—		39		1
Latin America	99		4		66		2		56		3
Caterpillar Power Finance	180		6		50		1		115		3
Total	$	365	$	13	$	211	$	7	$	268	$	10

Total Impaired Finance Receivables
North America	$	62	$	2	$	52	$	1	$	21	$	1
Europe	54		1		57		2		56		2
Asia Pacific	55		4		39		3		37		2
Mining	126		7		111		4		114		4
Latin America	163		7		113		3		87		3
Caterpillar Power Finance	401		15		320		12		285		8
Total	$	861	$	36	$	692	$	25	$	600	$	20

Investment in loans and finance leases on non-accrual status

The recorded investment in Customer finance receivable on non-accrual status was as follows:



	December 31,
(Millions of dollars)	2017		2016
North America	$	38	$	66
Europe	37		35
Asia Pacific	10		12
Mining	63		69
Latin America	192		307
Caterpillar Power Finance	343		90
Total	$	683	$	579

Loans and finance receivables modified as TDRs

TDRs in the Customer portfolio segment with a payment default (defined as 91+ days past due) during the years ended December 31, 2017, 2016 and 2015 which had been modified within twelve months prior to the default date, were as follows:



(Millions of dollars)	Year ended December 31, 2017			Year ended December 31, 2016			Year ended December 31, 2015
	Number of Contracts	Post-TDR Recorded Investment		Number of Contracts	Post-TDR Recorded Investment		Number of Contracts	Post-TDR Recorded Investment
North America	4	$	3	5	$	2	7	$	1
Europe	1	—		5	2		—	—
Asia Pacific	4	1		1	—		—	—
Latin America¹	243	17		4	1		12	1
Total	252	$	21	15	$	5	19	$	2


¹	In Latin America, 238 contracts with a Post-TDR recorded investment of $16 million are related to two customers for the year ended December 31, 2017.

Cat Financial's recorded investment in finance receivables in the Customer portfolio segment modified as TDRs during the years ended December 31, 2017, 2016 and 2015 were as follows:



(Millions of dollars)	Year ended December 31, 2017
	Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	43	$	34	$	35
Europe	4	1		1
Asia Pacific	10	39		31
Mining	2	57		56
Latin America	17	26		27
Caterpillar Power Finance¹	68	422		407
Total	144	$	579	$	557

	Year ended December 31, 2016
	Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	25	$	25	$	25
Europe	43	12		9
Asia Pacific	31	29		28
Mining	4	74		66
Latin America²	437	118		82
Caterpillar Power Finance	34	196		177
Total	574	$	454	$	387

	Year ended December 31, 2015
	Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	14	$	1	$	1
Europe	23	2		2
Asia Pacific	21	26		26
Mining	4	65		65
Latin America	11	1		2
Caterpillar Power Finance	21	259		242
Total	94	$	354	$	338


¹	In Caterpillar Power Finance, 48 contracts with a pre-TDR recorded investment of $265 million and a post-TDR recorded investment of $258 million are related to six customers.


²	In Latin America, 321 contracts with a pre-TDR recorded investment of $94 million and a post-TDR recorded investment of $64 million are related to four customers.

TDRs with a payment default which had been modified within twelve months prior to the default date



(Millions of dollars)	Year ended December 31, 2017			Year ended December 31, 2016			Year ended December 31, 2015
	Number of Contracts	Post-TDR Recorded Investment		Number of Contracts	Post-TDR Recorded Investment		Number of Contracts	Post-TDR Recorded Investment
North America	4	$	3	5	$	2	7	$	1
Europe	1	—		5	2		—	—
Asia Pacific	4	1		1	—		—	—
Latin America¹	243	17		4	1		12	1
Total	252	$	21	15	$	5	19	$	2


¹	In Latin America, 238 contracts with a Post-TDR recorded investment of $16 million are related to two customers for the year ended December 31, 2017.

Cat Financial's recorded investment in finance receivables in the Customer portfolio segment modified as TDRs during the years ended December 31, 2017, 2016 and 2015 were as follows:



(Millions of dollars)	Year ended December 31, 2017
	Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	43	$	34	$	35
Europe	4	1		1
Asia Pacific	10	39		31
Mining	2	57		56
Latin America	17	26		27
Caterpillar Power Finance¹	68	422		407
Total	144	$	579	$	557

	Year ended December 31, 2016
	Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	25	$	25	$	25
Europe	43	12		9
Asia Pacific	31	29		28
Mining	4	74		66
Latin America²	437	118		82
Caterpillar Power Finance	34	196		177
Total	574	$	454	$	387

	Year ended December 31, 2015
	Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	14	$	1	$	1
Europe	23	2		2
Asia Pacific	21	26		26
Mining	4	65		65
Latin America	11	1		2
Caterpillar Power Finance	21	259		242
Total	94	$	354	$	338


¹	In Caterpillar Power Finance, 48 contracts with a pre-TDR recorded investment of $265 million and a post-TDR recorded investment of $258 million are related to six customers.


²	In Latin America, 321 contracts with a pre-TDR recorded investment of $94 million and a post-TDR recorded investment of $64 million are related to four customers.