Cat Financial Financing Activities (Tables)

12 Months Ended

Dec. 31, 2018

Contractual maturities of outstanding wholesale inventory receivables



Contractual maturities of outstanding wholesale inventory receivables:
(Millions of dollars)	December 31, 2018
Amounts Due In	Wholesale Loans			Wholesale Leases			Total
2019	$	564		$	70		$	634
2020	229			48			277
2021	157			30			187
2022	71			16			87
2023	21			6			27
Thereafter	16			3			19
Total	1,058			173			1,231
Guaranteed residual value	—			66			66
Unguaranteed residual value	—			35			35
Less: Unearned income	(8		)	(16		)	(24		)
Total	$	1,050		$	258		$	1,308

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, 2018
Amounts Due In	Retail Loans			Retail Leases			Total
2019	$	5,769		$	2,981		$	8,750
2020	3,742			2,026			5,768
2021	2,560			1,073			3,633
2022	1,750			453			2,203
2023	833			166			999
Thereafter	683			56			739
Total	15,337			6,755			22,092
Guaranteed residual value	—			392			392
Unguaranteed residual value	—			822			822
Less: Unearned income	(252		)	(628		)	(880		)
Total	$	15,085		$	7,341		$	22,426

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, 2018
	Customer			Dealer		Total
Allowance for Credit Losses:
Balance at beginning of year	$	353		$	9	$	362
Receivables written off	(235		)	—		(235		)
Recoveries on receivables previously written off	46			—		46
Provision for credit losses	337			12		349
Other	(15		)	—		(15		)
Balance at end of year	$	486		$	21	$	507

Individually evaluated for impairment	$	288		$	14	$	302
Collectively evaluated for impairment	198			7		205
Ending Balance	$	486		$	21	$	507

Recorded Investment in Finance Receivables:
Individually evaluated for impairment	$	858		$	78	$	936
Collectively evaluated for impairment	18,152			3,338		21,490
Ending Balance	$	19,010		$	3,416	$	22,426



(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

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, 2018
	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	$	65	$	18	$	84	$	167	$	7,825	$	7,992	$	14
Europe	19		9		153		181		2,850		3,031		5
Asia Pacific	24		9		8		41		2,409		2,450		5
Mining	28		1		9		38		1,642		1,680		—
Latin America	38		29		71		138		1,421		1,559		—
Caterpillar Power Finance	10		1		384		395		1,903		2,298		—
Dealer
North America	—		—		—		—		1,895		1,895		—
Europe	—		—		—		—		333		333		—
Asia Pacific	—		—		—		—		466		466		—
Mining	—		—		—		—		4		4		—
Latin America	—		—		78		78		638		716		—
Caterpillar Power Finance	—		—		—		—		2		2		—
Total	$	184	$	67	$	787	$	1,038	$	21,388	$	22,426	$	24



(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

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, 2018						December 31, 2017
(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	$	10	$	10	$	—	$	19	$	19	$	—
Europe	1		1		—		45		45		—
Asia Pacific	—		—		—		34		33		—
Mining	33		33		—		121		121		—
Latin America	29		29		—		45		45		—
Caterpillar Power Finance	69		83		—		160		172		—
Total	$	142	$	156	$	—	$	424	$	435	$	—

Impaired Finance Receivables With An Allowance Recorded
North America	$	40	$	41	$	14	$	44	$	43	$	17
Europe	92		92		57		9		8		5
Asia Pacific	4		4		2		8		8		2
Mining	56		55		26		—		—		—
Latin America	75		75		25		95		106		42
Caterpillar Power Finance	449		455		164		362		365		83
Total	$	716	$	722	$	288	$	518	$	530	$	149

Total Impaired Finance Receivables
North America	$	50	$	51	$	14	$	63	$	62	$	17
Europe	93		93		57		54		53		5
Asia Pacific	4		4		2		42		41		2
Mining	89		88		26		121		121		—
Latin America	104		104		25		140		151		42
Caterpillar Power Finance	518		538		164		522		537		83
Total	$	858	$	878	$	288	$	942	$	965	$	149



	Years ended December 31,
	2018				2017				2016
(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	$	16	$	1	$	13	$	1	$	18	$	1
Europe	14		—		48		1		46		1
Asia Pacific	27		3		24		2		2		—
Mining	57		2		126		7		98		4
Latin America	38		2		64		3		47		1
Caterpillar Power Finance	130		7		221		9		270		11
Total	$	282	$	15	$	496	$	23	$	481	$	18

Impaired Finance Receivables With An Allowance Recorded
North America	$	49	$	2	$	49	$	1	$	34	$	—
Europe	53		2		6		—		11		1
Asia Pacific	4		—		31		2		37		3
Mining	46		3		—		—		13		—
Latin America	67		3		99		4		66		2
Caterpillar Power Finance	378		12		180		6		50		1
Total	$	597	$	22	$	365	$	13	$	211	$	7

Total Impaired Finance Receivables
North America	$	65	$	3	$	62	$	2	$	52	$	1
Europe	67		2		54		1		57		2
Asia Pacific	31		3		55		4		39		3
Mining	103		5		126		7		111		4
Latin America	105		5		163		7		113		3
Caterpillar Power Finance	508		19		401		15		320		12
Total	$	879	$	37	$	861	$	36	$	692	$	25

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)	2018		2017
North America	$	77	$	38
Europe	154		37
Asia Pacific	4		10
Mining	50		63
Latin America	106		192
Caterpillar Power Finance	416		343
Total	$	807	$	683

TDR tables

Cat Financial's recorded investment in finance receivables in the Customer portfolio segment modified as TDRs during the years ended December 31, 2018, 2017 and 2016 were as follows:



(Millions of dollars)	Year ended December 31, 2018
	Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	38	$	21	$	21
Europe	—	—		—
Asia Pacific	—	—		—
Mining	1	29		29
Latin America	1	3		3
Caterpillar Power Finance	12	133		99
Total	52	$	186	$	152

	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 Finance ¹	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 America ²	437	118		82
Caterpillar Power Finance	34	196		177
Total	574	$	454	$	387


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 were 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 were related to four customers.

TDRs in the Customer portfolio segment with a payment default (defined as 91+ days past due) during the years ended December 31, 2018, 2017 and 2016 which had been modified within twelve months prior to the default date, were as follows:



(Millions of dollars)	Year ended December 31, 2018			Year ended December 31, 2017			Year ended December 31, 2016
	Number of Contracts	Post-TDR Recorded Investment		Number of Contracts	Post-TDR Recorded Investment		Number of Contracts	Post-TDR Recorded Investment
North America	10	$	10	4	$	3	5	$	2
Europe	—	—		1	—		5	2
Asia Pacific	—	—		4	1		1	—
Latin America¹	3	1		243	17		4	1
Caterpillar Power Finance	3	33		—	—		—	—
Total	16	$	44	252	$	21	15	$	5


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