Cat Financial Financing Activities (Tables)

3 Months Ended

Mar. 31, 2020

Financing Receivable, Past Due [Line Items]

Allowance for credit losses and total finance receivables

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




(Millions of dollars)	March 31, 2020
Allowance for Credit Losses:	Customer			Dealer		Total
Balance at beginning of year	$	375		$	45	$	420
Adjustment to adopt new accounting guidance ¹	12			—		12
Receivables written off	(37		)	—		(37		)
Recoveries on receivables previously written off	7			—		7
Provision for credit losses	60			—		60
Other	(9		)	—		(9		)
Balance at end of period	$	408		$	45	$	453

Individually evaluated	$	176		$	39	$	215
Collectively evaluated	232			6		238
Ending Balance	$	408		$	45	$	453

Finance Receivables:
Individually evaluated	$	570		$	78	$	648
Collectively evaluated	17,436			3,500		20,936
Ending Balance	$	18,006		$	3,578	$	21,584

¹ See Note 2 regarding new accounting guidance related to credit losses.




(Millions of dollars)	December 31, 2019
Allowance for Credit Losses:	Customer			Dealer		Total
Balance at beginning of year	$	486		$	21	$	507
Receivables written off	(281		)	—		(281		)
Recoveries on receivables previously written off	44			—		44
Provision for credit losses	138			24		162
Other	(12		)	—		(12		)
Balance at end of year	$	375		$	45	$	420

Individually evaluated	$	178		$	39	$	217
Collectively evaluated	197			6		203
Ending Balance	$	375		$	45	$	420

Finance Receivables:
Individually evaluated	$	594		$	78	$	672
Collectively evaluated	18,093			3,632		21,725
Ending Balance	$	18,687		$	3,710	$	22,397

Aging related to finance receivables

The table below summarizes the aging category of Cat Financial's amortized cost of finance receivables in the Customer portfolio segment by origination year:




(Millions of dollars)	March 31, 2020
	2020		2019		2018		2017		2016		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	931	$	3,274	$	2,010	$	952	$	455	$	155	$	157	$	7,934
31-60 days past due	6		55		52		29		21		5		—		168
61-90 days past due	—		11		11		10		3		1		—		36
91+ days past due	—		14		21		15		10		6		—		66
EAME
Current	249		1,164		773		358		133		44		—		2,721
31-60 days past due	2		11		5		4		2		—		—		24
61-90 days past due	—		7		3		2		1		1		—		14
91+ days past due	—		8		22		23		53		61		—		167
Asia/Pacific
Current	217		1,021		570		163		21		9		—		2,001
31-60 days past due	2		26		25		9		—		1		—		63
61-90 days past due	—		14		14		5		1		—		—		34
91+ days past due	—		15		17		8		1		—		—		41
Mining
Current	72		701		413		235		139		215		199		1,974
31-60 days past due	—		—		1		—		—		1		—		2
61-90 days past due	—		3		12		6		—		—		—		21
91+ days past due	—		12		12		23		—		—		1		48
Latin America
Current	175		483		253		88		23		49		—		1,071
31-60 days past due	—		15		10		8		4		2		—		39
61-90 days past due	—		5		7		5		2		—		—		19
91+ days past due	—		11		29		24		9		7		—		80
Caterpillar Power Finance
Current	3		273		221		287		137		158		160		1,239
31-60 days past due	—		—		11		—		4		11		—		26
61-90 days past due	—		—		—		1		—		—		—		1
91+ days past due	—		—		20		11		37		149		—		217
Total Customer	$	1,657	$	7,123	$	4,512	$	2,266	$	1,056	$	875	$	517	$	18,006

The table below summarizes Cat Financial's recorded investment in finance receivables by aging category.




	December 31, 2019
(Millions of dollars)	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables
Customer
North America	$	72	$	23	$	55	$	150	$	8,002	$	8,152
EAME	30		31		141		202		2,882		3,084
Asia Pacific	40		14		29		83		2,181		2,264
Mining	5		—		19		24		2,266		2,290
Latin America	41		23		80		144		1,089		1,233
Caterpillar Power Finance	10		10		225		245		1,419		1,664
Dealer
North America	—		—		—		—		2,136		2,136
EAME	—		—		—		—		342		342
Asia Pacific	—		—		—		—		437		437
Mining	—		—		—		—		4		4
Latin America	—		—		78		78		712		790
Caterpillar Power Finance	—		—		—		—		1		1
Total	$	198	$	101	$	627	$	926	$	21,471	$	22,397

Impaired finance receivables

In Cat Financial’s Customer portfolio segment, impaired finance receivables and the related unpaid principal balances and allowance were as follows:



	December 31, 2019
(Millions of dollars)	Recorded Investment		Unpaid Principal Balance		Related Allowance
Impaired Finance Receivables With No Allowance Recorded
North America	$	6	$	6	$	—
EAME	—		—		—
Asia Pacific	—		—		—
Mining	22		22		—
Latin America	8		8		—
Caterpillar Power Finance	58		58		—
Total	$	94	$	94	$	—

Impaired Finance Receivables With An Allowance Recorded
North America	$	30	$	30	$	11
EAME	61		61		29
Asia Pacific	8		8		2
Mining	37		36		9
Latin America	58		58		20
Caterpillar Power Finance	306		319		107
Total	$	500	$	512	$	178

Total Impaired Finance Receivables
North America	$	36	$	36	$	11
EAME	61		61		29
Asia Pacific	8		8		2
Mining	59		58		9
Latin America	66		66		20
Caterpillar Power Finance	364		377		107
Total	$	594	$	606	$	178



	Three Months Ended March 31, 2019
(Millions of dollars)	Average Recorded Investment		Interest Income Recognized
Impaired Finance Receivables With No Allowance Recorded
North America	$	10	$	—
EAME	1		—
Asia Pacific	—		—
Mining	31		—
Latin America	24		—
Caterpillar Power Finance	60		1
Total	$	126	$	1

Impaired Finance Receivables With An Allowance Recorded
North America	$	40	$	1
EAME	94		1
Asia Pacific	7		—
Mining	43		1
Latin America	77		1
Caterpillar Power Finance	451		3
Total	$	712	$	7

Total Impaired Finance Receivables
North America	$	50	$	1
EAME	95		1
Asia Pacific	7		—
Mining	74		1
Latin America	101		1
Caterpillar Power Finance	511		4
Total	$	838	$	8

Investment in finance receivables on non-accrual status

In Cat Financial's Customer portfolio segment, finance receivables which were on non-accrual status and finance receivables over 90 days past due and still accruing income were as follows:




	March 31, 2020
	Amortized Cost
(Millions of dollars)	Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing

North America	$	50	$	—	$	20
EAME	168		1		5
Asia Pacific	29		—		12
Mining	40		—		9
Latin America	87		—		—
Caterpillar Power Finance	329		—		7
Total	$	703	$	1	$	53

There was less than $1 million of interest income recognized during the three months ended March 31, 2020 for customer finance receivables on non-accrual status.




(Millions of dollars)	December 31, 2019
	Recorded Investment
	Non-accrual Finance Receivables		91+ Still Accruing
North America	$	44	$	15
EAME	165		4
Asia Pacific	21		8
Mining	47		—
Latin America	89		2
Caterpillar Power Finance	361		—
Total	$	727	$	29

Finance receivables modified as TDRs

Cat Financial’s finance receivables in the Customer portfolio segment modified as TDRs were as follows:




	Three Months Ended March 31, 2020					Three Months Ended March 31, 2019
(Dollars in millions)	Number of Contracts	Pre-TDR Amortized Cost		Post-TDR Amortized Cost		Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
EAME	0	$	—	$	—	17	$	7	$	7
Latin America	5	2		2		—	—		—
Caterpillar Power Finance	0	—		—		8	51		50
Total	5	$	2	$	2	25	$	58	$	57

TDRs in the Customer portfolio segment with a payment default (defined as 91+ days past due) which had been modified within twelve months prior to the default date, were as follows:





	Three Months Ended March 31, 2020			Three Months Ended March 31, 2019
(Dollars in millions)	Number of Contracts	Post-TDR Amortized Cost		Number of Contracts	Post-TDR Recorded Investment
Customer
EAME	2	$	10	—	$	—
Latin America	3	1		—	—
Total	5	$	11	—	$	—