Cat Financial Financing Activities (Tables)

6 Months Ended

Jun. 30, 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)	June 30, 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	(73		)	—		(73		)
Recoveries on receivables previously written off	13			—		13
Provision for credit losses	146			—		146
Other	(6		)	—		(6		)
Balance at end of period	$	467		$	45	$	512

Individually evaluated	$	184		$	39	$	223
Collectively evaluated	283			6		289
Ending Balance	$	467		$	45	$	512

Finance Receivables:
Individually evaluated	$	601		$	78	$	679
Collectively evaluated	17,869			3,305		21,174
Ending Balance	$	18,470		$	3,383	$	21,853

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 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

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)	June 30, 2020
	2020		2019		2018		2017		2016		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	1,854	$	3,032	$	1,831	$	814	$	374	$	97	$	102	$	8,104
31-60 days past due	13		28		20		15		5		2		—		83
61-90 days past due	4		15		14		8		3		1		—		45
91+ days past due	3		24		31		19		15		6		—		98
EAME
Current	545		1,104		727		336		113		33		—		2,858
31-60 days past due	5		13		12		5		2		—		—		37
61-90 days past due	6		7		2		2		—		—		—		17
91+ days past due	—		11		14		15		51		62		—		153
Asia/Pacific
Current	696		941		502		126		17		7		—		2,289
31-60 days past due	4		22		18		5		—		—		—		49
61-90 days past due	2		11		8		3		—		—		—		24
91+ days past due	1		19		18		5		1		—		—		44
Mining
Current	198		655		375		207		124		188		270		2,017
31-60 days past due	—		—		13		5		—		—		—		18
61-90 days past due	—		1		3		—		—		—		—		4
91+ days past due	—		12		3		25		—		—		1		41
Latin America
Current	286		440		214		74		22		27		—		1,063
31-60 days past due	2		6		8		1		1		1		—		19
61-90 days past due	—		3		9		5		1		—		—		18
91+ days past due	—		19		40		29		8		6		—		102
Caterpillar Power Finance
Current	106		250		172		278		99		143		134		1,182
31-60 days past due	—		—		2		—		—		—		—		2
61-90 days past due	—		—		—		—		—		2		—		2
91+ days past due	—		—		20		13		33		135		—		201
Total Customer	$	3,725	$	6,613	$	4,056	$	1,990	$	869	$	710	$	507	$	18,470

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 June 30, 2019				Six Months Ended June 30, 2019
(Millions of dollars)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Impaired Finance Receivables With No Allowance Recorded
North America	$	10	$	—	$	10	$	—
EAME	1		—		1		—
Asia Pacific	—		—		—		—
Mining	29		1		30		1
Latin America	20		1		23		1
Caterpillar Power Finance	41		—		51		1
Total	$	101	$	2	$	115	$	3

Impaired Finance Receivables With An Allowance Recorded
North America	$	35	$	—	$	37	$	1
EAME	94		—		94		1
Asia Pacific	9		—		8		—
Mining	39		—		42		1
Latin America	74		2		75		3
Caterpillar Power Finance	443		4		446		7
Total	$	694	$	6	$	702	$	13

Total Impaired Finance Receivables
North America	$	45	$	—	$	47	$	1
EAME	95		—		95		1
Asia Pacific	9		—		8		—
Mining	68		1		72		2
Latin America	94		3		98		4
Caterpillar Power Finance	484		4		497		8
Total	$	795	$	8	$	817	$	16

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:




	June 30, 2020
	Amortized Cost
(Millions of dollars)	Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing

North America	$	78	$	1	$	30
EAME	168		—		5
Asia Pacific	32		—		12
Mining	43		—		—
Latin America	106		3		2
Caterpillar Power Finance	302		21		—
Total	$	729	$	25	$	49

There was $1 million and $5 million of interest income recognized during the three and six months ended June 30, 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 June 30, 2020					Three Months Ended June 30, 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
North America	10	$	9	$	9	8	$	5	$	4
EAME	—	—		—		2	10		10
Asia Pacific⁽¹⁾	104	8		8		—	—		—
Mining⁽²⁾	40	17		17		1	6		6
Latin America	1	—		—		4	2		2
Caterpillar Power Finance	6	37		37		7	47		47
Total	161	$	71	$	71	22	$	70	$	69

	Six Months Ended June 30, 2020					Six Months Ended June 30, 2019
	Number of Contracts	Pre-TDR Amortized Cost		Post-TDR Amortized Cost		Number of Contracts	Pre-TDR Recorded Investment		Post-TDR Recorded Investment
North America	10	$	9	$	9	8	$	5	$	4
EAME	—	—		—		19	17		17
Asia Pacific	104	8		8		—	—		—
Mining	40	17		17		1	6		6
Latin America	6	2		2		4	2		2
Caterpillar Power Finance	6	37		37		15	98		97
Total	166	$	73	$	73	47	$	128	$	126

⁽¹⁾ In Asia/Pacific, during the three months ended June 30, 2020, 104 contracts with a pre-TDR amortized cost of $8 million and a post-TDR amortized cost of $8 million were related to four customers.

⁽²⁾ In Mining, during the three months ended June 30, 2020, 40 contracts with a pre-TDR amortized cost of $17 million and a post-TDR amortized cost of $17 million were related to two customers.

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 June 30, 2020			Three Months Ended June 30, 2019
(Dollars in millions)	Number of Contracts	Post-TDR Amortized Cost		Number of Contracts	Post-TDR Recorded Investment
North America	1	$	—	—	$	—
Total	1	$	—	—	$	—




	Six Months Ended June 30, 2020			Six Months Ended June 30, 2019
	Number of Contracts	Post-TDR Amortized Cost		Number of Contracts	Post-TDR Recorded Investment
North America	1	$	—	—	$	—
EAME	2	10		—	—
Latin America	3	1		—	—
Total	6	$	11	—	$	—