Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Entity Information | ||
Entity Registrant Name | CATERPILLAR FINANCIAL SERVICES CORPORATION | |
Entity Central Index Key | 0000764764 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1 | |
Entity Current Reporting Status | Yes |
Consolidated Statements of Prof
Consolidated Statements of Profit - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Revenues: | |||||
Retail finance | $ 346 | $ 330 | $ 1,031 | $ 975 | |
Operating lease | 262 | 259 | 777 | 760 | |
Wholesale finance | 125 | 108 | 375 | 304 | |
Other, net | 15 | 38 | 58 | 109 | |
Total revenues | 748 | 735 | 2,241 | 2,148 | |
Expenses: | |||||
Interest | 198 | 194 | 599 | 558 | |
Depreciation on equipment leased to others | 205 | 208 | 611 | 616 | |
General, operating and administrative | 128 | 109 | 378 | 326 | |
Provision for credit losses | 20 | 47 | 144 | 218 | |
Other | 9 | 11 | 28 | 28 | |
Total expenses | 560 | 569 | 1,760 | 1,746 | |
Other income (expense) | (4) | (3) | (14) | (15) | |
Profit before income taxes | 184 | 163 | 467 | 387 | |
Provision for income taxes | 49 | 32 | 144 | 85 | |
Profit of consolidated companies | 135 | 131 | 323 | 302 | |
Less: Profit attributable to noncontrolling interests | 6 | 6 | 17 | 15 | |
Profit | [1] | $ 129 | $ 125 | $ 306 | $ 287 |
[1] | Profit attributable to Caterpillar Financial Services Corporation. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Profit of consolidated companies | $ 135 | $ 131 | $ 323 | $ 302 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation, net of tax (expense)/benefit | (165) | (50) | (132) | (241) |
Derivative financial instruments: | ||||
Gains (losses) deferred, net of tax (expense)/benefit | 68 | 42 | 46 | 115 |
(Gains) losses reclassified to earnings, net of tax expense/(benefit) | (73) | (42) | (87) | (118) |
Total Other comprehensive income (loss), net of tax | (170) | (50) | (173) | (244) |
Comprehensive income (loss) | (35) | 81 | 150 | 58 |
Less: Comprehensive income (loss) attributable to the noncontrolling interests | 1 | 0 | 12 | 7 |
Comprehensive income (loss) attributable to Caterpillar Financial Services Corporation | $ (36) | $ 81 | $ 138 | $ 51 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation, tax | $ (22) | $ (3) | $ (19) | $ (18) |
Derivative financial instruments: | ||||
Gains (losses) deferred, tax | (20) | (14) | (14) | (36) |
(Gains) losses reclassified to earnings, tax | $ 22 | $ 14 | $ 25 | $ 37 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Cash and cash equivalents | $ 1,366 | $ 766 |
Finance receivables, net | 27,186 | 27,923 |
Notes receivable from Caterpillar | 469 | 662 |
Equipment on operating leases, net | 3,567 | 3,562 |
Other assets | 1,319 | 1,268 |
Total assets | 33,907 | 34,181 |
Liabilities and shareholder's equity: | ||
Payable to dealers and others | 129 | 117 |
Payable to Caterpillar - borrowings and other | 871 | 1,601 |
Accrued expenses | 286 | 259 |
Short-term borrowings | 4,268 | 5,723 |
Current maturities of long-term debt | 8,025 | 5,820 |
Long-term debt | 16,454 | 16,995 |
Other liabilities | 875 | 817 |
Total liabilities | 30,908 | 31,332 |
Commitments and contingent liabilities (Notes 8 and 10) | ||
Common stock - $1 par value Authorized: 2,000 shares; Issued and outstanding: one share (at paid-in amount) | 745 | 745 |
Additional paid-in capital | 2 | 2 |
Retained earnings | 3,083 | 2,874 |
Accumulated other comprehensive income/(loss) | (996) | (925) |
Noncontrolling interests | 165 | 153 |
Total shareholder's equity | 2,999 | 2,849 |
Total liabilities and shareholder's equity | $ 33,907 | $ 34,181 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parentheticals) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Shareholder's Equity: | ||
Common stock - par value | $ 1 | $ 1 |
Common stock - authorized | 2,000 | 2,000 |
Common stock - issued | 1 | 1 |
Common stock - outstanding | 1 | 1 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholder's Equity - USD ($) $ in Millions | Total | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income/(loss) | Noncontrolling interests |
Balance at Dec. 31, 2017 | $ 3,264 | $ 745 | $ 2 | $ 2,969 | $ (592) | $ 140 |
Increase (Decrease) in Shareholder's Equity [Roll Forward] | ||||||
Profit of consolidated companies | 302 | 287 | 15 | |||
Foreign currency translation, net of tax | (241) | (233) | (8) | |||
Derivative financial instruments, net of tax | (3) | (3) | ||||
Balance at Sep. 30, 2018 | 3,322 | 745 | 2 | 3,256 | (828) | 147 |
Balance at Jun. 30, 2018 | 3,241 | 745 | 2 | 3,131 | (784) | 147 |
Increase (Decrease) in Shareholder's Equity [Roll Forward] | ||||||
Profit of consolidated companies | 131 | 125 | 6 | |||
Foreign currency translation, net of tax | (50) | (44) | (6) | |||
Derivative financial instruments, net of tax | 0 | 0 | ||||
Balance at Sep. 30, 2018 | 3,322 | 745 | 2 | 3,256 | (828) | 147 |
Balance at Dec. 31, 2018 | 2,849 | 745 | 2 | 2,874 | (925) | 153 |
Increase (Decrease) in Shareholder's Equity [Roll Forward] | ||||||
Profit of consolidated companies | 323 | 306 | 17 | |||
Foreign currency translation, net of tax | (132) | (127) | (5) | |||
Derivative financial instruments, net of tax | (41) | (41) | ||||
Adjustment to adopt new accounting guidance | Accounting Standards Update 2018-02 | 0 | (97) | 97 | |||
Balance at Sep. 30, 2019 | 2,999 | 745 | 2 | 3,083 | (996) | 165 |
Balance at Jun. 30, 2019 | 3,034 | 745 | 2 | 2,954 | (831) | 164 |
Increase (Decrease) in Shareholder's Equity [Roll Forward] | ||||||
Profit of consolidated companies | 135 | 129 | 6 | |||
Foreign currency translation, net of tax | (165) | (160) | (5) | |||
Derivative financial instruments, net of tax | (5) | (5) | ||||
Balance at Sep. 30, 2019 | $ 2,999 | $ 745 | $ 2 | $ 3,083 | $ (996) | $ 165 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Profit of consolidated companies | $ 323 | $ 302 |
Adjustments for non-cash items: | ||
Depreciation and amortization | 621 | 626 |
Amortization of receivables purchase discount | (346) | (274) |
Provision for credit losses | 144 | 218 |
Other, net | 128 | 93 |
Changes in assets and liabilities: | ||
Other assets | 65 | 11 |
Payable to dealers and others | 26 | (32) |
Accrued expenses | (44) | 5 |
Other payables with Caterpillar | (14) | (27) |
Other liabilities | 51 | (40) |
Net cash provided by operating activities | 954 | 882 |
Cash flows from investing activities: | ||
Expenditures for equipment on operating leases | (1,079) | (1,093) |
Capital expenditures - excluding equipment on operating leases | (14) | (99) |
Proceeds from disposals of equipment | 548 | 619 |
Additions to finance receivables | (10,633) | (10,151) |
Collections of finance receivables | 10,161 | 9,132 |
Net changes in Caterpillar purchased receivables | 763 | (484) |
Proceeds from sales of receivables | 183 | 416 |
Net change in variable lending to Caterpillar | 51 | (18) |
Additions to other notes receivable with Caterpillar | (80) | (390) |
Collections on other notes receivable with Caterpillar | 222 | 300 |
Settlements of undesignated derivatives | (38) | (2) |
Net cash provided by (used for) investing activities | 84 | (1,770) |
Cash flows from financing activities: | ||
Net change in variable lending from Caterpillar | (627) | (63) |
Payments on borrowings with Caterpillar | (93) | 0 |
Proceeds from debt issued (original maturities greater than three months) | 7,348 | 7,026 |
Payments on debt issued (original maturities greater than three months) | (6,054) | (5,636) |
Short-term borrowings, net (original maturities three months or less) | (1,006) | (479) |
Net cash provided by (used for) financing activities | (432) | 848 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (9) | (13) |
Increase/(decrease) in cash, cash equivalents and restricted cash | 597 | (53) |
Cash, cash equivalents and restricted cash at beginning of year | 773 | 732 |
Cash, cash equivalents and restricted cash at end of period | $ 1,370 | $ 679 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parentheticals) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Cash Flows [Abstract] | ||
Restricted cash and cash equivalents | $ 4 | $ 7 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the consolidated profit for the three and nine months ended September 30, 2019 and 2018 , (b) the consolidated comprehensive income for the three and nine months ended September 30, 2019 and 2018 , (c) the consolidated financial position as of September 30, 2019 and December 31, 2018 , (d) the consolidated changes in shareholder's equity for the three and nine months ended September 30, 2019 and 2018 and (e) the consolidated cash flows for the nine months ended September 30, 2019 and 2018 . The preparation of financial statements, in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), requires management to make estimates and assumptions that affect reported amounts. Significant estimates include residual values for leased assets, allowance for credit losses and income taxes. Actual results may differ from these estimates. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2018 ( 2018 Form 10-K) filed with the SEC on February 14, 2019. The December 31, 2018 financial position data included herein was derived from the audited consolidated financial statements included in the 2018 Form 10-K but does not include all disclosures required by U.S. GAAP. Certain amounts for prior periods have been reclassified to conform with current period financial statement presentation. We consolidate all variable interest entities (VIEs) where we are the primary beneficiary. For VIEs, we assess whether we are the primary beneficiary as prescribed by the accounting guidance on the consolidation of VIEs. The primary beneficiary of a VIE is the party that has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the entity. Please refer to Note 8 for more information. We have customers and dealers that are VIEs of which we are not the primary beneficiary. Although we have provided financial support to these entities and therefore have a variable interest, we do not have the power to direct the activities that most significantly impact their economic performance. Our maximum exposure to loss from our involvement with these VIEs is limited to the credit risk inherently present in the financial support that we have provided. These risks are evaluated and reflected in our financial statements as part of our overall portfolio of finance receivables and related allowance for credit losses. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements A. Adoption of New Accounting Standards Lease accounting (Accounting Standards Update (ASU) 2016-02) – In February 2016, the Financial Accounting Standards Board (FASB) issued accounting guidance that revises the accounting for leases. Under the new guidance, lessees are required to recognize a right-of-use asset and a lease liability for substantially all leases. The new guidance will continue to classify leases as either financing or operating, with classification affecting the pattern of expense recognition. The accounting applied by a lessor under the new guidance will be substantially equivalent to current lease accounting guidance. The new guidance was effective January 1, 2019 and was applied using a modified retrospective approach through a cumulative effect adjustment to retained earnings as of January 1, 2019. The prior period comparative information has not been recasted and continues to be reported under the accounting guidance in effect for those periods. The new guidance provides a number of optional practical expedients in transition. We elected the "package of practical expedients," which allows us not to reassess under the new guidance our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight practical expedient. In addition, the new guidance provides practical expedients for an entity’s ongoing lessee accounting. We have elected not to separate lease and non-lease components for the majority of our asset classes. We have elected the short-term lease recognition exemption for all leases that qualify, which means we will not recognize right-of-use assets or lease liabilities for these leases with a term of twelve months or less. The most significant effects of adoption relate to the recognition of right-of-use assets and lease liabilities on our balance sheet for operating leases and providing new disclosures about our leasing activities. The adoption did not have a material impact on our results of operations. In March 2019, the FASB issued Leases - Codification improvements (ASU 2019-01) which amended the new leasing guidance. Under these amendments, lessors that are not manufacturers or dealers will use their cost, less any discounts that may apply, as the fair value of the underlying asset, and lessors within the scope of Financial Services-Depository and Lending guidance will present all principal payments received under leases within investment activities on the statement of cash flows. We adopted the new guidance effective January 1, 2019, and the adoption did not have a material impact to our financial statements. See Note 4 for additional information. Reclassification of certain tax effects from accumulated other comprehensive income (ASU 2018-02) – In February 2018, the FASB issued accounting guidance to allow a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for stranded tax effects resulting from U.S. tax reform legislation. We adopted the guidance effective January 1, 2019 and the resulting reclassification was included in the period of adoption. The reclassification resulted in decreased retained earnings and increased AOCI of $97 million . We adopted the following ASU effective January 1, 2019, which did not have a material impact on our financial statements: ASU Description 2017-12 Derivatives and hedging - Targeted improvements B. Accounting Standards Issued But Not Yet Adopted Credit losses (ASU 2016-13) – In June 2016, the FASB issued accounting guidance to introduce a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new guidance will apply to loans, accounts receivable, trade receivables, other financial assets measured at amortized cost, loan commitments and other off-balance sheet credit exposures. The new guidance will also apply to debt securities and other financial assets measured at fair value through other comprehensive income. We will adopt the new guidance effective January 1, 2020. An implementation team is continuing to work on the design of new processes and controls as well as assessing the effects of the new guidance. While we are still evaluating the impact of the new guidance, we do not expect a material impact to our financial statements. We consider the applicability and impact of all ASUs. ASUs not listed above were assessed and either determined to be not applicable or not expected to have a material impact on our financial statements. |
Finance Receivables
Finance Receivables | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Finance Receivables | Finance Receivables A summary of finance receivables included in the Consolidated Statements of Financial Position was as follows: (Millions of dollars) September 30, December 31, Retail loans, net (1) $ 15,180 $ 15,509 Retail leases, net (2) 7,531 7,499 Caterpillar purchased receivables, net 4,175 4,691 Wholesale loans, net (1) 664 626 Wholesale leases, net 70 109 Recorded investment in finance receivables 27,620 28,434 Less: Allowance for credit losses (434 ) (511 ) Total finance receivables, net (3) $ 27,186 $ 27,923 (1) Includes failed sale leasebacks. (2) Includes $11 million and $9 million of finance leases with Caterpillar as of September 30, 2019 and December 31, 2018 , respectively. (3) Includes $22 million and $0 million of finance receivables classified as held for sale as of September 30, 2019 and December 31, 2018 , respectively. Allowance for Credit Losses The allowance for credit losses is an estimate of the losses inherent in our finance receivable portfolio and includes consideration of accounts that have been individually identified as impaired, as well as pools of finance receivables where it is probable that certain receivables in the pool are impaired but the individual accounts cannot yet be identified. In identifying and measuring impairment, management takes into consideration past loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of underlying collateral and current economic conditions. Accounts are identified for individual review based on past-due status and information available about the customer, such as financial statements, news reports and published credit ratings, as well as general information regarding industry trends and the economic environment in which our customers operate. The allowance for credit losses attributable to finance receivables that are individually evaluated and determined to be impaired is based on the present value of expected future cash flows discounted at the receivables' effective interest rate, the fair value of the collateral for collateral-dependent receivables or the observable market price of the receivable. In determining collateral value, we estimate the current fair market value of the collateral less selling costs. We also consider credit enhancements such as additional collateral and contractual third-party guarantees. The allowance for credit losses attributable to the remaining accounts not yet individually identified as impaired is estimated based on loss forecast models utilizing probabilities of default, our estimate of the loss emergence period and the estimated loss given default. In addition, qualitative factors not able to be fully captured in our loss forecast models including industry trends, macroeconomic factors and model imprecision are considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management judgment. Our allowance for credit losses is segregated into three portfolio segments: • Customer - Finance receivables with end-user customers. • Dealer - Finance receivables with Caterpillar dealers. • Caterpillar Purchased Receivables - Trade receivables purchased from Caterpillar entities. A portfolio segment is the level at which the Company develops a systematic methodology for determining its allowance for credit losses. We further evaluate our portfolio segments by the class of finance receivables, which is defined as a level of information (below a portfolio segment) in which the finance receivables have the same initial measurement attribute and a similar method for assessing and monitoring credit risk. Typically, our finance receivables within a geographic area have similar credit risk profiles and methods for assessing and monitoring credit risk. Our classes, which align with management reporting for credit losses, are as follows: • North America - Finance receivables originated in the United States and Canada. • EAME - Finance receivables originated in Europe, Africa, the Middle East and the Commonwealth of Independent States. • Asia/Pacific - Finance receivables originated in Australia, New Zealand, China, Japan, Southeast Asia and India. • Mining - Finance receivables related to large mining customers worldwide. • Latin America - Finance receivables originated in Mexico and Central and South American countries. • Caterpillar Power Finance - Finance receivables originated worldwide related to marine vessels with Caterpillar engines and Caterpillar electrical power generation, gas compression and co-generation systems and non-Caterpillar equipment that is powered by these systems. Our allowance for credit losses as of September 30, 2019 was $434 million or 1.57 percent of our recorded investment in finance receivables compared with $511 million or 1.80 percent as of December 31, 2018 . An analysis of the allowance for credit losses was as follows: (Millions of dollars) September 30, 2019 Allowance for Credit Losses: Customer Dealer Caterpillar Purchased Receivables Total Balance at beginning of year $ 486 $ 21 $ 4 $ 511 Receivables written off (238 ) — — (238 ) Recoveries on receivables previously written off 31 — — 31 Provision for credit losses 120 24 — 144 Adjustment due to sale of receivables (11 ) — — (11 ) Foreign currency translation adjustment (3 ) — — (3 ) Balance at end of period $ 385 $ 45 $ 4 $ 434 Individually evaluated for impairment $ 182 $ 39 $ — $ 221 Collectively evaluated for impairment 203 6 4 213 Ending Balance $ 385 $ 45 $ 4 $ 434 Recorded Investment in Finance Receivables: Individually evaluated for impairment $ 665 $ 78 $ — $ 743 Collectively evaluated for impairment 18,301 4,401 4,175 26,877 Ending Balance $ 18,966 $ 4,479 $ 4,175 $ 27,620 (Millions of dollars) December 31, 2018 Allowance for Credit Losses: Customer Dealer Caterpillar Purchased Receivables Total Balance at beginning of year $ 353 $ 9 $ 3 $ 365 Receivables written off (235 ) — — (235 ) Recoveries on receivables previously written off 46 — — 46 Provision for credit losses 337 12 1 350 Adjustment due to sale of receivables (7 ) — — (7 ) Foreign currency translation adjustment (8 ) — — (8 ) Balance at end of year $ 486 $ 21 $ 4 $ 511 Individually evaluated for impairment $ 288 $ 14 $ — $ 302 Collectively evaluated for impairment 198 7 4 209 Ending Balance $ 486 $ 21 $ 4 $ 511 Recorded Investment in Finance Receivables: Individually evaluated for impairment $ 859 $ 78 $ — $ 937 Collectively evaluated for impairment 18,724 4,082 4,691 27,497 Ending Balance $ 19,583 $ 4,160 $ 4,691 $ 28,434 Credit quality of finance receivables At origination, we evaluate credit risk based on a variety of credit quality factors including prior payment experience, customer financial information, credit-rating agency ratings, loan-to-value ratios and other internal metrics. On an ongoing basis, we monitor credit quality based on past-due status and collection experience as there is a meaningful correlation between the past-due status of customers and the risk of loss. In determining past-due status, we consider the entire recorded investment in finance receivables past due when any installment is over 30 days past due. The tables below summarize our recorded investment in finance receivables by aging category. (Millions of dollars) September 30, 2019 31-60 Days Past Due 61-90 Days Past Due 91+ Days Past Due Total Past Due Current Recorded Investment in Finance Receivables 91+ Still Accruing Customer North America $ 73 $ 16 $ 48 $ 137 $ 7,875 $ 8,012 $ 15 EAME 33 10 136 179 2,853 3,032 4 Asia/Pacific 36 21 24 81 2,972 3,053 6 Mining 1 24 19 44 1,810 1,854 — Latin America 43 29 93 165 1,152 1,317 1 Caterpillar Power Finance 1 1 241 243 1,455 1,698 14 Dealer North America — — — — 2,481 2,481 — EAME — — — — 624 624 — Asia/Pacific — — — — 472 472 — Mining — — — — 4 4 — Latin America — — 81 81 814 895 — Caterpillar Power Finance — — — — 3 3 — Caterpillar Purchased Receivables (1) North America 12 5 17 34 2,675 2,709 EAME 1 — 2 3 507 510 Asia/Pacific 1 — 1 2 467 469 Mining — — — — — — Latin America — — — — 471 471 Caterpillar Power Finance — — — — 16 16 Total $ 201 $ 106 $ 662 $ 969 $ 26,651 $ 27,620 $ 40 (1) Caterpillar Purchased Receivables are non-interest bearing trade receivables purchased at a discount. (Millions of dollars) December 31, 2018 31-60 Days Past Due 61-90 Days Past Due 91+ Days Past Due Total Past Due Current Recorded Investment in Finance Receivables 91+ Still Accruing Customer North America $ 65 $ 18 $ 84 $ 167 $ 7,883 $ 8,050 $ 14 EAME 19 9 153 181 2,850 3,031 5 Asia/Pacific 25 9 8 42 2,923 2,965 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 — — — — 2,210 2,210 — EAME — — — — 619 619 — Asia/Pacific — — — — 514 514 — Mining — — — — 4 4 — Latin America — — 78 78 731 809 — Caterpillar Power Finance — — — — 4 4 — Caterpillar Purchased Receivables (1) North America 22 12 18 52 2,982 3,034 EAME 1 — 1 2 546 548 Asia/Pacific 5 1 1 7 756 763 Mining — — — — — — Latin America — — — — 338 338 Caterpillar Power Finance — — — — 8 8 Total $ 213 $ 80 $ 807 $ 1,100 $ 27,334 $ 28,434 $ 24 (1) Caterpillar Purchased Receivables are non-interest bearing trade receivables purchased at a discount. Impaired finance receivables For all classes, a finance receivable is considered impaired, based on current information and events, if it is probable that we will be unable to collect all amounts due according to the contractual terms. Impaired finance receivables include finance receivables that have been restructured and are considered to be troubled debt restructures. There were $78 million in impaired finance receivables with a related allowance of $39 million and $14 million as of September 30, 2019 and December 31, 2018 , respectively, for the Dealer portfolio segment, all of which was in Latin America. There were no impaired finance receivables as of September 30, 2019 and December 31, 2018 , for the Caterpillar Purchased Receivables portfolio segment. Our recorded investment in impaired finance receivables and the related unpaid principal balances and allowance for the Customer portfolio segment were as follows: (Millions of dollars) As of September 30, 2019 As of December 31, 2018 Impaired Finance Receivables With No Allowance Recorded Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance North America $ 9 $ 9 $ — $ 10 $ 10 $ — EAME — — — 1 1 — Asia/Pacific — — — 1 1 — Mining 23 23 — 33 33 — Latin America 25 25 — 29 29 — Caterpillar Power Finance 71 113 — 69 83 — Total $ 128 $ 170 $ — $ 143 $ 157 $ — Impaired Finance Receivables With An Allowance Recorded North America $ 31 $ 30 $ 9 $ 40 $ 41 $ 14 EAME 60 60 27 92 92 57 Asia/Pacific 10 10 4 4 4 2 Mining 61 59 18 56 55 26 Latin America 66 64 22 75 75 25 Caterpillar Power Finance 309 322 102 449 455 164 Total $ 537 $ 545 $ 182 $ 716 $ 722 $ 288 Total Impaired Finance Receivables North America $ 40 $ 39 $ 9 $ 50 $ 51 $ 14 EAME 60 60 27 93 93 57 Asia/Pacific 10 10 4 5 5 2 Mining 84 82 18 89 88 26 Latin America 91 89 22 104 104 25 Caterpillar Power Finance 380 435 102 518 538 164 Total $ 665 $ 715 $ 182 $ 859 $ 879 $ 288 (Millions of dollars) Three Months Ended Three Months Ended Impaired Finance Receivables With No Allowance Recorded Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized North America $ 10 $ — $ 19 $ — EAME 15 — 4 — Asia/Pacific — — 30 1 Mining 26 — 35 — Latin America 22 — 37 1 Caterpillar Power Finance 57 1 94 2 Total $ 130 $ 1 $ 219 $ 4 Impaired Finance Receivables With An Allowance Recorded North America $ 30 $ — $ 47 $ — EAME 80 1 59 — Asia/Pacific 12 1 2 — Mining 65 1 60 1 Latin America 69 1 51 1 Caterpillar Power Finance 376 1 374 4 Total $ 632 $ 5 $ 593 $ 6 Total Impaired Finance Receivables North America $ 40 $ — $ 66 $ — EAME 95 1 63 — Asia/Pacific 12 1 32 1 Mining 91 1 95 1 Latin America 91 1 88 2 Caterpillar Power Finance 433 2 468 6 Total $ 762 $ 6 $ 812 $ 10 (Millions of dollars) Nine Months Ended Nine Months Ended Impaired Finance Receivables With No Allowance Recorded Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized North America $ 10 $ — $ 17 $ 1 EAME 7 — 17 — Asia/Pacific — — 31 2 Mining 29 1 65 2 Latin America 22 1 41 2 Caterpillar Power Finance 53 2 149 5 Total $ 121 $ 4 $ 320 $ 12 Impaired Finance Receivables With An Allowance Recorded North America $ 36 $ 1 $ 51 $ 1 EAME 88 2 41 1 Asia/Pacific 9 1 5 — Mining 49 2 43 2 Latin America 73 4 69 3 Caterpillar Power Finance 422 8 364 8 Total $ 677 $ 18 $ 573 $ 15 Total Impaired Finance Receivables North America $ 46 $ 1 $ 68 $ 2 EAME 95 2 58 1 Asia/Pacific 9 1 36 2 Mining 78 3 108 4 Latin America 95 5 110 5 Caterpillar Power Finance 475 10 513 13 Total $ 798 $ 22 $ 893 $ 27 Recognition of income is suspended and the finance receivable is placed on non-accrual status when management determines that collection of future income is not probable (generally after 120 days past due). Recognition is resumed and previously suspended income is recognized when the finance receivable becomes current and collection of remaining amounts is considered probable. Payments received while the finance receivable is on non-accrual status are applied to interest and principal in accordance with the contractual terms. As of September 30, 2019 and December 31, 2018 , there were $81 million and $78 million, respectively, in finance receivables on non-accrual status for the Dealer portfolio segment, all of which was in Latin America. The recorded investment in Customer finance receivables on non-accrual status was as follows: (Millions of dollars) September 30, December 31, North America $ 38 $ 77 EAME 168 154 Asia/Pacific 19 4 Mining 44 50 Latin America 103 106 Caterpillar Power Finance 372 416 Total $ 744 $ 807 Troubled debt restructurings A restructuring of a finance receivable constitutes a troubled debt restructuring (TDR) when the lender grants a concession it would not otherwise consider to a borrower experiencing financial difficulties. Concessions granted may include extended contract maturities, inclusion of interest only periods, below market interest rates, extended skip payment periods and reduction of principal and/or accrued interest. As of September 30, 2019 and December 31, 2018 , there were no additional funds committed to lend to a borrower whose terms have been modified in a TDR. There were no finance receivables modified as TDRs during the three and nine months ended September 30, 2019 and 2018 for the Dealer or Caterpillar Purchased Receivables portfolio segments. Our recorded investment in finance receivables in the Customer portfolio segment modified as TDRs was as follows: (Dollars in millions) Three Months Ended Three Months Ended Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment North America 4 $ — $ — 4 $ — $ — Caterpillar Power Finance 4 56 55 2 40 40 Total 8 $ 56 $ 55 6 $ 40 $ 40 Nine Months Ended Nine Months Ended Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment North America 12 $ 5 $ 4 34 $ 13 $ 13 EAME 21 21 17 — — — Mining 1 6 6 1 29 29 Latin America 4 2 2 1 3 3 Caterpillar Power Finance 19 154 152 7 93 60 Total 57 $ 188 $ 181 43 $ 138 $ 105 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: (Dollars in millions) Three Months Ended Three Months Ended Number of Contracts Post-TDR Recorded Investment Number of Contracts Post-TDR Recorded Investment North America — $ — 7 $ 9 Latin America — — 1 — Caterpillar Power Finance — — 3 33 Total — $ — 11 $ 42 Nine Months Ended Nine Months Ended Number of Contracts Post-TDR Recorded Investment Number of Contracts Post-TDR Recorded Investment North America — $ — 10 $ 10 Latin America — — 3 1 Caterpillar Power Finance — — 3 33 Total — $ — 16 $ 44 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Lessor Arrangements | Leases A. Lessor Arrangements We lease Caterpillar equipment, machinery and engines and other equipment to customers and dealers around the world, primarily through sales-type (non-tax) leases, where the lessee for tax purposes is considered to be the owner of the equipment during the term of the lease. We also offer tax leases that are classified as either operating or direct finance leases for financial accounting purposes, depending on the characteristics of the lease. For tax purposes, we are considered the owner of the equipment. Our lease agreements may include options for the lessee to purchase the underlying asset at the end of the lease term for either a stated fixed price or fair market value. The residual values for leased assets, which are an estimate of the market value of leased equipment at the end of the lease term, are based on an analysis of historical wholesale market sales prices, projected forward on a level trend line without consideration for inflation or possible future pricing action. At the inception of the lease, residual values are estimated with consideration of the following critical factors: market size and demand, any known significant market/product trends, total expected hours of usage, machine configuration, application, location, model changes, quantities, past remarketing experience, third-party residual guarantees and contractual customer purchase options. Many of these factors are gathered in an application survey that is completed prior to quotation. The lease agreement also clearly defines applicable return conditions and remedies for non-compliance, to ensure that the leased equipment will be in good operating condition upon return. Model changes and updates, as well as market strength and product acceptance, are monitored and adjustments are made to residual values in accordance with the significance of any such changes. Our sales staff work closely with customers and dealers to manage the sale of lease returns and the recovery of residual exposure. The residuals for leases classified as operating leases are included in Equipment on operating leases, net in the Consolidated Statements of Financial Position. The residuals for leases classified as finance leases are included in Finance receivables, net in the Consolidated Statements of Financial Position. During the term of our operating leases, we evaluate the carrying value of our equipment on a regular basis taking into consideration expected residual values at lease termination. Adjustments to depreciation expense reflecting revised estimates of expected residual values at the end of the lease terms are recorded prospectively on a straight-line basis. For finance leases, residual value adjustments are recognized through a reduction of finance revenue. Contractual maturities for finance lease receivables (classified as sales-type and direct finance leases) were as follows: (Millions of dollars) September 30, 2019 Amounts due in Retail leases Wholesale leases Total Remaining three months of 2019 $ 917 $ 3 $ 920 2020 2,840 19 2,859 2021 1,766 12 1,778 2022 881 5 886 2023 383 2 385 Thereafter 204 2 206 Total 6,991 43 7,034 Guaranteed residual value 398 26 424 Unguaranteed residual value 825 5 830 Unearned income (683 ) (4 ) (687 ) Total $ 7,531 $ 70 $ 7,601 (Millions of dollars) December 31, 2018 Amounts due in Retail leases Wholesale leases Total 2019 $ 3,024 $ 29 $ 3,053 2020 2,055 21 2,076 2021 1,092 12 1,104 2022 465 5 470 2023 171 2 173 Thereafter 62 2 64 Total 6,869 71 6,940 Guaranteed residual value 416 42 458 Unguaranteed residual value 854 3 857 Unearned income (640 ) (7 ) (647 ) Total $ 7,499 $ 109 $ 7,608 Our finance lease receivables generally may be repaid or refinanced without penalty prior to contractual maturity and we also sell finance lease receivables to third parties to mitigate the concentration of credit risk with certain customers. Accordingly, this presentation should not be regarded as a forecast of future cash collections. The carrying amount of Equipment on operating leases, net in the Consolidated Statements of Financial Position was as follows: (Millions of dollars) September 30, December 31, Equipment on operating leases, at cost $ 5,229 $ 5,201 Less: Accumulated depreciation (1,662 ) (1,639 ) Equipment on operating leases, net (1) $ 3,567 $ 3,562 (1) Includes $101 million and $45 million of operating leases with Caterpillar as of September 30, 2019 and December 31, 2018, respectively. The carrying amount of residual assets covered by residual value guarantees and subject to operating leases was $20 million and $25 million as of September 30, 2019 and December 31, 2018, respectively. At September 30, 2019 , payments due for operating leases were as follows: (Millions of dollars) Remaining Three Months of 2019 2020 2021 2022 2023 Thereafter Total $ 245 $ 758 $ 433 $ 216 $ 96 $ 58 $ 1,806 At December 31, 2018, scheduled minimum rental payments for operating leases were as follows: (Millions of dollars) 2019 2020 2021 2022 2023 Thereafter Total $ 808 $ 503 $ 257 $ 115 $ 41 $ 15 $ 1,739 We sell operating lease receivables to third parties to mitigate the concentration of credit risk with certain customers. Accordingly, this presentation should not be regarded as a forecast of future cash collections. Revenues from finance and operating leases were as follows: (Millions of dollars) Three Months Ended Nine Months Ended Finance lease revenue (included in retail and wholesale finance revenue) $ 135 $ 388 Operating lease revenue 262 777 Total $ 397 $ 1,165 We typically pay property taxes on tax leases directly to the taxing authorities and invoice the lessee for reimbursement. These property tax reimbursements are accounted for as variable lease payments and are included in Operating lease revenues in the Consolidated Statements of Profit. We individually assess our operating lease receivables for impairment. If collectability of a recorded operating lease receivable is not considered probable, we recognize a current-period adjustment against operating lease revenue. |
Lessee Arrangements | B. Lessee Arrangements We lease certain property, vehicles and other equipment primarily through operating leases. We recognize a lease liability and corresponding right-of-use asset based on the present value of lease payments. To determine the present value of lease payments for most of our leases, we use our incremental borrowing rate based on information available on the lease commencement date. We have elected not to separate payments for lease components from non-lease components. Our lease agreements may include options to extend or terminate the lease. When it is reasonably certain that we will exercise that option, we have included the option in the recognition of right-of-use assets and lease liabilities. Our variable lease costs primarily include maintenance, taxes and insurance. We have elected not to recognize right-of-use assets or lease liabilities for leases with a term of twelve months or less. Our finance leases are not significant and therefore are not included in the following disclosures. The components of lease cost were as follows: (Millions of dollars) Three Months Ended Nine Months Ended Operating lease cost $ 2 $ 6 Short-term lease cost $ — $ 1 Variable lease cost $ — $ — Supplemental information related to operating leases was as follows: (Millions of dollars) Consolidated Statements of Financial Position Location September 30, January 1, Right-of-use assets Other assets $ 22 $ 22 Lease liabilities Other liabilities $ 22 $ 23 Weighted average remaining lease term 5 years 4 years Weighted average discount rates 2.4 % 2.6 % At September 30, 2019 , maturities of operating lease liabilities were as follows: (Millions of dollars) Remaining three months of 2019 $ 2 2020 7 2021 4 2022 3 2023 3 Thereafter 4 Total lease payments 23 Less: imputed interest (1 ) Total $ 22 At December 31, 2018, minimum payments for operating leases having initial non-cancelable terms in excess of one year were as follows: (Millions of dollars) 2019 $ 8 2020 6 2021 4 2022 2 2023 2 Thereafter 2 Total $ 24 Supplemental cash flow information related to operating leases was as follows: (Millions of dollars) Nine Months Ended Cash paid for amounts included in the measurement of operating lease liabilities $ 6 Right-of-use assets obtained in exchange for operating lease obligations (1) $ 24 (1) Includes a $23 million impact of initial recognition of right-of-use assets and lease liabilities. |
Derivative Financial Instrument
Derivative Financial Instruments and Risk Management | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Risk Management | Derivative Financial Instruments and Risk Management Our earnings and cash flow are subject to fluctuations due to changes in foreign currency exchange rates and interest rates. Our Risk Management Policy (policy) allows for the use of derivative financial instruments to manage foreign currency exchange rate and interest rate exposures. Our policy specifies that derivatives are not to be used for speculative purposes. Derivatives that we use are primarily foreign currency forward, option and cross currency contracts and interest rate contracts. Our derivative activities are subject to the management, direction and control of our senior financial officers. Risk management practices, including the use of financial derivative instruments, are presented to our Board of Directors and the Audit Committee of the Caterpillar Inc. Board of Directors at least annually. All derivatives are recognized on the Consolidated Statements of Financial Position at their fair value. On the date the derivative contract is entered into, the derivative instrument is (1) designated as a hedge of the fair value of a recognized asset or liability (fair value hedge), (2) designated as a hedge of a forecasted transaction or the variability of cash flows (cash flow hedge) or (3) undesignated. Changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged recognized asset or liability that is attributable to the hedged risk, are recorded in current earnings. Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge are recorded in Accumulated other comprehensive income/(loss) (AOCI), to the extent effective, on the Consolidated Statements of Financial Position until they are reclassified to earnings in the same period or periods during which the hedged transaction affects earnings. Changes in the fair value of undesignated derivative instruments are reported in current earnings. Cash flows from designated derivative financial instruments are classified within the same category as the item being hedged on the Consolidated Statements of Cash Flows. Cash flows from undesignated derivative financial instruments are included in the investing category on the Consolidated Statements of Cash Flows. We formally document all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities on the Consolidated Statements of Financial Position and linking cash flow hedges to specific forecasted transactions or variability of cash flow. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the designated derivatives that are used in hedging transactions are highly effective in offsetting changes in fair value or cash flow of hedged items. When a derivative is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, we discontinue hedge accounting prospectively in accordance with derecognition criteria for hedge accounting. Foreign currency exchange rate risk We have balance sheet positions and expected future transactions denominated in foreign currencies, thereby creating exposure to movements in exchange rates. In managing foreign currency risk, our objective is to minimize earnings volatility resulting from conversion and the remeasurement of net foreign currency balance sheet positions and future transactions denominated in foreign currencies. Our policy allows the use of foreign currency forward, option and cross currency contracts to offset the risk of currency mismatch between our assets and liabilities and exchange rate risk associated with future transactions denominated in foreign currencies. Our foreign currency forward and option contracts are primarily undesignated. We designate fixed-to-fixed cross currency contracts as cash flow hedges to protect against movements in exchange rates on foreign currency fixed-rate assets and liabilities. Interest rate risk Interest rate movements create a degree of risk by affecting the amount of our interest payments and the value of our fixed-rate debt. Our practice is to use interest rate contracts to manage our exposure to interest rate changes. We have a match-funding policy that addresses interest rate risk by aligning the interest rate profile (fixed or floating rate and duration) of our debt portfolio with the interest rate profile of our finance receivable portfolio within predetermined ranges on an ongoing basis. In connection with that policy, we use interest rate derivative instruments to modify the debt structure to match assets within the finance receivable portfolio. This matched funding reduces the volatility of margins between interest-bearing assets and interest-bearing liabilities, regardless of which direction interest rates move. Our policy allows us to use fixed-to-floating, floating-to-fixed and floating-to-floating interest rate contracts to meet the match-funding objective. We designate fixed-to-floating interest rate contracts as fair value hedges to protect debt against changes in fair value due to changes in the benchmark interest rate. We designate most floating-to-fixed interest rate contracts as cash flow hedges to protect against the variability of cash flows due to changes in the benchmark interest rate. As of September 30, 2019 , $3 million of deferred net losses, net of tax, included in equity (AOCI in the Consolidated Statements of Financial Position), related to our floating-to-fixed interest rate contracts, are expected to be reclassified to Interest expense over the next twelve months. The actual amount recorded in Interest expense will vary based on interest rates at the time the hedged transactions impact earnings. We have, at certain times, liquidated fixed-to-floating interest rate contracts that resulted in deferred gains at the time of liquidation. The deferred gains associated with these interest rate contracts are included in Long-term debt in the Consolidated Statements of Financial Position and are being amortized to Interest expense over the remaining term of the previously designated hedged item. The location and fair value of derivative instruments reported in the Consolidated Statements of Financial Position were as follows: (Millions of dollars) Asset (Liability) Fair Value Consolidated Statements of Financial Position Location September 30, December 31, Designated derivatives Interest rate contracts Other assets $ 7 $ 4 Interest rate contracts Accrued expenses (61 ) (40 ) Cross currency contracts Other assets 118 88 Cross currency contracts Accrued expenses (6 ) (9 ) $ 58 $ 43 Undesignated derivatives Foreign exchange contracts Other assets $ 22 $ 15 Foreign exchange contracts Accrued expenses (14 ) (12 ) Cross currency contracts Other assets 6 5 Cross currency contracts Accrued expenses — (2 ) $ 14 $ 6 The total notional amount of our derivative instruments was $8.64 billion and $10.21 billion as of September 30, 2019 and December 31, 2018 , respectively. The notional amounts of derivative financial instruments do not represent amounts exchanged by the parties. The amounts exchanged by the parties are calculated by reference to the notional amounts and by other terms of the derivatives, such as foreign currency exchange rates and interest rates. The effect of derivatives designated as hedging instruments on the Consolidated Statements of Profit was as follows: Cash Flow Hedges (Millions of dollars) Three Months Ended September 30, 2019 Recognized in Earnings Amount of Gains (Losses) Recognized in AOCI Classification Amount of Gains (Losses) Reclassified from AOCI Amount of the line items in the Consolidated Statements of Profit Interest rate contracts $ (12 ) Interest expense $ (3 ) $ (198 ) Cross currency contracts 100 Other income (expense) 89 (4 ) Interest expense 9 (198 ) $ 88 $ 95 Three Months Ended September 30, 2018 Recognized in Earnings Amount of Gains (Losses) Recognized in AOCI (Effective Portion) Classification Reclassified from AOCI to Earnings (Effective Portion) Recognized in Earnings (Ineffective Portion) Interest rate contracts $ 3 Interest expense $ — $ — Cross currency contracts 53 Other income (expense) 51 — Interest expense 5 — $ 56 $ 56 $ — Nine Months Ended September 30, 2019 Recognized in Earnings Amount of Gains (Losses) Recognized in AOCI Classification Amount of Gains (Losses) Reclassified from AOCI Amount of the line items in the Consolidated Statements of Profit Interest rate contracts $ (72 ) Interest expense $ (2 ) $ (599 ) Cross currency contracts 132 Other income (expense) 91 (14 ) Interest expense 23 (599 ) $ 60 $ 112 Nine Months Ended September 30, 2018 Recognized in Earnings Amount of Gains (Losses) Recognized in AOCI (Effective Portion) Classification Reclassified from AOCI to Earnings (Effective Portion) Recognized in Earnings (Ineffective Portion) Interest rate contracts $ 8 Interest expense $ 1 $ — Cross currency contracts 143 Other income (expense) 141 — Interest expense 13 — $ 151 $ 155 $ — The effect of derivatives not designated as hedging instruments on the Consolidated Statements of Profit was as follows: (Millions of dollars) Three Months Ended September 30, Classification 2019 2018 Foreign exchange contracts Other income (expense) $ 12 $ 12 Cross currency contracts Other income (expense) 3 1 $ 15 $ 13 Nine Months Ended September 30, Classification 2019 2018 Foreign exchange contracts Other income (expense) $ (26 ) $ 23 Cross currency contracts Other income (expense) 2 6 $ (24 ) $ 29 We enter into International Swaps and Derivatives Association (ISDA) master netting agreements that permit the net settlement of amounts owed under their respective derivative contracts. Under these master netting agreements, net settlement generally permits us or the counterparty to determine the net amount payable for contracts due on the same date and in the same currency for similar types of derivative transactions. The master netting agreements generally also provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event. Collateral is generally not required of the counterparties or us under the master netting agreements. As of September 30, 2019 and December 31, 2018 , no cash collateral was received or pledged under the master netting agreements. The effect of net settlement provisions of the master netting agreements on our derivative balances upon an event of default or a termination event was as follows: (Millions of dollars) September 30, December 31, Derivative Assets Gross Amount of Recognized Assets $ 153 $ 112 Gross Amounts Offset — — Net Amount of Assets (1) 153 112 Gross Amounts Not Offset (39 ) (34 ) Net Amount $ 114 $ 78 Derivative Liabilities Gross Amount of Recognized Liabilities $ (81 ) $ (63 ) Gross Amounts Offset — — Net Amount of Liabilities (1) (81 ) (63 ) Gross Amounts Not Offset 39 34 Net Amount $ (42 ) $ (29 ) (1) As presented in the Consolidated Statements of Financial Position. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income/(Loss) | 9 Months Ended |
Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income/(Loss) | Accumulated Other Comprehensive Income/(Loss) Comprehensive income/(loss) and its components are presented in the Consolidated Statements of Comprehensive Income. Changes in Accumulated other comprehensive income/(loss), net of tax, included in the Consolidated Statements of Changes in Shareholder's Equity, consisted of the following: (Millions of dollars) Foreign currency translation Derivative financial instruments Total Three Months Ended September 30, 2018 Balance at June 30, 2018 $ (776 ) $ (8 ) $ (784 ) Other comprehensive income/(loss) before reclassifications (44 ) 42 (2 ) Amounts reclassified from accumulated other comprehensive (income)/loss — (42 ) (42 ) Other comprehensive income/(loss) (44 ) — (44 ) Balance at September 30, 2018 $ (820 ) $ (8 ) $ (828 ) Three Months Ended September 30, 2019 Balance at June 30, 2019 $ (758 ) $ (73 ) $ (831 ) Other comprehensive income/(loss) before reclassifications (160 ) 68 (92 ) Amounts reclassified from accumulated other comprehensive (income)/loss — (73 ) (73 ) Other comprehensive income/(loss) (160 ) (5 ) (165 ) Balance at September 30, 2019 $ (918 ) $ (78 ) $ (996 ) Nine Months Ended September 30, 2018 Balance at December 31, 2017 $ (587 ) $ (5 ) $ (592 ) Other comprehensive income/(loss) before reclassifications (233 ) 115 (118 ) Amounts reclassified from accumulated other comprehensive (income)/loss — (118 ) (118 ) Other comprehensive income/(loss) (233 ) (3 ) (236 ) Balance at September 30, 2018 $ (820 ) $ (8 ) $ (828 ) Nine Months Ended September 30, 2019 Balance at December 31, 2018 $ (889 ) $ (36 ) $ (925 ) Other comprehensive income/(loss) before reclassifications (127 ) 46 (81 ) Amounts reclassified from accumulated other comprehensive (income)/loss — (87 ) (87 ) Adjustment to adopt new accounting guidance (1) 98 (1 ) 97 Other comprehensive income/(loss) (29 ) (42 ) (71 ) Balance at September 30, 2019 $ (918 ) $ (78 ) $ (996 ) (1) See Note 2 regarding new accounting guidance related to reclassification of certain tax effects from accumulated other comprehensive income/(loss). The effect of the reclassifications out of Accumulated other comprehensive income/(loss) on the Consolidated Statements of Profit was as follows: (Millions of dollars) Three Months Ended Nine Months Ended Derivative financial instruments Classification of income (expense) 2019 2018 2019 2018 Cross currency contracts Other income (expense) $ 89 $ 51 $ 91 $ 141 Cross currency contracts Interest expense 9 5 23 13 Interest rate contracts Interest expense (3 ) — (2 ) 1 Reclassifications before tax 95 56 112 155 Tax (provision) benefit (22 ) (14 ) (25 ) (37 ) Total reclassifications from Accumulated other comprehensive income/(loss) $ 73 $ 42 $ 87 $ 118 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information A. Basis for Segment Information We report information internally for operating segments based on management responsibility. Our operating segments provide financing alternatives to customers and dealers around the world for Caterpillar products, as well as financing for vehicles, power generation facilities and marine vessels that, in most cases, incorporate Caterpillar products. Financing plans include operating and finance leases, installment sale contracts, working capital loans and wholesale financing plans within each of the operating segments. B. Description of Segments We have six operating segments that offer financing services. Following is a brief description of our segments: • North America - Includes our operations in the United States and Canada. • EAME - Includes our operations in Europe, Africa, the Middle East and the Commonwealth of Independent States. • Asia/Pacific - Includes our operations in Australia, New Zealand, China, Japan, Southeast Asia and India. • Latin America - Includes our operations in Mexico and Central and South American countries. • Caterpillar Power Finance - Provides financing worldwide for marine vessels with Caterpillar engines and for Caterpillar electrical power generation, gas compression and co-generation systems and non-Caterpillar equipment that is powered by these systems. • Mining - Provides financing for large mining customers worldwide. C. Segment Measurement and Reconciliations Cash, debt and other expenses are allocated to our segments based on their respective portfolios. The related Interest expense is calculated based on the amount of allocated debt and the rates associated with that debt. The performance of each segment is assessed based on a consistent leverage ratio. The Provision for credit losses is based on each segment's respective finance receivable portfolio. Capital expenditures include expenditures for equipment on operating leases and other miscellaneous capital expenditures. Reconciling items are created based on accounting differences between segment reporting and consolidated external reporting. For the reconciliation of Profit before income taxes, we have grouped the reconciling items as follows: • Unallocated - This item is related to corporate requirements and strategies that are considered to be for the benefit of the entire organization. Also included are the consolidated results of the special purpose corporation (see Note 8 for additional information) and other miscellaneous items. • Timing - Timing differences in the recognition of costs between segment reporting and consolidated external reporting. • Methodology - Methodology differences between segment reporting and consolidated external reporting are as follows: ◦ Segment assets include off-balance sheet managed assets for which we maintain servicing responsibilities. ◦ The impact of differences between the actual leverage and the segment leverage ratios. ◦ Interest expense includes realized forward points on foreign currency forward contracts. ◦ The net gain or loss from interest rate derivatives is excluded from segment reporting. Supplemental segment data and reconciliations to consolidated external reporting for the three months ended September 30 was as follows: (Millions of dollars) 2019 External Revenues Profit before income taxes Interest Expense Depreciation on equipment leased to others Provision for credit losses Assets at September 30, 2019 Capital expenditures North America $ 414 $ 127 $ 99 $ 147 $ 3 $ 15,764 $ 265 EAME 72 14 13 16 6 4,924 21 Asia/Pacific 96 45 26 3 6 4,488 (1 ) Latin America 67 19 25 6 2 2,996 2 Caterpillar Power Finance 23 9 10 1 (3 ) 1,766 — Mining 69 10 14 32 6 2,471 99 Total Segments 741 224 187 205 20 32,409 386 Unallocated 14 (87 ) 66 — — 1,986 2 Timing (7 ) (4 ) — — — 19 — Methodology — 51 (55 ) — — (144 ) — Inter-segment Eliminations (1) — — — — — (363 ) — Total $ 748 $ 184 $ 198 $ 205 $ 20 $ 33,907 $ 388 2018 External Revenues Profit before income taxes Interest Expense Depreciation on equipment leased to others Provision for credit losses Assets at December 31, 2018 Capital expenditures North America $ 402 $ 121 $ 94 $ 148 $ 7 $ 15,632 $ 204 EAME 69 12 12 17 8 4,862 20 Asia/Pacific 92 44 29 4 — 4,639 3 Latin America 61 15 23 6 6 2,972 1 Caterpillar Power Finance 33 (21 ) 13 1 34 2,259 — Mining 64 19 15 32 (7 ) 2,234 67 Total Segments 721 190 186 208 48 32,598 295 Unallocated 23 (72 ) 62 — (1 ) 1,957 3 Timing (9 ) 6 — — — 55 — Methodology — 39 (54 ) — — (159 ) — Inter-segment Eliminations (1) — — — — — (270 ) — Total $ 735 $ 163 $ 194 $ 208 $ 47 $ 34,181 $ 298 (1) Elimination is primarily related to intercompany loans. Supplemental segment data and reconciliations to consolidated external reporting for the nine months ended September 30 was as follows: (Millions of dollars) 2019 External Revenues Profit before income taxes Interest Expense Depreciation on equipment leased to others Provision for credit losses Assets at September 30, 2019 Capital expenditures North America $ 1,229 $ 374 $ 295 $ 437 $ 12 $ 15,764 $ 832 EAME 217 60 40 50 3 4,924 62 Asia/Pacific 295 139 85 9 14 4,488 9 Latin America 189 25 73 17 31 2,996 21 Caterpillar Power Finance 78 (40 ) 34 2 65 1,766 — Mining 208 29 42 96 19 2,471 158 Total Segments 2,216 587 569 611 144 32,409 1,082 Unallocated 48 (253 ) 195 — — 1,986 11 Timing (23 ) (13 ) — — — 19 — Methodology — 146 (165 ) — — (144 ) — Inter-segment Eliminations (1) — — — — — (363 ) — Total $ 2,241 $ 467 $ 599 $ 611 $ 144 $ 33,907 $ 1,093 2018 External Revenues Profit before income taxes Interest Expense Depreciation on equipment leased to others Provision for credit losses Assets at December 31, 2018 Capital expenditures North America $ 1,141 $ 321 $ 267 $ 427 $ 32 $ 15,632 $ 870 EAME 208 24 35 56 32 4,862 56 Asia/Pacific 269 128 84 14 (5 ) 4,639 10 Latin America 193 (1 ) 77 21 54 2,972 28 Caterpillar Power Finance 98 (60 ) 40 2 98 2,259 — Mining 196 35 45 95 1 2,234 131 Total Segments 2,105 447 548 615 212 32,598 1,095 Unallocated 68 (204 ) 182 1 (1 ) 1,957 97 Timing (25 ) 12 — — 7 55 — Methodology — 132 (172 ) — — (159 ) — Inter-segment Eliminations (1) — — — — — (270 ) — Total $ 2,148 $ 387 $ 558 $ 616 $ 218 $ 34,181 $ 1,192 (1) Elimination is primarily related to intercompany loans. |
Guarantees
Guarantees | 9 Months Ended |
Sep. 30, 2019 | |
Guarantees [Abstract] | |
Guarantees | Guarantees We provide loan guarantees to third-party lenders for financing associated with machinery purchased by customers. These guarantees have varying terms and are secured by the machinery being financed. We also provide residual value guarantees to third-party lenders associated with machinery leased to customers. These guarantees have varying terms. In addition, we participate in standby letters of credit issued to third parties on behalf of our customers. These standby letters of credit have varying terms and beneficiaries and are secured by customer assets. No significant loss has been experienced or is anticipated under any of these guarantees. At September 30, 2019 and December 31, 2018 , the related recorded liability was less than $1 million . The maximum potential amount of future payments (undiscounted and without reduction for any amounts that may possibly be recovered under recourse or collateralized provisions) we could be required to make under the guarantees was $84 million and $97 million at September 30, 2019 and December 31, 2018 , respectively. We provide guarantees to repurchase certain loans of Caterpillar dealers from a special-purpose corporation (SPC) that qualifies as a VIE (see Note 1 for additional information regarding the accounting guidance on the consolidation of VIEs). The purpose of the SPC is to provide short-term working capital loans to Caterpillar dealers. This SPC issues commercial paper and uses the proceeds to fund its loan program. We have a loan purchase agreement with the SPC that obligates us to purchase certain loans that are not paid at maturity. We receive a fee for providing this guarantee, which provides a source of liquidity for the SPC. We are the primary beneficiary of the SPC as our guarantees result in us having both the power to direct the activities that most significantly impact the SPC's economic performance and the obligation to absorb losses and therefore we have consolidated the financial statements of the SPC. As of September 30, 2019 and December 31, 2018 , the SPC’s assets of $1.39 billion and $1.15 billion , respectively, were primarily comprised of loans to dealers, which are included in Finance receivables, net in the Consolidated Statements of Financial Position, and the SPC's liabilities of $1.39 billion and $1.15 billion , respectively, were primarily comprised of commercial paper, which is included in Short-term borrowings in the Consolidated Statements of Financial Position. The assets of the SPC are not available to pay our creditors. We may be obligated to perform under the guarantee if the SPC experiences losses. No loss has been experienced or is anticipated under this loan purchase agreement. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements A. Fair Value Measurements The guidance on fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. This guidance also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. In accordance with this guidance, fair value measurements are classified under the following hierarchy: • Level 1 – Quoted prices for identical instruments in active markets. • Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets. • Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable. When available, we use quoted market prices to determine fair value and we classify such measurements within Level 1. In some cases where market prices are not available, we make use of observable market-based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon valuations in which one or more significant inputs are unobservable, including internally developed models that use, where possible, current market-based parameters such as interest rates, yield curves and currency rates. These measurements are classified within Level 3. Fair value measurements are classified according to the lowest level input or value-driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable. Fair value measurement includes the consideration of nonperformance risk. Nonperformance risk refers to the risk that an obligation (either by a counterparty or us) will not be fulfilled. For financial assets traded in an active market (Level 1), the nonperformance risk is included in the market price. For certain other financial assets and liabilities (Level 2 and 3), our fair value calculations have been adjusted accordingly. Derivative financial instruments The fair value of interest rate contracts is primarily based on standard industry accepted models that utilize the appropriate market-based forward swap curves and zero-coupon interest rates to determine discounted cash flows. The fair value of foreign currency forward and cross currency contracts is based on standard industry accepted valuation models that discount cash flows resulting from the differential between the contract price and the market-based forward rate. Derivative financial instruments are measured on a recurring basis at fair value and are classified as Level 2 measurements. We had derivative financial instruments in a net asset position included in our Consolidated Statements of Financial Position of $72 million and $49 million as of September 30, 2019 and December 31, 2018 , respectively. Impaired loans Our impaired loans are subject to measurement at fair value on a nonrecurring basis and are classified as Level 3 measurements. A loan is considered impaired when management determines that collection of contractual amounts due is not probable. In these cases, an allowance for credit losses may be established based either on the present value of expected future cash flows discounted at the receivables' effective interest rate, the fair value of the collateral for collateral-dependent receivables or the observable market price of the receivable. In determining collateral value, we estimate the current fair market value of the collateral less selling costs. We had impaired loans carried at the fair value of $373 million and $469 million as of September 30, 2019 and December 31, 2018 , respectively. B. Fair Values of Financial Instruments In addition to the methods and assumptions we use to record the fair value of financial instruments as discussed in the Fair Value Measurements section above, we used the following methods and assumptions to estimate the fair value of our financial instruments: Cash and cash equivalents – carrying amount approximated fair value. Finance receivables, net – fair value was estimated by discounting the future cash flows using current rates representative of receivables with similar remaining maturities. Restricted cash and cash equivalents – carrying amount approximated fair value. Short-term borrowings – carrying amount approximated fair value. Long-term debt – fair value for fixed and floating-rate debt was estimated based on quoted market prices. Guarantees – fair value of guarantees is based on our estimate of the premium a market participant would require to issue the same guarantee in a stand-alone, arms-length transaction with an unrelated party. If quoted or observable market prices are not available, fair value is based upon internally developed models that utilize current market-based assumptions. Please refer to the table below for the fair values of our financial instruments. (Millions of dollars) September 30, 2019 December 31, 2018 Carrying Amount Fair Value Carrying Amount Fair Value Fair Value Levels Reference Cash and cash equivalents $ 1,366 $ 1,366 $ 766 $ 766 1 Restricted cash and cash equivalents (2) $ 4 $ 4 $ 7 $ 7 1 Finance receivables, net (excluding finance leases (1) ) $ 19,507 $ 19,612 $ 20,451 $ 20,510 3 Note 3 Interest rate contracts: In a receivable position $ 7 $ 7 $ 4 $ 4 2 Note 5 In a payable position $ (61 ) $ (61 ) $ (40 ) $ (40 ) 2 Note 5 Cross currency contracts: In a receivable position $ 124 $ 124 $ 93 $ 93 2 Note 5 In a payable position $ (6 ) $ (6 ) $ (11 ) $ (11 ) 2 Note 5 Foreign exchange contracts: In a receivable position $ 22 $ 22 $ 15 $ 15 2 Note 5 In a payable position $ (14 ) $ (14 ) $ (12 ) $ (12 ) 2 Note 5 Short-term borrowings $ (4,268 ) $ (4,268 ) $ (5,723 ) $ (5,723 ) 1 Long-term debt $ (24,479 ) $ (24,798 ) $ (22,815 ) $ (22,684 ) 2 Guarantees $ — $ — $ — $ — 3 Note 8 (1) Represents finance leases and failed sale leasebacks of $7.68 billion as of September 30, 2019 and finance leases of $7.47 billion as of December 31, 2018 . (2) Included in Other assets in the Consolidated Statements of Financial Position. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies We are involved in unresolved legal actions that arise in the normal course of business. Although it is not possible to predict with certainty the outcome of our unresolved legal actions, we believe that these unresolved legal actions will neither individually nor in the aggregate have a material adverse effect on our consolidated results of operations, financial position or liquidity. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes reflected an estimated annual tax rate of 28 percent in the third quarter of 2019 , compared with 24 percent in the third quarter of 2018 , excluding the discrete item discussed in the following paragraph. The increase in the estimated annual tax rate was primarily due to changes in the geographic mix of profits. A discrete tax benefit of $7 million was recorded in the third quarter of 2018 for the write-down of net deferred tax liabilities resulting from the 2017 tax year return to provision adjustments. The write-down reflected the reduction in the U.S. corporate tax rate from 35 percent to 21 percent beginning January 1, 2018. |
Finance Receivables (Tables)
Finance Receivables (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Summary of finance receivables included in the Consolidated Statements of Financial Position | A summary of finance receivables included in the Consolidated Statements of Financial Position was as follows: (Millions of dollars) September 30, December 31, Retail loans, net (1) $ 15,180 $ 15,509 Retail leases, net (2) 7,531 7,499 Caterpillar purchased receivables, net 4,175 4,691 Wholesale loans, net (1) 664 626 Wholesale leases, net 70 109 Recorded investment in finance receivables 27,620 28,434 Less: Allowance for credit losses (434 ) (511 ) Total finance receivables, net (3) $ 27,186 $ 27,923 (1) Includes failed sale leasebacks. (2) Includes $11 million and $9 million of finance leases with Caterpillar as of September 30, 2019 and December 31, 2018 , respectively. (3) Includes $22 million and $0 million of finance receivables classified as held for sale as of September 30, 2019 and December 31, 2018 , respectively. |
Allowance for credit losses and recorded investment in finance receivables | An analysis of the allowance for credit losses was as follows: (Millions of dollars) September 30, 2019 Allowance for Credit Losses: Customer Dealer Caterpillar Purchased Receivables Total Balance at beginning of year $ 486 $ 21 $ 4 $ 511 Receivables written off (238 ) — — (238 ) Recoveries on receivables previously written off 31 — — 31 Provision for credit losses 120 24 — 144 Adjustment due to sale of receivables (11 ) — — (11 ) Foreign currency translation adjustment (3 ) — — (3 ) Balance at end of period $ 385 $ 45 $ 4 $ 434 Individually evaluated for impairment $ 182 $ 39 $ — $ 221 Collectively evaluated for impairment 203 6 4 213 Ending Balance $ 385 $ 45 $ 4 $ 434 Recorded Investment in Finance Receivables: Individually evaluated for impairment $ 665 $ 78 $ — $ 743 Collectively evaluated for impairment 18,301 4,401 4,175 26,877 Ending Balance $ 18,966 $ 4,479 $ 4,175 $ 27,620 (Millions of dollars) December 31, 2018 Allowance for Credit Losses: Customer Dealer Caterpillar Purchased Receivables Total Balance at beginning of year $ 353 $ 9 $ 3 $ 365 Receivables written off (235 ) — — (235 ) Recoveries on receivables previously written off 46 — — 46 Provision for credit losses 337 12 1 350 Adjustment due to sale of receivables (7 ) — — (7 ) Foreign currency translation adjustment (8 ) — — (8 ) Balance at end of year $ 486 $ 21 $ 4 $ 511 Individually evaluated for impairment $ 288 $ 14 $ — $ 302 Collectively evaluated for impairment 198 7 4 209 Ending Balance $ 486 $ 21 $ 4 $ 511 Recorded Investment in Finance Receivables: Individually evaluated for impairment $ 859 $ 78 $ — $ 937 Collectively evaluated for impairment 18,724 4,082 4,691 27,497 Ending Balance $ 19,583 $ 4,160 $ 4,691 $ 28,434 |
Aging related to finance receivables | The tables below summarize our recorded investment in finance receivables by aging category. (Millions of dollars) September 30, 2019 31-60 Days Past Due 61-90 Days Past Due 91+ Days Past Due Total Past Due Current Recorded Investment in Finance Receivables 91+ Still Accruing Customer North America $ 73 $ 16 $ 48 $ 137 $ 7,875 $ 8,012 $ 15 EAME 33 10 136 179 2,853 3,032 4 Asia/Pacific 36 21 24 81 2,972 3,053 6 Mining 1 24 19 44 1,810 1,854 — Latin America 43 29 93 165 1,152 1,317 1 Caterpillar Power Finance 1 1 241 243 1,455 1,698 14 Dealer North America — — — — 2,481 2,481 — EAME — — — — 624 624 — Asia/Pacific — — — — 472 472 — Mining — — — — 4 4 — Latin America — — 81 81 814 895 — Caterpillar Power Finance — — — — 3 3 — Caterpillar Purchased Receivables (1) North America 12 5 17 34 2,675 2,709 EAME 1 — 2 3 507 510 Asia/Pacific 1 — 1 2 467 469 Mining — — — — — — Latin America — — — — 471 471 Caterpillar Power Finance — — — — 16 16 Total $ 201 $ 106 $ 662 $ 969 $ 26,651 $ 27,620 $ 40 (1) Caterpillar Purchased Receivables are non-interest bearing trade receivables purchased at a discount. (Millions of dollars) December 31, 2018 31-60 Days Past Due 61-90 Days Past Due 91+ Days Past Due Total Past Due Current Recorded Investment in Finance Receivables 91+ Still Accruing Customer North America $ 65 $ 18 $ 84 $ 167 $ 7,883 $ 8,050 $ 14 EAME 19 9 153 181 2,850 3,031 5 Asia/Pacific 25 9 8 42 2,923 2,965 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 — — — — 2,210 2,210 — EAME — — — — 619 619 — Asia/Pacific — — — — 514 514 — Mining — — — — 4 4 — Latin America — — 78 78 731 809 — Caterpillar Power Finance — — — — 4 4 — Caterpillar Purchased Receivables (1) North America 22 12 18 52 2,982 3,034 EAME 1 — 1 2 546 548 Asia/Pacific 5 1 1 7 756 763 Mining — — — — — — Latin America — — — — 338 338 Caterpillar Power Finance — — — — 8 8 Total $ 213 $ 80 $ 807 $ 1,100 $ 27,334 $ 28,434 $ 24 (1) Caterpillar Purchased Receivables are non-interest bearing trade receivables purchased at a discount. |
Impaired finance receivables | Our recorded investment in impaired finance receivables and the related unpaid principal balances and allowance for the Customer portfolio segment were as follows: (Millions of dollars) As of September 30, 2019 As of December 31, 2018 Impaired Finance Receivables With No Allowance Recorded Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance North America $ 9 $ 9 $ — $ 10 $ 10 $ — EAME — — — 1 1 — Asia/Pacific — — — 1 1 — Mining 23 23 — 33 33 — Latin America 25 25 — 29 29 — Caterpillar Power Finance 71 113 — 69 83 — Total $ 128 $ 170 $ — $ 143 $ 157 $ — Impaired Finance Receivables With An Allowance Recorded North America $ 31 $ 30 $ 9 $ 40 $ 41 $ 14 EAME 60 60 27 92 92 57 Asia/Pacific 10 10 4 4 4 2 Mining 61 59 18 56 55 26 Latin America 66 64 22 75 75 25 Caterpillar Power Finance 309 322 102 449 455 164 Total $ 537 $ 545 $ 182 $ 716 $ 722 $ 288 Total Impaired Finance Receivables North America $ 40 $ 39 $ 9 $ 50 $ 51 $ 14 EAME 60 60 27 93 93 57 Asia/Pacific 10 10 4 5 5 2 Mining 84 82 18 89 88 26 Latin America 91 89 22 104 104 25 Caterpillar Power Finance 380 435 102 518 538 164 Total $ 665 $ 715 $ 182 $ 859 $ 879 $ 288 (Millions of dollars) Three Months Ended Three Months Ended Impaired Finance Receivables With No Allowance Recorded Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized North America $ 10 $ — $ 19 $ — EAME 15 — 4 — Asia/Pacific — — 30 1 Mining 26 — 35 — Latin America 22 — 37 1 Caterpillar Power Finance 57 1 94 2 Total $ 130 $ 1 $ 219 $ 4 Impaired Finance Receivables With An Allowance Recorded North America $ 30 $ — $ 47 $ — EAME 80 1 59 — Asia/Pacific 12 1 2 — Mining 65 1 60 1 Latin America 69 1 51 1 Caterpillar Power Finance 376 1 374 4 Total $ 632 $ 5 $ 593 $ 6 Total Impaired Finance Receivables North America $ 40 $ — $ 66 $ — EAME 95 1 63 — Asia/Pacific 12 1 32 1 Mining 91 1 95 1 Latin America 91 1 88 2 Caterpillar Power Finance 433 2 468 6 Total $ 762 $ 6 $ 812 $ 10 (Millions of dollars) Nine Months Ended Nine Months Ended Impaired Finance Receivables With No Allowance Recorded Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized North America $ 10 $ — $ 17 $ 1 EAME 7 — 17 — Asia/Pacific — — 31 2 Mining 29 1 65 2 Latin America 22 1 41 2 Caterpillar Power Finance 53 2 149 5 Total $ 121 $ 4 $ 320 $ 12 Impaired Finance Receivables With An Allowance Recorded North America $ 36 $ 1 $ 51 $ 1 EAME 88 2 41 1 Asia/Pacific 9 1 5 — Mining 49 2 43 2 Latin America 73 4 69 3 Caterpillar Power Finance 422 8 364 8 Total $ 677 $ 18 $ 573 $ 15 Total Impaired Finance Receivables North America $ 46 $ 1 $ 68 $ 2 EAME 95 2 58 1 Asia/Pacific 9 1 36 2 Mining 78 3 108 4 Latin America 95 5 110 5 Caterpillar Power Finance 475 10 513 13 Total $ 798 $ 22 $ 893 $ 27 |
Recorded investment in customer finance receivables on non-accrual status | The recorded investment in Customer finance receivables on non-accrual status was as follows: (Millions of dollars) September 30, December 31, North America $ 38 $ 77 EAME 168 154 Asia/Pacific 19 4 Mining 44 50 Latin America 103 106 Caterpillar Power Finance 372 416 Total $ 744 $ 807 |
Finance receivables modified as TDRs | Our recorded investment in finance receivables in the Customer portfolio segment modified as TDRs was as follows: (Dollars in millions) Three Months Ended Three Months Ended Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment North America 4 $ — $ — 4 $ — $ — Caterpillar Power Finance 4 56 55 2 40 40 Total 8 $ 56 $ 55 6 $ 40 $ 40 Nine Months Ended Nine Months Ended Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment North America 12 $ 5 $ 4 34 $ 13 $ 13 EAME 21 21 17 — — — Mining 1 6 6 1 29 29 Latin America 4 2 2 1 3 3 Caterpillar Power Finance 19 154 152 7 93 60 Total 57 $ 188 $ 181 43 $ 138 $ 105 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: (Dollars in millions) Three Months Ended Three Months Ended Number of Contracts Post-TDR Recorded Investment Number of Contracts Post-TDR Recorded Investment North America — $ — 7 $ 9 Latin America — — 1 — Caterpillar Power Finance — — 3 33 Total — $ — 11 $ 42 Nine Months Ended Nine Months Ended Number of Contracts Post-TDR Recorded Investment Number of Contracts Post-TDR Recorded Investment North America — $ — 10 $ 10 Latin America — — 3 1 Caterpillar Power Finance — — 3 33 Total — $ — 16 $ 44 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Contractual maturities for finance lease receivables (classified as sales-type and direct finance leases) | Contractual maturities for finance lease receivables (classified as sales-type and direct finance leases) were as follows: (Millions of dollars) September 30, 2019 Amounts due in Retail leases Wholesale leases Total Remaining three months of 2019 $ 917 $ 3 $ 920 2020 2,840 19 2,859 2021 1,766 12 1,778 2022 881 5 886 2023 383 2 385 Thereafter 204 2 206 Total 6,991 43 7,034 Guaranteed residual value 398 26 424 Unguaranteed residual value 825 5 830 Unearned income (683 ) (4 ) (687 ) Total $ 7,531 $ 70 $ 7,601 (Millions of dollars) December 31, 2018 Amounts due in Retail leases Wholesale leases Total 2019 $ 3,024 $ 29 $ 3,053 2020 2,055 21 2,076 2021 1,092 12 1,104 2022 465 5 470 2023 171 2 173 Thereafter 62 2 64 Total 6,869 71 6,940 Guaranteed residual value 416 42 458 Unguaranteed residual value 854 3 857 Unearned income (640 ) (7 ) (647 ) Total $ 7,499 $ 109 $ 7,608 |
Carrying amount of Equipment on operating leases, net | The carrying amount of Equipment on operating leases, net in the Consolidated Statements of Financial Position was as follows: (Millions of dollars) September 30, December 31, Equipment on operating leases, at cost $ 5,229 $ 5,201 Less: Accumulated depreciation (1,662 ) (1,639 ) Equipment on operating leases, net (1) $ 3,567 $ 3,562 (1) Includes $101 million and $45 million of operating leases with Caterpillar as of September 30, 2019 and December 31, 2018, respectively. |
Schedule of payments due for operating leases | At September 30, 2019 , payments due for operating leases were as follows: (Millions of dollars) Remaining Three Months of 2019 2020 2021 2022 2023 Thereafter Total $ 245 $ 758 $ 433 $ 216 $ 96 $ 58 $ 1,806 |
Scheduled minimum rental payments for operating leases | At December 31, 2018, scheduled minimum rental payments for operating leases were as follows: (Millions of dollars) 2019 2020 2021 2022 2023 Thereafter Total $ 808 $ 503 $ 257 $ 115 $ 41 $ 15 $ 1,739 |
Revenues from finance and operating leases | Revenues from finance and operating leases were as follows: (Millions of dollars) Three Months Ended Nine Months Ended Finance lease revenue (included in retail and wholesale finance revenue) $ 135 $ 388 Operating lease revenue 262 777 Total $ 397 $ 1,165 |
Components of lease cost | The components of lease cost were as follows: (Millions of dollars) Three Months Ended Nine Months Ended Operating lease cost $ 2 $ 6 Short-term lease cost $ — $ 1 Variable lease cost $ — $ — |
Supplemental information related to operating leases | Supplemental information related to operating leases was as follows: (Millions of dollars) Consolidated Statements of Financial Position Location September 30, January 1, Right-of-use assets Other assets $ 22 $ 22 Lease liabilities Other liabilities $ 22 $ 23 Weighted average remaining lease term 5 years 4 years Weighted average discount rates 2.4 % 2.6 % |
Maturities of operating lease liabilities | At September 30, 2019 , maturities of operating lease liabilities were as follows: (Millions of dollars) Remaining three months of 2019 $ 2 2020 7 2021 4 2022 3 2023 3 Thereafter 4 Total lease payments 23 Less: imputed interest (1 ) Total $ 22 |
Schedule of minimum payments for operating leases having initial non-cancelable terms in excess of one year | At December 31, 2018, minimum payments for operating leases having initial non-cancelable terms in excess of one year were as follows: (Millions of dollars) 2019 $ 8 2020 6 2021 4 2022 2 2023 2 Thereafter 2 Total $ 24 |
Supplemental cash flow information related to operating leases | Supplemental cash flow information related to operating leases was as follows: (Millions of dollars) Nine Months Ended Cash paid for amounts included in the measurement of operating lease liabilities $ 6 Right-of-use assets obtained in exchange for operating lease obligations (1) $ 24 (1) Includes a $23 million impact of initial recognition of right-of-use assets and lease liabilities. |
Derivative Financial Instrume_2
Derivative Financial Instruments and Risk Management (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Location and fair value of derivative instruments reported in the Consolidated Statements of Financial Position | The location and fair value of derivative instruments reported in the Consolidated Statements of Financial Position were as follows: (Millions of dollars) Asset (Liability) Fair Value Consolidated Statements of Financial Position Location September 30, December 31, Designated derivatives Interest rate contracts Other assets $ 7 $ 4 Interest rate contracts Accrued expenses (61 ) (40 ) Cross currency contracts Other assets 118 88 Cross currency contracts Accrued expenses (6 ) (9 ) $ 58 $ 43 Undesignated derivatives Foreign exchange contracts Other assets $ 22 $ 15 Foreign exchange contracts Accrued expenses (14 ) (12 ) Cross currency contracts Other assets 6 5 Cross currency contracts Accrued expenses — (2 ) $ 14 $ 6 |
Schedule of effect of derivatives designated as cash flow hedging instruments in the Consolidated Statements of Profit | The effect of derivatives designated as hedging instruments on the Consolidated Statements of Profit was as follows: Cash Flow Hedges (Millions of dollars) Three Months Ended September 30, 2019 Recognized in Earnings Amount of Gains (Losses) Recognized in AOCI Classification Amount of Gains (Losses) Reclassified from AOCI Amount of the line items in the Consolidated Statements of Profit Interest rate contracts $ (12 ) Interest expense $ (3 ) $ (198 ) Cross currency contracts 100 Other income (expense) 89 (4 ) Interest expense 9 (198 ) $ 88 $ 95 Three Months Ended September 30, 2018 Recognized in Earnings Amount of Gains (Losses) Recognized in AOCI (Effective Portion) Classification Reclassified from AOCI to Earnings (Effective Portion) Recognized in Earnings (Ineffective Portion) Interest rate contracts $ 3 Interest expense $ — $ — Cross currency contracts 53 Other income (expense) 51 — Interest expense 5 — $ 56 $ 56 $ — Nine Months Ended September 30, 2019 Recognized in Earnings Amount of Gains (Losses) Recognized in AOCI Classification Amount of Gains (Losses) Reclassified from AOCI Amount of the line items in the Consolidated Statements of Profit Interest rate contracts $ (72 ) Interest expense $ (2 ) $ (599 ) Cross currency contracts 132 Other income (expense) 91 (14 ) Interest expense 23 (599 ) $ 60 $ 112 Nine Months Ended September 30, 2018 Recognized in Earnings Amount of Gains (Losses) Recognized in AOCI (Effective Portion) Classification Reclassified from AOCI to Earnings (Effective Portion) Recognized in Earnings (Ineffective Portion) Interest rate contracts $ 8 Interest expense $ 1 $ — Cross currency contracts 143 Other income (expense) 141 — Interest expense 13 — $ 151 $ 155 $ — |
Schedule of effect of derivatives not designated as hedging instruments on the Consolidated Statements of Profit | The effect of derivatives not designated as hedging instruments on the Consolidated Statements of Profit was as follows: (Millions of dollars) Three Months Ended September 30, Classification 2019 2018 Foreign exchange contracts Other income (expense) $ 12 $ 12 Cross currency contracts Other income (expense) 3 1 $ 15 $ 13 Nine Months Ended September 30, Classification 2019 2018 Foreign exchange contracts Other income (expense) $ (26 ) $ 23 Cross currency contracts Other income (expense) 2 6 $ (24 ) $ 29 |
Schedule of effect of net settlement provisions of the master netting agreements on our derivative balances | The effect of net settlement provisions of the master netting agreements on our derivative balances upon an event of default or a termination event was as follows: (Millions of dollars) September 30, December 31, Derivative Assets Gross Amount of Recognized Assets $ 153 $ 112 Gross Amounts Offset — — Net Amount of Assets (1) 153 112 Gross Amounts Not Offset (39 ) (34 ) Net Amount $ 114 $ 78 Derivative Liabilities Gross Amount of Recognized Liabilities $ (81 ) $ (63 ) Gross Amounts Offset — — Net Amount of Liabilities (1) (81 ) (63 ) Gross Amounts Not Offset 39 34 Net Amount $ (42 ) $ (29 ) (1) As presented in the Consolidated Statements of Financial Position. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income/(Loss) (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated other comprehensive income/(loss) | Changes in Accumulated other comprehensive income/(loss), net of tax, included in the Consolidated Statements of Changes in Shareholder's Equity, consisted of the following: (Millions of dollars) Foreign currency translation Derivative financial instruments Total Three Months Ended September 30, 2018 Balance at June 30, 2018 $ (776 ) $ (8 ) $ (784 ) Other comprehensive income/(loss) before reclassifications (44 ) 42 (2 ) Amounts reclassified from accumulated other comprehensive (income)/loss — (42 ) (42 ) Other comprehensive income/(loss) (44 ) — (44 ) Balance at September 30, 2018 $ (820 ) $ (8 ) $ (828 ) Three Months Ended September 30, 2019 Balance at June 30, 2019 $ (758 ) $ (73 ) $ (831 ) Other comprehensive income/(loss) before reclassifications (160 ) 68 (92 ) Amounts reclassified from accumulated other comprehensive (income)/loss — (73 ) (73 ) Other comprehensive income/(loss) (160 ) (5 ) (165 ) Balance at September 30, 2019 $ (918 ) $ (78 ) $ (996 ) Nine Months Ended September 30, 2018 Balance at December 31, 2017 $ (587 ) $ (5 ) $ (592 ) Other comprehensive income/(loss) before reclassifications (233 ) 115 (118 ) Amounts reclassified from accumulated other comprehensive (income)/loss — (118 ) (118 ) Other comprehensive income/(loss) (233 ) (3 ) (236 ) Balance at September 30, 2018 $ (820 ) $ (8 ) $ (828 ) Nine Months Ended September 30, 2019 Balance at December 31, 2018 $ (889 ) $ (36 ) $ (925 ) Other comprehensive income/(loss) before reclassifications (127 ) 46 (81 ) Amounts reclassified from accumulated other comprehensive (income)/loss — (87 ) (87 ) Adjustment to adopt new accounting guidance (1) 98 (1 ) 97 Other comprehensive income/(loss) (29 ) (42 ) (71 ) Balance at September 30, 2019 $ (918 ) $ (78 ) $ (996 ) (1) See Note 2 regarding new accounting guidance related to reclassification of certain tax effects from accumulated other comprehensive income/(loss). |
Reclassifications out of Accumulated other comprehensive income/(loss) | The effect of the reclassifications out of Accumulated other comprehensive income/(loss) on the Consolidated Statements of Profit was as follows: (Millions of dollars) Three Months Ended Nine Months Ended Derivative financial instruments Classification of income (expense) 2019 2018 2019 2018 Cross currency contracts Other income (expense) $ 89 $ 51 $ 91 $ 141 Cross currency contracts Interest expense 9 5 23 13 Interest rate contracts Interest expense (3 ) — (2 ) 1 Reclassifications before tax 95 56 112 155 Tax (provision) benefit (22 ) (14 ) (25 ) (37 ) Total reclassifications from Accumulated other comprehensive income/(loss) $ 73 $ 42 $ 87 $ 118 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Supplemental segment data and reconciliations to consolidated external reporting for the three months ended September 30 was as follows: (Millions of dollars) 2019 External Revenues Profit before income taxes Interest Expense Depreciation on equipment leased to others Provision for credit losses Assets at September 30, 2019 Capital expenditures North America $ 414 $ 127 $ 99 $ 147 $ 3 $ 15,764 $ 265 EAME 72 14 13 16 6 4,924 21 Asia/Pacific 96 45 26 3 6 4,488 (1 ) Latin America 67 19 25 6 2 2,996 2 Caterpillar Power Finance 23 9 10 1 (3 ) 1,766 — Mining 69 10 14 32 6 2,471 99 Total Segments 741 224 187 205 20 32,409 386 Unallocated 14 (87 ) 66 — — 1,986 2 Timing (7 ) (4 ) — — — 19 — Methodology — 51 (55 ) — — (144 ) — Inter-segment Eliminations (1) — — — — — (363 ) — Total $ 748 $ 184 $ 198 $ 205 $ 20 $ 33,907 $ 388 2018 External Revenues Profit before income taxes Interest Expense Depreciation on equipment leased to others Provision for credit losses Assets at December 31, 2018 Capital expenditures North America $ 402 $ 121 $ 94 $ 148 $ 7 $ 15,632 $ 204 EAME 69 12 12 17 8 4,862 20 Asia/Pacific 92 44 29 4 — 4,639 3 Latin America 61 15 23 6 6 2,972 1 Caterpillar Power Finance 33 (21 ) 13 1 34 2,259 — Mining 64 19 15 32 (7 ) 2,234 67 Total Segments 721 190 186 208 48 32,598 295 Unallocated 23 (72 ) 62 — (1 ) 1,957 3 Timing (9 ) 6 — — — 55 — Methodology — 39 (54 ) — — (159 ) — Inter-segment Eliminations (1) — — — — — (270 ) — Total $ 735 $ 163 $ 194 $ 208 $ 47 $ 34,181 $ 298 (1) Elimination is primarily related to intercompany loans. Supplemental segment data and reconciliations to consolidated external reporting for the nine months ended September 30 was as follows: (Millions of dollars) 2019 External Revenues Profit before income taxes Interest Expense Depreciation on equipment leased to others Provision for credit losses Assets at September 30, 2019 Capital expenditures North America $ 1,229 $ 374 $ 295 $ 437 $ 12 $ 15,764 $ 832 EAME 217 60 40 50 3 4,924 62 Asia/Pacific 295 139 85 9 14 4,488 9 Latin America 189 25 73 17 31 2,996 21 Caterpillar Power Finance 78 (40 ) 34 2 65 1,766 — Mining 208 29 42 96 19 2,471 158 Total Segments 2,216 587 569 611 144 32,409 1,082 Unallocated 48 (253 ) 195 — — 1,986 11 Timing (23 ) (13 ) — — — 19 — Methodology — 146 (165 ) — — (144 ) — Inter-segment Eliminations (1) — — — — — (363 ) — Total $ 2,241 $ 467 $ 599 $ 611 $ 144 $ 33,907 $ 1,093 2018 External Revenues Profit before income taxes Interest Expense Depreciation on equipment leased to others Provision for credit losses Assets at December 31, 2018 Capital expenditures North America $ 1,141 $ 321 $ 267 $ 427 $ 32 $ 15,632 $ 870 EAME 208 24 35 56 32 4,862 56 Asia/Pacific 269 128 84 14 (5 ) 4,639 10 Latin America 193 (1 ) 77 21 54 2,972 28 Caterpillar Power Finance 98 (60 ) 40 2 98 2,259 — Mining 196 35 45 95 1 2,234 131 Total Segments 2,105 447 548 615 212 32,598 1,095 Unallocated 68 (204 ) 182 1 (1 ) 1,957 97 Timing (25 ) 12 — — 7 55 — Methodology — 132 (172 ) — — (159 ) — Inter-segment Eliminations (1) — — — — — (270 ) — Total $ 2,148 $ 387 $ 558 $ 616 $ 218 $ 34,181 $ 1,192 (1) Elimination is primarily related to intercompany loans. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair values of financial instruments | Please refer to the table below for the fair values of our financial instruments. (Millions of dollars) September 30, 2019 December 31, 2018 Carrying Amount Fair Value Carrying Amount Fair Value Fair Value Levels Reference Cash and cash equivalents $ 1,366 $ 1,366 $ 766 $ 766 1 Restricted cash and cash equivalents (2) $ 4 $ 4 $ 7 $ 7 1 Finance receivables, net (excluding finance leases (1) ) $ 19,507 $ 19,612 $ 20,451 $ 20,510 3 Note 3 Interest rate contracts: In a receivable position $ 7 $ 7 $ 4 $ 4 2 Note 5 In a payable position $ (61 ) $ (61 ) $ (40 ) $ (40 ) 2 Note 5 Cross currency contracts: In a receivable position $ 124 $ 124 $ 93 $ 93 2 Note 5 In a payable position $ (6 ) $ (6 ) $ (11 ) $ (11 ) 2 Note 5 Foreign exchange contracts: In a receivable position $ 22 $ 22 $ 15 $ 15 2 Note 5 In a payable position $ (14 ) $ (14 ) $ (12 ) $ (12 ) 2 Note 5 Short-term borrowings $ (4,268 ) $ (4,268 ) $ (5,723 ) $ (5,723 ) 1 Long-term debt $ (24,479 ) $ (24,798 ) $ (22,815 ) $ (22,684 ) 2 Guarantees $ — $ — $ — $ — 3 Note 8 (1) Represents finance leases and failed sale leasebacks of $7.68 billion as of September 30, 2019 and finance leases of $7.47 billion as of December 31, 2018 . (2) Included in Other assets in the Consolidated Statements of Financial Position. |
New Accounting Pronouncements (
New Accounting Pronouncements (Details) $ in Millions | Jan. 01, 2019USD ($) |
Accounting Standards Update 2018-02 | |
New Accounting Pronouncements or Change in Accounting Principle | |
Amount, Reclassification of certain tax effects from AOCI | $ 97 |
Finance Receivables (Details)
Finance Receivables (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts, Notes, Loans and Financing Receivable | |||
Recorded Investment in Finance Receivables | $ 27,620 | $ 28,434 | |
Less: Allowance for credit losses | (434) | (511) | $ (365) |
Total finance receivables, net | 27,186 | 27,923 | |
Retail loans | |||
Accounts, Notes, Loans and Financing Receivable | |||
Recorded Investment in Finance Receivables | 15,180 | 15,509 | |
Retail leases | |||
Accounts, Notes, Loans and Financing Receivable | |||
Recorded Investment in Finance Receivables | 7,531 | 7,499 | |
Caterpillar Purchased Receivables | |||
Accounts, Notes, Loans and Financing Receivable | |||
Recorded Investment in Finance Receivables | 4,175 | 4,691 | |
Wholesale loans | |||
Accounts, Notes, Loans and Financing Receivable | |||
Recorded Investment in Finance Receivables | 664 | 626 | |
Wholesale leases | |||
Accounts, Notes, Loans and Financing Receivable | |||
Recorded Investment in Finance Receivables | 70 | 109 | |
Caterpillar | Retail leases | |||
Accounts, Notes, Loans and Financing Receivable | |||
Recorded Investment in Finance Receivables | 11 | 9 | |
Finance receivables held-for-sale | |||
Accounts, Notes, Loans and Financing Receivable | |||
Total finance receivables, net | $ 22 | $ 0 |
Finance Receivables (Details 2)
Finance Receivables (Details 2) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | |
Financing Receivable, Allowance for Credit Losses | ||||
Allowance for credit losses | $ 511 | $ 365 | $ 434 | $ 511 |
Allowance for credit losses as a percent of our recorded investment in finance receivables | 1.57% | 1.80% | ||
Financing Receivable, Allowance for Credit Losses | ||||
Balance at beginning of year | 511 | 365 | ||
Receivables written off | (238) | (235) | ||
Recoveries on receivables previously written off | 31 | 46 | ||
Provision for credit losses | 144 | 350 | ||
Adjustment due to sale of receivables | (11) | (7) | ||
Foreign currency translation adjustment | (3) | (8) | ||
Balance at end of period | 434 | 511 | ||
Allowance for Credit Losses | ||||
Individually evaluated for impairment | $ 221 | $ 302 | ||
Collectively evaluated for impairment | 213 | 209 | ||
Allowance, Ending Balance | 511 | 365 | 434 | 511 |
Recorded Investment in Finance Receivables | ||||
Individually evaluated for impairment | 743 | 937 | ||
Collectively evaluated for impairment | 26,877 | 27,497 | ||
Recorded Investment in Finance Receivables, Ending Balance | 27,620 | 28,434 | ||
Customer | ||||
Financing Receivable, Allowance for Credit Losses | ||||
Allowance for credit losses | 486 | 353 | 385 | 486 |
Financing Receivable, Allowance for Credit Losses | ||||
Balance at beginning of year | 486 | 353 | ||
Receivables written off | (238) | (235) | ||
Recoveries on receivables previously written off | 31 | 46 | ||
Provision for credit losses | 120 | 337 | ||
Adjustment due to sale of receivables | (11) | (7) | ||
Foreign currency translation adjustment | (3) | (8) | ||
Balance at end of period | 385 | 486 | ||
Allowance for Credit Losses | ||||
Individually evaluated for impairment | 182 | 288 | ||
Collectively evaluated for impairment | 203 | 198 | ||
Allowance, Ending Balance | 486 | 353 | 385 | 486 |
Recorded Investment in Finance Receivables | ||||
Individually evaluated for impairment | 665 | 859 | ||
Collectively evaluated for impairment | 18,301 | 18,724 | ||
Recorded Investment in Finance Receivables, Ending Balance | 18,966 | 19,583 | ||
Dealer | ||||
Financing Receivable, Allowance for Credit Losses | ||||
Allowance for credit losses | 21 | 9 | 45 | 21 |
Financing Receivable, Allowance for Credit Losses | ||||
Balance at beginning of year | 21 | 9 | ||
Receivables written off | 0 | 0 | ||
Recoveries on receivables previously written off | 0 | 0 | ||
Provision for credit losses | 24 | 12 | ||
Adjustment due to sale of receivables | 0 | 0 | ||
Foreign currency translation adjustment | 0 | 0 | ||
Balance at end of period | 45 | 21 | ||
Allowance for Credit Losses | ||||
Individually evaluated for impairment | 39 | 14 | ||
Collectively evaluated for impairment | 6 | 7 | ||
Allowance, Ending Balance | 21 | 9 | 45 | 21 |
Recorded Investment in Finance Receivables | ||||
Individually evaluated for impairment | 78 | 78 | ||
Collectively evaluated for impairment | 4,401 | 4,082 | ||
Recorded Investment in Finance Receivables, Ending Balance | 4,479 | 4,160 | ||
Caterpillar Purchased Receivables | ||||
Financing Receivable, Allowance for Credit Losses | ||||
Allowance for credit losses | 4 | 3 | 4 | 4 |
Financing Receivable, Allowance for Credit Losses | ||||
Balance at beginning of year | 4 | 3 | ||
Receivables written off | 0 | 0 | ||
Recoveries on receivables previously written off | 0 | 0 | ||
Provision for credit losses | 0 | 1 | ||
Adjustment due to sale of receivables | 0 | 0 | ||
Foreign currency translation adjustment | 0 | 0 | ||
Balance at end of period | 4 | 4 | ||
Allowance for Credit Losses | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 4 | 4 | ||
Allowance, Ending Balance | $ 4 | $ 3 | 4 | 4 |
Recorded Investment in Finance Receivables | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 4,175 | 4,691 | ||
Recorded Investment in Finance Receivables, Ending Balance | $ 4,175 | $ 4,691 |
Finance Receivables (Details 3)
Finance Receivables (Details 3) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Receivables [Abstract] | ||
Period after which unpaid installments are considered as past due | 30 days | |
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | $ 969 | $ 1,100 |
Current | 26,651 | 27,334 |
Recorded Investment in Finance Receivables | 27,620 | 28,434 |
91 Plus, Still Accruing | 40 | 24 |
31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 201 | 213 |
61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 106 | 80 |
91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 662 | 807 |
Customer | ||
Financing Receivable, Recorded Investment, Past Due | ||
Recorded Investment in Finance Receivables | 18,966 | 19,583 |
Customer | North America | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 137 | 167 |
Current | 7,875 | 7,883 |
Recorded Investment in Finance Receivables | 8,012 | 8,050 |
91 Plus, Still Accruing | 15 | 14 |
Customer | North America | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 73 | 65 |
Customer | North America | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 16 | 18 |
Customer | North America | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 48 | 84 |
Customer | EAME | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 179 | 181 |
Current | 2,853 | 2,850 |
Recorded Investment in Finance Receivables | 3,032 | 3,031 |
91 Plus, Still Accruing | 4 | 5 |
Customer | EAME | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 33 | 19 |
Customer | EAME | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 10 | 9 |
Customer | EAME | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 136 | 153 |
Customer | Asia/Pacific | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 81 | 42 |
Current | 2,972 | 2,923 |
Recorded Investment in Finance Receivables | 3,053 | 2,965 |
91 Plus, Still Accruing | 6 | 5 |
Customer | Asia/Pacific | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 36 | 25 |
Customer | Asia/Pacific | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 21 | 9 |
Customer | Asia/Pacific | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 24 | 8 |
Customer | Mining | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 44 | 38 |
Current | 1,810 | 1,642 |
Recorded Investment in Finance Receivables | 1,854 | 1,680 |
91 Plus, Still Accruing | 0 | 0 |
Customer | Mining | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 1 | 28 |
Customer | Mining | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 24 | 1 |
Customer | Mining | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 19 | 9 |
Customer | Latin America | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 165 | 138 |
Current | 1,152 | 1,421 |
Recorded Investment in Finance Receivables | 1,317 | 1,559 |
91 Plus, Still Accruing | 1 | 0 |
Customer | Latin America | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 43 | 38 |
Customer | Latin America | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 29 | 29 |
Customer | Latin America | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 93 | 71 |
Customer | Caterpillar Power Finance | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 243 | 395 |
Current | 1,455 | 1,903 |
Recorded Investment in Finance Receivables | 1,698 | 2,298 |
91 Plus, Still Accruing | 14 | 0 |
Customer | Caterpillar Power Finance | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 1 | 10 |
Customer | Caterpillar Power Finance | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 1 | 1 |
Customer | Caterpillar Power Finance | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 241 | 384 |
Dealer | ||
Financing Receivable, Recorded Investment, Past Due | ||
Recorded Investment in Finance Receivables | 4,479 | 4,160 |
Dealer | North America | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Current | 2,481 | 2,210 |
Recorded Investment in Finance Receivables | 2,481 | 2,210 |
91 Plus, Still Accruing | 0 | 0 |
Dealer | North America | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | North America | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | North America | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | EAME | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Current | 624 | 619 |
Recorded Investment in Finance Receivables | 624 | 619 |
91 Plus, Still Accruing | 0 | 0 |
Dealer | EAME | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | EAME | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | EAME | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | Asia/Pacific | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Current | 472 | 514 |
Recorded Investment in Finance Receivables | 472 | 514 |
91 Plus, Still Accruing | 0 | 0 |
Dealer | Asia/Pacific | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | Asia/Pacific | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | Asia/Pacific | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | Mining | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Current | 4 | 4 |
Recorded Investment in Finance Receivables | 4 | 4 |
91 Plus, Still Accruing | 0 | 0 |
Dealer | Mining | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | Mining | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | Mining | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | Latin America | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 81 | 78 |
Current | 814 | 731 |
Recorded Investment in Finance Receivables | 895 | 809 |
91 Plus, Still Accruing | 0 | 0 |
Dealer | Latin America | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | Latin America | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | Latin America | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 81 | 78 |
Dealer | Caterpillar Power Finance | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Current | 3 | 4 |
Recorded Investment in Finance Receivables | 3 | 4 |
91 Plus, Still Accruing | 0 | 0 |
Dealer | Caterpillar Power Finance | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | Caterpillar Power Finance | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Dealer | Caterpillar Power Finance | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Caterpillar Purchased Receivables | ||
Financing Receivable, Recorded Investment, Past Due | ||
Recorded Investment in Finance Receivables | 4,175 | 4,691 |
Caterpillar Purchased Receivables | North America | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 34 | 52 |
Current | 2,675 | 2,982 |
Recorded Investment in Finance Receivables | 2,709 | 3,034 |
Caterpillar Purchased Receivables | North America | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 12 | 22 |
Caterpillar Purchased Receivables | North America | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 5 | 12 |
Caterpillar Purchased Receivables | North America | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 17 | 18 |
Caterpillar Purchased Receivables | EAME | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 3 | 2 |
Current | 507 | 546 |
Recorded Investment in Finance Receivables | 510 | 548 |
Caterpillar Purchased Receivables | EAME | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 1 | 1 |
Caterpillar Purchased Receivables | EAME | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Caterpillar Purchased Receivables | EAME | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 2 | 1 |
Caterpillar Purchased Receivables | Asia/Pacific | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 2 | 7 |
Current | 467 | 756 |
Recorded Investment in Finance Receivables | 469 | 763 |
Caterpillar Purchased Receivables | Asia/Pacific | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 1 | 5 |
Caterpillar Purchased Receivables | Asia/Pacific | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 1 |
Caterpillar Purchased Receivables | Asia/Pacific | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 1 | 1 |
Caterpillar Purchased Receivables | Mining | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Current | 0 | 0 |
Recorded Investment in Finance Receivables | 0 | 0 |
Caterpillar Purchased Receivables | Mining | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Caterpillar Purchased Receivables | Mining | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Caterpillar Purchased Receivables | Mining | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Caterpillar Purchased Receivables | Latin America | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Current | 471 | 338 |
Recorded Investment in Finance Receivables | 471 | 338 |
Caterpillar Purchased Receivables | Latin America | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Caterpillar Purchased Receivables | Latin America | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Caterpillar Purchased Receivables | Latin America | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Caterpillar Purchased Receivables | Caterpillar Power Finance | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Current | 16 | 8 |
Recorded Investment in Finance Receivables | 16 | 8 |
Caterpillar Purchased Receivables | Caterpillar Power Finance | 31-60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Caterpillar Purchased Receivables | Caterpillar Power Finance | 61-90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | 0 | 0 |
Caterpillar Purchased Receivables | Caterpillar Power Finance | 91 Plus Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due | ||
Past Due | $ 0 | $ 0 |
Finance Receivables (Details 4)
Finance Receivables (Details 4) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Receivables [Abstract] | |||||
Period after which collection of future income is considered as not probable | 120 days | ||||
Customer | |||||
Financing Receivable, Impaired | |||||
Recorded Investment With No Allowance Recorded | $ 128 | $ 128 | $ 143 | ||
Unpaid Principal Balance With No Allowance Recorded | 170 | 170 | 157 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 537 | 537 | 716 | ||
Unpaid Principal Balance With An Allowance Recorded | 545 | 545 | 722 | ||
Related Allowance With An Allowance Recorded | 182 | 182 | 288 | ||
Recorded Investment, Total | 665 | 665 | 859 | ||
Unpaid Principal Balance, Total | 715 | 715 | 879 | ||
Related Allowance, Total | 182 | 182 | 288 | ||
Average Recorded Investment With No Allowance Recorded | 130 | $ 219 | 121 | $ 320 | |
Interest Income Recognized With No Allowance Recorded | 1 | 4 | 4 | 12 | |
Average Recorded Investment With An Allowance Recorded | 632 | 593 | 677 | 573 | |
Interest Income Recognized With An Allowance Recorded | 5 | 6 | 18 | 15 | |
Average Recorded Investment, Total | 762 | 812 | 798 | 893 | |
Interest Income Recognized, Total | 6 | 10 | 22 | 27 | |
Customer | North America | |||||
Financing Receivable, Impaired | |||||
Recorded Investment With No Allowance Recorded | 9 | 9 | 10 | ||
Unpaid Principal Balance With No Allowance Recorded | 9 | 9 | 10 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 31 | 31 | 40 | ||
Unpaid Principal Balance With An Allowance Recorded | 30 | 30 | 41 | ||
Related Allowance With An Allowance Recorded | 9 | 9 | 14 | ||
Recorded Investment, Total | 40 | 40 | 50 | ||
Unpaid Principal Balance, Total | 39 | 39 | 51 | ||
Related Allowance, Total | 9 | 9 | 14 | ||
Average Recorded Investment With No Allowance Recorded | 10 | 19 | 10 | 17 | |
Interest Income Recognized With No Allowance Recorded | 0 | 0 | 0 | 1 | |
Average Recorded Investment With An Allowance Recorded | 30 | 47 | 36 | 51 | |
Interest Income Recognized With An Allowance Recorded | 0 | 0 | 1 | 1 | |
Average Recorded Investment, Total | 40 | 66 | 46 | 68 | |
Interest Income Recognized, Total | 0 | 0 | 1 | 2 | |
Customer | EAME | |||||
Financing Receivable, Impaired | |||||
Recorded Investment With No Allowance Recorded | 0 | 0 | 1 | ||
Unpaid Principal Balance With No Allowance Recorded | 0 | 0 | 1 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 60 | 60 | 92 | ||
Unpaid Principal Balance With An Allowance Recorded | 60 | 60 | 92 | ||
Related Allowance With An Allowance Recorded | 27 | 27 | 57 | ||
Recorded Investment, Total | 60 | 60 | 93 | ||
Unpaid Principal Balance, Total | 60 | 60 | 93 | ||
Related Allowance, Total | 27 | 27 | 57 | ||
Average Recorded Investment With No Allowance Recorded | 15 | 4 | 7 | 17 | |
Interest Income Recognized With No Allowance Recorded | 0 | 0 | 0 | 0 | |
Average Recorded Investment With An Allowance Recorded | 80 | 59 | 88 | 41 | |
Interest Income Recognized With An Allowance Recorded | 1 | 0 | 2 | 1 | |
Average Recorded Investment, Total | 95 | 63 | 95 | 58 | |
Interest Income Recognized, Total | 1 | 0 | 2 | 1 | |
Customer | Asia/Pacific | |||||
Financing Receivable, Impaired | |||||
Recorded Investment With No Allowance Recorded | 0 | 0 | 1 | ||
Unpaid Principal Balance With No Allowance Recorded | 0 | 0 | 1 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 10 | 10 | 4 | ||
Unpaid Principal Balance With An Allowance Recorded | 10 | 10 | 4 | ||
Related Allowance With An Allowance Recorded | 4 | 4 | 2 | ||
Recorded Investment, Total | 10 | 10 | 5 | ||
Unpaid Principal Balance, Total | 10 | 10 | 5 | ||
Related Allowance, Total | 4 | 4 | 2 | ||
Average Recorded Investment With No Allowance Recorded | 0 | 30 | 0 | 31 | |
Interest Income Recognized With No Allowance Recorded | 0 | 1 | 0 | 2 | |
Average Recorded Investment With An Allowance Recorded | 12 | 2 | 9 | 5 | |
Interest Income Recognized With An Allowance Recorded | 1 | 0 | 1 | 0 | |
Average Recorded Investment, Total | 12 | 32 | 9 | 36 | |
Interest Income Recognized, Total | 1 | 1 | 1 | 2 | |
Customer | Mining | |||||
Financing Receivable, Impaired | |||||
Recorded Investment With No Allowance Recorded | 23 | 23 | 33 | ||
Unpaid Principal Balance With No Allowance Recorded | 23 | 23 | 33 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 61 | 61 | 56 | ||
Unpaid Principal Balance With An Allowance Recorded | 59 | 59 | 55 | ||
Related Allowance With An Allowance Recorded | 18 | 18 | 26 | ||
Recorded Investment, Total | 84 | 84 | 89 | ||
Unpaid Principal Balance, Total | 82 | 82 | 88 | ||
Related Allowance, Total | 18 | 18 | 26 | ||
Average Recorded Investment With No Allowance Recorded | 26 | 35 | 29 | 65 | |
Interest Income Recognized With No Allowance Recorded | 0 | 0 | 1 | 2 | |
Average Recorded Investment With An Allowance Recorded | 65 | 60 | 49 | 43 | |
Interest Income Recognized With An Allowance Recorded | 1 | 1 | 2 | 2 | |
Average Recorded Investment, Total | 91 | 95 | 78 | 108 | |
Interest Income Recognized, Total | 1 | 1 | 3 | 4 | |
Customer | Latin America | |||||
Financing Receivable, Impaired | |||||
Recorded Investment With No Allowance Recorded | 25 | 25 | 29 | ||
Unpaid Principal Balance With No Allowance Recorded | 25 | 25 | 29 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 66 | 66 | 75 | ||
Unpaid Principal Balance With An Allowance Recorded | 64 | 64 | 75 | ||
Related Allowance With An Allowance Recorded | 22 | 22 | 25 | ||
Recorded Investment, Total | 91 | 91 | 104 | ||
Unpaid Principal Balance, Total | 89 | 89 | 104 | ||
Related Allowance, Total | 22 | 22 | 25 | ||
Average Recorded Investment With No Allowance Recorded | 22 | 37 | 22 | 41 | |
Interest Income Recognized With No Allowance Recorded | 0 | 1 | 1 | 2 | |
Average Recorded Investment With An Allowance Recorded | 69 | 51 | 73 | 69 | |
Interest Income Recognized With An Allowance Recorded | 1 | 1 | 4 | 3 | |
Average Recorded Investment, Total | 91 | 88 | 95 | 110 | |
Interest Income Recognized, Total | 1 | 2 | 5 | 5 | |
Customer | Caterpillar Power Finance | |||||
Financing Receivable, Impaired | |||||
Recorded Investment With No Allowance Recorded | 71 | 71 | 69 | ||
Unpaid Principal Balance With No Allowance Recorded | 113 | 113 | 83 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 309 | 309 | 449 | ||
Unpaid Principal Balance With An Allowance Recorded | 322 | 322 | 455 | ||
Related Allowance With An Allowance Recorded | 102 | 102 | 164 | ||
Recorded Investment, Total | 380 | 380 | 518 | ||
Unpaid Principal Balance, Total | 435 | 435 | 538 | ||
Related Allowance, Total | 102 | 102 | 164 | ||
Average Recorded Investment With No Allowance Recorded | 57 | 94 | 53 | 149 | |
Interest Income Recognized With No Allowance Recorded | 1 | 2 | 2 | 5 | |
Average Recorded Investment With An Allowance Recorded | 376 | 374 | 422 | 364 | |
Interest Income Recognized With An Allowance Recorded | 1 | 4 | 8 | 8 | |
Average Recorded Investment, Total | 433 | 468 | 475 | 513 | |
Interest Income Recognized, Total | 2 | $ 6 | 10 | $ 13 | |
Dealer | Latin America | |||||
Financing Receivable, Impaired | |||||
Related Allowance With An Allowance Recorded | 39 | 39 | 14 | ||
Recorded Investment, Total | 78 | 78 | 78 | ||
Related Allowance, Total | 39 | 39 | 14 | ||
Caterpillar Purchased Receivables | |||||
Financing Receivable, Impaired | |||||
Recorded Investment, Total | $ 0 | $ 0 | $ 0 |
Finance Receivables (Details 5)
Finance Receivables (Details 5) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Customer | ||
Financing Receivable, Recorded Investment, Past Due | ||
Recorded investment in finance receivables on non-accrual status | $ 744 | $ 807 |
Customer | North America | ||
Financing Receivable, Recorded Investment, Past Due | ||
Recorded investment in finance receivables on non-accrual status | 38 | 77 |
Customer | EAME | ||
Financing Receivable, Recorded Investment, Past Due | ||
Recorded investment in finance receivables on non-accrual status | 168 | 154 |
Customer | Asia/Pacific | ||
Financing Receivable, Recorded Investment, Past Due | ||
Recorded investment in finance receivables on non-accrual status | 19 | 4 |
Customer | Mining | ||
Financing Receivable, Recorded Investment, Past Due | ||
Recorded investment in finance receivables on non-accrual status | 44 | 50 |
Customer | Latin America | ||
Financing Receivable, Recorded Investment, Past Due | ||
Recorded investment in finance receivables on non-accrual status | 103 | 106 |
Customer | Caterpillar Power Finance | ||
Financing Receivable, Recorded Investment, Past Due | ||
Recorded investment in finance receivables on non-accrual status | 372 | 416 |
Dealer | Latin America | ||
Financing Receivable, Recorded Investment, Past Due | ||
Recorded investment in finance receivables on non-accrual status | $ 81 | $ 78 |
Finance Receivables (Details 6)
Finance Receivables (Details 6) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)contracts | Sep. 30, 2018USD ($)contracts | Sep. 30, 2019USD ($)contracts | Sep. 30, 2018USD ($)contracts | Dec. 31, 2018USD ($) | |
Financing Receivable, Modifications | |||||
Remaining commitments | $ 0 | $ 0 | $ 0 | ||
Finance receivables modified as TDRs | |||||
Number of Contracts | contracts | 8 | 6 | 57 | 43 | |
Pre-TDR Recorded Investment | $ 56 | $ 40 | $ 188 | $ 138 | |
Post-TDR Recorded Investment | $ 55 | $ 40 | $ 181 | $ 105 | |
Customer | |||||
TDRs which had been modified within twelve months of the default date [Abstract] | |||||
Number of Contracts | contracts | 0 | 11 | 0 | 16 | |
Post-TDR Recorded Investment | $ 0 | $ 42 | $ 0 | $ 44 | |
Customer | North America | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts | contracts | 4 | 4 | 12 | 34 | |
Pre-TDR Recorded Investment | $ 0 | $ 0 | $ 5 | $ 13 | |
Post-TDR Recorded Investment | $ 0 | $ 0 | $ 4 | $ 13 | |
TDRs which had been modified within twelve months of the default date [Abstract] | |||||
Number of Contracts | contracts | 0 | 7 | 0 | 10 | |
Post-TDR Recorded Investment | $ 0 | $ 9 | $ 0 | $ 10 | |
Customer | EAME | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts | contracts | 21 | 0 | |||
Pre-TDR Recorded Investment | $ 21 | $ 0 | |||
Post-TDR Recorded Investment | $ 17 | $ 0 | |||
Customer | Mining | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts | contracts | 1 | 1 | |||
Pre-TDR Recorded Investment | $ 6 | $ 29 | |||
Post-TDR Recorded Investment | $ 6 | $ 29 | |||
Customer | Latin America | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts | contracts | 4 | 1 | |||
Pre-TDR Recorded Investment | $ 2 | $ 3 | |||
Post-TDR Recorded Investment | $ 2 | $ 3 | |||
TDRs which had been modified within twelve months of the default date [Abstract] | |||||
Number of Contracts | contracts | 0 | 1 | 0 | 3 | |
Post-TDR Recorded Investment | $ 0 | $ 0 | $ 0 | $ 1 | |
Customer | Caterpillar Power Finance | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts | contracts | 4 | 2 | 19 | 7 | |
Pre-TDR Recorded Investment | $ 56 | $ 40 | $ 154 | $ 93 | |
Post-TDR Recorded Investment | $ 55 | $ 40 | $ 152 | $ 60 | |
TDRs which had been modified within twelve months of the default date [Abstract] | |||||
Number of Contracts | contracts | 0 | 3 | 0 | 3 | |
Post-TDR Recorded Investment | $ 0 | $ 33 | $ 0 | $ 33 | |
Dealer | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts | contracts | 0 | 0 | 0 | 0 | |
Caterpillar Purchased Receivables | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts | contracts | 0 | 0 | 0 | 0 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Loans and Leases Receivable Disclosure | ||
Remaining three months of 2019 | $ 920 | |
2019 | $ 3,053 | |
2020 | 2,859 | 2,076 |
2021 | 1,778 | 1,104 |
2022 | 886 | 470 |
2023 | 385 | 173 |
Thereafter | 206 | 64 |
Total | 7,034 | 6,940 |
Guaranteed residual value | 424 | 458 |
Unguaranteed residual value | 830 | 857 |
Unearned income | (687) | (647) |
Total | 7,601 | 7,608 |
Retail leases | ||
Loans and Leases Receivable Disclosure | ||
Remaining three months of 2019 | 917 | |
2019 | 3,024 | |
2020 | 2,840 | 2,055 |
2021 | 1,766 | 1,092 |
2022 | 881 | 465 |
2023 | 383 | 171 |
Thereafter | 204 | 62 |
Total | 6,991 | 6,869 |
Guaranteed residual value | 398 | 416 |
Unguaranteed residual value | 825 | 854 |
Unearned income | (683) | (640) |
Total | 7,531 | 7,499 |
Wholesale leases | ||
Loans and Leases Receivable Disclosure | ||
Remaining three months of 2019 | 3 | |
2019 | 29 | |
2020 | 19 | 21 |
2021 | 12 | 12 |
2022 | 5 | 5 |
2023 | 2 | 2 |
Thereafter | 2 | 2 |
Total | 43 | 71 |
Guaranteed residual value | 26 | 42 |
Unguaranteed residual value | 5 | 3 |
Unearned income | (4) | (7) |
Total | $ 70 | $ 109 |
Leases (Details 2)
Leases (Details 2) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment | ||
Carrying amount of residual assets covered by residual value guarantees and subject to operating leases | $ 20 | $ 25 |
Payments due for operating leases | ||
Remaining Three Months of 2019 | 245 | |
2020 | 758 | |
2021 | 433 | |
2022 | 216 | |
2023 | 96 | |
Thereafter | 58 | |
Total | 1,806 | |
Scheduled minimum rental payments for operating leases | ||
2019 | 808 | |
2020 | 503 | |
2021 | 257 | |
2022 | 115 | |
2023 | 41 | |
Thereafter | 15 | |
Total | 1,739 | |
Equipment on operating leases | ||
Property, Plant and Equipment | ||
Equipment on operating leases, at cost | 5,229 | 5,201 |
Less: Accumulated depreciation | (1,662) | (1,639) |
Equipment on operating leases, net | 3,567 | 3,562 |
Caterpillar | Equipment on operating leases | ||
Property, Plant and Equipment | ||
Equipment on operating leases, net | $ 101 | $ 45 |
Leases (Details 3)
Leases (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Leases [Abstract] | ||||
Finance lease revenue (included in retail and wholesale finance revenue) | $ 135 | $ 388 | ||
Operating lease revenue | 262 | $ 259 | 777 | $ 760 |
Total | $ 397 | $ 1,165 |
Leases (Details 4)
Leases (Details 4) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 2 | $ 6 |
Short-term lease cost | 0 | 1 |
Variable lease cost | $ 0 | $ 0 |
Leases (Details 5)
Leases (Details 5) - USD ($) $ in Millions | Sep. 30, 2019 | Jan. 01, 2019 |
Operating leases | ||
Lease liabilities | $ 22 | |
Weighted average remaining lease term | 5 years | 4 years |
Weighted average discount rates | 2.40% | 2.60% |
Other assets | ||
Operating leases | ||
Right-of-use assets | $ 22 | $ 22 |
Other liabilities | ||
Operating leases | ||
Lease liabilities | $ 22 | $ 23 |
Leases (Details 6)
Leases (Details 6) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Maturities of operating lease liabilities | ||
Remaining three months of 2019 | $ 2 | |
2020 | 7 | |
2021 | 4 | |
2022 | 3 | |
2023 | 3 | |
Thereafter | 4 | |
Total lease payments | 23 | |
Less: imputed interest | (1) | |
Total | $ 22 | |
Minimum payments for operating leases having initial non-cancelable terms in excess of one year | ||
2019 | $ 8 | |
2020 | 6 | |
2021 | 4 | |
2022 | 2 | |
2023 | 2 | |
Thereafter | 2 | |
Total | $ 24 |
Leases (Details 7)
Leases (Details 7) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 6 |
Right-of-use assets obtained in exchange for operating lease obligations | 24 |
Initial recognition, Right-of-use assets obtained in exchange for operating lease obligations | $ 23 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Risk Management (Details) $ in Millions | Sep. 30, 2019USD ($) |
Derivative | |
Deferred net losses, interest rate risk, to be reclassified from equity to current earnings over the next twelve months | $ 3 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Risk Management (Details 2) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value | ||
Asset Fair Value | $ 153 | $ 112 |
Liability Fair Value | (81) | (63) |
Designated derivatives | ||
Derivatives, Fair Value | ||
Asset (Liability) Fair Value | 58 | 43 |
Designated derivatives | Interest rate contracts | Other assets | ||
Derivatives, Fair Value | ||
Asset Fair Value | 7 | 4 |
Designated derivatives | Interest rate contracts | Accrued expenses | ||
Derivatives, Fair Value | ||
Liability Fair Value | (61) | (40) |
Designated derivatives | Cross currency contracts | Other assets | ||
Derivatives, Fair Value | ||
Asset Fair Value | 118 | 88 |
Designated derivatives | Cross currency contracts | Accrued expenses | ||
Derivatives, Fair Value | ||
Liability Fair Value | (6) | (9) |
Undesignated derivatives | ||
Derivatives, Fair Value | ||
Asset (Liability) Fair Value | 14 | 6 |
Undesignated derivatives | Foreign exchange contracts | Other assets | ||
Derivatives, Fair Value | ||
Asset Fair Value | 22 | 15 |
Undesignated derivatives | Foreign exchange contracts | Accrued expenses | ||
Derivatives, Fair Value | ||
Liability Fair Value | (14) | (12) |
Undesignated derivatives | Cross currency contracts | Other assets | ||
Derivatives, Fair Value | ||
Asset Fair Value | 6 | 5 |
Undesignated derivatives | Cross currency contracts | Accrued expenses | ||
Derivatives, Fair Value | ||
Liability Fair Value | $ 0 | $ (2) |
Derivative Financial Instrume_5
Derivative Financial Instruments and Risk Management (Details 3) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Derivative | ||
Derivative, Notional Amount | $ 8,640 | $ 10,210 |
Derivative Financial Instrume_6
Derivative Financial Instruments and Risk Management (Details 4) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Derivative Instruments, Gain (Loss) | ||||
Interest expense | $ (198) | $ (194) | $ (599) | $ (558) |
Other income (expense) | (4) | (3) | (14) | (15) |
Designated derivatives | Cash flow hedges | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Recognized in AOCI | 88 | 56 | 60 | 151 |
Amount of Gains (Losses) Reclassified from AOCI | 95 | 56 | 112 | 155 |
Recognized in Earnings (Ineffective Portion) | 0 | 0 | ||
Designated derivatives | Cash flow hedges | Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Recognized in AOCI | (12) | 3 | (72) | 8 |
Designated derivatives | Cash flow hedges | Interest rate contracts | Interest expense | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Reclassified from AOCI | (3) | 0 | (2) | 1 |
Interest expense | (198) | (599) | ||
Recognized in Earnings (Ineffective Portion) | 0 | 0 | ||
Designated derivatives | Cash flow hedges | Cross currency contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Recognized in AOCI | 100 | 53 | 132 | 143 |
Designated derivatives | Cash flow hedges | Cross currency contracts | Interest expense | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Reclassified from AOCI | 9 | 5 | 23 | 13 |
Interest expense | (198) | (599) | ||
Recognized in Earnings (Ineffective Portion) | 0 | 0 | ||
Designated derivatives | Cash flow hedges | Cross currency contracts | Other income (expense) | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Reclassified from AOCI | 89 | 51 | 91 | 141 |
Other income (expense) | (4) | (14) | ||
Recognized in Earnings (Ineffective Portion) | 0 | 0 | ||
Undesignated derivatives | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments | 15 | 13 | (24) | 29 |
Undesignated derivatives | Foreign exchange contracts | Other income (expense) | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments | 12 | 12 | (26) | 23 |
Undesignated derivatives | Cross currency contracts | Other income (expense) | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments | $ 3 | $ 1 | $ 2 | $ 6 |
Derivative Financial Instrume_7
Derivative Financial Instruments and Risk Management (Details 5) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amount of Recognized Assets | $ 153 | $ 112 |
Gross Amounts Offset | 0 | 0 |
Net Amount of Assets | 153 | 112 |
Gross Amounts Not Offset | (39) | (34) |
Net Amount | 114 | 78 |
Gross Amount of Recognized Liabilities | (81) | (63) |
Gross Amounts Offset | 0 | 0 |
Net Amount of Liabilities | (81) | (63) |
Gross Amounts Not Offset | 39 | 34 |
Net Amount | $ (42) | $ (29) |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income/(Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance at beginning of period | $ (831) | $ (784) | $ (925) | $ (592) |
Other comprehensive income/(loss) before reclassifications | (92) | (2) | (81) | (118) |
Amounts reclassified from accumulated other comprehensive (income)/loss | (73) | (42) | (87) | (118) |
Adjustment to adopt reclassification of certain tax effects from AOCI | 97 | |||
Other comprehensive income/(loss) | (165) | (44) | (71) | (236) |
Balance at end of period | (996) | (828) | (996) | (828) |
Foreign currency translation | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance at beginning of period | (758) | (776) | (889) | (587) |
Other comprehensive income/(loss) before reclassifications | (160) | (44) | (127) | (233) |
Amounts reclassified from accumulated other comprehensive (income)/loss | 0 | 0 | 0 | 0 |
Adjustment to adopt reclassification of certain tax effects from AOCI | 98 | |||
Other comprehensive income/(loss) | (160) | (44) | (29) | (233) |
Balance at end of period | (918) | (820) | (918) | (820) |
Derivative financial instruments | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Balance at beginning of period | (73) | (8) | (36) | (5) |
Other comprehensive income/(loss) before reclassifications | 68 | 42 | 46 | 115 |
Amounts reclassified from accumulated other comprehensive (income)/loss | (73) | (42) | (87) | (118) |
Adjustment to adopt reclassification of certain tax effects from AOCI | (1) | |||
Other comprehensive income/(loss) | (5) | 0 | (42) | (3) |
Balance at end of period | $ (78) | $ (8) | $ (78) | $ (8) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income/(Loss) (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Other income (expense) | $ (4) | $ (3) | $ (14) | $ (15) | |
Interest | (198) | (194) | (599) | (558) | |
Reclassifications before tax | 184 | 163 | 467 | 387 | |
Tax (provision) benefit | (49) | (32) | (144) | (85) | |
Total reclassifications from Accumulated other comprehensive income/(loss) | [1] | 129 | 125 | 306 | 287 |
Reclassifications out of Accumulated other comprehensive income/(loss) | Derivative financial instruments | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassifications before tax | 95 | 56 | 112 | 155 | |
Tax (provision) benefit | (22) | (14) | (25) | (37) | |
Total reclassifications from Accumulated other comprehensive income/(loss) | 73 | 42 | 87 | 118 | |
Reclassifications out of Accumulated other comprehensive income/(loss) | Derivative financial instruments | Cross currency contracts | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Other income (expense) | 89 | 51 | 91 | 141 | |
Interest | 9 | 5 | 23 | 13 | |
Reclassifications out of Accumulated other comprehensive income/(loss) | Derivative financial instruments | Interest rate contracts | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Interest | $ (3) | $ 0 | $ (2) | $ 1 | |
[1] | Profit attributable to Caterpillar Financial Services Corporation. |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Segment Reporting Information | |||||
External Revenues | $ 748 | $ 735 | $ 2,241 | $ 2,148 | |
Profit before income taxes | 184 | 163 | 467 | 387 | |
Interest Expense | 198 | 194 | 599 | 558 | |
Depreciation on equipment leased to others | 205 | 208 | 611 | 616 | |
Provision for credit losses | 20 | 47 | 144 | 218 | |
Assets | 33,907 | 33,907 | $ 34,181 | ||
Capital expenditures | 388 | 298 | 1,093 | 1,192 | |
Operating Segments | |||||
Segment Reporting Information | |||||
External Revenues | 741 | 721 | 2,216 | 2,105 | |
Profit before income taxes | 224 | 190 | 587 | 447 | |
Interest Expense | 187 | 186 | 569 | 548 | |
Depreciation on equipment leased to others | 205 | 208 | 611 | 615 | |
Provision for credit losses | 20 | 48 | 144 | 212 | |
Assets | 32,409 | 32,409 | 32,598 | ||
Capital expenditures | 386 | 295 | 1,082 | 1,095 | |
Unallocated | |||||
Segment Reporting Information | |||||
External Revenues | 14 | 23 | 48 | 68 | |
Profit before income taxes | (87) | (72) | (253) | (204) | |
Interest Expense | 66 | 62 | 195 | 182 | |
Depreciation on equipment leased to others | 0 | 0 | 0 | 1 | |
Provision for credit losses | 0 | (1) | 0 | (1) | |
Assets | 1,986 | 1,986 | 1,957 | ||
Capital expenditures | 2 | 3 | 11 | 97 | |
Timing | |||||
Segment Reporting Information | |||||
External Revenues | (7) | (9) | (23) | (25) | |
Profit before income taxes | (4) | 6 | (13) | 12 | |
Interest Expense | 0 | 0 | 0 | 0 | |
Depreciation on equipment leased to others | 0 | 0 | 0 | 0 | |
Provision for credit losses | 0 | 0 | 0 | 7 | |
Assets | 19 | 19 | 55 | ||
Capital expenditures | 0 | 0 | 0 | 0 | |
Methodology | |||||
Segment Reporting Information | |||||
External Revenues | 0 | 0 | 0 | 0 | |
Profit before income taxes | 51 | 39 | 146 | 132 | |
Interest Expense | (55) | (54) | (165) | (172) | |
Depreciation on equipment leased to others | 0 | 0 | 0 | 0 | |
Provision for credit losses | 0 | 0 | 0 | 0 | |
Assets | (144) | (144) | (159) | ||
Capital expenditures | 0 | 0 | 0 | 0 | |
Inter-segment Eliminations | |||||
Segment Reporting Information | |||||
External Revenues | 0 | 0 | 0 | 0 | |
Profit before income taxes | 0 | 0 | 0 | 0 | |
Interest Expense | 0 | 0 | 0 | 0 | |
Depreciation on equipment leased to others | 0 | 0 | 0 | 0 | |
Provision for credit losses | 0 | 0 | 0 | 0 | |
Assets | (363) | (363) | (270) | ||
Capital expenditures | 0 | 0 | 0 | 0 | |
North America | Operating Segments | |||||
Segment Reporting Information | |||||
External Revenues | 414 | 402 | 1,229 | 1,141 | |
Profit before income taxes | 127 | 121 | 374 | 321 | |
Interest Expense | 99 | 94 | 295 | 267 | |
Depreciation on equipment leased to others | 147 | 148 | 437 | 427 | |
Provision for credit losses | 3 | 7 | 12 | 32 | |
Assets | 15,764 | 15,764 | 15,632 | ||
Capital expenditures | 265 | 204 | 832 | 870 | |
EAME | Operating Segments | |||||
Segment Reporting Information | |||||
External Revenues | 72 | 69 | 217 | 208 | |
Profit before income taxes | 14 | 12 | 60 | 24 | |
Interest Expense | 13 | 12 | 40 | 35 | |
Depreciation on equipment leased to others | 16 | 17 | 50 | 56 | |
Provision for credit losses | 6 | 8 | 3 | 32 | |
Assets | 4,924 | 4,924 | 4,862 | ||
Capital expenditures | 21 | 20 | 62 | 56 | |
Asia/Pacific | Operating Segments | |||||
Segment Reporting Information | |||||
External Revenues | 96 | 92 | 295 | 269 | |
Profit before income taxes | 45 | 44 | 139 | 128 | |
Interest Expense | 26 | 29 | 85 | 84 | |
Depreciation on equipment leased to others | 3 | 4 | 9 | 14 | |
Provision for credit losses | 6 | 0 | 14 | (5) | |
Assets | 4,488 | 4,488 | 4,639 | ||
Capital expenditures | (1) | 3 | 9 | 10 | |
Latin America | Operating Segments | |||||
Segment Reporting Information | |||||
External Revenues | 67 | 61 | 189 | 193 | |
Profit before income taxes | 19 | 15 | 25 | (1) | |
Interest Expense | 25 | 23 | 73 | 77 | |
Depreciation on equipment leased to others | 6 | 6 | 17 | 21 | |
Provision for credit losses | 2 | 6 | 31 | 54 | |
Assets | 2,996 | 2,996 | 2,972 | ||
Capital expenditures | 2 | 1 | 21 | 28 | |
Caterpillar Power Finance | Operating Segments | |||||
Segment Reporting Information | |||||
External Revenues | 23 | 33 | 78 | 98 | |
Profit before income taxes | 9 | (21) | (40) | (60) | |
Interest Expense | 10 | 13 | 34 | 40 | |
Depreciation on equipment leased to others | 1 | 1 | 2 | 2 | |
Provision for credit losses | (3) | 34 | 65 | 98 | |
Assets | 1,766 | 1,766 | 2,259 | ||
Capital expenditures | 0 | 0 | 0 | 0 | |
Mining | Operating Segments | |||||
Segment Reporting Information | |||||
External Revenues | 69 | 64 | 208 | 196 | |
Profit before income taxes | 10 | 19 | 29 | 35 | |
Interest Expense | 14 | 15 | 42 | 45 | |
Depreciation on equipment leased to others | 32 | 32 | 96 | 95 | |
Provision for credit losses | 6 | (7) | 19 | 1 | |
Assets | 2,471 | 2,471 | $ 2,234 | ||
Capital expenditures | $ 99 | $ 67 | $ 158 | $ 131 |
Guarantees (Details)
Guarantees (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Guarantor Obligations | ||
Guarantees, maximum potential amount of future payments | $ 84 | $ 97 |
SPC's assets in Consolidated Statements of Financial Position | 1,390 | 1,150 |
SPC's liabilities in Consolidated Statements of Financial Position | 1,390 | 1,150 |
Maximum | ||
Guarantor Obligations | ||
Related recorded liability | $ 1 | $ 1 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Recurring basis | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Derivative financial instruments, net asset (liability) position | $ 72 | $ 49 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details 2) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value of impaired loans | $ 373 | $ 469 |
Fair Value Measurements (Deta_3
Fair Value Measurements (Details 3) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Financial Instruments, Financial Assets, Balance Sheet Groupings | ||
Restricted cash and cash equivalents | $ 4 | $ 7 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings | ||
Short-term borrowings | (4,268) | (5,723) |
Fair Value, Level 1 | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings | ||
Cash and cash equivalents | 1,366 | 766 |
Restricted cash and cash equivalents | 4 | 7 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings | ||
Short-term borrowings | (4,268) | (5,723) |
Fair Value, Level 2 | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings | ||
Interest rate contracts, in a receivable position | 7 | 4 |
Foreign exchange contracts, in a receivable position | 22 | 15 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings | ||
Interest rate contracts, in a payable position | (61) | (40) |
Foreign exchange contracts, in a payable position | (14) | (12) |
Long-term debt | (24,798) | (22,684) |
Fair Value, Level 3 | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings | ||
Finance receivables, net (excluding finance leases) | 19,612 | 20,510 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings | ||
Guarantees | 0 | 0 |
Carrying Amount | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings | ||
Cash and cash equivalents | 1,366 | 766 |
Restricted cash and cash equivalents | 4 | 7 |
Finance receivables, net (excluding finance leases) | 19,507 | 20,451 |
Interest rate contracts, in a receivable position | 7 | 4 |
Foreign exchange contracts, in a receivable position | 22 | 15 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings | ||
Interest rate contracts, in a payable position | (61) | (40) |
Foreign exchange contracts, in a payable position | (14) | (12) |
Short-term borrowings | (4,268) | (5,723) |
Long-term debt | (24,479) | (22,815) |
Guarantees | 0 | 0 |
Carrying amount of assets excluded from measurement at fair value | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings | ||
Finance leases and failed sale leasebacks | 7,680 | 7,470 |
Cross currency contracts | Fair Value, Level 2 | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings | ||
Foreign exchange contracts, in a receivable position | 124 | 93 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings | ||
Foreign exchange contracts, in a payable position | (6) | (11) |
Cross currency contracts | Carrying Amount | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings | ||
Foreign exchange contracts, in a receivable position | 124 | 93 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings | ||
Foreign exchange contracts, in a payable position | $ (6) | $ (11) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Estimated annual tax rate | 28.00% | 24.00% | ||
Write-down of net deferred tax liabilities | $ 7 | |||
U.S. corporate tax rate | 21.00% | 35.00% |