Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 04, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-11241 | |
Entity Registrant Name | CATERPILLAR FINANCIAL SERVICES CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 37-1105865 | |
Entity Address, Address Line One | 2120 West End Ave. | |
Entity Address, City or Town | Nashville | |
Entity Address, State or Province | TN | |
Entity Address, Postal Zip Code | 37203-0001 | |
City Area Code | 615 | |
Local Phone Number | 341-1000 | |
Title of 12(b) Security | Medium-Term Notes, Series H,3.300% Notes Due 2024 | |
Trading Symbol | CAT/24 | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1 | |
Entity Central Index Key | 0000764764 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Statements of Prof
Consolidated Statements of Profit - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | ||
Revenues: | |||||
Retail finance | $ 303 | $ 307 | $ 606 | $ 636 | |
Operating lease | 238 | 247 | 482 | 504 | |
Wholesale finance | 82 | 84 | 160 | 183 | |
Other, net | 23 | 3 | 37 | 13 | |
Total revenues | 646 | 641 | 1,285 | 1,336 | |
Expenses: | |||||
Interest | 116 | 150 | 241 | 325 | |
Depreciation on equipment leased to others | 187 | 194 | 379 | 395 | |
General, operating and administrative | 134 | 104 | 255 | 212 | |
Provision for credit losses | 11 | 86 | 1 | 147 | |
Other | 8 | 12 | 15 | 25 | |
Total expenses | 456 | 546 | 891 | 1,104 | |
Other income (expense) | (1) | (6) | (9) | (16) | |
Profit before income taxes | 189 | 89 | 385 | 216 | |
Provision for income taxes | 44 | 25 | 97 | 58 | |
Profit of consolidated companies | 145 | 64 | 288 | 158 | |
Less: Profit attributable to noncontrolling interests | 3 | 5 | 6 | 9 | |
Profit | [1] | $ 142 | $ 59 | $ 282 | $ 149 |
[1] | Profit attributable to Caterpillar Financial Services Corporation. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Profit of consolidated companies | $ 145 | $ 64 | $ 288 | $ 158 |
Other comprehensive income (loss), net of tax (Note 5): | ||||
Foreign currency translation | 73 | 125 | (48) | (182) |
Derivative financial instruments | 1 | 7 | 12 | 13 |
Total Other comprehensive income (loss), net of tax | 74 | 132 | (36) | (169) |
Comprehensive income (loss) | 219 | 196 | 252 | (11) |
Less: Comprehensive income (loss) attributable to the noncontrolling interests | 7 | 4 | 8 | 7 |
Comprehensive income (loss) attributable to Caterpillar Financial Services Corporation | $ 212 | $ 192 | $ 244 | $ (18) |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Assets: | ||
Cash and cash equivalents | $ 639 | $ 411 |
Finance receivables, net of Allowance for credit losses of $402 and $479 | 27,136 | 26,575 |
Notes receivable from Caterpillar | 378 | 356 |
Equipment on operating leases, net | 3,217 | 3,366 |
Other assets | 1,171 | 1,283 |
Total assets | 32,541 | 31,991 |
Liabilities and shareholder’s equity: | ||
Payable to dealers and others | 149 | 144 |
Payable to Caterpillar - borrowings and other | 92 | 1,087 |
Accrued expenses | 230 | 400 |
Short-term borrowings | 3,421 | 2,005 |
Current maturities of long-term debt | 7,906 | 7,729 |
Long-term debt | 16,452 | 16,250 |
Other liabilities | 898 | 885 |
Total liabilities | 29,148 | 28,500 |
Commitments and contingent liabilities (Note 7) | ||
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 | 3,074 | 3,142 |
Accumulated other comprehensive income (loss) | (633) | (595) |
Noncontrolling interests | 205 | 197 |
Total shareholder’s equity | 3,393 | 3,491 |
Total liabilities and shareholder’s equity | $ 32,541 | $ 31,991 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position (Parentheticals) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for credit losses | $ 402 | $ 479 |
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 | Adjustment to adopt new accounting guidance | Adjustment to adopt new accounting guidanceRetained earnings |
Balance at Dec. 31, 2019 | $ 3,236 | $ 745 | $ 2 | $ 3,162 | $ (845) | $ 172 | ||
Balance (Accounting Standards Update 2016-13) at Dec. 31, 2019 | $ (13) | $ (13) | ||||||
Increase (Decrease) in Shareholder's Equity [Roll Forward] | ||||||||
Profit of consolidated companies | 158 | 149 | 9 | |||||
Dividend paid to Caterpillar | 0 | |||||||
Foreign currency translation, net of tax | (182) | (180) | (2) | |||||
Derivative financial instruments, net of tax | 13 | 13 | ||||||
Balance at Jun. 30, 2020 | 3,212 | 745 | 2 | 3,298 | (1,012) | 179 | ||
Balance at Mar. 31, 2020 | 3,016 | 745 | 2 | 3,239 | (1,145) | 175 | ||
Increase (Decrease) in Shareholder's Equity [Roll Forward] | ||||||||
Profit of consolidated companies | 64 | 59 | 5 | |||||
Foreign currency translation, net of tax | 125 | 126 | (1) | |||||
Derivative financial instruments, net of tax | 7 | 7 | ||||||
Balance at Jun. 30, 2020 | 3,212 | 745 | 2 | 3,298 | (1,012) | 179 | ||
Balance at Dec. 31, 2020 | 3,491 | 745 | 2 | 3,142 | (595) | 197 | ||
Increase (Decrease) in Shareholder's Equity [Roll Forward] | ||||||||
Profit of consolidated companies | 288 | 282 | 6 | |||||
Dividend paid to Caterpillar | (350) | (350) | ||||||
Foreign currency translation, net of tax | (48) | (50) | 2 | |||||
Derivative financial instruments, net of tax | 12 | 12 | ||||||
Balance at Jun. 30, 2021 | 3,393 | 745 | 2 | 3,074 | (633) | 205 | ||
Balance at Mar. 31, 2021 | 3,524 | 745 | 2 | 3,282 | (703) | 198 | ||
Increase (Decrease) in Shareholder's Equity [Roll Forward] | ||||||||
Profit of consolidated companies | 145 | 142 | 3 | |||||
Dividend paid to Caterpillar | (350) | (350) | ||||||
Foreign currency translation, net of tax | 73 | 69 | 4 | |||||
Derivative financial instruments, net of tax | 1 | 1 | ||||||
Balance at Jun. 30, 2021 | $ 3,393 | $ 745 | $ 2 | $ 3,074 | $ (633) | $ 205 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | ||
Profit of consolidated companies | $ 288 | $ 158 |
Adjustments for non-cash items: | ||
Depreciation and amortization | 386 | 402 |
Accretion of Caterpillar purchased receivable revenue | (153) | (166) |
Provision for credit losses | 1 | 147 |
Other, net | 22 | 139 |
Changes in assets and liabilities: | ||
Other assets | 25 | (20) |
Payable to dealers and others | 4 | 11 |
Accrued expenses | (62) | (53) |
Other payables with Caterpillar | 4 | (20) |
Other liabilities | 21 | (15) |
Net cash provided by operating activities | 536 | 583 |
Cash flows from investing activities: | ||
Expenditures for equipment on operating leases | (582) | (496) |
Capital expenditures - excluding equipment on operating leases | (6) | (7) |
Proceeds from disposals of equipment | 548 | 282 |
Additions to finance receivables | (6,680) | (7,352) |
Collections of finance receivables | 6,097 | 7,444 |
Net changes in Caterpillar purchased receivables | (78) | 920 |
Proceeds from sales of receivables | 27 | 31 |
Net change in variable lending to Caterpillar | 16 | (30) |
Additions to other notes receivable from Caterpillar | (75) | (25) |
Collections of other notes receivable from Caterpillar | 37 | 12 |
Settlements of undesignated derivatives | (89) | 22 |
Other, net | 1 | 0 |
Net cash provided by (used for) investing activities | (784) | 801 |
Cash flows from financing activities: | ||
Net change in variable lending from Caterpillar | (1,000) | (497) |
Proceeds from debt issued (original maturities greater than three months) | 4,412 | 4,168 |
Payments on debt issued (original maturities greater than three months) | (4,064) | (4,617) |
Short-term borrowings, net (original maturities three months or less) | 1,466 | (485) |
Dividend paid to Caterpillar | (350) | 0 |
Net cash provided by (used for) financing activities | 464 | (1,431) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 8 | (14) |
Increase (decrease) in cash, cash equivalents and restricted cash | 224 | (61) |
Cash, cash equivalents and restricted cash at beginning of year | 425 | 695 |
Cash, cash equivalents and restricted cash at end of period | $ 649 | $ 634 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parentheticals) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Cash Flows [Abstract] | ||
Restricted cash and cash equivalents | $ 10 | $ 14 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2021 | |
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 six months ended June 30, 2021 and 2020, (b) the consolidated comprehensive income for the three and six months ended June 30, 2021 and 2020, (c) the consolidated financial position at June 30, 2021 and December 31, 2020, (d) the consolidated changes in shareholder’s equity for the three and six months ended June 30, 2021 and 2020 and (e) the consolidated cash flows for the six months ended June 30, 2021 and 2020. The preparation of financial statements, in conformity with generally accepted accounting principles and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), requires management to make estimates and assumptions that affect the 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, 2020 (2020 Form 10-K). The December 31, 2020 financial position data included herein was derived from the audited consolidated financial statements included in the 2020 Form 10-K but does not include all disclosures required by generally accepted accounting principles. 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 7 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. Credit risk was 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 | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements A. Adoption of New Accounting Standards Reference rate reform (Accounting Standards Update (ASU) 2020-04) – In March 2020, the Financial Accounting Standards Board (FASB) issued accounting guidance to ease the potential burden in accounting for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and may be elected over time as reference rate reform activities occur between March 12, 2020 through December 31, 2022. In January 2021, we elected to adopt optional expedients impacting our derivative instruments. We continue to evaluate the impact of reference rate reform on our other contracts and assess the impacts of adopting this guidance on our financial statements. We adopted the following ASUs effective January 1, 2021, none of which had a material impact on our financial statements: ASU Description 2020-08 Codification improvements – Receivables – Nonrefundable fees and other costs 2021-01 Reference rate reform – Scope B. Accounting Standards Issued But Not Yet Adopted We consider the applicability and impact of all ASUs. We assessed the ASUs and determined that they either were not applicable or were not expected to have a material impact on our financial statements. |
Finance Receivables
Finance Receivables | 6 Months Ended |
Jun. 30, 2021 | |
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) June 30, December 31, Retail loans, net (1) $ 15,265 $ 15,037 Retail leases, net 7,961 7,812 Caterpillar purchased receivables, net 3,858 3,646 Wholesale loans, net (1) 437 533 Wholesale leases, net 17 26 Total finance receivables 27,538 27,054 Less: Allowance for credit losses (402) (479) Total finance receivables, net $ 27,136 $ 26,575 (1) Includes failed sale leasebacks. Finance leases Revenues from finance leases were $123 million and $119 million for the three months ended June 30, 2021 and 2020, respectively, and $245 million and $244 million for the six months ended June 30, 2021 and 2020, respectively, and are included in retail and wholesale finance revenue in the Consolidated Statements of Profit. The residual values for finance leases are included in Finance receivables, net in the Consolidated Statements of Financial Position. Residual value adjustments are recognized through a reduction of finance revenue over the remaining lease term. Allowance for credit losses Portfolio segments A portfolio segment is the level at which we develop a systematic methodology for determining our allowance for credit losses. Our portfolio segments and related methods for estimating expected credit losses are as follows: Customer We provide loans and finance leases to end-user customers primarily for the purpose of financing new and used Caterpillar machinery, engines and equipment for commercial use, the majority of which operate in construction-related industries. We also provide financing for vehicles, power generation facilities and marine vessels that, in most cases, incorporate Caterpillar products. The average original term of our customer finance receivable portfolio was approximately 48 months with an average remaining term of approximately 26 months as of June 30, 2021. We typically maintain a security interest in financed equipment and we require physical damage insurance coverage on the financed equipment, both of which provide us with certain rights and protections. If our collection efforts fail to bring a defaulted account current, we generally can repossess the financed equipment, after satisfying local legal requirements, and sell it within the Caterpillar dealer network or through third-party auctions. We estimate the allowance for credit losses related to our customer finance receivables based on loss forecast models utilizing probabilities of default and our estimated loss given default based on past loss experience adjusted for current conditions and reasonable and supportable forecasts capturing country and industry-specific economic factors. During the three and six months ended June 30, 2021, our forecasts for the markets in which we operate reflected an overall rebound in economic conditions, which had deteriorated due to the COVID-19 pandemic, resulting from a growing economy, improved unemployment rates and a decrease in delinquencies. We believe the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long-term trends. Dealer We provide financing to Caterpillar dealers in the form of wholesale financing plans. Our wholesale financing plans provide assistance to dealers by financing their mostly new Caterpillar equipment inventory and rental fleets on a secured and unsecured basis. In addition, we provide a variety of secured and unsecured loans to Caterpillar dealers. We estimate the allowance for credit losses for dealer finance receivables based on historical loss rates with consideration of current economic conditions and reasonable and supportable forecasts. In general, our Dealer portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to our close working relationships with the dealers and their financial strength. Therefore, we made no adjustments to historical loss rates during the three and six months ended June 30, 2021. Caterpillar Purchased Receivables We purchase receivables from Caterpillar, primarily related to the sale of equipment and parts to dealers. Caterpillar purchased receivables are non-interest-bearing short-term trade receivables that are purchased at a discount. We estimate the allowance for credit losses for Caterpillar purchased receivables based on historical loss rates with consideration of current economic conditions and reasonable and supportable forecasts. In general, our Caterpillar Purchased Receivables portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to the short-term maturities of the receivables, our close working relationships with the dealers and their financial strength. Therefore, we made no adjustments to historical loss rates during the three and six months ended June 30, 2021. Classes of finance receivables 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. An analysis of the allowance for credit losses was as follows: (Millions of dollars) Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 Allowance for Credit Losses: Customer Dealer Caterpillar Total Customer Dealer Caterpillar Total Beginning balance $ 393 $ 44 $ 4 $ 441 $ 408 $ 45 $ 4 $ 457 Write-offs (68) — — (68) (36) — — (36) Recoveries 14 — — 14 6 — — 6 Provision for credit losses 13 — — 13 86 — (1) 85 Other 2 — — 2 3 — — 3 Ending Balance $ 354 $ 44 $ 4 $ 402 $ 467 $ 45 $ 3 $ 515 Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 Allowance for Credit Losses: Customer Dealer Caterpillar Total Customer Dealer Caterpillar Total Beginning balance $ 431 $ 44 $ 4 $ 479 $ 375 $ 45 $ 4 $ 424 Adjustment to adopt new accounting guidance (1) — — — — 12 — — 12 Write-offs (102) — — (102) (73) — — (73) Recoveries 24 — — 24 13 — — 13 Provision for credit losses 3 — — 3 146 — (1) 145 Other (2) — — (2) (6) — — (6) Ending Balance $ 354 $ 44 $ 4 $ 402 $ 467 $ 45 $ 3 $ 515 Individually evaluated $ 183 $ 39 $ — $ 222 $ 184 $ 39 $ — $ 223 Collectively evaluated 171 5 4 180 283 6 3 292 Ending Balance $ 354 $ 44 $ 4 $ 402 $ 467 $ 45 $ 3 $ 515 Finance Receivables: Individually evaluated $ 492 $ 78 $ — $ 570 $ 601 $ 78 $ — $ 679 Collectively evaluated 20,071 3,039 3,858 26,968 18,538 4,125 3,514 26,177 Ending Balance $ 20,563 $ 3,117 $ 3,858 $ 27,538 $ 19,139 $ 4,203 $ 3,514 $ 26,856 (1) Adjustment to adopt new accounting guidance related to credit losses. 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 ratings, loan-to-value ratios, probabilities of default, industry trends, macroeconomic factors and other internal metrics. On an ongoing basis, we monitor credit quality based on past-due status 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 finance receivable past due when any installment is over 30 days past due. Customer The tables below summarize the aging category of our amortized cost of finance receivables in the Customer portfolio segment by origination year. (Millions of dollars) June 30, 2021 2021 2020 2019 2018 2017 Prior Revolving Total North America Current $ 2,469 $ 3,224 $ 1,931 $ 957 $ 325 $ 111 $ 117 $ 9,134 31-60 days past due 12 37 25 19 8 3 — 104 61-90 days past due 4 7 5 5 2 2 — 25 91+ days past due 2 17 27 15 10 6 2 79 EAME Current 952 1,275 669 329 126 38 — 3,389 31-60 days past due 6 10 15 2 1 1 — 35 61-90 days past due — 7 4 2 — — — 13 91+ days past due 3 11 7 6 3 61 — 91 Asia/Pacific Current 955 1,259 642 217 69 15 36 3,193 31-60 days past due 4 22 18 8 1 — — 53 61-90 days past due — 8 9 4 — — — 21 91+ days past due — 12 8 8 1 — — 29 Mining Current 507 431 509 274 89 191 71 2,072 31-60 days past due — 3 — — — — — 3 61-90 days past due — — — — — — — — 91+ days past due — 1 2 4 2 — — 9 Latin America Current 315 452 233 93 30 19 — 1,142 31-60 days past due 1 14 6 3 1 — — 25 61-90 days past due — 3 2 1 — — — 6 91+ days past due — 18 11 11 6 8 — 54 Caterpillar Power Finance Current 31 222 157 82 209 180 109 990 31-60 days past due — — — — — — — — 61-90 days past due — — — — — 2 — 2 91+ days past due — 2 — 20 3 69 — 94 Total $ 5,261 $ 7,035 $ 4,280 $ 2,060 $ 886 $ 706 $ 335 $ 20,563 (Millions of dollars) December 31, 2020 2020 2019 2018 2017 2016 Prior Revolving Total North America Current $ 3,780 $ 2,423 $ 1,344 $ 522 $ 212 $ 27 $ 89 $ 8,397 31-60 days past due 52 49 33 16 7 2 — 159 61-90 days past due 22 25 16 9 2 1 — 75 91+ days past due 14 35 31 20 9 4 2 115 EAME Current 1,605 931 501 203 60 18 — 3,318 31-60 days past due 5 15 3 2 — — — 25 61-90 days past due 1 1 2 1 — — — 5 91+ days past due 7 7 12 4 39 43 — 112 Asia/Pacific Current 1,583 933 412 115 32 6 32 3,113 31-60 days past due 13 23 13 6 — — — 55 61-90 days past due 7 11 7 1 — — — 26 91+ days past due 4 10 9 3 — — — 26 Mining Current 515 574 289 181 92 151 137 1,939 31-60 days past due 5 — 5 1 — — — 11 61-90 days past due — — — — — — — — 91+ days past due — 11 8 2 — — 1 22 Latin America Current 561 348 151 48 13 34 — 1,155 31-60 days past due 3 6 4 3 — — — 16 61-90 days past due 1 7 6 3 2 — — 19 91+ days past due 2 14 11 24 5 4 — 60 Caterpillar Power Finance Current 217 199 111 273 99 117 119 1,135 31-60 days past due — — 6 — — — — 6 61-90 days past due — — — — — 9 — 9 91+ days past due 2 — 20 3 25 79 — 129 Total $ 8,399 $ 5,622 $ 2,994 $ 1,440 $ 597 $ 495 $ 380 $ 19,927 Finance receivables in the Customer portfolio segment are substantially secured by collateral, primarily in the form of Caterpillar and other machinery. For those contracts where the borrower is experiencing financial difficulty, repayment of the outstanding amounts is generally expected to be provided through the operation or repossession and sale of the machinery. Dealer As of June 30, 2021, our total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $78 million that was 91+ days past due in Latin America, all of which was originated in 2017. As of December 31, 2020, our total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $81 million that was 91+ days past due in Latin America. Of these past due receivables, $78 million were originated in 2017 and $3 million were originated prior to 2016. Caterpillar Purchased Receivables The tables below summarize the aging category of our amortized cost of finance receivables in the Caterpillar Purchased Receivables portfolio segment. (Millions of dollars) June 30, 2021 31-60 61-90 91+ Total Current Total Finance North America $ 12 $ 3 $ 3 $ 18 $ 2,015 $ 2,033 EAME 1 1 1 3 867 870 Asia/Pacific 1 — 1 2 490 492 Mining — — — — — — Latin America 2 — — 2 458 460 Caterpillar Power Finance — — — — 3 3 Total $ 16 $ 4 $ 5 $ 25 $ 3,833 $ 3,858 (Millions of dollars) December 31, 2020 31-60 61-90 91+ Total Current Total Finance North America $ 14 $ 11 $ 6 $ 31 $ 1,889 $ 1,920 EAME 1 — 1 2 632 634 Asia/Pacific 2 1 1 4 581 585 Mining — — — — — — Latin America — — — — 501 501 Caterpillar Power Finance — — — — 6 6 Total $ 17 $ 12 $ 8 $ 37 $ 3,609 $ 3,646 Non-accrual finance receivables 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. Contracts on non-accrual status are generally more than 120 days past due or have been restructured in a troubled debt restructuring (TDR). Recognition is resumed and previously suspended income is recognized when the 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. Interest earned but uncollected prior to the receivable being placed on non-accrual status is written off through Provision for credit losses when, in the judgment of management, it is considered uncollectible. In our Customer portfolio segment, finance receivables which were on non-accrual status and finance receivables over 90 days past due and still accruing income were as follows: (Millions of dollars) June 30, 2021 December 31, 2020 Amortized Cost Amortized Cost Non-accrual Non-accrual 91+ Still Non-accrual Non-accrual 91+ Still North America $ 62 $ 1 $ 19 $ 86 $ 1 $ 34 EAME 89 — 2 113 1 1 Asia/Pacific 19 1 11 13 — 13 Mining 9 1 — 21 1 — Latin America 57 — 1 63 — 1 Caterpillar Power Finance 113 — — 170 17 — Total $ 349 $ 3 $ 33 $ 466 $ 20 $ 49 There was $1 million of interest income recognized during the three months ended June 30, 2021 and 2020 for customer finance receivables on non-accrual status. There was $6 million and $5 million of interest income recognized during the six months ended June 30, 2021 and 2020, respectively, for customer finance receivables on non-accrual status. As of June 30, 2021 and December 31, 2020, finance receivables in our Dealer portfolio segment on non-accrual status were $78 million and $81 million, respectively, all of which was in Latin America. There were no finance receivables in our Dealer portfolio segment more than 90 days past due and still accruing income as of June 30, 2021 and December 31, 2020 and no interest income was recognized on dealer finance receivables on non-accrual status during the three and six months ended June 30, 2021 and 2020. Troubled debt restructurings A restructuring of a finance receivable constitutes a 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, payment deferrals and reduction of principal and/or accrued interest. We individually evaluate TDR contracts and establish an allowance based on the present value of expected future cash flows discounted at the receivable’s effective interest rate, the fair value of the collateral for collateral-dependent receivables or the observable market price of the receivable. There were no finance receivables modified as TDRs during the three and six months ended June 30, 2021 and 2020 for the Dealer or Caterpillar Purchased Receivables portfolio segments. Finance receivables in the Customer portfolio segment modified as TDRs were as follows: (Millions of dollars) Three Months Ended Three Months Ended Pre-TDR Post-TDR Pre-TDR Post-TDR North America $ 4 $ 4 $ 9 $ 9 Asia/Pacific — — 8 8 Mining — — 17 17 Latin America 6 6 — — Caterpillar Power Finance 16 16 37 37 Total $ 26 $ 26 $ 71 $ 71 Six Months Ended Six Months Ended Pre-TDR Post-TDR Pre-TDR Post-TDR North America $ 4 $ 4 $ 9 $ 9 Asia/Pacific — — 8 8 Mining 11 5 17 17 Latin America 6 6 2 2 Caterpillar Power Finance 16 16 37 37 Total $ 37 $ 31 $ 73 $ 73 The Post-TDR amortized cost of 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, was as follows: (Millions of dollars) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 North America $ — $ — $ 1 $ — EAME — — — 10 Asia/Pacific 2 — 6 — Latin America 15 — 15 1 Caterpillar Power Finance — — 5 — Total $ 17 $ — $ 27 $ 11 |
Derivative Financial Instrument
Derivative Financial Instruments and Risk Management | 6 Months Ended |
Jun. 30, 2021 | |
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 prudently 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. We present at least annually to our Board of Directors and the Audit Committee of the Caterpillar Inc. Board of Directors on our risk management practices, including our use of financial derivative instruments. We recognize all derivatives at their fair value on the Consolidated Statements of Financial Position. On the date the derivative contract is entered into, we designate the derivative as (1) a hedge of the fair value of a recognized asset or liability (fair value hedge), (2) a hedge of a forecasted transaction or the variability of cash flow (cash flow hedge) or (3) an undesignated instrument. We record in current earnings 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. We record in Accumulated other comprehensive income (loss) (AOCI) changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge, to the extent effective, on the Consolidated Statements of Financial Position until we reclassify them to earnings in the same period or periods during which the hedged transaction affects earnings. We report changes in the fair value of undesignated derivative instruments in current earnings. We classify cash flows from designated derivative financial instruments within the same category as the item being hedged on the Consolidated Statements of Cash Flows. We include cash flows from undesignated derivative financial instruments 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 the 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 June 30, 2021, the cumulative amount of fair value hedging adjustments related to our fixed-to-floating interest rate contracts included in the carrying amount of Long-term debt w a s $29 million. Fair value gains and losses on these interest rate contracts and the related hedged items generally offset within interest expense. We have, at certain times, liquidated fixed-to-floating interest rate contracts. 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 June 30, December 31, Designated derivatives Interest rate contracts Other assets $ 38 $ 59 Interest rate contracts Accrued expenses (8) (5) Cross currency contracts Other assets 49 2 Cross currency contracts Accrued expenses (54) (148) $ 25 $ (92) Undesignated derivatives Foreign exchange contracts Other assets $ 44 $ 17 Foreign exchange contracts Accrued expenses (18) (107) Cross currency contracts Other assets 5 7 $ 31 $ (83) The total notional amount of our derivative instruments was $10.58 billion and $11.26 billion as of June 30, 2021 and December 31, 2020, respectively. The notional amounts of derivative financial instruments do not represent amounts exchanged by the parties. We calculate the amounts exchanged by the parties by referencing 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 June 30, 2021 Recognized in Earnings Amount of Classification Amount of Amount of the line Interest rate contracts $ 1 Interest expense $ (6) $ 116 Cross currency contracts (38) Other income (expense) (32) (1) Interest expense — 116 $ (37) $ (38) Three Months Ended June 30, 2020 Recognized in Earnings Amount of Classification Amount of Amount of the line Interest rate contracts $ (9) Interest expense $ (19) $ 150 Cross currency contracts (35) Other income (expense) (43) (6) Interest expense 9 150 $ (44) $ (53) Six Months Ended June 30, 2021 Recognized in Earnings Amount of Classification Amount of Amount of the line Interest rate contracts $ 1 Interest expense $ (16) $ 241 Cross currency contracts 81 Other income (expense) 80 (9) Interest expense 2 241 $ 82 $ 66 Six Months Ended June 30, 2020 Recognized in Earnings Amount of Classification Amount of Amount of the line Interest rate contracts $ (24) Interest expense $ (24) $ 325 Cross currency contracts 66 Other income (expense) 28 (16) Interest expense 20 325 $ 42 $ 24 As of June 30, 2021, $15 million of deferred net losses, net of tax, included in equity (AOCI in the Consolidated Statements of Financial Position), related to our cash flow hedges, are expected to be reclassified to earnings over the next twelve months. The actual amount recorded in earnings will vary based on interest rates and exchange rates at the time the hedged transactions impact earnings. The effect of derivatives not designated as hedging instruments on the Consolidated Statements of Profit was as follows: (Millions of dollars) Three Months Ended June 30, Classification 2021 2020 Foreign exchange contracts Other income (expense) $ (57) $ (24) Cross currency contracts Other income (expense) (1) 1 $ (58) $ (23) Six Months Ended June 30, Classification 2021 2020 Foreign exchange contracts Other income (expense) $ 28 $ 75 Cross currency contracts Other income (expense) — 10 $ 28 $ 85 We enter into International Swaps and Derivatives Association 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 June 30, 2021 and December 31, 2020, 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) June 30, December 31, Derivative Assets Gross Amount of Recognized Assets $ 136 $ 85 Gross Amounts Offset — — Net Amount of Assets (1) 136 85 Gross Amounts Not Offset (55) (57) Net Amount $ 81 $ 28 Derivative Liabilities Gross Amount of Recognized Liabilities $ (80) $ (260) Gross Amounts Offset — — Net Amount of Liabilities (1) (80) (260) Gross Amounts Not Offset 55 57 Net Amount $ (25) $ (203) (1) As presented in the Consolidated Statements of Financial Position. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) We present Comprehensive income (loss) and its components in the Consolidated Statements of Comprehensive Income. Changes in Accumulated other comprehensive income (loss) included in the Consolidated Statements of Changes in Shareholder’s Equity consisted of the following: (Millions of dollars) Three Months Ended Six Months Ended 2021 2020 2021 2020 Foreign currency translation Balance at beginning of period $ (670) $ (1,083) $ (551) $ (777) Gains (losses) on foreign currency translation 62 115 (32) (179) Less: Tax provision/(benefit) (7) (11) 18 1 Net gains (losses) on foreign currency translation 69 126 (50) (180) Other comprehensive income (loss), net of tax 69 126 (50) (180) Balance at end of period $ (601) $ (957) $ (601) $ (957) Derivative financial instruments Balance at beginning of period $ (33) $ (62) $ (44) $ (68) Gains (losses) deferred (37) (44) 82 42 Less: Tax provision/(benefit) (9) (9) 16 10 Net gains (losses) deferred (28) (35) 66 32 (Gains) losses reclassified to earnings 38 53 (66) (24) Less: Tax (provision)/benefit 9 11 (12) (5) Net (gains) losses reclassified to earnings 29 42 (54) (19) Other comprehensive income (loss), net of tax 1 7 12 13 Balance at end of period $ (32) $ (55) $ (32) $ (55) Total Accumulated other comprehensive income (loss) at end of period $ (633) $ (1,012) $ (633) $ (1,012) 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 Six Months Ended Derivative financial instruments Classification of 2021 2020 2021 2020 Cross currency contracts Other income (expense) $ (32) $ (43) $ 80 $ 28 Cross currency contracts Interest expense — 9 2 20 Interest rate contracts Interest expense (6) (19) (16) (24) Reclassifications before tax (38) (53) 66 24 Tax (provision) benefit 9 11 (12) (5) Total reclassifications from Accumulated other comprehensive $ (29) $ (42) $ 54 $ 19 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2021 | |
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 and vehicles, power generation facilities and marine vessels that, in most cases, incorporate Caterpillar products. Financing plans include operating and finance leases, retail loans, working capital loans to Caterpillar dealers and wholesale financing plans within each of the operating segments. Certain operating segments also purchase short-term trade receivables from Caterpillar. 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 7 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 June 30 was as follows: (Millions of dollars) 2021 External Profit Interest Depreciation Provision Assets at Capital North America $ 348 $ 102 $ 64 $ 134 $ 3 $ 15,159 $ 266 EAME 68 (6) 5 15 32 5,245 17 Asia/Pacific 93 49 25 2 — 4,576 2 Latin America 50 18 15 2 4 2,533 1 Caterpillar Power Finance 14 19 3 — (12) 1,120 — Mining 71 39 10 34 (16) 2,686 74 Total Segments 644 221 122 187 11 31,319 360 Unallocated 4 (75) 45 — — 1,518 — Timing (2) 2 — — — 13 — Methodology — 41 (51) — — (78) — Inter-segment Eliminations (1) — — — — — (231) — Total $ 646 $ 189 $ 116 $ 187 $ 11 $ 32,541 $ 360 2020 External Profit Interest Depreciation Provision Assets at Capital North America $ 356 $ 62 $ 87 $ 139 $ 25 $ 14,749 $ 221 EAME 63 14 10 15 6 4,981 9 Asia/Pacific 82 39 23 3 7 4,585 2 Latin America 48 2 21 3 12 2,621 1 Caterpillar Power Finance 17 (10) 6 — 18 1,308 — Mining 75 (1) 14 34 18 2,575 18 Total Segments 641 106 161 194 86 30,819 251 Unallocated 6 (64) 46 — — 1,576 5 Timing (6) (1) — — — 12 — Methodology — 48 (57) — — (152) — Inter-segment Eliminations (1) — — — — — (264) — Total $ 641 $ 89 $ 150 $ 194 $ 86 $ 31,991 $ 256 (1) Elimination is primarily related to intercompany loans. Supplemental segment data and reconciliations to consolidated external reporting for the six months ended June 30 was as follows: (Millions of dollars) 2021 External Profit Interest Depreciation Provision Assets at Capital North America $ 695 $ 201 $ 133 $ 271 $ 4 $ 15,159 $ 444 EAME 135 24 10 30 28 5,245 27 Asia/Pacific 185 100 48 4 — 4,576 5 Latin America 97 34 29 4 7 2,533 8 Caterpillar Power Finance 27 30 7 1 (19) 1,120 — Mining 142 57 20 69 (19) 2,686 100 Total Segments 1,281 446 247 379 1 31,319 584 Unallocated 9 (147) 95 — — 1,518 4 Timing (5) 3 — — — 13 — Methodology — 83 (101) — — (78) — Inter-segment Eliminations (1) — — — — — (231) — Total $ 1,285 $ 385 $ 241 $ 379 $ 1 $ 32,541 $ 588 2020 External Profit Interest Depreciation Provision Assets at Capital North America $ 738 $ 137 $ 181 $ 283 $ 47 $ 14,749 $ 441 EAME 133 30 23 31 13 4,981 13 Asia/Pacific 168 75 50 5 14 4,585 5 Latin America 101 8 44 6 19 2,621 4 Caterpillar Power Finance 37 (9) 14 — 23 1,308 — Mining 156 7 31 70 31 2,575 34 Total Segments 1,333 248 343 395 147 30,819 497 Unallocated 15 (134) 102 — — 1,576 6 Timing (12) (2) — — — 12 — Methodology — 104 (120) — — (152) — Inter-segment Eliminations (1) — — — — — (264) — Total $ 1,336 $ 216 $ 325 $ 395 $ 147 $ 31,991 $ 503 (1) Elimination is primarily related to intercompany loans. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities Guarantees We provide credit guarantees and residual value guarantees to third parties for financing and leasing associated with Caterpillar machinery. In addition, we provide standby letters of credit issued to third parties on behalf of our customers. These guarantees and standby letters of credit have varying terms and beneficiaries and are generally secured by customer assets. No significant loss has been experienced or is anticipated under any of these guarantees. At June 30, 2021 and December 31, 2020, 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 $40 million at June 30, 2021 and December 31, 2020. We provide guarantees to purchase 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. 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 June 30, 2021 and December 31, 2020, the SPC’s assets of $966 million and $1.03 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 $965 million and $1.03 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. Litigation and claims 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. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value MeasurementsFair 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. We classify fair value measurements according to the lowest level input or value-driver that is significant to the valuation. We may therefore classify a measurement 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 a standard industry accepted valuation model that utilizes 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 included in our Consolidated Statements of Financial Position in a net asset position of $56 million and a net liability position of $175 million as of June 30, 2021 and December 31, 2020, respectively. Loans measured at fair value Certain loans are subject to measurement at fair value on a nonrecurring basis and are classified as Level 3 measurements. A loan is measured at fair value when management determines that collection of contractual amounts due is not probable and the loan is individually evaluated. 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 loans carried at fair value of $157 million and $243 million as of June 30, 2021 and December 31, 2020, respectively. 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 use the following methods and assumptions to estimate the fair value of our financial instruments: Cash and cash equivalents – carrying amount approximates fair value. Restricted cash and cash equivalents – carrying amount approximates fair value. Finance receivables, net – we estimate fair value by discounting the future cash flows using current rates representative of receivables with similar remaining maturities. Short-term borrowings – carrying amount approximates fair value. Long-term debt – we estimate fair value for fixed and floating-rate debt based on quoted market prices. Fair values of our financial instruments were as follows: (Millions of dollars) June 30, 2021 December 31, 2020 Carrying Fair Carrying Fair Fair Value Reference Cash and cash equivalents $ 639 $ 639 $ 411 $ 411 1 Restricted cash and cash equivalents (1) $ 10 $ 10 $ 14 $ 14 1 Finance receivables, net (excluding finance leases (2) ) $ 18,961 $ 19,112 $ 18,599 $ 18,910 3 Note 3 Interest rate contracts: In a receivable position $ 38 $ 38 $ 59 $ 59 2 Note 4 In a payable position $ (8) $ (8) $ (5) $ (5) 2 Note 4 Cross currency contracts: In a receivable position $ 54 $ 54 $ 9 $ 9 2 Note 4 In a payable position $ (54) $ (54) $ (148) $ (148) 2 Note 4 Foreign exchange contracts: In a receivable position $ 44 $ 44 $ 17 $ 17 2 Note 4 In a payable position $ (18) $ (18) $ (107) $ (107) 2 Note 4 Short-term borrowings $ (3,421) $ (3,421) $ (2,005) $ (2,005) 1 Long-term debt $ (24,358) $ (24,811) $ (23,979) $ (24,614) 2 (1) Included in Other assets in the Consolidated Statements of Financial Position. (2) Represents finance leases and failed sale leasebacks of $8.18 billion and $7.98 billion as of June 30, 2021 and December 31, 2020, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes |
Finance Receivables (Tables)
Finance Receivables (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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) June 30, December 31, Retail loans, net (1) $ 15,265 $ 15,037 Retail leases, net 7,961 7,812 Caterpillar purchased receivables, net 3,858 3,646 Wholesale loans, net (1) 437 533 Wholesale leases, net 17 26 Total finance receivables 27,538 27,054 Less: Allowance for credit losses (402) (479) Total finance receivables, net $ 27,136 $ 26,575 (1) Includes failed sale leasebacks. |
Allowance for credit losses and total finance receivables | An analysis of the allowance for credit losses was as follows: (Millions of dollars) Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 Allowance for Credit Losses: Customer Dealer Caterpillar Total Customer Dealer Caterpillar Total Beginning balance $ 393 $ 44 $ 4 $ 441 $ 408 $ 45 $ 4 $ 457 Write-offs (68) — — (68) (36) — — (36) Recoveries 14 — — 14 6 — — 6 Provision for credit losses 13 — — 13 86 — (1) 85 Other 2 — — 2 3 — — 3 Ending Balance $ 354 $ 44 $ 4 $ 402 $ 467 $ 45 $ 3 $ 515 Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 Allowance for Credit Losses: Customer Dealer Caterpillar Total Customer Dealer Caterpillar Total Beginning balance $ 431 $ 44 $ 4 $ 479 $ 375 $ 45 $ 4 $ 424 Adjustment to adopt new accounting guidance (1) — — — — 12 — — 12 Write-offs (102) — — (102) (73) — — (73) Recoveries 24 — — 24 13 — — 13 Provision for credit losses 3 — — 3 146 — (1) 145 Other (2) — — (2) (6) — — (6) Ending Balance $ 354 $ 44 $ 4 $ 402 $ 467 $ 45 $ 3 $ 515 Individually evaluated $ 183 $ 39 $ — $ 222 $ 184 $ 39 $ — $ 223 Collectively evaluated 171 5 4 180 283 6 3 292 Ending Balance $ 354 $ 44 $ 4 $ 402 $ 467 $ 45 $ 3 $ 515 Finance Receivables: Individually evaluated $ 492 $ 78 $ — $ 570 $ 601 $ 78 $ — $ 679 Collectively evaluated 20,071 3,039 3,858 26,968 18,538 4,125 3,514 26,177 Ending Balance $ 20,563 $ 3,117 $ 3,858 $ 27,538 $ 19,139 $ 4,203 $ 3,514 $ 26,856 (1) Adjustment to adopt new accounting guidance related to credit losses. |
Amortized cost of finance receivables in the Customer portfolio segment by origination year | The tables below summarize the aging category of our amortized cost of finance receivables in the Customer portfolio segment by origination year. (Millions of dollars) June 30, 2021 2021 2020 2019 2018 2017 Prior Revolving Total North America Current $ 2,469 $ 3,224 $ 1,931 $ 957 $ 325 $ 111 $ 117 $ 9,134 31-60 days past due 12 37 25 19 8 3 — 104 61-90 days past due 4 7 5 5 2 2 — 25 91+ days past due 2 17 27 15 10 6 2 79 EAME Current 952 1,275 669 329 126 38 — 3,389 31-60 days past due 6 10 15 2 1 1 — 35 61-90 days past due — 7 4 2 — — — 13 91+ days past due 3 11 7 6 3 61 — 91 Asia/Pacific Current 955 1,259 642 217 69 15 36 3,193 31-60 days past due 4 22 18 8 1 — — 53 61-90 days past due — 8 9 4 — — — 21 91+ days past due — 12 8 8 1 — — 29 Mining Current 507 431 509 274 89 191 71 2,072 31-60 days past due — 3 — — — — — 3 61-90 days past due — — — — — — — — 91+ days past due — 1 2 4 2 — — 9 Latin America Current 315 452 233 93 30 19 — 1,142 31-60 days past due 1 14 6 3 1 — — 25 61-90 days past due — 3 2 1 — — — 6 91+ days past due — 18 11 11 6 8 — 54 Caterpillar Power Finance Current 31 222 157 82 209 180 109 990 31-60 days past due — — — — — — — — 61-90 days past due — — — — — 2 — 2 91+ days past due — 2 — 20 3 69 — 94 Total $ 5,261 $ 7,035 $ 4,280 $ 2,060 $ 886 $ 706 $ 335 $ 20,563 (Millions of dollars) December 31, 2020 2020 2019 2018 2017 2016 Prior Revolving Total North America Current $ 3,780 $ 2,423 $ 1,344 $ 522 $ 212 $ 27 $ 89 $ 8,397 31-60 days past due 52 49 33 16 7 2 — 159 61-90 days past due 22 25 16 9 2 1 — 75 91+ days past due 14 35 31 20 9 4 2 115 EAME Current 1,605 931 501 203 60 18 — 3,318 31-60 days past due 5 15 3 2 — — — 25 61-90 days past due 1 1 2 1 — — — 5 91+ days past due 7 7 12 4 39 43 — 112 Asia/Pacific Current 1,583 933 412 115 32 6 32 3,113 31-60 days past due 13 23 13 6 — — — 55 61-90 days past due 7 11 7 1 — — — 26 91+ days past due 4 10 9 3 — — — 26 Mining Current 515 574 289 181 92 151 137 1,939 31-60 days past due 5 — 5 1 — — — 11 61-90 days past due — — — — — — — — 91+ days past due — 11 8 2 — — 1 22 Latin America Current 561 348 151 48 13 34 — 1,155 31-60 days past due 3 6 4 3 — — — 16 61-90 days past due 1 7 6 3 2 — — 19 91+ days past due 2 14 11 24 5 4 — 60 Caterpillar Power Finance Current 217 199 111 273 99 117 119 1,135 31-60 days past due — — 6 — — — — 6 61-90 days past due — — — — — 9 — 9 91+ days past due 2 — 20 3 25 79 — 129 Total $ 8,399 $ 5,622 $ 2,994 $ 1,440 $ 597 $ 495 $ 380 $ 19,927 |
Aging related to finance receivables | The tables below summarize the aging category of our amortized cost of finance receivables in the Caterpillar Purchased Receivables portfolio segment. (Millions of dollars) June 30, 2021 31-60 61-90 91+ Total Current Total Finance North America $ 12 $ 3 $ 3 $ 18 $ 2,015 $ 2,033 EAME 1 1 1 3 867 870 Asia/Pacific 1 — 1 2 490 492 Mining — — — — — — Latin America 2 — — 2 458 460 Caterpillar Power Finance — — — — 3 3 Total $ 16 $ 4 $ 5 $ 25 $ 3,833 $ 3,858 (Millions of dollars) December 31, 2020 31-60 61-90 91+ Total Current Total Finance North America $ 14 $ 11 $ 6 $ 31 $ 1,889 $ 1,920 EAME 1 — 1 2 632 634 Asia/Pacific 2 1 1 4 581 585 Mining — — — — — — Latin America — — — — 501 501 Caterpillar Power Finance — — — — 6 6 Total $ 17 $ 12 $ 8 $ 37 $ 3,609 $ 3,646 |
Finance receivables on non-accrual status | In our Customer portfolio segment, finance receivables which were on non-accrual status and finance receivables over 90 days past due and still accruing income were as follows: (Millions of dollars) June 30, 2021 December 31, 2020 Amortized Cost Amortized Cost Non-accrual Non-accrual 91+ Still Non-accrual Non-accrual 91+ Still North America $ 62 $ 1 $ 19 $ 86 $ 1 $ 34 EAME 89 — 2 113 1 1 Asia/Pacific 19 1 11 13 — 13 Mining 9 1 — 21 1 — Latin America 57 — 1 63 — 1 Caterpillar Power Finance 113 — — 170 17 — Total $ 349 $ 3 $ 33 $ 466 $ 20 $ 49 There was $1 million of interest income recognized during the three months ended June 30, 2021 and 2020 for customer finance receivables on non-accrual status. There was $6 million and $5 million of interest income recognized during the six months ended June 30, 2021 and 2020, respectively, for customer finance receivables on non-accrual status. |
Finance receivables modified as TDRs | Finance receivables in the Customer portfolio segment modified as TDRs were as follows: (Millions of dollars) Three Months Ended Three Months Ended Pre-TDR Post-TDR Pre-TDR Post-TDR North America $ 4 $ 4 $ 9 $ 9 Asia/Pacific — — 8 8 Mining — — 17 17 Latin America 6 6 — — Caterpillar Power Finance 16 16 37 37 Total $ 26 $ 26 $ 71 $ 71 Six Months Ended Six Months Ended Pre-TDR Post-TDR Pre-TDR Post-TDR North America $ 4 $ 4 $ 9 $ 9 Asia/Pacific — — 8 8 Mining 11 5 17 17 Latin America 6 6 2 2 Caterpillar Power Finance 16 16 37 37 Total $ 37 $ 31 $ 73 $ 73 The Post-TDR amortized cost of 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, was as follows: (Millions of dollars) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 North America $ — $ — $ 1 $ — EAME — — — 10 Asia/Pacific 2 — 6 — Latin America 15 — 15 1 Caterpillar Power Finance — — 5 — Total $ 17 $ — $ 27 $ 11 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Risk Management (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, December 31, Designated derivatives Interest rate contracts Other assets $ 38 $ 59 Interest rate contracts Accrued expenses (8) (5) Cross currency contracts Other assets 49 2 Cross currency contracts Accrued expenses (54) (148) $ 25 $ (92) Undesignated derivatives Foreign exchange contracts Other assets $ 44 $ 17 Foreign exchange contracts Accrued expenses (18) (107) Cross currency contracts Other assets 5 7 $ 31 $ (83) |
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 June 30, 2021 Recognized in Earnings Amount of Classification Amount of Amount of the line Interest rate contracts $ 1 Interest expense $ (6) $ 116 Cross currency contracts (38) Other income (expense) (32) (1) Interest expense — 116 $ (37) $ (38) Three Months Ended June 30, 2020 Recognized in Earnings Amount of Classification Amount of Amount of the line Interest rate contracts $ (9) Interest expense $ (19) $ 150 Cross currency contracts (35) Other income (expense) (43) (6) Interest expense 9 150 $ (44) $ (53) Six Months Ended June 30, 2021 Recognized in Earnings Amount of Classification Amount of Amount of the line Interest rate contracts $ 1 Interest expense $ (16) $ 241 Cross currency contracts 81 Other income (expense) 80 (9) Interest expense 2 241 $ 82 $ 66 Six Months Ended June 30, 2020 Recognized in Earnings Amount of Classification Amount of Amount of the line Interest rate contracts $ (24) Interest expense $ (24) $ 325 Cross currency contracts 66 Other income (expense) 28 (16) Interest expense 20 325 $ 42 $ 24 |
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 June 30, Classification 2021 2020 Foreign exchange contracts Other income (expense) $ (57) $ (24) Cross currency contracts Other income (expense) (1) 1 $ (58) $ (23) Six Months Ended June 30, Classification 2021 2020 Foreign exchange contracts Other income (expense) $ 28 $ 75 Cross currency contracts Other income (expense) — 10 $ 28 $ 85 |
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) June 30, December 31, Derivative Assets Gross Amount of Recognized Assets $ 136 $ 85 Gross Amounts Offset — — Net Amount of Assets (1) 136 85 Gross Amounts Not Offset (55) (57) Net Amount $ 81 $ 28 Derivative Liabilities Gross Amount of Recognized Liabilities $ (80) $ (260) Gross Amounts Offset — — Net Amount of Liabilities (1) (80) (260) Gross Amounts Not Offset 55 57 Net Amount $ (25) $ (203) (1) As presented in the Consolidated Statements of Financial Position. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated other comprehensive income (loss) | Changes in Accumulated other comprehensive income (loss) included in the Consolidated Statements of Changes in Shareholder’s Equity consisted of the following: (Millions of dollars) Three Months Ended Six Months Ended 2021 2020 2021 2020 Foreign currency translation Balance at beginning of period $ (670) $ (1,083) $ (551) $ (777) Gains (losses) on foreign currency translation 62 115 (32) (179) Less: Tax provision/(benefit) (7) (11) 18 1 Net gains (losses) on foreign currency translation 69 126 (50) (180) Other comprehensive income (loss), net of tax 69 126 (50) (180) Balance at end of period $ (601) $ (957) $ (601) $ (957) Derivative financial instruments Balance at beginning of period $ (33) $ (62) $ (44) $ (68) Gains (losses) deferred (37) (44) 82 42 Less: Tax provision/(benefit) (9) (9) 16 10 Net gains (losses) deferred (28) (35) 66 32 (Gains) losses reclassified to earnings 38 53 (66) (24) Less: Tax (provision)/benefit 9 11 (12) (5) Net (gains) losses reclassified to earnings 29 42 (54) (19) Other comprehensive income (loss), net of tax 1 7 12 13 Balance at end of period $ (32) $ (55) $ (32) $ (55) Total Accumulated other comprehensive income (loss) at end of period $ (633) $ (1,012) $ (633) $ (1,012) |
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 Six Months Ended Derivative financial instruments Classification of 2021 2020 2021 2020 Cross currency contracts Other income (expense) $ (32) $ (43) $ 80 $ 28 Cross currency contracts Interest expense — 9 2 20 Interest rate contracts Interest expense (6) (19) (16) (24) Reclassifications before tax (38) (53) 66 24 Tax (provision) benefit 9 11 (12) (5) Total reclassifications from Accumulated other comprehensive $ (29) $ (42) $ 54 $ 19 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Supplemental segment data and reconciliations to consolidated external reporting for the three months ended June 30 was as follows: (Millions of dollars) 2021 External Profit Interest Depreciation Provision Assets at Capital North America $ 348 $ 102 $ 64 $ 134 $ 3 $ 15,159 $ 266 EAME 68 (6) 5 15 32 5,245 17 Asia/Pacific 93 49 25 2 — 4,576 2 Latin America 50 18 15 2 4 2,533 1 Caterpillar Power Finance 14 19 3 — (12) 1,120 — Mining 71 39 10 34 (16) 2,686 74 Total Segments 644 221 122 187 11 31,319 360 Unallocated 4 (75) 45 — — 1,518 — Timing (2) 2 — — — 13 — Methodology — 41 (51) — — (78) — Inter-segment Eliminations (1) — — — — — (231) — Total $ 646 $ 189 $ 116 $ 187 $ 11 $ 32,541 $ 360 2020 External Profit Interest Depreciation Provision Assets at Capital North America $ 356 $ 62 $ 87 $ 139 $ 25 $ 14,749 $ 221 EAME 63 14 10 15 6 4,981 9 Asia/Pacific 82 39 23 3 7 4,585 2 Latin America 48 2 21 3 12 2,621 1 Caterpillar Power Finance 17 (10) 6 — 18 1,308 — Mining 75 (1) 14 34 18 2,575 18 Total Segments 641 106 161 194 86 30,819 251 Unallocated 6 (64) 46 — — 1,576 5 Timing (6) (1) — — — 12 — Methodology — 48 (57) — — (152) — Inter-segment Eliminations (1) — — — — — (264) — Total $ 641 $ 89 $ 150 $ 194 $ 86 $ 31,991 $ 256 (1) Elimination is primarily related to intercompany loans. Supplemental segment data and reconciliations to consolidated external reporting for the six months ended June 30 was as follows: (Millions of dollars) 2021 External Profit Interest Depreciation Provision Assets at Capital North America $ 695 $ 201 $ 133 $ 271 $ 4 $ 15,159 $ 444 EAME 135 24 10 30 28 5,245 27 Asia/Pacific 185 100 48 4 — 4,576 5 Latin America 97 34 29 4 7 2,533 8 Caterpillar Power Finance 27 30 7 1 (19) 1,120 — Mining 142 57 20 69 (19) 2,686 100 Total Segments 1,281 446 247 379 1 31,319 584 Unallocated 9 (147) 95 — — 1,518 4 Timing (5) 3 — — — 13 — Methodology — 83 (101) — — (78) — Inter-segment Eliminations (1) — — — — — (231) — Total $ 1,285 $ 385 $ 241 $ 379 $ 1 $ 32,541 $ 588 2020 External Profit Interest Depreciation Provision Assets at Capital North America $ 738 $ 137 $ 181 $ 283 $ 47 $ 14,749 $ 441 EAME 133 30 23 31 13 4,981 13 Asia/Pacific 168 75 50 5 14 4,585 5 Latin America 101 8 44 6 19 2,621 4 Caterpillar Power Finance 37 (9) 14 — 23 1,308 — Mining 156 7 31 70 31 2,575 34 Total Segments 1,333 248 343 395 147 30,819 497 Unallocated 15 (134) 102 — — 1,576 6 Timing (12) (2) — — — 12 — Methodology — 104 (120) — — (152) — Inter-segment Eliminations (1) — — — — — (264) — Total $ 1,336 $ 216 $ 325 $ 395 $ 147 $ 31,991 $ 503 (1) Elimination is primarily related to intercompany loans. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair values of financial instruments | Fair values of our financial instruments were as follows: (Millions of dollars) June 30, 2021 December 31, 2020 Carrying Fair Carrying Fair Fair Value Reference Cash and cash equivalents $ 639 $ 639 $ 411 $ 411 1 Restricted cash and cash equivalents (1) $ 10 $ 10 $ 14 $ 14 1 Finance receivables, net (excluding finance leases (2) ) $ 18,961 $ 19,112 $ 18,599 $ 18,910 3 Note 3 Interest rate contracts: In a receivable position $ 38 $ 38 $ 59 $ 59 2 Note 4 In a payable position $ (8) $ (8) $ (5) $ (5) 2 Note 4 Cross currency contracts: In a receivable position $ 54 $ 54 $ 9 $ 9 2 Note 4 In a payable position $ (54) $ (54) $ (148) $ (148) 2 Note 4 Foreign exchange contracts: In a receivable position $ 44 $ 44 $ 17 $ 17 2 Note 4 In a payable position $ (18) $ (18) $ (107) $ (107) 2 Note 4 Short-term borrowings $ (3,421) $ (3,421) $ (2,005) $ (2,005) 1 Long-term debt $ (24,358) $ (24,811) $ (23,979) $ (24,614) 2 (1) Included in Other assets in the Consolidated Statements of Financial Position. (2) Represents finance leases and failed sale leasebacks of $8.18 billion and $7.98 billion as of June 30, 2021 and December 31, 2020, respectively. |
Finance Receivables (Details)
Finance Receivables (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable | ||||||
Total finance receivables | $ 27,538 | $ 27,054 | $ 26,856 | |||
Less: Allowance for credit losses | (402) | $ (441) | (479) | $ (515) | $ (457) | $ (424) |
Total finance receivables, net | 27,136 | 26,575 | ||||
Retail loans | ||||||
Accounts, Notes, Loans and Financing Receivable | ||||||
Total finance receivables | 15,265 | 15,037 | ||||
Retail leases | ||||||
Accounts, Notes, Loans and Financing Receivable | ||||||
Total finance receivables | 7,961 | 7,812 | ||||
Caterpillar Purchased Receivables | ||||||
Accounts, Notes, Loans and Financing Receivable | ||||||
Total finance receivables | 3,858 | 3,646 | ||||
Wholesale loans | ||||||
Accounts, Notes, Loans and Financing Receivable | ||||||
Total finance receivables | 437 | 533 | ||||
Wholesale leases | ||||||
Accounts, Notes, Loans and Financing Receivable | ||||||
Total finance receivables | $ 17 | $ 26 |
Finance Receivables (Details 2)
Finance Receivables (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Receivables [Abstract] | ||||
Finance lease revenue (included in retail and wholesale finance revenue) | $ 123 | $ 119 | $ 245 | $ 244 |
Finance Receivables (Details 3)
Finance Receivables (Details 3) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Financing Receivable, Allowance for Credit Losses | |||||
Beginning balance | $ 441 | $ 457 | $ 479 | $ 424 | |
Write-offs | (68) | (36) | (102) | (73) | |
Recoveries | 14 | 6 | 24 | 13 | |
Provision for credit losses | 13 | 85 | 3 | 145 | |
Other | 2 | 3 | (2) | (6) | |
Ending Balance | 402 | 515 | 402 | 515 | |
Allowance for Credit Losses | |||||
Individually evaluated | 222 | 223 | 222 | 223 | |
Collectively evaluated | 180 | 292 | 180 | 292 | |
Allowance, Ending Balance | 402 | 515 | 402 | 515 | $ 479 |
Finance Receivables | |||||
Individually evaluated | 570 | 679 | 570 | 679 | |
Collectively evaluated | 26,968 | 26,177 | 26,968 | 26,177 | |
Finance Receivables, Ending Balance | 27,538 | 26,856 | 27,538 | 26,856 | 27,054 |
Adjustment to adopt new accounting guidance | Accounting Standards Update 2016-13 | |||||
Financing Receivable, Allowance for Credit Losses | |||||
Beginning balance | 0 | 12 | |||
Allowance for Credit Losses | |||||
Allowance, Ending Balance | 0 | ||||
Customer | |||||
Financing Receivable, Allowance for Credit Losses | |||||
Beginning balance | 393 | 408 | 431 | 375 | |
Write-offs | (68) | (36) | (102) | (73) | |
Recoveries | 14 | 6 | 24 | 13 | |
Provision for credit losses | 13 | 86 | 3 | 146 | |
Other | 2 | 3 | (2) | (6) | |
Ending Balance | 354 | 467 | 354 | 467 | |
Allowance for Credit Losses | |||||
Individually evaluated | 183 | 184 | 183 | 184 | |
Collectively evaluated | 171 | 283 | 171 | 283 | |
Allowance, Ending Balance | 354 | 467 | 354 | 467 | 431 |
Finance Receivables | |||||
Individually evaluated | 492 | 601 | 492 | 601 | |
Collectively evaluated | 20,071 | 18,538 | 20,071 | 18,538 | |
Finance Receivables, Ending Balance | 20,563 | 19,139 | 20,563 | 19,139 | 19,927 |
Customer | Adjustment to adopt new accounting guidance | Accounting Standards Update 2016-13 | |||||
Financing Receivable, Allowance for Credit Losses | |||||
Beginning balance | 0 | 12 | |||
Allowance for Credit Losses | |||||
Allowance, Ending Balance | 0 | ||||
Dealer | |||||
Financing Receivable, Allowance for Credit Losses | |||||
Beginning balance | 44 | 45 | 44 | 45 | |
Write-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Provision for credit losses | 0 | 0 | 0 | 0 | |
Other | 0 | 0 | 0 | 0 | |
Ending Balance | 44 | 45 | 44 | 45 | |
Allowance for Credit Losses | |||||
Individually evaluated | 39 | 39 | 39 | 39 | |
Collectively evaluated | 5 | 6 | 5 | 6 | |
Allowance, Ending Balance | 44 | 45 | 44 | 45 | 44 |
Finance Receivables | |||||
Individually evaluated | 78 | 78 | 78 | 78 | |
Collectively evaluated | 3,039 | 4,125 | 3,039 | 4,125 | |
Finance Receivables, Ending Balance | 3,117 | 4,203 | 3,117 | 4,203 | |
Dealer | Adjustment to adopt new accounting guidance | Accounting Standards Update 2016-13 | |||||
Financing Receivable, Allowance for Credit Losses | |||||
Beginning balance | 0 | 0 | |||
Allowance for Credit Losses | |||||
Allowance, Ending Balance | 0 | ||||
Caterpillar Purchased Receivables | |||||
Financing Receivable, Allowance for Credit Losses | |||||
Beginning balance | 4 | 4 | 4 | 4 | |
Write-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Provision for credit losses | 0 | (1) | 0 | (1) | |
Other | 0 | 0 | 0 | 0 | |
Ending Balance | 4 | 3 | 4 | 3 | |
Allowance for Credit Losses | |||||
Individually evaluated | 0 | 0 | 0 | 0 | |
Collectively evaluated | 4 | 3 | 4 | 3 | |
Allowance, Ending Balance | 4 | 3 | 4 | 3 | 4 |
Finance Receivables | |||||
Individually evaluated | 0 | 0 | 0 | 0 | |
Collectively evaluated | 3,858 | 3,514 | 3,858 | 3,514 | |
Finance Receivables, Ending Balance | $ 3,858 | $ 3,514 | 3,858 | 3,514 | 3,646 |
Caterpillar Purchased Receivables | Adjustment to adopt new accounting guidance | Accounting Standards Update 2016-13 | |||||
Financing Receivable, Allowance for Credit Losses | |||||
Beginning balance | $ 0 | $ 0 | |||
Allowance for Credit Losses | |||||
Allowance, Ending Balance | $ 0 |
Finance Receivables (Details 4)
Finance Receivables (Details 4) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 |
Financing Receivable, Credit Quality Indicator | |||
Total Finance Receivables | $ 27,538 | $ 27,054 | $ 26,856 |
Customer | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 5,261 | 8,399 | |
2020 and 2019, respectively | 7,035 | 5,622 | |
2019 and 2018, respectively | 4,280 | 2,994 | |
2018 and 2017, respectively | 2,060 | 1,440 | |
2017 and 2016, respectively | 886 | 597 | |
Prior | 706 | 495 | |
Revolving Finance Receivables | 335 | 380 | |
Total Finance Receivables | 20,563 | 19,927 | 19,139 |
Customer | North America | Current | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 2,469 | 3,780 | |
2020 and 2019, respectively | 3,224 | 2,423 | |
2019 and 2018, respectively | 1,931 | 1,344 | |
2018 and 2017, respectively | 957 | 522 | |
2017 and 2016, respectively | 325 | 212 | |
Prior | 111 | 27 | |
Revolving Finance Receivables | 117 | 89 | |
Total Finance Receivables | 9,134 | 8,397 | |
Customer | North America | 31-60 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 12 | 52 | |
2020 and 2019, respectively | 37 | 49 | |
2019 and 2018, respectively | 25 | 33 | |
2018 and 2017, respectively | 19 | 16 | |
2017 and 2016, respectively | 8 | 7 | |
Prior | 3 | 2 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 104 | 159 | |
Customer | North America | 61-90 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 4 | 22 | |
2020 and 2019, respectively | 7 | 25 | |
2019 and 2018, respectively | 5 | 16 | |
2018 and 2017, respectively | 5 | 9 | |
2017 and 2016, respectively | 2 | 2 | |
Prior | 2 | 1 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 25 | 75 | |
Customer | North America | 91+ days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 2 | 14 | |
2020 and 2019, respectively | 17 | 35 | |
2019 and 2018, respectively | 27 | 31 | |
2018 and 2017, respectively | 15 | 20 | |
2017 and 2016, respectively | 10 | 9 | |
Prior | 6 | 4 | |
Revolving Finance Receivables | 2 | 2 | |
Total Finance Receivables | 79 | 115 | |
Customer | EAME | Current | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 952 | 1,605 | |
2020 and 2019, respectively | 1,275 | 931 | |
2019 and 2018, respectively | 669 | 501 | |
2018 and 2017, respectively | 329 | 203 | |
2017 and 2016, respectively | 126 | 60 | |
Prior | 38 | 18 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 3,389 | 3,318 | |
Customer | EAME | 31-60 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 6 | 5 | |
2020 and 2019, respectively | 10 | 15 | |
2019 and 2018, respectively | 15 | 3 | |
2018 and 2017, respectively | 2 | 2 | |
2017 and 2016, respectively | 1 | 0 | |
Prior | 1 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 35 | 25 | |
Customer | EAME | 61-90 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 0 | 1 | |
2020 and 2019, respectively | 7 | 1 | |
2019 and 2018, respectively | 4 | 2 | |
2018 and 2017, respectively | 2 | 1 | |
2017 and 2016, respectively | 0 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 13 | 5 | |
Customer | EAME | 91+ days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 3 | 7 | |
2020 and 2019, respectively | 11 | 7 | |
2019 and 2018, respectively | 7 | 12 | |
2018 and 2017, respectively | 6 | 4 | |
2017 and 2016, respectively | 3 | 39 | |
Prior | 61 | 43 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 91 | 112 | |
Customer | Asia/Pacific | Current | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 955 | 1,583 | |
2020 and 2019, respectively | 1,259 | 933 | |
2019 and 2018, respectively | 642 | 412 | |
2018 and 2017, respectively | 217 | 115 | |
2017 and 2016, respectively | 69 | 32 | |
Prior | 15 | 6 | |
Revolving Finance Receivables | 36 | 32 | |
Total Finance Receivables | 3,193 | 3,113 | |
Customer | Asia/Pacific | 31-60 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 4 | 13 | |
2020 and 2019, respectively | 22 | 23 | |
2019 and 2018, respectively | 18 | 13 | |
2018 and 2017, respectively | 8 | 6 | |
2017 and 2016, respectively | 1 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 53 | 55 | |
Customer | Asia/Pacific | 61-90 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 0 | 7 | |
2020 and 2019, respectively | 8 | 11 | |
2019 and 2018, respectively | 9 | 7 | |
2018 and 2017, respectively | 4 | 1 | |
2017 and 2016, respectively | 0 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 21 | 26 | |
Customer | Asia/Pacific | 91+ days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 0 | 4 | |
2020 and 2019, respectively | 12 | 10 | |
2019 and 2018, respectively | 8 | 9 | |
2018 and 2017, respectively | 8 | 3 | |
2017 and 2016, respectively | 1 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 29 | 26 | |
Customer | Mining | Current | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 507 | 515 | |
2020 and 2019, respectively | 431 | 574 | |
2019 and 2018, respectively | 509 | 289 | |
2018 and 2017, respectively | 274 | 181 | |
2017 and 2016, respectively | 89 | 92 | |
Prior | 191 | 151 | |
Revolving Finance Receivables | 71 | 137 | |
Total Finance Receivables | 2,072 | 1,939 | |
Customer | Mining | 31-60 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 0 | 5 | |
2020 and 2019, respectively | 3 | 0 | |
2019 and 2018, respectively | 0 | 5 | |
2018 and 2017, respectively | 0 | 1 | |
2017 and 2016, respectively | 0 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 3 | 11 | |
Customer | Mining | 61-90 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 0 | 0 | |
2020 and 2019, respectively | 0 | 0 | |
2019 and 2018, respectively | 0 | 0 | |
2018 and 2017, respectively | 0 | 0 | |
2017 and 2016, respectively | 0 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 0 | 0 | |
Customer | Mining | 91+ days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 0 | 0 | |
2020 and 2019, respectively | 1 | 11 | |
2019 and 2018, respectively | 2 | 8 | |
2018 and 2017, respectively | 4 | 2 | |
2017 and 2016, respectively | 2 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 1 | |
Total Finance Receivables | 9 | 22 | |
Customer | Latin America | Current | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 315 | 561 | |
2020 and 2019, respectively | 452 | 348 | |
2019 and 2018, respectively | 233 | 151 | |
2018 and 2017, respectively | 93 | 48 | |
2017 and 2016, respectively | 30 | 13 | |
Prior | 19 | 34 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 1,142 | 1,155 | |
Customer | Latin America | 31-60 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 1 | 3 | |
2020 and 2019, respectively | 14 | 6 | |
2019 and 2018, respectively | 6 | 4 | |
2018 and 2017, respectively | 3 | 3 | |
2017 and 2016, respectively | 1 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 25 | 16 | |
Customer | Latin America | 61-90 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 0 | 1 | |
2020 and 2019, respectively | 3 | 7 | |
2019 and 2018, respectively | 2 | 6 | |
2018 and 2017, respectively | 1 | 3 | |
2017 and 2016, respectively | 0 | 2 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 6 | 19 | |
Customer | Latin America | 91+ days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 0 | 2 | |
2020 and 2019, respectively | 18 | 14 | |
2019 and 2018, respectively | 11 | 11 | |
2018 and 2017, respectively | 11 | 24 | |
2017 and 2016, respectively | 6 | 5 | |
Prior | 8 | 4 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 54 | 60 | |
Customer | Caterpillar Power Finance | Current | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 31 | 217 | |
2020 and 2019, respectively | 222 | 199 | |
2019 and 2018, respectively | 157 | 111 | |
2018 and 2017, respectively | 82 | 273 | |
2017 and 2016, respectively | 209 | 99 | |
Prior | 180 | 117 | |
Revolving Finance Receivables | 109 | 119 | |
Total Finance Receivables | 990 | 1,135 | |
Customer | Caterpillar Power Finance | 31-60 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 0 | 0 | |
2020 and 2019, respectively | 0 | 0 | |
2019 and 2018, respectively | 0 | 6 | |
2018 and 2017, respectively | 0 | 0 | |
2017 and 2016, respectively | 0 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 0 | 6 | |
Customer | Caterpillar Power Finance | 61-90 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 0 | 0 | |
2020 and 2019, respectively | 0 | 0 | |
2019 and 2018, respectively | 0 | 0 | |
2018 and 2017, respectively | 0 | 0 | |
2017 and 2016, respectively | 0 | 0 | |
Prior | 2 | 9 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 2 | 9 | |
Customer | Caterpillar Power Finance | 91+ days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2021 and 2020, respectively | 0 | 2 | |
2020 and 2019, respectively | 2 | 0 | |
2019 and 2018, respectively | 0 | 20 | |
2018 and 2017, respectively | 20 | 3 | |
2017 and 2016, respectively | 3 | 25 | |
Prior | 69 | 79 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 94 | 129 | |
Dealer | |||
Financing Receivable, Credit Quality Indicator | |||
Total Finance Receivables | 3,117 | $ 4,203 | |
Dealer | Latin America | 91+ days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2018 and 2017, respectively | 78 | ||
2017 and 2016, respectively | $ 78 | ||
Prior | 3 | ||
Total Finance Receivables | $ 81 |
Finance Receivables (Details 5)
Finance Receivables (Details 5) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 |
Receivables [Abstract] | |||
Period after which unpaid installments are considered as past due | 30 days | ||
Financing Receivable, Past Due | |||
Total Finance Receivables | $ 27,538 | $ 27,054 | $ 26,856 |
Caterpillar Purchased Receivables | |||
Financing Receivable, Past Due | |||
Past Due | 25 | 37 | |
Current | 3,833 | 3,609 | |
Total Finance Receivables | 3,858 | 3,646 | $ 3,514 |
Caterpillar Purchased Receivables | 31-60 days past due | |||
Financing Receivable, Past Due | |||
Past Due | 16 | 17 | |
Caterpillar Purchased Receivables | 61-90 days past due | |||
Financing Receivable, Past Due | |||
Past Due | 4 | 12 | |
Caterpillar Purchased Receivables | 91+ days past due | |||
Financing Receivable, Past Due | |||
Past Due | 5 | 8 | |
Caterpillar Purchased Receivables | North America | |||
Financing Receivable, Past Due | |||
Past Due | 18 | 31 | |
Current | 2,015 | 1,889 | |
Total Finance Receivables | 2,033 | 1,920 | |
Caterpillar Purchased Receivables | North America | 31-60 days past due | |||
Financing Receivable, Past Due | |||
Past Due | 12 | 14 | |
Caterpillar Purchased Receivables | North America | 61-90 days past due | |||
Financing Receivable, Past Due | |||
Past Due | 3 | 11 | |
Caterpillar Purchased Receivables | North America | 91+ days past due | |||
Financing Receivable, Past Due | |||
Past Due | 3 | 6 | |
Caterpillar Purchased Receivables | EAME | |||
Financing Receivable, Past Due | |||
Past Due | 3 | 2 | |
Current | 867 | 632 | |
Total Finance Receivables | 870 | 634 | |
Caterpillar Purchased Receivables | EAME | 31-60 days past due | |||
Financing Receivable, Past Due | |||
Past Due | 1 | 1 | |
Caterpillar Purchased Receivables | EAME | 61-90 days past due | |||
Financing Receivable, Past Due | |||
Past Due | 1 | 0 | |
Caterpillar Purchased Receivables | EAME | 91+ days past due | |||
Financing Receivable, Past Due | |||
Past Due | 1 | 1 | |
Caterpillar Purchased Receivables | Asia/Pacific | |||
Financing Receivable, Past Due | |||
Past Due | 2 | 4 | |
Current | 490 | 581 | |
Total Finance Receivables | 492 | 585 | |
Caterpillar Purchased Receivables | Asia/Pacific | 31-60 days past due | |||
Financing Receivable, Past Due | |||
Past Due | 1 | 2 | |
Caterpillar Purchased Receivables | Asia/Pacific | 61-90 days past due | |||
Financing Receivable, Past Due | |||
Past Due | 0 | 1 | |
Caterpillar Purchased Receivables | Asia/Pacific | 91+ days past due | |||
Financing Receivable, Past Due | |||
Past Due | 1 | 1 | |
Caterpillar Purchased Receivables | Mining | |||
Financing Receivable, Past Due | |||
Past Due | 0 | 0 | |
Current | 0 | 0 | |
Total Finance Receivables | 0 | 0 | |
Caterpillar Purchased Receivables | Mining | 31-60 days past due | |||
Financing Receivable, Past Due | |||
Past Due | 0 | 0 | |
Caterpillar Purchased Receivables | Mining | 61-90 days past due | |||
Financing Receivable, Past Due | |||
Past Due | 0 | 0 | |
Caterpillar Purchased Receivables | Mining | 91+ days past due | |||
Financing Receivable, Past Due | |||
Past Due | 0 | 0 | |
Caterpillar Purchased Receivables | Latin America | |||
Financing Receivable, Past Due | |||
Past Due | 2 | 0 | |
Current | 458 | 501 | |
Total Finance Receivables | 460 | 501 | |
Caterpillar Purchased Receivables | Latin America | 31-60 days past due | |||
Financing Receivable, Past Due | |||
Past Due | 2 | 0 | |
Caterpillar Purchased Receivables | Latin America | 61-90 days past due | |||
Financing Receivable, Past Due | |||
Past Due | 0 | 0 | |
Caterpillar Purchased Receivables | Latin America | 91+ days past due | |||
Financing Receivable, Past Due | |||
Past Due | 0 | 0 | |
Caterpillar Purchased Receivables | Caterpillar Power Finance | |||
Financing Receivable, Past Due | |||
Past Due | 0 | 0 | |
Current | 3 | 6 | |
Total Finance Receivables | 3 | 6 | |
Caterpillar Purchased Receivables | Caterpillar Power Finance | 31-60 days past due | |||
Financing Receivable, Past Due | |||
Past Due | 0 | 0 | |
Caterpillar Purchased Receivables | Caterpillar Power Finance | 61-90 days past due | |||
Financing Receivable, Past Due | |||
Past Due | 0 | 0 | |
Caterpillar Purchased Receivables | Caterpillar Power Finance | 91+ days past due | |||
Financing Receivable, Past Due | |||
Past Due | $ 0 | $ 0 |
Finance Receivables (Details 6)
Finance Receivables (Details 6) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Financing Receivable, Past Due | |||||
Period after which collection of future income is considered as not probable | 120 days | ||||
Customer | |||||
Financing Receivable, Past Due | |||||
Amortized Cost, Non-accrual With an Allowance | $ 349 | $ 349 | $ 466 | ||
Amortized Cost, Non-accrual Without an Allowance | 3 | 3 | 20 | ||
Amortized Cost, 91+ Still Accruing | 33 | 33 | 49 | ||
Interest income recognized for finance receivables on non-accrual status | 1 | $ 1 | 6 | $ 5 | |
Customer | North America | |||||
Financing Receivable, Past Due | |||||
Amortized Cost, Non-accrual With an Allowance | 62 | 62 | 86 | ||
Amortized Cost, Non-accrual Without an Allowance | 1 | 1 | 1 | ||
Amortized Cost, 91+ Still Accruing | 19 | 19 | 34 | ||
Customer | EAME | |||||
Financing Receivable, Past Due | |||||
Amortized Cost, Non-accrual With an Allowance | 89 | 89 | 113 | ||
Amortized Cost, Non-accrual Without an Allowance | 0 | 0 | 1 | ||
Amortized Cost, 91+ Still Accruing | 2 | 2 | 1 | ||
Customer | Asia/Pacific | |||||
Financing Receivable, Past Due | |||||
Amortized Cost, Non-accrual With an Allowance | 19 | 19 | 13 | ||
Amortized Cost, Non-accrual Without an Allowance | 1 | 1 | 0 | ||
Amortized Cost, 91+ Still Accruing | 11 | 11 | 13 | ||
Customer | Mining | |||||
Financing Receivable, Past Due | |||||
Amortized Cost, Non-accrual With an Allowance | 9 | 9 | 21 | ||
Amortized Cost, Non-accrual Without an Allowance | 1 | 1 | 1 | ||
Amortized Cost, 91+ Still Accruing | 0 | 0 | 0 | ||
Customer | Latin America | |||||
Financing Receivable, Past Due | |||||
Amortized Cost, Non-accrual With an Allowance | 57 | 57 | 63 | ||
Amortized Cost, Non-accrual Without an Allowance | 0 | 0 | 0 | ||
Amortized Cost, 91+ Still Accruing | 1 | 1 | 1 | ||
Customer | Caterpillar Power Finance | |||||
Financing Receivable, Past Due | |||||
Amortized Cost, Non-accrual With an Allowance | 113 | 113 | 170 | ||
Amortized Cost, Non-accrual Without an Allowance | 0 | 0 | 17 | ||
Amortized Cost, 91+ Still Accruing | 0 | 0 | 0 | ||
Dealer | |||||
Financing Receivable, Past Due | |||||
Amortized Cost, 91+ Still Accruing | 0 | 0 | 0 | ||
Interest income recognized for finance receivables on non-accrual status | 0 | $ 0 | 0 | $ 0 | |
Dealer | Latin America | |||||
Financing Receivable, Past Due | |||||
Amortized Cost, Non-accrual With an Allowance | $ 78 | $ 78 | $ 81 |
Finance Receivables (Details 7)
Finance Receivables (Details 7) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021USD ($)contracts | Jun. 30, 2020USD ($)contracts | Jun. 30, 2021USD ($)contracts | Jun. 30, 2020USD ($)contracts | |
Customer | ||||
Finance receivables modified as TDRs | ||||
Pre-TDR Amortized Cost | $ 26 | $ 71 | $ 37 | $ 73 |
Post-TDR Amortized Cost | 26 | 71 | 31 | 73 |
TDRs which had been modified within twelve months of the default date [Abstract] | ||||
Post-TDR Amortized Cost | 17 | 0 | 27 | 11 |
Customer | North America | ||||
Finance receivables modified as TDRs | ||||
Pre-TDR Amortized Cost | 4 | 9 | 4 | 9 |
Post-TDR Amortized Cost | 4 | 9 | 4 | 9 |
TDRs which had been modified within twelve months of the default date [Abstract] | ||||
Post-TDR Amortized Cost | 0 | 0 | 1 | 0 |
Customer | EAME | ||||
TDRs which had been modified within twelve months of the default date [Abstract] | ||||
Post-TDR Amortized Cost | 0 | 0 | 0 | 10 |
Customer | Asia/Pacific | ||||
Finance receivables modified as TDRs | ||||
Pre-TDR Amortized Cost | 0 | 8 | 0 | 8 |
Post-TDR Amortized Cost | 0 | 8 | 0 | 8 |
TDRs which had been modified within twelve months of the default date [Abstract] | ||||
Post-TDR Amortized Cost | 2 | 0 | 6 | 0 |
Customer | Mining | ||||
Finance receivables modified as TDRs | ||||
Pre-TDR Amortized Cost | 0 | 17 | 11 | 17 |
Post-TDR Amortized Cost | 0 | 17 | 5 | 17 |
Customer | Latin America | ||||
Finance receivables modified as TDRs | ||||
Pre-TDR Amortized Cost | 6 | 0 | 6 | 2 |
Post-TDR Amortized Cost | 6 | 0 | 6 | 2 |
TDRs which had been modified within twelve months of the default date [Abstract] | ||||
Post-TDR Amortized Cost | 15 | 0 | 15 | 1 |
Customer | Caterpillar Power Finance | ||||
Finance receivables modified as TDRs | ||||
Pre-TDR Amortized Cost | 16 | 37 | 16 | 37 |
Post-TDR Amortized Cost | 16 | 37 | 16 | 37 |
TDRs which had been modified within twelve months of the default date [Abstract] | ||||
Post-TDR Amortized Cost | $ 0 | $ 0 | $ 5 | $ 0 |
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 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Risk Management (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Derivative | |
Cumulative amount of fair value hedging adjustments related to our fixed-to-floating interest rate contracts included in the carrying amount of Long-term debt | $ 29 |
Deferred net losses, net of tax, included in equity, related to cash flow hedges, expected to be reclassified to earnings over the next twelve months | $ 15 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Risk Management (Details 2) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value | ||
Asset Fair Value | $ 136 | $ 85 |
Liability Fair Value | (80) | (260) |
Designated derivatives | ||
Derivatives, Fair Value | ||
Asset (Liability) Fair Value | 25 | (92) |
Designated derivatives | Interest rate contracts | Other assets | ||
Derivatives, Fair Value | ||
Asset Fair Value | 38 | 59 |
Designated derivatives | Interest rate contracts | Accrued expenses | ||
Derivatives, Fair Value | ||
Liability Fair Value | (8) | (5) |
Designated derivatives | Cross currency contracts | Other assets | ||
Derivatives, Fair Value | ||
Asset Fair Value | 49 | 2 |
Designated derivatives | Cross currency contracts | Accrued expenses | ||
Derivatives, Fair Value | ||
Liability Fair Value | (54) | (148) |
Undesignated derivatives | ||
Derivatives, Fair Value | ||
Asset (Liability) Fair Value | 31 | (83) |
Undesignated derivatives | Foreign exchange contracts | Other assets | ||
Derivatives, Fair Value | ||
Asset Fair Value | 44 | 17 |
Undesignated derivatives | Foreign exchange contracts | Accrued expenses | ||
Derivatives, Fair Value | ||
Liability Fair Value | (18) | (107) |
Undesignated derivatives | Cross currency contracts | Other assets | ||
Derivatives, Fair Value | ||
Asset Fair Value | $ 5 | $ 7 |
Derivative Financial Instrume_5
Derivative Financial Instruments and Risk Management (Details 3) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Derivative | ||
Derivative, Notional Amount | $ 10,580 | $ 11,260 |
Derivative Financial Instrume_6
Derivative Financial Instruments and Risk Management (Details 4) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Recognized in AOCI | $ (37) | $ (44) | $ 82 | $ 42 |
Amount of Gains (Losses) Reclassified from AOCI | 38 | 53 | (66) | (24) |
Interest Expense | 116 | 150 | 241 | 325 |
Other income (expense) | (1) | (6) | (9) | (16) |
Designated derivatives | Cash flow hedges | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Recognized in AOCI | (37) | (44) | 82 | 42 |
Amount of Gains (Losses) Reclassified from AOCI | (38) | (53) | 66 | 24 |
Designated derivatives | Cash flow hedges | Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Recognized in AOCI | 1 | (9) | 1 | (24) |
Designated derivatives | Cash flow hedges | Interest rate contracts | Interest expense | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Reclassified from AOCI | (6) | (19) | (16) | (24) |
Interest Expense | 116 | 150 | 241 | 325 |
Designated derivatives | Cash flow hedges | Cross currency contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Recognized in AOCI | (38) | (35) | 81 | 66 |
Designated derivatives | Cash flow hedges | Cross currency contracts | Interest expense | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Reclassified from AOCI | 0 | 9 | 2 | 20 |
Interest Expense | 116 | 150 | 241 | 325 |
Designated derivatives | Cash flow hedges | Cross currency contracts | Other income (expense) | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Reclassified from AOCI | (32) | (43) | 80 | 28 |
Other income (expense) | (1) | (6) | (9) | (16) |
Undesignated derivatives | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments | (58) | (23) | 28 | 85 |
Undesignated derivatives | Foreign exchange contracts | Other income (expense) | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments | (57) | (24) | 28 | 75 |
Undesignated derivatives | Cross currency contracts | Other income (expense) | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments | $ (1) | $ 1 | $ 0 | $ 10 |
Derivative Financial Instrume_7
Derivative Financial Instruments and Risk Management (Details 5) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amount of Recognized Assets | $ 136 | $ 85 |
Gross Amounts Offset | 0 | 0 |
Net Amount of Assets | 136 | 85 |
Gross Amounts Not Offset | (55) | (57) |
Net Amount | 81 | 28 |
Gross Amount of Recognized Liabilities | (80) | (260) |
Gross Amounts Offset | 0 | 0 |
Net Amount of Liabilities | (80) | (260) |
Gross Amounts Not Offset | 55 | 57 |
Net Amount | $ (25) | $ (203) |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance at beginning of period | $ (670) | $ (1,083) | $ (551) | $ (777) | |
Gains (losses) on foreign currency translation | 62 | 115 | (32) | (179) | |
Less: Tax provision/(benefit) | (7) | (11) | 18 | 1 | |
Net gains (losses) on foreign currency translation | 69 | 126 | (50) | (180) | |
Other comprehensive income (loss), net of tax | 69 | 126 | (50) | (180) | |
Balance at end of period | (601) | (957) | (601) | (957) | |
Balance at beginning of period | (33) | (62) | (44) | (68) | |
Gains (losses) deferred | (37) | (44) | 82 | 42 | |
Less: Tax provision/(benefit) | (9) | (9) | 16 | 10 | |
Net gains (losses) deferred | (28) | (35) | 66 | 32 | |
(Gains) losses reclassified to earnings | 38 | 53 | (66) | (24) | |
Less: Tax (provision)/benefit | 9 | 11 | (12) | (5) | |
Net (gains) losses reclassified to earnings | 29 | 42 | (54) | (19) | |
Other comprehensive income (loss), net of tax | 1 | 7 | 12 | 13 | |
Balance at end of period | (32) | (55) | (32) | (55) | |
Total Accumulated other comprehensive income (loss) at end of period | $ (633) | $ (1,012) | $ (633) | $ (1,012) | $ (595) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Other income (expense) | $ (1) | $ (6) | $ (9) | $ (16) | |
Interest | (116) | (150) | (241) | (325) | |
Reclassifications before tax | 189 | 89 | 385 | 216 | |
Tax (provision) benefit | (44) | (25) | (97) | (58) | |
Total reclassifications from Accumulated other comprehensive income (loss) | [1] | 142 | 59 | 282 | 149 |
Reclassifications out of Accumulated other comprehensive income (loss) | Derivative financial instruments | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassifications before tax | (38) | (53) | 66 | 24 | |
Tax (provision) benefit | 9 | 11 | (12) | (5) | |
Total reclassifications from Accumulated other comprehensive income (loss) | (29) | (42) | 54 | 19 | |
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) | (32) | (43) | 80 | 28 | |
Interest | 0 | 9 | 2 | 20 | |
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 | $ (6) | $ (19) | $ (16) | $ (24) | |
[1] | Profit attributable to Caterpillar Financial Services Corporation. |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Segment Reporting Information | |||||
External Revenues | $ 646 | $ 641 | $ 1,285 | $ 1,336 | |
Profit before income taxes | 189 | 89 | 385 | 216 | |
Interest Expense | 116 | 150 | 241 | 325 | |
Depreciation on equipment leased to others | 187 | 194 | 379 | 395 | |
Provision for credit losses | 11 | 86 | 1 | 147 | |
Assets | 32,541 | 32,541 | $ 31,991 | ||
Capital expenditures | 360 | 256 | 588 | 503 | |
Operating Segments | |||||
Segment Reporting Information | |||||
External Revenues | 644 | 641 | 1,281 | 1,333 | |
Profit before income taxes | 221 | 106 | 446 | 248 | |
Interest Expense | 122 | 161 | 247 | 343 | |
Depreciation on equipment leased to others | 187 | 194 | 379 | 395 | |
Provision for credit losses | 11 | 86 | 1 | 147 | |
Assets | 31,319 | 31,319 | 30,819 | ||
Capital expenditures | 360 | 251 | 584 | 497 | |
Unallocated | |||||
Segment Reporting Information | |||||
External Revenues | 4 | 6 | 9 | 15 | |
Profit before income taxes | (75) | (64) | (147) | (134) | |
Interest Expense | 45 | 46 | 95 | 102 | |
Depreciation on equipment leased to others | 0 | 0 | 0 | 0 | |
Provision for credit losses | 0 | 0 | 0 | 0 | |
Assets | 1,518 | 1,518 | 1,576 | ||
Capital expenditures | 0 | 5 | 4 | 6 | |
Segment Reconciling Items | Timing | |||||
Segment Reporting Information | |||||
External Revenues | (2) | (6) | (5) | (12) | |
Profit before income taxes | 2 | (1) | 3 | (2) | |
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 | 13 | 13 | 12 | ||
Capital expenditures | 0 | 0 | 0 | 0 | |
Segment Reconciling Items | Methodology | |||||
Segment Reporting Information | |||||
External Revenues | 0 | 0 | 0 | 0 | |
Profit before income taxes | 41 | 48 | 83 | 104 | |
Interest Expense | (51) | (57) | (101) | (120) | |
Depreciation on equipment leased to others | 0 | 0 | 0 | 0 | |
Provision for credit losses | 0 | 0 | 0 | 0 | |
Assets | (78) | (78) | (152) | ||
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 | (231) | (231) | (264) | ||
Capital expenditures | 0 | 0 | 0 | 0 | |
North America | Operating Segments | |||||
Segment Reporting Information | |||||
External Revenues | 348 | 356 | 695 | 738 | |
Profit before income taxes | 102 | 62 | 201 | 137 | |
Interest Expense | 64 | 87 | 133 | 181 | |
Depreciation on equipment leased to others | 134 | 139 | 271 | 283 | |
Provision for credit losses | 3 | 25 | 4 | 47 | |
Assets | 15,159 | 15,159 | 14,749 | ||
Capital expenditures | 266 | 221 | 444 | 441 | |
EAME | Operating Segments | |||||
Segment Reporting Information | |||||
External Revenues | 68 | 63 | 135 | 133 | |
Profit before income taxes | (6) | 14 | 24 | 30 | |
Interest Expense | 5 | 10 | 10 | 23 | |
Depreciation on equipment leased to others | 15 | 15 | 30 | 31 | |
Provision for credit losses | 32 | 6 | 28 | 13 | |
Assets | 5,245 | 5,245 | 4,981 | ||
Capital expenditures | 17 | 9 | 27 | 13 | |
Asia/Pacific | Operating Segments | |||||
Segment Reporting Information | |||||
External Revenues | 93 | 82 | 185 | 168 | |
Profit before income taxes | 49 | 39 | 100 | 75 | |
Interest Expense | 25 | 23 | 48 | 50 | |
Depreciation on equipment leased to others | 2 | 3 | 4 | 5 | |
Provision for credit losses | 0 | 7 | 0 | 14 | |
Assets | 4,576 | 4,576 | 4,585 | ||
Capital expenditures | 2 | 2 | 5 | 5 | |
Latin America | Operating Segments | |||||
Segment Reporting Information | |||||
External Revenues | 50 | 48 | 97 | 101 | |
Profit before income taxes | 18 | 2 | 34 | 8 | |
Interest Expense | 15 | 21 | 29 | 44 | |
Depreciation on equipment leased to others | 2 | 3 | 4 | 6 | |
Provision for credit losses | 4 | 12 | 7 | 19 | |
Assets | 2,533 | 2,533 | 2,621 | ||
Capital expenditures | 1 | 1 | 8 | 4 | |
Caterpillar Power Finance | Operating Segments | |||||
Segment Reporting Information | |||||
External Revenues | 14 | 17 | 27 | 37 | |
Profit before income taxes | 19 | (10) | 30 | (9) | |
Interest Expense | 3 | 6 | 7 | 14 | |
Depreciation on equipment leased to others | 0 | 0 | 1 | 0 | |
Provision for credit losses | (12) | 18 | (19) | 23 | |
Assets | 1,120 | 1,120 | 1,308 | ||
Capital expenditures | 0 | 0 | 0 | 0 | |
Mining | Operating Segments | |||||
Segment Reporting Information | |||||
External Revenues | 71 | 75 | 142 | 156 | |
Profit before income taxes | 39 | (1) | 57 | 7 | |
Interest Expense | 10 | 14 | 20 | 31 | |
Depreciation on equipment leased to others | 34 | 34 | 69 | 70 | |
Provision for credit losses | (16) | 18 | (19) | 31 | |
Assets | 2,686 | 2,686 | $ 2,575 | ||
Capital expenditures | $ 74 | $ 18 | $ 100 | $ 34 |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Guarantor Obligations | ||
Guarantees, maximum potential amount of future payments | $ 40 | $ 40 |
Assets | 32,541 | 31,991 |
Liabilities | 29,148 | 28,500 |
Maximum | ||
Guarantor Obligations | ||
Related recorded liability | 1 | 1 |
Variable interest entity, primary beneficiary | ||
Guarantor Obligations | ||
Assets | 966 | 1,030 |
Liabilities | $ 965 | $ 1,030 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Recurring basis | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Derivative financial instruments, net asset (liability) position | $ 56 | $ (175) |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details 2) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Loans carried at fair value | $ 157 | $ 243 |
Fair Value Measurements (Deta_3
Fair Value Measurements (Details 3) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Financial Instruments, Financial Assets, Balance Sheet Groupings | ||
Restricted cash and cash equivalents | $ 10 | $ 14 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings | ||
Short-term borrowings | (3,421) | (2,005) |
Fair Value, Level 1 | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings | ||
Cash and cash equivalents | 639 | 411 |
Restricted cash and cash equivalents | 10 | 14 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings | ||
Short-term borrowings | (3,421) | (2,005) |
Fair Value, Level 2 | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings | ||
Interest rate contracts, in a receivable position | 38 | 59 |
Foreign exchange contracts, in a receivable position | 44 | 17 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings | ||
Interest rate contracts, in a payable position | (8) | (5) |
Foreign exchange contracts, in a payable position | (18) | (107) |
Long-term debt | (24,811) | (24,614) |
Fair Value, Level 3 | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings | ||
Finance receivables, net (excluding finance leases) | 19,112 | 18,910 |
Carrying Amount | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings | ||
Cash and cash equivalents | 639 | 411 |
Restricted cash and cash equivalents | 10 | 14 |
Finance receivables, net (excluding finance leases) | 18,961 | 18,599 |
Interest rate contracts, in a receivable position | 38 | 59 |
Foreign exchange contracts, in a receivable position | 44 | 17 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings | ||
Interest rate contracts, in a payable position | (8) | (5) |
Foreign exchange contracts, in a payable position | (18) | (107) |
Short-term borrowings | (3,421) | (2,005) |
Long-term debt | (24,358) | (23,979) |
Carrying amount of assets excluded from measurement at fair value | ||
Financial Instruments, Financial Liabilities, Balance Sheet Groupings | ||
Finance leases and failed sale leasebacks, Carrying Value | 8,180 | 7,980 |
Cross currency contracts | Fair Value, Level 2 | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings | ||
Foreign exchange contracts, in a receivable position | 54 | 9 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings | ||
Foreign exchange contracts, in a payable position | (54) | (148) |
Cross currency contracts | Carrying Amount | ||
Financial Instruments, Financial Assets, Balance Sheet Groupings | ||
Foreign exchange contracts, in a receivable position | 54 | 9 |
Financial Instruments, Financial Liabilities, Balance Sheet Groupings | ||
Foreign exchange contracts, in a payable position | $ (54) | $ (148) |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||
Estimated annual tax rate | 25.00% | 27.00% |