v3.25.2
Finance Receivables
 6 Months Ended
Jun. 30, 2025
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,
2025		December 31,
2024
Retail loans(1)
$18,160 $17,331 
Retail leases6,848 6,380 
Caterpillar purchased receivables4,582 4,283 
Wholesale loans(1)
1,305 1,235 
Wholesale leases1 2 
Total finance receivables30,896 29,231 
Less: Allowance for credit losses(290)(267)
Total finance receivables, net$30,606 $28,964 
(1)    Includes failed sale leasebacks.

Finance leases
Revenues from finance leases were $118 million and $107 million for the three months ended June 30, 2025 and 2024, respectively, and $230 million and $213 million for the six months ended June 30, 2025 and 2024, respectively, and are included in retail and wholesale finance revenues in the Consolidated Statements of Profit.

A.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. We also provide financing for power generation facilities that, in most cases, incorporate Caterpillar products. The average original term of our customer finance receivables portfolio was approximately 51 months with an average remaining term of approximately 27 months as of June 30, 2025.

We typically maintain a security interest in financed equipment and generally 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, 2025, our forecasts reflected a continuation of the trend of historically low unemployment rates as well as global market uncertainty and continued actions by global central banks aimed at reducing inflation. 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 and working capital loans. Our wholesale financing plans provide financing to dealers for their primarily new Caterpillar equipment inventory and rental fleets on a secured and unsecured basis. In addition, we provide a variety of secured and unsecured retail 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, 2025.

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, 2025.

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. 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 Eurasia.
•Asia/Pacific - Finance receivables originated in Australia, New Zealand, China, Japan, Southeast Asia and India.
•Latin America - Finance receivables originated in Mexico and Central and South American countries.
•Mining - Finance receivables originated worldwide related to large mining customers.
•Power - Finance receivables originated worldwide related to large power customers of 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, 2025Three Months Ended June 30, 2024
CustomerDealerCaterpillar
Purchased
Receivables		TotalCustomerDealerCaterpillar
Purchased
Receivables		Total
Beginning Balance$273 $4 $5 $282 $273 $4 $4 $281 
Write-offs(27)— — (27)(33)— — (33)
Recoveries9 — — 9 15 — — 15 
Provision for credit losses(1)
21 — — 21 15 — — 15 
Other5 — — 5 (24)— — (24)
Ending Balance$281 $4 $5 $290 $246 $4 $4 $254 
Six Months Ended June 30, 2025Six Months Ended June 30, 2024
CustomerDealerCaterpillar
Purchased
Receivables		TotalCustomerDealerCaterpillar
Purchased
Receivables		Total
Beginning Balance$258 $4 $5 $267 $276 $51 $4 $331 
Write-offs(57)— — (57)(56)(47)— (103)
Recoveries19 — — 19 30 — — 30 
Provision for credit losses(1)
54 — — 54 24 — — 24 
Other7 — — 7 (28)— — (28)
Ending Balance$281 $4 $5 $290 $246 $4 $4 $254 
Finance Receivables$23,629 $2,685 $4,582 $30,896 $21,293 $2,909 $4,326 $28,528 
(1)    Excludes provision for credit losses on unfunded commitments and other miscellaneous receivables.
Gross write-offs by origination year for our Customer portfolio segment were as follows:
(Millions of dollars)Three Months Ended June 30, 2025
20252024202320222021PriorRevolving Finance ReceivablesTotal
North America$— $3 $6 $2 $2 $2 $2 $17 
EAME— 1 2 — 1 — — 4 
Asia/Pacific— 1 1 1 — — — 3 
Latin America— — 1 2 — — — 3 
Total$— $5 $10 $5 $3 $2 $2 $27 
Three Months Ended June 30, 2024
20242023202220212020PriorRevolving Finance ReceivablesTotal
North America$— $5 $2 $1 $— $1 $3 $12 
EAME— 1 1 1 1 — — 4 
Asia/Pacific— 1 1 2 — — — 4 
Latin America— — 2 2 1 8 — 13 
Total$— $7 $6 $6 $2 $9 $3 $33 
Six Months Ended June 30, 2025
20252024202320222021PriorRevolving Finance ReceivablesTotal
North America$— $5 $11 $6 $4 $3 $4 $33 
EAME— 2 3 1 1 — — 7 
Asia/Pacific— 1 2 1 1 — — 5 
Latin America— — 2 3 — 1 — 6 
Mining— 3 1 1 — — — 5 
Power— — — — — 1 — 1 
Total$— $11 $19 $12 $6 $5 $4 $57 
Six Months Ended June 30, 2024
20242023202220212020PriorRevolving Finance ReceivablesTotal
North America$— $8 $6 $3 $1 $1 $6 $25 
EAME— 2 2 2 1 — — 7 
Asia/Pacific— 2 3 3 1 — — 9 
Latin America— — 3 3 1 8 — 15 
Total$— $12 $14 $11 $4 $9 $6 $56 

For the three months ended June 30, 2025 and 2024, there were no gross write-offs in our Dealer portfolio segment. For the six months ended June 30, 2025, there were no gross write-offs in our Dealer portfolio segment. For the six months ended June 30, 2024, there were $47 million of gross write-offs in our Dealer portfolio segment, all of which were in Latin America and originated prior to 2020.
B.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 aging category of the amortized cost of finance receivables in our Customer portfolio segment by origination year were as follows:
(Millions of dollars)June 30, 2025
20252024202320222021PriorRevolving
Finance
Receivables		Total
Finance
Receivables
North America
Current$2,805 $4,496 $2,439 $1,126 $607 $107 $443 $12,023 
31-60 days past due14 43 40 26 12 3 3 141 
61-90 days past due3 18 13 8 5 1 1 49 
91+ days past due1 27 37 26 14 5 1 111 
EAME
Current773 1,165 786 444 213 95 — 3,476 
31-60 days past due2 9 11 6 2 1 — 31 
61-90 days past due2 4 7 3 2 2 — 20 
91+ days past due— 8 14 8 4 3 — 37 
Asia/Pacific
Current616 887 533 216 80 15 55 2,402 
31-60 days past due4 9 5 5 1 — — 24 
61-90 days past due— 2 2 2 — — — 6 
91+ days past due— 2 2 1 — — — 5 
Latin America
Current532 672 298 161 35 5 1 1,704 
31-60 days past due— 10 5 3 1 1 — 20 
61-90 days past due— 3 2 1 — — — 6 
91+ days past due1 7 8 7 3 — — 26 
Mining
Current445 957 654 363 155 77 16 2,667 
31-60 days past due— — 1 — — — — 1 
61-90 days past due— — 1 — — 2 — 3 
91+ days past due— 3 4 5 — 1 — 13 
Power
Current125 244 178 37 32 71 176 863 
31-60 days past due— — — — — — — — 
61-90 days past due— — — — — — — — 
91+ days past due— — — — — 1 — 1 
Totals by Aging Category
Current5,296 8,421 4,888 2,347 1,122 370 691 23,135 
31-60 days past due20 71 62 40 16 5 3 217 
61-90 days past due5 27 25 14 7 5 1 84 
91+ days past due2 47 65 47 21 10 1 193 
Total$5,323 $8,566 $5,040 $2,448 $1,166 $390 $696 $23,629 
(Millions of dollars)December 31, 2024
20242023202220212020PriorRevolving
Finance
Receivables		Total
Finance
Receivables
North America
Current$5,340 $3,035 $1,567 $980 $244 $23 $385 $11,574 
31-60 days past due30 42 29 18 5 1 3 128 
61-90 days past due9 14 10 6 2 1 1 43 
91+ days past due13 37 26 16 6 2 1 101 
EAME
Current1,244 874 532 285 92 72 — 3,099 
31-60 days past due7 10 4 3 1 — — 25 
61-90 days past due3 4 1 1 1 — — 10 
91+ days past due3 14 8 6 4 1 — 36 
Asia/Pacific
Current1,064 662 313 126 31 4 46 2,246 
31-60 days past due4 6 5 2 — — — 17 
61-90 days past due1 1 2 1 — — — 5 
91+ days past due4 1 2 1 1 — — 9 
Latin America
Current800 363 220 60 8 2 — 1,453 
31-60 days past due4 6 5 1 — 2 — 18 
61-90 days past due1 2 1 — — — — 4 
91+ days past due2 6 8 4 1 1 — 22 
Mining
Current1,067 775 450 214 69 41 21 2,637 
31-60 days past due— 1 — — — — — 1 
61-90 days past due— 1 — — — — — 1 
91+ days past due4 5 5 1 — 3 — 18 
Power
Current190 184 40 43 64 63 166 750 
31-60 days past due— — — — — — — — 
61-90 days past due— — — — — — — — 
91+ days past due— — — — — 2 — 2 
Totals by Aging Category
Current9,705 5,893 3,122 1,708 508 205 618 21,759 
31-60 days past due45 65 43 24 6 3 3 189 
61-90 days past due14 22 14 8 3 1 1 63 
91+ days past due26 63 49 28 12 9 1 188 
Total$9,790 $6,043 $3,228 $1,768 $529 $218 $623 $22,199 

Dealer
As of June 30, 2025 and December 31, 2024, the total amortized cost of finance receivables within our Dealer portfolio segment was current.
Caterpillar Purchased Receivables
The aging category of the amortized cost of finance receivables in our Caterpillar Purchased Receivables portfolio segment were as follows:
(Millions of dollars)June 30, 2025
 31-60
Days
Past Due		61-90
Days
Past Due		91+
Days
Past Due		Total
Past Due		Current
Total Finance
Receivables
North America$10 $3 $4 $17 $2,808 $2,825 
EAME4 2 1 7 832 839 
Asia/Pacific— 1 — 1 508 509 
Latin America— — — — 393 393 
Power2 — — 2 14 16 
Total$16 $6 $5 $27 $4,555 $4,582 

December 31, 2024
 31-60
Days
Past Due		61-90
Days
Past Due		91+
Days
Past Due		Total
Past Due		Current
Total Finance
Receivables
North America$14 $5 $4 $23 $2,584 $2,607 
EAME3 1 — 4 740 744 
Asia/Pacific— — 1 1 528 529 
Latin America— — — — 383 383 
Power2 1 1 4 16 20 
Total$19 $7 $6 $32 $4,251 $4,283 

Non-accrual finance receivables
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, 2025December 31, 2024
Amortized CostAmortized Cost
Non-accrual
With an
Allowance		91+ Still
Accruing		Non-accrual
With an
Allowance		91+ Still
Accruing
North America$94 $20 $83 $20 
EAME36 5 33 5 
Asia/Pacific3 3 5 5 
Latin America26 — 24 — 
Mining16 — 29 — 
Power1 — 2 — 
Total$176 $28 $176 $30 
    
There were no finance receivables in our Dealer portfolio segment on non-accrual status as of June 30, 2025 and December 31, 2024.

Modifications
We periodically modify the terms of our finance receivable agreements. Typically, the types of modifications granted are payment deferrals, interest only payment periods and/or term extensions. Many modifications we grant are for commercial reasons or for borrowers experiencing some form of short-term financial stress and may result in insignificant payment delays. We do not consider these borrowers to be experiencing financial difficulty. Modifications for borrowers we do consider to be experiencing financial difficulty typically result in payment deferrals and/or reduced payments for a period of four months or longer, term extension of six months or longer or a combination of both.
During the three and six months ended June 30, 2025 and 2024, there were no finance receivable modifications granted to borrowers experiencing financial difficulty in our Dealer or Caterpillar Purchased Receivables portfolio segments.

The ending amortized cost of finance receivables modified with borrowers experiencing financial difficulty in our Customer portfolio segment was as follows:
(Millions of dollars)Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Amortized cost of finance receivables modified$16 $3 $20 $6 
Modifications as a percentage of Customer portfolio0.07 %0.02 %0.08 %0.03 %

The financial effects of term extensions and payment delays for borrowers experiencing financial difficulty were as follows:
(In months)Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Weighted average extension to term of modified contracts14131311
Weighted average payment deferral and/or interest only periods7678

After we modify a finance receivable, we continue to track its performance under its most recent modified terms. Defaults of loans modified in the prior twelve months were not significant during the three and six months ended June 30, 2025 and 2024.

The effect of most modifications made to finance receivables for borrowers experiencing financial difficulty is already included in the allowance for credit losses based on the methodologies used to estimate the allowance; therefore, a change to the allowance for credit losses is generally not recorded upon modification. On rare occasions when principal forgiveness is provided, the amount forgiven is written off against the allowance for credit losses.