v3.26.1
Cat Financial Financing Activities
 3 Months Ended
Mar. 31, 2026
Receivables [Abstract]  
Cat Financial Financing Activities Cat Financial financing activities
Allowance for credit losses

Portfolio segments
A portfolio segment is the level at which Cat Financial develops a systematic methodology for determining its allowance for credit losses. Cat Financial's portfolio segments and related methods for estimating expected credit losses are as follows:

Customer
Cat Financial provides 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. Cat Financial also provides financing for power generation facilities that incorporate Caterpillar products. The average original term of Cat Financial's customer finance receivables portfolio was approximately 51 months with an average remaining term of approximately 28 months as of March 31, 2026.

Cat Financial typically maintains a security interest in financed equipment and generally requires physical damage insurance coverage on the financed equipment, both of which provide Cat Financial with certain rights and protections. If Cat Financial's collection efforts fail to bring a defaulted account current, Cat Financial generally can repossess the financed equipment, after satisfying local legal requirements, and sell it within the Caterpillar dealer network or through third-party auctions.

Cat Financial estimates the allowance for credit losses related to its customer finance receivables based on loss forecast models utilizing probabilities of default and the 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 months ended March 31, 2026, Cat Financial's forecasts reflected a continuation of global market uncertainty and actions by global central banks aimed at balancing economic growth and managing inflation. Cat Financial believes the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long-term trends.
Dealer
Cat Financial provides financing to Caterpillar dealers on a secured and unsecured basis in the form of wholesale financing plans and retail loans. Cat Financial's wholesale financing plans provide financing to dealers for their new Caterpillar equipment inventory and rental fleets. The retail loans to Caterpillar dealers are primarily for working capital.
    
Cat Financial estimates 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, Cat Financial's Dealer portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to its close working relationships with the dealers and their financial strength. Therefore, Cat Financial made no adjustments to historical loss rates during the three months ended March 31, 2026.

Classes of finance receivables
Cat Financial further evaluates 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. Cat Financial's 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.

Receivable balances, including accrued interest, are written off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible (generally upon repossession of the collateral). Generally, the amount of the write-off is determined by comparing the fair value of the collateral, less cost to sell, to the amortized cost of the receivable. Subsequent recoveries, if any, are credited to the allowance for credit losses when received.

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

   
 (Millions of dollars)Three Months Ended March 31, 2026Three Months Ended March 31, 2025
CustomerDealerTotalCustomerDealerTotal
Beginning balance$273 $4 $277 $258 $4 $262 
Write-offs(42)— (42)(30)— (30)
Recoveries13 — 13 10 — 10 
Provision for credit losses 1
29 — 29 33 — 33 
Other— — — 2 — 2 
Ending balance$273 $4 $277 $273 $4 $277 
   
Finance Receivables$23,513 $1,502 $25,015 $21,964 $1,377 $23,341 
1 Excludes provision for credit losses on unfunded commitments and other miscellaneous receivables.
Gross write-offs by origination year for the Customer portfolio segment were as follows:

      
 (Millions of dollars)Three Months Ended March 31, 2026
20262025202420232022PriorRevolving
Finance
Receivables		Total
North America$— $3 $8 $6 $2 $2 $3 $24 
EAME— 1 1 1 — 1 — 4 
Asia/Pacific— 3 1 1 — — — 5 
Latin America— 1 2 1 1 — — 5 
Mining— 4 — — — — — 4 
Total$— $12 $12 $9 $3 $3 $3 $42 
Three Months Ended March 31, 2025
20252024202320222021PriorRevolving
Finance
Receivables		Total
North America$— $2 $5 $4 $2 $1 $2 $16 
EAME— 1 1 1 — — — 3 
Asia/Pacific— — 1 — 1 — — 2 
Latin America— — 1 1 — 1 — 3 
Mining— 3 1 1 — — — 5 
Power— — — — — 1 — 1 
Total$— $6 $9 $7 $3 $3 $2 $30 

Credit quality of finance receivables
At origination, Cat Financial evaluates 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, Cat Financial monitors 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, Cat Financial considers the entire finance receivable past due when any installment is over 30 days past due.
Customer
The aging analysis of Cat Financial's Customer portfolio segment by origination year was as follows:

      
 (Millions of dollars)March 31, 2026
20262025202420232022PriorRevolving
Finance
Receivables 		Total Finance Receivables
North America      
Current$1,389 $5,117 $3,264 $1,582 $589 $219 $524 $12,684 
31-60 days past due2 34 33 24 11 4 3 111 
61-90 days past due— 11 10 6 5 1 2 35 
91+ days past due— 18 36 27 18 8 2 109 
EAME
Current282 1,373 821 528 261 113 — 3,378 
31-60 days past due1 14 11 8 3 2 — 39 
61-90 days past due— 8 7 5 3 2 — 25 
91+ days past due— 8 12 14 9 4 — 47 
Asia/Pacific
Current289 880 489 240 79 17 1 1,995 
31-60 days past due— 8 7 3 2 1 — 21 
61-90 days past due— 2 5 1 1 — — 9 
91+ days past due— 3 2 2 1 — — 8 
Latin America
Current228 867 440 181 77 12 4 1,809 
31-60 days past due— 7 7 4 2 — — 20 
61-90 days past due— 2 4 1 1 — — 8 
91+ days past due— 3 10 7 4 1 — 25 
Mining
Current231 739 638 429 242 130 22 2,431 
31-60 days past due— 1 — 1 — 1 — 3 
61-90 days past due— — 1 — — — — 1 
91+ days past due— — — — — — — — 
Power
Current29 162 260 152 54 22 76 755 
31-60 days past due— — — — — — — — 
61-90 days past due— — — — — — — — 
91+ days past due— — — — — — — — 
Totals by Aging Category
Current$2,448 $9,138 $5,912 $3,112 $1,302 $513 $627 $23,052 
31-60 days past due3 64 58 40 18 8 3 194 
61-90 days past due— 23 27 13 10 3 2 78 
91+ days past due— 32 60 50 32 13 2 189 
Total Customer$2,451 $9,257 $6,057 $3,215 $1,362 $537 $634 $23,513 
      
 (Millions of dollars)December 31, 2025
20252024202320222021PriorRevolving
Finance
Receivables 		Total Finance Receivables
North America      
Current$5,531 $3,634 $1,845 $743 $318 $20 $510 $12,601 
31-60 days past due30 42 28 18 6 1 4 129 
61-90 days past due11 14 10 5 3 — 2 45 
91+ days past due11 34 29 20 8 3 1 106 
EAME
Current1,551 929 614 316 114 44 — 3,568 
31-60 days past due5 12 6 6 2 — — 31 
61-90 days past due3 5 3 2 1 — — 14 
91+ days past due5 9 12 6 3 2 — 37 
Asia/Pacific
Current996 571 290 104 25 1 — 1,987 
31-60 days past due5 8 3 1 — — — 17 
61-90 days past due2 3 1 2 — — — 8 
91+ days past due1 1 2 2 — — — 6 
Latin America
Current984 511 212 96 15 1 4 1,823 
31-60 days past due3 6 5 3 — — — 17 
61-90 days past due2 2 2 1 — 1 — 8 
91+ days past due1 10 7 4 1 — — 23 
Mining
Current765 698 484 278 106 46 — 2,377 
31-60 days past due3 — — — — — — 3 
61-90 days past due— — — — — — — — 
91+ days past due1 1 8 — — — — 10 
Power
Current168 250 179 37 8 35 148 825 
31-60 days past due— — — — — — — — 
61-90 days past due— — — — — — — — 
91+ days past due— — — — — — — — 
Totals by Aging Category
Current$9,995 $6,593 $3,624 $1,574 $586 $147 $662 $23,181 
31-60 days past due46 68 42 28 8 1 4 197 
61-90 days past due18 24 16 10 4 1 2 75 
91+ days past due19 55 58 32 12 5 1 182 
Total Customer$10,078 $6,740 $3,740 $1,644 $610 $154 $669 $23,635 

Dealer
As of March 31, 2026 and December 31, 2025, Cat Financial's total amortized cost of finance receivables within the Dealer portfolio segment was current.
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. Recognition is resumed and previously suspended income is recognized when collection 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 Cat Financial's Customer portfolio segment, finance receivables which were on non-accrual status and finance receivables over 90 days past due and still accruing income were as follows:

  
 (Millions of dollars)March 31, 2026December 31, 2025
 Amortized CostAmortized Cost

Non-accrual
With an
Allowance		91+ Still
Accruing		Non-accrual
With an
Allowance		91+ Still
Accruing
  
North America$104 $14 $90 $20 
EAME44 6 35 5 
Asia/Pacific6 3 4 2 
Latin America25 — 24 1 
Mining3 — 10 — 
Total$182 $23 $163 $28 

There were no finance receivables in Cat Financial's Dealer portfolio segment on non-accrual status as of March 31, 2026 and December 31, 2025.

Modifications
Cat Financial periodically modifies the terms of their finance receivable agreements. Typically, the types of modifications granted are payment deferrals, interest-only payment periods and/or term extensions. Many modifications Cat Financial grants are for commercial reasons or for borrowers experiencing some form of short-term financial stress and may result in insignificant payment delays. Cat Financial does not consider these borrowers to be experiencing financial difficulty. Modifications for borrowers Cat Financial does 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 months ended March 31, 2026 and 2025, there were no finance receivable modifications granted to borrowers experiencing financial difficulty in Cat Financial's Dealer portfolio segment.
The ending amortized cost of finance receivables modified with borrowers experiencing financial difficulty in Cat Financial's Customer portfolio segment was as follows:

(Millions of dollars)Three Months Ended March 31,
20262025
Amortized cost of finance receivables modified$11 $6 
Modifications as a percentage of Customer portfolio0.05 %0.03 %

The financial effects of term extensions and payment delays for borrowers experiencing financial difficulty were as follows:

(In months)Three Months Ended March 31,
20262025
Weighted average extension to term of modified contracts137
Weighted average payment deferral and/or interest only periods68

After Cat Financial modifies a finance receivable, they 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 months ended March 31, 2026 and 2025.

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.