v3.25.4
Cat Financial Financing Activities
 12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
Cat Financial Financing Activities Cat Financial financing activities
 
Wholesale inventory receivables
 
Wholesale inventory receivables are receivables of Cat Financial that arise when Cat Financial provides financing for a dealer’s purchase of inventory and were $2,169 million and $1,750 million, at December 31, 2025 and 2024, respectively. We include these receivables in Receivables—trade and other and Long-term receivables—trade and other in Statement 3.
 
Contractual maturities of outstanding wholesale inventory receivables:
(Millions of dollars)December 31, 2025
Amounts Due InWholesale
Loans		Wholesale
Leases		Total
2026$1,128 $30 $1,158 
2027497 21 518 
2028256 15 271 
202991 9 100 
203039 5 44 
Thereafter17 1 18 
Total2,028 81 2,109 
Guaranteed residual value 1
39 22 61 
Unguaranteed residual value 1
9 21 30 
Less: Unearned income(22)(9)(31)
Total$2,054 $115 $2,169 
1 For Wholesale loans, represents residual value on failed sale leasebacks.
 
Cat Financial’s wholesale inventory receivables generally may be repaid or refinanced without penalty prior to contractual maturity.

Please refer to Note 18 for fair value information.
Finance receivables
 
Finance receivables are receivables of Cat Financial and are reported in Statement 3 net of an allowance for credit losses.

Contractual maturities of outstanding finance receivables:
(Millions of dollars)December 31, 2025
Amounts Due InRetail
Loans		Retail
Leases		Total
2026$8,372 $2,561 $10,933 
20274,992 1,740 6,732 
20283,324 1,052 4,376 
20291,779 566 2,345 
2030687 207 894 
Thereafter149 54 203 
Total19,303 6,180 25,483 
Guaranteed residual value 1
7 429 436 
Unguaranteed residual value 1
8 528 536 
Less: Unearned income(642)(663)(1,305)
Total$18,676 $6,474 $25,150 
1 For Retail loans, represents residual value on failed sale leasebacks.

Cat Financial’s finance receivables generally may be repaid or refinanced without penalty prior to contractual maturity.

Please refer to Note 18 for fair value information.
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 December 31, 2025.

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 year ended December 31, 2025, 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 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 year ended December 31, 2025.

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 worldwide.
•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). The amount of the write-off is primarily determined by comparing the fair value of the collateral, less estimated selling costs, 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)December 31, 2025December 31, 2024
CustomerDealerTotalCustomerDealerTotal
Allowance for Credit Losses:   
Beginning balance$258 $4 $262 $276 $51 $327 
Write-offs(148)— (148)(125)(47)(172)
Recoveries47 — 47 57 — 57 
Provision for credit losses1
109 — 109 84 — 84 
Other7 — 7 (34)— (34)
Ending balance$273 $4 $277 $258 $4 $262 
Finance Receivables$23,635 $1,515 $25,150 $21,517 $1,512 $23,029 
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)
Year Ended December 31, 2025
20252024202320222021PriorRevolving Finance ReceivablesTotal
North America$3 $15 $27 $12 $8 $4 $8 $77 
EAME1 5 7 3 2 1 1 20 
Asia/Pacific2 6 3 2 1 — — 14 
Latin America1 3 3 5 2 1 — 15 
Mining— 8 6 6 — 1 — 21 
Power— — — — — 1 — 1 
Total$7 $37 $46 $28 $13 $8 $9 $148 
Year Ended December 31, 2024
20242023202220212020PriorRevolving Finance ReceivablesTotal
North America$2 $19 $13 $6 $3 $1 $9 $53 
EAME1 4 5 4 2 1 — 17 
Asia/Pacific1 4 5 4 1 1 — 16 
Latin America— 3 6 5 3 8 — 25 
Mining8 3 3 — — — — 14 
Total$12 $33 $32 $19 $9 $11 $9 $125 

All $47 million of gross write-offs in the Dealer portfolio segment for the year ended December 31, 2024 were in Latin America and originated prior to 2020.
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)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
Current9,995 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 
      
 (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
Current1,235 874 532 285 92 72 — 3,090 
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
Current898 531 256 87 14 2 — 1,788 
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
Current924 755 444 206 67 34 21 2,451 
31-60 days past due— 1 — — — — — 1 
61-90 days past due— 1 — — — — — 1 
91+ days past due4 5 5 1 — 3 — 18 
Power
Current169 184 39 43 64 56 166 721 
31-60 days past due— — — — — — — — 
61-90 days past due— — — — — — — — 
91+ days past due— — — — — 2 — 2 
Totals by Aging Category
Current9,366 5,742 3,058 1,661 489 189 572 21,077 
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 Customer$9,451 $5,892 $3,164 $1,721 $510 $202 $577 $21,517 

Dealer
As of December 31, 2025 and 2024, 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 as of December 31, were as follows:

   
December 31, 2025December 31, 2024
 Amortized CostAmortized Cost
 (Millions of dollars)
Non-accrual 91+ Still
Accruing		Non-accrual91+ Still
Accruing
   
North America$90 $20 $83 $20 
EAME35 5 33 5 
Asia/Pacific4 2 5 5 
Latin America24 1 24 — 
Mining10 — 29 — 
Power— — 2 — 
Total$163 $28 $176 $30 

There were no finance receivables in Cat Financial's Dealer portfolio segment on non-accrual status as of December 31, 2025 and 2024.

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 years ended December 31, 2025 and 2024, 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 for the years ended December 31, 2025 and 2024 were as follows:

(Millions of dollars)20252024
Amortized cost of finance receivables modified$38 $33 
Modifications as a percentage of Customer portfolio0.16 %0.15 %

The financial effects of term extensions and payment delays for borrowers experiencing financial difficulty for the years ended December 31, were as follows:

(In months)20252024
Weighted average extension to term of modified contracts198
Weighted average payment deferral and/or interest only periods66
After Cat Financial modifies a finance receivable, they continue to track its performance under its most recent modified terms. As of December 31, 2025 and 2024, defaults of loans modified in the prior twelve months were not significant.

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.
Concentration of Credit Risk
Finance receivables and wholesale inventory receivables primarily represent receivables under installment sales contracts, receivables arising from leasing transactions and notes receivable. No single customer or dealer represented a significant concentration of credit risk.