UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

Commission File No. 001-11241

CATERPILLAR FINANCIAL SERVICES CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	37-1105865
(State of incorporation)	(IRS Employer I.D. No.)
2120 West End Ave., Nashville, Tennessee	37203-0001
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (615) 341-1000

Securities registered pursuant to Section 12(b) of the Act:
	Title of each class	Trading  Symbol(s)	Name of each exchange  on which registered
	Medium-Term Notes, Series K, 4.850% Notes Due 2029	CAT/29	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒

As of May 7, 2025, one share of common stock of the registrant was outstanding, which is owned by Caterpillar Inc.

The registrant is a wholly owned subsidiary of Caterpillar Inc. and meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q, and is therefore filing this form with the reduced disclosure format.

Table of Contents

Part I. Financial Information
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	*
Item 4.	Controls and Procedures	30
Part II. Other Information
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	*
Item 3.	Defaults Upon Senior Securities	*
Item 4.	Mine Safety Disclosures	*
Item 5.	Other Information	30
Item 6.	Exhibits	31
* Item omitted because no answer is called for or item is not applicable.

2

UNAUDITED

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

In addition to the accompanying unaudited consolidated financial statements for Caterpillar Financial Services Corporation (together with its subsidiaries, “Cat Financial,” “the Company,” “we,” “us” or “our”), we suggest that you read our 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 14, 2025. The Company files electronically with the SEC required reports on Form 8-K, Form 10-Q, Form 10-K; registration statements on Form S-3; and other forms or reports as required. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports filed or furnished with the SEC are available free of charge through Caterpillar Inc.’s (“Caterpillar”) website (www.Caterpillar.com/secfilings) as soon as reasonably practicable after filing with the SEC. In addition, the public may obtain more detailed information about our parent company, Caterpillar, by visiting its website (www.Caterpillar.com). None of the information contained at any time on our website or Caterpillar’s website is incorporated by reference into this document.

3

UNAUDITED

Caterpillar Financial Services Corporation

 CONSOLIDATED STATEMENTS OF PROFIT

(Unaudited)

(Dollars in Millions)

	Three Months Ended March 31,
	2025		2024
Revenues:
Retail finance	$	441	$	404
Operating lease	228		233
Wholesale finance	153		173
Other, net	38		43
Total revenues	860		853
Expenses:
Interest	325		298
Depreciation on equipment leased to others	173		181
General, operating and administrative	151		154
Provision for credit losses	29		7
Other	5		7
Total expenses	683		647
Other income (expense)	(3)		23
Profit before income taxes	174		229
Provision for income taxes	44		59
Profit of consolidated companies	130		170
Less: Profit attributable to noncontrolling interests	—		1
Profit attributable to Caterpillar Financial Services Corporation	$	130	$	169

See Notes to Consolidated Financial Statements (Unaudited).

4

UNAUDITED

Caterpillar Financial Services Corporation

 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in Millions)

	Three Months Ended March 31,
	2025		2024
Profit of consolidated companies	$	130	$	170
Other comprehensive income (loss), net of tax (Note 5):
Foreign currency translation	88		(121)
Derivative financial instruments	(12)		(2)
Total Other comprehensive income (loss), net of tax	76		(123)
Comprehensive income (loss)	206		47
Less: Comprehensive income (loss) attributable to noncontrolling interests	—		1
Comprehensive income (loss) attributable to Caterpillar Financial Services Corporation	$	206	$	46

See Notes to Consolidated Financial Statements (Unaudited).

5

UNAUDITED

Caterpillar Financial Services Corporation

 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)

(Dollars in Millions, except share data)

	March 31, 2025		December 31, 2024
Assets:
Cash and cash equivalents	$	663	$	599
Finance receivables, net of allowance for credit losses of $282 and $267	29,400		28,964
Notes receivable from Caterpillar	592		559
Equipment on operating leases, net	2,689		2,780
Other assets	1,079		1,182
Total assets	$	34,423	$	34,084
Liabilities and shareholder’s equity:
Payable to dealers and others	$	159	$	137
Payable to Caterpillar - borrowings and other	152		128
Accrued expenses	428		489
Short-term borrowings	3,454		4,393
Current maturities of long-term debt	9,286		6,619
Long-term debt	17,201		18,787
Other liabilities	647		641
Total liabilities	31,327		31,194
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	3,430		3,300
Accumulated other comprehensive income (loss)	(1,156)		(1,232)
Noncontrolling interests	75		75
Total shareholder’s equity	3,096		2,890
Total liabilities and shareholder’s equity	$	34,423	$	34,084

See Notes to Consolidated Financial Statements (Unaudited).

6

UNAUDITED

Caterpillar Financial Services Corporation

 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY

(Unaudited)

(Dollars in Millions)

Three Months Ended March 31, 2024	Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive income (loss)		Noncontrolling interests		Total
Balance at December 31, 2023	$	745	$	2	$	3,327	$	(978)	$	74	$	3,170
Profit of consolidated companies					169				1		170
Foreign currency translation, net of tax							(121)				(121)
Derivative financial instruments, net of tax							(2)				(2)
Balance at March 31, 2024	$	745	$	2	$	3,496	$	(1,101)	$	75	$	3,217
Three Months Ended March 31, 2025
Balance at December 31, 2024	$	745	$	2	$	3,300	$	(1,232)	$	75	$	2,890
Profit of consolidated companies					130						130
Foreign currency translation, net of tax							88				88
Derivative financial instruments, net of tax							(12)				(12)
Balance at March 31, 2025	$	745	$	2	$	3,430	$	(1,156)	$	75	$	3,096

See Notes to Consolidated Financial Statements (Unaudited).

7

UNAUDITED

Caterpillar Financial Services Corporation

 CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in Millions)

	Three Months Ended March 31,
	2025		2024
Cash flows from operating activities:
Profit of consolidated companies	$	130	$	170
Adjustments to reconcile profit to net cash provided by operating activities:
Depreciation and amortization	177		185
Accretion of Caterpillar purchased receivable revenue	(134)		(153)
Provision for credit losses	29		7
Provision (benefit) for deferred income taxes	(4)		(32)
Other, net	(12)		25
Changes in assets and liabilities:
Other assets	21		3
Payable to dealers and others	43		23
Accrued expenses	(24)		(27)
Other payables with Caterpillar	16		13
Other liabilities	1		49
Net cash provided by operating activities	243		263
Cash flows from investing activities:
Expenditures for equipment on operating leases	(159)		(226)
Capital expenditures - excluding equipment on operating leases	(11)		(7)
Proceeds from disposals of equipment	132		150
Additions to finance receivables	(3,544)		(3,573)
Collections of finance receivables	3,464		3,569
Net changes in Caterpillar purchased receivables	(3)		(137)
Proceeds from sales of receivables	7		13
Net change in variable lending to Caterpillar	(46)		—
Collections of other notes receivable from Caterpillar	15		14
Settlements of undesignated derivatives	33		(23)
Net cash provided by (used for) investing activities	(112)		(220)
Cash flows from financing activities:
Proceeds from debt issued (original maturities greater than three months)	2,633		2,731
Payments on debt issued (original maturities greater than three months)	(1,770)		(1,564)
Short-term borrowings, net (original maturities three months or less)	(934)		(1,050)
Net cash provided by (used for) financing activities	(71)		117
Effect of exchange rate changes on cash, cash equivalents and restricted cash	7		(10)
Increase (decrease) in cash, cash equivalents and restricted cash	67		150
Cash, cash equivalents and restricted cash at beginning of year(1)	600		729
Cash, cash equivalents and restricted cash at end of period(1)	$	667	$	879

(1)    As of March 31, 2025 and December 31, 2024, restricted cash, which is included in Other assets in the Consolidated Statements of Financial Position, was $4 million and $1 million, respectively. Restricted cash primarily includes cash related to syndication activities.

See Notes to Consolidated Financial Statements (Unaudited).

8

UNAUDITED

Notes to Consolidated Financial Statements

(Unaudited)

1.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 months ended March 31, 2025 and 2024, (b) the consolidated comprehensive income for the three months ended March 31, 2025 and 2024, (c) the consolidated financial position at March 31, 2025 and December 31, 2024, (d) the consolidated changes in shareholder’s equity for the three months ended March 31, 2025 and 2024 and (e) the consolidated cash flows for the three months ended March 31, 2025 and 2024. 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, 2024 (2024 Form 10-K). The December 31, 2024 financial position data included herein was derived from the audited consolidated financial statements included in the 2024 Form 10-K but does not include all disclosures required by generally accepted accounting principles. Certain amounts for prior periods have been reclassified to conform with the current period financial statement presentation.

The accompanying consolidated financial statements include the accounts of Cat Financial and a consolidated variable interest entity (VIE). We consolidate all 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. Please refer to Note 7 for more information.

We have customers and dealers that are VIEs of which we are not the primary beneficiary. 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.

2.New Accounting Pronouncements

A.Adoption of New Accounting Standards

We consider the applicability and impact of all Accounting Standards Updates (ASUs). We determined that the ASUs effective January 1, 2025 were either not applicable or did not have a material impact on our financial statements.

B.    Accounting Standards Issued But Not Yet Adopted

Income tax reporting (ASU 2023-09) - In December 2023, the Financial Accounting Standards Board (FASB) issued accounting guidance to expand the annual disclosure requirements for income taxes, primarily related to the rate reconciliation and income taxes paid. The expanded disclosures are effective for our year ending December 31, 2025, and can be applied prospectively or retrospectively. We are in the process of evaluating the effect of this new guidance on the related disclosures.

Disaggregation of income statement expenses (ASU 2024-03) - In November 2024, the FASB issued accounting guidance to enhance transparency into the nature and function of income statement expenses. The amendments require that on an annual and interim basis, entities disclose disaggregated operating expense information about specific categories, including employee compensation, depreciation and amortization. The expanded annual disclosures are effective for our year ending December 31, 2027, and the expanded interim disclosures are effective in 2028, with early adoption permitted. We are in the process of evaluating the effect of this new guidance on the related disclosures.

All other ASUs issued but not yet adopted were assessed and we determined that they either were not applicable or were not expected to have a material impact on our financial statements.

9

UNAUDITED

3.Finance Receivables

A summary of finance receivables included in the Consolidated Statements of Financial Position was as follows:

(Millions of dollars)	March 31, 2025		December 31, 2024
Retail loans(1)	$	17,601	$	17,331
Retail leases	6,477		6,380
Caterpillar purchased receivables	4,477		4,283
Wholesale loans(1)	1,126		1,235
Wholesale leases	1		2
Total finance receivables	29,682		29,231
Less: Allowance for credit losses	(282)		(267)
Total finance receivables, net	$	29,400	$	28,964

(1)    Includes failed sale leasebacks.

Finance leases

Revenues from finance leases were $112 million and $106 million for the three months ended March 31, 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 March 31, 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 months ended March 31, 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 months ended March 31, 2025.

10

UNAUDITED

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 months ended March 31, 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 related to large mining customers worldwide.

•Power - Finance receivables originated worldwide to large power customers related to 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 March 31, 2025								Three Months Ended March 31, 2024
	Customer		Dealer		Caterpillar Purchased Receivables		Total		Customer		Dealer		Caterpillar Purchased Receivables		Total
Beginning Balance	$	258	$	4	$	5	$	267	$	276	$	51	$	4	$	331
Write-offs	(30)		—		—		(30)		(23)		(47)		—		(70)
Recoveries	10		—		—		10		15		—		—		15
Provision for credit losses(1)	33		—		—		33		9		—		—		9
Other	2		—		—		2		(4)		—		—		(4)
Ending Balance	$	273	$	4	$	5	$	282	$	273	$	4	$	4	$	281
Finance Receivables	$	22,701	$	2,504	$	4,477	$	29,682	$	20,963	$	2,776	$	4,195	$	27,934

(1)    Excludes provision for credit losses on unfunded commitments and other miscellaneous receivables.

11

UNAUDITED

Gross write-offs by origination year for our Customer portfolio segment were as follows:

(Millions of dollars)	Three Months Ended March 31, 2025
	2025		2024		2023		2022		2021		Prior		Revolving 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
	Three Months Ended March 31, 2024
	2024		2023		2022		2021		2020		Prior		Revolving Finance Receivables		Total
North America	$	—	$	3	$	4	$	2	$	1	$	—	$	3	$	13
EAME	—		1		1		1		—		—		—		3
Asia/Pacific	—		1		2		1		1		—		—		5
Latin America	—		—		1		1		—		—		—		2
Total	$	—	$	5	$	8	$	5	$	2	$	—	$	3	$	23

For the three months ended March 31, 2025, there were no gross write-offs in our Dealer portfolio segment. For the three months ended March 31, 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.

12

UNAUDITED

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)	March 31, 2025
	2025		2024		2023		2022		2021		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	1,359	$	4,932	$	2,741	$	1,347	$	787	$	181	$	394	$	11,741
31-60 days past due	4		37		38		29		14		4		3		129
61-90 days past due	—		18		14		6		5		2		1		46
91+ days past due	—		14		41		26		14		7		1		103
EAME
Current	324		1,197		817		479		246		128		—		3,191
31-60 days past due	—		8		8		7		4		1		—		28
61-90 days past due	—		6		8		5		1		—		—		20
91+ days past due	—		4		14		6		6		4		—		34
Asia/Pacific
Current	297		967		590		258		99		24		53		2,288
31-60 days past due	—		8		6		3		2		—		—		19
61-90 days past due	—		1		1		3		—		—		—		5
91+ days past due	—		2		2		2		1		—		—		7
Latin America
Current	260		738		332		190		46		7		—		1,573
31-60 days past due	—		10		7		4		1		2		—		24
61-90 days past due	—		3		2		2		1		—		—		8
91+ days past due	—		4		6		7		3		1		—		21
Mining
Current	211		1,008		717		400		180		90		23		2,629
31-60 days past due	—		2		—		—		—		2		—		4
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		4		7		5		—		4		—		20
Power
Current	31		235		185		39		37		112		171		810
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		1		—		1
Totals by Aging Category
Current	2,482		9,077		5,382		2,713		1,395		542		641		22,232
31-60 days past due	4		65		59		43		21		9		3		204
61-90 days past due	—		28		25		16		7		2		1		79
91+ days past due	—		28		70		46		24		17		1		186
Total	$	2,486	$	9,198	$	5,536	$	2,818	$	1,447	$	570	$	646	$	22,701

13

UNAUDITED

(Millions of dollars)	December 31, 2024
	2024		2023		2022		2021		2020		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	5,340	$	3,035	$	1,567	$	980	$	244	$	23	$	385	$	11,574
31-60 days past due	30		42		29		18		5		1		3		128
61-90 days past due	9		14		10		6		2		1		1		43
91+ days past due	13		37		26		16		6		2		1		101
EAME
Current	1,244		874		532		285		92		72		—		3,099
31-60 days past due	7		10		4		3		1		—		—		25
61-90 days past due	3		4		1		1		1		—		—		10
91+ days past due	3		14		8		6		4		1		—		36
Asia/Pacific
Current	1,064		662		313		126		31		4		46		2,246
31-60 days past due	4		6		5		2		—		—		—		17
61-90 days past due	1		1		2		1		—		—		—		5
91+ days past due	4		1		2		1		1		—		—		9
Latin America
Current	800		363		220		60		8		2		—		1,453
31-60 days past due	4		6		5		1		—		2		—		18
61-90 days past due	1		2		1		—		—		—		—		4
91+ days past due	2		6		8		4		1		1		—		22
Mining
Current	1,067		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 due	4		5		5		1		—		3		—		18
Power
Current	190		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
Current	9,705		5,893		3,122		1,708		508		205		618		21,759
31-60 days past due	45		65		43		24		6		3		3		189
61-90 days past due	14		22		14		8		3		1		1		63
91+ days past due	26		63		49		28		12		9		1		188
Total	$	9,790	$	6,043	$	3,228	$	1,768	$	529	$	218	$	623	$	22,199

Dealer

As of March 31, 2025 and December 31, 2024, the total amortized cost of finance receivables within our Dealer portfolio segment was current.

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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)	March 31, 2025
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables
North America	$	5	$	4	$	4	$	13	$	2,759	$	2,772
EAME	4		2		1		7		799		806
Asia/Pacific	1		—		—		1		507		508
Latin America	—		—		—		—		375		375
Power	1		—		1		2		14		16
Total	$	11	$	6	$	6	$	23	$	4,454	$	4,477

	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
EAME	3		1		—		4		740		744
Asia/Pacific	—		—		1		1		528		529
Latin America	—		—		—		—		383		383
Power	2		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)	March 31, 2025				December 31, 2024
	Amortized Cost				Amortized Cost
	Non-accrual With an Allowance		91+ Still Accruing		Non-accrual With an Allowance		91+ Still Accruing
North America	$	90	$	16	$	83	$	20
EAME	30		4		33		5
Asia/Pacific	4		3		5		5
Latin America	21		—		24		—
Mining	27		—		29		—
Power	1		—		2		—
Total	$	173	$	23	$	176	$	30

There were no finance receivables in our Dealer portfolio segment on non-accrual status as of March 31, 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.

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During the three months ended March 31, 2025 and 2024, there were no finance receivable modifications granted to borrowers experiencing financial difficulty in the Dealer or Caterpillar Purchased Receivables portfolio segments. The amortized cost basis of finance receivables modified for borrowers experiencing financial difficulty in our Customer portfolio segment during the three months ended March 31, 2025 and 2024 was $6 million and $3 million, respectively. Total modifications with borrowers experiencing financial difficulty represented 0.03 percent and 0.01 percent of the Customer portfolio for the same periods, respectively.

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

(In months)	2025	2024
Weighted average extension to term of modified contracts	7	10
Weighted average payment deferral and/or interest only periods	8	9

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 months ended March 31, 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.

4.Derivative Financial Instruments and Risk Management

Our earnings and cash flows 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 Board of Directors on our risk management practices, including our use of derivative financial instruments.

We recognize all derivatives at their fair value in the Consolidated Statements of Financial Position. On the date the derivative contract is entered into, the derivative instrument is (1) designated as a hedge of the fair value of a recognized asset or liability (fair value hedge), (2) designated as a hedge of a forecasted transaction or the variability of cash flows (cash flow hedge) or (3) undesignated. 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. For foreign exchange contracts designated as fair value hedges, the interim settlements are excluded from the effectiveness assessment and are recognized under a systematic and rational method over the life of the hedging instrument within Interest expense. 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, in 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 in the Consolidated Statements of Cash Flows. We include cash flows from undesignated derivative financial instruments in the investing category in 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 in the Consolidated Statements of Financial Position and linking cash flow hedges to specific forecasted transactions or variability of cash flow.

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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. We designate float-to-float cross currency contracts as fair value hedges to protect against movements in exchange rates on floating-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 receivables 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 receivables 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. We have, at certain times, liquidated fixed-to-floating and floating-to-fixed interest rate contracts. We amortize the gains or losses associated with these contracts at the time of liquidation into earnings 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)	March 31, 2025				December 31, 2024
	Assets1		Liabilities2		Assets1		Liabilities2
Designated derivatives
Foreign exchange contracts	$	128	$	(48)	$	228	$	(89)
Interest rate contracts	43		(19)		10		(31)
	$	171	$	(67)	$	238	$	(120)
Undesignated derivatives
Foreign exchange contracts	$	28	$	(31)	$	84	$	(19)
	$	28	$	(31)	$	84	$	(19)

(1)    Assets are classified in the Consolidated Statements of Financial Position as Other assets.

(2)    Liabilities are classified in the Consolidated Statements of Financial Position as Accrued expenses.

The total notional amount of our derivative instruments was $16.16 billion and $15.97 billion as of March 31, 2025 and December 31, 2024, 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.

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Gains (Losses) on derivative instruments are categorized as follows:

(Millions of dollars)	Three Months Ended March 31,
	Gains (Losses) Recognized1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI2
	2025		2024		2025		2024		2025		2024
Cash Flow Hedges
Foreign exchange contracts	$	—	$	—	$	(4)	$	97	$	8	$	95
Interest rate contracts	—		—		(2)		11		1		16
Fair Value Hedges
Interest rate contracts	(7)		(20)		—		—		—		—
Undesignated Hedges
Foreign exchange contracts	(34)		37		—		—		—		—
Total	$	(41)	$	17	$	(6)	$	108	$	9	$	111

(1)    Foreign exchange contract gains (losses) are included in Other income (expense). Interest rate contract gains (losses) are included in Interest expense.

(2)    Foreign exchange contract gains (losses) are primarily included in Other income (expense). Interest rate contract gains (losses) are included in Interest expense.

Amounts recorded in the Consolidated Statements of Financial Position related to cumulative basis adjustments for fair value hedges were as follows:

(Millions of dollars)	Carrying Value of the Hedged Liabilities				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities
	March 31, 2025		December 31, 2024		March 31, 2025		December 31, 2024
Current maturities of long-term debt	$	488	$	483	$	(12)	$	(16)
Long-term debt	3,838		3,247		41		—
Total	$	4,326	$	3,730	$	29	$	(16)

As of March 31, 2025, $1 million of deferred net gains, 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.

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 may 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 typically not required of the counterparties or us under the master netting agreements. As of March 31, 2025 and December 31, 2024, no cash collateral was received or pledged under the master netting agreements.

The effects of net settlement provisions of the master netting agreements on our derivative balances upon an event of default or a termination event were as follows:

(Millions of dollars)	March 31, 2025				December 31, 2024
	Assets		Liabilities		Assets		Liabilities
Gross amounts recognized	$	199	$	(98)	$	322	$	(139)
Financial instruments not offset	(74)		74		(54)		54
Net amount	$	125	$	(24)	$	268	$	(85)

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5.Accumulated Other Comprehensive Income (Loss)

We present Comprehensive income (loss) and its components in the Consolidated Statements of Comprehensive Income. Changes in the balances for each component of AOCI were as follows:

(Millions of dollars)	Three Months Ended March 31,
	2025		2024
Foreign currency translation
Balance at beginning of period	$	(1,256)	$	(996)
Gains (losses) on foreign currency translation	88		(110)
Less: Tax provision/(benefit)	—		11
Net gains (losses) on foreign currency translation	88		(121)
Other comprehensive income (loss), net of tax	88		(121)
Balance at end of period	$	(1,168)	$	(1,117)
Derivative financial instruments
Balance at beginning of period	$	24	$	18
Gains (losses) deferred	(6)		108
Less: Tax provision/(benefit)	(1)		28
Net gains (losses) deferred	(5)		80
(Gains) losses reclassified to earnings	(9)		(111)
Less: Tax (provision)/benefit	(2)		(29)
Net (gains) losses reclassified to earnings	(7)		(82)
Other comprehensive income (loss), net of tax	(12)		(2)
Balance at end of period	$	12	$	16
Total Accumulated other comprehensive income (loss) at end of period	$	(1,156)	$	(1,101)

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6.Segment Information

A.     Basis for Segment Information

Our executive office is comprised of our Chief Executive Officer (CEO), who is our Chief Operating Decision Maker (CODM) and five Vice Presidents. Each of our regional operating segments: North America, EAME, Asia/Pacific, and Latin America is led by a Vice President. The Mining and Power operating segments are led by one Vice President. Our CEO allocates resources and manages operating performance at the Vice President level.

B.    Description of Segments

Our operating segments provide financing alternatives to customers and dealers around the world for Caterpillar products and services and power generation facilities that, in most cases, incorporate Caterpillar products. Financing plans include operating and finance leases, revolving charge accounts, 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.

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 Eurasia.

•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.

•Mining - Provides financing for large mining customers worldwide.

•Power - Provides financing worldwide to large power customers related to Caterpillar electrical power generation, gas compression and co-generation systems and non-Caterpillar equipment that is powered by these systems.

C.     Segment Measurement and Reconciliations

We determine segment profit on a pretax basis. Cash, debt and other expenses are allocated to our segments based on their respective portfolios. Interest expense is calculated based on the amount of allocated debt and the rates associated with that debt using a consistent leverage ratio.

Our CODM uses segment profit to evaluate the performance of each segment by monitoring key performance metrics to identify trends and evaluate which segments require additional resources or strategic adjustments. The CODM also uses segment profit to support the allocation of resources predominantly in the annual budget and forecasting process and monitors forecast-to-actual variances monthly.

Reconciling items are created based on accounting differences between segment reporting and consolidated external reporting. The following is a list of significant reconciling items:

•Unallocated - Corporate requirements and strategies that are considered to be for the benefit of the entire organization including notes receivable from Caterpillar. Also included are the consolidated results of the special-purpose corporation (SPC) (see Note 7 for additional information).

•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:

◦The impact of differences between the actual leverage and the segment leverage ratios.

◦Interest expense includes realized forward points on foreign currency forward contracts within segment reporting.

◦Segment results include off-balance sheet managed assets for which we maintain servicing responsibilities.

◦Designated derivative activity is excluded from segment results.

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Supplemental segment data and reconciliations to consolidated external reporting for the three months ended March 31 were as follows:

(Millions of dollars) 2025	External revenues		Interest expense		Depreciation on equipment leased to others		General, operating and administrative expenses		Provision for credit losses		Other segment items(1)		Profit before income taxes
North America	$	500	$	170	$	125	$	48	$	19	$	3	$	135
EAME	93		33		12		19		1		1		27
Asia/Pacific	62		24		1		17		1		—		19
Latin America	83		40		3		13		1		1		25
Mining	93		27		32		10		9		(1)		16
Power	17		10		—		3		(2)		—		6
Total Segments	848		304		173		110		29		4		228
Unallocated	17		126		—		44		—		—		(153)
Timing	(5)		—		—		(5)		—		—		—
Methodology	—		(105)		—		2		—		4		99
Total	$	860	$	325	$	173	$	151	$	29	$	8	$	174
2024	External revenues		Interest expense		Depreciation on equipment leased to others		General, operating and administrative expenses		Provision for credit losses		Other segment items(1)		Profit before income taxes
North America	$	485	$	143	$	129	$	46	$	19	$	4	$	144
EAME	92		33		14		22		(8)		1		30
Asia/Pacific	66		26		1		19		(1)		—		21
Latin America	85		40		3		14		(2)		1		29
Mining	92		24		33		3		—		—		26
Power	15		7		1		9		(1)		—		5
Total Segments	835		273		181		113		7		6		255
Unallocated	22		113		—		43		—		(30)		(104)
Timing	(4)		—		—		(4)		—		—		—
Methodology	—		(88)		—		2		—		8		78
Total	$	853	$	298	$	181	$	154	$	7	$	(16)	$	229

(1)    Other segment items are primarily costs related to repossessed and returned equipment.

(Millions of dollars)	Assets as of				Capital Expenditures(1)
	March 31, 2025		December 31, 2024		2025		2024
North America	$	17,948	$	17,800	$	134	$	161
EAME	4,907		4,668		14		8
Asia/Pacific	3,272		3,276		4		2
Latin America	2,533		2,423		1		8
Mining	3,268		3,306		6		49
Power	868		812		—		—
Total Segments	$	32,796	$	32,285	$	159	$	228
Unallocated	1,813		1,921		11		5
Timing	(8)		(12)		—		—
Methodology	64		128		—		—
Inter-segment Eliminations(2)	(242)		(238)		—		—
Total	$	34,423	$	34,084	$	170	$	233

(1)    Capital expenditures include expenditures for equipment on operating leases and other miscellaneous capital expenditures.

(2)    Eliminations are primarily related to intercompany loans.

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7.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.

No significant loss has been experienced or is anticipated under any of these guarantees. At March 31, 2025 and December 31, 2024, 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 $24 million and $23 million at March 31, 2025 and December 31, 2024, respectively.

We provide guarantees to purchase certain loans of Caterpillar dealers from an SPC that qualifies as a VIE. We receive a fee for providing this guarantee. 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 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 March 31, 2025 and December 31, 2024, the SPC’s assets of $1.01 billion and $1.14 billion, respectively, were primarily comprised of loans to dealers, which are included in Finance receivables, net in the Consolidated Statements of Financial Position, and the SPC’s liabilities of $1.01 billion and $1.14 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. The aggregate range of reasonably possible losses in excess of accrued liabilities, if any, associated with these unresolved legal actions is not material. In some cases, we cannot reasonably estimate a range of loss because there is insufficient information regarding the matter. However, we believe there is no more than a remote chance that any liability arising from these matters would be material. 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.

8.Fair Value Disclosures

A.Fair Value Measurements

The guidance on fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. This guidance also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. In accordance with this guidance, fair value measurements are classified under the following hierarchy:

•Level 1 – Quoted prices for identical instruments in active markets.

•Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

•Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

When available, we use quoted market prices to determine fair value and we classify such measurements within Level 1. In some cases where market prices are not available, we make use of observable market-based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon valuations in which one or more significant inputs are unobservable, including internally developed models that use, where possible, current market-based parameters such as interest rates, yield curves and currency rates. These measurements are classified within Level 3.

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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, the nonperformance risk is included in the market price. For certain other financial assets and liabilities, 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 $101 million and $183 million as of March 31, 2025 and December 31, 2024, respectively. See Note 4 for additional information.

B.Fair Values of Financial Instruments

Cash and cash equivalents, restricted cash (included in Other assets in the Consolidated Statements of Financial Position) and Short-term borrowings are classified as Level 1 measurements and carrying amount approximates fair value. We use the following methods and assumptions to estimate the fair value of our financial instruments not carried at 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. 

•Long-term debt – We estimate fair value for fixed and floating-rate debt based on quoted market prices.

Fair values of our financial instruments not carried at fair value were as follows:

(Millions of dollars)	March 31, 2025				December 31, 2024
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Levels	Reference
Assets
Finance receivables, net (excluding finance leases(1))	$	22,376	$	21,984	$	22,026	$	21,593	3	Note 3
Liabilities
Long-term debt	$	26,487	$	26,448	$	25,406	$	25,304	2

(1)    Represents finance leases and failed sale leasebacks of $7.02 billion and $6.94 billion as of March 31, 2025 and December 31, 2024, respectively.

Certain loans are subject to measurement at fair value on a nonrecurring basis. These are loans for which the company has determined that collection of contractual amounts due is not probable. Generally, the fair value of these receivables is measured using the fair value of collateral less estimated costs to sell. We had loans carried at fair value of $70 million and $59 million as of March 31, 2025 and December 31, 2024, respectively.

9.Income Taxes 

The provision for income taxes for the first quarter of 2025 was $44 million on $174 million profit before income taxes compared with $59 million on $229 million profit before income taxes for the first quarter of 2024.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to provide information that will assist the reader in understanding the Company’s Consolidated Financial Statements, the changes in certain key items in those financial statements between select periods and the primary factors that accounted for those changes. In addition, we discuss how certain accounting principles, policies and critical estimates affect our Consolidated Financial Statements. This MD&A should be read in conjunction with our discussion of cautionary statements and significant risks to the Company’s business under Item 1A. Risk Factors of the 2024 Form 10-K.

THREE MONTHS ENDED MARCH 31, 2025 COMPARED WITH THREE MONTHS ENDED MARCH 31, 2024

Overview

(Millions of dollars)	Three Months Ended March 31,
	2025		2024		Change
Retail revenue	$	441	$	404	$	37
Operating lease revenue	228		233		(5)
Wholesale revenue	153		173		(20)
Other revenue, net	38		43		(5)
Total revenues	$	860	$	853	$	7
Profit before income taxes	$	174	$	229	$	(55)
Profit attributable to Caterpillar Financial Services Corporation	$	130	$	169	$	(39)

Revenues

We reported first-quarter 2025 revenues of $860 million, an increase of $7 million, or 1 percent, compared with $853 million in the first quarter of 2024. The increase in revenues was primarily due to a favorable impact from higher average earning assets of $28 million, partially offset by an unfavorable impact from lower average financing rates of $15 million.

Retail revenue for the first quarter of 2025 was $441 million, an increase of $37 million from the same period in 2024. The increase was due to a favorable impact from higher average earning assets of $19 million and a favorable impact from higher interest rates on retail finance receivables of $18 million. For the quarter ended March 31, 2025, retail average earning assets were $23.82 billion, an increase of $1.05 billion from the same period in 2024. The annualized average yield was 7.40 percent for the first quarter of 2025, compared with 7.10 percent for the first quarter of 2024.

Operating lease revenue for the first quarter of 2025 was $228 million, a decrease of $5 million from the same period in 2024. The decrease was due to an unfavorable impact from lower average earning assets of $17 million, offset by a favorable impact from higher rental rates on operating leases of $12 million.

Wholesale revenue for the first quarter of 2025 was $153 million, a decrease of $20 million from the same period in 2024. The decrease was due to an unfavorable impact from lower interest rates on wholesale finance receivables of $26 million, offset by a favorable impact from higher average earning assets of $6 million. For the quarter ended March 31, 2025, wholesale average earning assets were $5.40 billion, an increase of $181 million from the same period in 2024. The annualized average yield was 11.35 percent for the first quarter of 2025, compared with 13.23 percent for the first quarter of 2024.

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Other revenue, net items were as follows:

(Millions of dollars)	Three Months Ended March 31,
	2025		2024		Change
Net gain on returned or repossessed equipment	$	9	$	15	$	(6)
Finance receivable and operating lease fees (including late charges)	16		16		—
Interest income on Notes receivable from Caterpillar	6		5		1
Miscellaneous other revenue, net	7		7		—
Total Other revenue, net	$	38	$	43	$	(5)

There was an unfavorable impact from currency translation on revenues of $20 million in the first quarter of 2025. Currency translation represents the net impact from converting the results of our subsidiaries to U.S. dollar reporting currency and is included in all financial statement line items.

Consolidated Profit Before Income Taxes

(1) Analysis excludes $4 million related to property taxes on operating leases for first quarter 2025 and 2024.

The chart above graphically illustrates reasons for the change in consolidated profit before income taxes between first quarter 2024 (at left) and first quarter 2025 (at right). Management utilizes these charts internally to visually communicate results.

First-quarter 2025 profit before income taxes was $174 million, a decrease of $55 million, or 24 percent, compared with $229 million for the first quarter of 2024. The decrease was mainly due to the absence of an insurance settlement of $33 million in the first quarter of 2024 and an unfavorable impact from higher provision for credit losses of $22 million.

There was an unfavorable impact from currency translation on profit before income taxes of $9 million in the first quarter of 2025. Currency translation represents the net impact from converting the results of our subsidiaries to U.S. dollar reporting currency and is included in all financial statement line items.

Provision for Income Taxes

The provision for income taxes for the first quarter of 2025 was $44 million on $174 million profit before income taxes compared with $59 million on $229 million profit before income taxes for the first quarter of 2024.

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FINANCE RECEIVABLES AND EQUIPMENT ON OPERATING LEASES

New Business Volume

(Millions of dollars)	Three Months Ended March 31,
	2025		2024		Change
New retail financing	$	2,800	$	2,507	$	293
New retail operating lease activity	164		235		(71)
New wholesale financing	12,123		13,664		(1,541)
Total	$	15,087	$	16,406	$	(1,319)

New retail financing increased due to higher volume across all segments. The decrease in new operating lease activity was mainly driven by lower rentals of Caterpillar equipment in Mining and North America. New wholesale financing decreased primarily due to lower purchases of trade receivables from Caterpillar.

Total Managed Portfolio

We define total portfolio as Finance receivables, net plus Equipment on operating leases, net. We also manage and service receivables and leases that have been sold by us to third parties with limited or no recourse in order to mitigate our concentration of credit risk with certain customers. These assets are not available to pay our creditors. Total managed portfolio was as follows: 

(Millions of dollars)	March 31, 2025		December 31, 2024		Change
Finance receivables, net	$	29,400	$	28,964	$	436
Equipment on operating leases, net	2,689		2,780		(91)
Total portfolio	$	32,089	$	31,744	$	345
Retail loans	$	77	$	80	$	(3)
Retail leases	16		17		(1)
Operating leases	11		12		(1)
Total off-balance sheet managed assets	$	104	$	109	$	(5)
Total managed portfolio	$	32,193	$	31,853	$	340

Total Portfolio Metrics

At the end of the first quarter of 2025, past dues were 1.58 percent, compared with 1.78 percent at the end of the first quarter of 2024. Total non-performing finance receivables, which represent finance receivables currently on non-accrual status, were $173 million and $176 million at March 31, 2025 and December 31, 2024, respectively. Total non-performing finance receivables as a percentage of our finance receivables were less than 1 percent at March 31, 2025 and December 31, 2024.

Write-offs, net of recoveries, were $20 million for the first quarter of 2025, compared with $55 million for the first quarter of 2024.

Our allowance for credit losses as of March 31, 2025 was $282 million, or 0.95 percent of finance receivables, compared with $267 million, or 0.91 percent, as of December 31, 2024. The allowance is subject to an ongoing evaluation based on many quantitative and qualitative factors, including past loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of underlying collateral and economic forecasts. We believe our allowance is sufficient to provide for losses over the remaining life of our finance receivables portfolio as of March 31, 2025.

Global Business Conditions

Caterpillar continues to monitor a variety of external factors around the world, such as supply chain disruptions, inflationary cost, labor pressures and the impact of trade policies. We are monitoring the potential downstream impacts from these factors on our business, while remaining focused on portfolio health and continuing to provide qualified customers and dealers with new loans and leases to support their current and future business needs.

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LIQUIDITY AND CAPITAL RESOURCES

Maintaining and managing adequate capital and liquidity resources includes management of funding sources and their utilization based on current, future and contingent needs. Throughout the first quarter of 2025, we experienced favorable liquidity conditions. We ended the first quarter of 2025 with $663 million of cash, an increase of $64 million from year-end 2024. Our cash balances are held in numerous locations throughout the world with approximately $467 million held by our non-U.S. subsidiaries. Amounts held by non-U.S. subsidiaries are available for general corporate use and could be used in the U.S. without incurring significant additional U.S. taxes. We expect to meet our U.S. funding needs without repatriating undistributed profits that are indefinitely reinvested outside the U.S.

Borrowings

Borrowings consist primarily of medium-term notes and commercial paper, the combination of which is used to manage interest rate risk and funding requirements.

We receive debt ratings from the major credit rating agencies. Fitch maintains a “high-A” debt rating, while Moody’s and S&P maintain a “mid-A” debt rating. A downgrade of our credit ratings by any of the major credit rating agencies could result in increased borrowing costs and could make access to certain credit markets more difficult. In the event economic conditions deteriorate such that access to debt markets becomes unavailable, we would rely on cash flows from our existing portfolio, existing cash balances, access to our committed credit facilities and other credit line facilities, and potential borrowings from Caterpillar. In addition, Caterpillar maintains a support agreement with us, which requires Caterpillar to remain our sole owner and may, under certain circumstances, require Caterpillar to make payments to us should we fail to maintain certain financial ratios.

Total borrowings outstanding as of March 31, 2025 were $29.95 billion, an increase of $142 million from December 31, 2024. Outstanding borrowings were as follows:

(Millions of dollars)	March 31, 2025		December 31, 2024
Medium-term notes, net	$	25,937	$	24,882
Commercial paper, net of unamortized discount	2,990		3,946
Bank borrowings – long-term	548		522
Bank borrowings – short-term	168		165
Variable denomination floating rate demand notes	296		282
Notes payable to Caterpillar	10		10
Other	2		2
Total outstanding borrowings	$	29,951	$	29,809

Medium-term notes

We issue medium-term unsecured notes through securities dealers or underwriters in the U.S., Europe, and other international capital markets. These notes are offered in several currencies and with a variety of maturities. These notes are senior unsecured obligations of the Company. Medium-term notes issued totaled $2.53 billion and redeemed totaled $1.65 billion for the three months ended March 31, 2025. Medium-term notes, net outstanding as of March 31, 2025 mature as follows: 

(Millions of dollars)
2025	$	5,939
2026	8,402
2027	7,743
2028	1,286
2029	2,090
Thereafter	448
Fair value adjustments	29
Total	$	25,937

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Commercial paper

We issue unsecured commercial paper in the U.S., Europe and other international capital markets. These short-term promissory notes are issued on a discounted basis and are payable at maturity.

Revolving credit facilities

As of March 31, 2025, we had three global credit facilities with a syndicate of banks totaling $10.50 billion (“Credit Facility”) available in the aggregate to both Caterpillar and us for general liquidity purposes. Based on management’s allocation decision, which can be revised from time to time, the portion of the Credit Facility available to us as of March 31, 2025 was $7.75 billion. Information on our Credit Facility is as follows:

•The 364-day facility of $3.15 billion (of which $2.33 billion is available to us) expires in August 2025.

•The three-year facility, as amended in August 2024, of $2.73 billion (of which $2.01 billion is available to us) expires in August 2027.

•The five-year facility, as amended in August 2024, of $4.62 billion (of which $3.41 billion is available to us) expires in August 2029.

At March 31, 2025, Caterpillar’s consolidated net worth was $18.13 billion, which was above the $9.00 billion required under the Credit Facility. The consolidated net worth is defined in the Credit Facility as Caterpillar’s consolidated shareholders’ equity including preferred stock but excluding the pension and other postretirement benefits balance within Accumulated other comprehensive income (loss).

At March 31, 2025, our covenant interest coverage ratio was 1.36 to 1. This was above the 1.15 to 1 minimum ratio, calculated as (1) profit excluding income taxes, interest expense and net gain (loss) from interest rate derivatives to (2) interest expense, calculated at the end of each fiscal quarter for the prior four consecutive fiscal quarter period, required by the Credit Facility.

In addition, at March 31, 2025, our six-month covenant leverage ratio was 7.42 to 1. This was below the maximum ratio of debt to net worth of 10 to 1, calculated (1) on a monthly basis as the average of the leverage ratios determined on the last day of each of the six preceding calendar months and (2) at each December 31, required by the Credit Facility.

In the event that either Caterpillar or we do not meet one or more of our respective financial covenants under the Credit Facility in the future (and are unable to obtain a consent or waiver), the syndicate of banks may terminate the commitments allocated to the party that does not meet its covenants. Additionally, in such event, certain of our other lenders under other loan agreements where similar financial covenants or cross default provisions are applicable, may, at their election, choose to pursue remedies under those loan agreements, including accelerating the repayment of outstanding borrowings. At March 31, 2025, there were no borrowings under the Credit Facility.

The aforementioned financial covenants are being reported as calculated under the Credit Facility and not pursuant to U.S. GAAP. Please refer to the credit agreements governing the Credit Facility filed as an exhibit to our periodic reports for further information related to the calculation thereof. For risks related to our indebtedness and compliance with these covenants, please refer to the risk factor "Restrictive covenants in our debt agreements could limit our financial and operating flexibility" set forth in Part I, Item 1A of our most recent annual report on Form 10-K.

Bank borrowings

Available credit lines with banks as of March 31, 2025 totaled $3.33 billion. These committed and uncommitted credit lines, which may be eligible for renewal at various future dates or have no specified expiration date, are used primarily by our non-U.S. subsidiaries for local funding requirements. We may guarantee subsidiary borrowings under these lines. As of March 31, 2025, we were in compliance with all debt covenants under these credit lines.

Variable denomination floating rate demand notes

We obtain funding from the sale of variable denomination floating rate demand notes, which may be redeemed at any time at the option of the holder without any material restriction. We do not hold reserves to fund the payment of the demand notes. The notes are offered on a continuous basis. The maximum amount of variable denomination floating rate demand notes that we may have outstanding at any time may not exceed $1.25 billion.

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Notes receivable from/payable to Caterpillar

Under our variable amount and term lending agreements and other notes receivable with Caterpillar, we may borrow up to $2.44 billion from Caterpillar and Caterpillar may borrow up to $2.14 billion from us. Most variable amount lending agreements are in effect for indefinite periods of time and may be changed or terminated by either party with 30 days’ notice. The term lending agreements have remaining maturities ranging up to nine years.

Off-Balance Sheet Arrangements

We are a party to certain off-balance sheet arrangements, primarily in the form of guarantees. Please refer to Note 7 of Notes to Consolidated Financial Statements for further information.

Cash Flows

Net cash provided by operating activities was $243 million in the first three months of 2025, compared with $263 million for the same period in 2024. Net cash used for investing activities was $112 million in the first three months of 2025, compared with $220 million for the same period in 2024. The change was primarily due to portfolio-related activity. Net cash used for financing activities was $71 million in the first three months of 2025, compared with net cash provided of $117 million for the same period in 2024. The change was due to external borrowing activity.

RECENT ACCOUNTING PRONOUNCEMENTS

For a discussion of recent accounting pronouncements, see Part I, Item 1. Note 2 - New Accounting Pronouncements.

CRITICAL ACCOUNTING ESTIMATES

For a discussion of the Company’s critical accounting estimates, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2024 Form 10-K. There have been no significant changes to our critical accounting estimates since our 2024 Form 10-K.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Form 10-Q relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,” “project,” “intend,” “could,” “should” or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts and trend descriptions. These statements do not guarantee future performance and speak only as of the date they are made, and we do not undertake to update our forward-looking statements.

Cat Financial’s actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including, but not limited to: (i) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers; (ii) failure to maintain our credit ratings and potential resulting increases to our cost of borrowing and adverse effects on our cost of funds, liquidity, competitive position and access to capital markets; (iii) changes in interest rates, currency fluctuations or market liquidity conditions; (iv) an increase in delinquencies, repossessions or net losses of our customers; (v) residual values of leased equipment; (vi) our compliance with financial and other restrictive covenants in debt agreements; (vii) government monetary or fiscal policies; (viii) political and economic risks, commercial instability and events beyond our control in the countries in which we operate; (ix) demand for Caterpillar products; (x) marketing, operational or administrative support received from Caterpillar; (xi) our ability to develop, produce and market quality products that meet our customers’ needs; (xii) information technology security threats and computer crime; (xiii) alleged or actual violations of trade or anti-corruption laws and regulations; (xiv) new regulations or changes in financial services regulations; (xv) additional tax expense or exposure; (xvi) changes in accounting guidance; (xvii) catastrophic events, including global pandemics such as the COVID-19 pandemic; and (xviii) other factors described in more detail under the section entitled “Part I - Item 1A. Risk Factors” of Cat Financial’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as such factors may be updated from time to time in Cat Financial’s periodic filings with the Securities and Exchange Commission.

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ITEM 4. CONTROLS AND PROCEDURES 

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer (CEO) and our Chief Financial Officer (CFO), of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this quarterly report. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the first quarter of 2025 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors we previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

ITEM 5. OTHER INFORMATION

During the three months ended March 31, 2025, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

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ITEM 6. EXHIBITS

Exhibit No.	Description of Exhibit
31.1	Certification of President, Director and Chief Executive Officer of Caterpillar Financial Services Corporation, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Executive Vice President and Chief Financial Officer of Caterpillar Financial Services Corporation, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification of President, Director and Chief Executive Officer of Caterpillar Financial Services Corporation, and Executive Vice President and Chief Financial Officer of Caterpillar Financial Services Corporation, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive File (embedded within the Inline XBRL document and included in Exhibit 101)
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Caterpillar Financial Services Corporation
Date:	May 7, 2025	/s/ David T. Walton
		David T. Walton, President, Director and Chief Executive Officer

Date:	May 7, 2025	/s/ Kristen R. Covey
		Kristen R. Covey, Executive Vice President and Chief Financial Officer

Date:	May 7, 2025	/s/ James M. Rooney
		James M. Rooney, Secretary

Date:	May 7, 2025	/s/ Daniel R. Court
		Daniel R. Court, Controller (Principal Accounting Officer)

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