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Cat Financial Financing Activities
 12 Months Ended
Dec. 31, 2024
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 $1,750 million and $1,632 million, at December 31, 2024 and 2023, 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, 2024
Amounts Due InWholesale
Loans		Wholesale
Leases		Total
2025$1,056 $35 $1,091 
2026275 22 297 
2027206 14 220 
202848 9 57 
202918 4 22 
Thereafter6 1 7 
Total1,609 85 1,694 
Guaranteed residual value 1
31 19 50 
Unguaranteed residual value 1
2 22 24 
Less: Unearned income(9)(9)(18)
Total$1,633 $117 $1,750 
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, 2024
Amounts Due InRetail
Loans		Retail
Leases		Total
2025$7,422 $2,375 $9,797 
20264,449 1,651 6,100 
20273,084 981 4,065 
20281,724 517 2,241 
2029607 220 827 
Thereafter144 64 208 
Total17,430 5,808 23,238 
Guaranteed residual value 1
6 384 390 
Unguaranteed residual value 1
2 551 553 
Less: Unearned income(505)(647)(1,152)
Total$16,933 $6,096 $23,029 
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, in most cases, incorporate Caterpillar products. The average original term of Cat Financial's customer finance receivable portfolio was approximately 51 months with an average remaining term of approximately 27 months as of December 31, 2024.

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, 2024, Cat Financial's forecasts reflected a continuation of the trend of historically low unemployment rates as well as low delinquencies within their portfolio. However, industry delinquencies show an increasing trend as the central bank actions aimed at reducing inflation have weakened global economic growth. The company 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 in the form of wholesale financing plans and short-term working capital loans. Cat Financial's wholesale financing plans provide assistance to dealers by financing their mostly new Caterpillar equipment inventory and rental fleets on a secured and unsecured basis. In addition, Cat Financial provides a variety of secured and unsecured loans to Caterpillar dealers.
    
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, 2024.

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.
•Mining — Finance receivables related to large mining customers worldwide.
•Latin America — Finance receivables originated in Mexico and Central and South American countries.
•Power — Finance receivables originated worldwide related to Caterpillar electrical power generation, gas compression and co-generation systems and non-Caterpillar equipment that is powered by these systems.
Receivable balances, including accrued interest, are written off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible (generally upon repossession of the collateral). Generally, the amount of the write-off is determined by comparing the fair value of the collateral, less cost to sell, to the amortized cost of the receivable. Subsequent recoveries, if any, are credited to the allowance for credit losses when received.

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

(Millions of dollars)December 31, 2024December 31, 2023
CustomerDealerTotalCustomerDealerTotal
Allowance for Credit Losses:   
Beginning balance$276 $51 $327 $277 $65 $342 
Write-offs(125)(47)(172)(115)— (115)
Recoveries57 — 57 50 — 50 
Provision for credit losses1
84 — 84 61 (14)47 
Other(34)— (34)3 — 3 
Ending balance$258 $4 $262 $276 $51 $327 
Finance Receivables$21,517 $1,512 $23,029 $20,571 $1,878 $22,449 
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, 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 
Mining8 3 3 — — — — 14 
Latin America— 3 6 5 3 8 — 25 
Total$12 $33 $32 $19 $9 $11 $9 $125 
Year Ended December 31, 2023
20232022202120202019PriorRevolving Finance ReceivablesTotal
North America$2 $11 $11 $5 $3 $2 $12 $46 
EAME1 5 6 4 1 — — 17 
Asia/Pacific2 5 8 5 1 — — 21 
Latin America— 8 5 6 1 10 — 30 
Power— — — — — 1 — 1 
Total$5 $29 $30 $20 $6 $13 $12 $115 

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 2019.
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 tables below summarize the aging category of Cat Financial's amortized cost of finance receivables in the Customer portfolio segment by origination year:
      
 (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 
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 
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 
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 
      
 (Millions of dollars)December 31, 2023
20232022202120202019PriorRevolving
Finance
Receivables 		Total Finance Receivables
North America      
Current$4,430 $2,628 $2,000 $745 $220 $32 $312 $10,367 
31-60 days past due28 31 24 14 7 1 4 109 
61-90 days past due10 11 8 4 1 — 2 36 
91+ days past due12 23 18 9 4 1 2 69 
EAME
Current1,336 895 588 258 111 105 — 3,293 
31-60 days past due10 9 7 3 1 — — 30 
61-90 days past due4 3 3 1 1 — — 12 
91+ days past due7 17 15 8 3 1 — 51 
Asia/Pacific
Current943 594 293 73 16 4 — 1,923 
31-60 days past due5 6 7 2 — — — 20 
61-90 days past due2 3 3 2 — — — 10 
91+ days past due1 5 3 3 1 — — 13 
Mining
Current1,039 686 381 121 68 27 66 2,388 
31-60 days past due— — — — — — — — 
61-90 days past due— — — — 1 1 — 2 
91+ days past due— — 1 — — 1 — 2 
Latin America
Current750 520 219 59 23 6 — 1,577 
31-60 days past due9 10 6 1 — — — 26 
61-90 days past due2 4 1 — — — — 7 
91+ days past due2 10 8 5 8 11 — 44 
Power
Current152 49 64 75 28 59 162 589 
31-60 days past due— — — — — — — — 
61-90 days past due— — — — — — — — 
91+ days past due— — — — — 3 — 3 
Totals by Aging Category
Current8,650 5,372 3,545 1,331 466 233 540 20,137 
31-60 days past due52 56 44 20 8 1 4 185 
61-90 days past due18 21 15 7 3 1 2 67 
91+ days past due22 55 45 25 16 17 2 182 
Total Customer$8,742 $5,504 $3,649 $1,383 $493 $252 $548 $20,571 

Finance receivables in the Customer portfolio segment are substantially secured by collateral, primarily in the form of Caterpillar and other equipment. For those contracts where the borrower is experiencing financial difficulty, repayment of the outstanding amounts is generally expected to be provided through the operation or repossession and sale of the equipment.
Dealer
As of December 31, 2024, Cat Financial's total amortized cost of finance receivables within the Dealer portfolio segment was current. As of December 31, 2023, Cat Financial's total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $44 million that was 91+ days past due in Latin America, all of which originated prior to 2019.
Non-accrual finance receivables
In Cat Financial's Customer portfolio segment, finance receivables which were on non-accrual status and finance receivables over 90 days past due and still accruing income were as follows:

   
December 31, 2024December 31, 2023
 Amortized CostAmortized Cost
 (Millions of dollars)
Non-accrual With an Allowance91+ Still
Accruing		Non-accrual With an Allowance91+ Still
Accruing
   
North America$83 $20 $52 $20 
EAME33 5 34 18 
Asia/Pacific5 5 8 5 
Mining29 — 2 — 
Latin America24 — 48 1 
Power2 — 8 — 
Total$176 $30 $152 $44 

There were no finance receivables in Cat Financial's Dealer portfolio segment on non-accrual status as of December 31, 2024. There were $44 million in finance receivables in Cat Financial's Dealer portfolio segment on non-accrual status as of December 31, 2023, all of which was in Latin America.

Modifications
Cat Financial periodically modifies the terms of their finance receivable agreements in response to borrowers’ financial difficulty. 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, 2024 and 2023, there were no finance receivable modifications granted to borrowers experiencing financial difficulty in Cat Financial's Dealer portfolio segment. The amortized cost basis of finance receivables modified for borrowers experiencing financial difficulty in Cat Financial's Customer portfolio segment during the years ended December 31, 2024 and 2023, was $33 million and $47 million, respectively. Total modifications with borrowers experiencing financial difficulty represented 0.15 percent and 0.21 percent of Cat Financial's Customer portfolio for the same periods, respectively.

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)20242023
Weighted average extension to term of modified contracts815
Weighted average payment deferral and/or interest only periods67

After Cat Financial modifies a finance receivable, they continue to track its performance under its most recent modified terms. As of December 31, 2024 and 2023, 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.