10-Q

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 September 30, 2023

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 H, 3.300% Notes Due 2024	CAT/24	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 November 1, 2023, 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	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	*
Item 4.	Controls and Procedures	37
Part II. Other Information
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
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	*
Item 6.	Exhibits	38
* 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 2022 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 15, 2023. 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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenues:
Retail finance	$	378	$	312	$	1,072	$	903
Operating lease	232		222		672		671
Wholesale finance	184		117		508		300
Other, net	52		39		155		136
Total revenues	846		690		2,407		2,010
Expenses:
Interest	280		151		742		377
Depreciation on equipment leased to others	182		179		532		544
General, operating and administrative	153		136		434		397
Provision for credit losses	35		(16)		23		34
Other	7		7		23		20
Total expenses	657		457		1,754		1,372
Other income (expense)	(19)		(45)		(74)		(58)
Profit before income taxes	170		188		579		580
Provision for income taxes	72		55		177		157
Profit of consolidated companies	98		133		402		423
Less: Profit attributable to noncontrolling interests	—		2		5		6
Profit attributable to Caterpillar Financial Services Corporation	$	98	$	131	$	397	$	417

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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Profit of consolidated companies	$	98	$	133	$	402	$	423
Other comprehensive income (loss), net of tax (Note 5):
Foreign currency translation	(102)		(296)		(99)		(543)
Derivative financial instruments	(4)		(5)		(4)		18
Total Other comprehensive income (loss), net of tax	(106)		(301)		(103)		(525)
Comprehensive income (loss)	(8)		(168)		299		(102)
Less: Comprehensive income (loss) attributable to noncontrolling interests	—		(6)		(1)		(9)
Comprehensive income (loss) attributable to Caterpillar Financial Services Corporation	$	(8)	$	(162)	$	300	$	(93)

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)

	September 30, 2023		December 31, 2022
Assets:
Cash and cash equivalents	$	561	$	868
Finance receivables, net of Allowance for credit losses of $340 and $346	27,202		26,441
Notes receivable from Caterpillar	549		482
Equipment on operating leases, net	3,033		2,911
Other assets	1,119		1,255
Total assets	$	32,464	$	31,957
Liabilities and shareholder’s equity:
Payable to dealers and others	$	152	$	163
Payable to Caterpillar - borrowings and other	126		124
Accrued expenses	451		380
Short-term borrowings	4,218		5,954
Current maturities of long-term debt	7,619		5,202
Long-term debt	15,789		16,216
Other liabilities	1,002		955
Total liabilities	29,357		28,994
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	3,431		3,109
Accumulated other comprehensive income (loss)	(1,144)		(1,047)
Noncontrolling interests	73		154
Total shareholder’s equity	3,107		2,963
Total liabilities and shareholder’s equity	$	32,464	$	31,957

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 September 30, 2022	Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive income (loss)		Noncontrolling interests		Total
Balance at June 30, 2022	$	745	$	2	$	3,135	$	(991)	$	156	$	3,047
Profit of consolidated companies					131				2		133
Foreign currency translation, net of tax							(288)		(8)		(296)
Derivative financial instruments, net of tax							(5)				(5)
Balance at September 30, 2022	$	745	$	2	$	3,266	$	(1,284)	$	150	$	2,879
Three Months Ended September 30, 2023
Balance at June 30, 2023	$	745	$	2	$	3,333	$	(1,038)	$	153	$	3,195
Profit of consolidated companies					98						98
Dividend paid to Caterpillar									(80)		(80)
Foreign currency translation, net of tax							(102)				(102)
Derivative financial instruments, net of tax							(4)				(4)
Balance at September 30, 2023	$	745	$	2	$	3,431	$	(1,144)	$	73	$	3,107
Nine Months Ended September 30, 2022
Balance at December 31, 2021	$	745	$	2	$	2,849	$	(774)	$	159	$	2,981
Profit of consolidated companies					417				6		423
Foreign currency translation, net of tax							(528)		(15)		(543)
Derivative financial instruments, net of tax							18				18
Balance at September 30, 2022	$	745	$	2	$	3,266	$	(1,284)	$	150	$	2,879
Nine Months Ended September 30, 2023
Balance at December 31, 2022	$	745	$	2	$	3,109	$	(1,047)	$	154	$	2,963
Profit of consolidated companies					397				5		402
Dividend paid to Caterpillar					(75)				(80)		(155)
Foreign currency translation, net of tax							(93)		(6)		(99)
Derivative financial instruments, net of tax							(4)				(4)
Balance at September 30, 2023	$	745	$	2	$	3,431	$	(1,144)	$	73	$	3,107

See Notes to Consolidated Financial Statements (Unaudited).

7

UNAUDITED

Caterpillar Financial Services Corporation

 CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in Millions)

	Nine Months Ended September 30,
	2023		2022
Cash flows from operating activities:
Profit of consolidated companies	$	402	$	423
Adjustments for non-cash items:
Depreciation and amortization	542		554
Accretion of Caterpillar purchased receivable revenue	(460)		(284)
Provision for credit losses	23		34
Other, net	(49)		116
Changes in assets and liabilities:
Other assets	102		41
Payable to dealers and others	31		62
Accrued expenses	35		17
Other payables with Caterpillar	2		(3)
Other liabilities	43		61
Net cash provided by operating activities	671		1,021
Cash flows from investing activities:
Expenditures for equipment on operating leases	(1,015)		(860)
Capital expenditures - excluding equipment on operating leases	(14)		(9)
Proceeds from disposals of equipment	515		607
Additions to finance receivables	(12,484)		(10,578)
Collections of finance receivables	11,561		10,333
Net changes in Caterpillar purchased receivables	429		678
Proceeds from sales of receivables	40		50
Net change in variable lending to Caterpillar	(98)		(3)
Additions to other notes receivable from Caterpillar	(8)		(139)
Collections of other notes receivable from Caterpillar	38		34
Settlements of undesignated derivatives	8		(69)
Net cash provided by (used for) investing activities	(1,028)		44
Cash flows from financing activities:
Net change in variable lending from Caterpillar	1		—
Proceeds from debt issued (original maturities greater than three months)	6,360		5,570
Payments on debt issued (original maturities greater than three months)	(4,360)		(5,269)
Short-term borrowings, net (original maturities three months or less)	(1,723)		(1,173)
Dividend paid to Caterpillar	(155)		—
Net cash provided by (used for) financing activities	123		(872)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(65)		(44)
Increase (decrease) in cash, cash equivalents and restricted cash	(299)		149
Cash, cash equivalents and restricted cash at beginning of year(1)	870		614
Cash, cash equivalents and restricted cash at end of period(1)	$	571	$	763

(1) As of September 30, 2023 and December 31, 2022, restricted cash, which is included in Other assets in the Consolidated Statements of Financial Position, was $10 million and $2 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 and nine months ended September 30, 2023 and 2022, (b) the consolidated comprehensive income for the three and nine months ended September 30, 2023 and 2022, (c) the consolidated financial position at September 30, 2023 and December 31, 2022, (d) the consolidated changes in shareholder’s equity for the three and nine months ended September 30, 2023 and 2022 and (e) the consolidated cash flows for the nine months ended September 30, 2023 and 2022. 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, 2022 (2022 Form 10-K). The December 31, 2022 financial position data included herein was derived from the audited consolidated financial statements included in the 2022 Form 10-K but does not include all disclosures required by generally accepted accounting principles.

We consolidate all variable interest entities (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.

In the current period we identified a misclassification between Noncontrolling interests and Retained earnings related to certain dividends we paid to Caterpillar in prior periods. We have determined that the impact was not material to any previously filed financial statements and have revised the reported balances to correct for the misclassification. The impact of the revisions was a $52 million increase in Retained earnings and offsetting $52 million decrease in Noncontrolling interests as of December 31, 2021 and 2022, March 31, 2023 and June 30, 2023 and a $25 million increase in Retained earnings and offsetting $25 million decrease in Noncontrolling interests as of December 31, 2020. There was no impact on total equity or any other line items within the financial statements.

2.New Accounting Pronouncements

A.Adoption of New Accounting Standards

We consider the applicability and impact of all Accounting Standards Updates (ASUs). Effective January 1, 2023, we adopted ASU 2022-02, Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures prospectively. The ASU eliminates accounting guidance for troubled debt restructurings (TDRs), enhances disclosures for certain receivable modifications related to borrowers experiencing financial difficulty, and requires disclosure of current period gross write-offs by year of origination. See Note 3 for additional information.

B.Accounting Standards Issued But Not Yet Adopted

We consider the applicability and impact of all ASUs. We have assessed the ASUs and 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)	September 30, 2023		December 31, 2022
Retail loans, net(1)	$	15,907	$	14,973
Retail leases, net	6,432		6,965
Caterpillar purchased receivables, net	4,381		4,297
Wholesale loans, net(1)	817		545
Wholesale leases, net	5		7
Total finance receivables	27,542		26,787
Less: Allowance for credit losses	(340)		(346)
Total finance receivables, net	$	27,202	$	26,441

(1) Includes failed sale leasebacks.

Finance leases

Revenues from finance leases were $106 million and $105 million for the three months ended September 30, 2023 and 2022, respectively, and $314 million and $326 million for the nine months ended September 30, 2023 and 2022, respectively, and are included in retail and wholesale finance revenue in the Consolidated Statements of Profit. The residual values for finance leases are included in Finance receivables, net in the Consolidated Statements of Financial Position. Residual value adjustments are recognized through a reduction of finance revenue over the remaining lease term.

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 receivable portfolio was approximately 51 months with an average remaining term of approximately 27 months as of September 30, 2023.

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

We estimate the allowance for credit losses related to our customer finance receivables based on loss forecast models utilizing probabilities of default and our estimated loss given default based on past loss experience adjusted for current conditions and reasonable and supportable forecasts capturing country and industry-specific economic factors.

During the three and nine months ended September 30, 2023, our forecasts reflected a continuation of the trend of relatively low unemployment rates and delinquencies within our portfolio. However, industry delinquencies show an increasing trend as persistently high inflation rates and consequent central bank actions are weakening global economic growth. 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. Our 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, we provide a variety of secured and unsecured loans to Caterpillar dealers.

10

UNAUDITED

We estimate the allowance for credit losses for dealer finance receivables based on historical loss rates with consideration of current economic conditions and reasonable and supportable forecasts.

In general, our Dealer portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to our close working relationships with the dealers and their financial strength. Therefore, we made no adjustments to historical loss rates during the three and nine months ended September 30, 2023.

Caterpillar Purchased Receivables

We purchase receivables from Caterpillar, primarily related to the sale of equipment and parts to dealers. Caterpillar purchased receivables are non-interest-bearing short-term trade receivables that are purchased at a discount.

We estimate the allowance for credit losses for Caterpillar purchased receivables based on historical loss rates with consideration of current economic conditions and reasonable and supportable forecasts.

In general, our Caterpillar Purchased Receivables portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to the short-term maturities of the receivables, our close working relationships with the dealers and their financial strength. Therefore, we made no adjustments to historical loss rates during the three and nine months ended September 30, 2023.

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.

•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.

11

UNAUDITED

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

(Millions of dollars)	Three Months Ended September 30, 2023								Three Months Ended September 30, 2022
	Customer		Dealer		Caterpillar Purchased Receivables		Total		Customer		Dealer		Caterpillar Purchased Receivables		Total
Beginning Balance	$	265	$	50	$	5	$	320	$	290	$	82	$	4	$	376
Write-offs	(22)		—		—		(22)		(30)		—		—		(30)
Recoveries	13		—		—		13		17		—		—		17
Provision for credit losses(1)	31		1		—		32		(2)		(17)		—		(19)
Other	(3)		—		—		(3)		(5)		—		—		(5)
Ending Balance	$	284	$	51	$	5	$	340	$	270	$	65	$	4	$	339
	Nine Months Ended September 30, 2023								Nine Months Ended September 30, 2022
	Customer		Dealer		Caterpillar Purchased Receivables		Total		Customer		Dealer		Caterpillar Purchased Receivables		Total
Beginning Balance	$	277	$	65	$	4	$	346	$	251	$	82	$	4	$	337
Write-offs	(63)		—		—		(63)		(68)		—		—		(68)
Recoveries	36		—		—		36		47		—		—		47
Provision for credit losses(1)	35		(14)		1		22		46		(17)		—		29
Other	(1)		—		—		(1)		(6)		—		—		(6)
Ending Balance	$	284	$	51	$	5	$	340	$	270	$	65	$	4	$	339
Finance Receivables	$	20,279	$	2,882	$	4,381	$	27,542	$	19,927	$	2,222	$	3,962	$	26,111

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

12

UNAUDITED

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

(Millions of Dollars)	Three Months Ended September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total
North America	$	1	$	2	$	2	$	1	$	1	$	—	$	2	$	9
EAME	—		1		1		1		—		—		—		3
Asia/Pacific	—		2		3		1		—		—		—		6
Latin America	—		1		1		1		—		1		—		4
Total	$	1	$	6	$	7	$	4	$	1	$	1	$	2	$	22
	Nine Months Ended September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total
North America	$	1	$	7	$	7	$	2	$	2	$	1	$	9	$	29
EAME	—		2		3		3		—		1		—		9
Asia/Pacific	—		3		6		4		1		—		—		14
Latin America	—		3		3		3		1		1		—		11
Total	$	1	$	15	$	19	$	12	$	4	$	3	$	9	$	63

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.

13

UNAUDITED

Customer

The tables below summarize the aging category of our amortized cost of finance receivables in the Customer portfolio segment by origination year.

(Millions of dollars)	September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,134	$	2,940	$	2,310	$	919	$	310	$	65	$	304	$	9,982
31-60 days past due	18		31		23		15		6		2		3		98
61-90 days past due	6		10		7		4		1		—		2		30
91+ days past due	5		19		18		10		5		3		2		62
EAME
Current	914		962		649		297		144		124		—		3,090
31-60 days past due	11		8		11		3		1		—		—		34
61-90 days past due	3		6		3		3		2		—		—		17
91+ days past due	4		16		18		9		3		1		—		51
Asia/Pacific
Current	832		760		440		150		47		12		42		2,283
31-60 days past due	3		13		10		4		1		—		—		31
61-90 days past due	1		3		3		4		1		—		—		12
91+ days past due	—		4		5		3		—		—		—		12
Mining
Current	836		740		436		148		111		50		49		2,370
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		1		—		—		2		—		3
91+ days past due	—		2		2		—		—		1		—		5
Latin America
Current	552		571		255		74		29		8		—		1,489
31-60 days past due	6		13		7		4		3		1		—		34
61-90 days past due	1		5		2		1		—		—		—		9
91+ days past due	1		15		9		8		8		20		—		61
Power
Current	46		71		70		86		45		122		162		602
31-60 days past due	—		—		—		—		—		1		—		1
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		3		—		3
Totals by Aging Category
Current	6,314		6,044		4,160		1,674		686		381		557		19,816
31-60 days past due	38		65		51		26		11		4		3		198
61-90 days past due	11		24		16		12		4		2		2		71
91+ days past due	10		56		52		30		16		28		2		194
Total	$	6,373	$	6,189	$	4,279	$	1,742	$	717	$	415	$	564	$	20,279

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(Millions of dollars)	December 31, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,915	$	3,276	$	1,525	$	653	$	206	$	34	$	240	$	9,849
31-60 days past due	25		26		18		12		4		1		4		90
61-90 days past due	9		15		7		3		1		—		3		38
91+ days past due	11		16		12		6		4		3		4		56
EAME
Current	1,270		953		477		280		155		68		—		3,203
31-60 days past due	10		12		7		1		1		—		—		31
61-90 days past due	8		4		3		1		—		—		—		16
91+ days past due	6		25		16		4		1		1		—		53
Asia/Pacific
Current	1,174		805		393		124		37		5		40		2,578
31-60 days past due	10		12		8		1		1		—		—		32
61-90 days past due	2		5		4		2		—		—		—		13
91+ days past due	2		6		6		4		—		—		—		18
Mining
Current	875		627		227		193		94		108		80		2,204
31-60 days past due	—		1		—		—		—		—		—		1
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		1		—		1
Latin America
Current	770		400		150		69		26		20		—		1,435
31-60 days past due	7		8		4		2		—		1		—		22
61-90 days past due	2		5		1		1		—		—		—		9
91+ days past due	2		13		11		2		1		—		—		29
Power
Current	82		87		146		51		18		161		125		670
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		5		—		5
Totals by Aging Category
Current	8,086		6,148		2,918		1,370		536		396		485		19,939
31-60 days past due	52		59		37		16		6		2		4		176
61-90 days past due	21		29		15		7		1		—		3		76
91+ days past due	21		60		45		16		6		10		4		162
Total	$	8,180	$	6,296	$	3,015	$	1,409	$	549	$	408	$	496	$	20,353

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.

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Dealer

As of September 30, 2023 and December 31, 2022, our total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $47 million and $62 million, respectively, that was 91+ days past due in Latin America, all of which originated in 2017.

Caterpillar Purchased Receivables

The tables below summarize the aging category of our amortized cost of finance receivables in the Caterpillar Purchased Receivables portfolio segment.

(Millions of dollars)	September 30, 2023
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables
North America	$	15	$	5	$	2	$	22	$	2,629	$	2,651
EAME	1		1		1		3		758		761
Asia/Pacific	8		—		1		9		565		574
Latin America	4		4		23		31		353		384
Power	2		1		1		4		7		11
Total	$	30	$	11	$	28	$	69	$	4,312	$	4,381

(Millions of dollars)	December 31, 2022
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables
North America	$	11	$	7	$	4	$	22	$	2,458	$	2,480
EAME	1		—		2		3		812		815
Asia/Pacific	6		2		2		10		555		565
Latin America	9		2		14		25		406		431
Power	1		—		—		1		5		6
Total	$	28	$	11	$	22	$	61	$	4,236	$	4,297

Non-accrual finance receivables

Recognition of income is suspended and the finance receivable is placed on non-accrual status when management determines that collection of future income is not probable. Contracts on non-accrual status are generally more than 120 days past due. Recognition is resumed and previously suspended income is recognized when collection is considered probable. Payments received while the finance receivable is on non-accrual status are applied to interest and principal in accordance with the contractual terms. Interest earned but uncollected prior to the receivable being placed on non-accrual status is written off through Provision for credit losses when, in the judgment of management, it is considered uncollectible.

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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)	September 30, 2023						December 31, 2022
	Amortized Cost						Amortized Cost
	Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing		Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing
North America	$	54	$	—	$	12	$	52	$	4	$	11
EAME	44		—		9		43		—		10
Asia/Pacific	8		—		5		11		—		7
Mining	4		—		1		—		1		—
Latin America	69		—		—		45		—		—
Power	9		—		—		5		11		—
Total	$	188	$	—	$	27	$	156	$	16	$	28

There were $47 million and $62 million, respectively, in finance receivables in our Dealer portfolio segment on non-accrual status as of September 30, 2023 and December 31, 2022, all of which was in Latin America.

Modifications

We periodically modify the terms of our 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 we grant are for commercial reasons or for borrowers experiencing some form of short-term financial stress and may result in insignificant payment delays. We do not consider these borrowers to be experiencing financial difficulty. Modifications for borrowers we do consider to be experiencing financial difficulty typically result in payment deferrals and/or reduced payments for a period of four months or longer, term extension of six months or longer or a combination of both.

During the three and nine months ended September 30, 2023, 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 the Customer portfolio segment during the three and nine months ended September 30, 2023, was $13 million and $38 million, respectively. Total modifications with borrowers experiencing financial difficulty represented 0.05 percent and 0.14 percent of our finance receivable portfolio for the same periods, respectively.

For the three and nine months ended September 30, 2023, the financial effects of term extensions for borrowers experiencing financial difficulty added a weighted average of 8 and 17 months, respectively, to the terms of modified contracts. For the three and nine months ended September 30, 2023, the financial effects of payment delays for borrowers experiencing financial difficulty resulted in weighted average payment deferral and/or interest only periods of 6 and 7 months, respectively.

After we modify a finance receivable, we continue to track its performance under its most recent modified terms. As of September 30, 2023, all finance receivables modified with borrowers experiencing financial difficulty are current except for $3 million in EAME that was 31-60 days past due.

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.

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Troubled debt restructurings

Prior to the adoption of ASU 2022-02, a modification constituted a TDR when the lender granted a concession it would not otherwise consider to a borrower experiencing financial difficulties. Concessions granted may have included extended contract maturities, inclusion of interest only periods, below market interest rates, payment deferrals and reduction of principal and/or accrued interest.

There were no finance receivables modified as TDRs during the three and nine months ended September 30, 2022 for the Dealer or Caterpillar Purchased Receivables portfolio segments. Finance receivables in the Customer portfolio segment modified as TDRs were as follows:

(Millions of dollars)	Three Months Ended September 30, 2022				Nine Months Ended September 30, 2022
	Pre-TDR Amortized Cost		Post-TDR Amortized Cost		Pre-TDR Amortized Cost		Post-TDR Amortized Cost
North America	$	3	$	3	$	4	$	4
EAME	—		—		1		1
Mining	15		15		15		15
Power	11		11		20		19
Total	$	29	$	29	$	40	$	39

During the three months ended September 30, 2022, there were no TDRs in the Customer portfolio segment with a payment default (defined as 91+ days past due) which had been modified within twelve months prior to the default date. During the nine months ended September 30, 2022, the Post-TDR amortized cost of TDRs in the Customer portfolio segment with a payment default which had been modified within twelve months prior to the default date was $5 million, all of which was in Mining.

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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. The 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 financial derivative instruments.

All derivatives are recognized on the Consolidated Statements of Financial Position at their fair value. 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. 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, on 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 on the Consolidated Statements of Cash Flows. We include cash flows from undesignated derivative financial instruments in the investing category on 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 on the Consolidated Statements of Financial Position and linking cash flow hedges to specific forecasted transactions or variability of cash flow.

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.

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 receivable 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 receivable portfolio. This matched funding reduces the volatility of margins between interest-bearing assets and interest-bearing liabilities, regardless of which direction interest rates move.

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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 original 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)	September 30, 2023				December 31, 2022
	Assets1		Liabilities2		Assets1		Liabilities2
Designated derivatives
Foreign exchange contracts	$	282	$	(61)	$	305	$	(44)
Interest rate contracts	52		(109)		87		(113)
	$	334	$	(170)	$	392	$	(157)
Undesignated derivatives
Foreign exchange contracts	$	28	$	(35)	$	25	$	(42)
	$	28	$	(35)	$	25	$	(42)

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

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

The total notional amount of our derivative instruments was $14.44 billion and $13.18 billion as of September 30, 2023 and December 31, 2022, 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.

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

(Millions of dollars)	Fair Value / Undesignated Hedges				Cash Flow Hedges
	Gains (Losses) Recognized1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI2
	Three Months Ended September 30,
	2023		2022		2023		2022		2023		2022
Foreign exchange contracts	$	22	$	16	$	76	$	276	$	70	$	303
Interest rate contracts	(20)		(5)		3		26		15		8
	$	2	$	11	$	79	$	302	$	85	$	311
	Nine Months Ended September 30,
	2023		2022		2023		2022		2023		2022
Foreign exchange contracts	$	21	$	(26)	$	59	$	570	$	38	$	656
Interest rate contracts	(53)		4		15		103		43		—
	$	(32)	$	(22)	$	74	$	673	$	81	$	656

(1) Foreign exchange contract gains (losses) are primarily from undesignated forward contracts and are included in Other income (expense). Interest rate contract gains (losses) are from designated fair value hedges and 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.

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The following amounts were recorded in the Consolidated Statements of Financial Position related to cumulative basis adjustments for fair value hedges:

(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
	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Current maturities of long-term debt	$	249	$	—	$	(4)	$	—
Long-term debt	2,720		2,091		(105)		(112)
Total	$	2,969	$	2,091	$	(109)	$	(112)

As of September 30, 2023, $30 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 September 30, 2023 and December 31, 2022, no cash collateral was received or pledged under the master netting agreements.

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

(Millions of dollars)	September 30, 2023				December 31, 2022
	Assets		Liabilities		Assets		Liabilities
Gross amounts recognized	$	362	$	(205)	$	417	$	(199)
Financial instruments not offset	(122)		122		(108)		108
Net amount	$	240	$	(83)	$	309	$	(91)

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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 Accumulated other comprehensive income (loss) included in the Consolidated Statements of Changes in Shareholder’s Equity consisted of the following:

(Millions of dollars)	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Foreign currency translation
Balance at beginning of period	$	(1,059)	$	(1,002)	$	(1,068)	$	(762)
Gains (losses) on foreign currency translation	(89)		(258)		(89)		(456)
Less: Tax provision/(benefit)	13		30		4		72
Net gains (losses) on foreign currency translation	(102)		(288)		(93)		(528)
Other comprehensive income (loss), net of tax	(102)		(288)		(93)		(528)
Balance at end of period	$	(1,161)	$	(1,290)	$	(1,161)	$	(1,290)
Derivative financial instruments
Balance at beginning of period	$	21	$	11	$	21	$	(12)
Gains (losses) deferred	79		302		74		673
Less: Tax provision/(benefit)	20		95		18		158
Net gains (losses) deferred	59		207		56		515
(Gains) losses reclassified to earnings	(85)		(311)		(81)		(656)
Less: Tax (provision)/benefit	(22)		(99)		(21)		(159)
Net (gains) losses reclassified to earnings	(63)		(212)		(60)		(497)
Other comprehensive income (loss), net of tax	(4)		(5)		(4)		18
Balance at end of period	$	17	$	6	$	17	$	6
Total Accumulated other comprehensive income (loss) at end of period	$	(1,144)	$	(1,284)	$	(1,144)	$	(1,284)

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6.Segment Information

A.     Basis for Segment Information

The Chief Operating Decision Maker (the CEO) allocates resources and manages performance for our six operating segments described as follows. 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, 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.

B.    Description of Segments

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 for 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

Cash, debt and other expenses are allocated to our segments based on their respective portfolios. The related Interest expense is calculated based on the amount of allocated debt and the rates associated with that debt. The performance of each segment is assessed based on a consistent leverage ratio. The Provision for credit losses is based on each segment’s respective finance receivable portfolio. Capital expenditures include expenditures for equipment on operating leases and other miscellaneous capital expenditures.

Reconciling items are created based on accounting differences between segment reporting and consolidated external reporting. For the reconciliation of Profit before income taxes, we have grouped the reconciling items as follows:

•Unallocated - This item is related to corporate requirements and strategies that are considered to be for the benefit of the entire organization. Also included are the consolidated results of the special-purpose corporation (SPC) (see Note 7 for additional information) and other miscellaneous items.

•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:

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

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

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

◦The net gain or loss from interest rate derivatives is excluded from segment reporting.

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Supplemental segment data and reconciliations to consolidated external reporting for the three months ended September 30 was as follows:

(Millions of dollars) 2023	External Revenues		Profit before income taxes		Interest Expense		Depreciation on equipment leased to others		Provision for credit losses		Assets at September 30, 2023		Capital expenditures
North America	$	459	$	144	$	128	$	130	$	10	$	15,928	$	274
EAME	102		35		26		14		1		4,867		14
Asia/Pacific	70		19		32		2		1		3,265		—
Latin America	95		15		48		3		13		2,579		3
Mining	86		17		23		32		5		2,880		49
Power	15		(1)		7		1		4		644		—
Total Segments	827		229		264		182		34		30,163		340
Unallocated	23		(137)		108		—		1		2,255		1
Timing	(4)		1		—		—		—		19		—
Methodology	—		77		(92)		—		—		235		—
Inter-segment Eliminations (1)	—		—		—		—		—		(208)		—
Total	$	846	$	170	$	280	$	182	$	35	$	32,464	$	341
2022	External Revenues		Profit before income taxes		Interest Expense		Depreciation on equipment leased to others		Provision for credit losses		Assets at December 31, 2022		Capital expenditures
North America	$	383	$	150	$	69	$	126	$	(5)	$	15,229	$	205
EAME	72		—		27		13		7		5,067		45
Asia/Pacific	70		33		19		1		1		3,921		3
Latin America	75		31		37		3		(8)		2,636		3
Mining	72		21		11		35		(4)		2,700		36
Power	11		12		5		1		(7)		704		—
Total Segments	683		247		168		179		(16)		30,257		292
Unallocated	10		(80)		53		—		—		1,628		2
Timing	(3)		—		—		—		—		18		—
Methodology	—		21		(70)		—		—		278		—
Inter-segment Eliminations (1)	—		—		—		—		—		(224)		—
Total	$	690	$	188	$	151	$	179	$	(16)	$	31,957	$	294

 (1) Elimination is primarily related to intercompany loans

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Supplemental segment data and reconciliations to consolidated external reporting for the nine months ended September 30 was as follows:

(Millions of dollars) 2023	External Revenues		Profit before income taxes		Interest Expense		Depreciation on equipment leased to others		Provision for credit losses		Assets at September 30, 2023		Capital expenditures
North America	$	1,313	$	447	$	331	$	380	$	17	$	15,928	$	789
EAME	274		79		72		43		3		4,867		50
Asia/Pacific	213		86		78		4		(3)		3,265		2
Latin America	264		81		132		9		(2)		2,579		13
Mining	253		76		56		94		(2)		2,880		168
Power	43		3		19		2		9		644		—
Total Segments	2,360		772		688		532		22		30,163		1,022
Unallocated	58		(378)		279		—		1		2,255		7
Timing	(11)		1		—		—		—		19		—
Methodology	—		184		(225)		—		—		235		—
Inter-segment Eliminations (1)	—		—		—		—		—		(208)		—
Total	$	2,407	$	579	$	742	$	532	$	23	$	32,464	$	1,029
2022	External Revenues		Profit before income taxes		Interest Expense		Depreciation on equipment leased to others		Provision for credit losses		Assets at December 31, 2022		Capital expenditures
North America	$	1,112	$	411	$	181	$	381	$	11	$	15,229	$	652
EAME	207		5		45		41		49		5,067		101
Asia/Pacific	216		104		55		4		5		3,921		6
Latin America	204		65		98		7		(3)		2,636		21
Mining	218		66		29		109		(14)		2,700		83
Power	41		35		10		2		(14)		704		—
Total Segments	1,998		686		418		544		34		30,257		863
Unallocated	21		(222)		138		—		—		1,628		6
Timing	(9)		3		—		—		—		18		—
Methodology	—		113		(179)		—		—		278		—
Inter-segment Eliminations (1)	—		—		—		—		—		(224)		—
Total	$	2,010	$	580	$	377	$	544	$	34	$	31,957	$	869

 (1) Elimination is primarily related to intercompany loans

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 and beneficiaries and are generally secured by customer assets.

No significant loss has been experienced or is anticipated under any of these guarantees. At September 30, 2023 and December 31, 2022, 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 $19 million and $26 million at September 30, 2023 and December 31, 2022, respectively.

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We provide guarantees to purchase certain loans of Caterpillar dealers from a SPC that qualifies as a VIE. 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 receive a fee for providing this guarantee. 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 September 30, 2023 and December 31, 2022, the SPC’s assets of $1.54 billion and $971 million, 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 $1.54 billion and $970 million, 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. 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 Measurements

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.

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.

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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 $157 million and $218 million as of September 30, 2023 and December 31, 2022, respectively.

See Note 4 for additional information.

Loans measured at fair value

Certain loans are subject to measurement at fair value on a nonrecurring basis and are classified as Level 3 measurements. A loan is measured at fair value when management determines that collection of contractual amounts due is not probable and the loan is individually evaluated. In these cases, an allowance for credit losses may be established based either on the present value of expected future cash flows discounted at the receivables’ effective interest rate, the fair value of the collateral for collateral-dependent receivables or the observable market price of the receivable. In determining collateral value, we estimate the current fair market value of the collateral less selling costs. We had loans carried at fair value of $57 million and $68 million as of September 30, 2023 and December 31, 2022, respectively.

B.Fair Values of Financial Instruments

Cash and cash equivalents, restricted cash and cash equivalents (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.

Financial instruments not carried at fair value were as follows:

(Millions of dollars)	September 30, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Levels	Reference
Assets
Finance receivables, net (excluding finance leases(1))	$	20,345	$	19,773	$	19,085	$	18,448	3	Note 3
Liabilities
Long-term debt	$	23,408	$	22,806	$	21,418	$	20,686	2

(1) Represents finance leases and failed sale leasebacks of $6.86 billion and $7.36 billion as of September 30, 2023 and December 31, 2022, respectively.

9.Income Taxes 

The provision for income taxes reflected an estimated annual tax rate of 26 percent for the third quarter of 2023 compared with 27 percent in the third quarter of 2022. In addition, a discrete tax expense of $27 million was recorded in the third quarter of 2023 for the repatriation of non-U.S. earnings and the change in the reinvestment position of a non-U.S. subsidiary.

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

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited financial statements and related notes included elsewhere in this report and our discussion of significant risks to the company’s business under Part I, Item 1A. Risk Factors of the 2022 Form 10-K.

OVERVIEW

We reported third-quarter 2023 revenues of $846 million, an increase of $156 million, or 23 percent, compared with $690 million in the third quarter of 2022. The increase in revenues was primarily due to a $118 million favorable impact from higher average financing rates. Third-quarter 2023 profit was $98 million, a decrease of $33 million, or 25 percent, compared with $131 million in the third quarter of 2022.

Third-quarter 2023 profit before income taxes was $170 million, a decrease of $18 million, or 10 percent, compared with $188 million in the third quarter of 2022. The decrease was mainly due to a $51 million unfavorable impact from a higher provision for credit losses mostly driven by the absence of prior year reserve releases, partially offset by a $24 million favorable impact from mark-to-market adjustments on derivative contracts.

The provision for income taxes reflected an estimated annual tax rate of 26 percent for the third quarter of 2023 compared with 27 percent in the third quarter of 2022. In addition, a discrete tax expense of $27 million was recorded in the third quarter of 2023 for the repatriation of non-U.S. earnings and the change in the reinvestment position of a non-U.S. subsidiary.

During the third quarter of 2023, retail new business volume was $2.89 billion, an increase of $169 million, or 6 percent, compared with $2.73 billion in the third quarter of 2022. The increase was primarily driven by higher volume in North America.

At the end of the third quarter of 2023, past dues were 1.96 percent, compared with 2.00 percent at the end of the third quarter of 2022. Write-offs, net of recoveries, were $9 million for the third quarter of 2023, compared with $13 million for the third quarter of 2022. As of September 30, 2023, the allowance for credit losses totaled $340 million, or 1.23 percent of finance receivables, compared with $320 million, or 1.15 percent of finance receivables at June 30, 2023. The allowance for credit losses at year-end 2022 was $346 million, or 1.29 percent of finance receivables.

Global Business Conditions

Caterpillar continues to monitor a variety of external factors around the world, such as supply chain disruptions, inflationary cost and labor pressures. 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.

We continue to closely monitor the events in Russia and Ukraine and have evaluated our exposure in these countries.

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THREE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED WITH THREE MONTHS ENDED SEPTEMBER 30, 2022

Consolidated Total Revenues

The chart above graphically illustrates reasons for the change in consolidated total revenues between third quarter 2022 (at left) and third quarter 2023 (at right). Items favorably impacting total revenues appear as upward stair steps with corresponding dollar amounts above each bar, while items negatively impacting total revenues appear as downward stair steps with dollar amounts reflected in parentheses above each bar. Management utilizes these charts internally to visually communicate results.

Retail revenue for the third quarter of 2023 was $378 million, an increase of $66 million from the same period in 2022. The increase was due to a $63 million favorable impact from higher interest rates on retail finance receivables and a $3 million favorable impact from higher average earning assets. For the quarter ended September 30, 2023, retail average earning assets were $22.26 billion, an increase of $210 million from the same period in 2022. The annualized average yield was 6.80 percent for the third quarter of 2023, compared with 5.65 percent for the third quarter of 2022.

Operating lease revenue for the third quarter of 2023 was $232 million, an increase of $10 million from the same period in 2022. The increase was primarily due to a $5 million favorable impact from higher average earning assets and a $5 million favorable impact from higher rental rates on operating leases.

Wholesale revenue for the third quarter of 2023 was $184 million, an increase of $67 million from the same period in 2022. The increase was due to a $43 million favorable impact from higher interest rates on wholesale finance receivables and a $24 million favorable impact from higher average earning assets. For the quarter ended September 30, 2023, wholesale average earning assets were $5.42 billion, an increase of $1.05 billion from the same period in 2022. The annualized average yield was 13.56 percent for the third quarter of 2023, compared with 10.63 percent for the third quarter of 2022.

Other revenue, net items were as follows:

(Millions of dollars)	Three Months Ended September 30,
	2023		2022		Change
Net gain on returned or repossessed equipment	$	23	$	16	$	7
Finance receivable and operating lease fees (including late charges)	15		14		1
Interest income on Notes receivable from Caterpillar	6		5		1
Miscellaneous other revenue, net	8		4		4
Total Other revenue, net	$	52	$	39	$	13

There was a $4 million favorable impact from currency translation on revenues in the third quarter of 2023. 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 and each of the items included in the above analysis.

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Consolidated Profit Before Income Taxes

(1) Analysis excludes $4 million and $3 million in offsetting revenues and expenses for property taxes on operating leases for the third quarter of 2023 and 2022, respectively.

The chart above graphically illustrates reasons for the change in consolidated profit before income taxes between third quarter 2022 (at left) and third quarter 2023 (at right). Items favorably impacting profit before income taxes appear as upward stair steps with corresponding dollar amounts above each bar, while items negatively impacting profit before income taxes appear as downward stair steps with dollar amounts reflected in parentheses above each bar. Management utilizes these charts internally to visually communicate results.

Third-quarter 2023 profit before income taxes was $170 million, a decrease of $18 million, or 10 percent, compared with $188 million for the third quarter of 2022. The decrease was mainly due to a $51 million unfavorable impact from a higher provision for credit losses mostly driven by the absence of prior year reserve releases, partially offset by a $24 million favorable impact from mark-to-market adjustments on derivative contracts.

There was a $4 million favorable impact from currency translation on profit before income taxes in the third quarter of 2023. 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 and each of the items included in the above analysis.

Provision for Income Taxes

The provision for income taxes reflected an estimated annual tax rate of 26 percent for the third quarter of 2023 compared with 27 percent in the third quarter of 2022. In addition, a discrete tax expense of $27 million was recorded in the third quarter of 2023 for the repatriation of non-U.S. earnings and the change in the reinvestment position of a non-U.S. subsidiary.

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UNAUDITED

NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED WITH NINE MONTHS ENDED SEPTEMBER 30, 2022

Consolidated Total Revenues

The chart above graphically illustrates reasons for the change in consolidated total revenues between September YTD 2022 (at left) and September YTD 2023 (at right). Items favorably impacting total revenues appear as upward stair steps with corresponding dollar amounts above each bar, while items negatively impacting total revenues appear as downward stair steps with dollar amounts reflected in parentheses above each bar. Management utilizes these charts internally to visually communicate results.

Retail revenue for the first nine months of 2023 was $1.07 billion, an increase of $169 million from the same period in 2022. The increase was due to a $183 million favorable impact from higher interest rates on retail finance receivables, partially offset by a $14 million unfavorable impact from lower average earning assets. For the nine months ended September 30, 2023, retail average earning assets were $21.97 billion, a decrease of $355 million from the same period in 2022. The annualized average yield was 6.51 percent for the first nine months of 2023, compared with 5.39 percent for the same period in 2022.

Operating lease revenue for the first nine months of 2023 was $672 million, an increase of $1 million from the same period in 2022. The increase was primarily due to a $16 million favorable impact from higher rental rates on operating leases, partially offset by a $15 million unfavorable impact from lower average earning assets.

Wholesale revenue for the first nine months of 2023 was $508 million, an increase of $208 million from the same period in 2022. The increase was due to a $158 million favorable impact from higher interest rates on wholesale finance receivables and a $50 million favorable impact from higher average earning assets. For the nine months ended September 30, 2023, wholesale average earning assets were $5.18 billion, an increase of $743 million from the same period in 2022. The annualized average yield was 13.07 percent for the first nine months of 2023, compared with 9.00 percent for the same period in 2022.

Other revenue, net items were as follows:

(Millions of dollars)	Nine Months Ended September 30,
	2023		2022		Change
Net gain on returned or repossessed equipment	$	72	$	67	$	5
Finance receivable and operating lease fees (including late charges)	46		44		2
Interest income on Notes receivable from Caterpillar	16		13		3
Miscellaneous other revenue, net	21		12		9
Total Other revenue, net	$	155	$	136	$	19

There was a $20 million unfavorable impact from currency translation on revenues in the first nine months of 2023. 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 and each of the items included in the above analysis.

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UNAUDITED

Consolidated Profit Before Income Taxes

(1) Analysis excludes $11 million in offsetting revenues and expenses for property taxes on operating leases for both September YTD 2023 and 2022.

The chart above graphically illustrates reasons for the change in consolidated profit before income taxes between September YTD 2022 (at left) and September YTD 2023 (at right). Items favorably impacting profit before income taxes appear as upward stair steps with corresponding dollar amounts above each bar, while items negatively impacting profit before income taxes appear as downward stair steps with dollar amounts reflected in parentheses above each bar. Management utilizes these charts internally to visually communicate results.

Profit before income taxes was $579 million for the first nine months of 2023, a decrease of $1 million, or less than 1 percent, compared with $580 million for the same period in 2022 mainly driven by a $44 million increase in net yield on average earning assets offset by a $37 million increase in general, operating and administrative expenses.

There was a $6 million unfavorable impact from currency translation on profit before income taxes in the first nine months of 2023. 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 and each of the items included in the above analysis.

Provision for Income Taxes

The provision for income taxes reflected an estimated annual tax rate of 26 percent for the first nine months of 2023 compared with 27 percent in the first nine months of 2022. In addition, a discrete tax expense of $27 million was recorded in the third quarter of 2023 for the repatriation of non-U.S. earnings and the change in the reinvestment position of a non-U.S. subsidiary.

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UNAUDITED

Finance Receivables and Equipment on Operating Leases

New Business Volume

(Millions of dollars)	Nine Months Ended September 30,
	2023		2022		Change
New retail financing	$	7,475	$	7,721	$	(246)
New operating lease activity	1,035		878		157
New wholesale financing	41,326		34,773		6,553
Total	$	49,836	$	43,372	$	6,464

New retail financing decreased due to lower volume across all segments with the exception of increases in Mining and Power. New operating lease activity increased due to higher rentals of Caterpillar equipment in North America and Mining. New wholesale financing increased primarily due to higher 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)	September 30, 2023		December 31, 2022		Change
Finance receivables, net	$	27,202	$	26,441	$	761
Equipment on operating leases, net	3,033		2,911		122
Total portfolio	$	30,235	$	29,352	$	883
Retail loans, net	$	63	$	68	$	(5)
Operating leases	22		21		1
Retail leases, net	15		23		(8)
Total off-balance sheet managed assets	$	100	$	112	$	(12)
Total managed portfolio	$	30,335	$	29,464	$	871

Total Portfolio Metrics

At the end of the third quarter of 2023, past dues were 1.96 percent, compared with 2.00 percent at the end of the third quarter of 2022. Total non-performing finance receivables, which represent finance receivables currently on non-accrual status, were $235 million and $234 million at September 30, 2023 and December 31, 2022, respectively. Total non-performing finance receivables as a percentage of our finance receivables were less than 1 percent at September 30, 2023 and December 31, 2022.

Our allowance for credit losses as of September 30, 2023 was $340 million, or 1.23 percent of finance receivables, compared with $346 million, or 1.29 percent, as of December 31, 2022. 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 receivable portfolio as of September 30, 2023.

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UNAUDITED

CAPITAL RESOURCES AND LIQUIDITY

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 third quarter of 2023, we experienced favorable liquidity conditions. We ended the third quarter of 2023 with $561 million of cash, a decrease of $307 million from year-end 2022. Our cash balances are held in numerous locations throughout the world with approximately $481 million held by our non-U.S. subsidiaries, including $173 million in Russia which is currently subject to local government restrictions that substantially limit transfer outside of the country. 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 September 30, 2023 were $27.65 billion, an increase of $254 million from December 31, 2022. Outstanding borrowings were as follows:

(Millions of dollars)	September 30, 2023		December 31, 2022
Medium-term notes, net	$	22,613	$	20,672
Commercial paper, net of unamortized discount	3,738		5,455
Bank borrowings and other – long-term	795		746
Bank borrowings and other – short-term	243		234
Variable denomination floating rate demand notes	237		265
Notes payable to Caterpillar	23		23
Total outstanding borrowings	$	27,649	$	27,395

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 $6.06 billion and redeemed totaled $4.12 billion for the nine months ended September 30, 2023. Medium-term notes, net outstanding as of September 30, 2023 mature as follows: 

(Millions of dollars)
2023	$	1,512
2024	7,252
2025	6,632
2026	5,378
2027	1,947
Thereafter	1
Fair value adjustments	(109)
Total	$	22,613

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UNAUDITED

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. As of September 30, 2023, there was $3.74 billion outstanding in commercial paper.

Revolving credit facilities

As of September 30, 2023, 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 September 30, 2023 was $7.75 billion. Information on our Credit Facility is as follows:

•In August 2023, we entered into a new 364-day facility. The 364-day facility of $3.15 billion (of which $2.33 billion is available to us) expires in August 2024.

•In August 2023, we amended and restated the three-year facility (as amended and restated, "the three-year facility"). The three-year facility of $2.73 billion (of which $2.01 billion is available to us) expires in August 2026.

•In August 2023, we amended and restated the five-year facility (as amended and restated, "the five-year facility"). The five-year facility of $4.62 billion (of which $3.41 billion is available to us) expires in August 2028.

At September 30, 2023, Caterpillar’s consolidated net worth was $20.55 billion, which was above the $9.00 billion required under the Credit Facility. The consolidated net worth is defined in the Credit Facility as the consolidated shareholders’ equity including preferred stock but excluding the pension and other postretirement benefits balance within Accumulated other comprehensive income (loss).

At September 30, 2023, our covenant interest coverage ratio was 1.78 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 September 30, 2023, our six-month covenant leverage ratio was 6.80 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 September 30, 2023, there were no borrowings under the Credit Facility.

Bank borrowings

Available credit lines with banks as of September 30, 2023 totaled $3.50 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 September 30, 2023, we had $1.04 billion outstanding against these credit lines and 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. As of September 30, 2023, there were $237 million of variable denomination floating rate demand notes outstanding. 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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UNAUDITED

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 $2.12 billion from us. The 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 ten years. We had notes payable of $23 million and notes receivable of $549 million outstanding under these agreements as of September 30, 2023.

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

Operating cash flow was $671 million in the first nine months of 2023, compared with $1.02 billion for the same period in 2022. Net cash used for investing activities was $1.03 billion in the first nine months of 2023, compared with net cash provided of $44 million for the same period in 2022. The change was primarily due to portfolio related activity. Net cash provided by financing activities was $123 million in the first nine months of 2023, compared with net cash used of $872 million for the same period in 2022. The change was primarily due to higher portfolio funding requirements.

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 2022 Form 10-K. There have been no significant changes to our critical accounting estimates since our 2022 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, 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, 2022, as such factors may be updated from time to time in Cat Financial's periodic filings with the Securities and Exchange Commission.

36

UNAUDITED

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 third quarter of 2023 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, 2022.

37

UNAUDITED

ITEM 6. EXHIBITS

Exhibit No.	Description of Exhibit
10.1	Credit Agreement (2023 364-Day Facility), dated August 31, 2023, among Caterpillar Inc., Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company and Caterpillar Finance Kabushiki Kaisha, certain financial institutions named therein, Citibank, N.A., as agent, Citibank Europe PLC, UK Branch, as Local Currency Agent, MUFG Bank, Ltd. as Japan Local Currency Agent and the certain Joint Lead Arrangers and Joint Bookrunners named therein (incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K filed on September 1, 2023)
10.2	Local Currency Addendum, dated August 31, 2023, to the Credit Agreement (2023 364-Day Facility) (incorporated by reference from Exhibit 10.2 to the Company's Current Report on Form 8-K filed September 1, 2023)
10.3	Japan Local Currency Addendum, dated August 31, 2023, to the Credit Agreement (2023 364-Day Facility) (incorporated by reference from Exhibit 10.3 to the Company's Current Report on Form 8-K filed September 1, 2023)
10.4	Amendment No. 1, dated August 31, 2023, to the Third Amended and Restated Credit Agreement (Three-Year Facility), dated September 1, 2022, among Caterpillar Inc., Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company and Caterpillar Finance Kabushiki Kaisha, certain financial institutions named therein and Citibank, N.A., as agent (incorporated by reference from Exhibit 10.4 to the Company's Current Report on Form 8-K filed September 1, 2023)
10.5	Amendment No. 1, dated August 31, 2023, to the Third Amended and Restated Credit Agreement (Five Facility), dated September 1, 2022, among Caterpillar Inc., Caterpillar Financial Services Corporation, Caterpillar International Finance Designated Activity Company and Caterpillar Finance Kabushiki Kaisha, certain financial institutions named therein and Citibank, N.A., as agent (incorporated by reference from Exhibit 10.5 to the Company's Current Report on Form 8-K filed September 1, 2023)
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.

38

UNAUDITED

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:	November 1, 2023	/s/ David T. Walton
		David T. Walton, President, Director and Chief Executive Officer

Date:	November 1, 2023	/s/ Kristen R. Covey
		Kristen R. Covey, Executive Vice President and Chief Financial Officer

Date:	November 1, 2023	/s/ James M. Rooney
		James M. Rooney, Secretary

39

EX-31.1

EXHIBIT 31.1

SECTION 302 CERTIFICATION

I, David T. Walton, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Caterpillar Financial Services Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 1, 2023	/s/ David T. Walton
		David T. Walton, President, Director and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

SECTION 302 CERTIFICATION

I, Kristen R. Covey, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Caterpillar Financial Services Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 1, 2023	/s/ Kristen R. Covey
		Kristen R. Covey, Executive Vice President and Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Caterpillar Financial Services Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	November 1, 2023	/s/ David T. Walton
		David T. Walton
		President, Director and Chief Executive Officer
Date:	November 1, 2023	/s/ Kristen R. Covey
		Kristen R. Covey
		Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2023	Nov. 01, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-11241
Entity Registrant Name	CATERPILLAR FINANCIAL SERVICES CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	37-1105865
Entity Address, Address Line One	2120 West End Ave.
Entity Address, City or Town	Nashville
Entity Address, State or Province	TN
Entity Address, Postal Zip Code	37203-0001
City Area Code	615
Local Phone Number	341-1000
Title of 12(b) Security	Medium-Term Notes, Series H,3.300% Notes Due 2024
Trading Symbol	CAT/24
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		1
Entity Central Index Key	0000764764
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Consolidated Statements of Profit - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues:
Retail finance	$ 378	$ 312	$ 1,072	$ 903
Operating lease	232	222	672	671
Wholesale finance	184	117	508	300
Other, net	52	39	155	136
Total revenues	846	690	2,407	2,010
Expenses:
Interest	280	151	742	377
Depreciation on equipment leased to others	182	179	532	544
General, operating and administrative	153	136	434	397
Provision for credit losses	35	(16)	23	34
Other	7	7	23	20
Total expenses	657	457	1,754	1,372
Other income (expense)	(19)	(45)	(74)	(58)
Profit before income taxes	170	188	579	580
Provision for income taxes	72	55	177	157
Profit of consolidated companies	98	133	402	423
Less: Profit attributable to noncontrolling interests	0	2	5	6
Profit attributable to Caterpillar Financial Services Corporation	$ 98	$ 131	$ 397	$ 417

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Profit of consolidated companies	$ 98	$ 133	$ 402	$ 423
Other comprehensive income (loss), net of tax (Note 5):
Foreign currency translation	(102)	(296)	(99)	(543)
Derivative financial instruments	(4)	(5)	(4)	18
Total Other comprehensive income (loss), net of tax	(106)	(301)	(103)	(525)
Comprehensive income (loss)	(8)	(168)	299	(102)
Less: Comprehensive income (loss) attributable to noncontrolling interests	0	(6)	(1)	(9)
Comprehensive income (loss) attributable to Caterpillar Financial Services Corporation	$ (8)	$ (162)	$ 300	$ (93)

XML

Consolidated Statements of Financial Position - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Assets:
Cash and cash equivalents	$ 561	$ 868
Finance receivables, net of Allowance for credit losses of $340 and $346	27,202	26,441
Equipment on operating leases, net	3,033	2,911
Total assets	32,464	31,957
Liabilities and shareholder’s equity:
Payable to dealers and others	152	163
Payable to Caterpillar - borrowings and other	126	124
Accrued expenses	451	380
Short-term borrowings	4,218	5,954
Current maturities of long-term debt	7,619	5,202
Long-term debt	15,789	16,216
Other liabilities	1,002	955
Total liabilities	29,357	28,994
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	3,431	3,109
Accumulated other comprehensive income (loss)	(1,144)	(1,047)
Noncontrolling interests	73	154
Total shareholder’s equity	3,107	2,963
Total liabilities and shareholder’s equity	32,464	31,957
Related Party
Assets:
Other assets	549	482
Nonrelated Party
Assets:
Other assets	$ 1,119	$ 1,255

XML

Consolidated Statements of Financial Position (Parentheticals) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Allowance for credit losses	$ 340	$ 346
Shareholder's Equity:
Common stock - par value	$ 1	$ 1
Common stock - authorized	2,000	2,000
Common stock - issued	1	1
Common stock - outstanding	1	1

XML

Consolidated Statements of Changes in Shareholder's Equity - USD ($) $ in Millions	Total	Common stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)	Noncontrolling interests
Balance at Dec. 31, 2021	$ 2,981	$ 745	$ 2	$ 2,849	$ (774)	$ 159
Increase (Decrease) in Shareholder's Equity [Roll Forward]
Profit of consolidated companies	423			417		6
Dividend paid to Caterpillar	0
Foreign currency translation, net of tax	(543)				(528)	(15)
Derivative financial instruments, net of tax	18				18
Balance at Sep. 30, 2022	2,879	745	2	3,266	(1,284)	150
Balance at Jun. 30, 2022	3,047	745	2	3,135	(991)	156
Increase (Decrease) in Shareholder's Equity [Roll Forward]
Profit of consolidated companies	133			131		2
Foreign currency translation, net of tax	(296)				(288)	(8)
Derivative financial instruments, net of tax	(5)				(5)
Balance at Sep. 30, 2022	2,879	745	2	3,266	(1,284)	150
Balance at Dec. 31, 2022	2,963	745	2	3,109	(1,047)	154
Increase (Decrease) in Shareholder's Equity [Roll Forward]
Profit of consolidated companies	402			397		5
Dividend paid to Caterpillar	(155)			(75)		80
Foreign currency translation, net of tax	(99)				(93)	(6)
Derivative financial instruments, net of tax	(4)				(4)
Balance at Sep. 30, 2023	3,107	745	2	3,431	(1,144)	73
Balance at Jun. 30, 2023	3,195	745	2	3,333	(1,038)	153
Increase (Decrease) in Shareholder's Equity [Roll Forward]
Profit of consolidated companies	98			98
Dividend paid to Caterpillar	(80)					80
Foreign currency translation, net of tax	(102)				(102)
Derivative financial instruments, net of tax	(4)				(4)
Balance at Sep. 30, 2023	$ 3,107	$ 745	$ 2	$ 3,431	$ (1,144)	$ 73

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Profit of consolidated companies	$ 402	$ 423
Adjustments for non-cash items:
Depreciation and amortization	542	554
Accretion of Caterpillar purchased receivable revenue	(460)	(284)
Provision for credit losses	23	34
Other, net	(49)	116
Changes in assets and liabilities:
Other assets	102	41
Payable to dealers and others	31	62
Accrued expenses	35	17
Other payables with Caterpillar	2	(3)
Other liabilities	43	61
Net cash provided by operating activities	671	1,021
Cash flows from investing activities:
Expenditures for equipment on operating leases	(1,015)	(860)
Capital expenditures - excluding equipment on operating leases	(14)	(9)
Proceeds from disposals of equipment	515	607
Additions to finance receivables	(12,484)	(10,578)
Collections of finance receivables	11,561	10,333
Net changes in Caterpillar purchased receivables	429	678
Proceeds from sales of receivables	40	50
Net change in variable lending to Caterpillar	(98)	(3)
Additions to other notes receivable from Caterpillar	(8)	(139)
Collections of other notes receivable from Caterpillar	38	34
Settlements of undesignated derivatives	8	(69)
Net cash provided by (used for) investing activities	(1,028)	44
Cash flows from financing activities:
Net change in variable lending from Caterpillar	1	0
Proceeds from debt issued (original maturities greater than three months)	6,360	5,570
Payments on debt issued (original maturities greater than three months)	(4,360)	(5,269)
Short-term borrowings, net (original maturities three months or less)	(1,723)	(1,173)
Dividend paid to Caterpillar	(155)	0
Net cash provided by (used for) financing activities	123	(872)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(65)	(44)
Increase (decrease) in cash, cash equivalents and restricted cash	(299)	149
Cash, cash equivalents and restricted cash at beginning of year	870	614
Cash, cash equivalents and restricted cash at end of period	$ 571	$ 763

XML

Consolidated Statements of Cash Flows (Parentheticals) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Statement of Cash Flows [Abstract]
Restricted cash and cash equivalents	$ 10	$ 2

XML

Basis of Presentation

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

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 and nine months ended September 30, 2023 and 2022, (b) the consolidated comprehensive income for the three and nine months ended September 30, 2023 and 2022, (c) the consolidated financial position at September 30, 2023 and December 31, 2022, (d) the consolidated changes in shareholder’s equity for the three and nine months ended September 30, 2023 and 2022 and (e) the consolidated cash flows for the nine months ended September 30, 2023 and 2022. 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, 2022 (2022 Form 10-K). The December 31, 2022 financial position data included herein was derived from the audited consolidated financial statements included in the 2022 Form 10-K but does not include all disclosures required by generally accepted accounting principles.

We consolidate all variable interest entities (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.

In the current period we identified a misclassification between Noncontrolling interests and Retained earnings related to certain dividends we paid to Caterpillar in prior periods. We have determined that the impact was not material to any previously filed financial statements and have revised the reported balances to correct for the misclassification. The impact of the revisions was a $52 million increase in Retained earnings and offsetting $52 million decrease in Noncontrolling interests as of December 31, 2021 and 2022, March 31, 2023 and June 30, 2023 and a $25 million increase in Retained earnings and offsetting $25 million decrease in Noncontrolling interests as of December 31, 2020. There was no impact on total equity or any other line items within the financial statements.

XML

New Accounting Pronouncements

9 Months Ended

Sep. 30, 2023

Accounting Standards Update and Change in Accounting Principle [Abstract]

New Accounting Pronouncements

New Accounting Pronouncements

A.Adoption of New Accounting Standards

We consider the applicability and impact of all Accounting Standards Updates (ASUs). Effective January 1, 2023, we adopted ASU 2022-02, Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures prospectively. The ASU eliminates accounting guidance for troubled debt restructurings (TDRs), enhances disclosures for certain receivable modifications related to borrowers experiencing financial difficulty, and requires disclosure of current period gross write-offs by year of origination. See Note 3 for additional information.

B.Accounting Standards Issued But Not Yet Adopted

We consider the applicability and impact of all ASUs. We have assessed the ASUs and determined that they either were not applicable or were not expected to have a material impact on our financial statements.

XML

Finance Receivables

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Finance Receivables

Finance Receivables

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

(Millions of dollars)	September 30, 2023		December 31, 2022
Retail loans, net(1)	$	15,907	$	14,973
Retail leases, net	6,432		6,965
Caterpillar purchased receivables, net	4,381		4,297
Wholesale loans, net(1)	817		545
Wholesale leases, net	5		7
Total finance receivables	27,542		26,787
Less: Allowance for credit losses	(340)		(346)
Total finance receivables, net	$	27,202	$	26,441

(1) Includes failed sale leasebacks.

Finance leases

Revenues from finance leases were $106 million and $105 million for the three months ended September 30, 2023 and 2022, respectively, and $314 million and $326 million for the nine months ended September 30, 2023 and 2022, respectively, and are included in retail and wholesale finance revenue in the Consolidated Statements of Profit. The residual values for finance leases are included in Finance receivables, net in the Consolidated Statements of Financial Position. Residual value adjustments are recognized through a reduction of finance revenue over the remaining lease term.

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 receivable portfolio was approximately 51 months with an average remaining term of approximately 27 months as of September 30, 2023.

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

We estimate the allowance for credit losses related to our customer finance receivables based on loss forecast models utilizing probabilities of default and our estimated loss given default based on past loss experience adjusted for current conditions and reasonable and supportable forecasts capturing country and industry-specific economic factors.

During the three and nine months ended September 30, 2023, our forecasts reflected a continuation of the trend of relatively low unemployment rates and delinquencies within our portfolio. However, industry delinquencies show an increasing trend as persistently high inflation rates and consequent central bank actions are weakening global economic growth. 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. Our 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, we provide a variety of secured and unsecured loans to Caterpillar dealers.

We estimate the allowance for credit losses for dealer finance receivables based on historical loss rates with consideration of current economic conditions and reasonable and supportable forecasts.

In general, our Dealer portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to our close working relationships with the dealers and their financial strength. Therefore, we made no adjustments to historical loss rates during the three and nine months ended September 30, 2023.

Caterpillar Purchased Receivables

We purchase receivables from Caterpillar, primarily related to the sale of equipment and parts to dealers. Caterpillar purchased receivables are non-interest-bearing short-term trade receivables that are purchased at a discount.

We estimate the allowance for credit losses for Caterpillar purchased receivables based on historical loss rates with consideration of current economic conditions and reasonable and supportable forecasts.

In general, our Caterpillar Purchased Receivables portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to the short-term maturities of the receivables, our close working relationships with the dealers and their financial strength. Therefore, we made no adjustments to historical loss rates during the three and nine months ended September 30, 2023.

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.

•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.

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

(Millions of dollars)	Three Months Ended September 30, 2023								Three Months Ended September 30, 2022
	Customer		Dealer		Caterpillar Purchased Receivables		Total		Customer		Dealer		Caterpillar Purchased Receivables		Total
Beginning Balance	$	265	$	50	$	5	$	320	$	290	$	82	$	4	$	376
Write-offs	(22)		—		—		(22)		(30)		—		—		(30)
Recoveries	13		—		—		13		17		—		—		17
Provision for credit losses(1)	31		1		—		32		(2)		(17)		—		(19)
Other	(3)		—		—		(3)		(5)		—		—		(5)
Ending Balance	$	284	$	51	$	5	$	340	$	270	$	65	$	4	$	339
	Nine Months Ended September 30, 2023								Nine Months Ended September 30, 2022
	Customer		Dealer		Caterpillar Purchased Receivables		Total		Customer		Dealer		Caterpillar Purchased Receivables		Total
Beginning Balance	$	277	$	65	$	4	$	346	$	251	$	82	$	4	$	337
Write-offs	(63)		—		—		(63)		(68)		—		—		(68)
Recoveries	36		—		—		36		47		—		—		47
Provision for credit losses(1)	35		(14)		1		22		46		(17)		—		29
Other	(1)		—		—		(1)		(6)		—		—		(6)
Ending Balance	$	284	$	51	$	5	$	340	$	270	$	65	$	4	$	339
Finance Receivables	$	20,279	$	2,882	$	4,381	$	27,542	$	19,927	$	2,222	$	3,962	$	26,111

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

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

(Millions of Dollars)	Three Months Ended September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total
North America	$	1	$	2	$	2	$	1	$	1	$	—	$	2	$	9
EAME	—		1		1		1		—		—		—		3
Asia/Pacific	—		2		3		1		—		—		—		6
Latin America	—		1		1		1		—		1		—		4
Total	$	1	$	6	$	7	$	4	$	1	$	1	$	2	$	22
	Nine Months Ended September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total
North America	$	1	$	7	$	7	$	2	$	2	$	1	$	9	$	29
EAME	—		2		3		3		—		1		—		9
Asia/Pacific	—		3		6		4		1		—		—		14
Latin America	—		3		3		3		1		1		—		11
Total	$	1	$	15	$	19	$	12	$	4	$	3	$	9	$	63

Credit quality of finance receivables

At origination, we evaluate credit risk based on a variety of credit quality factors including prior payment experience, customer financial information, credit ratings, loan-to-value ratios, probabilities of default, industry trends, macroeconomic factors and other internal metrics. On an ongoing basis, we monitor credit quality based on past-due status as there is a meaningful correlation between the past-due status of customers and the risk of loss. In determining past-due status, we consider the entire finance receivable past due when any installment is over 30 days past due.

Customer

The tables below summarize the aging category of our amortized cost of finance receivables in the Customer portfolio segment by origination year.

(Millions of dollars)	September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,134	$	2,940	$	2,310	$	919	$	310	$	65	$	304	$	9,982
31-60 days past due	18		31		23		15		6		2		3		98
61-90 days past due	6		10		7		4		1		—		2		30
91+ days past due	5		19		18		10		5		3		2		62
EAME
Current	914		962		649		297		144		124		—		3,090
31-60 days past due	11		8		11		3		1		—		—		34
61-90 days past due	3		6		3		3		2		—		—		17
91+ days past due	4		16		18		9		3		1		—		51
Asia/Pacific
Current	832		760		440		150		47		12		42		2,283
31-60 days past due	3		13		10		4		1		—		—		31
61-90 days past due	1		3		3		4		1		—		—		12
91+ days past due	—		4		5		3		—		—		—		12
Mining
Current	836		740		436		148		111		50		49		2,370
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		1		—		—		2		—		3
91+ days past due	—		2		2		—		—		1		—		5
Latin America
Current	552		571		255		74		29		8		—		1,489
31-60 days past due	6		13		7		4		3		1		—		34
61-90 days past due	1		5		2		1		—		—		—		9
91+ days past due	1		15		9		8		8		20		—		61
Power
Current	46		71		70		86		45		122		162		602
31-60 days past due	—		—		—		—		—		1		—		1
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		3		—		3
Totals by Aging Category
Current	6,314		6,044		4,160		1,674		686		381		557		19,816
31-60 days past due	38		65		51		26		11		4		3		198
61-90 days past due	11		24		16		12		4		2		2		71
91+ days past due	10		56		52		30		16		28		2		194
Total	$	6,373	$	6,189	$	4,279	$	1,742	$	717	$	415	$	564	$	20,279

(Millions of dollars)	December 31, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,915	$	3,276	$	1,525	$	653	$	206	$	34	$	240	$	9,849
31-60 days past due	25		26		18		12		4		1		4		90
61-90 days past due	9		15		7		3		1		—		3		38
91+ days past due	11		16		12		6		4		3		4		56
EAME
Current	1,270		953		477		280		155		68		—		3,203
31-60 days past due	10		12		7		1		1		—		—		31
61-90 days past due	8		4		3		1		—		—		—		16
91+ days past due	6		25		16		4		1		1		—		53
Asia/Pacific
Current	1,174		805		393		124		37		5		40		2,578
31-60 days past due	10		12		8		1		1		—		—		32
61-90 days past due	2		5		4		2		—		—		—		13
91+ days past due	2		6		6		4		—		—		—		18
Mining
Current	875		627		227		193		94		108		80		2,204
31-60 days past due	—		1		—		—		—		—		—		1
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		1		—		1
Latin America
Current	770		400		150		69		26		20		—		1,435
31-60 days past due	7		8		4		2		—		1		—		22
61-90 days past due	2		5		1		1		—		—		—		9
91+ days past due	2		13		11		2		1		—		—		29
Power
Current	82		87		146		51		18		161		125		670
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		5		—		5
Totals by Aging Category
Current	8,086		6,148		2,918		1,370		536		396		485		19,939
31-60 days past due	52		59		37		16		6		2		4		176
61-90 days past due	21		29		15		7		1		—		3		76
91+ days past due	21		60		45		16		6		10		4		162
Total	$	8,180	$	6,296	$	3,015	$	1,409	$	549	$	408	$	496	$	20,353

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 September 30, 2023 and December 31, 2022, our total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $47 million and $62 million, respectively, that was 91+ days past due in Latin America, all of which originated in 2017.

Caterpillar Purchased Receivables

The tables below summarize the aging category of our amortized cost of finance receivables in the Caterpillar Purchased Receivables portfolio segment.

(Millions of dollars)	September 30, 2023
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables
North America	$	15	$	5	$	2	$	22	$	2,629	$	2,651
EAME	1		1		1		3		758		761
Asia/Pacific	8		—		1		9		565		574
Latin America	4		4		23		31		353		384
Power	2		1		1		4		7		11
Total	$	30	$	11	$	28	$	69	$	4,312	$	4,381

(Millions of dollars)	December 31, 2022
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables
North America	$	11	$	7	$	4	$	22	$	2,458	$	2,480
EAME	1		—		2		3		812		815
Asia/Pacific	6		2		2		10		555		565
Latin America	9		2		14		25		406		431
Power	1		—		—		1		5		6
Total	$	28	$	11	$	22	$	61	$	4,236	$	4,297

Non-accrual finance receivables

Recognition of income is suspended and the finance receivable is placed on non-accrual status when management determines that collection of future income is not probable. Contracts on non-accrual status are generally more than 120 days past due. Recognition is resumed and previously suspended income is recognized when collection is considered probable. Payments received while the finance receivable is on non-accrual status are applied to interest and principal in accordance with the contractual terms. Interest earned but uncollected prior to the receivable being placed on non-accrual status is written off through Provision for credit losses when, in the judgment of management, it is considered uncollectible.

In 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)	September 30, 2023						December 31, 2022
	Amortized Cost						Amortized Cost
	Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing		Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing
North America	$	54	$	—	$	12	$	52	$	4	$	11
EAME	44		—		9		43		—		10
Asia/Pacific	8		—		5		11		—		7
Mining	4		—		1		—		1		—
Latin America	69		—		—		45		—		—
Power	9		—		—		5		11		—
Total	$	188	$	—	$	27	$	156	$	16	$	28

There were $47 million and $62 million, respectively, in finance receivables in our Dealer portfolio segment on non-accrual status as of September 30, 2023 and December 31, 2022, all of which was in Latin America.

Modifications

We periodically modify the terms of our 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 we grant are for commercial reasons or for borrowers experiencing some form of short-term financial stress and may result in insignificant payment delays. We do not consider these borrowers to be experiencing financial difficulty. Modifications for borrowers we do consider to be experiencing financial difficulty typically result in payment deferrals and/or reduced payments for a period of four months or longer, term extension of six months or longer or a combination of both.

During the three and nine months ended September 30, 2023, 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 the Customer portfolio segment during the three and nine months ended September 30, 2023, was $13 million and $38 million, respectively. Total modifications with borrowers experiencing financial difficulty represented 0.05 percent and 0.14 percent of our finance receivable portfolio for the same periods, respectively.

For the three and nine months ended September 30, 2023, the financial effects of term extensions for borrowers experiencing financial difficulty added a weighted average of 8 and 17 months, respectively, to the terms of modified contracts. For the three and nine months ended September 30, 2023, the financial effects of payment delays for borrowers experiencing financial difficulty resulted in weighted average payment deferral and/or interest only periods of 6 and 7 months, respectively.

After we modify a finance receivable, we continue to track its performance under its most recent modified terms. As of September 30, 2023, all finance receivables modified with borrowers experiencing financial difficulty are current except for $3 million in EAME that was 31-60 days past due.

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.

Troubled debt restructurings

Prior to the adoption of ASU 2022-02, a modification constituted a TDR when the lender granted a concession it would not otherwise consider to a borrower experiencing financial difficulties. Concessions granted may have included extended contract maturities, inclusion of interest only periods, below market interest rates, payment deferrals and reduction of principal and/or accrued interest.

There were no finance receivables modified as TDRs during the three and nine months ended September 30, 2022 for the Dealer or Caterpillar Purchased Receivables portfolio segments. Finance receivables in the Customer portfolio segment modified as TDRs were as follows:

(Millions of dollars)	Three Months Ended September 30, 2022				Nine Months Ended September 30, 2022
	Pre-TDR Amortized Cost		Post-TDR Amortized Cost		Pre-TDR Amortized Cost		Post-TDR Amortized Cost
North America	$	3	$	3	$	4	$	4
EAME	—		—		1		1
Mining	15		15		15		15
Power	11		11		20		19
Total	$	29	$	29	$	40	$	39

During the three months ended September 30, 2022, there were no TDRs in the Customer portfolio segment with a payment default (defined as 91+ days past due) which had been modified within twelve months prior to the default date. During the nine months ended September 30, 2022, the Post-TDR amortized cost of TDRs in the Customer portfolio segment with a payment default which had been modified within twelve months prior to the default date was $5 million, all of which was in Mining.

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Derivative Financial Instruments and Risk Management

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Risk Management

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. The 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 financial derivative instruments.

All derivatives are recognized on the Consolidated Statements of Financial Position at their fair value. 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. 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, on 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 on the Consolidated Statements of Cash Flows. We include cash flows from undesignated derivative financial instruments in the investing category on 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 on the Consolidated Statements of Financial Position and linking cash flow hedges to specific forecasted transactions or variability of cash flow.

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.

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 receivable 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 receivable 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 original 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)	September 30, 2023				December 31, 2022
	Assets1		Liabilities2		Assets1		Liabilities2
Designated derivatives
Foreign exchange contracts	$	282	$	(61)	$	305	$	(44)
Interest rate contracts	52		(109)		87		(113)
	$	334	$	(170)	$	392	$	(157)
Undesignated derivatives
Foreign exchange contracts	$	28	$	(35)	$	25	$	(42)
	$	28	$	(35)	$	25	$	(42)

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

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

The total notional amount of our derivative instruments was $14.44 billion and $13.18 billion as of September 30, 2023 and December 31, 2022, 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.

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

(Millions of dollars)	Fair Value / Undesignated Hedges				Cash Flow Hedges
	Gains (Losses) Recognized1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI2
	Three Months Ended September 30,
	2023		2022		2023		2022		2023		2022
Foreign exchange contracts	$	22	$	16	$	76	$	276	$	70	$	303
Interest rate contracts	(20)		(5)		3		26		15		8
	$	2	$	11	$	79	$	302	$	85	$	311
	Nine Months Ended September 30,
	2023		2022		2023		2022		2023		2022
Foreign exchange contracts	$	21	$	(26)	$	59	$	570	$	38	$	656
Interest rate contracts	(53)		4		15		103		43		—
	$	(32)	$	(22)	$	74	$	673	$	81	$	656

(1) Foreign exchange contract gains (losses) are primarily from undesignated forward contracts and are included in Other income (expense). Interest rate contract gains (losses) are from designated fair value hedges and 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.

The following amounts were recorded in the Consolidated Statements of Financial Position related to cumulative basis adjustments for fair value hedges:

(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
	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Current maturities of long-term debt	$	249	$	—	$	(4)	$	—
Long-term debt	2,720		2,091		(105)		(112)
Total	$	2,969	$	2,091	$	(109)	$	(112)

As of September 30, 2023, $30 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 September 30, 2023 and December 31, 2022, no cash collateral was received or pledged under the master netting agreements.

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

(Millions of dollars)	September 30, 2023				December 31, 2022
	Assets		Liabilities		Assets		Liabilities
Gross amounts recognized	$	362	$	(205)	$	417	$	(199)
Financial instruments not offset	(122)		122		(108)		108
Net amount	$	240	$	(83)	$	309	$	(91)

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2023

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

We present Comprehensive income (loss) and its components in the Consolidated Statements of Comprehensive Income. Changes in Accumulated other comprehensive income (loss) included in the Consolidated Statements of Changes in Shareholder’s Equity consisted of the following:

(Millions of dollars)	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Foreign currency translation
Balance at beginning of period	$	(1,059)	$	(1,002)	$	(1,068)	$	(762)
Gains (losses) on foreign currency translation	(89)		(258)		(89)		(456)
Less: Tax provision/(benefit)	13		30		4		72
Net gains (losses) on foreign currency translation	(102)		(288)		(93)		(528)
Other comprehensive income (loss), net of tax	(102)		(288)		(93)		(528)
Balance at end of period	$	(1,161)	$	(1,290)	$	(1,161)	$	(1,290)
Derivative financial instruments
Balance at beginning of period	$	21	$	11	$	21	$	(12)
Gains (losses) deferred	79		302		74		673
Less: Tax provision/(benefit)	20		95		18		158
Net gains (losses) deferred	59		207		56		515
(Gains) losses reclassified to earnings	(85)		(311)		(81)		(656)
Less: Tax (provision)/benefit	(22)		(99)		(21)		(159)
Net (gains) losses reclassified to earnings	(63)		(212)		(60)		(497)
Other comprehensive income (loss), net of tax	(4)		(5)		(4)		18
Balance at end of period	$	17	$	6	$	17	$	6
Total Accumulated other comprehensive income (loss) at end of period	$	(1,144)	$	(1,284)	$	(1,144)	$	(1,284)

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Segment Information

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segment Information

Segment Information

A.     Basis for Segment Information

The Chief Operating Decision Maker (the CEO) allocates resources and manages performance for our six operating segments described as follows. 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, 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.

B.    Description of Segments

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 for 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

Cash, debt and other expenses are allocated to our segments based on their respective portfolios. The related Interest expense is calculated based on the amount of allocated debt and the rates associated with that debt. The performance of each segment is assessed based on a consistent leverage ratio. The Provision for credit losses is based on each segment’s respective finance receivable portfolio. Capital expenditures include expenditures for equipment on operating leases and other miscellaneous capital expenditures.

Reconciling items are created based on accounting differences between segment reporting and consolidated external reporting. For the reconciliation of Profit before income taxes, we have grouped the reconciling items as follows:

•Unallocated - This item is related to corporate requirements and strategies that are considered to be for the benefit of the entire organization. Also included are the consolidated results of the special-purpose corporation (SPC) (see Note 7 for additional information) and other miscellaneous items.

•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:

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

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

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

◦The net gain or loss from interest rate derivatives is excluded from segment reporting.

Supplemental segment data and reconciliations to consolidated external reporting for the three months ended September 30 was as follows:

(Millions of dollars) 2023	External Revenues		Profit before income taxes		Interest Expense		Depreciation on equipment leased to others		Provision for credit losses		Assets at September 30, 2023		Capital expenditures
North America	$	459	$	144	$	128	$	130	$	10	$	15,928	$	274
EAME	102		35		26		14		1		4,867		14
Asia/Pacific	70		19		32		2		1		3,265		—
Latin America	95		15		48		3		13		2,579		3
Mining	86		17		23		32		5		2,880		49
Power	15		(1)		7		1		4		644		—
Total Segments	827		229		264		182		34		30,163		340
Unallocated	23		(137)		108		—		1		2,255		1
Timing	(4)		1		—		—		—		19		—
Methodology	—		77		(92)		—		—		235		—
Inter-segment Eliminations (1)	—		—		—		—		—		(208)		—
Total	$	846	$	170	$	280	$	182	$	35	$	32,464	$	341
2022	External Revenues		Profit before income taxes		Interest Expense		Depreciation on equipment leased to others		Provision for credit losses		Assets at December 31, 2022		Capital expenditures
North America	$	383	$	150	$	69	$	126	$	(5)	$	15,229	$	205
EAME	72		—		27		13		7		5,067		45
Asia/Pacific	70		33		19		1		1		3,921		3
Latin America	75		31		37		3		(8)		2,636		3
Mining	72		21		11		35		(4)		2,700		36
Power	11		12		5		1		(7)		704		—
Total Segments	683		247		168		179		(16)		30,257		292
Unallocated	10		(80)		53		—		—		1,628		2
Timing	(3)		—		—		—		—		18		—
Methodology	—		21		(70)		—		—		278		—
Inter-segment Eliminations (1)	—		—		—		—		—		(224)		—
Total	$	690	$	188	$	151	$	179	$	(16)	$	31,957	$	294

 (1) Elimination is primarily related to intercompany loans

Supplemental segment data and reconciliations to consolidated external reporting for the nine months ended September 30 was as follows:

(Millions of dollars) 2023	External Revenues		Profit before income taxes		Interest Expense		Depreciation on equipment leased to others		Provision for credit losses		Assets at September 30, 2023		Capital expenditures
North America	$	1,313	$	447	$	331	$	380	$	17	$	15,928	$	789
EAME	274		79		72		43		3		4,867		50
Asia/Pacific	213		86		78		4		(3)		3,265		2
Latin America	264		81		132		9		(2)		2,579		13
Mining	253		76		56		94		(2)		2,880		168
Power	43		3		19		2		9		644		—
Total Segments	2,360		772		688		532		22		30,163		1,022
Unallocated	58		(378)		279		—		1		2,255		7
Timing	(11)		1		—		—		—		19		—
Methodology	—		184		(225)		—		—		235		—
Inter-segment Eliminations (1)	—		—		—		—		—		(208)		—
Total	$	2,407	$	579	$	742	$	532	$	23	$	32,464	$	1,029
2022	External Revenues		Profit before income taxes		Interest Expense		Depreciation on equipment leased to others		Provision for credit losses		Assets at December 31, 2022		Capital expenditures
North America	$	1,112	$	411	$	181	$	381	$	11	$	15,229	$	652
EAME	207		5		45		41		49		5,067		101
Asia/Pacific	216		104		55		4		5		3,921		6
Latin America	204		65		98		7		(3)		2,636		21
Mining	218		66		29		109		(14)		2,700		83
Power	41		35		10		2		(14)		704		—
Total Segments	1,998		686		418		544		34		30,257		863
Unallocated	21		(222)		138		—		—		1,628		6
Timing	(9)		3		—		—		—		18		—
Methodology	—		113		(179)		—		—		278		—
Inter-segment Eliminations (1)	—		—		—		—		—		(224)		—
Total	$	2,010	$	580	$	377	$	544	$	34	$	31,957	$	869

 (1) Elimination is primarily related to intercompany loans

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Commitments and Contingent Liabilities

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingent Liabilities

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 and beneficiaries and are generally secured by customer assets.

No significant loss has been experienced or is anticipated under any of these guarantees. At September 30, 2023 and December 31, 2022, 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 $19 million and $26 million at September 30, 2023 and December 31, 2022, respectively.

We provide guarantees to purchase certain loans of Caterpillar dealers from a SPC that qualifies as a VIE. 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 receive a fee for providing this guarantee. 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 September 30, 2023 and December 31, 2022, the SPC’s assets of $1.54 billion and $971 million, 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 $1.54 billion and $970 million, 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. 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.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value MeasurementsFair 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.

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 $157 million and $218 million as of September 30, 2023 and December 31, 2022, respectively.

See Note 4 for additional information.

Loans measured at fair value

Certain loans are subject to measurement at fair value on a nonrecurring basis and are classified as Level 3 measurements. A loan is measured at fair value when management determines that collection of contractual amounts due is not probable and the loan is individually evaluated. In these cases, an allowance for credit losses may be established based either on the present value of expected future cash flows discounted at the receivables’ effective interest rate, the fair value of the collateral for collateral-dependent receivables or the observable market price of the receivable. In determining collateral value, we estimate the current fair market value of the collateral less selling costs. We had loans carried at fair value of $57 million and $68 million as of September 30, 2023 and December 31, 2022, respectively.

Fair Values of Financial Instruments

Cash and cash equivalents, restricted cash and cash equivalents (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.

Financial instruments not carried at fair value were as follows:

(Millions of dollars)	September 30, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Levels	Reference
Assets
Finance receivables, net (excluding finance leases(1))	$	20,345	$	19,773	$	19,085	$	18,448	3	Note 3
Liabilities
Long-term debt	$	23,408	$	22,806	$	21,418	$	20,686	2

(1) Represents finance leases and failed sale leasebacks of $6.86 billion and $7.36 billion as of September 30, 2023 and December 31, 2022, respectively.

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Income Taxes	9 Months Ended
	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The provision for income taxes reflected an estimated annual tax rate of 26 percent for the third quarter of 2023 compared with 27 percent in the third quarter of 2022. In addition, a discrete tax expense of $27 million was recorded in the third quarter of 2023 for the repatriation of non-U.S. earnings and the change in the reinvestment position of a non-U.S. subsidiary.

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Finance Receivables (Tables)

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Receivables [Abstract]

Summary of finance receivables included in the Consolidated Statements of Financial Position

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

(Millions of dollars)	September 30, 2023		December 31, 2022
Retail loans, net(1)	$	15,907	$	14,973
Retail leases, net	6,432		6,965
Caterpillar purchased receivables, net	4,381		4,297
Wholesale loans, net(1)	817		545
Wholesale leases, net	5		7
Total finance receivables	27,542		26,787
Less: Allowance for credit losses	(340)		(346)
Total finance receivables, net	$	27,202	$	26,441

(1) Includes failed sale leasebacks.

Allowance for credit losses and total finance receivables

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

(Millions of dollars)	Three Months Ended September 30, 2023								Three Months Ended September 30, 2022
	Customer		Dealer		Caterpillar Purchased Receivables		Total		Customer		Dealer		Caterpillar Purchased Receivables		Total
Beginning Balance	$	265	$	50	$	5	$	320	$	290	$	82	$	4	$	376
Write-offs	(22)		—		—		(22)		(30)		—		—		(30)
Recoveries	13		—		—		13		17		—		—		17
Provision for credit losses(1)	31		1		—		32		(2)		(17)		—		(19)
Other	(3)		—		—		(3)		(5)		—		—		(5)
Ending Balance	$	284	$	51	$	5	$	340	$	270	$	65	$	4	$	339
	Nine Months Ended September 30, 2023								Nine Months Ended September 30, 2022
	Customer		Dealer		Caterpillar Purchased Receivables		Total		Customer		Dealer		Caterpillar Purchased Receivables		Total
Beginning Balance	$	277	$	65	$	4	$	346	$	251	$	82	$	4	$	337
Write-offs	(63)		—		—		(63)		(68)		—		—		(68)
Recoveries	36		—		—		36		47		—		—		47
Provision for credit losses(1)	35		(14)		1		22		46		(17)		—		29
Other	(1)		—		—		(1)		(6)		—		—		(6)
Ending Balance	$	284	$	51	$	5	$	340	$	270	$	65	$	4	$	339
Finance Receivables	$	20,279	$	2,882	$	4,381	$	27,542	$	19,927	$	2,222	$	3,962	$	26,111

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

Write-offs by origination year

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

(Millions of Dollars)	Three Months Ended September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total
North America	$	1	$	2	$	2	$	1	$	1	$	—	$	2	$	9
EAME	—		1		1		1		—		—		—		3
Asia/Pacific	—		2		3		1		—		—		—		6
Latin America	—		1		1		1		—		1		—		4
Total	$	1	$	6	$	7	$	4	$	1	$	1	$	2	$	22
	Nine Months Ended September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total
North America	$	1	$	7	$	7	$	2	$	2	$	1	$	9	$	29
EAME	—		2		3		3		—		1		—		9
Asia/Pacific	—		3		6		4		1		—		—		14
Latin America	—		3		3		3		1		1		—		11
Total	$	1	$	15	$	19	$	12	$	4	$	3	$	9	$	63

Amortized cost of finance receivables in the Customer portfolio segment by origination year

The tables below summarize the aging category of our amortized cost of finance receivables in the Customer portfolio segment by origination year.

(Millions of dollars)	September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,134	$	2,940	$	2,310	$	919	$	310	$	65	$	304	$	9,982
31-60 days past due	18		31		23		15		6		2		3		98
61-90 days past due	6		10		7		4		1		—		2		30
91+ days past due	5		19		18		10		5		3		2		62
EAME
Current	914		962		649		297		144		124		—		3,090
31-60 days past due	11		8		11		3		1		—		—		34
61-90 days past due	3		6		3		3		2		—		—		17
91+ days past due	4		16		18		9		3		1		—		51
Asia/Pacific
Current	832		760		440		150		47		12		42		2,283
31-60 days past due	3		13		10		4		1		—		—		31
61-90 days past due	1		3		3		4		1		—		—		12
91+ days past due	—		4		5		3		—		—		—		12
Mining
Current	836		740		436		148		111		50		49		2,370
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		1		—		—		2		—		3
91+ days past due	—		2		2		—		—		1		—		5
Latin America
Current	552		571		255		74		29		8		—		1,489
31-60 days past due	6		13		7		4		3		1		—		34
61-90 days past due	1		5		2		1		—		—		—		9
91+ days past due	1		15		9		8		8		20		—		61
Power
Current	46		71		70		86		45		122		162		602
31-60 days past due	—		—		—		—		—		1		—		1
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		3		—		3
Totals by Aging Category
Current	6,314		6,044		4,160		1,674		686		381		557		19,816
31-60 days past due	38		65		51		26		11		4		3		198
61-90 days past due	11		24		16		12		4		2		2		71
91+ days past due	10		56		52		30		16		28		2		194
Total	$	6,373	$	6,189	$	4,279	$	1,742	$	717	$	415	$	564	$	20,279

(Millions of dollars)	December 31, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,915	$	3,276	$	1,525	$	653	$	206	$	34	$	240	$	9,849
31-60 days past due	25		26		18		12		4		1		4		90
61-90 days past due	9		15		7		3		1		—		3		38
91+ days past due	11		16		12		6		4		3		4		56
EAME
Current	1,270		953		477		280		155		68		—		3,203
31-60 days past due	10		12		7		1		1		—		—		31
61-90 days past due	8		4		3		1		—		—		—		16
91+ days past due	6		25		16		4		1		1		—		53
Asia/Pacific
Current	1,174		805		393		124		37		5		40		2,578
31-60 days past due	10		12		8		1		1		—		—		32
61-90 days past due	2		5		4		2		—		—		—		13
91+ days past due	2		6		6		4		—		—		—		18
Mining
Current	875		627		227		193		94		108		80		2,204
31-60 days past due	—		1		—		—		—		—		—		1
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		1		—		1
Latin America
Current	770		400		150		69		26		20		—		1,435
31-60 days past due	7		8		4		2		—		1		—		22
61-90 days past due	2		5		1		1		—		—		—		9
91+ days past due	2		13		11		2		1		—		—		29
Power
Current	82		87		146		51		18		161		125		670
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		5		—		5
Totals by Aging Category
Current	8,086		6,148		2,918		1,370		536		396		485		19,939
31-60 days past due	52		59		37		16		6		2		4		176
61-90 days past due	21		29		15		7		1		—		3		76
91+ days past due	21		60		45		16		6		10		4		162
Total	$	8,180	$	6,296	$	3,015	$	1,409	$	549	$	408	$	496	$	20,353

Aging related to finance receivables

The tables below summarize the aging category of our amortized cost of finance receivables in the Caterpillar Purchased Receivables portfolio segment.

(Millions of dollars)	September 30, 2023
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables
North America	$	15	$	5	$	2	$	22	$	2,629	$	2,651
EAME	1		1		1		3		758		761
Asia/Pacific	8		—		1		9		565		574
Latin America	4		4		23		31		353		384
Power	2		1		1		4		7		11
Total	$	30	$	11	$	28	$	69	$	4,312	$	4,381

(Millions of dollars)	December 31, 2022
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables
North America	$	11	$	7	$	4	$	22	$	2,458	$	2,480
EAME	1		—		2		3		812		815
Asia/Pacific	6		2		2		10		555		565
Latin America	9		2		14		25		406		431
Power	1		—		—		1		5		6
Total	$	28	$	11	$	22	$	61	$	4,236	$	4,297

Finance receivables on non-accrual status

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)	September 30, 2023						December 31, 2022
	Amortized Cost						Amortized Cost
	Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing		Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing
North America	$	54	$	—	$	12	$	52	$	4	$	11
EAME	44		—		9		43		—		10
Asia/Pacific	8		—		5		11		—		7
Mining	4		—		1		—		1		—
Latin America	69		—		—		45		—		—
Power	9		—		—		5		11		—
Total	$	188	$	—	$	27	$	156	$	16	$	28

Finance receivables modified as TDRs

Finance receivables in the Customer portfolio segment modified as TDRs were as follows:

(Millions of dollars)	Three Months Ended September 30, 2022				Nine Months Ended September 30, 2022
	Pre-TDR Amortized Cost		Post-TDR Amortized Cost		Pre-TDR Amortized Cost		Post-TDR Amortized Cost
North America	$	3	$	3	$	4	$	4
EAME	—		—		1		1
Mining	15		15		15		15
Power	11		11		20		19
Total	$	29	$	29	$	40	$	39

During the three months ended September 30, 2022, there were no TDRs in the Customer portfolio segment with a payment default (defined as 91+ days past due) which had been modified within twelve months prior to the default date. During the nine months ended September 30, 2022, the Post-TDR amortized cost of TDRs in the Customer portfolio segment with a payment default which had been modified within twelve months prior to the default date was $5 million, all of which was in Mining.

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Derivative Financial Instruments and Risk Management (Tables)

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Location and fair value of derivative instruments reported in the Consolidated Statements of Financial Position

The location and fair value of derivative instruments reported in the Consolidated Statements of Financial Position were as follows:

(Millions of dollars)	September 30, 2023				December 31, 2022
	Assets1		Liabilities2		Assets1		Liabilities2
Designated derivatives
Foreign exchange contracts	$	282	$	(61)	$	305	$	(44)
Interest rate contracts	52		(109)		87		(113)
	$	334	$	(170)	$	392	$	(157)
Undesignated derivatives
Foreign exchange contracts	$	28	$	(35)	$	25	$	(42)
	$	28	$	(35)	$	25	$	(42)

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

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

Schedule of Gains (Losses) on derivatives instruments

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

(Millions of dollars)	Fair Value / Undesignated Hedges				Cash Flow Hedges
	Gains (Losses) Recognized1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI2
	Three Months Ended September 30,
	2023		2022		2023		2022		2023		2022
Foreign exchange contracts	$	22	$	16	$	76	$	276	$	70	$	303
Interest rate contracts	(20)		(5)		3		26		15		8
	$	2	$	11	$	79	$	302	$	85	$	311
	Nine Months Ended September 30,
	2023		2022		2023		2022		2023		2022
Foreign exchange contracts	$	21	$	(26)	$	59	$	570	$	38	$	656
Interest rate contracts	(53)		4		15		103		43		—
	$	(32)	$	(22)	$	74	$	673	$	81	$	656

(1) Foreign exchange contract gains (losses) are primarily from undesignated forward contracts and are included in Other income (expense). Interest rate contract gains (losses) are from designated fair value hedges and 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.

Schedule of amounts recorded in the Consolidated Statements of Financial Position related to cumulative basis adjustments for fair value hedges

The following amounts were recorded in the Consolidated Statements of Financial Position related to cumulative basis adjustments for fair value hedges:

(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
	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Current maturities of long-term debt	$	249	$	—	$	(4)	$	—
Long-term debt	2,720		2,091		(105)		(112)
Total	$	2,969	$	2,091	$	(109)	$	(112)

Schedule of effect of net settlement provisions of the master netting agreements on our derivative balances

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

(Millions of dollars)	September 30, 2023				December 31, 2022
	Assets		Liabilities		Assets		Liabilities
Gross amounts recognized	$	362	$	(205)	$	417	$	(199)
Financial instruments not offset	(122)		122		(108)		108
Net amount	$	240	$	(83)	$	309	$	(91)

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Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2023

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated other comprehensive income (loss)

Changes in Accumulated other comprehensive income (loss) included in the Consolidated Statements of Changes in Shareholder’s Equity consisted of the following:

(Millions of dollars)	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Foreign currency translation
Balance at beginning of period	$	(1,059)	$	(1,002)	$	(1,068)	$	(762)
Gains (losses) on foreign currency translation	(89)		(258)		(89)		(456)
Less: Tax provision/(benefit)	13		30		4		72
Net gains (losses) on foreign currency translation	(102)		(288)		(93)		(528)
Other comprehensive income (loss), net of tax	(102)		(288)		(93)		(528)
Balance at end of period	$	(1,161)	$	(1,290)	$	(1,161)	$	(1,290)
Derivative financial instruments
Balance at beginning of period	$	21	$	11	$	21	$	(12)
Gains (losses) deferred	79		302		74		673
Less: Tax provision/(benefit)	20		95		18		158
Net gains (losses) deferred	59		207		56		515
(Gains) losses reclassified to earnings	(85)		(311)		(81)		(656)
Less: Tax (provision)/benefit	(22)		(99)		(21)		(159)
Net (gains) losses reclassified to earnings	(63)		(212)		(60)		(497)
Other comprehensive income (loss), net of tax	(4)		(5)		(4)		18
Balance at end of period	$	17	$	6	$	17	$	6
Total Accumulated other comprehensive income (loss) at end of period	$	(1,144)	$	(1,284)	$	(1,144)	$	(1,284)

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segment Information

Supplemental segment data and reconciliations to consolidated external reporting for the three months ended September 30 was as follows:

(Millions of dollars) 2023	External Revenues		Profit before income taxes		Interest Expense		Depreciation on equipment leased to others		Provision for credit losses		Assets at September 30, 2023		Capital expenditures
North America	$	459	$	144	$	128	$	130	$	10	$	15,928	$	274
EAME	102		35		26		14		1		4,867		14
Asia/Pacific	70		19		32		2		1		3,265		—
Latin America	95		15		48		3		13		2,579		3
Mining	86		17		23		32		5		2,880		49
Power	15		(1)		7		1		4		644		—
Total Segments	827		229		264		182		34		30,163		340
Unallocated	23		(137)		108		—		1		2,255		1
Timing	(4)		1		—		—		—		19		—
Methodology	—		77		(92)		—		—		235		—
Inter-segment Eliminations (1)	—		—		—		—		—		(208)		—
Total	$	846	$	170	$	280	$	182	$	35	$	32,464	$	341
2022	External Revenues		Profit before income taxes		Interest Expense		Depreciation on equipment leased to others		Provision for credit losses		Assets at December 31, 2022		Capital expenditures
North America	$	383	$	150	$	69	$	126	$	(5)	$	15,229	$	205
EAME	72		—		27		13		7		5,067		45
Asia/Pacific	70		33		19		1		1		3,921		3
Latin America	75		31		37		3		(8)		2,636		3
Mining	72		21		11		35		(4)		2,700		36
Power	11		12		5		1		(7)		704		—
Total Segments	683		247		168		179		(16)		30,257		292
Unallocated	10		(80)		53		—		—		1,628		2
Timing	(3)		—		—		—		—		18		—
Methodology	—		21		(70)		—		—		278		—
Inter-segment Eliminations (1)	—		—		—		—		—		(224)		—
Total	$	690	$	188	$	151	$	179	$	(16)	$	31,957	$	294

 (1) Elimination is primarily related to intercompany loans

Supplemental segment data and reconciliations to consolidated external reporting for the nine months ended September 30 was as follows:

(Millions of dollars) 2023	External Revenues		Profit before income taxes		Interest Expense		Depreciation on equipment leased to others		Provision for credit losses		Assets at September 30, 2023		Capital expenditures
North America	$	1,313	$	447	$	331	$	380	$	17	$	15,928	$	789
EAME	274		79		72		43		3		4,867		50
Asia/Pacific	213		86		78		4		(3)		3,265		2
Latin America	264		81		132		9		(2)		2,579		13
Mining	253		76		56		94		(2)		2,880		168
Power	43		3		19		2		9		644		—
Total Segments	2,360		772		688		532		22		30,163		1,022
Unallocated	58		(378)		279		—		1		2,255		7
Timing	(11)		1		—		—		—		19		—
Methodology	—		184		(225)		—		—		235		—
Inter-segment Eliminations (1)	—		—		—		—		—		(208)		—
Total	$	2,407	$	579	$	742	$	532	$	23	$	32,464	$	1,029
2022	External Revenues		Profit before income taxes		Interest Expense		Depreciation on equipment leased to others		Provision for credit losses		Assets at December 31, 2022		Capital expenditures
North America	$	1,112	$	411	$	181	$	381	$	11	$	15,229	$	652
EAME	207		5		45		41		49		5,067		101
Asia/Pacific	216		104		55		4		5		3,921		6
Latin America	204		65		98		7		(3)		2,636		21
Mining	218		66		29		109		(14)		2,700		83
Power	41		35		10		2		(14)		704		—
Total Segments	1,998		686		418		544		34		30,257		863
Unallocated	21		(222)		138		—		—		1,628		6
Timing	(9)		3		—		—		—		18		—
Methodology	—		113		(179)		—		—		278		—
Inter-segment Eliminations (1)	—		—		—		—		—		(224)		—
Total	$	2,010	$	580	$	377	$	544	$	34	$	31,957	$	869

 (1) Elimination is primarily related to intercompany loans

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair values of financial instruments

Financial instruments not carried at fair value were as follows:

(Millions of dollars)	September 30, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Levels	Reference
Assets
Finance receivables, net (excluding finance leases(1))	$	20,345	$	19,773	$	19,085	$	18,448	3	Note 3
Liabilities
Long-term debt	$	23,408	$	22,806	$	21,418	$	20,686	2

(1) Represents finance leases and failed sale leasebacks of $6.86 billion and $7.36 billion as of September 30, 2023 and December 31, 2022, respectively.

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Basis of Presentation (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Mar. 31, 2023	Jun. 30, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Prior Period Reclassification Adjustment	$ 52	$ 52	$ 52	$ 52	$ 25

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Finance Receivables (Details) - USD ($) $ in Millions	Sep. 30, 2023	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable
Total Finance Receivables	$ 27,542		$ 26,787	$ 26,111
Less: Allowance for credit losses	(340)	$ (320)	(346)	$ (339)	$ (376)	$ (337)
Financing Receivable, after Allowance for Credit Loss, Total	27,202		26,441
Retail loans
Accounts, Notes, Loans and Financing Receivable
Total Finance Receivables	15,907		14,973
Retail leases
Accounts, Notes, Loans and Financing Receivable
Total Finance Receivables	6,432		6,965
Caterpillar Purchased Receivables
Accounts, Notes, Loans and Financing Receivable
Total Finance Receivables	4,381		4,297
Wholesale loans
Accounts, Notes, Loans and Financing Receivable
Total Finance Receivables	817		545
Wholesale leases
Accounts, Notes, Loans and Financing Receivable
Total Finance Receivables	$ 5		$ 7

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Finance Receivables (Details 2) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Receivables [Abstract]
Finance lease revenue (included in retail and wholesale finance revenue)	$ 106	$ 105	$ 314	$ 326

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Finance Receivables (Details 3) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Financing Receivable, Allowance for Credit Losses
Beginning Balance	$ 320	$ 376	$ 346	$ 337
Write-offs	(22)	(30)	(63)	(68)
Recoveries	13	17	36	47
Financing Receivable, Credit Loss, Expense (Reversal)	32	(19)	22	29
Financing Receivable, Allowance for Credit Losses, Other	(3)	(5)	(1)	(6)
Ending Balance	340	339	340	339
Customer
Financing Receivable, Allowance for Credit Losses
Beginning Balance	265	290	277	251
Write-offs	(22)	(30)	(63)	(68)
Recoveries	13	17	36	47
Financing Receivable, Credit Loss, Expense (Reversal)	31	(2)	35	46
Financing Receivable, Allowance for Credit Losses, Other	(3)	(5)	(1)	(6)
Ending Balance	284	270	284	270
Dealer
Financing Receivable, Allowance for Credit Losses
Beginning Balance	50	82	65	82
Write-offs	0	0	0	0
Recoveries	0	0	0	0
Financing Receivable, Credit Loss, Expense (Reversal)	1	(17)	(14)	(17)
Financing Receivable, Allowance for Credit Losses, Other	0	0	0	0
Ending Balance	51	65	51	65
Caterpillar Purchased Receivables
Financing Receivable, Allowance for Credit Losses
Beginning Balance	5	4	4	4
Write-offs	0	0	0	0
Recoveries	0	0	0	0
Financing Receivable, Credit Loss, Expense (Reversal)	0	0	1	0
Financing Receivable, Allowance for Credit Losses, Other	0	0	0	0
Ending Balance	$ 5	$ 4	$ 5	$ 4

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Finance Receivables (Details 4) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Financing Receivable, Credit Quality Indicator
Total Finance Receivables	$ 27,542	$ 26,787	$ 26,111
Customer
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	6,373	8,180
2022 and 2021, respectively	6,189	6,296
2021 and 2020, respectively	4,279	3,015
2020 and 2019, respectively	1,742	1,409
2019 and 2018, respectively	717	549
Prior	415	408
Revolving Finance Receivables	564	496
Total Finance Receivables	20,279	20,353	19,927
Customer | Current
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	6,314	8,086
2022 and 2021, respectively	6,044	6,148
2021 and 2020, respectively	4,160	2,918
2020 and 2019, respectively	1,674	1,370
2019 and 2018, respectively	686	536
Prior	381	396
Revolving Finance Receivables	557	485
Total Finance Receivables	19,816	19,939
Customer | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	38	52
2022 and 2021, respectively	65	59
2021 and 2020, respectively	51	37
2020 and 2019, respectively	26	16
2019 and 2018, respectively	11	6
Prior	4	2
Revolving Finance Receivables	3	4
Total Finance Receivables	198	176
Customer | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	11	21
2022 and 2021, respectively	24	29
2021 and 2020, respectively	16	15
2020 and 2019, respectively	12	7
2019 and 2018, respectively	4	1
Prior	2	0
Revolving Finance Receivables	2	3
Total Finance Receivables	71	76
Customer | 91+ days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	10	21
2022 and 2021, respectively	56	60
2021 and 2020, respectively	52	45
2020 and 2019, respectively	30	16
2019 and 2018, respectively	16	6
Prior	28	10
Revolving Finance Receivables	2	4
Total Finance Receivables	194	162
Customer | North America | Current
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	3,134	3,915
2022 and 2021, respectively	2,940	3,276
2021 and 2020, respectively	2,310	1,525
2020 and 2019, respectively	919	653
2019 and 2018, respectively	310	206
Prior	65	34
Revolving Finance Receivables	304	240
Total Finance Receivables	9,982	9,849
Customer | North America | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	18	25
2022 and 2021, respectively	31	26
2021 and 2020, respectively	23	18
2020 and 2019, respectively	15	12
2019 and 2018, respectively	6	4
Prior	2	1
Revolving Finance Receivables	3	4
Total Finance Receivables	98	90
Customer | North America | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	6	9
2022 and 2021, respectively	10	15
2021 and 2020, respectively	7	7
2020 and 2019, respectively	4	3
2019 and 2018, respectively	1	1
Prior	0	0
Revolving Finance Receivables	2	3
Total Finance Receivables	30	38
Customer | North America | 91+ days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	5	11
2022 and 2021, respectively	19	16
2021 and 2020, respectively	18	12
2020 and 2019, respectively	10	6
2019 and 2018, respectively	5	4
Prior	3	3
Revolving Finance Receivables	2	4
Total Finance Receivables	62	56
Customer | EAME | Current
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	914	1,270
2022 and 2021, respectively	962	953
2021 and 2020, respectively	649	477
2020 and 2019, respectively	297	280
2019 and 2018, respectively	144	155
Prior	124	68
Revolving Finance Receivables	0	0
Total Finance Receivables	3,090	3,203
Customer | EAME | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	11	10
2022 and 2021, respectively	8	12
2021 and 2020, respectively	11	7
2020 and 2019, respectively	3	1
2019 and 2018, respectively	1	1
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	34	31
Customer | EAME | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	3	8
2022 and 2021, respectively	6	4
2021 and 2020, respectively	3	3
2020 and 2019, respectively	3	1
2019 and 2018, respectively	2	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	17	16
Customer | EAME | 91+ days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	4	6
2022 and 2021, respectively	16	25
2021 and 2020, respectively	18	16
2020 and 2019, respectively	9	4
2019 and 2018, respectively	3	1
Prior	1	1
Revolving Finance Receivables	0	0
Total Finance Receivables	51	53
Customer | Asia/Pacific | Current
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	832	1,174
2022 and 2021, respectively	760	805
2021 and 2020, respectively	440	393
2020 and 2019, respectively	150	124
2019 and 2018, respectively	47	37
Prior	12	5
Revolving Finance Receivables	42	40
Total Finance Receivables	2,283	2,578
Customer | Asia/Pacific | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	3	10
2022 and 2021, respectively	13	12
2021 and 2020, respectively	10	8
2020 and 2019, respectively	4	1
2019 and 2018, respectively	1	1
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	31	32
Customer | Asia/Pacific | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	1	2
2022 and 2021, respectively	3	5
2021 and 2020, respectively	3	4
2020 and 2019, respectively	4	2
2019 and 2018, respectively	1	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	12	13
Customer | Asia/Pacific | 91+ days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	0	2
2022 and 2021, respectively	4	6
2021 and 2020, respectively	5	6
2020 and 2019, respectively	3	4
2019 and 2018, respectively	0	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	12	18
Customer | Mining | Current
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	836	875
2022 and 2021, respectively	740	627
2021 and 2020, respectively	436	227
2020 and 2019, respectively	148	193
2019 and 2018, respectively	111	94
Prior	50	108
Revolving Finance Receivables	49	80
Total Finance Receivables	2,370	2,204
Customer | Mining | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	0	0
2022 and 2021, respectively	0	1
2021 and 2020, respectively	0	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	0	1
Customer | Mining | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	0	0
2022 and 2021, respectively	0	0
2021 and 2020, respectively	1	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
Prior	2	0
Revolving Finance Receivables	0	0
Total Finance Receivables	3	0
Customer | Mining | 91+ days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	0	0
2022 and 2021, respectively	2	0
2021 and 2020, respectively	2	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
Prior	1	1
Revolving Finance Receivables	0	0
Total Finance Receivables	5	1
Customer | Latin America | Current
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	552	770
2022 and 2021, respectively	571	400
2021 and 2020, respectively	255	150
2020 and 2019, respectively	74	69
2019 and 2018, respectively	29	26
Prior	8	20
Revolving Finance Receivables	0	0
Total Finance Receivables	1,489	1,435
Customer | Latin America | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	6	7
2022 and 2021, respectively	13	8
2021 and 2020, respectively	7	4
2020 and 2019, respectively	4	2
2019 and 2018, respectively	3	0
Prior	1	1
Revolving Finance Receivables	0	0
Total Finance Receivables	34	22
Customer | Latin America | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	1	2
2022 and 2021, respectively	5	5
2021 and 2020, respectively	2	1
2020 and 2019, respectively	1	1
2019 and 2018, respectively	0	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	9	9
Customer | Latin America | 91+ days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	1	2
2022 and 2021, respectively	15	13
2021 and 2020, respectively	9	11
2020 and 2019, respectively	8	2
2019 and 2018, respectively	8	1
Prior	20	0
Revolving Finance Receivables	0	0
Total Finance Receivables	61	29
Customer | Power | Current
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	46	82
2022 and 2021, respectively	71	87
2021 and 2020, respectively	70	146
2020 and 2019, respectively	86	51
2019 and 2018, respectively	45	18
Prior	122	161
Revolving Finance Receivables	162	125
Total Finance Receivables	602	670
Customer | Power | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	0	0
2022 and 2021, respectively	0	0
2021 and 2020, respectively	0	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
Prior	1	0
Revolving Finance Receivables	0	0
Total Finance Receivables	1	0
Customer | Power | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	0	0
2022 and 2021, respectively	0	0
2021 and 2020, respectively	0	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	0	0
Customer | Power | 91+ days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	0	0
2022 and 2021, respectively	0	0
2021 and 2020, respectively	0	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
Prior	3	5
Revolving Finance Receivables	0	0
Total Finance Receivables	3	5
Dealer
Financing Receivable, Credit Quality Indicator
Total Finance Receivables	2,882		$ 2,222
Dealer | Total past due
Financing Receivable, Credit Quality Indicator
Prior	$ 47	$ 62

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Finance Receivables (Details 5) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Receivables [Abstract]
Period after which unpaid installments are considered as past due	30 days
Financing Receivable, Past Due
Total Finance Receivables	$ 27,542	$ 26,787	$ 26,111
Caterpillar Purchased Receivables
Financing Receivable, Past Due
Total Finance Receivables	4,381	4,297	$ 3,962
Caterpillar Purchased Receivables | 31-60 days past due
Financing Receivable, Past Due
Total Finance Receivables	30	28
Caterpillar Purchased Receivables | 61-90 days past due
Financing Receivable, Past Due
Total Finance Receivables	11	11
Caterpillar Purchased Receivables | 91+ days past due
Financing Receivable, Past Due
Total Finance Receivables	28	22
Caterpillar Purchased Receivables | Total Past Due
Financing Receivable, Past Due
Total Finance Receivables	69	61
Caterpillar Purchased Receivables | Current
Financing Receivable, Past Due
Total Finance Receivables	4,312	4,236
Caterpillar Purchased Receivables | North America
Financing Receivable, Past Due
Total Finance Receivables	2,651	2,480
Caterpillar Purchased Receivables | North America | 31-60 days past due
Financing Receivable, Past Due
Total Finance Receivables	15	11
Caterpillar Purchased Receivables | North America | 61-90 days past due
Financing Receivable, Past Due
Total Finance Receivables	5	7
Caterpillar Purchased Receivables | North America | 91+ days past due
Financing Receivable, Past Due
Total Finance Receivables	2	4
Caterpillar Purchased Receivables | North America | Total Past Due
Financing Receivable, Past Due
Total Finance Receivables	22	22
Caterpillar Purchased Receivables | North America | Current
Financing Receivable, Past Due
Total Finance Receivables	2,629	2,458
Caterpillar Purchased Receivables | EAME
Financing Receivable, Past Due
Total Finance Receivables	761	815
Caterpillar Purchased Receivables | EAME | 31-60 days past due
Financing Receivable, Past Due
Total Finance Receivables	1	1
Caterpillar Purchased Receivables | EAME | 61-90 days past due
Financing Receivable, Past Due
Total Finance Receivables	1	0
Caterpillar Purchased Receivables | EAME | 91+ days past due
Financing Receivable, Past Due
Total Finance Receivables	1	2
Caterpillar Purchased Receivables | EAME | Total Past Due
Financing Receivable, Past Due
Total Finance Receivables	3	3
Caterpillar Purchased Receivables | EAME | Current
Financing Receivable, Past Due
Total Finance Receivables	758	812
Caterpillar Purchased Receivables | Asia/Pacific
Financing Receivable, Past Due
Total Finance Receivables	574	565
Caterpillar Purchased Receivables | Asia/Pacific | 31-60 days past due
Financing Receivable, Past Due
Total Finance Receivables	8	6
Caterpillar Purchased Receivables | Asia/Pacific | 61-90 days past due
Financing Receivable, Past Due
Total Finance Receivables	0	2
Caterpillar Purchased Receivables | Asia/Pacific | 91+ days past due
Financing Receivable, Past Due
Total Finance Receivables	1	2
Caterpillar Purchased Receivables | Asia/Pacific | Total Past Due
Financing Receivable, Past Due
Total Finance Receivables	9	10
Caterpillar Purchased Receivables | Asia/Pacific | Current
Financing Receivable, Past Due
Total Finance Receivables	565	555
Caterpillar Purchased Receivables | Latin America
Financing Receivable, Past Due
Total Finance Receivables	384	431
Caterpillar Purchased Receivables | Latin America | 31-60 days past due
Financing Receivable, Past Due
Total Finance Receivables	4	9
Caterpillar Purchased Receivables | Latin America | 61-90 days past due
Financing Receivable, Past Due
Total Finance Receivables	4	2
Caterpillar Purchased Receivables | Latin America | 91+ days past due
Financing Receivable, Past Due
Total Finance Receivables	23	14
Caterpillar Purchased Receivables | Latin America | Total Past Due
Financing Receivable, Past Due
Total Finance Receivables	31	25
Caterpillar Purchased Receivables | Latin America | Current
Financing Receivable, Past Due
Total Finance Receivables	353	406
Caterpillar Purchased Receivables | Power
Financing Receivable, Past Due
Total Finance Receivables	11	6
Caterpillar Purchased Receivables | Power | 31-60 days past due
Financing Receivable, Past Due
Total Finance Receivables	2	1
Caterpillar Purchased Receivables | Power | 61-90 days past due
Financing Receivable, Past Due
Total Finance Receivables	1	0
Caterpillar Purchased Receivables | Power | 91+ days past due
Financing Receivable, Past Due
Total Finance Receivables	1	0
Caterpillar Purchased Receivables | Power | Total Past Due
Financing Receivable, Past Due
Total Finance Receivables	4	1
Caterpillar Purchased Receivables | Power | Current
Financing Receivable, Past Due
Total Finance Receivables	$ 7	$ 5

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Finance Receivables (Details 6) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Past Due
Period after which collection of future income is considered as not probable	120 days
Customer
Financing Receivable, Past Due
Amortized Cost, Non-accrual With an Allowance	$ 188	$ 156
Amortized Cost, Non-accrual Without an Allowance	0	16
Amortized Cost, 91+ Still Accruing	27	28
Customer | North America
Financing Receivable, Past Due
Amortized Cost, Non-accrual With an Allowance	54	52
Amortized Cost, Non-accrual Without an Allowance	0	4
Amortized Cost, 91+ Still Accruing	12	11
Customer | EAME
Financing Receivable, Past Due
Amortized Cost, Non-accrual With an Allowance	44	43
Amortized Cost, Non-accrual Without an Allowance	0	0
Amortized Cost, 91+ Still Accruing	9	10
Customer | Asia/Pacific
Financing Receivable, Past Due
Amortized Cost, Non-accrual With an Allowance	8	11
Amortized Cost, Non-accrual Without an Allowance	0	0
Amortized Cost, 91+ Still Accruing	5	7
Customer | Mining
Financing Receivable, Past Due
Amortized Cost, Non-accrual With an Allowance	4	0
Amortized Cost, Non-accrual Without an Allowance	0	1
Amortized Cost, 91+ Still Accruing	1	0
Customer | Latin America
Financing Receivable, Past Due
Amortized Cost, Non-accrual With an Allowance	69	45
Amortized Cost, Non-accrual Without an Allowance	0	0
Amortized Cost, 91+ Still Accruing	0	0
Customer | Power
Financing Receivable, Past Due
Amortized Cost, Non-accrual With an Allowance	9	5
Amortized Cost, Non-accrual Without an Allowance	0	11
Amortized Cost, 91+ Still Accruing	0	0
Dealer | Latin America
Financing Receivable, Past Due
Amortized Cost, Non-accrual With an Allowance	$ 47	$ 62

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Finance Receivables (Details 7) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023 contracts	Sep. 30, 2022 USD ($) contracts	Sep. 30, 2023 contracts	Sep. 30, 2022 USD ($) contracts
Customer
Finance receivables modified as TDRs
Pre-TDR Amortized Cost		$ 29		$ 40
Post-TDR Amortized Cost		29		39
Customer | North America
Finance receivables modified as TDRs
Pre-TDR Amortized Cost		3		4
Post-TDR Amortized Cost		3		4
Customer | EAME
Finance receivables modified as TDRs
Pre-TDR Amortized Cost		0		1
Post-TDR Amortized Cost		0		1
Customer | Mining
Finance receivables modified as TDRs
Pre-TDR Amortized Cost		15		15
Post-TDR Amortized Cost		15		15
TDRs with a payment default which had been modified within twelve months prior to the default date
Post-TDR Amortized Cost				5
Customer | Power
Finance receivables modified as TDRs
Pre-TDR Amortized Cost		11		20
Post-TDR Amortized Cost		$ 11		$ 19
Dealer
Finance receivables modified as TDRs
Number of Contracts | contracts	0	0	0	0
Caterpillar Purchased Receivables
Finance receivables modified as TDRs
Number of Contracts | contracts	0	0	0	0

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Finance Receivables (Details 8) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Write-offs by origination year [Line Items]
Total	$ 22	$ 30	$ 63	$ 68
Customer
Write-offs by origination year [Line Items]
2023	1		1
2022	6		15
2021	7		19
2020	4		12
2019	1		4
Prior	1		3
Revolving Finance Receivables	2		9
Total	22	$ 30	63	$ 68
Customer | North America
Write-offs by origination year [Line Items]
2023	1		1
2022	2		7
2021	2		7
2020	1		2
2019	1		2
Prior	0		1
Revolving Finance Receivables	2		9
Total	9		29
Customer | EAME
Write-offs by origination year [Line Items]
2023	0		0
2022	1		2
2021	1		3
2020	1		3
2019	0		0
Prior	0		1
Revolving Finance Receivables	0		0
Total	3		9
Customer | Asia/Pacific
Write-offs by origination year [Line Items]
2023	0		0
2022	2		3
2021	3		6
2020	1		4
2019	0		1
Prior	0		0
Revolving Finance Receivables	0		0
Total	6		14
Customer | Latin America
Write-offs by origination year [Line Items]
2023	0		0
2022	1		3
2021	1		3
2020	1		3
2019	0		1
Prior	1		1
Revolving Finance Receivables	0		0
Total	$ 4		$ 11

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Finance Receivables (Details 9) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)
Dealer
Financing Receivable, Modified [Line Items]
Financing Receivable, Modified in Period, Amount	$ 0	$ 0
Caterpillar Purchased Receivables
Financing Receivable, Modified [Line Items]
Financing Receivable, Modified in Period, Amount	0	0
Customer
Financing Receivable, Modified [Line Items]
Financing Receivable, Modified in Period, Amount	$ 13	$ 38
Financing Receivable, Modification To Total Financing Receivables, Percent	0.05%	0.14%
Financing Receivable, Modified, Weighted Average Term Increase from Modification	8 months	17 months
Financing Receivable, Modified, Weighted Average Payment Delay	6 months	7 months
EAME | 31-60 days past due | Customer
Financing Receivable, Modified [Line Items]
Financing Receivable, Modified, Accumulated	$ 3	$ 3

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Derivative Financial Instruments and Risk Management (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Derivatives, Fair Value
Derivative assets	$ 362	$ 417
Derivative liabilities	(205)	(199)
Designated derivatives | Other assets
Derivatives, Fair Value
Derivative assets	334	392
Designated derivatives | Accrued expenses
Derivatives, Fair Value
Derivative liabilities	(170)	(157)
Designated derivatives | Foreign exchange contracts | Other assets
Derivatives, Fair Value
Derivative assets	282	305
Designated derivatives | Foreign exchange contracts | Accrued expenses
Derivatives, Fair Value
Derivative liabilities	(61)	(44)
Designated derivatives | Interest rate contracts | Other assets
Derivatives, Fair Value
Derivative assets	52	87
Designated derivatives | Interest rate contracts | Accrued expenses
Derivatives, Fair Value
Derivative liabilities	(109)	(113)
Undesignated derivatives | Other assets
Derivatives, Fair Value
Derivative assets	28	25
Undesignated derivatives | Accrued expenses
Derivatives, Fair Value
Derivative liabilities	(35)	(42)
Undesignated derivatives | Foreign exchange contracts | Other assets
Derivatives, Fair Value
Derivative assets	28	25
Undesignated derivatives | Foreign exchange contracts | Accrued expenses
Derivatives, Fair Value
Derivative liabilities	$ (35)	$ (42)

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Derivative Financial Instruments and Risk Management (Details 2) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Derivative
Derivative instruments, notional amount	$ 14,440	$ 13,180

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Derivative Financial Instruments and Risk Management (Details 3) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Derivative Instruments, Gain (Loss)
Gains (Losses) Recognized in AOCI	$ 79	$ 302	$ 74	$ 673
Gains (Losses) Reclassified from AOCI	(85)	(311)	(81)	(656)
Undesignated derivatives | Fair Value Hedges
Derivative Instruments, Gain (Loss)
Gains (Losses) Recognized on Undesignated Hedges	2	11	(32)	(22)
Undesignated derivatives | Fair Value Hedges | Foreign exchange contracts
Derivative Instruments, Gain (Loss)
Gains (Losses) Recognized on Undesignated Hedges	22	16	21	(26)
Undesignated derivatives | Fair Value Hedges | Interest rate contracts
Derivative Instruments, Gain (Loss)
Gains (Losses) Recognized on Undesignated Hedges	(20)	(5)	(53)	4
Designated derivatives | Cash Flow Hedges
Derivative Instruments, Gain (Loss)
Gains (Losses) Recognized in AOCI	79	302	74	673
Gains (Losses) Reclassified from AOCI	85	311	81	656
Designated derivatives | Cash Flow Hedges | Foreign exchange contracts
Derivative Instruments, Gain (Loss)
Gains (Losses) Recognized in AOCI	76	276	59	570
Gains (Losses) Reclassified from AOCI	70	303	38	656
Designated derivatives | Cash Flow Hedges | Interest rate contracts
Derivative Instruments, Gain (Loss)
Gains (Losses) Recognized in AOCI	3	26	15	103
Gains (Losses) Reclassified from AOCI	$ 15	$ 8	$ 43	$ 0

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Derivative Financial Instruments and Risk Management (Details 4) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Derivatives, Fair Value
Carrying Value of the Hedged Liabilities	$ 2,969	$ 2,091
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities	(109)	(112)
Current maturities of long-term debt
Derivatives, Fair Value
Carrying Value of the Hedged Liabilities	249	0
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities	(4)	0
Long-term debt
Derivatives, Fair Value
Carrying Value of the Hedged Liabilities	2,720	2,091
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities	$ (105)	$ (112)

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Derivative Financial Instruments and Risk Management (Details 5) $ in Millions	9 Months Ended
	Sep. 30, 2023 USD ($)
Derivative
Deferred net gains, net of tax, included in equity, related to cash flow hedges, expected to be reclassified to earnings over the next twelve months	$ 30

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Derivative Financial Instruments and Risk Management (Details 6) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Assets, Gross amounts recognized	$ 362	$ 417
Assets, Financial instruments not offset	(122)	(108)
Assets, Net amount	240	309
Liabilities, Gross amounts recognized	(205)	(199)
Liabilities, Financial instruments not offset	122	108
Liabilities, Net amount	$ (83)	$ (91)

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	$ (1,059)	$ (1,002)	$ (1,068)	$ (762)
Gains (losses) on foreign currency translation	(89)	(258)	(89)	(456)
Less: Tax provision/(benefit)	13	30	4	72
Net gains (losses) on foreign currency translation	(102)	(288)	(93)	(528)
Other comprehensive income (loss), net of tax	(102)	(288)	(93)	(528)
Balance at end of period	(1,161)	(1,290)	(1,161)	(1,290)
Balance at beginning of period	21	11	21	(12)
Gains (losses) deferred	79	302	74	673
Less: Tax provision/(benefit)	20	95	18	158
Net gains (losses) deferred	59	207	56	515
(Gains) losses reclassified to earnings	(85)	(311)	(81)	(656)
Less: Tax (provision)/benefit	(22)	(99)	(21)	(159)
Net (gains) losses reclassified to earnings	(63)	(212)	(60)	(497)
Other comprehensive income (loss), net of tax	(4)	(5)	(4)	18
Balance at end of period	17	6	17	6
Total Accumulated other comprehensive income (loss) at end of period	$ (1,144)	$ (1,284)	$ (1,144)	$ (1,284)	$ (1,047)

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Segment Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Segment Reporting Information
External Revenues	$ 846	$ 690	$ 2,407	$ 2,010
Profit before income taxes	170	188	579	580
Interest Expense	280	151	742	377
Depreciation on equipment leased to others	182	179	532	544
Provision for credit losses	35	(16)	23	34
Assets	32,464		32,464		$ 31,957
Capital expenditures	341	294	1,029	869
Operating Segments
Segment Reporting Information
External Revenues	827	683	2,360	1,998
Profit before income taxes	229	247	772	686
Interest Expense	264	168	688	418
Depreciation on equipment leased to others	182	179	532	544
Provision for credit losses	34	(16)	22	34
Assets	30,163		30,163		30,257
Capital expenditures	340	292	1,022	863
Unallocated
Segment Reporting Information
External Revenues	23	10	58	21
Profit before income taxes	(137)	(80)	(378)	(222)
Interest Expense	108	53	279	138
Depreciation on equipment leased to others	0	0	0	0
Provision for credit losses	1	0	1	0
Assets	2,255		2,255		1,628
Capital expenditures	1	2	7	6
Segment Reconciling Items | Timing
Segment Reporting Information
External Revenues	(4)	(3)	(11)	(9)
Profit before income taxes	1	0	1	3
Interest Expense	0	0	0	0
Depreciation on equipment leased to others	0	0	0	0
Provision for credit losses	0	0	0	0
Assets	19		19		18
Capital expenditures	0	0	0	0
Segment Reconciling Items | Methodology
Segment Reporting Information
External Revenues	0	0	0	0
Profit before income taxes	77	21	184	113
Interest Expense	(92)	(70)	(225)	(179)
Depreciation on equipment leased to others	0	0	0	0
Provision for credit losses	0	0	0	0
Assets	235		235		278
Capital expenditures	0	0	0	0
Inter-segment Eliminations
Segment Reporting Information
External Revenues	0	0	0	0
Profit before income taxes	0	0	0	0
Interest Expense	0	0	0	0
Depreciation on equipment leased to others	0	0	0	0
Provision for credit losses	0	0	0	0
Assets	(208)		(208)		(224)
Capital expenditures	0	0	0	0
North America | Operating Segments
Segment Reporting Information
External Revenues	459	383	1,313	1,112
Profit before income taxes	144	150	447	411
Interest Expense	128	69	331	181
Depreciation on equipment leased to others	130	126	380	381
Provision for credit losses	10	(5)	17	11
Assets	15,928		15,928		15,229
Capital expenditures	274	205	789	652
EAME | Operating Segments
Segment Reporting Information
External Revenues	102	72	274	207
Profit before income taxes	35	0	79	5
Interest Expense	26	27	72	45
Depreciation on equipment leased to others	14	13	43	41
Provision for credit losses	1	7	3	49
Assets	4,867		4,867		5,067
Capital expenditures	14	45	50	101
Asia/Pacific | Operating Segments
Segment Reporting Information
External Revenues	70	70	213	216
Profit before income taxes	19	33	86	104
Interest Expense	32	19	78	55
Depreciation on equipment leased to others	2	1	4	4
Provision for credit losses	1	1	(3)	5
Assets	3,265		3,265		3,921
Capital expenditures	0	3	2	6
Latin America | Operating Segments
Segment Reporting Information
External Revenues	95	75	264	204
Profit before income taxes	15	31	81	65
Interest Expense	48	37	132	98
Depreciation on equipment leased to others	3	3	9	7
Provision for credit losses	13	(8)	(2)	(3)
Assets	2,579		2,579		2,636
Capital expenditures	3	3	13	21
Mining | Operating Segments
Segment Reporting Information
External Revenues	86	72	253	218
Profit before income taxes	17	21	76	66
Interest Expense	23	11	56	29
Depreciation on equipment leased to others	32	35	94	109
Provision for credit losses	5	(4)	(2)	(14)
Assets	2,880		2,880		2,700
Capital expenditures	49	36	168	83
Power | Operating Segments
Segment Reporting Information
External Revenues	15	11	43	41
Profit before income taxes	(1)	12	3	35
Interest Expense	7	5	19	10
Depreciation on equipment leased to others	1	1	2	2
Provision for credit losses	4	(7)	9	(14)
Assets	644		644		$ 704
Capital expenditures	$ 0	$ 0	$ 0	$ 0

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Commitments and Contingent Liabilities (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Guarantor Obligations
Guarantees, maximum potential amount of future payments	$ 19	$ 26
Total assets	32,464	31,957
Liabilities	29,357	28,994
Maximum
Guarantor Obligations
Related recorded liability	1	1
Variable interest entity, primary beneficiary
Guarantor Obligations
Total assets	1,540	971
Liabilities	$ 1,540	$ 970

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Fair Value Measurements (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Recurring basis | Fair Value, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Derivative financial instruments, net asset position	$ 157	$ 218

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Fair Value Measurements (Details 2) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Loans carried at fair value	$ 57	$ 68

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Fair Value Measurements (Details 3) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Level 2
Financial Instruments, Financial Liabilities, Balance Sheet Groupings
Long-term debt	$ 22,806	$ 20,686
Fair Value, Level 3
Financial Instruments, Financial Assets, Balance Sheet Groupings
Finance receivables, net (excluding finance leases)	19,773	18,448
Carrying Amount
Financial Instruments, Financial Assets, Balance Sheet Groupings
Finance receivables, net (excluding finance leases)	20,345	19,085
Financial Instruments, Financial Liabilities, Balance Sheet Groupings
Long-term debt	23,408	21,418
Carrying amount of assets excluded from measurement at fair value
Financial Instruments, Financial Liabilities, Balance Sheet Groupings
Finance leases and failed sale leasebacks, Carrying Value	$ 6,860	$ 7,360

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Estimated annual tax rate	26.00%	27.00%
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Amount	$ 27