
(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

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.

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.

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.

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.

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.

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:


(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


(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

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.


(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.


(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

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.


(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

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.

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.

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.


(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.