XML 24 R10.htm IDEA: XBRL DOCUMENT

Finance Receivables

12 Months Ended

Dec. 31, 2025

FINANCE RECEIVABLES

A summary of finance receivables included in the Consolidated Statements of Financial Position as of December 31, was as follows:


(Millions of dollars)	2025		2024
Retail loans(1)	$	19,218	$	17,331
Retail finance leases	6,870		6,380
Caterpillar purchased receivables	5,500		4,283
Wholesale loans(1)	1,511		1,235
Wholesale leases	—		2
Total finance receivables	33,099		29,231
Less: Allowance for credit losses	(284)		(267)
Total finance receivables, net	$	32,815	$	28,964

(1) Includes failed sale leasebacks.

Maturities of our finance receivables, as of December 31, 2025, reflect contractual repayments due from borrowers and were as follows:


(Millions of dollars)	Retail loans		Retail finance leases		Caterpillar purchased receivables		Wholesale loans		Total
Amounts due in
2026	$	8,600	$	2,661	$	5,538	$	900	$	17,699
2027	5,138		1,839		—		351		7,328
2028	3,414		1,134		—		166		4,714
2029	1,833		622		—		36		2,491
2030	712		248		—		14		974
Thereafter	152		74		—		14		240
Total	19,849		6,578		5,538		1,481		33,446
Guaranteed residual value(1)	7		454		—		39		500
Unguaranteed residual value(1)	8		565		—		9		582
Unearned income	(646)		(727)		(38)		(18)		(1,429)
Total	$	19,218	$	6,870	$	5,500	$	1,511	$	33,099

(1) For Retail loans and Wholesale loans, represents residual value on failed sale leasebacks.

Our finance receivables generally may be repaid or refinanced without penalty prior to contractual maturity and we also sell finance receivables to third parties to mitigate the concentration of credit risk with certain customers.

Finance leases

Leases classified as sales-type or direct financing are reported as finance leases. Revenues from finance leases were $470 million, $437 million and $419 million for the years ended December 31, 2025, 2024, and 2023, respectively, and are included in retail and wholesale finance revenues in the Consolidated Statements of Profit.

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 incorporate Caterpillar products. The average original term of our customer finance receivables portfolio was approximately 51 months with an average remaining term of approximately 28 months as of December 31, 2025.

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

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

During the year ended December 31, 2025, our forecasts reflected a continuation of global market uncertainty and actions by global central banks aimed at balancing economic growth and managing inflation. We believe the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long-term trends.

Dealer

We provide financing to Caterpillar dealers on a secured and unsecured basis in the form of wholesale financing plans and retail loans. Our wholesale financing plans provide financing to dealers for their new Caterpillar equipment inventory and rental fleets. The retail loans to dealers are primarily for working capital.

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 year ended December 31, 2025.

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 year ended December 31, 2025.

Classes of finance receivables

We further evaluate our portfolio segments by the class of finance receivables, which is defined as a level of information (below a portfolio segment) in which the finance receivables have the same initial measurement attribute and a similar method for assessing and monitoring credit risk. Our classes, which align with management reporting for credit losses, are as follows:

•North America - Finance receivables originated in the United States and Canada.

•EAME - Finance receivables originated in Europe, Africa, the Middle East and Eurasia.

•Asia/Pacific - Finance receivables originated in Australia, New Zealand, China, Japan, Southeast Asia and India.

•Latin America - Finance receivables originated in Mexico and Central and South American countries.

•Mining - Finance receivables originated worldwide related to large mining customers.

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

An analysis of the allowance for credit losses as of December 31, was as follows:


(Millions of dollars)	2025								2024
Allowance for Credit Losses:	Customer		Dealer		Caterpillar Purchased Receivables		Total		Customer		Dealer		Caterpillar Purchased Receivables		Total
Beginning Balance	$	258	$	4	$	5	$	267	$	276	$	51	$	4	$	331

Write-offs	(148)		—		—		(148)		(125)		(47)		—		(172)
Recoveries	47		—		—		47		57		—		—		57
Provision for credit losses(1)	109		—		2		111		84		—		1		85
Other	7		—		—		7		(34)		—		—		(34)
Ending Balance	$	273	$	4	$	7	$	284	$	258	$	4	$	5	$	267








Finance Receivables	$	24,572	$	3,027	$	5,500	$	33,099	$	22,199	$	2,749	$	4,283	$	29,231

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

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


(Millions of dollars)	Year Ended December 31, 2025
	2025		2024		2023		2022		2021		Prior		Revolving Finance Receivables		Total
North America	$	3	$	15	$	27	$	12	$	8	$	4	$	8	$	77
EAME	1		5		7		3		2		1		1		20
Asia/Pacific	2		6		3		2		1		—		—		14
Latin America	1		3		3		5		2		1		—		15
Mining	—		8		6		6		—		1		—		21
Power	—		—		—		—		—		1		—		1
Total	$	7	$	37	$	46	$	28	$	13	$	8	$	9	$	148

	Year Ended December 31, 2024
	2024		2023		2022		2021		2020		Prior		Revolving Finance Receivables		Total
North America	$	2	$	19	$	13	$	6	$	3	$	1	$	9	$	53
EAME	1		4		5		4		2		1		—		17
Asia/Pacific	1		4		5		4		1		1		—		16
Latin America	—		3		6		5		3		8		—		25
Mining	8		3		3		—		—		—		—		14

Total	$	12	$	33	$	32	$	19	$	9	$	11	$	9	$	125

All $47 million of gross write-offs in the Dealer portfolio segment for the year ended December 31, 2024 were in Latin America and originated prior to 2020.

Credit quality of finance receivables

At origination, 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 aging analysis of our Customer portfolio segment by origination year was as follows:


(Millions of dollars)	December 31, 2025
	2025		2024		2023		2022		2021		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	5,531	$	3,634	$	1,845	$	743	$	318	$	20	$	510	$	12,601
31-60 days past due	30		42		28		18		6		1		4		129
61-90 days past due	11		14		10		5		3		—		2		45
91+ days past due	11		34		29		20		8		3		1		106

EAME
Current	1,560		938		614		316		114		44		—		3,586
31-60 days past due	5		12		6		6		2		—		—		31
61-90 days past due	3		5		3		2		1		—		—		14
91+ days past due	5		9		12		6		3		2		—		37

Asia/Pacific
Current	1,175		691		380		137		42		3		50		2,478
31-60 days past due	5		8		3		1		—		—		—		17
61-90 days past due	2		3		1		2		—		—		—		8
91+ days past due	1		1		2		2		—		—		—		6

Latin America
Current	984		511		212		96		15		1		4		1,823
31-60 days past due	3		6		5		3		—		—		—		17
61-90 days past due	2		2		2		1		—		1		—		8
91+ days past due	1		10		7		4		1		—		—		23

Mining
Current	946		806		495		280		107		51		—		2,685
31-60 days past due	3		—		—		—		—		—		—		3
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	1		1		8		—		—		—		—		10

Power
Current	272		264		179		37		8		37		148		945
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		—		—		—

Totals by Aging Category
Current	10,468		6,844		3,725		1,609		604		156		712		24,118
31-60 days past due	46		68		42		28		8		1		4		197
61-90 days past due	18		24		16		10		4		1		2		75
91+ days past due	19		55		58		32		12		5		1		182
Total	$	10,551	$	6,991	$	3,841	$	1,679	$	628	$	163	$	719	$	24,572


(Millions of dollars)	December 31, 2024
	2024		2023		2022		2021		2020		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	5,340	$	3,035	$	1,567	$	980	$	244	$	23	$	385	$	11,574
31-60 days past due	30		42		29		18		5		1		3		128
61-90 days past due	9		14		10		6		2		1		1		43
91+ days past due	13		37		26		16		6		2		1		101

EAME
Current	1,244		874		532		285		92		72		—		3,099
31-60 days past due	7		10		4		3		1		—		—		25
61-90 days past due	3		4		1		1		1		—		—		10
91+ days past due	3		14		8		6		4		1		—		36

Asia/Pacific
Current	1,064		662		313		126		31		4		46		2,246
31-60 days past due	4		6		5		2		—		—		—		17
61-90 days past due	1		1		2		1		—		—		—		5
91+ days past due	4		1		2		1		1		—		—		9

Latin America
Current	800		363		220		60		8		2		—		1,453
31-60 days past due	4		6		5		1		—		2		—		18
61-90 days past due	1		2		1		—		—		—		—		4
91+ days past due	2		6		8		4		1		1		—		22

Mining
Current	1,067		775		450		214		69		41		21		2,637
31-60 days past due	—		1		—		—		—		—		—		1
61-90 days past due	—		1		—		—		—		—		—		1
91+ days past due	4		5		5		1		—		3		—		18

Power
Current	190		184		40		43		64		63		166		750
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		2		—		2

Totals by Aging Category
Current	9,705		5,893		3,122		1,708		508		205		618		21,759
31-60 days past due	45		65		43		24		6		3		3		189
61-90 days past due	14		22		14		8		3		1		1		63
91+ days past due	26		63		49		28		12		9		1		188
Total	$	9,790	$	6,043	$	3,228	$	1,768	$	529	$	218	$	623	$	22,199

Finance receivables in our Customer portfolio segment are substantially secured by collateral, primarily in the form of Caterpillar and other equipment. For those contracts where the borrower is experiencing financial difficulty, repayment of the outstanding amounts is generally expected to be provided through the operation or repossession and sale of the equipment.

Dealer

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

Caterpillar Purchased Receivables

The aging analysis of our Caterpillar Purchased Receivables portfolio segment as of December 31, was as follows:


(Millions of dollars)	2025
	Current		31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Finance Receivables
North America	$	3,242	$	9	$	7	$	5	$	3,263
EAME	1,189		1		—		—		1,190
Asia/Pacific	646		1		—		—		647
Latin America	387		—		—		—		387

Power	11		2		—		—		13
Total	$	5,475	$	13	$	7	$	5	$	5,500

	2024
	Current		31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Finance Receivables
North America	$	2,584	$	14	$	5	$	4	$	2,607
EAME	740		3		1		—		744
Asia/Pacific	528		—		—		1		529
Latin America	383		—		—		—		383

Power	16		2		1		1		20
Total	$	4,251	$	19	$	7	$	6	$	4,283

Non-accrual finance receivables

In our Customer portfolio segment, finance receivables which were on non-accrual status and finance receivables over 90 days past due and still accruing income as of December 31, were as follows:


(Millions of dollars)	2025		2024
	Amortized Cost		Amortized Cost
	Non-accrual		91+ Still Accruing		Non-accrual		91+ Still Accruing
North America	$	90	$	20	$	83	$	20
EAME	35		5		33		5
Asia/Pacific	4		2		5		5
Latin America	24		1		24		—
Mining	10		—		29		—
Power	—		—		2		—
Total	$	163	$	28	$	176	$	30

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

Modifications

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

During the years ended December 31, 2025 and 2024, there were no finance receivable modifications granted to borrowers experiencing financial difficulty in the Dealer or Caterpillar Purchased Receivables portfolio segments.

The ending amortized cost of finance receivables modified with borrowers experiencing financial difficulty in the Customer portfolio segment for the years ended December 31, 2025 and 2024 was as follows:


(Millions of dollars)	2025			2024
Amortized cost of finance receivables modified	$	38		$	33
Modifications as a percentage of Customer portfolio	0.16		%	0.15		%

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


(In months)	2025	2024
Weighted average extension to term of modified contracts	19	8
Weighted average payment deferral and/or interest only periods	6	6

After we modify a finance receivable, we continue to track its performance under its most recent modified terms. As of December 31, 2025 and 2024, defaults of loans modified in the prior twelve months were not significant.

The effect of most modifications made to finance receivables for borrowers experiencing financial difficulty is already included in the allowance for credit losses based on the methodologies used to estimate the allowance; therefore, a change to the allowance for credit losses is generally not recorded upon modification. On rare occasions when principal forgiveness is provided, the amount forgiven is written off against the allowance for credit losses.

Concentration of credit risk

As of December 31, 2025 and 2024, receivables from customers in construction-related industries made up approximately 40 percent of our total portfolio. No single customer or dealer represented a significant concentration of credit risk.