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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 June 30, 2025

Commission File No. 001-11241

CATERPILLAR FINANCIAL SERVICES CORPORATION

(Exact name of Registrant as specified in its charter)


Delaware						37-1105865
(State of incorporation)						(IRS Employer I.D. No.)

2120 West End Ave., Nashville, Tennessee						37203-0001
(Address of principal executive offices)						(Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Medium-Term Notes, Series K,
4.850% Notes Due 2029

CAT/29

New York Stock Exchange

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

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

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

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

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

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

As of August 6, 2025, one share of common stock of the registrant was outstanding, which is owned by Caterpillar Inc.

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

Table of Contents


Part I. Financial Information
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	*
Item 4.	Controls and Procedures	34

Part II. Other Information
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
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	35
Item 6.	Exhibits	35
* Item omitted because no answer is called for or item is not applicable.

UNAUDITED

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

In addition to the accompanying unaudited consolidated financial statements for Caterpillar Financial Services Corporation (together with its subsidiaries, “Cat Financial,” “the Company,” “we,” “us” or “our”), we suggest that you read our 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 14, 2025. The Company files electronically with the SEC required reports on Form 8-K, Form 10-Q and Form 10-K; registration statements on Form S-3; and other forms or reports as required. Our SEC filings are available to the public free of charge on the SEC's website (www.sec.gov) and 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.

UNAUDITED

Caterpillar Financial Services Corporation

CONSOLIDATED STATEMENTS OF PROFIT (LOSS)

(Unaudited)

(Dollars in Millions)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Revenues:
Retail finance	$	459	$	416	$	900	$	820
Operating lease	227		233		455		466
Wholesale finance	170		180		323		353
Other, net	43		36		81		79
Total revenues	899		865		1,759		1,718

Expenses:
Interest	342		315		667		613
Depreciation on equipment leased to others	174		180		347		361
General, operating and administrative	172		164		323		318
Provision for credit losses	19		6		48		13
Other	7		7		12		14
Total expenses	714		672		1,397		1,319

Other income (expense)	(2)		(211)		(5)		(188)

Profit (loss) before income taxes	183		(18)		357		211

Provision for income taxes	45		47		89		106

Profit (loss) of consolidated companies	138		(65)		268		105

Less: Profit (loss) attributable to noncontrolling interests	1		—		1		1

Profit (loss) attributable to Caterpillar Financial Services Corporation	$	137	$	(65)	$	267	$	104

See Notes to Consolidated Financial Statements (Unaudited).

UNAUDITED

Caterpillar Financial Services Corporation

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(Dollars in Millions)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024

Profit (loss) of consolidated companies	$	138	$	(65)	$	268	$	105

Other comprehensive income (loss), net of tax (Note 5):
Foreign currency translation	222		21		310		(100)
Derivative financial instruments	(7)		(2)		(19)		(4)
Total Other comprehensive income (loss), net of tax	215		19		291		(104)

Comprehensive income (loss)	353		(46)		559		1

Less: Comprehensive income (loss) attributable to noncontrolling interests	1		—		1		1

Comprehensive income (loss) attributable to Caterpillar Financial Services Corporation	$	352	$	(46)	$	558	$	—

See Notes to Consolidated Financial Statements (Unaudited).

UNAUDITED

Caterpillar Financial Services Corporation

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)

(Dollars in Millions, except share data)


	June 30, 2025		December 31, 2024
Assets:
Cash and cash equivalents	$	820	$	599
Finance receivables, net of allowance for credit losses of $290 and $267	30,606		28,964
Notes receivable from Caterpillar	595		559
Equipment on operating leases, net	2,781		2,780

Other assets	1,281		1,182
Total assets	$	36,083	$	34,084

Liabilities and shareholder’s equity:
Payable to dealers and others	$	148	$	137
Payable to Caterpillar - borrowings and other	1,130		128
Accrued expenses	618		489


Short-term borrowings	4,485		4,393
Current maturities of long-term debt	8,285		6,619
Long-term debt	17,294		18,787
Other liabilities	674		641
Total liabilities	32,634		31,194

Commitments and contingent liabilities (Note 7)

Common stock - $1 par value
Authorized: 2,000 shares; Issued and
outstanding: one share (at paid-in amount)	745		745
Additional paid-in capital	2		2
Retained earnings	3,567		3,300
Accumulated other comprehensive income (loss)	(941)		(1,232)
Noncontrolling interests	76		75
Total shareholder’s equity	3,449		2,890

Total liabilities and shareholder’s equity	$	36,083	$	34,084

See Notes to Consolidated Financial Statements (Unaudited).

UNAUDITED

Caterpillar Financial Services Corporation

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY

(Unaudited)

(Dollars in Millions)


Three Months Ended June 30, 2024	Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive income (loss)		Noncontrolling interests		Total
Balance at March 31, 2024	$	745	$	2	$	3,496	$	(1,101)	$	75	$	3,217
Profit (loss) of consolidated companies					(65)						(65)

Foreign currency translation, net of tax							21				21
Derivative financial instruments, net of tax							(2)				(2)


Balance at June 30, 2024	$	745	$	2	$	3,431	$	(1,082)	$	75	$	3,171

Three Months Ended June 30, 2025
Balance at March 31, 2025	$	745	$	2	$	3,430	$	(1,156)	$	75	$	3,096
Profit (loss) of consolidated companies					137				1		138

Foreign currency translation, net of tax							222				222
Derivative financial instruments, net of tax							(7)				(7)


Balance at June 30, 2025	$	745	$	2	$	3,567	$	(941)	$	76	$	3,449

Six Months Ended June 30, 2024
Balance at December 31, 2023	$	745	$	2	$	3,327	$	(978)	$	74	$	3,170
Profit (loss) of consolidated companies					104				1		105

Foreign currency translation, net of tax							(100)				(100)
Derivative financial instruments, net of tax							(4)				(4)


Balance at June 30, 2024	$	745	$	2	$	3,431	$	(1,082)	$	75	$	3,171

Six Months Ended June 30, 2025
Balance at December 31, 2024	$	745	$	2	$	3,300	$	(1,232)	$	75	$	2,890
Profit (loss) of consolidated companies					267				1		268

Foreign currency translation, net of tax							310				310
Derivative financial instruments, net of tax							(19)				(19)


Balance at June 30, 2025	$	745	$	2	$	3,567	$	(941)	$	76	$	3,449

See Notes to Consolidated Financial Statements (Unaudited).

UNAUDITED

Caterpillar Financial Services Corporation

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in Millions)


	Six Months Ended June 30,
	2025		2024
Cash flows from operating activities:
Profit of consolidated companies	$	268	$	105
Adjustments to reconcile profit to net cash provided by operating activities:
Depreciation and amortization	355		369
Accretion of Caterpillar purchased receivable revenue	(283)		(315)
Provision for credit losses	48		13
Provision (benefit) for deferred income taxes	(25)		(51)
Loss on divestiture	—		210
Other, net	(11)		47
Changes in assets and liabilities:
Other assets	26		107
Payable to dealers and others	38		(7)
Accrued expenses	22		44
Other payables with Caterpillar	—		(9)
Other liabilities	51		101
Net cash provided by operating activities	489		614
Cash flows from investing activities:
Expenditures for equipment on operating leases	(527)		(541)
Capital expenditures - excluding equipment on operating leases	(22)		(12)
Proceeds from disposals of equipment	327		325
Additions to finance receivables	(8,076)		(7,961)
Collections of finance receivables	7,310		7,185
Net changes in Caterpillar purchased receivables	93		(138)
Proceeds from sale of business, net of cash sold	—		(153)
Proceeds from sales of receivables	18		37
Net change in variable lending to Caterpillar	(62)		(56)

Collections of other notes receivable from Caterpillar	30		27

Settlements of undesignated derivatives	(38)		10

Net cash provided by (used for) investing activities	(947)		(1,277)
Cash flows from financing activities:
Net change in variable lending from Caterpillar	(10)		(14)
Proceeds from borrowings with Caterpillar	1,000		—

Proceeds from debt issued (original maturities greater than three months)	3,731		4,151
Payments on debt issued (original maturities greater than three months)	(4,133)		(4,203)
Short-term borrowings, net (original maturities three months or less)	72		687

Net cash provided by (used for) financing activities	660		621
Effect of exchange rate changes on cash, cash equivalents and restricted cash	20		(9)
Increase (decrease) in cash, cash equivalents and restricted cash	222		(51)
Cash, cash equivalents and restricted cash at beginning of year(1)	600		729
Cash, cash equivalents and restricted cash at end of period(1)	$	822	$	678

(1) As of June 30, 2025 and December 31, 2024, restricted cash, which is included in Other assets in the Consolidated Statements of Financial Position, was $2 million and $1 million, respectively. Restricted cash primarily includes cash related to syndication activities.

See Notes to Consolidated Financial Statements (Unaudited).

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 (loss) for the three and six months ended June 30, 2025 and 2024, (b) the consolidated comprehensive income (loss) for the three and six months ended June 30, 2025 and 2024, (c) the consolidated financial position at June 30, 2025 and December 31, 2024, (d) the consolidated changes in shareholder’s equity for the three and six months ended June 30, 2025 and 2024 and (e) the consolidated cash flows for the six months ended June 30, 2025 and 2024. The preparation of financial statements, in conformity with generally accepted accounting principles and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), requires management to make estimates and assumptions that affect the reported amounts. Significant estimates include residual values for leased assets, allowance for credit losses and income taxes. Actual results may differ from these estimates.

Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2024 (2024 Form 10-K). The December 31, 2024 financial position data included herein was derived from the audited consolidated financial statements included in the 2024 Form 10-K but does not include all disclosures required by generally accepted accounting principles. Certain amounts for prior periods have been reclassified to conform with the current period financial statement presentation.

The accompanying consolidated financial statements include the accounts of Cat Financial and a consolidated variable interest entity (VIE). We consolidate all VIEs where we are the primary beneficiary. For VIEs, we assess whether we are the primary beneficiary as prescribed by the accounting guidance on the consolidation of VIEs. Please refer to Note 7 for more information.

We have customers and dealers that are VIEs of which we are not the primary beneficiary. Our maximum exposure to loss from our involvement with these VIEs is limited to the credit risk inherently present in the financial support that we have provided. Credit risk was evaluated and reflected in our financial statements as part of our overall portfolio of finance receivables and related allowance for credit losses.

2.New Accounting Pronouncements

A.Adoption of New Accounting Standards

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

B. Accounting Standards Issued But Not Yet Adopted

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

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

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

UNAUDITED

3.Finance Receivables

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


(Millions of dollars)	June 30, 2025		December 31, 2024
Retail loans(1)	$	18,160	$	17,331
Retail leases	6,848		6,380
Caterpillar purchased receivables	4,582		4,283
Wholesale loans(1)	1,305		1,235
Wholesale leases	1		2
Total finance receivables	30,896		29,231
Less: Allowance for credit losses	(290)		(267)
Total finance receivables, net	$	30,606	$	28,964

(1) Includes failed sale leasebacks.

Finance leases

Revenues from finance leases were $118 million and $107 million for the three months ended June 30, 2025 and 2024, respectively, and $230 million and $213 million for the six months ended June 30, 2025 and 2024, respectively, and are included in retail and wholesale finance revenues in the Consolidated Statements of Profit.

A.Allowance for credit losses

Portfolio segments

A portfolio segment is the level at which we develop a systematic methodology for determining our allowance for credit losses. Our portfolio segments and related methods for estimating expected credit losses are as follows:

Customer

We provide loans and finance leases to end-user customers primarily for the purpose of financing new and used Caterpillar machinery, engines and equipment for commercial use. We also provide financing for power generation facilities that, in most cases, incorporate Caterpillar products. The average original term of our customer finance receivables portfolio was approximately 51 months with an average remaining term of approximately 27 months as of June 30, 2025.

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

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

During the three and six months ended June 30, 2025, our forecasts reflected a continuation of the trend of historically low unemployment rates as well as global market uncertainty and continued actions by global central banks aimed at reducing inflation. We believe the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long-term trends.

Dealer

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

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

UNAUDITED

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 six months ended June 30, 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 three and six months ended June 30, 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 was as follows:


(Millions of dollars)	Three Months Ended June 30, 2025								Three Months Ended June 30, 2024
	Customer		Dealer		Caterpillar Purchased Receivables		Total		Customer		Dealer		Caterpillar Purchased Receivables		Total
Beginning Balance	$	273	$	4	$	5	$	282	$	273	$	4	$	4	$	281
Write-offs	(27)		—		—		(27)		(33)		—		—		(33)
Recoveries	9		—		—		9		15		—		—		15
Provision for credit losses(1)	21		—		—		21		15		—		—		15
Other	5		—		—		5		(24)		—		—		(24)
Ending Balance	$	281	$	4	$	5	$	290	$	246	$	4	$	4	$	254

	Six Months Ended June 30, 2025								Six Months Ended June 30, 2024
	Customer		Dealer		Caterpillar Purchased Receivables		Total		Customer		Dealer		Caterpillar Purchased Receivables		Total
Beginning Balance	$	258	$	4	$	5	$	267	$	276	$	51	$	4	$	331
Write-offs	(57)		—		—		(57)		(56)		(47)		—		(103)
Recoveries	19		—		—		19		30		—		—		30
Provision for credit losses(1)	54		—		—		54		24		—		—		24
Other	7		—		—		7		(28)		—		—		(28)
Ending Balance	$	281	$	4	$	5	$	290	$	246	$	4	$	4	$	254

Finance Receivables	$	23,629	$	2,685	$	4,582	$	30,896	$	21,293	$	2,909	$	4,326	$	28,528

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

UNAUDITED

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


(Millions of dollars)	Three Months Ended June 30, 2025
	2025		2024		2023		2022		2021		Prior		Revolving Finance Receivables		Total
North America	$	—	$	3	$	6	$	2	$	2	$	2	$	2	$	17
EAME	—		1		2		—		1		—		—		4
Asia/Pacific	—		1		1		1		—		—		—		3
Latin America	—		—		1		2		—		—		—		3


Total	$	—	$	5	$	10	$	5	$	3	$	2	$	2	$	27

	Three Months Ended June 30, 2024
	2024		2023		2022		2021		2020		Prior		Revolving Finance Receivables		Total
North America	$	—	$	5	$	2	$	1	$	—	$	1	$	3	$	12
EAME	—		1		1		1		1		—		—		4
Asia/Pacific	—		1		1		2		—		—		—		4
Latin America	—		—		2		2		1		8		—		13


Total	$	—	$	7	$	6	$	6	$	2	$	9	$	3	$	33

	Six Months Ended June 30, 2025
	2025		2024		2023		2022		2021		Prior		Revolving Finance Receivables		Total
North America	$	—	$	5	$	11	$	6	$	4	$	3	$	4	$	33
EAME	—		2		3		1		1		—		—		7
Asia/Pacific	—		1		2		1		1		—		—		5
Latin America	—		—		2		3		—		1		—		6
Mining	—		3		1		1		—		—		—		5
Power	—		—		—		—		—		1		—		1
Total	$	—	$	11	$	19	$	12	$	6	$	5	$	4	$	57

	Six Months Ended June 30, 2024
	2024		2023		2022		2021		2020		Prior		Revolving Finance Receivables		Total
North America	$	—	$	8	$	6	$	3	$	1	$	1	$	6	$	25
EAME	—		2		2		2		1		—		—		7
Asia/Pacific	—		2		3		3		1		—		—		9
Latin America	—		—		3		3		1		8		—		15


Total	$	—	$	12	$	14	$	11	$	4	$	9	$	6	$	56

For the three months ended June 30, 2025 and 2024, there were no gross write-offs in our Dealer portfolio segment. For the six months ended June 30, 2025, there were no gross write-offs in our Dealer portfolio segment. For the six months ended June 30, 2024, there were $47 million of gross write-offs in our Dealer portfolio segment, all of which were in Latin America and originated prior to 2020.

UNAUDITED

B.Credit quality of finance receivables

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

Customer

The aging category of the amortized cost of finance receivables in our Customer portfolio segment by origination year were as follows:


(Millions of dollars)	June 30, 2025
	2025		2024		2023		2022		2021		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	2,805	$	4,496	$	2,439	$	1,126	$	607	$	107	$	443	$	12,023
31-60 days past due	14		43		40		26		12		3		3		141
61-90 days past due	3		18		13		8		5		1		1		49
91+ days past due	1		27		37		26		14		5		1		111

EAME
Current	773		1,165		786		444		213		95		—		3,476
31-60 days past due	2		9		11		6		2		1		—		31
61-90 days past due	2		4		7		3		2		2		—		20
91+ days past due	—		8		14		8		4		3		—		37

Asia/Pacific
Current	616		887		533		216		80		15		55		2,402
31-60 days past due	4		9		5		5		1		—		—		24
61-90 days past due	—		2		2		2		—		—		—		6
91+ days past due	—		2		2		1		—		—		—		5

Latin America
Current	532		672		298		161		35		5		1		1,704
31-60 days past due	—		10		5		3		1		1		—		20
61-90 days past due	—		3		2		1		—		—		—		6
91+ days past due	1		7		8		7		3		—		—		26

Mining
Current	445		957		654		363		155		77		16		2,667
31-60 days past due	—		—		1		—		—		—		—		1
61-90 days past due	—		—		1		—		—		2		—		3
91+ days past due	—		3		4		5		—		1		—		13

Power
Current	125		244		178		37		32		71		176		863
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		1		—		1



Totals by Aging Category
Current	5,296		8,421		4,888		2,347		1,122		370		691		23,135
31-60 days past due	20		71		62		40		16		5		3		217
61-90 days past due	5		27		25		14		7		5		1		84
91+ days past due	2		47		65		47		21		10		1		193
Total	$	5,323	$	8,566	$	5,040	$	2,448	$	1,166	$	390	$	696	$	23,629

UNAUDITED


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

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

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

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

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

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



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

Dealer

As of June 30, 2025 and December 31, 2024, the total amortized cost of finance receivables within our Dealer portfolio segment was current.

UNAUDITED

Caterpillar Purchased Receivables

The aging category of the amortized cost of finance receivables in our Caterpillar Purchased Receivables portfolio segment were as follows:


(Millions of dollars)	June 30, 2025
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables














North America	$	10	$	3	$	4	$	17	$	2,808	$	2,825
EAME	4		2		1		7		832		839
Asia/Pacific	—		1		—		1		508		509

Latin America	—		—		—		—		393		393
Power	2		—		—		2		14		16
Total	$	16	$	6	$	5	$	27	$	4,555	$	4,582


	December 31, 2024
	31-60 Days Past Due		61-90 Days Past Due		91+ Days Past Due		Total Past Due		Current		Total Finance Receivables















North America	$	14	$	5	$	4	$	23	$	2,584	$	2,607
EAME	3		1		—		4		740		744
Asia/Pacific	—		—		1		1		528		529

Latin America	—		—		—		—		383		383
Power	2		1		1		4		16		20
Total	$	19	$	7	$	6	$	32	$	4,251	$	4,283

Non-accrual finance receivables

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


(Millions of dollars)	June 30, 2025		December 31, 2024
	Amortized Cost		Amortized Cost
	Non-accrual With an Allowance		91+ Still Accruing		Non-accrual With an Allowance		91+ Still Accruing
North America	$	94	$	20	$	83	$	20
EAME	36		5		33		5
Asia/Pacific	3		3		5		5
Latin America	26		—		24		—
Mining	16		—		29		—
Power	1		—		2		—
Total	$	176	$	28	$	176	$	30

There were no finance receivables in our Dealer portfolio segment on non-accrual status as of June 30, 2025 and December 31, 2024.

Modifications

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

UNAUDITED

During the three and six months ended June 30, 2025 and 2024, there were no finance receivable modifications granted to borrowers experiencing financial difficulty in our Dealer or Caterpillar Purchased Receivables portfolio segments.

The ending amortized cost of finance receivables modified with borrowers experiencing financial difficulty in our Customer portfolio segment was as follows:


(Millions of dollars)	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Amortized cost of finance receivables modified	$	16		$	3		$	20		$	6
Modifications as a percentage of Customer portfolio	0.07		%	0.02		%	0.08		%	0.03		%

The financial effects of term extensions and payment delays for borrowers experiencing financial difficulty were as follows:


(In months)	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Weighted average extension to term of modified contracts	14	13	13	11
Weighted average payment deferral and/or interest only periods	7	6	7	8

After we modify a finance receivable, we continue to track its performance under its most recent modified terms. Defaults of loans modified in the prior twelve months were not significant during the three and six months ended June 30, 2025 and 2024.

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

4.Derivative Financial Instruments and Risk Management

Our earnings and cash flows are subject to fluctuations due to changes in foreign currency exchange rates and interest rates. Our Risk Management Policy (“policy”) allows for the use of derivative financial instruments to prudently manage foreign currency exchange rate and interest rate exposures. Our policy specifies that derivatives are not to be used for speculative purposes. Derivatives that we use are primarily foreign currency forward, option and cross currency contracts and interest rate contracts. Our derivative activities are subject to the management, direction and control of our senior financial officers. We present at least annually to our Board of Directors and the Audit Committee of the Caterpillar Board of Directors on our risk management practices, including our use of derivative financial instruments.

We recognize all derivatives at their fair value in the Consolidated Statements of Financial Position. On the date the derivative contract is entered into, the derivative instrument is (1) designated as a hedge of the fair value of a recognized asset or liability (fair value hedge), (2) designated as a hedge of a forecasted transaction or the variability of cash flows (cash flow hedge) or (3) undesignated. We record in current earnings changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged recognized asset or liability that is attributable to the hedged risk. For foreign exchange contracts designated as fair value hedges, the interim settlements are excluded from the effectiveness assessment and are recognized under a systematic and rational method over the life of the hedging instrument within Interest expense. We record in Accumulated other comprehensive income (loss) (AOCI) changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge, to the extent effective, in the Consolidated Statements of Financial Position until we reclassify them to earnings in the same period or periods during which the hedged transaction affects earnings. We report changes in the fair value of undesignated derivative instruments in current earnings. We classify cash flows from designated derivative financial instruments within the same category as the item being hedged in the Consolidated Statements of Cash Flows. We include cash flows from undesignated derivative financial instruments in the investing category in the Consolidated Statements of Cash Flows.

We formally document all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities in the Consolidated Statements of Financial Position and linking cash flow hedges to specific forecasted transactions or variability of cash flow.

UNAUDITED

We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the designated derivatives that are used in hedging transactions are highly effective in offsetting changes in fair value or cash flow of hedged items. When a derivative is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, we discontinue hedge accounting prospectively, in accordance with the derecognition criteria for hedge accounting.

Foreign currency exchange rate risk

We have balance sheet positions and expected future transactions denominated in foreign currencies, thereby creating exposure to movements in exchange rates. In managing foreign currency risk, our objective is to minimize earnings volatility resulting from conversion and the remeasurement of net foreign currency balance sheet positions and future transactions denominated in foreign currencies. Our policy allows the use of foreign currency forward, option and cross currency contracts to offset the risk of currency mismatch between our assets and liabilities and exchange rate risk associated with future transactions denominated in foreign currencies. Our foreign currency forward and option contracts are primarily undesignated. We designate fixed-to-fixed cross currency contracts as cash flow hedges to protect against movements in exchange rates on foreign currency fixed-rate assets and liabilities. We designate float-to-float cross currency contracts as fair value hedges to protect against movements in exchange rates on floating-rate assets and liabilities.

Interest rate risk

Interest rate movements create a degree of risk by affecting the amount of our interest payments and the value of our fixed-rate debt. Our practice is to use interest rate contracts to manage our exposure to interest rate changes.

We have a match-funding policy that addresses interest rate risk by aligning the interest rate profile (fixed or floating rate and duration) of our debt portfolio with the interest rate profile of our finance receivables portfolio within predetermined ranges on an ongoing basis. In connection with that policy, we use interest rate derivative instruments to modify the debt structure to match assets within the finance receivables portfolio. This matched funding reduces the volatility of margins between interest-bearing assets and interest-bearing liabilities, regardless of which direction interest rates move.

Our policy allows us to use fixed-to-floating, floating-to-fixed and floating-to-floating interest rate contracts to meet the match-funding objective. We designate fixed-to-floating interest rate contracts as fair value hedges to protect debt against changes in fair value due to changes in the benchmark interest rate. We designate most floating-to-fixed interest rate contracts as cash flow hedges to protect against the variability of cash flows due to changes in the benchmark interest rate. We have, at certain times, liquidated fixed-to-floating and floating-to-fixed interest rate contracts. We amortize the gains or losses associated with these contracts at the time of liquidation into earnings over the remaining term of the previously designated hedged item.

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



(Millions of dollars)	June 30, 2025				December 31, 2024
	Assets1		Liabilities2		Assets1		Liabilities2
Designated derivatives
Foreign exchange contracts	$	267	$	(133)	$	228	$	(89)
Interest rate contracts	60		(15)		10		(31)
	$	327	$	(148)	$	238	$	(120)
Undesignated derivatives
Foreign exchange contracts	$	11	$	(79)	$	84	$	(19)
	$	11	$	(79)	$	84	$	(19)

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

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

The total notional amount of our derivative instruments was $18.36 billion and $15.97 billion as of June 30, 2025 and December 31, 2024, respectively. The notional amounts of derivative financial instruments do not represent amounts exchanged by the parties. We calculate the amounts exchanged by the parties by referencing the notional amounts and by other terms of the derivatives, such as foreign currency exchange rates and interest rates.

UNAUDITED

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


(Millions of dollars)	Three Months Ended June 30,
	Gains (Losses) Recognized1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI2
	2025		2024		2025		2024		2025		2024
Cash Flow Hedges
Foreign exchange contracts	$	—	$	—	$	67	$	70	$	74	$	61
Interest rate contracts	—		—		(1)		4		1		14

Fair Value Hedges
Foreign exchange contracts	—		—		(2)		—		(1)		—
Interest rate contracts	(9)		(21)		—		—		—		—

Undesignated Hedges
Foreign exchange contracts	(132)		43		—		—		—		—


Total	$	(141)	$	22	$	64	$	74	$	74	$	75

	Six Months Ended June 30,
	Gains (Losses) Recognized1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI2
	2025		2024		2025		2024		2025		2024
Cash Flow Hedges
Foreign exchange contracts	$	—	$	—	$	63	$	167	$	82	$	156
Interest rate contracts	—		—		(3)		15		2		30

Fair Value Hedges
Foreign exchange contracts	—		—		(2)		—		(1)		—
Interest rate contracts	(16)		(41)		—		—		—		—

Undesignated Hedges
Foreign exchange contracts	(166)		80		—		—		—		—


Total	$	(182)	$	39	$	58	$	182	$	83	$	186

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

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

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


(Millions of dollars)	Carrying Value of the Hedged Liabilities				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities
	June 30, 2025		December 31, 2024		June 30, 2025		December 31, 2024
Current maturities of long-term debt	$	1,096	$	483	$	(1)	$	(16)
Long-term debt	3,253		3,247		53		—
Total	$	4,349	$	3,730	$	52	$	(16)

UNAUDITED

As of June 30, 2025, $25 million of deferred net losses, 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. Our exposure to credit loss in the event of nonperformance by the counterparties is limited to only those gains that we have recorded, but for which we have not yet received cash payment.

Collateral is typically not required of the counterparties or us under the master netting agreements. As of June 30, 2025 and December 31, 2024, no cash collateral was received or pledged under the master netting agreements.

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


(Millions of dollars)	June 30, 2025				December 31, 2024
	Assets		Liabilities		Assets		Liabilities
Gross amounts recognized	$	338	$	(227)	$	322	$	(139)
Financial instruments not offset	(127)		127		(54)		54

Net amount	$	211	$	(100)	$	268	$	(85)

UNAUDITED

5.Accumulated Other Comprehensive Income (Loss)

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


(Millions of dollars)	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Foreign currency translation
Balance at beginning of period	$	(1,168)	$	(1,117)	$	(1,256)	$	(996)


Gains (losses) on foreign currency translation	222		(36)		310		(146)
Less: Tax provision/(benefit)	—		4		—		15
Net gains (losses) on foreign currency translation	222		(40)		310		(161)
(Gains) losses reclassified to earnings	—		61		—		61
Less: Tax provision/(benefit)	—		—		—		—
Net (gains) losses reclassified to earnings	—		61		—		61
Other comprehensive income (loss), net of tax	222		21		310		(100)
Balance at end of period	$	(946)	$	(1,096)	$	(946)	$	(1,096)

Derivative financial instruments
Balance at beginning of period	$	12	$	16	$	24	$	18


Gains (losses) deferred	64		74		58		182
Less: Tax provision/(benefit)	17		18		16		46
Net gains (losses) deferred	47		56		42		136
(Gains) losses reclassified to earnings	(74)		(75)		(83)		(186)
Less: Tax (provision)/benefit	(20)		(17)		(22)		(46)
Net (gains) losses reclassified to earnings	(54)		(58)		(61)		(140)
Other comprehensive income (loss), net of tax	(7)		(2)		(19)		(4)
Balance at end of period	$	5	$	14	$	5	$	14

Total Accumulated other comprehensive income (loss) at end of period	$	(941)	$	(1,082)	$	(941)	$	(1,082)

UNAUDITED

6.Segment Information

A. Basis for Segment Information

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

B. Description of Segments

Our operating segments provide financing alternatives to customers and dealers around the world for Caterpillar products and services and power generation facilities that, in most cases, incorporate Caterpillar products. Financing plans include operating and finance leases, revolving charge accounts, retail loans, working capital loans to Caterpillar dealers and wholesale financing plans within each of the operating segments. Certain operating segments also purchase short-term trade receivables from Caterpillar.

We have six operating segments that offer financing services. Following is a brief description of our segments:

•North America - Includes our operations in the United States and Canada.

•EAME - Includes our operations in Europe, Africa, the Middle East and Eurasia.

•Asia/Pacific - Includes our operations in Australia, New Zealand, China, Japan, Southeast Asia and India.

•Latin America - Includes our operations in Mexico and Central and South American countries.

•Mining - Provides financing worldwide for large mining customers.

•Power - Provides financing worldwide 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.

C. Segment Measurement and Reconciliations

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

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

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

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

•Timing - Timing differences between segment reporting and consolidated external reporting.

•Methodology - Methodology differences between segment reporting and consolidated external reporting are as follows:

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

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

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

◦Designated derivative activity is excluded from segment results.

•Divestiture - Loss on divestiture included in Other income (expense). See Note 10 for more information.

UNAUDITED

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


(Millions of dollars) 2025	External revenues		Interest expense		Depreciation on equipment leased to others		General, operating and administrative expenses		Provision for credit losses		Other segment items(1)		Profit (loss) before income taxes
North America	$	520	$	172	$	126	$	48	$	24	$	4	$	146
EAME	96		34		13		25		—		1		23
Asia/Pacific	66		24		2		19		—		—		21
Latin America	89		44		2		17		2		2		22
Mining	95		27		31		9		(8)		2		34
Power	19		10		—		3		1		—		5
Total Segments	885		311		174		121		19		9		251
Unallocated	17		135		—		52		—		—		(170)
Timing	(3)		—		—		(5)		—		—		2
Methodology	—		(104)		—		4		—		—		100
Total	$	899	$	342	$	174	$	172	$	19	$	9	$	183

2024	External revenues		Interest expense		Depreciation on equipment leased to others		General, operating and administrative expenses		Provision for credit losses		Other segment items(1)		Profit (loss) before income taxes
North America	$	493	$	152	$	128	$	46	$	15	$	4	$	148
EAME	93		36		13		24		(4)		2		22
Asia/Pacific	68		22		1		19		(1)		2		25
Latin America	84		38		4		13		5		1		23
Mining	93		25		34		10		5		1		18
Power	15		8		—		2		(14)		—		19
Total Segments	846		281		180		114		6		10		255
Unallocated	22		119		—		50		—		(5)		(142)
Timing	(3)		—		—		(4)		—		—		1
Methodology	—		(85)		—		4		—		3		78
Divestiture	—		—		—		—		—		210		(210)
Total	$	865	$	315	$	180	$	164	$	6	$	218	$	(18)

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

UNAUDITED

Supplemental segment data and reconciliations to consolidated external reporting for the six months ended June 30 were as follows:


(Millions of dollars) 2025	External Revenues		Interest Expense		Depreciation on equipment leased to others		General, operating and administrative expenses		Provision for credit losses		Other segment items(1)		Profit (loss) before income taxes
North America	$	1,020	$	342	$	251	$	96	$	43	$	7	$	281
EAME	189		67		25		44		1		2		50
Asia/Pacific	128		48		3		36		1		—		40
Latin America	172		84		5		30		3		3		47
Mining	188		54		63		19		1		1		50
Power	36		20		—		6		(1)		—		11
Total Segments	1,733		615		347		231		48		13		479
Unallocated	34		261		—		96		—		—		(323)
Timing	(8)		—		—		(10)		—		—		2
Methodology	—		(209)		—		6		—		4		199
Total	$	1,759	$	667	$	347	$	323	$	48	$	17	$	357

2024	External Revenues		Interest Expense		Depreciation on equipment leased to others		General, operating and administrative expenses		Provision for credit losses		Other segment items(1)		Profit (loss) before income taxes
North America	$	978	$	295	$	257	$	92	$	34	$	8	$	292
EAME	185		69		27		46		(12)		3		52
Asia/Pacific	134		48		2		38		(2)		2		46
Latin America	169		78		7		27		3		2		52
Mining	185		49		67		19		5		1		44
Power	30		15		1		5		(15)		—		24
Total Segments	1,681		554		361		227		13		16		510
Unallocated	44		232		—		93		—		(35)		(246)
Timing	(7)		—		—		(8)		—		—		1
Methodology	—		(173)		—		6		—		11		156
Divestiture	—		—		—		—		—		210		(210)
Total	$	1,718	$	613	$	361	$	318	$	13	$	202	$	211

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


(Millions of dollars)	Assets as of
	June 30, 2025		December 31, 2024
North America	$	18,466	$	17,800
EAME	5,384		4,668
Asia/Pacific	3,416		3,276
Latin America	2,791		2,423
Mining	3,355		3,306
Power	891		812
Total Segments	$	34,303	$	32,285
Unallocated	1,863		1,921
Timing	(10)		(12)
Methodology	221		128
Inter-segment Eliminations(1)	(294)		(238)
Total	$	36,083	$	34,084

(1) Eliminations are primarily related to intercompany loans.

UNAUDITED


(Millions of dollars)	Capital Expenditures(1)
	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
North America	$	300	$	250	$	434	$	411
EAME	11		11		25		19
Asia/Pacific	4		2		8		4
Latin America	—		4		1		12
Mining	54		50		60		99

Total Segments	369		317		528		545
Unallocated	10		3		21		8


Total	$	379	$	320	$	549	$	553

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

7.Commitments and Contingent Liabilities

Guarantees

We provide credit guarantees and residual value guarantees to third parties for financing and leasing associated with Caterpillar machinery. In addition, we provide standby letters of credit issued to third parties on behalf of our customers. These guarantees and standby letters of credit have varying terms.

No significant loss has been experienced or is anticipated under any of these guarantees. At June 30, 2025 and December 31, 2024, the related recorded liability was less than $1 million. The maximum potential amount of future payments (undiscounted and without reduction for any amounts that may possibly be recovered under recourse or collateralized provisions) we could be required to make under the guarantees was $26 million and $23 million at June 30, 2025 and December 31, 2024, respectively.

We provide guarantees to purchase certain loans of Caterpillar dealers from an SPC that qualifies as a VIE. We receive a fee for providing this guarantee. The purpose of the SPC is to provide short-term working capital loans to Caterpillar dealers. This SPC issues commercial paper and uses the proceeds to fund its loan program. We are the primary beneficiary of the SPC as our guarantees result in us having both the power to direct the activities that most significantly impact the SPC’s economic performance and the obligation to absorb losses and therefore we have consolidated the financial statements of the SPC. As of June 30, 2025 and December 31, 2024, the SPC’s assets of $1.06 billion and $1.14 billion, respectively, were primarily comprised of loans to dealers, which are included in Finance receivables, net in the Consolidated Statements of Financial Position, and the SPC’s liabilities of $1.06 billion and $1.14 billion, respectively, were primarily comprised of commercial paper, which is included in Short-term borrowings in the Consolidated Statements of Financial Position. The assets of the SPC are not available to pay our creditors. We may be obligated to perform under the guarantee if the SPC experiences losses. No loss has been experienced or is anticipated under this loan purchase agreement.

Litigation and claims

We are involved in unresolved legal actions that arise in the normal course of business. The aggregate range of reasonably possible losses in excess of accrued liabilities, if any, associated with these unresolved legal actions is not material. In some cases, we cannot reasonably estimate a range of loss because there is insufficient information regarding the matter. However, we believe there is no more than a remote chance that any liability arising from these matters would be material. Although it is not possible to predict with certainty the outcome of our unresolved legal actions, we believe that these unresolved legal actions will neither individually nor in the aggregate have a material adverse effect on our consolidated results of operations, financial position or liquidity.

UNAUDITED

8.Fair Value Disclosures

A.Fair Value Measurements

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

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

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

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

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

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 $111 million and $183 million as of June 30, 2025 and December 31, 2024, respectively. See Note 4 for additional information.

B.Fair Values of Financial Instruments

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

•Finance receivables, net – We estimate fair value by discounting the future cash flows using current rates representative of receivables with similar remaining maturities.

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

UNAUDITED

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


(Millions of dollars)	June 30, 2025				December 31, 2024
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Fair Value Levels	Reference
Assets
Finance receivables, net (excluding finance leases(1))	$	23,212	$	22,831	$	22,026	$	21,593	3	Note 3
Liabilities
Long-term debt	$	25,579	$	25,605	$	25,406	$	25,304	2

(1) Represents finance leases and failed sale leasebacks of $7.39 billion and $6.94 billion as of June 30, 2025 and December 31, 2024, respectively.

Certain loans are subject to measurement at fair value on a nonrecurring basis. These are loans for which the company has determined that collection of contractual amounts due is not probable. Generally, the fair value of these receivables is measured using the fair value of collateral less estimated costs to sell. We had loans carried at fair value of $61 million and $59 million as of June 30, 2025 and December 31, 2024, respectively.

9.Income Taxes

The provision for income taxes for the second quarter of 2025 was $45 million on $183 million profit before income taxes compared with $47 million on $18 million loss before income taxes for the second quarter of 2024. The provision for income taxes for the first six months of 2025 was $89 million on $357 million profit before income taxes compared with $106 million on $211 million profit before income taxes in the first six months of 2024. The effective tax rate for the three and six months ended June 30, 2024 was negatively impacted by the $210 million loss on divestiture of a non-U.S. entity which had no related tax benefit (See Note 10).

On July 4, 2025, U.S. tax legislation was enacted containing several corporate tax provisions including reinstatement of 100 percent bonus depreciation. This change in tax law will be accounted for in the period of enactment. We do not currently expect this change to have a material impact on our 2025 effective tax rate.

10. Divestiture

We divested a non-U.S. entity on June 13, 2024 and recognized a pre-tax loss of approximately $210 million for the three and six months ended June 30, 2024. The loss on divestiture is included within Other income (expense) in the Consolidated Statements of Profit (Loss). The proceeds were allocated in accordance with the sales agreement and agreement with Caterpillar.

UNAUDITED

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

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

THREE MONTHS ENDED JUNE 30, 2025 COMPARED WITH THREE MONTHS ENDED JUNE 30, 2024

Overview


(Millions of dollars)	Three Months Ended June 30,
	2025		2024		Change
Retail revenue	$	459	$	416	$	43
Operating lease revenue	227		233		(6)
Wholesale revenue	170		180		(10)
Other revenue, net	43		36		7
Total revenues	$	899	$	865	$	34
Profit (loss) before income taxes	$	183	$	(18)	$	201
Profit (loss) attributable to Caterpillar Financial Services Corporation	$	137	$	(65)	$	202

Revenues

We reported second-quarter 2025 revenues of $899 million, an increase of $34 million, or 4 percent, compared with $865 million in the second quarter of 2024. The increase in revenues was primarily due to a favorable impact from higher average earning assets of $49 million, partially offset by an unfavorable impact from lower average financing rates of $20 million.

Retail revenue for the second quarter of 2025 was $459 million, an increase of $43 million from the same period in 2024. The increase was due to a favorable impact from higher average earning assets of $31 million and a favorable impact from higher interest rates on retail finance receivables of $12 million. For the quarter ended June 30, 2025, retail average earning assets were $24.59 billion, an increase of $1.70 billion from the same period in 2024. The annualized average yield was 7.47 percent for the second quarter of 2025, compared with 7.26 percent for the second quarter of 2024.

Operating lease revenue for the second quarter of 2025 was $227 million, a decrease of $6 million from the same period in 2024. The decrease was due to an unfavorable impact from lower average earning assets of $14 million, partially offset by a favorable impact from higher rental rates on operating leases of $8 million.

Wholesale revenue for the second quarter of 2025 was $170 million, a decrease of $10 million from the same period in 2024. The decrease was due to an unfavorable impact from lower interest rates on wholesale finance receivables of $19 million, partially offset by a favorable impact from higher average earning assets of $9 million. For the quarter ended June 30, 2025, wholesale average earning assets were $5.73 billion, an increase of $311 million from the same period in 2024. The annualized average yield was 11.85 percent for the second quarter of 2025, compared with 13.31 percent for the second quarter of 2024.

Other revenue, net items were as follows:


(Millions of dollars)	Three Months Ended June 30,
	2025		2024		Change

Finance receivable and operating lease fees (including late charges)	$	18	$	16	$	2
Net gain on returned or repossessed equipment	12		12		—
Interest income on Notes receivable from Caterpillar	7		6		1
Miscellaneous other revenue, net	6		2		4
Total Other revenue, net	$	43	$	36	$	7

UNAUDITED

There was an unfavorable impact from currency translation on revenues of $4 million in the second quarter of 2025. Currency translation represents the net impact from converting the results of our subsidiaries to U.S. dollar reporting currency and is included in all financial statement line items.

Consolidated Profit (Loss) Before Income Taxes

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

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

Second-quarter 2025 profit before income taxes was $183 million, an increase of $201 million compared with an $18 million loss for the second quarter of 2024. The increase was mainly driven by the absence of a $210 million loss on divestiture of a non-U.S. entity in 2024 and a favorable impact from higher average earning assets of $20 million, partially offset by higher provision for credit losses of $13 million and an unfavorable impact from lower margin of $10 million.

There was an unfavorable impact from currency translation on profit before income taxes of $2 million in the second quarter of 2025. Currency translation represents the net impact from converting the results of our subsidiaries to U.S. dollar reporting currency and is included in all financial statement line items.

Provision for Income Taxes

The provision for income taxes for the second quarter of 2025 was $45 million on $183 million profit before income taxes compared with $47 million on $18 million loss before income taxes for the second quarter of 2024. The effective tax rate for the second quarter of 2024 was negatively impacted by the loss on divestiture of a non-U.S. entity with no related tax benefit.

SIX MONTHS ENDED JUNE 30, 2025 COMPARED WITH SIX MONTHS ENDED JUNE 30, 2024

Overview


(Millions of dollars)	Six Months Ended June 30,
	2025		2024		Change
Retail revenue	$	900	$	820	$	80
Operating lease revenue	455		466		(11)
Wholesale revenue	323		353		(30)
Other revenue, net	81		79		2
Total revenues	$	1,759	$	1,718	$	41
Profit (loss) before income taxes	$	357	$	211	$	146
Profit (loss) attributable to Caterpillar Financial Services Corporation	$	267	$	104	$	163

UNAUDITED

Revenues

Revenues for the first six months of 2025 were $1.76 billion, an increase of $41 million, or 2 percent, compared with $1.72 billion in the same period in 2024. The increase in revenues was primarily due to a favorable impact from higher average earning assets of $77 million, partially offset by an unfavorable impact from lower average financing rates of $35 million.

Retail revenue for the first six months of 2025 was $900 million, an increase of $80 million from the same period in 2024. The increase was due to a $50 million favorable impact from higher average earning assets and a $30 million favorable impact from higher interest rates on retail finance receivables. For the six months ended June 30, 2025, retail average earning assets were $24.23 billion, an increase of $1.39 billion from the same period in 2024. The annualized average yield was 7.43 percent for the first six months of 2025, compared with 7.18 percent for the same period in 2024.

Operating lease revenue for the first six months of 2025 was $455 million, a decrease of $11 million from the same period in 2024. The decrease was primarily due to a $31 million unfavorable impact from lower average earning assets, partially offset by a $20 million favorable impact from higher rental rates on operating leases.

Wholesale revenue for the first six months of 2025 was $323 million, a decrease of $30 million from the same period in 2024. The decrease was due to a $45 million unfavorable impact from lower interest rates on wholesale finance receivables, partially offset by a $15 million favorable impact from higher average earning assets. For the six months ended June 30, 2025, wholesale average earning assets were $5.56 billion, an increase of $220 million from the same period in 2024. The annualized average yield was 11.62 percent for the first six months of 2025, compared with 13.22 percent for the same period in 2024.

Other revenue, net items were as follows:


(Millions of dollars)	Six Months Ended June 30,
	2025		2024		Change
Finance receivable and operating lease fees (including late charges)	$	34	$	32	$	2
Net gain on returned or repossessed equipment	21		27		(6)

Interest income on Notes receivable from Caterpillar	13		11		2
Miscellaneous other revenue, net	13		9		4
Total Other revenue, net	$	81	$	79	$	2

There was an unfavorable impact from currency translation on revenues of $24 million in the first six months of 2025. Currency translation represents the net impact from converting the results of our subsidiaries to U.S. dollar reporting currency and is included in all financial statement line items and each of the items included in the above analysis.

Consolidated Profit (Loss) Before Income Taxes

(1) Analysis excludes $8 million related to property taxes on operating leases for the first six months of 2025 and 2024.

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

UNAUDITED

Profit before income taxes was $357 million for the first six months of 2025, an increase of $146 million, or 69 percent, compared with $211 million for the same period in 2024. The increase was mainly driven by the absence of a $210 million loss on divestiture of a non-U.S. entity in the prior year and a favorable impact from higher average earning assets of $32 million, partially offset by higher provision expense of $35 million, the absence of an insurance settlement of $33 million in 2024, and an unfavorable impact from lower margin of $24 million.

There was an unfavorable impact from currency translation on profit before income taxes of $11 million in the first six months of 2025. Currency translation represents the net impact from converting the results of our subsidiaries to U.S. dollar reporting currency and is included in all financial statement line items and each of the items included in the above analysis.

Provision for Income Taxes

The provision for income taxes for the first six months of 2025 was $89 million on $357 million profit before income taxes compared with $106 million on $211 million profit before income taxes for the first six months of 2024. The effective tax rate for the first six months of 2024 was negatively impacted by the loss on divestiture of a non-U.S. entity with no related tax benefit.

FINANCE RECEIVABLES AND EQUIPMENT ON OPERATING LEASES

New Business Volume


(Millions of dollars)	Six Months Ended June 30,
	2025		2024		Change
New retail financing	$	6,019	$	5,593	$	426
New retail operating lease activity	544		561		(17)
New wholesale financing	26,318		27,857		(1,539)
Total	$	32,881	$	34,011	$	(1,130)

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

Total Managed Portfolio

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


(Millions of dollars)	June 30, 2025		December 31, 2024		Change
Finance receivables, net	$	30,606	$	28,964	$	1,642
Equipment on operating leases, net	2,781		2,780		1
Total portfolio	$	33,387	$	31,744	$	1,643

Retail loans	$	79	$	80	$	(1)
Retail leases	15		17		(2)
Operating leases	11		12		(1)
Total off-balance sheet managed assets	$	105	$	109	$	(4)

Total managed portfolio	$	33,492	$	31,853	$	1,639

UNAUDITED

Total Portfolio Metrics

At the end of the second quarter of 2025, past dues were 1.62 percent, compared with 1.74 percent at the end of the second quarter of 2024. Total non-performing finance receivables, which represent finance receivables currently on non-accrual status, were $176 million at June 30, 2025 and December 31, 2024. Total non-performing finance receivables as a percentage of our finance receivables were less than 1 percent at June 30, 2025 and December 31, 2024.

Write-offs, net of recoveries, were $18 million for the second quarters of 2025 and 2024.

Our allowance for credit losses as of June 30, 2025 was $290 million, or 0.94 percent of finance receivables, compared with $267 million, or 0.91 percent, as of December 31, 2024. The allowance is subject to an ongoing evaluation based on many quantitative and qualitative factors, including past loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of underlying collateral and economic forecasts. We believe our allowance is sufficient to provide for losses over the remaining life of our finance receivables portfolio as of June 30, 2025.

Global Business Conditions

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

LIQUIDITY AND CAPITAL RESOURCES

Maintaining and managing adequate capital and liquidity resources includes management of funding sources and their utilization based on current, future and contingent needs. Throughout the second quarter of 2025, we experienced favorable liquidity conditions. We ended the second quarter of 2025 with $820 million of cash, an increase of $221 million from year-end 2024. Our cash balances are held in numerous locations throughout the world with approximately $672 million held by our non-U.S. subsidiaries. Amounts held by non-U.S. subsidiaries are available for general corporate use and could be used in the U.S. without incurring significant additional U.S. taxes. We expect to meet our U.S. funding needs without repatriating undistributed profits that are indefinitely reinvested outside the U.S.

Borrowings

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

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

Total borrowings outstanding as of June 30, 2025 were $31.06 billion, an increase of $1.26 billion from December 31, 2024. Outstanding borrowings were as follows:


(Millions of dollars)	June 30, 2025		December 31, 2024
Medium-term notes, net	$	24,986	$	24,882
Commercial paper, net of unamortized discount	3,985		3,946
Bank borrowings – long-term	591		522
Bank borrowings – short-term	209		165
Variable denomination floating rate demand notes	291		282
Notes payable to Caterpillar	1,000		10
Other	2		2
Total outstanding borrowings	$	31,064	$	29,809

UNAUDITED

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 $3.55 billion and redeemed totaled $3.98 billion for the six months ended June 30, 2025. Medium-term notes, net outstanding as of June 30, 2025 mature as follows:


(Millions of dollars)
2025	$	3,370
2026	8,530
2027	8,719
2028	1,309
2029	2,558
Thereafter	448
Fair value adjustments	52
Total	$	24,986

CATERPILLAR FINANCIAL SERVICES CORP 10-Q