What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-01 compared with 2023-11-01 · 194 added, 412 removed, 1062 unchanged (36% of the section changed)

3 unchanged sentences

(Dollars in millions except per share data)

Three Months Ended September 30,

Sales and revenues:

Sales of Machinery, Energy & Transportation $ 15,988 $ 14,278

Revenues of Financial Products 822 716

Total sales and revenues 16,810 14,994

Operating costs:

Cost of goods sold 10,583 10,202

Selling, general and administrative expenses 1,624 1,401

Research and development expenses 554 476

Interest expense of Financial Products 280 151

Other operating (income) expenses 320 339

Total operating costs 13,361 12,569

Operating profit 3,449 2,425

Interest expense excluding Financial Products 129 109

Other income (expense) 195 242

Consolidated profit before taxes 3,515 2,558

Provision (benefit) for income taxes 734 527

Profit of consolidated companies 2,781 2,031

Equity in profit (loss) of unconsolidated affiliated companies 12 9

Profit of consolidated and affiliated companies 2,793 2,040

Profit (loss) attributable to noncontrolling interests ( 1 ) ( 1 )

$ 2,794 $ 2,041

Profit per common share $ 5.48 $ 3.89

Profit per common share – diluted 2

$ 5.45 $ 3.87

Weighted-average common shares outstanding (millions)

– Basic 509.8 525.0

1 Profit attributable to common shareholders.

2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.

See accompanying notes to Consolidated Financial Statements.

Table of Conte n t s

Caterpillar Inc .

Consolidated Statement of Comprehensive Income

(Dollars in millions)

Three Months Ended September 30,

Profit of consolidated and affiliated companies $ 2,793 $ 2,040

Other comprehensive income (loss), net of tax (Note 13):

Foreign currency translation:

( 205 ) ( 618 )

Pension and other postretirement benefits:

Derivative financial instruments:

( 62 ) ( 191 )

Available-for-sale securities:

( 16 ) ( 44 )

Total other comprehensive income (loss), net of tax ( 286 ) ( 854 )

Comprehensive income 2,507 1,186

comprehensive income attributable to the noncontrolling interests ( 1 ) ( 1 )

Comprehensive income attributable to shareholders $ 2,508 $ 1,187

See accompanying notes to Consolidated Financial Statements.

Table of Conte n t s

Caterpillar Inc.

Consolidated Statement of Results of Operations

(Dollars in millions except per share data)

Nine Months Ended September 30,

Three Months Ended March 31,

Sales and revenues:

27 unchanged sentences

See accompanying notes to Consolidated Financial Statements.

Table of Conte n t s

Caterpillar Inc .

1 unchanged sentence

(Dollars in millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Profit of consolidated and affiliated companies $ 2,854 $ 1,942

1 unchanged sentence

Foreign currency translation:

260 ( 1,392 )

Pension and other postretirement benefits:

Derivative financial instruments:

( 19 ) ( 254 )

Available-for-sale securities:

( 8 ) ( 151 )

Total other comprehensive income (loss), net of tax ( 273 ) 711

3 unchanged sentences

See accompanying notes to Consolidated Financial Statements.

Table of Conte n t s

Caterpillar Inc .

1 unchanged sentence

(Dollars in millions)

September 30,

2024 December 31,

16 unchanged sentences

Short-term borrowings:

Machinery, Energy & Transportation $ — $ 3

Financial Products $ 3,568 $ 4,643

32 unchanged sentences

See accompanying notes to Consolidated Financial Statements.

Table of Conte n t s

Caterpillar Inc.

6 unchanged sentences

interests Total

Three Months Ended September 30, 2022

Balance at June 30, 2022 $ 6,464 $ ( 29,501 ) $ 41,263 $ ( 2,499 ) $ 32 $ 15,759

Profit of consolidated and affiliated companies — — 2,041 — ( 1 ) 2,040

Foreign currency translation, net of tax — — — ( 618 ) — ( 618 )

Pension and other postretirement benefits, net of tax — — — ( 1 ) — ( 1 )

Derivative financial instruments, net of tax — — — ( 191 ) — ( 191 )

Available-for-sale securities, net of tax — — — ( 44 ) — ( 44 )

Common shares issued from treasury stock for stock-based compensation:

( 5 ) 4 — — — ( 1 )

Stock-based compensation expense 55 — — — — 55

Common shares repurchased:

— ( 1,385 ) — — — ( 1,385 )

Other 9 ( 1 ) — — — 8

Balance at September 30, 2022 $ 6,523 $ ( 30,883 ) $ 43,304 $ ( 3,353 ) $ 31 $ 15,622

Three Months Ended September 30, 2023

Balance at June 30, 2023 $ 6,478 $ ( 33,391 ) $ 47,094 $ ( 1,946 ) $ 21 $ 18,256

Profit of consolidated and affiliated companies — — 2,794 — ( 1 ) 2,793

Foreign currency translation, net of tax — — — ( 205 ) — ( 205 )

Pension and other postretirement benefits, net of tax — — — ( 3 ) — ( 3 )

Derivative financial instruments, net of tax — — — ( 62 ) — ( 62 )

Available-for-sale securities, net of tax — — — ( 16 ) — ( 16 )

Common shares issued from treasury stock for stock-based compensation:

— 59 — — — 59

Stock-based compensation expense 60 — — — — 60

Common shares repurchased:

— ( 530 ) — — — ( 530 )

Outstanding authorized accelerated share repurchase 150 — — — — 150

Other 10 ( 3 ) — — ( 2 ) 5

Balance at September 30, 2023 $ 6,698 $ ( 33,865 ) $ 49,888 $ ( 2,232 ) $ 18 $ 20,507

1 See Note 12 for additional information.

See accompanying notes to Consolidated Financial Statements.

Table of Conte n t s

Caterpillar Inc.

Consolidated Statement of Changes in Shareholders’ Equity

(Dollars in millions)

stock Treasury

business Accumulated

comprehensive

income (loss) Noncontrolling

interests Total

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Balance at December 31, 2022 $ 6,560 $ ( 31,748 ) $ 43,514 $ ( 2,457 ) $ 22 $ 15,891

Profit of consolidated and affiliated companies — — 5,251 — ( 1 ) 5,250

Profit (loss) of consolidated and affiliated companies — — 1,943 — ( 1 ) 1,942

Foreign currency translation, net of tax — — — 607 — 607

2 unchanged sentences

Available-for-sale securities, net of tax — — — 22 — 22

Dividends declared 1

— — ( 1,229 ) — — ( 1,229 )

Common shares issued from treasury stock for stock-based compensation:

4 unchanged sentences

Other 8 ( 1 ) — — — 7

Balance at September 30, 2022 $ 6,523 $ ( 30,883 ) $ 43,304 $ ( 3,353 ) $ 31 $ 15,622

Nine Months Ended September 30, 2023

Balance at March 31, 2023 $ 6,546 $ ( 32,108 ) $ 45,457 $ ( 1,746 ) $ 21 $ 18,170

Three Months Ended March 31, 2024

Balance at December 31, 2023 $ 6,403 $ ( 36,339 ) $ 51,250 $ ( 1,820 ) $ 9 $ 19,503

Profit of consolidated and affiliated companies — — 7,659 — — 7,659

Profit (loss) of consolidated and affiliated companies — — 2,856 — ( 2 ) 2,854

Foreign currency translation, net of tax — — — ( 257 ) — ( 257 )

Pension and other postretirement benefits, net of tax — — — ( 3 ) — ( 3 )

Derivative financial instruments, net of tax — — — ( 19 ) — ( 19 )

Available-for-sale securities, net of tax — — — ( 13 ) — ( 13 )

Dividends declared — — 2 — — 2

— — ( 1,285 ) — — ( 1,285 )

Common shares issued from treasury stock for stock-based compensation:

3 unchanged sentences

— ( 3,705 ) — — — ( 3,705 )

Outstanding authorized accelerated stock repurchases ( 750 ) — — — — ( 750 )

Other 11 ( 32 ) — — ( 1 ) ( 22 )

Balance at September 30, 2023 $ 6,698 $ ( 33,865 ) $ 49,888 $ ( 2,232 ) $ 18 $ 20,507

1 Dividends per share of common stock of $ 2.50 and $ 2.31 were declared in the nine months ended September 30, 2023 and 2022, respectively.

Balance at March 31, 2024 $ 5,663 $ ( 40,039 ) $ 54,108 $ ( 2,093 ) $ 6 $ 17,645

1 See Note 12 for additional information.

See accompanying notes to Consolidated Financial Statements.

Table of Conte n t s

Caterpillar Inc.

1 unchanged sentence

(Millions of dollars)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flow from operating activities:

Profit of consolidated and affiliated companies $ 2,854 $ 1,942

Adjustments for non-cash items:

Adjustments to reconcile profit to net cash provided by operating activities:

Depreciation and amortization 524 532

Provision (benefit) for deferred income taxes ( 54 ) ( 191 )

Loss on divestiture 572 —

(Gain) loss on divestiture ( 64 ) 572

Other ( 5 ) 117

18 unchanged sentences

Proceeds from sale of businesses and investments (net of cash sold) 42 ( 14 )

Proceeds from sale of securities 747 2,080

Proceeds from maturities and sale of securities 1,867 239

Investments in securities ( 275 ) ( 536 )

11 unchanged sentences

Short-term borrowings – net (original maturities three months or less) ( 1,050 ) ( 103 )

Other – net — ( 1 )

Net cash provided by (used for) financing activities ( 5,000 ) ( 1,106 )

5 unchanged sentences

See accompanying notes to Consolidated Financial Statements.

Table of Conte n t s

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8 unchanged sentences

Basis of presentation

In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the consolidated results of operations for the three and nine months ended September 30, 2023 and 2022, (b) the consolidated comprehensive income for the three and nine months ended September 30, 2023 and 2022, (c) the consolidated financial position at September 30, 2023 and December 31, 2022, (d) the consolidated changes in shareholders’ equity for the three and nine months ended September 30, 2023 and 2022 and (e) the consolidated cash flow for the nine months ended September 30, 2023 and 2022.

In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the consolidated results of operations for the three months ended March 31, 2024 and 2023, (b) the consolidated comprehensive income for the three months ended March 31, 2024 and 2023, (c) the consolidated financial position at March 31, 2024 and December 31, 2023, (d) the consolidated changes in shareholders’ equity for the three months ended March 31, 2024 and 2023 and (e) the consolidated cash flow for the three months ended March 31, 2024 and 2023.

The financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (U.S.

10 unchanged sentences

Adoption of new accounting standards

Supplier finance programs (ASU 2022-04) - In September 2022, the Financial Accounting Standards Board (FASB) issued guidance to enhance the transparency of supplier finance programs.

The new standard requires annual disclosure of the key terms of the program, a description of where in the financial statements amounts outstanding under the program are presented, a rollforward of such amounts, and interim disclosure of amounts outstanding as of the end of each period.

The guidance does not affect recognition, measurement, or financial statement presentation of supplier finance programs.

The ASU was effective on January 1, 2023, except for the rollforward, which is effective on January 1, 2024.

Our adoption of this guidance results in the following disclosures relating to our supplier finance programs and related obligations.

Table of Conte n t s

We facilitate voluntary supplier finance programs (the “Programs”) through participating financial institutions.

The Programs are available to a wide range of suppliers and allow them the option to manage their cash flow.

We are not a party to the agreements between the participating financial institutions and the suppliers in connection with the Programs.

The range of payment terms, typically 60-90 days, we negotiate with our suppliers is consistent, irrespective of whether a supplier participates in the Programs.

The amount of obligations outstanding that are confirmed as valid to the participating financial institutions for suppliers who voluntarily participate in the Programs, included in Accounts payable in the Consolidated Statement of Financial Position, were $ 825 million and $ 862 million at September 30, 2023 and December 31, 2022, respectively.

We consider the applicability and impact of all ASUs.

1 unchanged sentence

ASU Description

2021-08 Business combinations

2022-02 Financial instruments - Credit losses

2022-06 Reference rate reform

2022-03 Fair value measurement – Equity securities subject to contractual sale restrictions

2023-01 Leases – Common control arrangements

2023-02 Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method

Accounting standards issued but not yet adopted

We consider the applicability and impact of all ASUs.

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

Segment reporting (ASU 2023-07) — In November 2023, the Financial Accounting Standards Board (FASB) issued accounting guidance that requires incremental disclosures related to reportable segments which includes significant segment expense categories and amounts for each reportable segment.

The expanded annual disclosures are effective

for our year ending December 31, 2024, and the expanded interim disclosures are effective in 2025 and will be applied retrospectively to all prior periods presented.

We are in the process of evaluating the effect of this new guidance on the related disclosures.

Income tax reporting (ASU 2023-09) — In December 2023, the FASB issued accounting guidance to expand the annual disclosure requirements for income taxes, primarily related to the rate reconciliation and income taxes paid.

This guidance is effective January 1, 2025, with early adoption permitted.

This guidance can be applied prospectively or retrospectively.

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 determined that they either were not applicable or were not expected to have a material impact on our financial statements.

Sales and revenue contract information

1 unchanged sentence

We recognize trade receivables from dealers and end users in Receivables – trade and other and Long-term receivables – trade and other in the Consolidated Statement of Financial Position.

Trade receivables from dealers and end users were $ 7,825 million, $ 7,551 million and $ 7,267 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively.

Long-term trade receivables from dealers and end users were $ 494 million, $ 506 million and $ 624 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively.

Trade receivables from dealers and end users were $ 7,860 million, $ 7,923 million and $ 7,551 million as of March 31, 2024, December 31, 2023 and December 31, 2022, respectively.

Long-term trade receivables from dealers and end users were $ 604 million, $ 589 million and $ 506 million as of March 31, 2024, December 31, 2023 and December 31, 2022, respectively.

For certain contracts, we invoice for payment when contractual milestones are achieved.

2 unchanged sentences

Contract assets are included in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position.

Contract assets were $ 212 million, $ 247 million and $ 187 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively.

Contract assets were $ 196 million, $ 246 million and $ 247 million as of March 31, 2024, December 31, 2023 and December 31, 2022, respectively.

We invoice in advance of recognizing the sale of certain products.

We recognize advanced customer payments as a contract liability in Customer advances and Other liabilities in the Consolidated Statement of Financial Position.

Contract liabilities were $ 2,816 million, $ 2,314 million and $ 1,557 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively.

Contract liabilities were $ 2,664 million, $ 2,389 million and $ 2,314 million as of March 31, 2024, December 31, 2023 and December 31, 2022, respectively.

We reduce the contract liability when revenue is recognized.

During the three and nine months ended September 30, 2023, we recognized $ 197 million and $ 1,333 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2023.

During the three and nine months ended September 30, 2022, we recognized $ 124 million and $ 781 million, respectively.

As of September 30, 2023, we have entered into contracts with dealers and end users for which sales have not been recognized as we have not satisfied our performance obligations and transferred control of the products.

The dollar amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $ 13.2 billion, with about one-half of the amount expected to be completed and revenue recognized in the twelve months following September 30, 2023.

During the three months ended March 31, 2024 and 2023, we recognized $ 813 million and $ 737 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2024 and 2023.

As of March 31, 2024, we have entered into contracts with dealers and end users for which sales have not been recognized as we have not satisfied our performance obligations and transferred control of the products.

The dollar amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $ 12.5 billion, with about one-half of the amount expected to be completed and revenue recognized in the twelve months following March 31, 2024.

We have elected the practical expedient not to disclose unsatisfied performance obligations with an original contract duration of one year or less.

1 unchanged sentence

See Note 16 for further disaggregated sales and revenues information.

Table of Conte n t s

Stock-based compensation

1 unchanged sentence

Our stock-based compensation consists of stock options, restricted stock units (RSUs) and performance-based restricted stock units (PRSUs).

We recognized pretax stock-based compensation expense of $ 60 million and $ 178 million for the three and nine months ended September 30, 2023, respectively, and $ 55 million and $ 162 million for the three and nine months ended September 30, 2022, respectively.

The following table illustrates the type and fair value of the stock-based compensation awards granted during the nine months ended September 30, 2023 and 2022, respectively:

Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

We recognized pretax stock-based compensation expense of $ 44 million for both the three months ended March 31, 2024 and 2023, respectively.

The following table illustrates the type and fair value of the stock-based compensation awards granted during the three months ended March 31, 2024 and 2023, respectively:

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

Shares Granted Weighted-Average Fair Value Per Share Weighted-Average Grant Date Stock Price Shares Granted Weighted-Average Fair Value Per Share Weighted-Average Grant Date Stock Price

2 unchanged sentences

PRSUs 169,120 $ 408.64 $ 338.65 221,869 $ 253.98 $ 253.98

The following table provides the assumptions used in determining the fair value of the stock-based awards for the nine months ended September 30, 2023 and 2022, respectively:

The fair value of our stock options was estimated using the Black-Scholes option-pricing model.

The following table provides the assumptions used in determining the fair value of the stock-options granted in the three months ended March 31, 2024 and 2023, respectively:

Weighted-average dividend yield 2.40 % 2.60 %

5 unchanged sentences

Weighted-average expected lives 7 years 7 years

As of September 30, 2023, the total remaining unrecognized compensation expense related to nonvested stock-based compensation awards was $ 167 million, which will be amortized over the weighted-average remaining requisite service periods of approximately 1.8 years.

The PRSUs granted in 2024 contain a market condition and a Monte Carlo simulation was utilized to estimate the fair value of the awards.

The following table provides the assumptions used in determining the fair value of the PRSUs granted in the three months ended March 31, 2024:

Expected volatility of the Company's stock 29.8 %

Risk-free interest rate 4.38 %

As of March 31, 2024, the total remaining unrecognized compensation expense related to nonvested stock-based compensation awards was $ 318 million, which will be amortized over the weighted-average remaining requisite service periods of approximately 1.8 years.

Derivative financial instruments and risk management

Our earnings and cash flow are subject to fluctuations due to changes in foreign currency exchange rates, interest rates and commodity prices.

Our Risk Management Policy (policy) allows for the use of derivative financial instruments to prudently manage foreign currency exchange rate, interest rate and commodity price exposures.

Our earnings and cash flow are subject to fluctuations due to changes in foreign currency exchange rates, interest rates, commodity prices, and certain deferred compensation plan liabilities.

Our Risk Management Policy (policy) allows for the use of derivative financial instruments to prudently manage foreign currency exchange rate, interest rate, commodity price and certain deferred compensation plan liability 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, interest rate contracts and commodity forward and option contracts.

Derivatives that we use are primarily foreign currency forward, option and cross currency contracts, interest rate contracts, commodity forward and option contracts and total return swap contracts.

Our derivative activities are subject to the management, direction and control of our senior financial officers.

We present at least annually to the Audit Committee of the Board of Directors on our risk management practices, including our use of financial derivative instruments.

Table of Conte n t s

We recognize all derivatives at their fair value on the Consolidated Statement of Financial Position.

20 unchanged sentences

Our policy allows for managing anticipated foreign currency cash flow for up to approximately five years .

As of September 30, 2023, the maximum term of these outstanding contracts at inception was approximately 60 months.

As of March 31, 2024, the maximum term of these outstanding contracts at inception was approximately 60 months.

We generally designate as cash flow hedges at inception of the contract any foreign currency forward or option contracts that meet the requirements for hedge accounting and the maturity extends beyond the current quarter-end.

8 unchanged sentences

Our practice is to use interest rate contracts to manage our exposure to interest rate changes.

Table of Conte n t s

Our ME&T operations generally use fixed-rate debt as a source of funding.

19 unchanged sentences

All such commodity forward and option contracts are undesignated.

Table of Conte n t s

Deferred Compensation Plan Liability Risk

We are also exposed to variability in compensation expense related to certain non-qualified deferred compensation obligations to employees.

We utilize total return swaps to economically hedge this exposure to offset the related compensation expense.

All such total return swap contracts are undesignated.

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

(Millions of dollars) Fair Value

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Liabilities 2

7 unchanged sentences

Commodity contracts 5 ( 10 ) 18 ( 9 )

Total return swap contracts 21 — — —

Total $ 58 $ ( 34 ) $ 73 $ ( 91 )

1 unchanged sentence

2 Liabilities are classified on the Consolidated Statement of Financial Position as Accrued expenses or Other liabilities.

The total notional amounts of the derivative instruments as of September 30, 2023 and December 31, 2022 were $ 23.4 billion and $ 24.3 billion, respectively.

The total notional amounts of the derivative instruments as of March 31, 2024 and December 31, 2023 were $ 24.2 billion and $ 25.6 billion, respectively.

The notional amounts of the 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, interest rates or commodity prices.

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

(Millions of dollars) Three Months Ended September 30,

(Millions of dollars) Three Months Ended March 31,

Fair Value / Undesignated Hedges Cash Flow Hedges

5 unchanged sentences

Commodity contracts ( 10 ) 8 — — — —

Total $ ( 1 ) $ ( 49 ) $ 13 $ 44 $ 94 $ 296

1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense).

Interest rate contract gains (losses) are included in Interest expense of Financial Products and Interest expense excluding Financial Products.

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

Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products.

Table of Conte n t s

(Millions of dollars) Nine Months Ended September 30,

Fair Value / Undesignated Hedges Cash Flow Hedges

Gains (Losses) Recognized on the Consolidated Statement of Results of Operations 1

Gains (Losses) Recognized in AOCI Gains (Losses) Reclassified from AOCI 2

2023 2022 2023 2022 2023 2022

Foreign exchange contracts $ 22 $ ( 32 ) $ 42 $ 195 $ 43 $ 638

Interest rate contracts ( 95 ) 12 15 103 41 ( 2 )

Commodity contract 2 3 — — — —

Total return swap contracts 30 — — — — —

Total $ 13 $ ( 47 ) $ 106 $ 56 $ 106 $ ( 52 )

1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense).

Interest rate contract gains (losses) are included in Interest expense of Financial Products and Interest expense excluding Financial Products.

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

Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products.

1 Foreign exchange contract, Commodity contract and Total return swap contract gains (losses) are included in Other income (expense) in the Consolidated Statement of Financial Position.

Interest rate contract gains (losses) are included in Interest expense of Financial Products and Interest expense excluding Financial Products on the Consolidated Statement of Financial Position.

2 Foreign exchange contract gains (losses) are primarily included in Other income (expense) on the Consolidated Statement of Financial Position.

Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products on the Consolidated Statement of Financial Position.

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

(Millions of dollars) Carrying Value of the Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities

September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023

Long-term debt due within one year $ 786 $ 982 $ ( 18 ) $ ( 23 )

5 unchanged sentences

Collateral is typically not required of the counterparties or of our company under the master netting agreements.

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

As of March 31, 2024 and December 31, 2023, no cash collateral was received or pledged under the master netting agreements.

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

(Millions of dollars) September 30, 2023 December 31, 2022

(Millions of dollars) March 31, 2024 December 31, 2023

Assets Liabilities Assets Liabilities

2 unchanged sentences

Net Amount $ 364 $ ( 245 ) $ 318 $ ( 253 )

Table of Conte n t s

Inventories (principally using the last-in, first-out (LIFO) method) were comprised of the following:

(Millions of dollars) September 30,

(Millions of dollars) March 31,

2024 December 31,

7 unchanged sentences

Intangible assets were comprised of the following:

September 30, 2023

(Millions of dollars) Weighted

Life (Years) Gross

Amortization 1

March 31, 2024

(Millions of dollars) Gross

Amount Accumulated

Amortization Net

Customer relationships $ 2,226 $ ( 1,847 ) $ 379

3 unchanged sentences

December 31, 2023

Life (Years) Gross

Amount Accumulated

4 unchanged sentences

Total finite-lived intangible assets $ 2,833 $ ( 2,269 ) $ 564

1 For the nine months ended September 30, 2023, $ 1.0 billion of intangible assets were fully amortized and have been removed.

Amortization expense for the three and nine months ended September 30, 2023 was $ 44 million and $ 174 million, respectively.

Amortization expense for the three and nine months ended September 30, 2022 was $ 70 million and $ 213 million, respectively.

Amortization expense for the three months ended March 31, 2024 and 2023 was $ 44 million and $ 66 million, respectively.

Amortization expense related to intangible assets is expected to be:

(Millions of dollars)

Remaining Three Months of 2023 2024 2025 2026 2027 Thereafter

Remaining Nine Months of 2024 2025 2026 2027 2028 Thereafter

$ 130 $ 165 $ 94 $ 31 $ 24 $ 72

No goodwill was impaired during the nine months ended September 30, 2023 or 2022.

Table of Conte n t s

The changes in carrying amount of goodwill by reportable segment for the nine months ended September 30, 2023 were as follows:

No goodwill was impaired during the three months ended March 31, 2024 or 2023.

The changes in carrying amount of goodwill by reportable segment for the three months ended March 31, 2024 were as follows:

(Millions of dollars) December 31,

2023 Other Adjustments 1

September 30,

Construction Industries

11 unchanged sentences

Goodwill 43 ( 3 ) 40

Impairments — — —

Net goodwill 46 ( 5 ) 41

Consolidated total

3 unchanged sentences

1 Other adjustments are comprised primarily of foreign currency translation.

2 Includes All Other operating segment (See Note 16).

2 Includes All Other Segment (See Note 16).

Investments in debt and equity securities

5 unchanged sentences

The cost basis and fair value of available-for-sale debt securities with unrealized gains and losses included in equity (AOCI in the Consolidated Statement of Financial Position) were as follows:

Table of Conte n t s

Available-for-sale debt securities

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

(Millions of dollars) Cost

13 unchanged sentences

Available-for-sale debt securities in an unrealized loss position:

September 30, 2023

March 31, 2024

Less than 12 months 1

8 unchanged sentences

governmental agency 81 1 286 30 367 31

Residential — — 2 1 2 1

Commercial 6 — 114 8 120 8

11 unchanged sentences

governmental agency 33 — 287 25 320 25

Residential 2 — 1 1 3 1

Commercial 2 — 121 9 123 9

1 unchanged sentence

1 Indicates the length of time that individual securities have been in a continuous unrealized loss position.

Table of Conte n t s

The unrealized losses on our investments in government debt securities, corporate debt securities, and mortgage-backed debt securities relate to changes in underlying interest rates and credit spreads since time of purchase.

We do not intend to sell the investments, and it is not likely that we will be required to sell the investments before recovery of their respective amortized cost basis.

In addition, we did not expect credit-related losses on these investments as of September 30, 2023.

The cost basis and fair value of available-for-sale debt securities at September 30, 2023, by contractual maturity, are shown below.

In addition, we did not expect credit-related losses on these investments as of March 31, 2024.

The cost basis and fair value of available-for-sale debt securities at March 31, 2024, by contractual maturity, are shown below.

Expected maturities will differ from contractual maturities because borrowers may have the right to prepay and creditors may have the right to call obligations.

September 30, 2023

March 31, 2024

(Millions of dollars) Cost Basis Fair Value

8 unchanged sentences

Sales of available-for-sale debt securities:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Millions of dollars) 2024 2023

2 unchanged sentences

Gross losses from the sale of available-for-sale securities $ 1 $ —

In addition, we had $ 2,550 million of investments in time deposits classified as held-to-maturity debt securities as of September 30, 2023.

We did not have any investments classified as held-to-maturity debt securities as of December 31, 2022.

In addition, we had $ 400 million and $ 1,900 million of investments in time deposits classified as held-to-maturity debt securities as of March 31, 2024 and December 31, 2023.

All these investments mature within one year and we include them in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position.

We record held-to-maturity debt securities at amortized cost, which approximates fair value.

For the three months ended September 30, 2023 and 2022, the net unrealized gains (losses) for equity securities held at September 30, 2023 and 2022 were $( 11 ) million and $( 12 ) million, respectively.

For the nine months ended September 30, 2023 and 2022, the net unrealized gains (losses) for equity securities held at September 30, 2023 and 2022 were $( 25 ) million and $( 97 ) million, respectively.

Table of Conte n t s

For the three months ended March 31, 2024 and 2023, the net unrealized gains (losses) for equity securities held at March 31, 2024 and 2023 were $ 17 million and $( 8 ) million, respectively.

Postretirement benefits

1 unchanged sentence

Postretirement

September 30, September 30, September 30,

March 31, March 31, March 31,

(Millions of dollars) 2024 2023 2024 2023 2024 2023

7 unchanged sentences

$ ( 19 ) $ ( 8 ) $ ( 1 ) $ 1 $ 45 $ 47

For the nine months ended:

Components of net periodic benefit cost:

Service cost $ — $ — $ 30 $ 40 $ 50 $ 74

Interest cost 492 301 91 53 108 60

Expected return on plan assets ( 517 ) ( 502 ) ( 120 ) ( 100 ) ( 8 ) ( 9 )

Amortization of prior service cost (credit) — — — — ( 9 ) ( 4 )

Net periodic benefit cost (benefit) 1

$ ( 25 ) $ ( 201 ) $ 1 $ ( 7 ) $ 141 $ 121

1 The service cost component is included in Operating costs in the Consolidated Statement of Results of Operations.

All other components are included in Other income (expense) in the Consolidated Statement of Results of Operations.

We made $ 56 million and $ 320 million of contributions to our pension and other postretirement plans during the three and nine months ended September 30, 2023, respectively.

We made $ 113 million of contributions to our pension and other postretirement plans during the three months ended March 31, 2024, respectively.

We currently anticipate full-year 2024 contributions of approximately $ 273 million.

1 unchanged sentence

Total company costs related to our defined contribution plans, which are included in Operating Costs in the Consolidated Statement of Results of Operations, were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Millions of dollars) 2024 2023

Plans $ 120 $ 87 $ 405 $ 236

Plans 27 29 85 85

$ 147 $ 116 $ 490 $ 321

The increase in the U.S.

defined contribution benefit costs for the three and nine months ended September 30, 2023 was primarily due to the fair value adjustments related to our non-qualified deferred compensation plans.

Table of Conte n t s

1 Includes costs related to our non-qualified deferred compensation plans.

We utilize total return swaps to economically hedge this exposure to offset the related costs.

See Note 5 for additional information.

Revenues from finance and operating leases, primarily included in Revenues of Financial Products on the Consolidated Statement of Results of Operations, were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Millions of dollars) 2024 2023

4 unchanged sentences

Guarantees and product warranty

Caterpillar dealer performance guarantees

Dealer performance guarantees mainly consists of an indemnity to a third-party insurance company for potential losses related to performance bonds issued on behalf of Caterpillar dealers.

The bonds have varying terms and are issued to insure governmental agencies against nonperformance by certain dealers.

The guarantees began to expire during the third quarter of 2023.

No payments were made under the guarantees.

We have provided various guarantees that have varying terms and limit potential payment.

Under the guarantees, non-performance by the third-parties could require Caterpillar to satisfy the contractual obligation by providing goods, services or financial compensation.

The maximum potential amount of future payments (undiscounted and without reduction for any amounts possibly recoverable) that we could be required to make under the guarantees was $ 319 million and $ 353 million at March 31, 2024 and December 31, 2023, respectively.

We have dealer performance guarantees and third-party performance guarantees that do not limit potential payment to end users related to indemnities and other commercial contractual obligations.

2 unchanged sentences

No significant loss has been experienced or is anticipated under any of these guarantees.

At September 30, 2023 and December 31, 2022, the related recorded liability was $ 4 million and $ 2 million, respectively.

The maximum potential amount of future payments that we can estimate (undiscounted and without reduction for any amounts that may possibly be recovered under recourse or collateralized provisions) and we could be required to make under the guarantees was as follows:

(Millions of dollars) September 30,

2023 December 31,

Caterpillar dealer performance guarantees $ 42 $ 188

Other guarantees 341 323

Total guarantees $ 383 $ 511

Cat Financial provides guarantees to purchase certain loans of Caterpillar dealers from a special-purpose corporation (SPC) that qualifies as a variable interest entity.

Cat Financial receives 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.

Cat Financial receives a fee for providing this guarantee.

Cat Financial is the primary beneficiary of the SPC as its guarantees result in Cat Financial 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 Cat Financial has consolidated the financial statements of the SPC.

As of September 30, 2023 and December 31, 2022, the SPC’s assets of $ 1.54 billion and $ 971 million, respectively, were primarily comprised of loans to dealers, and the SPC’s liabilities of $ 1.54 billion and $ 970 million, respectively, were primarily comprised of commercial paper.

As of March 31, 2024 and December 31, 2023, the SPC’s assets of $ 1.33 billion and $ 1.35 billion, respectively, were primarily comprised of loans to dealers, and the SPC’s liabilities of $ 1.33 billion and $ 1.35 billion, respectively, were primarily comprised of commercial paper.

The assets of the SPC are not available to pay Cat Financial’s creditors.

2 unchanged sentences

We determine our product warranty liability by applying historical claim rate experience to the current field population and dealer inventory.

Generally, we base historical claim rates on actual warranty experience for each product by

Table of Conte n t s

machine model/engine size by customer or dealer location (inside or outside North America).

Generally, we base historical claim rates on actual warranty experience for each product by machine model/engine size by customer or dealer location (inside or outside North America).

We develop specific rates for each product shipment month and update them monthly based on actual warranty claim experience.

The reconciliation of the change in our product warranty liability balances for the nine months ended September 30 was as follows:

First Nine Months

The reconciliation of the change in our product warranty liability balances for the three months ended March 31 was as follows:

Three Months Ended March 31,

(Millions of dollars) 2024 2023

5 unchanged sentences

Computations of profit per share:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Dollars in millions except per share data) 2024 2023

5 unchanged sentences

Average common shares outstanding for fully diluted computation (C) 2

512.6 527.6 515.7 533.2

Profit per share of common stock:

2 unchanged sentences

$ 5.75 $ 3.74

Shares outstanding as of September 30, (in millions) 509.1 520.4

Shares outstanding as of March 31, (in millions) 489.3 515.9

1 Profit attributable to common shareholders.

2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.

For the three and nine months ended September 30, 2023 and 2022, we excluded 0.8 million and 2.1 million of outstanding stock options, respectively, from the computation of diluted earnings per share because the effect would have been antidilutive.

For the three and nine months ended September 30, 2023, we repurchased 1.9 million and 9.5 million shares of Caterpillar common stock, respectively, at an aggregate cost of $ 0.5 billion and $ 2.2 billion, respectively.

For the three and nine months ended September 30, 2022, we repurchased 7.6 million and 17.0 million shares of Caterpillar common stock, respectively, at an aggregate cost of $ 1.4 billion and $ 3.3 billion, respectively.

We made these purchases through the combination of accelerated stock repurchase agreements with a third-party financial institution and open market transactions in 2023 and 2022.

For the three months ended March 31, 2024 and 2023, we excluded 0.3 million and 0.8 million of outstanding stock options, respectively, from the computation of diluted earnings per share because the effect would have been antidilutive.

For the three months ended March 31, 2024 and 2023, we repurchased 11.3 million and 1.7 million shares of Caterpillar common stock, respectively, at an aggregate cost of $ 3,705 million and $ 400 million, respectively.

We made these purchases through the combination of accelerated stock repurchase (ASR) agreements with third-party financial institutions and open market transactions in 2024 and open market transactions in 2023.

In February 2024, we entered into ASR agreements to repurchase an aggregate of $ 3.50 billion of common stock.

We advanced the $ 3.50 billion and received approximately 7.6 million shares of Caterpillar common stock with a value of $ 2.45 billion.

The ASR agreements may last for up to nine months .

The final number of shares to ultimately be purchased will be based on the average of the daily volume-weighted average prices of our common stock during the term of the ASR agreements, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreements.

The remaining $ 1.05 billion was evaluated as an unsettled forward contract and was classified as a reduction to Common stock within the Consolidated Statement of Financial Position.

Accumulated other comprehensive income (loss)

1 unchanged sentence

Changes in the balances for each component of AOCI were as follows:

Table of Conte n t s

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Millions of dollars) 2024 2023

39 unchanged sentences

Ending balance $ ( 69 ) $ ( 96 )

Total AOCI Ending Balance at September 30

Total AOCI Ending Balance at March 31,

$ ( 2,093 ) $ ( 1,746 )

Table of Conte n t s

Environmental and legal matters

17 unchanged sentences

Although it is not possible to predict with certainty the outcome of these unresolved legal actions, we believe that these actions will not individually or in the aggregate have a material adverse effect on our consolidated results of operations, financial position or liquidity.

The effective tax rate for the nine months ended September 30, 2023 was 22.4 percent compared to 21.4 percent for the nine months ended September 30, 2022.

The effective tax rate for the three months ended September 30, 2023 was 20.9 percent compared to 20.6 percent for the three months ended September 30, 2022.

The provision for income taxes for the nine months ended September 30, 2023, reflected an estimated annual tax rate of 22.5 percent, compared with 23 percent for the nine months ended September 30, 2022, excluding the discrete items discussed below.

The comparative tax rate for full-year 2022 was 23.2 percent.

The 2023 estimated annual tax rate excludes the impact of the nondeductible loss of $ 586 million related to the divestiture of the company's Longwall business.

In the nine months ended September 30, 2023, the company recorded a discrete tax benefit of $ 88 million due to a change in the valuation allowance for certain deferred tax assets.

In addition, the company recorded a discrete tax benefit of $ 54 million for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S.

GAAP compensation expense, compared with a $ 18 million benefit for the nine months ended September 30, 2022.

In the nine months ended September 30, 2022, the company also recorded discrete benefits of $ 90 million to reflect changes in estimates related to prior years.

Table of Conte n t s

Perkins Engines Company Limited (Perkins), a subsidiary of Caterpillar Inc., acquired the small diesel engine business of IHI Agri-Tech Corporation (IAT) in 2019.

During the integration process, Perkins identified potential compliance concerns with engines manufactured and sold by IAT in California that failed to comply with the requirements of Cal.

Perkins then submitted a voluntary self-disclosure to the California Air Resources Board (CARB) on October 15, 2019.

On March 14, 2024, CARB and Perkins entered into a settlement agreement regarding the matter.

Consistent with the terms of the settlement agreement, Perkins paid a civil penalty of $ 205,313 to CARB along with a contribution of $ 205,312 to a Supplemental Environmental Project entitled To Reduce Contaminated Waste & Emissions Throughout Bay View Hunters Point Community.

The effective tax rate for the three months ended March 31, 2024 was 19.5 percent compared to 26.9 percent for the three months ended March 31, 2023.

The decrease primarily resulted from nontaxable gains in the first quarter of 2024 compared to nondeductible losses in the first quarter of 2023 related to divestitures.

Segment information

Basis for segment information

Our Executive Office is comprised of a Chief Executive Officer (CEO), four Group Presidents, a Chief Financial Officer (CFO), a Chief Legal Officer and a Chief Human Resources Officer.

The Group Presidents and CFO are accountable for a related set of end-to-end businesses that they manage.

The Chief Legal Officer leads the Law, Security and Public Policy Division.

Our Executive Office is comprised of a Chief Executive Officer (CEO), Chief Operating Officer (COO), four Group Presidents, a Chief Financial Officer (CFO), a Chief Legal Officer and General Counsel and a Chief Human Resources Officer.

The COO, Group Presidents and CFO are accountable for a related set of end-to-end businesses that they manage.

The Chief Legal Officer and General Counsel leads the Law, Security and Public Policy Division.

The Chief Human Resources Officer leads the Human Resources Organization.

The CEO allocates resources and manages performance at the Group President/CFO level.

As such, the CEO serves as our Chief Operating Decision Maker, and operating segments are primarily based on the Group President/CFO reporting structure.

The CEO allocates resources and manages performance at the COO/Group President/CFO level.

As such, the CEO serves as our Chief Operating Decision Maker, and operating segments are primarily based on the COO/Group President/CFO reporting structure.

Three of our operating segments, Construction Industries, Resource Industries and Energy & Transportation are led by Group Presidents.

2 unchanged sentences

it does not meet the definition of an operating segment.

One Group President leads one smaller operating segment that is included in the All Other operating segment.

One Group President leads one smaller operating segment that is included in the All Other Segment.

The Law, Security and Public Policy Division and the Human Resources Organization are cost centers and do not meet the definition of an operating segment.

1 unchanged sentence

We have five operating segments, of which four are reportable segments.

Following is a brief description of our reportable segments and the business activities included in the All Other operating segment:

Following is a brief description of our reportable segments and the business activities included in the All Other Segment:

Construction Industries :

34 unchanged sentences

soil compactors;

wide-body trucks;

select work tools;

2 unchanged sentences

In addition to equipment, Resource Industries also develops and sells technology products and services to provide customers fleet management, equipment management analytics, autonomous machine capabilities, safety services and mining performance solutions.

Resource Industries also manages areas that provide services to other parts of the company, including strategic procurement, lean center of excellence, integrated manufacturing, research and development for hydraulic systems, automation, electronics and software for Cat machines and engines.

Inter-segment sales are a source of revenue for this segment.

Table of Conte n t s

Energy & Transportation :

A segment primarily responsible for supporting customers using reciprocating engines, turbines, diesel-electric locomotives and related services across industries serving Oil and Gas, Power Generation, Industrial and Transportation applications, including marine- and rail-related businesses.

Responsibilities include business strategy, product design, product management, development and testing, manufacturing, marketing and sales and product support.

3 unchanged sentences

reciprocating engines, drivetrain and integrated systems and solutions for the marine and oil and gas industries;

reciprocating engines, drivetrain and integrated systems and solutions supplied to the industrial industry as well as Cat machinery;

reciprocating engines, drivetrain and integrated systems and solutions supplied to the industrial industry as well as Caterpillar machines;

electrified powertrain and zero-emission power sources and service solutions development;

1 unchanged sentence

Responsibilities also include the remanufacturing of Caterpillar reciprocating engines and components and remanufacturing services for other companies.

and product support of on-highway vocational trucks for North America.

Inter-segment sales are a source of revenue for this segment.

7 unchanged sentences

Financial Products’ segment profit is determined on a pretax basis and includes other income/expense items.

All Other operating segment :

All Other Segment :

Primarily includes activities such as:

1 unchanged sentence

product management and development;

manufacturing and sourcing of filters and fluids, undercarriage, ground-engaging tools, fluid transfer products, precision seals, rubber sealing and connecting components primarily for Cat® products;

manufacturing and sourcing of wear and maintenance components primarily for Cat® products;

parts distribution;

4 unchanged sentences

and digital investments for new customer and dealer solutions that integrate data analytics with state-of-the-art digital technologies while transforming the buying experience.

Results for the All Other operating segment are included as a reconciling item between reportable segments and consolidated external reporting.

Results for the All Other Segment are included as a reconciling item between reportable segments and consolidated external reporting.

Segment measurement and reconciliations

13 unchanged sentences

• We do not include stock-based compensation expense in segment profit.

Table of Conte n t s

• Postretirement benefit expenses are split;

9 unchanged sentences

• Restructuring costs:

May include costs for employee separation, long-lived asset impairments, contract terminations and divestiture impacts.

May include costs for employee separation, long-lived asset impairments, contract terminations and (gains)/losses on divestitures.

These costs are included in Other operating (income) expenses except for defined-benefit plan curtailment losses and special termination benefits, which are included in Other income (expense).

5 unchanged sentences

For example, we report certain costs on the cash basis for segment reporting and the accrual basis for consolidated external reporting.

Table of Conte n t s

For the three and nine months ended September 30, 2023 and 2022, sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows:

Sales and Revenues by Geographic Region

(Millions of dollars) North

External Sales and Revenues Intersegment Sales and Revenues Total Sales and Revenues

Three Months Ended September 30, 2023

Construction Industries $ 4,078 $ 555 $ 1,351 $ 997 $ 6,981 $ 18 $ 6,999

Resource Industries 1,366 499 508 886 3,259 92 3,351

Energy & Transportation 2,966 460 1,428 901 5,755 1,104 6,859

Financial Products Segment 627 110 132 110 979 1

Total sales and revenues from reportable segments 9,037 1,624 3,419 2,894 16,974 1,214 18,188

All Other operating segment 16 ( 1 ) 5 10 30 76 106

Corporate Items and Eliminations ( 126 ) ( 20 ) ( 22 ) ( 26 ) ( 194 ) ( 1,290 ) ( 1,484 )

Total Sales and Revenues $ 8,927 $ 1,603 $ 3,402 $ 2,878 $ 16,810 $ — $ 16,810

Three Months Ended September 30, 2022

Construction Industries $ 3,106 $ 799 $ 1,247 $ 1,084 $ 6,236 $ 40 $ 6,276

Resource Industries 1,122 472 526 893 3,013 74 3,087

Energy & Transportation 2,422 468 1,280 827 4,997 1,189 6,186

Financial Products Segment 522 90 100 107 819 1

Total sales and revenues from reportable segments 7,172 1,829 3,153 2,911 15,065 1,303 16,368

All Other operating segment 16 — 4 15 35 68 103

Corporate Items and Eliminations ( 53 ) ( 20 ) ( 12 ) ( 21 ) ( 106 ) ( 1,371 ) ( 1,477 )

Total Sales and Revenues $ 7,135 $ 1,809 $ 3,145 $ 2,905 $ 14,994 $ — $ 14,994

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $ 181 million and $ 124 million in the three months ended September 30, 2023 and 2022, respectively.

Table of Conte n t s

For the three months ended March 31, 2024 and 2023, sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows:

Sales and Revenues by Geographic Region

1 unchanged sentence

External Sales and Revenues Intersegment Sales and Revenues Total Sales and Revenues

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Construction Industries $ 3,833 $ 595 $ 996 $ 993 $ 6,417 $ 7 $ 6,424

3 unchanged sentences

Total sales and revenues from reportable segments 8,707 1,580 2,878 2,826 15,991 1,298 17,289

All Other operating segment 50 ( 1 ) 13 37 99 234 333

All Other Segment 18 ( 1 ) 4 13 34 75 109

Corporate Items and Eliminations ( 152 ) ( 20 ) ( 30 ) ( 24 ) ( 226 ) ( 1,373 ) ( 1,599 )

Total Sales and Revenues $ 8,573 $ 1,559 $ 2,852 $ 2,815 $ 15,799 $ — $ 15,799

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

Construction Industries $ 3,608 $ 599 $ 1,336 $ 1,161 $ 6,704 $ 42 $ 6,746

3 unchanged sentences

Total sales and revenues from reportable segments 8,063 1,557 3,433 2,967 16,020 1,309 17,329

All Other operating segment 52 — 14 46 112 227 339

All Other Segment 18 — 4 13 35 76 111

Corporate Items and Eliminations ( 131 ) ( 18 ) ( 19 ) ( 25 ) ( 193 ) ( 1,385 ) ( 1,578 )

Total Sales and Revenues $ 7,950 $ 1,539 $ 3,418 $ 2,955 $ 15,862 $ — $ 15,862

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $ 515 million and $ 332 million in the nine months ended September 30, 2023 and 2022, respectively.

For the three and nine months ended September 30, 2023 and 2022, Energy & Transportation segment sales by end user application were as follows:

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other Segment of $ 177 million and $ 162 million in the three months ended March 31, 2024 and 2023, respectively.

For the three months ended March 31, 2024 and 2023, Energy & Transportation segment sales by end user application were as follows:

Energy & Transportation External Sales

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Millions of dollars) 2024 2023

4 unchanged sentences

Energy & Transportation External Sales $ 5,487 $ 5,055

Table of Conte n t s

Reconciliation of Consolidated profit before taxes:

(Millions of dollars) Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

(Millions of dollars) Three Months Ended March 31,

Profit from reportable segments:

4 unchanged sentences

Total profit from reportable segments 4,088 3,843

Profit from All Other operating segment 21 8 42 42

Profit from All Other Segment 24 11

Cost centers 14 30

12 unchanged sentences

Reconciliation of Assets:

(Millions of dollars) September 30, 2023 December 31, 2022

(Millions of dollars) March 31, 2024 December 31, 2023

Assets from reportable segments:

4 unchanged sentences

Total assets from reportable segments 57,591 57,366

Assets from All Other operating segment 1,855 1,828

Assets from All Other Segment 1,926 1,890

Items not included in segment assets:

7 unchanged sentences

Total assets $ 83,741 $ 87,476

Table of Conte n t s

Reconciliation of Depreciation and amortization:

(Millions of dollars)

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Depreciation and amortization from reportable segments:

5 unchanged sentences

Items not included in segment depreciation and amortization:

All Other operating segment 59 56 176 172

All Other Segment 61 57

Cost centers 23 20

3 unchanged sentences

(Millions of dollars)

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Capital expenditures from reportable segments:

5 unchanged sentences

Items not included in segment capital expenditures:

All Other operating segment 67 54 142 116

All Other Segment 29 26

Cost centers 30 22

9 unchanged sentences

Cat Financial also provides financing for power generation facilities that, in most cases, incorporate Caterpillar products.

The average original term of Cat Financial's customer finance receivable portfolio was approximately 51 months with an average remaining term of approximately 27 months as of September 30, 2023.

Table of Conte n t s

Cat Financial typically maintains a security interest in financed equipment and requires physical damage insurance coverage on the financed equipment, both of which provide Cat Financial with certain rights and protections.

The average original term of Cat Financial's customer finance receivable portfolio was approximately 51 months with an average remaining term of approximately 27 months as of March 31, 2024.

Cat Financial typically maintains a security interest in financed equipment and generally requires physical damage insurance coverage on the financed equipment, both of which provide Cat Financial with certain rights and protections.

If Cat Financial's collection efforts fail to bring a defaulted account current, Cat Financial generally can repossess the financed equipment, after satisfying local legal requirements, and sell it within the Caterpillar dealer network or through third-party auctions.

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

During the three and nine months ended September 30, 2023, Cat Financial's forecasts reflected a continuation of the trend of relatively low unemployment rates and delinquencies within their portfolio.

However, industry delinquencies show an increasing trend as persistently high inflation rates and consequent central bank actions are weakening global economic growth.

During the three months ended March 31, 2024, Cat Financial's forecasts reflected a continuation of the trend of relatively low unemployment rates as well as low delinquencies within their portfolio.

However, industry delinquencies show an increasing trend as the central bank actions aimed at reducing inflation have weakened global economic growth.

The company believes the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long-term trends.

4 unchanged sentences

In general, Cat Financial's Dealer portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to its close working relationships with the dealers and their financial strength.

Therefore, Cat Financial made no adjustments to historical loss rates during the three and nine months ended September 30, 2023.

Therefore, Cat Financial made no adjustments to historical loss rates during the three months ended March 31, 2024.

Classes of finance receivables

8 unchanged sentences

Receivable balances, including accrued interest, are written off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible (generally upon repossession of the collateral).

The amount of the write-off is determined by comparing the fair value of the collateral, less cost to sell, to the amortized cost.

Generally, the amount of the write-off is determined by comparing the fair value of the collateral, less cost to sell, to the amortized cost of the receivable.

Subsequent recoveries, if any, are credited to the allowance for credit losses when received.

Table of Conte n t s

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

(Millions of dollars) Three Months Ended September 30, 2023 Three Months Ended September 30, 2022

Customer Dealer Total Customer Dealer Total

Beginning balance $ 265 $ 50 $ 315 $ 290 $ 82 $ 372

Write-offs ( 22 ) — ( 22 ) ( 30 ) — ( 30 )

Recoveries 13 — 13 17 — 17

Provision for credit losses 1

31 1 32 ( 2 ) ( 17 ) ( 19 )

Other ( 3 ) — ( 3 ) ( 5 ) — ( 5 )

Ending balance $ 284 $ 51 $ 335 $ 270 $ 65 $ 335

Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

(Millions of dollars) Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

Customer Dealer Total Customer Dealer Total

8 unchanged sentences

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

Table of Conte n t s

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

(Millions of dollars) Three Months Ended September 30, 2023

(Millions of dollars) Three Months Ended March 31, 2024

2024 2023 2022 2021 2020 Prior Revolving

5 unchanged sentences

Total $ — $ 5 $ 8 $ 5 $ 2 $ — $ 3 $ 23

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2023

2023 2022 2021 2020 2019 Prior Revolving

5 unchanged sentences

Total $ — $ 4 $ 6 $ 4 $ 2 $ — $ 4 $ 20

All $ 47 million of gross write-offs in the Dealer portfolio segment for the three months ended March 31, 2024 were in Latin America and originated prior to 2019.

Credit quality of finance receivables

2 unchanged sentences

In determining past-due status, Cat Financial considers the entire finance receivable past due when any installment is over 30 days past due.

Table of Conte n t s

The tables below summarize the aging category of Cat Financial's amortized cost of finance receivables in the Customer portfolio segment by origination year:

(Millions of dollars) September 30, 2023

(Millions of dollars) March 31, 2024

2024 2023 2022 2021 2020 Prior Revolving

32 unchanged sentences

Total Customer $ 2,173 $ 8,068 $ 4,875 $ 3,086 $ 1,122 $ 565 $ 524 $ 20,413

Table of Conte n t s

(Millions of dollars) December 31, 2023

35 unchanged sentences

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.

Table of Conte n t s

As of September 30, 2023 and December 31, 2022, Cat Financial's total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $ 44 million and $ 58 million, respectively, that were 91+ days past due in Latin America, all of which were originated in 2017.

As of March 31, 2024, Cat Financial's total amortized cost of finance receivables within the Dealer portfolio segment was current.

As of December 31, 2023, Cat Financial's total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $ 44 million that was 91+ days past due in Latin America, all of which originated prior to 2019.

Non-accrual finance receivables

6 unchanged sentences

(Millions of dollars)

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Amortized Cost Amortized Cost

Allowance Non-accrual

Allowance 91+ Still

Accruing Non-accrual

Allowance Non-accrual

Allowance 91+ Still

6 unchanged sentences

Total $ 182 $ 36 $ 152 $ 44

There were $ 44 million and $ 58 million, respectively, in finance receivables in Cat Financial's Dealer portfolio segment on non-accrual status as of September 30, 2023 and December 31, 2022, all of which was in Latin America.

There were no finance receivables in Cat Financial's Dealer portfolio segment on non-accrual status as of March 31, 2024.

There were $ 44 million in finance receivables in Cat Financial's Dealer portfolio segment on non-accrual status as of December 31, 2023, all of which were in Latin America.

Modifications

4 unchanged sentences

Modifications for borrowers Cat Financial does consider to be experiencing financial difficulty typically result in payment deferrals and/or reduced payments for a period of four months or longer, term extension of six months or longer or a combination of both.

During the three and nine months ended September 30, 2023, there were no finance receivable modifications granted to borrowers experiencing financial difficulty in Cat Financial's Dealer portfolio segment.

The amortized cost basis of finance receivables modified for borrowers experiencing financial difficulty in the Customer portfolio segment during the three and nine months ended September 30, 2023, was $ 13 million and $ 38 million, respectively.

During the three months ended March 31, 2024 and 2023, there were no finance receivable modifications granted to borrowers experiencing financial difficulty in Cat Financial's Dealer portfolio segment.

The amortized cost basis of finance receivables modified for borrowers experiencing financial difficulty in the Customer portfolio segment during the three months ended March 31, 2024 and 2023, was $ 3 million and $ 8 million, respectively.

Total modifications with borrowers experiencing financial difficulty represented 0.01 percent and 0.04 percent of Cat Financial's finance receivable portfolio for the same periods, respectively.

For the three and nine months ended September 30, 2023, the financial effects of term extensions for borrowers experiencing financial difficulty added a weighted average of 8 and 17 months, respectively, to the terms of modified contracts.

For the three and nine months ended September 30, 2023, the financial effects of payment delays for

Table of Conte n t s

borrowers experiencing financial difficulty resulted in weighted average paymen t deferrals and/or interest only payment periods of 6 and 7 months, respectively.

For the three months ended March 31, 2024 and 2023, the financial effects of term extensions for borrowers experiencing financial difficulty added a weighted average of 10 and 28 months, respectively, to the terms of modified

For both the three months ended March 31, 2024 and 2023, the financial effects of payment delays for borrowers experiencing financial difficulty resulted in weighted average paymen t deferrals and/or interest only payment periods of 9 months, respectively.

After Cat Financial modifies a finance receivable, they continue to track its performance under its most recent modified terms.

As of September 30, 2023, all of the finance receivables modified with borrowers experiencing financial difficulty are current except for $ 3 million in EAME that was 31-60 days past due.

As of March 31, 2024, all finance receivables modified with borrowers experiencing financial difficulty in the past 12 months are current except for in EAME where there was $ 2 million past due and Asia/Pacific where there was $ 1 million past due.

As of March 31, 2023, all finance receivables modified with borrowers experiencing financial difficulty in the past 12 months were current.

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;

18 unchanged sentences

We may therefore classify a measurement within Level 3 even though there may be significant inputs that are readily observable.

Table of Conte n t s

Fair value measurement includes the consideration of nonperformance risk.

6 unchanged sentences

treasury bonds and large capitalization value and smaller company growth equity securities are based upon valuations for identical instruments in active markets.

Fair values for other government debt securities, corporate debt securities and mortgage-backed debt securities are based upon models that take into consideration such market-based factors as recent sales, risk-free yield curves and prices of similarly rated bonds.

Fair values for other government debt securities, corporate debt securities and mortgage-backed debt securities are based upon models that take into consideration such market-based factors as

recent sales, risk-free yield curves and prices of similarly rated bonds.

We also have investments in time deposits classified as held-to-maturity debt securities.

6 unchanged sentences

The fair value of foreign currency and commodity forward, option 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.

The fair value of total return swap contracts is primarily based on valuing the underlying securities or funds using pricing by industry providers and the average Secured Overnight Financing Rate (SOFR) plus a spread.

See Note 5 for additional information.

Table of Conte n t s

Assets and liabilities measured on a recurring basis at fair value included in our Consolidated Statement of Financial Position as of September 30, 2023 and December 31, 2022 were as follows:

September 30, 2023

Assets and liabilities measured on a recurring basis at fair value included in our Consolidated Statement of Financial Position as of March 31, 2024 and December 31, 2023 were as follows:

March 31, 2024

(Millions of dollars)

21 unchanged sentences

Foreign currency contracts - net — 320 — — 320

Commodity contracts - net — 9 — — 9

Total return swap contracts - net — 21 — — 21

Total assets $ 297 $ 4,022 $ — $ 169 $ 4,488

1 unchanged sentence

Interest rate contracts - net $ — $ 217 $ — $ — $ 217

Commodity contracts - net — 5 — — 5

Total liabilities $ — $ 222 $ — $ — $ 222

Table of Conte n t s

December 31, 2023

31 unchanged sentences

In determining collateral value, Cat Financial estimates the current fair market value of the collateral less selling costs.

Cat Financial had loans carried at fair value of $ 57 million and $ 68 million as of September 30, 2023 and December 31, 2022, respectively.

Cat Financial had loans carried at fair value of $ 52 million and $ 55 million as of March 31, 2024 and December 31, 2023, respectively.

Fair values of financial instruments

7 unchanged sentences

We include restricted cash and short-term investments in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position.

We classify these instruments as Level 1 except for time deposits which are Level 2, and certain corporate debt securities which are Level 3.

We classify these instruments as Level 1

except for time deposits which are Level 2, and certain corporate debt securities which are Level 3.

See Note 8 for additional information.

Table of Conte n t s

Finance receivables

8 unchanged sentences

We estimate fair value for fixed and floating rate debt based on quoted market prices.

The fair value of guarantees is based upon our estimate of the premium a market participant would require to issue the same guarantee in a stand-alone arms-length transaction with an unrelated party.

If quoted or observable market prices are not available, fair value is based upon internally developed models that utilize current market-based assumptions.

We classify guarantees as Level 3.

See Note 11 for additional information.

Our financial instruments not carried at fair value were as follows:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

(Millions of dollars) Carrying

7 unchanged sentences

Financial Products 24,701 24,373 23,612 23,299 2

1 Represents finance leases and failed sale leasebacks of $ 6,816 million and $ 7,325 million at September 30, 2023 and December 31, 2022, respectively.

Table of Conte n t s

1 Represents finance leases and failed sale leasebacks of $ 6,715 million and $ 6,953 million at March 31, 2024 and December 31, 2023, respectively.

Other income (expense)

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Millions of dollars) 2024 2023

1 unchanged sentence

Foreign exchange gains (losses) 1

17 134 ( 15 ) 405

License fee income 34 31

9 unchanged sentences

For involuntary programs, we recognize eligible costs when management has approved the program, the affected employees have been properly notified and the costs are estimable.

Restructuring costs for the three and nine months ended September 30, 2023 and 2022 were as follows:

(Millions of dollars) Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Restructuring costs for the three months ended March 31, 2024 and 2023 were as follows:

(Millions of dollars) Three Months Ended March 31,

Employee separations 1

$ 10 $ 39 $ 32 $ 62

Longwall divestiture 1

Contract terminations 1

Divestitures 1

Long-lived asset impairments 1

Total restructuring costs $ 46 $ 49 $ 688 $ 90

Total restructuring (income) costs $ ( 6 ) $ 611

1 Recognized in Other operating (income) expenses.

2 Represents costs related to our restructuring programs, primarily for inventory write-downs, accelerated depreciation, project management and equipment relocation, all of which are primarily included in Cost of goods sold.

The restructuring costs for the nine months ended September 30, 2023 were primarily related to the divestiture of the company's Longwall business within Resource Industries.

The restructuring income for the three months ended March 31, 2024 was primarily related to the divestiture of a non-US mining entity.

The restructuring costs for the three months ended March 31, 2023 were primarily related to the divestiture of the company's Longwall business within Resource Industries.

The divestiture closed on February 1, 2023 and resulted in a pre-tax loss of approximately $ 586 million, primarily a non-cash item driven by the release of $ 494 million of accumulated foreign currency translation.

The transaction is subject to certain post-closing adjustments.

For the nine months ended September 30, 2022, the restructuring costs were primarily related to actions across the company including strategic actions to address a small number of products.

In 2024 and 2023, all restructuring costs are excluded from segment profit.

Table of Conte n t s

The following table summarizes the 2023 and 2022 employee separation activity:

(Millions of dollars) Nine Months Ended September 30,

Liability balance, beginning of period $ 39 $ 61

Increase in liability (separation charges) 32 62

Reduction in liability (payments) ( 55 ) ( 63 )

Liability balance, end of period $ 16 $ 60

Most of the liability balance at September 30, 2023 is expected to be paid in 2023 and 2024.

Table of Conte n t s

Supplier finance programs

We facilitate voluntary supplier finance programs (the “Programs”) through participating financial institutions.

The Programs are available to a wide range of suppliers and allow them the option to manage their cash flow.

We are not a party to the agreements between the participating financial institutions and the suppliers in connection with the Programs.

The range of payment terms, typically 60 - 90 days, we negotiate with our suppliers is consistent, irrespective of whether a supplier participates in the Programs.

The amount of obligations outstanding that are confirmed as valid to the participating financial institutions for suppliers who voluntarily participate in the Programs, included in Accounts payable in the Consolidated Statement of Financial Position, were $ 833 million and $ 803 million at March 31, 2024 and December 31, 2023, respectively.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements