What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-07 compared with 2024-05-01 · 327 added, 136 removed, 1120 unchanged (29% of the section changed)

3 unchanged sentences

(Dollars in millions except per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Sales and revenues:

30 unchanged sentences

(Dollars in millions)

Three Months Ended March 31,

Three Months Ended June 30,

Profit of consolidated and affiliated companies $ 2,681 $ 2,924

1 unchanged sentence

Foreign currency translation:

( 71 ) ( 142 )

Pension and other postretirement benefits:

Derivative financial instruments:

( 62 ) ( 41 )

Available-for-sale securities:

1 unchanged sentence

Comprehensive income 2,544 2,724

comprehensive income attributable to the noncontrolling interests ( 2 ) ( 1 )

comprehensive income (loss) attributable to the noncontrolling interests — 2

Comprehensive income attributable to shareholders $ 2,544 $ 2,722

1 unchanged sentence

Caterpillar Inc.

Consolidated Statement of Results of Operations

(Dollars in millions except per share data)

Six Months Ended June 30,

Sales and revenues:

Sales of Machinery, Energy & Transportation $ 30,800 $ 31,644

Revenues of Financial Products 1,688 1,536

Total sales and revenues 32,488 33,180

Operating costs:

Cost of goods sold 19,812 21,168

Selling, general and administrative expenses 3,229 2,991

Research and development expenses 1,055 1,000

Interest expense of Financial Products 612 462

Other operating (income) expenses 779 1,176

Total operating costs 25,487 26,797

Operating profit 7,001 6,383

Interest expense excluding Financial Products 280 256

Other income (expense) 311 159

Consolidated profit before taxes 7,032 6,286

Provision (benefit) for income taxes 1,524 1,460

Profit of consolidated companies 5,508 4,826

Equity in profit (loss) of unconsolidated affiliated companies 27 40

Profit of consolidated and affiliated companies 5,535 4,866

Profit (loss) attributable to noncontrolling interests ( 2 ) 1

$ 5,537 $ 4,865

Profit per common share $ 11.28 $ 9.46

Profit per common share – diluted 2

$ 11.23 $ 9.41

Weighted-average common shares outstanding (millions)

– Basic 490.7 514.3

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.

Caterpillar Inc .

Consolidated Statement of Comprehensive Income

(Dollars in millions)

Six Months Ended June 30,

Profit of consolidated and affiliated companies $ 5,535 $ 4,866

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

Foreign currency translation:

Pension and other postretirement benefits:

Derivative financial instruments:

Available-for-sale securities:

Total other comprehensive income (loss), net of tax ( 410 ) 511

Comprehensive income 5,125 5,377

comprehensive income (loss) attributable to the noncontrolling interests ( 2 ) 1

Comprehensive income attributable to shareholders $ 5,127 $ 5,376

See accompanying notes to Consolidated Financial Statements.

Caterpillar Inc .

Consolidated Statement of Financial Position

60 unchanged sentences

interests Total

Three Months Ended March 31, 2023

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

Three Months Ended June 30, 2023

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

Profit (loss) of consolidated and affiliated companies — — 2,922 — 2 2,924

3 unchanged sentences

Available-for-sale securities, net of tax — — — ( 14 ) — ( 14 )

Dividends declared 1

— — ( 1,285 ) — — ( 1,285 )

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

3 unchanged sentences

— ( 1,279 ) — — — ( 1,279 )

Outstanding authorized accelerated share repurchase ( 150 ) — — — — ( 150 )

Other 13 ( 12 ) — — ( 2 ) ( 1 )

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

Three Months Ended June 30, 2024

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

Three Months Ended March 31, 2024

Profit (loss) of consolidated and affiliated companies — — 2,681 — — 2,681

Foreign currency translation, net of tax — — — ( 71 ) — ( 71 )

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 — — — ( 1 ) — ( 1 )

Dividends declared 1

— — ( 1,334 ) — — ( 1,334 )

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

4 12 — — — 16

Stock-based compensation expense 75 — — — — 75

Common shares repurchased:

— ( 1,570 ) — — — ( 1,570 )

Outstanding authorized accelerated share repurchase ( 250 ) — — — — ( 250 )

Other 25 ( 15 ) — — — 10

Balance at June 30, 2024 $ 5,517 $ ( 41,612 ) $ 55,455 $ ( 2,230 ) $ 6 $ 17,136

1 Dividends per share of common stock of $ 2.71 and $ 2.50 were declared in the three months ended June 30, 2024 and 2023, respectively .

2 See Note 12 for additional information.

See accompanying notes to Consolidated Financial Statements.

Caterpillar Inc.

Consolidated Statement of Changes in Shareholders’ Equity

(Dollars in millions)

stock Treasury

business Accumulated

comprehensive

income (loss) Noncontrolling

interests Total

Six Months Ended June 30, 2023

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

2 unchanged sentences

Pension and other postretirement benefits, net of tax — — — ( 5 ) — ( 5 )

Derivative financial instruments, net of tax — — — 43 — 43

Available-for-sale securities, net of tax — — — 8 — 8

Dividends declared 1

— — ( 1,285 ) — — ( 1,285 )

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

1 unchanged sentence

Stock-based compensation expense 118 — — — — 118

Outstanding authorized accelerated stock repurchases ( 150 ) — — — — ( 150 )

Common shares repurchased:

— ( 1,679 ) — — — ( 1,679 )

Other 21 ( 13 ) — — ( 2 ) 6

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

Six Months Ended June 30, 2024

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

Profit (loss) of consolidated and affiliated companies — — 5,537 — ( 2 ) 5,535

Foreign currency translation, net of tax — — — ( 328 ) — ( 328 )

Pension and other postretirement benefits, net of tax — — — ( 6 ) — ( 6 )

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

Available-for-sale securities, net of tax — — — ( 14 ) — ( 14 )

Dividends declared 1

— — ( 1,332 ) — — ( 1,332 )

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

( 41 ) 49 — — — 8

Stock-based compensation expense 119 — — — — 119

Common shares repurchased:

— ( 5,275 ) — — — ( 5,275 )

Outstanding authorized accelerated stock repurchases ( 1,000 ) — — — — ( 1,000 )

Other 36 ( 47 ) — — ( 1 ) ( 12 )

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

Balance at June 30, 2024 $ 5,517 $ ( 41,612 ) $ 55,455 $ ( 2,230 ) $ 6 $ 17,136

1 Dividends per share of common stock of $ 2.71 and $ 2.50 were declared in the six months ended June 30, 2024 and 2023, respectively.

2 See Note 12 for additional information.

2 unchanged sentences

Consolidated Statement of Cash Flow

(Millions of dollars)

Three Months Ended March 31,

(Dollars in Millions)

Six Months Ended June 30,

Cash flow from operating activities:

31 unchanged sentences

Common stock issued, including treasury shares reissued 8 ( 22 )

Common shares repurchased ( 4,455 ) ( 400 )

Payments to purchase common stock ( 6,275 ) ( 1,829 )

Proceeds from debt issued (original maturities greater than three months):

21 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 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.

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 six months ended June 30, 2024 and 2023, (b) the consolidated comprehensive income for the three and six months ended June 30, 2024 and 2023, (c) the consolidated financial position at June 30, 2024 and December 31, 2023, (d) the consolidated changes in shareholders’ equity for the three and six months ended June 30, 2024 and 2023 and (e) the consolidated cash flow for the six months ended June 30, 2024 and 2023.

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

29 unchanged sentences

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 $ 7,860 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.

Trade receivables from dealers and end users were $ 8,024 million, $ 7,923 million and $ 7,551 million as of June 30, 2024, December 31, 2023 and December 31, 2022, respectively.

Long-term trade receivables from dealers and end users were $ 625 million, $ 589 million and $ 506 million as of June 30, 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 $ 196 million, $ 246 million and $ 247 million as of March 31, 2024, December 31, 2023 and December 31, 2022, respectively.

Contract assets were $ 243 million, $ 246 million and $ 247 million as of June 30, 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 $ 2,664 million, $ 2,389 million and $ 2,314 million as of March 31, 2024, December 31, 2023 and December 31, 2022, respectively.

Contract liabilities were $ 2,728 million, $ 2,389 million and $ 2,314 million as of June 30, 2024, December 31, 2023 and December 31, 2022, respectively.

We reduce the contract liability when revenue is recognized.

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.

During the three and six months ended June 30, 2024, we recognized $ 360 million and $ 1,173 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2024.

During the three and six months ended June 30, 2023, we recognized $ 398 million and $ 1,135 million, respectively.

As of June 30, 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 $ 13.4 billion, with about one-half of the amount expected to be completed and revenue recognized in the twelve months following June 30, 2024.

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

4 unchanged sentences

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 $ 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

We recognized pretax stock-based compensation expense of $ 75 million and $ 119 million for the three and six months ended June 30, 2024, respectively, and $ 74 million and $ 118 million for the three and six months ended June 30, 2023, respectively.

The following table illustrates the type and fair value of the stock-based compensation awards granted during the six months ended June 30, 2024 and 2023, respectively:

Six Months Ended June 30, 2024 Six Months Ended June 30, 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

3 unchanged sentences

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:

The following table provides the assumptions used in determining the fair value of the stock-options granted in the six months ended June 30, 2024 and 2023, respectively:

Weighted-average dividend yield 2.40 % 2.60 %

6 unchanged sentences

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:

The following table provides the assumptions used in determining the fair value of the PRSUs granted in the six months ended June 30, 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.

As of June 30, 2024, the total remaining unrecognized compensation expense related to nonvested stock-based compensation awards was $ 241 million, which will be amortized over the weighted-average remaining requisite service periods of approximately 1.8 years.

Derivative financial instruments and risk management

27 unchanged sentences

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

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

As of June 30, 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.

35 unchanged sentences

(Millions of dollars) Fair Value

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Liabilities 2

9 unchanged sentences

Total $ 65 $ ( 28 ) $ 73 $ ( 91 )

1 Assets are classified on the Consolidated Statement of Financial Position as Receivables - trade and other or Long-term receivables - trade and other.

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 March 31, 2024 and December 31, 2023 were $ 24.2 billion and $ 25.6 billion, respectively.

1 Assets are classified as Receivables - trade and other or Long-term receivables - trade and other.

2 Liabilities are classified as Accrued expenses or Other liabilities.

The total notional amounts of the derivative instruments as of June 30, 2024 and December 31, 2023 were $ 24.7 billion and $ 25.6 billion, respectively.

The notional amounts of the derivative financial instruments do not represent amounts exchanged by the parties.

1 unchanged sentence

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

(Millions of dollars) Three Months Ended March 31,

(Millions of dollars) Three Months Ended June 30,

Fair Value / Undesignated Hedges Cash Flow Hedges

7 unchanged sentences

Total $ 25 $ ( 23 ) $ ( 9 ) $ ( 12 ) $ 70 $ 42

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.

1 Foreign exchange contract, Commodity contract and Total return swap 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.

(Millions of dollars) Six Months Ended June 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

2024 2023 2024 2023 2024 2023

Foreign exchange contracts $ 93 $ 3 $ 82 $ 32 $ 147 $ ( 37 )

Interest rate contracts ( 74 ) ( 60 ) 15 12 29 27

Commodity contracts 1 ( 12 ) — — — —

Total return swap contracts 18 — — — — —

Total $ 38 $ ( 69 ) $ 97 $ 44 $ 176 $ ( 10 )

1 Foreign exchange contract, Commodity contract and Total return swap 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.

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

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

June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023

Long-term debt due within one year $ 793 $ 982 $ ( 11 ) $ ( 23 )

5 unchanged sentences

Collateral is typically not required of the counterparties or of our company 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.

As of June 30, 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) March 31, 2024 December 31, 2023

(Millions of dollars) June 30, 2024 December 31, 2023

Assets Liabilities Assets Liabilities

3 unchanged sentences

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

(Millions of dollars) March 31,

(Millions of dollars) June 30,

2024 December 31,

7 unchanged sentences

Intangible assets were comprised of the following:

March 31, 2024

June 30, 2024

(Millions of dollars) Gross

12 unchanged sentences

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

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

Amortization expense for the three and six months ended June 30, 2024 was $ 43 million and $ 87 million, respectively.

Amortization expense for the three and six months ended June 30, 2023 was $ 64 million and $ 130 million, respectively.

Amortization expense related to intangible assets is expected to be:

(Millions of dollars)

Remaining Nine Months of 2024 2025 2026 2027 2028 Thereafter

Remaining Six Months of 2024 2025 2026 2027 2028 Thereafter

$ 88 $ 167 $ 96 $ 33 $ 26 $ 78

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:

No goodwill was impaired during the six months ended June 30, 2024 or 2023.

The changes in carrying amount of goodwill by reportable segment for the six months ended June 30, 2024 were as follows:

(Millions of dollars) December 31,

27 unchanged sentences

Available-for-sale debt securities

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(Millions of dollars) Cost

13 unchanged sentences

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

March 31, 2024

June 30, 2024

Less than 12 months 1

8 unchanged sentences

governmental agency 61 1 307 32 368 33

Residential — — 1 1 1 1

Commercial 6 — 119 8 125 8

16 unchanged sentences

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 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.

In addition, we did not expect credit-related losses on these investments as of June 30, 2024.

The cost basis and fair value of available-for-sale debt securities at June 30, 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.

March 31, 2024

June 30, 2024

(Millions of dollars) Cost Basis Fair Value

8 unchanged sentences

Sales of available-for-sale debt securities:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Millions of dollars) 2024 2023 2024 2023

2 unchanged sentences

Gross losses from the sale of available-for-sale securities $ 1 $ — $ 2 $ —

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.

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

We did not have any investments classified as held-to-maturity debt securities as of June 30, 2024.

These investments matured within one year and were included 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 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.

For the three months ended June 30, 2024 and 2023, the net unrealized gains (losses) for equity securities held at June 30, 2024 and 2023 were $( 3 ) million and $( 4 ) million, respectively.

For the six months ended June 30, 2024 and 2023, the net unrealized gains (losses) for equity securities held at June 30, 2024 and 2023 were $ 14 million and $( 14 ) million, respectively.

Postretirement benefits

1 unchanged sentence

Postretirement

March 31, March 31, March 31,

June 30, June 30, June 30,

(Millions of dollars) 2024 2023 2024 2023 2024 2023

7 unchanged sentences

$ ( 18 ) $ ( 8 ) $ — $ — $ 44 $ 47

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

For the six months ended:

Components of net periodic benefit cost:

Service cost $ — $ — $ 22 $ 20 $ 34 $ 34

Interest cost 313 328 61 61 66 72

Expected return on plan assets ( 350 ) ( 344 ) ( 84 ) ( 80 ) ( 4 ) ( 6 )

Amortization of prior service cost (credit) — — — — ( 7 ) ( 6 )

Net periodic benefit cost (benefit) 1

$ ( 37 ) $ ( 16 ) $ ( 1 ) $ 1 $ 89 $ 94

1 The service cost component is included in Operating costs.

All other components are included in Other income (expense).

We made $ 59 million and $ 172 million of contributions to our pension and other postretirement plans during the three and six months ended June 30, 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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Millions of dollars) 2024 2023 2024 2023

$ 115 $ 136 $ 338 $ 285

Plans 32 29 62 58

$ 147 $ 165 $ 400 $ 343

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

2 unchanged sentences

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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Millions of dollars) 2024 2023 2024 2023

6 unchanged sentences

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.

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 $ 406 million and $ 353 million at June 30, 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.

7 unchanged sentences

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 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.

As of June 30, 2024 and December 31, 2023, the SPC’s assets of $ 1.35 billion and $ 1.35 billion, respectively, were primarily comprised of loans to dealers, and the SPC’s liabilities of $ 1.35 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.

Cat Financial may be obligated to perform under the guarantee if the SPC experiences losses.

3 unchanged sentences

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 three months ended March 31 was as follows:

Three Months Ended March 31,

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

Six Months Ended June 30,

(Millions of dollars) 2024 2023

5 unchanged sentences

Computations of profit per share:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Dollars in millions except per share data) 2024 2023 2024 2023

5 unchanged sentences

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

489.5 515.0 493.3 517.1

Profit per share of common stock:

2 unchanged sentences

$ 5.48 $ 5.67 $ 11.23 $ 9.41

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

Shares outstanding as of June 30, (in millions) 484.9 510.1

1 Profit attributable to common shareholders.

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

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.

For the three and six months ended June 30, 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 and six months ended June 30, 2024, we repurchased 4.6 million and 15.9 million shares of Caterpillar common stock, respectively, at an aggregate cost of $ 1.6 billion and $ 5.3 billion, respectively.

For the three and six months ended June 30, 2023, we repurchased 5.9 million and 7.6 million shares of Caterpillar common stock, respectively, at an aggregate cost of $ 1.3 billion and $ 1.7 billion, 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 2023.

In the first quarter of 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 .

In the second quarter of 2024, we entered into ASR agreements to repurchase an aggregate of $ 1.00 billion of common stock.

We advanced the $ 1.00 billion and received approximately 2.2 million shares of Caterpillar common stock with a value of $ 750 million.

These ASR agreements may last into the fourth quarter of 2024.

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.

The remaining $ 1.30 billion was evaluated as unsettled forward contracts 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:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Millions of dollars) 2024 2023 2024 2023

39 unchanged sentences

Ending balance $ ( 70 ) $ ( 110 ) $ ( 70 ) $ ( 110 )

Total AOCI Ending Balance at March 31,

Total AOCI Ending Balance at June 30,

$ ( 2,230 ) $ ( 1,946 ) $ ( 2,230 ) $ ( 1,946 )

18 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.

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.

The effective tax rate for the three months ended June 30, 2024 of 23.9 percent was negatively impacted by losses for the divestiture of two non-U.S.

entities with no related tax benefit compared to 20.6 percent for the three months ended June 30, 2023 which included a benefit due to a change in a valuation allowance for certain deferred tax assets.

The effective tax rate for the six months ended June 30, 2024 was 21.7 percent compared to 23.2 percent for the six months ended June 30, 2023.

Segment information

88 unchanged sentences

brand management and marketing strategy;

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.

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 Segment are included as a reconciling item between reportable segments and consolidated external reporting.

24 unchanged sentences

These costs are related to corporate requirements primarily for compliance and legal functions for the benefit of the entire organization.

• Restructuring costs:

• Restructuring income/costs:

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

6 unchanged sentences

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

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:

For the three and six months ended June 30, 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

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Construction Industries $ 3,957 $ 677 $ 1,047 $ 975 $ 6,656 $ 27 $ 6,683

6 unchanged sentences

Total Sales and Revenues $ 9,043 $ 1,719 $ 2,997 $ 2,930 $ 16,689 $ — $ 16,689

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Construction Industries $ 3,968 $ 566 $ 1,438 $ 1,149 $ 7,121 $ 33 $ 7,154

6 unchanged sentences

Total Sales and Revenues $ 8,922 $ 1,642 $ 3,533 $ 3,221 $ 17,318 $ — $ 17,318

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:

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other Segment of $ 180 million and $ 172 million in the three months ended June 30, 2024 and 2023, respectively.

Sales and Revenues by Geographic Region

(Millions of dollars) North

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

Six Months Ended June 30, 2024

Construction Industries $ 7,790 $ 1,272 $ 2,043 $ 1,968 $ 13,073 $ 34 $ 13,107

Resource Industries 2,470 1,000 907 1,841 6,218 181 6,399

Energy & Transportation 6,259 847 2,715 1,746 11,567 2,451 14,018

Financial Products Segment 1,327 202 247 219 1,995 1

Total sales and revenues from reportable segments 17,846 3,321 5,912 5,774 32,853 2,666 35,519

All Other Segment 31 ( 1 ) 8 25 63 154 217

Corporate Items and Eliminations ( 261 ) ( 42 ) ( 71 ) ( 54 ) ( 428 ) ( 2,820 ) ( 3,248 )

Total Sales and Revenues $ 17,616 $ 3,278 $ 5,849 $ 5,745 $ 32,488 $ — $ 32,488

Six Months Ended June 30, 2023

Construction Industries $ 7,576 $ 1,165 $ 2,774 $ 2,310 $ 13,825 $ 75 $ 13,900

Resource Industries 2,650 1,012 1,116 2,054 6,832 158 6,990

Energy & Transportation 5,692 839 2,863 1,618 11,012 2,461 13,473

Financial Products Segment 1,168 206 232 219 1,825 1

Total sales and revenues from reportable segments 17,086 3,222 6,985 6,201 33,494 2,694 36,188

All Other Segment 34 — 8 27 69 158 227

Corporate Items and Eliminations ( 248 ) ( 41 ) ( 42 ) ( 52 ) ( 383 ) ( 2,852 ) ( 3,235 )

Total Sales and Revenues $ 16,872 $ 3,181 $ 6,951 $ 6,176 $ 33,180 $ — $ 33,180

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other Segment of $ 357 million and $ 334 million in the six months ended June 30, 2024 and 2023, respectively.

For the three and six months ended June 30, 2024 and 2023, Energy & Transportation segment sales by end user application were as follows:

Energy & Transportation External Sales

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Millions of dollars) 2024 2023 2024 2023

5 unchanged sentences

Reconciliation of Consolidated profit before taxes:

(Millions of dollars) Three Months Ended March 31,

(Millions of dollars) Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Profit from reportable segments:

8 unchanged sentences

Timing 82 95 15 ( 111 )

Restructuring costs 6 ( 611 )

Restructuring income (costs) ( 258 ) ( 31 ) ( 252 ) ( 642 )

Methodology differences:

8 unchanged sentences

Reconciliation of Assets:

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

(Millions of dollars) June 30, 2024 December 31, 2023

Assets from reportable segments:

16 unchanged sentences

(Millions of dollars)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Depreciation and amortization from reportable segments:

11 unchanged sentences

(Millions of dollars)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Capital expenditures from reportable segments:

17 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 March 31, 2024.

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 June 30, 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.

1 unchanged sentence

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 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.

During the three and six months ended June 30, 2024, Cat Financial's forecasts reflected a continuation of the trend of historically 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.

2 unchanged sentences

Cat Financial's wholesale financing plans provide assistance to dealers by financing their mostly new Caterpillar equipment inventory and rental fleets on a secured and unsecured basis.

In addition, Cat Financial provides a variety of secured and unsecured loans to Caterpillar dealers.

In addition, Cat Financial provides a variety of secured and

unsecured loans to Caterpillar dealers.

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

In general, 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 months ended March 31, 2024.

Therefore, Cat Financial made no adjustments to historical loss rates during the three and six months ended June 30, 2024.

Classes of finance receivables

10 unchanged sentences

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

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

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

An analysis of Cat Financial's allowance for credit losses was as follows:

(Millions of dollars) Three Months Ended June 30, 2024 Three Months Ended June 30, 2023

Customer Dealer Total Customer Dealer Total

6 unchanged sentences

Ending balance $ 246 $ 4 $ 250 $ 265 $ 50 $ 315

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

Customer Dealer Total Customer Dealer Total

Beginning balance $ 276 $ 51 $ 327 $ 277 $ 65 $ 342

Write-offs ( 56 ) ( 47 ) ( 103 ) ( 41 ) — ( 41 )

Recoveries 30 — 30 23 — 23

Provision for credit losses 1

24 — 24 4 ( 15 ) ( 11 )

Other ( 28 ) — ( 28 ) 2 — 2

Ending balance $ 246 $ 4 $ 250 $ 265 $ 50 $ 315

Finance Receivables $ 20,740 $ 1,780 $ 22,520 $ 19,814 $ 1,793 $ 21,607

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

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

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

Gross write-offs by origination year for Cat Financial's Customer portfolio segment were as follows:

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

2024 2023 2022 2021 2020 Prior Revolving

5 unchanged sentences

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

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

2023 2022 2021 2020 2019 Prior Revolving

5 unchanged sentences

Total $ — $ 5 $ 6 $ 4 $ 1 $ 2 $ 3 $ 21

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.

Six Months Ended June 30, 2024

2024 2023 2022 2021 2020 Prior Revolving

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

Six Months Ended June 30, 2023

2023 2022 2021 2020 2019 Prior Revolving

Receivables Total

North America $ — $ 5 $ 5 $ 1 $ 1 $ 1 $ 7 $ 20

EAME — 1 2 2 — 1 — 6

Asia/Pacific — 1 3 3 1 — — 8

Latin America — 2 2 2 1 — — 7

Total $ — $ 9 $ 12 $ 8 $ 3 $ 2 $ 7 $ 41

For the three months ended June 30, 2024, there were no gross write-offs in Cat Financial's Dealer portfolio segment.

For the six months ended June 30, 2024 there were $ 47 million of gross write-offs in Cat Financial's Dealer portfolio segment, all of which 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.

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) March 31, 2024

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

(Millions of dollars) June 30, 2024

2024 2023 2022 2021 2020 Prior Revolving

67 unchanged sentences

Total Customer $ 8,742 $ 5,504 $ 3,649 $ 1,383 $ 493 $ 252 $ 548 $ 20,571

Finance receivables in the Customer portfolio segment are substantially secured by collateral, primarily in the form of Caterpillar and other equipment.

Finance receivables in Cat Financial's Customer portfolio segment are substantially secured by collateral, primarily in the form of Caterpillar and other equipment.

For those contracts where the borrower is experiencing financial difficulty, repayment of the outstanding amounts is generally expected to be provided through the operation or repossession and sale of the equipment.

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

As of June 30, 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.

6 unchanged sentences

In Cat Financial's 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)

March 31, 2024 December 31, 2023

(Millions of dollars) June 30, 2024 December 31, 2023

Amortized Cost Amortized Cost

9 unchanged sentences

Total $ 176 $ 29 $ 152 $ 44

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.

There were no finance receivables in Cat Financial's Dealer portfolio segment on non-accrual status as of June 30, 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 was in Latin America.

Modifications

Cat Financial periodically modifies the terms of their finance receivable agreements in response to borrowers’ financial difficulty.

Cat Financial periodically modifies the terms of their finance receivable agreements.

Typically, the types of modifications granted are payment deferrals, interest-only payment periods and/or term extensions.

2 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 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.

During the three and six months ended June 30, 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 June 30, 2024 and 2023, was $ 3 million and $ 22 million, respectively.

Total modifications with borrowers experiencing financial difficulty represented 0.02 percent and 0.10 percent of Cat Financial's finance receivable portfolio for the same periods, 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.

The amortized cost basis of finance receivables modified for borrowers experiencing financial difficulty in the Customer portfolio segment during the six

months ended June 30, 2024 and 2023, was $ 6 million and $ 30 million, respectively.

Total modifications with borrowers experiencing financial difficulty represented 0.03 percent and 0.14 percent of Cat Financial's finance receivable portfolio for the same periods, respectively.

Fo r the three months ende d June 30, 2024 and 2023, the financial effects of term extensions for borrowers experiencing financial difficulty added a weighted average of 13 and 18 months, respectively, to the terms of modified contracts.

For the six months ended June 30, 2024 and 2023, the financial effects of term extensions for borrowers experiencing financial difficulty added a weighted average o f 11 and 21 months, res pectively, to the terms of modified contracts.

For t he three months en ded June 30, 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 6 and 7 months, respectively.

For the six months e nded June 30, 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 8 months.

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

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.

As of June 30, 2024 and 2023, defaults of loans modified in the prior twelve months were not significant.

The effect of most modifications made to finance receivables for borrowers experiencing financial difficulty is already included in the allowance for credit losses based on the methodologies used to estimate the allowance;

26 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.

8 unchanged sentences

See Note 5 for additional information.

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

Assets and liabilities measured on a recurring basis at fair value included in our Consolidated Statement of Financial Position as of June 30, 2024 and December 31, 2023 were as follows:

June 30, 2024

(Millions of dollars)

21 unchanged sentences

Foreign currency contracts - net — 214 — — 214

Commodity contracts - net — 2 — — 2

Total return swap contracts - net — 3 — — 3

2 unchanged sentences

Interest rate contracts - net $ — $ 228 $ — $ — $ 228

Commodity contracts - net — 5 — — 5

Total liabilities $ — $ 228 $ — $ — $ 228

32 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 $ 52 million and $ 55 million as of March 31, 2024 and December 31, 2023, respectively.

Cat Financial had loans carried at fair value of $ 51 million and $ 55 million as of June 30, 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.

10 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(Millions of dollars) Carrying

7 unchanged sentences

Financial Products 23,431 23,126 23,612 23,299 2

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.

1 Represents finance leases and failed sale leasebacks of $ 6,720 million and $ 6,953 million at June 30, 2024 and December 31, 2023, respectively.

Other income (expense)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Millions of dollars) 2024 2023 2024 2023

1 unchanged sentence

Foreign exchange gains (losses) 1

17 40 59 ( 32 )

License fee income 37 43 71 74

5 unchanged sentences

See Note 5 for further details.

Restructuring costs

Restructuring income/costs

Our accounting for employee separations is dependent upon how the particular program is designed.

1 unchanged sentence

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 months ended March 31, 2024 and 2023 were as follows:

(Millions of dollars) Three Months Ended March 31,

Restructuring costs for the three and six months ended June 30, 2024 and 2023 were as follows:

(Millions of dollars) Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Employee separations 1

$ 19 $ 10 $ 32 $ 22

Divestitures 1

228 — 164 586

Contract terminations 1

Long-lived asset impairments 1

1 unchanged sentence

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 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.

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

The restructuring costs for the six months ended June 30, 2024 were primarily related to the divestitures of certain non-US entities.

The restructuring costs for the six months ended June 30, 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.

5 unchanged sentences

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.

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 $ 819 million and $ 803 million at June 30, 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