What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-07 compared with 2024-05-01 · 484 added, 201 removed, 670 unchanged (51% of the section changed)

5 unchanged sentences

Risk Factors of the 2023 Form 10-K .

Highlights for the first quarter of 2024 include:

• Total sales and revenues for the first quarter of 2024 were $15.799 billion, a decrease of $63 million, or about flat, compared with $15.862 billion in the first quarter of 2023.

In the three primary segments, sales were higher in Energy & Transportation and lower in Construction Industries and Resource Industries .

• Operating profit margin was 22.3 percent for the first quarter of 2024, compared with 17.2 percent for the first quarter of 2023.

Adjusted operating profit margin was 22.2 percent for the first quarter of 2024, compared with 21.1 percent for the first quarter of 2023.

• First-quarter 2024 profit per share was $5.75, and excluding the items in the table below, adjusted profit per share was $5.60.

First-quarter 2023 profit per share was $3.74, and excluding the items in the table below, adjusted profit per share was $4.91.

• Caterpillar ended the first quarter of 2024 with $5.0 billion of enterprise cash.

• Enterprise operating cash flow was $2.1 billion in the first quarter of 2024.

Highlights for the second quarter of 2024 include:

• Total sales and revenues for the second quarter of 2024 were $16.689 billion, a decrease of $629 million, or 4 percent, compared with $17.318 billion in the second quarter of 2023.

In the three primary segments, sales were lower in Construction Industries and Resource Industries and higher in Energy & Transportation .

• Operating profit margin was 20.9 percent for the second quarter of 2024, compared with 21.1 percent for the second quarter of 2023.

Adjusted operating profit margin was 22.4 percent for the second quarter of 2024, compared with 21.3 percent for the second quarter of 2023.

• Second-quarter 2024 profit per share was $5.48, and excluding the items in the table below, adjusted profit per share was $5.99.

Second-quarter 2023 profit per share was $5.67, and excluding the items in the table below, adjusted profit per share was $5.55.

• Caterpillar ended the second quarter of 2024 with $4.3 billion of enterprise cash.

Highlights for the six months ended June 30, 2024 include:

• Total sales and revenues were $32.488 billion for the six months ended June 30, 2024, a decrease of $692 million, or 2 percent, compared with $33.180 billion for the six months ended June 30, 2023.

• Operating profit margin was 21.5 percent for the six months ended June 30, 2024, compared with 19.2 percent for the six months ended June 30, 2023.

Adjusted operating profit margin was 22.3 percent for the six months ended June 30, 2024, compared with 21.2 percent for the six months ended June 30, 2023.

• Profit per share for the six months ended June 30, 2024, was $11.23, and excluding the items in the table below, adjusted profit per share was $11.59.

Profit per share for the six months ended June 30, 2023, was $9.41, and excluding the items in the table below, adjusted profit per share was $10.46.

• Enterprise operating cash flow was $5.1 billion for the six months ended June 30, 2024.

• In order for our results to be more meaningful to our readers, we have separately quantified the impact of several significant items.

A detailed reconciliation of GAAP to non-GAAP financial measures is included on pages 66-67.

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

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

(Dollars in millions except per share data) Profit Before Taxes Profit

Per Share Profit Before Taxes Profit

Profit $ 3,500 $ 5.48 $ 3,652 $ 5.67 $ 7,032 $ 11.23 $ 6,286 $ 9.41

Restructuring (income) - non-US mining entity divestiture (64) (0.24) — —

Restructuring (income) costs - divestitures of certain non-U.S.

entities 228 0.47 — — 164 0.22 — —

Other restructuring (income) costs 30 0.04 31 0.05 88 0.14 56 0.09

Restructuring costs - Longwall divestiture

— — — — — — 586 1.13

Deferred tax valuation allowance adjustments — — — (0.17) — — — (0.17)

Adjusted profit $ 3,758 $ 5.99 $ 3,683 $ 5.55 $ 7,284 $ 11.59 $ 6,928 $ 10.46

Total sales and revenues for the first quarter of 2024 were $15.799 billion, a decrease of $63 million, or about flat, compared with $15.862 billion in the first quarter of 2023.

Lower sales volume and unfavorable currency impacts, primarily related to the Australian dollar, were mostly offset by favorable price realization and higher Financial Products' revenues.

The decrease in sales volume was primarily driven by lower sales of equipment to end users;

there was not a significant impact from changes in dealer inventories .

First-quarter 2024 profit per share was $5.75, compared with $3.74 profit per share in the first quarter of 2023.

In the first quarter of 2024 and 2023, profit per share included restructuring income/costs.

Profit for the first quarter of 2024 was $2.856 billion, an increase of $913 million, or 47 percent, compared with $1.943 billion for the first quarter of 2023.

The increase was primarily due to the absence of the impact of the divestiture of the company's Longwall business in 2023 and favorable price realization, partially offse t by the profit impact of lower sales volume.

Total sales and revenues for the second quarter of 2024 were $16.689 billion, a decrease of $629 million, or 4 percent, compared with $17.318 billion in the second quarter of 2023.

The decrease was primarily due to lower sales volume , partially offset by favorable price realization .

The decrease in sales volume was mainly driven by the impact from changes in dealer inventories .

Dealer inventory decreased during the second quarter of 2024, compared with an increase during the second quarter of 2023.

Second-quarter 2024 profit per share was $5.48, compared with $5.67 profit per share in the second quarter of 2023.

In the second quarter of 2024 and 2023, profit per share included restructuring costs.

Second-quarter 2023 profit per share also included a discrete tax benefit to adjust deferred tax balances.

Profit for the second quarter of 2024 was $2.681 billion, a decrease of $241 million, or 8 percent, compared with $2.922 billion for the second quarter of 2023.

Favorable price realization

was more than offset by the profit impact of lower sales volume, higher restructuring costs and higher selling, general and administrative (SG&A) and research and development (R&D) expenses.

Trends and Economic Conditions

Outlook for Key End Markets

Overall, we expect a continuation of healthy demand across most of our end markets for our products and services .

In Construction Industries, we continue to expect North America to remain healthy in 2024 for both non-residential and residential construction after a strong 2023.

We anticipate non-residential construction in North America to remain at similar to slightly higher demand levels to 2023 due to government-related infrastructure and construction projects.

Residential construction demand is expected to be flat to slightly down compared to 2023, which remains strong relative to historical levels.

In Asia Pacific, outside of China, we expect some softening in economic conditions.

We anticipate China will remain at a

relatively low level in the excavator industry above 10-tons.

In EAME , we anticipate that economic weakness in Europe will continue, partially offset by strong construction demand in the Middle East.

In Construction Industries, sales of equipment to end users in the second half of 2024 are expected to decline slightly as compared to the second half of 2023.

In North America, for 2024, we anticipate lower rental fleet loading.

Government-related infrastructure projects are expected to remain healthy.

In Asia Pacific, outside of China, we continue to expect soft economic conditions.

We anticipate demand in China will remain at a relatively low level in the excavator industry above 10-tons.

In EAME , we anticipate that weak economic conditions in Europe will continue, partially offset by continued healthy construction demand in the Middle East.

Construction activity in Latin America remains mixed, but overall, we are expecting modest growth.

In addition, we anticipate the ongoing benefit of our services initiatives will positively impact Construction Industries in 2024.

In Resource Industries, in 2024, for both mining and heavy construction and quarry and aggregates, we anticipate lower sales volume compared to strong 2023 performance, primarily in off-highway and articulated trucks.

We anticipate a small decrease in dealer inventory in 2024, as compared to a slight increase in 2023.

While we continue to see a high level of quoting activity overall, we anticipate lower order rates as customers display capital discipline.

Customer product utilization remains high, the number of parked trucks remains low, the age of the fleet remains elevated, and our autonomous solutions continue to have strong customer acceptance.

In Resource Industries, for both mining and heavy construction and quarry and aggregates, we continue to anticipate lower sales volume in 2024 compared to strong 2023 performance, primarily in off-highway and articulated trucks.

We anticipate a decrease in dealer inventory in 2024, as compared to a slight increase in 2023.

We expect higher services revenues, including robust rebuild activity in 2024.

We continue to believe the energy transition will support increased commodity demand over time, expanding our total addressable market and providing further opportunities for long-term profitable growth.

In Energy & Transportation, we expect reciprocating engines and services for Oil & Gas to be about flat in 2024 after strong 2023 performance.

We expect reciprocating gas compression demand to be higher in 2024 than it was in 2023.

Well servicing for reciprocating engines in North America is expected to soften.

Power Generation reciprocating engine demand is expected to remain strong, largely due to continued data center growth relating to cloud computing and generative artificial intelligence (AI).

For Solar Turbines, backlog and quoting activity remains strong for Oil & Gas and Power Generation.

Industrial demand is expected to soften relative to a strong 2023.

In Transportation, we anticipate high-speed marine to increase as customers continue to upgrade aging fleets.

Customer product utilization remains high, the number of parked trucks remains low, the age of the fleet remains elevated, and our autonomous solutions continue to have strong customer acceptance.

Customers continue to display capital discipline, however, we continue to believe the energy transition will support increased commodity demand over time, expanding our total addressable market and providing further opportunities for long-term profitable growth.

For Energy & Transportation, in Oil & Gas in total, we expect a stronger year overall in 2024 as compared to 2023.

We expect reciprocating engines for Oil & Gas to be about flat to slightly down in 2024 after strong 2023 performance, primarily due to ongoing softness in well servicing.

We expect gas compression to be up in 2024 as compared to 2023, but expect it to soften in the second half of 2024 as compared to the second half of 2023.

For Solar Turbines, we continue to expect sales volume to increase in the second half of 2024 as compared to the second half of 2023, as backlog remains strong for Oil & Gas.

For Power Generation, reciprocating engine and Solar Turbines demand is expected to remain strong, largely due to continued data center growth relating to cloud computing and generative artificial intelligence (AI).

Industrial demand is expected to remain at a relatively low level in the second half of 2024 compared to the second half of 2023.

In Transportation, we anticipate growth as the year progresses in both high-speed marine and rail services.

Full-Year 2024 Company Trends and Expectations

For the full-year 2024, we continue to anticipate sales and revenues will be broadly similar to 2023.

We do not anticipate a significant change in machine dealer inventories during 2024, compared to a $0.7 billion increase in machine dealer inventories during 2023.

We expect slightly favorable price realization in 2024 as compared to 2023.

Services revenues grew in the first quarter of 2024, and we expect continued growth in 2024 across each of our three primary segments.

In Construction Industries, we expect sales of equipment to end users to be slightly lower compared to 2023 due to softer economic conditions in Europe.

We expect demand in North America to remain at healthy levels in Construction Industries.

Resource Industries' sales in 2024 are expected to be lower, driven by lower sales volume primarily in off-highway and articulated trucks.

We also expect an unfavorable impact from changes in dealer inventories in Construction Industries and Resource Industries.

Within Energy & Transportation, we expect slightly higher sales compared to 2023, including a seasonal increase throughout the year.

In 2024, we expect a benefit from price realization during the first half of the year.

We expect manufacturing costs to be about flat compared to 2023.

We anticipate favorable freight to be partially offset by unfavorable cost absorption.

We also anticipate shipping a more normal mix of products, which we expect to drive a slight unfavorable impact to operating profit.

Selling, general and administrative (SG&A) and research and development (R&D) expenses are expected to increase throughout the year as we continue to invest in strategic initiatives aimed at future long-term profitable growth, such as services growth and technology, including autonomy, alternative fuels, connectivity and digital and electrification.

We also expect a benefit of lower short-term incentive compensation expense in 2024 as compared to 2023.

In 2024, we expect restructuring costs to be between $300 million and $450 million and expect capital expenditures to be in the range of $2.0 to $2.5 billion.

For the full-year 2024, we anticipate slightly lower sales and revenues as compared to 2023.

We anticipate a slight decrease in machine dealer inventories during 2024, mostly driven by Resource Industries, compared to an increase in 2023.

In 2024, we expect restructuring costs to be around $450 million and expect capital expenditures to be in the range of $2.0 to $2.5 billion.

We expect the annual effective tax rate, excluding discrete items, to be 22.5 percent.

Second-Quarter 2024 Company Trends and Expectations

In the second quarter of 2024, we expect lower sales and revenues as compared to the second quarter of 2023.

We anticipate an unfavorable impact from changes in machine dealer inventories, as machine dealer inventory is expected to decline during the second quarter of 2024 compared to a $0.2 billion increase during the second quarter of 2023.

In the second quarter of 2024, price realization is expected to remain favorable as compared to the second quarter of 2023.

We expect lower Construction Industries' sales as compared to the second quarter of 2023 due to the impact from changes in dealer inventories, partially offset by favorable price realization.

Resource Industries' sales are expected to be lower driven by lower sales volume, partially offset by favorable price realization.

In Energy & Transportation, we expect sales to be about flat as compared to the second quarter of 2023.

In the second quarter of 2024, we expect a benefit from price realization primarily from price actions taken in the second half of 2023.

We expect manufacturing costs to be about flat compared to the second quarter of 2023, as we anticipate favorable freight to be partially offset by unfavorable cost absorption.

We expect an increase in SG&A/R&D expenses in the second quarter of 2024 as compared to the second quarter of 2023 due to investments in strategic initiatives, which is expected to be offset by lower short-term incentive compensation expense.

Within Construction Industries and Resource Industries in the second quarter of 2024 as compared to the second quarter of 2023, we expect favorable price realization to be offset by the profit impact of lower sales volume.

In Energy & Transportation, we anticipate favorable price realization and a favorable mix of products to be partially offset by higher manufacturing costs and SG&A/R&D expenses due to investments in strategic initiatives.

Within corporate items and eliminations , we anticipate increased expenses due to timing differences in the second quarter of 2024 as compared to the second quarter of 2023.

Second-Half 2024 Company Trends and Expectations

We expect sales and revenues in the second half of 2024 to be slightly higher than the first half of 2024, following a normal seasonal trend.

We expect sales and revenues in the second half of 2024 to be slightly lower than the second half of 2023, due to lower sales volume driven by lower sales of equipment to end users for machines.

Changes in machine dealer inventories are expected to have a nominal impact on second-half 2024 sales and revenues as compared to the second half of 2023.

We expect the decrease in machine dealer inventory in the second half of 2024 to be similar to the decrease in the second half of 2023 which was about $1.0 billion.

We anticipate the decline in second-half 2024 sales and revenues compared to second-half 2023 will be roughly similar to the decline in the first half of 2024 compared to the first half of 2023.

Services revenues grew in the second quarter of 2024, and we expect growth in the second half of 2024 compared to the second half of 2023.

As compared to the second half of 2023, we expect favorable manufacturing costs in the second half of 2024.

We also expect an unfavorable profit impact from lower sales volume and unfavorable price realization in the second half of 2024 compared to the second half of 2023.

We anticipate the benefit from price realization in the second half of 2024 will be significantly lower as we lap favorable price trends from 2023 along with a normalizing price environment.

Third-Quarter 2024 Company Trends and Expectations

In the third quarter of 2024, we expect slightly lower sales and revenues as compared to the third quarter of 2023.

We anticipate lower sales volume driven by an unfavorable impact from changes in machine dealer inventories and lower sales of equipment to end users of machines.

Machine dealer inventory is expected to be about flat or slightly down during the third quarter of 2024 compared to a $0.4 billion increase during the third quarter of 2023.

We expect price realization in the third quarter of

2024 to be about flat compared to the third quarter of 2023.

We also anticipate services revenues growth in the third quarter of 2024 compared to the third quarter of 2023.

As compared to the third quarter of 2023, we expect lower Construction Industries' sales in the third quarter of 2024 due to the impact from changes in dealer inventories.

Resource Industries' sales are expected to be lower driven by lower sales of equipment to end users.

In Energy & Transportation, we expect sales to be higher driven by strength in Power Generation, Oil & Gas and Transportation, partially offset by lower sales in Industrial.

We expect an unfavorable profit impact from lower sales volume to be offset by favorable manufacturing costs in the third quarter of 2024 as compared to the third quarter of 2023.

Within Construction Industries, we expect an unfavorable profit impact from lower sales volume and slightly unfavorable price realization, partially offset by favorable manufacturing costs.

In Resource Industries, we anticipate an unfavorable profit impact from lower sales volume and higher SG&A/R&D expenses.

In Energy & Transportation, we expect a favorable profit impact from higher sales volume and favorable price realization.

Global Business Conditions

10 unchanged sentences

Consolidated Results of Operations

THREE MONTHS ENDED MARCH 31, 2024 COMPARED WITH THREE MONTHS ENDED MARCH 31, 2023

THREE MONTHS ENDED JUNE 30, 2024 COMPARED WITH THREE MONTHS ENDED JUNE 30, 2023

CONSOLIDATED SALES AND REVENUES

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the first quarter of 2023 (at left) and the first quarter of 2024 (at right).

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the second quarter of 2023 (at left) and the second quarter of 2024 (at right).

Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees.

Total sales and revenues for the first quarter of 2024 were $15.799 billion, a decrease of $63 million, or about flat, compared with $15.862 billion in the first quarter of 2023.

Lower sales volume of $684 million and unfavorable currency impacts of $30 million, primarily related to the Australian dollar, were mostly offset by favorable price realization of $575 million and higher Financial Products' revenues of $76 million.

The decrease in sales volume was primarily driven by lower sales of equipment to end users;

there was not a significant impact from changes in dealer inventories.

In the three primary segments, sales were higher in Energy & Transportation and lower in Construction Industries and Resource Industries.

North America sales increased 7 percent primarily due to favorable price realization and higher sales volume.

The increase in sales volume was primarily driven by the impact from changes in dealer inventories.

Dealer inventory increased more during the first quarter of 2024 than during the first quarter of 2023.

Sales increased 2 percent in Latin America mainly due to higher sales volume.

Total sales and revenues for the second quarter of 2024 were $16.689 billion, a decrease of $629 million, or 4 percent, compared with $17.318 billion in the second quarter of 2023.

The decrease was primarily due to lower sales volume of $1.206 billion, partially offset by favorable price realization of $578 million.

The decrease in sales volume was mainly driven by the impact from changes in dealer inventories.

Dealer inventory decreased during the second quarter of 2024, compared with an increase during the second quarter of 2023.

In the three primary segments, sales were lower in Construction Industries and Resource Industries and higher in Energy & Transportation.

North America sales increased 1 percent primarily due to favorable price realization, partially offset by lower sales volume.

The decrease in sales volume was mainly driven by the impact from changes in dealer inventories.

Dealer inventory increased less during the second quarter of 2024 than during the second quarter of 2023.

Sales increased 5 percent in Latin America mainly due to higher sales volume and favorable price realization.

The increase in sales volume was primarily driven by higher services sales volume.

EAME sales decreased 16 percent primarily due to lower sales volume.

The decrease in sales volume was primarily driven by lower sales of equipment to end users.

Asia/Pacific sales decreased 5 percent mainly due to lower sales volume.

The decrease in sales volume was primarily driven by the impact from changes in dealer inventories.

Dealer inventory increased more during the first quarter of 2023 than during the first quarter of 2024.

Total dealer inventory increased by $1.4 billion during the first quarter of 2024, compared with an increase of $1.4 billion during the first quarter of 2023.

Dealer inventory decreased during the second quarter of 2024, compared with an increase during the second quarter of 2023.

Asia/Pacific sales decreased 9 percent mainly due to lower sales volume.

The decrease in sales volume was primarily driven by lower sales of equipment to end users.

Total dealer inventory decreased $200 million during the second quarter of 2024, compared with an increase of $600 million during the second quarter of 2023.

Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times.

2 unchanged sentences

Sales and Revenues by Segment

(Millions of dollars) First Quarter 2023 Sales

Realization Currency Inter-Segment / Other First Quarter 2024 $

(Millions of dollars) Second Quarter 2023 Sales

Realization Currency Inter-Segment / Other Second Quarter 2024 $

Construction Industries $ 7,154 $ (588) $ 178 $ (55) $ (6) $ 6,683 $ (471) (7 %)

8 unchanged sentences

Financial Products Revenues

773 — — — 76 849 76 10 %

Consolidated Sales and Revenues $ 17,318 $ (1,206) $ 578 $ (77) $ 76 $ 16,689 $ (629) (4 %)

2 unchanged sentences

(Millions of dollars) $ % Chg $ % Chg $ % Chg $ % Chg $ % Chg $ % Chg $ % Chg

First Quarter 2024

Second Quarter 2024

Construction Industries $ 3,957 — % $ 677 20 % $ 1,047 (27 %) $ 975 (15 %) $ 6,656 (7 %) $ 27 (18 %) $ 6,683 (7 %)

9 unchanged sentences

Consolidated Sales and Revenues $ 9,043 1 % $ 1,719 5 % $ 2,997 (15 %) $ 2,930 (9 %) $ 16,689 (4 %) $ — — % $ 16,689 (4 %)

First Quarter 2023

Second Quarter 2023

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

8 unchanged sentences

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

1 Includes revenues from Machinery, Energy & Transportation of $177 million and $162 million in the first quarter of 2024 and 2023, respectively.

1 Includes revenues from Machinery, Energy & Transportation o f $180 m illion and $172 million in the second quarter of 2024 and 2023, respectively.

CONSOLIDATED OPERATING PROFIT

The chart above graphically illustrates reasons for the change in consolidated operating profit between the first quarter of 2023 (at left) and the first quarter of 2024 (at right).

The chart above graphically illustrates reasons for the change in consolidated operating profit between the second quarter of 2023 (at left) and the second quarter of 2024 (at right).

Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees.

The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation's other operating (income) expenses .

Operating profit for the first quarter of 2024 was $3.519 billion, an increase of $788 million, or 29 percent, compared with $2.731 billion in the first quarter of 2023.

The increase was primarily due to the absence of the impact of the divestiture of the company's Longwall business in 2023 of $586 million and favorable price realization of $575 million, partially offset by the profit impact of lower sales volume of $268 million.

Operating profit margin was 22.3 percent for the first quarter of 2024, compared with 17.2 percen t for the first quarter of 2023.

Operating profit for the second quarter of 2024 was $3.482 billion, a decrease of $170 million, or 5 percent, compared with $3.652 billion in the second quarter of 2023.

Favorable price realization of $578 million was more than offset by the profit impact of lower sales volume of $431 million, higher restructuring costs of $227 million and higher SG&A/R&D expenses of $79 million.

The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives.

In the second quarter of 2024, restructuring costs increased primarily due to the divestiture of two non-U.S.

Operating profit margin was 20.9 percent for the second quarter of 2024, compared with 21.1 percent for the second quarter of 2023.

Profit (Loss) by Segment

(Millions of dollars) First Quarter 2024 First Quarter 2023 $

(Millions of dollars) Second Quarter 2024 Second Quarter 2023 $

Construction Industries $ 1,741 $ 1,803 $ (62) (3 %)

10 unchanged sentences

Other Profit/Loss and Tax Items

▪ Interest expense excluding Financial Products in the first quarter of 2024 was $143 million, compared with $129 million in the first quarter of 2023.

▪ Interest expense excluding Financial Products in the second quarter of 2024 was $137 million, compared with $127 million in the second quarter of 2023.

The increase was due to higher average borrowing rates.

▪ Other income (expense) in the first quarter of 2024 was income of $156 million, compared with income of $32 million in the first quarter of 2023.

The change was primarily driven by favorable impacts from foreign currency exchange.

▪ The effective tax rate for the first quarter of 2024 was 19.5 percent compared to 26.9 percent for the first quarter of 2023.

Excluding the discrete items discussed below, the first quarter 2024 estimated annual tax rate was 22.5 percent compared with 23.0 percent for the first quarter of 2023.

The 2024 estimated annual tax rate excludes the impact of nontaxable gains of $64 million for the divestiture of a non-U.S.

mining entity along with a related tax benefit of $54 million.

The estimated annual tax rate in the first quarter of 2023 excluded the impact of the nondeductible loss of $586 million related to the divestiture of the company’s Longwall business.

In addition, a discrete tax benefit of $38 million was recorded in the first quarter of 2024, compared with a $32 million benefit in the first quarter of 2023, for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S.

▪ Other income (expense) in the second quarter of 2024 was income of $155 million, compared with income of $127 million in the second quarter of 2023.

The change was primarily driven by favorable impacts from commodity hedges.

▪ The effective tax rate for the second quarter of 2024 was 23.9 percent compared to 20.6 percent for the second quarter of 2023.

Excluding the discrete items discussed below, the second quarter 2024 estimated annual tax rate was 22.5 percent compared with 23.0 percent for the second quarter of 2023.

The 2024 estimated annual tax rate excludes the impact of second-quarter losses of $228 million for the divestiture of two non-U.S.

entities with no related tax benefit.

In addition, a discrete tax benefit of $4 million was recorded in the second quarter of 2024 for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S.

GAAP compensation expense.

In the second quarter of 2023, the company recorded a discrete tax benefit of $88 million due to a change in the valuation allowance for certain deferred tax assets.

Please see a reconciliation of GAAP to non-GAAP financial measures on pages 66-67.

Construction Industries

Construction Industries’ total sales were $6.424 billion in the first quarter of 2024, a decrease of $322 million, or 5 percent, compared with $6.746 billion in the first quarter of 2023.

Construction Industries’ total sales were $6.683 billion in the second quarter of 2024, a decrease of $471 million, or 7 percent, compared with $7.154 billion in the second quarter of 2023.

The decrease was primarily due to lower sales volume of $588 million, partially offset by favorable price realization of $178 million.

The decrease in sales volume was mainly driven by lower sales of equipment to end users.

▪ In North America, sales increased primarily due to favorable price realization.

▪ Sales in Latin America were about flat.

▪ In EAME, sales decreased mainly due to lower sales volume.

Lower sales volume was primarily driven by lower sales of equipment to end users.

▪ Sales decreased in Asia/Pacific primarily due to lower sales volume.

The decrease in sales volume was mainly driven by the impact from changes in dealer inventories.

Dealer inventory remained about flat during the second quarter of 2024, compared to an increase during the second quarter of 2023.

▪ Sales in North America were about flat.

Lower sales volume was offset by favorable price realization.

Lower sales volume was mainly driven by lower sales of equipment to end users.

▪ Sales increased in Latin America mainly due to higher sales volume.

Higher sales volume was primarily driven by the impact from changes in dealer inventories.

Dealer inventory increased during the second quarter of 2024, compared with a decrease during the second quarter of 2023.

▪ In EAME, sales decreased primarily due to lower sales volume.

Lower sales volume was mainly driven by the impact from changes in dealer inventories.

Dealer inventory increased more during the first quarter of 2023 than during the first quarter of 2024.

Construction Industries’ segment profit was $1.764 billion in the first quarter of 2024, a decrease of $26 million, or 1 percent, compared with $1.790 billion in the first quarter of 2023.

The decrease was mainly due to the profit impact of lower sales volume of $278 million, higher SG&A/R&D expenses of $26 million and unfavorable other segment items of $7 million, partially offset by favorable price realization of $199 million and favorable manufacturing costs of $86 million.

Favorable manufacturing costs largely reflected lower freight.

Construction Industries’ segment profit as a percent of total sales was 27.5 percent in the first quarter of 2024, compared with 26.5 percent in the first quarter of 2023.

Dealer inventory decreased during the second quarter of 2024, compared with an increase during the second quarter of 2023.

▪ Sales decreased in Asia/Pacific mainly due to lower sales volume and unfavorable currency impacts primarily related to the Japanese yen.

Lower sales volume was mainly driven by the impact from changes in dealer inventories.

Dealer inventory decreased during the second quarter of 2024, compared with an increase during the second quarter of 2023.

Construction Industries’ segment profit was $1.741 billion in the second quarter of 2024, a decrease of $62 million, or 3 percent, compared with $1.803 billion in the second quarter of 2023.

The decrease was mainly due to the profit impact of lower sales volume of $288 million and higher SG&A/R&D expenses of $30 million, partially offset by favorable price realization of $178 million, favorable manufacturing costs of $62 million and favorable other segment items of $16 million.

The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives.

Favorable manufacturing costs largely reflected lower material costs.

Favorable other segment items primarily consisted of favorable currency impacts.

Construction Industries’ segment profit as a percent of total sales was 26.1 percent in the second quarter of 2024, compared with 25.2 percent in the second quarter of 2023.

Resource Industries

Resource Industries’ total sales were $3.193 billion in the first quarter of 2024, a decrease of $234 million, or 7 percent, compared with $3.427 billion in the first quarter of 2023.

Resource Industries’ total sales were $3.206 billion in the second quarter of 2024, a decrease of $357 million, or 10 percent, compared with $3.563 billion in the second quarter of 2023.

The decrease was primarily due to lower sales volume of $475 million, partially offset by favorable price realization of $133 million.

The decrease in sales volume was mainly driven by the impact from changes in dealer inventories.

Dealer inventory decreased more during the second quarter of 2024 than during the second quarter of 2023.

Resource Industries’ segment profit was $718 million in the second quarter of 2024, a decrease of $22 million, or 3 percent, compared with $740 million in the second quarter of 2023.

The decrease was mainly due to the profit impact of lower sales volume of $169 million, unfavorable other segment items of $16 million and higher SG&A/R&D expenses of $14 million, partially offset by favorable price realization of $133 million and favorable manufacturing costs of $44 million.

Unfavorable other segment items primarily consisted of unfavorable currency impacts.

The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives.

Favorable manufacturing costs largely reflected lower freight.

Resource Industries’ segment profit as a percent of total sales was 22.4 percent in the second quarter of 2024, compared with 20.8 percent in the second quarter of 2023.

Energy & Transportation

Sales by Application

(Millions of dollars) Second Quarter 2024 Second Quarter 2023 $

Oil and Gas $ 1,829 $ 1,760 $ 69 4 %

Power Generation 1,885 1,645 240 15 %

Industrial 1,045 1,318 (273) (21 %)

Transportation 1,321 1,234 87 7 %

External Sales 6,080 5,957 123 2 %

Inter-segment 1,257 1,262 (5) — %

Total Sales $ 7,337 $ 7,219 $ 118 2 %

Energy & Transportation’s total sales were $7.337 billion in the second quarter of 2024, an increase of $118 million, or 2 percent, compared with $7.219 billion in the second quarter of 2023.

Sales increased across all applications except Industrial.

The increase in sales was primarily due to favorable price realization of $264 million, partially offset by lower sales volume of $129 million.

▪ Oil and Gas – Sales increased for turbines and turbine-related services.

▪ Power Generation – Sales increased in large reciprocating engines, primarily data center applications.

Turbines and turbine-related services increased as well.

▪ Industrial – Sales decreased in EAME and North America.

▪ Transportation – Sales increased in rail services and marine.

Energy & Transportation’s segment profit was $1.525 billion in the second quarter of 2024, an increase of $256 million, or 20 percent, compared with $1.269 billion in the second quarter of 2023.

The increase was mainly due to favorable price realization of $264 million.

Energy & Transportation’s segment profit as a percent of total sales was 20.8 percent in the second quarter of 2024, compared with 17.6 percent in the second quarter of 2023.

Financial Products Segment

Financial Products’ segment revenues were $1.004 billion in the second quarter of 2024, an increase of $81 million, or 9 percent, compared with $923 million in the second quarter of 2023.

The increase was primarily due to a favorable impact from higher average financing rates across all regions of $50 million and a favorable impact from higher average earning assets driven by North America of $32 million.

Financial Products’ segment profit was $227 million in the second quarter of 2024, a decrease of $13 million, or 5 percent, compared with $240 million in the second quarter of 2023.

The decrease was mainly due to higher provision for credit losses at Cat Financial of $27 million and an increase in SG&A expenses of $15 million, partially offset by the absence of prior year unfavorable currency impacts of $14 million and a favorable impact from higher average earning assets of $12 million.

At the end of the second quarter of 2024, past dues at Cat Financial were 1.74 percent, compared with 2.15 percent at the end of the second quarter of 2023.

Write-offs, net of recoveries, were $18 million for the second quarter of 2024, compared with $8 million for the second quarter of 2023.

As of June 30, 2024, Cat Financial's allowance for credit losses totaled $254 million, or 0.89 percent of finance receivables, compared with $281 million, or 1.01 percent of finance receivables at March 31, 2024.

The allowance for credit losses at year-end 2023 was $331 million, or 1.18 percent of finance receivables.

Corporate Items and Eliminations

Expense for corporate items and eliminations was $587 million in the second quarter of 2024, an increase of $332 million from the second quarter of 2023, primarily driven by higher restructuring costs and higher corporate costs.

In the second quarter of 2024, restructuring costs increased primarily due to the divestiture of two non-U.S.

SIX MONTHS ENDED JUNE 30, 2024 COMPARED WITH SIX MONTHS ENDED JUNE 30, 2023

CONSOLIDATED SALES AND REVENUES

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the six months ended June 30, 2023 (at left) and the six months ended June 30, 2024 (at right).

Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees.

Total sales and revenues were $32.488 billion for the six months ended June 30, 2024, a decrease of $692 million, or 2 percent, compared with $33.180 billion for the six months ended June 30, 2023.

The decrease was primarily due to lower sales volume of $1.890 billion, partially offset by favorable price realization of $1.153 billion.

The decrease in sales volume was mainly driven by the impact from changes in dealer inventories.

Dealer inventory increased less during the six months ended June 30, 2024, than during the six months ended June 30, 2023.

In the three primary segments, sales were lower in Construction Industries and Resource Industries and higher in Energy & Transportation.

North America sales increased 4 percent primarily due to favorable price realization.

Sales increased 3 percent in Latin America mainly due to higher sales volume and favorable currency impacts primarily related to the Brazilian real.

The increase in sales volume was primarily driven by higher services sales volume.

EAME sales decreased 17 percent primarily due to lower sales volume.

The decrease in sales volume was mainly due to lower sales of equipment to end users.

Asia/Pacific sales decreased 7 percent mainly due to lower sales volume.

The decrease in sales volume was primarily driven by the impact from changes in dealer inventories.

Dealer inventory decreased during the six months ended June 30, 2024, compared with an increase during the six months ended June 30, 2023.

Dealer inventory increased about $1.2 billion during the six months ended June 30, 2024, compared with an increase of about $2.2 billion during the six months ended June 30, 2023.

Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times.

Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rentals and other factors.

Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers.

Sales and Revenues by Segment

(Millions of dollars) Six Months Ended June 30, 2023 Sales

Realization Currency Inter-Segment / Other Six Months Ended June 30, 2024 $

Construction Industries $ 13,900 $ (1,052) $ 377 $ (77) $ (41) $ 13,107 $ (793) (6 %)

Resource Industries 6,990 (900) 306 (20) 23 6,399 (591) (8 %)

Energy & Transportation 13,473 102 466 (13) (10) 14,018 545 4 %

All Other Segment 227 (8) 3 (1) (4) 217 (10) (4 %)

Corporate Items and Eliminations (2,946) (32) 1 4 32 (2,941) 5

Machinery, Energy & Transportation Sales 31,644 (1,890) 1,153 (107) — 30,800 (844) (3 %)

Financial Products Segment 1,825 — — — 170 1,995 170 9 %

Corporate Items and Eliminations (289) — — — (18) (307) (18)

Financial Products Revenues 1,536 — — — 152 1,688 152 10 %

Consolidated Sales and Revenues $ 33,180 $ (1,890) $ 1,153 $ (107) $ 152 $ 32,488 $ (692) (2 %)

Sales and Revenues by Geographic Region

North America Latin America EAME Asia/Pacific External Sales and Revenues Inter-Segment Total Sales and Revenues

(Millions of dollars) $ % Chg $ % Chg $ % Chg $ % Chg $ % Chg $ % Chg $ % Chg

Six Months Ended June 30, 2024

Construction Industries $ 7,790 3 % $ 1,272 9 % $ 2,043 (26 %) $ 1,968 (15 %) $ 13,073 (5 %) $ 34 (55 %) $ 13,107 (6 %)

Resource Industries 2,470 (7 %) 1,000 (1 %) 907 (19 %) 1,841 (10 %) 6,218 (9 %) 181 15 % 6,399 (8 %)

Energy & Transportation 6,259 10 % 847 1 % 2,715 (5 %) 1,746 8 % 11,567 5 % 2,451 — % 14,018 4 %

All Other Segment 31 (9 %) (1) — % 8 — % 25 (7 %) 63 (9 %) 154 (3 %) 217 (4 %)

Corporate Items and Eliminations (78) (3) (32) (8) (121) (2,820) (2,941)

Machinery, Energy & Transportation Sales 16,472 4 % 3,115 3 % 5,641 (17 %) 5,572 (7 %) 30,800 (3 %) — — % 30,800 (3 %)

Financial Products Segment 1,327 14 % 202 (2 %) 247 6 % 219 — % 1,995 1

9 % — — % 1,995 9 %

Corporate Items and Eliminations (183) (39) (39) (46) (307) — (307)

Financial Products Revenues 1,144 14 % 163 (2 %) 208 8 % 173 (2 %) 1,688 10 % — — % 1,688 10 %

Consolidated Sales and Revenues $ 17,616 4 % $ 3,278 3 % $ 5,849 (16 %) $ 5,745 (7 %) $ 32,488 (2 %) $ — — % $ 32,488 (2 %)

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

All Other Segment 34 — 8 27 69 158 227

Corporate Items and Eliminations (80) (2) (3) (9) (94) (2,852) (2,946)

Machinery, Energy & Transportation Sales 15,872 3,014 6,758 6,000 31,644 — 31,644

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

Corporate Items and Eliminations (168) (39) (39) (43) (289) — (289)

Financial Products Revenues 1,000 167 193 176 1,536 — 1,536

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

1 Includes revenues from Machinery, Energy & Transportation of $357 million and $334 million in the six months ended June 30, 2024 and 2023, respectively.

CONSOLIDATED OPERATING PROFIT

The chart above graphically illustrates reasons for the change in consolidated operating profit between the six months ended June 30, 2023 (at left) and the six months ended June 30, 2024 (at right).

Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees.

The bar titled Longwall Divestiture is included in total restructuring costs.

The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation’s other operating (income) expenses.

Operating profit for the six months ended June 30, 2024, was $7.001 billion, an increase of $618 million, or 10 percent, compared with $6.383 billion for the six months ended June 30, 2023.

The increase was primarily due to favorable price realization of $1.153 billion and the absence of the impact of the divestiture of the company's Longwall business in 2023 of $586 million, partially offset by the profit impact of lower sales volume of $699 million, higher SG&A/R&D expenses of $220 million and higher restructuring costs of $196 million.

The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives.

For the six months ended June 30, 2024, restructuring costs increased primarily due to the divestitures of certain non-U.S.

Operating profit margin was 21.5 percent for the six months ended June 30, 2024, compared with 19.2 percent for the six months ended June 30, 2023.

Profit (Loss) by Segment

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

Construction Industries $ 3,505 $ 3,593 $ (88) (2 %)

Resource Industries 1,448 1,504 (56) (4 %)

Energy & Transportation 2,826 2,326 500 21 %

All Other Segment 45 21 24 114 %

Corporate Items and Eliminations (759) (1,280) 521

Machinery, Energy & Transportation 7,065 6,164 901 15 %

Financial Products Segment 520 472 48 10 %

Corporate Items and Eliminations (268) 42 (310)

Financial Products 252 514 (262) (51 %)

Consolidating Adjustments (316) (295) (21)

Consolidated Operating Profit $ 7,001 $ 6,383 $ 618 10 %

Other Profit/Loss and Tax Items

▪ Interest expense excluding Financial Products for the six months ended June 30, 2024, was $280 million, compared with $256 million for the six months ended June 30, 2023.

The increase was due to higher average borrowing rates.

▪ Other income (expense) for the six months ended June 30, 2024, was income of $311 million, compared with income of $159 million for the six months ended June 30, 2023.

The change was primarily driven by favorable impacts from foreign currency exchange.

▪ 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.

Excluding the discrete items discussed below, the estimated annual tax rate for the six months ended June 30, 2024 was 22.5 percent compared with 23.0 percent for the six months ended June 30, 2023.

The 2024 estimated annual tax rate excludes the impact of year-to-date losses of $164 million for the divestitures of certain non-U.S.

entities with a related tax benefit of $54 million.

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 addition, a discrete tax benefit of $42 million was recorded in the six months ended June 30, 2024, for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S.

GAAP compensation expense, compared with $32 million for the six months ended June 30, 2023.

In the six months ended June 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.

Please see a reconciliation of GAAP to non-GAAP financial measures on pages 66-67.

Construction Industries

Construction Industries’ total sales were $13.107 billion for the six months ended June 30, 2024, a decrease of $793 million, or 6 percent, compared with $13.900 billion for the six months ended June 30, 2023.

The decrease was primarily due to lower sales volume of $1.052 billion, partially offset by favorable price realization of $377 million.

The decrease in sales volume was mainly driven by lower sales of equipment to end users.

Resource Industries’ segment profit was $730 million in the first quarter of 2024, a decrease of $34 million, or 4 percent, compared with $764 million in the first quarter of 2023.

The decrease was mainly due to the profit impact of lower sales volume of $217 million and unfavorable other segment items of $24 million, partially offset by favorable price realization of $173 million and favorable manufacturing costs of $38 million.

• In North America, sales increased primarily due to favorable price realization, partially offset by lower sales volume.

Lower sales volume was mainly driven by lower sales of equipment to end users.

• Sales increased in Latin America mainly due to higher sales volume, partially offset by unfavorable price realization.

Higher sales volume was driven primarily by the impact from changes in dealer inventories.

Dealer inventory increased during the six months ended June 30, 2024, compared with a decrease during the six months ended June 30, 2023.

• In EAME, sales decreased primarily due to lower sales volume.

Lower sales volume was mainly due to lower sales of equipment to end users.

• Sales decreased in Asia/Pacific mainly due to lower sales volume and unfavorable currency impacts primarily related to the Japanese yen.

Lower sales volume was driven by the impact from changes in dealer inventories.

Dealer inventory decreased during the six months ended June 30, 2024, compared with an increase during the six months ended June 30, 2023.

Construction Industries’ profit was $3.505 billion for the six months ended June 30, 2024, a decrease of $88 million, or 2 percent, compared with $3.593 billion for the six months ended June 30, 2023.

The decrease was mainly due to the profit impact of lower sales volume of $566 million and higher SG&A/R&D expenses of $56 million, partially offset by favorable price realization of $377 million and favorable manufacturing costs of $148 million.

The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives.

Favorable manufacturing costs were primarily driven by lower material costs.

Construction Industries’ profit as a percent of total sales was 26.7 percent for the six months ended June 30, 2024, compared with 25.8 percent for the six months ended June 30, 2023.

Resource Industries

Resource Industries’ total sales were $6.399 billion for the six months ended June 30, 2024, a decrease of $591 million, or 8 percent, compared with $6.990 billion for the six months ended June 30, 2023.

The decrease was primarily due to lower sales volume of $900 million, partially offset by favorable price realization of $306 million.

The decrease in sales volume was mainly due to lower sales of equipment to end users.

Resource Industries’ profit was $1.448 billion for the six months ended June 30, 2024, a decrease of $56 million, or 4 percent, compared with $1.504 billion for the six months ended June 30, 2023.

The decrease was mainly due to the profit impact of lower sales volume of $386 million, unfavorable other segment items of $40 million and higher SG&A/R&D expenses of $18 million, partially offset by favorable price realization of $306 million and favorable manufacturing costs of $82 million.

Unfavorable other segment items primarily consisted of unfavorable currency impacts.

The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives.

Favorable manufacturing costs largely reflected lower freight.

Resource Industries’ segment profit as a percent of total sales was 22.9 percent in the first quarter of 2024, compared with 22.3 percent in the first quarter of 2023.

Resource Industries’ profit as a percent of total sales was 22.6 percent for the six months ended June 30, 2024, compared with 21.5 percent for the six months ended June 30, 2023.

Energy & Transportation

Sales by Application

(Millions of dollars) First Quarter 2024 First Quarter 2023 $

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

Oil and Gas $ 3,397 $ 3,074 $ 323 11 %

5 unchanged sentences

Total Sales $ 14,018 $ 13,473 $ 545 4 %

Energy & Transportation’s total sales were $6.681 billion in the first quarter of 2024, an increase of $427 million, or 7 percent, compared with $6.254 billion in the first quarter of 2023.

Energy & Transportation’s total sales were $14.018 billion for the six months ended June 30, 2024, an increase of $545 million, or 4 percent, compared with $13.473 billion for the six months ended June 30, 2023.

Sales increased across all applications except Industrial.

The increase in sales was primarily due to higher sales volume of $231 million and favorable price realization of $202 million.

The increase in sales was primarily due to favorable price realization of $466 million.

• Oil and Gas – Sales increased for turbines and turbine-related services.

1 unchanged sentence

• Power Generation – Sales increased in large reciprocating engines, primarily data center applications.

▪ Industrial – Sales decreased primarily in EAME and North America.

▪ Transportation – Sales increased in rail services.

International locomotive deliveries were also higher.

Energy & Transportation’s segment profit was $1.301 billion in the first quarter of 2024, an increase of $244 million, or 23 percent, compared with $1.057 billion in the first quarter of 2023.

• Industrial – Sales decreased in EAME and North America.

• Transportation – Sales increased in rail services and marine.

Energy & Transportation’s profit was $2.826 billion for the six months ended June 30, 2024, an increase of $500 million, or 21 percent, compared with $2.326 billion for the six months ended June 30, 2023.

The increase was mainly due to favorable price realization of $466 million.

Energy & Transportation’s segment profit as a percent of total sales was 19.5 percent in the first quarter of 2024, compared with 16.9 percent in the first quarter of 2023.

Energy & Transportation’s profit as a percent of total sales was 20.2 percent for the six months ended June 30, 2024, compared with 17.3 percent for the six months ended June 30, 2023.

Financial Products Segment

Financial Products’ segment revenues were $991 million in the first quarter of 2024, an increase of $89 million, or 10 percent, compared with $902 million in the first quarter of 2023.

The increase was primarily due to a $69 million favorable impact from higher average financing rates across all regions and a $32 million favorable impact from higher average earning assets driven by North America.

Financial Products’ segment profit was $293 million in the first quarter of 2024, an increase of $61 million, or 26 percent, compared with $232 million in the first quarter of 2023.

The increase was mainly due to a $33 million insurance settlement and a $27 million favorable impact from equity securities.

At the end of the first quarter of 2024, past dues at Cat Financial were 1.78 percent, compared with 2.00 percent at the end of the first quarter of 2023.

Write-offs, net of recoveries, were $55 million for the first quarter of 2024, compared with $10 million for the first quarter of 2023.

As of March 31, 2024, Cat Financial's allowance for credit losses totaled $281 million, or 1.01 percent of finance receivables, compared with $331 million, or 1.18 percent of finance receivables at December 31, 2023.

Financial Products’ segment revenues were $1.995 billion for the six months ended June 30, 2024, an increase of $170 million, or 9 percent, compared with $1.825 billion for the six months ended June 30, 2023.

The increase was primarily due to a favorable impact from higher average financing rates across all regions of $119 million and a favorable impact from higher average earning assets driven by North America of $64 million.

Financial Products’ segment profit was $520 million for the six months ended June 30, 2024, an increase of $48 million, or 10 percent, compared with $472 million for the six months ended June 30, 2023.

The increase was mainly due to an insurance

settlement of $33 million, a favorable impact from higher average earning assets of $28 million and the absence of prior year unfavorable currency impacts of $27 million, partially offset by an increase in SG&A expenses of $34 million.

Corporate Items and Eliminations

Expense for corporate items and eliminations was $440 million in the first quarter of 2024, a decrease of $543 million from the first quarter of 2023, primarily driven by the absence of the impact of the divestiture of the company's Longwall business in 2023.

Expense for corporate items and eliminations was $1.027 billion for the six months ended June 30, 2024, a decrease of $211 million from the six months ended June 30, 2023, primarily driven by the absence of the impact of the divestiture of the company's Longwall business in 2023 and decreased expenses due to timing differences, partially offset by unfavorable impacts of segment reporting methodology differences and higher restructuring costs.

For the six months ended June 30, 2024, restructuring costs increased primarily due to the divestitures of certain non-U.S.

RESTRUCTURING COSTS

In 2024, we expect to incur about $300 million to $450 million of restructuring costs.

In 2024, we expect to incur about $450 million of restructuring costs.

We expect that prior restructuring actions will result in an incremental benefit to operating costs, primarily Cost of goods sold and SG&A expenses, of about $35 million in 2024 compared with 2023.

2 unchanged sentences

Adjusted Operating Profit Margin – Operating profit excluding restructuring income/costs as a percent of sales and revenues.

Adjusted Profit Per Share – Profit per share excluding restructuring income/costs.

Adjusted Profit Per Share – Profit per share excluding restructuring income/costs and a discrete tax benefit to adjust deferred tax balances.

All Other Segment – Primarily includes activities such as:

92 unchanged sentences

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 Caterpillar machines and engines.

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

Restructuring income/costs – 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).

11 unchanged sentences

Financial Products’ operations are funded primarily from commercial paper, term debt issuances and collections from its existing portfolio.

On a consolidated basis, we had positive operating cash flow in the first three months of 2024 and ended the first quarter with $4.96 billion of cash, a decrease of $2.02 billion from year-end 2023.

In addition, ME&T has invested in available-for-sale debt securities and bank time deposits that are considered highly liquid and are available for current operations.

These ME&T securities were $2.19 billion as of March 31, 2024 and are included in Prepaid expenses and other current assets and Other assets in the Consolidated Statement of Financial Position.

On a consolidated basis, we had positive operating cash flow in the first six months of 2024 and ended the second quarter with $4.34 billion of cash, a decrease of $2.64 billion from year-end 2023.

In addition, ME&T invests in available-for-sale debt securities and bank time deposits that are considered highly liquid and are available for current operations.

These ME&T securities were $1.75 billion as of June 30, 2024 and are included in Prepaid expenses and other current assets and Other assets in the Consolidated Statement of Financial Position.

We intend to maintain a strong cash and liquidity position.

Consolidated operating cash flow for the first three months of 2024 was $2.05 billion, up $479 million compared to the same period a year ago.

The increase was primarily due to higher profit before taxes including reconciling adjustments and lower working capital requirements, excluding changes in accrued wages, salaries and benefits, which were a partial offset due to higher payments for short-term incentive compensation.

Within working capital, changes in inventory favorably impacted cash flow as inventory increased less in the first quarter of 2024 compared to the prior year period, partially offset by unfavorable changes in accounts payable.

Total debt as of March 31, 2024 was $37.85 billion, a decrease of $25 million from year-end 2023.

Debt related to ME&T decreased $31 million in the first three months of 2024 while debt related to Financial Products increased $14 million.

As of March 31, 2024, we had three global credit facilities with a syndicate of banks totaling $10.50 billion (Credit Facility) available in the aggregate to both Caterpillar and Cat Financial for general liquidity purposes.

Based on management’s allocation decision, which can be revised from time to time, the portion of the Credit Facility available to ME&T as of March 31, 2024 was $2.75 billion.

Consolidated operating cash flow for the first six months of 2024 was $5.07 billion, up $251 million compared to the same period a year ago.

The increase was primarily due to higher profit before taxes including reconciling adjustments, lower working capital requirements, excluding changes in accrued wages, salaries and benefits, partially offset by changes in accrued wages, salaries and benefits, and higher cash taxes paid.

Within working capital, changes in inventory and receivables favorably impacted cash flow as they both increased less in the first six months of 2024 compared to the prior year period, partially offset by unfavorable changes in accrued expenses.

Total debt as of June 30, 2024 was $37.31 billion, a decrease of $567 million from year-end 2023.

Debt related to ME&T decreased $1.02 billion in the first six months of 2024 while debt related to Financial Products increased $474 million.

As of June 30, 2024, we had three global credit facilities with a syndicate of banks totaling $10.50 billion (Credit Facility) available in the aggregate to both Caterpillar and Cat Financial for general liquidity purposes.

Based on management’s allocation decision, which can be revised from time to time, the portion of the Credit Facility available to ME&T as of June 30, 2024 was $2.75 billion.

Information on our Credit Facility is as follows:

2 unchanged sentences

• The five-year facility, as amended in August 2023, of $4.62 billion (of which $1.21 billion is available to ME&T) expires in August 2028.

At March 31, 2024, Caterpillar’s consolidated net worth was $17.70 billion, which was above the $9.00 billion required under the Credit Facility.

At June 30, 2024, Caterpillar’s consolidated net worth was $17.19 billion, which was above the $9.00 billion required under the Credit Facility.

The consolidated net worth is defined in the Credit Facility as Caterpillar's consolidated shareholders’ equity including preferred stock but excluding the pension and other postretirement benefits balance within Accumulated other comprehensive income (loss).

At March 31, 2024, Cat Financial’s covenant interest coverage ratio was 1.70 to 1.

At June 30, 2024, Cat Financial’s covenant interest coverage ratio was 1.47 to 1.

This was above the 1.15 to 1 minimum ratio calculated as (1) profit excluding income taxes, interest expense and net gain (loss) from interest rate derivatives to (2) interest expense calculated at the end of each fiscal quarter for the prior four consecutive fiscal quarter period, required by the Credit Facility.

In addition, at March 31, 2024, Cat Financial’s six-month covenant leverage ratio was 6.90 to 1.

In addition, at June 30, 2024, Cat Financial’s six-month covenant leverage ratio was 6.75 to 1.

This was below the maximum ratio of debt to net worth of 10 to 1, calculated (1) on a monthly basis as the average of the leverage ratios determined on the last day of each of the six preceding calendar months and (2) at each December 31, required by the Credit Facility.

1 unchanged sentence

Additionally, in such event, certain of Cat Financial’s other lenders under other loan agreements where similar financial covenants or cross default provisions are applicable may, at their election, choose to pursue remedies under those loan agreements, including accelerating the repayment of outstanding borrowings.

At March 31, 2024, there were no borrowings under the Credit Facility.

At June 30, 2024, there were no borrowings under the Credit Facility.

The aforementioned financial covenants are being reported as calculated under the Credit Facility and not pursuant to U.S.

1 unchanged sentence

For risks related to our indebtedness and compliance with these covenants, please refer to the risk factor "Restrictive covenants in our debt agreements could limit our financial and operating flexibility" set forth in Part I, Item 1A of our most recent annual report on Form 10-K.

Our total credit commitments and available credit as of March 31, 2024 were:

March 31, 2024

Our total credit commitments and available credit as of June 30, 2024 were:

June 30, 2024

(Millions of dollars) Consolidated Machinery,

7 unchanged sentences

Available credit $ 9,094 $ 3,270 $ 5,824

The other external consolidated credit lines with banks as of March 31, 2024 totaled $4.14 billion.

The other external consolidated credit lines with banks as of June 30, 2024 totaled $4.14 billion.

These committed and uncommitted credit lines, which may be eligible for renewal at various future dates or have no specified expiration date, are used primarily by our subsidiaries for local funding requirements.

11 unchanged sentences

Machinery, Energy & Transportation

Net cash provided by operating activities was $1.77 billion in the first three months of 2024, compared with net cash provided of $1.78 billion for the same period in 2023.

The decrease was primarily due to changes in accrued wages, salaries, and employee benefits mostly due to higher payments for short term incentive compensation in 2024, partially offset by lower working capital requirements, excluding the impact of changes in accrued wages, salaries, and employee benefits.

Within working capital, changes in inventories favorably impacted cash flow but were partially offset by changes in accounts payable, accounts receivable and customer advances.

Net cash provided by investing activities in the first three months of 2024 was $1.23 billion, compared with net cash used of $670 million in the first three months of 2023.

The change was due to higher proceeds from maturities and sale of securities, primarily due to time deposit maturities in 2024, and lower investments in securities.

Net cash used for financing activities during the first three months of 2024 was $5.12 billion, compared with net cash used of $1.14 billion in the same period of 2023.

The change was primarily due to higher share repurchases in the first three months of 2024.

Net cash provided by operating activities was $4.57 billion in the first six months of 2024, compared with net cash provided of $4.67 billion for the same period in 2023.

The decrease was primarily due to changes in accrued wages, salaries, and employee benefits, mostly due to higher payments for short term incentive compensation in 2024, and higher cash taxes paid;

partially offset by lower working capital requirements, excluding the impact of changes in accrued wages, salaries, and employee benefits.

Within working capital, changes in inventory favorably impacted cash flow as inventory increased less in the first six months of 2024 compared to the prior year period, partially offset by changes in accrued expenses.

Net cash provided by investing activities in the first six months of 2024 was $1.38 billion, compared with net cash used of $1.19 billion in the first six months of 2023.

The change was due to higher proceeds from maturities and sale of securities, primarily due to time deposit maturities in 2024, and lower new investments in securities compared to the same period in 2023.

Net cash used for financing activities during the first six months of 2024 was $8.57 billion, compared with net cash used of $3.19 billion in the same period of 2023.

The change was primarily due to higher payments to purchase shares and debt payments in the first six months of 2024 compared to the same period in 2023.

While our short-term priorities for the use of cash may vary from time to time as business needs and conditions dictate, our long-term cash deployment strategy is focused on the following priorities.

5 unchanged sentences

We track a diverse group of financial metrics that focus on liquidity, leverage, cash flow and margins which align with our cash deployment actions and the various methodologies used by the major credit rating agencies.

Operational excellence and commitments – Capital expenditures were $502 million during the first three months of 2024, compared to $414 million for the same period in 2023.

Operational excellence and commitments – Capital expenditures were $841 million during the first six months of 2024, compared to $685 million for the same period in 2023.

We expect ME&T’s capital expenditures in 2024 to be about $2.0 billion to $2.5 billion.

We made $113 million of contributions to our pension and other postretirement benefit plans during the first three months of 2024.

We made $172 million of contributions to our pension and other postretirement benefit plans during the first six months of 2024.

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

In comparison, we made $208 million of contributions to our pension and other postretirement benefit plans during the first three months of 2023.

In comparison, we made $264 million of contributions to our pension and other postretirement benefit plans during the first six months of 2023.

Fund strategic growth initiatives and return capital to shareholders – We intend to utilize our liquidity and debt capacity to fund targeted investments that drive long-term profitable growth focused in the areas of expanded offerings, services and sustainability, including acquisitions.

5 unchanged sentences

In May 2022, the Board approved a share repurchase authorization (the 2022 Authorization) of up to $15.0 billion of Caterpillar common stock effective August 1, 2022, with no expiration.

In the first three months of 2024, we repurchased $4.46 billion of Caterpillar common stock, with $3.37 billion remaining under the 2022 Authorization as of March 31, 2024.

Our basic shares outstanding as of March 31, 2024 were approximately 489 million.

In June 2024, the Board approved a share repurchase authorization (the 2024 Authorization) of up to $20.0 billion of Caterpillar common stock, effective June 12, 2024, with no expiration.

In the first six months of 2024, we repurchased $6.28 billion of Caterpillar common stock, with $21.6 billion remaining under the 2022 and 2024 Authorizations as of June 30, 2024.

Our basic shares outstanding as of June 30, 2024 were approximately 485 million.

Each quarter, our Board of Directors reviews the company’s dividend for the applicable quarter.

The Board evaluates the financial condition of the company and considers corporate cash flow, the company’s liquidity needs, the economic outlook, and the health and stability of global credit markets to determine whether to maintain or change the quarterly dividend.

In April 2024, the Board of Directors approved maintaining our quarterly dividend representing $1.30 per share, and we continue to expect our strong financial position to support the dividend.

Dividends paid totaled $648 million in the first three months of 2024.

In June 2024, the Board of Directors approved an 8 percent increase in the quarterly dividend to $1.41 per share, and we continue to expect our strong financial position to support the dividend.

Dividends paid totaled $1.28 billion in the first six months of 2024.

Financial Products

Net cash provided by operating activities was $308 million in the first three months of 2024, compared with $302 million for the same period in 2023.

Net cash used for investing activities was $291 million in the first three months of 2024, compared with net cash used of $444 million for the same period in 2023.

The change was primarily due to portfolio related activity.

Net cash provided by financing activities was $117 million in the first three months of 2024, compared with net cash used of $43 million for the same period in 2023.

The change was due to a higher net inflow from external borrowings and the absence of dividends paid to Caterpillar.

Net cash provided by operating activities was $715 million in the first six months of 2024, compared with $542 million for the same period in 2023.

Net cash used for investing activities was $1.35 billion in the first six months of 2024, compared with $1.01 billion for the same period in 2023.

The change was primarily due to portfolio related activity and the divestiture of a non-U.S.

Net cash provided by financing activities was $635 million in the first six months of 2024, compared with $613 million for the same period in 2023.

RECENT ACCOUNTING PRONOUNCEMENTS

7 unchanged sentences

Order Backlog

At the end of the first quarter of 2024, the dollar amount of backlog believed to be firm was approximately $27.9 billion, about $0.4 billion higher than the fourth quarter of 2023.

The order backlog increased primarily within the Energy and Transportation segment.

Of the total backlog at March 31, 2024, approximately $6.0 billion was not expected to be filled in the following twelve months.

At the end of the second quarter of 2024, the dollar amount of backlog believed to be firm was approximately $28.6 billion, about $0.7 billion higher than the first quarter of 2024 due to increases in the Energy and Transportation segment.

Of the total backlog at June 30, 2024, approximately $6.5 billion was not expected to be filled in the following twelve months.

NON-GAAP FINANCIAL MEASURES

3 unchanged sentences

Management does not intend these items to be considered in isolation or as a substitute for the related GAAP measures.

We believe it is important to separately quantify the profit impact of three significant items in order for our results to be meaningful to our readers.

These items consist of (i) restructuring income related to the divestiture of a non-US mining entity, (ii) other restructuring income/costs and (iii) restructuring costs related to the divestiture of the company's Longwall business in 2023.

We believe it is important to separately quantify the profit impact of four significant items in order for our results to be meaningful to our readers.

These items consist of (i) restructuring income/costs related to the divestitures of certain non-U.S.

entities in 2024, (ii) other restructuring income/costs, (iii) restructuring costs related to the divestiture of the company's Longwall business in 2023 and (iv) certain deferred tax valuation allowance adjustments in 2023.

We do not consider these items indicative of earnings from ongoing business activities and believe the non-GAAP measure provides investors with useful perspective on underlying business results and trends and aids with assessing our period-over-period results.

1 unchanged sentence

(Dollars in millions except per share data) Operating Profit Operating Profit Margin Profit Before Taxes Provision (Benefit) for Income Taxes Profit Profit per Share

Three Months Ended March 31, 2024 - U.S.

Three Months Ended June 30, 2024 - U.S.

$ 3,482 20.9 % $ 3,500 $ 836 $ 2,681 $ 5.48

Restructuring (income) - non-US mining entity divestiture (64) (0.5) % (64) 54 (118) (0.24)

Restructuring costs - divestiture of two non-U.S.

entities 228 1.3 % 228 — 228 0.47

Other restructuring (income) costs 30 0.2 % 30 6 24 0.04

Three Months Ended March 31, 2024 - Adjusted

Three Months Ended June 30, 2024 - Adjusted

$ 3,740 22.4 % $ 3,758 $ 842 $ 2,933 $ 5.99

Three Months Ended March 31, 2023 - U.S.

Three Months Ended June 30, 2023 - U.S.

$ 3,652 21.1 % $ 3,652 $ 752 $ 2,922 $ 5.67

Other restructuring (income) costs 31 0.2 % 31 6 25 0.05

Deferred tax valuation allowance adjustments — — % — 88 (88) (0.17)

Three Months Ended June 30, 2023 - Adjusted

$ 3,683 21.3 % $ 3,683 $ 846 $ 2,859 $ 5.55

Six Months Ended June 30, 2024- U.S.

$ 7,001 21.5 % $ 7,032 $ 1,524 $ 5,537 $ 11.23

Restructuring (income) costs - divestitures of certain non-U.S.

entities 164 0.5 % 164 54 110 0.22

Other restructuring (income) costs 88 0.3 % 88 20 68 0.14

Six Months Ended June 30, 2024 - Adjusted

$ 7,253 22.3 % $ 7,284 $ 1,598 $ 5,715 $ 11.59

Six Months Ended June 30, 2023 - U.S.

$ 6,383 19.2 % $ 6,286 $ 1,460 $ 4,865 $ 9.41

Restructuring costs - Longwall divestiture 586 1.8 % 586 — 586 1.13

Other restructuring (income) costs 56 0.2 % 56 11 45 0.09

Three Months Ended March 31, 2023 - Adjusted

Deferred tax valuation allowance adjustments — — % — 88 (88) (0.17)

Six Months Ended June 30, 2023 - Adjusted

$ 7,025 21.2 % $ 6,928 $ 1,559 $ 5,408 $ 10.46

We believe it is important to separately disclose our annual effective tax rate, excluding discrete items for our results to be meaningful to our readers.

The annual effective tax rate, excluding discrete items for the three months ended March 31, 2024, and 2023 is discussed using non-GAAP financial measures that exclude the effects of amounts associated with discrete items recorded fully in the quarter they occur.

These items consist of (i) restructuring income related to the divestiture of a non-US mining entity, (ii) restructuring costs related to the divestiture of the company's Longwall business in 2023 and (iii) settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S.

The annual effective tax rate is discussed using non-GAAP financial measures that exclude the effects of amounts associated with discrete items recorded fully in the quarter they occur.

These items consist of (i) restructuring income/costs related to the divestitures of certain non-U.S.

entities in 2024, (ii) restructuring costs related to the divestiture of the company's Longwall business in 2023, (iii) certain deferred tax valuation allowance adjustments in 2023 and (iv) settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S.

GAAP compensation expense.

1 unchanged sentence

A reconciliation of our effective tax rate to annual effective tax rate, excluding discrete items is below:

(Dollars in millions) Profit Before Taxes Provision (Benefit) for Income Taxes Effective Tax Rate

Three Months Ended March 31, 2024 - U.S.

(Millions of dollars) Profit Before Taxes Provision (Benefit) for Income Taxes Effective Tax Rate

Three Months Ended June 30, 2024 - U.S.

$ 3,500 $ 836 23.9 %

Restructuring (income) - non-US mining entity divestiture (64) 54

Restructuring costs - divestiture of two non-U.S.

entities 228 —

Excess stock-based compensation — 4

2 unchanged sentences

Other restructuring (income) costs 30 6

Three Months Ended March 31, 2024 - Adjusted

Three Months Ended June 30, 2024 - Adjusted

$ 3,758 $ 842

Three Months Ended March 31, 2023 - U.S.

Three Months Ended June 30, 2023 - U.S.

$ 3,652 $ 752 20.6 %

Deferred tax valuation allowance adjustments — 88

Annual effective tax rate, excluding discrete items $ 3,652 $ 840 23.0 %

Other restructuring (income) costs 31 6

Three Months Ended June 30, 2023 - Adjusted

$ 3,683 $ 846

Six Months Ended June 30, 2024 - U.S.

$ 7,032 $ 1,524 21.7 %

Restructuring (income) costs - divestitures of certain non-U.S.

entities 164 54

Excess stock-based compensation — 42

Annual effective tax rate, excluding discrete items $ 7,196 $ 1,620 22.5 %

Excess stock-based compensation — (42)

Other restructuring (income) costs 88 20

Six Months Ended June 30, 2024 - Adjusted

$ 7,284 $ 1,598

Six Months Ended June 30, 2023 - U.S.

$ 6,286 $ 1,460 23.2 %

Restructuring costs - Longwall divestiture 586 —

Deferred tax valuation allowance adjustments — 88

Excess stock-based compensation — 32

2 unchanged sentences

Other restructuring (income) costs 56 11

Three Months Ended March 31, 2023 - Adjusted

Six Months Ended June 30, 2023 - Adjusted

$ 6,928 $ 1,559

1 unchanged sentence

Reconciliations of ME&T free cash flow to the most directly comparable GAAP measure, net cash provided by operating activities are as follows:

(Millions of dollars) Three Months Ended March 31,

(Millions of dollars) Six Months Ended June 30,

ME&T net cash provided by operating activities 1

23 unchanged sentences

Supplemental Data for Results of Operations

For the Three Months Ended March 31, 2024

For the Three Months Ended June 30, 2024

(Millions of dollars)

Supplemental Consolidating Data

Consolidated Machinery,

Transportation Financial

Products Consolidating

Sales and revenues:

Sales of Machinery, Energy & Transportation $ 15,840 $ 15,840 $ — $ —

Revenues of Financial Products 849 — 1,043 (194) 1

Total sales and revenues 16,689 15,840 1,043 (194)

Operating costs:

Cost of goods sold 10,150 10,152 — (2) 2

Selling, general and administrative expenses 1,652 1,449 185 18 2

Research and development expenses 535 535 — —

Interest expense of Financial Products 314 — 314 —

Other operating (income) expenses 556 43 560 (47) 2

Total operating costs 13,207 12,179 1,059 (31)

Operating profit 3,482 3,661 (16) (163)

Interest expense excluding Financial Products 137 137 — —

Other income (expense) 155 (21) 13 163 3

Consolidated profit before taxes 3,500 3,503 (3) —

Provision (benefit) for income taxes 836 786 50 —

Profit of consolidated companies 2,664 2,717 (53) —

Equity in profit (loss) of unconsolidated affiliated companies 17 17 — —

Profit of consolidated and affiliated companies 2,681 2,734 (53) —

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

$ 2,681 $ 2,734 $ (53) $ —

1 Elimination of Financial Products’ revenues earned from ME&T.

2 Elimination of net expenses recorded between ME&T and Financial Products.

3 Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.

4 Profit attributable to common shareholders.

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Six Months Ended June 30, 2024

(Millions of dollars)

Supplemental Consolidating Data

Consolidated Machinery, Energy & Transportation Financial

27 unchanged sentences

Supplemental Data for Results of Operations

For the Three Months Ended March 31, 2023

For the Three Months Ended June 30, 2023

(Millions of dollars)

27 unchanged sentences

4 Profit attributable to common shareholders.

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Six Months Ended June 30, 2023

(Millions of dollars)

Supplemental Consolidating Data

Consolidated Machinery,

Transportation Financial

Products Consolidating

Sales and revenues:

Sales of Machinery, Energy & Transportation $ 31,644 $ 31,644 $ — $ —

Revenues of Financial Products 1,536 — 1,890 (354) 1

Total sales and revenues 33,180 31,644 1,890 (354)

Operating costs:

Cost of goods sold 21,168 21,172 — (4) 2

Selling, general and administrative expenses 2,991 2,709 301 (19) 2

Research and development expenses 1,000 1,000 — —

Interest expense of Financial Products 462 — 462 —

Other operating (income) expenses 1,176 599 613 (36) 2

Total operating costs 26,797 25,480 1,376 (59)

Operating profit 6,383 6,164 514 (295)

Interest expense excluding Financial Products 256 256 — —

Other income (expense) 159 (24) (37) 220 3

Consolidated profit before taxes 6,286 5,884 477 (75)

Provision (benefit) for income taxes 1,460 1,339 121 —

Profit of consolidated companies 4,826 4,545 356 (75)

Equity in profit (loss) of unconsolidated affiliated companies 40 43 — (3) 4

Profit of consolidated and affiliated companies 4,866 4,588 356 (78)

Profit (loss) attributable to noncontrolling interests 1 (1) 5 (3) 5

$ 4,865 $ 4,589 $ 351 $ (75)

1 Elimination of Financial Products’ revenues earned from ME&T.

2 Elimination of net expenses recorded by ME&T paid to Financial Products.

4 Elimination of equity profit (loss) earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries.

3 unchanged sentences

Supplemental Data for Financial Position

At March 31, 2024

At June 30, 2024

(Millions of dollars)

24 unchanged sentences

Customer advances 2,324 2,303 3 18 7

Dividends payable 684 684 — —

Other current liabilities 2,882 2,365 744 (227) 4,8

20 unchanged sentences

6 Elimination of payables between ME&T and Financial Products.

7 Reclassification of Financial Products' payables to accrued expenses or customer advances.

7 Reclassification of Financial Products' payables to customer advances.

8 Elimination of prepaid insurance in Financial Products’ other liabilities.

53 unchanged sentences

6 Elimination of payables between ME&T and Financial Products.

7 Reclassification of Financial Products' payables to accrued expenses or customer advances.

7 Reclassification of Financial Products' payables to customer advances.

8 Elimination of prepaid insurance in Financial Products' other liabilities.

3 unchanged sentences

Supplemental Data for Cash Flow

For the Three Months Ended March 31, 2024

For the Six Months Ended June 30, 2024

(Millions of dollars)

29 unchanged sentences

Net intercompany borrowings — — 9 (9) 3

Investments and acquisitions (net of cash acquired) (32) (32) — —

Proceeds from sale of businesses and investments (net of cash sold) (61) 92 (153) —

6 unchanged sentences

Common stock issued, including treasury shares reissued 8 8 — —

Common shares repurchased (4,455) (4,455) — —

Payments to purchase common stock (6,275) (6,275) — —

Net intercompany borrowings — (9) — 9 3

12 unchanged sentences

Supplemental Data for Cash Flow

For the Three Months Ended March 31, 2023

For the Six Months Ended June 30, 2023

(Millions of dollars)

38 unchanged sentences

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

Common shares repurchased (400) (400) — —

Payments to purchase common stock (1,829) (1,829) — —

Net intercompany borrowings — (4) — 4 4

49 unchanged sentences

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 2. Management’s Discussion and Analysis