What changed in this filing

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Item 1. Financial Statements

2025-08-06 compared with 2025-05-07 · 348 added, 115 removed, 1153 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 $ 2,179 $ 2,681

5 unchanged sentences

Total other comprehensive income (loss), net of tax 521 ( 137 )

Comprehensive income attributable to shareholders $ 2,700 $ 2,544

See accompanying notes to Consolidated Financial Statements.

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 $ 29,052 $ 30,800

Revenues of Financial Products 1,766 1,688

Total sales and revenues 30,818 32,488

Operating costs:

Cost of goods sold 19,772 19,812

Selling, general and administrative expenses 3,287 3,229

Research and development expenses 1,031 1,055

Interest expense of Financial Products 662 612

Other operating (income) expenses 627 779

Total operating costs 25,379 25,487

Operating profit 5,439 7,001

Interest expense excluding Financial Products 242 280

Other income (expense) 191 311

Consolidated profit before taxes 5,388 7,032

Provision (benefit) for income taxes 1,220 1,524

Profit of consolidated companies 4,168 5,508

Equity in profit (loss) of unconsolidated affiliated companies 14 27

Profit of consolidated and affiliated companies 4,182 5,535

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

$ 4,182 $ 5,537

Profit per common share $ 8.85 $ 11.28

Profit per common share – diluted 2

$ 8.82 $ 11.23

Weighted-average common shares outstanding (millions)

– Basic 472.4 490.7

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 $ 4,182 $ 5,535

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

Foreign currency translation 623 ( 328 )

Pension and other postretirement benefits ( 2 ) ( 6 )

Derivative financial instruments 120 ( 62 )

Available-for-sale securities 46 ( 14 )

Total other comprehensive income (loss), net of tax 787 ( 410 )

Comprehensive income 4,969 5,125

65 unchanged sentences

interests Total

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

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

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

Three Months Ended June 30, 2025

Balance at March 31, 2025 $ 6,043 $ ( 47,127 ) $ 61,356 $ ( 2,205 ) $ 3 $ 18,070

Profit (loss) of consolidated and affiliated companies — — 2,179 — — 2,179

Foreign currency translation, net of tax — — — 435 — 435

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

Derivative financial instruments, net of tax — — — 63 — 63

Available-for-sale securities, net of tax — — — 24 — 24

Dividends declared 1

— — ( 1,375 ) — — ( 1,375 )

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

Stock-based compensation expense 86 — — — — 86

Common shares repurchased:

— ( 828 ) — — — ( 828 )

Other 14 ( 8 ) — — ( 1 ) 5

Balance at June 30, 2025 $ 6,143 $ ( 47,958 ) $ 62,160 $ ( 1,684 ) $ 2 $ 18,663

1 Dividends per share of common stock of $ 2.92 and $ 2.71 were declared in the three months ended June 30, 2025 and 2024, 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, 2024

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

2 unchanged sentences

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:

5 unchanged sentences

Other 36 ( 47 ) — — ( 1 ) ( 12 )

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

Three Months Ended March 31, 2025

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

Six Months Ended June 30, 2025

Balance at December 31, 2024 $ 6,941 $ ( 44,331 ) $ 59,352 $ ( 2,471 ) $ 3 $ 19,494

5 unchanged sentences

Dividends declared 1

— — ( 1,374 ) — — ( 1,374 )

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

5 unchanged sentences

Other 24 ( 33 ) — — ( 1 ) ( 10 )

Balance at March 31, 2025 $ 6,043 $ ( 47,127 ) $ 61,356 $ ( 2,205 ) $ 3 $ 18,070

Balance at June 30, 2025 $ 6,143 $ ( 47,958 ) $ 62,160 $ ( 1,684 ) $ 2 $ 18,663

1 Dividends per share of common stock of $ 2.92 and $ 2.71 were declared in the six months ended June 30, 2025 and 2024, respectively.

2 See Note 12 for additional information.

3 unchanged sentences

(Dollars in Millions)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flow from operating activities:

32 unchanged sentences

Payments to purchase common stock ( 4,488 ) ( 6,275 )

Excise tax paid on purchases of common stock ( 73 ) —

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

- Machinery, Energy & Transportation 1,976 —

- Financial Products 3,731 4,151

20 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, 2025 and 2024, (b) the consolidated comprehensive income for the three months ended March 31, 2025 and 2024, (c) the consolidated financial position at March 31, 2025 and December 31, 2024, (d) the consolidated changes in shareholders’ equity for the three months ended March 31, 2025 and 2024 and (e) the consolidated cash flow for the three months ended March 31, 2025 and 2024.

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, 2025 and 2024, (b) the consolidated comprehensive income for the three and six months ended June 30, 2025 and 2024, (c) the consolidated financial position at June 30, 2025 and December 31, 2024, (d) the consolidated changes in shareholders’ equity for the three and six months ended June 30, 2025 and 2024 and (e) the consolidated cash flow for the six months ended June 30, 2025 and 2024.

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

17 unchanged sentences

The amendments require that on an annual and interim basis, entities disclose disaggregated operating expense information about specific categories, including purchases of inventory, employee compensation, depreciation and amortization.

annual disclosures are effective for our year ending December 31, 2027, and the expanded interim disclosures are effective in 2028, with early adoption permitted.

The expanded annual disclosures are effective for our year ending December 31, 2027, and the expanded interim disclosures are effective in 2028, with early adoption permitted.

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

3 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 $ 7,819 million, $ 7,864 million and $ 7,923 million as of March 31, 2025, December 31, 2024 and December 31, 2023, respectively.

Long-term trade receivables from dealers and end users were $ 638 million, $ 640 million and $ 589 million as of March 31, 2025, December 31, 2024 and December 31, 2023, respectively.

Trade receivables from dealers and end users were $ 8,354 million, $ 7,864 million and $ 7,923 million as of June 30, 2025, December 31, 2024 and December 31, 2023, respectively.

Long-term trade receivables from dealers and end users were $ 682 million, $ 640 million and $ 589 million as of June 30, 2025, December 31, 2024 and December 31, 2023, 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 $ 245 million, $ 238 million and $ 246 million as of March 31, 2025, December 31, 2024 and December 31, 2023, respectively.

Contract assets were $ 227 million, $ 238 million and $ 246 million as of June 30, 2025, December 31, 2024 and December 31, 2023, 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 $ 3,462 million, $ 2,745 million and $ 2,389 million as of March 31, 2025, December 31, 2024 and December 31, 2023, respectively.

Contract liabilities were $ 4,043 million, $ 2,745 million and $ 2,389 million as of June 30, 2025, December 31, 2024 and December 31, 2023, respectively.

We reduce the contract liability when revenue is recognized.

During the three months ended March 31, 2025 and 2024, we recognized $ 683 million and $ 813 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2025 and 2024.

As of March 31, 2025, 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 $ 17.6 billion, with about one-half of the amount expected to be completed and revenue recognized in the twelve months following March 31, 2025.

During the three and six months ended June 30, 2025, we recognized $ 462 million and $ 1,145 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2025.

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.

We provide discounts to dealers through merchandising programs.

We have numerous programs that are designed to promote the sale of our products.

The most common dealer programs provide a discount when the dealer sells a product to a targeted end user.

We report the estimated cost of these discounts as a reduction to the transaction price when we recognize the product sale.

We accrue a corresponding post-sale discount reserve in the Consolidated Statement of Financial Position, which represents discounts we expect to pay on units sold.

If discounts paid differ from those estimated, we report the difference as a change in the transaction price in the subsequent period when the final discount is paid.

As a result of differences between actual and estimated payments and changes in estimates, we recognized a decrease in revenue of $ 201 million and $ 454 million during the three and six months ended June 30, 2025, respectively, related to prior period sales.

The change in revenue during the three and six months ended June 30, 2024 related to prior periods sales was inconsequential.

Generally, we estimate the cost of these discounts for each product by model by geographic region based on historical experience and changes in merchandising programs known as of the period end financial reporting date.

Products sold to dealers in a prior period that remained in dealer inventory during 2025 were subject to merchandising program actions taken in 2025 which resulted in higher discounts paid in the current year.

As of June 30, 2025, 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 $ 19.7 billion, with about one-half of the amount expected to be completed and revenue recognized in the twelve months following June 30, 2025.

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 $ 45 million and $ 44 million for the three months ended March 31, 2025 and 2024, respectively.

The following table illustrates the type and fair value of the stock-based compensation awards granted during the three months ended March 31, 2025 and 2024, respectively:

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

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

We recognized pretax stock-based compensation expense of $ 86 million and $ 131 million for the three and six months ended June 30, 2025, respectively, and $ 75 million and $ 119 million for the three and six months ended June 30, 2024, respectively.

The following table illustrates the type and fair value of the stock-based compensation awards granted during the six months ended June 30, 2025 and 2024, respectively:

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

Shares Granted Weighted-Average Fair Value Per Share Shares Granted Weighted-Average Fair Value Per Share

Stock options 299,523 $ 106.04 296,295 $ 104.27

2 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, 2025 and 2024, 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, 2025 and 2024, respectively:

Weighted-average dividend yield 2.13 % 2.40 %

6 unchanged sentences

The PRSUs granted in 2025 and 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, 2025 and 2024, respectively:

The following table provides the assumptions used in determining the fair value of the PRSUs granted in the six months ended June 30, 2025 and 2024, respectively:

Expected volatility of the Company's stock 29.5 % 29.8 %

Risk-free interest rate 3.90 % 4.38 %

As of March 31, 2025, the total remaining unrecognized compensation expense related to nonvested stock-based compensation awards was $ 324 million, which will be amortized over the weighted-average remaining requisite service periods of approximately 1.9 years.

As of June 30, 2025, the total remaining unrecognized compensation expense related to nonvested stock-based compensation awards was $ 292 million, which will be amortized over the weighted-average remaining requisite service periods of approximately 1.9 years.

Derivative financial instruments and risk management

28 unchanged sentences

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

As of March 31, 2025, the maximum term of these outstanding contracts at inception was approximately 60 months.

As of June 30, 2025, 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.

36 unchanged sentences

(Millions of dollars) Fair Value

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Liabilities 2

11 unchanged sentences

2 Liabilities are classified as Accrued expenses or Other liabilities.

The total notional amounts of the derivative instruments as of March 31, 2025 and December 31, 2024 were $ 26.0 billion and $ 27.0 billion, respectively.

The total notional amounts of the derivative instruments as of June 30, 2025 and December 31, 2024 were $ 28.0 billion and $ 27.0 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,

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

5 unchanged sentences

Fair Value Hedges

Foreign exchange contracts — — ( 2 ) — ( 1 ) —

Interest rate contracts ( 20 ) ( 38 ) — — — —

6 unchanged sentences

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 Cost of goods sold, Sales of Machinery, Energy and Transportation, and Other income (expense).

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,

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

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

2025 2024 2025 2024 2025 2024

Cash Flow Hedges

Foreign exchange contracts $ — $ — $ 217 $ 82 $ 72 $ 147

Interest rate contracts — — 13 15 2 29

Fair Value Hedges

Foreign exchange contracts — — ( 2 ) — ( 1 ) —

Interest rate contracts ( 38 ) ( 74 ) — — — —

Undesignated Hedges

Foreign exchange contracts ( 97 ) 93 — — — —

Commodity contracts 5 1 — — — —

Total return swap contracts 30 18 — — — —

Total $ ( 100 ) $ 38 $ 228 $ 97 $ 73 $ 176

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, 2025 December 31, 2024 March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024 June 30, 2025 December 31, 2024

Long-term debt due within one year $ 1,096 $ 483 $ ( 1 ) $ ( 16 )

6 unchanged sentences

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

As of March 31, 2025 and December 31, 2024, no cash collateral was received or pledged under the master netting agreements.

As of June 30, 2025 and December 31, 2024, no cash collateral was received or pledged under the master netting agreements.

The 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, 2025 December 31, 2024

(Millions of dollars) June 30, 2025 December 31, 2024

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,

2025 December 31,

7 unchanged sentences

Intangible assets were comprised of the following:

March 31, 2025

June 30, 2025

(Millions of dollars) Gross

12 unchanged sentences

Total finite-lived intangible assets $ 2,833 $ ( 2,434 ) $ 399

Amortization expense for the three months ended March 31, 2025 and 2024 was $ 44 million and $ 44 million, respectively.

Amortization expense was $ 43 million for both the three months ended June 30, 2025 and 2024.

Amortization expense was $ 87 million for both the six months ended June 30, 2025 and 2024.

Amortization expense related to intangible assets is expected to be:

(Millions of dollars)

Remaining Nine Months of 2025 2026 2027 2028 2029 Thereafter

Remaining Six Months of 2025 2026 2027 2028 2029 Thereafter

$ 80 $ 98 $ 34 $ 27 $ 24 $ 58

No goodwill was impaired during the three months ended March 31, 2025 or 2024.

The changes in carrying amount of goodwill by reportable segment for the three months ended March 31, 2025 were as follows:

No goodwill was impaired during the six months ended June 30, 2025 or 2024.

The changes in carrying amount of goodwill by reportable segment for the six months ended June 30, 2025 were as follows:

(Millions of dollars) December 31,

28 unchanged sentences

Available-for-sale debt securities

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(Millions of dollars) Cost

13 unchanged sentences

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

March 31, 2025

June 30, 2025

Less than 12 months 1

26 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, 2025.

The cost basis and fair value of available-for-sale debt securities at March 31, 2025, by contractual maturity, are shown below.

In addition, we did not expect credit-related losses on these investments as of June 30, 2025.

The cost basis and fair value of available-for-sale debt securities at June 30, 2025, 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, 2025

June 30, 2025

(Millions of dollars) Cost Basis Fair Value

7 unchanged sentences

Total debt securities – available-for-sale $ 3,400 $ 3,386

For the three months ended March 31, 2025 and 2024, proceeds from available-for-sale debt securities were $ 911 million and $ 361 million, respectively.

For the three months ended March 31, 2025 and 2024, the net unrealized gains (losses) for equity securities held at March 31, 2025 and 2024 were $ 3 million and $ 17 million, respectively.

For the three months ended June 30, 2025 and 2024, proceeds from available-for-sale debt securities were $ 402 million and $ 300 million, respectively.

For the six months ended June 30, 2025 and 2024, proceeds from available-for-sale debt securities were $ 1,313 million and $ 660 million, respectively.

For the three months ended June 30, 2025 and 2024, the net unrealized gains (losses) for equity securities held at June 30, 2025 and 2024 were $ 24 million and $( 3 ) million, respectively.

For the six months ended June 30, 2025 and 2024, the net unrealized gains (losses) for equity securities held at June 30, 2025 and 2024 were $ 27 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) 2025 2024 2025 2024 2025 2024

7 unchanged sentences

$ ( 27 ) $ ( 18 ) $ ( 1 ) $ — $ 43 $ 44

For the six months ended:

Components of net periodic benefit cost:

Service cost $ — $ — $ 23 $ 22 $ 32 $ 34

Interest cost 306 313 55 61 61 66

Expected return on plan assets ( 360 ) ( 350 ) ( 80 ) ( 84 ) ( 4 ) ( 4 )

Amortization of prior service cost (credit) — — — — ( 2 ) ( 7 )

Net periodic benefit cost (benefit) 1

$ ( 54 ) $ ( 37 ) $ ( 2 ) $ ( 1 ) $ 87 $ 89

1 The service cost component is included in Operating costs.

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

We made $ 211 million of contributions to our pension and other postretirement plans during the three months ended March 31, 2025.

We made $ 65 million and $ 276 million of contributions to our pension and other postretirement plans during the three and six months ended June 30, 2025, respectively.

We currently anticipate full-year 2025 contributions of approximately $ 354 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) 2025 2024 2025 2024

$ 190 $ 115 $ 344 $ 338

Plans 35 32 68 62

$ 225 $ 147 $ 412 $ 400

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) 2025 2024 2025 2024

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 $ 390 million and $ 368 million at March 31, 2025 and December 31, 2024, 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 $ 421 million and $ 368 million at June 30, 2025 and December 31, 2024, 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, 2025 and December 31, 2024, the SPC’s assets of $ 1.01 billion and $ 1.14 billion, respectively, were primarily comprised of loans to dealers, and the SPC’s liabilities of $ 1.01 billion and $ 1.14 billion, respectively, were primarily comprised of commercial paper.

As of June 30, 2025 and December 31, 2024, the SPC’s assets of $ 1.06 billion and $ 1.14 billion, respectively, were primarily comprised of loans to dealers, and the SPC’s liabilities of $ 1.06 billion and $ 1.14 billion, respectively, were primarily comprised of commercial paper.

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

4 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) 2025 2024

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) 2025 2024 2025 2024

5 unchanged sentences

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

471.5 489.5 474.5 493.3

Profit per share of common stock:

Assuming no dilution (A/B) $ 4.22 $ 5.78

Assuming full dilution (A/C) 2

Basic (A/B) $ 4.64 $ 5.50 $ 8.85 $ 11.28

Diluted (A/C) 2

$ 4.62 $ 5.48 $ 8.82 $ 11.23

Shares outstanding as of March 31, (in millions) 471.0 489.3

Shares outstanding as of June 30, (in millions) 468.5 484.9

1 Profit attributable to common shareholders.

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

For both the three months ended March 31, 2025 and 2024, we excluded 0.3 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, 2025 and 2024, we repurchased 7.5 million and 11.3 million shares of Caterpillar common stock, respectively, at an aggregate cost of $ 2.8 billion and $ 3.7 billion, respectively.

For the three and six months ended June 30, 2025, we excluded 0.6 million and 0.4 million of outstanding stock options, respectively, from the computation of diluted earnings per share because the effect would have been antidilutive.

For both the three and six months ended June 30, 2024, we excluded 0.3 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, 2025, we repurchased 2.7 million and 10.2 million shares of Caterpillar common stock, respectively, at an aggregate cost of $ 0.8 billion and $ 3.6 billion, respectively.

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.

We made these purchases through the combination of accelerated share repurchase (ASR) agreements with third-party financial institutions and open market transactions in 2025 and 2024.

7 unchanged sentences

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) 2025 2024 2025 2024

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Ending balance $ ( 8 ) $ ( 70 ) $ ( 8 ) $ ( 70 )

Total AOCI Ending Balance at March 31,

Total AOCI ending balance at June 30,

$ ( 1,684 ) $ ( 2,230 ) $ ( 1,684 ) $ ( 2,230 )

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however, we currently believe that any matters raised will not have a material adverse effect on the Company’s consolidated results of operations, financial position or liquidity.

The effective tax rate for the three months ended March 31, 2025 was 22.3 percent compared to 19.5 percent for the three months ended March 31, 2024.

The effective tax rate for the three months ended March 31, 2024 was favorably impacted by nontaxable gains from a divestiture of a non-US mining entity.

The effective tax rate for the three months ended June 30, 2025 was 23.0 percent compared to 23.9 percent for the three months ended June 30, 2024 which was negatively impacted by losses for the divestiture of two non-U.S.

entities with no related tax benefit.

The effective tax rate for the six months ended June 30, 2025 was 22.6 percent compared to 21.7 percent for the six months ended June 30, 2024.

On July 4, 2025, U.S.

tax legislation was enacted containing a number of corporate tax provisions including reinstatement of 100 percent bonus depreciation and full expensing of U.S.

research and development expenditures.

This change in tax law will be accounted for in the period of enactment.

We are evaluating the impact of this legislation and do not currently expect this change to have a material impact on our 2025 effective tax rate.

Segment information

Basis for segment information

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

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

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

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

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

The Chief Human Resources Officer leads the Human Resources Organization.

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

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

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

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

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

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Reconciling items are created based on accounting differences between segment reporting and our consolidated external reporting.

Please refer to pages 29 to 30 for financial information regarding significant reconciling items.

Please refer to pages 33 - 35 for financial information regarding significant reconciling items.

Most of our reconciling items are self-explanatory given the above explanations.

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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, 2025 and 2024, sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows:

The three and six months ended June 30, 2025 and 2024, sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows:

Sales and Revenues by Geographic Region

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

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Construction Industries $ 3,369 $ 540 $ 1,185 $ 1,029 $ 6,123 $ 67 $ 6,190

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Total Sales and Revenues $ 8,851 $ 1,656 $ 3,180 $ 2,882 $ 16,569 $ — $ 16,569

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

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other Segment of $ 163 million and $ 177 million in the three months ended March 31, 2025 and 2024, respectively.

For the three months ended March 31, 2025 and 2024, Energy & Transportation external sales by end user application were as follows:

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other Segment of $ 172 million and $ 180 million in the three months ended June 30, 2025 and 2024, 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, 2025

Construction Industries $ 6,273 $ 1,044 $ 2,052 $ 1,898 $ 11,267 $ 107 $ 11,374

Resource Industries 2,195 1,102 907 1,621 5,825 146 5,971

Energy & Transportation 6,918 863 2,516 1,661 11,958 2,446 14,404

Financial Products Segment 1,385 204 248 212 2,049 1

Total sales and revenues from reportable segments 16,771 3,213 5,723 5,392 31,099 2,699 33,798

All Other Segment 30 — 5 29 64 131 195

Corporate Items and Eliminations ( 212 ) ( 42 ) ( 42 ) ( 49 ) ( 345 ) ( 2,830 ) ( 3,175 )

Total Sales and Revenues $ 16,589 $ 3,171 $ 5,686 $ 5,372 $ 30,818 $ — $ 30,818

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

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other Segment of $ 335 million and $ 357 million in the six months ended June 30, 2025 and 2024, respectively.

For the three and six months ended June 30, 2025 and 2024, Energy & Transportation external 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) 2025 2024 2025 2024

6 unchanged sentences

(Millions of dollars) Construction Industries Resource Industries Energy & Transportation Financial Products Segment Total from Reportable Segments

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Sales and revenues $ 6,190 $ 3,087 $ 7,836 $ 1,042 $ 18,155

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Segment Profit $ 1,244 $ 537 $ 1,585 $ 248 $ 3,614

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Sales and revenues $ 6,683 $ 3,206 $ 7,337 $ 1,004 $ 18,230

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Financial Products Segment – interest expense, Cat Financial’s depreciation on equipment leased to others, Insurance Services’ underwriting expenses and investment and interest income, and foreign exchange (gains) losses.

Profit from Reportable Segments

(Millions of dollars) Construction Industries Resource Industries Energy & Transportation Financial Products Segment Total from Reportable Segments

Six Months Ended June 30, 2025

Sales and revenues $ 11,374 $ 5,971 $ 14,404 $ 2,049 $ 33,798

Cost of goods sold 8,177 4,149 9,910 — 22,236

921 722 1,597 399 3,639

Other segment items 3

8 ( 36 ) ( 2 ) 1,187 1,157

Segment Profit $ 2,268 $ 1,136 $ 2,899 $ 463 $ 6,766

Six Months Ended June 30, 2024

Sales and revenues $ 13,107 $ 6,399 $ 14,018 $ 1,995 $ 35,519

Cost of goods sold 8,680 4,248 9,567 — 22,495

923 693 1,575 355 3,546

Other segment items 3

( 1 ) 10 50 1,120 1,179

Segment Profit $ 3,505 $ 1,448 $ 2,826 $ 520 $ 8,299

1 The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

Inter-segment income/expenses are included within the amounts shown.

2 Includes selling, general and administrative (SG&A) and research and development (R&D) expenses.

The combined presentation aligns with the segment-level information that is regularly provided to the CODM.

3 Other segment items for each reportable segment primarily includes:

Construction Industries / Resource Industries / Energy & Transportation – other operating (income) expenses, currency impacts defined as a methodology difference between exchange rates used in U.S.

GAAP and segment reporting, and equity in (profit) loss of unconsolidated affiliated companies.

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,

2025 2024 2025 2024

Total profit from reportable segments $ 3,614 $ 4,211 $ 6,766 $ 8,299

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Reconciliation of Assets:

(Millions of dollars) March 31, 2025 December 31, 2024

(Millions of dollars) June 30, 2025 December 31, 2024

Assets from reportable segments:

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(Millions of dollars)

Three Months Ended March 31,

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

2025 2024 2025 2024

Depreciation and amortization from reportable segments:

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(Millions of dollars)

Three Months Ended March 31,

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

2025 2024 2025 2024

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, 2025.

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, 2025.

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, 2025, Cat Financial's forecasts reflected a continuation of the trend of historically low unemployment rates as well as global market uncertainty and continued actions by global central banks aimed at reducing inflation.

During the three and six months ended June 30, 2025, Cat Financial's forecasts reflected a continuation of the trend of historically low unemployment rates as well as global market uncertainty and continued actions by global central banks aimed at reducing inflation.

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

Cat Financial provides financing to Caterpillar dealers in the form of wholesale financing plans and working capital loans.

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.

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

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

1 unchanged sentence

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, 2025.

Therefore, Cat Financial made no adjustments to historical loss rates during the three and six months ended June 30, 2025.

Classes of finance receivables

5 unchanged sentences

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

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

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

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

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

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

2 unchanged sentences

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

(Millions of dollars) Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

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

Customer Dealer Total Customer Dealer Total

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Ending balance $ 281 $ 4 $ 285 $ 246 $ 4 $ 250

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

Customer Dealer Total Customer Dealer Total

Beginning balance $ 258 $ 4 $ 262 $ 276 $ 51 $ 327

Write-offs ( 57 ) — ( 57 ) ( 56 ) ( 47 ) ( 103 )

Recoveries 19 — 19 30 — 30

Provision for credit losses 1

54 — 54 24 — 24

Other 7 — 7 ( 28 ) — ( 28 )

Ending balance $ 281 $ 4 $ 285 $ 246 $ 4 $ 250

Finance Receivables $ 22,842 $ 1,378 $ 24,220 $ 20,740 $ 1,780 $ 22,520

1 unchanged sentence

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

(Millions of dollars) Three Months Ended March 31, 2025

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

2025 2024 2023 2022 2021 Prior Revolving

4 unchanged sentences

Latin America — — 1 2 — — — 3

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

Three Months Ended June 30, 2024

2024 2023 2022 2021 2020 Prior Revolving

Receivables Total

North America $ — $ 5 $ 2 $ 1 $ — $ 1 $ 3 $ 12

EAME — 1 1 1 1 — — 4

Asia/Pacific — 1 1 2 — — — 4

Latin America — — 2 2 1 8 — 13

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

Six Months Ended June 30, 2025

2025 2024 2023 2022 2021 Prior Revolving

Receivables Total

North America $ — $ 5 $ 11 $ 6 $ 4 $ 3 $ 4 $ 33

EAME — 2 3 1 1 — — 7

Asia/Pacific — 1 2 1 1 — — 5

Latin America — — 2 3 — 1 — 6

Mining — 3 1 1 — — — 5

1 unchanged sentence

Total $ — $ 11 $ 19 $ 12 $ 6 $ 5 $ 4 $ 57

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

2024 2023 2022 2021 2020 Prior Revolving

5 unchanged sentences

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

For the three months ended March 31, 2025, there were no gross write-offs in Cat Financial's Dealer portfolio segment.

For the three months ended March 31, 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 2020.

For the three months ended June 30, 2025 and 2024, there were no gross write-offs in Cat Financial's Dealer portfolio segment.

For the six months ended June 30, 2025, 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 2020.

Credit quality of finance receivables

3 unchanged sentences

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) March 31, 2025

(Millions of dollars) June 30, 2025

2025 2024 2023 2022 2021 Prior Revolving

67 unchanged sentences

Total Customer $ 9,451 $ 5,892 $ 3,164 $ 1,721 $ 510 $ 202 $ 577 $ 21,517

As of March 31, 2025 and December 31, 2024, Cat Financial's total amortized cost of finance receivables within the Dealer portfolio segment was current.

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

Non-accrual finance receivables

5 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, 2025 December 31, 2024

(Millions of dollars) June 30, 2025 December 31, 2024

Amortized Cost Amortized Cost

9 unchanged sentences

Total $ 176 $ 28 $ 176 $ 30

There were no finance receivables in Cat Financial's Dealer portfolio segment on non-accrual status as of March 31, 2025 and December 31, 2024.

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

Modifications

4 unchanged sentences

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

During the three months ended March 31, 2025 and 2024, 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, 2025 and 2024, was $ 6 million and $ 3 million, respectively.

Total modifications with borrowers experiencing financial difficulty represented 0.03 percent and 0.01 percent of Cat Financial's Customer portfolio for the same periods, respectively.

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

(In months) 2025 2024

During the three and six months ended June 30, 2025 and 2024, there were no finance receivable modifications granted to borrowers experiencing financial difficulty in Cat Financial's Dealer portfolio segment.

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

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

2025 2024 2025 2024

Amortized cost of finance receivables modified $ 16 $ 3 $ 20 $ 6

Modifications as a percentage of Customer portfolio 0.07 % 0.02 % 0.09 % 0.03 %

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

(In months) Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Weighted average extension to term of modified contracts 14 13 13 11

1 unchanged sentence

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

Defaults of loans modified in the prior twelve months were not significant during the three months ended March 31, 2025 and 2024.

Defaults of loans modified in the prior twelve months were not significant during the three and six months ended June 30, 2025 and 2024.

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

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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.

In addition, Insurance Services has an equity investment in a real estate investment trust (REIT) which is recorded at fair value based on the net asset value (NAV) of the investment and is not classified within the fair value hierarchy.

5 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, 2025 and December 31, 2024 were as follows:

March 31, 2025

Assets and liabilities measured on a recurring basis at fair value included in our Consolidated Statement of Financial Position as of June 30, 2025 and December 31, 2024 were as follows:

June 30, 2025

(Millions of dollars)

22 unchanged sentences

Commodity contracts - net — 2 — — 2

Total return swap contracts - net — 30 — — 30

Total assets $ 339 $ 3,608 $ — $ 171 $ 4,118

1 unchanged sentence

Interest rate contracts - net $ — $ 53 $ — $ — $ 53

Total return swap contracts - net — 26 — — 26

Total liabilities $ — $ 53 $ — $ — $ 53

32 unchanged sentences

Generally, the fair value of these receivables is measured using the fair value of collateral less estimated costs to sell.

Cat Financial had loans carried at fair value of $ 70 million and $ 59 million as of March 31, 2025 and December 31, 2024, respectively.

Cat Financial had loans carried at fair value of $ 61 million and $ 59 million as of June 30, 2025 and December 31, 2024, respectively.

Fair values of financial instruments

20 unchanged sentences

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(Millions of dollars) Carrying

7 unchanged sentences

Financial Products 25,579 25,605 25,406 25,304 2

1 Represents finance leases and failed sale leasebacks of $ 6,829 million and $ 6,769 million at March 31, 2025 and December 31, 2024, respectively.

1 Represents finance leases and failed sale leasebacks of $ 7,195 million and $ 6,769 million at June 30, 2025 and December 31, 2024, respectively.

Other income (expense)

Three Months Ended March 31,

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

(Millions of dollars) 2025 2024 2025 2024

1 unchanged sentence

Foreign exchange gains (losses) 1

( 125 ) 17 ( 143 ) 59

License fee income 37 37 72 71

9 unchanged sentences

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

Restructuring costs for the three months ended March 31, 2025 and 2024 were as follows:

(Millions of dollars) Three Months Ended March 31,

Restructuring costs for the three and six months ended June 30, 2025 and 2024 were as follows:

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

2025 2024 2025 2024

Employee separations 1

$ 10 $ 19 $ 27 $ 32

Divestitures 1

3 unchanged sentences

1 Recognized in Other operating (income) expenses.

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

The restructuring costs for the three months ended March 31, 2025 were related to restructuring actions across the company.

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

2 Represents costs related to our restructuring programs, primarily for inventory write-downs, project management, 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, 2025 were related to restructuring actions across the company.

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

In 2025 and 2024, all restructuring costs are excluded from segment profit.

4 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 $ 880 million and $ 830 million at March 31, 2025 and December 31, 2024, 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 $ 949 million and $ 830 million at June 30, 2025 and December 31, 2024, respectively.

Long-term debt

On May 12, 2025, we issued $ 1.7 billion of 5.200 % Senior Notes due 2035 and $ 300 million 5.500 % Senior Notes due 2055.

Interest on each series of notes will be paid semi-annually on May 15 and November 15 of each year, commencing on November 15, 2025.

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