Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to provide information that will assist the reader in understanding the company’s Consolidated Financial Statements, the changes in certain key items in those financial statements between select periods and the primary factors that accounted for those changes. In addition, we discuss how certain accounting principles, policies and critical estimates affect our Consolidated Financial Statements. Our discussion also contains certain forward-looking statements related to future events and expectations as well as a discussion of the many factors that we believe may have an impact on our business on an ongoing basis. This MD&A should be read in conjunction with our discussion of cautionary statements and significant risks to the company’s business under Part I, Item 1A. Risk Factors of the 2022 Form 10-K.

Highlights for the third quarter of 2023 include:

• Total sales and revenues for the third quarter of 2023 were $16.810 billion, an increase of $1.816 billion, or 12 percent, compared with $14.994 billion in the third quarter of 2022. Sales were higher across the three primary segments.

• Operating profit margin was 20.5 percent for the third quarter of 2023, compared with 16.2 percent for the third quarter of 2022. Adjusted operating profit margin was 20.8 percent for the third quarter of 2023, compared with 16.5 percent for the third quarter of 2022.

• Third-quarter 2023 profit per share was $5.45, and excluding the items in the table below, adjusted profit per share was $5.52. Third-quarter 2022 profit per share was $3.87, and excluding the items in the table below, adjusted profit per share was $3.95.

• Caterpillar ended the third quarter of 2023 with $6.5 billion of enterprise cash.

Highlights for the nine months ended September 30, 2023 include:

• Total sales and revenues were $49.990 billion for the nine months ended September 30, 2023, an increase of $7.160 billion, or 17 percent, compared with $42.830 billion for the nine months ended September 30, 2022.

• Operating profit margin was 19.7 percent for the nine months ended September 30, 2023, compared with 14.5 percent for the nine months ended September 30, 2022. Adjusted operating profit margin was 21.0 percent for the nine months ended September 30, 2023, compared with 14.7 percent for the nine months ended September 30, 2022.

• Profit per share for the nine months ended September 30, 2023, was $14.85, and excluding the items in the table below, adjusted profit per share was $15.98. Profit per share for the nine months ended September 30, 2022, was $9.85, and excluding the items in the table below, adjusted profit per share was $9.99.

• Enterprise operating cash flow was $8.9 billion for the nine months ended September 30, 2023.

• 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 page 65.

			Three Months Ended September 30, 2023									Three Months Ended September 30, 2022									Nine Months Ended September 30, 2023									Nine Months Ended September 30, 2022
(Dollars in millions except per share data)			Profit Before Taxes			Profit Per Share						Profit Before Taxes			Profit Per Share						Profit Before Taxes			Profit Per Share						Profit Before Taxes			Profit Per Share
Profit			$	3,515		$	5.45					$	2,558		$	3.87					$	9,801		$	14.85					$	6,653		$	9.85
Restructuring costs - Longwall divestiture			—			—						—			—						586			1.13						—			—
Other restructuring costs			46			0.07						49			0.08						102			0.17						90			0.14
Deferred tax valuation allowance adjustments			—			—						—			—						—			(0.17)						—			—
Adjusted profit			$	3,561		$	5.52					$	2,607		$	3.95					$	10,489		$	15.98					$	6,743		$	9.99

Overview

Total sales and revenues for the third quarter of 2023 were $16.810 billion, an increase of $1.816 billion, or 12 percent, compared with $14.994 billion in the third quarter of 2022. The increase was due to favorable price realization and higher sales volume. The increase in sales volume was driven by higher sales of equipment to end users, partially offset by the impact from changes in dealer inventories and lower services sales volume. Dealer inventory increased more during the third quarter of 2022 than during the third quarter of 2023.

Third-quarter 2023 profit per share was $5.45, compared with $3.87 profit per share in the third quarter of 2022. Profit per share for both quarters included restructuring costs. Profit for the third quarter of 2023 was $2.794 billion, an increase of $753 million, or 37 percent, compared with $2.041 billion for the third quarter of 2022. The increase was primarily due to favorable price realization and higher sales volume, partially offset by higher selling, general and administrative (SG&A) and research and development (R&D) expenses, higher manufacturing costs and unfavorable impacts from foreign currency exchange.

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Trends and Economic Conditions

Outlook for Key End Markets

In Construction Industries, we continue to see positive momentum for North America. We expect continued growth in non-residential construction in North America due to the positive impact of government-related infrastructure investments and a healthy pipeline of construction projects. Although residential construction growth has moderated, we expect it to remain healthy. In Asia Pacific, excluding China, we expect growth due to public infrastructure spending and supportive commodity prices. We expect continued weakness in China. In EAME, we anticipate the region will be slightly down. Continued weakness in Europe is expected to be partially offset by strong construction demand in the Middle East. Construction activity in Latin America is expected to be about flat versus a strong 2022 performance.

In Resource Industries, within mining, customer product utilization remains high, the number of parked trucks remains low and the age of the fleet remains high, which supports future demand for our equipment and services. Order rates are slightly lower than we expected at this time, reflecting capital discipline by customers. The energy transition is expected to support increased commodity demand over time, expanding our total addressable market and providing further opportunities for long-term profitable growth. We expect heavy construction and quarry and aggregates to remain at healthy levels due to major infrastructure and non-residential construction projects.

In Energy & Transportation, in Oil & Gas reciprocating engines, although customers remain disciplined, we are encouraged by continued strength in demand for gas compression. Power Generation reciprocating engine demand is expected to remain strong, primarily driven by data center growth. New equipment turbines and turbine-related services in both Oil & Gas and Power Generation remain robust. Industrial demand is expected to soften slightly from the recent high levels. In Transportation, we anticipate strength in high-speed marine as customers continue to upgrade aging fleets.

Company Trends and Expectations

For the full-year 2023, we expect a strong top line supported by price realization and higher sales of equipment to end users. The environment remains positive with an improving supply chain, a strong backlog and healthy demand across most end markets.

In the fourth quarter of 2023, we expect slightly higher sales and revenues compared to the fourth quarter of 2022. In the fourth quarter of 2023, price realization is expected to remain favorable as compared to the fourth quarter of 2022. We expect sales of equipment to end users to remain positive. We also expect an unfavorable impact from the changes in dealer inventories. We expect dealer inventory to decrease in the fourth quarter of 2023, compared to an increase in the fourth quarter of 2022.

We continue to expect operating profit to increase in 2023, compared to 2022. While we expect price realization to remain positive, the magnitude of the year-over-year benefit is expected to moderate in the fourth quarter of 2023 as we continue to lap prior year price increases. Incentive compensation is expected to be higher in the fourth quarter of 2023 compared to the fourth quarter of 2022. Within other income (expense), we do not expect the significant, unfavorable impacts from foreign currency exchange that occurred in the fourth quarter of 2022 to re-occur in the fourth quarter of 2023. We continue to anticipate higher pension expense in 2023, compared to 2022, due to higher interest costs from higher interest rates. The change is estimated to be just over $300 million for the full year as compared to 2022, or about $80 million per quarter.

For the full-year 2024, we expect continued strength in most of our key end markets as supported by our strong backlog, resulting in another good year.

Global Business Conditions

We continue to monitor a variety of external factors around the world, such as supply chain disruptions, inflationary cost and labor pressures. Areas of particular focus include certain components, transportation and raw materials. Contingency plans have been developed and continue to be modified to minimize supply chain challenges that may impact our ability to meet increasing customer demand. We continue to assess the environment to determine if additional actions need to be taken.

Risk Factors

Risk factors are disclosed within Item 1A. Risk Factors of the 2022 Form 10-K.

Notes:

• Glossary of terms is included on pages 59 - 61; first occurrence of terms shown in bold italics.

• Information on non-GAAP financial measures is included on page 65.

• Certain amounts may not add due to rounding.

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Consolidated Results of Operations

THREE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED WITH THREE MONTHS ENDED SEPTEMBER 30, 2022

CONSOLIDATED SALES AND REVENUES

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the third quarter of 2022 (at left) and the third quarter of 2023 (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 third quarter of 2023 were $16.810 billion, an increase of $1.816 billion, or 12 percent, compared with $14.994 billion in the third quarter of 2022. The increase was due to favorable price realization and higher sales volume. The increase in sales volume was driven by higher sales of equipment to end users, partially offset by the impact from changes in dealer inventories and lower services sales volume. Dealer inventory increased more during the third quarter of 2022 than during the third quarter of 2023.

Sales were higher across the three primary segments.

North America sales increased 26 percent due to higher sales of equipment to end users and favorable price realization.

Sales decreased 13 percent in Latin America due to the impact from changes in dealer inventories. Dealer inventory increased during the third quarter of 2022, compared with a decrease during the third quarter of 2023.

EAME sales increased 8 percent due to favorable price realization.

Asia/Pacific sales were about flat. Favorable price realization and the impact from changes in dealer inventories were offset by lower sales of equipment to end users, unfavorable currency impacts, primarily related to the Australian dollar and Japanese yen, and lower services sales volume. Dealer inventory increased more during the third quarter of 2023 than during the third quarter of 2022.

Dealer inventory increased by $600 million during the third quarter of 2023, compared with an increase of $700 million during the third quarter of 2022. 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.

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Sales and Revenues by Segment
(Millions of dollars)			Third Quarter 2022						Sales Volume						Price Realization						Currency						Inter-Segment / Other						Third Quarter 2023						$ Change						% Change
Construction Industries			$	6,276					$	62					$	662					$	21					$	(22)					$	6,999					$	723					12		%
Resource Industries			3,087						(81)						336						(9)						18						3,351						264						9		%
Energy & Transportation			6,186						415						298						45						(85)						6,859						673						11		%
All Other Segment			103						(7)						2						—						8						106						3						3		%
Corporate Items and Eliminations			(1,374)						(38)						—						4						81						(1,327)						47
Machinery, Energy & Transportation Sales			14,278						351						1,298						61						—						15,988						1,710						12		%
Financial Products Segment			819						—						—						—						160						979						160						20		%
Corporate Items and Eliminations			(103)						—						—						—						(54)						(157)						(54)
Financial Products Revenues			716						—						—						—						106						822						106						15		%
Consolidated Sales and Revenues			$	14,994					$	351					$	1,298					$	61					$	106					$	16,810					$	1,816					12		%

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
Third Quarter 2023
Construction Industries			$	4,078					31		%				$	555					(31		%)				$	1,351					8		%				$	997					(8		%)				$	6,981					12		%				$	18					(55		%)				$	6,999					12		%
Resource Industries			1,366						22		%				499						6		%				508						(3		%)				886						(1		%)				3,259						8		%				92						24		%				3,351						9		%
Energy & Transportation			2,966						22		%				460						(2		%)				1,428						12		%				901						9		%				5,755						15		%				1,104						(7		%)				6,859						11		%
All Other Segment			16						—		%				(1)						—		%				5						25		%				10						(33		%)				30						(14		%)				76						12		%				106						3		%
Corporate Items and Eliminations			(35)												1												—												(3)												(37)												(1,290)												(1,327)
Machinery, Energy & Transportation Sales			8,391						26		%				1,514						(13		%)				3,292						8		%				2,791						(1		%)				15,988						12		%				—						—		%				15,988						12		%
Financial Products Segment			627						20		%				110						22		%				132						32		%				110						3		%				979			1			20		%				—						—		%				979						20		%
Corporate Items and Eliminations			(91)												(21)												(22)												(23)												(157)												—												(157)
Financial Products Revenues			536						15		%				89						27		%				110						25		%				87						(3		%)				822						15		%				—						—		%				822						15		%
Consolidated Sales and Revenues			$	8,927					25		%				$	1,603					(11		%)				$	3,402					8		%				$	2,878					(1		%)				$	16,810					12		%				$	—					—		%				$	16,810					12		%
Third Quarter 2022
Construction Industries			$	3,106											$	799											$	1,247											$	1,084											$	6,236											$	40											$	6,276
Resource Industries			1,122												472												526												893												3,013												74												3,087
Energy & Transportation			2,422												468												1,280												827												4,997												1,189												6,186
All Other Segment			16												—												4												15												35												68												103
Corporate Items and Eliminations			1												—												—												(4)												(3)												(1,371)												(1,374)
Machinery, Energy & Transportation Sales			6,667												1,739												3,057												2,815												14,278												—												14,278
Financial Products Segment			522												90												100												107												819			1									—												819
Corporate Items and Eliminations			(54)												(20)												(12)												(17)												(103)												—												(103)
Financial Products Revenues			468												70												88												90												716												—												716
Consolidated Sales and Revenues			$	7,135											$	1,809											$	3,145											$	2,905											$	14,994											$	—											$	14,994

1 Includes revenues from Machinery, Energy & Transportation of $181 million and $124 million in the third quarter of 2023 and 2022, respectively.

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CONSOLIDATED OPERATING PROFIT

The chart above graphically illustrates reasons for the change in consolidated operating profit between the third quarter of 2022 (at left) and the third quarter of 2023 (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 third quarter of 2023 was $3.449 billion, an increase of $1.024 billion, or 42 percent, compared with $2.425 billion in the third quarter of 2022. The increase was primarily due to favorable price realization, including a favorable geographic mix of sales, and higher sales volume, partially offset by higher SG&A/R&D expenses and higher manufacturing costs. The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives, higher short-term incentive compensation expense and an unfavorable change in fair value adjustments related to deferred compensation plans. Unfavorable manufacturing costs were driven by lower freight being more than offset by higher material costs, unfavorable cost absorption, increased period manufacturing costs and the impact of manufacturing inefficiencies. Cost absorption was unfavorable as inventory increased during the third quarter of 2022, compared with a decrease in the third quarter of 2023.

Operating profit margin was 20.5 percent for the third quarter of 2023, compared with 16.2 percent for the third quarter of 2022.

Profit (Loss) by Segment
(Millions of dollars)			Third Quarter 2023						Third Quarter 2022						$ Change						% Change
Construction Industries			$	1,847					$	1,209					$	638					53		%
Resource Industries			730						506						224						44		%
Energy & Transportation			1,181						935						246						26		%
All Other Segment			21						8						13						163		%
Corporate Items and Eliminations			(386)						(373)						(13)
Machinery, Energy & Transportation			3,393						2,285						1,108						48		%
Financial Products Segment			203						220						(17)						(8		%)
Corporate Items and Eliminations			18						30						(12)
Financial Products			221						250						(29)						(12		%)
Consolidating Adjustments			(165)						(110)						(55)
Consolidated Operating Profit			$	3,449					$	2,425					$	1,024					42		%

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Other Profit/Loss and Tax Items

▪Interest expense excluding Financial Products in the third quarter of 2023 was $129 million, compared with $109 million in the third quarter of 2022. The increase was due to higher average borrowing rates.

▪Other income (expense) in the third quarter of 2023 was income of $195 million, compared with income of $242 million in the third quarter of 2022. The change was primarily driven by unfavorable impacts from foreign currency exchange and pension and other postemployment benefit (OPEB) plan costs, partially offset by higher investment and interest income and favorable impacts from commodity hedges and unrealized gains on marketable securities.

▪The provision for income taxes for the third quarter of 2023 reflected an estimated annual tax rate of 22.5 percent, compared with 23 percent for the third quarter of 2022, excluding the discrete items discussed below. The comparative tax rate for full-year 2022 was 23.2 percent.

The company recorded a $34 million benefit in the third quarter of 2023 compared to a $20 million benefit in the third quarter of 2022 due to a decrease from the second-quarter estimated annual tax rate. In the third quarter of 2023, the company also recorded a discrete tax benefit of $22 million for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense. In the third quarter of 2022, the company also recorded a discrete benefit of $41 million to reflect changes in estimates related to prior years.

Construction Industries

Construction Industries’ total sales were $6.999 billion in the third quarter of 2023, an increase of $723 million, or 12 percent, compared with $6.276 billion in the third quarter of 2022. The increase was primarily due to favorable price realization.

▪In North America, sales increased due to higher sales volume and favorable price realization. Higher sales volume was driven by higher sales of equipment to end users and the impact from changes in dealer inventories. Dealer inventory increased more during the third quarter of 2023 than during the third quarter of 2022.

▪Sales decreased in Latin America primarily due to lower sales volume, partially offset by favorable price realization. Lower sales volume was driven by the impact from changes in dealer inventories and lower sales of equipment to end users. Dealer inventory increased during the third quarter of 2022, compared with a decrease during the third quarter of 2023.

▪In EAME, sales increased mainly due to favorable price realization and favorable currency impacts primarily related to the euro.

▪Sales decreased in Asia/Pacific primarily due to lower sales volume. Lower sales volume was driven by lower sales of equipment to end users, partially offset by the impact from changes in dealer inventories. Dealer inventory increased during the third quarter of 2023, compared with a decrease during the third quarter of 2022.

Construction Industries’ profit was $1.847 billion in the third quarter of 2023, an increase of $638 million, or 53 percent, compared with $1.209 billion in the third quarter of 2022. The increase was mainly due to favorable price realization.

Construction Industries’ profit as a percent of total sales was 26.4 percent in the third quarter of 2023, compared with 19.3 percent in the third quarter of 2022.

Resource Industries

Resource Industries’ total sales were $3.351 billion in the third quarter of 2023, an increase of $264 million, or 9 percent, compared with $3.087 billion in the third quarter of 2022. The increase was primarily due to favorable price realization, partially offset by lower sales volume. Sales volume decreased as higher sales of equipment to end users were more than offset by lower aftermarket parts sales volume and the impact from changes in dealer inventories. Dealer inventory increased during the third quarter of 2022, while remaining about flat during the third quarter of 2023.

Resource Industries’ profit was $730 million in the third quarter of 2023, an increase of $224 million, or 44 percent, compared with $506 million in the third quarter of 2022. The increase was mainly due to favorable price realization, partially offset by lower sales volume, including an unfavorable mix of products.

Resource Industries’ profit as a percent of total sales was 21.8 percent in the third quarter of 2023, compared with 16.4 percent in the third quarter of 2022.

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Energy & Transportation

Sales by Application
(Millions of dollars)						Third Quarter 2023						Third Quarter 2022						$ Change						% Change
Oil and Gas						$	1,667					$	1,323					$	344					26		%
Power Generation						1,598						1,320						278						21		%
Industrial						1,220						1,158						62						5		%
Transportation						1,270						1,196						74						6		%
External Sales						5,755						4,997						758						15		%
Inter-segment						1,104						1,189						(85)						(7		%)
Total Sales						$	6,859					$	6,186					$	673					11		%

Energy & Transportation’s total sales were $6.859 billion in the third quarter of 2023, an increase of $673 million, or 11 percent, compared with $6.186 billion in the third quarter of 2022. Sales increased across all applications. The increase in sales was primarily due to higher sales volume and favorable price realization.

▪Oil and Gas – Sales increased for turbines and turbine-related services. Sales also increased in reciprocating engines used in well servicing applications.

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

▪Industrial – Sales increased primarily in EAME and Latin America.

▪Transportation – Sales increased in rail services.

Energy & Transportation’s profit was $1.181 billion in the third quarter of 2023, an increase of $246 million, or 26 percent, compared with $935 million in the third quarter of 2022. The increase was mainly due to favorable price realization and higher sales volume, partially offset by higher SG&A/R&D expenses, unfavorable manufacturing costs and currency impacts. The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives and higher short-term incentive compensation expense. Unfavorable manufacturing costs reflected lower freight being more than offset by higher material costs, increased period manufacturing costs, the impact of manufacturing inefficiencies and the unfavorable impact from inventory write-downs.

Energy & Transportation’s profit as a percent of total sales was 17.2 percent in the third quarter of 2023, compared with 15.1 percent in the third quarter of 2022.

Financial Products Segment

Financial Products' segment revenues were $979 million in the third quarter of 2023, an increase of $160 million, or 20 percent, compared with $819 million in the third quarter of 2022. The increase was primarily due to higher average financing rates across all regions.

Financial Products’ segment profit was $203 million in the third quarter of 2023, a decrease of $17 million, or 8 percent, compared with $220 million in the third quarter of 2022. The decrease was mainly due to the absence of prior year reserve releases for credit losses at Cat Financial, partially offset by a favorable impact from mark-to-market adjustments on derivative contracts.

At the end of the third quarter of 2023, past dues at Cat Financial were 1.96 percent, compared with 2.00 percent at the end of the third quarter of 2022. Write-offs, net of recoveries, were $9 million for the third quarter of 2023, compared with $13 million for the third quarter of 2022. As of September 30, 2023, Cat Financial's allowance for credit losses totaled $340 million, or 1.23 percent of finance receivables, compared with $320 million, or 1.15 percent of finance receivables at June 30, 2023. The allowance for credit losses at year-end 2022 was $346 million, or 1.29 percent of finance receivables.

Corporate Items and Eliminations

Expense for corporate items and eliminations was $368 million in the third quarter of 2023, an increase of $25 million from the third quarter of 2022. Decreased expenses due to timing differences were more than offset by higher corporate costs, unfavorable impacts of segment reporting methodology differences and an unfavorable change in fair value adjustments related to deferred compensation plans.

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NINE MONTHS ENDED SEPTEMBER 30, 2023 COMPARED WITH NINE MONTHS ENDED SEPTEMBER 30, 2022

CONSOLIDATED SALES AND REVENUES

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the nine months ended September 30, 2022 (at left) and the nine months ended September 30, 2023 (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 $49.990 billion for the nine months ended September 30, 2023, an increase of $7.160 billion, or 17 percent, compared with $42.830 billion for the nine months ended September 30, 2022. The increase was primarily due to favorable price realization and higher sales volume. The increase in sales volume was driven by higher sales of equipment to end users and the impact from changes in dealer inventories. Dealer inventory increased more during the nine months ended September 30, 2023, than the during the nine months ended September 30, 2022.

Sales were higher in the three primary segments.

North America sales increased 30 percent driven by higher sales of equipment to end users, favorable price realization and the impact from changes in dealer inventories. Dealer inventory increased more during the nine months ended September 30, 2023, than during the nine months ended September 30, 2022.

Sales were about flat in Latin America. Favorable price realization was offset by the impact from changes in dealer inventories and lower services sales volume. Dealer inventory increased during the nine months ended September 30, 2022, compared to a decrease during the nine months ended September 30, 2023.

EAME sales increased 11 percent due to favorable price realization and higher sales of equipment to end users.

Asia/Pacific sales increased 4 percent driven by favorable price realization and the impact from changes in dealer inventories, partially offset by unfavorable currency impacts, primarily related to the Australian dollar and Japanese yen, and lower sales of equipment to end users. Dealer inventory increased more during the nine months ended September 30, 2023, than during the nine months ended September 30, 2022.

Dealer inventory increased about $2.9 billion during the nine months ended September 30, 2023, compared with an increase of about $1.6 billion during the nine months ended September 30, 2022. 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.

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Sales and Revenues by Segment
(Millions of dollars)			Nine Months Ended September 30, 2022						Sales Volume						Price Realization						Currency						Inter-Segment / Other						Nine Months Ended September 30, 2023						$ Change						% Change
Construction Industries			$	18,424					$	495					$	2,233					$	(235)					$	(18)					$	20,899					$	2,475					13		%
Resource Industries			8,878						326						1,183						(85)						39						10,341						1,463						16		%
Energy & Transportation			16,929						1,968						1,195						(65)						305						20,332						3,403						20		%
All Other Segment			339						(13)						2						(2)						7						333						(6)						(2		%)
Corporate Items and Eliminations			(3,867)						(77)						1						3						(333)						(4,273)						(406)
Machinery, Energy & Transportation Sales			40,703						2,699						4,614						(384)						—						47,632						6,929						17		%
Financial Products Segment			2,400						—						—						—						404						2,804						404						17		%
Corporate Items and Eliminations			(273)						—						—						—						(173)						(446)						(173)
Financial Products Revenues			2,127						—						—						—						231						2,358						231						11		%
Consolidated Sales and Revenues			$	42,830					$	2,699					$	4,614					$	(384)					$	231					$	49,990					$	7,160					17		%

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
Nine Months Ended September 30, 2023
Construction Industries			$	11,654					32		%				$	1,720					(17		%)				$	4,125					11		%				$	3,307					(10		%)				$	20,806					14		%				$	93					(16		%)				$	20,899					13		%
Resource Industries			4,016						27		%				1,511						13		%				1,624						1		%				2,940						15		%				10,091						16		%				250						18		%				10,341						16		%
Energy & Transportation			8,658						30		%				1,299						12		%				4,291						17		%				2,519						15		%				16,767						23		%				3,565						9		%				20,332						20		%
All Other Segment			50						(4		%)				(1)						—		%				13						(7		%)				37						(20		%)				99						(12		%)				234						3		%				333						(2		%)
Corporate Items and Eliminations			(115)												(1)												(3)												(12)												(131)												(4,142)												(4,273)
Machinery, Energy & Transportation Sales			24,263						30		%				4,528						(1		%)				10,050						11		%				8,791						4		%				47,632						17		%				—						—		%				47,632						17		%
Financial Products Segment			1,795						17		%				316						26		%				364						24		%				329						1		%				2,804			1			17		%				—						—		%				2,804						17		%
Corporate Items and Eliminations			(259)												(60)												(61)												(66)												(446)												—												(446)
Financial Products Revenues			1,536						10		%				256						33		%				303						16		%				263						(4		%)				2,358						11		%				—						—		%				2,358						11		%
Consolidated Sales and Revenues			$	25,799					29		%				$	4,784					1		%				$	10,353					11		%				$	9,054					3		%				$	49,990					17		%				$	—					—		%				$	49,990					17		%
Nine Months Ended September 30, 2022
Construction Industries			$	8,832											$	2,061											$	3,726											$	3,694											$	18,313											$	111											$	18,424
Resource Industries			3,167												1,337												1,609												2,554												8,667												211												8,878
Energy & Transportation			6,637												1,160												3,679												2,193												13,669												3,260												16,929
All Other Segment			52												—												14												46												112												227												339
Corporate Items and Eliminations			(43)												(1)												(2)												(12)												(58)												(3,809)												(3,867)
Machinery, Energy & Transportation Sales			18,645												4,557												9,026												8,475												40,703												—												40,703
Financial Products Segment			1,530												250												293												327												2,400			1									—												2,400
Corporate Items and Eliminations			(132)												(58)												(31)												(52)												(273)												—												(273)
Financial Products Revenues			1,398												192												262												275												2,127												—												2,127
Consolidated Sales and Revenues			$	20,043											$	4,749											$	9,288											$	8,750											$	42,830											$	—											$	42,830

1 Includes revenues from Machinery, Energy & Transportation of $515 million and $332 million in the nine months ended September 30, 2023 and 2022, respectively.

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CONSOLIDATED OPERATING PROFIT

The chart above graphically illustrates reasons for the change in consolidated operating profit between the nine months ended September 30, 2022 (at left) and the nine months ended September 30, 2023 (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 nine months ended September 30, 2023, was $9.832 billion, an increase of $3.608 billion, or 58 percent, compared with $6.224 billion for the nine months ended September 30, 2022. The increase was due to favorable price realization and higher sales volume, partially offset by unfavorable manufacturing costs, higher SG&A/R&D expenses and the impact of the divestiture of the company's Longwall business. Unfavorable manufacturing costs largely reflected higher material costs, increased period manufacturing costs, the impact of manufacturing inefficiencies and unfavorable cost absorption, partially offset by lower freight. Cost absorption was unfavorable as inventory increased more during the nine months ended September 30, 2022 than during the nine months ended September 30, 2023. The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives and an unfavorable change in fair value adjustments related to deferred compensation plans.

In the first quarter of 2023, the divestiture of the company’s Longwall business was finalized, resulting in an unfavorable impact to operating profit of $586 million, primarily a non-cash item driven by the release of accumulated foreign currency translation.

Operating profit margin was 19.7 percent for the nine months ended September 30, 2023, compared with 14.5 percent for the nine months ended September 30, 2022.

Profit (Loss) by Segment
(Millions of dollars)			Nine Months Ended September 30, 2023						Nine Months Ended September 30, 2022						$ Change						% Change
Construction Industries			$	5,440					$	3,255					$	2,185					67		%
Resource Industries			2,234						1,222						1,012						83		%
Energy & Transportation			3,507						2,132						1,375						64		%
All Other Segment			42						42						—						—		%
Corporate Items and Eliminations			(1,666)						(847)						(819)
Machinery, Energy & Transportation			9,557						5,804						3,753						65		%
Financial Products Segment			675						675						—						—		%
Corporate Items and Eliminations			60						30						30
Financial Products			735						705						30						4		%
Consolidating Adjustments			(460)						(285)						(175)
Consolidated Operating Profit			$	9,832					$	6,224					$	3,608					58		%

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Other Profit/Loss and Tax Items

▪Interest expense excluding Financial Products for the nine months ended September 30, 2023, was $385 million, compared with $326 million for the nine months ended September 30, 2022. The increase was due to higher average borrowing rates.

▪Other income (expense) for the nine months ended September 30, 2023, was income of $354 million, compared with income of $755 million for the nine months September 30, 2022. The change was primarily driven by unfavorable impacts from foreign currency exchange and pension and OPEB plan costs, partially offset by higher investment and interest income.

▪The provision for income taxes for the nine months ended September 30, 2023, reflected an estimated annual tax rate of 22.5 percent, compared with 23 percent for the nine months ended September 30, 2022, excluding the discrete items discussed below. The comparative tax rate for full-year 2022 was 23.2 percent.

The 2023 estimated annual tax rate excludes the impact of the nondeductible loss of $586 million related to the divestiture of the company’s Longwall business. In the nine months ended September 30, 2023, the company recorded a discrete tax benefit of $88 million due to a change in the valuation allowance for certain deferred tax assets. In addition, the company recorded a discrete tax benefit of $54 million for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense, compared with a $18 million benefit for the nine months ended September 30, 2022. In the nine months ended September 30, 2022, the company also recorded discrete benefits of $90 million to reflect changes in estimates related to prior years.

Construction Industries

Construction Industries’ total sales were $20.899 billion for the nine months ended September 30, 2023, an increase of $2.475 billion, or 13 percent, compared with $18.424 billion for the nine months ended September 30, 2022. The increase was primarily due to favorable price realization.

• In North America, sales increased due to favorable price realization and higher sales volume. Higher sales volume was driven by higher sales of equipment to end users and the impact from changes in dealer inventories. Dealer inventory increased more during the nine months ended September 30, 2023, than during the nine months ended September 30, 2022.

• Sales decreased in Latin America primarily due to lower sales volume, partially offset by favorable price realization. Lower sales volume was driven by the impact from changes in dealer inventories and lower sales of equipment to end users. Dealer inventory increased during the nine months ended September 30, 2022, compared with a decrease during the nine months ended September 30, 2023.

• In EAME, sales increased primarily due to favorable price realization and higher sales volume. Higher sales volume was due to the impact from changes in dealer inventories, partially offset by lower sales of equipment to end users. Dealer inventory increased more during the nine months ended September 30, 2023, than during the nine months ended September 30, 2022.

• Sales decreased in Asia/Pacific due to lower sales volume and unfavorable currency impacts, primarily related to the Japanese yen, Australian dollar and Chinese yuan, partially offset by favorable price realization. Lower sales volume was driven by lower sales of equipment to end users, partially offset by the impact from changes in dealer inventories. Dealer inventory increased more during the nine months ended September 30, 2023, than during the nine months ended September 30, 2022.

Construction Industries’ profit was $5.440 billion for the nine months ended September 30, 2023, an increase of $2.185 billion, or 67 percent, compared with $3.255 billion for the nine months ended September 30, 2022. The increase was mainly due to favorable price realization.

Construction Industries’ profit as a percent of total sales was 26.0 percent for the nine months ended September 30, 2023, compared with 17.7 percent for the nine months ended September 30, 2022.

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Resource Industries

Resource Industries’ total sales were $10.341 billion for the nine months ended September 30, 2023, an increase of $1.463 billion, or 16 percent, compared with $8.878 billion for the nine months ended September 30, 2022. The increase was primarily due to favorable price realization and higher sales volume. The increase in sales volume was driven by higher sales of equipment to end users, partially offset by lower aftermarket parts sales volume and the impact from changes in dealer inventories. Dealer inventory increased more during the nine months ended September 30, 2022, than during the nine months ended September 30, 2023.

Resource Industries’ profit was $2.234 billion for the nine months ended September 30, 2023, an increase of $1.012 billion, or 83 percent, compared with $1.222 billion for the nine months ended September 30, 2022. The increase was mainly due to favorable price realization, partially offset by unfavorable manufacturing costs. Unfavorable manufacturing costs were driven by higher materials costs, the impact of manufacturing inefficiencies and unfavorable cost absorption, partially offset by lower freight. Cost absorption was unfavorable as inventory increased more during the nine months ended September 30, 2022, than during the nine months ended September 30, 2023.

Resource Industries’ profit as a percent of total sales was 21.6 percent for the nine months ended September 30, 2023, compared with 13.8 percent for the nine months ended September 30, 2022.

Energy & Transportation

Sales by Application
(Millions of dollars)						Nine Months Ended September 30, 2023						Nine Months Ended September 30, 2022						$ Change						% Change
Oil and Gas						$	4,741					$	3,503					$	1,238					35		%
Power Generation						4,527						3,518						1,009						29		%
Industrial						3,793						3,295						498						15		%
Transportation						3,706						3,353						353						11		%
External Sales						16,767						13,669						3,098						23		%
Inter-Segment						3,565						3,260						305						9		%
Total Sales						$	20,332					$	16,929					$	3,403					20		%

Energy & Transportation’s total sales were $20.332 billion for the nine months ended September 30, 2023, an increase of $3.403 billion, or 20 percent, compared with $16.929 billion for the nine months ended September 30, 2022. Sales increased across all applications and inter-segment sales. The increase in sales was primarily due to higher sales volume and favorable price realization.

• Oil and Gas – Sales increased for turbines and turbine-related services. Sales also increased in reciprocating engines used in well servicing and gas compression applications.

• Power Generation – Sales increased in large reciprocating engines, primarily data center applications, and small reciprocating engines. Turbines and turbine-related services increased as well.

• Industrial – Sales were up across all regions.

• Transportation – Sales increased in rail services and marine.

Energy & Transportation’s profit was $3.507 billion for the nine months ended September 30, 2023, an increase of $1.375 billion, or 64 percent, compared with $2.132 billion for the nine months ended September 30, 2022. The increase was mainly due to favorable price realization and higher sales volume, partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses. Unfavorable manufacturing costs were driven by higher material costs. The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives.

Energy & Transportation’s profit as a percent of total sales was 17.2 percent for the nine months ended September 30, 2023, compared with 12.6 percent for the nine months ended September 30, 2022.

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Financial Products Segment

Financial Products’ segment revenues were $2.804 billion for the nine months ended September 30, 2023, an increase of $404 million, or 17 percent, compared with $2.400 billion for the nine months ended September 30, 2022. The increase was primarily due to higher average financing rates across all regions.

Financial Products’ segment profit was $675 million for both the nine months ended September 30, 2023 and 2022, primarily driven by a favorable impact from higher net yield on average earning assets, offset by an unfavorable impact from an increase in SG&A expenses.

Corporate Items and Eliminations

Expense for corporate items and eliminations was $1.606 billion for the nine months ended September 30, 2023, an increase of $789 million from the nine months ended September 30, 2022, primarily driven by the impact of the divestiture of the company's Longwall business and an unfavorable change in fair value adjustments related to deferred compensation plans.

In the first quarter of 2023, the divestiture of the company’s Longwall business was finalized, resulting in an unfavorable impact to operating profit of $586 million, primarily a non-cash item driven by the release of accumulated foreign currency translation. This impact was included in total restructuring costs.

RESTRUCTURING COSTS

In 2023, we expect to incur about $700 million of restructuring costs, which includes a pre-tax loss of approximately $586 million from the divestiture of our Longwall business within Resource Industries on February 1, 2023. In addition, we expect to incur about $100 million of restructuring costs this year primarily related to strategic actions to address a small number of products. 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 $75 million in 2023 compared with 2022.

Additional information related to restructuring costs is included in Note 20 - "Restructuring Costs" of Part I, Item 1 "Financial Statements".

GLOSSARY OF TERMS

1.Adjusted Operating Profit Margin – Operating profit excluding restructuring costs, which include the divestiture of the company’s Longwall business, as a percent of sales and revenues.

2.Adjusted Profit Per Share – Profit per share excluding restructuring costs, which include the divestiture of the company’s Longwall business, and a discrete tax benefit to adjust deferred tax balances.

3.All Other Segment – Primarily includes activities such as: business strategy; product management and development; manufacturing and sourcing of filters and fluids, undercarriage, ground-engaging tools, fluid transfer products, precision seals, rubber sealing and connecting components primarily for Cat® products; parts distribution; integrated logistics solutions; distribution services responsible for dealer development and administration, including a wholly owned dealer in Japan; dealer portfolio management and ensuring the most efficient and effective distribution of machines, engines and parts; brand management and marketing strategy; and digital investments for new customer and dealer solutions that integrate data analytics with state-of-the-art digital technologies while transforming the buying experience.

4.Consolidating Adjustments – Elimination of transactions between Machinery, Energy & Transportation and Financial Products.

5.Construction Industries – A segment primarily responsible for supporting customers using machinery in infrastructure and building construction applications. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes asphalt pavers; backhoe loaders; cold planers; compactors; compact track loaders; forestry machines; material handlers; motor graders; pipelayers; road reclaimers; skid steer loaders; telehandlers; track-type loaders; track-type tractors (small, medium); track excavators (mini, small, medium, large); wheel excavators; wheel loaders (compact, small, medium); and related parts and work tools.

6.Corporate Items and Eliminations – Includes corporate-level expenses, timing differences (as some expenses are reported in segment profit on a cash basis), methodology differences between segment and consolidated external reporting, certain restructuring costs and inter-segment eliminations.

7.Currency – With respect to sales and revenues, currency represents the translation impact on sales resulting from changes in foreign currency exchange rates versus the U.S. dollar. With respect to operating profit, currency represents the net

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translation impact on sales and operating costs resulting from changes in foreign currency exchange rates versus the U.S. dollar. Currency only includes the impact on sales and operating profit for the Machinery, Energy & Transportation line of business; currency impacts on Financial Products revenues and operating profit are included in the Financial Products portions of the respective analyses. With respect to other income/expense, currency represents the effects of forward and option contracts entered into by the company to reduce the risk of fluctuations in exchange rates (hedging) and the net effect of changes in foreign currency exchange rates on our foreign currency assets and liabilities for consolidated results (translation).

8.Dealer Inventories – Represents dealer machine and engine inventories, excluding aftermarket parts.

9.EAME – A geographic region including Europe, Africa, the Middle East and Eurasia.

10.Earning Assets – Assets consisting primarily of total finance receivables net of unearned income, plus equipment on operating leases net of accumulated depreciation at Cat Financial.

11.Energy & Transportation – A segment primarily responsible for supporting customers using reciprocating engines, turbines, diesel-electric locomotives and related services across industries serving Oil and Gas, Power Generation, Industrial and Transportation applications, including marine- and rail-related businesses. Responsibilities include business strategy, product design, product management, development and testing, manufacturing, marketing and sales and product support. The product and services portfolio includes turbines, centrifugal gas compressors, and turbine-related services; reciprocating engine-powered generator sets; integrated systems and solutions used in the electric power generation industry; reciprocating engines, drivetrain and integrated systems and solutions for the marine and oil and gas industries; reciprocating engines, drivetrain and integrated systems and solutions supplied to the industrial industry as well as Cat machinery; electrified powertrain and zero-emission power sources and service solutions development; and diesel-electric locomotives and components and other rail-related products and services, including remanufacturing and leasing. Responsibilities also include the remanufacturing of Caterpillar reciprocating engines and components and remanufacturing services for other companies; and product support of on-highway vocational trucks for North America.

12.Financial Products – The company defines Financial Products as our finance and insurance subsidiaries, primarily Caterpillar Financial Services Corporation (Cat Financial) and Caterpillar Insurance Holdings Inc. (Insurance Services). Financial Products’ information relates to the financing to customers and dealers for the purchase and lease of Caterpillar and other equipment.

13.Financial Products Segment – Provides financing alternatives to customers and dealers around the world for Caterpillar products and services, as well as financing for power generation facilities that, in most cases, incorporate Caterpillar products. Financing plans include operating and finance leases, revolving charge accounts, installment sale contracts, repair/rebuild financing, working capital loans and wholesale financing plans. The segment also provides insurance and risk management products and services that help customers and dealers manage their business risk. Insurance and risk management products offered include physical damage insurance, inventory protection plans, extended service coverage and maintenance plans for machines and engines, and dealer property and casualty insurance. The various forms of financing, insurance and risk management products offered to customers and dealers help support the purchase and lease of Caterpillar equipment. The segment also earns revenues from Machinery, Energy & Transportation, but the related costs are not allocated to operating segments. Financial Products’ segment profit is determined on a pretax basis and includes other income/expense items.

14.Latin America – A geographic region including Central and South American countries and Mexico.

15.Machinery, Energy & Transportation (ME&T) – The company defines ME&T as Caterpillar Inc. and its subsidiaries, excluding Financial Products. ME&T’s information relates to the design, manufacturing and marketing of its products.

16.Machinery, Energy & Transportation Other Operating (Income) Expenses – Comprised primarily of gains/losses on disposal of long-lived assets, gains/losses on divestitures and legal settlements and accruals.

17.Manufacturing Costs – Manufacturing costs exclude the impacts of currency and represent the volume-adjusted change for variable costs and the absolute dollar change for period manufacturing costs. Variable manufacturing costs are defined as having a direct relationship with the volume of production. This includes material costs, direct labor and other costs that vary directly with production volume, such as freight, power to operate machines and supplies that are consumed in the manufacturing process. Period manufacturing costs support production but are defined as generally not having a direct relationship to short-term changes in volume. Examples include machinery and equipment repair, depreciation on manufacturing assets, facility support, procurement, factory scheduling, manufacturing planning and operations management.

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18.Mark-to-market gains/losses – Represents the net gain or loss of actual results differing from the company’s assumptions and the effects of changing assumptions for our defined benefit pension and OPEB plans. These gains and losses are immediately recognized through earnings upon the annual remeasurement in the fourth quarter, or on an interim basis as triggering events warrant remeasurement.

19.Pension and Other Postemployment Benefits (OPEB) – The company’s defined-benefit pension and postretirement benefit plans.

20.Price Realization – The impact of net price changes excluding currency and new product introductions. Price realization includes geographic mix of sales, which is the impact of changes in the relative weighting of sales prices between geographic regions.

21.Resource Industries – A segment primarily responsible for supporting customers using machinery in mining, heavy construction and quarry and aggregates. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes large track-type tractors; large mining trucks; hard rock vehicles; electric rope shovels; draglines; hydraulic shovels; rotary drills; large wheel loaders; off-highway trucks; articulated trucks; wheel tractor scrapers; wheel dozers; landfill compactors; soil compactors; select work tools; machinery components; electronics and control systems and related parts. In addition to equipment, Resource Industries also develops and sells technology products and services to provide customers fleet management, equipment management analytics, autonomous machine capabilities, safety services and mining performance solutions. Resource Industries also manages areas that provide services to other parts of the company, including strategic procurement, lean center of excellence, integrated manufacturing, research and development for hydraulic systems, automation, electronics and software for Cat machines and engines.

22.Restructuring Costs – May include costs for employee separation, long-lived asset impairments, contract terminations and divestiture impacts. 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). Restructuring costs also include other exit-related costs, which may consist of accelerated depreciation, inventory write-downs, building demolition, equipment relocation and project management costs and LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold.

23.Sales Volume – With respect to sales and revenues, sales volume represents the impact of changes in the quantities sold for Machinery, Energy & Transportation as well as the incremental sales impact of new product introductions, including emissions-related product updates. With respect to operating profit, sales volume represents the impact of changes in the quantities sold for Machinery, Energy & Transportation combined with product mix as well as the net operating profit impact of new product introductions, including emissions-related product updates. Product mix represents the net operating profit impact of changes in the relative weighting of Machinery, Energy & Transportation sales with respect to total sales. The impact of sales volume on segment profit includes inter-segment sales.

24.Services – Enterprise services include, but are not limited to, aftermarket parts, Financial Products revenues and other service-related revenues. Machinery, Energy & Transportation segments exclude most Financial Products revenues.

LIQUIDITY AND CAPITAL RESOURCES

Sources of funds

We generate significant capital resources from operating activities, which are the primary source of funding for our ME&T operations. Funding for these businesses is also available from commercial paper and long-term debt issuances. 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 nine months of 2023 and ended the third quarter with $6.55 billion of cash, a decrease of $459 million from year-end 2022. In addition, ME&T has invested in bank time deposits with varying maturity dates within one year and available-for-sale debt securities that are considered highly liquid and are available for current operations. These ME&T securities were $4.27 billion as of September 30, 2023 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 nine months of 2023 was $8.88 billion, up $3.86 billion compared to the same period a year ago. The increase was primarily due to higher profit before taxes adjusted for non-cash items, including the loss on divestiture of the company's Longwall business.

Total debt as of September 30, 2023 was $37.14 billion, an increase of $146 million from year-end 2022. Debt related to ME&T decreased $99 million in the first nine months of 2023 while debt related to Financial Products increased $254 million.

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As of September 30, 2023, 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 September 30, 2023 was $2.75 billion. Information on our Credit Facility is as follows:

• In August 2023, we entered into a new 364-day facility. The 364-day facility of $3.15 billion (of which $825 million is available to ME&T) expires in August 2024.

• In August 2023, we amended and extended the three-year facility (as amended and restated, the "three-year facility"). The three-year facility of $2.73 billion (of which $715 million is available to ME&T) expires in August 2026.

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

At September 30, 2023, Caterpillar’s consolidated net worth was $20.55 billion, which was above the $9.00 billion required under the Credit Facility. The consolidated net worth is defined in the Credit Facility as the consolidated shareholders’ equity including preferred stock but excluding the pension and other postretirement benefits balance within Accumulated other comprehensive income (loss).

At September 30, 2023, Cat Financial’s covenant interest coverage ratio was 1.78 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 September 30, 2023, Cat Financial’s six-month covenant leverage ratio was 6.80 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.

In the event Caterpillar or Cat Financial does not meet one or more of their respective financial covenants under the Credit Facility in the future (and are unable to obtain a consent or waiver), the syndicate of banks may terminate the commitments allocated to the party that does not meet its covenants. 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 September 30, 2023, there were no borrowings under the Credit Facility.

Our total credit commitments and available credit as of September 30, 2023 were:

			September 30, 2023
(Millions of dollars)			Consolidated						Machinery, Energy & Transportation						Financial Products
Credit lines available:
Global credit facilities			$	10,500					$	2,750					$	7,750
Other external			4,076						571						3,505
Total credit lines available			14,576						3,321						11,255
Less: Commercial paper outstanding			(3,738)						—						(3,738)
Less: Utilized credit			(1,036)						—						(1,036)
Available credit			$	9,802					$	3,321					$	6,481

The other external consolidated credit lines with banks as of September 30, 2023 totaled $4.08 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. Caterpillar or Cat Financial may guarantee subsidiary borrowings under these lines.

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We receive debt ratings from the major credit rating agencies. Fitch maintains a "high-A" debt rating, while Moody’s and S&P maintain a “mid-A” debt rating. A downgrade of our credit ratings by any of the major credit rating agencies could result in increased borrowing costs and could make access to credit in certain markets more difficult. In the event economic conditions deteriorate such that access to debt markets becomes unavailable, ME&T’s operations would rely on cash flow from operations, use of existing cash balances, borrowings from Cat Financial and access to our committed credit facilities. Our Financial Products’ operations would rely on cash flow from its existing portfolio, existing cash balances, access to our committed credit facilities and other credit line facilities of Cat Financial, and potential borrowings from Caterpillar. In addition, we maintain a support agreement with Cat Financial, which requires Caterpillar to remain the sole owner of Cat Financial and may, under certain circumstances, require Caterpillar to make payments to Cat Financial should Cat Financial fail to maintain certain financial ratios.

We facilitate voluntary supplier finance programs (the “Programs”) through participating financial institutions. We account for the payments made under the Programs, the same as our other accounts payable, as a reduction to our cash flows from operations. We do not believe that changes in the availability of the Programs will have a significant impact on our liquidity. Additional information related to the Programs is included in Note 2 - "New accounting guidance" of Part I, Item 1 "Financial Statements".

Machinery, Energy & Transportation

Net cash provided by operating activities was $7.96 billion in the first nine months of 2023, compared with net cash provided of $3.19 billion for the same period in 2022. The increase was primarily due to higher profit before taxes, adjusted for non-cash items, including the loss on divestiture of the company's Longwall business and lower working capital requirements. Within working capital, changes in inventories and accrued expenses favorably impacted cash flow but were partially offset by changes in accounts payable, customer advances and accounts receivable.

Net cash used for investing activities in the first nine months of 2023 was $3.89 billion, compared with net cash used of $881 million in the first nine months of 2022. The increase was due to higher investment in securities, net of proceeds from sale of securities, and an increase in capital spend.

Net cash used for financing activities during the first nine months of 2023 was $4.18 billion, compared with net cash used of $5.29 billion in the same period of 2022. The change was primarily due to lower share repurchases in the first nine months of 2023 along with favorable impacts from borrowing activity, partially offset by increased dividends paid.

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. Our top priority is to maintain a strong financial position in support of a mid-A rating. Next, we intend to fund operational requirements and commitments. Then, we intend to fund priorities that profitably grow the company and return capital to shareholders through dividend growth and share repurchases. Additional information on cash deployment is as follows:

Strong financial position – Our top priority is to maintain a strong financial position in support of a mid-A rating. 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 $1.11 billion during the first nine months of 2023, compared to $880 million for the same period in 2022. We expect ME&T’s capital expenditures in 2023 to be about $1.50 billion. We made $320 million of contributions to our pension and other postretirement benefit plans during the first nine months of 2023. We currently anticipate full-year 2023 contributions of approximately $372 million. In comparison, we made $299 million of contributions to our pension and other postretirement benefit plans during the first nine months of 2022.

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.

As part of our capital allocation strategy, ME&T free cash flow is a liquidity measure we use to determine the cash generated and available for financing activities including debt repayments, dividends and share repurchases. We define ME&T free cash flow as cash from ME&T operations less capital expenditures, excluding discretionary pension and other postretirement benefit plan contributions and cash payments related to settlements with the U.S. Internal Revenue Service. A goal of our capital allocation strategy is to return substantially all ME&T free cash flow to shareholders over time in the form of dividends and share repurchases, while maintaining a mid-A rating.

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Our share repurchase plans are subject to the company’s cash deployment priorities and are evaluated on an ongoing basis considering the financial condition of the company, corporate cash flow, the company’s liquidity needs, the economic outlook, and the health and stability of global credit markets. The timing and amount of future repurchases may vary depending on market conditions and investing priorities. 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 nine months of 2023, we repurchased $2.21 billion of Caterpillar common stock, with $10.59 billion remaining under the 2022 Authorization as of September 30, 2023. Our basic shares outstanding as of September 30, 2023 were approximately 509 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 October 2023, 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 $1.90 billion in the first nine months of 2023.

Financial Products

Net cash provided by operating activities was $905 million in the first nine months of 2023, compared with $1.25 billion for the same period in 2022. Net cash used for investing activities was $1.25 billion for the first nine months of 2023, compared with net cash used of $228 million for the same period in 2022. The change was primarily due to portfolio related activity. Net cash provided by financing activities was $122 million in the first nine months of 2023 compared with net cash used of $872 million for the same period in 2022. The change was primarily due to higher portfolio funding requirements.

RECENT ACCOUNTING PRONOUNCEMENTS

For a discussion of recent accounting pronouncements, see Part I, Item 1. Note 2 - “New accounting guidance”.

CRITICAL ACCOUNTING ESTIMATES

For a discussion of the company’s critical accounting estimates, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form 10-K. There have been no significant changes to our critical accounting estimates since our 2022 Annual Report on Form 10-K.

OTHER MATTERS

Information related to legal proceedings appears in Note 14—Environmental and Legal Matters of Part II, Item 8 “Financial Statements and Supplementary Data.”

Retirement Benefits

We recognize mark-to-market gains and losses immediately through earnings upon the remeasurement of our pension and OPEB plans. Mark-to-market gains and losses represent the effects of actual results differing from our assumptions and the effects of changing assumptions. We will record the annual mark-to-market adjustment as of the measurement date, December 31, 2023. It is difficult to predict the December 31, 2023 adjustment amount, as it will be dependent primarily on changes in discount rates during 2023, and actual returns on plan assets differing from our expected returns for 2023.

Order Backlog

At the end of the third quarter of 2023, the dollar amount of backlog believed to be firm was approximately $28.1 billion, about $2.6 billion lower than the second quarter of 2023. The order backlog decreased across the three primary segments. Of the total backlog at September 30, 2023, approximately $6.1 billion was not expected to be filled in the following twelve months.

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NON-GAAP FINANCIAL MEASURES

We provide the following definitions for the non-GAAP financial measures used in this report. These non-GAAP financial measures have no standardized meaning prescribed by U.S. GAAP and therefore are unlikely to be comparable to the calculation of similar measures for other companies. 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 costs related to the divestiture of the company's Longwall business, (ii) other restructuring costs and (iii) certain deferred tax valuation allowance adjustments. 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. In addition, we provide a calculation of ME&T free cash flow as we believe it is an important measure for investors to determine the cash generation available for financing activities including debt repayments, dividends and share repurchases.

Reconciliations of adjusted results to the most directly comparable GAAP measures are as follows:

(Dollars in millions except per share data)						Operating Profit						Operating Profit Margin						Profit Before Taxes						Provision (Benefit) for Income Taxes						Effective Tax Rate						Profit						Profit per Share
Three Months Ended September 30, 2023 - U.S. GAAP						$	3,449					20.5		%				$	3,515					$	734					20.9		%				$	2,794					$	5.45
Restructuring costs						46						0.3		%				46						10						20.0		%				36						0.07
Three Months Ended September 30, 2023 - Adjusted						$	3,495					20.8		%				$	3,561					$	744					20.9		%				$	2,830					$	5.52
Three Months Ended September 30, 2022 - U.S. GAAP						$	2,425					16.2		%				$	2,558					$	527					20.6		%				$	2,041					$	3.87
Restructuring costs						49						0.3		%				49						9						18.4		%				40						0.08
Three Months Ended September 30, 2022 - Adjusted						$	2,474					16.5		%				$	2,607					$	536					20.6		%				$	2,081					$	3.95
Nine Months Ended September 30, 2023- U.S. GAAP						$	9,832					19.7		%				$	9,801					$	2,194					22.4		%				$	7,659					$	14.85
Restructuring costs - Longwall divestiture						586						1.2		%				586						—						—		%				586						1.13
Other restructuring costs						102						0.1		%				102						21						20.0		%				81						0.17
Deferred tax valuation allowance adjustments						—						—		%				—						88						—		%				(88)						(0.17)
Nine Months Ended September 30, 2023 - Adjusted						$	10,520					21.0		%				$	10,489					$	2,303					22.0		%				$	8,238					$	15.98
Nine Months Ended September 30, 2022 - U.S. GAAP						$	6,224					14.5		%				$	6,653					$	1,423					21.4		%				$	5,251					$	9.85
Restructuring costs						90						0.2		%				90						13						14.0		%				77						0.14
Nine Months Ended September 30, 2022 - Adjusted						$	6,314					14.7		%				$	6,743					$	1,436					21.3		%				$	5,328					$	9.99

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)						Nine Months Ended September 30,
												2023						2022
ME&T net cash provided by operating activities 1												$	7,955					$	3,191
ME&T capital expenditures												(1,108)						(880)
Cash payments related to settlements with the U.S. Internal Revenue Service												—						467
ME&T free cash flow												$	6,847					$	2,778
1 See reconciliation of ME&T net cash provided by operating activities to consolidated net cash provided by operating activities on pages 73 - 74.

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Supplemental Consolidating Data

We are providing supplemental consolidating data for the purpose of additional analysis. The data has been grouped as follows:

Consolidated – Caterpillar Inc. and its subsidiaries.

Machinery, Energy & Transportation – We define ME&T as it is presented in the supplemental data as Caterpillar Inc. and its subsidiaries, excluding Financial Products. ME&T’s information relates to the design, manufacturing and marketing of our products.

Financial Products – We define Financial Products as it is presented in the supplemental data as our finance and insurance subsidiaries, primarily Caterpillar Financial Services Corporation (Cat Financial) and Caterpillar Insurance Holdings Inc. (Insurance Services). Financial Products’ information relates to the financing to customers and dealers for the purchase and lease of Caterpillar and other equipment.

Consolidating Adjustments – Eliminations of transactions between ME&T and Financial Products.

The nature of the ME&T and Financial Products businesses is different, especially with regard to the financial position and cash flow items. Caterpillar management utilizes this presentation internally to highlight these differences. We believe this presentation will assist readers in understanding our business.

Pages 67 to 74 reconcile ME&T and Financial Products to Caterpillar Inc. consolidated financial information. Certain amounts for prior periods have been reclassified to conform to the current period presentation.

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Caterpillar Inc.

Supplemental Data for Results of Operations

For the Three Months Ended September 30, 2023

(Unaudited)

(Millions of dollars)

									Supplemental Consolidating Data
			Consolidated						Machinery, Energy & Transportation						Financial Products						Consolidating Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation			$	15,988					$	15,988					$	—					$	—
Revenues of Financial Products			822						—						1,017						(195)			1
Total sales and revenues			16,810						15,988						1,017						(195)
Operating costs:
Cost of goods sold			10,583						10,586						—						(3)			2
Selling, general and administrative expenses			1,624						1,430						206						(12)			2
Research and development expenses			554						554						—						—
Interest expense of Financial Products			280						—						280						—
Other operating (income) expenses			320						25						310						(15)			2
Total operating costs			13,361						12,595						796						(30)
Operating profit			3,449						3,393						221						(165)
Interest expense excluding Financial Products			129						129						—						—
Other income (expense)			195						42						(12)						165			3
Consolidated profit before taxes			3,515						3,306						209						—
Provision (benefit) for income taxes			734						654						80						—
Profit of consolidated companies			2,781						2,652						129						—
Equity in profit (loss) of unconsolidated affiliated companies			12						12						—						—
Profit of consolidated and affiliated companies			2,793						2,664						129						—
Less: Profit (loss) attributable to noncontrolling interests			(1)						(1)						—						—
Profit 4			$	2,794					$	2,665					$	129					$	—

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

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

3Elimination 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.

4Profit attributable to common shareholders.

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Caterpillar Inc.

Supplemental Data for Results of Operations

For the Nine Months Ended September 30, 2023

(Unaudited)

(Millions of dollars)

									Supplemental Consolidating Data
			Consolidated						Machinery, Energy & Transportation						Financial Products						Consolidating Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation			$	47,632					$	47,632					$	—					$	—
Revenues of Financial Products			2,358						—						2,907						(549)			1
Total sales and revenues			49,990						47,632						2,907						(549)
Operating costs:
Cost of goods sold			31,751						31,758						—						(7)			2
Selling, general and administrative expenses			4,615						4,139						507						(31)			2
Research and development expenses			1,554						1,554						—						—
Interest expense of Financial Products			742						—						742						—
Other operating (income) expenses			1,496						624						923						(51)			2
Total operating costs			40,158						38,075						2,172						(89)
Operating profit			9,832						9,557						735						(460)
Interest expense excluding Financial Products			385						385						—						—
Other income (expense)			354						18						(49)						385			3
Consolidated profit before taxes			9,801						9,190						686						(75)
Provision (benefit) for income taxes			2,194						1,993						201						—
Profit of consolidated companies			7,607						7,197						485						(75)
Equity in profit (loss) of unconsolidated affiliated companies			52						55						—						(3)			4
Profit of consolidated and affiliated companies			7,659						7,252						485						(78)
Less: Profit (loss) attributable to noncontrolling interests			—						(2)						5						(3)			5
Profit 6			$	7,659					$	7,254					$	480					$	(75)

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

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

3Elimination 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.

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

5Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries.

6Profit attributable to common shareholders.

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Caterpillar Inc.

Supplemental Data for Results of Operations

For the Three Months Ended September 30, 2022

(Unaudited)

(Millions of dollars)

									Supplemental Consolidating Data
			Consolidated						Machinery, Energy & Transportation						Financial Products						Consolidating Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation			$	14,278					$	14,278					$	—					$	—
Revenues of Financial Products			716						—						852						(136)			1
Total sales and revenues			14,994						14,278						852						(136)
Operating costs:
Cost of goods sold			10,202						10,203						—						(1)			2
Selling, general and administrative expenses			1,401						1,271						136						(6)			2
Research and development expenses			476						476						—						—
Interest expense of Financial Products			151						—						151						—
Other operating (income) expenses			339						43						315						(19)			2
Total operating costs			12,569						11,993						602						(26)
Operating profit			2,425						2,285						250						(110)
Interest expense excluding Financial Products			109						110						—						(1)			3
Other income (expense)			242						160						(27)						109			4
Consolidated profit before taxes			2,558						2,335						223						—
Provision (benefit) for income taxes			527						464						63						—
Profit of consolidated companies			2,031						1,871						160						—
Equity in profit (loss) of unconsolidated affiliated companies			9						11						—						(2)			5
Profit of consolidated and affiliated companies			2,040						1,882						160						(2)
Less: Profit (loss) attributable to noncontrolling interests			(1)						(1)						2						(2)			6
Profit 7			$	2,041					$	1,883					$	158					$	—

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

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

3Elimination of interest expense recorded between Financial Products and ME&T.

4Elimination 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.

5Elimination of equity profit (loss) earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries.

6Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries.

7Profit attributable to common shareholders.

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Caterpillar Inc.

Supplemental Data for Results of Operations

For the Nine Months Ended September 30, 2022

(Unaudited)

(Millions of dollars)

									Supplemental Consolidating Data
			Consolidated						Machinery, Energy & Transportation						Financial Products						Consolidating Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation			$	40,703					$	40,703					$	—					$	—
Revenues of Financial Products			2,127						—						2,493						(366)			1
Total sales and revenues			42,830						40,703						2,493						(366)
Operating costs:
Cost of goods sold			29,736						29,741						—						(5)			2
Selling, general and administrative expenses			4,172						3,714						475						(17)			2
Research and development expenses			1,413						1,413						—						—
Interest expense of Financial Products			377						—						377						—
Other operating (income) expenses			908						31						936						(59)			2
Total operating costs			36,606						34,899						1,788						(81)
Operating profit			6,224						5,804						705						(285)
Interest expense excluding Financial Products			326						327						—						(1)			3
Other income (expense)			755						497						(26)						284			4
Consolidated profit before taxes			6,653						5,974						679						—
Provision (benefit) for income taxes			1,423						1,250						173						—
Profit of consolidated companies			5,230						4,724						506						—
Equity in profit (loss) of unconsolidated affiliated companies			20						26						—						(6)			5
Profit of consolidated and affiliated companies			5,250						4,750						506						(6)
Less: Profit (loss) attributable to noncontrolling interests			(1)						(1)						6						(6)			6
Profit 7			$	5,251					$	4,751					$	500					$	—

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

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

3Elimination of interest expense recorded between Financial Products and ME&T.

4Elimination 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.

5Elimination of equity profit (loss) earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries.

6Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries.

7Profit attributable to common shareholders.

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Caterpillar Inc.

Supplemental Data for Financial Position

At September 30, 2023

(Unaudited)

(Millions of dollars)

									Supplemental Consolidating Data
			Consolidated						Machinery, Energy & Transportation						Financial Products						Consolidating Adjustments
Assets
Current assets:
Cash and cash equivalents			$	6,545					$	5,874					$	671					$	—
Receivables – trade and other			9,134						3,550						602						4,982			1,2
Receivables – finance			9,608						—						14,782						(5,174)			2
Prepaid expenses and other current assets			5,138						4,957						332						(151)			3
Inventories			17,580						17,580						—						—
Total current assets			48,005						31,961						16,387						(343)
Property, plant and equipment – net			12,287						8,243						4,044						—
Long-term receivables – trade and other			1,110						497						119						494			1,2
Long-term receivables – finance			11,907						—						12,441						(534)			2
Noncurrent deferred and refundable income taxes			2,719						3,265						118						(664)			4
Intangible assets			604						604						—						—
Goodwill			5,268						5,268						—						—
Other assets			4,891						3,936						1,998						(1,043)			5
Total assets			$	86,791					$	53,774					$	35,107					$	(2,090)
Liabilities
Current liabilities:
Short-term borrowings			$	4,218					$	—					$	4,218					$	—
Accounts payable			7,827						7,734						297						(204)			6,7
Accrued expenses			4,669						4,218						451						—
Accrued wages, salaries and employee benefits			2,300						2,252						48						—
Customer advances			2,333						2,320						1						12			7
Other current liabilities			3,115						2,515						775						(175)			4,8
Long-term debt due within one year			8,662						1,043						7,619						—
Total current liabilities			33,124						20,082						13,409						(367)
Long-term debt due after one year			24,259						8,510						15,789						(40)			9
Liability for postemployment benefits			4,060						4,060						—						—
Other liabilities			4,841						3,895						1,659						(713)			4
Total liabilities			66,284						36,547						30,857						(1,120)
Commitments and contingencies
Shareholders’ equity
Common stock			6,698						6,698						905						(905)			10
Treasury stock			(33,865)						(33,865)						—						—
Profit employed in the business			49,888						45,352						4,526						10			10
Accumulated other comprehensive income (loss)			(2,232)						(978)						(1,254)						—
Noncontrolling interests			18						20						73						(75)			10
Total shareholders’ equity			20,507						17,227						4,250						(970)
Total liabilities and shareholders’ equity			$	86,791					$	53,774					$	35,107					$	(2,090)

1 Elimination of receivables between ME&T and Financial Products.

2 Reclassification of ME&T’s trade receivables purchased by Financial Products and Financial Products’ wholesale inventory receivables.

3 Elimination of ME&T’s insurance premiums that are prepaid to Financial Products.

4 Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction.

5 Elimination of other intercompany assets between ME&T and Financial Products.

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

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

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

9 Elimination of debt between ME&T and Financial Products.

10 Eliminations associated with ME&T’s investments in Financial Products’ subsidiaries.

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Caterpillar Inc.

Supplemental Data for Financial Position

At December 31, 2022

(Unaudited)

(Millions of dollars)

									Supplemental Consolidating Data
			Consolidated						Machinery, Energy & Transportation						Financial Products						Consolidating Adjustments
Assets
Current assets:
Cash and cash equivalents			$	7,004					$	6,042					$	962					$	—
Receivables – trade and other			8,856						3,710						519						4,627			1,2
Receivables – finance			9,013						—						13,902						(4,889)			2
Prepaid expenses and other current assets			2,642						2,488						290						(136)			3
Inventories			16,270						16,270						—						—
Total current assets			43,785						28,510						15,673						(398)
Property, plant and equipment – net			12,028						8,186						3,842						—
Long-term receivables – trade and other			1,265						418						339						508			1,2
Long-term receivables – finance			12,013						—						12,552						(539)			2
Noncurrent deferred and refundable income taxes			2,213						2,755						115						(657)			4
Intangible assets			758						758						—						—
Goodwill			5,288						5,288						—						—
Other assets			4,593						3,882						1,892						(1,181)			5
Total assets			$	81,943					$	49,797					$	34,413					$	(2,267)
Liabilities
Current liabilities:
Short-term borrowings			$	5,957					$	3					$	5,954					$	—
Accounts payable			8,689						8,657						294						(262)			6
Accrued expenses			4,080						3,687						393						—
Accrued wages, salaries and employee benefits			2,313						2,264						49						—
Customer advances			1,860						1,860						—						—
Dividends payable			620						620						—						—
Other current liabilities			2,690						2,215						635						(160)			4,7
Long-term debt due within one year			5,322						120						5,202						—
Total current liabilities			31,531						19,426						12,527						(422)
Long-term debt due after one year			25,714						9,529						16,216						(31)			8
Liability for postemployment benefits			4,203						4,203						—						—
Other liabilities			4,604						3,677						1,638						(711)			4
Total liabilities			66,052						36,835						30,381						(1,164)
Commitments and contingencies
Shareholders’ equity
Common stock			6,560						6,560						905						(905)			9
Treasury stock			(31,748)						(31,748)						—						—
Profit employed in the business			43,514						39,435						4,068						11			9
Accumulated other comprehensive income (loss)			(2,457)						(1,310)						(1,147)						—
Noncontrolling interests			22						25						206						(209)			9
Total shareholders’ equity			15,891						12,962						4,032						(1,103)
Total liabilities and shareholders’ equity			$	81,943					$	49,797					$	34,413					$	(2,267)

1 Elimination of receivables between ME&T and Financial Products.

2 Reclassification of ME&T’s trade receivables purchased by Financial Products and Financial Products’ wholesale inventory receivables.

3 Elimination of ME&T’s insurance premiums that are prepaid to Financial Products.

4 Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction.

5 Elimination of other intercompany assets between ME&T and Financial Products.

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

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

8 Elimination of debt between ME&T and Financial Products.

9 Eliminations associated with ME&T’s investments in Financial Products’ subsidiaries.

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Caterpillar Inc.

Supplemental Data for Cash Flow

For the Nine Months Ended September 30, 2023

(Unaudited)

(Millions of dollars)

									Supplemental Consolidating Data
			Consolidated						Machinery, Energy & Transportation						Financial Products						Consolidating Adjustments
Cash flow from operating activities:
Profit of consolidated and affiliated companies			$	7,659					$	7,252					$	485					$	(78)		1,5
Adjustments for non-cash items:
Depreciation and amortization			1,599						1,015						584						—
Provision (benefit) for deferred income taxes			(448)						(456)						8						—
Loss on divestiture			572						572						—						—
Other			205						309						(463)						359			2
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables – trade and other			(319)						(46)						70						(343)			2,3
Inventories			(1,424)						(1,420)						—						(4)			2
Accounts payable			(532)						(628)						26						70			2
Accrued expenses			588						557						31						—
Accrued wages, salaries and employee benefits			—						1						(1)						—
Customer advances			516						515						1						—
Other assets – net			128						107						17						4			2
Other liabilities – net			338						177						147						14			2
Net cash provided by (used for) operating activities			8,882						7,955						905						22
Cash flow from investing activities:
Capital expenditures – excluding equipment leased to others			(1,061)						(1,088)						(16)						43			2
Expenditures for equipment leased to others			(1,177)						(20)						(1,165)						8			2
Proceeds from disposals of leased assets and property, plant and equipment			563						46						564						(47)			2
Additions to finance receivables			(11,082)						—						(12,493)						1,411			3
Collections of finance receivables			10,391						—						11,554						(1,163)			3
Net intercompany purchased receivables			—						—						429						(429)			3
Proceeds from sale of finance receivables			40						—						40						—
Net intercompany borrowings			—						—						7						(7)			4
Investments and acquisitions (net of cash acquired)			(67)						(67)						—						—
Proceeds from sale of businesses and investments (net of cash sold)			(14)						(14)						—						—
Proceeds from sale of securities			747						553						194						—
Investments in securities			(3,689)						(3,340)						(349)						—
Other – net			32						43						(11)						—
Net cash provided by (used for) investing activities			(5,317)						(3,887)						(1,246)						(184)
Cash flow from financing activities:
Dividends paid			(1,901)						(1,901)						(155)						155			5
Common stock issued, including treasury shares reissued			36						36						—						—
Common shares repurchased			(2,209)						(2,209)						—						—
Net intercompany borrowings			—						(7)						—						7			4
Proceeds from debt issued (original maturities greater than three months)			6,360						—						6,360						—
Payments on debt (original maturities greater than three months)			(4,459)						(99)						(4,360)						—
Short-term borrowings – net (original maturities three months or less)			(1,726)						(3)						(1,723)						—
Net cash provided by (used for) financing activities			(3,899)						(4,183)						122						162
Effect of exchange rate changes on cash			(119)						(55)						(64)						—
Increase (decrease) in cash, cash equivalents and restricted cash			(453)						(170)						(283)						—
Cash, cash equivalents and restricted cash at beginning of period			7,013						6,049						964						—
Cash, cash equivalents and restricted cash at end of period			$	6,560					$	5,879					$	681					$	—

1 Elimination of equity profit earned from Financial Products' subsidiaries partially owned by ME&T subsidiaries.

2 Elimination of non-cash adjustments and changes in assets and liabilities related to consolidated reporting.

3 Reclassification of Financial Products’ cash flow activity from investing to operating for receivables that arose from the sale of inventory.

4 Elimination of net proceeds and payments to/from ME&T and Financial Products.

5 Elimination of dividend activity between Financial Products and ME&T.

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Caterpillar Inc.

Supplemental Data for Cash Flow

For the Nine Months Ended September 30, 2022

(Unaudited)

(Millions of dollars)

									Supplemental Consolidating Data
			Consolidated						Machinery, Energy & Transportation						Financial Products						Consolidating Adjustments
Cash flow from operating activities:
Profit of consolidated and affiliated companies			$	5,250					$	4,750					$	506					$	(6)		1
Adjustments for non-cash items:
Depreciation and amortization			1,661						1,072						589						—
Provision (benefit) for deferred income taxes			(349)						(294)						(55)						—
Other			132						(83)						(123)						338			2
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables – trade and other			365						97						21						247			2,3
Inventories			(3,088)						(3,074)						—						(14)			2
Accounts payable			786						701						74						11			2
Accrued expenses			70						28						42						—
Accrued wages, salaries and employee benefits			15						27						(12)						—
Customer advances			751						752						(1)						—
Other assets – net			57						128						(28)						(43)			2
Other liabilities – net			(623)						(913)						239						51			2
Net cash provided by (used for) operating activities			5,027						3,191						1,252						584
Cash flow from investing activities:
Capital expenditures – excluding equipment leased to others			(868)						(860)						(10)						2			2
Expenditures for equipment leased to others			(1,023)						(20)						(1,024)						21			2
Proceeds from disposals of leased assets and property, plant and equipment			666						63						612						(9)			2
Additions to finance receivables			(9,914)						—						(10,584)						670			3
Collections of finance receivables			9,738						—						10,328						(590)			3
Net intercompany purchased receivables			—						—						678						(678)			3
Proceeds from sale of finance receivables			50						—						50						—
Net intercompany borrowings			—						—						5						(5)			4
Investments and acquisitions (net of cash acquired)			(44)						(44)						—						—
Proceeds from sale of businesses and investments (net of cash sold)			1						1						—						—
Proceeds from sale of securities			2,080						1,820						260						—
Investments in securities			(2,399)						(1,925)						(474)						—
Other – net			15						84						(69)						—
Net cash provided by (used for) investing activities			(1,698)						(881)						(228)						(589)
Cash flow from financing activities:
Dividends paid			(1,820)						(1,820)						—						—
Common stock issued, including treasury shares reissued			2						2						—						—
Common shares repurchased			(3,309)						(3,309)						—						—
Net intercompany borrowings			—						(5)						—						5			4
Proceeds from debt issued (original maturities greater than three months)			5,570						—						5,570						—
Payments on debt (original maturities greater than three months)			(5,289)						(20)						(5,269)						—
Short-term borrowings – net (original maturities three months or less)			(1,311)						(138)						(1,173)						—
Other – net			(1)						(1)						—						—
Net cash provided by (used for) financing activities			(6,158)						(5,291)						(872)						5
Effect of exchange rate changes on cash			(79)						(42)						(37)						—
Increase (decrease) in cash, cash equivalents and restricted cash			(2,908)						(3,023)						115						—
Cash, cash equivalents and restricted cash at beginning of period			9,263						8,433						830						—
Cash, cash equivalents and restricted cash at end of period			$	6,355					$	5,410					$	945					$	—

1 Elimination of equity profit earned from Financial Products' subsidiaries partially owned by ME&T subsidiaries.

2 Elimination of non-cash adjustments and changes in assets and liabilities related to consolidated reporting.

3 Reclassification of Financial Products’ cash flow activity from investing to operating for receivables that arose from the sale of inventory.

4 Elimination of net proceeds and payments to/from ME&T and Financial Products.

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Forward-looking Statements

Certain statements in this Form 10-Q relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,” “forecast,” “target,” “guide,” “project,” “intend,” “could,” “should” or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These statements do not guarantee future performance and speak only as of the date they are made, and we do not undertake to update our forward-looking statements.

Caterpillar’s actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including, but not limited to: (i) global and regional economic conditions and economic conditions in the industries we serve; (ii) commodity price changes, material price increases, fluctuations in demand for our products or significant shortages of material; (iii) government monetary or fiscal policies; (iv) political and economic risks, commercial instability and events beyond our control in the countries in which we operate; (v) international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates; (vi) our ability to develop, produce and market quality products that meet our customers’ needs; (vii) the impact of the highly competitive environment in which we operate on our sales and pricing; (viii) information technology security threats and computer crime; (ix) inventory management decisions and sourcing practices of our dealers and our OEM customers; (x) a failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures or divestitures; (xi) union disputes or other employee relations issues; (xii) adverse effects of unexpected events; (xiii) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers; (xiv) failure to maintain our credit ratings and potential resulting increases to our cost of borrowing and adverse effects on our cost of funds, liquidity, competitive position and access to capital markets; (xv) our Financial Products segment’s risks associated with the financial services industry; (xvi) changes in interest rates or market liquidity conditions; (xvii) an increase in delinquencies, repossessions or net losses of Cat Financial’s customers; (xviii) currency fluctuations; (xix) our or Cat Financial’s compliance with financial and other restrictive covenants in debt agreements; (xx) increased pension plan funding obligations; (xxi) alleged or actual violations of trade or anti-corruption laws and regulations; (xxii) additional tax expense or exposure, including the impact of U.S. tax reform; (xxiii) significant legal proceedings, claims, lawsuits or government investigations; (xxiv) new regulations or changes in financial services regulations; (xxv) compliance with environmental laws and regulations; (xxvi) catastrophic events, including global pandemics such as the COVID-19 pandemic; and (xxvii) other factors described in more detail under the section entitled "Part I - Item 1A. Risk Factors" of Caterpillar's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as such factors may be updated from time to time in Caterpillar's periodic filings with the Securities and Exchange Commission.