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 2024 Form 10-K.

Highlights for the second quarter of 2025 include:

• Total sales and revenues for the second quarter of 2025 were $16.569 billion, a decrease of $120 million, or 1 percent, compared with $16.689 billion in the second quarter of 2024. In the three primary segments, sales were higher in Energy & Transportation and lower in Construction Industries and Resource Industries.

• Operating profit margin was 17.3 percent for the second quarter of 2025, compared with 20.9 percent for the second quarter of 2024. Adjusted operating profit margin was 17.6 percent for the second quarter of 2025, compared with 22.4 percent for the second quarter of 2024.

• Second-quarter 2025 profit per share was $4.62, and excluding the items in the table below, adjusted profit per share was $4.72. Second-quarter 2024 profit per share was $5.48, and excluding the items in the table below, adjusted profit per share was $5.99.

• Caterpillar ended the second quarter of 2025 with $5.4 billion of enterprise cash.

Highlights for the six months ended June 30, 2025 include:

• Total sales and revenues were $30.818 billion for the six months ended June 30, 2025, a decrease of $1.670 billion, or 5 percent, compared with $32.488 billion for the six months ended June 30, 2024.

• Operating profit margin was 17.6 percent for the six months ended June 30, 2025, compared with 21.5 percent for the six months ended June 30, 2024. Adjusted operating profit margin was 17.9 percent for the six months ended June 30, 2025, compared with 22.3 percent for the six months ended June 30, 2024.

• Profit per share for the six months ended June 30, 2025, was $8.82, and excluding the items in the table below, adjusted profit per share was $8.97. Profit per share for the six months ended June 30, 2024, was $11.23, and excluding the items in the table below, adjusted profit per share was $11.59.

• Enterprise operating cash flow was $4.4 billion for the six months ended June 30, 2025.

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

			Three Months Ended June 30, 2025									Three Months Ended June 30, 2024									Six Months Ended June 30, 2025									Six Months Ended June 30, 2024
(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			$	2,818		$	4.62					$	3,500		$	5.48					$	5,388		$	8.82					$	7,032		$	11.23
Other restructuring (income) costs			56			0.10						30			0.04						89			0.15						88			0.14
Restructuring (income) costs - divestitures of certain non-U.S. entities			—			—						228			0.47						—			—						164			0.22
Adjusted profit			$	2,874		$	4.72					$	3,758		$	5.99					$	5,477		$	8.97					$	7,284		$	11.59

A detailed reconciliation of GAAP to non-GAAP financial measures is included on pages 67-69.

Overview

Total sales and revenues for the second quarter of 2025 were $16.569 billion, a decrease of $120 million, or 1 percent, compared with $16.689 billion in the second quarter of 2024. The decrease was primarily due to unfavorable price realization of $414 million, partially offset by higher sales volume of $237 million and higher Financial Products' revenues of $46 million. Higher sales volume was mainly driven by higher sales of equipment to end users.

Second-quarter 2025 profit per share was $4.62, compared with $5.48 profit per share in the second quarter of 2024. In the second quarter of 2025 and 2024, profit per share included restructuring costs. Profit for the second quarter of 2025 was $2.179 billion, a decrease of $502 million, or 19 percent, compared with $2.681 billion for the second quarter of 2024. The decrease was mainly due to unfavorable manufacturing costs. Unfavorable manufacturing costs largely reflected the impact of higher tariffs.

Trends and Economic Conditions

Outlook for Key End Markets

We continue to see strong orders across our three primary segments as demand remains resilient supported by infrastructure spending and growing energy needs. As a result, the backlog increased by about $2.5 billion with increases across all three primary segments.

In Construction Industries, we are encouraged by another quarter of higher sales of equipment to end users, strong order rates across many of our regions, and backlog growth. Customers continue to be responsive to the attractive rates we are offering through Cat Financial. As a result, we anticipate growth in sales of equipment to end users in 2025 despite softness in the global industry. In North America, overall construction spending remains at healthy levels and infrastructure projects funded by the Infrastructure Investment and Jobs Act (IIJA) continue to be awarded. We now expect growth for sales of equipment to end users in North America in 2025. Dealer rental revenues are also expected to grow and dealer rental fleet loading is expected to increase in the second half of 2025. In Asia Pacific, we anticipate growth in sales of equipment to end users in 2025. China is showing positive momentum, and we expect growth in the above 10-ton excavator industry, but from a very low level of activity. In Asia Pacific, outside of China, we expect economic conditions to be soft. In EAME, we expect moderate growth in sales of equipment to end users in 2025, driven by healthy construction activity in Africa and the Middle East and improving economic conditions in Europe. Despite weaker construction activity in Latin America, we expect growth in sales of equipment to end users in 2025.

In Resource Industries, we currently anticipate lower sales of equipment to end users for 2025 compared to 2024, as customers continue to display capital discipline. However, we see positive momentum with strong order rates and backlog growth, particularly for large mining and articulated trucks. Although most key commodities remain above investment thresholds, declining coal prices have caused an increase in the number of parked trucks. As a result, we expect slightly lower rebuild activity throughout the second half of 2025. Overall, customer product utilization remains high, and the age of the fleet remains elevated. We also continue to see growing demand and customer acceptance of our autonomous solutions. We believe the evolving energy landscape will support increased commodity demand over time providing further opportunities for long-term profitable growth.

In Energy & Transportation, the backlog growth was driven by robust order activity in Power Generation, Oil and Gas, and Transportation. For Power Generation, we expect growth in 2025 as demand remains strong for both prime and backup power applications, driven by increasing energy demands to support data center growth related to cloud computing and generative artificial intelligence (AI). In Oil and Gas, we expect moderate growth in 2025. For Oil and Gas reciprocating engines and services, we continue to expect softness in well servicing due to ongoing capital discipline by our customers, industry consolidation and efficiency improvements in our customers’ operations. Also within Oil and Gas, we do see positive momentum in demand for reciprocating engines used in gas compression applications. For turbines and turbine-related services used in Oil and Gas applications, backlog remains strong, and we see healthy order and inquiry activity. Demand for products in Industrial applications is expected to improve from previous low levels. Transportation is expected to remain stable.

Full-Year 2025 Company Trends and Expectations

We are optimistic about our sales and revenues expectations. Demand signals have remained healthy, including backlog growth across our three primary segments.

For 2025, we expect slightly higher sales and revenues as compared to 2024, with a stronger second half of 2025 than is typical. Services revenues are expected to be about flat for 2025 as compared to 2024.

The environment continues to be dynamic. The incremental tariffs announced in 2025 and expected to be in place on August 7 will be a headwind to profitability during the remainder of the year. While we have taken initial mitigating actions to reduce the impact, tariff and trade negotiations continue to be fluid. We will remain flexible, and we intend to implement longer-term actions once there is sufficient certainty. We are considering all options to further reduce the impact from incremental tariffs going forward.

Based on the incremental tariffs announced in 2025 and expected to be in place on August 7, we expect the incremental tariff impact for 2025 to be around $1.3 billion to $1.5 billion, net of some mitigating actions and cost controls. This assumes higher net incremental tariff impacts in both the third and fourth quarters compared to the second-quarter level. Due to the timing of recent rate changes, the impact is likely to be larger in the fourth quarter of 2025 as compared to the third quarter of 2025.

In 2025, we expect restructuring costs of approximately $300 to $350 million and capital expenditures of around $2.5 billion. We are evaluating the impact from recently enacted U.S. legislation and do not expect a material impact on the estimated annual effective tax rate of 23.0 percent in 2025.

Second-Half 2025 Company Trends and Expectations

We anticipate higher machine sales volume, including growth in sales of equipment to end users, in the second half of 2025 as compared to the second half of 2024. We also continue to expect machine dealer inventory will be about flat for the full-year 2025 as compared to 2024, which implies an increase in the second half of 2025 as compared to a decrease in the second half of 2024. In Energy & Transportation, we expect higher sales in the second half of 2025 compared to the second half of 2024.

We expect unfavorable price realization in the second half of 2025 as compared to the second half of 2024, although we expect it to be less unfavorable than the first half of 2025 as compared to the first half of 2024.

Third-Quarter 2025 Company Trends and Expectations

In the third quarter of 2025 as compared to the third quarter of 2024, we expect moderately higher sales and revenues, primarily driven by higher sales volume across all three primary segments. In Construction Industries, we expect higher sales in the third quarter of 2025 as compared to the third quarter of 2024, primarily driven by higher sales volume, partially offset by unfavorable price realization. We expect higher sales volume to be mainly driven by higher sales of equipment to end users. Though the year-over-year price comparison begins to ease in the third quarter of 2025, we expect our sales merchandising programs will continue to support higher sales of equipment to end users. The unfavorable impact of price realization in the third quarter of 2025 as compared to the third quarter of 2024 is expected to be about half of the impact in the second quarter of 2025 when compared to the second quarter of 2024. In Resource Industries, in the third quarter of 2025, we expect slightly higher sales as compared to the third quarter of 2024, primarily due to higher sales volume, partially offset by unfavorable price realization. The unfavorable impact of price realization in the third quarter of 2025 as compared to the third quarter of 2024 is expected to be similar to the impact in the second quarter of 2025 as compared to the second quarter of 2024. In Energy & Transportation, in the third quarter of 2025, we anticipate higher sales as compared to the third quarter of 2024, primarily driven by continued strength in Power Generation. We also expect higher sales in Oil and Gas, driven by turbines and turbine-related services. Price realization is expected to remain favorable.

In the third quarter of 2025 as compared to the third quarter of 2024, excluding the net impact from incremental tariffs, we expect the profit impact of higher sales volume to be about offset by unfavorable price realization and higher selling, general and administrative (SG&A) and research and development (R&D) expenses. In the third quarter of 2025, we expect a net incremental tariff impact of about $400 to $500 million.

In the third quarter of 2025 as compared to the third quarter of 2024, in Construction Industries, excluding the net impact from incremental tariffs, we expect the profit impact of higher sales volume will be about offset by unfavorable price realization. We expect about 55 percent of the net incremental tariff impact will be incurred in Construction Industries. In Resource Industries, excluding the net impact from incremental tariffs, we expect unfavorable price realization and higher SG&A/R&D expenses. We expect about 20 percent of the net incremental tariff impact will be incurred in Resource Industries. In Energy & Transportation, excluding the net impact from incremental tariffs, we expect profit impact of higher sales volume and favorable price realization, partially offset by higher manufacturing costs. We expect about 25 percent of the net incremental tariff impact will be incurred in Energy & Transportation.

Global Business Conditions

We continue to monitor a variety of external factors around the world, such as supply chain disruptions, inflationary cost, labor pressures and the impact of trade policies. Areas of particular focus include transportation, certain components and raw materials. We continue to work to minimize supply chain challenges that may impact our ability to meet 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 2024 Form 10-K.

Notes:

• Glossary of terms is included on pages 61-63; first occurrence of terms shown in bold italics.

• Information on non-GAAP financial measures is included on pages 67-69.

• Certain amounts may not add due to rounding.

Consolidated Results of Operations

THREE MONTHS ENDED JUNE 30, 2025 COMPARED WITH THREE MONTHS ENDED JUNE 30, 2024

CONSOLIDATED SALES AND REVENUES

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the second quarter of 2024 (at left) and the second quarter of 2025 (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 second quarter of 2025 were $16.569 billion, a decrease of $120 million, or 1 percent, compared with $16.689 billion in the second quarter of 2024. The decrease was primarily due to unfavorable price realization of $414 million, partially offset by higher sales volume of $237 million and higher Financial Products' revenues of $46 million. Higher sales volume was mainly driven by higher sales of equipment to end users.

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

North America sales decreased 3 percent primarily due to unfavorable price realization, partially offset by higher sales volume. The increase in sales volume was mainly driven by higher sales of equipment to end users, partially offset by the impact from changes in dealer inventories. Dealer inventory decreased during the second quarter of 2025, compared with an increase during the second quarter of 2024.

Sales decreased 4 percent in Latin America mainly due to lower sales volume. The decrease in sales volume was primarily driven by the impact from changes in dealer inventories. Dealer inventory increased less during the second quarter of 2025 than during the second quarter of 2024.

EAME sales increased 6 percent primarily due to higher sales volume. Higher sales volume was primarily driven by the impact from changes in dealer inventories. Dealer inventory increased during the second quarter of 2025, compared with a decrease during the second quarter of 2024.

Asia/Pacific sales decreased 2 percent due to unfavorable price realization and unfavorable currency impacts primarily related to the Australian dollar, partially offset by higher sales volume. Higher sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased during the second quarter of 2025, compared with a decrease during the second quarter of 2024.

Total dealer inventory increased $100 million during the second quarter of 2025, compared with a decrease of $200 million during the second quarter of 2024. In the second quarter of 2025 and 2024, machine dealer inventory decreased $400 million. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rentals and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers.

Sales and Revenues by Segment
(Millions of dollars)			Second Quarter 2024						Sales Volume						Price Realization						Currency						Inter-Segment / Other						Second Quarter 2025						$ Change						% Change
Construction Industries			$	6,683					$	(83)					$	(459)					$	9					$	40					$	6,190					$	(493)					(7		%)
Resource Industries			3,206						(13)						(94)						(11)						(1)						3,087						(119)						(4		%)
Energy & Transportation			7,337						326						139						15						19						7,836						499						7		%
All Other Segment			108						5						(1)						—						(8)						104						(4)						(4		%)
Corporate Items and Eliminations			(1,494)						2						1						(2)						(50)						(1,543)						(49)
Machinery, Energy & Transportation Sales			15,840						237						(414)						11						—						15,674						(166)						(1		%)
Financial Products Segment			1,004						—						—						—						38						1,042						38						4		%
Corporate Items and Eliminations			(155)						—						—						—						8						(147)						8
Financial Products Revenues			849						—						—						—						46						895						46						5		%
Consolidated Sales and Revenues			$	16,689					$	237					$	(414)					$	11					$	46					$	16,569					$	(120)					(1		%)

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
Second Quarter 2025
Construction Industries			$	3,369					(15		%)				$	540					(20		%)				$	1,185					13		%				$	1,029					6		%				$	6,123					(8		%)				$	67					148		%				$	6,190					(7		%)
Resource Industries			1,111						(8		%)				541						3		%				501						13		%				851						(10		%)				3,004						(4		%)				83						(1		%)				3,087						(4		%)
Energy & Transportation			3,776						14		%				493						12		%				1,386						(2		%)				905						(1		%)				6,560						8		%				1,276						2		%				7,836						7		%
All Other Segment			13						—		%				—						—		%				3						(25		%)				17						42		%				33						14		%				71						(10		%)				104						(4		%)
Corporate Items and Eliminations			(33)												(3)												(3)												(7)												(46)												(1,497)												(1,543)
Machinery, Energy & Transportation Sales			8,236						(3		%)				1,571						(4		%)				3,072						6		%				2,795						(2		%)				15,674						(1		%)				—						—		%				15,674						(1		%)
Financial Products Segment			703						5		%				105						4		%				126						2		%				108						(3		%)				1,042			1			4		%				—						—		%				1,042						4		%
Corporate Items and Eliminations			(88)												(20)												(18)												(21)												(147)												—												(147)
Financial Products Revenues			615						6		%				85						6		%				108						4		%				87						1		%				895						5		%				—						—		%				895						5		%
Consolidated Sales and Revenues			$	8,851					(2		%)				$	1,656					(4		%)				$	3,180					6		%				$	2,882					(2		%)				$	16,569					(1		%)				$	—					—		%				$	16,569					(1		%)
Second Quarter 2024
Construction Industries			$	3,957											$	677											$	1,047											$	975											$	6,656											$	27											$	6,683
Resource Industries			1,206												524												442												950												3,122												84												3,206
Energy & Transportation			3,308												439												1,421												912												6,080												1,257												7,337
All Other Segment			13												—												4												12												29												79												108
Corporate Items and Eliminations			(20)												(1)												(21)												(5)												(47)												(1,447)												(1,494)
Machinery, Energy & Transportation Sales			8,464												1,639												2,893												2,844												15,840												—												15,840
Financial Products Segment			668												101												124												111												1,004			1									—												1,004
Corporate Items and Eliminations			(89)												(21)												(20)												(25)												(155)												—												(155)
Financial Products Revenues			579												80												104												86												849												—												849
Consolidated Sales and Revenues			$	9,043											$	1,719											$	2,997											$	2,930											$	16,689											$	—											$	16,689

1 Includes revenues from Machinery, Energy & Transportation of $172 million and $180 million in the second quarter of 2025 and 2024, respectively.

CONSOLIDATED OPERATING PROFIT

The chart above graphically illustrates reasons for the change in consolidated operating profit between the second quarter of 2024 (at left) and the second quarter of 2025 (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 other operating (income) expenses.

Operating profit for the second quarter of 2025 was $2.860 billion, a decrease of $622 million, or 18 percent, compared with $3.482 billion in the second quarter of 2024. The decrease was mainly due to unfavorable manufacturing costs. Unfavorable manufacturing costs largely reflected the impacts of higher tariffs.

Operating profit margin was 17.3 percent for the second quarter of 2025, compared with 20.9 percent for the second quarter of 2024.

Profit (Loss) by Segment
(Millions of dollars)			Second Quarter 2025						Second Quarter 2024						$ Change						% Change
Construction Industries			$	1,244					$	1,741					$	(497)					(29		%)
Resource Industries			537						718						(181)						(25		%)
Energy & Transportation			1,585						1,525						60						4		%
All Other Segment			(5)						21						(26)						(124		%)
Corporate Items and Eliminations			(566)						(344)						(222)
Machinery, Energy & Transportation			2,795						3,661						(866)						(24		%)
Financial Products Segment			248						227						21						9		%
Corporate Items and Eliminations			(36)						(243)						207
Financial Products			212						(16)						228						1,425		%
Consolidating Adjustments			(147)						(163)						16
Consolidated Operating Profit			$	2,860					$	3,482					$	(622)					(18		%)

Other Pr****ofit/Loss and Tax Items

• Interest expense excluding Financial Products in the second quarter of 2025 was $126 million, compared with $137 million in the second quarter of 2024. The decrease was due to lower average debt outstanding and lower average borrowing rates.

• Other income (expense) in the second quarter of 2025 was income of $84 million, compared with income of $155 million in the second quarter of 2024. The change was primarily driven by unfavorable foreign currency impacts, partially offset by favorable impacts from total return swap contracts.

• The effective tax rate for the second quarter of 2025 was 23.0 percent compared to 23.9 percent for the second quarter of 2024. Excluding discrete items, the second-quarter 2025 estimated annual effective tax rate was 23.0 percent compared with 22.5 percent for the second quarter of 2024. The estimated annual effective tax rate in the second quarter of 2024 excluded the impact of second-quarter losses of $228 million for the divestiture of two non-U.S. entities with no related tax benefit.

Please see a reconciliation of GAAP to non-GAAP financial measures on pages 67-69.

Construction Industries

Construction Industries’ total sales were $6.190 billion in the second quarter of 2025, a decrease of $493 million, or 7 percent, compared with $6.683 billion in the second quarter of 2024. The decrease was primarily due to unfavorable price realization. Sales volume was also lower, primarily driven by the impact from changes in dealer inventories. Dealer inventory decreased during the second quarter of 2025, while remaining about flat during the second quarter of 2024.

• In North America, sales decreased due to unfavorable price realization and lower sales volume. Lower sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased during the second quarter of 2025, compared with an increase during the second quarter of 2024.

• Sales decreased in Latin America primarily due to lower sales volume and unfavorable currency impacts primarily related to the Brazilian real. Lower sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased during the second quarter of 2025, compared with an increase during the second quarter of 2024.

• In EAME, sales increased due to higher sales volume and favorable currency impacts primarily related to the euro, partially offset by unfavorable price realization. Higher sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased during the second quarter of 2025, compared with a decrease during the second quarter of 2024.

• Sales increased in Asia/Pacific due to higher sales volume, partially offset by unfavorable price realization. Higher sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased during the second quarter of 2025, compared with a decrease during the second quarter of 2024.

Construction Industries’ segment profit was $1.244 billion in the second quarter of 2025, a decrease of $497 million, or 29 percent, compared with $1.741 billion in the second quarter of 2024. The decrease was mainly due to unfavorable price realization. In addition, tariffs were also higher.

Construction Industries’ segment profit as a percent of total sales was 20.1 percent in the second quarter of 2025, compared with 26.1 percent in the second quarter of 2024.

Resource Industries

Resource Industries’ total sales were $3.087 billion in the second quarter of 2025, a decrease of $119 million, or 4 percent, compared with $3.206 billion in the second quarter of 2024. The decrease was primarily due to unfavorable price realization.

Resource Industries’ segment profit was $537 million in the second quarter of 2025, a decrease of $181 million, or 25 percent, compared with $718 million in the second quarter of 2024. The decrease was mainly due to unfavorable price realization of $94 million, unfavorable manufacturing costs of $44 million and the profit impact of lower sales volume of $31 million, including an unfavorable mix of products. Unfavorable manufacturing costs largely reflected the impact of higher tariffs.

Resource Industries’ segment profit as a percent of total sales was 17.4 percent in the second quarter of 2025, compared with 22.4 percent in the second quarter of 2024.

Energy & Transportation

Sales by Application
(Millions of dollars)						Second Quarter 2025						Second Quarter 2024						$ Change						% Change
Oil and Gas						$	1,867					$	1,829					$	38					2		%
Power Generation						2,407						1,885						522						28		%
Industrial						1,060						1,045						15						1		%
Transportation						1,226						1,321						(95)						(7		%)
External Sales						6,560						6,080						480						8		%
Inter-segment						1,276						1,257						19						2		%
Total Sales						$	7,836					$	7,337					$	499					7		%

Energy & Transportation’s total sales were $7.836 billion in the second quarter of 2025, an increase of $499 million, or 7 percent, compared with $7.337 billion in the second quarter of 2024. The increase was due to higher sales volume of $326 million and favorable price realization of $139 million.

• Oil and Gas – Sales increased for turbines and turbine-related services. The increase was partially offset by lower sales of reciprocating engines, primarily engines used in gas compression applications.

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

• Industrial – Sales increased in EAME, partially offset by decreased sales in North America and Latin America.

• Transportation – Sales decreased in marine. International locomotive deliveries were also lower.

Energy & Transportation’s segment profit was $1.585 billion in the second quarter of 2025, an increase of $60 million, or 4 percent, compared with $1.525 billion in the second quarter of 2024. The increase was primarily due to favorable price realization of $139 million and the profit impact of higher sales volume of $63 million, partially offset by unfavorable manufacturing costs of $154 million. Unfavorable manufacturing costs largely reflected the impact of higher tariffs.

Energy & Transportation’s segment profit as a percent of total sales was 20.2 percent in the second quarter of 2025, compared with 20.8 percent in the second quarter of 2024.

Financial Products Segment

Financial Products’ segment revenues were $1.042 billion in the second quarter of 2025, an increase of $38 million, or 4 percent, compared with $1.004 billion in the second quarter of 2024. The increase was primarily due to a favorable impact from higher average earning assets of $49 million driven by North America and higher revenues from Insurance Services of $5 million, partially offset by an unfavorable impact from lower average financing rates of $20 million mainly in North America.

Financial Products’ segment profit was $248 million in the second quarter of 2025, an increase of $21 million, or 9 percent, compared with $227 million in the second quarter of 2024. The increase was mainly due to a favorable impact from equity securities of $28 million and a favorable impact from higher average earning assets of $20 million, partially offset by higher provision for credit losses at Cat Financial of $13 million and an unfavorable impact from lower net yield on average earning assets of $10 million.

At the end of the second quarter of 2025, past dues at Cat Financial were 1.62 percent, compared with 1.74 percent at the end of the second quarter of 2024. Write-offs, net of recoveries, were $18 million for both the second quarter of 2025 and the second quarter of 2024. As of June 30, 2025, Cat Financial's allowance for credit losses totaled $290 million, or 0.94 percent of finance receivables, compared with $282 million, or 0.95 percent of finance receivables at March 31, 2025. The allowance for credit losses at year-end 2024 was $267 million, or 0.91 percent of finance receivables.

Corporate Items and Eliminations

Expense for corporate items and eliminations was $602 million in the second quarter of 2025, an increase of $15 million from the second quarter of 2024. Lower restructuring costs, primarily due to the absence of the divestiture of two non-U.S. entities in 2024, and lower corporate costs, were more than offset by increased expenses due to timing differences, an unfavorable change in fair value adjustments related to deferred compensation plans and unfavorable impacts of segment reporting methodology differences.

SIX MONTHS ENDED JUNE 30, 2025 COMPARED WITH SIX MONTHS ENDED JUNE 30, 2024

CONSOLIDATED SALES AND REVENUES

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the six months ended June 30, 2024 (at left) and the six months ended June 30, 2025 (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 $30.818 billion for the six months ended June 30, 2025, a decrease of $1.670 billion, or 5 percent, compared with $32.488 billion for the six months ended June 30, 2024. The decrease was primarily due to lower sales volume of $873 million and unfavorable price realization of $664 million. The decrease in sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased less during the six months ended June 30, 2025, than during the six months ended June 30, 2024.

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

North America sales decreased 7 percent primarily due to lower sales volume and unfavorable price realization. The decrease in sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory was about flat during the six months ended June 30, 2025, compared with an increase during the six months ended June 30, 2024.

Sales decreased 3 percent in Latin America mainly due to unfavorable currency impacts primarily related to the Brazilian real.

EAME sales decreased 3 percent primarily due to unfavorable price realization.

Asia/Pacific sales decreased 7 percent due to lower sales volume, unfavorable price realization and unfavorable currency impacts primarily related to the Australian dollar. The decrease in sales volume was mainly due to lower sales of equipment to end users.

Dealer inventory increased about $200 million during the six months ended June 30, 2025, compared with an increase of about $1.2 billion during the six months ended June 30, 2024. Machine dealer inventory decreased $300 million during the six months ended June 30, 2025, compared with an increase of $700 million during the six months ended June 30, 2024. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rentals and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers.

Sales and Revenues by Segment
(Millions of dollars)			Six Months Ended June 30, 2024						Sales Volume						Price Realization						Currency						Inter-Segment / Other						Six Months Ended June 30, 2025						$ Change						% Change
Construction Industries			$	13,107					$	(903)					$	(814)					$	(89)					$	73					$	11,374					$	(1,733)					(13		%)
Resource Industries			6,399						(192)						(144)						(57)						(35)						5,971						(428)						(7		%)
Energy & Transportation			14,018						151						294						(54)						(5)						14,404						386						3		%
All Other Segment			217						3						(1)						(1)						(23)						195						(22)						(10		%)
Corporate Items and Eliminations			(2,941)						68						1						(10)						(10)						(2,892)						49
Machinery, Energy & Transportation Sales			30,800						(873)						(664)						(211)						—						29,052						(1,748)						(6		%)
Financial Products Segment			1,995						—						—						—						54						2,049						54						3		%
Corporate Items and Eliminations			(307)						—						—						—						24						(283)						24
Financial Products Revenues			1,688						—						—						—						78						1,766						78						5		%
Consolidated Sales and Revenues			$	32,488					$	(873)					$	(664)					$	(211)					$	78					$	30,818					$	(1,670)					(5		%)

Sales and Revenues by Geographic Region

			North America												Latin America												EAME												Asia/Pacific												External Sales and Revenues												Inter-Segment												Total Sales and Revenues
(Millions of dollars)			$						% Chg						$						% Chg						$						% Chg						$						% Chg						$						% Chg						$						% Chg						$						% Chg
Six Months Ended June 30, 2025
Construction Industries			$	6,273					(19		%)				$	1,044					(18		%)				$	2,052					—		%				$	1,898					(4		%)				$	11,267					(14		%)				$	107					215		%				$	11,374					(13		%)
Resource Industries			2,195						(11		%)				1,102						10		%				907						—		%				1,621						(12		%)				5,825						(6		%)				146						(19		%)				5,971						(7		%)
Energy & Transportation			6,918						11		%				863						2		%				2,516						(7		%)				1,661						(5		%)				11,958						3		%				2,446						—		%				14,404						3		%
All Other Segment			30						(3		%)				—						100		%				5						(38		%)				29						16		%				64						2		%				131						(15		%)				195						(10		%)
Corporate Items and Eliminations			(44)												(3)												(5)												(10)												(62)												(2,830)												(2,892)
Machinery, Energy & Transportation Sales			15,372						(7		%)				3,006						(3		%)				5,475						(3		%)				5,199						(7		%)				29,052						(6		%)				—						—		%				29,052						(6		%)
Financial Products Segment			1,385						4		%				204						1		%				248						—		%				212						(3		%)				2,049			1			3		%				—						—		%				2,049						3		%
Corporate Items and Eliminations			(168)												(39)												(37)												(39)												(283)												—												(283)
Financial Products Revenues			1,217						6		%				165						1		%				211						1		%				173						—		%				1,766						5		%				—						—		%				1,766						5		%
Consolidated Sales and Revenues			$	16,589					(6		%)				$	3,171					(3		%)				$	5,686					(3		%)				$	5,372					(6		%)				$	30,818					(5		%)				$	—					—		%				$	30,818					(5		%)
Six Months Ended June 30, 2024
Construction Industries			$	7,790											$	1,272											$	2,043											$	1,968											$	13,073											$	34											$	13,107
Resource Industries			2,470												1,000												907												1,841												6,218												181												6,399
Energy & Transportation			6,259												847												2,715												1,746												11,567												2,451												14,018
All Other Segment			31												(1)												8												25												63												154												217
Corporate Items and Eliminations			(78)												(3)												(32)												(8)												(121)												(2,820)												(2,941)
Machinery, Energy & Transportation Sales			16,472												3,115												5,641												5,572												30,800												—												30,800
Financial Products Segment			1,327												202												247												219												1,995			1									—												1,995
Corporate Items and Eliminations			(183)												(39)												(39)												(46)												(307)												—												(307)
Financial Products Revenues			1,144												163												208												173												1,688												—												1,688
Consolidated Sales and Revenues			$	17,616											$	3,278											$	5,849											$	5,745											$	32,488											$	—											$	32,488

1 Includes revenues from Machinery, Energy & Transportation of $335 million and $357 million in the six months ended June 30, 2025 and 2024, respectively.

CONSOLIDATED OPERATING PROFIT

The chart above graphically illustrates reasons for the change in consolidated operating profit between the six months ended June 30, 2024 (at left) and the six months ended June 30, 2025 (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 six months ended June 30, 2025, was $5.439 billion, a decrease of $1.562 billion, or 22 percent, compared with $7.001 billion for the six months ended June 30, 2024. The decrease was primarily due to unfavorable price realization of $664 million, the profit impact of lower sales volume of $554 million and unfavorable manufacturing costs of $432 million. Unfavorable manufacturing costs largely reflected the impact of higher tariffs.

Operating profit margin was 17.6 percent for the six months ended June 30, 2025, compared with 21.5 percent for the six months ended June 30, 2024.

Profit (Loss) by Segment
(Millions of dollars)			Six Months Ended June 30, 2025						Six Months Ended June 30, 2024						$ Change						% Change
Construction Industries			$	2,268					$	3,505					$	(1,237)					(35		%)
Resource Industries			1,136						1,448						(312)						(22		%)
Energy & Transportation			2,899						2,826						73						3		%
All Other Segment			(26)						45						(71)						(158		%)
Corporate Items and Eliminations			(967)						(759)						(208)
Machinery, Energy & Transportation			5,310						7,065						(1,755)						(25		%)
Financial Products Segment			463						520						(57)						(11		%)
Corporate Items and Eliminations			(50)						(268)						218
Financial Products			413						252						161						64		%
Consolidating Adjustments			(284)						(316)						32
Consolidated Operating Profit			$	5,439					$	7,001					$	(1,562)					(22		%)

Other Profit/Loss and Tax Items

• Interest expense excluding Financial Products for the six months ended June 30, 2025, was $242 million, compared with $280 million for the six months ended June 30, 2024. The decrease was due to lower average debt outstanding and lower average borrowing rates.

• Other income (expense) for the six months ended June 30, 2025, was income of $191 million, compared with income of $311 million for the six months ended June 30, 2024. The change was primarily driven by unfavorable foreign currency impacts.

• The effective tax rate for the six months ended June 30, 2025 was 22.6 percent compared to 21.7 percent for the six months ended June 30, 2024. Excluding the discrete items discussed below, the estimated annual effective tax rate for the six months ended June 30, 2025 was 23.0 percent compared with 22.5 percent for the six months ended June 30, 2024.

A discrete tax benefit of $18 million was recorded in the six months ended June 30, 2025, for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense, compared with $42 million for the six months ended June 30, 2024. In addition, the 2024 estimated annual effective tax rate excluded the impact of year-to-date losses of $164 million for the divestitures of certain non-U.S. entities with a related tax benefit of $54 million.

Please see a reconciliation of GAAP to non-GAAP financial measures on pages 67-69.

Construction Industries

Construction Industries’ total sales were $11.374 billion for the six months ended June 30, 2025, a decrease of $1.733 billion, or 13 percent, compared with $13.107 billion for the six months ended June 30, 2024. The decrease was primarily due to lower sales volume of $903 million and unfavorable price realization of $814 million. Lower sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased during the six months ended June 30, 2025, compared with an increase during the six months ended June 30, 2024.

• In North America, sales decreased due to lower sales volume and unfavorable price realization. Lower sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased during the six months ended June 30, 2025, compared with an increase during the six months ended June 30, 2024.

• Sales decreased in Latin America mainly due to lower sales volume and unfavorable currency impacts primary related to the Brazilian real. Lower sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased during the six months ended June 30, 2025, compared with an increase during the six months ended June 30, 2024.

• In EAME, sales were about flat. Higher sales volume was offset by unfavorable price realization. Higher sales volume was primarily due to higher sales of equipment to end users.

• Sales decreased in Asia/Pacific due to unfavorable price realization and unfavorable currency impacts primarily related to the Australian dollar, partially offset by higher sales volume. Higher sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased during the six months ended June 30, 2025, compared with a decrease during the six months ended June 30, 2024.

Construction Industries’ profit was $2.268 billion for the six months ended June 30, 2025, a decrease of $1.237 billion, or 35 percent, compared with $3.505 billion for the six months ended June 30, 2024. The decrease was mainly due to unfavorable price realization of $814 million and the profit impact of lower sales volume of $320 million.

Construction Industries’ profit as a percent of total sales was 19.9 percent for the six months ended June 30, 2025, compared with 26.7 percent for the six months ended June 30, 2024.

Resource Industries

Resource Industries’ total sales were $5.971 billion for the six months ended June 30, 2025, a decrease of $428 million, or 7 percent, compared with $6.399 billion for the six months ended June 30, 2024. The decrease was primarily due to lower sales volume of $192 million and unfavorable price realization of $144 million. The decrease in sales volume was mainly due to lower sales of equipment to end users.

Resource Industries’ profit was $1.136 billion for the six months ended June 30, 2025, a decrease of $312 million, or 22 percent, compared with $1.448 billion for the six months ended June 30, 2024. The decrease was mainly due to unfavorable price realization of $144 million and the profit impact of lower sales volume of $142 million.

Resource Industries’ profit as a percent of total sales was 19.0 percent for the six months ended June 30, 2025, compared with 22.6 percent for the six months ended June 30, 2024.

Energy & Transportation

Sales by Application
(Millions of dollars)						Six Months Ended June 30, 2025						Six Months Ended June 30, 2024						$ Change						% Change
Oil and Gas						$	3,125					$	3,397					$	(272)					(8		%)
Power Generation						4,403						3,503						900						26		%
Industrial						2,027						2,034						(7)						—		%
Transportation						2,403						2,633						(230)						(9		%)
External Sales						11,958						11,567						391						3		%
Inter-Segment						2,446						2,451						(5)						—		%
Total Sales						$	14,404					$	14,018					$	386					3		%

Energy & Transportation’s total sales were $14.404 billion for the six months ended June 30, 2025, an increase of $386 million, or 3 percent, compared with $14.018 billion for the six months ended June 30, 2024. The increase was primarily due to favorable price realization of $294 million and higher sales volume of $151 million.

• Oil and Gas – Sales decreased in reciprocating engines, primarily engines used in gas compression applications.

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

• Industrial – Sales were about flat.

• Transportation – Sales decreased in marine. International locomotive deliveries were also lower.

Energy & Transportation’s profit was $2.899 billion for the six months ended June 30, 2025, an increase of $73 million, or 3 percent, compared with $2.826 billion for the six months ended June 30, 2024. The increase was mainly due to favorable price realization of $294 million, partially offset by unfavorable manufacturing costs of $194 million. Unfavorable manufacturing costs largely reflected increased period manufacturing costs.

Energy & Transportation’s profit as a percent of total sales was 20.1 percent for the six months ended June 30, 2025, compared with 20.2 percent for the six months ended June 30, 2024.

Financial Products Segment

Financial Products’ segment revenues were $2.049 billion for the six months ended June 30, 2025, an increase of $54 million, or 3 percent, compared with $1.995 billion for the six months ended June 30, 2024. The increase was primarily due to a favorable impact from higher average earning assets driven by North America of $77 million and higher revenues from Insurance Services of $14 million, partially offset by an unfavorable impact from lower average financing rates of $35 million mainly in North America.

Financial Products’ segment profit was $463 million for the six months ended June 30, 2025, a decrease of $57 million, or 11 percent, compared with $520 million for the six months ended June 30, 2024. The decrease was mainly due to higher provision for credit losses at Cat Financial of $35 million, the absence of an insurance settlement of $33 million in the first quarter of 2024 and an unfavorable impact from lower net yield on average earning assets of $24 million, partially offset by a favorable impact from higher average earning assets of $32 million.

Corporate Items and Eliminations

Expense for corporate items and eliminations was $1.017 billion for the six months ended June 30, 2025, a decrease of $10 million from the six months ended June 30, 2024, mainly driven by favorable restructuring income/costs and lower corporate costs, partially offset by increased expenses due to timing differences and unfavorable impacts of segment reporting methodology differences.

RESTRUCTURING COSTS

In 2025, we expect to incur about $300 million to $350 million of restructuring costs. We expect that prior restructuring actions will result in an incremental benefit to operating costs, primarily Cost of goods sold and SG&A expenses, of about $29 million in 2025 compared with 2024.

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

GLOSSARY OF TERMS

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

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

3.All Other Segment – Primarily includes activities such as: business strategy; product management and development; manufacturing and sourcing of wear and maintenance 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 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 as well as product support of on-highway engines. 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 Caterpillar machines; electrified powertrain and zero-emission power sources and service solutions development; and diesel-electric and hybrid 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.

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.

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; wide-body trucks; 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 Caterpillar machines and engines.

22.Restructuring income/costs – May include costs for employee separation, long-lived asset impairments, contract terminations and (gains)/losses on divestitures. These costs are included in Other operating (income) expenses except for defined-benefit plan curtailment losses and special termination benefits, which are included in Other income (expense). 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 – Machinery, Energy & Transportation services revenues include, but are not limited to, aftermarket parts and other service-related revenues and exclude most Financial Products revenues, discontinued products and captive dealer services.

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 six months of 2025 and ended the second quarter with $5.442 billion of cash, a decrease of $1.447 billion from year-end 2024. In addition, ME&T invests in available-for-sale debt securities and bank time deposits that are considered highly liquid and are available for current operations. These ME&T securities were $1.221 billion as of June 30, 2025 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 six months of 2025 was $4.411 billion, down $662 million compared to the same period a year ago. The decrease was primarily due to lower profit before taxes adjusted for non-cash items partially offset by changes in working capital. Within working capital, changes in accounts payable and customer advances favorably impacted cash flow, partially offset by changes in inventories.

Total debt as of June 30, 2025 was $40.748 billion, an increase of $2.339 billion from year-end 2024. Debt related to ME&T increased $2.103 billion in the first six months of 2025 primarily due to the issuance of new debt in the second quarter of 2025. ME&T issued $1.700 billion of ten-year bonds at 5.2 percent and $300 million of thirty-year bonds at 5.5 percent. The proceeds from the offering will be used for general corporate purposes, which may include the repayment of existing indebtedness. Debt related to Financial Products increased $1.265 billion, of which $1.000 billion is related to intercompany borrowings with ME&T.

As of June 30, 2025, we had three global credit facilities with a syndicate of banks totaling $10.500 billion (Credit Facility) available in the aggregate to both Caterpillar and Cat Financial for general liquidity purposes. Based on management’s allocation decision, which can be revised from time to time, the portion of the Credit Facility available to ME&T as of June 30, 2025 was $2.750 billion. Information on our Credit Facility is as follows:

• The 364-day facility of $3.150 billion (of which $825 million is available to ME&T) expires in August 2025.

• The three-year facility, as amended in August 2024, of $2.730 billion (of which $715 million is available to ME&T) expires in August 2027.

• The five-year facility, as amended in August 2024, of $4.620 billion (of which $1.210 billion is available to ME&T) expires in August 2029.

At June 30, 2025, Caterpillar’s consolidated net worth was $18.726 billion, which was above the $9.000 billion required under the Credit Facility. The consolidated net worth is defined in the Credit Facility as Caterpillar's consolidated shareholders’ equity including preferred stock but excluding the pension and other postretirement benefits balance within Accumulated other comprehensive income (loss).

At June 30, 2025, Cat Financial’s covenant interest coverage ratio was 1.51 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 June 30, 2025, Cat Financial’s six-month covenant leverage ratio was 7.18 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 June 30, 2025, there were no borrowings under the Credit Facility.

The aforementioned financial covenants are being reported as calculated under the Credit Facility and not pursuant to U.S. GAAP. Please refer to the credit agreements governing the Credit Facility filed as an exhibit to our periodic reports for further information related to the calculation thereof. For risks related to our indebtedness and compliance with these covenants, please refer to the risk factor "Restrictive covenants in our debt agreements could limit our financial and operating flexibility" set forth in Part I, Item 1A of our most recent annual report on Form 10-K.

Our total credit commitments and available credit as of June 30, 2025 were:

			June 30, 2025
(Millions of dollars)			Consolidated						Machinery, Energy & Transportation						Financial Products
Credit lines available:
Global credit facilities			$	10,500					$	2,750					$	7,750
Other external			4,084						617						3,467
Total credit lines available			14,584						3,367						11,217
Less: Commercial paper outstanding			(3,985)						—						(3,985)
Less: Utilized credit			(800)						—						(800)
Available credit			$	9,799					$	3,367					$	6,432

The other external consolidated credit lines with banks as of June 30, 2025 totaled $4.084 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.

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 certain credit 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 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 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 21 – "Supplier finance programs" of Part I, Item 1 "Financial Statements."

Machinery, Energy & Transportation

Net cash provided by operating activities was $3.862 billion in the first six months of 2025, compared with net cash provided of $4.573 billion for the same period in 2024. The decrease was primarily due to lower profit before taxes, adjusted for non-cash items, partially offset by lower working capital requirements. Within working capital, changes in customer advances and accounts payable favorably impacted cash flow but were partially offset by changes in inventories.

Net cash used by investing activities in the first six months of 2025 was $1.530 billion, compared with net cash provided of $1.381 billion in the first six months of 2024. The change was primarily due to lower proceeds from maturities and sale of securities, primarily due to time deposit maturities in 2024; increased activity related to intercompany lending with Financial Products; and an increase in capital expenditures.

Net cash used for financing activities during the first six months of 2025 was $4.050 billion, compared with net cash used of $8.573 billion in the same period of 2024. The change was primarily due to higher proceeds from debt issued, lower payments to purchase common stock and lower payments on debt in the first six months of 2025 compared to the same period in 2024.

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 $1.287 billion during the first six months of 2025, compared to $841 million for the same period in 2024. We expect ME&T’s capital expenditures in 2025 to be about $2.5 billion. We made $276 million of contributions to our pension and other postretirement benefit plans during the first six months of 2025. We currently anticipate full-year 2025 contributions of approximately $354 million. In comparison, we made $172 million of contributions to our pension and other postretirement benefit plans during the first six months of 2024.

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. 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 our mid-A rating.

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 June 2025, the Board of Directors approved a seven percent increase in the quarterly dividend to $1.51 per share, and we continue to expect our strong financial position to support the dividend. Dividends paid totaled $1.336 billion in the first six months of 2025.

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 June 2024, the Board approved an additional share repurchase authorization (the 2024 Authorization) of up to $20.0 billion of Caterpillar common stock, effective June 12, 2024, with no expiration. In the first six months of 2025, we repurchased $4.488 billion of Caterpillar common stock. As of June 30, 2025, the 2022 Authorization was fully utilized and $15.640 billion remained available under the 2024 Authorization. Our basic shares outstanding as of June 30, 2025 were approximately 468 million.

Financial Products

Net cash provided by operating activities was $597 million in the first six months of 2025, compared with $715 million for the same period in 2024. Net cash used for investing activities was $990 million in the first six months of 2025, compared with $1.351 billion for the same period in 2024. The change was primarily due to portfolio related activity and the 2024 divestiture of a non-U.S. subsidiary. Net cash provided by financing activities was $670 million in the first six months of 2025, compared with $635 million for the same period in 2024. The change was primarily due to increased intercompany borrowings from ME&T, partially offset by decreased external borrowings.

RECENT ACCOUNTING PRONOUNCEMENTS

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

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 2024 Annual Report on Form 10-K. There have been no significant changes to our critical accounting estimates since our 2024 Annual Report on Form 10-K.

OTHER MATTERS

Information related to legal proceedings appears in Note 14 – "Environmental and legal matters" of Part I, Item 1 “Financial Statements.”

Order Backlog

At the end of the second quarter of 2025, the dollar amount of backlog believed to be firm was approximately $37.5 billion, about $2.5 billion higher than the first quarter of 2025. The order backlog increased across the primary segments, with the largest increase in Energy & Transportation. Of the total backlog at June 30, 2025, approximately $10.3 billion was not expected to be filled in the following twelve months.

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 two significant items in order for the company’s results to be meaningful to our readers. These items consist of (i) other restructuring income/costs and (ii) restructuring income/costs related to the divestitures of certain non-U.S. entities in 2024. 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 the company’s period-over-period results.

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												Profit						Profit per Share
Three Months Ended June 30, 2025 - U.S. GAAP						$	2,860					17.3		%				$	2,818					$	646											$	2,179					$	4.62
Other restructuring (income) costs						56						0.3		%				56						12												47						0.10
Three Months Ended June 30, 2025 - Adjusted						$	2,916					17.6		%				$	2,874					$	658											$	2,226					$	4.72
Three Months Ended June 30, 2024 - U.S. GAAP						$	3,482					20.9		%				$	3,500					$	836											$	2,681					$	5.48
Restructuring costs - divestiture of two non-U.S. entities						228						1.3		%				228						—												228						0.47
Other restructuring (income) costs						30						0.2		%				30						6												24						0.04
Three Months Ended June 30, 2024 - Adjusted						$	3,740					22.4		%				$	3,758					$	842											$	2,933					$	5.99
Six Months Ended June 30, 2025 - U.S. GAAP						$	5,439					17.6		%				$	5,388					$	1,220											$	4,182					$	8.82
Other restructuring (income) costs						88						0.3		%				89						20												72						0.15
Six Months Ended June 30, 2025 - Adjusted						$	5,527					17.9		%				$	5,477					$	1,240											$	4,254					$	8.97
Six Months Ended June 30, 2024 - U.S. GAAP						$	7,001					21.5		%				$	7,032					$	1,524											$	5,537					$	11.23
Restructuring (income) costs - divestitures of certain non-U.S. entities						164						0.5		%				164						54												110						0.22
Other restructuring (income) costs						88						0.3		%				88						20												68						0.14
Six Months Ended June 30, 2024 - Adjusted						$	7,253					22.3		%				$	7,284					$	1,598											$	5,715					$	11.59

We believe it is important to separately disclose our annual effective tax rate, excluding discrete items for our results to be meaningful to our readers. The annual effective tax rate is discussed using non-GAAP financial measures that exclude the effects of amounts associated with discrete items recorded fully in the quarter they occur. These items consist of (i) the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense and (ii) restructuring income/costs related to the divestitures of certain non-U.S. entities in 2024. We believe the non-GAAP measures will provide investors with useful perspective on underlying business results and trends and aids with assessing the company's period-over-period results.

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

(Millions of dollars)						Profit Before Taxes						Provision (Benefit) for Income Taxes									Effective Tax Rate
Three Months Ended June 30, 2025 - U.S. GAAP						$	2,818					$	646								23.0		%
Excess stock-based compensation						—						1
Annual effective tax rate, excluding discrete items						2,818						647									23.0		%
Excess stock-based compensation						—						(1)
Other restructuring (income) costs						56						12
Three Months Ended June 30, 2025 - Adjusted						$	2,874					$	658
Three Months Ended June 30, 2024 - U.S. GAAP						$	3,500					$	836								23.9		%
Restructuring costs - divestiture of two non-U.S. entities						228						—
Excess stock-based compensation						—						4
Annual effective tax rate, excluding discrete items						3,728						840									22.5		%
Excess stock-based compensation						—						(4)
Other restructuring (income) costs						30						6
Three Months Ended June 30, 2024 - Adjusted						$	3,758					$	842
Six Months Ended June 30, 2025 - U.S. GAAP						$	5,388					$	1,220								22.6		%
Excess stock-based compensation						—						18
Annual effective tax rate, excluding discrete items						5,388						1,238									23.0		%
Excess stock-based compensation						—						(18)
Other restructuring (income) costs						89						20
Six Months Ended June 30, 2025 - Adjusted						$	5,477					$	1,240
Six Months Ended June 30, 2024 - U.S. GAAP						$	7,032					$	1,524								21.7		%
Restructuring (income) costs - divestitures of certain non-U.S. entities						164						54
Excess stock-based compensation						—						42
Annual effective tax rate, excluding discrete items						7,196						1,620									22.5		%
Excess stock-based compensation						—						(42)
Other restructuring (income) costs						88						20
Six Months Ended June 30, 2024 - Adjusted						$	7,284					$	1,598

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

(Millions of dollars)						Six Months Ended June 30,
												2025						2024
ME&T net cash provided by operating activities 1												$	3,862					$	4,573
ME&T capital expenditures												(1,287)						(841)
ME&T free cash flow												$	2,575					$	3,732
1 See reconciliation of ME&T net cash provided by operating activities to consolidated net cash provided by operating activities on pages 76-77.

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 70-77 reconcile ME&T and Financial Products to Caterpillar Inc. consolidated financial information.

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Three Months Ended June 30, 2025

(Unaudited)

(Millions of dollars)

									Supplemental Consolidating Data
			Consolidated						Machinery, Energy & Transportation						Financial Products						Consolidating Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation			$	15,674					$	15,674					$	—					$	—
Revenues of Financial Products			895						—						1,081						(186)			1
Total sales and revenues			16,569						15,674						1,081						(186)
Operating costs:
Cost of goods sold			10,807						10,809						—						(2)			2
Selling, general and administrative expenses			1,694						1,497						209						(12)			2
Research and development expenses			551						551						—						—
Interest expense of Financial Products			336						—						342						(6)			2
Other operating (income) expenses			321						22						318						(19)			2
Total operating costs			13,709						12,879						869						(39)
Operating profit			2,860						2,795						212						(147)
Interest expense excluding Financial Products			126						130						—						(4)			3
Other income (expense)			84						(101)						42						143			4
Consolidated profit before taxes			2,818						2,564						254						—
Provision (benefit) for income taxes			646						585						61						—
Profit of consolidated companies			2,172						1,979						193						—
Equity in profit (loss) of unconsolidated affiliated companies			7						7						—						—
Profit of consolidated and affiliated companies			2,179						1,986						193						—
Less: Profit (loss) attributable to noncontrolling interests			—						(1)						1						—
Profit 5			$	2,179					$	1,987					$	192					$	—

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

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

5Profit attributable to common shareholders.

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Six Months Ended June 30, 2025

(Unaudited)

(Millions of dollars)

									Supplemental Consolidating Data
			Consolidated						Machinery, Energy & Transportation						Financial Products						Consolidating Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation			$	29,052					$	29,052					$	—					$	—
Revenues of Financial Products			1,766						—						2,129						(363)			1
Total sales and revenues			30,818						29,052						2,129						(363)
Operating costs:
Cost of goods sold			19,772						19,776						—						(4)			2
Selling, general and administrative expenses			3,287						2,905						405						(23)			2
Research and development expenses			1,031						1,031						—						—
Interest expense of Financial Products			662						—						668						(6)			2
Other operating (income) expenses			627						30						643						(46)			2
Total operating costs			25,379						23,742						1,716						(79)
Operating profit			5,439						5,310						413						(284)
Interest expense excluding Financial Products			242						249						—						(7)			3
Other income (expense)			191						(146)						60						277			4
Consolidated profit before taxes			5,388						4,915						473						—
Provision (benefit) for income taxes			1,220						1,105						115						—
Profit of consolidated companies			4,168						3,810						358						—
Equity in profit (loss) of unconsolidated affiliated companies			14						14						—						—
Profit of consolidated and affiliated companies			4,182						3,824						358						—
Less: Profit (loss) attributable to noncontrolling interests			—						(1)						1						—
Profit 5			$	4,182					$	3,825					$	357					$	—

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

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

5Profit attributable to common shareholders.

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Three Months Ended June 30, 2024

(Unaudited)

(Millions of dollars)

									Supplemental Consolidating Data
			Consolidated						Machinery, Energy & Transportation						Financial Products						Consolidating Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation			$	15,840					$	15,840					$	—					$	—
Revenues of Financial Products			849						—						1,043						(194)			1
Total sales and revenues			16,689						15,840						1,043						(194)
Operating costs:
Cost of goods sold			10,150						10,152						—						(2)			2
Selling, general and administrative expenses			1,652						1,449						185						18			2
Research and development expenses			535						535						—						—
Interest expense of Financial Products			314						—						314						—
Other operating (income) expenses			556						43						560						(47)			2
Total operating costs			13,207						12,179						1,059						(31)
Operating profit			3,482						3,661						(16)						(163)
Interest expense excluding Financial Products			137						137						—						—
Other income (expense)			155						(21)						13						163			3
Consolidated profit before taxes			3,500						3,503						(3)						—
Provision (benefit) for income taxes			836						786						50						—
Profit of consolidated companies			2,664						2,717						(53)						—
Equity in profit (loss) of unconsolidated affiliated companies			17						17						—						—
Profit of consolidated and affiliated companies			2,681						2,734						(53)						—
Less: Profit (loss) attributable to noncontrolling interests			—						—						—						—
Profit 4			$	2,681					$	2,734					$	(53)					$	—

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.

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Six Months Ended June 30, 2024

(Unaudited)

(Millions of dollars)

									Supplemental Consolidating Data
			Consolidated						Machinery, Energy & Transportation						Financial Products						Consolidating Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation			$	30,800					$	30,800					$	—					$	—
Revenues of Financial Products			1,688						—						2,072						(384)			1
Total sales and revenues			32,488						30,800						2,072						(384)
Operating costs:
Cost of goods sold			19,812						19,816						—						(4)			2
Selling, general and administrative expenses			3,229						2,862						363						4			2
Research and development expenses			1,055						1,055						—						—
Interest expense of Financial Products			612						—						612						—
Other operating (income) expenses			779						2						845						(68)			2
Total operating costs			25,487						23,735						1,820						(68)
Operating profit			7,001						7,065						252						(316)
Interest expense excluding Financial Products			280						280						—						—
Other income (expense)			311						(41)						36						316			3
Consolidated profit before taxes			7,032						6,744						288						—
Provision (benefit) for income taxes			1,524						1,401						123						—
Profit of consolidated companies			5,508						5,343						165						—
Equity in profit (loss) of unconsolidated affiliated companies			27						27						—						—
Profit of consolidated and affiliated companies			5,535						5,370						165						—
Less: Profit (loss) attributable to noncontrolling interests			(2)						(3)						1						—
Profit 4			$	5,537					$	5,373					$	164					$	—

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

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

Caterpillar Inc.

Supplemental Data for Financial Position

At June 30, 2025

(Unaudited)

(Millions of dollars)

									Supplemental Consolidating Data
			Consolidated						Machinery, Energy & Transportation						Financial Products						Consolidating Adjustments
Assets
Current assets:
Cash and cash equivalents			$	5,442					$	4,428					$	1,014					$	—
Receivables – trade and other			9,704						3,605						527						5,572			1,2
Receivables – finance			10,147						—						15,946						(5,799)			2
Prepaid expenses and other current assets			2,867						2,680						401						(214)			3
Inventories			18,595						18,595						—						—
Total current assets			46,755						29,308						17,888						(441)
Property, plant and equipment – net			13,896						10,035						3,861						—
Long-term receivables – trade and other			1,607						1,619						308						(320)			1,2
Long-term receivables – finance			13,835						—						14,708						(873)			2
Noncurrent deferred and refundable income taxes			3,427						3,680						131						(384)			4
Intangible assets			321						321						—						—
Goodwill			5,331						5,331						—						—
Other assets			5,153						3,747						2,420						(1,014)			5
Total assets			$	90,325					$	54,041					$	39,316					$	(3,032)
Liabilities
Current liabilities:
Short-term borrowings			$	4,485					$	—					$	4,485					$	—
Accounts payable			8,563						8,515						294						(246)			6,7
Accrued expenses			5,207						4,374						833						—
Accrued wages, salaries and employee benefits			1,618						1,580						38						—
Customer advances			3,412						3,387						3						22			7
Dividends payable			707						707						—						—
Other current liabilities			2,627						2,091						768						(232)			4,5,8
Long-term debt due within one year			8,315						30						8,285						—
Total current liabilities			34,934						20,684						14,706						(456)
Long-term debt due after one year			27,948						10,850						18,294						(1,196)			7,9
Liability for postemployment benefits			3,611						3,611						—						—
Other liabilities			5,169						4,199						1,376						(406)			4,5
Total liabilities			71,662						39,344						34,376						(2,058)
Commitments and contingencies
Shareholders’ equity
Common stock			6,143						6,143						905						(905)			10
Treasury stock			(47,958)						(47,958)						—						—
Profit employed in the business			62,160						57,238						4,912						10			10
Accumulated other comprehensive income (loss)			(1,684)						(731)						(953)						—
Noncontrolling interests			2						5						76						(79)			10
Total shareholders’ equity			18,663						14,697						4,940						(974)
Total liabilities and shareholders’ equity			$	90,325					$	54,041					$	39,316					$	(3,032)

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 and liabilities between ME&T and Financial Products.

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

7 Reclassification of Financial Products' payables to 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.

Caterpillar Inc.

Supplemental Data for Financial Position

At December 31, 2024

(Unaudited)

(Millions of dollars)

									Supplemental Consolidating Data
			Consolidated						Machinery, Energy & Transportation						Financial Products						Consolidating Adjustments
Assets
Current assets:
Cash and cash equivalents			$	6,889					$	6,165					$	724					$	—
Receivables – trade and other			9,282						3,463						688						5,131			1,2
Receivables – finance			9,565						—						14,957						(5,392)			2
Prepaid expenses and other current assets			3,119						2,872						401						(154)			3
Inventories			16,827						16,827						—						—
Total current assets			45,682						29,327						16,770						(415)
Property, plant and equipment – net			13,361						9,531						3,830						—
Long-term receivables – trade and other			1,225						500						86						639			1,2
Long-term receivables – finance			13,242						—						14,048						(806)			2
Noncurrent deferred and refundable income taxes			3,312						3,594						118						(400)			4
Intangible assets			399						399						—						—
Goodwill			5,241						5,241						—						—
Other assets			5,302						4,050						2,277						(1,025)			5
Total assets			$	87,764					$	52,642					$	37,129					$	(2,007)
Liabilities
Current liabilities:
Short-term borrowings			$	4,393					$	—					$	4,393					$	—
Accounts payable			7,675						7,619						331						(275)			6,7
Accrued expenses			5,243						4,589						654						—
Accrued wages, salaries and employee benefits			2,391						2,335						56						—
Customer advances			2,322						2,305						3						14			7
Dividends payable			674						674						—						—
Other current liabilities			2,909						2,388						696						(175)			4,8
Long-term debt due within one year			6,665						46						6,619						—
Total current liabilities			32,272						19,956						12,752						(436)
Long-term debt due after one year			27,351						8,731						18,787						(167)			9
Liability for postemployment benefits			3,757						3,757						—						—
Other liabilities			4,890						3,977						1,344						(431)			4
Total liabilities			68,270						36,421						32,883						(1,034)
Commitments and contingencies
Shareholders’ equity
Common stock			6,941						6,941						905						(905)			10
Treasury stock			(44,331)						(44,331)						—						—
Profit employed in the business			59,352						54,787						4,555						10			10
Accumulated other comprehensive income (loss)			(2,471)						(1,182)						(1,289)						—
Noncontrolling interests			3						6						75						(78)			10
Total shareholders’ equity			19,494						16,221						4,246						(973)
Total liabilities and shareholders’ equity			$	87,764					$	52,642					$	37,129					$	(2,007)

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 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.

Caterpillar Inc.

Supplemental Data for Cash Flow

For the Six Months Ended June 30, 2025

(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			$	4,182					$	3,824					$	358					$	—
Adjustments to reconcile profit to net cash provided by operating activities:
Depreciation and amortization			1,094						716						378						—
Provision (benefit) for deferred income taxes			(110)						(88)						(22)						—
Other			398						357						(286)						327			1
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables – trade and other			(319)						90						5						(414)			1,2
Inventories			(1,639)						(1,639)						—						—
Accounts payable			973						930						6						37			1
Accrued expenses			(12)						(64)						52						—
Accrued wages, salaries and employee benefits			(805)						(786)						(19)						—
Customer advances			1,276						1,276						—						—
Other assets – net			(90)						(133)						(3)						46			1
Other liabilities – net			(537)						(621)						128						(44)			1
Net cash provided by (used for) operating activities			4,411						3,862						597						(48)
Cash flow from investing activities:
Capital expenditures – excluding equipment leased to others			(1,265)						(1,273)						(22)						30			1
Expenditures for equipment leased to others			(608)						(14)						(597)						3			1
Proceeds from disposals of leased assets and property, plant and equipment			365						36						362						(33)			1
Additions to finance receivables			(7,064)						—						(8,084)						1,020			2
Collections of finance receivables			6,399						—						7,278						(879)			2
Net intercompany purchased receivables			—						—						93						(93)			2
Proceeds from sale of finance receivables			18						—						18						—
Additions to intercompany receivables (original maturities greater than three months)			—						(1,000)						—						1,000			3
Collections of intercompany receivables (original maturities greater than three months)			—						—						35						(35)			3
Investments and acquisitions (net of cash acquired)			(21)						(21)						—						—
Proceeds from sale of businesses and investments (net of cash sold)			12						12						—						—
Proceeds from maturities and sale of securities			1,328						1,026						302						—
Investments in securities			(618)						(278)						(340)						—
Other – net			(53)						(18)						(35)						—
Net cash provided by (used for) investing activities			(1,507)						(1,530)						(990)						1,013
Cash flow from financing activities:
Dividends paid			(1,336)						(1,336)						—						—
Common stock issued, including treasury shares reissued			(59)						(59)						—						—
Payments to purchase common stock			(4,488)						(4,488)						—						—
Excise tax paid on purchases of common stock			(73)						(73)						—						—
Proceeds from intercompany borrowings (original maturities greater than three months)			—						—						1,000						(1,000)			3
Payments on intercompany borrowings (original maturities greater than three months)			—						(35)						—						35			3
Proceeds from debt issued (original maturities greater than three months)			5,707						1,976						3,731						—
Payments on debt (original maturities greater than three months)			(4,168)						(35)						(4,133)						—
Short-term borrowings – net (original maturities three months or less)			72						—						72						—
Net cash provided by (used for) financing activities			(4,345)						(4,050)						670						(965)
Effect of exchange rate changes on cash			(7)						(21)						14						—
Increase (decrease) in cash, cash equivalents and restricted cash			(1,448)						(1,739)						291						—
Cash, cash equivalents and restricted cash at beginning of period			6,896						6,170						726						—
Cash, cash equivalents and restricted cash at end of period			$	5,448					$	4,431					$	1,017					$	—

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

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

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

Caterpillar Inc.

Supplemental Data for Cash Flow

For the Six Months Ended June 30, 2024

(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			$	5,535					$	5,370					$	165					$	—
Adjustments to reconcile profit to net cash provided by operating activities:
Depreciation and amortization			1,055						662						393						—
Provision (benefit) for deferred income taxes			(133)						(81)						(52)						—
(Gain) loss on divestiture			164						(46)						210						—
Other			105						104						(280)						281			1
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables – trade and other			(245)						195						96						(536)			1.2
Inventories			(643)						(638)						—						(5)			1
Accounts payable			(21)						6						(58)						31			1
Accrued expenses			69						(41)						110						—
Accrued wages, salaries and employee benefits			(1,056)						(1,035)						(21)						—
Customer advances			341						341						—						—
Other assets – net			20						(108)						5						123			1
Other liabilities – net			(118)						(156)						147						(109)			1
Net cash provided by (used for) operating activities			5,073						4,573						715						(215)
Cash flow from investing activities:
Capital expenditures – excluding equipment leased to others			(841)						(831)						(13)						3			1
Expenditures for equipment leased to others			(614)						(10)						(612)						8			1
Proceeds from disposals of leased assets and property, plant and equipment			342						13						335						(6)			1
Additions to finance receivables			(7,446)						—						(7,951)						505			2
Collections of finance receivables			6,743						—						7,176						(433)			2
Net intercompany purchased receivables			—						—						(138)						138			2
Proceeds from sale of finance receivables			37						—						37						—
Net intercompany borrowings			—						—						9						(9)			3
Investments and acquisitions (net of cash acquired)			(32)						(32)						—						—
Proceeds from sale of businesses and investments (net of cash sold)			(61)						92						(153)						—
Proceeds from maturities and sale of securities			2,574						2,402						172						—
Investments in securities			(523)						(300)						(223)						—
Other – net			57						47						10						—
Net cash provided by (used for) investing activities			236						1,381						(1,351)						206
Cash flow from financing activities:
Dividends paid			(1,283)						(1,283)						—						—
Common stock issued, including treasury shares reissued			8						8						—						—
Payments to purchase common stock			(6,275)						(6,275)						—						—
Net intercompany borrowings			—						(9)						—						9			3
Proceeds from debt issued (original maturities greater than three months)			4,151						—						4,151						—
Payments on debt (original maturities greater than three months)			(5,217)						(1,014)						(4,203)						—
Short-term borrowings – net (original maturities three months or less)			687						—						687						—
Net cash provided by (used for) financing activities			(7,929)						(8,573)						635						9
Effect of exchange rate changes on cash			(17)						(7)						(10)						—
Increase (decrease) in cash, cash equivalents and restricted cash			(2,637)						(2,626)						(11)						—
Cash, cash equivalents and restricted cash at beginning of period			6,985						6,111						874						—
Cash, cash equivalents and restricted cash at end of period			$	4,348					$	3,485					$	863					$	—

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

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

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

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, 2024, as such factors may be updated from time to time in Caterpillar's periodic filings with the Securities and Exchange Commission.