10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 FORM 10-Q 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to

Commission File Number:  1-768

CATERPILLAR INC.

(Exact name of registrant as specified in its charter)

Delaware				37-0602744
(State or other jurisdiction of incorporation)				(IRS Employer I.D. No.)
5205 N. O'Connor Boulevard,	Suite 100,	Irving,	Texas	75039
(Address of principal executive offices)				(Zip Code)

Registrant’s telephone number, including area code: (972) 891-7700 

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol (s)	Name of each exchange on which registered
Common Stock ($1.00 par value)	CAT	New York Stock Exchange	¹
5.3% Debentures due September 15, 2035	CAT35	New York Stock Exchange

¹    In addition to the New York Stock Exchange, Caterpillar common stock is also listed on stock exchanges in France and Switzerland.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No ☒

At September 30, 2023, 509,084,743 shares of common stock of the registrant were outstanding.

Table of Contents

Table of Contents

Part I. Financial Information
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	47
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	75
Item 4.	Controls and Procedures	75
Part II. Other Information
Item 1.	Legal Proceedings	76
Item 1A.	Risk Factors	76
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	76
Item 3.	Defaults Upon Senior Securities	*
Item 4.	Mine Safety Disclosures	*
Item 5.	Other Information	76
Item 6.	Exhibits	77

* Item omitted because no answer is called for or item is not applicable.

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Part I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

Caterpillar Inc.

Consolidated Statement of Results of Operations

(Unaudited)

(Dollars in millions except per share data)

	Three Months Ended September 30,
	2023		2022
Sales and revenues:
Sales of Machinery, Energy & Transportation	$	15,988	$	14,278
Revenues of Financial Products	822		716
Total sales and revenues	16,810		14,994
Operating costs:
Cost of goods sold	10,583		10,202
Selling, general and administrative expenses	1,624		1,401
Research and development expenses	554		476
Interest expense of Financial Products	280		151
Other operating (income) expenses	320		339
Total operating costs	13,361		12,569
Operating profit	3,449		2,425
Interest expense excluding Financial Products	129		109
Other income (expense)	195		242
Consolidated profit before taxes	3,515		2,558
Provision (benefit) for income taxes	734		527
Profit of consolidated companies	2,781		2,031
Equity in profit (loss) of unconsolidated affiliated companies	12		9
Profit of consolidated and affiliated companies	2,793		2,040
Less: Profit (loss) attributable to noncontrolling interests	(1)		(1)
Profit 1	$	2,794	$	2,041
Profit per common share	$	5.48	$	3.89
Profit per common share – diluted 2	$	5.45	$	3.87
Weighted-average common shares outstanding (millions)
– Basic	509.8		525.0
– Diluted 2	512.6		527.6

1    Profit attributable to common shareholders.

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

See accompanying notes to Consolidated Financial Statements.

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Caterpillar Inc.

Consolidated Statement of Comprehensive Income

(Unaudited)

(Dollars in millions)

	Three Months Ended September 30,
	2023		2022
Profit of consolidated and affiliated companies	$	2,793	$	2,040
Other comprehensive income (loss), net of tax (Note 13):
Foreign currency translation:	(205)		(618)
Pension and other postretirement benefits:	(3)		(1)
Derivative financial instruments:	(62)		(191)
Available-for-sale securities:	(16)		(44)
Total other comprehensive income (loss), net of tax	(286)		(854)
Comprehensive income	2,507		1,186
Less: comprehensive income attributable to the noncontrolling interests	(1)		(1)
Comprehensive income attributable to shareholders	$	2,508	$	1,187

See accompanying notes to Consolidated Financial Statements.

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Caterpillar Inc.

Consolidated Statement of Results of Operations

(Unaudited)

(Dollars in millions except per share data)

	Nine Months Ended September 30,
	2023		2022
Sales and revenues:
Sales of Machinery, Energy & Transportation	$	47,632	$	40,703
Revenues of Financial Products	2,358		2,127
Total sales and revenues	49,990		42,830
Operating costs:
Cost of goods sold	31,751		29,736
Selling, general and administrative expenses	4,615		4,172
Research and development expenses	1,554		1,413
Interest expense of Financial Products	742		377
Other operating (income) expenses	1,496		908
Total operating costs	40,158		36,606
Operating profit	9,832		6,224
Interest expense excluding Financial Products	385		326
Other income (expense)	354		755
Consolidated profit before taxes	9,801		6,653
Provision (benefit) for income taxes	2,194		1,423
Profit of consolidated companies	7,607		5,230
Equity in profit (loss) of unconsolidated affiliated companies	52		20
Profit of consolidated and affiliated companies	7,659		5,250
Less: Profit (loss) attributable to noncontrolling interests	—		(1)
Profit 1	$	7,659	$	5,251
Profit per common share	$	14.93	$	9.91
Profit per common share – diluted 2	$	14.85	$	9.85
Weighted-average common shares outstanding (millions)
– Basic	513.0		530.1
– Diluted 2	515.7		533.2

1    Profit attributable to common shareholders.

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

See accompanying notes to Consolidated Financial Statements.

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Caterpillar Inc.

Consolidated Statement of Comprehensive Income

(Unaudited)

(Dollars in millions)

	Nine Months Ended September 30,
	2023		2022
Profit of consolidated and affiliated companies	$	7,659	$	5,250
Other comprehensive income (loss), net of tax (Note 13):
Foreign currency translation:	260		(1,392)
Pension and other postretirement benefits:	(8)		(3)
Derivative financial instruments:	(19)		(254)
Available-for-sale securities:	(8)		(151)
Total other comprehensive income (loss), net of tax	225		(1,800)
Comprehensive income	7,884		3,450
Less: comprehensive income attributable to the noncontrolling interests	—		(1)
Comprehensive income attributable to shareholders	$	7,884	$	3,451

See accompanying notes to Consolidated Financial Statements.

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Caterpillar Inc.

Consolidated Statement of Financial Position

(Unaudited)

(Dollars in millions) 

	September 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	6,545	$	7,004
Receivables – trade and other	9,134		8,856
Receivables – finance	9,608		9,013
Prepaid expenses and other current assets	5,138		2,642
Inventories	17,580		16,270
Total current assets	48,005		43,785
Property, plant and equipment – net	12,287		12,028
Long-term receivables – trade and other	1,110		1,265
Long-term receivables – finance	11,907		12,013
Noncurrent deferred and refundable income taxes	2,719		2,213
Intangible assets	604		758
Goodwill	5,268		5,288
Other assets	4,891		4,593
Total assets	$	86,791	$	81,943
Liabilities
Current liabilities:
Short-term borrowings:
Machinery, Energy & Transportation	$	—	$	3
Financial Products	4,218		5,954
Accounts payable	7,827		8,689
Accrued expenses	4,669		4,080
Accrued wages, salaries and employee benefits	2,300		2,313
Customer advances	2,333		1,860
Dividends payable	—		620
Other current liabilities	3,115		2,690
Long-term debt due within one year:
Machinery, Energy & Transportation	1,043		120
Financial Products	7,619		5,202
Total current liabilities	33,124		31,531
Long-term debt due after one year:
Machinery, Energy & Transportation	8,470		9,498
Financial Products	15,789		16,216
Liability for postemployment benefits	4,060		4,203
Other liabilities	4,841		4,604
Total liabilities	66,284		66,052
Commitments and contingencies (Notes 11 and 14)
Shareholders’ equity
Common stock of $1.00 par value:
Authorized shares: 2,000,000,000 Issued shares: (9/30/23 and 12/31/22 – 814,894,624) at paid-in amount	6,698		6,560
Treasury stock: (9/30/23 – 305,809,881 shares; 12/31/22 – 298,549,134 shares) at cost	(33,865)		(31,748)
Profit employed in the business	49,888		43,514
Accumulated other comprehensive income (loss)	(2,232)		(2,457)
Noncontrolling interests	18		22
Total shareholders’ equity	20,507		15,891
Total liabilities and shareholders’ equity	$	86,791	$	81,943

See accompanying notes to Consolidated Financial Statements.

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Caterpillar Inc.

Consolidated Statement of Changes in Shareholders’ Equity

(Unaudited)

(Dollars in millions) 

	Common stock		Treasury stock		Profit employed in the business		Accumulated other comprehensive income (loss)		Noncontrolling interests		Total
Three Months Ended September 30, 2022
Balance at June 30, 2022	$	6,464	$	(29,501)	$	41,263	$	(2,499)	$	32	$	15,759
Profit of consolidated and affiliated companies	—		—		2,041		—		(1)		2,040
Foreign currency translation, net of tax	—		—		—		(618)		—		(618)
Pension and other postretirement benefits, net of tax	—		—		—		(1)		—		(1)
Derivative financial instruments, net of tax	—		—		—		(191)		—		(191)
Available-for-sale securities, net of tax	—		—		—		(44)		—		(44)
Common shares issued from treasury stock for stock-based compensation: 75,534	(5)		4		—		—		—		(1)
Stock-based compensation expense	55		—		—		—		—		55
Common shares repurchased: 7,575,322 1	—		(1,385)		—		—		—		(1,385)
Other	9		(1)		—		—		—		8
Balance at September 30, 2022	$	6,523	$	(30,883)	$	43,304	$	(3,353)	$	31	$	15,622
Three Months Ended September 30, 2023
Balance at June 30, 2023	$	6,478	$	(33,391)	$	47,094	$	(1,946)	$	21	$	18,256
Profit of consolidated and affiliated companies	—		—		2,794		—		(1)		2,793
Foreign currency translation, net of tax	—		—		—		(205)		—		(205)
Pension and other postretirement benefits, net of tax	—		—		—		(3)		—		(3)
Derivative financial instruments, net of tax	—		—		—		(62)		—		(62)
Available-for-sale securities, net of tax	—		—		—		(16)		—		(16)
Common shares issued from treasury stock for stock-based compensation: 824,973	—		59		—		—		—		59
Stock-based compensation expense	60		—		—		—		—		60
Common shares repurchased: 1,883,487 1	—		(530)		—		—		—		(530)
Outstanding authorized accelerated share repurchase	150		—		—		—		—		150
Other	10		(3)		—		—		(2)		5
Balance at September 30, 2023	$	6,698	$	(33,865)	$	49,888	$	(2,232)	$	18	$	20,507

1 See Note 12 for additional information.

See accompanying notes to Consolidated Financial Statements.

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Caterpillar Inc.

Consolidated Statement of Changes in Shareholders’ Equity

(Unaudited)

(Dollars in millions) 

	Common stock		Treasury stock		Profit employed in the business		Accumulated other comprehensive income (loss)		Noncontrolling interests		Total
Nine Months Ended September 30, 2022
Balance at December 31, 2021	$	6,398	$	(27,643)	$	39,282	$	(1,553)	$	32	$	16,516
Profit of consolidated and affiliated companies	—		—		5,251		—		(1)		5,250
Foreign currency translation, net of tax	—		—		—		(1,392)		—		(1,392)
Pension and other postretirement benefits, net of tax	—		—		—		(3)		—		(3)
Derivative financial instruments, net of tax	—		—		—		(254)		—		(254)
Available-for-sale securities, net of tax	—		—		—		(151)		—		(151)
Dividends declared 1	—		—		(1,229)		—		—		(1,229)
Common shares issued from treasury stock for stock-based compensation: 1,529,753	(67)		69		—		—		—		2
Stock-based compensation expense	162		—		—		—		—		162
Common shares repurchased: 17,007,819 2	—		(3,309)		—		—		—		(3,309)
Other	30		—		—		—		—		30
Balance at September 30, 2022	$	6,523	$	(30,883)	$	43,304	$	(3,353)	$	31	$	15,622
Nine Months Ended September 30, 2023
Balance at December 31, 2022	$	6,560	$	(31,748)	$	43,514	$	(2,457)	$	22	$	15,891
Profit of consolidated and affiliated companies	—		—		7,659		—		—		7,659
Foreign currency translation, net of tax	—		—		—		260		—		260
Pension and other postretirement benefits, net of tax	—		—		—		(8)		—		(8)
Derivative financial instruments, net of tax	—		—		—		(19)		—		(19)
Available-for-sale securities, net of tax	—		—		—		(8)		—		(8)
Dividends declared 1	—		—		(1,285)		—		—		(1,285)
Common shares issued from treasury stock for stock-based compensation: 2,238,728	(71)		108		—		—		—		37
Stock-based compensation expense	178		—		—		—		—		178
Common shares repurchased: 9,499,655 2	—		(2,209)		—		—		—		(2,209)
Other	31		(16)		—		—		(4)		11
Balance at September 30, 2023	$	6,698	$	(33,865)	$	49,888	$	(2,232)	$	18	$	20,507

1 Dividends per share of common stock of $2.50 and $2.31 were declared in the nine months ended September 30, 2023 and 2022, respectively.

2 See Note 12 for additional information.

See accompanying notes to Consolidated Financial Statements.

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Caterpillar Inc.

Consolidated Statement of Cash Flow

(Unaudited)

(Millions of dollars)

	Nine Months Ended September 30,
	2023		2022
Cash flow from operating activities:
Profit of consolidated and affiliated companies	$	7,659	$	5,250
Adjustments for non-cash items:
Depreciation and amortization	1,599		1,661
Provision (benefit) for deferred income taxes	(448)		(349)
Loss on divestiture	572		—
Other	205		132
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables – trade and other	(319)		365
Inventories	(1,424)		(3,088)
Accounts payable	(532)		786
Accrued expenses	588		70
Accrued wages, salaries and employee benefits	—		15
Customer advances	516		751
Other assets – net	128		57
Other liabilities – net	338		(623)
Net cash provided by (used for) operating activities	8,882		5,027
Cash flow from investing activities:
Capital expenditures – excluding equipment leased to others	(1,061)		(868)
Expenditures for equipment leased to others	(1,177)		(1,023)
Proceeds from disposals of leased assets and property, plant and equipment	563		666
Additions to finance receivables	(11,082)		(9,914)
Collections of finance receivables	10,391		9,738
Proceeds from sale of finance receivables	40		50
Investments and acquisitions (net of cash acquired)	(67)		(44)
Proceeds from sale of businesses and investments (net of cash sold)	(14)		1
Proceeds from sale of securities	747		2,080
Investments in securities	(3,689)		(2,399)
Other – net	32		15
Net cash provided by (used for) investing activities	(5,317)		(1,698)
Cash flow from financing activities:
Dividends paid	(1,901)		(1,820)
Common stock issued, including treasury shares reissued	36		2
Common shares repurchased	(2,209)		(3,309)
Proceeds from debt issued (original maturities greater than three months):
Financial Products	6,360		5,570
Payments on debt (original maturities greater than three months):
Machinery, Energy & Transportation	(99)		(20)
Financial Products	(4,360)		(5,269)
Short-term borrowings – net (original maturities three months or less)	(1,726)		(1,311)
Other – net	—		(1)
Net cash provided by (used for) financing activities	(3,899)		(6,158)
Effect of exchange rate changes on cash	(119)		(79)
Increase (decrease) in cash, cash equivalents and restricted cash	(453)		(2,908)
Cash, cash equivalents and restricted cash at beginning of period	7,013		9,263
Cash, cash equivalents and restricted cash at end of period	$	6,560	$	6,355

 Cash equivalents primarily represent short-term, highly liquid investments with original maturities of generally three months or less.

See accompanying notes to Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.                                   A.  Nature of operations

Information in our financial statements and related commentary are presented in the following categories:

Machinery, Energy & Transportation (ME&T) – We define ME&T 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 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.

B.  Basis of presentation

In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the consolidated results of operations for the three and nine months ended September 30, 2023 and 2022, (b) the consolidated comprehensive income for the three and nine months ended September 30, 2023 and 2022, (c) the consolidated financial position at September 30, 2023 and December 31, 2022, (d) the consolidated changes in shareholders’ equity for the three and nine months ended September 30, 2023 and 2022 and (e) the consolidated cash flow for the nine months ended September 30, 2023 and 2022.  The financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).

Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in our company’s annual report on Form 10-K for the year ended December 31, 2022 (2022 Form 10-K).

The December 31, 2022 financial position data included herein is derived from the audited consolidated financial statements included in the 2022 Form 10-K but does not include all disclosures required by U.S. GAAP. Certain amounts for prior periods have been reclassified to conform to the current period financial statement presentation.

Cat Financial has end-user customers and dealers that are variable interest entities (VIEs) of which we are not the primary beneficiary. Our maximum exposure to loss from our involvement with these VIEs is limited to the credit risk inherently present in the financial support that we have provided. Credit risk was evaluated and reflected in our financial statements as part of our overall portfolio of finance receivables and related allowance for credit losses. See Note 11 for further discussions on a consolidated VIE.

2.                                   New accounting guidance

A. Adoption of new accounting standards

Supplier finance programs (ASU 2022-04) - In September 2022, the Financial Accounting Standards Board (FASB) issued guidance to enhance the transparency of supplier finance programs. The new standard requires annual disclosure of the key terms of the program, a description of where in the financial statements amounts outstanding under the program are presented, a rollforward of such amounts, and interim disclosure of amounts outstanding as of the end of each period. The guidance does not affect recognition, measurement, or financial statement presentation of supplier finance programs. The ASU was effective on January 1, 2023, except for the rollforward, which is effective on January 1, 2024. Our adoption of this guidance results in the following disclosures relating to our supplier finance programs and related obligations.

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We facilitate voluntary supplier finance programs (the “Programs”) through participating financial institutions. The Programs are available to a wide range of suppliers and allow them the option to manage their cash flow. We are not a party to the agreements between the participating financial institutions and the suppliers in connection with the Programs. The range of payment terms, typically 60-90 days, we negotiate with our suppliers is consistent, irrespective of whether a supplier participates in the Programs. The amount of obligations outstanding that are confirmed as valid to the participating financial institutions for suppliers who voluntarily participate in the Programs, included in Accounts payable in the Consolidated Statement of Financial Position, were $825 million and $862 million at September 30, 2023 and December 31, 2022, respectively.

We consider the applicability and impact of all ASUs. We adopted the following ASUs effective January 1, 2023, none of which had a material impact on our financial statements:

ASU	Description
2021-08	Business combinations
2022-02	Financial instruments - Credit losses
2022-06	Reference rate reform

B. Accounting standards issued but not yet adopted

We consider the applicability and impact of all ASUs. We assessed the ASUs and determined that they either were not applicable or were not expected to have a material impact on our financial statements.

3.                                   Sales and revenue contract information

Trade receivables represent amounts due from dealers and end users for the sale of our products, and include amounts due from wholesale inventory financing provided by Cat Financial for a dealer’s purchase of inventory. We recognize trade receivables from dealers and end users in Receivables – trade and other and Long-term receivables – trade and other in the Consolidated Statement of Financial Position. Trade receivables from dealers and end users were $7,825 million, $7,551 million and $7,267 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively. Long-term trade receivables from dealers and end users were $494 million, $506 million and $624 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively.

For certain contracts, we invoice for payment when contractual milestones are achieved. We recognize a contract asset when a sale is recognized before achieving the contractual milestones for invoicing. We reduce the contract asset when we invoice for payment and recognize a corresponding trade receivable. Contract assets are included in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. Contract assets were $212 million, $247 million and $187 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively.

We invoice in advance of recognizing the sale of certain products. We recognize advanced customer payments as a contract liability in Customer advances and Other liabilities in the Consolidated Statement of Financial Position. Contract liabilities were $2,816 million, $2,314 million and $1,557 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively. We reduce the contract liability when revenue is recognized. During the three and nine months ended September 30, 2023, we recognized $197 million and $1,333 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2023. During the three and nine months ended September 30, 2022, we recognized $124 million and $781 million, respectively.

As of September 30, 2023, we have entered into contracts with dealers and end users for which sales have not been recognized as we have not satisfied our performance obligations and transferred control of the products. The dollar amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $13.2 billion, with about one-half of the amount expected to be completed and revenue recognized in the twelve months following September 30, 2023. We have elected the practical expedient not to disclose unsatisfied performance obligations with an original contract duration of one year or less. Contracts with an original duration of one year or less are primarily sales to dealers for machinery, engines and replacement parts.

See Note 16 for further disaggregated sales and revenues information.

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4.                                    Stock-based compensation

Accounting for stock-based compensation requires that the cost resulting from all stock-based payments be recognized in the financial statements based on the grant date fair value of the award.  Our stock-based compensation consists of stock options, restricted stock units (RSUs) and performance-based restricted stock units (PRSUs).

We recognized pretax stock-based compensation expense of $60 million and $178 million for the three and nine months ended September 30, 2023, respectively, and $55 million and $162 million for the three and nine months ended September 30, 2022, respectively.

The following table illustrates the type and fair value of the stock-based compensation awards granted during the nine months ended September 30, 2023 and 2022, respectively:

	Nine Months Ended September 30, 2023					Nine Months Ended September 30, 2022
	Shares Granted	Weighted-Average Fair Value Per Share		Weighted-Average Grant Date Stock Price		Shares Granted	Weighted-Average Fair Value Per Share		Weighted-Average Grant Date Stock Price
Stock options	777,275	$	75.79	$	253.98	1,029,202	$	51.69	$	196.70
RSUs	379,426	$	253.98	$	253.98	484,025	$	196.70	$	196.70
PRSUs	221,869	$	253.98	$	253.98	258,900	$	196.70	$	196.70

The following table provides the assumptions used in determining the fair value of the stock-based awards for the nine months ended September 30, 2023 and 2022, respectively:

	Grant Year
	2023	2022
Weighted-average dividend yield	2.60%	2.60%
Weighted-average volatility	31.0%	31.7%
Range of volatilities	28.5% - 35.5%	25.3% - 36.8%
Range of risk-free interest rates	3.92% - 5.03%	1.03% - 2.00%
Weighted-average expected lives	7 years	8 years

As of September 30, 2023, the total remaining unrecognized compensation expense related to nonvested stock-based compensation awards was $167 million, which will be amortized over the weighted-average remaining requisite service periods of approximately 1.8 years.

5.                                     Derivative financial instruments and risk management

Our earnings and cash flow are subject to fluctuations due to changes in foreign currency exchange rates, interest rates and commodity prices.  Our Risk Management Policy (policy) allows for the use of derivative financial instruments to prudently manage foreign currency exchange rate, interest rate and commodity price exposures.  Our policy specifies that derivatives are not to be used for speculative purposes.  Derivatives that we use are primarily foreign currency forward, option and cross currency contracts, interest rate contracts and commodity forward and option contracts.  Our derivative activities are subject to the management, direction and control of our senior financial officers.  We present at least annually to the Audit Committee of the Board of Directors on our risk management practices, including our use of financial derivative instruments.

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We recognize all derivatives at their fair value on the Consolidated Statement of Financial Position. On the date the derivative contract is entered into, we designate the derivative as (1) a hedge of the fair value of a recognized asset or liability (fair value hedge), (2) a hedge of a forecasted transaction or the variability of cash flow (cash flow hedge) or (3) an undesignated instrument. We record in current earnings changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged recognized asset or liability that is attributable to the hedged risk. We record in AOCI changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge, to the extent effective, on the Consolidated Statement of Financial Position until we reclassify them to earnings in the same period or periods during which the hedged transaction affects earnings.  We report changes in the fair value of undesignated derivative instruments in current earnings. We classify cash flows from designated derivative financial instruments within the same category as the item being hedged on the Consolidated Statement of Cash Flow.  We include cash flows from undesignated derivative financial instruments in the investing category on the Consolidated Statement of Cash Flow.

We formally document all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions.  This process includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities on the Consolidated Statement of Financial Position and linking cash flow hedges to specific forecasted transactions or variability of cash flow.

We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the designated derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flow of hedged items.  When a derivative is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, we discontinue hedge accounting prospectively, in accordance with the derecognition criteria for hedge accounting.

Foreign Currency Exchange Rate Risk

Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of sales made and costs incurred in foreign currencies. Movements in foreign currency rates also affect our competitive position as these changes may affect business practices and/or pricing strategies of non-U.S.-based competitors. Additionally, we have balance sheet positions denominated in foreign currencies, thereby creating exposure to movements in exchange rates.

Our ME&T operations purchase, manufacture and sell products in many locations around the world. As we have a diversified revenue and cost base, we manage our future foreign currency cash flow exposure on a net basis. We use foreign currency forward and option contracts to manage unmatched foreign currency cash inflow and outflow. Our objective is to minimize the risk of exchange rate movements that would reduce the U.S. dollar value of our foreign currency cash flow. Our policy allows for managing anticipated foreign currency cash flow for up to approximately five years. As of September 30, 2023, the maximum term of these outstanding contracts at inception was approximately 60 months.

We generally designate as cash flow hedges at inception of the contract any foreign currency forward or option contracts that meet the requirements for hedge accounting and the maturity extends beyond the current quarter-end. We perform designation on a specific exposure basis to support hedge accounting. The remainder of ME&T foreign currency contracts are undesignated.  

In managing foreign currency risk for our Financial Products operations, our objective is to minimize earnings volatility resulting from conversion and the remeasurement of net foreign currency balance sheet positions and future transactions denominated in foreign currencies. Our policy allows the use of foreign currency forward, option and cross currency contracts to offset the risk of currency mismatch between our assets and liabilities and exchange rate risk associated with future transactions denominated in foreign currencies. Our foreign currency forward and option contracts are primarily undesignated. We designate fixed-to-fixed cross currency contracts as cash flow hedges to protect against movements in exchange rates on foreign currency fixed-rate assets and liabilities.

Interest Rate Risk

Interest rate movements create a degree of risk by affecting the amount of our interest payments and the value of our fixed-rate debt. Our practice is to use interest rate contracts to manage our exposure to interest rate changes.

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Our ME&T operations generally use fixed-rate debt as a source of funding.  Our objective is to minimize the cost of borrowed funds.  Our policy allows us to enter into fixed-to-floating interest rate contracts and forward rate agreements to meet that objective. We designate fixed-to-floating interest rate contracts as fair value hedges at inception of the contract, and we designate certain forward rate agreements as cash flow hedges at inception of the contract.

Financial Products operations has a match-funding policy that addresses interest rate risk by aligning the interest rate profile (fixed or floating rate and duration) of Cat Financial’s debt portfolio with the interest rate profile of our receivables portfolio within predetermined ranges on an ongoing basis. In connection with that policy, we use interest rate derivative instruments to modify the debt structure to match assets within the receivables portfolio. This matched funding reduces the volatility of margins between interest-bearing assets and interest-bearing liabilities, regardless of which direction interest rates move.

Our policy allows us to use fixed-to-floating, floating-to-fixed and floating-to-floating interest rate contracts to meet the match-funding objective.  We designate fixed-to-floating interest rate contracts as fair value hedges to protect debt against changes in fair value due to changes in the benchmark interest rate.  We designate most floating-to-fixed interest rate contracts as cash flow hedges to protect against the variability of cash flows due to changes in the benchmark interest rate.

We have, at certain times, liquidated fixed-to-floating and floating-to-fixed interest rate contracts at both ME&T and Financial Products. We amortize the gains or losses associated with these contracts at the time of liquidation into earnings over the original term of the previously designated hedged item.

Commodity Price Risk

Commodity price movements create a degree of risk by affecting the price we must pay for certain raw materials. Our policy is to use commodity forward and option contracts to manage the commodity risk and reduce the cost of purchased materials.

Our ME&T operations purchase base and precious metals embedded in the components we purchase from suppliers.  Our suppliers pass on to us price changes in the commodity portion of the component cost. In addition, we are subject to price changes on energy products such as natural gas and diesel fuel purchased for operational use.

Our objective is to minimize volatility in the price of these commodities. Our policy allows us to enter into commodity forward and option contracts to lock in the purchase price of a portion of these commodities within a five-year horizon. All such commodity forward and option contracts are undesignated.

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The location and fair value of derivative instruments reported in the Consolidated Statement of Financial Position were as follows:

(Millions of dollars)	Fair Value
	September 30, 2023				December 31, 2022
	Assets 1		Liabilities 2		Assets 1		Liabilities 2
Designated derivatives
Foreign exchange contracts	$	411	$	(163)	$	462	$	(152)
Interest rate contracts	52		(346)		93		(288)
Total	$	463	$	(509)	$	555	$	(440)
Undesignated derivatives
Foreign exchange contracts	$	32	$	(48)	$	65	$	(47)
Commodity contracts	11		(2)		24		(9)
Total	$	43	$	(50)	$	89	$	(56)
1 Assets are classified on the Consolidated Statement of Financial Position as Receivables - trade and other or Long-term receivables - trade and other.
2 Liabilities are classified on the Consolidated Statement of Financial Position as Accrued expenses or Other liabilities.

The total notional amounts of the derivative instruments as of September 30, 2023 and December 31, 2022 were $23.4 billion and $24.3 billion, respectively. The notional amounts of the derivative financial instruments do not represent amounts exchanged by the parties. We calculate the amounts exchanged by the parties by referencing the notional amounts and by other terms of the derivatives, such as foreign currency exchange rates, interest rates or commodity prices.

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

(Millions of dollars)	Three Months Ended September 30,
	Fair Value / Undesignated Hedges				Cash Flow Hedges
	Gains (Losses) Recognized on the Consolidated Statement of Results of Operations1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI2
	2023		2022		2023		2022		2023		2022
Foreign exchange contracts	$	19	$	(2)	$	10	$	18	$	80	$	289
Interest rate contracts	(34)		(5)		3		26		14		7
Commodity contracts	14		(42)		—		—		—		—
Total	$	(1)	$	(49)	$	13	$	44	$	94	$	296
1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense). Interest rate contract gains (losses) are included in Interest expense of Financial Products and Interest expense excluding Financial Products.
2 Foreign exchange contract gains (losses) are primarily included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products.

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(Millions of dollars)	Nine Months Ended September 30,
	Fair Value / Undesignated Hedges				Cash Flow Hedges
	Gains (Losses) Recognized on the Consolidated Statement of Results of Operations 1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI 2
	2023		2022		2023		2022		2023		2022
Foreign exchange contracts	$	22	$	(32)	$	42	$	195	$	43	$	638
Interest rate contracts	(95)		12		15		103		41		(2)
Commodity contract	2		3		—		—		—		—
Total	$	(71)	$	(17)	$	57	$	298	$	84	$	636
1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense). Interest rate contract gains (losses) are included in Interest expense of Financial Products and Interest expense excluding Financial Products.
2 Foreign exchange contract gains (losses) are primarily included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products.

The following amounts were recorded on the Consolidated Statement of Financial Position related to cumulative basis adjustments for fair value hedges:

(Millions of dollars)	Carrying Value of the Hedged Liabilities				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities
	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Long-term debt due within one year	$	249	$	—	$	(4)	$	—
Long-term debt due after one year	4,732		4,173		(343)		(280)
Total	$	4,981	$	4,173	$	(347)	$	(280)

We enter into International Swaps and Derivatives Association (ISDA) master netting agreements within ME&T and Financial Products that permit the net settlement of amounts owed under their respective derivative contracts. Under these master netting agreements, net settlement generally permits the company or the counterparty to determine the net amount payable for contracts due on the same date and in the same currency for similar types of derivative transactions. The master netting agreements may also provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event.

Collateral is typically not required of the counterparties or of our company under the master netting agreements. As of September 30, 2023 and December 31, 2022, no cash collateral was received or pledged under the master netting agreements.

The effect of the net settlement provisions of the master netting agreements on our derivative balances upon an event of default or termination event was as follows:

(Millions of dollars)	September 30, 2023				December 31, 2022
	Assets		Liabilities		Assets		Liabilities
Gross Amounts Recognized	$	506	$	(559)	$	644	$	(496)
Financial Instruments Not Offset	(221)		221		(233)		233
Net Amount	$	285	$	(338)	$	411	$	(263)

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6.                                     Inventories

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

(Millions of dollars)	September 30, 2023		December 31, 2022
Raw materials	$	6,798	$	6,370
Work-in-process	1,650		1,452
Finished goods	8,788		8,138
Supplies	344		310
Total inventories	$	17,580	$	16,270

7.                                     Intangible assets and goodwill

A.  Intangible assets

Intangible assets were comprised of the following:

		September 30, 2023
(Millions of dollars)	Weighted Amortizable Life (Years)	Gross Carrying Amount 1		Accumulated Amortization 1		Net
Customer relationships	16	$	2,224	$	(1,774)	$	450
Intellectual property	14	503		(393)		110
Other	17	117		(73)		44
Total finite-lived intangible assets	15	$	2,844	$	(2,240)	$	604

		December 31, 2022
	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	16	$	2,233	$	(1,675)	$	558
Intellectual property	12	1,473		(1,320)		153
Other	16	132		(85)		47
Total finite-lived intangible assets	14	$	3,838	$	(3,080)	$	758
1 For the nine months ended September 30, 2023, $1.0 billion of intangible assets were fully amortized and have been removed.

Amortization expense for the three and nine months ended September 30, 2023 was $44 million and $174 million, respectively. Amortization expense for the three and nine months ended September 30, 2022 was $70 million and $213 million, respectively. Amortization expense related to intangible assets is expected to be:

(Millions of dollars)
Remaining Three Months of 2023	2024	2025	2026	2027	Thereafter
$44	$174	$165	$94	$31	$96

B.  Goodwill

No goodwill was impaired during the nine months ended September 30, 2023 or 2022.

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The changes in carrying amount of goodwill by reportable segment for the nine months ended September 30, 2023 were as follows: 

(Millions of dollars)	December 31, 2022		Other Adjustments 1		September 30, 2023
Construction Industries
Goodwill	$	287	$	(18)	$	269
Impairments	(22)		—		(22)
Net goodwill	265		(18)		247
Resource Industries
Goodwill	4,130		5		4,135
Impairments	(1,175)		—		(1,175)
Net goodwill	2,955		5		2,960
Energy & Transportation
Goodwill	2,947		(2)		2,945
Impairments	(925)		—		(925)
Net goodwill	2,022		(2)		2,020
All Other 2
Goodwill	46		(5)		41
Impairments	—		—		—
Net goodwill	46		(5)		41
Consolidated total
Goodwill	7,410		(20)		7,390
Impairments	(2,122)		—		(2,122)
Net goodwill	$	5,288	$	(20)	$	5,268

1 Other adjustments are comprised primarily of foreign currency translation.

2 Includes All Other operating segment (See Note 16).

8.                                     Investments in debt and equity securities

We have investments in certain debt and equity securities, which we record at fair value and primarily include in Other assets in the Consolidated Statement of Financial Position.

We classify debt securities primarily as available-for-sale. We include the unrealized gains and losses arising from the revaluation of available-for-sale debt securities, net of applicable deferred income taxes, in equity (AOCI in the Consolidated Statement of Financial Position). We include the unrealized gains and losses arising from the revaluation of the equity securities in Other income (expense) in the Consolidated Statement of Results of Operations. We generally determine realized gains and losses on sales of investments using the specific identification method for available-for-sale debt and equity securities and include them in Other income (expense) in the Consolidated Statement of Results of Operations.

The cost basis and fair value of available-for-sale debt securities with unrealized gains and losses included in equity (AOCI in the Consolidated Statement of Financial Position) were as follows:

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Available-for-sale debt securities	September 30, 2023						December 31, 2022
(Millions of dollars)	Cost Basis		Unrealized Pretax Net Gains (Losses)		Fair Value		Cost Basis		Unrealized Pretax Net Gains (Losses)		Fair Value
Government debt securities
U.S. treasury bonds	$	9	$	—	$	9	$	9	$	—	$	9
Other U.S. and non-U.S. government bonds	57		(4)		53		60		(5)		55
Corporate debt securities
Corporate bonds and other debt securities	2,823		(93)		2,730		2,561		(95)		2,466
Asset-backed securities	193		(4)		189		187		(5)		182
Mortgage-backed debt securities
U.S. governmental agency	429		(45)		384		364		(31)		333
Residential	3		(1)		2		3		(1)		2
Commercial	137		(11)		126		127		(10)		117
Total available-for-sale debt securities	$	3,651	$	(158)	$	3,493	$	3,311	$	(147)	$	3,164

Available-for-sale debt securities in an unrealized loss position:
	September 30, 2023
	Less than 12 months 1				12 months or more 1				Total
(Millions of dollars)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government debt securities
Other U.S. and non-U.S. government bonds	$	19	$	—	$	25	$	4	$	44	$	4
Corporate debt securities
Corporate bonds	1,660		29		972		64		2,632		93
Asset-backed securities	35		—		88		4		123		4
Mortgage-backed debt securities
U.S. governmental agency	102		4		281		41		383		45
Residential	—		—		2		1		2		1
Commercial	18		1		108		10		126		11
Total	$	1,834	$	34	$	1,476	$	124	$	3,310	$	158

	December 31, 2022
	Less than 12 months 1				12 months or more 1				Total
(Millions of dollars)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government debt securities
Other U.S. and non-U.S. government bonds	$	19	$	1	$	20	$	4	$	39	$	5
Corporate debt securities
Corporate bonds	1,815		46		357		50		2,172		96
Asset-backed securities	75		2		55		3		130		5
Mortgage-backed debt securities
U.S. governmental agency	229		16		98		15		327		31
Residential	2		—		1		1		3		1
Commercial	63		5		54		5		117		10
Total	$	2,203	$	70	$	585	$	78	$	2,788	$	148
1 Indicates the length of time that individual securities have been in a continuous unrealized loss position.

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The unrealized losses on our investments in government debt securities, corporate debt securities, and mortgage-backed debt securities relate to changes in underlying interest rates and credit spreads since time of purchase. We do not intend to sell the investments, and it is not likely that we will be required to sell the investments before recovery of their respective amortized cost basis. In addition, we did not expect credit-related losses on these investments as of September 30, 2023.

The cost basis and fair value of available-for-sale debt securities at September 30, 2023, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay and creditors may have the right to call obligations.        

	September 30, 2023
(Millions of dollars)	Cost Basis		Fair Value
Due in one year or less	$	940	$	929
Due after one year through five years	1,812		1,737
Due after five years through ten years	262		248
Due after ten years	68		67
U.S. governmental agency mortgage-backed securities	429		384
Residential mortgage-backed securities	3		2
Commercial mortgage-backed securities	137		126
Total debt securities – available-for-sale	$	3,651	$	3,493

Sales of available-for-sale debt securities:
	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Proceeds from the sale of available-for-sale securities	$	271	$	204	$	710	$	474
Gross gains from the sale of available-for-sale securities	—		—		—		1
Gross losses from the sale of available-for-sale securities	1		—		1		1

In addition, we had $2,550 million of investments in time deposits classified as held-to-maturity debt securities as of September 30, 2023. We did not have any investments classified as held-to-maturity debt securities as of December 31, 2022. All these investments mature within one year and we include them in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. We record held-to-maturity debt securities at amortized cost, which approximates fair value.

For the three months ended September 30, 2023 and 2022, the net unrealized gains (losses) for equity securities held at September 30, 2023 and 2022 were $(11) million and $(12) million, respectively. For the nine months ended September 30, 2023 and 2022, the net unrealized gains (losses) for equity securities held at September 30, 2023 and 2022 were $(25) million and $(97) million, respectively.

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9.                                     Postretirement benefits

A.  Pension and postretirement benefit costs    

	U.S. Pension Benefits				Non-U.S. Pension Benefits				Other Postretirement Benefits
	September 30,				September 30,				September 30,
(Millions of dollars)	2023		2022		2023		2022		2023		2022
For the three months ended:
Components of net periodic benefit cost:
Service cost	$	—	$	—	$	10	$	15	$	16	$	24
Interest cost	164		100		30		17		36		20
Expected return on plan assets	(173)		(167)		(40)		(33)		(2)		(3)
Amortization of prior service cost (credit)	—		—		—		—		(3)		(1)
Net periodic benefit cost (benefit) 1	$	(9)	$	(67)	$	—	$	(1)	$	47	$	40
For the nine months ended:
Components of net periodic benefit cost:
Service cost	$	—	$	—	$	30	$	40	$	50	$	74
Interest cost	492		301		91		53		108		60
Expected return on plan assets	(517)		(502)		(120)		(100)		(8)		(9)
Amortization of prior service cost (credit)	—		—		—		—		(9)		(4)
Net periodic benefit cost (benefit) 1	$	(25)	$	(201)	$	1	$	(7)	$	141	$	121

1 The service cost component is included in Operating costs in the Consolidated Statement of Results of Operations. All other components are included in Other income (expense) in the Consolidated Statement of Results of Operations.

We made $56 million and $320 million of contributions to our pension and other postretirement plans during the three and nine months ended September 30, 2023, respectively. We currently anticipate full-year 2023 contributions of approximately $372 million.

B.  Defined contribution benefit costs

Total company costs related to our defined contribution plans, which are included in Operating Costs in the Consolidated Statement of Results of Operations, were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
U.S. Plans	$	120	$	87	$	405	$	236
Non-U.S. Plans	27		29		85		85
	$	147	$	116	$	490	$	321

The increase in the U.S. defined contribution benefit costs for the three and nine months ended September 30, 2023 was primarily due to the fair value adjustments related to our non-qualified deferred compensation plans.

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10.                              Leases

Revenues from finance and operating leases, primarily included in Revenues of Financial Products on the Consolidated Statement of Results of Operations, were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Finance lease revenue	$	106	$	105	$	315	$	326
Operating lease revenue	286		270		836		819
Total	$	392	$	375	$	1,151	$	1,145

We present revenues net of sales and other related taxes.

11.                              Guarantees and product warranty

Caterpillar dealer performance guarantees

Dealer performance guarantees mainly consists of an indemnity to a third-party insurance company for potential losses related to performance bonds issued on behalf of Caterpillar dealers.  The bonds have varying terms and are issued to insure governmental agencies against nonperformance by certain dealers. The guarantees began to expire during the third quarter of 2023. No payments were made under the guarantees.

We have dealer performance guarantees and third-party performance guarantees that do not limit potential payment to end users related to indemnities and other commercial contractual obligations. In addition, we have entered into contracts involving industry standard indemnifications that do not limit potential payment. For these unlimited guarantees, we are unable to estimate a maximum potential amount of future payments that could result from claims made.

No significant loss has been experienced or is anticipated under any of these guarantees.  At September 30, 2023 and December 31, 2022, the related recorded liability was $4 million and $2 million, respectively. The maximum potential amount of future payments that we can estimate (undiscounted and without reduction for any amounts that may possibly be recovered under recourse or collateralized provisions) and we could be required to make under the guarantees was as follows:

(Millions of dollars)	September 30, 2023		December 31, 2022
Caterpillar dealer performance guarantees	$	42	$	188
Other guarantees	341		323
Total guarantees	$	383	$	511

Cat Financial provides guarantees to purchase certain loans of Caterpillar dealers from a special-purpose corporation (SPC) that qualifies as a variable interest entity.  The purpose of the SPC is to provide short-term working capital loans to Caterpillar dealers.  This SPC issues commercial paper and uses the proceeds to fund its loan program. Cat Financial receives a fee for providing this guarantee.  Cat Financial is the primary beneficiary of the SPC as its guarantees result in Cat Financial having both the power to direct the activities that most significantly impact the SPC’s economic performance and the obligation to absorb losses, and therefore Cat Financial has consolidated the financial statements of the SPC.  As of September 30, 2023 and December 31, 2022, the SPC’s assets of $1.54 billion and $971 million, respectively, were primarily comprised of loans to dealers, and the SPC’s liabilities of $1.54 billion and $970 million, respectively, were primarily comprised of commercial paper.  The assets of the SPC are not available to pay Cat Financial’s creditors. Cat Financial may be obligated to perform under the guarantee if the SPC experiences losses. No loss has been experienced or is anticipated under this loan purchase agreement.

We determine our product warranty liability by applying historical claim rate experience to the current field population and dealer inventory.  Generally, we base historical claim rates on actual warranty experience for each product by

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machine model/engine size by customer or dealer location (inside or outside North America).  We develop specific rates for each product shipment month and update them monthly based on actual warranty claim experience.  

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

	First Nine Months
(Millions of dollars)	2023		2022
Warranty liability, beginning of period	$	1,761	$	1,689
Reduction in liability (payments)	(617)		(589)
Increase in liability (new warranties)	724		562
Warranty liability, end of period	$	1,868	$	1,662

12.                               Profit per share

Computations of profit per share:	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions except per share data)	2023		2022		2023		2022
Profit for the period (A) 1	$	2,794	$	2,041	$	7,659	$	5,251
Determination of shares (in millions):
Weighted-average number of common shares outstanding (B)	509.8		525.0		513.0		530.1
Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price	2.8		2.6		2.7		3.1
Average common shares outstanding for fully diluted computation (C) 2	512.6		527.6		515.7		533.2
Profit per share of common stock:
Assuming no dilution (A/B)	$	5.48	$	3.89	$	14.93	$	9.91
Assuming full dilution (A/C) 2	$	5.45	$	3.87	$	14.85	$	9.85
Shares outstanding as of September 30, (in millions)					509.1		520.4
1 Profit attributable to common shareholders.
2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.

For the three and nine months ended September 30, 2023 and 2022, we excluded 0.8 million and 2.1 million of outstanding stock options, respectively, from the computation of diluted earnings per share because the effect would have been antidilutive.

For the three and nine months ended September 30, 2023, we repurchased 1.9 million and 9.5 million shares of Caterpillar common stock, respectively, at an aggregate cost of $0.5 billion and $2.2 billion, respectively. For the three and nine months ended September 30, 2022, we repurchased 7.6 million and 17.0 million shares of Caterpillar common stock, respectively, at an aggregate cost of $1.4 billion and $3.3 billion, respectively. We made these purchases through the combination of accelerated stock repurchase agreements with a third-party financial institution and open market transactions in 2023 and 2022.

13.                         Accumulated other comprehensive income (loss)

We present comprehensive income and its components in the Consolidated Statement of Comprehensive Income. Changes in the balances for each component of AOCI were as follows:

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	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Foreign currency translation:
Beginning balance	$	(1,863)	$	(2,282)	$	(2,328)	$	(1,508)
Gains (losses) on foreign currency translation	(194)		(592)		(235)		(1,328)
Less: Tax provision /(benefit)	10		26		(2)		64
Net gains (losses) on foreign currency translation	(204)		(618)		(233)		(1,392)
(Gains) losses reclassified to earnings	(1)		—		493		—
Less: Tax provision /(benefit)	—		—		—		—
Net (gains) losses reclassified to earnings	(1)		—		493		—
Other comprehensive income (loss), net of tax	(205)		(618)		260		(1,392)
Ending balance	$	(2,068)	$	(2,900)	$	(2,068)	$	(2,900)
Pension and other postretirement benefits
Beginning balance	$	(44)	$	(64)	$	(39)	$	(62)
Current year prior service credit (cost)	—		—		—		—
Less: Tax provision /(benefit)	—		—		—		—
Net current year prior service credit (cost)	—		—		—		—
Amortization of prior service (credit) cost	(3)		(1)		(9)		(4)
Less: Tax provision /(benefit)	—		—		(1)		(1)
Net amortization of prior service (credit) cost	(3)		(1)		(8)		(3)
Other comprehensive income (loss), net of tax	(3)		(1)		(8)		(3)
Ending balance	$	(47)	$	(65)	$	(47)	$	(65)
Derivative financial instruments
Beginning balance	$	71	$	(66)	$	28	$	(3)
Gains (losses) deferred	13		44		57		298
Less: Tax provision /(benefit)	5		35		14		71
Net gains (losses) deferred	8		9		43		227
(Gains) losses reclassified to earnings	(94)		(296)		(84)		(636)
Less: Tax provision /(benefit)	(24)		(96)		(22)		(155)
Net (gains) losses reclassified to earnings	(70)		(200)		(62)		(481)
Other comprehensive income (loss), net of tax	(62)		(191)		(19)		(254)
Ending balance	$	9	$	(257)	$	9	$	(257)
Available-for-sale securities
Beginning balance	$	(110)	$	(87)	$	(118)	$	20
Gains (losses) deferred	(22)		(55)		(12)		(188)
Less: Tax provision /(benefit)	(5)		(11)		(3)		(37)
Net gains (losses) deferred	(17)		(44)		(9)		(151)
(Gains) losses reclassified to earnings	1		—		1		—
Less: Tax provision /(benefit)	—		—		—		—
Net (gains) losses reclassified to earnings	1		—		1		—
Other comprehensive income (loss), net of tax	(16)		(44)		(8)		(151)
Ending balance	$	(126)	$	(131)	$	(126)	$	(131)
Total AOCI Ending Balance at September 30	$	(2,232)	$	(3,353)	$	(2,232)	$	(3,353)

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14.                              Environmental and legal matters

The Company is regulated by federal, state and international environmental laws governing its use, transport and disposal of substances and control of emissions. In addition to governing our manufacturing and other operations, these laws often impact the development of our products, including, but not limited to, required compliance with air emissions standards applicable to internal combustion engines. We have made, and will continue to make, significant research and development and capital expenditures to comply with these emissions standards.

We are engaged in remedial activities at a number of locations, often with other companies, pursuant to federal and state laws. When it is probable we will pay remedial costs at a site, and those costs can be reasonably estimated, we accrue the investigation, remediation, and operating and maintenance costs against our earnings. We accrue costs based on consideration of currently available data and information with respect to each individual site, including available technologies, current applicable laws and regulations, and prior remediation experience. Where no amount within a range of estimates is more likely, we accrue the minimum. Where multiple potentially responsible parties are involved, we consider our proportionate share of the probable costs. In formulating the estimate of probable costs, we do not consider amounts expected to be recovered from insurance companies or others. We reassess these accrued amounts on a quarterly basis. The amount recorded for environmental remediation is not material and is included in Accrued expenses. We believe there is no more than a remote chance that a material amount for remedial activities at any individual site, or at all the sites in the aggregate, will be required.

In addition, we are involved in other unresolved legal actions that arise in the normal course of business. The most prevalent of these unresolved actions involve disputes related to product design, manufacture and performance liability (including claimed asbestos exposure), contracts, employment issues, environmental matters, intellectual property rights, taxes (other than income taxes) and securities laws. The aggregate range of reasonably possible losses in excess of accrued liabilities, if any, associated with these unresolved legal actions is not material. In some cases, we cannot reasonably estimate a range of loss because there is insufficient information regarding the matter. However, we believe there is no more than a remote chance that any liability arising from these matters would be material. Although it is not possible to predict with certainty the outcome of these unresolved legal actions, we believe that these actions will not individually or in the aggregate have a material adverse effect on our consolidated results of operations, financial position or liquidity.

15.                              Income taxes

The effective tax rate for the nine months ended September 30, 2023 was 22.4 percent compared to 21.4 percent for the nine months ended September 30, 2022. The effective tax rate for the three months ended September 30, 2023 was 20.9 percent compared to 20.6 percent for the three months ended September 30, 2022.

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

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

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16.                              Segment information

A.    Basis for segment information

Our Executive Office is comprised of a Chief Executive Officer (CEO), four Group Presidents, a Chief Financial Officer (CFO), a Chief Legal Officer and a Chief Human Resources Officer. The Group Presidents and CFO are accountable for a related set of end-to-end businesses that they manage.  The Chief Legal Officer leads the Law, Security and Public Policy Division. The Chief Human Resources Officer leads the Human Resources Organization. The CEO allocates resources and manages performance at the Group President/CFO level.  As such, the CEO serves as our Chief Operating Decision Maker, and operating segments are primarily based on the Group President/CFO reporting structure.

Three of our operating segments, Construction Industries, Resource Industries and Energy & Transportation are led by Group Presidents.  One operating segment, Financial Products, is led by the CFO who also has responsibility for Corporate Services. Corporate Services is a cost center primarily responsible for the performance of certain support functions globally and to provide centralized services; it does not meet the definition of an operating segment. One Group President leads one smaller operating segment that is included in the All Other operating segment.  The Law, Security and Public Policy Division and the Human Resources Organization are cost centers and do not meet the definition of an operating segment.

B.    Description of segments

We have five operating segments, of which four are reportable segments. Following is a brief description of our reportable segments and the business activities included in the All Other operating segment:

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. Inter-segment sales are a source of revenue for this segment.

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

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

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 ME&T, 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.

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

C.    Segment measurement and reconciliations

There are several methodology differences between our segment reporting and our external reporting.  The following is a list of the more significant methodology differences:

•ME&T segment net assets generally include inventories, receivables, property, plant and equipment, goodwill, intangibles, accounts payable and customer advances. We generally manage at the corporate level liabilities other than accounts payable and customer advances, and we do not include these in segment operations.  Financial Products Segment assets generally include all categories of assets.

•We value segment inventories and cost of sales using a current cost methodology.

•We amortize goodwill allocated to segments using a fixed amount based on a 20-year useful life.  This methodology difference only impacts segment assets. We do not include goodwill amortization expense in segment profit. In addition, we have allocated to segments only a portion of goodwill for certain acquisitions made in 2011 or later.

•We generally manage currency exposures for ME&T at the corporate level and do not include in segment profit the effects of changes in exchange rates on results of operations within the year.  We report the net difference created in the translation of revenues and costs between exchange rates used for U.S. GAAP reporting and exchange rates used for segment reporting as a methodology difference.

•We do not include stock-based compensation expense in segment profit.

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•Postretirement benefit expenses are split; segments are generally responsible for service costs, with the remaining elements of net periodic benefit cost included as a methodology difference.

•We determine ME&T segment profit on a pretax basis and exclude interest expense and most other income/expense items.  We determine Financial Products Segment profit on a pretax basis and include other income/expense items.

Reconciling items are created based on accounting differences between segment reporting and our consolidated external reporting. Please refer to pages 30 to 33 for financial information regarding significant reconciling items.  Most of our reconciling items are self-explanatory given the above explanations.  For the reconciliation of profit, we have grouped the reconciling items as follows:

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

•Restructuring costs: May include costs for employee separation, long-lived asset impairments, contract terminations and divestiture impacts. These costs are included in Other operating (income) expenses except for defined-benefit plan curtailment losses and special termination benefits, which are included in Other income (expense). Restructuring costs also include other exit-related costs, which may consist of accelerated depreciation, inventory write-downs, building demolition, equipment relocation and project management costs and LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold. See Note 20 for more information.

•Methodology differences:  See previous discussion of significant accounting differences between segment reporting and consolidated external reporting.

•Timing:   Timing differences in the recognition of costs between segment reporting and consolidated external reporting. For example, we report certain costs on the cash basis for segment reporting and the accrual basis for consolidated external reporting.

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For the three and nine months ended September 30, 2023 and 2022, sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows:

Sales and Revenues by Geographic Region
(Millions of dollars)	North America		Latin America		EAME		Asia/ Pacific		External Sales and Revenues			Intersegment Sales and Revenues		Total Sales and Revenues
Three Months Ended September 30, 2023
Construction Industries	$	4,078	$	555	$	1,351	$	997	$	6,981		$	18	$	6,999
Resource Industries	1,366		499		508		886		3,259			92		3,351
Energy & Transportation	2,966		460		1,428		901		5,755			1,104		6,859
Financial Products Segment	627		110		132		110		979		1	—		979
Total sales and revenues from reportable segments	9,037		1,624		3,419		2,894		16,974			1,214		18,188
All Other operating segment	16		(1)		5		10		30			76		106
Corporate Items and Eliminations	(126)		(20)		(22)		(26)		(194)			(1,290)		(1,484)
Total Sales and Revenues	$	8,927	$	1,603	$	3,402	$	2,878	$	16,810		$	—	$	16,810
Three Months Ended September 30, 2022
Construction Industries	$	3,106	$	799	$	1,247	$	1,084	$	6,236		$	40	$	6,276
Resource Industries	1,122		472		526		893		3,013			74		3,087
Energy & Transportation	2,422		468		1,280		827		4,997			1,189		6,186
Financial Products Segment	522		90		100		107		819		1	—		819
Total sales and revenues from reportable segments	7,172		1,829		3,153		2,911		15,065			1,303		16,368
All Other operating segment	16		—		4		15		35			68		103
Corporate Items and Eliminations	(53)		(20)		(12)		(21)		(106)			(1,371)		(1,477)
Total Sales and Revenues	$	7,135	$	1,809	$	3,145	$	2,905	$	14,994		$	—	$	14,994

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $181 million and $124 million in the three months ended September 30, 2023 and 2022, respectively.

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Sales and Revenues by Geographic Region
(Millions of dollars)	North America		Latin America		EAME		Asia/ Pacific		External Sales and Revenues			Intersegment Sales and Revenues		Total Sales and Revenues
Nine Months Ended September 30, 2023
Construction Industries	$	11,654	$	1,720	$	4,125	$	3,307	$	20,806		$	93	$	20,899
Resource Industries	4,016		1,511		1,624		2,940		10,091			250		10,341
Energy & Transportation	8,658		1,299		4,291		2,519		16,767			3,565		20,332
Financial Products Segment	1,795		316		364		329		2,804		1	—		2,804
Total sales and revenues from reportable segments	26,123		4,846		10,404		9,095		50,468			3,908		54,376
All Other operating segment	50		(1)		13		37		99			234		333
Corporate Items and Eliminations	(374)		(61)		(64)		(78)		(577)			(4,142)		(4,719)
Total Sales and Revenues	$	25,799	$	4,784	$	10,353	$	9,054	$	49,990		$	—	$	49,990
Nine Months Ended September 30, 2022
Construction Industries	$	8,832	$	2,061	$	3,726	$	3,694	$	18,313		$	111	$	18,424
Resource Industries	3,167		1,337		1,609		2,554		8,667			211		8,878
Energy & Transportation	6,637		1,160		3,679		2,193		13,669			3,260		16,929
Financial Products Segment	1,530		250		293		327		2,400		1	—		2,400
Total sales and revenues from reportable segments	20,166		4,808		9,307		8,768		43,049			3,582		46,631
All Other operating segment	52		—		14		46		112			227		339
Corporate Items and Eliminations	(175)		(59)		(33)		(64)		(331)			(3,809)		(4,140)
Total Sales and Revenues	$	20,043	$	4,749	$	9,288	$	8,750	$	42,830		$	—	$	42,830

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $515 million and $332 million in the nine months ended September 30, 2023 and 2022, respectively.

For the three and nine months ended September 30, 2023 and 2022, Energy & Transportation segment sales by end user application were as follows:

Energy & Transportation External Sales
	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Oil and gas	$	1,667	$	1,323	$	4,741	$	3,503
Power generation	1,598		1,320		4,527		3,518
Industrial	1,220		1,158		3,793		3,295
Transportation	1,270		1,196		3,706		3,353
Energy & Transportation External Sales	$	5,755	$	4,997	$	16,767	$	13,669

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Reconciliation of Consolidated profit before taxes:
(Millions of dollars)	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Profit from reportable segments:
Construction Industries	$	1,847	$	1,209	$	5,440	$	3,255
Resource Industries	730		506		2,234		1,222
Energy & Transportation	1,181		935		3,507		2,132
Financial Products Segment	203		220		675		675
Total profit from reportable segments	3,961		2,870		11,856		7,284
Profit from All Other operating segment	21		8		42		42
Cost centers	10		(37)		53		1
Corporate costs	(265)		(168)		(714)		(670)
Timing	22		(84)		(89)		(129)
Restructuring costs	(46)		(49)		(688)		(90)
Methodology differences:
Inventory/cost of sales	(2)		138		137		407
Postretirement benefit expense	(13)		82		(84)		293
Stock-based compensation expense	(60)		(55)		(178)		(162)
Financing costs	(13)		(75)		(115)		(269)
Currency	78		53		106		315
Other income/expense methodology differences	(164)		(109)		(468)		(287)
Other methodology differences	(14)		(16)		(57)		(82)
Total consolidated profit before taxes	$	3,515	$	2,558	$	9,801	$	6,653

Reconciliation of Assets:
(Millions of dollars)	September 30, 2023		December 31, 2022
Assets from reportable segments:
Construction Industries	$	5,407	$	5,168
Resource Industries	5,831		5,775
Energy & Transportation	10,373		9,455
Financial Products Segment	34,953		34,269
Total assets from reportable segments	56,564		54,667
Assets from All Other operating segment	1,855		1,828
Items not included in segment assets:
Cash and cash equivalents	5,874		6,042
Deferred income taxes	2,601		2,098
Goodwill and intangible assets	4,413		4,248
Property, plant and equipment – net and other assets	6,969		4,234
Inventory methodology differences	(3,259)		(3,063)
Liabilities included in segment assets	12,227		12,519
Other	(453)		(630)
Total assets	$	86,791	$	81,943

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Reconciliation of Depreciation and amortization:
(Millions of dollars)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Depreciation and amortization from reportable segments:
Construction Industries	$	54	$	57	$	162	$	172
Resource Industries	66		92		235		275
Energy & Transportation	139		136		401		405
Financial Products Segment	186		183		545		556
Total depreciation and amortization from reportable segments	445		468		1,343		1,408
Items not included in segment depreciation and amortization:
All Other operating segment	59		56		176		172
Cost centers	23		20		65		63
Other	(2)		7		15		18
Total depreciation and amortization	$	525	$	551	$	1,599	$	1,661

Reconciliation of Capital expenditures:
(Millions of dollars)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Capital expenditures from reportable segments:
Construction Industries	$	105	$	74	$	188	$	149
Resource Industries	62		65		132		129
Energy & Transportation	249		167		595		444
Financial Products Segment	342		295		1,031		870
Total capital expenditures from reportable segments	758		601		1,946		1,592
Items not included in segment capital expenditures:
All Other operating segment	67		54		142		116
Cost centers	27		16		71		41
Timing	—		(35)		185		173
Other	(71)		(19)		(106)		(31)
Total capital expenditures	$	781	$	617	$	2,238	$	1,891

17.                             Cat Financial financing activities

Allowance for credit losses

Portfolio segments

A portfolio segment is the level at which Cat Financial develops a systematic methodology for determining its allowance for credit losses. Cat Financial's portfolio segments and related methods for estimating expected credit losses are as follows:

Customer

Cat Financial provides loans and finance leases to end-user customers primarily for the purpose of financing new and used Caterpillar machinery, engines and equipment for commercial use. Cat Financial also provides financing for power generation facilities that, in most cases, incorporate Caterpillar products. The average original term of Cat Financial's customer finance receivable portfolio was approximately 51 months with an average remaining term of approximately 27 months as of September 30, 2023.

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Cat Financial typically maintains a security interest in financed equipment and requires physical damage insurance coverage on the financed equipment, both of which provide Cat Financial with certain rights and protections. If Cat Financial's collection efforts fail to bring a defaulted account current, Cat Financial generally can repossess the financed equipment, after satisfying local legal requirements, and sell it within the Caterpillar dealer network or through third-party auctions.

Cat Financial estimates the allowance for credit losses related to its customer finance receivables based on loss forecast models utilizing probabilities of default and the estimated loss given default based on past loss experience adjusted for current conditions and reasonable and supportable forecasts capturing country and industry-specific economic factors.

During the three and nine months ended September 30, 2023, Cat Financial's forecasts reflected a continuation of the trend of relatively low unemployment rates and delinquencies within their portfolio. However, industry delinquencies show an increasing trend as persistently high inflation rates and consequent central bank actions are weakening global economic growth. The company believes the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long-term trends.

Dealer

Cat Financial provides financing to Caterpillar dealers in the form of wholesale financing plans. Cat Financial's wholesale financing plans provide assistance to dealers by financing their mostly new Caterpillar equipment inventory and rental fleets on a secured and unsecured basis. In addition, Cat Financial provides a variety of secured and unsecured loans to Caterpillar dealers.

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

In general, Cat Financial's Dealer portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to its close working relationships with the dealers and their financial strength. Therefore, Cat Financial made no adjustments to historical loss rates during the three and nine months ended September 30, 2023.

Classes of finance receivables

Cat Financial further evaluates portfolio segments by the class of finance receivables, which is defined as a level of information (below a portfolio segment) in which the finance receivables have the same initial measurement attribute and a similar method for assessing and monitoring credit risk. Cat Financial's classes, which align with management reporting for credit losses, are as follows:

•North America - Finance receivables originated in the United States and Canada.

•EAME - Finance receivables originated in Europe, Africa, the Middle East and Eurasia.

•Asia/Pacific - Finance receivables originated in Australia, New Zealand, China, Japan, Southeast Asia and India.

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

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

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

Receivable balances, including accrued interest, are written off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible (generally upon repossession of the collateral). The amount of the write-off is determined by comparing the fair value of the collateral, less cost to sell, to the amortized cost. Subsequent recoveries, if any, are credited to the allowance for credit losses when received.

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

(Millions of dollars)	Three Months Ended September 30, 2023						Three Months Ended September 30, 2022
	Customer		Dealer		Total		Customer		Dealer		Total
Beginning balance	$	265	$	50	$	315	$	290	$	82	$	372
Write-offs	(22)		—		(22)		(30)		—		(30)
Recoveries	13		—		13		17		—		17
Provision for credit losses 1	31		1		32		(2)		(17)		(19)
Other	(3)		—		(3)		(5)		—		(5)
Ending balance	$	284	$	51	$	335	$	270	$	65	$	335
	Nine Months Ended September 30, 2023						Nine Months Ended September 30, 2022
	Customer		Dealer		Total		Customer		Dealer		Total
Beginning balance	$	277	$	65	$	342	$	251	$	82	$	333
Write-offs	(63)		—		(63)		(68)		—		(68)
Recoveries	36		—		36		47		—		47
Provision for credit losses 1	35		(14)		21		46		(17)		29
Other	(1)		—		(1)		(6)		—		(6)
Ending balance	$	284	$	51	$	335	$	270	$	65	$	335
Finance Receivables	$	19,768	$	2,060	$	21,828	$	19,363	$	1,737	$	21,100
1 Excludes provision for credit losses on unfunded commitments and other miscellaneous receivables.

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

(Millions of dollars)	Three Months Ended September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total
North America	$	1	$	2	$	2	$	1	$	1	$	—	$	2	$	9
EAME	—		1		1		1		—		—		—		3
Asia/Pacific	—		2		3		1		—		—		—		6
Latin America	—		1		1		1		—		1		—		4
Total	$	1	$	6	$	7	$	4	$	1	$	1	$	2	$	22
	Nine Months Ended September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total
North America	$	1	$	7	$	7	$	2	$	2	$	1	$	9	$	29
EAME	—		2		3		3		—		1		—		9
Asia/Pacific	—		3		6		4		1		—		—		14
Latin America	—		3		3		3		1		1		—		11
Total	$	1	$	15	$	19	$	12	$	4	$	3	$	9	$	63

Credit quality of finance receivables

At origination, Cat Financial evaluates credit risk based on a variety of credit quality factors including prior payment experience, customer financial information, credit ratings, loan-to-value ratios, probabilities of default, industry trends, macroeconomic factors and other internal metrics. On an ongoing basis, Cat Financial monitors credit quality based on past-due status as there is a meaningful correlation between the past-due status of customers and the risk of loss. In determining past-due status, Cat Financial considers the entire finance receivable past due when any installment is over 30 days past due.

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Customer

The tables below summarize the aging category of Cat Financial's amortized cost of finance receivables in the Customer portfolio segment by origination year:

(Millions of dollars)	September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,134	$	2,940	$	2,310	$	919	$	310	$	65	$	304	$	9,982
31-60 days past due	18		31		23		15		6		2		3		98
61-90 days past due	6		10		7		4		1		—		2		30
91+ days past due	5		19		18		10		5		3		2		62
EAME
Current	914		962		649		297		144		124		—		3,090
31-60 days past due	11		8		11		3		1		—		—		34
61-90 days past due	3		6		3		3		2		—		—		17
91+ days past due	4		16		18		9		3		1		—		51
Asia/Pacific
Current	722		660		361		103		21		6		—		1,873
31-60 days past due	2		12		10		4		1		—		—		29
61-90 days past due	1		3		3		4		1		—		—		12
91+ days past due	—		4		5		3		—		—		—		12
Mining
Current	807		730		420		143		92		49		49		2,290
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		1		—		—		2		—		3
91+ days past due	—		2		2		—		—		1		—		5
Latin America
Current	552		571		255		74		29		8		—		1,489
31-60 days past due	6		13		7		4		3		1		—		34
61-90 days past due	1		5		2		1		—		—		—		9
91+ days past due	1		15		9		8		8		20		—		61
Power
Current	46		68		69		86		30		122		162		583
31-60 days past due	—		—		—		—		—		1		—		1
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		3		—		3
Totals by Aging Category
Current	$	6,175	$	5,931	$	4,064	$	1,622	$	626	$	374	$	515	$	19,307
31-60 days past due	37		64		51		26		11		4		3		196
61-90 days past due	11		24		16		12		4		2		2		71
91+ days past due	10		56		52		30		16		28		2		194
Total Customer	$	6,233	$	6,075	$	4,183	$	1,690	$	657	$	408	$	522	$	19,768

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(Millions of dollars)	December 31, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,915	$	3,276	$	1,525	$	653	$	206	$	34	$	240	$	9,849
31-60 days past due	25		26		18		12		4		1		4		90
61-90 days past due	9		15		7		3		1		—		3		38
91+ days past due	11		16		12		6		4		3		4		56
EAME
Current	1,270		953		477		280		155		68		—		3,203
31-60 days past due	10		12		7		1		1		—		—		31
61-90 days past due	8		4		3		1		—		—		—		16
91+ days past due	6		25		16		4		1		1		—		53
Asia/Pacific
Current	1,033		684		313		69		18		2		—		2,119
31-60 days past due	10		12		8		1		1		—		—		32
61-90 days past due	2		5		4		2		—		—		—		13
91+ days past due	2		6		6		4		—		—		—		18
Mining
Current	863		575		220		171		93		108		80		2,110
31-60 days past due	—		1		—		—		—		—		—		1
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		1		—		1
Latin America
Current	770		400		150		69		26		20		—		1,435
31-60 days past due	7		8		4		2		—		1		—		22
61-90 days past due	2		5		1		1		—		—		—		9
91+ days past due	2		13		11		2		1		—		—		29
Power
Current	78		85		142		33		18		161		125		642
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		5		—		5
Totals by Aging Category
Current	$	7,929	$	5,973	$	2,827	$	1,275	$	516	$	393	$	445	$	19,358
31-60 days past due	52		59		37		16		6		2		4		176
61-90 days past due	21		29		15		7		1		—		3		76
91+ days past due	21		60		45		16		6		10		4		162
Total Customer	$	8,023	$	6,121	$	2,924	$	1,314	$	529	$	405	$	456	$	19,772

Finance receivables in the Customer portfolio segment are substantially secured by collateral, primarily in the form of Caterpillar and other equipment. For those contracts where the borrower is experiencing financial difficulty, repayment of the outstanding amounts is generally expected to be provided through the operation or repossession and sale of the equipment.

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Dealer

As of September 30, 2023 and December 31, 2022, Cat Financial's total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $44 million and $58 million, respectively, that were 91+ days past due in Latin America, all of which were originated in 2017.

Non-accrual finance receivables

Recognition of income is suspended and the finance receivable is placed on non-accrual status when management determines that collection of future income is not probable. Contracts on non-accrual status are generally more than 120 days past due. Recognition is resumed and previously suspended income is recognized when collection is considered probable. Payments received while the finance receivable is on non-accrual status are applied to interest and principal in accordance with the contractual terms. Interest earned but uncollected prior to the receivable being placed on non-accrual status is written off through Provision for credit losses when, in the judgment of management, it is considered uncollectible.

In Cat Financial's Customer portfolio segment, finance receivables which were on non-accrual status and finance receivables over 90 days past due and still accruing income were as follows:

(Millions of dollars)	September 30, 2023						December 31, 2022
	Amortized Cost						Amortized Cost
	Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing		Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing
North America	$	54	$	—	$	12	$	52	$	4	$	11
EAME	44		—		9		43		—		10
Asia/Pacific	8		—		5		11		—		7
Mining	4		—		1		—		1		—
Latin America	69		—		—		45		—		—
Power	9		—		—		5		11		—
Total	$	188	$	—	$	27	$	156	$	16	$	28

There were $44 million and $58 million, respectively, in finance receivables in Cat Financial's Dealer portfolio segment on non-accrual status as of September 30, 2023 and December 31, 2022, all of which was in Latin America.

Modifications

Cat Financial periodically modifies the terms of their finance receivable agreements in response to borrowers’ financial difficulty. Typically, the types of modifications granted are payment deferrals, interest-only payment periods and/or term extensions. Many modifications Cat Financial grants are for commercial reasons or for borrowers experiencing some form of short-term financial stress and may result in insignificant payment delays. Cat Financial does not consider these borrowers to be experiencing financial difficulty. Modifications for borrowers Cat Financial does consider to be experiencing financial difficulty typically result in payment deferrals and/or reduced payments for a period of four months or longer, term extension of six months or longer or a combination of both.

During the three and nine months ended September 30, 2023, there were no finance receivable modifications granted to borrowers experiencing financial difficulty in Cat Financial's Dealer portfolio segment. The amortized cost basis of finance receivables modified for borrowers experiencing financial difficulty in the Customer portfolio segment during the three and nine months ended September 30, 2023, was $13 million and $38 million, respectively. Total modifications with borrowers experiencing financial difficulty represented 0.06 percent and 0.17 percent of Cat Financial's finance receivable portfolio for the same periods, respectively.

For the three and nine months ended September 30, 2023, the financial effects of term extensions for borrowers experiencing financial difficulty added a weighted average of 8 and 17 months, respectively, to the terms of modified contracts. For the three and nine months ended September 30, 2023, the financial effects of payment delays for

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borrowers experiencing financial difficulty resulted in weighted average payment deferrals and/or interest only payment periods of 6 and 7 months, respectively.

After Cat Financial modifies a finance receivable, they continue to track its performance under its most recent modified terms. As of September 30, 2023, all of the finance receivables modified with borrowers experiencing financial difficulty are current except for $3 million in EAME that was 31-60 days past due.

The effect of most modifications made to finance receivables for borrowers experiencing financial difficulty is already included in the allowance for credit losses based on the methodologies used to estimate the allowance; therefore, a change to the allowance for credit losses is generally not recorded upon modification. On rare occasions when principal forgiveness is provided, the amount forgiven is written off against the allowance for credit losses.

18.                              Fair value disclosures

    A. Fair value measurements

The guidance on fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.  This guidance also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques.  Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions.  In accordance with this guidance, fair value measurements are classified under the following hierarchy:

•Level 1 – Quoted prices for identical instruments in active markets.

•Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

•Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

When available, we use quoted market prices to determine fair value, and we classify such measurements within Level 1.  In some cases where market prices are not available, we make use of observable market based inputs to calculate fair value, in which case the measurements are classified within Level 2.  If quoted or observable market prices are not available, fair value is based upon valuations in which one or more significant inputs are unobservable, including internally developed models that use, where possible, current market-based parameters such as interest rates, yield curves and currency rates.  These measurements are classified within Level 3.

We classify fair value measurements according to the lowest level input or value-driver that is significant to the valuation.  We may therefore classify a measurement within Level 3 even though there may be significant inputs that are readily observable.

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Fair value measurement includes the consideration of nonperformance risk.  Nonperformance risk refers to the risk that an obligation (either by a counterparty or Caterpillar) will not be fulfilled.  For financial assets traded in an active market (Level 1 and certain Level 2), the nonperformance risk is included in the market price.  For certain other financial assets and liabilities (certain Level 2 and Level 3), our fair value calculations have been adjusted accordingly.

Investments in debt and equity securities

We have investments in certain debt and equity securities that are recorded at fair value.  Fair values for our U.S. treasury bonds and large capitalization value and smaller company growth equity securities are based upon valuations for identical instruments in active markets.  Fair values for other government debt securities, corporate debt securities and mortgage-backed debt securities are based upon models that take into consideration such market-based factors as recent sales, risk-free yield curves and prices of similarly rated bonds.

We also have investments in time deposits classified as held-to-maturity debt securities. The fair value of these investments is based upon valuations observed in less active markets than Level 1. These investments have a maturity of less than one year and are recorded at amortized costs, which approximate fair value.

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

See Note 8 for additional information on our investments in debt and equity securities.

Derivative financial instruments

The fair value of interest rate contracts is primarily based on a standard industry accepted valuation model that utilizes the appropriate market-based forward swap curves and zero-coupon interest rates to determine discounted cash flows.  The fair value of foreign currency and commodity forward, option and cross currency contracts is based on standard industry accepted valuation models that discount cash flows resulting from the differential between the contract price and the market-based forward rate.

See Note 5 for additional information.

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Assets and liabilities measured on a recurring basis at fair value included in our Consolidated Statement of Financial Position as of September 30, 2023 and December 31, 2022 were as follows:

	September 30, 2023
(Millions of dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt securities
U.S. treasury bonds	$	9	$	—	$	—	$	—	$	9
Other U.S. and non-U.S. government bonds	—		53		—		—		53
Corporate debt securities
Corporate bonds and other debt securities	—		2,730		—		—		2,730
Asset-backed securities	—		189		—		—		189
Mortgage-backed debt securities
U.S. governmental agency	—		384		—		—		384
Residential	—		2		—		—		2
Commercial	—		126		—		—		126
Total debt securities	9		3,484		—		—		3,493
Equity securities
Large capitalization value	204		—		—		—		204
Smaller company growth	31		—		—		—		31
REIT	—		—		—		184		184
Total equity securities	235		—		—		184		419
Derivative financial instruments - assets
Foreign currency contracts - net	—		232		—		—		232
Commodity contracts - net	—		9		—		—		9
Total assets	$	244	$	3,725	$	—	$	184	$	4,153
Liabilities
Derivative financial instruments - liabilities
Interest rate contracts - net	$	—	$	294	$	—	$	—	$	294
Total liabilities	$	—	$	294	$	—	$	—	$	294

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	December 31, 2022
(Millions of dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt securities
U.S. treasury bonds	$	9	$	—	$	—	$	—	$	9
Other U.S. and non-U.S. government bonds	—		55		—		—		55
Corporate debt securities
Corporate bonds and other debt securities	—		2,416		50		—		2,466
Asset-backed securities	—		182		—		—		182
Mortgage-backed debt securities
U.S. governmental agency	—		333		—		—		333
Residential	—		2		—		—		2
Commercial	—		117		—		—		117
Total debt securities	9		3,105		50		—		3,164
Equity securities
Large capitalization value	203		—		—		—		203
Smaller company growth	31		—		—		—		31
REIT	—		—		—		207		207
Total equity securities	234		—		—		207		441
Derivative financial instruments - assets
Foreign currency contracts - net	—		328		—		—		328
Commodity contracts - net	—		15		—		—		15
Total Assets	$	243	$	3,448	$	50	$	207	$	3,948
Liabilities
Derivative financial instruments - liabilities
Interest rate contracts - net	$	—	$	195	$	—	$	—	$	195
Total liabilities	$	—	$	195	$	—	$	—	$	195

In addition to the amounts above, certain Cat Financial loans are subject to measurement at fair value on a nonrecurring basis and are classified as Level 3 measurements. A loan is measured at fair value when management determines that collection of contractual amounts due is not probable and the loan is individually evaluated.  In these cases, an allowance for credit losses may be established based either on the present value of expected future cash flows discounted at the receivables’ effective interest rate, the fair value of the collateral for collateral-dependent receivables, or the observable market price of the receivable.  In determining collateral value, Cat Financial estimates the current fair market value of the collateral less selling costs. Cat Financial had loans carried at fair value of $57 million and $68 million as of September 30, 2023 and December 31, 2022, respectively.  

    B. Fair values of financial instruments

In addition to the methods and assumptions we use to record the fair value of financial instruments as discussed in the Fair value measurements section above, we use the following methods and assumptions to estimate the fair value of our financial instruments:

Cash and cash equivalents

Carrying amount approximates fair value. We classify cash and cash equivalents as Level 1. See Consolidated Statement of Financial Position.

Restricted cash and short-term investments

Carrying amount approximates fair value.  We include restricted cash and short-term investments in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. We classify these instruments as Level 1 except for time deposits which are Level 2, and certain corporate debt securities which are Level 3. See Note 8 for additional information.

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Finance receivables

We estimate fair value by discounting the future cash flows using current rates, representative of receivables with similar remaining maturities.

Wholesale inventory receivables

We estimate fair value by discounting the future cash flows using current rates, representative of receivables with similar remaining maturities.

Short-term borrowings

Carrying amount approximates fair value. We classify short-term borrowings as Level 1. See Consolidated Statement of Financial Position.

Long-term debt

We estimate fair value for fixed and floating rate debt based on quoted market prices.

Guarantees

The fair value of guarantees is based upon our estimate of the premium a market participant would require to issue the same guarantee in a stand-alone arms-length transaction with an unrelated party. If quoted or observable market prices are not available, fair value is based upon internally developed models that utilize current market-based assumptions. We classify guarantees as Level 3. See Note 11 for additional information.

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

	September 30, 2023				December 31, 2022
(Millions of dollars)	Carrying  Amount		Fair  Value		Carrying  Amount		Fair  Value		Fair Value Levels	Reference
Assets
Finance receivables – net (excluding finance leases 1 )	$	14,894	$	14,365	$	13,965	$	13,377	3	Note 17
Wholesale inventory receivables – net (excluding finance leases 1)	1,075		1,032		827		778		3
Liabilities
Long-term debt (including amounts due within one year)
Machinery, Energy & Transportation	9,513		8,712		9,618		9,240		2
Financial Products	23,408		22,806		21,418		20,686		2

1    Represents finance leases and failed sale leasebacks of $6,816 million and $7,325 million at September 30, 2023 and December 31, 2022, respectively.

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19.                         Other income (expense)

	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Investment and interest income	$	135	$	52	$	324	$	98
Foreign exchange gains (losses) 1	17		134		(15)		405
License fee income	37		37		111		106
Net periodic pension and OPEB income (cost), excluding service cost	(12)		67		(37)		201
Gains (losses) on securities	6		—		(15)		(59)
Miscellaneous income (loss)	12		(48)		(14)		4
Total	$	195	$	242	$	354	$	755

1 Includes gains (losses) from foreign exchange derivative contracts. See Note 5 for further details.

20.                              Restructuring costs

Our accounting for employee separations is dependent upon how the particular program is designed. For voluntary programs, we recognize eligible separation costs at the time of employee acceptance unless the acceptance requires explicit approval by the company. For involuntary programs, we recognize eligible costs when management has approved the program, the affected employees have been properly notified and the costs are estimable.

Restructuring costs for the three and nine months ended September 30, 2023 and 2022 were as follows:

(Millions of dollars)	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Employee separations 1	$	10	$	39	$	32	$	62
Longwall divestiture 1	—		—		586		—
Contract terminations 1	—		1		—		1
Long-lived asset impairments 1	2		(4)		4		1
Other 2	34		13		66		26
Total restructuring costs	$	46	$	49	$	688	$	90
1 Recognized in Other operating (income) expenses.
2 Represents costs related to our restructuring programs, primarily for inventory write-downs, accelerated depreciation, project management and equipment relocation, all of which are primarily included in Cost of goods sold.

The restructuring costs for the nine months ended September 30, 2023 were primarily related to the divestiture of the company's Longwall business within Resource Industries. The divestiture closed on February 1, 2023 and resulted in a pre-tax loss of approximately $586 million, primarily a non-cash item driven by the release of $494 million of accumulated foreign currency translation. The transaction is subject to certain post-closing adjustments. For the nine months ended September 30, 2022, the restructuring costs were primarily related to actions across the company including strategic actions to address a small number of products.

In 2023 and 2022, all restructuring costs are excluded from segment profit.

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The following table summarizes the 2023 and 2022 employee separation activity:

(Millions of dollars)	Nine Months Ended September 30,
	2023		2022
Liability balance, beginning of period	$	39	$	61
Increase in liability (separation charges)	32		62
Reduction in liability (payments)	(55)		(63)
Liability balance, end of period	$	16	$	60

Most of the liability balance at September 30, 2023 is expected to be paid in 2023 and 2024.

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

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

Highlights for the third quarter of 2023 include:

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

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

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

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

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

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

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

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

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

•In order for our results to be more meaningful to our readers, we have separately quantified the impact of several significant items. A detailed reconciliation of GAAP to non-GAAP financial measures is included on page 65.

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

Overview

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

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

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Trends and Economic Conditions

Outlook for Key End Markets

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

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

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

Company Trends and Expectations

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

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

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

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

Global Business Conditions

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

Risk Factors

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

Notes:

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

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

•Certain amounts may not add due to rounding.

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Consolidated Results of Operations

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

CONSOLIDATED SALES AND REVENUES

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the third quarter of 2022 (at left) and the third quarter of 2023 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees.

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

Sales were higher across the three primary segments.

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

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

EAME sales increased 8 percent due to favorable price realization.

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

Dealer inventory increased by $600 million during the third quarter of 2023, compared with an increase of $700 million during the third quarter of 2022. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rentals and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers.

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

Sales and Revenues by Geographic Region

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

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

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CONSOLIDATED OPERATING PROFIT

The chart above graphically illustrates reasons for the change in consolidated operating profit between the third quarter of 2022 (at left) and the third quarter of 2023 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation's other operating (income) expenses.

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

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

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

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Other Profit/Loss and Tax Items

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

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

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

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

Construction Industries

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

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

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

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

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

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

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

Resource Industries

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

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

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

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Energy & Transportation

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

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

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

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

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

▪Transportation – Sales increased in rail services.

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

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

Financial Products Segment

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

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

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

Corporate Items and Eliminations

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

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

CONSOLIDATED SALES AND REVENUES

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the nine months ended September 30, 2022 (at left) and the nine months ended September 30, 2023 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees.

Total sales and revenues were $49.990 billion for the nine months ended September 30, 2023, an increase of $7.160 billion, or 17 percent, compared with $42.830 billion for the nine months ended September 30, 2022. The increase was primarily due to favorable price realization and higher sales volume. The increase in sales volume was driven by higher sales of equipment to end users and the impact from changes in dealer inventories. Dealer inventory increased more during the nine months ended September 30, 2023, than the during the nine months ended September 30, 2022.

Sales were higher in the three primary segments.

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

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

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

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

Dealer inventory increased about $2.9 billion during the nine months ended September 30, 2023, compared with an increase of about $1.6 billion during the nine months ended September 30, 2022. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rentals and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers.

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

Sales and Revenues by Geographic Region

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

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

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CONSOLIDATED OPERATING PROFIT

The chart above graphically illustrates reasons for the change in consolidated operating profit between the nine months ended September 30, 2022 (at left) and the nine months ended September 30, 2023 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees. The bar titled Longwall Divestiture is included in total restructuring costs. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation’s other operating (income) expenses.

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

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

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

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

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Other Profit/Loss and Tax Items

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

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

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

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

Construction Industries

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

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

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

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

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

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

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

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Resource Industries

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

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

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

Energy & Transportation

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

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

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

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

•Industrial – Sales were up across all regions.

•Transportation – Sales increased in rail services and marine.

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

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

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Financial Products Segment

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

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

Corporate Items and Eliminations

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

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

RESTRUCTURING COSTS

In 2023, we expect to incur about $700 million of restructuring costs, which includes a pre-tax loss of approximately $586 million from the divestiture of our Longwall business within Resource Industries on February 1, 2023. In addition, we expect to incur about $100 million of restructuring costs this year primarily related to strategic actions to address a small number of products. We expect that prior restructuring actions will result in an incremental benefit to operating costs, primarily Cost of goods sold and SG&A expenses of about $75 million in 2023 compared with 2022.

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

GLOSSARY OF TERMS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

22.Restructuring Costs – May include costs for employee separation, long-lived asset impairments, contract terminations and divestiture impacts. These costs are included in Other operating (income) expenses except for defined-benefit plan curtailment losses and special termination benefits, which are included in Other income (expense). Restructuring costs also include other exit-related costs, which may consist of accelerated depreciation, inventory write-downs, building demolition, equipment relocation and project management costs and LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold.

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

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

LIQUIDITY AND CAPITAL RESOURCES

Sources of funds

We generate significant capital resources from operating activities, which are the primary source of funding for our ME&T operations. Funding for these businesses is also available from commercial paper and long-term debt issuances. Financial Products’ operations are funded primarily from commercial paper, term debt issuances and collections from its existing portfolio. On a consolidated basis, we had positive operating cash flow in the first nine months of 2023 and ended the third quarter with $6.55 billion of cash, a decrease of $459 million from year-end 2022. In addition, ME&T has invested in bank time deposits with varying maturity dates within one year and available-for-sale debt securities that are considered highly liquid and are available for current operations. These ME&T securities were $4.27 billion as of September 30, 2023 and are included in Prepaid expenses and other current assets and Other assets in the Consolidated Statement of Financial Position. We intend to maintain a strong cash and liquidity position.

Consolidated operating cash flow for the first nine months of 2023 was $8.88 billion, up $3.86 billion compared to the same period a year ago. The increase was primarily due to higher profit before taxes adjusted for non-cash items, including the loss on divestiture of the company's Longwall business.

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

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As of September 30, 2023, we had three global credit facilities with a syndicate of banks totaling $10.50 billion (Credit Facility) available in the aggregate to both Caterpillar and Cat Financial for general liquidity purposes. Based on management’s allocation decision, which can be revised from time to time, the portion of the Credit Facility available to ME&T as of September 30, 2023 was $2.75 billion. Information on our Credit Facility is as follows:

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

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

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

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

At September 30, 2023, Cat Financial’s covenant interest coverage ratio was 1.78 to 1. This was above the 1.15 to 1 minimum ratio calculated as (1) profit excluding income taxes, interest expense and net gain (loss) from interest rate derivatives to (2) interest expense calculated at the end of each fiscal quarter for the prior four consecutive fiscal quarter period, required by the Credit Facility.

In addition, at September 30, 2023, Cat Financial’s six-month covenant leverage ratio was 6.80 to 1. This was below the maximum ratio of debt to net worth of 10 to 1, calculated (1) on a monthly basis as the average of the leverage ratios determined on the last day of each of the six preceding calendar months and (2) at each December 31, required by the Credit Facility.

In the event Caterpillar or Cat Financial does not meet one or more of their respective financial covenants under the Credit Facility in the future (and are unable to obtain a consent or waiver), the syndicate of banks may terminate the commitments allocated to the party that does not meet its covenants. Additionally, in such event, certain of Cat Financial’s other lenders under other loan agreements where similar financial covenants or cross default provisions are applicable may, at their election, choose to pursue remedies under those loan agreements, including accelerating the repayment of outstanding borrowings. At September 30, 2023, there were no borrowings under the Credit Facility.

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

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

The other external consolidated credit lines with banks as of September 30, 2023 totaled $4.08 billion. These committed and uncommitted credit lines, which may be eligible for renewal at various future dates or have no specified expiration date, are used primarily by our subsidiaries for local funding requirements. Caterpillar or Cat Financial may guarantee subsidiary borrowings under these lines.

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

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

Machinery, Energy & Transportation

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

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

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

While our short-term priorities for the use of cash may vary from time to time as business needs and conditions dictate, our long-term cash deployment strategy is focused on the following priorities. Our top priority is to maintain a strong financial position in support of a mid-A rating. Next, we intend to fund operational requirements and commitments. Then, we intend to fund priorities that profitably grow the company and return capital to shareholders through dividend growth and share repurchases. Additional information on cash deployment is as follows:

Strong financial position – Our top priority is to maintain a strong financial position in support of a mid-A rating. We track a diverse group of financial metrics that focus on liquidity, leverage, cash flow and margins which align with our cash deployment actions and the various methodologies used by the major credit rating agencies.

Operational excellence and commitments – Capital expenditures were $1.11 billion during the first nine months of 2023, compared to $880 million for the same period in 2022. We expect ME&T’s capital expenditures in 2023 to be about $1.50 billion. We made $320 million of contributions to our pension and other postretirement benefit plans during the first nine months of 2023. We currently anticipate full-year 2023 contributions of approximately $372 million. In comparison, we made $299 million of contributions to our pension and other postretirement benefit plans during the first nine months of 2022.

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

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

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Our share repurchase plans are subject to the company’s cash deployment priorities and are evaluated on an ongoing basis considering the financial condition of the company, corporate cash flow, the company’s liquidity needs, the economic outlook, and the health and stability of global credit markets. The timing and amount of future repurchases may vary depending on market conditions and investing priorities. In May 2022, the Board approved a share repurchase authorization (the 2022 Authorization) of up to $15.0 billion of Caterpillar common stock effective August 1, 2022, with no expiration. In the first nine months of 2023, we repurchased $2.21 billion of Caterpillar common stock, with $10.59 billion remaining under the 2022 Authorization as of September 30, 2023. Our basic shares outstanding as of September 30, 2023 were approximately 509 million.

Each quarter, our Board of Directors reviews the company’s dividend for the applicable quarter. The Board evaluates the financial condition of the company and considers corporate cash flow, the company’s liquidity needs, the economic outlook, and the health and stability of global credit markets to determine whether to maintain or change the quarterly dividend. In October 2023, the Board of Directors approved maintaining our quarterly dividend representing $1.30 per share, and we continue to expect our strong financial position to support the dividend. Dividends paid totaled $1.90 billion in the first nine months of 2023.

Financial Products

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

RECENT ACCOUNTING PRONOUNCEMENTS

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

CRITICAL ACCOUNTING ESTIMATES

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

OTHER MATTERS

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

Retirement Benefits

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

Order Backlog

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

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NON-GAAP FINANCIAL MEASURES

We provide the following definitions for the non-GAAP financial measures used in this report. These non-GAAP financial measures have no standardized meaning prescribed by U.S. GAAP and therefore are unlikely to be comparable to the calculation of similar measures for other companies. Management does not intend these items to be considered in isolation or as a substitute for the related GAAP measures.

We believe it is important to separately quantify the profit impact of three significant items in order for our results to be meaningful to our readers. These items consist of (i) restructuring costs related to the divestiture of the company's Longwall business, (ii) other restructuring costs and (iii) certain deferred tax valuation allowance adjustments. We do not consider these items indicative of earnings from ongoing business activities and believe the non-GAAP measure provides investors with useful perspective on underlying business results and trends and aids with assessing our period-over-period results. In addition, we provide a calculation of ME&T free cash flow as we believe it is an important measure for investors to determine the cash generation available for financing activities including debt repayments, dividends and share repurchases.

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

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

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

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

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Supplemental Consolidating Data

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

Consolidated – Caterpillar Inc. and its subsidiaries.

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

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

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

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

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

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Caterpillar Inc.

Supplemental Data for Results of Operations

For the Three Months Ended September 30, 2023

(Unaudited)

(Millions of dollars)

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

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

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

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

4Profit attributable to common shareholders.

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Caterpillar Inc.

Supplemental Data for Results of Operations

For the Nine Months Ended September 30, 2023

(Unaudited)

(Millions of dollars)

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

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

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

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

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

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

6Profit attributable to common shareholders.

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Caterpillar Inc.

Supplemental Data for Results of Operations

For the Three Months Ended September 30, 2022

(Unaudited)

(Millions of dollars)

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

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

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

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

4Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.

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

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

7Profit attributable to common shareholders.

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Caterpillar Inc.

Supplemental Data for Results of Operations

For the Nine Months Ended September 30, 2022

(Unaudited)

(Millions of dollars)

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

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

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

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

4Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.

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

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

7Profit attributable to common shareholders.

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Caterpillar Inc.

Supplemental Data for Financial Position

At September 30, 2023

(Unaudited)

(Millions of dollars)

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

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

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

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

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

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

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

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

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

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

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

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Caterpillar Inc.

Supplemental Data for Financial Position

At December 31, 2022

(Unaudited)

(Millions of dollars)

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

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

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

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

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

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

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

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

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

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

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Caterpillar Inc.

Supplemental Data for Cash Flow

For the Nine Months Ended September 30, 2023

(Unaudited)

(Millions of dollars)

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

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

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

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

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

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

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Caterpillar Inc.

Supplemental Data for Cash Flow

For the Nine Months Ended September 30, 2022

(Unaudited)

(Millions of dollars)

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

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

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

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

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

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Table of Contents

Forward-looking Statements

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

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

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

The information required by this Item is incorporated by reference from Note 5 – “Derivative financial instruments and risk management” included in Part I, Item 1 and Management’s Discussion and Analysis included in Part I, Item 2 of this Form 10-Q.

Item 4.  Controls and Procedures

Evaluation of disclosure controls and procedures

An evaluation was performed under the supervision and with the participation of the company’s management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of the company’s disclosure controls and procedures, as that term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this quarterly report.  Based on that evaluation, the CEO and CFO concluded that the company’s disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in internal control over financial reporting

During the third quarter of 2023, there has been no change in the company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

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Table of Contents

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

The information required by this Item is incorporated by reference from Note 14 – “Environmental and legal matters” included in Part I, Item 1 of this Form 10-Q.    

Item 1A. Risk Factors

There have been no material changes to the risk factors we previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

Item 2.  Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased2,3	Average Price Paid per Share2,3		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet be Purchased under the Program (in billions)1
July 1-31, 2023	518,457	$	228.66	518,457	$	10.970
August 1-31, 2023	684,126	$	277.72	684,126	$	10.780
September 1-30, 2023	680,904	$	279.03	680,904	$	10.590
Total	1,883,487	$	264.69	1,883,487
1 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. As of September 30, 2023, $10.6 billion remained available under the 2022 Authorization.
2 During the second quarter of 2023, we entered into an accelerated share repurchase agreement ("ASR") with a third-party financial institution to purchase $750 million of our common stock. In May 2023, upon payment of the $750 million to the financial institution, we received 2.8 million shares. In July 2023, upon final settlement of the ASR, we received an additional 0.5 million shares. In total, we repurchased 3.3 million shares under this ASR at an average price per share of $228.66.
3 In both August and September of 2023, we repurchased 0.7 million shares, respectively, for an aggregate of $380 million in open market transactions at an average price per share of $277.72 and $279.03, respectively.

Non-U.S. Employee Stock Purchase Plans

As of September 30, 2023, we had 28 employee stock purchase plans (the “EIP Plans”) that are administered outside the United States for our non-U.S. employees, which had approximately 14,000 active participants in the aggregate. During the third quarter of 2023, approximately 61,000 shares of Caterpillar common stock were purchased by the EIP Plans pursuant to the terms of such plans.

Item 5.     Other Information

On August 22, 2023, Andrew Bonfield, the Company's Chief Financial Officer, entered into a Rule 10b5-1 sales plan intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended. The sales plan will be in effect until the earlier of (1) November 20, 2024 and (2) the date on which an aggregate of 30,000 shares of our common stock have been sold under the plan.

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Table of Contents

Item 6. Exhibits

10.1	364-Day Credit Agreement dated August 31, 2023 (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 1, 2023).
10.2	Local Currency Addendum to the 364-Day Credit Agreement dated August 31, 2023 (incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed September 1, 2023).
10.3	Japan Local Currency Addendum to the 364-Day Credit Agreement dated August 31, 2023 (incorporated by reference from Exhibit 10.3 to the Company’s Current Report on Form 8-K filed September 1, 2023).
10.4	Amendment No. 1 to Third Amended and Restated Credit Agreement (Three-Year Facility) dated August 31, 2023 (incorporated by reference from Exhibit 10.4 to the Company’s Current Report on Form 8-K filed September 1, 2023).
10.5	Amendment No. 1 to Third Amended and Restated Credit Agreement (Five-Year Facility) dated August 31, 2023 (incorporated by reference from Exhibit 10.5 to the Company’s Current Report on Form 8-K filed September 1, 2023).
31.1	Certification of Chief Executive Officer of Caterpillar Inc., as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer of Caterpillar Inc., as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification of Chief Executive Officer of Caterpillar Inc. and Chief Financial Officer of Caterpillar Inc., as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive File (embedded within the Inline XBRL document and included in Exhibit 101)

*Management contracts and compensatory plans and arrangements required to be filed as exhibits pursuant to Item 6 of this report.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CATERPILLAR INC.
November 1, 2023	/s/ D. James Umpleby III	Chairman of the Board and Chief Executive Officer
	D. James Umpleby III
November 1, 2023	/s/ Andrew R.J. Bonfield	Chief Financial Officer
	Andrew R.J. Bonfield
November 1, 2023	/s/ Derek Owens	Senior Vice President and General Counsel
	Derek Owens
November 1, 2023	/s/ William E. Schaupp	Vice President and Chief Accounting Officer
	William E. Schaupp

78

EX-31.1

EXHIBIT 31.1

SECTION 302 CERTIFICATION

I, D. James Umpleby III, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Caterpillar Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 1, 2023	/s/ D. James Umpleby III	Chief Executive Officer
	D. James Umpleby III

EX-31.2

EXHIBIT 31.2

SECTION 302 CERTIFICATION

I, Andrew R.J. Bonfield, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Caterpillar Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 1, 2023	/s/ Andrew R.J. Bonfield	Chief Financial Officer
	Andrew R.J. Bonfield

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Caterpillar Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 1, 2023	/s/ D. James Umpleby III	Chief Executive Officer
	D. James Umpleby III
November 1, 2023	/s/ Andrew R.J. Bonfield	Chief Financial Officer
	Andrew R.J. Bonfield

A signed original of this written statement required by Section 906 has been provided to Caterpillar Inc. and will be retained by Caterpillar Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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	Sep. 30, 2023 shares
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Entity Registrant Name	CATERPILLAR INC
Entity Incorporation, State or Country Code	DE
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Entity Address, Address Line One	5205 N. O'Connor Boulevard,
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Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Common Stock ($1.00 par value)
Trading Symbol	CAT
Security Exchange Name	NYSE
5.3% Debentures due September 15, 2035
Entity Information [Line Items]
Title of 12(b) Security	5.3% Debentures due September 15, 2035
Trading Symbol	CAT35
Security Exchange Name	NYSE

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Consolidated Statement of Results of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended				9 Months Ended
	Sep. 30, 2023		Sep. 30, 2022		Sep. 30, 2023		Sep. 30, 2022
Sales and revenues:
Total sales and revenues	$ 16,810		$ 14,994		$ 49,990		$ 42,830
Operating costs:
Cost of goods sold	10,583		10,202		31,751		29,736
Selling, general and administrative expenses	1,624		1,401		4,615		4,172
Research and development expenses	554		476		1,554		1,413
Other operating (income) expenses	320		339		1,496		908
Total operating costs	13,361		12,569		40,158		36,606
Operating profit	3,449		2,425		9,832		6,224
Other income (expense)	195		242		354		755
Consolidated profit before taxes	3,515		2,558		9,801		6,653
Provision (benefit) for income taxes	734		527		2,194		1,423
Profit of consolidated companies	2,781		2,031		7,607		5,230
Equity in profit (loss) of unconsolidated affiliated companies	12		9		52		20
Profit of consolidated and affiliated companies	2,793		2,040		7,659		5,250
Less: Profit (loss) attributable to noncontrolling interests	(1)		(1)		0		(1)
Profit	$ 2,794	[1]	$ 2,041	[1]	$ 7,659	[2]	$ 5,251	[2]
Profit per common share (in dollars per share)	$ 5.48		$ 3.89		$ 14.93		$ 9.91
Profit per common share - diluted (in dollars per share)	$ 5.45	[3]	$ 3.87	[3]	$ 14.85	[4]	$ 9.85	[4]
Weighted-average common shares outstanding (millions)
Basic (in shares)	509.8		525.0		513.0		530.1
Diluted (in shares)	512.6	[3]	527.6	[3]	515.7	[4]	533.2	[4]
Machinery, Energy & Transportation
Sales and revenues:
Total sales and revenues	$ 15,988		$ 14,278		$ 47,632		$ 40,703
Financial Products
Sales and revenues:
Total sales and revenues	822		716		2,358		2,127
Operating costs:
Interest expense of Financial Products	280		151		742		377
All other excluding Financial Products
Operating costs:
Interest expense excluding Financial Products	$ 129		$ 109		$ 385		$ 326

[1] Profit attributable to common shareholders.

[2] Profit attributable to common shareholders.

[3] Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.

[4] Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.

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Consolidated Statement of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Profit of consolidated and affiliated companies	$ 2,793	$ 2,040	$ 7,659	$ 5,250
Other comprehensive income (loss), net of tax (Note 13):
Foreign currency translation, net of tax	(205)	(618)	260	(1,392)
Pension and other postretirement benefits, net of tax	(3)	(1)	(8)	(3)
Derivative financial instruments:	(62)	(191)	(19)	(254)
Available-for-sale securities, net of tax	(16)	(44)	(8)	(151)
Total other comprehensive income (loss), net of tax	(286)	(854)	225	(1,800)
Comprehensive income	2,507	1,186	7,884	3,450
Less: comprehensive income attributable to the noncontrolling interests	(1)	(1)	0	(1)
Comprehensive income attributable to shareholders	$ 2,508	$ 1,187	$ 7,884	$ 3,451

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Consolidated Statement of Financial Position - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 6,545	$ 7,004
Receivables – trade and other	9,134	8,856
Receivables – finance	9,608	9,013
Prepaid expenses and other current assets	5,138	2,642
Inventories	17,580	16,270
Total current assets	48,005	43,785
Property, plant and equipment – net	12,287	12,028
Long-term receivables – trade and other	1,110	1,265
Long-term receivables – finance	11,907	12,013
Noncurrent deferred and refundable income taxes	2,719	2,213
Intangible assets	604	758
Goodwill	5,268	5,288
Other assets	4,891	4,593
Total assets	86,791	81,943
Short-term borrowings:
Accounts payable	7,827	8,689
Accrued expenses	4,669	4,080
Accrued wages, salaries and employee benefits	2,300	2,313
Customer advances	2,333	1,860
Dividends payable	0	620
Other current liabilities	3,115	2,690
Long-term debt due within one year:
Total current liabilities	33,124	31,531
Long-term debt due after one year:
Liability for postemployment benefits	4,060	4,203
Other liabilities	4,841	4,604
Total liabilities	66,284	66,052
Commitments and contingencies (Notes 11 and 14)
Shareholders’ equity
Common stock, authorized and issued	6,698	6,560
Treasury stock: (9/30/23 – 305,809,881 shares; 12/31/22 – 298,549,134 shares) at cost	(33,865)	(31,748)
Profit employed in the business	49,888	43,514
Accumulated other comprehensive income (loss)	(2,232)	(2,457)
Noncontrolling interests	18	22
Total shareholders’ equity	20,507	15,891
Total liabilities and shareholders’ equity	86,791	81,943
Machinery, Energy & Transportation
Short-term borrowings:
Short-term borrowings	0	3
Long-term debt due within one year:
Long-term debt due within one year	1,043	120
Long-term debt due after one year:
Long-term Debt due after one year	8,470	9,498
Financial Products
Short-term borrowings:
Short-term borrowings	4,218	5,954
Long-term debt due within one year:
Long-term debt due within one year	7,619	5,202
Long-term debt due after one year:
Long-term Debt due after one year	$ 15,789	$ 16,216

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Consolidated Statement of Financial Position (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 1.00	$ 1.00
Common stock, authorized (in shares)	2,000,000,000	2,000,000,000
Common stock, issued (in shares)	814,894,624	814,894,624
Treasury stock (in shares)	305,809,881	298,549,134

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Consolidated Statement of Changes in Shareholders' Equity - USD ($) $ in Millions		Total	Common stock	Treasury stock	Profit employed in the business	Accumulated other comprehensive income (loss)	Noncontrolling interests
Beginning balance at Dec. 31, 2021		$ 16,516	$ 6,398	$ (27,643)	$ 39,282	$ (1,553)	$ 32
Increase (Decrease) in Shareholders' Equity
Profit of consolidated and affiliated companies		5,250			5,251		(1)
Foreign currency translation, net of tax		(1,392)				(1,392)
Pension and other postretirement benefits, net of tax		(3)				(3)
Derivative financial instruments, net of tax		(254)				(254)
Available-for-sale securities, net of tax		(151)				(151)
Dividends declared	[1]	(1,229)			(1,229)
Common shares issued from treasury stock for stock-based compensation		2	(67)	69
Stock-based compensation expense		162	162
Common shares repurchased	[2]	(3,309)		(3,309)
Other		30	30
Ending balance at Sep. 30, 2022		15,622	6,523	(30,883)	43,304	(3,353)	31
Beginning balance at Jun. 30, 2022		15,759	6,464	(29,501)	41,263	(2,499)	32
Increase (Decrease) in Shareholders' Equity
Profit of consolidated and affiliated companies		2,040			2,041		(1)
Foreign currency translation, net of tax		(618)				(618)
Pension and other postretirement benefits, net of tax		(1)				(1)
Derivative financial instruments, net of tax		(191)				(191)
Available-for-sale securities, net of tax		(44)				(44)
Common shares issued from treasury stock for stock-based compensation		(1)	(5)	4
Stock-based compensation expense		55	55
Common shares repurchased	[3]	(1,385)		(1,385)
Other		8	9	(1)
Ending balance at Sep. 30, 2022		15,622	6,523	(30,883)	43,304	(3,353)	31
Beginning balance at Dec. 31, 2022		15,891	6,560	(31,748)	43,514	(2,457)	22
Increase (Decrease) in Shareholders' Equity
Profit of consolidated and affiliated companies		7,659			7,659		0
Foreign currency translation, net of tax		260				260
Pension and other postretirement benefits, net of tax		(8)				(8)
Derivative financial instruments, net of tax		(19)				(19)
Available-for-sale securities, net of tax		(8)				(8)
Dividends declared	[1]	(1,285)			(1,285)
Common shares issued from treasury stock for stock-based compensation		37	(71)	108
Stock-based compensation expense		178	178
Common shares repurchased	[2]	(2,209)		(2,209)
Other		11	31	(16)			(4)
Ending balance at Sep. 30, 2023		20,507	6,698	(33,865)	49,888	(2,232)	18
Beginning balance at Jun. 30, 2023		18,256	6,478	(33,391)	47,094	(1,946)	21
Increase (Decrease) in Shareholders' Equity
Profit of consolidated and affiliated companies		2,793			2,794		(1)
Foreign currency translation, net of tax		(205)				(205)
Pension and other postretirement benefits, net of tax		(3)				(3)
Derivative financial instruments, net of tax		(62)				(62)
Available-for-sale securities, net of tax		(16)				(16)
Common shares issued from treasury stock for stock-based compensation		59	0	59
Stock-based compensation expense		60	60	0
Common shares repurchased	[3]	(530)	0	(530)
Outstanding authorized accelerated share repurchase		150	150
Other		5	10	(3)			(2)
Ending balance at Sep. 30, 2023		$ 20,507	$ 6,698	$ (33,865)	$ 49,888	$ (2,232)	$ 18

[1] 1 Dividends per share of common stock of $2.50 and $2.31 were declared in the nine months ended September 30, 2023 and 2022, respectively.

[2] 2 See Note 12 for additional information.

[3] 1 See Note 12 for additional information.

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Consolidated Statement of Changes in Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Stockholders' Equity [Abstract]
Common shares issued, Shares, from treasury stock for stock-based compensation (in shares)	824,973	75,534	2,238,728	1,529,753
Common shares repurchased (in shares)	1,883,487	7,575,322	9,499,655	17,007,819
Dividends per share of common stock (dollars per share)			$ 2.50	$ 2.31

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Consolidated Statement of Cash Flow - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flow from operating activities:
Profit of consolidated and affiliated companies	$ 7,659	$ 5,250
Adjustments for non-cash items:
Depreciation and amortization	1,599	1,661
Provision (benefit) for deferred income taxes	(448)	(349)
Loss on divestiture	572	0
Other	205	132
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables – trade and other	(319)	365
Inventories	(1,424)	(3,088)
Accounts payable	(532)	786
Accrued expenses	588	70
Accrued wages, salaries and employee benefits	0	15
Customer advances	516	751
Other assets – net	128	57
Other liabilities – net	338	(623)
Net cash provided by (used for) operating activities	8,882	5,027
Cash flow from investing activities:
Capital expenditures – excluding equipment leased to others	(1,061)	(868)
Expenditures for equipment leased to others	(1,177)	(1,023)
Proceeds from disposals of leased assets and property, plant and equipment	563	666
Additions to finance receivables	(11,082)	(9,914)
Collections of finance receivables	10,391	9,738
Proceeds from sale of finance receivables	40	50
Investments and acquisitions (net of cash acquired)	(67)	(44)
Proceeds from sale of businesses and investments (net of cash sold)	(14)	1
Proceeds from sale of securities	747	2,080
Investments in securities	(3,689)	(2,399)
Other – net	32	15
Net cash provided by (used for) investing activities	(5,317)	(1,698)
Cash flow from financing activities:
Dividends paid	(1,901)	(1,820)
Common stock issued, including treasury shares reissued	36	2
Common shares repurchased	(2,209)	(3,309)
Proceeds from debt issued (original maturities greater than three months):	6,360	5,570
Short-term borrowings – net (original maturities three months or less)	(1,726)	(1,311)
Other – net	0	(1)
Net cash provided by (used for) financing activities	(3,899)	(6,158)
Effect of exchange rate changes on cash	(119)	(79)
Increase (decrease) in cash, cash equivalents and restricted cash	(453)	(2,908)
Cash and short-term investments and restricted cash at beginning of period	7,013	9,263
Cash and short-term investments and restricted cash at end of period	6,560	6,355
Machinery, Energy & Transportation
Cash flow from financing activities:
Payments on debt (original maturities greater than three months):	(99)	(20)
Financial Products
Cash flow from financing activities:
Payments on debt (original maturities greater than three months):	$ (4,360)	$ (5,269)

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Nature of Operations and Basis of Presentation

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations and Basis of Presentation

A.  Nature of operations

Information in our financial statements and related commentary are presented in the following categories:

Machinery, Energy & Transportation (ME&T) – We define ME&T 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 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.

B.  Basis of presentation

In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the consolidated results of operations for the three and nine months ended September 30, 2023 and 2022, (b) the consolidated comprehensive income for the three and nine months ended September 30, 2023 and 2022, (c) the consolidated financial position at September 30, 2023 and December 31, 2022, (d) the consolidated changes in shareholders’ equity for the three and nine months ended September 30, 2023 and 2022 and (e) the consolidated cash flow for the nine months ended September 30, 2023 and 2022.  The financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).

Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in our company’s annual report on Form 10-K for the year ended December 31, 2022 (2022 Form 10-K).

The December 31, 2022 financial position data included herein is derived from the audited consolidated financial statements included in the 2022 Form 10-K but does not include all disclosures required by U.S. GAAP. Certain amounts for prior periods have been reclassified to conform to the current period financial statement presentation.

Cat Financial has end-user customers and dealers that are variable interest entities (VIEs) of which we are not the primary beneficiary. Our maximum exposure to loss from our involvement with these VIEs is limited to the credit risk inherently present in the financial support that we have provided. Credit risk was evaluated and reflected in our financial statements as part of our overall portfolio of finance receivables and related allowance for credit losses. See Note 11 for further discussions on a consolidated VIE.

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New Accounting Guidance

9 Months Ended

Sep. 30, 2023

Accounting Changes and Error Corrections [Abstract]

New Accounting Guidance

New accounting guidance

A. Adoption of new accounting standards

Supplier finance programs (ASU 2022-04) - In September 2022, the Financial Accounting Standards Board (FASB) issued guidance to enhance the transparency of supplier finance programs. The new standard requires annual disclosure of the key terms of the program, a description of where in the financial statements amounts outstanding under the program are presented, a rollforward of such amounts, and interim disclosure of amounts outstanding as of the end of each period. The guidance does not affect recognition, measurement, or financial statement presentation of supplier finance programs. The ASU was effective on January 1, 2023, except for the rollforward, which is effective on January 1, 2024. Our adoption of this guidance results in the following disclosures relating to our supplier finance programs and related obligations.

We facilitate voluntary supplier finance programs (the “Programs”) through participating financial institutions. The Programs are available to a wide range of suppliers and allow them the option to manage their cash flow. We are not a party to the agreements between the participating financial institutions and the suppliers in connection with the Programs. The range of payment terms, typically 60-90 days, we negotiate with our suppliers is consistent, irrespective of whether a supplier participates in the Programs. The amount of obligations outstanding that are confirmed as valid to the participating financial institutions for suppliers who voluntarily participate in the Programs, included in Accounts payable in the Consolidated Statement of Financial Position, were $825 million and $862 million at September 30, 2023 and December 31, 2022, respectively.

We consider the applicability and impact of all ASUs. We adopted the following ASUs effective January 1, 2023, none of which had a material impact on our financial statements:

ASU	Description
2021-08	Business combinations
2022-02	Financial instruments - Credit losses
2022-06	Reference rate reform

B. Accounting standards issued but not yet adopted

We consider the applicability and impact of all ASUs. We assessed the ASUs and determined that they either were not applicable or were not expected to have a material impact on our financial statements.

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Sales and Revenue Contract Information

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Sales and Revenue Contract Information

Sales and revenue contract information

Trade receivables represent amounts due from dealers and end users for the sale of our products, and include amounts due from wholesale inventory financing provided by Cat Financial for a dealer’s purchase of inventory. We recognize trade receivables from dealers and end users in Receivables – trade and other and Long-term receivables – trade and other in the Consolidated Statement of Financial Position. Trade receivables from dealers and end users were $7,825 million, $7,551 million and $7,267 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively. Long-term trade receivables from dealers and end users were $494 million, $506 million and $624 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively.

For certain contracts, we invoice for payment when contractual milestones are achieved. We recognize a contract asset when a sale is recognized before achieving the contractual milestones for invoicing. We reduce the contract asset when we invoice for payment and recognize a corresponding trade receivable. Contract assets are included in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. Contract assets were $212 million, $247 million and $187 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively.

We invoice in advance of recognizing the sale of certain products. We recognize advanced customer payments as a contract liability in Customer advances and Other liabilities in the Consolidated Statement of Financial Position. Contract liabilities were $2,816 million, $2,314 million and $1,557 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively. We reduce the contract liability when revenue is recognized. During the three and nine months ended September 30, 2023, we recognized $197 million and $1,333 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2023. During the three and nine months ended September 30, 2022, we recognized $124 million and $781 million, respectively.

As of September 30, 2023, we have entered into contracts with dealers and end users for which sales have not been recognized as we have not satisfied our performance obligations and transferred control of the products. The dollar amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $13.2 billion, with about one-half of the amount expected to be completed and revenue recognized in the twelve months following September 30, 2023. We have elected the practical expedient not to disclose unsatisfied performance obligations with an original contract duration of one year or less. Contracts with an original duration of one year or less are primarily sales to dealers for machinery, engines and replacement parts.

See Note 16 for further disaggregated sales and revenues information.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-based compensation

Accounting for stock-based compensation requires that the cost resulting from all stock-based payments be recognized in the financial statements based on the grant date fair value of the award.  Our stock-based compensation consists of stock options, restricted stock units (RSUs) and performance-based restricted stock units (PRSUs).

We recognized pretax stock-based compensation expense of $60 million and $178 million for the three and nine months ended September 30, 2023, respectively, and $55 million and $162 million for the three and nine months ended September 30, 2022, respectively.

The following table illustrates the type and fair value of the stock-based compensation awards granted during the nine months ended September 30, 2023 and 2022, respectively:

	Nine Months Ended September 30, 2023					Nine Months Ended September 30, 2022
	Shares Granted	Weighted-Average Fair Value Per Share		Weighted-Average Grant Date Stock Price		Shares Granted	Weighted-Average Fair Value Per Share		Weighted-Average Grant Date Stock Price
Stock options	777,275	$	75.79	$	253.98	1,029,202	$	51.69	$	196.70
RSUs	379,426	$	253.98	$	253.98	484,025	$	196.70	$	196.70
PRSUs	221,869	$	253.98	$	253.98	258,900	$	196.70	$	196.70

The following table provides the assumptions used in determining the fair value of the stock-based awards for the nine months ended September 30, 2023 and 2022, respectively:

	Grant Year
	2023	2022
Weighted-average dividend yield	2.60%	2.60%
Weighted-average volatility	31.0%	31.7%
Range of volatilities	28.5% - 35.5%	25.3% - 36.8%
Range of risk-free interest rates	3.92% - 5.03%	1.03% - 2.00%
Weighted-average expected lives	7 years	8 years

As of September 30, 2023, the total remaining unrecognized compensation expense related to nonvested stock-based compensation awards was $167 million, which will be amortized over the weighted-average remaining requisite service periods of approximately 1.8 years.

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Derivative Financial Instruments and Risk Management

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Risk Management

Derivative financial instruments and risk management

Our earnings and cash flow are subject to fluctuations due to changes in foreign currency exchange rates, interest rates and commodity prices.  Our Risk Management Policy (policy) allows for the use of derivative financial instruments to prudently manage foreign currency exchange rate, interest rate and commodity price exposures.  Our policy specifies that derivatives are not to be used for speculative purposes.  Derivatives that we use are primarily foreign currency forward, option and cross currency contracts, interest rate contracts and commodity forward and option contracts.  Our derivative activities are subject to the management, direction and control of our senior financial officers.  We present at least annually to the Audit Committee of the Board of Directors on our risk management practices, including our use of financial derivative instruments.

We recognize all derivatives at their fair value on the Consolidated Statement of Financial Position. On the date the derivative contract is entered into, we designate the derivative as (1) a hedge of the fair value of a recognized asset or liability (fair value hedge), (2) a hedge of a forecasted transaction or the variability of cash flow (cash flow hedge) or (3) an undesignated instrument. We record in current earnings changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged recognized asset or liability that is attributable to the hedged risk. We record in AOCI changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge, to the extent effective, on the Consolidated Statement of Financial Position until we reclassify them to earnings in the same period or periods during which the hedged transaction affects earnings.  We report changes in the fair value of undesignated derivative instruments in current earnings. We classify cash flows from designated derivative financial instruments within the same category as the item being hedged on the Consolidated Statement of Cash Flow.  We include cash flows from undesignated derivative financial instruments in the investing category on the Consolidated Statement of Cash Flow.

We formally document all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions.  This process includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities on the Consolidated Statement of Financial Position and linking cash flow hedges to specific forecasted transactions or variability of cash flow.

We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the designated derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flow of hedged items.  When a derivative is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, we discontinue hedge accounting prospectively, in accordance with the derecognition criteria for hedge accounting.

Foreign Currency Exchange Rate Risk

Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of sales made and costs incurred in foreign currencies. Movements in foreign currency rates also affect our competitive position as these changes may affect business practices and/or pricing strategies of non-U.S.-based competitors. Additionally, we have balance sheet positions denominated in foreign currencies, thereby creating exposure to movements in exchange rates.

Our ME&T operations purchase, manufacture and sell products in many locations around the world. As we have a diversified revenue and cost base, we manage our future foreign currency cash flow exposure on a net basis. We use foreign currency forward and option contracts to manage unmatched foreign currency cash inflow and outflow. Our objective is to minimize the risk of exchange rate movements that would reduce the U.S. dollar value of our foreign currency cash flow. Our policy allows for managing anticipated foreign currency cash flow for up to approximately five years. As of September 30, 2023, the maximum term of these outstanding contracts at inception was approximately 60 months.

We generally designate as cash flow hedges at inception of the contract any foreign currency forward or option contracts that meet the requirements for hedge accounting and the maturity extends beyond the current quarter-end. We perform designation on a specific exposure basis to support hedge accounting. The remainder of ME&T foreign currency contracts are undesignated.  

In managing foreign currency risk for our Financial Products operations, our objective is to minimize earnings volatility resulting from conversion and the remeasurement of net foreign currency balance sheet positions and future transactions denominated in foreign currencies. Our policy allows the use of foreign currency forward, option and cross currency contracts to offset the risk of currency mismatch between our assets and liabilities and exchange rate risk associated with future transactions denominated in foreign currencies. Our foreign currency forward and option contracts are primarily undesignated. We designate fixed-to-fixed cross currency contracts as cash flow hedges to protect against movements in exchange rates on foreign currency fixed-rate assets and liabilities.

Interest Rate Risk

Interest rate movements create a degree of risk by affecting the amount of our interest payments and the value of our fixed-rate debt. Our practice is to use interest rate contracts to manage our exposure to interest rate changes.

Our ME&T operations generally use fixed-rate debt as a source of funding.  Our objective is to minimize the cost of borrowed funds.  Our policy allows us to enter into fixed-to-floating interest rate contracts and forward rate agreements to meet that objective. We designate fixed-to-floating interest rate contracts as fair value hedges at inception of the contract, and we designate certain forward rate agreements as cash flow hedges at inception of the contract.

Financial Products operations has a match-funding policy that addresses interest rate risk by aligning the interest rate profile (fixed or floating rate and duration) of Cat Financial’s debt portfolio with the interest rate profile of our receivables portfolio within predetermined ranges on an ongoing basis. In connection with that policy, we use interest rate derivative instruments to modify the debt structure to match assets within the receivables portfolio. This matched funding reduces the volatility of margins between interest-bearing assets and interest-bearing liabilities, regardless of which direction interest rates move.

Our policy allows us to use fixed-to-floating, floating-to-fixed and floating-to-floating interest rate contracts to meet the match-funding objective.  We designate fixed-to-floating interest rate contracts as fair value hedges to protect debt against changes in fair value due to changes in the benchmark interest rate.  We designate most floating-to-fixed interest rate contracts as cash flow hedges to protect against the variability of cash flows due to changes in the benchmark interest rate.

We have, at certain times, liquidated fixed-to-floating and floating-to-fixed interest rate contracts at both ME&T and Financial Products. We amortize the gains or losses associated with these contracts at the time of liquidation into earnings over the original term of the previously designated hedged item.

Commodity Price Risk

Commodity price movements create a degree of risk by affecting the price we must pay for certain raw materials. Our policy is to use commodity forward and option contracts to manage the commodity risk and reduce the cost of purchased materials.

Our ME&T operations purchase base and precious metals embedded in the components we purchase from suppliers.  Our suppliers pass on to us price changes in the commodity portion of the component cost. In addition, we are subject to price changes on energy products such as natural gas and diesel fuel purchased for operational use.

Our objective is to minimize volatility in the price of these commodities. Our policy allows us to enter into commodity forward and option contracts to lock in the purchase price of a portion of these commodities within a five-year horizon. All such commodity forward and option contracts are undesignated.

The location and fair value of derivative instruments reported in the Consolidated Statement of Financial Position were as follows:

(Millions of dollars)	Fair Value
	September 30, 2023				December 31, 2022
	Assets 1		Liabilities 2		Assets 1		Liabilities 2
Designated derivatives
Foreign exchange contracts	$	411	$	(163)	$	462	$	(152)
Interest rate contracts	52		(346)		93		(288)
Total	$	463	$	(509)	$	555	$	(440)
Undesignated derivatives
Foreign exchange contracts	$	32	$	(48)	$	65	$	(47)
Commodity contracts	11		(2)		24		(9)
Total	$	43	$	(50)	$	89	$	(56)
1 Assets are classified on the Consolidated Statement of Financial Position as Receivables - trade and other or Long-term receivables - trade and other.
2 Liabilities are classified on the Consolidated Statement of Financial Position as Accrued expenses or Other liabilities.

The total notional amounts of the derivative instruments as of September 30, 2023 and December 31, 2022 were $23.4 billion and $24.3 billion, respectively. The notional amounts of the derivative financial instruments do not represent amounts exchanged by the parties. We calculate the amounts exchanged by the parties by referencing the notional amounts and by other terms of the derivatives, such as foreign currency exchange rates, interest rates or commodity prices.

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

(Millions of dollars)	Three Months Ended September 30,
	Fair Value / Undesignated Hedges				Cash Flow Hedges
	Gains (Losses) Recognized on the Consolidated Statement of Results of Operations1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI2
	2023		2022		2023		2022		2023		2022
Foreign exchange contracts	$	19	$	(2)	$	10	$	18	$	80	$	289
Interest rate contracts	(34)		(5)		3		26		14		7
Commodity contracts	14		(42)		—		—		—		—
Total	$	(1)	$	(49)	$	13	$	44	$	94	$	296
1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense). Interest rate contract gains (losses) are included in Interest expense of Financial Products and Interest expense excluding Financial Products.
2 Foreign exchange contract gains (losses) are primarily included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products.

(Millions of dollars)	Nine Months Ended September 30,
	Fair Value / Undesignated Hedges				Cash Flow Hedges
	Gains (Losses) Recognized on the Consolidated Statement of Results of Operations 1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI 2
	2023		2022		2023		2022		2023		2022
Foreign exchange contracts	$	22	$	(32)	$	42	$	195	$	43	$	638
Interest rate contracts	(95)		12		15		103		41		(2)
Commodity contract	2		3		—		—		—		—
Total	$	(71)	$	(17)	$	57	$	298	$	84	$	636
1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense). Interest rate contract gains (losses) are included in Interest expense of Financial Products and Interest expense excluding Financial Products.
2 Foreign exchange contract gains (losses) are primarily included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products.

The following amounts were recorded on the Consolidated Statement of Financial Position related to cumulative basis adjustments for fair value hedges:

(Millions of dollars)	Carrying Value of the Hedged Liabilities				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities
	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Long-term debt due within one year	$	249	$	—	$	(4)	$	—
Long-term debt due after one year	4,732		4,173		(343)		(280)
Total	$	4,981	$	4,173	$	(347)	$	(280)

We enter into International Swaps and Derivatives Association (ISDA) master netting agreements within ME&T and Financial Products that permit the net settlement of amounts owed under their respective derivative contracts. Under these master netting agreements, net settlement generally permits the company or the counterparty to determine the net amount payable for contracts due on the same date and in the same currency for similar types of derivative transactions. The master netting agreements may also provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event.

Collateral is typically not required of the counterparties or of our company under the master netting agreements. As of September 30, 2023 and December 31, 2022, no cash collateral was received or pledged under the master netting agreements.

The effect of the net settlement provisions of the master netting agreements on our derivative balances upon an event of default or termination event was as follows:

(Millions of dollars)	September 30, 2023				December 31, 2022
	Assets		Liabilities		Assets		Liabilities
Gross Amounts Recognized	$	506	$	(559)	$	644	$	(496)
Financial Instruments Not Offset	(221)		221		(233)		233
Net Amount	$	285	$	(338)	$	411	$	(263)

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Inventories

9 Months Ended

Sep. 30, 2023

Inventory Disclosure [Abstract]

Inventories

Inventories

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

(Millions of dollars)	September 30, 2023		December 31, 2022
Raw materials	$	6,798	$	6,370
Work-in-process	1,650		1,452
Finished goods	8,788		8,138
Supplies	344		310
Total inventories	$	17,580	$	16,270

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Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

Intangible assets and goodwill

A.  Intangible assets

Intangible assets were comprised of the following:

		September 30, 2023
(Millions of dollars)	Weighted Amortizable Life (Years)	Gross Carrying Amount 1		Accumulated Amortization 1		Net
Customer relationships	16	$	2,224	$	(1,774)	$	450
Intellectual property	14	503		(393)		110
Other	17	117		(73)		44
Total finite-lived intangible assets	15	$	2,844	$	(2,240)	$	604

		December 31, 2022
	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	16	$	2,233	$	(1,675)	$	558
Intellectual property	12	1,473		(1,320)		153
Other	16	132		(85)		47
Total finite-lived intangible assets	14	$	3,838	$	(3,080)	$	758
1 For the nine months ended September 30, 2023, $1.0 billion of intangible assets were fully amortized and have been removed.

Amortization expense for the three and nine months ended September 30, 2023 was $44 million and $174 million, respectively. Amortization expense for the three and nine months ended September 30, 2022 was $70 million and $213 million, respectively. Amortization expense related to intangible assets is expected to be:

(Millions of dollars)
Remaining Three Months of 2023	2024	2025	2026	2027	Thereafter
$44	$174	$165	$94	$31	$96

B.  Goodwill

No goodwill was impaired during the nine months ended September 30, 2023 or 2022.

The changes in carrying amount of goodwill by reportable segment for the nine months ended September 30, 2023 were as follows: 

(Millions of dollars)	December 31, 2022		Other Adjustments 1		September 30, 2023
Construction Industries
Goodwill	$	287	$	(18)	$	269
Impairments	(22)		—		(22)
Net goodwill	265		(18)		247
Resource Industries
Goodwill	4,130		5		4,135
Impairments	(1,175)		—		(1,175)
Net goodwill	2,955		5		2,960
Energy & Transportation
Goodwill	2,947		(2)		2,945
Impairments	(925)		—		(925)
Net goodwill	2,022		(2)		2,020
All Other 2
Goodwill	46		(5)		41
Impairments	—		—		—
Net goodwill	46		(5)		41
Consolidated total
Goodwill	7,410		(20)		7,390
Impairments	(2,122)		—		(2,122)
Net goodwill	$	5,288	$	(20)	$	5,268

1 Other adjustments are comprised primarily of foreign currency translation.

2 Includes All Other operating segment (See Note 16).

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Investments in Debt and Equity Securities

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Equity Securities

Investments in debt and equity securities

We have investments in certain debt and equity securities, which we record at fair value and primarily include in Other assets in the Consolidated Statement of Financial Position.

We classify debt securities primarily as available-for-sale. We include the unrealized gains and losses arising from the revaluation of available-for-sale debt securities, net of applicable deferred income taxes, in equity (AOCI in the Consolidated Statement of Financial Position). We include the unrealized gains and losses arising from the revaluation of the equity securities in Other income (expense) in the Consolidated Statement of Results of Operations. We generally determine realized gains and losses on sales of investments using the specific identification method for available-for-sale debt and equity securities and include them in Other income (expense) in the Consolidated Statement of Results of Operations.

The cost basis and fair value of available-for-sale debt securities with unrealized gains and losses included in equity (AOCI in the Consolidated Statement of Financial Position) were as follows:

Available-for-sale debt securities	September 30, 2023						December 31, 2022
(Millions of dollars)	Cost Basis		Unrealized Pretax Net Gains (Losses)		Fair Value		Cost Basis		Unrealized Pretax Net Gains (Losses)		Fair Value
Government debt securities
U.S. treasury bonds	$	9	$	—	$	9	$	9	$	—	$	9
Other U.S. and non-U.S. government bonds	57		(4)		53		60		(5)		55
Corporate debt securities
Corporate bonds and other debt securities	2,823		(93)		2,730		2,561		(95)		2,466
Asset-backed securities	193		(4)		189		187		(5)		182
Mortgage-backed debt securities
U.S. governmental agency	429		(45)		384		364		(31)		333
Residential	3		(1)		2		3		(1)		2
Commercial	137		(11)		126		127		(10)		117
Total available-for-sale debt securities	$	3,651	$	(158)	$	3,493	$	3,311	$	(147)	$	3,164

Available-for-sale debt securities in an unrealized loss position:
	September 30, 2023
	Less than 12 months 1				12 months or more 1				Total
(Millions of dollars)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government debt securities
Other U.S. and non-U.S. government bonds	$	19	$	—	$	25	$	4	$	44	$	4
Corporate debt securities
Corporate bonds	1,660		29		972		64		2,632		93
Asset-backed securities	35		—		88		4		123		4
Mortgage-backed debt securities
U.S. governmental agency	102		4		281		41		383		45
Residential	—		—		2		1		2		1
Commercial	18		1		108		10		126		11
Total	$	1,834	$	34	$	1,476	$	124	$	3,310	$	158

	December 31, 2022
	Less than 12 months 1				12 months or more 1				Total
(Millions of dollars)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government debt securities
Other U.S. and non-U.S. government bonds	$	19	$	1	$	20	$	4	$	39	$	5
Corporate debt securities
Corporate bonds	1,815		46		357		50		2,172		96
Asset-backed securities	75		2		55		3		130		5
Mortgage-backed debt securities
U.S. governmental agency	229		16		98		15		327		31
Residential	2		—		1		1		3		1
Commercial	63		5		54		5		117		10
Total	$	2,203	$	70	$	585	$	78	$	2,788	$	148
1 Indicates the length of time that individual securities have been in a continuous unrealized loss position.

The unrealized losses on our investments in government debt securities, corporate debt securities, and mortgage-backed debt securities relate to changes in underlying interest rates and credit spreads since time of purchase. We do not intend to sell the investments, and it is not likely that we will be required to sell the investments before recovery of their respective amortized cost basis. In addition, we did not expect credit-related losses on these investments as of September 30, 2023.

The cost basis and fair value of available-for-sale debt securities at September 30, 2023, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay and creditors may have the right to call obligations.        

	September 30, 2023
(Millions of dollars)	Cost Basis		Fair Value
Due in one year or less	$	940	$	929
Due after one year through five years	1,812		1,737
Due after five years through ten years	262		248
Due after ten years	68		67
U.S. governmental agency mortgage-backed securities	429		384
Residential mortgage-backed securities	3		2
Commercial mortgage-backed securities	137		126
Total debt securities – available-for-sale	$	3,651	$	3,493

Sales of available-for-sale debt securities:
	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Proceeds from the sale of available-for-sale securities	$	271	$	204	$	710	$	474
Gross gains from the sale of available-for-sale securities	—		—		—		1
Gross losses from the sale of available-for-sale securities	1		—		1		1

In addition, we had $2,550 million of investments in time deposits classified as held-to-maturity debt securities as of September 30, 2023. We did not have any investments classified as held-to-maturity debt securities as of December 31, 2022. All these investments mature within one year and we include them in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. We record held-to-maturity debt securities at amortized cost, which approximates fair value.

For the three months ended September 30, 2023 and 2022, the net unrealized gains (losses) for equity securities held at September 30, 2023 and 2022 were $(11) million and $(12) million, respectively. For the nine months ended September 30, 2023 and 2022, the net unrealized gains (losses) for equity securities held at September 30, 2023 and 2022 were $(25) million and $(97) million, respectively.

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Postretirement Benefits

9 Months Ended

Sep. 30, 2023

Retirement Benefits [Abstract]

Postretirement Benefits

Postretirement benefits

A.  Pension and postretirement benefit costs    

	U.S. Pension Benefits				Non-U.S. Pension Benefits				Other Postretirement Benefits
	September 30,				September 30,				September 30,
(Millions of dollars)	2023		2022		2023		2022		2023		2022
For the three months ended:
Components of net periodic benefit cost:
Service cost	$	—	$	—	$	10	$	15	$	16	$	24
Interest cost	164		100		30		17		36		20
Expected return on plan assets	(173)		(167)		(40)		(33)		(2)		(3)
Amortization of prior service cost (credit)	—		—		—		—		(3)		(1)
Net periodic benefit cost (benefit) 1	$	(9)	$	(67)	$	—	$	(1)	$	47	$	40
For the nine months ended:
Components of net periodic benefit cost:
Service cost	$	—	$	—	$	30	$	40	$	50	$	74
Interest cost	492		301		91		53		108		60
Expected return on plan assets	(517)		(502)		(120)		(100)		(8)		(9)
Amortization of prior service cost (credit)	—		—		—		—		(9)		(4)
Net periodic benefit cost (benefit) 1	$	(25)	$	(201)	$	1	$	(7)	$	141	$	121

1 The service cost component is included in Operating costs in the Consolidated Statement of Results of Operations. All other components are included in Other income (expense) in the Consolidated Statement of Results of Operations.

We made $56 million and $320 million of contributions to our pension and other postretirement plans during the three and nine months ended September 30, 2023, respectively. We currently anticipate full-year 2023 contributions of approximately $372 million.

B.  Defined contribution benefit costs

Total company costs related to our defined contribution plans, which are included in Operating Costs in the Consolidated Statement of Results of Operations, were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
U.S. Plans	$	120	$	87	$	405	$	236
Non-U.S. Plans	27		29		85		85
	$	147	$	116	$	490	$	321

The increase in the U.S. defined contribution benefit costs for the three and nine months ended September 30, 2023 was primarily due to the fair value adjustments related to our non-qualified deferred compensation plans.

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Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

Leases

Revenues from finance and operating leases, primarily included in Revenues of Financial Products on the Consolidated Statement of Results of Operations, were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Finance lease revenue	$	106	$	105	$	315	$	326
Operating lease revenue	286		270		836		819
Total	$	392	$	375	$	1,151	$	1,145

We present revenues net of sales and other related taxes.

Leases

Leases

Revenues from finance and operating leases, primarily included in Revenues of Financial Products on the Consolidated Statement of Results of Operations, were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Finance lease revenue	$	106	$	105	$	315	$	326
Operating lease revenue	286		270		836		819
Total	$	392	$	375	$	1,151	$	1,145

We present revenues net of sales and other related taxes.

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Guarantees and Product Warranty

9 Months Ended

Sep. 30, 2023

Guarantees and Product Warranties [Abstract]

Guarantees and Product Warranty

Guarantees and product warranty

Caterpillar dealer performance guarantees

Dealer performance guarantees mainly consists of an indemnity to a third-party insurance company for potential losses related to performance bonds issued on behalf of Caterpillar dealers.  The bonds have varying terms and are issued to insure governmental agencies against nonperformance by certain dealers. The guarantees began to expire during the third quarter of 2023. No payments were made under the guarantees.

We have dealer performance guarantees and third-party performance guarantees that do not limit potential payment to end users related to indemnities and other commercial contractual obligations. In addition, we have entered into contracts involving industry standard indemnifications that do not limit potential payment. For these unlimited guarantees, we are unable to estimate a maximum potential amount of future payments that could result from claims made.

No significant loss has been experienced or is anticipated under any of these guarantees.  At September 30, 2023 and December 31, 2022, the related recorded liability was $4 million and $2 million, respectively. The maximum potential amount of future payments that we can estimate (undiscounted and without reduction for any amounts that may possibly be recovered under recourse or collateralized provisions) and we could be required to make under the guarantees was as follows:

(Millions of dollars)	September 30, 2023		December 31, 2022
Caterpillar dealer performance guarantees	$	42	$	188
Other guarantees	341		323
Total guarantees	$	383	$	511

Cat Financial provides guarantees to purchase certain loans of Caterpillar dealers from a special-purpose corporation (SPC) that qualifies as a variable interest entity.  The purpose of the SPC is to provide short-term working capital loans to Caterpillar dealers.  This SPC issues commercial paper and uses the proceeds to fund its loan program. Cat Financial receives a fee for providing this guarantee.  Cat Financial is the primary beneficiary of the SPC as its guarantees result in Cat Financial having both the power to direct the activities that most significantly impact the SPC’s economic performance and the obligation to absorb losses, and therefore Cat Financial has consolidated the financial statements of the SPC.  As of September 30, 2023 and December 31, 2022, the SPC’s assets of $1.54 billion and $971 million, respectively, were primarily comprised of loans to dealers, and the SPC’s liabilities of $1.54 billion and $970 million, respectively, were primarily comprised of commercial paper.  The assets of the SPC are not available to pay Cat Financial’s creditors. Cat Financial may be obligated to perform under the guarantee if the SPC experiences losses. No loss has been experienced or is anticipated under this loan purchase agreement.

We determine our product warranty liability by applying historical claim rate experience to the current field population and dealer inventory.  Generally, we base historical claim rates on actual warranty experience for each product by

machine model/engine size by customer or dealer location (inside or outside North America).  We develop specific rates for each product shipment month and update them monthly based on actual warranty claim experience.  

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

	First Nine Months
(Millions of dollars)	2023		2022
Warranty liability, beginning of period	$	1,761	$	1,689
Reduction in liability (payments)	(617)		(589)
Increase in liability (new warranties)	724		562
Warranty liability, end of period	$	1,868	$	1,662

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Profit Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share Reconciliation [Abstract]

Profit Per Share

Profit per share

Computations of profit per share:	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions except per share data)	2023		2022		2023		2022
Profit for the period (A) 1	$	2,794	$	2,041	$	7,659	$	5,251
Determination of shares (in millions):
Weighted-average number of common shares outstanding (B)	509.8		525.0		513.0		530.1
Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price	2.8		2.6		2.7		3.1
Average common shares outstanding for fully diluted computation (C) 2	512.6		527.6		515.7		533.2
Profit per share of common stock:
Assuming no dilution (A/B)	$	5.48	$	3.89	$	14.93	$	9.91
Assuming full dilution (A/C) 2	$	5.45	$	3.87	$	14.85	$	9.85
Shares outstanding as of September 30, (in millions)					509.1		520.4
1 Profit attributable to common shareholders.
2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.

For the three and nine months ended September 30, 2023 and 2022, we excluded 0.8 million and 2.1 million of outstanding stock options, respectively, from the computation of diluted earnings per share because the effect would have been antidilutive.

For the three and nine months ended September 30, 2023, we repurchased 1.9 million and 9.5 million shares of Caterpillar common stock, respectively, at an aggregate cost of $0.5 billion and $2.2 billion, respectively. For the three and nine months ended September 30, 2022, we repurchased 7.6 million and 17.0 million shares of Caterpillar common stock, respectively, at an aggregate cost of $1.4 billion and $3.3 billion, respectively. We made these purchases through the combination of accelerated stock repurchase agreements with a third-party financial institution and open market transactions in 2023 and 2022.

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss)We present comprehensive income and its components in the Consolidated Statement of Comprehensive Income. Changes in the balances for each component of AOCI were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Foreign currency translation:
Beginning balance	$	(1,863)	$	(2,282)	$	(2,328)	$	(1,508)
Gains (losses) on foreign currency translation	(194)		(592)		(235)		(1,328)
Less: Tax provision /(benefit)	10		26		(2)		64
Net gains (losses) on foreign currency translation	(204)		(618)		(233)		(1,392)
(Gains) losses reclassified to earnings	(1)		—		493		—
Less: Tax provision /(benefit)	—		—		—		—
Net (gains) losses reclassified to earnings	(1)		—		493		—
Other comprehensive income (loss), net of tax	(205)		(618)		260		(1,392)
Ending balance	$	(2,068)	$	(2,900)	$	(2,068)	$	(2,900)
Pension and other postretirement benefits
Beginning balance	$	(44)	$	(64)	$	(39)	$	(62)
Current year prior service credit (cost)	—		—		—		—
Less: Tax provision /(benefit)	—		—		—		—
Net current year prior service credit (cost)	—		—		—		—
Amortization of prior service (credit) cost	(3)		(1)		(9)		(4)
Less: Tax provision /(benefit)	—		—		(1)		(1)
Net amortization of prior service (credit) cost	(3)		(1)		(8)		(3)
Other comprehensive income (loss), net of tax	(3)		(1)		(8)		(3)
Ending balance	$	(47)	$	(65)	$	(47)	$	(65)
Derivative financial instruments
Beginning balance	$	71	$	(66)	$	28	$	(3)
Gains (losses) deferred	13		44		57		298
Less: Tax provision /(benefit)	5		35		14		71
Net gains (losses) deferred	8		9		43		227
(Gains) losses reclassified to earnings	(94)		(296)		(84)		(636)
Less: Tax provision /(benefit)	(24)		(96)		(22)		(155)
Net (gains) losses reclassified to earnings	(70)		(200)		(62)		(481)
Other comprehensive income (loss), net of tax	(62)		(191)		(19)		(254)
Ending balance	$	9	$	(257)	$	9	$	(257)
Available-for-sale securities
Beginning balance	$	(110)	$	(87)	$	(118)	$	20
Gains (losses) deferred	(22)		(55)		(12)		(188)
Less: Tax provision /(benefit)	(5)		(11)		(3)		(37)
Net gains (losses) deferred	(17)		(44)		(9)		(151)
(Gains) losses reclassified to earnings	1		—		1		—
Less: Tax provision /(benefit)	—		—		—		—
Net (gains) losses reclassified to earnings	1		—		1		—
Other comprehensive income (loss), net of tax	(16)		(44)		(8)		(151)
Ending balance	$	(126)	$	(131)	$	(126)	$	(131)
Total AOCI Ending Balance at September 30	$	(2,232)	$	(3,353)	$	(2,232)	$	(3,353)

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Environmental and Legal Matters

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Environmental and Legal Matters

Environmental and legal matters

The Company is regulated by federal, state and international environmental laws governing its use, transport and disposal of substances and control of emissions. In addition to governing our manufacturing and other operations, these laws often impact the development of our products, including, but not limited to, required compliance with air emissions standards applicable to internal combustion engines. We have made, and will continue to make, significant research and development and capital expenditures to comply with these emissions standards.

We are engaged in remedial activities at a number of locations, often with other companies, pursuant to federal and state laws. When it is probable we will pay remedial costs at a site, and those costs can be reasonably estimated, we accrue the investigation, remediation, and operating and maintenance costs against our earnings. We accrue costs based on consideration of currently available data and information with respect to each individual site, including available technologies, current applicable laws and regulations, and prior remediation experience. Where no amount within a range of estimates is more likely, we accrue the minimum. Where multiple potentially responsible parties are involved, we consider our proportionate share of the probable costs. In formulating the estimate of probable costs, we do not consider amounts expected to be recovered from insurance companies or others. We reassess these accrued amounts on a quarterly basis. The amount recorded for environmental remediation is not material and is included in Accrued expenses. We believe there is no more than a remote chance that a material amount for remedial activities at any individual site, or at all the sites in the aggregate, will be required.

In addition, we are involved in other unresolved legal actions that arise in the normal course of business. The most prevalent of these unresolved actions involve disputes related to product design, manufacture and performance liability (including claimed asbestos exposure), contracts, employment issues, environmental matters, intellectual property rights, taxes (other than income taxes) and securities laws. The aggregate range of reasonably possible losses in excess of accrued liabilities, if any, associated with these unresolved legal actions is not material. In some cases, we cannot reasonably estimate a range of loss because there is insufficient information regarding the matter. However, we believe there is no more than a remote chance that any liability arising from these matters would be material. Although it is not possible to predict with certainty the outcome of these unresolved legal actions, we believe that these actions will not individually or in the aggregate have a material adverse effect on our consolidated results of operations, financial position or liquidity.

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Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income taxes

The effective tax rate for the nine months ended September 30, 2023 was 22.4 percent compared to 21.4 percent for the nine months ended September 30, 2022. The effective tax rate for the three months ended September 30, 2023 was 20.9 percent compared to 20.6 percent for the three months ended September 30, 2022.

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

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

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Segment Information

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segment Information

Segment information

A.    Basis for segment information

Our Executive Office is comprised of a Chief Executive Officer (CEO), four Group Presidents, a Chief Financial Officer (CFO), a Chief Legal Officer and a Chief Human Resources Officer. The Group Presidents and CFO are accountable for a related set of end-to-end businesses that they manage.  The Chief Legal Officer leads the Law, Security and Public Policy Division. The Chief Human Resources Officer leads the Human Resources Organization. The CEO allocates resources and manages performance at the Group President/CFO level.  As such, the CEO serves as our Chief Operating Decision Maker, and operating segments are primarily based on the Group President/CFO reporting structure.

Three of our operating segments, Construction Industries, Resource Industries and Energy & Transportation are led by Group Presidents.  One operating segment, Financial Products, is led by the CFO who also has responsibility for Corporate Services. Corporate Services is a cost center primarily responsible for the performance of certain support functions globally and to provide centralized services; it does not meet the definition of an operating segment. One Group President leads one smaller operating segment that is included in the All Other operating segment.  The Law, Security and Public Policy Division and the Human Resources Organization are cost centers and do not meet the definition of an operating segment.

B.    Description of segments

We have five operating segments, of which four are reportable segments. Following is a brief description of our reportable segments and the business activities included in the All Other operating segment:

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. Inter-segment sales are a source of revenue for this segment.

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

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

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 ME&T, 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.

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

C.    Segment measurement and reconciliations

There are several methodology differences between our segment reporting and our external reporting.  The following is a list of the more significant methodology differences:

•ME&T segment net assets generally include inventories, receivables, property, plant and equipment, goodwill, intangibles, accounts payable and customer advances. We generally manage at the corporate level liabilities other than accounts payable and customer advances, and we do not include these in segment operations.  Financial Products Segment assets generally include all categories of assets.

•We value segment inventories and cost of sales using a current cost methodology.

•We amortize goodwill allocated to segments using a fixed amount based on a 20-year useful life.  This methodology difference only impacts segment assets. We do not include goodwill amortization expense in segment profit. In addition, we have allocated to segments only a portion of goodwill for certain acquisitions made in 2011 or later.

•We generally manage currency exposures for ME&T at the corporate level and do not include in segment profit the effects of changes in exchange rates on results of operations within the year.  We report the net difference created in the translation of revenues and costs between exchange rates used for U.S. GAAP reporting and exchange rates used for segment reporting as a methodology difference.

•We do not include stock-based compensation expense in segment profit.

•Postretirement benefit expenses are split; segments are generally responsible for service costs, with the remaining elements of net periodic benefit cost included as a methodology difference.

•We determine ME&T segment profit on a pretax basis and exclude interest expense and most other income/expense items.  We determine Financial Products Segment profit on a pretax basis and include other income/expense items.

Reconciling items are created based on accounting differences between segment reporting and our consolidated external reporting. Please refer to pages 30 to 33 for financial information regarding significant reconciling items.  Most of our reconciling items are self-explanatory given the above explanations.  For the reconciliation of profit, we have grouped the reconciling items as follows:

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

•Restructuring costs: May include costs for employee separation, long-lived asset impairments, contract terminations and divestiture impacts. These costs are included in Other operating (income) expenses except for defined-benefit plan curtailment losses and special termination benefits, which are included in Other income (expense). Restructuring costs also include other exit-related costs, which may consist of accelerated depreciation, inventory write-downs, building demolition, equipment relocation and project management costs and LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold. See Note 20 for more information.

•Methodology differences:  See previous discussion of significant accounting differences between segment reporting and consolidated external reporting.

•Timing:   Timing differences in the recognition of costs between segment reporting and consolidated external reporting. For example, we report certain costs on the cash basis for segment reporting and the accrual basis for consolidated external reporting.

For the three and nine months ended September 30, 2023 and 2022, sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows:

Sales and Revenues by Geographic Region
(Millions of dollars)	North America		Latin America		EAME		Asia/ Pacific		External Sales and Revenues			Intersegment Sales and Revenues		Total Sales and Revenues
Three Months Ended September 30, 2023
Construction Industries	$	4,078	$	555	$	1,351	$	997	$	6,981		$	18	$	6,999
Resource Industries	1,366		499		508		886		3,259			92		3,351
Energy & Transportation	2,966		460		1,428		901		5,755			1,104		6,859
Financial Products Segment	627		110		132		110		979		1	—		979
Total sales and revenues from reportable segments	9,037		1,624		3,419		2,894		16,974			1,214		18,188
All Other operating segment	16		(1)		5		10		30			76		106
Corporate Items and Eliminations	(126)		(20)		(22)		(26)		(194)			(1,290)		(1,484)
Total Sales and Revenues	$	8,927	$	1,603	$	3,402	$	2,878	$	16,810		$	—	$	16,810
Three Months Ended September 30, 2022
Construction Industries	$	3,106	$	799	$	1,247	$	1,084	$	6,236		$	40	$	6,276
Resource Industries	1,122		472		526		893		3,013			74		3,087
Energy & Transportation	2,422		468		1,280		827		4,997			1,189		6,186
Financial Products Segment	522		90		100		107		819		1	—		819
Total sales and revenues from reportable segments	7,172		1,829		3,153		2,911		15,065			1,303		16,368
All Other operating segment	16		—		4		15		35			68		103
Corporate Items and Eliminations	(53)		(20)		(12)		(21)		(106)			(1,371)		(1,477)
Total Sales and Revenues	$	7,135	$	1,809	$	3,145	$	2,905	$	14,994		$	—	$	14,994

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $181 million and $124 million in the three months ended September 30, 2023 and 2022, respectively.

Sales and Revenues by Geographic Region
(Millions of dollars)	North America		Latin America		EAME		Asia/ Pacific		External Sales and Revenues			Intersegment Sales and Revenues		Total Sales and Revenues
Nine Months Ended September 30, 2023
Construction Industries	$	11,654	$	1,720	$	4,125	$	3,307	$	20,806		$	93	$	20,899
Resource Industries	4,016		1,511		1,624		2,940		10,091			250		10,341
Energy & Transportation	8,658		1,299		4,291		2,519		16,767			3,565		20,332
Financial Products Segment	1,795		316		364		329		2,804		1	—		2,804
Total sales and revenues from reportable segments	26,123		4,846		10,404		9,095		50,468			3,908		54,376
All Other operating segment	50		(1)		13		37		99			234		333
Corporate Items and Eliminations	(374)		(61)		(64)		(78)		(577)			(4,142)		(4,719)
Total Sales and Revenues	$	25,799	$	4,784	$	10,353	$	9,054	$	49,990		$	—	$	49,990
Nine Months Ended September 30, 2022
Construction Industries	$	8,832	$	2,061	$	3,726	$	3,694	$	18,313		$	111	$	18,424
Resource Industries	3,167		1,337		1,609		2,554		8,667			211		8,878
Energy & Transportation	6,637		1,160		3,679		2,193		13,669			3,260		16,929
Financial Products Segment	1,530		250		293		327		2,400		1	—		2,400
Total sales and revenues from reportable segments	20,166		4,808		9,307		8,768		43,049			3,582		46,631
All Other operating segment	52		—		14		46		112			227		339
Corporate Items and Eliminations	(175)		(59)		(33)		(64)		(331)			(3,809)		(4,140)
Total Sales and Revenues	$	20,043	$	4,749	$	9,288	$	8,750	$	42,830		$	—	$	42,830

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $515 million and $332 million in the nine months ended September 30, 2023 and 2022, respectively.

For the three and nine months ended September 30, 2023 and 2022, Energy & Transportation segment sales by end user application were as follows:

Energy & Transportation External Sales
	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Oil and gas	$	1,667	$	1,323	$	4,741	$	3,503
Power generation	1,598		1,320		4,527		3,518
Industrial	1,220		1,158		3,793		3,295
Transportation	1,270		1,196		3,706		3,353
Energy & Transportation External Sales	$	5,755	$	4,997	$	16,767	$	13,669

Reconciliation of Consolidated profit before taxes:
(Millions of dollars)	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Profit from reportable segments:
Construction Industries	$	1,847	$	1,209	$	5,440	$	3,255
Resource Industries	730		506		2,234		1,222
Energy & Transportation	1,181		935		3,507		2,132
Financial Products Segment	203		220		675		675
Total profit from reportable segments	3,961		2,870		11,856		7,284
Profit from All Other operating segment	21		8		42		42
Cost centers	10		(37)		53		1
Corporate costs	(265)		(168)		(714)		(670)
Timing	22		(84)		(89)		(129)
Restructuring costs	(46)		(49)		(688)		(90)
Methodology differences:
Inventory/cost of sales	(2)		138		137		407
Postretirement benefit expense	(13)		82		(84)		293
Stock-based compensation expense	(60)		(55)		(178)		(162)
Financing costs	(13)		(75)		(115)		(269)
Currency	78		53		106		315
Other income/expense methodology differences	(164)		(109)		(468)		(287)
Other methodology differences	(14)		(16)		(57)		(82)
Total consolidated profit before taxes	$	3,515	$	2,558	$	9,801	$	6,653

Reconciliation of Assets:
(Millions of dollars)	September 30, 2023		December 31, 2022
Assets from reportable segments:
Construction Industries	$	5,407	$	5,168
Resource Industries	5,831		5,775
Energy & Transportation	10,373		9,455
Financial Products Segment	34,953		34,269
Total assets from reportable segments	56,564		54,667
Assets from All Other operating segment	1,855		1,828
Items not included in segment assets:
Cash and cash equivalents	5,874		6,042
Deferred income taxes	2,601		2,098
Goodwill and intangible assets	4,413		4,248
Property, plant and equipment – net and other assets	6,969		4,234
Inventory methodology differences	(3,259)		(3,063)
Liabilities included in segment assets	12,227		12,519
Other	(453)		(630)
Total assets	$	86,791	$	81,943

Reconciliation of Depreciation and amortization:
(Millions of dollars)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Depreciation and amortization from reportable segments:
Construction Industries	$	54	$	57	$	162	$	172
Resource Industries	66		92		235		275
Energy & Transportation	139		136		401		405
Financial Products Segment	186		183		545		556
Total depreciation and amortization from reportable segments	445		468		1,343		1,408
Items not included in segment depreciation and amortization:
All Other operating segment	59		56		176		172
Cost centers	23		20		65		63
Other	(2)		7		15		18
Total depreciation and amortization	$	525	$	551	$	1,599	$	1,661

Reconciliation of Capital expenditures:
(Millions of dollars)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Capital expenditures from reportable segments:
Construction Industries	$	105	$	74	$	188	$	149
Resource Industries	62		65		132		129
Energy & Transportation	249		167		595		444
Financial Products Segment	342		295		1,031		870
Total capital expenditures from reportable segments	758		601		1,946		1,592
Items not included in segment capital expenditures:
All Other operating segment	67		54		142		116
Cost centers	27		16		71		41
Timing	—		(35)		185		173
Other	(71)		(19)		(106)		(31)
Total capital expenditures	$	781	$	617	$	2,238	$	1,891

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Cat Financial Financing Activities

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Cat Financial Financing Activities

Cat Financial financing activities

Allowance for credit losses

Portfolio segments

A portfolio segment is the level at which Cat Financial develops a systematic methodology for determining its allowance for credit losses. Cat Financial's portfolio segments and related methods for estimating expected credit losses are as follows:

Customer

Cat Financial provides loans and finance leases to end-user customers primarily for the purpose of financing new and used Caterpillar machinery, engines and equipment for commercial use. Cat Financial also provides financing for power generation facilities that, in most cases, incorporate Caterpillar products. The average original term of Cat Financial's customer finance receivable portfolio was approximately 51 months with an average remaining term of approximately 27 months as of September 30, 2023.

Cat Financial typically maintains a security interest in financed equipment and requires physical damage insurance coverage on the financed equipment, both of which provide Cat Financial with certain rights and protections. If Cat Financial's collection efforts fail to bring a defaulted account current, Cat Financial generally can repossess the financed equipment, after satisfying local legal requirements, and sell it within the Caterpillar dealer network or through third-party auctions.

Cat Financial estimates the allowance for credit losses related to its customer finance receivables based on loss forecast models utilizing probabilities of default and the estimated loss given default based on past loss experience adjusted for current conditions and reasonable and supportable forecasts capturing country and industry-specific economic factors.

During the three and nine months ended September 30, 2023, Cat Financial's forecasts reflected a continuation of the trend of relatively low unemployment rates and delinquencies within their portfolio. However, industry delinquencies show an increasing trend as persistently high inflation rates and consequent central bank actions are weakening global economic growth. The company believes the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long-term trends.

Dealer

Cat Financial provides financing to Caterpillar dealers in the form of wholesale financing plans. Cat Financial's wholesale financing plans provide assistance to dealers by financing their mostly new Caterpillar equipment inventory and rental fleets on a secured and unsecured basis. In addition, Cat Financial provides a variety of secured and unsecured loans to Caterpillar dealers.

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

In general, Cat Financial's Dealer portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to its close working relationships with the dealers and their financial strength. Therefore, Cat Financial made no adjustments to historical loss rates during the three and nine months ended September 30, 2023.

Classes of finance receivables

Cat Financial further evaluates portfolio segments by the class of finance receivables, which is defined as a level of information (below a portfolio segment) in which the finance receivables have the same initial measurement attribute and a similar method for assessing and monitoring credit risk. Cat Financial's classes, which align with management reporting for credit losses, are as follows:

•North America - Finance receivables originated in the United States and Canada.

•EAME - Finance receivables originated in Europe, Africa, the Middle East and Eurasia.

•Asia/Pacific - Finance receivables originated in Australia, New Zealand, China, Japan, Southeast Asia and India.

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

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

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

Receivable balances, including accrued interest, are written off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible (generally upon repossession of the collateral). The amount of the write-off is determined by comparing the fair value of the collateral, less cost to sell, to the amortized cost. Subsequent recoveries, if any, are credited to the allowance for credit losses when received.

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

(Millions of dollars)	Three Months Ended September 30, 2023						Three Months Ended September 30, 2022
	Customer		Dealer		Total		Customer		Dealer		Total
Beginning balance	$	265	$	50	$	315	$	290	$	82	$	372
Write-offs	(22)		—		(22)		(30)		—		(30)
Recoveries	13		—		13		17		—		17
Provision for credit losses 1	31		1		32		(2)		(17)		(19)
Other	(3)		—		(3)		(5)		—		(5)
Ending balance	$	284	$	51	$	335	$	270	$	65	$	335
	Nine Months Ended September 30, 2023						Nine Months Ended September 30, 2022
	Customer		Dealer		Total		Customer		Dealer		Total
Beginning balance	$	277	$	65	$	342	$	251	$	82	$	333
Write-offs	(63)		—		(63)		(68)		—		(68)
Recoveries	36		—		36		47		—		47
Provision for credit losses 1	35		(14)		21		46		(17)		29
Other	(1)		—		(1)		(6)		—		(6)
Ending balance	$	284	$	51	$	335	$	270	$	65	$	335
Finance Receivables	$	19,768	$	2,060	$	21,828	$	19,363	$	1,737	$	21,100
1 Excludes provision for credit losses on unfunded commitments and other miscellaneous receivables.

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

(Millions of dollars)	Three Months Ended September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total
North America	$	1	$	2	$	2	$	1	$	1	$	—	$	2	$	9
EAME	—		1		1		1		—		—		—		3
Asia/Pacific	—		2		3		1		—		—		—		6
Latin America	—		1		1		1		—		1		—		4
Total	$	1	$	6	$	7	$	4	$	1	$	1	$	2	$	22
	Nine Months Ended September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total
North America	$	1	$	7	$	7	$	2	$	2	$	1	$	9	$	29
EAME	—		2		3		3		—		1		—		9
Asia/Pacific	—		3		6		4		1		—		—		14
Latin America	—		3		3		3		1		1		—		11
Total	$	1	$	15	$	19	$	12	$	4	$	3	$	9	$	63

Credit quality of finance receivables

At origination, Cat Financial evaluates credit risk based on a variety of credit quality factors including prior payment experience, customer financial information, credit ratings, loan-to-value ratios, probabilities of default, industry trends, macroeconomic factors and other internal metrics. On an ongoing basis, Cat Financial monitors credit quality based on past-due status as there is a meaningful correlation between the past-due status of customers and the risk of loss. In determining past-due status, Cat Financial considers the entire finance receivable past due when any installment is over 30 days past due.

Customer

The tables below summarize the aging category of Cat Financial's amortized cost of finance receivables in the Customer portfolio segment by origination year:

(Millions of dollars)	September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,134	$	2,940	$	2,310	$	919	$	310	$	65	$	304	$	9,982
31-60 days past due	18		31		23		15		6		2		3		98
61-90 days past due	6		10		7		4		1		—		2		30
91+ days past due	5		19		18		10		5		3		2		62
EAME
Current	914		962		649		297		144		124		—		3,090
31-60 days past due	11		8		11		3		1		—		—		34
61-90 days past due	3		6		3		3		2		—		—		17
91+ days past due	4		16		18		9		3		1		—		51
Asia/Pacific
Current	722		660		361		103		21		6		—		1,873
31-60 days past due	2		12		10		4		1		—		—		29
61-90 days past due	1		3		3		4		1		—		—		12
91+ days past due	—		4		5		3		—		—		—		12
Mining
Current	807		730		420		143		92		49		49		2,290
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		1		—		—		2		—		3
91+ days past due	—		2		2		—		—		1		—		5
Latin America
Current	552		571		255		74		29		8		—		1,489
31-60 days past due	6		13		7		4		3		1		—		34
61-90 days past due	1		5		2		1		—		—		—		9
91+ days past due	1		15		9		8		8		20		—		61
Power
Current	46		68		69		86		30		122		162		583
31-60 days past due	—		—		—		—		—		1		—		1
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		3		—		3
Totals by Aging Category
Current	$	6,175	$	5,931	$	4,064	$	1,622	$	626	$	374	$	515	$	19,307
31-60 days past due	37		64		51		26		11		4		3		196
61-90 days past due	11		24		16		12		4		2		2		71
91+ days past due	10		56		52		30		16		28		2		194
Total Customer	$	6,233	$	6,075	$	4,183	$	1,690	$	657	$	408	$	522	$	19,768

(Millions of dollars)	December 31, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,915	$	3,276	$	1,525	$	653	$	206	$	34	$	240	$	9,849
31-60 days past due	25		26		18		12		4		1		4		90
61-90 days past due	9		15		7		3		1		—		3		38
91+ days past due	11		16		12		6		4		3		4		56
EAME
Current	1,270		953		477		280		155		68		—		3,203
31-60 days past due	10		12		7		1		1		—		—		31
61-90 days past due	8		4		3		1		—		—		—		16
91+ days past due	6		25		16		4		1		1		—		53
Asia/Pacific
Current	1,033		684		313		69		18		2		—		2,119
31-60 days past due	10		12		8		1		1		—		—		32
61-90 days past due	2		5		4		2		—		—		—		13
91+ days past due	2		6		6		4		—		—		—		18
Mining
Current	863		575		220		171		93		108		80		2,110
31-60 days past due	—		1		—		—		—		—		—		1
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		1		—		1
Latin America
Current	770		400		150		69		26		20		—		1,435
31-60 days past due	7		8		4		2		—		1		—		22
61-90 days past due	2		5		1		1		—		—		—		9
91+ days past due	2		13		11		2		1		—		—		29
Power
Current	78		85		142		33		18		161		125		642
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		5		—		5
Totals by Aging Category
Current	$	7,929	$	5,973	$	2,827	$	1,275	$	516	$	393	$	445	$	19,358
31-60 days past due	52		59		37		16		6		2		4		176
61-90 days past due	21		29		15		7		1		—		3		76
91+ days past due	21		60		45		16		6		10		4		162
Total Customer	$	8,023	$	6,121	$	2,924	$	1,314	$	529	$	405	$	456	$	19,772

Finance receivables in the Customer portfolio segment are substantially secured by collateral, primarily in the form of Caterpillar and other equipment. For those contracts where the borrower is experiencing financial difficulty, repayment of the outstanding amounts is generally expected to be provided through the operation or repossession and sale of the equipment.

Dealer

As of September 30, 2023 and December 31, 2022, Cat Financial's total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $44 million and $58 million, respectively, that were 91+ days past due in Latin America, all of which were originated in 2017.

Non-accrual finance receivables

Recognition of income is suspended and the finance receivable is placed on non-accrual status when management determines that collection of future income is not probable. Contracts on non-accrual status are generally more than 120 days past due. Recognition is resumed and previously suspended income is recognized when collection is considered probable. Payments received while the finance receivable is on non-accrual status are applied to interest and principal in accordance with the contractual terms. Interest earned but uncollected prior to the receivable being placed on non-accrual status is written off through Provision for credit losses when, in the judgment of management, it is considered uncollectible.

In Cat Financial's Customer portfolio segment, finance receivables which were on non-accrual status and finance receivables over 90 days past due and still accruing income were as follows:

(Millions of dollars)	September 30, 2023						December 31, 2022
	Amortized Cost						Amortized Cost
	Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing		Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing
North America	$	54	$	—	$	12	$	52	$	4	$	11
EAME	44		—		9		43		—		10
Asia/Pacific	8		—		5		11		—		7
Mining	4		—		1		—		1		—
Latin America	69		—		—		45		—		—
Power	9		—		—		5		11		—
Total	$	188	$	—	$	27	$	156	$	16	$	28

There were $44 million and $58 million, respectively, in finance receivables in Cat Financial's Dealer portfolio segment on non-accrual status as of September 30, 2023 and December 31, 2022, all of which was in Latin America.

Modifications

Cat Financial periodically modifies the terms of their finance receivable agreements in response to borrowers’ financial difficulty. Typically, the types of modifications granted are payment deferrals, interest-only payment periods and/or term extensions. Many modifications Cat Financial grants are for commercial reasons or for borrowers experiencing some form of short-term financial stress and may result in insignificant payment delays. Cat Financial does not consider these borrowers to be experiencing financial difficulty. Modifications for borrowers Cat Financial does consider to be experiencing financial difficulty typically result in payment deferrals and/or reduced payments for a period of four months or longer, term extension of six months or longer or a combination of both.

During the three and nine months ended September 30, 2023, there were no finance receivable modifications granted to borrowers experiencing financial difficulty in Cat Financial's Dealer portfolio segment. The amortized cost basis of finance receivables modified for borrowers experiencing financial difficulty in the Customer portfolio segment during the three and nine months ended September 30, 2023, was $13 million and $38 million, respectively. Total modifications with borrowers experiencing financial difficulty represented 0.06 percent and 0.17 percent of Cat Financial's finance receivable portfolio for the same periods, respectively.

For the three and nine months ended September 30, 2023, the financial effects of term extensions for borrowers experiencing financial difficulty added a weighted average of 8 and 17 months, respectively, to the terms of modified contracts. For the three and nine months ended September 30, 2023, the financial effects of payment delays for

borrowers experiencing financial difficulty resulted in weighted average payment deferrals and/or interest only payment periods of 6 and 7 months, respectively.

After Cat Financial modifies a finance receivable, they continue to track its performance under its most recent modified terms. As of September 30, 2023, all of the finance receivables modified with borrowers experiencing financial difficulty are current except for $3 million in EAME that was 31-60 days past due.

The effect of most modifications made to finance receivables for borrowers experiencing financial difficulty is already included in the allowance for credit losses based on the methodologies used to estimate the allowance; therefore, a change to the allowance for credit losses is generally not recorded upon modification. On rare occasions when principal forgiveness is provided, the amount forgiven is written off against the allowance for credit losses.

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Fair Value Disclosures

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Disclosures

Fair value disclosures

    A. Fair value measurements

The guidance on fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.  This guidance also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques.  Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions.  In accordance with this guidance, fair value measurements are classified under the following hierarchy:

•Level 1 – Quoted prices for identical instruments in active markets.

•Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

•Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

When available, we use quoted market prices to determine fair value, and we classify such measurements within Level 1.  In some cases where market prices are not available, we make use of observable market based inputs to calculate fair value, in which case the measurements are classified within Level 2.  If quoted or observable market prices are not available, fair value is based upon valuations in which one or more significant inputs are unobservable, including internally developed models that use, where possible, current market-based parameters such as interest rates, yield curves and currency rates.  These measurements are classified within Level 3.

We classify fair value measurements according to the lowest level input or value-driver that is significant to the valuation.  We may therefore classify a measurement within Level 3 even though there may be significant inputs that are readily observable.

Fair value measurement includes the consideration of nonperformance risk.  Nonperformance risk refers to the risk that an obligation (either by a counterparty or Caterpillar) will not be fulfilled.  For financial assets traded in an active market (Level 1 and certain Level 2), the nonperformance risk is included in the market price.  For certain other financial assets and liabilities (certain Level 2 and Level 3), our fair value calculations have been adjusted accordingly.

Investments in debt and equity securities

We have investments in certain debt and equity securities that are recorded at fair value.  Fair values for our U.S. treasury bonds and large capitalization value and smaller company growth equity securities are based upon valuations for identical instruments in active markets.  Fair values for other government debt securities, corporate debt securities and mortgage-backed debt securities are based upon models that take into consideration such market-based factors as recent sales, risk-free yield curves and prices of similarly rated bonds.

We also have investments in time deposits classified as held-to-maturity debt securities. The fair value of these investments is based upon valuations observed in less active markets than Level 1. These investments have a maturity of less than one year and are recorded at amortized costs, which approximate fair value.

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

See Note 8 for additional information on our investments in debt and equity securities.

Derivative financial instruments

The fair value of interest rate contracts is primarily based on a standard industry accepted valuation model that utilizes the appropriate market-based forward swap curves and zero-coupon interest rates to determine discounted cash flows.  The fair value of foreign currency and commodity forward, option and cross currency contracts is based on standard industry accepted valuation models that discount cash flows resulting from the differential between the contract price and the market-based forward rate.

See Note 5 for additional information.

Assets and liabilities measured on a recurring basis at fair value included in our Consolidated Statement of Financial Position as of September 30, 2023 and December 31, 2022 were as follows:

	September 30, 2023
(Millions of dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt securities
U.S. treasury bonds	$	9	$	—	$	—	$	—	$	9
Other U.S. and non-U.S. government bonds	—		53		—		—		53
Corporate debt securities
Corporate bonds and other debt securities	—		2,730		—		—		2,730
Asset-backed securities	—		189		—		—		189
Mortgage-backed debt securities
U.S. governmental agency	—		384		—		—		384
Residential	—		2		—		—		2
Commercial	—		126		—		—		126
Total debt securities	9		3,484		—		—		3,493
Equity securities
Large capitalization value	204		—		—		—		204
Smaller company growth	31		—		—		—		31
REIT	—		—		—		184		184
Total equity securities	235		—		—		184		419
Derivative financial instruments - assets
Foreign currency contracts - net	—		232		—		—		232
Commodity contracts - net	—		9		—		—		9
Total assets	$	244	$	3,725	$	—	$	184	$	4,153
Liabilities
Derivative financial instruments - liabilities
Interest rate contracts - net	$	—	$	294	$	—	$	—	$	294
Total liabilities	$	—	$	294	$	—	$	—	$	294

	December 31, 2022
(Millions of dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt securities
U.S. treasury bonds	$	9	$	—	$	—	$	—	$	9
Other U.S. and non-U.S. government bonds	—		55		—		—		55
Corporate debt securities
Corporate bonds and other debt securities	—		2,416		50		—		2,466
Asset-backed securities	—		182		—		—		182
Mortgage-backed debt securities
U.S. governmental agency	—		333		—		—		333
Residential	—		2		—		—		2
Commercial	—		117		—		—		117
Total debt securities	9		3,105		50		—		3,164
Equity securities
Large capitalization value	203		—		—		—		203
Smaller company growth	31		—		—		—		31
REIT	—		—		—		207		207
Total equity securities	234		—		—		207		441
Derivative financial instruments - assets
Foreign currency contracts - net	—		328		—		—		328
Commodity contracts - net	—		15		—		—		15
Total Assets	$	243	$	3,448	$	50	$	207	$	3,948
Liabilities
Derivative financial instruments - liabilities
Interest rate contracts - net	$	—	$	195	$	—	$	—	$	195
Total liabilities	$	—	$	195	$	—	$	—	$	195

In addition to the amounts above, certain Cat Financial loans are subject to measurement at fair value on a nonrecurring basis and are classified as Level 3 measurements. A loan is measured at fair value when management determines that collection of contractual amounts due is not probable and the loan is individually evaluated.  In these cases, an allowance for credit losses may be established based either on the present value of expected future cash flows discounted at the receivables’ effective interest rate, the fair value of the collateral for collateral-dependent receivables, or the observable market price of the receivable.  In determining collateral value, Cat Financial estimates the current fair market value of the collateral less selling costs. Cat Financial had loans carried at fair value of $57 million and $68 million as of September 30, 2023 and December 31, 2022, respectively.  

    B. Fair values of financial instruments

In addition to the methods and assumptions we use to record the fair value of financial instruments as discussed in the Fair value measurements section above, we use the following methods and assumptions to estimate the fair value of our financial instruments:

Cash and cash equivalents

Carrying amount approximates fair value. We classify cash and cash equivalents as Level 1. See Consolidated Statement of Financial Position.

Restricted cash and short-term investments

Carrying amount approximates fair value.  We include restricted cash and short-term investments in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. We classify these instruments as Level 1 except for time deposits which are Level 2, and certain corporate debt securities which are Level 3. See Note 8 for additional information.

Finance receivables

We estimate fair value by discounting the future cash flows using current rates, representative of receivables with similar remaining maturities.

Wholesale inventory receivables

We estimate fair value by discounting the future cash flows using current rates, representative of receivables with similar remaining maturities.

Short-term borrowings

Carrying amount approximates fair value. We classify short-term borrowings as Level 1. See Consolidated Statement of Financial Position.

Long-term debt

We estimate fair value for fixed and floating rate debt based on quoted market prices.

Guarantees

The fair value of guarantees is based upon our estimate of the premium a market participant would require to issue the same guarantee in a stand-alone arms-length transaction with an unrelated party. If quoted or observable market prices are not available, fair value is based upon internally developed models that utilize current market-based assumptions. We classify guarantees as Level 3. See Note 11 for additional information.

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

	September 30, 2023				December 31, 2022
(Millions of dollars)	Carrying  Amount		Fair  Value		Carrying  Amount		Fair  Value		Fair Value Levels	Reference
Assets
Finance receivables – net (excluding finance leases 1 )	$	14,894	$	14,365	$	13,965	$	13,377	3	Note 17
Wholesale inventory receivables – net (excluding finance leases 1)	1,075		1,032		827		778		3
Liabilities
Long-term debt (including amounts due within one year)
Machinery, Energy & Transportation	9,513		8,712		9,618		9,240		2
Financial Products	23,408		22,806		21,418		20,686		2

1    Represents finance leases and failed sale leasebacks of $6,816 million and $7,325 million at September 30, 2023 and December 31, 2022, respectively.

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Other Income (Expense)

9 Months Ended

Sep. 30, 2023

Other Income and Expenses [Abstract]

Other Income (Expense)

Other income (expense)

	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Investment and interest income	$	135	$	52	$	324	$	98
Foreign exchange gains (losses) 1	17		134		(15)		405
License fee income	37		37		111		106
Net periodic pension and OPEB income (cost), excluding service cost	(12)		67		(37)		201
Gains (losses) on securities	6		—		(15)		(59)
Miscellaneous income (loss)	12		(48)		(14)		4
Total	$	195	$	242	$	354	$	755

1 Includes gains (losses) from foreign exchange derivative contracts. See Note 5 for further details.

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Restructuring Costs

9 Months Ended

Sep. 30, 2023

Restructuring Charges [Abstract]

Restructuring Costs

Restructuring costs

Our accounting for employee separations is dependent upon how the particular program is designed. For voluntary programs, we recognize eligible separation costs at the time of employee acceptance unless the acceptance requires explicit approval by the company. For involuntary programs, we recognize eligible costs when management has approved the program, the affected employees have been properly notified and the costs are estimable.

Restructuring costs for the three and nine months ended September 30, 2023 and 2022 were as follows:

(Millions of dollars)	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Employee separations 1	$	10	$	39	$	32	$	62
Longwall divestiture 1	—		—		586		—
Contract terminations 1	—		1		—		1
Long-lived asset impairments 1	2		(4)		4		1
Other 2	34		13		66		26
Total restructuring costs	$	46	$	49	$	688	$	90
1 Recognized in Other operating (income) expenses.
2 Represents costs related to our restructuring programs, primarily for inventory write-downs, accelerated depreciation, project management and equipment relocation, all of which are primarily included in Cost of goods sold.

The restructuring costs for the nine months ended September 30, 2023 were primarily related to the divestiture of the company's Longwall business within Resource Industries. The divestiture closed on February 1, 2023 and resulted in a pre-tax loss of approximately $586 million, primarily a non-cash item driven by the release of $494 million of accumulated foreign currency translation. The transaction is subject to certain post-closing adjustments. For the nine months ended September 30, 2022, the restructuring costs were primarily related to actions across the company including strategic actions to address a small number of products.

In 2023 and 2022, all restructuring costs are excluded from segment profit.

The following table summarizes the 2023 and 2022 employee separation activity:

(Millions of dollars)	Nine Months Ended September 30,
	2023		2022
Liability balance, beginning of period	$	39	$	61
Increase in liability (separation charges)	32		62
Reduction in liability (payments)	(55)		(63)
Liability balance, end of period	$	16	$	60

Most of the liability balance at September 30, 2023 is expected to be paid in 2023 and 2024.

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Insider Trading Arrangements - Andrew Bonfield [Member]	3 Months Ended	9 Months Ended
	Sep. 30, 2023 shares	Sep. 30, 2023 shares
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		On August 22, 2023, Andrew Bonfield, the Company's Chief Financial Officer, entered into a Rule 10b5-1 sales plan intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended. The sales plan will be in effect until the earlier of (1) November 20, 2024 and (2) the date on which an aggregate of 30,000 shares of our common stock have been sold under the plan.
Name	Andrew Bonfield
Title	Chief Financial Officer
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	August 22, 2023
Arrangement Duration	456 days
Aggregate Available	30,000	30,000

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Nature of Operations and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations and Basis of Presentation

Basis of presentation

In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the consolidated results of operations for the three and nine months ended September 30, 2023 and 2022, (b) the consolidated comprehensive income for the three and nine months ended September 30, 2023 and 2022, (c) the consolidated financial position at September 30, 2023 and December 31, 2022, (d) the consolidated changes in shareholders’ equity for the three and nine months ended September 30, 2023 and 2022 and (e) the consolidated cash flow for the nine months ended September 30, 2023 and 2022.  The financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).

Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in our company’s annual report on Form 10-K for the year ended December 31, 2022 (2022 Form 10-K).

The December 31, 2022 financial position data included herein is derived from the audited consolidated financial statements included in the 2022 Form 10-K but does not include all disclosures required by U.S. GAAP. Certain amounts for prior periods have been reclassified to conform to the current period financial statement presentation.

Revenue

Trade receivables represent amounts due from dealers and end users for the sale of our products, and include amounts due from wholesale inventory financing provided by Cat Financial for a dealer’s purchase of inventory. We recognize trade receivables from dealers and end users in Receivables – trade and other and Long-term receivables – trade and other in the Consolidated Statement of Financial Position. Trade receivables from dealers and end users were $7,825 million, $7,551 million and $7,267 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively. Long-term trade receivables from dealers and end users were $494 million, $506 million and $624 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively.

For certain contracts, we invoice for payment when contractual milestones are achieved. We recognize a contract asset when a sale is recognized before achieving the contractual milestones for invoicing. We reduce the contract asset when we invoice for payment and recognize a corresponding trade receivable. Contract assets are included in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. Contract assets were $212 million, $247 million and $187 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively.

We invoice in advance of recognizing the sale of certain products. We recognize advanced customer payments as a contract liability in Customer advances and Other liabilities in the Consolidated Statement of Financial Position. Contract liabilities were $2,816 million, $2,314 million and $1,557 million as of September 30, 2023, December 31, 2022 and December 31, 2021, respectively. We reduce the contract liability when revenue is recognized.

Share-Based Compensation

Accounting for stock-based compensation requires that the cost resulting from all stock-based payments be recognized in the financial statements based on the grant date fair value of the award.  Our stock-based compensation consists of stock options, restricted stock units (RSUs) and performance-based restricted stock units (PRSUs).

Derivatives

Our earnings and cash flow are subject to fluctuations due to changes in foreign currency exchange rates, interest rates and commodity prices.  Our Risk Management Policy (policy) allows for the use of derivative financial instruments to prudently manage foreign currency exchange rate, interest rate and commodity price exposures.  Our policy specifies that derivatives are not to be used for speculative purposes.  Derivatives that we use are primarily foreign currency forward, option and cross currency contracts, interest rate contracts and commodity forward and option contracts.  Our derivative activities are subject to the management, direction and control of our senior financial officers.  We present at least annually to the Audit Committee of the Board of Directors on our risk management practices, including our use of financial derivative instruments.

We recognize all derivatives at their fair value on the Consolidated Statement of Financial Position. On the date the derivative contract is entered into, we designate the derivative as (1) a hedge of the fair value of a recognized asset or liability (fair value hedge), (2) a hedge of a forecasted transaction or the variability of cash flow (cash flow hedge) or (3) an undesignated instrument. We record in current earnings changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged recognized asset or liability that is attributable to the hedged risk. We record in AOCI changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge, to the extent effective, on the Consolidated Statement of Financial Position until we reclassify them to earnings in the same period or periods during which the hedged transaction affects earnings.  We report changes in the fair value of undesignated derivative instruments in current earnings. We classify cash flows from designated derivative financial instruments within the same category as the item being hedged on the Consolidated Statement of Cash Flow.  We include cash flows from undesignated derivative financial instruments in the investing category on the Consolidated Statement of Cash Flow.

We formally document all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions.  This process includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities on the Consolidated Statement of Financial Position and linking cash flow hedges to specific forecasted transactions or variability of cash flow.

We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the designated derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flow of hedged items.  When a derivative is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, we discontinue hedge accounting prospectively, in accordance with the derecognition criteria for hedge accounting.

Foreign Currency Exchange Rate Risk

Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of sales made and costs incurred in foreign currencies. Movements in foreign currency rates also affect our competitive position as these changes may affect business practices and/or pricing strategies of non-U.S.-based competitors. Additionally, we have balance sheet positions denominated in foreign currencies, thereby creating exposure to movements in exchange rates.

Our ME&T operations purchase, manufacture and sell products in many locations around the world. As we have a diversified revenue and cost base, we manage our future foreign currency cash flow exposure on a net basis. We use foreign currency forward and option contracts to manage unmatched foreign currency cash inflow and outflow. Our objective is to minimize the risk of exchange rate movements that would reduce the U.S. dollar value of our foreign currency cash flow. Our policy allows for managing anticipated foreign currency cash flow for up to approximately five years. As of September 30, 2023, the maximum term of these outstanding contracts at inception was approximately 60 months.

We generally designate as cash flow hedges at inception of the contract any foreign currency forward or option contracts that meet the requirements for hedge accounting and the maturity extends beyond the current quarter-end. We perform designation on a specific exposure basis to support hedge accounting. The remainder of ME&T foreign currency contracts are undesignated.  

In managing foreign currency risk for our Financial Products operations, our objective is to minimize earnings volatility resulting from conversion and the remeasurement of net foreign currency balance sheet positions and future transactions denominated in foreign currencies. Our policy allows the use of foreign currency forward, option and cross currency contracts to offset the risk of currency mismatch between our assets and liabilities and exchange rate risk associated with future transactions denominated in foreign currencies. Our foreign currency forward and option contracts are primarily undesignated. We designate fixed-to-fixed cross currency contracts as cash flow hedges to protect against movements in exchange rates on foreign currency fixed-rate assets and liabilities.

Interest Rate Risk

Interest rate movements create a degree of risk by affecting the amount of our interest payments and the value of our fixed-rate debt. Our practice is to use interest rate contracts to manage our exposure to interest rate changes.

Our ME&T operations generally use fixed-rate debt as a source of funding.  Our objective is to minimize the cost of borrowed funds.  Our policy allows us to enter into fixed-to-floating interest rate contracts and forward rate agreements to meet that objective. We designate fixed-to-floating interest rate contracts as fair value hedges at inception of the contract, and we designate certain forward rate agreements as cash flow hedges at inception of the contract.

Financial Products operations has a match-funding policy that addresses interest rate risk by aligning the interest rate profile (fixed or floating rate and duration) of Cat Financial’s debt portfolio with the interest rate profile of our receivables portfolio within predetermined ranges on an ongoing basis. In connection with that policy, we use interest rate derivative instruments to modify the debt structure to match assets within the receivables portfolio. This matched funding reduces the volatility of margins between interest-bearing assets and interest-bearing liabilities, regardless of which direction interest rates move.

Our policy allows us to use fixed-to-floating, floating-to-fixed and floating-to-floating interest rate contracts to meet the match-funding objective.  We designate fixed-to-floating interest rate contracts as fair value hedges to protect debt against changes in fair value due to changes in the benchmark interest rate.  We designate most floating-to-fixed interest rate contracts as cash flow hedges to protect against the variability of cash flows due to changes in the benchmark interest rate.

We have, at certain times, liquidated fixed-to-floating and floating-to-fixed interest rate contracts at both ME&T and Financial Products. We amortize the gains or losses associated with these contracts at the time of liquidation into earnings over the original term of the previously designated hedged item.

Commodity Price Risk

Commodity price movements create a degree of risk by affecting the price we must pay for certain raw materials. Our policy is to use commodity forward and option contracts to manage the commodity risk and reduce the cost of purchased materials.

Our ME&T operations purchase base and precious metals embedded in the components we purchase from suppliers.  Our suppliers pass on to us price changes in the commodity portion of the component cost. In addition, we are subject to price changes on energy products such as natural gas and diesel fuel purchased for operational use.

Our objective is to minimize volatility in the price of these commodities. Our policy allows us to enter into commodity forward and option contracts to lock in the purchase price of a portion of these commodities within a five-year horizon. All such commodity forward and option contracts are undesignated.

Investments

We have investments in certain debt and equity securities, which we record at fair value and primarily include in Other assets in the Consolidated Statement of Financial Position.

We classify debt securities primarily as available-for-sale. We include the unrealized gains and losses arising from the revaluation of available-for-sale debt securities, net of applicable deferred income taxes, in equity (AOCI in the Consolidated Statement of Financial Position). We include the unrealized gains and losses arising from the revaluation of the equity securities in Other income (expense) in the Consolidated Statement of Results of Operations. We generally determine realized gains and losses on sales of investments using the specific identification method for available-for-sale debt and equity securities and include them in Other income (expense) in the Consolidated Statement of Results of Operations.

Guarantees and Product Warranty

Caterpillar dealer performance guarantees

Dealer performance guarantees mainly consists of an indemnity to a third-party insurance company for potential losses related to performance bonds issued on behalf of Caterpillar dealers.  The bonds have varying terms and are issued to insure governmental agencies against nonperformance by certain dealers. The guarantees began to expire during the third quarter of 2023. No payments were made under the guarantees.

We have dealer performance guarantees and third-party performance guarantees that do not limit potential payment to end users related to indemnities and other commercial contractual obligations. In addition, we have entered into contracts involving industry standard indemnifications that do not limit potential payment. For these unlimited guarantees, we are unable to estimate a maximum potential amount of future payments that could result from claims made.

We determine our product warranty liability by applying historical claim rate experience to the current field population and dealer inventory.  Generally, we base historical claim rates on actual warranty experience for each product by machine model/engine size by customer or dealer location (inside or outside North America).  We develop specific rates for each product shipment month and update them monthly based on actual warranty claim experience.

Segments

Our Executive Office is comprised of a Chief Executive Officer (CEO), four Group Presidents, a Chief Financial Officer (CFO), a Chief Legal Officer and a Chief Human Resources Officer. The Group Presidents and CFO are accountable for a related set of end-to-end businesses that they manage.  The Chief Legal Officer leads the Law, Security and Public Policy Division. The Chief Human Resources Officer leads the Human Resources Organization. The CEO allocates resources and manages performance at the Group President/CFO level.  As such, the CEO serves as our Chief Operating Decision Maker, and operating segments are primarily based on the Group President/CFO reporting structure.

Three of our operating segments, Construction Industries, Resource Industries and Energy & Transportation are led by Group Presidents.  One operating segment, Financial Products, is led by the CFO who also has responsibility for Corporate Services. Corporate Services is a cost center primarily responsible for the performance of certain support functions globally and to provide centralized services; it does not meet the definition of an operating segment. One Group President leads one smaller operating segment that is included in the All Other operating segment.  The Law, Security and Public Policy Division and the Human Resources Organization are cost centers and do not meet the definition of an operating segment.

B.    Description of segments

We have five operating segments, of which four are reportable segments. Following is a brief description of our reportable segments and the business activities included in the All Other operating segment:

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. Inter-segment sales are a source of revenue for this segment.

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

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

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 ME&T, 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.

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

C.    Segment measurement and reconciliations

There are several methodology differences between our segment reporting and our external reporting.  The following is a list of the more significant methodology differences:

•ME&T segment net assets generally include inventories, receivables, property, plant and equipment, goodwill, intangibles, accounts payable and customer advances. We generally manage at the corporate level liabilities other than accounts payable and customer advances, and we do not include these in segment operations.  Financial Products Segment assets generally include all categories of assets.

•We value segment inventories and cost of sales using a current cost methodology.

•We amortize goodwill allocated to segments using a fixed amount based on a 20-year useful life.  This methodology difference only impacts segment assets. We do not include goodwill amortization expense in segment profit. In addition, we have allocated to segments only a portion of goodwill for certain acquisitions made in 2011 or later.

•We generally manage currency exposures for ME&T at the corporate level and do not include in segment profit the effects of changes in exchange rates on results of operations within the year.  We report the net difference created in the translation of revenues and costs between exchange rates used for U.S. GAAP reporting and exchange rates used for segment reporting as a methodology difference.

•We do not include stock-based compensation expense in segment profit.

•Postretirement benefit expenses are split; segments are generally responsible for service costs, with the remaining elements of net periodic benefit cost included as a methodology difference.

•We determine ME&T segment profit on a pretax basis and exclude interest expense and most other income/expense items.  We determine Financial Products Segment profit on a pretax basis and include other income/expense items.

Reconciling items are created based on accounting differences between segment reporting and our consolidated external reporting. Please refer to pages 30 to 33 for financial information regarding significant reconciling items.  Most of our reconciling items are self-explanatory given the above explanations.  For the reconciliation of profit, we have grouped the reconciling items as follows:

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

•Restructuring costs: May include costs for employee separation, long-lived asset impairments, contract terminations and divestiture impacts. These costs are included in Other operating (income) expenses except for defined-benefit plan curtailment losses and special termination benefits, which are included in Other income (expense). Restructuring costs also include other exit-related costs, which may consist of accelerated depreciation, inventory write-downs, building demolition, equipment relocation and project management costs and LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold. See Note 20 for more information.

•Methodology differences:  See previous discussion of significant accounting differences between segment reporting and consolidated external reporting.

•Timing:   Timing differences in the recognition of costs between segment reporting and consolidated external reporting. For example, we report certain costs on the cash basis for segment reporting and the accrual basis for consolidated external reporting.

Allowance for Credit Losses

Allowance for credit losses

Portfolio segments

A portfolio segment is the level at which Cat Financial develops a systematic methodology for determining its allowance for credit losses. Cat Financial's portfolio segments and related methods for estimating expected credit losses are as follows:

Customer

Cat Financial provides loans and finance leases to end-user customers primarily for the purpose of financing new and used Caterpillar machinery, engines and equipment for commercial use. Cat Financial also provides financing for power generation facilities that, in most cases, incorporate Caterpillar products. The average original term of Cat Financial's customer finance receivable portfolio was approximately 51 months with an average remaining term of approximately 27 months as of September 30, 2023.

Cat Financial typically maintains a security interest in financed equipment and requires physical damage insurance coverage on the financed equipment, both of which provide Cat Financial with certain rights and protections. If Cat Financial's collection efforts fail to bring a defaulted account current, Cat Financial generally can repossess the financed equipment, after satisfying local legal requirements, and sell it within the Caterpillar dealer network or through third-party auctions.

Cat Financial estimates the allowance for credit losses related to its customer finance receivables based on loss forecast models utilizing probabilities of default and the estimated loss given default based on past loss experience adjusted for current conditions and reasonable and supportable forecasts capturing country and industry-specific economic factors.

During the three and nine months ended September 30, 2023, Cat Financial's forecasts reflected a continuation of the trend of relatively low unemployment rates and delinquencies within their portfolio. However, industry delinquencies show an increasing trend as persistently high inflation rates and consequent central bank actions are weakening global economic growth. The company believes the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long-term trends.

Dealer

Cat Financial provides financing to Caterpillar dealers in the form of wholesale financing plans. Cat Financial's wholesale financing plans provide assistance to dealers by financing their mostly new Caterpillar equipment inventory and rental fleets on a secured and unsecured basis. In addition, Cat Financial provides a variety of secured and unsecured loans to Caterpillar dealers.

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

In general, Cat Financial's Dealer portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to its close working relationships with the dealers and their financial strength. Therefore, Cat Financial made no adjustments to historical loss rates during the three and nine months ended September 30, 2023.

Classes of finance receivables

Cat Financial further evaluates portfolio segments by the class of finance receivables, which is defined as a level of information (below a portfolio segment) in which the finance receivables have the same initial measurement attribute and a similar method for assessing and monitoring credit risk. Cat Financial's classes, which align with management reporting for credit losses, are as follows:

•North America - Finance receivables originated in the United States and Canada.

•EAME - Finance receivables originated in Europe, Africa, the Middle East and Eurasia.

•Asia/Pacific - Finance receivables originated in Australia, New Zealand, China, Japan, Southeast Asia and India.

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

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

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

Receivable balances, including accrued interest, are written off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible (generally upon repossession of the collateral). The amount of the write-off is determined by comparing the fair value of the collateral, less cost to sell, to the amortized cost. Subsequent recoveries, if any, are credited to the allowance for credit losses when received.

Fair Value Measurement

Fair value measurements

The guidance on fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.  This guidance also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques.  Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions.  In accordance with this guidance, fair value measurements are classified under the following hierarchy:

•Level 1 – Quoted prices for identical instruments in active markets.

•Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

•Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

When available, we use quoted market prices to determine fair value, and we classify such measurements within Level 1.  In some cases where market prices are not available, we make use of observable market based inputs to calculate fair value, in which case the measurements are classified within Level 2.  If quoted or observable market prices are not available, fair value is based upon valuations in which one or more significant inputs are unobservable, including internally developed models that use, where possible, current market-based parameters such as interest rates, yield curves and currency rates.  These measurements are classified within Level 3.

We classify fair value measurements according to the lowest level input or value-driver that is significant to the valuation.  We may therefore classify a measurement within Level 3 even though there may be significant inputs that are readily observable.

Fair value measurement includes the consideration of nonperformance risk.  Nonperformance risk refers to the risk that an obligation (either by a counterparty or Caterpillar) will not be fulfilled.  For financial assets traded in an active market (Level 1 and certain Level 2), the nonperformance risk is included in the market price.  For certain other financial assets and liabilities (certain Level 2 and Level 3), our fair value calculations have been adjusted accordingly.

Investments in debt and equity securities

We have investments in certain debt and equity securities that are recorded at fair value.  Fair values for our U.S. treasury bonds and large capitalization value and smaller company growth equity securities are based upon valuations for identical instruments in active markets.  Fair values for other government debt securities, corporate debt securities and mortgage-backed debt securities are based upon models that take into consideration such market-based factors as recent sales, risk-free yield curves and prices of similarly rated bonds.

We also have investments in time deposits classified as held-to-maturity debt securities. The fair value of these investments is based upon valuations observed in less active markets than Level 1. These investments have a maturity of less than one year and are recorded at amortized costs, which approximate fair value.

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

See Note 8 for additional information on our investments in debt and equity securities.

Derivative financial instruments

The fair value of interest rate contracts is primarily based on a standard industry accepted valuation model that utilizes the appropriate market-based forward swap curves and zero-coupon interest rates to determine discounted cash flows.  The fair value of foreign currency and commodity forward, option and cross currency contracts is based on standard industry accepted valuation models that discount cash flows resulting from the differential between the contract price and the market-based forward rate.

In addition to the methods and assumptions we use to record the fair value of financial instruments as discussed in the Fair value measurements section above, we use the following methods and assumptions to estimate the fair value of our financial instruments:

Cash and cash equivalents

Carrying amount approximates fair value. We classify cash and cash equivalents as Level 1. See Consolidated Statement of Financial Position.

Restricted cash and short-term investments

Carrying amount approximates fair value.  We include restricted cash and short-term investments in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. We classify these instruments as Level 1 except for time deposits which are Level 2, and certain corporate debt securities which are Level 3. See Note 8 for additional information.

Finance receivables

We estimate fair value by discounting the future cash flows using current rates, representative of receivables with similar remaining maturities.

Wholesale inventory receivables

We estimate fair value by discounting the future cash flows using current rates, representative of receivables with similar remaining maturities.

Short-term borrowings

Carrying amount approximates fair value. We classify short-term borrowings as Level 1. See Consolidated Statement of Financial Position.

Long-term debt

We estimate fair value for fixed and floating rate debt based on quoted market prices.

Guarantees

The fair value of guarantees is based upon our estimate of the premium a market participant would require to issue the same guarantee in a stand-alone arms-length transaction with an unrelated party. If quoted or observable market prices are not available, fair value is based upon internally developed models that utilize current market-based assumptions. We classify guarantees as Level 3.

Restructuring Costs

Our accounting for employee separations is dependent upon how the particular program is designed. For voluntary programs, we recognize eligible separation costs at the time of employee acceptance unless the acceptance requires explicit approval by the company. For involuntary programs, we recognize eligible costs when management has approved the program, the affected employees have been properly notified and the costs are estimable.

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Type and Fair Value of Stock-Based Compensation Awards

The following table illustrates the type and fair value of the stock-based compensation awards granted during the nine months ended September 30, 2023 and 2022, respectively:

	Nine Months Ended September 30, 2023					Nine Months Ended September 30, 2022
	Shares Granted	Weighted-Average Fair Value Per Share		Weighted-Average Grant Date Stock Price		Shares Granted	Weighted-Average Fair Value Per Share		Weighted-Average Grant Date Stock Price
Stock options	777,275	$	75.79	$	253.98	1,029,202	$	51.69	$	196.70
RSUs	379,426	$	253.98	$	253.98	484,025	$	196.70	$	196.70
PRSUs	221,869	$	253.98	$	253.98	258,900	$	196.70	$	196.70

Schedule of Assumptions Used for Fair Value

The following table provides the assumptions used in determining the fair value of the stock-based awards for the nine months ended September 30, 2023 and 2022, respectively:

	Grant Year
	2023	2022
Weighted-average dividend yield	2.60%	2.60%
Weighted-average volatility	31.0%	31.7%
Range of volatilities	28.5% - 35.5%	25.3% - 36.8%
Range of risk-free interest rates	3.92% - 5.03%	1.03% - 2.00%
Weighted-average expected lives	7 years	8 years

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Derivative Financial Instruments and Risk Management (Tables)

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Location and Fair Value of Derivative Instruments

The location and fair value of derivative instruments reported in the Consolidated Statement of Financial Position were as follows:

(Millions of dollars)	Fair Value
	September 30, 2023				December 31, 2022
	Assets 1		Liabilities 2		Assets 1		Liabilities 2
Designated derivatives
Foreign exchange contracts	$	411	$	(163)	$	462	$	(152)
Interest rate contracts	52		(346)		93		(288)
Total	$	463	$	(509)	$	555	$	(440)
Undesignated derivatives
Foreign exchange contracts	$	32	$	(48)	$	65	$	(47)
Commodity contracts	11		(2)		24		(9)
Total	$	43	$	(50)	$	89	$	(56)
1 Assets are classified on the Consolidated Statement of Financial Position as Receivables - trade and other or Long-term receivables - trade and other.
2 Liabilities are classified on the Consolidated Statement of Financial Position as Accrued expenses or Other liabilities.

Schedule of Gains (Losses) on Derivative Instruments

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

(Millions of dollars)	Three Months Ended September 30,
	Fair Value / Undesignated Hedges				Cash Flow Hedges
	Gains (Losses) Recognized on the Consolidated Statement of Results of Operations1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI2
	2023		2022		2023		2022		2023		2022
Foreign exchange contracts	$	19	$	(2)	$	10	$	18	$	80	$	289
Interest rate contracts	(34)		(5)		3		26		14		7
Commodity contracts	14		(42)		—		—		—		—
Total	$	(1)	$	(49)	$	13	$	44	$	94	$	296
1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense). Interest rate contract gains (losses) are included in Interest expense of Financial Products and Interest expense excluding Financial Products.
2 Foreign exchange contract gains (losses) are primarily included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products.

(Millions of dollars)	Nine Months Ended September 30,
	Fair Value / Undesignated Hedges				Cash Flow Hedges
	Gains (Losses) Recognized on the Consolidated Statement of Results of Operations 1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI 2
	2023		2022		2023		2022		2023		2022
Foreign exchange contracts	$	22	$	(32)	$	42	$	195	$	43	$	638
Interest rate contracts	(95)		12		15		103		41		(2)
Commodity contract	2		3		—		—		—		—
Total	$	(71)	$	(17)	$	57	$	298	$	84	$	636
1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense). Interest rate contract gains (losses) are included in Interest expense of Financial Products and Interest expense excluding Financial Products.
2 Foreign exchange contract gains (losses) are primarily included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products.

Summary of Cumulative Basis Adjustments for Fair Value Hedges

The following amounts were recorded on the Consolidated Statement of Financial Position related to cumulative basis adjustments for fair value hedges:

(Millions of dollars)	Carrying Value of the Hedged Liabilities				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities
	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Long-term debt due within one year	$	249	$	—	$	(4)	$	—
Long-term debt due after one year	4,732		4,173		(343)		(280)
Total	$	4,981	$	4,173	$	(347)	$	(280)

Summary Offsetting Assets and Liabilities

The effect of the net settlement provisions of the master netting agreements on our derivative balances upon an event of default or termination event was as follows:

(Millions of dollars)	September 30, 2023				December 31, 2022
	Assets		Liabilities		Assets		Liabilities
Gross Amounts Recognized	$	506	$	(559)	$	644	$	(496)
Financial Instruments Not Offset	(221)		221		(233)		233
Net Amount	$	285	$	(338)	$	411	$	(263)

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Inventories (Tables)

9 Months Ended

Sep. 30, 2023

Inventory Disclosure [Abstract]

Summary of Inventories

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

(Millions of dollars)	September 30, 2023		December 31, 2022
Raw materials	$	6,798	$	6,370
Work-in-process	1,650		1,452
Finished goods	8,788		8,138
Supplies	344		310
Total inventories	$	17,580	$	16,270

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Intangible Assets and Goodwill (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Intangible assets

Intangible assets were comprised of the following:

		September 30, 2023
(Millions of dollars)	Weighted Amortizable Life (Years)	Gross Carrying Amount 1		Accumulated Amortization 1		Net
Customer relationships	16	$	2,224	$	(1,774)	$	450
Intellectual property	14	503		(393)		110
Other	17	117		(73)		44
Total finite-lived intangible assets	15	$	2,844	$	(2,240)	$	604

		December 31, 2022
	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	16	$	2,233	$	(1,675)	$	558
Intellectual property	12	1,473		(1,320)		153
Other	16	132		(85)		47
Total finite-lived intangible assets	14	$	3,838	$	(3,080)	$	758
1 For the nine months ended September 30, 2023, $1.0 billion of intangible assets were fully amortized and have been removed.

Summary of expected amortization expense related to intangible assets

Amortization expense related to intangible assets is expected to be:

(Millions of dollars)
Remaining Three Months of 2023	2024	2025	2026	2027	Thereafter
$44	$174	$165	$94	$31	$96

Summary of Goodwill acquired

The changes in carrying amount of goodwill by reportable segment for the nine months ended September 30, 2023 were as follows: 

(Millions of dollars)	December 31, 2022		Other Adjustments 1		September 30, 2023
Construction Industries
Goodwill	$	287	$	(18)	$	269
Impairments	(22)		—		(22)
Net goodwill	265		(18)		247
Resource Industries
Goodwill	4,130		5		4,135
Impairments	(1,175)		—		(1,175)
Net goodwill	2,955		5		2,960
Energy & Transportation
Goodwill	2,947		(2)		2,945
Impairments	(925)		—		(925)
Net goodwill	2,022		(2)		2,020
All Other 2
Goodwill	46		(5)		41
Impairments	—		—		—
Net goodwill	46		(5)		41
Consolidated total
Goodwill	7,410		(20)		7,390
Impairments	(2,122)		—		(2,122)
Net goodwill	$	5,288	$	(20)	$	5,268

1 Other adjustments are comprised primarily of foreign currency translation.

2 Includes All Other operating segment (See Note 16).

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Investments in Debt and Equity Securities (Tables)

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of cost basis and fair value of available-for-sale securities

The cost basis and fair value of available-for-sale debt securities with unrealized gains and losses included in equity (AOCI in the Consolidated Statement of Financial Position) were as follows:

Available-for-sale debt securities	September 30, 2023						December 31, 2022
(Millions of dollars)	Cost Basis		Unrealized Pretax Net Gains (Losses)		Fair Value		Cost Basis		Unrealized Pretax Net Gains (Losses)		Fair Value
Government debt securities
U.S. treasury bonds	$	9	$	—	$	9	$	9	$	—	$	9
Other U.S. and non-U.S. government bonds	57		(4)		53		60		(5)		55
Corporate debt securities
Corporate bonds and other debt securities	2,823		(93)		2,730		2,561		(95)		2,466
Asset-backed securities	193		(4)		189		187		(5)		182
Mortgage-backed debt securities
U.S. governmental agency	429		(45)		384		364		(31)		333
Residential	3		(1)		2		3		(1)		2
Commercial	137		(11)		126		127		(10)		117
Total available-for-sale debt securities	$	3,651	$	(158)	$	3,493	$	3,311	$	(147)	$	3,164

Summary of investments in an unrealized loss position that are not other-than-temporarily impaired

Available-for-sale debt securities in an unrealized loss position:
	September 30, 2023
	Less than 12 months 1				12 months or more 1				Total
(Millions of dollars)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government debt securities
Other U.S. and non-U.S. government bonds	$	19	$	—	$	25	$	4	$	44	$	4
Corporate debt securities
Corporate bonds	1,660		29		972		64		2,632		93
Asset-backed securities	35		—		88		4		123		4
Mortgage-backed debt securities
U.S. governmental agency	102		4		281		41		383		45
Residential	—		—		2		1		2		1
Commercial	18		1		108		10		126		11
Total	$	1,834	$	34	$	1,476	$	124	$	3,310	$	158

	December 31, 2022
	Less than 12 months 1				12 months or more 1				Total
(Millions of dollars)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government debt securities
Other U.S. and non-U.S. government bonds	$	19	$	1	$	20	$	4	$	39	$	5
Corporate debt securities
Corporate bonds	1,815		46		357		50		2,172		96
Asset-backed securities	75		2		55		3		130		5
Mortgage-backed debt securities
U.S. governmental agency	229		16		98		15		327		31
Residential	2		—		1		1		3		1
Commercial	63		5		54		5		117		10
Total	$	2,203	$	70	$	585	$	78	$	2,788	$	148
1 Indicates the length of time that individual securities have been in a continuous unrealized loss position.

Summary of cost basis and fair value of the available-for-sale debt securities by contractual maturity

Expected maturities will differ from contractual maturities because borrowers may have the right to prepay and creditors may have the right to call obligations.        

	September 30, 2023
(Millions of dollars)	Cost Basis		Fair Value
Due in one year or less	$	940	$	929
Due after one year through five years	1,812		1,737
Due after five years through ten years	262		248
Due after ten years	68		67
U.S. governmental agency mortgage-backed securities	429		384
Residential mortgage-backed securities	3		2
Commercial mortgage-backed securities	137		126
Total debt securities – available-for-sale	$	3,651	$	3,493

Schedule of proceeds and gross gain and losses from the sale of available-for-sale securities

Sales of available-for-sale debt securities:
	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Proceeds from the sale of available-for-sale securities	$	271	$	204	$	710	$	474
Gross gains from the sale of available-for-sale securities	—		—		—		1
Gross losses from the sale of available-for-sale securities	1		—		1		1

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Postretirement Benefits (Tables)

9 Months Ended

Sep. 30, 2023

Retirement Benefits [Abstract]

Schedule of net benefit costs

	U.S. Pension Benefits				Non-U.S. Pension Benefits				Other Postretirement Benefits
	September 30,				September 30,				September 30,
(Millions of dollars)	2023		2022		2023		2022		2023		2022
For the three months ended:
Components of net periodic benefit cost:
Service cost	$	—	$	—	$	10	$	15	$	16	$	24
Interest cost	164		100		30		17		36		20
Expected return on plan assets	(173)		(167)		(40)		(33)		(2)		(3)
Amortization of prior service cost (credit)	—		—		—		—		(3)		(1)
Net periodic benefit cost (benefit) 1	$	(9)	$	(67)	$	—	$	(1)	$	47	$	40
For the nine months ended:
Components of net periodic benefit cost:
Service cost	$	—	$	—	$	30	$	40	$	50	$	74
Interest cost	492		301		91		53		108		60
Expected return on plan assets	(517)		(502)		(120)		(100)		(8)		(9)
Amortization of prior service cost (credit)	—		—		—		—		(9)		(4)
Net periodic benefit cost (benefit) 1	$	(25)	$	(201)	$	1	$	(7)	$	141	$	121

1 The service cost component is included in Operating costs in the Consolidated Statement of Results of Operations. All other components are included in Other income (expense) in the Consolidated Statement of Results of Operations.

Summary of company costs related to U.S. and non-U.S. defined contribution plans

Total company costs related to our defined contribution plans, which are included in Operating Costs in the Consolidated Statement of Results of Operations, were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
U.S. Plans	$	120	$	87	$	405	$	236
Non-U.S. Plans	27		29		85		85
	$	147	$	116	$	490	$	321

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Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Revenue from finance and operating leases

Revenues from finance and operating leases, primarily included in Revenues of Financial Products on the Consolidated Statement of Results of Operations, were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Finance lease revenue	$	106	$	105	$	315	$	326
Operating lease revenue	286		270		836		819
Total	$	392	$	375	$	1,151	$	1,145

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Guarantees and Product Warranty (Tables)

9 Months Ended

Sep. 30, 2023

Guarantees and Product Warranties [Abstract]

Summary of guarantees

The maximum potential amount of future payments that we can estimate (undiscounted and without reduction for any amounts that may possibly be recovered under recourse or collateralized provisions) and we could be required to make under the guarantees was as follows:

(Millions of dollars)	September 30, 2023		December 31, 2022
Caterpillar dealer performance guarantees	$	42	$	188
Other guarantees	341		323
Total guarantees	$	383	$	511

Summary of product warranty

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

	First Nine Months
(Millions of dollars)	2023		2022
Warranty liability, beginning of period	$	1,761	$	1,689
Reduction in liability (payments)	(617)		(589)
Increase in liability (new warranties)	724		562
Warranty liability, end of period	$	1,868	$	1,662

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Profit Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share Reconciliation [Abstract]

Computations of profit per share

Computations of profit per share:	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions except per share data)	2023		2022		2023		2022
Profit for the period (A) 1	$	2,794	$	2,041	$	7,659	$	5,251
Determination of shares (in millions):
Weighted-average number of common shares outstanding (B)	509.8		525.0		513.0		530.1
Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price	2.8		2.6		2.7		3.1
Average common shares outstanding for fully diluted computation (C) 2	512.6		527.6		515.7		533.2
Profit per share of common stock:
Assuming no dilution (A/B)	$	5.48	$	3.89	$	14.93	$	9.91
Assuming full dilution (A/C) 2	$	5.45	$	3.87	$	14.85	$	9.85
Shares outstanding as of September 30, (in millions)					509.1		520.4
1 Profit attributable to common shareholders.
2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.

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Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Changes in Accumulated other comprehensive income (loss), net of tax

We present comprehensive income and its components in the Consolidated Statement of Comprehensive Income. Changes in the balances for each component of AOCI were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Foreign currency translation:
Beginning balance	$	(1,863)	$	(2,282)	$	(2,328)	$	(1,508)
Gains (losses) on foreign currency translation	(194)		(592)		(235)		(1,328)
Less: Tax provision /(benefit)	10		26		(2)		64
Net gains (losses) on foreign currency translation	(204)		(618)		(233)		(1,392)
(Gains) losses reclassified to earnings	(1)		—		493		—
Less: Tax provision /(benefit)	—		—		—		—
Net (gains) losses reclassified to earnings	(1)		—		493		—
Other comprehensive income (loss), net of tax	(205)		(618)		260		(1,392)
Ending balance	$	(2,068)	$	(2,900)	$	(2,068)	$	(2,900)
Pension and other postretirement benefits
Beginning balance	$	(44)	$	(64)	$	(39)	$	(62)
Current year prior service credit (cost)	—		—		—		—
Less: Tax provision /(benefit)	—		—		—		—
Net current year prior service credit (cost)	—		—		—		—
Amortization of prior service (credit) cost	(3)		(1)		(9)		(4)
Less: Tax provision /(benefit)	—		—		(1)		(1)
Net amortization of prior service (credit) cost	(3)		(1)		(8)		(3)
Other comprehensive income (loss), net of tax	(3)		(1)		(8)		(3)
Ending balance	$	(47)	$	(65)	$	(47)	$	(65)
Derivative financial instruments
Beginning balance	$	71	$	(66)	$	28	$	(3)
Gains (losses) deferred	13		44		57		298
Less: Tax provision /(benefit)	5		35		14		71
Net gains (losses) deferred	8		9		43		227
(Gains) losses reclassified to earnings	(94)		(296)		(84)		(636)
Less: Tax provision /(benefit)	(24)		(96)		(22)		(155)
Net (gains) losses reclassified to earnings	(70)		(200)		(62)		(481)
Other comprehensive income (loss), net of tax	(62)		(191)		(19)		(254)
Ending balance	$	9	$	(257)	$	9	$	(257)
Available-for-sale securities
Beginning balance	$	(110)	$	(87)	$	(118)	$	20
Gains (losses) deferred	(22)		(55)		(12)		(188)
Less: Tax provision /(benefit)	(5)		(11)		(3)		(37)
Net gains (losses) deferred	(17)		(44)		(9)		(151)
(Gains) losses reclassified to earnings	1		—		1		—
Less: Tax provision /(benefit)	—		—		—		—
Net (gains) losses reclassified to earnings	1		—		1		—
Other comprehensive income (loss), net of tax	(16)		(44)		(8)		(151)
Ending balance	$	(126)	$	(131)	$	(126)	$	(131)
Total AOCI Ending Balance at September 30	$	(2,232)	$	(3,353)	$	(2,232)	$	(3,353)

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Disaggregation of Revenue

For the three and nine months ended September 30, 2023 and 2022, sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows:

Sales and Revenues by Geographic Region
(Millions of dollars)	North America		Latin America		EAME		Asia/ Pacific		External Sales and Revenues			Intersegment Sales and Revenues		Total Sales and Revenues
Three Months Ended September 30, 2023
Construction Industries	$	4,078	$	555	$	1,351	$	997	$	6,981		$	18	$	6,999
Resource Industries	1,366		499		508		886		3,259			92		3,351
Energy & Transportation	2,966		460		1,428		901		5,755			1,104		6,859
Financial Products Segment	627		110		132		110		979		1	—		979
Total sales and revenues from reportable segments	9,037		1,624		3,419		2,894		16,974			1,214		18,188
All Other operating segment	16		(1)		5		10		30			76		106
Corporate Items and Eliminations	(126)		(20)		(22)		(26)		(194)			(1,290)		(1,484)
Total Sales and Revenues	$	8,927	$	1,603	$	3,402	$	2,878	$	16,810		$	—	$	16,810
Three Months Ended September 30, 2022
Construction Industries	$	3,106	$	799	$	1,247	$	1,084	$	6,236		$	40	$	6,276
Resource Industries	1,122		472		526		893		3,013			74		3,087
Energy & Transportation	2,422		468		1,280		827		4,997			1,189		6,186
Financial Products Segment	522		90		100		107		819		1	—		819
Total sales and revenues from reportable segments	7,172		1,829		3,153		2,911		15,065			1,303		16,368
All Other operating segment	16		—		4		15		35			68		103
Corporate Items and Eliminations	(53)		(20)		(12)		(21)		(106)			(1,371)		(1,477)
Total Sales and Revenues	$	7,135	$	1,809	$	3,145	$	2,905	$	14,994		$	—	$	14,994

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $181 million and $124 million in the three months ended September 30, 2023 and 2022, respectively.

Sales and Revenues by Geographic Region
(Millions of dollars)	North America		Latin America		EAME		Asia/ Pacific		External Sales and Revenues			Intersegment Sales and Revenues		Total Sales and Revenues
Nine Months Ended September 30, 2023
Construction Industries	$	11,654	$	1,720	$	4,125	$	3,307	$	20,806		$	93	$	20,899
Resource Industries	4,016		1,511		1,624		2,940		10,091			250		10,341
Energy & Transportation	8,658		1,299		4,291		2,519		16,767			3,565		20,332
Financial Products Segment	1,795		316		364		329		2,804		1	—		2,804
Total sales and revenues from reportable segments	26,123		4,846		10,404		9,095		50,468			3,908		54,376
All Other operating segment	50		(1)		13		37		99			234		333
Corporate Items and Eliminations	(374)		(61)		(64)		(78)		(577)			(4,142)		(4,719)
Total Sales and Revenues	$	25,799	$	4,784	$	10,353	$	9,054	$	49,990		$	—	$	49,990
Nine Months Ended September 30, 2022
Construction Industries	$	8,832	$	2,061	$	3,726	$	3,694	$	18,313		$	111	$	18,424
Resource Industries	3,167		1,337		1,609		2,554		8,667			211		8,878
Energy & Transportation	6,637		1,160		3,679		2,193		13,669			3,260		16,929
Financial Products Segment	1,530		250		293		327		2,400		1	—		2,400
Total sales and revenues from reportable segments	20,166		4,808		9,307		8,768		43,049			3,582		46,631
All Other operating segment	52		—		14		46		112			227		339
Corporate Items and Eliminations	(175)		(59)		(33)		(64)		(331)			(3,809)		(4,140)
Total Sales and Revenues	$	20,043	$	4,749	$	9,288	$	8,750	$	42,830		$	—	$	42,830

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $515 million and $332 million in the nine months ended September 30, 2023 and 2022, respectively.

For the three and nine months ended September 30, 2023 and 2022, Energy & Transportation segment sales by end user application were as follows:

Energy & Transportation External Sales
	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Oil and gas	$	1,667	$	1,323	$	4,741	$	3,503
Power generation	1,598		1,320		4,527		3,518
Industrial	1,220		1,158		3,793		3,295
Transportation	1,270		1,196		3,706		3,353
Energy & Transportation External Sales	$	5,755	$	4,997	$	16,767	$	13,669

Reconciliation of Consolidated profit before taxes

Reconciliation of Consolidated profit before taxes:
(Millions of dollars)	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Profit from reportable segments:
Construction Industries	$	1,847	$	1,209	$	5,440	$	3,255
Resource Industries	730		506		2,234		1,222
Energy & Transportation	1,181		935		3,507		2,132
Financial Products Segment	203		220		675		675
Total profit from reportable segments	3,961		2,870		11,856		7,284
Profit from All Other operating segment	21		8		42		42
Cost centers	10		(37)		53		1
Corporate costs	(265)		(168)		(714)		(670)
Timing	22		(84)		(89)		(129)
Restructuring costs	(46)		(49)		(688)		(90)
Methodology differences:
Inventory/cost of sales	(2)		138		137		407
Postretirement benefit expense	(13)		82		(84)		293
Stock-based compensation expense	(60)		(55)		(178)		(162)
Financing costs	(13)		(75)		(115)		(269)
Currency	78		53		106		315
Other income/expense methodology differences	(164)		(109)		(468)		(287)
Other methodology differences	(14)		(16)		(57)		(82)
Total consolidated profit before taxes	$	3,515	$	2,558	$	9,801	$	6,653

Reconciliation of Assets:

Reconciliation of Assets:
(Millions of dollars)	September 30, 2023		December 31, 2022
Assets from reportable segments:
Construction Industries	$	5,407	$	5,168
Resource Industries	5,831		5,775
Energy & Transportation	10,373		9,455
Financial Products Segment	34,953		34,269
Total assets from reportable segments	56,564		54,667
Assets from All Other operating segment	1,855		1,828
Items not included in segment assets:
Cash and cash equivalents	5,874		6,042
Deferred income taxes	2,601		2,098
Goodwill and intangible assets	4,413		4,248
Property, plant and equipment – net and other assets	6,969		4,234
Inventory methodology differences	(3,259)		(3,063)
Liabilities included in segment assets	12,227		12,519
Other	(453)		(630)
Total assets	$	86,791	$	81,943

Reconciliation of Depreciation and amortization:

Reconciliation of Depreciation and amortization:
(Millions of dollars)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Depreciation and amortization from reportable segments:
Construction Industries	$	54	$	57	$	162	$	172
Resource Industries	66		92		235		275
Energy & Transportation	139		136		401		405
Financial Products Segment	186		183		545		556
Total depreciation and amortization from reportable segments	445		468		1,343		1,408
Items not included in segment depreciation and amortization:
All Other operating segment	59		56		176		172
Cost centers	23		20		65		63
Other	(2)		7		15		18
Total depreciation and amortization	$	525	$	551	$	1,599	$	1,661

Reconciliation of Capital expenditures:

Reconciliation of Capital expenditures:
(Millions of dollars)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Capital expenditures from reportable segments:
Construction Industries	$	105	$	74	$	188	$	149
Resource Industries	62		65		132		129
Energy & Transportation	249		167		595		444
Financial Products Segment	342		295		1,031		870
Total capital expenditures from reportable segments	758		601		1,946		1,592
Items not included in segment capital expenditures:
All Other operating segment	67		54		142		116
Cost centers	27		16		71		41
Timing	—		(35)		185		173
Other	(71)		(19)		(106)		(31)
Total capital expenditures	$	781	$	617	$	2,238	$	1,891

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Cat Financial Financing Activities (Tables)

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Allowance for credit losses and total finance receivables

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

(Millions of dollars)	Three Months Ended September 30, 2023						Three Months Ended September 30, 2022
	Customer		Dealer		Total		Customer		Dealer		Total
Beginning balance	$	265	$	50	$	315	$	290	$	82	$	372
Write-offs	(22)		—		(22)		(30)		—		(30)
Recoveries	13		—		13		17		—		17
Provision for credit losses 1	31		1		32		(2)		(17)		(19)
Other	(3)		—		(3)		(5)		—		(5)
Ending balance	$	284	$	51	$	335	$	270	$	65	$	335
	Nine Months Ended September 30, 2023						Nine Months Ended September 30, 2022
	Customer		Dealer		Total		Customer		Dealer		Total
Beginning balance	$	277	$	65	$	342	$	251	$	82	$	333
Write-offs	(63)		—		(63)		(68)		—		(68)
Recoveries	36		—		36		47		—		47
Provision for credit losses 1	35		(14)		21		46		(17)		29
Other	(1)		—		(1)		(6)		—		(6)
Ending balance	$	284	$	51	$	335	$	270	$	65	$	335
Finance Receivables	$	19,768	$	2,060	$	21,828	$	19,363	$	1,737	$	21,100
1 Excludes provision for credit losses on unfunded commitments and other miscellaneous receivables.

Write-offs by origination year

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

(Millions of dollars)	Three Months Ended September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total
North America	$	1	$	2	$	2	$	1	$	1	$	—	$	2	$	9
EAME	—		1		1		1		—		—		—		3
Asia/Pacific	—		2		3		1		—		—		—		6
Latin America	—		1		1		1		—		1		—		4
Total	$	1	$	6	$	7	$	4	$	1	$	1	$	2	$	22
	Nine Months Ended September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total
North America	$	1	$	7	$	7	$	2	$	2	$	1	$	9	$	29
EAME	—		2		3		3		—		1		—		9
Asia/Pacific	—		3		6		4		1		—		—		14
Latin America	—		3		3		3		1		1		—		11
Total	$	1	$	15	$	19	$	12	$	4	$	3	$	9	$	63

Financing receivable credit quality indicators

The tables below summarize the aging category of Cat Financial's amortized cost of finance receivables in the Customer portfolio segment by origination year:

(Millions of dollars)	September 30, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,134	$	2,940	$	2,310	$	919	$	310	$	65	$	304	$	9,982
31-60 days past due	18		31		23		15		6		2		3		98
61-90 days past due	6		10		7		4		1		—		2		30
91+ days past due	5		19		18		10		5		3		2		62
EAME
Current	914		962		649		297		144		124		—		3,090
31-60 days past due	11		8		11		3		1		—		—		34
61-90 days past due	3		6		3		3		2		—		—		17
91+ days past due	4		16		18		9		3		1		—		51
Asia/Pacific
Current	722		660		361		103		21		6		—		1,873
31-60 days past due	2		12		10		4		1		—		—		29
61-90 days past due	1		3		3		4		1		—		—		12
91+ days past due	—		4		5		3		—		—		—		12
Mining
Current	807		730		420		143		92		49		49		2,290
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		1		—		—		2		—		3
91+ days past due	—		2		2		—		—		1		—		5
Latin America
Current	552		571		255		74		29		8		—		1,489
31-60 days past due	6		13		7		4		3		1		—		34
61-90 days past due	1		5		2		1		—		—		—		9
91+ days past due	1		15		9		8		8		20		—		61
Power
Current	46		68		69		86		30		122		162		583
31-60 days past due	—		—		—		—		—		1		—		1
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		3		—		3
Totals by Aging Category
Current	$	6,175	$	5,931	$	4,064	$	1,622	$	626	$	374	$	515	$	19,307
31-60 days past due	37		64		51		26		11		4		3		196
61-90 days past due	11		24		16		12		4		2		2		71
91+ days past due	10		56		52		30		16		28		2		194
Total Customer	$	6,233	$	6,075	$	4,183	$	1,690	$	657	$	408	$	522	$	19,768

(Millions of dollars)	December 31, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,915	$	3,276	$	1,525	$	653	$	206	$	34	$	240	$	9,849
31-60 days past due	25		26		18		12		4		1		4		90
61-90 days past due	9		15		7		3		1		—		3		38
91+ days past due	11		16		12		6		4		3		4		56
EAME
Current	1,270		953		477		280		155		68		—		3,203
31-60 days past due	10		12		7		1		1		—		—		31
61-90 days past due	8		4		3		1		—		—		—		16
91+ days past due	6		25		16		4		1		1		—		53
Asia/Pacific
Current	1,033		684		313		69		18		2		—		2,119
31-60 days past due	10		12		8		1		1		—		—		32
61-90 days past due	2		5		4		2		—		—		—		13
91+ days past due	2		6		6		4		—		—		—		18
Mining
Current	863		575		220		171		93		108		80		2,110
31-60 days past due	—		1		—		—		—		—		—		1
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		1		—		1
Latin America
Current	770		400		150		69		26		20		—		1,435
31-60 days past due	7		8		4		2		—		1		—		22
61-90 days past due	2		5		1		1		—		—		—		9
91+ days past due	2		13		11		2		1		—		—		29
Power
Current	78		85		142		33		18		161		125		642
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		5		—		5
Totals by Aging Category
Current	$	7,929	$	5,973	$	2,827	$	1,275	$	516	$	393	$	445	$	19,358
31-60 days past due	52		59		37		16		6		2		4		176
61-90 days past due	21		29		15		7		1		—		3		76
91+ days past due	21		60		45		16		6		10		4		162
Total Customer	$	8,023	$	6,121	$	2,924	$	1,314	$	529	$	405	$	456	$	19,772

Investment in finance receivables on non-accrual status

In Cat Financial's Customer portfolio segment, finance receivables which were on non-accrual status and finance receivables over 90 days past due and still accruing income were as follows:

(Millions of dollars)	September 30, 2023						December 31, 2022
	Amortized Cost						Amortized Cost
	Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing		Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing
North America	$	54	$	—	$	12	$	52	$	4	$	11
EAME	44		—		9		43		—		10
Asia/Pacific	8		—		5		11		—		7
Mining	4		—		1		—		1		—
Latin America	69		—		—		45		—		—
Power	9		—		—		5		11		—
Total	$	188	$	—	$	27	$	156	$	16	$	28

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Fair Value Disclosures (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Assets and liabilities measured on a recurring basis at fair value

Assets and liabilities measured on a recurring basis at fair value included in our Consolidated Statement of Financial Position as of September 30, 2023 and December 31, 2022 were as follows:

	September 30, 2023
(Millions of dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt securities
U.S. treasury bonds	$	9	$	—	$	—	$	—	$	9
Other U.S. and non-U.S. government bonds	—		53		—		—		53
Corporate debt securities
Corporate bonds and other debt securities	—		2,730		—		—		2,730
Asset-backed securities	—		189		—		—		189
Mortgage-backed debt securities
U.S. governmental agency	—		384		—		—		384
Residential	—		2		—		—		2
Commercial	—		126		—		—		126
Total debt securities	9		3,484		—		—		3,493
Equity securities
Large capitalization value	204		—		—		—		204
Smaller company growth	31		—		—		—		31
REIT	—		—		—		184		184
Total equity securities	235		—		—		184		419
Derivative financial instruments - assets
Foreign currency contracts - net	—		232		—		—		232
Commodity contracts - net	—		9		—		—		9
Total assets	$	244	$	3,725	$	—	$	184	$	4,153
Liabilities
Derivative financial instruments - liabilities
Interest rate contracts - net	$	—	$	294	$	—	$	—	$	294
Total liabilities	$	—	$	294	$	—	$	—	$	294

	December 31, 2022
(Millions of dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt securities
U.S. treasury bonds	$	9	$	—	$	—	$	—	$	9
Other U.S. and non-U.S. government bonds	—		55		—		—		55
Corporate debt securities
Corporate bonds and other debt securities	—		2,416		50		—		2,466
Asset-backed securities	—		182		—		—		182
Mortgage-backed debt securities
U.S. governmental agency	—		333		—		—		333
Residential	—		2		—		—		2
Commercial	—		117		—		—		117
Total debt securities	9		3,105		50		—		3,164
Equity securities
Large capitalization value	203		—		—		—		203
Smaller company growth	31		—		—		—		31
REIT	—		—		—		207		207
Total equity securities	234		—		—		207		441
Derivative financial instruments - assets
Foreign currency contracts - net	—		328		—		—		328
Commodity contracts - net	—		15		—		—		15
Total Assets	$	243	$	3,448	$	50	$	207	$	3,948
Liabilities
Derivative financial instruments - liabilities
Interest rate contracts - net	$	—	$	195	$	—	$	—	$	195
Total liabilities	$	—	$	195	$	—	$	—	$	195

Fair values of financial instruments

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

	September 30, 2023				December 31, 2022
(Millions of dollars)	Carrying  Amount		Fair  Value		Carrying  Amount		Fair  Value		Fair Value Levels	Reference
Assets
Finance receivables – net (excluding finance leases 1 )	$	14,894	$	14,365	$	13,965	$	13,377	3	Note 17
Wholesale inventory receivables – net (excluding finance leases 1)	1,075		1,032		827		778		3
Liabilities
Long-term debt (including amounts due within one year)
Machinery, Energy & Transportation	9,513		8,712		9,618		9,240		2
Financial Products	23,408		22,806		21,418		20,686		2

1    Represents finance leases and failed sale leasebacks of $6,816 million and $7,325 million at September 30, 2023 and December 31, 2022, respectively.

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Other Income (Expense) (Tables)

9 Months Ended

Sep. 30, 2023

Other Income and Expenses [Abstract]

Other income (expense)

	Three Months Ended September 30,				Nine Months Ended September 30,
(Millions of dollars)	2023		2022		2023		2022
Investment and interest income	$	135	$	52	$	324	$	98
Foreign exchange gains (losses) 1	17		134		(15)		405
License fee income	37		37		111		106
Net periodic pension and OPEB income (cost), excluding service cost	(12)		67		(37)		201
Gains (losses) on securities	6		—		(15)		(59)
Miscellaneous income (loss)	12		(48)		(14)		4
Total	$	195	$	242	$	354	$	755

1 Includes gains (losses) from foreign exchange derivative contracts. See Note 5 for further details.

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Restructuring Costs (Tables)

9 Months Ended

Sep. 30, 2023

Restructuring Charges [Abstract]

Restructuring and related costs

Restructuring costs for the three and nine months ended September 30, 2023 and 2022 were as follows:

(Millions of dollars)	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Employee separations 1	$	10	$	39	$	32	$	62
Longwall divestiture 1	—		—		586		—
Contract terminations 1	—		1		—		1
Long-lived asset impairments 1	2		(4)		4		1
Other 2	34		13		66		26
Total restructuring costs	$	46	$	49	$	688	$	90
1 Recognized in Other operating (income) expenses.
2 Represents costs related to our restructuring programs, primarily for inventory write-downs, accelerated depreciation, project management and equipment relocation, all of which are primarily included in Cost of goods sold.

Summary of separation activity

The following table summarizes the 2023 and 2022 employee separation activity:

(Millions of dollars)	Nine Months Ended September 30,
	2023		2022
Liability balance, beginning of period	$	39	$	61
Increase in liability (separation charges)	32		62
Reduction in liability (payments)	(55)		(63)
Liability balance, end of period	$	16	$	60

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New Accounting Guidance (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Accounting Changes and Error Corrections [Abstract]
Supplier finance program, obligation outstanding	$ 825	$ 862

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Sales and Revenue Contract Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Revenue from Contract with Customer [Abstract]
Trade receivables from dealers and end users	$ 7,825		$ 7,825		$ 7,551	$ 7,267
Long term trade receivables from dealers and end users	494		494		506	624
Contract assets	212		212		247	187
Contract liabilities	2,816		2,816		$ 2,314	$ 1,557
Revenue recognized from contract liability balance at beginning of period	197	$ 124	1,333	$ 781
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Unsatisfied performance obligations with an original contract duration greater than one year	$ 13,200		$ 13,200
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Expected period of performance satisfaction	12 months		12 months
Remaining performance obligation, percentage	50.00%		50.00%

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Stock-Based Compensation (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
Stock-based compensation expense	$ 60	$ 55	$ 178	$ 162
Unrecognized compensation expense	$ 167		$ 167
Term of amortization of unrecognized compensation cost over weighted-average remaining requisite service periods (in years)			1 year 9 months 18 days

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Stock-Based Compensation - Schedule of Type and Fair Value of Stock-Based Compensation Awards (Details) - $ / shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Stock options
Stock-based compensation awards
Shares Granted, stock options (in shares)	777,275	1,029,202
Weighted-Average Fair Value Per Share, stock options (in dollars per share)	$ 75.79	$ 51.69
Weighted-Average Grant Date Stock Price (in dollars per share)	253.98	196.70
RSUs
Stock-based compensation awards
Weighted-Average Grant Date Stock Price (in dollars per share)	$ 253.98	$ 196.70
Shares Granted, RSUs & PRSUs (in shares)	379,426	484,025
Weighted-Average Fair Value Per Share, RSUs & PRSUs (in dollars per share)	$ 253.98	$ 196.70
PRSUs
Stock-based compensation awards
Weighted-Average Grant Date Stock Price (in dollars per share)	$ 253.98	$ 196.70
Shares Granted, RSUs & PRSUs (in shares)	221,869	258,900
Weighted-Average Fair Value Per Share, RSUs & PRSUs (in dollars per share)	$ 253.98	$ 196.70

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Stock-Based Compensation - Schedule of Assumptions Used for Fair Value (Details)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
Weighted-average dividend yield	2.60%	2.60%
Weighted-average volatility	31.00%	31.70%
Rate of volatilities, minimum	28.50%	25.30%
Rate of volatilities, maximum	35.50%	36.80%
Risk-free interest rates, minimum	3.92%	1.03%
Risk-free interest rates, maximum	5.03%	2.00%
Weighted-average expected lives	7 years	8 years

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Derivative Financial Instruments and Risk Management (Details) - USD ($) $ in Billions	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Foreign currency cash flow hedges, maximum allowable period (in years)	5 years
Foreign currency cash flow hedges, maximum period (in months)	60 months
Commodity forward and option contracts, maximum period (in years)	5 years
Notional amount	$ 23.4	$ 24.3

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Derivative Financial instruments and Risk Management- Summary of Location and Fair Value of Derivative Instruments (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Derivatives Fair Value
Assets	$ 506	$ 644
Liabilities	(559)	(496)
Designated derivatives
Derivatives Fair Value
Assets	463	555
Liabilities	(509)	(440)
Designated derivatives | Foreign exchange contracts
Derivatives Fair Value
Assets	411	462
Liabilities	(163)	(152)
Designated derivatives | Interest rate contracts
Derivatives Fair Value
Assets	52	93
Liabilities	(346)	(288)
Undesignated derivatives
Derivatives Fair Value
Assets	43	89
Liabilities	(50)	(56)
Undesignated derivatives | Foreign exchange contracts
Derivatives Fair Value
Assets	32	65
Liabilities	(48)	(47)
Undesignated derivatives | Commodity contracts
Derivatives Fair Value
Assets	11	24
Liabilities	$ (2)	$ (9)

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Derivative Financial instruments and Risk Management- Schedule of Gains (Losses) on Derivative Instruments (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Designated derivatives | Cash Flow Hedges
Derivative Instruments, Gain (Loss)
Gains (losses) deferred	$ 13	$ 44	$ 57	$ 298
(Gains) losses reclassified to earnings	94	296	84	636
Designated derivatives | Cash Flow Hedges | Foreign exchange contracts
Derivative Instruments, Gain (Loss)
Gains (losses) deferred	10	18	42	195
(Gains) losses reclassified to earnings	80	289	43	638
Designated derivatives | Cash Flow Hedges | Interest rate contracts
Derivative Instruments, Gain (Loss)
Gains (losses) deferred	3	26	15	103
(Gains) losses reclassified to earnings	14	7	41	(2)
Designated derivatives | Cash Flow Hedges | Commodity contracts
Derivative Instruments, Gain (Loss)
Gains (losses) deferred	0	0	0	0
(Gains) losses reclassified to earnings	0	0	0	0
Undesignated derivatives
Derivative Instruments, Gain (Loss)
Gains (Losses) recognized on the consolidated statement of results of operations	(1)	(49)	(71)	(17)
Undesignated derivatives | Foreign exchange contracts
Derivative Instruments, Gain (Loss)
Gains (Losses) recognized on the consolidated statement of results of operations	19	(2)	22	(32)
Undesignated derivatives | Interest rate contracts
Derivative Instruments, Gain (Loss)
Gains (Losses) recognized on the consolidated statement of results of operations	(34)	(5)	(95)	12
Undesignated derivatives | Commodity contracts
Derivative Instruments, Gain (Loss)
Gains (Losses) recognized on the consolidated statement of results of operations	$ 14	$ (42)	$ 2	$ 3

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Derivative Financial Instruments and Risk Management- Summary of Cumulative Basis Adjustments for Fair Value Hedges (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Derivatives Fair Value
Carrying Value of the Hedged Liabilities	$ 4,981	$ 4,173
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities	(347)	(280)
Long-term debt due within one year
Derivatives Fair Value
Carrying Value of the Hedged Liabilities	249	0
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities	(4)	0
Long-term debt due after one year
Derivatives Fair Value
Carrying Value of the Hedged Liabilities	4,732	4,173
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities	$ (343)	$ (280)

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Derivative Financial instruments and Risk Management - Summary Offsetting Assets and Liabilities (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Assets
Gross Amounts Recognized	$ 506	$ 644
Financial Instruments Not Offset	(221)	(233)
Net Amount	285	411
Liabilities
Gross Amounts Recognized	(559)	(496)
Financial Instruments Not Offset	221	233
Net Amount	$ (338)	$ (263)

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Inventories (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 6,798	$ 6,370
Work-in-process	1,650	1,452
Finished goods	8,788	8,138
Supplies	344	310
Total inventories	$ 17,580	$ 16,270

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Intangible Assets and Goodwill - Summary of Intangible assets (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Intangible assets
Weighted Amortizable Life (Years)	15 years	14 years
Gross carrying amount	$ 2,844	$ 3,838
Accumulated Amortization	(2,240)	(3,080)
Net	604	$ 758
Fully amortized finite-lived intangibles	$ 1,000
Customer relationships
Intangible assets
Weighted Amortizable Life (Years)	16 years	16 years
Gross carrying amount	$ 2,224	$ 2,233
Accumulated Amortization	(1,774)	(1,675)
Net	$ 450	$ 558
Intellectual property
Intangible assets
Weighted Amortizable Life (Years)	14 years	12 years
Gross carrying amount	$ 503	$ 1,473
Accumulated Amortization	(393)	(1,320)
Net	$ 110	$ 153
Other
Intangible assets
Weighted Amortizable Life (Years)	17 years	16 years
Gross carrying amount	$ 117	$ 132
Accumulated Amortization	(73)	(85)
Net	$ 44	$ 47

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Intangible Assets and Goodwill (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 44	$ 70	$ 174	$ 213
Goodwill, impairment loss			$ 0	$ 0

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Intangible Assets and Goodwill - Summary of expected amortization expense related to intangible assets (Details) $ in Millions	Sep. 30, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Remaining Three Months of 2023	$ 44
2024	174
2025	165
2026	94
2027	31
Thereafter	$ 96

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Intangible Assets and Goodwill - Summary of Goodwill acquired (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Goodwill
Goodwill	$ 7,390	$ 7,410
Impairments	(2,122)	(2,122)
Net goodwill	5,268	5,288
Changes in carrying amount of goodwill by reportable segment:
Goodwill, beginning of period	7,410
Other adjustments	(20)
Goodwill, end of period	7,390
Net goodwill, beginning of period	5,288
Other adjustments	(20)
Net goodwill, end of period	5,268
Construction Industries
Goodwill
Goodwill	269	287
Impairments	(22)	(22)
Net goodwill	247	265
Changes in carrying amount of goodwill by reportable segment:
Goodwill, beginning of period	287
Other adjustments	(18)
Goodwill, end of period	269
Net goodwill, beginning of period	265
Other adjustments	(18)
Net goodwill, end of period	247
Resource Industries
Goodwill
Goodwill	4,135	4,130
Impairments	(1,175)	(1,175)
Net goodwill	2,960	2,955
Changes in carrying amount of goodwill by reportable segment:
Goodwill, beginning of period	4,130
Other adjustments	5
Goodwill, end of period	4,135
Net goodwill, beginning of period	2,955
Other adjustments	5
Net goodwill, end of period	2,960
Energy & Transportation
Goodwill
Goodwill	2,945	2,947
Impairments	(925)	(925)
Net goodwill	2,020	2,022
Changes in carrying amount of goodwill by reportable segment:
Goodwill, beginning of period	2,947
Other adjustments	(2)
Goodwill, end of period	2,945
Net goodwill, beginning of period	2,022
Other adjustments	(2)
Net goodwill, end of period	2,020
Other Segments
Goodwill
Goodwill	41	46
Impairments	0	0
Net goodwill	41	$ 46
Changes in carrying amount of goodwill by reportable segment:
Goodwill, beginning of period	46
Other adjustments	(5)
Goodwill, end of period	41
Net goodwill, beginning of period	46
Other adjustments	(5)
Net goodwill, end of period	$ 41

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Investments in Debt and Equity Securities - Schedule of cost basis and fair value of available-for-sale securities (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Schedule of Investments in Debt and Equity Securities
Cost Basis	$ 3,651	$ 3,311
Unrealized Pretax Net Gains (Losses)	(158)	(147)
Fair Value	3,493	3,164
U.S. treasury bonds
Schedule of Investments in Debt and Equity Securities
Cost Basis	9	9
Unrealized Pretax Net Gains (Losses)	0	0
Fair Value	9	9
Other U.S. and non-U.S. government bonds
Schedule of Investments in Debt and Equity Securities
Cost Basis	57	60
Unrealized Pretax Net Gains (Losses)	(4)	(5)
Fair Value	53	55
Corporate bonds and other debt securities
Schedule of Investments in Debt and Equity Securities
Cost Basis	2,823	2,561
Unrealized Pretax Net Gains (Losses)	(93)	(95)
Fair Value	2,730	2,466
Asset-backed securities
Schedule of Investments in Debt and Equity Securities
Cost Basis	193	187
Unrealized Pretax Net Gains (Losses)	(4)	(5)
Fair Value	189	182
U.S. governmental agency
Schedule of Investments in Debt and Equity Securities
Cost Basis	429	364
Unrealized Pretax Net Gains (Losses)	(45)	(31)
Fair Value	384	333
Residential
Schedule of Investments in Debt and Equity Securities
Cost Basis	3	3
Unrealized Pretax Net Gains (Losses)	(1)	(1)
Fair Value	2	2
Commercial
Schedule of Investments in Debt and Equity Securities
Cost Basis	137	127
Unrealized Pretax Net Gains (Losses)	(11)	(10)
Fair Value	$ 126	$ 117

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Investments in Debt and Equity Securities - Summary of investments in an unrealized loss position that are not other-than-temporarily impaired (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Available-for-sale Securities, Continuous Unrealized Loss Position
Less than 12 months - Fair Value	$ 1,834	$ 2,203
Less than 12 months - Unrealized losses	34	70
12 months or more - Fair Value	1,476	585
12 months or more - Unrealized losses	124	78
Fair Value	3,310	2,788
Unrealized Losses	158	148
Other U.S. and non-U.S. government bonds
Available-for-sale Securities, Continuous Unrealized Loss Position
Less than 12 months - Fair Value	19	19
Less than 12 months - Unrealized losses	0	1
12 months or more - Fair Value	25	20
12 months or more - Unrealized losses	4	4
Fair Value	44	39
Unrealized Losses	4	5
Corporate bonds and other debt securities
Available-for-sale Securities, Continuous Unrealized Loss Position
Less than 12 months - Fair Value	1,660	1,815
Less than 12 months - Unrealized losses	29	46
12 months or more - Fair Value	972	357
12 months or more - Unrealized losses	64	50
Fair Value	2,632	2,172
Unrealized Losses	93	96
Asset-backed securities
Available-for-sale Securities, Continuous Unrealized Loss Position
Less than 12 months - Fair Value	35	75
Less than 12 months - Unrealized losses	0	2
12 months or more - Fair Value	88	55
12 months or more - Unrealized losses	4	3
Fair Value	123	130
Unrealized Losses	4	5
U.S. governmental agency
Available-for-sale Securities, Continuous Unrealized Loss Position
Less than 12 months - Fair Value	102	229
Less than 12 months - Unrealized losses	4	16
12 months or more - Fair Value	281	98
12 months or more - Unrealized losses	41	15
Fair Value	383	327
Unrealized Losses	45	31
Residential
Available-for-sale Securities, Continuous Unrealized Loss Position
Less than 12 months - Fair Value	0	2
Less than 12 months - Unrealized losses	0	0
12 months or more - Fair Value	2	1
12 months or more - Unrealized losses	1	1
Fair Value	2	3
Unrealized Losses	1	1
Commercial
Available-for-sale Securities, Continuous Unrealized Loss Position
Less than 12 months - Fair Value	18	63
Less than 12 months - Unrealized losses	1	5
12 months or more - Fair Value	108	54
12 months or more - Unrealized losses	10	5
Fair Value	126	117
Unrealized Losses	$ 11	$ 10

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Investments in Debt and Equity Securities - Summary of cost basis and fair value of the available-for-sale debt securities by contractual maturity (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Cost Basis
Due in one year or less	$ 940		$ 940
Due after one year through five years	1,812		1,812
Due after five years through ten years	262		262
Due after ten years	68		68
Debt securities, available-for-sale, cost basis	3,651		3,651		$ 3,311
Fair Value
Due in one year or less	929		929
Due after one year through five years	1,737		1,737
Due after five years through ten years	248		248
Due after ten years	67		67
Debt securities	3,493		3,493		3,164
Available-for-sale Securities, Proceeds, Gains and Losses
Proceeds from the sale of available-for-sale securities	271	$ 204	710	$ 474
Gross gains from the sale of available-for-sale securities	0	0	0	1
Gross losses from the sale of available-for-sale securities	1	$ 0	1	$ 1
U.S. governmental agency
Cost Basis
Debt securities, available-for-sale, cost basis	429		429		364
Fair Value
Debt securities	384		384		333
Residential
Cost Basis
Debt securities, available-for-sale, cost basis	3		3		3
Fair Value
Debt securities	2		2		2
Commercial
Cost Basis
Debt securities, available-for-sale, cost basis	137		137		127
Fair Value
Debt securities	$ 126		$ 126		$ 117

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Investments in Debt and Equity Securities (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Schedule of Held-to-maturity Securities
Unrealized gain (loss) on equity securities	$ (11)	$ (12)	$ (25)	$ (97)
Bank Time Deposits
Schedule of Held-to-maturity Securities
Time deposit	$ 2,550		$ 2,550		$ 0

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Postretirement Benefits - Schedule of net benefit costs (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pension Benefits | U.S. Pension Benefits
Components of net periodic benefit cost:
Service cost	$ 0	$ 0	$ 0	$ 0
Interest cost	164	100	492	301
Expected return on plan assets	(173)	(167)	(517)	(502)
Amortization of prior service cost (credit)	0	0	0	0
Net periodic benefit cost (benefit)	(9)	(67)	(25)	(201)
Pension Benefits | Non-U.S. Pension Benefits
Components of net periodic benefit cost:
Service cost	10	15	30	40
Interest cost	30	17	91	53
Expected return on plan assets	(40)	(33)	(120)	(100)
Amortization of prior service cost (credit)	0	0	0	0
Net periodic benefit cost (benefit)	0	(1)	1	(7)
Other Postretirement Benefits
Components of net periodic benefit cost:
Service cost	16	24	50	74
Interest cost	36	20	108	60
Expected return on plan assets	(2)	(3)	(8)	(9)
Amortization of prior service cost (credit)	(3)	(1)	(9)	(4)
Net periodic benefit cost (benefit)	$ 47	$ 40	$ 141	$ 121

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Postretirement Benefits (Details) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)
Defined Benefit Plan Disclosure
Expected full year contributions to pension and other postretirement benefit plans during the year	$ 372	$ 372
Pension Benefits
Defined Benefit Plan Disclosure
Contributions to pension and other postretirement benefit plans	$ 56	$ 320

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Postretirement Benefits - Summary of company costs related to U.S. and non-U.S. defined contribution plans (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Defined Contribution Plan
Costs related to defined contribution plans	$ 147	$ 116	$ 490	$ 321
U.S. Pension Benefits
Defined Contribution Plan
Costs related to defined contribution plans	120	87	405	236
Non-U.S. Pension Benefits
Defined Contribution Plan
Costs related to defined contribution plans	$ 27	$ 29	$ 85	$ 85

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Leases Lease revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Finance lease revenue	$ 106	$ 105	$ 315	$ 326
Operating lease revenue	286	270	836	819
Total	$ 392	$ 375	$ 1,151	$ 1,145
Financial Products
Lessor, Lease, Description
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration]	Sales and revenues	Sales and revenues	Sales and revenues	Sales and revenues

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Guarantees and Product Warranty - Summary of guarantees (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Guarantor Obligations
Guarantees, maximum potential amount of future payments	$ 383	$ 511
Caterpillar dealer performance guarantees
Guarantor Obligations
Guarantees, maximum potential amount of future payments	42	188
Other guarantees
Guarantor Obligations
Guarantees, maximum potential amount of future payments	$ 341	$ 323

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Guarantees and Product Warranty (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Guarantor Obligations
Related liability	$ 4	$ 2
SPC assets in consolidated statement	86,791	81,943
SPC liabilities in consolidated statement	66,284	66,052
Variable Interest Entity, Primary Beneficiary
Guarantor Obligations
SPC assets in consolidated statement	1,540	971
SPC liabilities in consolidated statement	$ 1,540	$ 970

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Guarantees and Product Warranty - Summary of product warranty (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Change in product warranty liability balances
Warranty liability, beginning of period	$ 1,761	$ 1,689
Reduction in liability (payments)	(617)	(589)
Increase in liability (new warranties)	724	562
Warranty liability, end of period	$ 1,868	$ 1,662

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Profit Per Share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended				9 Months Ended
	Sep. 30, 2023		Sep. 30, 2022		Sep. 30, 2023		Sep. 30, 2022
Earnings Per Share Reconciliation [Abstract]
Profit for the period (A) (in dollars)	$ 2,794	[1]	$ 2,041	[1]	$ 7,659	[2]	$ 5,251	[2]
Determination of shares (in millions):
Weighted-average number of common shares outstanding (B) (in shares)	509,800,000		525,000,000.0		513,000,000.0		530,100,000
Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price (in shares)	2,800,000		2,600,000		2,700,000		3,100,000
Average common shares outstanding for fully diluted computation (C) (in shares)	512,600,000	[3]	527,600,000	[3]	515,700,000	[4]	533,200,000	[4]
Profit per share of common stock:
Assuming no dilution (A/B) (in dollars per share)	$ 5.48		$ 3.89		$ 14.93		$ 9.91
Assuming full dilution (A/C) (in dollars per share)	$ 5.45	[3]	$ 3.87	[3]	$ 14.85	[4]	$ 9.85	[4]
Shares outstanding as of June 30 (in shares)	509,100,000		520,400,000		509,100,000		520,400,000
Common shares under SARs and stock options not included in the computation of diluted earnings per share (in shares)	800,000		2,100,000		800,000		2,100,000
Common shares repurchased (in shares)	1,883,487		7,575,322		9,499,655		17,007,819
Cost of repurchase	$ 530	[5]	$ 1,385	[5]	$ 2,209	[6]	$ 3,309	[6]

[1] Profit attributable to common shareholders.

[2] Profit attributable to common shareholders.

[3] Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.

[4] Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.

[5] 1 See Note 12 for additional information.

[6] 2 See Note 12 for additional information.

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	$ 18,256	$ 15,759	$ 15,891	$ 16,516
Total other comprehensive income (loss), net of tax	(286)	(854)	225	(1,800)
Ending balance	20,507	15,622	20,507	15,622
Foreign currency translation
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	(1,863)	(2,282)	(2,328)	(1,508)
Gains (losses) on foreign currency translation	(194)	(592)	(235)	(1,328)
Less: Tax provision /(benefit)	10	26	(2)	64
Net gains (losses) on foreign currency translation	(204)	(618)	(233)	(1,392)
(Gains) losses reclassified to earnings	(1)	0	493	0
Less: Tax provision /(benefit)	0	0	0	0
Net (gains) losses reclassified to earnings	(1)	0	493	0
Total other comprehensive income (loss), net of tax	(205)	(618)	260	(1,392)
Ending balance	(2,068)	(2,900)	(2,068)	(2,900)
Pension and other postretirement benefits
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	(44)	(64)	(39)	(62)
Gains (losses) on foreign currency translation	0	0	0	0
Less: Tax provision /(benefit)	0	0	0	0
Net gains (losses) on foreign currency translation	0	0	0	0
(Gains) losses reclassified to earnings	(3)	(1)	(9)	(4)
Less: Tax provision /(benefit)	0	0	(1)	(1)
Net (gains) losses reclassified to earnings	(3)	(1)	(8)	(3)
Total other comprehensive income (loss), net of tax	(3)	(1)	(8)	(3)
Ending balance	(47)	(65)	(47)	(65)
Derivative financial instruments
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	71	(66)	28	(3)
Gains (losses) on foreign currency translation	13	44	57	298
Less: Tax provision /(benefit)	5	35	14	71
Net gains (losses) on foreign currency translation	8	9	43	227
(Gains) losses reclassified to earnings	(94)	(296)	(84)	(636)
Less: Tax provision /(benefit)	(24)	(96)	(22)	(155)
Net (gains) losses reclassified to earnings	(70)	(200)	(62)	(481)
Total other comprehensive income (loss), net of tax	(62)	(191)	(19)	(254)
Ending balance	9	(257)	9	(257)
Available-for-sale securities
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	(110)	(87)	(118)	20
Gains (losses) on foreign currency translation	(22)	(55)	(12)	(188)
Less: Tax provision /(benefit)	(5)	(11)	(3)	(37)
Net gains (losses) on foreign currency translation	(17)	(44)	(9)	(151)
(Gains) losses reclassified to earnings	1	0	1	0
Less: Tax provision /(benefit)	0	0	0	0
Net (gains) losses reclassified to earnings	1	0	1	0
Total other comprehensive income (loss), net of tax	(16)	(44)	(8)	(151)
Ending balance	(126)	(131)	(126)	(131)
Accumulated other comprehensive income (loss)
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	(1,946)	(2,499)	(2,457)	(1,553)
Ending balance	$ (2,232)	$ (3,353)	$ (2,232)	$ (3,353)

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Effective tax rate	20.90%	20.60%	22.40%	21.40%
Estimated annual tax rate			22.50%	23.00%	23.20%
Gain (loss) on divestiture			$ (586)
Income tax expense (benefit) due to change in valuation allowance			(88)
Tax benefit for settlement of stock-based compensation awards			$ 54	$ 18
Prior year tax adjustment expense (benefit)				$ (90)

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Segment Information (Details)	9 Months Ended
	Sep. 30, 2023 segment group_president
Segment Reporting Information
Number of group presidents | group_president	4
Number of operating segments	5
Useful life to amortize goodwill for segment assets	20 years
Reportable Segments
Segment Reporting Information
Number of operating segments led by Group Presidents	3
Number of operating segments led by Group President responsible for corporate services	1
Number of reportable segments	4
All Other operating segments
Segment Reporting Information
Number of group presidents | group_president	1
Number of smaller operating segments led by Group President	1

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Segment Information - Revenue by Geographic Region (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Sales and revenues by geographic region
Sales and revenues	$ 16,810	$ 14,994	$ 49,990	$ 42,830
Intersegment Sales and Revenues
Sales and revenues by geographic region
Sales and revenues	(1,290)	(1,371)	(4,142)	(3,809)
Corporate Items
Sales and revenues by geographic region
Sales and revenues	(194)	(106)	(577)	(331)
Corporate Reconciling Items and Eliminations
Sales and revenues by geographic region
Sales and revenues	(1,484)	(1,477)	(4,719)	(4,140)
North America
Sales and revenues by geographic region
Sales and revenues	8,927	7,135	25,799	20,043
North America | Corporate Items
Sales and revenues by geographic region
Sales and revenues	(126)	(53)	(374)	(175)
Latin America
Sales and revenues by geographic region
Sales and revenues	1,603	1,809	4,784	4,749
Latin America | Corporate Items
Sales and revenues by geographic region
Sales and revenues	(20)	(20)	(61)	(59)
EAME
Sales and revenues by geographic region
Sales and revenues	3,402	3,145	10,353	9,288
EAME | Corporate Items
Sales and revenues by geographic region
Sales and revenues	(22)	(12)	(64)	(33)
Asia/ Pacific
Sales and revenues by geographic region
Sales and revenues	2,878	2,905	9,054	8,750
Asia/ Pacific | Corporate Items
Sales and revenues by geographic region
Sales and revenues	(26)	(21)	(78)	(64)
Segments Excluding All Other Segments | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	16,974	15,065	50,468	43,049
Segments Excluding All Other Segments | Intersegment Sales and Revenues
Sales and revenues by geographic region
Sales and revenues	(1,214)	(1,303)	(3,908)	(3,582)
Segments Excluding All Other Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	18,188	16,368	54,376	46,631
Segments Excluding All Other Segments | North America | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	9,037	7,172	26,123	20,166
Segments Excluding All Other Segments | Latin America | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	1,624	1,829	4,846	4,808
Segments Excluding All Other Segments | EAME | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	3,419	3,153	10,404	9,307
Segments Excluding All Other Segments | Asia/ Pacific | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	2,894	2,911	9,095	8,768
Construction Industries | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	6,981	6,236	20,806	18,313
Construction Industries | Intersegment Sales and Revenues
Sales and revenues by geographic region
Sales and revenues	(18)	(40)	(93)	(111)
Construction Industries | Operating Segments
Sales and revenues by geographic region
Sales and revenues	6,999	6,276	20,899	18,424
Construction Industries | North America | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	4,078	3,106	11,654	8,832
Construction Industries | Latin America | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	555	799	1,720	2,061
Construction Industries | EAME | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	1,351	1,247	4,125	3,726
Construction Industries | Asia/ Pacific | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	997	1,084	3,307	3,694
Resource Industries | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	3,259	3,013	10,091	8,667
Resource Industries | Intersegment Sales and Revenues
Sales and revenues by geographic region
Sales and revenues	(92)	(74)	(250)	(211)
Resource Industries | Operating Segments
Sales and revenues by geographic region
Sales and revenues	3,351	3,087	10,341	8,878
Resource Industries | North America | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	1,366	1,122	4,016	3,167
Resource Industries | Latin America | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	499	472	1,511	1,337
Resource Industries | EAME | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	508	526	1,624	1,609
Resource Industries | Asia/ Pacific | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	886	893	2,940	2,554
Energy & Transportation
Sales and revenues by geographic region
Sales and revenues	5,755	4,997	16,767	13,669
Energy & Transportation | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	5,755	4,997	16,767	13,669
Energy & Transportation | Intersegment Sales and Revenues
Sales and revenues by geographic region
Sales and revenues	(1,104)	(1,189)	(3,565)	(3,260)
Energy & Transportation | Operating Segments
Sales and revenues by geographic region
Sales and revenues	6,859	6,186	20,332	16,929
Energy & Transportation | North America | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	2,966	2,422	8,658	6,637
Energy & Transportation | Latin America | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	460	468	1,299	1,160
Energy & Transportation | EAME | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	1,428	1,280	4,291	3,679
Energy & Transportation | Asia/ Pacific | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	901	827	2,519	2,193
Financial Products Segment | Related Party
Sales and revenues by geographic region
Sales and revenues	181	124	515	332
Financial Products Segment | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	979	819	2,804	2,400
Financial Products Segment | Intersegment Sales and Revenues
Sales and revenues by geographic region
Sales and revenues	0	0	0	0
Financial Products Segment | Operating Segments
Sales and revenues by geographic region
Sales and revenues	979	819	2,804	2,400
Financial Products Segment | North America | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	627	522	1,795	1,530
Financial Products Segment | Latin America | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	110	90	316	250
Financial Products Segment | EAME | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	132	100	364	293
Financial Products Segment | Asia/ Pacific | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	110	107	329	327
Other Segments | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	30	35	99	112
Other Segments | Intersegment Sales and Revenues
Sales and revenues by geographic region
Sales and revenues	(76)	(68)	(234)	(227)
Other Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	106	103	333	339
Other Segments | North America | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	16	16	50	52
Other Segments | Latin America | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	(1)	0	(1)	0
Other Segments | EAME | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	5	4	13	14
Other Segments | Asia/ Pacific | Operating Segments Excluding Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	$ 10	$ 15	$ 37	$ 46

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Segment Information - Energy & Transportation Sales (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Energy and transportation sales
Sales and revenues	$ 16,810	$ 14,994	$ 49,990	$ 42,830
Energy & Transportation
Energy and transportation sales
Sales and revenues	5,755	4,997	16,767	13,669
Energy & Transportation | Oil and gas
Energy and transportation sales
Sales and revenues	1,667	1,323	4,741	3,503
Energy & Transportation | Power generation
Energy and transportation sales
Sales and revenues	1,598	1,320	4,527	3,518
Energy & Transportation | Industrial
Energy and transportation sales
Sales and revenues	1,220	1,158	3,793	3,295
Energy & Transportation | Transportation
Energy and transportation sales
Sales and revenues	$ 1,270	$ 1,196	$ 3,706	$ 3,353

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Segment Information - Reconciliations of Consolidated Profit Before Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	$ 3,515	$ 2,558	$ 9,801	$ 6,653
Operating Segments | Reportable Segments
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	3,961	2,870	11,856	7,284
Operating Segments | Reportable Segments | Construction Industries
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	1,847	1,209	5,440	3,255
Operating Segments | Reportable Segments | Resource Industries
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	730	506	2,234	1,222
Operating Segments | Reportable Segments | Energy & Transportation
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	1,181	935	3,507	2,132
Operating Segments | Reportable Segments | Financial Products Segment
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	203	220	675	675
Operating Segments | All Other operating segments
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	21	8	42	42
Intersegment Sales and Revenues | Cost centers
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	10	(37)	53	1
Intersegment Sales and Revenues | Corporate costs
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	(265)	(168)	(714)	(670)
Intersegment Sales and Revenues | Timing
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	22	(84)	(89)	(129)
Intersegment Sales and Revenues | Restructuring costs
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	(46)	(49)	(688)	(90)
Intersegment Sales and Revenues | Inventory/cost of sales
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	(2)	138	137	407
Intersegment Sales and Revenues | Postretirement benefit expense
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	(13)	82	(84)	293
Intersegment Sales and Revenues | Stock-based compensation expense
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	(60)	(55)	(178)	(162)
Intersegment Sales and Revenues | Financing costs
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	(13)	(75)	(115)	(269)
Intersegment Sales and Revenues | Currency
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	78	53	106	315
Intersegment Sales and Revenues | Other income/expense methodology differences
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	(164)	(109)	(468)	(287)
Intersegment Sales and Revenues | Other methodology differences
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	$ (14)	$ (16)	$ (57)	$ (82)

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Segment Information - Reconciliation of Assets (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Reconciliation of Assets
Assets	$ 86,791	$ 81,943
Intersegment Sales and Revenues
Reconciliation of Assets
Inventory Methodology Difference	(3,259)	(3,063)
Intersegment Sales and Revenues | Cash and cash equivalents
Reconciliation of Assets
Assets	5,874	6,042
Intersegment Sales and Revenues | Deferred income taxes
Reconciliation of Assets
Assets	2,601	2,098
Intersegment Sales and Revenues | Goodwill and intangible assets
Reconciliation of Assets
Assets	4,413	4,248
Intersegment Sales and Revenues | Property, plant and equipment – net and other assets
Reconciliation of Assets
Assets	6,969	4,234
Intersegment Sales and Revenues | Liabilities included in segment assets
Reconciliation of Assets
Assets	12,227	12,519
Intersegment Sales and Revenues | Other methodology differences
Reconciliation of Assets
Assets	(453)	(630)
Operating Segments | Reportable Segments
Reconciliation of Assets
Assets	56,564	54,667
Operating Segments | Reportable Segments | Construction Industries
Reconciliation of Assets
Assets	5,407	5,168
Operating Segments | Reportable Segments | Resource Industries
Reconciliation of Assets
Assets	5,831	5,775
Operating Segments | Reportable Segments | Energy & Transportation
Reconciliation of Assets
Assets	10,373	9,455
Operating Segments | Reportable Segments | Financial Products Segment
Reconciliation of Assets
Assets	34,953	34,269
Operating Segments | All Other operating segments
Reconciliation of Assets
Assets	$ 1,855	$ 1,828

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Segment Information - Reconciliations of Depreciation and Amortization (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Reconciliation of Depreciation and amortization
Depreciation and amortization	$ 525	$ 551	$ 1,599	$ 1,661
Operating Segments | Reportable Segments
Reconciliation of Depreciation and amortization
Depreciation and amortization	445	468	1,343	1,408
Operating Segments | Reportable Segments | Construction Industries
Reconciliation of Depreciation and amortization
Depreciation and amortization	54	57	162	172
Operating Segments | Reportable Segments | Resource Industries
Reconciliation of Depreciation and amortization
Depreciation and amortization	66	92	235	275
Operating Segments | Reportable Segments | Energy & Transportation
Reconciliation of Depreciation and amortization
Depreciation and amortization	139	136	401	405
Operating Segments | Reportable Segments | Financial Products Segment
Reconciliation of Depreciation and amortization
Depreciation and amortization	186	183	545	556
Intersegment Sales and Revenues | All Other operating segments
Reconciliation of Depreciation and amortization
Depreciation and amortization	59	56	176	172
Intersegment Sales and Revenues | Cost centers
Reconciliation of Depreciation and amortization
Depreciation and amortization	23	20	65	63
Intersegment Sales and Revenues | Other methodology differences
Reconciliation of Depreciation and amortization
Depreciation and amortization	$ (2)	$ 7	$ 15	$ 18

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Segment Information - Reconciliations of Capital Expenditures (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Reconciliation of Capital expenditures
Capital expenditures	$ 781	$ 617	$ 2,238	$ 1,891
Operating Segments | Reportable Segments
Reconciliation of Capital expenditures
Capital expenditures	758	601	1,946	1,592
Operating Segments | Reportable Segments | Construction Industries
Reconciliation of Capital expenditures
Capital expenditures	105	74	188	149
Operating Segments | Reportable Segments | Resource Industries
Reconciliation of Capital expenditures
Capital expenditures	62	65	132	129
Operating Segments | Reportable Segments | Energy & Transportation
Reconciliation of Capital expenditures
Capital expenditures	249	167	595	444
Operating Segments | Reportable Segments | Financial Products Segment
Reconciliation of Capital expenditures
Capital expenditures	342	295	1,031	870
Intersegment Sales and Revenues | All Other operating segments
Reconciliation of Capital expenditures
Capital expenditures	67	54	142	116
Intersegment Sales and Revenues | Cost centers
Reconciliation of Capital expenditures
Capital expenditures	27	16	71	41
Intersegment Sales and Revenues | Timing
Reconciliation of Capital expenditures
Capital expenditures	0	(35)	185	173
Intersegment Sales and Revenues | Other methodology differences
Reconciliation of Capital expenditures
Capital expenditures	$ (71)	$ (19)	$ (106)	$ (31)

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Cat Financial Financing Activities - Allowance for Credit Losses (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Receivables [Abstract]
Average term	51 months		51 months
Average remaining term	27 months		27 months
Allowance for Credit Loss Activity
Beginning balance	$ 315	$ 372	$ 342	$ 333
Write-offs	(22)	(30)	(63)	(68)
Recoveries	13	17	36	47
Provision for credit losses	32	(19)	21	29
Other	(3)	(5)	(1)	(6)
Ending balance	335	335	335	335
Total Finance Receivables	21,828	21,100	21,828	21,100
Customer
Allowance for Credit Loss Activity
Beginning balance	265	290	277	251
Write-offs	(22)	(30)	(63)	(68)
Recoveries	13	17	36	47
Provision for credit losses	31	(2)	35	46
Other	(3)	(5)	(1)	(6)
Ending balance	284	270	284	270
Total Finance Receivables	19,768	19,363	19,768	19,363	$ 19,772
Dealer
Allowance for Credit Loss Activity
Beginning balance	50	82	65	82
Write-offs	0	0	0	0
Recoveries	0	0	0	0
Provision for credit losses	1	(17)	(14)	(17)
Other	0	0	0	0
Ending balance	51	65	51	65
Total Finance Receivables	$ 2,060	$ 1,737	$ 2,060	$ 1,737

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Cat Financial Financing Activities - Write Offs (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Write-offs by origination year
Total	$ 22	$ 30	$ 63	$ 68
Customer
Write-offs by origination year
2023	1		1
2022	6		15
2021	7		19
2020	4		12
2019	1		4
Prior	1		3
Revolving Finance Receivables	2		9
Total	22	$ 30	63	$ 68
Customer | North America
Write-offs by origination year
2023	1		1
2022	2		7
2021	2		7
2020	1		2
2019	1		2
Prior	0		1
Revolving Finance Receivables	2		9
Total	9		29
Customer | EAME
Write-offs by origination year
2023	0		0
2022	1		2
2021	1		3
2020	1		3
2019	0		0
Prior	0		1
Revolving Finance Receivables	0		0
Total	3		9
Customer | Asia/ Pacific
Write-offs by origination year
2023	0		0
2022	2		3
2021	3		6
2020	1		4
2019	0		1
Prior	0		0
Revolving Finance Receivables	0		0
Total	6		14
Customer | Latin America
Write-offs by origination year
2023	0		0
2022	1		3
2021	1		3
2020	1		3
2019	0		1
Prior	1		1
Revolving Finance Receivables	0		0
Total	$ 4		$ 11

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Cat Financial Financing Activities - Financing Receivable Credit Quality Indicator (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Receivables [Abstract]
Period after which Unpaid Installments are Considered as Past Due	30 days
Financing Receivable, Credit Quality Indicator
Total Finance Receivables	$ 21,828		$ 21,100
Customer
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	6,233	$ 8,023
2022 and 2021, respectively	6,075	6,121
2021 and 2020, respectively	4,183	2,924
2020 and 2019, respectively	1,690	1,314
2019 and 2018, respectively	657	529
Prior	408	405
Revolving Finance Receivables	522	456
Total Finance Receivables	19,768	19,772	19,363
Customer | Current
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	6,175	7,929
2022 and 2021, respectively	5,931	5,973
2021 and 2020, respectively	4,064	2,827
2020 and 2019, respectively	1,622	1,275
2019 and 2018, respectively	626	516
Prior	374	393
Revolving Finance Receivables	515	445
Total Finance Receivables	19,307	19,358
Customer | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	37	52
2022 and 2021, respectively	64	59
2021 and 2020, respectively	51	37
2020 and 2019, respectively	26	16
2019 and 2018, respectively	11	6
Prior	4	2
Revolving Finance Receivables	3	4
Total Finance Receivables	196	176
Customer | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	11	21
2022 and 2021, respectively	24	29
2021 and 2020, respectively	16	15
2020 and 2019, respectively	12	7
2019 and 2018, respectively	4	1
Prior	2	0
Revolving Finance Receivables	2	3
Total Finance Receivables	71	76
Customer | 91+ days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	10	21
2022 and 2021, respectively	56	60
2021 and 2020, respectively	52	45
2020 and 2019, respectively	30	16
2019 and 2018, respectively	16	6
Prior	28	10
Revolving Finance Receivables	2	4
Total Finance Receivables	194	162
Customer | North America | Current
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	3,134	3,915
2022 and 2021, respectively	2,940	3,276
2021 and 2020, respectively	2,310	1,525
2020 and 2019, respectively	919	653
2019 and 2018, respectively	310	206
Prior	65	34
Revolving Finance Receivables	304	240
Total Finance Receivables	9,982	9,849
Customer | North America | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	18	25
2022 and 2021, respectively	31	26
2021 and 2020, respectively	23	18
2020 and 2019, respectively	15	12
2019 and 2018, respectively	6	4
Prior	2	1
Revolving Finance Receivables	3	4
Total Finance Receivables	98	90
Customer | North America | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	6	9
2022 and 2021, respectively	10	15
2021 and 2020, respectively	7	7
2020 and 2019, respectively	4	3
2019 and 2018, respectively	1	1
Prior	0	0
Revolving Finance Receivables	2	3
Total Finance Receivables	30	38
Customer | North America | 91+ days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	5	11
2022 and 2021, respectively	19	16
2021 and 2020, respectively	18	12
2020 and 2019, respectively	10	6
2019 and 2018, respectively	5	4
Prior	3	3
Revolving Finance Receivables	2	4
Total Finance Receivables	62	56
Customer | EAME | Current
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	914	1,270
2022 and 2021, respectively	962	953
2021 and 2020, respectively	649	477
2020 and 2019, respectively	297	280
2019 and 2018, respectively	144	155
Prior	124	68
Revolving Finance Receivables	0	0
Total Finance Receivables	3,090	3,203
Customer | EAME | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	11	10
2022 and 2021, respectively	8	12
2021 and 2020, respectively	11	7
2020 and 2019, respectively	3	1
2019 and 2018, respectively	1	1
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	34	31
Customer | EAME | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	3	8
2022 and 2021, respectively	6	4
2021 and 2020, respectively	3	3
2020 and 2019, respectively	3	1
2019 and 2018, respectively	2	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	17	16
Customer | EAME | 91+ days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	4	6
2022 and 2021, respectively	16	25
2021 and 2020, respectively	18	16
2020 and 2019, respectively	9	4
2019 and 2018, respectively	3	1
Prior	1	1
Revolving Finance Receivables	0	0
Total Finance Receivables	51	53
Customer | Asia/ Pacific | Current
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	722	1,033
2022 and 2021, respectively	660	684
2021 and 2020, respectively	361	313
2020 and 2019, respectively	103	69
2019 and 2018, respectively	21	18
Prior	6	2
Revolving Finance Receivables	0	0
Total Finance Receivables	1,873	2,119
Customer | Asia/ Pacific | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	2	10
2022 and 2021, respectively	12	12
2021 and 2020, respectively	10	8
2020 and 2019, respectively	4	1
2019 and 2018, respectively	1	1
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	29	32
Customer | Asia/ Pacific | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	1	2
2022 and 2021, respectively	3	5
2021 and 2020, respectively	3	4
2020 and 2019, respectively	4	2
2019 and 2018, respectively	1	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	12	13
Customer | Asia/ Pacific | 91+ days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	0	2
2022 and 2021, respectively	4	6
2021 and 2020, respectively	5	6
2020 and 2019, respectively	3	4
2019 and 2018, respectively	0	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	12	18
Customer | Mining | Current
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	807	863
2022 and 2021, respectively	730	575
2021 and 2020, respectively	420	220
2020 and 2019, respectively	143	171
2019 and 2018, respectively	92	93
Prior	49	108
Revolving Finance Receivables	49	80
Total Finance Receivables	2,290	2,110
Customer | Mining | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	0	0
2022 and 2021, respectively	0	1
2021 and 2020, respectively	0	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	0	1
Customer | Mining | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	0	0
2022 and 2021, respectively	0	0
2021 and 2020, respectively	1	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
Prior	2	0
Revolving Finance Receivables	0	0
Total Finance Receivables	3	0
Customer | Mining | 91+ days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	0	0
2022 and 2021, respectively	2	0
2021 and 2020, respectively	2	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
Prior	1	1
Revolving Finance Receivables	0	0
Total Finance Receivables	5	1
Customer | Latin America | Current
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	552	770
2022 and 2021, respectively	571	400
2021 and 2020, respectively	255	150
2020 and 2019, respectively	74	69
2019 and 2018, respectively	29	26
Prior	8	20
Revolving Finance Receivables	0	0
Total Finance Receivables	1,489	1,435
Customer | Latin America | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	6	7
2022 and 2021, respectively	13	8
2021 and 2020, respectively	7	4
2020 and 2019, respectively	4	2
2019 and 2018, respectively	3	0
Prior	1	1
Revolving Finance Receivables	0	0
Total Finance Receivables	34	22
Customer | Latin America | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	1	2
2022 and 2021, respectively	5	5
2021 and 2020, respectively	2	1
2020 and 2019, respectively	1	1
2019 and 2018, respectively	0	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	9	9
Customer | Latin America | 91+ days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	1	2
2022 and 2021, respectively	15	13
2021 and 2020, respectively	9	11
2020 and 2019, respectively	8	2
2019 and 2018, respectively	8	1
Prior	20	0
Revolving Finance Receivables	0	0
Total Finance Receivables	61	29
Customer | Power | Current
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	46	78
2022 and 2021, respectively	68	85
2021 and 2020, respectively	69	142
2020 and 2019, respectively	86	33
2019 and 2018, respectively	30	18
Prior	122	161
Revolving Finance Receivables	162	125
Total Finance Receivables	583	642
Customer | Power | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	0	0
2022 and 2021, respectively	0	0
2021 and 2020, respectively	0	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
Prior	1	0
Revolving Finance Receivables	0	0
Total Finance Receivables	1	0
Customer | Power | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	0	0
2022 and 2021, respectively	0	0
2021 and 2020, respectively	0	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	0	0
Customer | Power | 91+ days past due
Financing Receivable, Credit Quality Indicator
2023 and 2022, respectively	0	0
2022 and 2021, respectively	0	0
2021 and 2020, respectively	0	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
Prior	3	5
Revolving Finance Receivables	0	0
Total Finance Receivables	3	5
Dealer
Financing Receivable, Credit Quality Indicator
Total Finance Receivables	2,060		$ 1,737
Dealer | Latin America | Financing Receivables, Equal to or Greater than 30 Days Past Due
Financing Receivable, Credit Quality Indicator
Prior	$ 44	$ 58

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Cat Financial Financing Activities - Investment in Finance Receivables on Non-Accrual Status (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Financing Receivable, Nonaccrual
Period after which collection of future income is considered not probable	120 days
Customer
Financing Receivable, Nonaccrual
Non-accrual With an Allowance	$ 188	$ 156
Non-accrual Without an Allowance	0	16
91+ Still Accruing	27	28
North America | Customer
Financing Receivable, Nonaccrual
Non-accrual With an Allowance	54	52
Non-accrual Without an Allowance	0	4
91+ Still Accruing	12	11
EAME | Customer
Financing Receivable, Nonaccrual
Non-accrual With an Allowance	44	43
Non-accrual Without an Allowance	0	0
91+ Still Accruing	9	10
Asia/ Pacific | Customer
Financing Receivable, Nonaccrual
Non-accrual With an Allowance	8	11
Non-accrual Without an Allowance	0	0
91+ Still Accruing	5	7
Mining | Customer
Financing Receivable, Nonaccrual
Non-accrual With an Allowance	4	0
Non-accrual Without an Allowance	0	1
91+ Still Accruing	1	0
Latin America | Dealer
Financing Receivable, Nonaccrual
Non-accrual With an Allowance	44	58
Latin America | Customer
Financing Receivable, Nonaccrual
Non-accrual With an Allowance	69	45
Non-accrual Without an Allowance	0	0
91+ Still Accruing	0	0
Power | Customer
Financing Receivable, Nonaccrual
Non-accrual With an Allowance	9	5
Non-accrual Without an Allowance	0	11
91+ Still Accruing	$ 0	$ 0

XML

Cat Financial Financing Activities - Modifications (Details) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)
Finance receivable, modifications
Financing receivables in relation to total financing receivables, percentage	0.06%	0.17%
Weighted average term increase from modification	8 months	17 months
Weighted average term increase due to payment deferrals or interest only payment periods	6 months	7 months
Dealer
Finance receivable, modifications
Financing receivables, modified	$ 0	$ 0
Customer
Finance receivable, modifications
Financing receivables, modified	13	38
31-60 days past due | EAME
Finance receivable, modifications
Financing receivable, 31 - 60 days past due	$ 3	$ 3

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Fair Value Disclosures - Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	$ 3,493	$ 3,164
Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	3,493	3,164
Equity securities	419	441
Total Assets	4,153	3,948
Total liabilities	294	195
Recurring basis | Foreign exchange contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivate financial instruments - assets/liabilities	232	328
Recurring basis | Interest rate contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivate financial instruments - assets/liabilities	(294)	(195)
Recurring basis | Commodity contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivate financial instruments - assets/liabilities	9	15
U.S. treasury bonds
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	9	9
U.S. treasury bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	9	9
Other U.S. and non-U.S. government bonds
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	53	55
Other U.S. and non-U.S. government bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	53	55
Corporate bonds and other debt securities
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	2,730	2,466
Corporate bonds and other debt securities | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	2,730	2,466
Asset-backed securities
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	189	182
Asset-backed securities | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	189	182
U.S. governmental agency | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	384	333
Residential
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	2	2
Residential | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	2	2
Commercial
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	126	117
Commercial | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	126	117
Large capitalization value | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity securities	204	203
Smaller company growth | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity securities	31	31
REIT | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity securities	184	207
Level 1 | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	9	9
Equity securities	235	234
Total Assets	244	243
Total liabilities	0	0
Level 1 | Recurring basis | Foreign exchange contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivate financial instruments - assets/liabilities	0	0
Level 1 | Recurring basis | Interest rate contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivate financial instruments - assets/liabilities	0	0
Level 1 | Recurring basis | Commodity contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivate financial instruments - assets/liabilities	0	0
Level 1 | U.S. treasury bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	9	9
Level 1 | Other U.S. and non-U.S. government bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Level 1 | Corporate bonds and other debt securities | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Level 1 | Asset-backed securities | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Level 1 | U.S. governmental agency | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Level 1 | Residential | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Level 1 | Commercial | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Level 1 | Large capitalization value | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity securities	204	203
Level 1 | Smaller company growth | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity securities	31	31
Level 1 | REIT | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity securities	0	0
Level 2 | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	3,484	3,105
Equity securities	0	0
Total Assets	3,725	3,448
Total liabilities	294	195
Level 2 | Recurring basis | Foreign exchange contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivate financial instruments - assets/liabilities	232	328
Level 2 | Recurring basis | Interest rate contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivate financial instruments - assets/liabilities	(294)	(195)
Level 2 | Recurring basis | Commodity contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivate financial instruments - assets/liabilities	9	15
Level 2 | U.S. treasury bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Level 2 | Other U.S. and non-U.S. government bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	53	55
Level 2 | Corporate bonds and other debt securities | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	2,730	2,416
Level 2 | Asset-backed securities | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	189	182
Level 2 | U.S. governmental agency | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	384	333
Level 2 | Residential | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	2	2
Level 2 | Commercial | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	126	117
Level 2 | Large capitalization value | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity securities	0	0
Level 2 | Smaller company growth | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity securities	0	0
Level 2 | REIT | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity securities	0	0
Level 3 | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	50
Equity securities	0	0
Total Assets	0	50
Total liabilities	0	0
Level 3 | Recurring basis | Foreign exchange contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivate financial instruments - assets/liabilities	0	0
Level 3 | Recurring basis | Interest rate contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivate financial instruments - assets/liabilities	0	0
Level 3 | Recurring basis | Commodity contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivate financial instruments - assets/liabilities	0	0
Level 3 | Nonrecurring basis | Financial Products
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Loans carried at fair value	57	68
Level 3 | U.S. treasury bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Level 3 | Other U.S. and non-U.S. government bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Level 3 | Corporate bonds and other debt securities | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	50
Level 3 | Asset-backed securities | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Level 3 | U.S. governmental agency | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Level 3 | Residential | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Level 3 | Commercial | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Level 3 | Large capitalization value | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity securities	0	0
Level 3 | Smaller company growth | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity securities	0	0
Level 3 | REIT | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity securities	0	0
Measured at NAV | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Equity securities	184	207
Total Assets	184	207
Total liabilities	0	0
Measured at NAV | Recurring basis | Foreign exchange contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivate financial instruments - assets/liabilities	0	0
Measured at NAV | Recurring basis | Interest rate contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivate financial instruments - assets/liabilities	0	0
Measured at NAV | Recurring basis | Commodity contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivate financial instruments - assets/liabilities	0	0
Measured at NAV | U.S. treasury bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Measured at NAV | Other U.S. and non-U.S. government bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Measured at NAV | Corporate bonds and other debt securities | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Measured at NAV | Asset-backed securities | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Measured at NAV | U.S. governmental agency | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Measured at NAV | Residential | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Measured at NAV | Commercial | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities	0	0
Measured at NAV | Large capitalization value | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity securities	0	0
Measured at NAV | Smaller company growth | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity securities	0	0
Measured at NAV | REIT | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity securities	$ 184	$ 207

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Fair Value Disclosures - Fair Value of Financial Instruments (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Carrying Amount
Assets
Finance receivables-net (excluding finance leases)	$ 14,894	$ 13,965
Wholesale inventory receivables-net (excluding finance leases)	1,075	827
Carrying Amount | Machinery, Energy & Transportation
Liabilities
Long-term debt (including amounts due within one year)	9,513	9,618
Carrying Amount | Financial Products
Liabilities
Long-term debt (including amounts due within one year)	23,408	21,418
Carrying amount of assets excluded from measurement at fair value
Assets
Excluded items: Finance leases and failed sale leasebacks, Carrying Value	6,816	7,325
Level 2 | Fair Value | Machinery, Energy & Transportation
Liabilities
Long-term debt (including amounts due within one year)	8,712	9,240
Level 2 | Fair Value | Financial Products
Liabilities
Long-term debt (including amounts due within one year)	22,806	20,686
Level 3 | Fair Value
Assets
Finance receivables-net (excluding finance leases)	14,365	13,377
Wholesale inventory receivables-net (excluding finance leases)	$ 1,032	$ 778

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Other Income (Expense) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Other Income and Expenses [Abstract]
Investment and interest income	$ 135	$ 52	$ 324	$ 98
Foreign exchange gains (losses)	17	134	(15)	405
License fee income	37	37	111	106
Net periodic pension and OPEB income (cost), excluding service cost	(12)	67	(37)	201
Gains (losses) on securities	6	0	(15)	(59)
Miscellaneous income (loss)	12	(48)	(14)	4
Total	$ 195	$ 242	$ 354	$ 755

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Restructuring Costs - Restructuring and Related Costs (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Restructuring Charges [Abstract]
Gain (loss) on divestiture			$ (586)
(Gains) losses reclassified to earnings			494
Restructuring and Related Cost
Restructuring costs	$ 46	$ 49	688	$ 90
Employee separations | Other Operating Income (Expense)
Restructuring and Related Cost
Restructuring costs	10	39	32	62
Longwall Divestiture | Other Operating Income (Expense)
Restructuring and Related Cost
Restructuring costs	0	0	586	0
Contract terminations | Other Operating Income (Expense)
Restructuring and Related Cost
Restructuring costs	0	1	0	1
Long-lived asset impairments | Other Operating Income (Expense)
Restructuring and Related Cost
Restructuring costs	2	(4)	4	1
Other | Cost of Sales
Restructuring and Related Cost
Restructuring costs	$ 34	$ 13	$ 66	$ 26

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Restructuring Costs - Summary of Separation Activity (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Restructuring Reserve [Roll Forward]
Liability balance, beginning of period	$ 39	$ 61
Increase in liability (separation charges)	32	62
Reduction in liability (payments)	(55)	(63)
Liability balance, end of period	$ 16	$ 60