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Leases

12 Months Ended

Dec. 31, 2023

A. Lessee arrangements

We lease certain property, information technology equipment, warehouse equipment, vehicles and other equipment through operating leases. We recognize a lease liability and corresponding right-of-use asset based on the present value of lease payments. To determine the present value of lease payments for most of our leases, we use our incremental borrowing rate based on information available on the lease commencement date. For certain property and information technology equipment leases, we have elected to separate payments for lease components from non-lease components. For all other leases, we have elected not to separate payments for lease and non-lease components. Our lease agreements may include options to extend or terminate the lease. When it is reasonably certain that we will exercise that option, we have included the option in the recognition of right-of-use assets and lease liabilities. We have elected not to recognize right-of-use assets or lease liabilities for leases with a term of twelve months or less.

Our finance leases are not significant and therefore are not included in the following disclosures.

The components of lease costs were as follows:



(Millions of dollars)
	Years Ended December 31,
	2023		2022		2021
Operating lease cost	$	189	$	187	$	214
Short-term lease cost	$	62	$	59	$	46

We recognize operating lease right-of-use assets in Other assets in Statement 3. We recognize the operating lease liabilities in Other current liabilities and Other liabilities.

Supplemental information related to leases was as follows:



(Millions of dollars)
	December 31, 2023			December 31, 2022
Operating Leases
Other assets	$	556		$	564
Other current liabilities	$	147		$	151
Other liabilities	$	427		$	428










Weighted average remaining lease term
Operating leases	7 years			7 years


Weighted average discount rates
Operating leases	3		%	2		%

Maturities of operating lease liabilities were as follows:



(Millions of dollars)	December 31, 2023

Amounts Due In
2024	$	160
2025	125
2026	91
2027	69
2028	48
Thereafter	151
Total lease payments	644
Less: Imputed interest	(70)
Total	$	574

Supplemental cash flow information related to leases was as follows:



(Millions of dollars)
	Years ended December 31,
	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	180	$	178	$	206


Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	148	$	123	$	238

B. Lessor arrangements

We lease Caterpillar machinery, engines and other equipment to customers and dealers around the world, primarily through Cat Financial. Cat Financial leases to customers primarily through sales-type (non-tax) leases, where the lessee for tax purposes is considered to be the owner of the equipment during the term of the lease. Cat Financial also offers tax leases that are classified as either operating or direct finance leases for financial accounting purposes, depending on the characteristics of the lease. For tax purposes, Cat Financial is considered the owner of the equipment. Our lease agreements may include options for the lessee to purchase the underlying asset at the end of the lease term for either a stated fixed price or fair market value.

We determine the residual value of Cat Financial’s leased equipment based on its estimated end-of-term market value. We estimate the residual value of leased equipment at the inception of the lease based on a number of factors, including historical wholesale market sales prices, past remarketing experience and any known significant market/product trends. We also consider the following critical factors in our residual value estimates: lease term, market size and demand, total expected hours of usage, machine configuration, application, location, model changes, quantities, third-party residual guarantees and contractual customer purchase options.

During the term of our leases, we monitor residual values. For operating leases, we record adjustments to depreciation expense reflecting changes in residual value estimates prospectively on a straight-line basis. For finance leases, we recognize residual value adjustments through a reduction of finance revenue over the remaining lease term.

See Note 7 for contractual maturities of finance lease receivables (sales-type and direct finance leases).

The carrying amount of equipment leased to others, included in Property, plant and equipment - net in Statement 3, under operating leases was as follows:



	December 31,
(Millions of dollars)	2023		2022
Equipment leased to others - at original cost	$	5,837	$	5,568
Less: Accumulated depreciation	(1,902)		(1,790)
Equipment leased to others - net	$	3,935	$	3,778

Payments due for operating leases as of December 31, 2023, were as follows:



(Millions of dollars)
2024	2025	2026	2027	2028	Thereafter	Total
$894	$586	$329	$157	$80	$29	$2,075

Revenues from finance and operating leases, primarily included in Revenues of Financial Products on Statement 1, were as follows:



(Millions of dollars)
	Year ended December 31,
	2023		2022		2021
Finance lease revenue	$	420	$	430	$	485
Operating lease revenue	1,166		1,085		1,128
Total	$	1,586	$	1,515	$	1,613

We present revenues net of sales and other related taxes.

Leases

A. Lessee arrangements

Our finance leases are not significant and therefore are not included in the following disclosures.

The components of lease costs were as follows:



(Millions of dollars)
	Years Ended December 31,
	2023		2022		2021
Operating lease cost	$	189	$	187	$	214
Short-term lease cost	$	62	$	59	$	46

We recognize operating lease right-of-use assets in Other assets in Statement 3. We recognize the operating lease liabilities in Other current liabilities and Other liabilities.

Supplemental information related to leases was as follows:



(Millions of dollars)
	December 31, 2023			December 31, 2022
Operating Leases
Other assets	$	556		$	564
Other current liabilities	$	147		$	151
Other liabilities	$	427		$	428










Weighted average remaining lease term
Operating leases	7 years			7 years


Weighted average discount rates
Operating leases	3		%	2		%

Maturities of operating lease liabilities were as follows:



(Millions of dollars)	December 31, 2023

Amounts Due In
2024	$	160
2025	125
2026	91
2027	69
2028	48
Thereafter	151
Total lease payments	644
Less: Imputed interest	(70)
Total	$	574

Supplemental cash flow information related to leases was as follows:



(Millions of dollars)
	Years ended December 31,
	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	180	$	178	$	206


Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	148	$	123	$	238

B. Lessor arrangements

See Note 7 for contractual maturities of finance lease receivables (sales-type and direct finance leases).

The carrying amount of equipment leased to others, included in Property, plant and equipment - net in Statement 3, under operating leases was as follows:



	December 31,
(Millions of dollars)	2023		2022
Equipment leased to others - at original cost	$	5,837	$	5,568
Less: Accumulated depreciation	(1,902)		(1,790)
Equipment leased to others - net	$	3,935	$	3,778

Payments due for operating leases as of December 31, 2023, were as follows:



(Millions of dollars)
2024	2025	2026	2027	2028	Thereafter	Total
$894	$586	$329	$157	$80	$29	$2,075

Revenues from finance and operating leases, primarily included in Revenues of Financial Products on Statement 1, were as follows:



(Millions of dollars)
	Year ended December 31,
	2023		2022		2021
Finance lease revenue	$	420	$	430	$	485
Operating lease revenue	1,166		1,085		1,128
Total	$	1,586	$	1,515	$	1,613

We present revenues net of sales and other related taxes.

Leases

A. Lessee arrangements

Our finance leases are not significant and therefore are not included in the following disclosures.

The components of lease costs were as follows:



(Millions of dollars)
	Years Ended December 31,
	2023		2022		2021
Operating lease cost	$	189	$	187	$	214
Short-term lease cost	$	62	$	59	$	46

We recognize operating lease right-of-use assets in Other assets in Statement 3. We recognize the operating lease liabilities in Other current liabilities and Other liabilities.

Supplemental information related to leases was as follows:



(Millions of dollars)
	December 31, 2023			December 31, 2022
Operating Leases
Other assets	$	556		$	564
Other current liabilities	$	147		$	151
Other liabilities	$	427		$	428










Weighted average remaining lease term
Operating leases	7 years			7 years


Weighted average discount rates
Operating leases	3		%	2		%

Maturities of operating lease liabilities were as follows:



(Millions of dollars)	December 31, 2023

Amounts Due In
2024	$	160
2025	125
2026	91
2027	69
2028	48
Thereafter	151
Total lease payments	644
Less: Imputed interest	(70)
Total	$	574

Supplemental cash flow information related to leases was as follows:



(Millions of dollars)
	Years ended December 31,
	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	180	$	178	$	206


Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	148	$	123	$	238

B. Lessor arrangements

See Note 7 for contractual maturities of finance lease receivables (sales-type and direct finance leases).

The carrying amount of equipment leased to others, included in Property, plant and equipment - net in Statement 3, under operating leases was as follows:



	December 31,
(Millions of dollars)	2023		2022
Equipment leased to others - at original cost	$	5,837	$	5,568
Less: Accumulated depreciation	(1,902)		(1,790)
Equipment leased to others - net	$	3,935	$	3,778

Payments due for operating leases as of December 31, 2023, were as follows:



(Millions of dollars)
2024	2025	2026	2027	2028	Thereafter	Total
$894	$586	$329	$157	$80	$29	$2,075

Revenues from finance and operating leases, primarily included in Revenues of Financial Products on Statement 1, were as follows:



(Millions of dollars)
	Year ended December 31,
	2023		2022		2021
Finance lease revenue	$	420	$	430	$	485
Operating lease revenue	1,166		1,085		1,128
Total	$	1,586	$	1,515	$	1,613

We present revenues net of sales and other related taxes.

Leases

A. Lessee arrangements

Our finance leases are not significant and therefore are not included in the following disclosures.

The components of lease costs were as follows:



(Millions of dollars)
	Years Ended December 31,
	2023		2022		2021
Operating lease cost	$	189	$	187	$	214
Short-term lease cost	$	62	$	59	$	46

We recognize operating lease right-of-use assets in Other assets in Statement 3. We recognize the operating lease liabilities in Other current liabilities and Other liabilities.

Supplemental information related to leases was as follows:



(Millions of dollars)
	December 31, 2023			December 31, 2022
Operating Leases
Other assets	$	556		$	564
Other current liabilities	$	147		$	151
Other liabilities	$	427		$	428










Weighted average remaining lease term
Operating leases	7 years			7 years


Weighted average discount rates
Operating leases	3		%	2		%

Maturities of operating lease liabilities were as follows:



(Millions of dollars)	December 31, 2023

Amounts Due In
2024	$	160
2025	125
2026	91
2027	69
2028	48
Thereafter	151
Total lease payments	644
Less: Imputed interest	(70)
Total	$	574

Supplemental cash flow information related to leases was as follows:



(Millions of dollars)
	Years ended December 31,
	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	180	$	178	$	206


Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	148	$	123	$	238

B. Lessor arrangements

See Note 7 for contractual maturities of finance lease receivables (sales-type and direct finance leases).

The carrying amount of equipment leased to others, included in Property, plant and equipment - net in Statement 3, under operating leases was as follows:



	December 31,
(Millions of dollars)	2023		2022
Equipment leased to others - at original cost	$	5,837	$	5,568
Less: Accumulated depreciation	(1,902)		(1,790)
Equipment leased to others - net	$	3,935	$	3,778

Payments due for operating leases as of December 31, 2023, were as follows:



(Millions of dollars)
2024	2025	2026	2027	2028	Thereafter	Total
$894	$586	$329	$157	$80	$29	$2,075

Revenues from finance and operating leases, primarily included in Revenues of Financial Products on Statement 1, were as follows:



(Millions of dollars)
	Year ended December 31,
	2023		2022		2021
Finance lease revenue	$	420	$	430	$	485
Operating lease revenue	1,166		1,085		1,128
Total	$	1,586	$	1,515	$	1,613

We present revenues net of sales and other related taxes.