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Published: 2023-10-31 06:32:42 ET

EX-99.1 2 ex991toformcat3q2023earnin.htm EX-99.1 Document

Exhibit 99.1

Caterpillar Inc.

3Q 2023 Earnings Release

FOR IMMEDIATE RELEASE

Caterpillar Reports Third-Quarter 2023 Results


	Third Quarter
($ in billions except profit per share)	2023	2022
Sales and Revenues	$16.8	$15.0
Profit Per Share	$5.45	$3.87
Adjusted Profit Per Share	$5.52	$3.95


●			Third-quarter 2023 sales and revenues increased 12% to $16.8 billion
●			Third-quarter 2023 profit per share of $5.45; adjusted profit per share of $5.52
●			Returned $1.0 billion to shareholders through dividends and share repurchases in the quarter

IRVING, Texas, Oct. 31, 2023 – Caterpillar Inc. (NYSE: CAT) announced third-quarter 2023 sales and revenues of $16.8 billion, a 12% increase compared with $15.0 billion in the third quarter of 2022. The increase was primarily due to favorable price realization and higher sales volume.

Operating profit margin was 20.5% for the third quarter of 2023, compared with 16.2% for the third quarter of 2022. Adjusted operating profit margin was 20.8% for the third quarter of 2023, compared with 16.5% for the third quarter of 2022. Third-quarter 2023 profit per share was $5.45, compared with third-quarter 2022 profit per share of $3.87. Adjusted profit per share in the third quarter of 2023 was $5.52, compared with third-quarter 2022 adjusted profit per share of $3.95. Adjusted operating profit margin and adjusted profit per share for both quarters excluded restructuring costs. Please see a reconciliation of GAAP to non-GAAP financial measures in the appendix on page 12.

For the nine months ended September 30, 2023, enterprise operating cash flow was $8.9 billion, and the company ended the third quarter with $6.5 billion of enterprise cash. In the quarter, the company paid dividends of $0.7 billion and repurchased $0.4 billion of Caterpillar common stock.

“I’d like to thank our global team for delivering another great quarter, as demonstrated by double-digit top-line growth, strong adjusted operating profit margin and robust ME&T free cash flow,” said Chairman and CEO Jim Umpleby. “We remain focused on supporting our customers’ success and executing our strategy for long-term profitable growth.”

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CONSOLIDATED RESULTS

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%, 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.


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	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%

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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	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		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	6,667			1,739			3,057			2,815			14,278			—			14,278

Financial Products Segment	522			90			100			107			819			—			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

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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%, 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 selling, general and administrative (SG&A) and research and development (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.


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

•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 global tax rate of 22.5%, excluding the discrete items discussed below. The comparative tax rate for the third quarter of 2022 and full-year 2022 was approximately 23%.

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.

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CONSTRUCTION INDUSTRIES
(Millions of dollars)
Segment Sales
	Third Quarter 2022			Sales Volume			Price Realization			Currency			Inter-Segment		Third Quarter 2023		$ Change		% Change
Total Sales	$	6,276		$	62		$	662		$	21		$	(22)	$	6,999	$	723	12	%

Sales by Geographic Region
	Third Quarter 2023			Third Quarter 2022			$ Change			% Change
North America	$	4,078		$	3,106		$	972		31		%
Latin America	555			799			(244)			(31		%)
EAME	1,351			1,247			104			8		%
Asia/Pacific	997			1,084			(87)			(8		%)
External Sales	6,981			6,236			745			12		%
Inter-segment	18			40			(22)			(55		%)
Total Sales	$	6,999		$	6,276		$	723		12		%

Segment Profit
	Third Quarter 2023			Third Quarter 2022			Change			% Change
Segment Profit	$	1,847		$	1,209		$	638		53		%
Segment Profit Margin	26.4		%	19.3		%	7.1		pts

Construction Industries’ total sales were $6.999 billion in the third quarter of 2023, an increase of $723 million, or 12%, 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%, compared with $1.209 billion in the third quarter of 2022. The increase was mainly due to favorable price realization.

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RESOURCE INDUSTRIES
(Millions of dollars)
Segment Sales
	Third Quarter 2022			Sales Volume			Price Realization			Currency			Inter-Segment		Third Quarter 2023		$ Change		% Change
Total Sales	$	3,087		$	(81)		$	336		$	(9)		$	18	$	3,351	$	264	9	%

Sales by Geographic Region
	Third Quarter 2023			Third Quarter 2022			$ Change			% Change
North America	$	1,366		$	1,122		$	244		22		%
Latin America	499			472			27			6		%
EAME	508			526			(18)			(3		%)
Asia/Pacific	886			893			(7)			(1		%)
External Sales	3,259			3,013			246			8		%
Inter-segment	92			74			18			24		%
Total Sales	$	3,351		$	3,087		$	264		9		%

Segment Profit
	Third Quarter 2023			Third Quarter 2022			Change			% Change
Segment Profit	$	730		$	506		$	224		44		%
Segment Profit Margin	21.8		%	16.4		%	5.4		pts

Resource Industries’ total sales were $3.351 billion in the third quarter of 2023, an increase of $264 million, or 9%, 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%, 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.

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ENERGY & TRANSPORTATION
(Millions of dollars)
Segment Sales
	Third Quarter 2022			Sales Volume			Price Realization			Currency			Inter-Segment		Third Quarter 2023		$ Change		% Change
Total Sales	$	6,186		$	415		$	298		$	45		$	(85)	$	6,859	$	673	11	%

Sales by Application
	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		%

Segment Profit
	Third Quarter 2023			Third Quarter 2022			Change			% Change
Segment Profit	$	1,181		$	935		$	246		26		%
Segment Profit Margin	17.2		%	15.1		%	2.1		pts

Energy & Transportation’s total sales were $6.859 billion in the third quarter of 2023, an increase of $673 million, or 11%, 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%, 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.

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FINANCIAL PRODUCTS SEGMENT
(Millions of dollars)
Revenues by Geographic Region
	Third Quarter 2023		Third Quarter 2022		$ Change		% Change
North America	$	627	$	522	$	105	20	%
Latin America	110		90		20		22	%
EAME	132		100		32		32	%
Asia/Pacific	110		107		3		3	%
Total Revenues	$	979	$	819	$	160	20	%

Segment Profit
	Third Quarter 2023		Third Quarter 2022		Change		% Change
Segment Profit	$	203	$	220	$	(17)	(8	%)

Financial Products’ segment revenues were $979 million in the third quarter of 2023, an increase of $160 million, or 20%, 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%, 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%, compared with 2.00% 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% of finance receivables, compared with $320 million, or 1.15% of finance receivables at June 30, 2023. The allowance for credit losses at year-end 2022 was $346 million, or 1.29% 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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Notes

i.Glossary of terms is included on the Caterpillar website at https://investors.caterpillar.com/overview/default.aspx.

ii.Sales of equipment to end users is demonstrated by the company’s Rolling 3 Month Retail Sales Statistics filed in a Form 8-K on Tuesday, Oct. 31, 2023.

iii.Information on non-GAAP financial measures is included in the appendix on page 12.

iv.Some amounts within this report are rounded to the millions or billions and may not add.

v.Caterpillar will conduct a teleconference and live webcast, with a slide presentation, beginning at 7:30 a.m. Central Time on Tuesday, Oct. 31, 2023, to discuss its 2023 third-quarter results. The accompanying slides will be available before the webcast on the Caterpillar website at https://investors.caterpillar.com/events-presentations/default.aspx.

About Caterpillar

With 2022 sales and revenues of $59.4 billion, Caterpillar Inc. is the world’s leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. For nearly 100 years, we’ve been helping customers build a better, more sustainable world and are committed and contributing to a reduced-carbon future. Our innovative products and services, backed by our global dealer network, provide exceptional value that helps customers succeed. Caterpillar does business on every continent, principally operating through three primary segments – Construction Industries, Resource Industries and Energy & Transportation – and providing financing and related services through our Financial Products segment. Visit us at caterpillar.com or join the conversation on our social media channels at caterpillar.com/en/news/social-media.html.

Caterpillar’s latest financial results are also available online:

https://investors.caterpillar.com/overview/default.aspx

https://investors.caterpillar.com/financials/quarterly-results/default.aspx (live broadcast/replays of quarterly conference call)

Caterpillar investor relations contact: Ryan Fiedler, +1 224-551-4074 or Fiedler_Ryan_S@cat.com

Caterpillar media contact: Tiffany Heikkila, +1 832-573-0958 or Tiffany.Heikkila@cat.com

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Forward-Looking Statements

Certain statements in this press release 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 in Caterpillar’s Forms 10-Q, 10-K and other filings with the Securities and Exchange Commission.

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APPENDIX

NON-GAAP FINANCIAL MEASURES

The following definitions are provided for the non-GAAP financial measures. 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.

The company believes it is important to separately quantify the profit impact of one significant item in order for the company’s results to be meaningful to readers. This item consists of (i) restructuring costs. The company does not consider this item indicative of earnings from ongoing business activities and believes the non-GAAP measure provides investors with useful perspective on underlying business results and trends and aids with assessing the company’s period-over-period results. The company intends to discuss adjusted profit per share for the fourth quarter and full-year 2023, excluding mark-to-market gains or losses for remeasurement of pension and other postemployment benefit plans along with any other discrete items.

Reconciliations of adjusted results to the most directly comparable GAAP measure 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

Supplemental Consolidating Data

The company is 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 (ME&T) – The company defines 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 its products.

Financial Products – The company defines Financial Products as it is presented in the supplemental data as its 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. The company believes this presentation will assist readers in understanding its business.

Pages 13 to 23 reconcile ME&T and Financial Products to Caterpillar Inc. consolidated financial information.

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Caterpillar Inc.

Condensed Consolidated Statement of Results of Operations

(Unaudited)

(Dollars in millions except per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Sales and revenues:
Sales of Machinery, Energy & Transportation	$	15,988	$	14,278	$	47,632	$	40,703
Revenues of Financial Products	822		716		2,358		2,127
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
Interest expense of Financial Products	280		151		742		377
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

Interest expense excluding Financial Products	129		109		385		326
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)		—		(1)

Profit 1	$	2,794	$	2,041	$	7,659	$	5,251


Profit per common share	$	5.48	$	3.89	$	14.93	$	9.91
Profit per common share — diluted 2	$	5.45	$	3.87	$	14.85	$	9.85

Weighted-average common shares outstanding (millions)
– Basic	509.8		525.0		513.0		530.1
– Diluted 2	512.6		527.6		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.

(more)

Caterpillar Inc.

Condensed Consolidated Statement of Financial Position

(Unaudited)

(Millions of dollars)


	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

Shareholders’ equity
Common stock	6,698		6,560
Treasury stock	(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

(more)

Caterpillar Inc.

Condensed 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)	6,360		5,570
Payments on debt (original maturities greater than three months)	(4,459)		(5,289)
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.

(more)

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	$	—


1			Elimination of Financial Products’ revenues earned from ME&T.
2			Elimination of net expenses recorded by ME&T paid to Financial Products.

3			Elimination 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.


4			Profit attributable to common shareholders.

(more)

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	$	—


1			Elimination of Financial Products’ revenues earned from ME&T.
2			Elimination of net expenses recorded by ME&T paid to Financial Products.
3			Elimination of interest expense recorded between Financial Products and ME&T.
4			Elimination 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.
5			Elimination of equity profit (loss) earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries.
6			Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries.
7			Profit attributable to common shareholders.

(more)

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)


1			Elimination of Financial Products’ revenues earned from ME&T.
2			Elimination of net expenses recorded by ME&T paid to Financial Products.

3			Elimination 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.
4			Elimination of equity profit (loss) earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries.
5			Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries.
6			Profit attributable to common shareholders.

(more)

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	$	—


1			Elimination of Financial Products’ revenues earned from ME&T.
2			Elimination of net expenses recorded by ME&T paid to Financial Products.
3			Elimination of interest expense recorded between Financial Products and ME&T.
4			Elimination 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.
5			Elimination of equity profit (loss) earned from Financial Products’ subsidiaries partially owned by ME&T subsidiaries.
6			Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries.
7			Profit attributable to common shareholders.

(more)

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)

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.

(more)

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)

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.

(more)

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 > 90 days	6,360		—		6,360		—
Payments on debt > 90 days	(4,459)		(99)		(4,360)		—
Short-term borrowings – net < 90 days	(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.

(more)

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 > 90 days	5,570		—		5,570		—
Payments on debt > 90 days	(5,289)		(20)		(5,269)		—
Short-term borrowings – net < 90 days	(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.