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What changed in Caterpillar Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Caterpillar Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+284 added−274 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-14)

Top changes in Caterpillar Inc.'s 2025 10-K

284 paragraphs added · 274 removed · 228 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeCredit decisions are based on a variety of credit quality factors including prior payment experience, customer financial information, credit ratings, loan-to-value ratios and other internal metrics. Cat Financial typically maintains a security interest in retail-financed equipment and generally requires physical damage insurance coverage on financed equipment.
Biggest changeCat Financial works with the broader Caterpillar organization to provide a broad array of financial merchandising programs to compete around the world. Cat Financial provides financing only when certain criteria are met. Credit decisions are based on a variety of credit quality factors including prior payment experience, customer financial information, credit ratings, loan-to-value ratios and other internal metrics.
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 8 to be recovered from insurance companies or others. We reassess these accrued amounts on a quarterly basis.
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.
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.
We have made, and will continue to make, significant research and development and capital expenditures to comply with these emissions standards. 8 We are engaged in remedial activities at a number of locations, often with other companies, pursuant to federal and state laws.
These sales and service agreements are terminable at will by either party primarily upon 90 days written notice. Human Capital Core Values Caterpillar’s global workforce is united by Our Values In Action, Caterpillar’s Code of Conduct. Integrity, Excellence, Teamwork, Commitment and Sustainability provide the foundation for our values-based culture. Our human capital management principles are embedded in our values.
These sales and service agreements are terminable at will by either party primarily upon 90 days written notice. Human Capital Core Values Caterpillar’s global workforce is united by Our Values In Action, Caterpillar’s Code of Conduct. Safety, Integrity, Teamwork, Excellence, and Commitment provide the foundation for our values-based culture. Our human capital management principles are embedded in our values.
In the United States, we employed approximately 51,500 full-time persons, most of whom are at-will employees and, therefore, not subject to any type of employment contract or agreement. At select business units, we have hired certain highly specialized employees under employment contracts that specify a term of employment, pay and other benefits.
In the United States, we employed approximately 51,600 full-time persons, most of whom are at-will employees and, therefore, not subject to any type of employment contract or agreement. At select business units, we have hired certain highly specialized employees under employment contracts that specify a term of employment, pay and other benefits.
Other information about our operations in 2024, including certain risks associated with our operations, is included in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Construction Industries Our Construction Industries segment is primarily responsible for supporting customers using machinery in infrastructure and building construction applications.
Other information about our operations in 2025, including certain risks associated with our operations, is included in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Construction Industries Our Construction Industries segment is primarily responsible for supporting customers using machinery in infrastructure and building construction applications.
The majority of Construction Industries' research and development spending in 2024 focused on the next generation of construction machines. 1 Table of Contents The competitive environment for construction machinery is characterized by some global competitors and many regional and specialized local competitors.
The majority of Construction Industries' research and development spending in 2025 focused on the next generation of construction machines. 1 Table of Contents The competitive environment for construction machinery is characterized by some global competitors and many regional and specialized local competitors.
Cat Financial is a wholly owned finance subsidiary of Caterpillar Inc., and it provides retail and wholesale 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.
Cat Financial is a wholly owned finance subsidiary of Caterpillar Inc., and it provides retail and wholesale financing alternatives to customers and dealers around the world for Caterpillar products and services, as well as financing for power generation facilities that incorporate Caterpillar products.
Our competitors include Wells Fargo Equipment Finance Inc., Banc of America Leasing & Capital LLC, BNP Paribas Leasing Solutions Limited, Australia and New Zealand Banking Group Limited, Société Générale S.A. and various other banks and finance companies.
Cat Financial’s competitors include Wells Fargo Equipment Finance Inc., Banc of America Leasing & Capital LLC, BNP Paribas Leasing Solutions Limited, Australia and New Zealand Banking Group Limited, Société Générale S.A. and various other banks and finance companies.
An additional set of competitors, including Aggreko plc, Generac Holdings Inc., Rehlko Energy, Baker Hughes Co., and others, are primarily packagers who source engines and/or other components from domestic and international suppliers and market products regionally and internationally through a variety of distribution channels.
An additional set of competitors, including Aggreko plc, Generac Holdings Inc., Discovery Energy, LLC (Rehlko, formerly Kohler Energy), Baker Hughes Co., and others, are primarily packagers who source engines and/or other components from domestic and international suppliers and market products regionally and internationally through a variety of distribution channels.
Dealers and Distributors We distribute our machines principally through a worldwide organization of dealers (dealer network), 41 located in the United States and 111 located outside the United States, serving 187 countries. We sell reciprocating engines principally through the dealer network and to other manufacturers for use in products.
Dealers and Distributors We distribute our machines principally through a worldwide organization of dealers (dealer network), 41 located in the United States and 109 located outside the United States, serving 190 countries. We sell reciprocating engines principally through the dealer network and to other manufacturers for use in products.
The Construction Industries portfolio includes the following product families as well as related parts and work tools: · asphalt pavers · motor graders · track-type tractors (small, medium) · backhoe loaders · pipelayers · track excavators (mini, small · cold planers · road reclaimers medium, large) · compactors · skid steer loaders · wheel excavators · compact track loaders · telehandlers · wheel loaders (compact, small, · forestry machines · track-type loaders medium) · material handlers Resource Industries The Resource Industries segment is primarily responsible for supporting customers using machinery in mining, heavy construction and quarry and aggregates.
The Construction Industries product portfolio includes the following machines and related parts, services and worktools: · asphalt pavers · motor graders · track-type tractors (small, medium) · backhoe loaders · pipelayers · track excavators (mini, small · cold planers · road reclaimers medium, large) · compactors · skid steer loaders · wheel excavators · compact track loaders · telehandlers · wheel loaders (compact, small, · forestry machines · track-type loaders medium) · material handlers Resource Industries The Resource Industries segment is primarily responsible for supporting customers using machinery in mining, heavy construction and quarry and aggregates.
These patents and trademarks are generally considered beneficial to our business. We do not regard our business as being dependent upon any single patent or group of patents. Order Backlog The dollar amount of backlog believed to be firm was approximately $30.0 billion at December 31, 2024 and $27.5 billion at December 31, 2023.
These patents and trademarks are generally considered beneficial to our business. We do not regard our business as being dependent upon any single patent or group of patents. Order Backlog The dollar amount of backlog believed to be firm was approximately $51.2 billion at December 31, 2025 and $30.0 billion at December 31, 2024.
In 2024, the Company achieved a recordable injury frequency rate of 0.43, compared to the 2023 recordable injury frequency rate of 0.40. We strive to continually reduce our recordable injuries utilizing programs that amplify our safety culture globally.
In 2025, the Company achieved a recordable injury frequency rate of 0.41, compared to the 2024 recordable injury frequency rate of 0.43. We strive to continually reduce our recordable injuries utilizing programs that amplify our safety culture globally.
The Energy & Transportation portfolio includes the following products and related parts: • Reciprocating engine powered generator sets • Reciprocating engines, drivetrain and integrated systems and solutions supplied to the industrial industry as well as Caterpillar machinery • Integrated systems and solutions used in the electric power generation industry • Turbines, centrifugal gas compressors and related services • Reciprocating engines, drivetrain and integrated systems and solutions for the marine and oil and gas industries • Diesel-electric locomotives and components and other rail-related products and services Financial Products Segment The business of our Financial Products Segment is primarily conducted by Cat Financial, Insurance Services and their respective subsidiaries and affiliates.
The Power & Energy portfolio includes the following products and related parts: • Reciprocating engine-powered generator sets • Reciprocating engines, drivetrain and integrated systems and solutions supplied to the industrial industry as well as Caterpillar machinery • Integrated systems and solutions used in the electric power generation industry • Turbines, centrifugal gas compressors and turbine-related services • Reciprocating engines, drivetrain and integrated systems and solutions for the marine and oil and gas industries • Electrified powertrain and zero-emission power sources and service solutions • Diesel-electric and hybrid locomotives and components and other rail-related products and services Financial Products Segment The business of our Financial Products Segment is primarily conducted by Cat Financial, Insurance Services and their respective subsidiaries and affiliates.
Our equipment is used to extract and haul copper, iron ore, coal, oil sands, aggregates, gold and other minerals and ores, as well as a variety of heavy construction applications. In addition to equipment, Resource Industries also develops and sells technology products and services to provide customers fleet management systems, equipment management analytics and autonomous machine capabilities.
Our equipment is used to extract and haul copper, iron ore, coal, oil sands, aggregates, gold and other minerals and ores, as well as a variety of heavy construction applications. In addition to equipment, Resource Industries sells technology products and services to provide customers fleet management, equipment management analytics, autonomous machine capabilities, safety services and mining performance solutions.
Ltd. insures its parent and affiliates for general liability, property, auto liability and cargo. It also provides reinsurance to Caterpillar Insurance Company under a quota share reinsurance agreement for its contractual liability and contractors’ equipment programs in the United States. In addition, Caterpillar Insurance Co.
Ltd. insures its parent and affiliates for general liability, property, auto liability and cargo. It also provides reinsurance to Caterpillar Insurance Company under a quota share reinsurance agreement for its Domestic Machine contractual liability policy in the United States. In addition, Caterpillar Insurance Co.
We also sell some of the reciprocating engines manufactured by our subsidiary Perkins Engines Company Limited through its worldwide network of 88 distributors covering 185 countries. We sell the FG Wilson branded electric power generation systems through its worldwide network of 108 distributors covering 158 countries.
We also sell some of the reciprocating engines manufactured by our subsidiary Perkins Engines Company Limited through its worldwide network of 86 distributors covering 183 countries. We sell the FG Wilson branded electric power generation systems through its worldwide network of 108 distributors covering 159 countries.
Full-Time Employees at Year-End 2024 2023 Inside U.S. 51,500 50,800 Outside U.S. 61,400 62,400 Total 112,900 113,200 By Region: North America 52,000 51,200 EAME 15,900 16,600 Latin America 19,700 20,300 Asia/Pacific 25,300 25,100 Total 112,900 113,200 As of December 31, 2024, there were 7,386 hourly production employees in the United States who were covered by collective bargaining agreements with various labor unions, including The United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), The International Association of Machinists and The United Steelworkers.
Full-Time Employees at Year-End 2025 2024 Inside U.S. 51,600 51,500 Outside U.S. 66,400 61,400 Total 118,000 112,900 By Region: North America 52,100 52,000 EAME 16,700 15,900 Latin America 22,300 19,700 Asia/Pacific 26,900 25,300 Total 118,000 112,900 As of December 31, 2025, there were 7,972 hourly production employees in the United States who were covered by collective bargaining agreements with various labor unions, including The United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), The International Association of Machinists and The United Steelworkers.
The Resource Industries product portfolio includes the following machines and related parts and services: · electric rope shovels · large wheel loaders · landfill compactors · draglines · off-highway trucks · soil compactors · hydraulic shovels · wide-body trucks · machinery components · rotary drills · articulated trucks · autonomous ready vehicles and solutions · hard rock vehicles · wheel tractor scrapers · select work tools · large track-type tractors · wheel dozers · safety services and mining performance · large mining trucks · fleet management solutions 2 Table of Contents Energy & Transportation Our Energy & Transportation segment supports customers in oil and gas, power generation, marine, rail and industrial applications, including Caterpillar machines.
The Resource Industries product portfolio includes the following machines and related parts, services and worktools: · electric rope shovels · large wheel loaders · draglines · off-highway trucks · hydraulic shovels · wide-body trucks · rotary drills · articulated trucks · hard rock vehicles · wheel tractor scrapers · large track-type tractors · wheel dozers · large mining trucks · landfill and soil compactors 2 Table of Contents Power & Energy Our Power & Energy segment supports customers in oil and gas, power generation, marine, rail and industrial applications, including Caterpillar machines.
We believe we have the appropriate human capital resources to successfully operate and deliver our enterprise strategy. As of December 31, 2024, we employed about 112,900 full-time persons of whom approximately 61,400 were located outside the United States.
We believe we have the appropriate human capital resources to successfully operate and deliver our enterprise strategy. As of December 31, 2025, we employed about 118,000 full-time persons of whom approximately 66,400 were located outside the United States.
This policy allows the use of foreign currency forward, option and cross currency contracts to offset the risk of currency mismatch between the assets and liabilities, and exchange rate risk associated with future transactions denominated in foreign currencies. Cat Financial provides financing only when certain criteria are met.
This policy allows the use of foreign currency forward, option and cross currency contracts to offset the risk of currency mismatch between the assets and liabilities, and exchange rate risk associated with future transactions denominated in foreign currencies.
In some instances, a separate trademark agreement exists between the company and a dealer. In exchange for these rights, the agreement obligates the dealer to develop and promote the sale of the company’s products to current and prospective customers in the dealer’s service territory.
In exchange for these rights, the agreement obligates the dealer to develop and promote the sale of the company’s products to current and prospective customers in the dealer’s service territory.
Principal global competitors include Cummins Inc., Deutz AG, Rolls-Royce Power Systems AG and Siemens Energy AG. Other competitors, such as Volvo Penta AB, FPT Industrial SpA (Iveco Group), INNIO Group, GE Vernova Inc., Kawasaki Heavy Industries Ltd., MAN Energy Solutions SE (VW), Weichai Power Co., Ltd., and other emerging market competitors compete in certain markets in which Caterpillar competes.
Other competitors, such as Volvo Penta AB, FPT Industrial SpA (Iveco Group), INNIO Group, GE Vernova Inc., Kawasaki Heavy Industries Ltd., Everllence SE (formerly MAN Energy Solutions SE), Weichai Power Co., Ltd., and other emerging market competitors compete in certain markets in which Caterpillar competes.
Overview With 2024 sales and revenues of $64.809 billion, Caterpillar 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.
Overview With 2025 sales and revenues of $67.589 billion, Caterpillar Inc. is shaping the future as the world’s leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.
Cat Financial finances a significant portion of Caterpillar dealers’ sales and inventory of Caterpillar equipment throughout the world. Cat Financial’s competitive position is improved by marketing programs offered in conjunction with Caterpillar and/or Caterpillar dealers.
Cat Financial typically maintains a security interest in retail-financed equipment and generally requires physical damage insurance coverage on financed equipment. Cat Financial finances a significant portion of Caterpillar dealers’ sales and inventory of Caterpillar equipment throughout the world. Cat Financial’s competitive position is improved by marketing programs offered in conjunction with Caterpillar and/or Caterpillar dealers.
Under these programs, Caterpillar, or the dealer, funds an amount at the outset of the transaction, which Cat Financial then recognizes as revenue over the term of the financing.
Under these programs, Caterpillar, or the dealer, funds an amount at the outset of the transaction, which Cat Financial then recognizes as revenue over the term of the financing. We believe that these marketing programs provide Cat Financial a significant competitive advantage in financing Caterpillar products.
Caterpillar offers a broad product range and services to deliver comprehensive solutions for our customers. We develop and manufacture high productivity equipment for both surface and underground mining operations around the world, as well as provide hydraulic systems, electronics and software for Caterpillar machines and engines.
Caterpillar offers a broad product range and services to deliver comprehensive solutions for our customers. We develop and manufacture high productivity equipment for both surface and underground mining operations around the world, as well as provide select work tools, machinery components, wear and maintenance components and related parts.
Caterpillar Insurance Company is licensed to conduct property and casualty insurance business in 50 states, the District of Columbia and Guam and, as such, is also regulated in those jurisdictions.
Caterpillar Insurance Company, a wholly owned subsidiary of Caterpillar Insurance Holdings Inc., is a U.S. insurance company domiciled in Missouri and primarily regulated by the Missouri Department of Insurance. Caterpillar Insurance Company is licensed to conduct property and casualty insurance business in 50 states, the District of Columbia and Guam and, as such, is also regulated in those jurisdictions.
There are also three independent dealers in the Southern Region of Japan. For Caterpillar-branded products, the company’s relationship with each of its independent dealers is memorialized in standard sales and service agreements. Pursuant to these agreements, the company grants the dealer the right to purchase and sell its products and to service the products in a specified geographic service territory.
There are also three independent dealers in the Southern Region of Japan. 6 Table of Contents For Caterpillar-branded products, the company’s relationship with each of its independent dealers is memorialized in standard sales and service agreements.
Financial Products information relates to the financing to customers and dealers for the purchase and lease of Caterpillar and other equipment.
Financial Products — 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.
Cat Financial's retail leases include: • Finance (non-tax) leases, where the lessee for tax purposes is considered to be the owner of the equipment during the term of the lease, that either require or allow the customer to purchase the equipment for a fixed price at the end of the term. • Tax leases that are classified as either operating or finance leases for financial accounting purposes, depending on the characteristics of the lease.
Non-tax leases are finance leases 3 Table of Contents that either require or allow the customer to purchase the equipment for a fixed price at the end of the term and the lessee for tax purposes is considered the owner of the equipment during the term of the lease.
For more information regarding match funding, please see Note 4 — “Derivative financial instruments and risk management” of Part II, Item 8 "Financial Statements and Supplementary Data." See also the risk factors associated with our financial products business included in Item 1A. of this Form 10-K.
For more information regarding match funding, please see Note 4 — “Derivative financial instruments and risk management” of Part II, Item 8 "Financial Statements and Supplementary Data." See also the risk factors associated with our financial products business included in Item 1A. of this Form 10-K. 4 Table of Contents In managing foreign currency risk for Cat Financial’s operations, the 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.
The company establishes prices to dealers after 6 Table of Contents receiving input from dealers on transactional pricing in the marketplace. The company also agrees to defend its intellectual property and to provide warranty and technical support to the dealer. The agreement further grants the dealer a non-exclusive license to use the company’s trademarks, service marks and brand names.
The company also agrees to defend its intellectual property and to provide warranty and technical support to the dealer. The agreement further grants the dealer a non-exclusive license to use the company’s trademarks, service marks and brand names. In some instances, a separate trademark agreement exists between the company and a dealer.
For over 40 years, Cat Financial has been providing financing for Caterpillar products, contributing to our knowledge of asset values, industry trends, financing structures and customer needs.
A significant portion of Cat Financial’s activity is conducted in North America, and Cat Financial has additional offices and subsidiaries in Latin America, Asia/Pacific, Europe and Africa. For over 40 years, Cat Financial has been providing financing for Caterpillar products, contributing to our knowledge of asset values, industry trends, financing structures and customer needs.
Compared with year-end 2023, the order backlog increased in Energy & Transportation, while Construction Industries and Resource Industries decreased. Of the total backlog at December 31, 2024, approximately $8.0 billion was not expected to be filled in 2025.
Compared with year-end 2024, the order backlog increased across the primary segments, with the largest increase in Power & Energy. Of the total backlog at December 31, 2025, approximately $19.3 billion was not expected to be filled in 2026.
Cat Financial works with the broader Caterpillar organization to provide a broad array of financial merchandising programs to compete around the world. The financial results of Cat Financial are largely dependent upon the ability of Caterpillar dealers to sell equipment and customers’ willingness to enter into financing or leasing agreements.
Cat Financial’s ability to comply with these and other governmental and legal requirements and restrictions affects its operations. The financial results of Cat Financial are largely dependent upon the ability of Caterpillar dealers to sell equipment and customers’ willingness to enter into financing or leasing agreements.
The various financing plans offered by Cat Financial are designed to support sales of Caterpillar products and services and generate financing income for Cat Financial. A significant portion of our activity is conducted in North America, and we have additional offices and subsidiaries in Latin America, Asia/Pacific, Europe and Africa.
The various financing plans offered by Cat Financial are designed to support sales of Caterpillar products and services and generate financing income for Cat Financial. In addition, Cat Financial purchases short-term wholesale trade receivables from Caterpillar.
Machinery, Energy & Transportation — Caterpillar Inc. and its subsidiaries, excluding Financial Products. Machinery, Energy & Transportation information relates to the design, manufacturing and marketing of our products. 2. Financial Products — Our finance and insurance subsidiaries, primarily Caterpillar Financial Services Corporation (Cat Financial) and Caterpillar Insurance Holdings Inc. (Insurance Services).
Caterpillar continues to operate through five operating segments, four of which are reportable segments and are described below. Categories of Business Organization 1. Machinery, Power & Energy — Caterpillar Inc. and its subsidiaries, excluding Financial Products. Machinery, Power & Energy information relates to the design, manufacturing and marketing of our products. 2.
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The company principally operates through its three primary segments - Construction Industries, Resource Industries and Energy & Transportation - and also provides financing and related services through its Financial Products segment. Caterpillar is also a leading U.S. exporter. Through a global network of independent dealers and direct sales of certain products, Caterpillar builds long-term relationships with customers around the world.
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Backed by one of the largest independent global dealer networks and financing services through Cat Financial, the company’s primary business segments: Power & Energy, Construction Industries and Resource Industries are solving customers’ toughest challenges through commercial excellence and advanced technology, driven by a highly skilled, dedicated global team.
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Enterprise Strategy Our company strategy, rolled out in 2017, reflects our legacy and our continuing commitment to meet the needs of our customers and the communities in which we live and work.
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Enterprise Strategy In 2025, our company introduced a revised strategy anchored by a new mission statement: Solving our customers' toughest challenges. Coupled with our purpose, we build a better, more sustainable world, this strategy guides how we operate with our global team and engage with customers, dealers and suppliers.
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United by our Values, Caterpillar employees around the world share a focused view of our business through the Operating & Execution Model, through which we are making strategic choices today to create long-term profitable growth. Since 2017, we focused on three strategic areas: Expanded Offerings, Operational Excellence and Services.
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The refreshed strategy establishes three profitable growth pillars focused on addressing customers' needs; Commercial Excellence, Advanced Technology Leader, and Transform How We Work. These pillars are built upon our longstanding foundation of Operational Excellence and guided by the Operating & Execution model. We also re-enforced our commitment to our Values in Action - Safety, Integrity, Teamwork, Excellence and Commitment.
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In 2022, we updated our strategy to also include Sustainability as a strategic area. For nearly 100 years, our longstanding commitment to sustainability has inspired us to set and achieve meaningful environmental, social and governance goals. It’s also allowed us to develop innovative products, technologies and services to support our customers on their sustainability journey.
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Principal global competitors include Cummins Inc., Deutz AG, Rolls-Royce Power Systems AG and Siemens Energy AG.
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The addition of sustainability as a strategic area, together with operational excellence, expanded offerings and services, highlights our work to help customers build a better, more sustainable world. Currently, we have five operating segments, of which four are reportable segments and are described below. Categories of Business Organization 1.
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Cat Financial offers the following financing products to customers: • Loans – Cat Financial offers loans that allow customers to purchase equipment with structured payments over time.
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Retail financing is primarily comprised of installment sale contracts and other equipment-related loans, working capital loans, finance leases, operating leases, and revolving charge accounts. Wholesale financing to Caterpillar dealers consists primarily of inventory and rental fleet financing. In addition, Cat Financial purchases short-term wholesale trade receivables from Caterpillar.
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These loans are typically secured by the equipment purchased. • Revolving Charge Accounts – Cat Financial offers revolving charge accounts that primarily allow customers to pay for parts, services and rentals at participating Caterpillar dealers. • Leases – Cat Financial offers non-tax finance leases and tax leases which may be classified as either finance or operating leases for accounting purposes based on the characteristics of the lease.
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Cat Financial’s ability to comply with these and other governmental and legal requirements and restrictions affects its operations. 3 Table of Contents Cat Financial’s retail loans include: • Loans that allow customers and dealers to use their Caterpillar equipment or other assets as collateral to obtain financing. • Installment sale contracts, which are equipment loans that enable customers to purchase equipment with structured payments over time.
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Tax leases are either operating or finance leases for accounting purposes, and for tax purposes, we are considered the owner of the equipment. At the end of tax leases, Lessees have the option to return the equipment or purchase it at market value.
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For tax purposes, we are considered the owner of the equipment. Cat Financial also purchases short-term receivables from Caterpillar. Cat Financial’s wholesale loans and leases include inventory/rental programs, which provide assistance to dealers by financing their new Caterpillar inventory and rental fleets.
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Lessees are obligated to maintain the equipment and insure it against damage and are responsible for payment of property and sales taxes, maintenance and other operating costs.
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In managing foreign currency risk for Cat Financial’s operations, the 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.
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Cat Financial offers the following financing products to dealers: • Wholesale Financing – Cat Financial provides dealers with inventory and rental fleet financing. • Retail Loans – Cat Financial makes loans to certain dealers for working capital and other purposes. These loans are typically secured by dealership assets.
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We believe that these marketing programs provide Cat Financial a significant competitive advantage in financing Caterpillar products. 4 Table of Contents Caterpillar Insurance Company, a wholly owned subsidiary of Caterpillar Insurance Holdings Inc., is a U.S. insurance company domiciled in Missouri and primarily regulated by the Missouri Department of Insurance.
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Cat Financial’s financing products may be offered at fixed or floating interest rates. Cat Financial typically maintains a security interest in retail-financed equipment and generally requires physical damage insurance coverage on financed equipment.
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Pursuant to these agreements, the company grants the dealer the right to purchase and sell its products and to service the products in a specified geographic service territory. The company establishes prices to dealers after receiving input from dealers on transactional pricing in the marketplace.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe employ a liability-driven investment strategy, where the interest rate sensitivity of the pension investments and pension obligations are aligned to reduce funded status volatility. Significant adverse changes in credit or capital markets could result in actual rates of return on pension investments being materially lower than projected and result in increased contribution requirements.
Biggest changeSignificant adverse changes in credit or capital markets could result in actual rates of return on pension investments being materially lower than projected and result in increased contribution requirements. These factors could increase our payment obligations under the plans and, as a result, adversely affect our business and overall financial condition.
Cat Financial has also agreed under certain of these agreements 16 Table of Contents not to exceed a certain leverage ratio (consolidated debt to consolidated net worth, 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), to maintain a minimum interest coverage 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) and not to terminate, amend or modify its support agreement with us.
Cat Financial has also agreed under certain of these agreements not to exceed a certain leverage ratio (consolidated debt to consolidated net worth, 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), to maintain a minimum interest coverage 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) and not to terminate, amend or modify its support agreement with us.
For example, a government’s adoption of “buy national” policies or retaliation by another government against such policies could have a negative impact on our results of operations. 17 Table of Contents We may incur additional tax expense or become subject to additional tax exposure. We are subject to income taxes in the United States and numerous other jurisdictions.
For example, a government’s adoption of “buy national” policies or retaliation by another government against such policies could have a negative impact on our results of operations. We may incur additional tax expense or become subject to additional tax exposure. We are subject to income taxes in the United States and numerous other jurisdictions.
Should known or unknown risks or uncertainties materialize or underlying assumptions prove inaccurate, actual results could materially differ from past results and/or those anticipated, estimated or projected. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.
Should known or unknown risks or uncertainties materialize or underlying assumptions prove inaccurate, actual results could materially differ from past results and/or those anticipated, estimated or projected. 9 Table of Contents We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.
Increases in the prices of such commodities would increase our costs, negatively impacting our business, results of operations and financial 10 Table of Contents condition if we are unable to fully offset the effect of these increased costs through price increases, productivity improvements, cost reduction programs or hedging programs.
Increases in the prices of such commodities would increase our costs, negatively impacting our business, results of operations and financial condition if we are unable to fully offset the effect of these increased costs through price increases, productivity improvements, cost reduction programs or hedging programs.
In addition to the factors discussed elsewhere in this report, the following are some of the important factors that, individually or in the aggregate, we believe could make our actual results differ materially from those described in any forward-looking 9 Table of Contents statements.
In addition to the factors discussed elsewhere in this report, the following are some of the important factors that, individually or in the aggregate, we believe could make our actual results differ materially from those described in any forward-looking statements.
Violations may also disrupt our business, and may result in an adverse effect on our reputation, business and results of operations or financial condition. International trade policies may impact demand for our products and our competitive position.
Violations may also disrupt our business, and may result in an adverse effect on our reputation, business and results of operations or financial condition. 17 Table of Contents International trade policies may impact demand for our products and our competitive position.
Operating in different regions and countries exposes us to numerous risks, including: • multiple and potentially conflicting laws, regulations and policies that are subject to change; • imposition of currency restrictions, restrictions on repatriation of earnings or other restraints; • imposition of new or additional tariffs or quotas; • withdrawal from or modification of trade agreements or the negotiation of new trade agreements; • imposition of new or additional trade and economic sanctions laws imposed by the U.S. or foreign governments; • war or acts of terrorism; and • political and economic instability or civil unrest that may severely disrupt economic activity in affected countries. 11 Table of Contents The occurrence of one or more of these events may negatively impact our business, results of operations and financial condition.
Operating in different regions and countries exposes us to numerous risks, including: • multiple and potentially conflicting laws, regulations and policies that are subject to change; • imposition of currency restrictions, restrictions on repatriation of earnings or other restraints; • imposition of new or additional tariffs or quotas; 11 Table of Contents • withdrawal from or modification of trade agreements or the negotiation of new trade agreements; • imposition of new or additional trade and economic sanctions laws imposed by the U.S. or foreign governments; • war or acts of terrorism; and • political and economic instability or civil unrest that may severely disrupt economic activity in affected countries.
Exchange controls may limit our ability to convert foreign currencies into U.S. dollars or to remit dividends and other payments by our foreign subsidiaries or businesses located in or conducted within a country imposing controls. Currency devaluations result in a diminished value of funds denominated in the currency of the country instituting the devaluation.
Exchange controls may limit our ability to convert foreign currencies into U.S. dollars or to remit dividends and other payments by our foreign subsidiaries or businesses located in or conducted within a country imposing controls.
LEGAL & REGULATORY RISKS Our global operations are subject to a wide range of trade and anti-corruption laws and regulations. Due to the international scope of our operations, we are subject to a complex system of import- and export-related laws and regulations.
Due to the international scope of our operations, we are subject to a complex system of import- and export-related laws and regulations.
Restrictive covenants in our debt agreements could limit our financial and operating flexibility. We maintain a number of credit facilities to support general corporate purposes (facilities) and have issued debt securities to manage liquidity and fund operations (debt securities).
We maintain a number of credit facilities to support general corporate purposes (facilities) and have issued debt securities to manage liquidity and fund operations (debt securities). The agreements relating to a number of the facilities and the debt securities contain certain restrictive covenants applicable to us and certain subsidiaries, including Cat Financial.
OPERATIONAL RISKS The success of our business depends on our ability to develop, produce and market quality products that meet our customers’ needs. Our business relies on continued global demand for our brands and products. To achieve business goals, we must develop and sell products that appeal to our dealers, OEMs and end-user customers.
The occurrence of one or more of these events may negatively impact our business, results of operations and financial condition. OPERATIONAL RISKS The success of our business depends on our ability to develop, produce and market quality products that meet our customers’ needs. Our business relies on continued global demand for our brands and products.
Commodity price changes, material price increases, fluctuations in demand for our products and services, significant disruptions to our supply chains or significant shortages of labor and material may adversely impact our financial results or our ability to meet commitments to customers. We are a significant user of steel and many other commodities required for the manufacture of our products.
The adverse effects of any such catastrophic event would be exacerbated if experienced at the same time as another unexpected and adverse event. 10 Table of Contents Commodity price changes, material price increases, fluctuations in demand for our products and services, significant disruptions to our supply chains or significant shortages of labor and material may adversely impact our financial results or our ability to meet commitments to customers.
Removed
The adverse effects of any such catastrophic event would be exacerbated if experienced at the same time as another unexpected and adverse event.
Added
We are a significant user of steel and many other commodities required for the manufacture of our products.
Removed
The agreements relating to a number of the facilities and the debt securities contain certain restrictive covenants applicable to us and certain subsidiaries, including Cat Financial.
Added
To achieve business goals, we must develop and sell products that appeal to our dealers, OEMs and end-user customers.
Removed
These factors could significantly increase our payment obligations under the plans and, as a result, adversely affect our business and overall financial condition.
Added
Currency devaluations result in a diminished value of funds denominated in the currency of the country instituting the devaluation. 16 Table of Contents Restrictive covenants in our debt agreements could limit our financial and operating flexibility.
Added
We employ a liability-driven investment strategy, where the interest rate sensitivity of the pension investments and pension obligations are aligned to reduce funded status volatility. LEGAL & REGULATORY RISKS Our global operations are subject to a wide range of trade and anti-corruption laws and regulations.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

7 edited+0 added−1 removed16 unchanged
Biggest changeWhile various procedures and controls have been and are being utilized to mitigate such risks, there can be no guarantee that the actions and controls we have implemented and are implementing, or which we cause or have caused third-party service providers to implement, will be sufficient to protect and mitigate associated risks to our systems, information or other property.
Biggest changeWhile various procedures and controls have been and are being utilized to mitigate such risks, there can be no guarantee that the actions and controls we have implemented and are implementing, or which we cause or have caused third-party service providers to implement, will be sufficient to protect and mitigate associated risks to our systems, information or other property. 20 Cybersecurity Governance Caterpillar’s board has oversight for risk management with a focus on the most significant risks facing the Company, including strategic, operational, financial and legal compliance risks.
The board’s risk oversight process builds upon management’s risk assessment and mitigation processes, which include an enterprise risk management program of which our cybersecurity processes are an integral component. 20 The board implements its risk oversight function both as a board and through delegation to board committees, which meet regularly and report back to the board.
The board’s risk oversight process builds upon management’s risk assessment and mitigation processes, which include an enterprise risk management program of which our cybersecurity processes are an integral component. The board implements its risk oversight function both as a board and through delegation to board committees, which meet regularly and report back to the board.
We provide extensive specialized role-based training to technical professionals in cybersecurity, secure application development, and other focus areas. We also conduct periodic tabletop exercises to validate our preparation for cyber events.
We provide specialized role-based training to technical professionals in cybersecurity, secure application development, and other focus areas. We also conduct periodic tabletop exercises to validate our preparation for cyber events.
Our cybersecurity program is overseen by our CIO, who has been a Caterpillar employee for over twenty-five years. Prior to her current appointment as our CIO in September 2020, she was the Chief Information Officer for the Company’s Financial Products Division.
Our cybersecurity program is overseen by our CIO, who has been a Caterpillar employee for over twenty-six years. Prior to her current appointment as our CIO in September 2020, she was the Chief Information Officer for the Company’s Financial Products Division.
Our cybersecurity program has implemented a governance structure and process to identify, assess, manage, mitigate, respond to and report on cybersecurity risks. We utilize cybersecurity policies and frameworks based on industry and government standards.
Our cybersecurity program maintains a governance structure and process to identify, assess, manage, mitigate, respond to and report on cybersecurity risks. We utilize cybersecurity policies and frameworks based on industry and government standards.
We have implemented a cybersecurity awareness program which covers topics such as phishing, social networking safety, password security and mobile device usage. We have mandatory training in the areas of cybersecurity, privacy, and confidential information handling. We also conduct regular phishing training and simulations for our employees and contractors.
We have implemented a cybersecurity awareness program which covers topics such as phishing, social networking safety, password security, mobile device usage and potential risks associated with emerging technologies. We have mandatory training in the areas of cybersecurity, privacy, and confidential information handling. We also conduct regular phishing training and simulations for our employees and contractors.
This team manages the Company’s global IT systems, IT risk management, cybersecurity, global infrastructure and IT transformations.
This team manages the Company’s global IT systems, IT risk management, cybersecurity, global infrastructure and IT transformations. 21 Table of Contents
Removed
Cybersecurity Governance Caterpillar’s board has oversight for risk management with a focus on the most significant risks facing the Company, including strategic, operational, financial and legal compliance risks.

Item 2. Properties

Properties — owned and leased real estate

8 edited+0 added−0 removed5 unchanged
Biggest changeConstruction Industries Arkansas: North Little Rock Brazil: Campo Largo, Piracicaba Georgia: Athens China: Suzhou, Wujiang, Xuzhou, Qingzhou Illinois: Decatur, East Peoria France: Grenoble, Echirolles Kansas: Wamego Hungary: Godollo Minnesota: Brooklyn Park India: Hosur, Thiruvallur North Carolina: Clayton, Sanford Italy: Minerbio, Cattolica Texas: Victoria Japan: Akashi Mexico: Torreon Netherlands: Den Bosch Poland: Janow, Sosnowiec Thailand: Rayong United Kingdom: Desford, Stockton Resource Industries Illinois: Decatur, East Peoria China: Qingzhou, Wuxi South Carolina: Sumter India: Thiruvallur Texas: Denison Indonesia: Batam Wisconsin: South Milwaukee Mexico: Acuna, Monterrey, Reynosa Thailand: Rayong United Kingdom: Peterlee Energy & Transportation Alabama: Albertville, Montgomery Australia: Cardiff, Perth, Redbank, Revesby California: San Diego Brazil: Curitiba, Piracicaba, Sete Lagoas Georgia: Griffin, Patterson China : Tianjin, Wuxi Illinois: East Peoria, Mossville, Mapleton, Pontiac Czech Republic: Zatec, Zebrak Indiana: Lafayette, Muncie Germany: Kiel, Mannheim, Rostock Kentucky: Decoursey, Mayfield India: Aurangabad, Hosur Oklahoma: Broken Arrow Italy : Pistoia North Carolina: Winston-Salem Mexico: San Luis Potosi, Tijuana Texas: Channelview, DeSoto, Fort Worth, Mabank, San Antonio, Schertz, Seguin, Sherman United Kingdom: Larne, Peterborough, Sandiacre, South Queensferry, Springvale, Stafford, Wimborne 23 Table of Contents
Biggest changeConstruction Industries Arkansas: North Little Rock Brazil: Campo Largo, Piracicaba Georgia: Athens China: Suzhou, Wujiang, Xuzhou, Qingzhou Illinois: Decatur, East Peoria France: Grenoble, Echirolles Minnesota: Brooklyn Park Hungary: Godollo North Carolina: Clayton, Sanford India: Hosur, Thiruvallur Texas: Victoria Italy: Minerbio, Cattolica Japan: Akashi Mexico: Torreon Netherlands: Den Bosch Poland: Janow, Sosnowiec Thailand: Rayong United Kingdom: Desford, Stockton Resource Industries Illinois: Decatur, East Peoria, Mapleton, Mossville Brazil: Piracicaba China: Qingzhou, Tianjin, Wuxi, Xuzhou Michigan: Menominee India : Thiruvallur Missouri: Boonville, West Plains Indonesia: Batam North Carolina: Goldsboro Italy: Atessa, Bazzano, Frosinone South Carolina: Sumter Japan: Sagami Texas: Denison Mexico: Acuna, Monterrey, Ramos Arizpe, Reynosa Wisconsin: South Milwaukee South Korea: Pyeongtaek Thailand: Rayong United Kingdom: Leicester, Peterlee, Skinningrove Power & Energy Alabama: Albertville, Montgomery Australia: Cardiff, Perth, Redbank, Revesby California: San Diego Brazil: Curitiba, Piracicaba, Sete Lagoas Georgia: Griffin, Patterson China : Tianjin, Wuxi Illinois: East Peoria, Mossville, Mapleton, Pontiac Czech Republic: Zatec, Zebrak Germany: Kiel, Mannheim, Rostock Indiana: Lafayette, Muncie India: Aurangabad, Hosur Kansas: Wamego Italy : Pistoia Kentucky: Decoursey, Mayfield Mexico: Monterrey, San Luis Potosi, Tijuana, Torreon Missouri: Kansas City North Carolina: Winston-Salem United Kingdom: Larne, Peterborough, Sandiacre, South Queensferry, Springvale, Stafford, Wimborne Oklahoma: Broken Arrow Texas: Channelview, DeSoto, Fort Worth, Mabank, San Antonio, Schertz, Seguin, Sherman 24 Table of Contents
Component manufacturing is reported in the All Other Segment and is conducted primarily at facilities in the following locations: East Peoria, Illinois; Mapleton, Illinois; Peoria, Illinois; Bogor, Indonesia; Menominee, Michigan; Boonville, Missouri; West Plains, Missouri; Goldsboro, North Carolina; Sumter, South Carolina; Tianjin, China; Xuzhou, China; Atessa, Italy; Bazzano, Italy; Frosinone, Italy; San Eusebio, Italy; Ramos Arizpe, Mexico; Pyeongtaek, South Korea; and Skinningrove, United Kingdom.
Component manufacturing is reported in the All Other Segment and is conducted primarily at facilities in the following locations: East Peoria, Illinois; Mapleton, Illinois; Peoria, Illinois; Menominee, Michigan; Boonville, Missouri; West Plains, Missouri; Goldsboro, North Carolina; Sumter, South Carolina; Tianjin, China; Xuzhou, China; Atessa, Italy; Bazzano, Italy; Frosinone, Italy; San Eusebio, Italy; Ramos Arizpe, Mexico; Pyeongtaek, South Korea; and Skinningrove, United Kingdom.
The research and development activities carried on at our Technical Centers in Aurora and Mossville, Illinois involve products for Construction Industries, Resource Industries and Energy & Transportation. We believe the properties we own to be generally well maintained and adequate for present use. Through planned capital expenditures, we expect these properties to remain adequate for future needs.
The research and development activities carried on at our Technical Centers in Aurora and Mossville, Illinois involve products for Construction Industries, Resource Industries and Power & Energy. We believe the properties we own to be generally well maintained and adequate for present use. Through planned capital expenditures, we expect these properties to remain adequate for future needs.
In addition, several plants reported in our financial statements under the All Other Segment are involved in the manufacturing of components that are used in the assembly of products for more than one business segment. Caterpillar’s parts distribution centers are involved in the storage and distribution of parts for Construction Industries, Resource Industries and Energy & Transportation.
In addition, several plants reported in our financial statements under the All Other Segment are involved in the manufacturing of components that are used in the assembly of products for more than one business segment. Caterpillar’s parts distribution centers are involved in the storage and distribution of parts for Construction Industries, Resource Industries and Power & Energy.
Remanufacturing and Components Remanufacturing of our products is reported in our Energy & Transportation segment and is conducted primarily at the facilities in the following locations: Franklin, Indiana; Bogor, Indonesia; Corinth, Mississippi; Prentiss County, Mississippi; West Fargo, North Dakota; Piracicaba, Brazil; Shanghai, China; and Nuevo Laredo, Mexico.
Remanufacturing and Components Remanufacturing of our products is reported in our Power & Energy segment and is conducted primarily at the facilities in the following locations: Franklin, Indiana; Bogor, Indonesia; Corinth, Mississippi; Prentiss County, Mississippi; West Fargo, North Dakota; Piracicaba, Brazil; Shanghai, China; and Nuevo Laredo, Mexico.
Item 2. Properties. General Information Caterpillar’s operations are highly integrated. Although the majority of our plants are involved primarily in production relating to our Construction Industries, Resource Industries or Energy & Transportation segments, several plants are involved in manufacturing relating to more than one business segment.
Item 2. Properties. General Information Caterpillar’s operations are highly integrated. Although the majority of our plants are involved primarily in production relating to our Construction Industries, Resource Industries or Power & Energy segments, several plants are involved in manufacturing relating to more than one business segment.
We also lease or own other facilities that support our remanufacturing and component manufacturing activities. Manufacturing Manufacturing of products for our Construction Industries, Resource Industries and Energy & Transportation segments is conducted primarily at the locations listed below. These facilities are believed to be suitable for their intended purposes, with adequate capacities for current and projected needs for existing products.
We also lease or own other facilities that support our remanufacturing and component manufacturing activities. Manufacturing Manufacturing of products for our Construction Industries, Resource Industries and Power & Energy segments is conducted primarily at the locations listed below.
Our principal manufacturing facilities include those used by the following segments in the following locations: 22 Table of Contents Segment U.S. Facilities Facilities Outside the U.S.
These facilities are believed to be suitable for their intended purposes, with adequate capacities for current and projected needs for existing products. 23 Table of Contents Our principal manufacturing facilities include those used by the following segments in the following locations: Segment U.S. Facilities Facilities Outside the U.S.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−0 removed2 unchanged
Biggest changeNumber of Shareholders: Shareholders of record at the end of 2024 totaled 20,191, compared with 21,217 at the end of 2023. 24 Table of Contents Performance Graph: Total Cumulative Shareholder Return for Five-Year Period Ending December 31, 2024 The graph below shows the cumulative shareholder return assuming an investment of $100 on December 31, 2019, and reinvestment of dividends issued thereafter. 2019 2020 2021 2022 2023 2024 Caterpillar Inc. $ 100.00 $ 126.97 $ 147.22 $ 174.60 $ 219.91 $ 274.14 S&P 500 $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 S&P 500 Machinery $ 100.00 $ 123.42 $ 148.30 $ 150.38 $ 180.74 $ 210.36 S&P 500 Capital Goods $ 100.00 $ 106.78 $ 127.01 $ 126.73 $ 151.22 $ 185.50 25 Table of Contents Non-U.S.
Biggest changeNumber of Shareholders: Shareholders of record at the end of 2025 totaled 19,227, compared with 20,191 at the end of 2024. 25 Table of Contents Performance Graph: Total Cumulative Shareholder Return for Five-Year Period Ending December 31, 2025 The graph below shows the cumulative shareholder return assuming an investment of $100 on December 31, 2020, and reinvestment of dividends issued thereafter. 2020 2021 2022 2023 2024 2025 Caterpillar Inc. $ 100.00 $ 115.95 $ 137.52 $ 173.20 $ 215.91 $ 346.12 S&P 500 $ 100.00 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 S&P 500 Machinery $ 100.00 $ 120.16 $ 121.84 $ 146.44 $ 170.44 $ 209.61 S&P 500 Capital Goods $ 100.00 $ 118.95 $ 118.69 $ 141.62 $ 173.73 $ 219.46 26 Table of Contents Non-U.S.
Employee Stock Purchase Plans As of December 31, 2024, we had 38 employee stock purchase plans (the “EIP Plans”) administered outside the United States for our non-U.S. employees, which had approximately 16,000 active participants in the aggregate.
Employee Stock Purchase Plans As of December 31, 2025, we had 38 employee stock purchase plans (the “EIP Plans”) administered outside the United States for our non-U.S. employees, which had approximately 18,000 active participants in the aggregate.
During the fourth quarter of 2024, approximately 57,000 shares of Caterpillar common stock were purchased by the EIP Plans pursuant to the terms of such plans.
During the fourth quarter of 2025, approximately 40,000 shares of Caterpillar common stock were purchased by the EIP Plans pursuant to the terms of such plans.
As of December 31, 2024, approximately $20.1 billion remained available under the 2024 and 2022 Authorizations. 2 Includes shares acquired pursuant to the accelerated share repurchase agreements entered into during the first and second quarters of 2024, each of which settled in October 2024. Item 6. [Reserved] 26 Table of Contents
As of March 31, 2025, the 2022 Authorization was fully utilized and as of December 31, 2025, approximately $14.9 billion remained available under the 2024 Authorization. 2 Includes shares acquired pursuant to the accelerated share repurchase agreements entered into during the first quarter of 2025, which settled in October 2025. Item 6. [Reserved] 27 Table of Contents
Issuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share 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 October 1-31, 2024 4,152,554 $ 344.55 4,152,554 2 $ 20.538 November 1-30, 2024 510,721 $ 391.52 510,721 $ 20.338 December 1-31, 2024 549,782 $ 381.95 549,782 $ 20.128 Total 5,213,057 $ 353.10 5,213,057 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.
Issuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share 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 October 1-31, 2025 2,693,976 $ 385.64 2,693,976 2 $ 15.141 November 1-30, 2025 171,407 $ 559.93 171,407 $ 15.045 December 1-31, 2025 183,577 $ 588.28 183,577 $ 14.937 Total 3,048,960 $ 407.64 3,048,960 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.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

155 edited+41 added−32 removed75 unchanged
Biggest changePages 50 to 52 reconcile ME&T and Financial Products to Caterpillar Inc. consolidated financial information. 49 Table of Contents Supplemental Data for Results of Operations For The Years Ended December 31, Supplemental consolidating data Consolidated Machinery, Energy & Transportation Financial Products Consolidating Adjustments (Millions of dollars) 2024 2023 2022 2024 2023 2022 2024 2023 2022 2024 2023 2022 Sales and revenues: Sales of Machinery, Energy & Transportation $ 61,363 $ 63,869 $ 56,574 $ 61,363 $ 63,869 $ 56,574 $ — $ — $ — $ — $ — $ — Revenues of Financial Products 3,446 3,191 2,853 — — — 4,212 3,927 3,376 (766) 1 (736) 1 (523) 1 Total sales and revenues 64,809 67,060 59,427 61,363 63,869 56,574 4,212 3,927 3,376 (766) (736) (523) Operating costs: Cost of goods sold 40,199 42,767 41,350 40,206 42,776 41,356 — — — (7) 2 (9) 2 (6) 2 Selling, general and administrative expenses 6,667 6,371 5,651 5,881 5,696 4,999 786 704 672 — (29) 2 (20) 2 Research and development expenses 2,107 2,108 1,814 2,107 2,108 1,814 — — — — — — Interest expense of Financial Products 1,286 1,030 565 — — — 1,286 1,032 565 — (2) 2 — Goodwill impairment charge — — 925 — — 925 — — — — — — Other operating (income) expenses 1,478 1,818 1,218 71 630 47 1,535 1,268 1,249 (128) 2 (80) 2 (78) 2 Total operating costs 51,737 54,094 51,523 48,265 51,210 49,141 3,607 3,004 2,486 (135) (120) (104) Operating profit 13,072 12,966 7,904 13,098 12,659 7,433 605 923 890 (631) (616) (419) Interest expense excluding Financial Products 512 511 443 518 511 444 — — — (6) 3 — (1) 3 Other income (expense) 813 595 1,291 728 340 1,374 85 (16) (26) — 271 4 (57) 4 Consolidated profit before taxes 13,373 13,050 8,752 13,308 12,488 8,363 690 907 864 (625) (345) (475) Provision (benefit) for income taxes 2,629 2,781 2,067 2,663 2,560 1,858 (34) 221 209 — — — Profit of consolidated companies 10,744 10,269 6,685 10,645 9,928 6,505 724 686 655 (625) (345) (475) Equity in profit (loss) of unconsolidated affiliated companies 44 63 19 44 67 26 — — — — (4) 5 (7) 5 Profit of consolidated and affiliated companies 10,788 10,332 6,704 10,689 9,995 6,531 724 686 655 (625) (349) (482) Less: Profit (loss) attributable to noncontrolling interests (4) (3) (1) (5) (4) (1) 1 5 7 — (4) 6 (7) 6 Profit 7 $ 10,792 $ 10,335 $ 6,705 $ 10,694 $ 9,999 $ 6,532 $ 723 $ 681 $ 648 $ (625) $ (345) $ (475) 1 Elimination of Financial Products' revenues earned from ME&T. 2 Elimination of net expenses recorded between ME&T and 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. 50 Table of Contents Supplemental Data for Financial Position At December 31, Supplemental consolidating data Consolidated Machinery, Energy & Transportation Financial Products Consolidating Adjustments (Millions of dollars) 2024 2023 2024 2023 2024 2023 2024 2023 Assets Current assets: Cash and cash equivalents $ 6,889 $ 6,978 $ 6,165 $ 6,106 $ 724 $ 872 $ — $ — Receivables - trade and other 9,282 9,310 3,463 3,971 688 570 5,131 1,2 4,769 1,2 Receivables - finance 9,565 9,510 — — 14,957 14,499 (5,392) 2 (4,989) 2 Prepaid expenses and other current assets 3,119 4,586 2,872 4,327 401 341 (154) 3 (82) 3 Inventories 16,827 16,565 16,827 16,565 — — — — Total current assets 45,682 46,949 29,327 30,969 16,770 16,282 (415) (302) Property, plant and equipment - net 13,361 12,680 9,531 8,694 3,830 3,986 — — Long-term receivables - trade and other 1,225 1,238 500 565 86 85 639 1,2 588 1,2 Long-term receivables - finance 13,242 12,664 — — 14,048 13,299 (806) 2 (635) 2 Noncurrent deferred and refundable income taxes 3,312 2,816 3,594 3,360 118 148 (400) 4 (692) 4 Intangible assets 399 564 399 564 — — — — Goodwill 5,241 5,308 5,241 5,308 — — — — Other assets 5,302 5,257 4,050 4,218 2,277 2,082 (1,025) 5 (1,043) 5 Total assets $ 87,764 $ 87,476 $ 52,642 $ 53,678 $ 37,129 $ 35,882 $ (2,007) $ (2,084) Liabilities Current liabilities: Short-term borrowings $ 4,393 $ 4,643 $ — $ — $ 4,393 $ 4,643 $ — $ — Accounts payable 7,675 7,906 7,619 7,827 331 314 (275) 6,7 (235) 6,7 Accrued expenses 5,243 4,958 4,589 4,361 654 597 — — Accrued wages, salaries and employee benefits 2,391 2,757 2,335 2,696 56 61 — — Customer advances 2,322 1,929 2,305 1,912 3 2 14 7 15 7 Dividends payable 674 649 674 649 — — — — Other current liabilities 2,909 3,123 2,388 2,583 696 647 (175) 4,8 (107) 4,8 Long-term debt due within one year 6,665 8,763 46 1,044 6,619 7,719 — — Total current liabilities 32,272 34,728 19,956 21,072 12,752 13,983 (436) (327) Long-term debt due after one year 27,351 24,472 8,731 8,626 18,787 15,893 (167) 9 (47) 9 Liability for postemployment benefits 3,757 4,098 3,757 4,098 — — — — Other liabilities 4,890 4,675 3,977 3,806 1,344 1,607 (431) 4 (738) 4 Total liabilities 68,270 67,973 36,421 37,602 32,883 31,483 (1,034) (1,112) Commitments and contingencies Shareholders’ equity Common stock 6,941 6,403 6,941 6,403 905 905 (905) 10 (905) 10 Treasury stock (44,331) (36,339) (44,331) (36,339) — — — — Profit employed in the business 59,352 51,250 54,787 46,783 4,555 4,457 10 10 10 10 Accumulated other comprehensive income (loss) (2,471) (1,820) (1,182) (783) (1,289) (1,037) — — Noncontrolling interests 3 9 6 12 75 74 (78) 10 (77) 10 Total shareholders’ equity 19,494 19,503 16,221 16,076 4,246 4,399 (973) (972) Total liabilities and shareholders’ equity $ 87,764 $ 87,476 $ 52,642 $ 53,678 $ 37,129 $ 35,882 $ (2,007) $ (2,084) 1 Elimination of receivables between ME&T and Financial Products. 2 Reclassification of ME&T’s trade receivables purchased by Financial Products and Financial Products’ wholesale inventory receivables. 3 Elimination of ME&T's insurance premiums that are prepaid to Financial Products. 4 Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction. 5 Elimination of other intercompany assets and liabilities between ME&T and Financial Products. 6 Elimination of payables between ME&T and Financial Products. 7 Reclassification of Financial Products’ payables to customer advances. 8 Elimination of prepaid insurance in Financial Products’ other liabilities. 9 Elimination of debt between ME&T and Financial Products. 10 Eliminations associated with ME&T’s investments in Financial Products’ subsidiaries. 51 Table of Contents Supplemental Data for Statement of Cash Flow For the Years Ended December 31, Supplemental consolidating data Consolidated Machinery, Energy & Transportation Financial Products Consolidating Adjustments (Millions of dollars) 2024 2023 2024 2023 2024 2023 2024 2023 Cash flow from operating activities: Profit of consolidated and affiliated companies $ 10,788 $ 10,332 $ 10,689 $ 9,995 $ 724 $ 686 $ (625) 1,5 $ (349) 1,5 Adjustments to reconcile profit to net cash provided by operating activities: Depreciation and amortization 2,153 2,144 1,368 1,361 785 783 — — Actuarial (gain) loss on pension and postretirement benefits (154) (97) (154) (97) — — — — Provision (benefit) for deferred income taxes (621) (592) (327) (576) (294) (16) — — (Gain) loss on divestiture 164 572 (46) 572 210 — — — Other 564 375 355 444 (388) (577) 597 2 508 2 Changes in assets and liabilities, net of acquisitions and divestitures: Receivables - trade and other (160) (437) 413 (367) 207 61 (780) 2,3 (131) 2,3 Inventories (414) (364) (400) (360) — — (14) 2 (4) 2 Accounts payable (282) (754) (200) (836) (41) 41 (41) 2 41 2 Accrued expenses 191 796 78 690 113 106 — — Accrued wages, salaries and employee benefits (363) 486 (358) 474 (5) 12 — — Customer advances 370 80 369 78 1 2 — — Other assets—net (97) (95) (188) 94 48 (110) 43 2 (79) 2 Other liabilities—net (104) 439 (162) 216 85 118 (27) 2 105 2 Net cash provided by (used for) operating activities 12,035 12,885 11,437 11,688 1,445 1,106 (847) 91 Cash flow from investing activities: Capital expenditures—excluding equipment leased to others (1,988) (1,597) (1,952) (1,624) (41) (22) 5 2 49 2 Expenditures for equipment leased to others (1,227) (1,495) (36) (39) (1,211) (1,466) 20 2 10 2 Proceeds from disposals of leased assets and property, plant and equipment 722 781 35 55 698 781 (11) 2 (55) 2 Additions to finance receivables (15,409) (15,161) — — (16,845) (17,321) 1,436 3 2,160 3 Collections of finance receivables 13,608 14,034 — — 14,707 15,634 (1,099) 3 (1,600) 3 Net intercompany purchased receivables — — — — 129 1,080 (129) 3 (1,080) 3 Proceeds from sale of finance receivables 83 63 — — 83 63 — — Net intercompany borrowings — — — — 21 10 (21) 4 (10) 4 Investments and acquisitions (net of cash acquired) (34) (75) (34) (75) — — — — Proceeds from sale of businesses and investments (net of cash sold) (61) (4) 92 (4) (153) — — — Proceeds from maturities and sale of securities 3,155 1,891 2,795 1,642 360 249 — — Investments in securities (1,495) (4,405) (909) (3,982) (586) (423) — — Other—net 193 97 142 106 51 (9) — — Net cash provided by (used for) investing activities (2,453) (5,871) 133 (3,921) (2,787) (1,424) 201 (526) Cash flow from financing activities: Dividends paid (2,646) (2,563) (2,646) (2,563) (625) (425) 625 5 425 5 Common stock issued, including treasury shares reissued 20 12 20 12 — — — — Payments to purchase common stock (7,697) (4,975) (7,697) (4,975) — — — — Excise tax paid on purchases of common stock (40) — (40) — — — — — Net intercompany borrowings — — (21) (10) — — 21 4 10 4 Proceeds from debt issued (original maturities greater than three months) 10,283 8,257 — — 10,283 8,257 — — Payments on debt (original maturities greater than three months) (9,316) (6,318) (1,032) (106) (8,284) (6,212) — — Short-term borrowings - net (original maturities three months or less) (168) (1,345) — (3) (168) (1,342) — — Other—net (1) — (1) — — — — — Net cash provided by (used for) financing activities (9,565) (6,932) (11,417) (7,645) 1,206 278 646 435 Effect of exchange rate changes on cash (106) (110) (94) (60) (12) (50) — — Increase (decrease) in cash, cash equivalents and restricted cash (89) (28) 59 62 (148) (90) — — Cash, cash equivalents and restricted cash at beginning of period 6,985 7,013 6,111 6,049 874 964 — — Cash, cash equivalents and restricted cash at end of period $ 6,896 $ 6,985 $ 6,170 $ 6,111 $ 726 $ 874 $ — $ — 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. 52 Table of Contents
Biggest changePages 51 to 53 reconcile MP&E and Financial Products to Caterpillar Inc. consolidated financial information. 50 Table of Contents Supplemental Data for Results of Operations For The Years Ended December 31, Supplemental consolidating data Consolidated Machinery, Power & Energy Financial Products Consolidating Adjustments (Millions of dollars) 2025 2024 2023 2025 2024 2023 2025 2024 2023 2025 2024 2023 Sales and revenues: Sales of Machinery, Power & Energy $ 63,980 $ 61,363 $ 63,869 $ 63,980 $ 61,363 $ 63,869 $ — $ — $ — $ — $ — $ — Revenues of Financial Products 3,609 3,446 3,191 — — — 4,382 4,212 3,927 (773) 1 (766) 1 (736) 1 Total sales and revenues 67,589 64,809 67,060 63,980 61,363 63,869 4,382 4,212 3,927 (773) (766) (736) Operating costs: Cost of goods sold 44,752 40,199 42,767 44,761 40,206 42,776 — — — (9) 2 (7) 2 (9) 2 Selling, general and administrative expenses 6,985 6,667 6,371 6,183 5,881 5,696 842 786 704 (40) 2 — (29) 2 Research and development expenses 2,148 2,107 2,108 2,148 2,107 2,108 — — — — — — Interest expense of Financial Products 1,359 1,286 1,030 — — — 1,389 1,286 1,032 (30) 2 — (2) 2 Other operating (income) expenses 1,194 1,478 1,818 4 71 630 1,287 1,535 1,268 (97) 2 (128) 2 (80) 2 Total operating costs 56,438 51,737 54,094 53,096 48,265 51,210 3,518 3,607 3,004 (176) (135) (120) Operating profit 11,151 13,072 12,966 10,884 13,098 12,659 864 605 923 (597) (631) (616) Interest expense excluding Financial Products 502 512 511 516 518 511 — — — (14) 3 (6) 3 — Other income (expense) 892 813 595 685 728 340 113 85 (16) 94 4 — 271 4 Consolidated profit before taxes 11,541 13,373 13,050 11,053 13,308 12,488 977 690 907 (489) (625) (345) Provision (benefit) for income taxes 2,768 2,629 2,781 2,525 2,663 2,560 243 (34) 221 — — — Profit of consolidated companies 8,773 10,744 10,269 8,528 10,645 9,928 734 724 686 (489) (625) (345) Equity in profit (loss) of unconsolidated affiliated companies 109 44 63 109 44 67 — — — — — (4) 5 Profit of consolidated and affiliated companies 8,882 10,788 10,332 8,637 10,689 9,995 734 724 686 (489) (625) (349) Less: Profit (loss) attributable to noncontrolling interests (2) (4) (3) (3) (5) (4) 1 1 5 — — (4) 6 Profit 7 $ 8,884 $ 10,792 $ 10,335 $ 8,640 $ 10,694 $ 9,999 $ 733 $ 723 $ 681 $ (489) $ (625) $ (345) 1 Elimination of Financial Products' revenues earned from MP&E. 2 Elimination of net expenses recorded between MP&E and Financial Products. 3 Elimination of interest expense recorded between Financial Products and MP&E. 4 Elimination of discount recorded by MP&E on receivables sold to Financial Products and of interest earned between MP&E and Financial Products as well as dividends paid by Financial Products to MP&E. 5 Elimination of equity profit (loss) earned from Financial Products’ subsidiaries partially owned by MP&E subsidiaries. 6 Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by MP&E subsidiaries. 7 Profit attributable to common shareholders. 51 Table of Contents Supplemental Data for Financial Position At December 31, Supplemental consolidating data Consolidated Machinery, Power & Energy Financial Products Consolidating Adjustments (Millions of dollars) 2025 2024 2025 2024 2025 2024 2025 2024 Assets Current assets: Cash and cash equivalents $ 9,980 $ 6,889 $ 9,333 $ 6,165 $ 647 $ 724 $ — $ — Receivables - trade and other 10,920 9,282 3,883 3,463 657 688 6,380 1,2 5,131 1,2 Receivables - finance 10,649 9,565 — — 17,325 14,957 (6,676) 2 (5,392) 2 Prepaid expenses and other current assets 2,801 3,119 2,448 2,872 441 401 (88) 3 (154) 3 Inventories 18,135 16,827 18,135 16,827 — — — — Total current assets 52,485 45,682 33,799 29,327 19,070 16,770 (384) (415) Property, plant and equipment - net 15,140 13,361 10,985 9,531 4,106 3,830 49 4 — Long-term receivables - trade and other 2,142 1,225 1,982 500 163 86 (3) 1,2 639 1,2 Long-term receivables - finance 14,272 13,242 — — 15,538 14,048 (1,266) 2 (806) 2 Noncurrent deferred and refundable income taxes 2,882 3,312 3,208 3,594 133 118 (459) 5 (400) 5 Intangible assets 241 399 241 399 — — — — Goodwill 5,321 5,241 5,321 5,241 — — — — Other assets 6,102 5,302 4,525 4,050 2,651 2,277 (1,074) 6 (1,025) 6 Total assets $ 98,585 $ 87,764 $ 60,061 $ 52,642 $ 41,661 $ 37,129 $ (3,137) $ (2,007) Liabilities Current liabilities: Short-term borrowings $ 5,514 $ 4,393 $ — $ — $ 5,514 $ 4,393 $ — $ — Accounts payable 8,968 7,675 8,988 7,619 268 331 (288) 7,8 (275) 7,8 Accrued expenses 5,587 5,243 4,877 4,589 710 654 — — Accrued wages, salaries and employee benefits 2,554 2,391 2,494 2,335 60 56 — — Customer advances 3,314 2,322 3,311 2,305 3 3 — 14 8 Dividends payable 703 674 703 674 — — — — Other current liabilities 2,798 2,909 2,259 2,388 645 696 (106) 5,9 (175) 5,9 Long-term debt due within one year 7,120 6,665 35 46 7,085 6,619 — — Total current liabilities 36,558 32,272 22,667 19,956 14,285 12,752 (394) (436) Long-term debt due after one year 30,696 27,351 10,955 8,731 21,018 18,787 (1,277) 10 (167) 10 Liability for postemployment benefits 3,838 3,757 3,837 3,757 1 — — — Other liabilities 6,175 4,890 5,162 3,977 1,516 1,344 (503) 5 (431) 5 Total liabilities 77,267 68,270 42,621 36,421 36,820 32,883 (2,174) (1,034) Commitments and contingencies Shareholders’ equity Common stock 7,181 6,941 7,181 6,941 905 905 (905) 11 (905) 11 Treasury stock (49,539) (44,331) (49,539) (44,331) — — — — Profit employed in the business 65,448 59,352 60,639 54,787 4,799 4,555 10 11 10 11 Accumulated other comprehensive income (loss) (1,772) (2,471) (843) (1,182) (929) (1,289) — — Noncontrolling interests — 3 2 6 66 75 (68) 11 (78) 11 Total shareholders’ equity 21,318 19,494 17,440 16,221 4,841 4,246 (963) (973) Total liabilities and shareholders’ equity $ 98,585 $ 87,764 $ 60,061 $ 52,642 $ 41,661 $ 37,129 $ (3,137) $ (2,007) 1 Elimination of receivables between MP&E and Financial Products. 2 Reclassification of MP&E’s trade receivables purchased by Financial Products and Financial Products’ wholesale inventory receivables. 3 Elimination of MP&E's insurance premiums that are prepaid to Financial Products. 4 Reclassification of Financial Products’ other assets to property, plant and equipment. 5 Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction. 6 Elimination of other intercompany assets and liabilities between MP&E and Financial Products. 7 Elimination of payables between MP&E and Financial Products. 8 Reclassification of Financial Products’ payables to customer advances. 9 Elimination of prepaid insurance in Financial Products’ other liabilities. 10 Elimination of debt between MP&E and Financial Products. 11 Eliminations associated with MP&E’s investments in Financial Products’ subsidiaries. 52 Table of Contents Supplemental Data for Cash Flow For the Years Ended December 31, Supplemental consolidating data Consolidated Machinery, Power & Energy Financial Products Consolidating Adjustments (Millions of dollars) 2025 2024 2025 2024 2025 2024 2025 2024 Cash flow from operating activities: Profit of consolidated and affiliated companies $ 8,882 $ 10,788 $ 8,637 $ 10,689 $ 734 $ 724 $ (489) 1,5 $ (625) 1,5 Adjustments to reconcile profit to net cash provided by operating activities: Depreciation and amortization 2,262 2,153 1,497 1,368 765 785 — — Actuarial (gain) loss on pension and postretirement benefits (294) (154) (294) (154) — — — — Provision (benefit) for deferred income taxes 465 (621) 395 (327) 70 (294) — — (Gain) loss on divestiture 30 164 30 (46) — 210 — — Other 742 564 658 355 (513) (388) 597 2 597 2 Changes in assets and liabilities, net of acquisitions and divestitures: Receivables - trade and other (2,138) (160) (503) 413 63 207 (1,698) 2,3 (780) 2,3 Inventories (1,477) (414) (1,473) (400) — — (4) 2 (14) 2 Accounts payable 1,179 (282) 1,217 (200) (11) (41) (27) 2 (41) 2 Accrued expenses 438 191 486 78 (48) 113 — — Accrued wages, salaries and employee benefits 187 (363) 185 (358) 2 (5) — — Customer advances 1,933 370 1,933 369 — 1 — — Other assets - net (176) (97) (48) (188) (28) 48 (100) 2 43 2 Other liabilities - net (294) (104) (442) (162) 40 85 108 2 (27) 2 Net cash provided by (used for) operating activities 11,739 12,035 12,278 11,437 1,074 1,445 (1,613) (847) Cash flow from investing activities: Capital expenditures - excluding equipment leased to others (2,821) (1,988) (2,758) (1,952) (94) (41) 31 2 5 2 Expenditures for equipment leased to others (1,465) (1,227) (36) (36) (1,438) (1,211) 9 2 20 2 Proceeds from disposals of leased assets and property, plant and equipment 708 722 79 35 665 698 (36) 2 (11) 2 Additions to finance receivables (15,329) (15,409) — — (18,058) (16,845) 2,729 3 1,436 3 Collections of finance receivables 13,515 13,608 — — 15,664 14,707 (2,149) 3 (1,099) 3 Net intercompany purchased receivables — — — — (529) 129 529 3 (129) 3 Proceeds from sale of finance receivables 71 83 — — 71 83 — — Additions to intercompany receivables (original maturities greater than three months) — — (1,000) — — — 1,000 4 — Collections of intercompany receivables (original maturities greater than three months) — — — — 80 — (80) 4 — Net intercompany borrowings — — — — — 21 — (21) 4 Investments and acquisitions (net of cash acquired) (47) (34) (47) (34) — — — — Proceeds from sale of businesses and investments (net of cash sold) 22 (61) 22 92 — (153) — — Proceeds from maturities and sale of securities 2,494 3,155 1,541 2,795 953 360 — — Investments in securities (1,930) (1,495) (797) (909) (1,133) (586) — — Other - net 75 193 126 142 (51) 51 — — Net cash provided by (used for) investing activities (4,707) (2,453) (2,870) 133 (3,870) (2,787) 2,033 201 Cash flow from financing activities: Dividends paid (2,749) (2,646) (2,749) (2,646) (500) (625) 500 5 625 5 Common stock issued, and other stock compensation transactions, net (16) 20 (16) 20 — — — — Payments to purchase common stock (5,190) (7,697) (5,190) (7,697) — — — — Excise tax paid on purchases of common stock (73) (40) (73) (40) — — — — Proceeds from intercompany borrowings (original maturities greater than three months) — — — — 1,000 — (1,000) 4 — Payments on intercompany borrowings (original maturities greater than three months) — — (80) — — — 80 4 — Net intercompany borrowings — — — (21) — — — 21 4 Proceeds from debt issued (original maturities greater than three months) 11,105 10,283 1,976 — 9,129 10,283 — — Payments on debt (original maturities greater than three months) (8,081) (9,316) (51) (1,032) (8,030) (8,284) — — Short-term borrowings - net (original maturities three months or less) 1,106 (168) — — 1,106 (168) — — Other - net (1) (1) (1) (1) — — — — Net cash provided by (used for) financing activities (3,899) (9,565) (6,184) (11,417) 2,705 1,206 (420) 646 Effect of exchange rate changes on cash (43) (106) (58) (94) 15 (12) — — Increase (decrease) in cash, cash equivalents and restricted cash 3,090 (89) 3,166 59 (76) (148) — — Cash, cash equivalents and restricted cash at beginning of period 6,896 6,985 6,170 6,111 726 874 — — Cash, cash equivalents and restricted cash at end of period $ 9,986 $ 6,896 $ 9,336 $ 6,170 $ 650 $ 726 $ — $ — 1 Elimination of equity profit earned from Financial Products’ subsidiaries partially owned by MP&E 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 proceeds and payments to/from MP&E and Financial Products. 5 Elimination of dividend activity between Financial Products and MP&E. 53 Table of Contents
Energy & Transportation – A segment primarily responsible for supporting customers using reciprocating engines, turbines, diesel-electric locomotives and related services across industries serving Oil and Gas, Power Generation, Industrial and Transportation applications, including marine- and rail-related businesses as well as product support of on-highway engines.
Power & Energy – A segment primarily responsible for supporting customers using reciprocating engines, turbines, diesel-electric locomotives and related services across industries serving Oil and Gas, Power Generation, Industrial and Transportation applications, including marine- and rail-related businesses as well as product support of on-highway engines.
Discount rates are sensitive to changes in interest rates. • The expected long-term rate of return on plan assets is based on our estimate of long-term returns for equities and fixed income securities weighted by the allocation of our plan assets.
Discount rates are sensitive to changes in interest rates. • The expected rate of return on plan assets is based on our estimate of long-term returns for equities and fixed income securities weighted by the allocation of our plan assets.
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 Cat 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.
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.
There are assumptions used in the accounting for these defined benefit plans that include discount rate, expected return on plan assets, expected rate of compensation increase, the future health care trend rate, mortality and other economic and demographic assumptions.
There are assumptions used in the accounting for these defined benefit plans that include discount rate, expected return on plan assets, expected rate of compensation increase, the future health care cost trend rate, mortality and other economic and demographic assumptions.
This rate is influenced by our long-term compensation policies. • The assumed health care trend rate represents the rate at which health care costs are assumed to increase and is based on historical and expected experience.
This rate is influenced by our long-term compensation policies. • The assumed health care cost trend rate represents the rate at which costs are assumed to increase and is based on historical and expected experience.
Additional information related to income taxes is included in Note 6 — “Income taxes” of Part II, Item 8 “Financial statements and Supplementary Data.” 44 Table of Contents OTHER MATTERS Information related to legal proceedings appears in Note 22 — "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.
Additional information related to income taxes is included in Note 6 — “Income taxes” of Part II, Item 8 “Financial statements and Supplementary Data.” OTHER MATTERS Information related to legal proceedings appears in Note 22 — "Environmental and legal matters" of Part II, Item 8 “Financial Statements and Supplementary Data.” 45 Table of Contents RETIREMENT BENEFITS We recognize mark-to-market gains and losses immediately through earnings upon the remeasurement of our pension and OPEB plans.
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. This MD&A should be read in conjunction with our discussion of cautionary statements and significant risks to the company’s business under Item 1A. Risk Factors of the 2024 Form 10-K.
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. This MD&A should be read in conjunction with our discussion of cautionary statements and significant risks to the company’s business under Item 1A. Risk Factors of the 2025 Form 10-K.
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.
In addition to equipment, Resource Industries also sells technology products and services to provide customers fleet management, equipment management analytics, autonomous machine capabilities, safety services and mining performance solutions.
See Note 12 — “Postemployment benefit plans” of Part II, Item 8 “Financial Statement and Supplemental Data” for further information regarding the accounting for postretirement benefits. 43 Table of Contents Post-sale discount reserve — We provide discounts to dealers through merchandising programs. We have numerous programs that are designed to promote the sale of our products.
See Note 12 — “Postemployment benefit plans” of Part II, Item 8 “Financial Statement and Supplemental Data” for further information regarding the accounting for postretirement benefits. 44 Table of Contents Post-sale discount reserve — We provide discounts to dealers through merchandising programs. We have numerous programs that are designed to promote the sale of our products.
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 December 31, 2024, there were no borrowings under the Credit Facility.
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 December 31, 2025, there were no borrowings under the Credit Facility.
Without consideration of other factors such as third-party residual guarantees or contractual customer purchase options, a 10 percent non-temporary decrease in the market value of our equipment subject to operating leases would reduce residual value estimates and result in the recognition of approximately $70 million of additional annual depreciation expense.
Without consideration of other factors such as third-party residual guarantees or contractual customer purchase options, a 10 percent non-temporary decrease in the market value of our equipment subject to operating leases would reduce residual value estimates and result in the recognition of approximately $65 million of additional annual depreciation expense.
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. 38 Table of Contents We facilitate voluntary supplier finance programs (the “Programs”) through participating financial institutions.
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. 39 Table of Contents We facilitate voluntary supplier finance programs (the “Programs”) through participating financial institutions.
Accordingly, no assurance can be given that actual results would be consistent with the results of our estimate. 46 Table of Contents 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.
Accordingly, no assurance can be given that actual results would be consistent with the results of our estimate. 47 Table of Contents 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.
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.
Consolidating Adjustments – Elimination of transactions between Machinery, Power & Energy 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 expected return on plan assets is based on the fair value of plan asset allocations as of our measurement date, December 31. • We use the expected rate of compensation increase to develop benefit obligations using projected pay at retirement. It represents average long-term salary increases.
The expected return on plan assets is based on asset allocations as of our measurement date, December 31. • We use the expected rate of compensation increase to develop benefit obligations using projected pay at retirement. It represents average long-term salary increases.
An analysis of the December 31, 2024 balance sheet, using these assumptions, estimates the impact of a 100 basis point immediate and sustained adverse change in interest rates to have a minimal impact on 2025 pre-tax earnings. Last year, similar assumptions and calculations yielded a minimal impact to 2024 pre-tax earnings.
An analysis of the December 31, 2025 balance sheet, using these assumptions, estimates the impact of a 100 basis point immediate and sustained adverse change in interest rates to have a minimal impact on 2026 pre-tax earnings. Last year, similar assumptions and calculations yielded a minimal impact to 2025 pre-tax earnings.
Allowance for credit losses — The allowance for credit losses is management’s estimate of expected losses over the life of our finance receivable portfolio calculated using loss forecast models that take into consideration historical credit loss experience, current economic conditions and forecasts and scenarios that capture country and industry-specific economic factors.
Allowance for credit losses — The allowance for credit losses is management’s estimate of expected losses over the life of our finance receivables portfolio calculated using loss forecast models that take into consideration historical credit loss experience, current economic conditions and forecasts and scenarios that capture country and industry-specific economic factors.
Reconciliations of adjusted results to the most directly comparable GAAP measures are as follows: (Dollars in millions except per share data) Operating Profit Operating Profit Margin Profit Before Taxes Provision (Benefit) for Income Taxes Profit Profit per Share Twelve Months Ended December 31, 2024 - U.S.
Reconciliations of adjusted results to the most directly comparable GAAP measures are as follows: (Dollars in millions except per share data) Operating Profit Operating Profit Margin Profit Before Taxes Provision (Benefit) for Income Taxes Profit Profit per Share Twelve Months Ended December 31, 2025 - U.S.
Pension Benefits Other Postretirement Benefits 2024 2023 2022 2024 2023 2022 2024 2023 2022 Weighted-average assumptions used to determine benefit obligation, end of year: Discount rate 5.6 % 5.0 % 5.4 % 4.1 % 3.9 % 4.3 % 5.6 % 5.1 % 5.4 % Rate of compensation increase 1 — % — % — % 2.2 % 2.3 % 2.3 % 4.0 % 4.0 % 4.0 % Weighted-average assumptions used to determine net periodic benefit cost: Discount rate used to measure service cost 1 — % — % — % 3.6 % 3.8 % 1.7 % 5.1 % 5.4 % 2.8 % Discount rate used to measure interest cost 5.0 % 5.2 % 2.3 % 3.9 % 4.2 % 1.7 % 5.0 % 5.3 % 2.2 % Expected rate of return on plan assets 5.7 % 5.8 % 4.0 % 5.1 % 5.2 % 3.1 % 7.4 % 7.4 % 6.9 % Rate of compensation increase 1 — % — % — % 2.3 % 2.3 % 2.0 % 4.0 % 4.0 % 4.0 % Health care cost trend rates at year-end: Health care trend rate assumed for next year 6.0 % 6.2 % 6.5 % Rate that the cost trend rate gradually declines to 4.7 % 4.7 % 4.7 % Year that the cost trend rate reaches ultimate rate 2030 2030 2030 1 Effective December 31, 2019, all U.S. pension benefits were frozen, and accordingly this assumption is no longer applicable.
Pension Benefits Other Postretirement Benefits 2025 2024 2023 2025 2024 2023 2025 2024 2023 Weighted-average assumptions used to determine benefit obligation, end of year: Discount rate 5.3 % 5.6 % 5.0 % 4.3 % 4.1 % 3.9 % 5.3 % 5.6 % 5.1 % Expected rate of compensation increase 1 — % — % — % 2.2 % 2.2 % 2.3 % 4.0 % 4.0 % 4.0 % Weighted-average assumptions used to determine net periodic benefit cost: Discount rate used to measure service cost 1 — % — % — % 3.2 % 3.6 % 3.8 % 5.7 % 5.1 % 5.4 % Discount rate used to measure interest cost 5.3 % 5.0 % 5.2 % 3.9 % 3.9 % 4.2 % 5.3 % 5.0 % 5.3 % Expected rate of return on plan assets 6.3 % 5.7 % 5.8 % 5.2 % 5.1 % 5.2 % 6.1 % 7.4 % 7.4 % Expected rate of compensation increase 1 — % — % — % 2.2 % 2.3 % 2.3 % 4.0 % 4.0 % 4.0 % Health care cost trend rates at year-end: Health care cost trend rate for next year 6.7 % 6.0 % 6.2 % Rate that the cost trend rate gradually declines to 4.7 % 4.7 % 4.7 % Year that the cost trend rate reaches ultimate rate 2037 2030 2030 1 Effective December 31, 2019, all U.S. pension benefits were frozen, and accordingly this assumption is no longer applicable.
In 2024, the company recorded a discrete tax benefit of $224 million for a tax law change related to currency translation. The 2024 annual effective tax rate excludes the impact of losses of $164 million for the divestitures of certain non-U.S. entities with related tax benefits of $54 million.
In 2024, the company recorded a discrete tax benefit of $224 million for a tax law change related to currency translation. The 2024 annual effective tax rate excluded the impact of losses of $164 million for the divestitures of certain non-U.S. entities with related tax benefits of $54 million.
Changes in our projections of future health care costs due to general economic conditions and those specific to health care (e.g., technology driven cost changes) will impact this trend rate. • We use the mortality assumption to estimate the life expectancy of plan participants. 42 Table of Contents Postretirement Benefit Plan Actuarial Assumptions Sensitivity The effects of a one percentage-point change in certain actuarial assumptions on 2024 pension and OPEB costs and obligations are as follows: 2024 Benefit Cost Increase (Decrease) Year-end Benefit Obligation Increase (Decrease) (Millions of dollars) One percentage- point increase One percentage- point decrease One percentage- point increase One percentage- point decrease U.S.
Changes in our projections of future health care costs due to general economic conditions and those specific to health care (e.g., technology driven cost changes) will impact this trend rate. • We use the mortality assumption to estimate the life expectancy of plan participants. 43 Table of Contents Postretirement Benefit Plan Actuarial Assumptions Sensitivity The effects of a one percentage-point change in certain actuarial assumptions on 2025 pension and OPEB costs and obligations are as follows: 2025 Benefit Cost Increase (Decrease) Year-end Benefit Obligation Increase (Decrease) (Millions of dollars) One percentage- point increase One percentage- point decrease One percentage- point increase One percentage- point decrease U.S.
Information related to guarantees appears in Note 21 — “Guarantees and product warranty” of Part II, Item 8 “Financial Statements and Supplementary Data.” RECENT ACCOUNTING PRONOUNCEMENTS For a discussion of recent accounting pronouncements, see Note 1J — “New accounting guidance” of Part II, Item 8 “Financial Statements and Supplementary Data.” CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts.
Information related to guarantees appears in Note 21 — “Guarantees and product warranty” of Part II, Item 8 “Financial Statements and Supplementary Data.” RECENT ACCOUNTING PRONOUNCEMENTS For a discussion of recent accounting pronouncements, see Note 1J — “New accounting guidance” of Part II, Item 8 “Financial Statements and Supplementary Data.” 41 Table of Contents CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts.
The majority of the balance in both 2024 and 2023 consisted of unearned insurance premiums. Postretirement benefits — We sponsor defined benefit pension plans and/or other postretirement benefit plans (retirement healthcare and life insurance) to employees in many of our locations throughout the world.
The majority of the balance in both 2025 and 2024 consisted of unearned insurance premiums. Postretirement benefits — We sponsor defined benefit pension plans and/or other postretirement benefit plans (retirement healthcare and life insurance) to employees in many of our locations throughout the world.
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.
With respect to operating profit, sales volume represents the impact of changes in the quantities sold for Machinery, Power & Energy combined with product mix as well as the net operating profit impact of new product introductions, including emissions-related product updates.
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.
Sales Volume – With respect to sales and revenues, sales volume represents the impact of changes in the quantities sold for Machinery, Power & Energy as well as the incremental sales impact of new product introductions, including emissions-related product updates.
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.
Currency only includes the impact on sales and operating profit for the Machinery, Power & Energy line of business; currency impacts on Financial Products revenues and operating profit are included in the Financial Products portions of the respective analyses.
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.
Product mix represents the net operating profit impact of changes in the relative weighting of Machinery, Power & Energy sales with respect to total sales. The impact of sales volume on segment profit includes inter-segment sales. 24.
We expect that prior restructuring actions will result in an incremental benefit to operating costs, primarily Costs of goods sold and SG&A expenses, of about $25 million in 2025 compared with 2024. Additional information related to restructuring costs is included in Note 24 — "Restructuring income/costs" of Part II, Item 8 "Financial Statements and Supplemental Data." GLOSSARY OF TERMS 1.
We expect that prior restructuring actions will result in an incremental benefit to operating costs, primarily Costs of goods sold and SG&A expenses, of about $40 million in 2026 compared with 2025. Additional information related to restructuring costs is included in Note 24 — "Restructuring income/costs" of Part II, Item 8 "Financial Statements and Supplemental Data." GLOSSARY OF TERMS 1.
The product and services portfolio includes turbines, centrifugal gas compressors, and turbine-related services; reciprocating engine-powered generator sets; integrated systems 35 Table of Contents and solutions used in the electric power generation industry; reciprocating engines, drivetrain and integrated systems and solutions for the marine and oil and gas industries; reciprocating engines, drivetrain and integrated systems and solutions supplied to the industrial industry as well as Caterpillar machines; electrified powertrain and zero-emission power sources and service solutions development; and diesel-electric locomotives and components and other rail-related products and services, including remanufacturing and leasing.
The product and services portfolio includes turbines, centrifugal gas compressors, and turbine-related services; reciprocating engine-powered generator sets; integrated systems and solutions used in the electric power generation industry; reciprocating engines, drivetrain and integrated systems and solutions for the marine and oil and gas industries; reciprocating engines, drivetrain and integrated systems and solutions supplied to the industrial industry as well as Caterpillar machines; electrified powertrain and zero-emission power sources and service solutions development; and diesel-electric and hybrid locomotives and components and other rail-related products and services, including remanufacturing and leasing.
The most common dealer programs provide a discount when the dealer sells a product to a targeted end user. The amount of accrued post-sale discounts was $2.2 billion and $2.1 billion at December 31, 2024 and 2023, respectively. The reserve represents discounts that we expect to pay on previously sold units and is reviewed at least quarterly.
The most common dealer programs provide a discount when the dealer sells a product to a targeted end user. The amount of accrued post-sale discounts was $2.5 billion and $2.2 billion at December 31, 2025 and 2024, respectively. The reserve represents discounts that we expect to pay on previously sold units and is reviewed at least quarterly.
We believe it is important to separately quantify the profit impact of six significant items in order for our results to be meaningful to our readers.
We believe it is important to separately quantify the profit impact of four significant items in order for our results to be meaningful to our readers.
We utilize a mark-to-market approach in recognizing actuarial gains or losses immediately through earnings upon the annual remeasurement in the fourth quarter, or on an interim basis as triggering events warrant remeasurement. Primary actuarial assumptions were determined as follows: • We use the assumed discount rate to discount future benefit obligations back to today’s dollars.
We utilize a mark-to-market approach in recognizing actuarial gains or losses immediately through earnings upon the annual remeasurement in the fourth quarter, or on an interim basis as triggering events warrant remeasurement. Primary actuarial assumptions were determined as follows: • The discount rate is used to discount the future benefit obligations back to today’s dollars.
Loss reserves, including incurred but not reported reserves, are based on estimates, and ultimate settlements may vary significantly from such estimates due to increased claims frequency or severity over historical levels. The amount of these reserves totaled $1.5 billion and $1.4 billion at December 31, 2024 and 2023, respectively.
Loss reserves, including incurred but not reported reserves, are based on estimates, and ultimate settlements may vary significantly from such estimates due to increased claims frequency or severity over historical levels. The amount of these reserves totaled $1.6 billion and $1.5 billion at December 31, 2025 and 2024, respectively.
Last year, similar assumptions and calculations yielded a potential $200 million adverse impact on 2024 cash flow. We determine our net exposures by calculating the difference in cash inflow and outflow by currency and adding or subtracting outstanding foreign currency derivative instruments. We multiply these net amounts by 10 percent to determine the sensitivity.
Last year, similar assumptions and calculations yielded a potential $77 million adverse impact on 2025 cash flow. We determine our net exposures by calculating the difference in cash inflow and outflow by currency and adding or subtracting outstanding foreign currency derivative instruments. We multiply these net amounts by 10 percent to determine the sensitivity.
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 40 Table of Contents market/product trends.
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.
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.
Consolidating Adjustments – Eliminations of transactions between MP&E and Financial Products. The nature of the MP&E 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.
In addition, the sum of the components reported across periods may not equal the total amount reported year-to-date due to rounding. 29 Table of Contents 2024 COMPARED WITH 2023 CONSOLIDATED SALES AND REVENUES The chart above graphically illustrates reasons for the change in consolidated sales and revenues between 2023 (at left) and 2024 (at right).
In addition, the sum of the components reported across periods may not equal the total amount reported year-to-date due to rounding. 30 Table of Contents 2025 COMPARED WITH 2024 CONSOLIDATED SALES AND REVENUES The chart above graphically illustrates reasons for the change in consolidated sales and revenues between 2024 (at left) and 2025 (at right).
We would report a goodwill impairment as a non-cash charge to earnings. 41 Table of Contents Product warranty liability — At the time we recognize a sale, we record estimated future warranty costs. We determine the product warranty liability by applying historical claim rate experience to the current field population and dealer inventory.
We would report a goodwill impairment as a non-cash charge to earnings. Product warranty liability — At the time we recognize a sale, we record estimated future warranty costs. We determine the product warranty liability by applying historical claim rate experience to the current field population and dealer inventory.
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.
In the event economic conditions deteriorate such that access to debt markets becomes unavailable, MP&E’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.
The product portfolio includes large track-type tractors; large mining trucks; hard rock vehicles; electric rope shovels; draglines; hydraulic shovels; rotary drills; large wheel loaders; off-highway trucks; articulated trucks; wheel tractor scrapers; wheel dozers; landfill compactors; soil compactors; wide-body trucks; select work tools; machinery components; electronics and control systems and related parts.
The product portfolio includes large track-type tractors; large mining trucks; hard rock vehicles; electric rope shovels; draglines; hydraulic shovels; rotary drills; large wheel loaders; off-highway trucks; articulated trucks; wheel tractor scrapers; wheel dozers; landfill compactors; soil compactors; wide-body trucks; select work tools; machinery components; wear and maintenance components and related parts.
Interest Rate Sensitivity For our ME&T operations, we have the option to use interest rate contracts to lower the cost of borrowed funds by attaching fixed-to-floating interest rate contracts to fixed-rate debt, and by entering into forward rate agreements on future debt issuances.
Interest Rate Sensitivity For our MP&E operations, we have the option to use interest rate contracts to lower the cost of borrowed funds by attaching fixed-to-floating interest rate contracts to fixed-rate debt, and by entering into forward rate agreements on future debt issuances.
We also have long-term contractual obligations primarily for logistics services agreements; systems support, software licenses and development contracts; information technology consulting contracts; outsourcing contracts for benefit plan administration and long-term commitments entered into with key suppliers for minimum purchase quantities. These obligations total $1.63 billion, with $762 million due in the next 12 months.
We also have long-term contractual obligations primarily for logistics services agreements; systems support, software licenses and development contracts; information technology consulting contracts; outsourcing contracts for benefit plan administration and long-term commitments entered into with key suppliers for minimum purchase quantities. These obligations total $2.399 billion, with $695 million due in the next 12 months.
We recognize an impairment charge for the amount by which the carrying value of the equipment on operating leases exceeds its estimated fair value. At December 31, 2024, the aggregate residual value of equipment on operating leases was $1.55 billion.
We recognize an impairment charge for the amount by which the carrying value of the equipment on operating leases exceeds its estimated fair value. At December 31, 2025, the aggregate residual value of equipment on operating leases was $1.57 billion.
The table below summarizes the amounts of net periodic benefit cost recognized for 2024, 2023 and 2022, respectively, and includes expected cost for 2025. (Millions of dollars) 2025 Expected 2024 2023 2022 U.S. Pension Benefits $ (108) $ (74) $ (33) $ (268) Non-U.S.
The table below summarizes the amounts of net periodic benefit cost recognized for 2025, 2024 and 2023, respectively, and includes expected cost for 2026. (Millions of dollars) 2026 Expected 2025 2024 2023 U.S. Pension Benefits $ (160) $ (108) $ (74) $ (33) Non-U.S.
Services – Machinery, Energy & Transportation services revenues include, but are not limited to, aftermarket parts and other service-related revenues and exclude most Financial Products revenues, discontinued products and captive dealer services. LIQUIDITY AND CAPITAL RESOURCES Sources of funds We generate significant capital resources from operating activities, which are the primary source of funding for our ME&T operations.
Services – Machinery, Power & Energy services revenues include, but are not limited to, aftermarket parts and other service-related revenues and exclude most Financial Products revenues, discontinued products and captive dealer services. LIQUIDITY AND CAPITAL RESOURCES Sources of funds We generate significant capital resources from operating activities, which are the primary source of funding for our MP&E operations.
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.
Our share repurchase plans are subject to the company’s resource allocation framework 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 consolidated net worth is defined as the consolidated shareholders' equity including preferred stock but excluding the pension and other postretirement benefits balance within AOCI. 37 Table of Contents At December 31, 2024, Cat Financial’s covenant interest coverage ratio was 1.41 to 1.
The consolidated net worth is defined as the consolidated shareholders' equity including preferred stock but excluding the pension and other postretirement benefits balance within AOCI. 38 Table of Contents At December 31, 2025, Cat Financial’s covenant interest coverage ratio was 1.53 to 1.
Notes: • Glossary of terms included on pages 35 - 37; first occurrence of terms shown in bold italics. • Information on non-GAAP financial measures is included on pages 47 - 48. • Some amounts within this report are rounded to the millions or billions and may not add.
Notes: • Glossary of terms included on pages 36 - 38; first occurrence of terms shown in bold italics. • Information on non-GAAP financial measures is included on pages 48 - 49. • Some amounts within this report are rounded to the millions or billions and may not add.
Based on the anticipated and firmly committed cash inflow and outflow for our ME&T operations for the next 12 months and the foreign currency derivative instruments in place at year-end, a hypothetical 10 percent weakening of the U.S. dollar relative to all other currencies would adversely affect our expected 2025 cash flow for our ME&T operations by approximately $77 million.
Based on the anticipated and firmly committed cash inflow and outflow for our MP&E operations for the next 12 months and the foreign currency derivative instruments in place at year-end, a hypothetical 10 percent weakening of the U.S. dollar relative to all other currencies would adversely affect our expected 2026 cash flow for our MP&E operations by approximately $135 million.
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. During 2024, we had positive operating cash flow within both our ME&T and Financial Products' 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. During 2025, we had positive operating cash flow within both our MP&E and Financial Products' operations.
A hypothetical 100 basis point adverse move in interest rates along the entire interest rate yield curve would have a minimal impact to the 2025 pre-tax earnings of ME&T. Last year, similar assumptions and calculations yielded a minimal impact to 2024 pre-tax earnings.
A hypothetical 100 basis point adverse move in interest rates along the entire interest rate yield curve would have a minimal impact to the 2026 pre-tax earnings of MP&E. Last year, similar assumptions and calculations yielded a minimal impact to 2025 pre-tax earnings.
Material cash requirements for contractual obligations We believe our balances of cash and cash equivalents of $6.89 billion and available-for-sale debt securities of $1.98 billion as of December 31, 2024, along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy our cash requirements over the next 12 months and beyond.
Material cash requirements for contractual obligations We believe our balances of cash and cash equivalents of $9.980 billion and available-for-sale debt securities of $1.230 billion as of December 31, 2025, along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy our cash requirements over the next 12 months and beyond.
As of December 31, 2024, 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.
As of December 31, 2025, we had three global credit facilities with a syndicate of banks totaling $11.500 billion (Credit Facility) available in the aggregate to both Caterpillar and Cat Financial for general liquidity purposes.
Adjusted Operating Profit Margin – Operating profit excluding restructuring income/costs as a percent of sales and revenues. 2. Adjusted Profit Per Share – Profit per share excluding restructuring income/costs, a discrete tax benefit for a tax law change related to currency translation, pension and OPEB mark-to-market gains/losses and certain deferred tax valuation allowance adjustments in 2023. 3.
Adjusted Operating Profit Margin – Operating profit excluding restructuring income/costs as a percent of sales and revenues. 2. Adjusted Profit Per Share – Profit per share excluding restructuring income/costs, pension and OPEB mark-to-market gains/losses, and a discrete tax benefit for a tax law change related to currency translation in 2024. 3.
Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the United States Securities and Exchange Commission on February 16, 2024 and hereby incorporated by reference. 34 Table of Contents RESTRUCTURING COSTS In 2025, we expect to incur about $150 million to $200 million of restructuring costs.
Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the United States Securities and Exchange Commission on February 14, 2025 and hereby incorporated by reference. 35 Table of Contents RESTRUCTURING COSTS In 2026, we expect to incur about $300 million to $350 million of restructuring costs.
In December 2024, the Board of Directors approved maintaining our quarterly dividend representing $1.41 per share, and we continue to expect our strong financial position to support the dividend. Dividends paid totaled $2.65 billion in 2024.
In December 2025, the Board of Directors approved maintaining our quarterly dividend representing $1.51 per share, and we continue to expect our strong financial position to support the dividend. Dividends paid totaled $2.749 billion in 2025.
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 December 31, 2024 was $2.75 billion. Information on our Credit Facility is as follows: • In August 2024, we entered into a new 364-day facility.
Based on management’s allocation decision, which can be revised from time to time, the portion of the Credit Facility available to MP&E as of December 31, 2025 was $2.875 billion. Information on our Credit Facility is as follows: • In August 2025, we entered into a new 364-day facility.
All Other Segment – Primarily includes activities such as: business strategy; product management and development; manufacturing and sourcing of wear and maintenance components primarily for Cat® products; parts distribution; integrated logistics solutions; distribution services responsible for dealer development and administration, including a wholly owned dealer in Japan; dealer portfolio management and ensuring the most efficient and effective distribution of machines, engines and parts; brand management and marketing strategy; and digital investments for new customer and dealer solutions that integrate data analytics with state-of-the-art digital technologies while transforming the buying experience. 4.
All Other Segment – Primarily includes activities such as: business strategy; product management and development; parts distribution; integrated logistics solutions; electronics and control systems; 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; research and development for automation, electronics and software for machines and engines 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.
We have grouped the data 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.
We have grouped the data as follows: Consolidated – Caterpillar Inc. and its subsidiaries. Machinery, Power & Energy – We define MP&E as it is presented in the supplemental data as Caterpillar Inc. and its subsidiaries, excluding Financial Products. MP&E's information relates to the design, manufacturing and marketing of our products.
These items consist of (i) restructuring income/costs related to the divestitures of certain non-U.S. entities in 2024, (ii) other restructuring income/costs, (iii) pension and OPEB mark-to-market gains/losses resulting from plan remeasurements, (iv) a discrete tax benefit for a tax law change related to currency translation in 2024, (v) restructuring costs related to the divestiture of the company's Longwall business in 2023 and (vi) certain deferred tax valuation allowance adjustments in 2023.
These items consist of (i) other restructuring income/costs, (ii) pension and OPEB mark-to-market gains/losses resulting from plan remeasurements, (iii) restructuring income/costs related to the divestitures of certain non-U.S. entities in 2024 and (iv) a discrete tax benefit for a tax law change related to currency translation in 2024.
This was partially offset by lower discount rates at the end of 2023 compared to the end of 2022. • 2022 net mark-to-market gain of $606 million — Primarily due to higher discount rates at the end of 2022 compared to the end of 2021.
This was partially offset by lower discount rates at the end of 2025 compared to the end of 2024. • 2024 net mark-to-market gain of $154 million — Primarily due to higher discount rates at the end of 2024 compared to the end of 2023.
These consist of invoices received and recorded as liabilities as of December 31, 2024, but scheduled for payment in 2025 of $7.68 billion. In addition, we have contractual obligations for material and services on order at December 31, 2024, but not yet invoiced or delivered, of $6.69 billion.
These consist of invoices received and recorded as liabilities as of December 31, 2025, but scheduled for payment in 2026 of $8.968 billion. In addition, we have contractual obligations for material and services on order at December 31, 2025, but not yet invoiced or delivered, of $9.633 billion.
Dealer inventory increased less during 2024 than during 2023. • Sales increased in Latin America primarily due to higher sales volume, partially offset by unfavorable price realization and unfavorable currency impacts primarily related to the Brazilian real. Higher sales volume was mainly driven by the impact from changes in dealer inventories.
Lower sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased less during 2025 than during 2024. • In EAME, sales increased due to higher sales volume and favorable currency impacts primarily related to the euro, partially offset by unfavorable price realization.
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.
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.
GAAP $ 13,072 20.2 % $ 13,373 $ 2,629 $ 10,792 $ 22.05 Restructuring (income) costs - divestitures of certain non-U.S. entities 164 0.2 % 164 54 110 0.22 Other restructuring (income) costs 195 0.3 % 195 46 149 0.32 Pension/OPEB mark-to-market (gains) losses — — % (154) (43) (111) (0.23) Tax law change related to currency translation — — % — 224 (224) (0.46) Twelve Months Ended December 31, 2024 - Adjusted $ 13,431 20.7 % $ 13,578 $ 2,910 $ 10,716 $ 21.90 Twelve Months Ended December 31, 2023 - U.S.
GAAP $ 13,072 20.2 % $ 13,373 $ 2,629 $ 10,792 $ 22.05 Restructuring (income) costs - divestitures of certain non-U.S. entities 164 0.2 % 164 54 110 0.22 Other restructuring (income) costs 195 0.3 % 195 46 149 0.32 Pension/OPEB mark-to-market (gains) losses — — % (154) (43) (111) (0.23) Tax law change related to currency translation — — % — 224 (224) (0.46) Twelve Months Ended December 31, 2024 - Adjusted $ 13,431 20.7 % $ 13,578 $ 2,910 $ 10,716 $ 21.90 We believe it is important to separately disclose our annual effective tax rate, excluding discrete items for our results to be meaningful to our readers.
These ME&T securities were $1.98 billion as of December 31, 2024 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 2024 was $12.04 billion, down $850 million compared to 2023.
These MP&E securities were $1.230 billion as of December 31, 2025 and are included in Prepaid expenses and other current assets and Other assets in the Consolidated Statement of Financial Position. We intend to maintain a strong cash and liquidity position. Consolidated operating cash flow for 2025 was $11.739 billion, down $296 million compared to 2024.
The company also recorded a tax charge of $43 million related to $154 million of mark-to-market gains for remeasurement of pension and OPEB plans in 2024, compared to a tax charge of $26 million related to $97 million of mark-to-market gains in 2023.
The company also recorded a tax charge of $68 million related to $294 million of mark-to-market gains for remeasurement of pension and other postretirement benefit (OPEB) plans in 2025, compared to a tax charge of $43 million related to $154 million of mark-to-market gains in 2024.
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 Twelve Months Ended December 31, 2024 2023 ME&T net cash provided by operating activities 1 $ 11,437 $ 11,688 ME&T capital expenditures (1,988) (1,663) ME&T free cash flow $ 9,449 $ 10,025 1 See reconciliation of ME&T net cash provided by operating activities to consolidated net cash provided by operating activities on page 52. 48 Table of Contents Supplemental Consolidating Data We are providing supplemental consolidating data for the purpose of additional analysis.
Reconciliations of MP&E free cash flow to the most directly comparable GAAP measure, net cash provided by operating activities are as follows: Millions of dollars Twelve Months Ended December 31, 2025 2024 MP&E net cash provided by operating activities 1 $ 12,278 $ 11,437 MP&E capital expenditures (2,794) (1,988) MP&E free cash flow $ 9,484 $ 9,449 1 See reconciliation of MP&E net cash provided by operating activities to consolidated net cash provided by operating activities on page 53. 49 Table of Contents Supplemental Consolidating Data We are providing supplemental consolidating data for the purpose of additional analysis.
In addition, at December 31, 2024, Cat Financial’s six-month covenant leverage ratio was 7.25 to 1 and year-end covenant leverage ratio was 7.37 to 1.
In addition, at December 31, 2025, Cat Financial’s six-month covenant leverage ratio was 7.65 to 1 and year-end covenant leverage ratio was 8.21 to 1.
Pension Benefits (2) (4) 2 (10) Other Postretirement Benefits 173 177 188 161 Mark-to-market loss (gain) — 1 (154) (97) (606) Total net periodic benefit cost (benefit) $ 63 $ (55) $ 60 $ (723) 1 Expected net periodic benefit cost (benefit) does not include an estimate for mark-to-market gains or losses. • Expected decrease in expense in 2025 compared to 2024 — Excluding the impact of mark-to-market gains and losses, our net periodic benefit cost is expected to decrease $36 million in 2025.
Pension Benefits (5) (3) (4) 2 Other Postretirement Benefits 150 174 177 188 Mark-to-market loss (gain) — 1 (294) (154) (97) Total net periodic benefit cost (benefit) $ (15) $ (231) $ (55) $ 60 1 Expected net periodic benefit cost (benefit) does not include an estimate for mark-to-market gains or losses. • Expected decrease in expense in 2026 compared to 2025 — Excluding the impact of mark-to-market gains and losses, our net periodic benefit cost is expected to decrease $78 million in 2026.
Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees. Total sales and revenues for 2024 were $64.809 billion, a decrease of $2.251 billion, or 3 percent, compared with $67.060 billion in 2023.
Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees. Total sales and revenues for 2025 were $67.589 billion, an increase of $2.780 billion, or 4 percent, compared with $64.809 billion in 2024.
Within working capital, changes in receivables, accounts payable, and customer advances favorably impacted cash flow partially offset by changes in accrued expenses. Net cash provided by investing activities in 2024 was $133 million, compared with net cash used of $3.92 billion in 2023.
Within working capital, changes in customer advances, accounts payable, and accrued wages, salaries, and employee benefits favorably impacted cash flow, partially offset by changes in inventories and receivables. Net cash used by investing activities in 2025 was $2.870 billion, compared with net cash provided of $133 million in 2024.
In June 2024, the Board approved an additional share repurchase authorization (the 2024 Authorization) of up to $20.0 billion of Caterpillar common stock, effective June 12, 2024, with no expiration. In 2024, we repurchased $7.7 billion of Caterpillar common stock, with $20.1 billion remaining under the 2022 and 2024 Authorizations as of December 31, 2024.
In June 2024, the Board approved an additional share repurchase authorization (the 2024 Authorization) of up to $20.0 billion of Caterpillar common stock, effective June 12, 2024, with no expiration. In 2025, we repurchased $5.190 billion of Caterpillar common stock. As of December 31, 2025, the 2022 Authorization was fully utilized and $14.937 billion remained under the 2024 Authorization.
Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees. The bar entitled Other includes consolidating adjustments and Machinery, Energy & Transportation other operating (income) expenses . Operating profit was $13.072 billion in 2024, an increase of $106 million, or 1 percent, compared with $12.966 billion in 2023.
Caterpillar management utilizes these charts internally to visually communicate with the company’s board of directors and employees. The bar entitled Other includes consolidating adjustments and Machinery, Power & Energy other operating (income) expenses . Operating profit was $11.151 billion in 2025, a decrease of $1.921 billion, or 15 percent, compared with $13.072 billion in 2024.
The 364-day facility of $3.15 billion (of which $825 million is available to ME&T) expires in August 2025. • In August 2024, we amended and extended the three-year facility (as amended and restated, the "three-year facility").
The 364-day facility of $3.500 billion (of which $875 million is available to MP&E) expires in August 2026. • In August 2025, we amended and extended the three-year facility (as amended and restated, the "three-year facility").
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.
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). 37 Table of Contents 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.
In the first quarter of 2025 as compared to the first quarter of 2024, we anticipate lower sales in Construction Industries primarily due to lower sales of equipment to end users, an unfavorable impact from changes in dealer inventories and unfavorable price realization. In Resource Industries, we expect lower sales primarily due to lower sales volume and unfavorable price realization.
In the first quarter of 2026 as compared to the first quarter of 2025, we anticipate strong sales growth in Construction Industries, primarily due to higher sales volume and favorable price realization. We expect higher sales volume to be driven by higher sales of equipment to end users and by the impact from changes in dealer inventories.
Dealer inventory increased during 2024, compared with a decrease during 2023. • In EAME, sales decreased primarily due to lower sales volume. Lower sales volume was mainly due to lower sales of equipment to end users. • Sales decreased in Asia/Pacific primarily due to lower sales volume and unfavorable currency impacts, primarily related to the Japanese yen.
Dealer inventory increased in 2025, compared to a decrease in 2024. Asia/Pacific sales decreased 2 percent primarily due to unfavorable currency impacts related to the Australian dollar, and lower sales volume. The decrease in sales volume was mainly driven by lower sales of equipment to end users.
These items consist of (i) restructuring income/costs related to the divestitures of certain non-U.S. entities in 2024, (ii) pension and OPEB mark-to-market gains/losses resulting from plan remeasurements, (iii) a discrete tax benefit for a tax law change related to currency translation in 2024, (iv) the impact of changes in estimates related to prior years in 2024, (v) a settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S.
These items consist of (i) pension and OPEB mark-to-market gains/losses resulting from plan remeasurements, (ii) the impact of changes in estimates related to prior years, (iii) the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInformation required by Item 7A appears in Note 1 — “Operations and summary of significant accounting policies,” Note 2 — "Sales and revenue recognition," Note 4 — “Derivative financial instruments and risk management,” Note 7 — "Cat Financial financing activities," Note 11 — "Investments in debt and equity securities," and Note 18 — “Fair value disclosures” of Part II, Item 8 “Financial Statements and Supplementary Data.” Other information required by Item 7A is included in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 53 Table of Contents
Biggest changeInformation required by Item 7A appears in Note 1 — “Operations and summary of significant accounting policies,” Note 2 — "Sales and revenue recognition," Note 4 — “Derivative financial instruments and risk management,” Note 7 — "Cat Financial financing activities," Note 11 — "Investments in debt and equity securities," and Note 18 — “Fair value disclosures” of Part II, Item 8 “Financial Statements and Supplementary Data.” Other information required by Item 7A is included in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 54 Table of Contents

Other CAT 10-K year-over-year comparisons