10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 FORM 10-Q 

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

For the quarterly period ended September 30, 2022

OR

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

For the transition period from                    to

Commission File Number:  1-768

CATERPILLAR INC.

(Exact name of registrant as specified in its charter)

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

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

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

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

Title of each class	Trading Symbol (s)	Name of each exchange on which registered
Common Stock ($1.00 par value)	CAT	New York Stock Exchange	¹
8% Debentures due February 15, 2023	CAT23	New York Stock Exchange
5.3% Debentures due September 15, 2035	CAT35	New York Stock Exchange

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

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

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

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

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

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

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

At September 30, 2022, 520,409,355 shares of common stock of the registrant were outstanding.

Table of Contents

Part I. Financial Information
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	45
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	75
Item 4.	Controls and Procedures	75
Part II. Other Information
Item 1.	Legal Proceedings	76
Item 1A.	Risk Factors	76
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	76
Item 3.	Defaults Upon Senior Securities	*
Item 4.	Mine Safety Disclosures	*
Item 5.	Other Information	*
Item 6.	Exhibits	77

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

2

Part I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

Caterpillar Inc.

Consolidated Statement of Results of Operations

(Unaudited)

(Dollars in millions except per share data)

	Three Months Ended September 30
	2022		2021
Sales and revenues:
Sales of Machinery, Energy & Transportation	$	14,278	$	11,707
Revenues of Financial Products	716		690
Total sales and revenues	14,994		12,397
Operating costs:
Cost of goods sold	10,202		8,617
Selling, general and administrative expenses	1,401		1,340
Research and development expenses	476		427
Interest expense of Financial Products	151		111
Other operating (income) expenses	339		238
Total operating costs	12,569		10,733
Operating profit	2,425		1,664
Interest expense excluding Financial Products	109		114
Other income (expense)	242		225
Consolidated profit before taxes	2,558		1,775
Provision (benefit) for income taxes	527		368
Profit of consolidated companies	2,031		1,407
Equity in profit (loss) of unconsolidated affiliated companies	9		21
Profit of consolidated and affiliated companies	2,040		1,428
Less: Profit (loss) attributable to noncontrolling interests	(1)		2
Profit 1	$	2,041	$	1,426
Profit per common share	$	3.89	$	2.62
Profit per common share – diluted 2	$	3.87	$	2.60
Weighted-average common shares outstanding (millions)
– Basic	525.0		544.0
– Diluted 2	527.6		547.6

1    Profit attributable to common shareholders.

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

See accompanying notes to Consolidated Financial Statements.

3

Caterpillar Inc.

Consolidated Statement of Comprehensive Income

(Unaudited)

(Dollars in millions)

	Three Months Ended September 30
	2022		2021
Profit of consolidated and affiliated companies	$	2,040	$	1,428
Other comprehensive income (loss), net of tax (Note 13):
Foreign currency translation:	(618)		(242)
Pension and other postretirement benefits:	(1)		(8)
Derivative financial instruments:	(191)		(31)
Available-for-sale securities:	(44)		(5)
Total other comprehensive income (loss), net of tax	(854)		(286)
Comprehensive income	1,186		1,142
Less: comprehensive income attributable to the noncontrolling interests	(1)		2
Comprehensive income attributable to shareholders	$	1,187	$	1,140

See accompanying notes to Consolidated Financial Statements.

4

Caterpillar Inc.

Consolidated Statement of Results of Operations

(Unaudited)

(Dollars in millions except per share data)

	Nine Months Ended September 30
	2022		2021
Sales and revenues:
Sales of Machinery, Energy & Transportation	$	40,703	$	35,091
Revenues of Financial Products	2,127		2,082
Total sales and revenues	42,830		37,173
Operating costs:
Cost of goods sold	29,736		25,510
Selling, general and administrative expenses	4,172		3,943
Research and development expenses	1,413		1,247
Interest expense of Financial Products	377		352
Other operating (income) expenses	908		854
Total operating costs	36,606		31,906
Operating profit	6,224		5,267
Interest expense excluding Financial Products	326		376
Other income (expense)	755		751
Consolidated profit before taxes	6,653		5,642
Provision (benefit) for income taxes	1,423		1,313
Profit of consolidated companies	5,230		4,329
Equity in profit (loss) of unconsolidated affiliated companies	20		44
Profit of consolidated and affiliated companies	5,250		4,373
Less: Profit (loss) attributable to noncontrolling interests	(1)		4
Profit 1	$	5,251	$	4,369
Profit per common share	$	9.91	$	8.00
Profit per common share – diluted 2	$	9.85	$	7.94
Weighted-average common shares outstanding (millions)
– Basic	530.1		545.8
– Diluted 2	533.2		550.2

1    Profit attributable to common shareholders.

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

See accompanying notes to Consolidated Financial Statements.

5

Caterpillar Inc.

Consolidated Statement of Comprehensive Income

(Unaudited)

(Dollars in millions)

	Nine Months Ended September 30
	2022		2021
Profit of consolidated and affiliated companies	$	5,250	$	4,373
Other comprehensive income (loss), net of tax (Note 13):
Foreign currency translation:	(1,392)		(490)
Pension and other postretirement benefits:	(3)		(23)
Derivative financial instruments:	(254)		(19)
Available-for-sale securities:	(151)		(20)
Total other comprehensive income (loss), net of tax	(1,800)		(552)
Comprehensive income	3,450		3,821
Less: comprehensive income attributable to the noncontrolling interests	(1)		4
Comprehensive income attributable to shareholders	$	3,451	$	3,817

See accompanying notes to Consolidated Financial Statements.

6

Caterpillar Inc.

Consolidated Statement of Financial Position

(Unaudited)

(Dollars in millions) 

	September 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	6,346	$	9,254
Receivables – trade and other	8,158		8,477
Receivables – finance	8,918		8,898
Prepaid expenses and other current assets	2,295		2,788
Inventories	16,860		14,038
Total current assets	42,577		43,455
Property, plant and equipment – net	11,643		12,090
Long-term receivables – trade and other	1,278		1,204
Long-term receivables – finance	11,859		12,707
Noncurrent deferred and refundable income taxes	2,218		1,840
Intangible assets	806		1,042
Goodwill	6,092		6,324
Other assets	4,434		4,131
Total assets	$	80,907	$	82,793
Liabilities
Current liabilities:
Short-term borrowings:
Machinery, Energy & Transportation	$	3	$	9
Financial Products	4,199		5,395
Accounts payable	8,260		8,154
Accrued expenses	4,013		3,757
Accrued wages, salaries and employee benefits	2,204		2,242
Customer advances	1,831		1,087
Dividends payable	—		595
Other current liabilities	2,878		2,256
Long-term debt due within one year:
Machinery, Energy & Transportation	120		45
Financial Products	6,694		6,307
Total current liabilities	30,202		29,847
Long-term debt due after one year:
Machinery, Energy & Transportation	9,479		9,746
Financial Products	16,030		16,287
Liability for postemployment benefits	5,038		5,592
Other liabilities	4,536		4,805
Total liabilities	65,285		66,277
Commitments and contingencies (Notes 11 and 14)
Shareholders’ equity
Common stock of $1.00 par value:
Authorized shares: 2,000,000,000 Issued shares: (9/30/22 and 12/31/21 – 814,894,624) at paid-in amount	6,523		6,398
Treasury stock: (9/30/22 – 294,485,269 shares; 12/31/21 – 279,006,573 shares) at cost	(30,883)		(27,643)
Profit employed in the business	43,304		39,282
Accumulated other comprehensive income (loss)	(3,353)		(1,553)
Noncontrolling interests	31		32
Total shareholders’ equity	15,622		16,516
Total liabilities and shareholders’ equity	$	80,907	$	82,793

See accompanying notes to Consolidated Financial Statements.

7

Caterpillar Inc.

Consolidated Statement of Changes in Shareholders’ Equity

(Unaudited)

(Dollars in millions) 

	Common stock		Treasury stock		Profit employed in the business		Accumulated other comprehensive income (loss)		Noncontrolling interests		Total
Three Months Ended September 30, 2021
Balance at June 30, 2021	$	6,293	$	(25,240)	$	36,934	$	(1,154)	$	47	$	16,880
Profit of consolidated and affiliated companies	—		—		1,426		—		2		1,428
Foreign currency translation, net of tax	—		—		—		(242)		—		(242)
Pension and other postretirement benefits, net of tax	—		—		—		(8)		—		(8)
Derivative financial instruments, net of tax	—		—		—		(31)		—		(31)
Available-for-sale securities, net of tax	—		—		—		(5)		—		(5)
Change in ownership from noncontrolling interests	—		—		—		—		(16)		(16)
Dividends declared	—		—		1		—		—		1
Distribution to noncontrolling interests	—		—		—		—		(2)		(2)
Common shares issued from treasury stock for stock-based compensation: 80,571	(5)		4		—		—		—		(1)
Stock-based compensation expense	58		—		—		—		—		58
Common shares repurchased: 6,610,438 1	—		(1,371)		—		—		—		(1,371)
Other	6		(1)		—		—		(1)		4
Balance at September 30, 2021	$	6,352	$	(26,608)	$	38,361	$	(1,440)	$	30	$	16,695
Three Months Ended September 30, 2022
Balance at June 30, 2022	$	6,464	$	(29,501)	$	41,263	$	(2,499)	$	32	$	15,759
Profit of consolidated and affiliated companies	—		—		2,041		—		(1)		2,040
Foreign currency translation, net of tax	—		—		—		(618)		—		(618)
Pension and other postretirement benefits, net of tax	—		—		—		(1)		—		(1)
Derivative financial instruments, net of tax	—		—		—		(191)		—		(191)
Available-for-sale securities, net of tax	—		—		—		(44)		—		(44)
Common shares issued from treasury stock for stock-based compensation: 75,534	(5)		4		—		—		—		(1)
Stock-based compensation expense	55		—		—		—		—		55
Common shares repurchased: 7,575,322 1	—		(1,385)		—		—		—		(1,385)
Other	9		(1)		—		—		—		8
Balance at September 30, 2022	$	6,523	$	(30,883)	$	43,304	$	(3,353)	$	31	$	15,622

1 See Note 12 for additional information.

See accompanying notes to Consolidated Financial Statements.

8

Caterpillar Inc.

Consolidated Statement of Changes in Shareholders’ Equity

(Unaudited)

(Dollars in millions) 

	Common stock		Treasury stock		Profit employed in the business		Accumulated other comprehensive income (loss)		Noncontrolling interests		Total
Nine Months Ended September 30, 2021
Balance at December 31, 2020	$	6,230	$	(25,178)	$	35,167	$	(888)	$	47	$	15,378
Profit of consolidated and affiliated companies	—		—		4,369		—		4		4,373
Foreign currency translation, net of tax	—		—		—		(490)		—		(490)
Pension and other postretirement benefits, net of tax	—		—		—		(23)		—		(23)
Derivative financial instruments, net of tax	—		—		—		(19)		—		(19)
Available-for-sale securities, net of tax	—		—		—		(20)		—		(20)
Change in ownership from noncontrolling interests	—		—		—		—		(16)		(16)
Dividends declared 1	—		—		(1,175)		—		—		(1,175)
Distribution to noncontrolling interests	—		—		—		—		(4)		(4)
Common shares issued from treasury stock for stock-based compensation: 3,410,146	(70)		192		—		—		—		122
Stock-based compensation expense	169		—		—		—		—		169
Common shares repurchased: 7,772,393 2	—		(1,622)		—		—		—		(1,622)
Other	23		—		—		—		(1)		22
Balance at September 30, 2021	$	6,352	$	(26,608)	$	38,361	$	(1,440)	$	30	$	16,695
Nine Months Ended September 30, 2022
Balance at December 31, 2021	$	6,398	$	(27,643)	$	39,282	$	(1,553)	$	32	$	16,516
Profit of consolidated and affiliated companies	—		—		5,251		—		(1)		5,250
Foreign currency translation, net of tax	—		—		—		(1,392)		—		(1,392)
Pension and other postretirement benefits, net of tax	—		—		—		(3)		—		(3)
Derivative financial instruments, net of tax	—		—		—		(254)		—		(254)
Available-for-sale securities, net of tax	—		—		—		(151)		—		(151)
Dividends declared 1	—		—		(1,229)		—		—		(1,229)
Common shares issued from treasury stock for stock-based compensation: 1,529,753	(67)		69		—		—		—		2
Stock-based compensation expense	162		—		—		—		—		162
Common shares repurchased: 17,007,819 2	—		(3,309)		—		—		—		(3,309)
Other	30		—		—		—		—		30
Balance at September 30, 2022	$	6,523	$	(30,883)	$	43,304	$	(3,353)	$	31	$	15,622

1 Dividends per share of common stock of $2.31 and $2.14 were declared in the nine months ended September 30, 2022 and 2021, respectively.

2 See Note 12 for additional information.

See accompanying notes to Consolidated Financial Statements.

9

Caterpillar Inc.

Consolidated Statement of Cash Flow

(Unaudited)

(Millions of dollars)

	Nine Months Ended September 30
	2022		2021
Cash flow from operating activities:
Profit of consolidated and affiliated companies	$	5,250	$	4,373
Adjustments for non-cash items:
Depreciation and amortization	1,661		1,766
Provision (benefit) for deferred income taxes	(349)		(321)
Other	132		102
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables – trade and other	365		(326)
Inventories	(3,088)		(2,195)
Accounts payable	786		1,232
Accrued expenses	70		46
Accrued wages, salaries and employee benefits	15		934
Customer advances	751		39
Other assets – net	57		138
Other liabilities – net	(623)		(2)
Net cash provided by (used for) operating activities	5,027		5,786
Cash flow from investing activities:
Capital expenditures – excluding equipment leased to others	(868)		(673)
Expenditures for equipment leased to others	(1,023)		(1,014)
Proceeds from disposals of leased assets and property, plant and equipment	666		877
Additions to finance receivables	(9,914)		(9,603)
Collections of finance receivables	9,738		9,221
Proceeds from sale of finance receivables	50		44
Investments and acquisitions (net of cash acquired)	(44)		(449)
Proceeds from sale of businesses and investments (net of cash sold)	1		23
Proceeds from sale of securities	2,080		424
Investments in securities	(2,399)		(934)
Other – net	15		(8)
Net cash provided by (used for) investing activities	(1,698)		(2,092)
Cash flow from financing activities:
Dividends paid	(1,820)		(1,733)
Common stock issued, including treasury shares reissued	2		122
Common shares repurchased	(3,309)		(1,622)
Proceeds from debt issued (original maturities greater than three months):
Machinery, Energy & Transportation	—		494
Financial Products	5,570		6,437
Payments on debt (original maturities greater than three months):
Machinery, Energy & Transportation	(20)		(1,910)
Financial Products	(5,269)		(6,710)
Short-term borrowings – net (original maturities three months or less)	(1,311)		1,324
Other – net	(1)		(4)
Net cash provided by (used for) financing activities	(6,158)		(3,602)
Effect of exchange rate changes on cash	(79)		(9)
Increase (decrease) in cash, cash equivalents and restricted cash	(2,908)		83
Cash, cash equivalents and restricted cash at beginning of period	9,263		9,366
Cash, cash equivalents and restricted cash at end of period	$	6,355	$	9,449

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

See accompanying notes to Consolidated Financial Statements.

10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.                                   A.  Nature of operations

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

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

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

B.  Basis of presentation

In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the consolidated results of operations for the three and nine months ended September 30, 2022 and 2021, (b) the consolidated comprehensive income for the three and nine months ended September 30, 2022 and 2021, (c) the consolidated financial position at September 30, 2022 and December 31, 2021, (d) the consolidated changes in shareholders’ equity for the three and nine months ended September 30, 2022 and 2021 and (e) the consolidated cash flow for the nine months ended September 30, 2022 and 2021.  The financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).

Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in our company’s annual report on Form 10-K for the year ended December 31, 2021 (2021 Form 10-K).

The December 31, 2021 financial position data included herein is derived from the audited consolidated financial statements included in the 2021 Form 10-K but does not include all disclosures required by U.S. GAAP. Certain amounts for prior periods have been reclassified to conform to the current period financial statement presentation.

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

2.                                   New accounting guidance

A. Adoption of new accounting standards

We consider the applicability and impact of all ASUs. We adopted the following ASUs effective January 1, 2022, none of which had a material impact on our financial statements:

ASU	Description
2020-06	Debt with conversion and other options and derivatives and hedging
2021-05	Lessor - Variable lease payments
2021-10	Government assistance

11

B. Accounting standards issued but not yet adopted

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

3.                                   Sales and revenue contract information

Trade receivables represent amounts due from dealers and end users for the sale of our products, and include amounts due from wholesale inventory financing provided by Cat Financial for a dealer’s purchase of inventory. We recognize trade receivables from dealers (including wholesale inventory financing) and end users in Receivables – trade and other and Long-term receivables – trade and other in the Consolidated Statement of Financial Position. Trade receivables from dealers and end users were $6,736 million, $7,267 million and $6,310 million as of September 30, 2022, December 31, 2021 and December 31, 2020, respectively. Long-term trade receivables from dealers and end users were $448 million, $624 million and $657 million as of September 30, 2022, December 31, 2021 and December 31, 2020, respectively.

We invoice in advance of recognizing the sale of certain products. We recognize advanced customer payments as a contract liability in Customer advances and Other liabilities in the Consolidated Statement of Financial Position. Contract liabilities were $2,290 million, $1,557 million and $1,526 million as of September 30, 2022, December 31, 2021 and December 31, 2020, respectively. We reduce the contract liability when revenue is recognized. During the three and nine months ended September 30, 2022, we recognized $124 million and $781 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2022. During the three and nine months ended September 30, 2021, we recognized $121 million and $795 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2021.

As of September 30, 2022, we have entered into contracts with dealers and end users for which sales have not been recognized as we have not satisfied our performance obligations and transferred control of the products. The dollar amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $10.9 billion, with about one-half of the amount expected to be completed and revenue recognized in the twelve months following September 30, 2022. We have elected the practical expedient not to disclose unsatisfied performance obligations with an original contract duration of one year or less. Contracts with an original duration of one year or less are primarily sales to dealers for machinery, engines and replacement parts.

See Note 16 for further disaggregated sales and revenues information.

4.                                    Stock-based compensation

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

We recognized pretax stock-based compensation expense of $55 million and $162 million for the three and nine months ended September 30, 2022, respectively, and $58 million and $169 million for the three and nine months ended September 30, 2021, respectively.

The following table illustrates the type and fair value of the stock-based compensation awards granted during the nine months ended September 30, 2022 and 2021, respectively:

	Nine Months Ended September 30, 2022					Nine Months Ended September 30, 2021
	Shares Granted	Weighted-Average Fair Value Per Share		Weighted-Average Grant Date Stock Price		Shares Granted	Weighted-Average Fair Value Per Share		Weighted-Average Grant Date Stock Price
Stock options	1,029,202	$	51.69	$	196.70	1,084,821	$	56.30	$	219.76
RSUs	484,025	$	196.70	$	196.70	448,311	$	219.76	$	219.76
PRSUs	258,900	$	196.70	$	196.70	266,894	$	219.76	$	219.76

12

The following table provides the assumptions used in determining the fair value of the stock-based awards for the nine months ended September 30, 2022 and 2021, respectively:

	Grant Year
	2022	2021
Weighted-average dividend yield	2.60%	2.60%
Weighted-average volatility	31.7%	32.9%
Range of volatilities	25.3% - 36.8%	29.2% - 45.8%
Range of risk-free interest rates	1.03% - 2.00%	0.06% - 1.41%
Weighted-average expected lives	8 years	8 years

As of September 30, 2022, the total remaining unrecognized compensation expense related to nonvested stock-based compensation awards was $173 million, which will be amortized over the weighted-average remaining requisite service periods of approximately 1.8 years.

5.                                     Derivative financial instruments and risk management

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

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

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

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

Foreign Currency Exchange Rate Risk

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

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Our ME&T operations purchase, manufacture and sell products in many locations around the world. As we have a diversified revenue and cost base, we manage our future foreign currency cash flow exposure on a net basis. We use foreign currency forward and option contracts to manage unmatched foreign currency cash inflow and outflow. Our objective is to minimize the risk of exchange rate movements that would reduce the U.S. dollar value of our foreign currency cash flow. Our policy allows for managing anticipated foreign currency cash flow for up to approximately five years. As of September 30, 2022, the maximum term of these outstanding contracts at inception was approximately 60 months.

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

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

Interest Rate Risk

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

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

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

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

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

Commodity Price Risk

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

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

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

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

(Millions of dollars)	Fair Value
	September 30, 2022				December 31, 2021
	Assets1		Liabilities2		Assets1		Liabilities2
Designated derivatives
Foreign exchange contracts	$	692	$	(394)	$	228	$	(64)
Interest rate contracts	94		(302)		38		(15)
Total	$	786	$	(696)	$	266	$	(79)
Undesignated derivatives
Foreign exchange contracts	$	118	$	(78)	$	46	$	(42)
Commodity contracts	9		(43)		30		(9)
Total	$	127	$	(121)	$	76	$	(51)
1 Assets are classified on the Consolidated Statement of Financial Position as Receivables - trade and other or Long-term receivables - trade and other.
2 Liabilities are classified on the Consolidated Statement of Financial Position as Accrued expenses or Other liabilities.

 

The total notional amounts of the derivative instruments as of September 30, 2022 and December 31, 2021 were $24.8 billion and $18.9 billion, respectively. The notional amounts of the derivative financial instruments do not represent amounts exchanged by the parties. We calculate the amounts exchanged by the parties by referencing the notional amounts and by other terms of the derivatives, such as foreign currency exchange rates, interest rates or commodity prices.

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

(Millions of dollars)	Three Months Ended September 30
	Fair Value / Undesignated Hedges				Cash Flow Hedges
	Gains (Losses) Recognized on the Consolidated Statement of Results of Operations1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI2
	2022		2021		2022		2021		2022		2021
Foreign exchange contracts	$	(2)	$	46	$	18	$	42	$	289	$	90
Interest rate contracts	(5)		5		26		3		7		(5)
Commodity contracts	(42)		(30)		—		—		—		—
Total	$	(49)	$	21	$	44	$	45	$	296	$	85
1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products.
2 Foreign exchange contract gains (losses) are primarily included in Other income (expense) in the Consolidated Statement of Results of Operations. Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products in the Consolidated Statement of Results of Operations.

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(Millions of dollars)	Nine Months Ended September 30
	Fair Value / Undesignated Hedges				Cash Flow Hedges
	Gains (Losses) Recognized on the Consolidated Statement of Results of Operations1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI2
	2022		2021		2022		2021		2022		2021
Foreign exchange contracts	$	(32)	$	77	$	195	$	130	$	638	$	187
Interest rate contracts	12		18		103		11		(2)		(23)
Commodity contract	3		35		—		—		—		—
Total	$	(17)	$	130	$	298	$	141	$	636	$	164
1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense excluding Financial Products.
2 Foreign exchange contract gains (losses) are primarily included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense excluding Financial Products.

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

(Millions of dollars)	Carrying Value of the Hedged Liabilities				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities
	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Long-term debt due within one year	$	—	$	755	$	—	$	5
Long-term debt due after one year	3,796		1,304		(227)		(2)
Total	$	3,796	$	2,059	$	(227)	$	3

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

Collateral is typically not required of the counterparties or of our company under the master netting agreements. As of September 30, 2022 and December 31, 2021, no cash collateral was received or pledged under the master netting agreements.

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

(Millions of dollars)	September 30, 2022				December 31, 2021
	Assets		Liabilities		Assets		Liabilities
Gross Amounts Recognized	$	913	$	(817)	$	342	$	(130)
Financial Instruments Not Offset	(282)		282		(114)		114
Cash Collateral Received	—		—		—		—
Net Amount	$	631	$	(535)	$	228	$	(16)

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6.                                     Inventories

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

(Millions of dollars)	September 30, 2022		December 31, 2021
Raw materials	$	6,335	$	5,528
Work-in-process	1,836		1,318
Finished goods	8,387		6,907
Supplies	302		285
Total inventories	$	16,860	$	14,038

7.                                     Intangible assets and goodwill

A.  Intangible assets

Intangible assets were comprised of the following:

		September 30, 2022
(Millions of dollars)	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	16	$	2,183	$	(1,604)	$	579
Intellectual property	12	1,470		(1,287)		183
Other	16	128		(84)		44
Total finite-lived intangible assets	14	$	3,781	$	(2,975)	$	806

		December 31, 2021
	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	15	$	2,421	$	(1,709)	$	712
Intellectual property	12	1,472		(1,192)		280
Other	14	156		(106)		50
Total finite-lived intangible assets	14	$	4,049	$	(3,007)	$	1,042

Amortization expense for the three and nine months ended September 30, 2022 was $70 million and $213 million, respectively. Amortization expense for the three and nine months ended September 30, 2021 was $75 million and $228 million, respectively. Amortization expense related to intangible assets is expected to be:

(Millions of dollars)
Remaining Three Months of 2022	2023	2024	2025	2026	Thereafter
$70	$222	$163	$153	$85	$113

B.  Goodwill

No goodwill was impaired during the nine months ended September 30, 2022 or 2021.

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The changes in carrying amount of goodwill by reportable segment for the nine months ended September 30, 2022 were as follows: 

(Millions of dollars)	December 31, 2021		Acquisitions		Other Adjustments 1		September 30, 2022
Construction Industries
Goodwill	$	302	$	—	$	(39)	$	263
Impairments	(22)		—		—		(22)
Net goodwill	280		—		(39)		241
Resource Industries
Goodwill	4,182		—		(127)		4,055
Impairments	(1,175)		—		—		(1,175)
Net goodwill	3,007		—		(127)		2,880
Energy & Transportation
Goodwill	2,985		25		(81)		2,929
All Other 2
Goodwill	52		—		(10)		42
Consolidated total
Goodwill	7,521		25		(257)		7,289
Impairments	(1,197)		—		—		(1,197)
Net goodwill	$	6,324	$	25	$	(257)	$	6,092

1 Other adjustments are comprised primarily of foreign currency translation.

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

8.                                     Investments in debt and equity securities

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

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

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

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Available-for-sale debt securities	September 30, 2022						December 31, 2021
(Millions of dollars)	Cost Basis		Unrealized Pretax Net Gains (Losses)		Fair Value		Cost Basis		Unrealized Pretax Net Gains (Losses)		Fair Value
Government debt securities
U.S. treasury bonds	$	10	$	—	$	10	$	10	$	—	$	10
Other U.S. and non-U.S. government bonds	51		(2)		49		61		—		61
Corporate debt securities
Corporate bonds and other debt securities	2,156		(108)		2,048		1,027		19		1,046
Asset-backed securities	185		(5)		180		175		1		176
Mortgage-backed debt securities
U.S. governmental agency	384		(36)		348		319		6		325
Residential	3		—		3		4		—		4
Commercial	139		(10)		129		98		1		99
Total available-for-sale debt securities	$	2,928	$	(161)	$	2,767	$	1,694	$	27	$	1,721

Available-for-sale debt securities in an unrealized loss position:
	September 30, 2022
	Less than 12 months 1				12 months or more 1				Total
(Millions of dollars)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government debt securities
Other U.S. and non-U.S. government bonds	$	31	$	1	$	15	$	1	$	46	$	2
Corporate debt securities
Corporate bonds	1,774		75		218		33		1,992		108
Asset-backed securities	102		4		35		1		137		5
Mortgage-backed debt securities
U.S. governmental agency	293		27		51		9		344		36
Commercial	88		7		41		3		129		10
	$	2,288	$	114	$	360	$	47	$	2,648	$	161

	December 31, 2021
	Less than 12 months 1				12 months or more 1				Total
(Millions of dollars)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Corporate debt securities
Corporate bonds	$	270	$	4	$	33	$	1	$	303	$	5
Mortgage-backed debt securities
U.S. governmental agency	89		1		22		—		111		1
Total	$	359	$	5	$	55	$	1	$	414	$	6
1 Indicates the length of time that individual securities have been in a continuous unrealized loss position.

The unrealized losses on our investments in government debt securities, corporate debt securities, and mortgage-backed debt securities relate to changes in interest rates and credit-related yield spreads since time of purchase. We do not intend to sell the investments, and it is not likely that we will be required to sell the investments before recovery of their respective amortized cost basis. In addition, we did not expect credit-related losses on these investments as of September 30, 2022.

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The cost basis and fair value of available-for-sale debt securities at September 30, 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay and creditors may have the right to call obligations.        

	September 30, 2022
(Millions of dollars)	Cost Basis		Fair Value
Due in one year or less	$	696	$	687
Due after one year through five years	1,354		1,277
Due after five years through ten years	282		256
Due after ten years	70		67
U.S. governmental agency mortgage-backed securities	384		348
Residential mortgage-backed securities	3		3
Commercial mortgage-backed securities	139		129
Total debt securities – available-for-sale	$	2,928	$	2,767

Sales of available-for-sale debt securities:
	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
Proceeds from the sale of available-for-sale securities	$	204	$	97	$	474	$	322
Gross gains from the sale of available-for-sale securities	—		1		1		3
Gross losses from the sale of available-for-sale securities	—		—		1		—

We did not have any investments classified as held-to-maturity debt securities as of September 30, 2022. We had $964 million of investments in time deposits classified as held-to-maturity debt securities as of December 31, 2021. All these investments mature within one year and we include them in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. We record held-to-maturity debt securities at amortized cost, which approximates fair value.

For the three months ended September 30, 2022 and 2021, the net unrealized gains (losses) for equity securities held at September 30, 2022 and 2021 were $(12) million and $46 million, respectively. For the nine months ended September 30, 2022 and 2021, the net unrealized gains (losses) for equity securities held at September 30, 2022 and 2021 were $(97) million and $65 million, respectively.

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9.                                     Postretirement benefits

A.  Pension and postretirement benefit costs    

	U.S. Pension Benefits				Non-U.S. Pension Benefits				Other Postretirement Benefits
	September 30				September 30				September 30
(Millions of dollars)	2022		2021		2022		2021		2022		2021
For the three months ended:
Components of net periodic benefit cost:
Service cost	$	—	$	—	$	15	$	15	$	24	$	25
Interest cost	100		82		17		16		20		16
Expected return on plan assets	(167)		(180)		(33)		(33)		(3)		(1)
Amortization of prior service cost (credit)	—		—		—		—		(1)		(11)
Net periodic benefit cost (benefit) 1	$	(67)	$	(98)	$	(1)	$	(2)	$	40	$	29
For the nine months ended:
Components of net periodic benefit cost:
Service cost	$	—	$	—	$	40	$	44	$	74	$	75
Interest cost	301		247		53		43		60		48
Expected return on plan assets	(502)		(538)		(100)		(98)		(9)		(4)
Amortization of prior service cost (credit)	—		—		—		—		(4)		(31)
Net periodic benefit cost (benefit) 1	$	(201)	$	(291)	$	(7)	$	(11)	$	121	$	88

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

We made $44 million and $299 million of contributions to our pension and other postretirement plans during the three and nine months ended September 30, 2022. We currently anticipate full-year 2022 contributions of approximately $357 million.

B.  Defined contribution benefit costs

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

	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
U.S. Plans	$	87	$	81	$	236	$	321
Non-U.S. Plans	29		29		85		83
	$	116	$	110	$	321	$	404

The decrease in the U.S. defined contribution benefit costs for the nine months ended September 30, 2022 was primarily due to the fair value adjustments related to our non-qualified deferred compensation plans.

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10.                              Leases

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

	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
Finance lease revenue	$	105	$	120	$	326	$	369
Operating lease revenue	270		275		819		850
Total	$	375	$	395	$	1,145	$	1,219

We present revenues net of sales and other related taxes.

11.                              Guarantees and product warranty

Caterpillar dealer performance guarantees

We have provided an indemnity to a third-party insurance company for potential losses related to performance bonds issued on behalf of Caterpillar dealers.  The bonds have varying terms and are issued to insure governmental agencies against nonperformance by certain dealers.  We also provided guarantees to third-parties related to the performance of contractual obligations by certain Caterpillar dealers. These guarantees have varying terms and cover potential financial losses incurred by the third parties resulting from the dealers’ nonperformance.

In 2016, we provided a guarantee to an end user related to the performance of contractual obligations by a Caterpillar dealer. Under the guarantee, which was set to expire in 2025, non-performance by the Caterpillar dealer could require Caterpillar to satisfy the contractual obligations by providing goods, services or financial compensation to the end user up to an annual designated cap. This guarantee was terminated during the first quarter of 2022. No payments were made under the guarantee.

Supplier consortium performance guarantee

We provided a guarantee to a customer in Europe related to the performance of contractual obligations by a supplier consortium to which one of our Caterpillar subsidiaries was a member. The guarantee covered potential damages incurred by the customer resulting from the supplier consortium's non-performance. The damages were capped except for failure of the consortium to meet certain obligations outlined in the contract in the normal course of business. The guarantee expired during the second quarter of 2022.

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

No significant loss has been experienced or is anticipated under any of these guarantees.  At September 30, 2022 and December 31, 2021, the related recorded liability was $3 million and $5 million, respectively. The maximum potential amount of future payments that we can estimate (undiscounted and without reduction for any amounts that may possibly be recovered under recourse or collateralized provisions) and we could be required to make under the guarantees was as follows:

(Millions of dollars)	September 30, 2022		December 31, 2021
Caterpillar dealer performance guarantees	$	137	$	747
Supplier consortium performance guarantee	17		242
Other guarantees	284		232
Total guarantees	$	438	$	1,221

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Cat Financial provides guarantees to purchase certain loans of Caterpillar dealers from a special-purpose corporation (SPC) that qualifies as a variable interest entity.  The purpose of the SPC is to provide short-term working capital loans to Caterpillar dealers.  This SPC issues commercial paper and uses the proceeds to fund its loan program. Cat Financial receives a fee for providing this guarantee.  Cat Financial is the primary beneficiary of the SPC as its guarantees result in Cat Financial having both the power to direct the activities that most significantly impact the SPC’s economic performance and the obligation to absorb losses, and therefore Cat Financial has consolidated the financial statements of the SPC.  As of September 30, 2022 and December 31, 2021, the SPC’s assets of $1.09 billion and $888 million, respectively, were primarily comprised of loans to dealers, and the SPC’s liabilities of $1.09 billion and $888 million, respectively, were primarily comprised of commercial paper.  The assets of the SPC are not available to pay Cat Financial’s creditors. Cat Financial may be obligated to perform under the guarantee if the SPC experiences losses. No loss has been experienced or is anticipated under this loan purchase agreement.

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

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

	First Nine Months
(Millions of dollars)	2022		2021
Warranty liability, beginning of period	$	1,689	$	1,612
Reduction in liability (payments)	(589)		(638)
Increase in liability (new warranties)	562		716
Warranty liability, end of period	$	1,662	$	1,690

12.                               Profit per share

Computations of profit per share:	Three Months Ended September 30				Nine Months Ended September 30
(Dollars in millions except per share data)	2022		2021		2022		2021
Profit for the period (A) 1	$	2,041	$	1,426	$	5,251	$	4,369
Determination of shares (in millions):
Weighted-average number of common shares outstanding (B)	525.0		544.0		530.1		545.8
Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price	2.6		3.6		3.1		4.4
Average common shares outstanding for fully diluted computation (C) 2	527.6		547.6		533.2		550.2
Profit per share of common stock:
Assuming no dilution (A/B)	$	3.89	$	2.62	$	9.91	$	8.00
Assuming full dilution (A/C) 2	$	3.87	$	2.60	$	9.85	$	7.94
Shares outstanding as of September 30 (in millions)					520.4		540.9
1 Profit attributable to common shareholders.
2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.

For the three and nine months ended September 30, 2022 and 2021, we excluded 2.1 million and 1.1 million of outstanding stock options, respectively, from the computation of diluted earnings per share because the effect would have been antidilutive.

23

For the three and nine months ended September 30, 2022, we repurchased 7.6 million and 17.0 million shares of Caterpillar common stock, respectively, at an aggregate cost of $1.4 billion and $3.3 billion, respectively. For the three and nine months ended September 30, 2021, we repurchased 6.6 million and 7.8 million shares of Caterpillar common stock, respectively, at an aggregate cost of $1.4 billion and $1.6 billion, respectively. We made these purchases through a combination of accelerated stock repurchase agreements with third-party financial institutions and open market transactions.

In July 2018, the Board approved a share repurchase authorization (the 2018 Authorization) of up to $10.0 billion of Caterpillar common stock effective January 1, 2019, with no expiration. In May 2022, the Board approved a new share repurchase authorization (the 2022 Authorization) of up to $15.0 billion of Caterpillar common stock effective August 1, 2022, with no expiration. Utilization of the 2022 Authorization for all share repurchases commenced on August 1, 2022, leaving approximately $70 million unutilized under the 2018 Authorization as of September 30, 2022. As of September 30, 2022, $13.7 billion remained available under the 2022 Authorization.

13.                         Accumulated other comprehensive income (loss)

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

24

	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
Foreign currency translation:
Beginning balance	$	(2,282)	$	(1,158)	$	(1,508)	$	(910)
Gains (losses) on foreign currency translation	(592)		(230)		(1,328)		(461)
Less: Tax provision /(benefit)	26		12		64		29
Net gains (losses) on foreign currency translation	(618)		(242)		(1,392)		(490)
(Gains) losses reclassified to earnings	—		—		—		—
Less: Tax provision /(benefit)	—		—		—		—
Net (gains) losses reclassified to earnings	—		—		—		—
Other comprehensive income (loss), net of tax	(618)		(242)		(1,392)		(490)
Ending balance	$	(2,900)	$	(1,400)	$	(2,900)	$	(1,400)
Pension and other postretirement benefits
Beginning balance	$	(64)	$	(47)	$	(62)	$	(32)
Current year prior service credit (cost)	—		—		—		—
Less: Tax provision /(benefit)	—		—		—		—
Net current year prior service credit (cost)	—		—		—		—
Amortization of prior service (credit) cost	(1)		(11)		(4)		(31)
Less: Tax provision /(benefit)	—		(3)		(1)		(8)
Net amortization of prior service (credit) cost	(1)		(8)		(3)		(23)
Other comprehensive income (loss), net of tax	(1)		(8)		(3)		(23)
Ending balance	$	(65)	$	(55)	$	(65)	$	(55)
Derivative financial instruments
Beginning balance	$	(66)	$	12	$	(3)	$	—
Gains (losses) deferred	44		45		298		141
Less: Tax provision /(benefit)	35		3		71		22
Net gains (losses) deferred	9		42		227		119
(Gains) losses reclassified to earnings	(296)		(85)		(636)		(164)
Less: Tax provision /(benefit)	(96)		(12)		(155)		(26)
Net (gains) losses reclassified to earnings	(200)		(73)		(481)		(138)
Other comprehensive income (loss), net of tax	(191)		(31)		(254)		(19)
Ending balance	$	(257)	$	(19)	$	(257)	$	(19)
Available-for-sale securities
Beginning balance	$	(87)	$	39	$	20	$	54
Gains (losses) deferred	(55)		(4)		(188)		(22)
Less: Tax provision /(benefit)	(11)		—		(37)		(4)
Net gains (losses) deferred	(44)		(4)		(151)		(18)
(Gains) losses reclassified to earnings	—		(1)		—		(3)
Less: Tax provision /(benefit)	—		—		—		(1)
Net (gains) losses reclassified to earnings	—		(1)		—		(2)
Other comprehensive income (loss), net of tax	(44)		(5)		(151)		(20)
Ending balance	$	(131)	$	34	$	(131)	$	34
Total AOCI Ending Balance at September 30	$	(3,353)	$	(1,440)	$	(3,353)	$	(1,440)

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14.                              Environmental and legal matters

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

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

On January 7, 2015, the Company received a grand jury subpoena from the U.S. District Court for the Central District of Illinois. The subpoena requested documents and information from the Company relating to, among other things, financial information concerning U.S. and non-U.S. Caterpillar subsidiaries (including undistributed profits of non-U.S. subsidiaries and the movement of cash among U.S. and non-U.S. subsidiaries). The Company has received additional subpoenas relating to this investigation requesting additional documents and information relating to, among other things, the purchase and resale of replacement parts by Caterpillar Inc. and non-U.S. Caterpillar subsidiaries, dividend distributions of certain non-U.S. Caterpillar subsidiaries, and Caterpillar SARL (CSARL) and related structures. On March 2-3, 2017, agents with the Department of Commerce, the Federal Deposit Insurance Corporation and the Internal Revenue Service executed search and seizure warrants at three facilities of the Company in the Peoria, Illinois area, including its former corporate headquarters. The warrants identify, and agents seized, documents and information related to, among other things, the export of products from the United States, the movement of products between the United States and Switzerland, the relationship between Caterpillar Inc. and CSARL, and sales outside the United States. It is the Company’s understanding that the warrants, which concern both tax and export activities, are related to the ongoing grand jury investigation. The Company is continuing to cooperate with this investigation. The Company is unable to predict the outcome or reasonably estimate any potential loss; however, we currently believe that this matter will not have a material adverse effect on the Company’s consolidated results of operations, financial position or liquidity.

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

15.                              Income taxes

The provision for income taxes for the nine months ended September 30, 2022, reflected an estimated annual tax rate of 23 percent, compared with 25 percent for the nine months ended September 30, 2021, excluding the discrete items discussed below. The comparative tax rate for full-year 2021 was approximately 23 percent.

26

On September 8, 2022, the company reached a settlement with the U.S. Internal Revenue Service (IRS) that resolves all issues for tax years 2007 through 2016, without any penalties. The company's settlement includes, among other issues, the resolution of disputed tax treatment of profits earned by Caterpillar SARL (CSARL) from certain parts transactions. We vigorously contested the IRS's application of the "substance-over-form" or "assignment-of-income" judicial doctrines and its proposed increases to tax and imposition of accuracy related penalties. The settlement does not include any increases to tax in the United States based on those judicial doctrines and does not include any penalties. The final tax assessed by the IRS for all issues under the settlement was $490 million for the ten-year period. This amount was primarily paid in the nine months ending September 30, 2022, and the associated estimated interest of $250 million is expected to be paid by the end of 2022. The settlement was within the total amount of gross unrecognized tax benefits for uncertain tax positions and enables us to avoid the costs and burdens of further disputes with the IRS. As a result of the settlement, we recorded a discrete tax benefit of $41 million to reflect changes in estimates of prior years' taxes and related interest, net of tax. We are subject to the continuous examination of our income tax returns by the IRS, and tax years subsequent to 2016 are not yet under examination.

In the nine months ended September 30, 2022, the company also recorded discrete tax benefits of $49 million to reflect other changes in estimates related to prior years' U.S. taxes, compared to $36 million in the nine months ended September 30, 2021. In addition, the company recorded a discrete tax benefit of $18 million for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense, compared with a $61 million benefit for the nine months ended September 30, 2021.

16.                              Segment information

A.    Basis for segment information

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

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

Segment information for 2021 has been recast due to a methodology change related to how we assign intersegment sales and segment profit from our technology products and services to Construction Industries, Resource Industries and Energy & Transportation. This methodology change did not have a material impact on our segment results.

B.    Description of segments

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

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

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

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

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

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

C.    Segment measurement and reconciliations

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

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

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

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

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

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

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

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

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

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

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

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

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

For the three and nine months ended September 30, 2022 and 2021, sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows:

29

Sales and Revenues by Geographic Region
(Millions of dollars)	North America		Latin America		EAME		Asia/ Pacific		External Sales and Revenues			Intersegment Sales and Revenues		Total Sales and Revenues
Three Months Ended September 30, 2022
Construction Industries	$	3,106	$	799	$	1,247	$	1,084	$	6,236		$	40	$	6,276
Resource Industries	1,122		472		526		893		3,013			74		3,087
Energy & Transportation	2,422		468		1,280		827		4,997			1,189		6,186
Financial Products Segment	522		90		100		107		819		1	—		819
Total sales and revenues from reportable segments	7,172		1,829		3,153		2,911		15,065			1,303		16,368
All Other operating segment	16		—		4		15		35			68		103
Corporate Items and Eliminations	(53)		(20)		(12)		(21)		(106)			(1,371)		(1,477)
Total Sales and Revenues	$	7,135	$	1,809	$	3,145	$	2,905	$	14,994		$	—	$	14,994
Three Months Ended September 30, 2021
Construction Industries	$	2,417	$	528	$	1,240	$	1,076	$	5,261		$	(6)	$	5,255
Resource Industries	674		417		456		744		2,291			75		2,366
Energy & Transportation	1,924		329		1,144		744		4,141			936		5,077
Financial Products Segment	478		68		105		111		762		1	—		762
Total sales and revenues from reportable segments	5,493		1,342		2,945		2,675		12,455			1,005		13,460
All Other operating segment	18		—		3		14		35			84		119
Corporate Items and Eliminations	(56)		(13)		(9)		(15)		(93)			(1,089)		(1,182)
Total Sales and Revenues	$	5,455	$	1,329	$	2,939	$	2,674	$	12,397		$	—	$	12,397

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $124 million and $87 million in the three months ended September 30, 2022 and 2021, respectively.

Sales and Revenues by Geographic Region
(Millions of dollars)	North America		Latin America		EAME		Asia/ Pacific		External Sales and Revenues			Intersegment Sales and Revenues		Total Sales and Revenues
Nine Months Ended September 30, 2022
Construction Industries	$	8,832	$	2,061	$	3,726	$	3,694	$	18,313		$	111	$	18,424
Resource Industries	3,167		1,337		1,609		2,554		8,667			211		8,878
Energy & Transportation	6,637		1,160		3,679		2,193		13,669			3,260		16,929
Financial Products Segment	1,530		250		293		327		2,400		1	—		2,400
Total sales and revenues from reportable segments	20,166		4,808		9,307		8,768		43,049			3,582		46,631
All Other operating segment	52		—		14		46		112			227		339
Corporate Items and Eliminations	(175)		(59)		(33)		(64)		(331)			(3,809)		(4,140)
Total Sales and Revenues	$	20,043	$	4,749	$	9,288	$	8,750	$	42,830		$	—	$	42,830
Nine Months Ended September 30, 2021
Construction Industries	$	7,041	$	1,350	$	3,612	$	4,302	$	16,305		$	65	$	16,370
Resource Industries	2,130		1,309		1,455		1,965		6,859			232		7,091
Energy & Transportation	5,698		835		3,433		1,953		11,919			2,640		14,559
Financial Products Segment	1,442		195		301		359		2,297		1	—		2,297
Total sales and revenues from reportable segments	16,311		3,689		8,801		8,579		37,380			2,937		40,317
All Other operating segment	42		1		10		54		107			270		377
Corporate Items and Eliminations	(188)		(36)		(27)		(63)		(314)			(3,207)		(3,521)
Total Sales and Revenues	$	16,165	$	3,654	$	8,784	$	8,570	$	37,173		$	—	$	37,173

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $332 million and $263 million in the nine months ended September 30, 2022 and 2021, respectively.

30

For the three and nine months ended September 30, 2022 and 2021, Energy & Transportation segment sales by end user application were as follows:

Energy & Transportation External Sales
	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
Oil and gas	$	1,323	$	1,088	$	3,503	$	3,140
Power generation	1,320		1,010		3,518		3,025
Industrial	1,158		948		3,295		2,660
Transportation	1,196		1,095		3,353		3,094
Energy & Transportation External Sales	$	4,997	$	4,141	$	13,669	$	11,919

Reconciliation of Consolidated profit before taxes:
(Millions of dollars)	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
Profit from reportable segments:
Construction Industries	$	1,209	$	866	$	3,255	$	2,937
Resource Industries	506		280		1,222		941
Energy & Transportation	935		706		2,132		2,119
Financial Products Segment	220		173		675		660
Total profit from reportable segments	2,870		2,025		7,284		6,657
Profit from All Other operating segment	8		5		42		(2)
Cost centers	(37)		19		1		51
Corporate costs	(168)		(189)		(670)		(576)
Timing	(84)		(40)		(129)		(230)
Restructuring costs	(49)		(35)		(90)		(124)
Methodology differences:
Inventory/cost of sales	138		73		407		80
Postretirement benefit expense	82		116		293		270
Stock-based compensation expense	(55)		(58)		(162)		(169)
Financing costs	(75)		(103)		(269)		(342)
Currency	53		19		315		255
Other income/expense methodology differences	(109)		(80)		(287)		(201)
Other methodology differences	(16)		23		(82)		(27)
Total consolidated profit before taxes	$	2,558	$	1,775	$	6,653	$	5,642

31

Reconciliation of Assets:
(Millions of dollars)	September 30, 2022		December 31, 2021
Assets from reportable segments:
Construction Industries	$	5,439	$	4,547
Resource Industries	5,841		5,962
Energy & Transportation	9,394		9,253
Financial Products Segment	33,982		34,860
Total assets from reportable segments	54,656		54,622
Assets from All Other operating segment	1,729		1,678
Items not included in segment assets:
Cash and cash equivalents	5,403		8,428
Deferred income taxes	2,112		1,735
Goodwill and intangible assets	4,681		4,859
Property, plant and equipment – net and other assets	3,714		4,056
Inventory methodology differences	(2,833)		(2,656)
Liabilities included in segment assets	11,973		10,777
Other	(528)		(706)
Total assets	$	80,907	$	82,793

Reconciliation of Depreciation and amortization:
(Millions of dollars)
	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
Depreciation and amortization from reportable segments:
Construction Industries	$	57	$	60	$	172	$	178
Resource Industries	92		101		275		301
Energy & Transportation	136		144		405		428
Financial Products Segment	183		195		556		582
Total depreciation and amortization from reportable segments	468		500		1,408		1,489
Items not included in segment depreciation and amortization:
All Other operating segment	56		59		172		181
Cost centers	20		24		63		74
Other	7		10		18		22
Total depreciation and amortization	$	551	$	593	$	1,661	$	1,766

32

Reconciliation of Capital expenditures:
(Millions of dollars)
	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
Capital expenditures from reportable segments:
Construction Industries	$	74	$	56	$	149	$	120
Resource Industries	65		44		129		101
Energy & Transportation	167		115		444		339
Financial Products Segment	295		311		870		900
Total capital expenditures from reportable segments	601		526		1,592		1,460
Items not included in segment capital expenditures:
All Other operating segment	54		59		116		106
Cost centers	16		15		41		34
Timing	(35)		(13)		173		96
Other	(19)		—		(31)		(9)
Total capital expenditures	$	617	$	587	$	1,891	$	1,687

17.                             Cat Financial financing activities

Allowance for credit losses

Portfolio segments

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

Customer

Cat Financial provides loans and finance leases to end-user customers primarily for the purpose of financing new and used Caterpillar machinery, engines and equipment for commercial use, the majority of which operate in construction-related industries. Cat Financial also provides financing for vehicles, power generation facilities and marine vessels that, in most cases, incorporate Caterpillar products. The average original term of Cat Financial's customer finance receivable portfolio was approximately 50 months with an average remaining term of approximately 26 months as of September 30, 2022.

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

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

During the three and nine months ended September 30, 2022, Cat Financial's forecasts for the markets in which it operates reflected a continuation of the trend of relatively low unemployment rates and delinquencies. However, high inflation rates and consequent central bank actions are weakening global economic growth. The company believes the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long-term trends.

Dealer

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

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

In general, Cat Financial's Dealer portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to its close working relationships with the dealers and their financial strength. Therefore, Cat Financial made no adjustments to historical loss rates during the three and nine months ended September 30, 2022.

Classes of finance receivables

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

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

•EAME - Finance receivables originated in Europe, Africa, the Middle East and the Commonwealth of Independent States.

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

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

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

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

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

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

(Millions of dollars)	Three Months Ended September 30, 2022						Three Months Ended September 30, 2021
	Customer		Dealer		Total		Customer		Dealer		Total
Beginning balance	$	290	$	82	$	372	$	354	$	44	$	398
Write-offs	(30)		—		(30)		(91)		—		(91)
Recoveries	17		—		17		15		—		15
Provision for credit losses 1	(2)		(17)		(19)		17		38		55
Other	(5)		—		(5)		(3)		—		(3)
Ending balance	$	270	$	65	$	335	$	292	$	82	$	374
	Nine Months Ended September 30, 2022						Nine Months Ended September 30, 2021
Allowance for Credit Losses:	Customer		Dealer		Total		Customer		Dealer		Total
Beginning balance	$	251	$	82	$	333	$	431	$	44	$	475
Write-offs	(68)		—		(68)		(193)		—		(193)
Recoveries	47		—		47		39		—		39
Provision for credit losses 1	46		(17)		29		20		38		58
Other	(6)		—		(6)		(5)		—		(5)
Ending balance	$	270	$	65	$	335	$	292	$	82	$	374
Finance Receivables	$	19,363	$	1,737	$	21,100	$	19,967	$	1,931	$	21,898
1 Excludes provision for credit losses on unfunded commitments and other miscellaneous receivables.

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Credit quality of finance receivables

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

Customer

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

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(Millions of dollars)	September 30, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,151	$	3,632	$	1,765	$	811	$	289	$	64	$	233	$	9,945
31-60 days past due	18		25		19		13		6		2		4		87
61-90 days past due	5		9		4		2		1		1		2		24
91+ days past due	5		16		13		8		5		5		5		57
EAME
Current	873		1,014		511		309		179		81		—		2,967
31-60 days past due	6		12		5		4		—		—		—		27
61-90 days past due	2		4		5		1		1		—		—		13
91+ days past due	3		21		11		5		2		1		—		43
Asia/Pacific
Current	805		765		385		95		23		4		—		2,077
31-60 days past due	5		13		11		2		1		—		—		32
61-90 days past due	1		6		6		2		—		—		—		15
91+ days past due	1		8		6		6		1		—		—		22
Mining
Current	568		625		240		203		117		112		79		1,944
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		3		—		3
91+ days past due	—		—		1		—		3		1		—		5
Latin America
Current	584		443		176		86		24		14		—		1,327
31-60 days past due	5		9		5		2		12		—		—		33
61-90 days past due	4		4		2		1		—		—		—		11
91+ days past due	—		14		14		5		4		17		—		54
Caterpillar Power Finance
Current	40		91		145		75		30		170		118		669
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		8		—		8
Totals by Aging Category
Current	$	6,021	$	6,570	$	3,222	$	1,579	$	662	$	445	$	430	$	18,929
31-60 days past due	34		59		40		21		19		2		4		179
61-90 days past due	12		23		17		6		2		4		2		66
91+ days past due	9		59		45		24		15		32		5		189
Total Customer	$	6,076	$	6,711	$	3,324	$	1,630	$	698	$	483	$	441	$	19,363

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(Millions of dollars)	December 31, 2021
	2021		2020		2019		2018		2017		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	4,792	$	2,596	$	1,426	$	630	$	182	$	32	$	182	$	9,840
31-60 days past due	27		32		20		12		4		1		5		101
61-90 days past due	7		8		5		3		1		1		5		30
91+ days past due	9		17		12		13		5		4		5		65
EAME
Current	1,499		836		577		352		140		26		—		3,430
31-60 days past due	5		4		3		1		1		—		—		14
61-90 days past due	3		3		3		1		—		—		—		10
91+ days past due	3		11		2		2		—		2		—		20
Asia/Pacific
Current	1,271		803		307		71		16		2		—		2,470
31-60 days past due	10		14		10		2		—		—		—		36
61-90 days past due	3		7		4		1		—		—		—		15
91+ days past due	2		10		10		3		—		—		—		25
Mining
Current	851		347		307		193		36		161		36		1,931
31-60 days past due	6		—		—		—		—		—		—		6
61-90 days past due	1		—		—		—		4		—		—		5
91+ days past due	—		1		8		9		3		1		—		22
Latin America
Current	617		299		160		70		17		18		—		1,181
31-60 days past due	4		7		3		3		1		—		—		18
61-90 days past due	3		3		1		1		—		—		—		8
91+ days past due	4		9		9		7		7		14		—		50
Caterpillar Power Finance
Current	117		145		97		70		180		104		101		814
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		44		—		44
Totals by Aging Category
Current	$	9,147	$	5,026	$	2,874	$	1,386	$	571	$	343	$	319	$	19,666
31-60 days past due	52		57		36		18		6		1		5		175
61-90 days past due	17		21		13		6		5		1		5		68
91+ days past due	18		48		41		34		15		65		5		226
Total Customer	$	9,234	$	5,152	$	2,964	$	1,444	$	597	$	410	$	334	$	20,135

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

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Dealer

As of September 30, 2022 and December 31, 2021, Cat Financial's total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $58 million and $78 million, respectively, that were 91+ days past due in Latin America, all of which were originated in 2017.

Non-accrual finance receivables

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

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

	September 30, 2022						December 31, 2021
	Amortized Cost						Amortized Cost
(Millions of dollars)	Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing		Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing
North America	$	54	$	5	$	10	$	47	$	9	$	12
EAME	42		—		4		18		1		2
Asia/Pacific	15		—		7		19		—		7
Mining	6		1		—		8		1		14
Latin America	57		—		—		52		4		1
Caterpillar Power Finance	9		11		—		40		11		—
Total	$	183	$	17	$	21	$	184	$	26	$	36

There was $2 million and $1 million of interest income recognized during the three months ended September 30, 2022 and 2021, respectively, for customer finance receivables on non-accrual status. There was $11 million and $9 million of interest income recognized during the nine months ended September 30, 2022 and 2021, respectively, for customer finance receivables on non-accrual status.

As of September 30, 2022 and December 31, 2021, finance receivables in Cat Financial's Dealer portfolio segment on non-accrual status were $58 million and $78 million, respectively, all of which was in Latin America. There were no finance receivables in Cat Financial's Dealer portfolio segment more than 90 days past due and still accruing income as of September 30, 2022 and December 31, 2021 and no interest income was recognized on dealer finance receivables on non-accrual status during the three and nine months ended September 30, 2022 and 2021.

Troubled debt restructurings

A restructuring of a finance receivable constitutes a TDR when the lender grants a concession it would not otherwise consider to a borrower experiencing financial difficulties. Concessions granted may include extended contract maturities, inclusion of interest only periods, below market interest rates, payment deferrals and reduction of principal and/or accrued interest. Cat Financial individually evaluates TDR contracts and establishes an allowance based on the present value of expected future cash flows discounted at the receivable's effective interest rate, the fair value of the collateral for collateral-dependent receivables or the observable market price of the receivable.

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There were no finance receivables modified as TDRs during the three and nine months ended September 30, 2022 and 2021 for the Dealer portfolio segment. Cat Financial’s finance receivables in the Customer portfolio segment modified as TDRs were as follows:

(Millions of dollars)	Three Months Ended September 30, 2022				Three Months Ended September 30, 2021
	Pre-TDR Amortized Cost		Post-TDR Amortized Cost		Pre-TDR Amortized Cost		Post-TDR Amortized Cost
Customer
North America	$	3	$	3	$	1	$	1
EAME	—		—		1		1
Asia/Pacific	—		—		4		4
Mining	15		15		—		—
Latin America	—		—		4		4
Caterpillar Power Finance	11		11		7		3
Total	$	29	$	29	$	17	$	13
	Nine Months Ended September 30, 2022				Nine Months Ended September 30, 2021
	Pre-TDR Amortized Cost		Post-TDR Amortized Cost		Pre-TDR Amortized Cost		Post-TDR Amortized Cost
North America	$	4	$	4	$	5	$	5
EAME	1		1		1		1
Asia/Pacific	—		—		4		4
Mining	15		15		11		5
Latin America	—		—		10		10
Caterpillar Power Finance	20		19		23		19
Total	$	40	$	39	$	54	$	44

The Post-TDR amortized costs in the Customer portfolio segment with a payment default (defined as 91+ days past due) which had been modified within twelve months prior to the default date, were as follows:

(Millions of dollars)	Three Months Ended September 30				Nine Months Ended September 30
Customer	2022		2021		2022		2021
North America	$	—	$	—	$	—	$	1
Asia/Pacific	—		—		—		6
Mining	—		—		5		—
Latin America	—		—		—		15
Caterpillar Power Finance	—		—		—		5
Total	$	—	$	—	$	5	$	27

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18.                              Fair value disclosures

    A. Fair value measurements

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

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

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

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

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

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

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

Investments in debt and equity securities

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

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

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

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

Derivative financial instruments

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

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See Note 5 for additional information.

Assets and liabilities measured on a recurring basis at fair value included in our Consolidated Statement of Financial Position as of September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022
(Millions of dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt securities
U.S. treasury bonds	$	10	$	—	$	—	$	—	$	10
Other U.S. and non-U.S. government bonds	—		49		—		—		49
Corporate debt securities
Corporate bonds and other debt securities	—		1,998		50		—		2,048
Asset-backed securities	—		180		—		—		180
Mortgage-backed debt securities
U.S. governmental agency	—		348		—		—		348
Residential	—		3		—		—		3
Commercial	—		129		—		—		129
Total debt securities	10		2,707		50		—		2,767
Equity securities
Large capitalization value	183		—		—		—		183
Smaller company growth	40		—		—		—		40
REIT	—		—		—		208		208
Total equity securities	223		—		—		208		431
Derivative financial instruments - assets
Foreign currency contracts - net	—		338		—		—		338
Total assets	$	233	$	3,045	$	50	$	208	$	3,536
Liabilities
Derivative financial instruments - liabilities
Interest rate contracts - net	$	—	$	208	$	—	$	—	$	208
Commodity contracts - net	—		34		—		—		34
Total liabilities	$	—	$	242	$	—	$	—	$	242

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	December 31, 2021
(Millions of dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt securities
U.S. treasury bonds	$	10	$	—	$	—	$	—	$	10
Other U.S. and non-U.S. government bonds	—		61		—		—		61
Corporate debt securities
Corporate bonds and other debt securities	—		1,046		—		—		1,046
Asset-backed securities	—		176		—		—		176
Mortgage-backed debt securities
U.S. governmental agency	—		325		—		—		325
Residential	—		4		—		—		4
Commercial	—		99		—		—		99
Total debt securities	10		1,711		—		—		1,721
Equity securities
Large capitalization value	217		—		—		—		217
Smaller company growth	98		—		—		—		98
REIT	—		—		—		167		167
Total equity securities	315		—		—		167		482
Derivative financial instruments - assets
Foreign currency contracts - net	—		168		—		—		168
Interest rate contracts - net	—		23		—		—		23
Commodity contracts - net	—		21		—		—		21
Total Assets	$	325	$	1,923	$	—	$	167	$	2,415

In addition to the amounts above, certain Cat Financial loans are subject to measurement at fair value on a nonrecurring basis and are classified as Level 3 measurements. A loan is measured at fair value when management determines that collection of contractual amounts due is not probable and the loan is individually evaluated.  In these cases, an allowance for credit losses may be established based either on the present value of expected future cash flows discounted at the receivables’ effective interest rate, the fair value of the collateral for collateral-dependent receivables, or the observable market price of the receivable.  In determining collateral value, Cat Financial estimates the current fair market value of the collateral less selling costs. Cat Financial had loans carried at fair value of $90 million and $100 million as of September 30, 2022 and December 31, 2021, respectively.  

    B. Fair values of financial instruments

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

Cash and cash equivalents

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

Restricted cash and short-term investments

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

Finance receivables

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

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Wholesale inventory receivables

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

Short-term borrowings

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

Long-term debt

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

Guarantees

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

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

	September 30, 2022				December 31, 2021
(Millions of dollars)	Carrying  Amount		Fair  Value		Carrying  Amount		Fair  Value		Fair Value Levels	Reference
Assets
Finance receivables – net (excluding finance leases 1 )	$	13,931	$	13,356	$	13,837	$	13,836	3	Note 17
Wholesale inventory receivables – net (excluding finance leases 1)	768		724		773		753		3
Liabilities
Long-term debt (including amounts due within one year)
Machinery, Energy & Transportation	9,599		9,072		9,791		12,420		2
Financial Products	22,724		21,886		22,594		22,797		2

1    Represents finance leases and failed sale leasebacks of $7,083 million and $8,083 million at September 30, 2022 and December 31, 2021, respectively.

19.                         Other income (expense)

	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
Investment and interest income	$	52	$	20	$	98	$	64
Foreign exchange gains (losses) 1	134		47		405		110
License fee income	37		31		106		88
Net periodic pension and OPEB income (cost), excluding service cost	67		111		201		333
Gains (losses) on securities	—		50		(59)		92
Miscellaneous income (loss)	(48)		(34)		4		64
Total	$	242	$	225	$	755	$	751

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

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20.                              Restructuring costs

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

Restructuring costs for the three and nine months ended September 30, 2022 and 2021 were as follows:

(Millions of dollars)	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
Employee separations 1	$	39	$	17	$	62	$	79
Contract terminations 1	1		1		1		1
Long-lived asset impairments 1	(4)		8		1		12
Other 2	13		9		26		32
Total restructuring costs	$	49	$	35	$	90	$	124
1 Recognized in Other operating (income) expenses.
2 Represents costs related to our restructuring programs, primarily for accelerated depreciation, equipment relocation, inventory write-downs and project management, all of which are primarily included in Cost of goods sold.

For both the nine months ended September 30, 2022 and 2021, the restructuring costs were primarily related to actions across the company including strategic actions to address a small number of products.

In 2022 and 2021, all restructuring costs are excluded from segment profit.

The following table summarizes the 2022 and 2021 employee separation activity:

(Millions of dollars)	Nine Months Ended September 30
	2022		2021
Liability balance, beginning of period	$	61	$	164
Increase in liability (separation charges)	62		79
Reduction in liability (payments)	(63)		(159)
Liability balance, end of period	$	60	$	84

Most of the liability balance at September 30, 2022 is expected to be paid in 2022 and 2023.

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

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to provide information that will assist the reader in understanding the company’s Consolidated Financial Statements, the changes in certain key items in those financial statements between select periods and the primary factors that accounted for those changes. In addition, we discuss how certain accounting principles, policies and critical estimates affect our Consolidated Financial Statements. Our discussion also contains certain forward-looking statements related to future events and expectations as well as a discussion of the many factors that we believe may have an impact on our business on an ongoing basis. This MD&A should be read in conjunction with our discussion of cautionary statements and significant risks to the company’s business under Part I, Item 1A. Risk Factors of the 2021 Form 10-K.

Highlights for the third quarter of 2022 include:

•Total sales and revenues for the third quarter of 2022 were $14.994 billion, an increase of $2.597 billion, or 21 percent, compared with $12.397 billion in the third quarter of 2021. Sales were higher across the three primary segments.

•Operating profit margin was 16.2 percent for the third quarter of 2022, compared with 13.4 percent for the third quarter of 2021. Adjusted operating profit margin was 16.5 percent for the third quarter of 2022, compared with 13.7 percent for the third quarter of 2021.

•Third-quarter 2022 profit per share was $3.87, and excluding the items in the table below, adjusted profit per share was $3.95. Third-quarter 2021 profit per share was $2.60 and, excluding the items in the table below, adjusted profit per share was $2.66.

•Caterpillar ended the third quarter of 2022 with $6.3 billion of enterprise cash.

Highlights for the nine months ended September 30, 2022 include:

•Total sales and revenues were $42.830 billion for the nine months ended September 30, 2022, an increase of $5.657 billion, or 15 percent, compared with $37.173 billion for the nine months ended September 30, 2021.

•Operating profit margin was 14.5 percent for the nine months ended September 30, 2022, compared with 14.2 percent for the nine months ended September 30, 2021. Adjusted operating profit margin was 14.7 percent for the nine months ended September 30, 2022, compared with 14.5 percent for the nine months ended September 30, 2021.

•Profit per share for the nine months ended September 30, 2022, was $9.85 and, excluding the items in the table below, adjusted profit per share was $9.99. Profit per share for the nine months ended September 30, 2021, was $7.94, and excluding the items in the table below, adjusted profit per share was $8.13.

•Enterprise operating cash flow was $5.0 billion for the nine months ended September 30, 2022.

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

	Three Months Ended September 30, 2022				Three Months Ended September 30, 2021				Nine Months Ended September 30, 2022				Nine Months Ended September 30, 2021
(Dollars in millions except per share data)	Profit Before Taxes		Profit Per Share		Profit Before Taxes		Profit Per Share		Profit Before Taxes		Profit Per Share		Profit Before Taxes		Profit Per Share
Profit	$	2,558	$	3.87	$	1,775	$	2.60	$	6,653	$	9.85	$	5,642	$	7.94
Restructuring costs	49		0.08		35		0.06		90		0.14		124		0.19
Adjusted profit	$	2,607	$	3.95	$	1,810	$	2.66	$	6,743	$	9.99	$	5,766	$	8.13

Overview

Total sales and revenues for the third quarter of 2022 were $14.994 billion, an increase of $2.597 billion, or 21 percent, compared with $12.397 billion in the third quarter of 2021. The increase was due to favorable price realization and higher sales volume, partially offset by unfavorable currency impacts primarily related to the euro, Japanese yen and Australian dollar. The increase in sales volume was driven by the impact from changes in dealer inventories, higher sales of equipment to end users and higher services. Dealers increased inventories by $700 million during the third quarter of 2022, compared with a decrease of $300 million during the third quarter of 2021. Sales were higher across the three primary segments.

Third-quarter 2022 profit per share was $3.87, compared with $2.60 profit per share in the third quarter of 2021. Profit per share for both quarters included restructuring costs. Profit for the third quarter of 2022 was $2.041 billion, an increase of $615 million, or 43%, compared with $1.426 billion for the third quarter of 2021. The increase was primarily due to favorable price realization and higher sales volume, partially offset by unfavorable manufacturing costs and higher selling, general and administrative (SG&A) and research and development (R&D) expenses. Unfavorable manufacturing costs largely reflected higher material costs, freight and the impact of manufacturing inefficiencies. SG&A/R&D expenses increased primarily due to investments aligned with the company's strategy for profitable growth and higher short-term incentive compensation expense.

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Global Business Conditions:

We continue to monitor a variety of external factors around the world, such as supply chain disruptions, inflationary cost and labor pressures. Areas of particular focus include certain components, transportation and raw materials. Transportation shortages have resulted in delays and increased costs. In addition, our suppliers are dealing with availability issues and freight delays, which leads to pressure on production in our facilities. Contingency plans have been developed and continue to be modified to minimize supply chain challenges that may impact our ability to meet increasing customer demand. We continue to assess the environment and are taking appropriate price actions in response to rising costs. We will continue to monitor the situation as conditions remain fluid and evolve throughout the year. We address these external factors throughout the discussion in the Consolidated Results of Operations section below.

Notes:

•Glossary of terms is included on pages 58 - 60; first occurrence of terms shown in bold italics.

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

•Certain amounts may not add due to rounding.

46

Consolidated Results of Operations

THREE MONTHS ENDED SEPTEMBER 30, 2022 COMPARED WITH THREE MONTHS ENDED SEPTEMBER 30, 2021

CONSOLIDATED SALES AND REVENUES

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the third quarter of 2021 (at left) and the third quarter of 2022 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s Board of Directors and employees.

Total sales and revenues for the third quarter of 2022 were $14.994 billion, an increase of $2.597 billion, or 21 percent, compared with $12.397 billion in the third quarter of 2021. The increase was due to favorable price realization and higher sales volume, partially offset by unfavorable currency impacts primarily related to the euro, Japanese yen and Australian dollar. The increase in sales volume was driven by the impact from changes in dealer inventories, higher sales of equipment to end users and higher services. Dealers increased inventories by $700 million during the third quarter of 2022, compared with a decrease of $300 million during the third quarter of 2021.

Sales were higher across the three primary segments.

North America sales increased 33 percent due to favorable price realization, the impact from changes in dealer inventories, services and higher sales of equipment to end users. Dealers increased inventories during the third quarter of 2022, compared with a decrease during the third quarter of 2021.

Sales increased 36 percent in Latin America due to favorable price realization, higher sales of equipment to end users and the impact from changes in dealer inventories. Dealers increased inventories during the third quarter of 2022, compared with remaining about flat during the third quarter of 2021.

EAME sales increased 8 percent as unfavorable currency impacts, primarily related to the euro and British pound, were more than offset by favorable price realization, the impact from changes in dealer inventories and higher sales of equipment to end users. Dealers increased inventories during the third quarter of 2022, compared with remaining about flat during the third quarter of 2021.

Asia/Pacific sales increased 9 percent driven by favorable price realization and the impact from changes in dealer inventories, partially offset by unfavorable currency impacts, related to the Japanese yen and Australian dollar. Dealers increased inventories during the third quarter of 2022, compared with a decrease during the third quarter of 2021.

Dealers increased inventories by $700 million during the third quarter of 2022, compared with a decrease of $300 million during the third quarter of 2021. Most of the increase related to timing differences between when we ship product to dealers and when the dealers, in turn, are able to deliver completed orders to customers. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rentals and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers. At year end, we expect dealer inventory levels to be similar to the third quarter of 2022.

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Compared to the fourth quarter of 2021, we expect higher sales to users and price realization to support the sales growth in the fourth quarter of 2022. We anticipate the fourth quarter will reflect our highest quarterly sales for the year, which is in line with typical seasonality.

Sales and Revenues by Segment
(Millions of dollars)	Third Quarter 2021		Sales Volume		Price Realization		Currency		Inter-Segment / Other		Third Quarter 2022		$ Change		% Change
Construction Industries	$	5,255	$	423	$	781	$	(229)	$	46	$	6,276	$	1,021	19	%
Resource Industries	2,366		338		443		(59)		(1)		3,087		721		30	%
Energy & Transportation	5,077		618		409		(171)		253		6,186		1,109		22	%
All Other Segment	119		2		—		(2)		(16)		103		(16)		(13	%)
Corporate Items and Eliminations	(1,110)		16		2		—		(282)		(1,374)		(264)
Machinery, Energy & Transportation Sales	11,707		1,397		1,635		(461)		—		14,278		2,571		22	%
Financial Products Segment	762		—		—		—		57		819		57		7	%
Corporate Items and Eliminations	(72)		—		—		—		(31)		(103)		(31)
Financial Products Revenues	690		—		—		—		26		716		26		4	%
Consolidated Sales and Revenues	$	12,397	$	1,397	$	1,635	$	(461)	$	26	$	14,994	$	2,597	21	%

Sales and Revenues by Geographic Region

	North America				Latin America				EAME				Asia/Pacific				External Sales and Revenues					Inter-Segment				Total Sales and Revenues
(Millions of dollars)	$		% Chg		$		% Chg		$		% Chg		$		% Chg		$			% Chg		$		% Chg		$		% Chg
Third Quarter 2022
Construction Industries	$	3,106	29	%	$	799	51	%	$	1,247	1	%	$	1,084	1	%	$	6,236		19	%	$	40	(767	%)	$	6,276	19	%
Resource Industries	1,122		66	%	472		13	%	526		15	%	893		20	%	3,013			32	%	74		(1	%)	3,087		30	%
Energy & Transportation	2,422		26	%	468		42	%	1,280		12	%	827		11	%	4,997			21	%	1,189		27	%	6,186		22	%
All Other Segment	16		(11	%)	—		—	%	4		33	%	15		7	%	35			—	%	68		(19	%)	103		(13	%)
Corporate Items and Eliminations	1				—				—				(4)				(3)					(1,371)				(1,374)
Machinery, Energy & Transportation Sales	6,667		33	%	1,739		36	%	3,057		8	%	2,815		9	%	14,278			22	%	—		—		14,278		22	%
Financial Products Segment	522		9	%	90		32	%	100		(5	%)	107		(4	%)	819		1	7	%	—		—		819		7	%
Corporate Items and Eliminations	(54)				(20)				(12)				(17)				(103)					—				(103)
Financial Products Revenues	468		6	%	70		27	%	88		(8	%)	90		(8	%)	716			4	%	—		—		716		4	%
Consolidated Sales and Revenues	$	7,135	31	%	$	1,809	36	%	$	3,145	7	%	$	2,905	9	%	$	14,994		21	%	$	—	—		$	14,994	21	%
Third Quarter 2021
Construction Industries	$	2,417			$	528			$	1,240			$	1,076			$	5,261				$	(6)			$	5,255
Resource Industries	674				417				456				744				2,291					75				2,366
Energy & Transportation	1,924				329				1,144				744				4,141					936				5,077
All Other Segment	18				—				3				14				35					84				119
Corporate Items and Eliminations	(19)				—				—				(2)				(21)					(1,089)				(1,110)
Machinery, Energy & Transportation Sales	5,014				1,274				2,843				2,576				11,707					—				11,707
Financial Products Segment	478				68				105				111				762		1			—				762
Corporate Items and Eliminations	(37)				(13)				(9)				(13)				(72)					—				(72)
Financial Products Revenues	441				55				96				98				690					—				690
Consolidated Sales and Revenues	$	5,455			$	1,329			$	2,939			$	2,674			$	12,397				$	—			$	12,397

1 Includes revenues from Machinery, Energy & Transportation of $124 million and $87 million in the third quarter of 2022 and 2021, respectively.

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CONSOLIDATED OPERATING PROFIT

The chart above graphically illustrates reasons for the change in consolidated operating profit between the third quarter of 2021 (at left) and the third quarter of 2022 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s Board of Directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation's other operating (income) expenses.

Operating profit for the third quarter of 2022 was $2.425 billion, an increase of $761 million, or 46 percent, compared with $1.664 billion in the third quarter of 2021. The increase was primarily due to favorable price realization and higher sales volume, partially offset by higher manufacturing costs and higher SG&A/R&D expenses. Unfavorable manufacturing costs largely reflected higher material costs, freight and the impact of manufacturing inefficiencies, due to ongoing disruptions to the supply chain. SG&A/R&D expenses increased primarily due to investments aligned with the company's strategy for profitable growth, which included services growth and technology, such as digital, electrification and autonomy, as well as higher short-term incentive compensation expense.

Short-term incentive compensation expense was about $400 million in the third quarter of 2022, compared to about $350 million in the third quarter of 2021.

Operating profit margin was 16.2 percent for the third quarter of 2022, compared with 13.4 percent for the third quarter of 2021.

We expect higher sales volume and continued favorable price realization in the fourth quarter of 2022, compared with the fourth quarter of 2021. We anticipate the impact of favorable price realization to more than offset manufacturing cost increases, including manufacturing inefficiencies.

Profit by Segment
(Millions of dollars)	Third Quarter 2022		Third Quarter 2021		$ Change		%  Change
Construction Industries	$	1,209	$	866	$	343	40	%
Resource Industries	506		280		226		81	%
Energy & Transportation	935		706		229		32	%
All Other Segment	8		5		3		60	%
Corporate Items and Eliminations	(373)		(286)		(87)
Machinery, Energy & Transportation	2,285		1,571		714		45	%
Financial Products Segment	220		173		47		27	%
Corporate Items and Eliminations	30		(7)		37
Financial Products	250		166		84		51	%
Consolidating Adjustments	(110)		(73)		(37)
Consolidated Operating Profit	$	2,425	$	1,664	$	761	46	%
Corporate Items and Eliminations included corporate-level expenses, timing differences (as some expenses are reported in segment profit on a cash basis), methodology differences between segment and consolidated external reporting (the company values segment inventories and cost of sales using a current cost methodology), certain restructuring costs and inter-segment eliminations.

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Other Profit/Loss and Tax Items

▪Interest expense excluding Financial Products in the third quarter of 2022 was $109 million, compared with $114 million in the third quarter of 2021. The decrease was due to lower average debt outstanding during the third quarter of 2022, compared with the third quarter of 2021.

▪Other income (expense) in the third quarter of 2022 was income of $242 million, compared with income of $225 million in the third quarter of 2021. The change was primarily driven by favorable impacts from foreign currency exchange and higher investment and interest income, partially offset by lower gains on marketable securities and lower pension and other postemployment benefit (OPEB) plan income.

▪The provision for income taxes for the third quarter of 2022 reflected an estimated annual tax rate of 23 percent, compared with 25 percent for the third quarter of 2021, excluding the discrete items discussed below. The comparative tax rate for full-year 2021 was approximately 23 percent.

In the third quarter of 2022, the company reached a settlement with the U.S. Internal Revenue Service (IRS) that resolves all issues for tax years 2007 through 2016, without any penalties. The company’s settlement includes, among other issues, the resolution of disputed tax treatment of profits earned by Caterpillar SARL (CSARL) from certain parts transactions. We vigorously contested the IRS’s application of the “substance-over-form” or “assignment-of-income” judicial doctrines and its proposed increases to tax and imposition of accuracy related penalties. The settlement does not include any increases to tax in the United States based on those judicial doctrines and does not include any penalties. The final tax assessed by the IRS for all issues under the settlement was $490 million for the ten-year period. This amount was primarily paid in the third quarter of 2022, and the associated estimated interest of $250 million is expected to be paid by the end of 2022. The settlement was within the total amount of gross unrecognized tax benefits for uncertain tax positions and enables us to avoid the costs and burdens of further disputes with the IRS. As a result of the settlement, we recorded a discrete tax benefit of $41 million to reflect changes in estimates of prior years’ taxes and related interest, net of tax. We are subject to the continuous examination of our income tax returns by the IRS, and tax years subsequent to 2016 are not yet under examination.

The provision for income taxes in third quarter of 2022 also included a $20 million benefit due to a decrease in the estimated annual tax rate, compared to $39 million in the third quarter of 2021. The company also recorded a discrete tax benefit of $36 million to reflect changes in estimates related to the prior year’s U.S. taxes in the third quarter of 2021.

Construction Industries

Construction Industries’ total sales were $6.276 billion in the third quarter of 2022, an increase of $1.021 billion, or 19 percent, compared with $5.255 billion in the third quarter of 2021. The increase was due to favorable price realization and higher sales volume, partially offset by unfavorable currency impacts primarily related to the euro, Japanese yen and Australian dollar. The increase in sales volume was driven by the impact from changes in dealer inventories. Dealer inventory increased during the third quarter of 2022, compared with a decrease during the third quarter of 2021.

▪In North America, sales increased due to favorable price realization and higher sales volume. Higher sales volume was driven by the impact from changes in dealer inventories. Dealer inventory decreased during the third quarter of 2021, compared with an increase during the third quarter of 2022. Dealer inventories in North America remained at relatively low levels.

▪Sales increased in Latin America primarily due to higher sales volume and favorable price realization. Higher sales volume was driven by higher sales of equipment to end users and the impact from changes in dealer inventories. Dealer inventory increased more during the third quarter of 2022 than during the third quarter of 2021.

▪In EAME, sales were about flat. Unfavorable currency impacts, primarily related to the euro, were offset by favorable price realization.

▪Sales were about flat in Asia/Pacific. Favorable price realization was offset by unfavorable currency impacts, primarily related to the Japanese yen and Australian dollar.

Construction Industries’ profit was $1.209 billion in the third quarter of 2022, an increase of $343 million, or 40 percent, compared with $866 million in the third quarter of 2021. The increase was mainly due to favorable price realization and higher sales volume, partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses. Unfavorable manufacturing costs largely reflected higher material costs, freight and the impact of manufacturing inefficiencies. The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives and higher short-term incentive compensation expense.

Construction Industries’ profit as a percent of total sales was 19.3 percent in the third quarter of 2022, compared with 16.5 percent in the third quarter of 2021.

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Construction Industries’ segment profit as a percent of total sales is expected to improve in the fourth quarter of 2022, compared to the fourth quarter of 2021. We expect North America residential construction to moderate due to tightening financial conditions but remain at relatively high levels. We expect non-residential construction to strengthen due to investments related to government infrastructure initiatives. In Asia Pacific, excluding China, we expect moderate growth due to higher infrastructure spending and commodity prices. We expect continued weakness in China in the above 10-ton excavator industry. In EAME, business activity is expected to be flat to slightly down versus last year based on uncertain economic conditions in Europe. Construction activity in Latin America is expected to grow due to supportive commodity prices. We also expect favorable price realization in the fourth quarter of 2022, compared to the fourth quarter of 2021. The favorable impact of price realization is expected to more than offset manufacturing cost increases in the fourth quarter of 2022.

Resource Industries

Resource Industries’ total sales were $3.087 billion in the third quarter of 2022, an increase of $721 million, or 30 percent, compared with $2.366 billion in the third quarter of 2021. The increase was primarily due to favorable price realization and higher sales volume. The increase in sales volume was due to the impact of changes in dealer inventories, higher sales of aftermarket parts and higher sales of equipment to end users. Dealer inventory decreased during the third quarter of 2021, compared with an increase during the third quarter of 2022.

Resource Industries’ profit was $506 million in the third quarter of 2022, an increase of $226 million, or 81 percent, compared with $280 million in the third quarter of 2021. The increase was mainly due to favorable price realization and higher sales volume, partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses. Unfavorable manufacturing costs largely reflected higher material costs, freight and the impact of manufacturing inefficiencies. The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives.

Resource Industries’ profit as a percent of total sales was 16.4 percent in the third quarter of 2022, compared with 11.8 percent in the third quarter of 2021.

Resource Industries’ segment profit as a percent of total sales is expected to improve in the fourth quarter of 2022, compared to the fourth quarter of 2021. Commodity prices remain supportive of continued investment. We expect production and utilization levels will remain elevated, and our autonomous solutions continue to gain momentum. We expect the continuation of high equipment utilization and a low level of parked trucks, which both support future demand for our equipment and services. In Heavy Construction and Quarry and Aggregates, we anticipate continued growth in the fourth quarter. We also expect price realization to be favorable in the fourth quarter of 2022, compared to the fourth quarter of 2021. The favorable impact from price realization is expected to more than offset manufacturing cost increases in the fourth quarter of 2022.

Energy & Transportation

Sales by Application
(Millions of dollars)	Third Quarter 2022		Third Quarter 2021		$ Change		%  Change
Oil and Gas	$	1,323	$	1,088	$	235	22	%
Power Generation	1,320		1,010		310		31	%
Industrial	1,158		948		210		22	%
Transportation	1,196		1,095		101		9	%
External Sales	4,997		4,141		856		21	%
Inter-segment	1,189		936		253		27	%
Total Sales	$	6,186	$	5,077	$	1,109	22	%

Energy & Transportation’s total sales were $6.186 billion in the third quarter of 2022, an increase of $1.109 billion, or 22 percent, compared with $5.077 billion in the third quarter of 2021. Sales increased across all applications and inter-segment sales. The increase in sales was primarily due to higher sales volume and favorable price realization, partially offset by unfavorable currency impacts.

•Oil and Gas – Sales increased due to higher sales of reciprocating engine aftermarket parts and engines used in gas compression and well servicing applications. Turbines and turbine-related services were about flat.

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

•Industrial – Sales were up across all regions.

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•Transportation – Sales increased in reciprocating engine aftermarket parts and marine applications. International locomotive deliveries were also higher.

Energy & Transportation’s profit was $935 million in the third quarter of 2022, an increase of $229 million, or 32 percent, compared with $706 million in the third quarter of 2021. The increase was driven by favorable price realization and higher sales volume, partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses. Unfavorable manufacturing costs largely reflected higher material costs, freight and the impact of manufacturing inefficiencies. The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives, including electrification and services growth, higher labor-related costs and higher short-term incentive compensation expense.

Energy & Transportation’s profit as a percent of total sales was 15.1 percent in the third quarter of 2022, compared with 13.9 percent in the third quarter of 2021.

Energy & Transportation's segment profit as a percent of total sales is expected to improve in the fourth quarter of 2022, compared to the fourth quarter of 2021. In Oil & Gas, we are encouraged by continued strength in reciprocating engine orders, especially for large engine repowers as asset utilization increases. New equipment orders for turbine and turbine–related services strengthened significantly, particularly in Oil & Gas. Power Generation orders remain healthy due to positive industry dynamics and continued data center strength. Industrial remains healthy with continued momentum in construction, agriculture and electric power. We also anticipate growth in high-speed marine as customers continue to upgrade aging fleets. We also expect favorable price realization in the fourth quarter of 2022, compared to the fourth quarter of 2021. The favorable impact from price realization is expected to more than offset manufacturing cost increases in the fourth quarter of 2022.

Financial Products Segment

Financial Products’ segment revenues were $819 million in the third quarter of 2022, an increase of $57 million, or 7 percent, compared with $762 million in the third quarter of 2021. The increase was primarily due to higher average financing rates in North America and Latin America.

Financial Products’ segment profit was $220 million in the third quarter of 2022, an increase of $47 million, or 27 percent, compared with $173 million in the third quarter of 2021. The increase was mainly due to a favorable impact from a lower provision for credit losses at Cat Financial, partially offset by mark-to-market adjustments on derivative contracts.

At the end of the third quarter of 2022, past dues at Cat Financial were 2.00 percent, compared with 2.41 percent at the end of the third quarter of 2021. Past dues decreased across all our portfolio segments, with the exception of an increase in Latin America. Write-offs, net of recoveries, were $13 million for the third quarter of 2022, compared with $76 million for the third quarter of 2021. As of September 30, 2022, Cat Financial's allowance for credit losses totaled $339 million, or 1.30 percent of finance receivables, compared with $376 million, or 1.41 percent of finance receivables, at June 30, 2022. The allowance for credit losses at year-end 2021 was $337 million, or 1.22 percent of finance receivables.

Corporate Items and Eliminations

Expense for corporate items and eliminations was $343 million in the third quarter of 2022, an increase of $50 million from the third quarter of 2021, primarily driven by increased expenses due to timing differences, partially offset by favorable impacts of segment reporting methodology differences and lower corporate costs.

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NINE MONTHS ENDED SEPTEMBER 30, 2022 COMPARED WITH NINE MONTHS ENDED SEPTEMBER 30, 2021

CONSOLIDATED SALES AND REVENUES

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the nine months ended September 30, 2021 (at left) and the nine months ended September 30, 2022 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s Board of Directors and employees.

Total sales and revenues were $42.830 billion for the nine months ended September 30, 2022, an increase of $5.657 billion, or 15 percent, compared with $37.173 billion for the nine months ended September 30, 2021. The increase was primarily due to favorable price realization and higher sales volume, partially offset by unfavorable currency impacts related to the euro, Australian dollar and Japanese yen. The increase in sales volume was driven by the impact from changes in dealer inventories, services and higher sales of equipment to end users. Dealers increased inventories about $1.6 billion during the nine months ended September 30, 2022, compared with remaining about flat during the nine months ended September 30, 2021.

Sales were higher in the three primary segments.

North America sales increased 26 percent driven by favorable price realization, the impact from changes in dealer inventories, services and higher sales of equipment to end users. Dealers decreased inventories during the nine months ended September 30, 2021, compared with an increase during the nine months ended September 30, 2022.

Sales increased 30 percent in Latin America due to favorable price realization, higher sales of equipment to end users and the impact from changes in dealer inventories. Dealers increased inventories more during the nine months ended September 30, 2022, than during the nine months ended September 30, 2021.

EAME sales increased 6 percent due to favorable price realization, higher sales of equipment to end users and the impact from changes in dealer inventories, partially offset by unfavorable currency impacts related to the euro and British pound. Dealers increased inventories more during the nine months ended September 30, 2022, than during the nine months ended September 30, 2021.

Asia/Pacific sales increased 3 percent driven by favorable price realization, services and the impact from changes in dealer inventories, partially offset by lower sales of equipment to end users and unfavorable currency impacts related to the Australian dollar and Japanese yen. Dealers increased inventories during the nine months ended September 30, 2022, compared with a decrease during the nine months ended September 30, 2021.

Dealers increased inventories about $1.6 billion during the nine months ended September 30, 2022, compared with remaining about flat during the nine months ended September 30, 2021. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rentals and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers.

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Sales and Revenues by Segment
(Millions of dollars)	Nine Months Ended September 30, 2021		Sales Volume		Price Realization		Currency		Inter-Segment / Other		Nine Months Ended September 30, 2022		$ Change		% Change
Construction Industries	$	16,370	$	723	$	1,737	$	(452)	$	46	$	18,424	$	2,054	13	%
Resource Industries	7,091		1,005		929		(126)		(21)		8,878		1,787		25	%
Energy & Transportation	14,559		1,314		784		(348)		620		16,929		2,370		16	%
All Other Segment	377		8		1		(4)		(43)		339		(38)		(10	%)
Corporate Items and Eliminations	(3,306)		48		(7)		—		(602)		(3,867)		(561)
Machinery, Energy & Transportation Sales	35,091		3,098		3,444		(930)		—		40,703		5,612		16	%
Financial Products Segment	2,297		—		—		—		103		2,400		103		4	%
Corporate Items and Eliminations	(215)		—		—		—		(58)		(273)		(58)
Financial Products Revenues	2,082		—		—		—		45		2,127		45		2	%
Consolidated Sales and Revenues	$	37,173	$	3,098	$	3,444	$	(930)	$	45	$	42,830	$	5,657	15	%

Sales and Revenues by Geographic Region

	North America				Latin America				EAME				Asia/Pacific				External Sales and Revenues					Inter-Segment				Total Sales and Revenues
(Millions of dollars)	$		% Chg		$		% Chg		$		% Chg		$		% Chg		$			% Chg		$		% Chg		$		% Chg
Nine Months Ended September 30, 2022
Construction Industries	$	8,832	25	%	$	2,061	53	%	$	3,726	3	%	$	3,694	(14	%)	$	18,313		12	%	$	111	71	%	$	18,424	13	%
Resource Industries	3,167		49	%	1,337		2	%	1,609		11	%	2,554		30	%	8,667			26	%	211		(9	%)	8,878		25	%
Energy & Transportation	6,637		16	%	1,160		39	%	3,679		7	%	2,193		12	%	13,669			15	%	3,260		23	%	16,929		16	%
All Other Segment	52		24	%	—		(100	%)	14		40	%	46		(15	%)	112			5	%	227		(16	%)	339		(10	%)
Corporate Items and Eliminations	(43)				(1)				(2)				(12)				(58)					(3,809)				(3,867)
Machinery, Energy & Transportation Sales	18,645		26	%	4,557		30	%	9,026		6	%	8,475		3	%	40,703			16	%	—		—	%	40,703		16	%
Financial Products Segment	1,530		6	%	250		28	%	293		(3	%)	327		(9	%)	2,400		1	4	%	—		—	%	2,400		4	%
Corporate Items and Eliminations	(132)				(58)				(31)				(52)				(273)					—				(273)
Financial Products Revenues	1,398		4	%	192		20	%	262		(5	%)	275		(10	%)	2,127			2	%	—		—	%	2,127		2	%
Consolidated Sales and Revenues	$	20,043	24	%	$	4,749	30	%	$	9,288	6	%	$	8,750	2	%	$	42,830		15	%	$	—	—	%	$	42,830	15	%
Nine Months Ended September 30, 2021
Construction Industries	$	7,041			$	1,350			$	3,612			$	4,302			$	16,305				$	65			$	16,370
Resource Industries	2,130				1,309				1,455				1,965				6,859					232				7,091
Energy & Transportation	5,698				835				3,433				1,953				11,919					2,640				14,559
All Other Segment	42				1				10				54				107					270				377
Corporate Items and Eliminations	(89)				(1)				(1)				(8)				(99)					(3,207)				(3,306)
Machinery, Energy & Transportation Sales	14,822				3,494				8,509				8,266				35,091					—				35,091
Financial Products Segment	1,442				195				301				359				2,297		1			—				2,297
Corporate Items and Eliminations	(99)				(35)				(26)				(55)				(215)					—				(215)
Financial Products Revenues	1,343				160				275				304				2,082					—				2,082
Consolidated Sales and Revenues	$	16,165			$	3,654			$	8,784			$	8,570			$	37,173				$	—			$	37,173

1 Includes revenues from Machinery, Energy & Transportation of $332 million and $263 million in the nine months ended September 30, 2022 and 2021, respectively.

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CONSOLIDATED OPERATING PROFIT

The chart above graphically illustrates reasons for the change in consolidated operating profit between the nine months ended September 30, 2021 (at left) and the nine months ended September 30, 2022 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company’s Board of Directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation’s other operating (income) expenses.

Operating profit for the nine months ended September 30, 2022, was $6.224 billion, an increase of $957 million, or 18 percent, compared with $5.267 billion for the nine months ended September 30, 2021. The increase was due to favorable price realization and higher sales volume, partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses.

Unfavorable manufacturing costs largely reflected higher material costs, freight and the impact of manufacturing inefficiencies. For 2022, price realization is expected to more than offset manufacturing cost increases. The increase in SG&A/R&D expenses was driven by investments aligned with the company's strategy for profitable growth, which included services growth and technology, such as digital, electrification and autonomy, as well as higher short-term incentive compensation expense.

Short-term incentive compensation expense is directly related to financial and operational performance, measured against targets set annually. Expense for the nine months ended September 30, 2022, was about $1.2 billion, compared with about $1.1 billion for the nine months ended September 30, 2021. For 2022, short-term incentive compensation expense is expected to be about $1.6 billion, compared with $1.3 billion in 2021.

Operating profit margin was 14.5 percent for the nine months ended September 30, 2022, compared with 14.2 percent for the nine months ended September 30, 2021.

Profit (Loss) by Segment
(Millions of dollars)	Nine Months Ended September 30, 2022		Nine Months Ended September 30, 2021		$ Change		%  Change
Construction Industries	$	3,255	$	2,937	$	318	11	%
Resource Industries	1,222		941		281		30	%
Energy & Transportation	2,132		2,119		13		1	%
All Other Segment	42		(2)		44		n/a
Corporate Items and Eliminations	(847)		(1,107)		260
Machinery, Energy & Transportation	5,804		4,888		916		19	%
Financial Products Segment	675		660		15		2	%
Corporate Items and Eliminations	30		(55)		85
Financial Products	705		605		100		17	%
Consolidating Adjustments	(285)		(226)		(59)
Consolidated Operating Profit	$	6,224	$	5,267	$	957	18	%
Corporate Items and Eliminations included corporate-level expenses, timing differences (as some expenses are reported in segment profit on a cash basis), methodology differences between segment and consolidated external reporting (the company values segment inventories and cost of sales using a current cost methodology), certain restructuring costs and inter-segment eliminations.

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Other Profit/Loss and Tax Items

▪Interest expense excluding Financial Products for the nine months ended September 30, 2022, was $326 million, compared with $376 million for the nine months ended September 30, 2021. The decrease was due to lower average debt outstanding during the nine months ended September 30, 2022, compared with the nine months ended September 30, 2021.

▪Other income (expense) for the nine months ended September 30, 2022, was income of $755 million, about flat compared with income of $751 million for the nine months September 30, 2021. Favorable impacts from foreign currency exchange were offset by unrealized losses on marketable securities and lower pension and OPEB income.

▪The provision for income taxes for the nine months ended September 30, 2022, reflected an estimated annual tax rate of 23 percent, compared with 25 percent for the nine months ended September 30, 2021, excluding the discrete items discussed below. The comparative tax rate for full-year 2021 was approximately 23 percent.

On September 8, 2022, the company reached a settlement with the U.S. Internal Revenue Service (IRS) that resolves all issues for tax years 2007 through 2016, without any penalties. The company’s settlement includes, among other issues, the resolution of disputed tax treatment of profits earned by Caterpillar SARL (CSARL) from certain parts transactions. We vigorously contested the IRS’s application of the “substance-over-form” or “assignment-of-income” judicial doctrines and its proposed increases to tax and imposition of accuracy related penalties. The settlement does not include any increases to tax in the United States based on those judicial doctrines and does not include any penalties. The final tax assessed by the IRS for all issues under the settlement was $490 million for the ten-year period. This amount was primarily paid in the nine months ending September 30, 2022, and the associated estimated interest of $250 million is expected to be paid by the end of 2022. The settlement was within the total amount of gross unrecognized tax benefits for uncertain tax positions and enables us to avoid the costs and burdens of further disputes with the IRS. As a result of the settlement, we recorded a discrete tax benefit of $41 million to reflect changes in estimates of prior years’ taxes and related interest, net of tax. We are subject to the continuous examination of our income tax returns by the IRS, and tax years subsequent to 2016 are not yet under examination.

In the nine months ended September 30, 2022, the company also recorded discrete tax benefits of $49 million to reflect other changes in estimates related to prior years’ U.S. taxes, compared to $36 million in the nine months ended September 30, 2021. In addition, the company recorded a discrete tax benefit of $18 million for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense, compared with a $61 million benefit for the nine months ended September 30, 2021.

Construction Industries

Construction Industries’ total sales were $18.424 billion for the nine months ended September 30, 2022, an increase of $2.054 billion, or 13 percent, compared with $16.370 billion for the nine months ended September 30, 2021. The increase was due to favorable price realization and higher sales volume, partially offset by unfavorable currency impacts related to the euro, Japanese yen and Australian dollar. The increase in sales volume was driven by the impact from changes in dealer inventories and higher sales of aftermarket parts, partially offset by lower sales of equipment to end users. Dealers increased inventories more during the nine months ended September 30, 2022, than during the nine months ended September 30, 2021.

•In North America, sales increased due to favorable price realization, the impact from changes in dealer inventories, higher sales of aftermarket parts and higher sales of equipment to end users. Dealers decreased inventories during the nine months ended September 30, 2021, compared with an increase during the nine months ended September 30, 2022.

•Sales increased in Latin America primarily due to higher sales of equipment to end users and favorable price realization.

•In EAME, sales increased as unfavorable currency impacts related to the euro were more than offset by favorable price realization and the impact from changes in dealer inventories. Dealers increased inventories more during the nine months ended September 30, 2022, than during the nine months ended September 30, 2021.

•Sales decreased in Asia/Pacific due to lower sales of equipment to end users and unfavorable currency impacts related to the Japanese yen and Australian dollar, partially offset by favorable price realization and the impact from changes in dealer inventories. Dealers increased inventories during the nine months ended September 30, 2022, compared with a decrease during the nine months ended September 30, 2021.

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Construction Industries’ profit was $3.255 billion for the nine months ended September 30, 2022, an increase of $318 million, or 11 percent, compared with $2.937 billion for the nine months ended September 30, 2021. The increase was mainly due to favorable price realization and higher sales volume, partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses. Unfavorable manufacturing costs largely reflected higher material costs, freight and the impact of manufacturing inefficiencies. The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives and higher short-term incentive compensation expense.

Construction Industries’ profit as a percent of total sales was 17.7 percent for the nine months ended September 30, 2022, compared with 17.9 percent for the nine months ended September 30, 2021.

Resource Industries

Resource Industries’ total sales were $8.878 billion for the nine months ended September 30, 2022, an increase of $1.787 billion, or 25 percent, compared with $7.091 billion for the nine months ended September 30, 2021. The increase was due to higher sales volume and favorable price realization. The increase in sales volume was driven by higher sales of aftermarket parts, the impact from changes in dealer inventories and higher sales of equipment to end users. Dealer inventory increased during the nine months ended September 30, 2022, compared with a decrease during the nine months ended September 30, 2021.

Resource Industries’ profit was $1.222 billion for the nine months ended September 30, 2022, an increase of $281 million, or 30 percent, compared with $941 million for the nine months ended September 30, 2021. Unfavorable manufacturing costs and higher SG&A/R&D expenses were more than offset by favorable price realization and higher sales volume. Unfavorable manufacturing costs largely reflected higher material costs, freight and the impact of manufacturing inefficiencies. The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives.

Resource Industries’ profit as a percent of total sales was 13.8 percent for the nine months ended September 30, 2022, compared with 13.3 percent for the nine months ended September 30, 2021.

Energy & Transportation

Sales by Application
(Millions of dollars)	Nine Months Ended September 30, 2022		Nine Months Ended September 30, 2021		$ Change		%  Change
Oil and Gas	$	3,503	$	3,140	$	363	12	%
Power Generation	3,518		3,025		493		16	%
Industrial	3,295		2,660		635		24	%
Transportation	3,353		3,094		259		8	%
External Sales	13,669		11,919		1,750		15	%
Inter-Segment	3,260		2,640		620		23	%
Total Sales	$	16,929	$	14,559	$	2,370	16	%

Energy & Transportation’s total sales were $16.929 billion for the nine months ended September 30, 2022, an increase of $2.370 billion, or 16 percent, compared with $14.559 billion for the nine months ended September 30, 2021. Sales increased across all applications and inter-segment sales. The increase in sales was primarily due to higher sales volume and favorable price realization, partially offset by unfavorable currency impacts.

•Oil and Gas – Sales increased due to higher sales of reciprocating engine aftermarket parts and engines used in well servicing and gas compression applications, primarily in North America, partially offset by lower sales for turbines and turbine-related services.

•Power Generation – Sales increased in small reciprocating engine applications, reciprocating engine aftermarket parts and turbines and turbine-related services.

•Industrial – Sales were up across all regions.

•Transportation – Sales increased primarily in reciprocating engine aftermarket parts and marine applications. Rail services and international locomotives deliveries were also higher.

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Energy & Transportation’s profit was $2.132 billion for the nine months ended September 30, 2022, about flat compared with $2.119 billion for the nine months ended September 30, 2021. Unfavorable manufacturing costs and higher SG&A/R&D expenses were offset by favorable price realization and higher sales volume. Unfavorable manufacturing costs largely reflected higher material costs, freight and the impact of manufacturing inefficiencies. The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives and higher short-term incentive compensation expense.

Energy & Transportation’s profit as a percent of total sales was 12.6 percent for the nine months ended September 30, 2022, compared with 14.6 percent for the nine months ended September 30, 2021.

Financial Products Segment

Financial Products’ segment revenues were $2.400 billion for the nine months ended September 30, 2022, an increase of $103 million, or 4 percent, compared with $2.297 billion for the nine months ended September 30, 2021. The increase was primarily due to a favorable impact from returned or repossessed equipment in North America and higher average financing rates in Latin America.

Financial Products’ segment profit was $675 million for the nine months ended September 30, 2022, an increase of $15 million, or 2 percent, compared with $660 million for the nine months ended September 30, 2021. The increase was mainly due to a favorable impact from returned or repossessed equipment and lower provision for credit losses at Cat Financial, partially offset by an unfavorable impact from equity securities in Insurance Services and an increase in SG&A expenses.

Corporate Items and Eliminations

Expense for corporate items and eliminations was $817 million for the nine months ended September 30, 2022, a decrease of $345 million from the nine months ended September 30, 2021, primarily driven by favorable impacts of segment reporting methodology, a favorable change in fair value adjustments related to deferred compensation plans and lower expenses due to timing differences, partially offset by higher corporate costs.

RESTRUCTURING COSTS

In 2022, we expect to incur about $800 million of restructuring costs primarily related to strategic actions to address a small number of products. Approximately $600 million of the total is a non-cash charge related to the release of accumulated foreign currency translation losses that will be recognized upon the sale of a business containing some of these products, which may not occur until 2023. We expect that prior restructuring actions will result in an incremental benefit to operating costs, primarily Cost of goods sold and SG&A expenses of about $75 million in 2022 compared with 2021.

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

GLOSSARY OF TERMS

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

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

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

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

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

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

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

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

9.EAME – A geographic region including Europe, Africa, the Middle East and the Commonwealth of Independent States (CIS).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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LIQUIDITY AND CAPITAL RESOURCES

Sources of funds

We generate significant capital resources from operating activities, which are the primary source of funding for our ME&T operations. Funding for these businesses is also available from commercial paper and long-term debt issuances. Financial Products’ operations are funded primarily from commercial paper, term debt issuances and collections from its existing portfolio. On a consolidated basis, we had positive operating cash flow in the first nine months of 2022 and ended the third quarter with $6.35 billion of cash, a decrease of $2.91 billion from year-end 2021. In addition, ME&T has invested in available-for-sale debt securities that are considered highly liquid and are available for current operations. These securities are included in Prepaid expenses and other current assets and Other assets in the Consolidated Statement of Financial Position and were $982 million at the end of September 30, 2022. We intend to maintain a strong cash and liquidity position.

Consolidated operating cash flow for the first nine months of 2022 was $5.03 billion, down $759 million compared to the same period a year ago. The decrease was primarily due to payments for short-term incentive compensation in the first quarter of 2022 as well as higher cash taxes paid which includes payments related to settlements with the U.S. Internal Revenue Service. Partially offsetting these items was higher profit adjusted for non-cash items during the first nine months of 2022 compared to the same period last year.

Total debt as of September 30, 2022 was $36.53 billion, a decrease of $1.26 billion from year-end 2021. Debt related to ME&T decreased $192 million in the first nine months of 2022 while debt related to Financial Products decreased $1.07 billion.

As of September 30, 2022, we had three global credit facilities with a syndicate of banks totaling $10.50 billion (Credit Facility) available in the aggregate to both Caterpillar and Cat Financial for general liquidity purposes. Based on management’s allocation decision, which can be revised from time to time, the portion of the Credit Facility available to ME&T as of September 30, 2022 was $2.75 billion. Information on our Credit Facility is as follows:

•In September 2022, we entered into a new 364-day facility. The 364-day facility of $3.15 billion (of which $825 million is available to ME&T) expires in August 2023.

•In September 2022, we amended and restated the three-year facility (as amended and restated, the "three-year facility"). The three-year facility of $2.73 billion (of which $715 million is available to ME&T) expires in August 2025.

•In September 2022, we amended and restated the five-year facility (as amended and restated, the "five-year facility"). The five-year facility of $4.62 billion (of which $1.21 billion is available to ME&T) expires in September 2027.

At September 30, 2022, Caterpillar’s consolidated net worth was $15.69 billion, which was above the $9.00 billion required under the Credit Facility. The consolidated net worth is defined in the Credit Facility as the consolidated shareholders’ equity including preferred stock but excluding the pension and other postretirement benefits balance within Accumulated other comprehensive income (loss).

At September 30, 2022, Cat Financial’s covenant interest coverage ratio was 2.59 to 1. This was above the 1.15 to 1 minimum ratio calculated as (1) profit excluding income taxes, interest expense and net gain (loss) from interest rate derivatives to (2) interest expense calculated at the end of each calendar quarter for the rolling four quarter period then most recently ended, required by the Credit Facility.

In addition, at September 30, 2022, Cat Financial’s six-month covenant leverage ratio was 7.03 to 1. This was below the maximum ratio of debt to net worth of 10 to 1, calculated (1) on a monthly basis as the average of the leverage ratios determined on the last day of each of the six preceding calendar months and (2) at each December 31, required by the Credit Facility.

In the event Caterpillar or Cat Financial does not meet one or more of their respective financial covenants under the Credit Facility in the future (and are unable to obtain a consent or waiver), the syndicate of banks may terminate the commitments allocated to the party that does not meet its covenants. Additionally, in such event, certain of Cat Financial’s other lenders under other loan agreements where similar financial covenants or cross default provisions are applicable may, at their election, choose to pursue remedies under those loan agreements, including accelerating the repayment of outstanding borrowings. At September 30, 2022, there were no borrowings under the Credit Facility.

Our total credit commitments and available credit as of September 30, 2022 were:

61

	September 30, 2022
(Millions of dollars)	Consolidated		Machinery, Energy & Transportation		Financial Products
Credit lines available:
Global credit facilities	$	10,500	$	2,750	$	7,750
Other external	3,352		172		3,180
Total credit lines available	13,852		2,922		10,930
Less: Commercial paper outstanding	(3,723)		—		(3,723)
Less: Utilized credit	(684)		(3)		(681)
Available credit	$	9,445	$	2,919	$	6,526

The other external consolidated credit lines with banks as of September 30, 2022 totaled $3.35 billion. These committed and uncommitted credit lines, which may be eligible for renewal at various future dates or have no specified expiration date, are used primarily by our subsidiaries for local funding requirements. Caterpillar or Cat Financial may guarantee subsidiary borrowings under these lines.

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

We facilitate voluntary supply chain finance programs (the “Programs”) through participating financial institutions. The Programs are available to a wide range of suppliers and allow them the option to manage their cash flow. We are not a party to the agreements between the participating financial institutions and the suppliers in connection with the Programs. The range of payment terms we negotiate with our suppliers is consistent, irrespective of whether a supplier participates in the Programs. The amounts payable to participating financial institutions for suppliers who voluntarily participate in the Programs and included in accounts payable in the Consolidated Statement of Financial Position were $894 million and $822 million at September 30, 2022 and December 31, 2021, respectively. The amounts settled through the Programs and paid to participating financial institutions were $4.0 billion and $2.9 billion during the first nine months of 2022 and 2021, respectively. We account for payments made under the Programs, the same as our other accounts payable, as a reduction to our cash flows from operations. We do not believe that changes in the availability of supply chain financing will have a significant impact on our liquidity.

Machinery, Energy & Transportation

Net cash provided by operating activities was $3.19 billion in the first nine months of 2022, compared with net cash provided of $4.90 billion for the same period in 2021. The decrease was primarily due to payments for short-term incentive compensation in the first quarter of 2022, higher payments for taxes which includes payments related to settlements with the U.S. Internal Revenue Service and increased working capital requirements during the first nine months of 2022 compared to the same period last year. Within working capital, changes in inventory, accounts payable and accrued expenses unfavorably impacted cash flow but were partially offset by favorable changes in customer advances and accounts receivable. Partially offsetting these unfavorable items was higher profit adjusted for non-cash items during the first nine months of 2022 compared to the same period a year ago.

Net cash used by investing activities in the first nine months of 2022 was $881 million, compared with net cash used of $487 million in the first nine months of 2021. The change was primarily due to decreased activity related to intercompany lending with Financial Products and was partially offset by decreases in net investment activity.

Net cash used for financing activities during the first nine months of 2022 was $5.29 billion, compared with net cash used of $4.67 billion in the same period of 2021. The change was primarily due to higher share repurchases in the first nine months of 2022 and the absence of proceeds from debt issuances which occurred in the first nine months of 2021. These items were partially offset by lower repayments of maturing debt during the first nine months of 2022.

62

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

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

Operational excellence and commitments – Capital expenditures were $880 million during the first nine months of 2022, compared to $693 million for the same period in 2021. We expect ME&T’s capital expenditures in 2022 to be about $1.4 billion. We made $299 million of contributions to our pension and other postretirement benefit plans during the first nine months of 2022. We currently anticipate full-year 2022 contributions of approximately $357 million. In comparison, we made $229 million of contributions to our pension and other postretirement benefit plans during the first nine months of 2021.

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

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

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 and the economic outlook, corporate cash flow, the company’s liquidity needs, and the health and stability of global credit markets. The timing and amount of future repurchases may vary depending on market conditions and investing priorities. In July 2018, the Board approved a repurchase authorization (the 2018 Authorization) of up to $10.0 billion of Caterpillar common stock effective January 1, 2019, with no expiration. In May 2022, the Board approved a new share repurchase authorization (the 2022 Authorization) of up to $15.0 billion of Caterpillar common stock effective August 1, 2022, with no expiration. Utilization of the 2022 Authorization for all share repurchases commenced on August 1, 2022, leaving $70 million unutilized under the 2018 Authorization as of September 30, 2022. In the first nine months of 2022, we repurchased $3.31 billion of Caterpillar common stock, with $13.7 billion remaining under the 2022 Authorization as of September 30, 2022. Our basic shares outstanding as of September 30, 2022 were approximately 520 million.

Each quarter, our Board of Directors reviews the company’s dividend for the applicable quarter. The Board evaluates the financial condition of the company and considers the economic outlook, corporate cash flow, the company’s liquidity needs, and the health and stability of global credit markets to determine whether to maintain or change the quarterly dividend. In October 2022, the Board of Directors approved maintaining our quarterly dividend representing $1.20 per share, and we continue to expect our strong financial position to support the dividend. Dividends paid totaled $1.82 billion in the first nine months of 2022.

Financial Products

Financial Products operating cash flow was $1.25 billion in the first nine months of 2022, compared with $1.10 billion for the same period a year ago. Net cash used for investing activities was $228 million for the first nine months of 2022, compared with net cash used of $468 million for the same period in 2021. The change was primarily due to portfolio related activity. Net cash used for financing activities was $872 million for the first nine months of 2022 compared with net cash used of $289 million for the same period in 2021. The change was primarily due to lower portfolio funding requirements.

Financial Products ended the third quarter of 2022 with $943 million of cash, including $142 million in Russia which is currently subject to local government restrictions that substantially limit transfer outside of the country.

RECENT ACCOUNTING PRONOUNCEMENTS

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

63

CRITICAL ACCOUNTING ESTIMATES

For a discussion of the company’s critical accounting estimates, see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2021 Annual Report on Form 10-K. There have been no significant changes to our critical accounting estimates since our 2021 Annual Report on Form 10-K.

OTHER MATTERS

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

Retirement Benefits

We recognize mark-to-market gains and losses immediately through earnings upon the remeasurement of our pension and OPEB plans. Mark-to-market gains and losses represent the effects of actual results differing from our assumptions and the effects of changing assumptions. We will record the annual mark-to-market adjustment as of the measurement date, December 31, 2022. It is difficult to predict the December 31, 2022 adjustment amount, as it will be dependent primarily on changes in discount rates during 2022, and actual returns on plan assets differing from our expected returns for 2022.

Order Backlog

At the end of the third quarter of 2022, the dollar amount of backlog believed to be firm was approximately $30.0 billion, about $1.6 billion higher than the second quarter of 2022. The order backlog increase was primarily driven by Energy & Transportation and Construction Industries. Of the total backlog at September 30, 2022, approximately $5.7 billion was not expected to be filled in the following twelve months.

64

NON-GAAP FINANCIAL MEASURES

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

We believe it is important to separately quantify the profit impact of one significant item in order for our results to be meaningful to our readers. This item consists of restructuring costs, which were incurred to generate longer-term benefits. We do not consider this item indicative of earnings from ongoing business activities and believe the non-GAAP measure provides investors with useful perspective on underlying business results and trends and aids with assessing our period-over-period results. In addition, we provide a calculation of ME&T free cash flow as we believe it is an important measure for investors to determine the cash generation available for financing activities including debt repayments, dividends and share repurchases.

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

(Dollars in millions except per share data)	Operating Profit		Operating Profit Margin		Profit Before Taxes		Provision (Benefit) for Income Taxes		Effective Tax Rate		Profit		Profit per Share
Three Months Ended September 30, 2022 - U.S. GAAP	$	2,425	16.2	%	$	2,558	$	527	20.6	%	$	2,041	$	3.87
Restructuring costs	49		0.3	%	49		9		18.4	%	40		$	0.08
Three Months Ended September 30, 2022 - Adjusted	$	2,474	16.5	%	$	2,607	$	536	20.6	%	$	2,081	$	3.95
Three Months Ended September 30, 2021 - U.S. GAAP	$	1,664	13.4	%	$	1,775	$	368	20.7	%	$	1,426	$	2.60
Restructuring costs	35		0.3	%	35		6		15.0	%	29		$	0.06
Three Months Ended September 30, 2021 - Adjusted	$	1,699	13.7	%	$	1,810	$	374	20.7	%	$	1,455	$	2.66
Nine Months Ended September 30, 2022- U.S. GAAP	$	6,224	14.5	%	$	6,653	$	1,423	21.4	%	$	5,251	$	9.85
Restructuring costs	90		0.2	%	90		13		14.0	%	77		$	0.14
Nine Months Ended September 30, 2022 - Adjusted	$	6,314	14.7	%	$	6,743	$	1,436	21.3	%	$	5,328	$	9.99
Nine Months Ended September 30, 2021 - U.S. GAAP	$	5,267	14.2	%	$	5,642	$	1,313	23.3	%	$	4,369	$	7.94
Restructuring costs	124		0.3	%	124		19		15.0	%	105		$	0.19
Nine Months Ended September 30, 2021 - Adjusted	$	5,391	14.5	%	$	5,766	$	1,332	23.1	%	$	4,474	$	8.13

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

(Millions of dollars)	Nine Months Ended September 30
	2022		2021
ME&T net cash provided by operating activities 1	$	3,191	$	4,899
ME&T capital expenditures	(880)		(693)
Cash payments related to settlements with the U.S. Internal Revenue Service	467		—
ME&T free cash flow	$	2,778	$	4,206
1 See reconciliation of ME&T net cash provided by operating activities to consolidated net cash provided by operating activities on pages 73 - 74.

65

Supplemental Consolidating Data

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

Consolidated – Caterpillar Inc. and its subsidiaries.

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

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

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

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

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

66

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Three Months Ended September 30, 2022

(Unaudited)

(Millions of dollars)

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

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

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

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

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

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

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

7Profit attributable to common shareholders.

67

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Nine Months Ended September 30, 2022

(Unaudited)

(Millions of dollars)

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

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

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

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

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

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

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

7Profit attributable to common shareholders.

68

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Three Months Ended September 30, 2021

(Unaudited)

(Millions of dollars)

			Supplemental Consolidating Data
	Consolidated		Machinery, Energy & Transportation		Financial Products		Consolidating Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation	$	11,707	$	11,707	$	—	$	—
Revenues of Financial Products	690		—		787		(97)		1
Total sales and revenues	12,397		11,707		787		(97)
Operating costs:
Cost of goods sold	8,617		8,618		—		(1)		2
Selling, general and administrative expenses	1,340		1,147		200		(7)		2
Research and development expenses	427		427		—		—
Interest expense of Financial Products	111		—		111		—
Other operating (income) expenses	238		(56)		310		(16)		2
Total operating costs	10,733		10,136		621		(24)
Operating profit	1,664		1,571		166		(73)
Interest expense excluding Financial Products	114		114		—		—
Other income (expense)	225		143		9		73		3
Consolidated profit before taxes	1,775		1,600		175		—
Provision (benefit) for income taxes	368		331		37		—
Profit of consolidated companies	1,407		1,269		138		—
Equity in profit (loss) of unconsolidated affiliated companies	21		23		—		(2)		4
Profit of consolidated and affiliated companies	1,428		1,292		138		(2)
Less: Profit (loss) attributable to noncontrolling interests	2		1		3		(2)		5
Profit 6	$	1,426	$	1,291	$	135	$	—

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

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

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

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

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

6Profit attributable to common shareholders.

69

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Nine Months Ended September 30, 2021

(Unaudited)

(Millions of dollars)

			Supplemental Consolidating Data
	Consolidated		Machinery, Energy & Transportation		Financial Products		Consolidating Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation	$	35,091	$	35,091	$	—	$	—
Revenues of Financial Products	2,082		—		2,371		(289)		1
Total sales and revenues	37,173		35,091		2,371		(289)
Operating costs:
Cost of goods sold	25,510		25,515		—		(5)		2
Selling, general and administrative expenses	3,943		3,471		483		(11)		2
Research and development expenses	1,247		1,247		—		—
Interest expense of Financial Products	352		—		352		—
Other operating (income) expenses	854		(30)		931		(47)		2
Total operating costs	31,906		30,203		1,766		(63)
Operating profit	5,267		4,888		605		(226)
Interest expense excluding Financial Products	376		376		—		—
Other income (expense)	751		819		56		(124)		3
Consolidated profit before taxes	5,642		5,331		661		(350)
Provision (benefit) for income taxes	1,313		1,158		155		—
Profit of consolidated companies	4,329		4,173		506		(350)
Equity in profit (loss) of unconsolidated affiliated companies	44		52		—		(8)		4
Profit of consolidated and affiliated companies	4,373		4,225		506		(358)
Less: Profit (loss) attributable to noncontrolling interests	4		3		9		(8)		5
Profit 6	$	4,369	$	4,222	$	497	$	(350)

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

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

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

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

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

6Profit attributable to common shareholders.

70

Caterpillar Inc.

Supplemental Data for Financial Position

At September 30, 2022

(Unaudited)

(Millions of dollars)

			Supplemental Consolidating Data
	Consolidated		Machinery, Energy & Transportation		Financial Products		Consolidating Adjustments
Assets
Current assets:
Cash and cash equivalents	$	6,346	$	5,403	$	943	$	—
Receivables – trade and other	8,158		3,134		652		4,372		1,2
Receivables – finance	8,918		—		13,446		(4,528)		2
Prepaid expenses and other current assets	2,295		2,013		316		(34)		3
Inventories	16,860		16,860		—		—
Total current assets	42,577		27,410		15,357		(190)
Property, plant and equipment – net	11,643		7,810		3,833		—
Long-term receivables – trade and other	1,278		319		512		447		1,2
Long-term receivables – finance	11,859		—		12,338		(479)		2
Noncurrent deferred and refundable income taxes	2,218		2,745		106		(633)		4
Intangible assets	806		806		—		—
Goodwill	6,092		6,092		—		—
Other assets	4,434		3,663		1,946		(1,175)		5
Total assets	$	80,907	$	48,845	$	34,092	$	(2,030)
Liabilities
Current liabilities:
Short-term borrowings	$	4,202	$	3	$	4,199	$	—
Accounts payable	8,260		8,149		267		(156)		6
Accrued expenses	4,013		3,622		391		—
Accrued wages, salaries and employee benefits	2,204		2,160		44		—
Customer advances	1,831		1,831		—		—
Other current liabilities	2,878		2,126		807		(55)		4,7
Long-term debt due within one year	6,814		120		6,694		—
Total current liabilities	30,202		18,011		12,402		(211)
Long-term debt due after one year	25,509		9,511		16,030		(32)		8
Liability for postemployment benefits	5,038		5,038		—		—
Other liabilities	4,536		3,659		1,565		(688)		4
Total liabilities	65,285		36,219		29,997		(931)
Commitments and contingencies
Shareholders’ equity
Common stock	6,523		6,523		905		(905)		9
Treasury stock	(30,883)		(30,883)		—		—
Profit employed in the business	43,304		38,898		4,395		11		9
Accumulated other comprehensive income (loss)	(3,353)		(1,946)		(1,407)		—
Noncontrolling interests	31		34		202		(205)		9
Total shareholders’ equity	15,622		12,626		4,095		(1,099)
Total liabilities and shareholders’ equity	$	80,907	$	48,845	$	34,092	$	(2,030)

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

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

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

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

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

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

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

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

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

71

Caterpillar Inc.

Supplemental Data for Financial Position

At December 31, 2021

(Unaudited)

(Millions of dollars)

			Supplemental Consolidating Data
	Consolidated		Machinery, Energy & Transportation		Financial Products		Consolidating Adjustments
Assets
Current assets:
Cash and cash equivalents	$	9,254	$	8,428	$	826	$	—
Receivables – trade and other	8,477		3,279		435		4,763		1,2
Receivables – finance	8,898		—		13,828		(4,930)		2
Prepaid expenses and other current assets	2,788		2,567		358		(137)		3
Inventories	14,038		14,038		—		—
Total current assets	43,455		28,312		15,447		(304)
Property, plant and equipment – net	12,090		8,172		3,918		—
Long-term receivables – trade and other	1,204		375		204		625		1,2
Long-term receivables – finance	12,707		—		13,358		(651)		2
Noncurrent deferred and refundable income taxes	1,840		2,396		105		(661)		4
Intangible assets	1,042		1,042		—		—
Goodwill	6,324		6,324		—		—
Other assets	4,131		3,388		1,952		(1,209)		5
Total assets	$	82,793	$	50,009	$	34,984	$	(2,200)
Liabilities
Current liabilities:
Short-term borrowings	$	5,404	$	9	$	5,395	$	—
Accounts payable	8,154		8,079		242		(167)		6
Accrued expenses	3,757		3,385		372		—
Accrued wages, salaries and employee benefits	2,242		2,186		56		—
Customer advances	1,087		1,086		1		—
Dividends payable	595		595		—		—
Other current liabilities	2,256		1,773		642		(159)		4,7
Long-term debt due within one year	6,352		45		6,307		—
Total current liabilities	29,847		17,158		13,015		(326)
Long-term debt due after one year	26,033		9,772		16,287		(26)		8
Liability for postemployment benefits	5,592		5,592		—		—
Other liabilities	4,805		4,106		1,425		(726)		4
Total liabilities	66,277		36,628		30,727		(1,078)
Commitments and contingencies
Shareholders’ equity
Common stock	6,398		6,398		919		(919)		9
Treasury stock	(27,643)		(27,643)		—		—
Profit employed in the business	39,282		35,390		3,881		11		9
Accumulated other comprehensive income (loss)	(1,553)		(799)		(754)		—
Noncontrolling interests	32		35		211		(214)		9
Total shareholders’ equity	16,516		13,381		4,257		(1,122)
Total liabilities and shareholders’ equity	$	82,793	$	50,009	$	34,984	$	(2,200)

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

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

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

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

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

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

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

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

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

72

Caterpillar Inc.

Supplemental Data for Cash Flow

For the Nine Months Ended September 30, 2022

(Unaudited)

(Millions of dollars)

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

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

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

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

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

73

Caterpillar Inc.

Supplemental Data for Cash Flow

For the Nine Months Ended September 30, 2021

(Unaudited)

(Millions of dollars)

			Supplemental Consolidating Data
	Consolidated		Machinery, Energy & Transportation		Financial Products		Consolidating Adjustments
Cash flow from operating activities:
Profit of consolidated and affiliated companies	$	4,373	$	4,225	$	506	$	(358)	1,5
Adjustments for non-cash items:
Depreciation and amortization	1,766		1,162		604		—
Provision (benefit) for deferred income taxes	(321)		(255)		(66)		—
Other	102		104		(135)		133		2
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables – trade and other	(326)		(338)		40		(28)		2,3
Inventories	(2,195)		(2,194)		—		(1)		2
Accounts payable	1,232		1,194		28		10		2
Accrued expenses	46		117		(71)		—
Accrued wages, salaries and employee benefits	934		905		29		—
Customer advances	39		39		—		—
Other assets – net	138		133		24		(19)		2
Other liabilities – net	(2)		(193)		144		47		2
Net cash provided by (used for) operating activities	5,786		4,899		1,103		(216)
Cash flow from investing activities:
Capital expenditures – excluding equipment leased to others	(673)		(670)		(11)		8		2
Expenditures for equipment leased to others	(1,014)		(23)		(997)		6		2
Proceeds from disposals of leased assets and property, plant and equipment	877		71		818		(12)		2
Additions to finance receivables	(9,603)		—		(10,292)		689		3
Collections of finance receivables	9,221		—		9,946		(725)		3
Net intercompany purchased receivables	—		—		100		(100)		3
Proceeds from sale of finance receivables	44		—		44		—
Net intercompany borrowings	—		1,000		3		(1,003)		4
Investments and acquisitions (net of cash acquired)	(449)		(449)		—		—
Proceeds from sale of businesses and investments (net of cash sold)	23		23		—		—
Proceeds from sale of securities	424		44		380		—
Investments in securities	(934)		(542)		(392)		—
Other – net	(8)		59		(67)		—
Net cash provided by (used for) investing activities	(2,092)		(487)		(468)		(1,137)
Cash flow from financing activities:
Dividends paid	(1,733)		(1,733)		(350)		350		5
Common stock issued, including treasury shares reissued	122		122		—		—
Common shares repurchased	(1,622)		(1,622)		—		—
Net intercompany borrowings	—		(3)		(1,000)		1,003		4
Proceeds from debt issued (original maturities greater than three months)	6,931		494		6,437		—
Payments on debt (original maturities greater than three months)	(8,620)		(1,910)		(6,710)		—
Short-term borrowings – net (original maturities three months or less)	1,324		(10)		1,334		—
Other – net	(4)		(4)		—		—
Net cash provided by (used for) financing activities	(3,602)		(4,666)		(289)		1,353
Effect of exchange rate changes on cash	(9)		(14)		5		—
Increase (decrease) in cash, cash equivalents and restricted cash	83		(268)		351		—
Cash, cash equivalents and restricted cash at beginning of period	9,366		8,822		544		—
Cash, cash equivalents and restricted cash at end of period	$	9,449	$	8,554	$	895	$	—

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.

74

Forward-looking Statements

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

Caterpillar’s actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including, but not limited to: (i) global and regional economic conditions and economic conditions in the industries we serve; (ii) commodity price changes, material price increases, fluctuations in demand for our products or significant shortages of material; (iii) government monetary or fiscal policies; (iv) political and economic risks, commercial instability and events beyond our control in the countries in which we operate; (v) international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates; (vi) our ability to develop, produce and market quality products that meet our customers’ needs; (vii) the impact of the highly competitive environment in which we operate on our sales and pricing; (viii) information technology security threats and computer crime; (ix) inventory management decisions and sourcing practices of our dealers and our OEM customers; (x) a failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures or divestitures; (xi) union disputes or other employee relations issues; (xii) adverse effects of unexpected events; (xiii) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers; (xiv) failure to maintain our credit ratings and potential resulting increases to our cost of borrowing and adverse effects on our cost of funds, liquidity, competitive position and access to capital markets; (xv) our Financial Products segment’s risks associated with the financial services industry; (xvi) changes in interest rates or market liquidity conditions; (xvii) an increase in delinquencies, repossessions or net losses of Cat Financial’s customers; (xviii) currency fluctuations; (xix) our or Cat Financial’s compliance with financial and other restrictive covenants in debt agreements; (xx) increased pension plan funding obligations; (xxi) alleged or actual violations of trade or anti-corruption laws and regulations; (xxii) additional tax expense or exposure, including the impact of U.S. tax reform; (xxiii) significant legal proceedings, claims, lawsuits or government investigations; (xxiv) new regulations or changes in financial services regulations; (xxv) compliance with environmental laws and regulations; (xxvi) the duration and geographic spread of, business disruptions caused by, and the overall global economic impact of, the COVID-19 pandemic; and (xxvii) other factors described in more detail under the section entitled "Part I - Item 1A. Risk Factors" of Caterpillar's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as such factors may be updated from time to time in Caterpillar's periodic filings with the Securities and Exchange Commission.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

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

Item 4.  Controls and Procedures

Evaluation of disclosure controls and procedures

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

Changes in internal control over financial reporting

During the third quarter of 2022, there has been no change in the company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

75

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

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

Item 1A. Risk Factors

There have been no material changes to the risk factors we previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased2	Average Price Paid per Share2		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet be Purchased under the Program (in billions)1
July 1-31, 2022	591,861	$	177.08	591,861	$	0.070
August 1-31, 2022	3,015,701	$	192.33	3,015,701	$	14.420
September 1-30, 2022	3,967,760	$	176.42	3,967,760	$	13.720
Total	7,575,322	$	182.80	7,575,322
1 In July 2018, the Board approved a share repurchase authorization (the 2018 Authorization) of up to $10.0 billion of Caterpillar common stock effective January 1, 2019, with no expiration. In May 2022, the Board approved a new share repurchase authorization (the 2022 Authorization) of up to $15.0 billion of Caterpillar common stock effective August 1, 2022, with no expiration. Utilization of the 2022 Authorization for all share repurchases commenced on August 1, 2022, leaving approximately $70 million unutilized under the 2018 Authorization as of September 30, 2022. As of September 30, 2022, $13.7 billion remained available under the 2022 Authorization.
2 In July, August and September of 2022, we repurchased 0.6 million, 3.0 million and 4.0 million shares respectively, for an aggregate of $1.4 billion in open market transactions at an average price per share of $177.08, $192.33 and $176.42, respectively.

Non-U.S. Employee Stock Purchase Plans

As of September 30, 2022, we had 28 employee stock purchase plans (the “EIP Plans”) that are administered outside the United States for our non-U.S. employees, which had approximately 13,000 active participants in the aggregate. During the third quarter of 2022, approximately 81,000 shares of Caterpillar common stock were purchased by the EIP Plans pursuant to the terms of such plans.

76

Item 6. Exhibits

10.1	Fourth Amendment to the Caterpillar Inc. 2006 Long-Term Incentive Plan*
10.2	First Amendment to the Caterpillar Inc. 2014 Long-Term Incentive Plan*
10.3	Second Amendment to the Caterpillar Inc. Supplemental Retirement Plan*
10.4	Fourth Amendment to the Caterpillar Inc. Supplemental Employees' Investment Plan*
10.5	Second Amendment to the Caterpillar Inc. Directors' Deferred Compensation Plan*
10.6	Fourth Amendment to the Caterpillar Inc. Deferred Employees' Investment Plan*
10.7	Fifth Amendment to the Caterpillar Inc. Supplement Deferred Compensation Plan*
10.8	364-Day Credit Agreement dated September 1, 2022 (incorporated by reference from Exhibit 10.1 to the Company's Current Report on Form 8-K filed September 6, 2022)
10.9	Local Currency Addendum to the 364-Day Credit Agreement dated September 1, 2022 (incorporated by reference from Exhibit 10.2 to the Company's Current Report on Form 8-K filed September 6, 2022)
10.10	Japan Local Currency Addendum to the 364-Day Credit Agreement dated September 1, 2022 (incorporated by reference from Exhibit 10.3 to the Company's Current Report on Form 8-K filed September 6, 2022)
10.11	Third Amended and Restated Credit Agreement (Three-Year Facility) dated September 1, 2022 (incorporated by reference from Exhibit 10.4 to the Company's Current Report on Form 8-K filed September 6, 2022)
10.12	Local Currency Addendum to the Third Amended and Restated Credit Agreement (Three-Year Facility) dated September 1, 2022 (incorporated by reference from Exhibit 10.5 to the Company's Current Report on Form 8-K filed September 6, 2022)
10.13	Japan Local Currency Addendum to the Third Amended and Restated Credit Agreement (Three-Year Facility) dated September 1, 2022 (incorporated by reference from Exhibit 10.6 to the Company's Current Report on Form 8-K filed September 6, 2022)
10.14	Third Amended and Restated Credit Agreement (Five-Year Facility) dated September 1, 2022 (incorporated by reference from Exhibit 10.7 to the Company's Current Report on Form 8-K filed September 6, 2022)
10.15	Local Currency Addendum to the Third Amended and Restated Credit Agreement (Five-Year Facility) dated September 1, 2022 (incorporated by reference from Exhibit 10.8 to the Company's Current Report on Form 8-K filed September 6, 2022)
10.16	Japan Local Currency Addendum to the Third Amended and Restated Credit Agreement (Five-Year Facility) dated September 1, 2022 (incorporated by reference from Exhibit 10.9 to the Company's Current Report on Form 8-K filed September 6, 2022)
31.1	Certification of Chief Executive Officer of Caterpillar Inc., as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer of Caterpillar Inc., as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification of Chief Executive Officer of Caterpillar Inc. and Chief Financial Officer of Caterpillar Inc., as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive File (embedded within the Inline XBRL document and included in Exhibit 101)

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

77

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

78

SIGNATURES

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

	CATERPILLAR INC.
November 2, 2022	/s/ D. James Umpleby III	Chairman of the Board and Chief Executive Officer
	D. James Umpleby III
November 2, 2022	/s/ Andrew R.J. Bonfield	Chief Financial Officer
	Andrew R.J. Bonfield
November 2, 2022	/s/ Suzette M. Long	Chief Legal Officer and General Counsel
	Suzette M. Long
November 2, 2022	/s/ William E. Schaupp	Vice President and Chief Accounting Officer
	William E. Schaupp

79

EX-10.1

EXHIBIT 10.1

FOURTH AMENDMENT

TO THE
CATERPILLAR INC.

2006 LONG-TERM INCENTIVE PLAN

Caterpillar Inc. (the “Company”) maintains the Caterpillar Inc. 2006 Long-Term Incentive (the “Plan”). The Plan was originally approved by stockholders effective on June 14, 2006. On June 9, 2010, stockholders approved an amendment and restatement of the Plan that became effective on such date. Pursuant to Section 16.1 of the Plan, the Company has reserved the right to amend the Plan, in whole or in part, at any time. By documents dated December 6, 2010, August 22, 2013, and February 4, 2019, the Company amended the amended and restated Plan. By this instrument, the Company hereby further amends the Plan to reflect changes in the Company’s employee title structure by updating the references to the position with management responsibility for the Company’s compensation and benefits, or total rewards, function.

1.This Fourth Amendment shall be effective as of July 1, 2022.

2.Section 6.8(b)(ii) of the Plan is hereby amended and restated in its entirety to provide as follows:

“(ii) NQSOs (whether vested or unvested) held by (A) Participants who are Section 16 Officers; (B) Participants who are Directors; or (C) any Participants who previously held the positions in clauses (A) and (B) may be transferred by gift or by domestic relations order to one or more Permitted Transferees. NQSOs (whether vested or unvested) held by all other Participants and by Permitted Transferees may be transferred by gift or by domestic relations order only to Permitted Transferees upon the prior written approval of the Company’s Vice President Total Rewards.”

3.Section 7.8(b) of the Plan is hereby amended and restated in its entirety to provide as follows:

“(b)    SARs held by (i) Participants who are Section 16 Officers; (ii) Participants who are Directors; or (iii) any Participants who previously held the positions in clauses (i) and (ii) may be transferred by gift or by domestic relations order to one or more

Caterpillar: Confidential Green

8576630

Permitted Transferees. SARs held by all other Participants and by Permitted Transferees may be transferred by gift or by domestic relations order to Permitted Transferees only upon the prior written approval of the Company’s Vice President Total Rewards.”

4.This Fourth Amendment amends only the provisions of the Plan as set forth herein, and those provisions not expressly amended shall be considered in full force and effect. Notwithstanding the foregoing, this Fourth Amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions and the intent of this Fourth Amendment.

* * * * *

IN WITNESS WHEREOF, the Company has caused this Fourth Amendment to be executed by its duly authorized representative as of this

9/6/2022

.

CATERPILLAR INC.

/s/ Cheryl Johnson

Caterpillar: Confidential Green

2

EX-10.2

EXHIBIT 10.2

FIRST AMENDMENT

TO THE
CATERPILLAR INC.

2014 LONG-TERM INCENTIVE PLAN

Caterpillar Inc. (the “Company”) maintains the Caterpillar Inc. 2014 Long-Term Incentive (the “Plan”). The Plan was originally approved by stockholders effective on June 11, 2014. On June 14, 2014, stockholders approved an amendment and restatement of the Plan that became effective on such date. Pursuant to Section 5.2 of the Plan, the Company has reserved the right to amend the Plan, in whole or in part, at any time. By a document dated October 16, 2019, the Company amended and restated the Plan. By this instrument, the Company hereby further amends the Plan to reflect changes in the Company’s employee title structure by updating the references to the position with management responsibility for the Company’s compensation and benefits, or total rewards, function.

1.This First Amendment shall be effective as of July 1, 2022.

2.Section 5.4(b) of the Plan is hereby amended and restated in its entirety to provide as follows:

“(b)    Nonqualified Stock Options and SARs (except for any Tandem SAR granted in tandem with an Incentive Stock Option), whether vested or unvested, held by (A) participants who are considered officers of the Company for purposes of Section 16 of the Exchange Act; (B) participants who are Directors; or (C) any participants who previously held the positions in clauses (A) and (B) may be transferred by gift or by domestic relations order to one or more Permitted Transferees. Nonqualified Stock Options and SARs (except for any Tandem SAR granted in tandem with an Incentive Stock Option), whether vested or unvested, held by all other participants and by Permitted Transferees may be transferred by gift or by domestic relations order only to Permitted Transferees and, in the case of transfers other than in connection with a domestic relations order, upon the prior written approval of the Company's Vice President Total Rewards.”

3.This First Amendment amends only the provisions of the Plan as set forth herein, and those provisions not expressly amended shall be considered in full force and effect.

Caterpillar: Confidential Green

8576654

Notwithstanding the foregoing, this First Amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions and the intent of this First Amendment.

* * * * *

IN WITNESS WHEREOF, the Company has caused this First Amendment to be executed by its duly authorized representative as of this

9/6/2022

.

    CATERPILLAR INC.

/s/ Cheryl Johnson

Caterpillar: Confidential Green

2

EX-10.3

EXHIBIT 10.3

SECOND AMENDMENT

TO THE

CATERPILLAR INC.
SUPPLEMENTAL RETIREMENT PLAN

Caterpillar Inc. (the “Company”) sponsors the Caterpillar Inc. Supplemental Retirement Plan (the “Plan”). The Plan was most recently amended and restated effective January 1, 2020 by a document dated December 16, 2020, and has since been amended on one occasion. Pursuant to Section 7.1 of the Plan, the Company has reserved the right to amend the Plan, in whole or in part, at any time. By this instrument, the Company amends the Plan to update the definition of Director.

    1.    This Second Amendment shall be effective as of July 1, 2022.

    2.    Section 1.1(k) of the Plan is amended in its entirety to read as follows:

“(k)    “Director” means the Company’s Vice President Total Rewards.”

    3.    This Second Amendment amends only the provisions of the Plan as noted herein, and those provisions not expressly amended shall be considered in full force and effect. Notwithstanding the foregoing, this Second Amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions and the intent of this Second Amendment.

IN WITNESS WHEREOF, the Company has caused this Second Amendment to be executed as of

9/6/2022

.

CATERPILLAR INC.

/s/ Cheryl Johnson

Cheryl H. Johnson
Chief Human Resources Officer

85972641

EX-10.4

EXHIBIT 10.4

FOURTH AMENDMENT

TO THE

CATERPILLAR INC.
SUPPLEMENTAL EMPLOYEES’ INVESTMENT PLAN

Caterpillar Inc. (the “Company”) sponsors the Caterpillar Inc. Supplemental Employees’ Investment Plan (the “Plan”). The Plan was most recently amended and restated effective May 15, 2017 by a document dated May 9, 2017, and has since been amended on three occasions. Pursuant to Section 9.1 of the Plan, the Company has reserved the right to amend the Plan, in whole or in part, at any time. By this instrument, the Company amends the Plan to update the definition of Director.

    1.    This Fourth Amendment shall be effective as of July 1, 2022.

    2.    Section 1.1(l) of the Plan is amended in its entirety to read as follows:

“(l)    “Director” means the Company’s Vice President Total Rewards.”

    3.    This Fourth Amendment amends only the provisions of the Plan as noted herein, and those provisions not expressly amended shall be considered in full force and effect. Notwithstanding the foregoing, this Fourth Amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions and the intent of this Fourth Amendment.

IN WITNESS WHEREOF, the Company has caused this Fourth Amendment to be executed as of

9/6/2022

.

CATERPILLAR INC.

/s/ Cheryl Johnson

Cheryl H. Johnson
Chief Human Resources Officer

8597295

EX-10.5

EXHIBIT 10.5

SECOND AMENDMENT

TO THE

CATERPILLAR INC.

DIRECTORS’ DEFERRED COMPENSATION PLAN

Caterpillar Inc. (the “Company”) established the Caterpillar Inc. Directors’ Deferred Compensation Plan (the “Plan”) to provide members of the Board of Directors with an opportunity to defer the payment of compensation. The Plan was most recently amended and restated effective July 1, 2018, by a document dated June 14, 2018, and was subsequently amended by a document dated January 22, 2019. Pursuant to Section 8.1 of the Plan, the Company has reserved the right to amend the Plan. By this instrument, the Company now amends the Plan to update the definition of C+B Officer.

1.    This Second Amendment shall be effective as of July 1, 2022.    

2.    Section 1.1(b) of the Plan is hereby amended and restated in its entirety to provide as follows:

“(b)    “C+B Officer” means the Company’s Vice President Total Rewards.”

3.    This Second Amendment amends only the provisions of the Plan as set forth herein, and those provisions not expressly amended shall be considered in full force and effect. Notwithstanding the foregoing, this Second Amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions and the intent of this Second Amendment.

* * * * *

IN WITNESS WHEREOF, the Company has caused this Second Amendment to be executed by its duly authorized representative as of this

9/6/2022

.

CATERPILLAR INC.

/s/ Cheryl Johnson

                            Cheryl H. Johnson

                            Chief Human Resources Officer

8595916

EX-10.6

EXHIBIT 10.6

FOURTH AMENDMENT

TO THE

CATERPILLAR INC.
DEFERRED EMPLOYEES’ INVESTMENT PLAN

Caterpillar Inc. (the “Company”) sponsors the Caterpillar Inc. Deferred Employees’ Investment Plan (the “Plan”). The Plan was most recently amended and restated effective May 15, 2017 by a document dated May 9, 2017, and has since been amended on three occasions. Pursuant to Section 9.1 of the Plan, the Company has reserved the right to amend the Plan, in whole or in part, at any time. By this instrument, the Company amends the Plan to update the definition of Director.

    1.    This Fourth Amendment shall be effective as of July 1, 2022.

    2.    Section 1.1(l) of the Plan is amended in its entirety to read as follows:

“(l)    “Director” means the Company’s Vice President Total Rewards.”

    3.    This Fourth Amendment amends only the provisions of the Plan as noted herein, and those provisions not expressly amended shall be considered in full force and effect. Notwithstanding the foregoing, this Fourth Amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions and the intent of this Fourth Amendment.

IN WITNESS WHEREOF, the Company has caused this Fourth Amendment to be executed as of

9/6/2022

.

CATERPILLAR INC.

/s/ Cheryl Johnson

Cheryl H. Johnson
Chief Human Resources Officer

8597293

EX-10.7

EXHIBIT 10.7

FIFTH AMENDMENT
TO THE
CATERPILLAR INC.
SUPPLEMENTAL DEFERRED COMPENSATION PLAN

Effective as of January 1, 2005, Caterpillar Inc. (the “Company”) established the Caterpillar Inc. Supplemental Deferred Compensation Plan (the “Plan”). By a document dated May 9, 2017, the Plan was most recently amended and restated effective May 15, 2017, and has since been amended on four occasions. Pursuant to Article IX of the Plan, the Company has reserved the right to amend the Plan in whole or in part, at any time. By this instrument, the Company amends the Plan to update the definition of Director.

1.This Fifth Amendment shall be effective as of July 1, 2022.

2.Section 1.1(p) of the Plan is amended in its entirety to read as follows:

“(p)    “Director” means the Company’s Vice President Total Rewards.”

3.This Fifth Amendment amends only the provisions of the Plan as set forth herein, and those provisions not expressly amended shall be considered in full force and effect. Notwithstanding the foregoing, this Fifth Amendment shall supersede the provisions of the Plan to the extent those provisions are inconsistent with the provisions and the intent of this Fifth Amendment.

IN WITNESS WHEREOF, the Company has caused this Fifth Amendment to be executed as of

9/6/2022

.

CATERPILLAR INC.

/s/ Cheryl Johnson

Cheryl H. Johnson
Chief Human Resources Officer

8597252

EX-31.1

EXHIBIT 31.1

SECTION 302 CERTIFICATION

I, D. James Umpleby III, certify that:

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

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

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

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

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

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

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

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

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

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

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

November 2, 2022	/s/ D. James Umpleby III	Chief Executive Officer
	D. James Umpleby III

EX-31.2

EXHIBIT 31.2

SECTION 302 CERTIFICATION

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

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

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

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

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

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

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

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

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

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

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

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

November 2, 2022	/s/ Andrew R.J. Bonfield	Chief Financial Officer
	Andrew R.J. Bonfield

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Caterpillar Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

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

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

November 2, 2022	/s/ D. James Umpleby III	Chief Executive Officer
	D. James Umpleby III
November 2, 2022	/s/ Andrew R.J. Bonfield	Chief Financial Officer
	Andrew R.J. Bonfield

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

XML

Cover Page	9 Months Ended
	Sep. 30, 2022 shares
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	1-768
Entity Registrant Name	CATERPILLAR INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	37-0602744
Entity Address, Address Line One	5205 N. O'Connor Boulevard,
Entity Address, Address Line Two	Suite 100,
Entity Address, City or Town	Irving,
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75039
City Area Code	972
Local Phone Number	891-7700
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	520,409,355
Entity Central Index Key	0000018230
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Common Stock ($1.00 par value)
Trading Symbol	CAT
Security Exchange Name	NYSE
8% Debentures due February 15, 2023
Entity Information [Line Items]
Title of 12(b) Security	8% Debentures due February 15, 2023
Trading Symbol	CAT23
Security Exchange Name	NYSE
5.3% Debentures due September 15, 2035
Entity Information [Line Items]
Title of 12(b) Security	5.3% Debentures due September 15, 2035
Trading Symbol	CAT35
Security Exchange Name	NYSE

XML

Consolidated Statement of Results of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended				9 Months Ended
	Sep. 30, 2022		Sep. 30, 2021		Sep. 30, 2022		Sep. 30, 2021
Sales and revenues:
Sales and revenues	$ 14,994		$ 12,397		$ 42,830		$ 37,173
Operating costs:
Cost of goods sold	10,202		8,617		29,736		25,510
Selling, general and administrative expenses	1,401		1,340		4,172		3,943
Research and development expenses	476		427		1,413		1,247
Other operating (income) expenses	339		238		908		854
Total operating costs	12,569		10,733		36,606		31,906
Operating profit	2,425		1,664		6,224		5,267
Other income (expense)	242		225		755		751
Consolidated profit before taxes	2,558		1,775		6,653		5,642
Provision (benefit) for income taxes	527		368		1,423		1,313
Profit of consolidated companies	2,031		1,407		5,230		4,329
Equity in profit (loss) of unconsolidated affiliated companies	9		21		20		44
Profit of consolidated and affiliated companies	2,040		1,428		5,250		4,373
Less: Profit (loss) attributable to the noncontrolling interests	(1)		2		(1)		4
Profit	$ 2,041	[1]	$ 1,426	[1]	$ 5,251	[2]	$ 4,369	[2]
Profit per common share (in dollars per share)	$ 3.89		$ 2.62		$ 9.91		$ 8.00
Profit per common share - diluted (in dollars per share)	$ 3.87	[3]	$ 2.60	[3]	$ 9.85	[4]	$ 7.94	[4]
Weighted-average common shares outstanding (millions)
Basic (in shares)	525.0		544.0		530.1		545.8
Diluted (in shares)	527.6	[3]	547.6	[3]	533.2	[4]	550.2	[4]
Machinery, Energy & Transportation
Sales and revenues:
Sales and revenues	$ 14,278		$ 11,707		$ 40,703		$ 35,091
Financial Products
Sales and revenues:
Sales and revenues	716		690		2,127		2,082
Operating costs:
Interest expense of Financial Products	151		111		377		352
All other excluding Financial Products
Operating costs:
Interest expense excluding Financial Products	$ 109		$ 114		$ 326		$ 376

[1] Profit attributable to common shareholders.

[2] Profit attributable to common shareholders.

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

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

XML

Consolidated Statement of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement of Comprehensive Income [Abstract]
Profit of consolidated and affiliated companies	$ 2,040	$ 1,428	$ 5,250	$ 4,373
Foreign currency translation	(618)	(242)	(1,392)	(490)
Pension and other post retirement benefits	(1)	(8)	(3)	(23)
Derivative financial instruments	(191)	(31)	(254)	(19)
Available for sale securities	(44)	(5)	(151)	(20)
Total other comprehensive income (loss), net of tax	(854)	(286)	(1,800)	(552)
Comprehensive income	1,186	1,142	3,450	3,821
Less: comprehensive income attributable to the noncontrolling interests	(1)	2	(1)	4
Comprehensive income attributable to shareholders	$ 1,187	$ 1,140	$ 3,451	$ 3,817

XML

Consolidated Statement of Financial Position - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 6,346	$ 9,254
Receivables - trade and other	8,158	8,477
Receivables - finance	8,918	8,898
Prepaid expenses and other current assets	2,295	2,788
Inventories	16,860	14,038
Total current assets	42,577	43,455
Property, plant and equipment - net	11,643	12,090
Long-term receivables - trade and other	1,278	1,204
Long-term receivables - finance	11,859	12,707
Noncurrent deferred and refundable income taxes	2,218	1,840
Intangible assets	806	1,042
Goodwill	6,092	6,324
Other assets	4,434	4,131
Total assets	80,907	82,793
Short-term borrowings:
Accounts payable	8,260	8,154
Accrued expenses	4,013	3,757
Accrued wages, salaries and employee benefits	2,204	2,242
Customer advances	1,831	1,087
Dividends payable	0	595
Other current liabilities	2,878	2,256
Long-term debt due within one year:
Total current liabilities	30,202	29,847
Long-term debt due after one year:
Liability for postemployment benefits	5,038	5,592
Other liabilities	4,536	4,805
SPC liabilities in consolidated statement	65,285	66,277
Commitments and contingencies (Notes 11 and 14)
Shareholders' equity
Authorized shares: 2,000,000,000 Issued shares: (9/30/22 and 12/31/21 – 814,894,624) at paid-in amount	6,523	6,398
Treasury stock: (9/30/22 – 294,485,269 shares; 12/31/21 – 279,006,573 shares) at cost	(30,883)	(27,643)
Profit employed in the business	43,304	39,282
Accumulated other comprehensive income (loss)	(3,353)	(1,553)
Noncontrolling interests	31	32
Total shareholders' equity	15,622	16,516
Total liabilities and shareholders' equity	$ 80,907	$ 82,793
Common stock, par value (in dollars per share)	$ 1.00	$ 1.00
Common stock, Authorized shares	2,000,000,000	2,000,000,000
Common stock, Issued shares	814,894,624	814,894,624
Treasury stock, shares	294,485,269	279,006,573
Machinery, Energy & Transportation
Short-term borrowings:
Short-term borrowings	$ 3	$ 9
Long-term debt due within one year:
Long-term debt due within one year	120	45
Long-term debt due after one year:
Long-term Debt due after one year	9,479	9,746
Financial Products
Short-term borrowings:
Short-term borrowings	4,199	5,395
Long-term debt due within one year:
Long-term debt due within one year	6,694	6,307
Long-term debt due after one year:
Long-term Debt due after one year	$ 16,030	$ 16,287

XML

Consolidated Statement of Changes in Shareholders' Equity - USD ($) $ in Millions		Total	Common stock	Treasury stock	Profit employed in the business	Accumulated other comprehensive income (loss)	Noncontrolling interests
Balance at Dec. 31, 2020		$ 15,378	$ 6,230	$ (25,178)	$ 35,167	$ (888)	$ 47
Increase (Decrease) in Shareholders' Equity
Profit of consolidated and affiliated companies		4,373	0	0	4,369	0	4
Foreign currency translation		(490)	0	0	0	(490)	0
Pension and other post retirement benefits		(23)	0	0	0	(23)	0
Derivative financial instruments, net of tax		(19)	0	0	0	(19)	0
Available for sale securities		(20)	0	0	0	(20)	0
Dividends declared	[1]	1,175	0	0	1,175	0	0
Distribution to noncontrolling interests		(4)	0	0	0	0	(4)
Common shares issued from treasury stock for stock-based compensation		122	(70)	192	0	0	0
Stock-based compensation expense, before tax (in dollars)		169	169	0	0	0	0
Common shares repurchased	[2]	(1,622)	0	(1,622)	0	0	0
Other		22	23	0	0	0	(1)
Balance at Sep. 30, 2021		$ 16,695	6,352	(26,608)	38,361	(1,440)	30
Increase (Decrease) in Shareholders' Equity
Common shares issued, Shares, from treasury stock for stock-based compensation (in shares)		3,410,146
Common shares repurchased (in shares)		7,772,393
Common Stock, Dividends, Per Share, Declared		$ 2.14
Balance at Jun. 30, 2021		$ 16,880	6,293	(25,240)	36,934	(1,154)	47
Increase (Decrease) in Shareholders' Equity
Profit of consolidated and affiliated companies		1,428	0	0	1,426	0	2
Foreign currency translation		(242)	0	0	0	(242)	0
Pension and other post retirement benefits		(8)	0	0	0	(8)	0
Derivative financial instruments, net of tax		(31)	0	0	0	(31)	0
Available for sale securities		(5)	0	0	0	(5)	0
Change in ownership from noncontrolling interests		(16)	0	0	0	0	(16)
Dividends declared		1	0	0	1	0	0
Distribution to noncontrolling interests		(2)	0	0	0	0	(2)
Common shares issued from treasury stock for stock-based compensation		(1)	(5)	4	0	0	0
Stock-based compensation expense, before tax (in dollars)		58	58	0	0	0	0
Common shares repurchased	[3]	(1,371)	0	(1,371)	0	0	0
Other		4	6	(1)	0	0	(1)
Balance at Sep. 30, 2021		$ 16,695	6,352	(26,608)	38,361	(1,440)	30
Increase (Decrease) in Shareholders' Equity
Common shares issued, Shares, from treasury stock for stock-based compensation (in shares)		80,571
Common shares repurchased (in shares)		6,610,438
Balance at Dec. 31, 2021		$ 16,516	6,398	(27,643)	39,282	(1,553)	32
Increase (Decrease) in Shareholders' Equity
Profit of consolidated and affiliated companies		5,250	0	0	5,251	0	(1)
Foreign currency translation		(1,392)	0	0	0	(1,392)	0
Pension and other post retirement benefits		(3)	0	0	0	(3)	0
Derivative financial instruments, net of tax		(254)	0	0	0	(254)	0
Available for sale securities		(151)	0	0	0	(151)	0
Dividends declared	[1]	1,229	0	0	1,229	0	0
Common shares issued from treasury stock for stock-based compensation		2	(67)	69	0	0	0
Stock-based compensation expense, before tax (in dollars)		162	162	0	0	0	0
Common shares repurchased	[2]	(3,309)	0	(3,309)	0	0	0
Other		30	30	0	0	0	0
Balance at Sep. 30, 2022		$ 15,622	6,523	(30,883)	43,304	(3,353)	31
Increase (Decrease) in Shareholders' Equity
Common shares issued, Shares, from treasury stock for stock-based compensation (in shares)		1,529,753
Common shares repurchased (in shares)		17,007,819
Common Stock, Dividends, Per Share, Declared		$ 2.31
Balance at Jun. 30, 2022		$ 15,759	6,464	(29,501)	41,263	(2,499)	32
Increase (Decrease) in Shareholders' Equity
Profit of consolidated and affiliated companies		2,040	0	0	2,041	0	(1)
Foreign currency translation		(618)	0	0	0	(618)	0
Pension and other post retirement benefits		(1)	0	0	0	(1)	0
Derivative financial instruments, net of tax		(191)	0	0	0	(191)	0
Available for sale securities		(44)	0	0	0	(44)	0
Common shares issued from treasury stock for stock-based compensation		(1)	(5)	4	0	0	0
Stock-based compensation expense, before tax (in dollars)		55	55	0	0	0	0
Common shares repurchased	[4]	(1,385)	0	(1,385)	0	0	0
Other		8	9	(1)	0	0	0
Balance at Sep. 30, 2022		$ 15,622	$ 6,523	$ (30,883)	$ 43,304	$ (3,353)	$ 31
Increase (Decrease) in Shareholders' Equity
Common shares issued, Shares, from treasury stock for stock-based compensation (in shares)		75,534
Common shares repurchased (in shares)		7,575,322

[1] Dividends per share of common stock of $2.31 and $2.14 were declared in the nine months ended September 30, 2022 and 2021, respectively.

[2] 2 See Note 12 for additional information.

[3] 1 See Note 12 for additional information.

[4] Profit attributable to common shareholders.

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Consolidated Statement of Cash Flow - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flow from operating activities:
Profit of consolidated and affiliated companies	$ 5,250	$ 4,373
Adjustments for non-cash items:
Depreciation and amortization	1,661	1,766
Provision (benefit) for deferred income taxes	(349)	(321)
Other	132	102
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables - trade and other	365	(326)
Inventories	(3,088)	(2,195)
Accounts payable	786	1,232
Accrued expenses	70	46
Accrued wages, salaries and employee benefits	15	934
Customer advances	751	39
Other assets - net	57	138
Other liabilities - net	(623)	(2)
Net cash provided by (used for) operating activities	5,027	5,786
Cash flow from investing activities:
Payments to Acquire Property, Plant, and Equipment	(868)	(673)
Expenditures for equipment leased to others	(1,023)	(1,014)
Proceeds from disposals of leased assets and property, plant and equipment	666	877
Additions to finance receivables	(9,914)	(9,603)
Collections of finance receivables	9,738	9,221
Proceeds from sale of finance receivables	50	44
Investments and acquisitions (net of cash acquired)	(44)	(449)
Proceeds from sale of businesses and investments (net of cash sold)	1	23
Proceeds from sale of securities	2,080	424
Investments in securities	(2,399)	(934)
Other - net	15	(8)
Net Cash Provided by (Used in) Investing Activities	(1,698)	(2,092)
Cash flow from financing activities:
Dividends paid	(1,820)	(1,733)
Common stock issued, including treasury shares reissued	2	122
Common shares repurchased	(3,309)	(1,622)
Short-term borrowings - net (original maturities three months or less)	(1,311)	1,324
Other - net	(1)	(4)
Net cash provided by (used for) financing activities	(6,158)	(3,602)
Effect of exchange rate changes on cash	(79)	(9)
Increase (decrease) in cash, cash equivalents and restricted cash	(2,908)	83
Cash and short-term investments and restricted cash at beginning of period	9,263	9,366
Cash and short-term investments and restricted cash at end of period	6,355	9,449
Machinery, Energy & Transportation
Cash flow from financing activities:
Proceeds from debt issued (original maturities greater than three months)	0	494
Payments on debt (original maturities greater than three months)	(20)	(1,910)
Financial Products
Cash flow from financing activities:
Proceeds from debt issued (original maturities greater than three months)	5,570	6,437
Payments on debt (original maturities greater than three months)	$ (5,269)	$ (6,710)

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Nature of Operations, Basis of Presentation and Change in Accounting Principle

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations and Basis of Presentation

A.  Nature of operations

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

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

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

B.  Basis of presentation

In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the consolidated results of operations for the three and nine months ended September 30, 2022 and 2021, (b) the consolidated comprehensive income for the three and nine months ended September 30, 2022 and 2021, (c) the consolidated financial position at September 30, 2022 and December 31, 2021, (d) the consolidated changes in shareholders’ equity for the three and nine months ended September 30, 2022 and 2021 and (e) the consolidated cash flow for the nine months ended September 30, 2022 and 2021.  The financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).

Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in our company’s annual report on Form 10-K for the year ended December 31, 2021 (2021 Form 10-K).

The December 31, 2021 financial position data included herein is derived from the audited consolidated financial statements included in the 2021 Form 10-K but does not include all disclosures required by U.S. GAAP. Certain amounts for prior periods have been reclassified to conform to the current period financial statement presentation.

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

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New Accounting Guidance

9 Months Ended

Sep. 30, 2022

Accounting Changes and Error Corrections [Abstract]

New Accounting Guidance

New accounting guidance

A. Adoption of new accounting standards

We consider the applicability and impact of all ASUs. We adopted the following ASUs effective January 1, 2022, none of which had a material impact on our financial statements:

ASU	Description
2020-06	Debt with conversion and other options and derivatives and hedging
2021-05	Lessor - Variable lease payments
2021-10	Government assistance

B. Accounting standards issued but not yet adopted

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

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Sales and revenue contract information

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue from contracts with customers

Sales and revenue contract information

Trade receivables represent amounts due from dealers and end users for the sale of our products, and include amounts due from wholesale inventory financing provided by Cat Financial for a dealer’s purchase of inventory. We recognize trade receivables from dealers (including wholesale inventory financing) and end users in Receivables – trade and other and Long-term receivables – trade and other in the Consolidated Statement of Financial Position. Trade receivables from dealers and end users were $6,736 million, $7,267 million and $6,310 million as of September 30, 2022, December 31, 2021 and December 31, 2020, respectively. Long-term trade receivables from dealers and end users were $448 million, $624 million and $657 million as of September 30, 2022, December 31, 2021 and December 31, 2020, respectively.

We invoice in advance of recognizing the sale of certain products. We recognize advanced customer payments as a contract liability in Customer advances and Other liabilities in the Consolidated Statement of Financial Position. Contract liabilities were $2,290 million, $1,557 million and $1,526 million as of September 30, 2022, December 31, 2021 and December 31, 2020, respectively. We reduce the contract liability when revenue is recognized. During the three and nine months ended September 30, 2022, we recognized $124 million and $781 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2022. During the three and nine months ended September 30, 2021, we recognized $121 million and $795 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2021.

As of September 30, 2022, we have entered into contracts with dealers and end users for which sales have not been recognized as we have not satisfied our performance obligations and transferred control of the products. The dollar amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $10.9 billion, with about one-half of the amount expected to be completed and revenue recognized in the twelve months following September 30, 2022. We have elected the practical expedient not to disclose unsatisfied performance obligations with an original contract duration of one year or less. Contracts with an original duration of one year or less are primarily sales to dealers for machinery, engines and replacement parts.

See Note 16 for further disaggregated sales and revenues information.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2021

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-based compensation

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

We recognized pretax stock-based compensation expense of $55 million and $162 million for the three and nine months ended September 30, 2022, respectively, and $58 million and $169 million for the three and nine months ended September 30, 2021, respectively.

The following table illustrates the type and fair value of the stock-based compensation awards granted during the nine months ended September 30, 2022 and 2021, respectively:

	Nine Months Ended September 30, 2022					Nine Months Ended September 30, 2021
	Shares Granted	Weighted-Average Fair Value Per Share		Weighted-Average Grant Date Stock Price		Shares Granted	Weighted-Average Fair Value Per Share		Weighted-Average Grant Date Stock Price
Stock options	1,029,202	$	51.69	$	196.70	1,084,821	$	56.30	$	219.76
RSUs	484,025	$	196.70	$	196.70	448,311	$	219.76	$	219.76
PRSUs	258,900	$	196.70	$	196.70	266,894	$	219.76	$	219.76

The following table provides the assumptions used in determining the fair value of the stock-based awards for the nine months ended September 30, 2022 and 2021, respectively:

	Grant Year
	2022	2021
Weighted-average dividend yield	2.60%	2.60%
Weighted-average volatility	31.7%	32.9%
Range of volatilities	25.3% - 36.8%	29.2% - 45.8%
Range of risk-free interest rates	1.03% - 2.00%	0.06% - 1.41%
Weighted-average expected lives	8 years	8 years

As of September 30, 2022, the total remaining unrecognized compensation expense related to nonvested stock-based compensation awards was $173 million, which will be amortized over the weighted-average remaining requisite service periods of approximately 1.8 years.

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Derivative Financial Instruments and Risk Management

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Risk Management

Derivative financial instruments and risk management

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

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

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

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

Foreign Currency Exchange Rate Risk

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

Our ME&T operations purchase, manufacture and sell products in many locations around the world. As we have a diversified revenue and cost base, we manage our future foreign currency cash flow exposure on a net basis. We use foreign currency forward and option contracts to manage unmatched foreign currency cash inflow and outflow. Our objective is to minimize the risk of exchange rate movements that would reduce the U.S. dollar value of our foreign currency cash flow. Our policy allows for managing anticipated foreign currency cash flow for up to approximately five years. As of September 30, 2022, the maximum term of these outstanding contracts at inception was approximately 60 months.

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

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

Interest Rate Risk

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

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

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

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

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

Commodity Price Risk

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

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

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

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

(Millions of dollars)	Fair Value
	September 30, 2022				December 31, 2021
	Assets1		Liabilities2		Assets1		Liabilities2
Designated derivatives
Foreign exchange contracts	$	692	$	(394)	$	228	$	(64)
Interest rate contracts	94		(302)		38		(15)
Total	$	786	$	(696)	$	266	$	(79)
Undesignated derivatives
Foreign exchange contracts	$	118	$	(78)	$	46	$	(42)
Commodity contracts	9		(43)		30		(9)
Total	$	127	$	(121)	$	76	$	(51)
1 Assets are classified on the Consolidated Statement of Financial Position as Receivables - trade and other or Long-term receivables - trade and other.
2 Liabilities are classified on the Consolidated Statement of Financial Position as Accrued expenses or Other liabilities.

 

The total notional amounts of the derivative instruments as of September 30, 2022 and December 31, 2021 were $24.8 billion and $18.9 billion, respectively. The notional amounts of the derivative financial instruments do not represent amounts exchanged by the parties. We calculate the amounts exchanged by the parties by referencing the notional amounts and by other terms of the derivatives, such as foreign currency exchange rates, interest rates or commodity prices.

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

(Millions of dollars)	Three Months Ended September 30
	Fair Value / Undesignated Hedges				Cash Flow Hedges
	Gains (Losses) Recognized on the Consolidated Statement of Results of Operations1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI2
	2022		2021		2022		2021		2022		2021
Foreign exchange contracts	$	(2)	$	46	$	18	$	42	$	289	$	90
Interest rate contracts	(5)		5		26		3		7		(5)
Commodity contracts	(42)		(30)		—		—		—		—
Total	$	(49)	$	21	$	44	$	45	$	296	$	85
1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products.
2 Foreign exchange contract gains (losses) are primarily included in Other income (expense) in the Consolidated Statement of Results of Operations. Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products in the Consolidated Statement of Results of Operations.

(Millions of dollars)	Nine Months Ended September 30
	Fair Value / Undesignated Hedges				Cash Flow Hedges
	Gains (Losses) Recognized on the Consolidated Statement of Results of Operations1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI2
	2022		2021		2022		2021		2022		2021
Foreign exchange contracts	$	(32)	$	77	$	195	$	130	$	638	$	187
Interest rate contracts	12		18		103		11		(2)		(23)
Commodity contract	3		35		—		—		—		—
Total	$	(17)	$	130	$	298	$	141	$	636	$	164
1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense excluding Financial Products.
2 Foreign exchange contract gains (losses) are primarily included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense excluding Financial Products.

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

(Millions of dollars)	Carrying Value of the Hedged Liabilities				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities
	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Long-term debt due within one year	$	—	$	755	$	—	$	5
Long-term debt due after one year	3,796		1,304		(227)		(2)
Total	$	3,796	$	2,059	$	(227)	$	3

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

Collateral is typically not required of the counterparties or of our company under the master netting agreements. As of September 30, 2022 and December 31, 2021, no cash collateral was received or pledged under the master netting agreements.

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

(Millions of dollars)	September 30, 2022				December 31, 2021
	Assets		Liabilities		Assets		Liabilities
Gross Amounts Recognized	$	913	$	(817)	$	342	$	(130)
Financial Instruments Not Offset	(282)		282		(114)		114
Cash Collateral Received	—		—		—		—
Net Amount	$	631	$	(535)	$	228	$	(16)

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Inventories

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

Inventories

Inventories

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

(Millions of dollars)	September 30, 2022		December 31, 2021
Raw materials	$	6,335	$	5,528
Work-in-process	1,836		1,318
Finished goods	8,387		6,907
Supplies	302		285
Total inventories	$	16,860	$	14,038

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Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

Intangible assets and goodwill

A.  Intangible assets

Intangible assets were comprised of the following:

		September 30, 2022
(Millions of dollars)	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	16	$	2,183	$	(1,604)	$	579
Intellectual property	12	1,470		(1,287)		183
Other	16	128		(84)		44
Total finite-lived intangible assets	14	$	3,781	$	(2,975)	$	806

		December 31, 2021
	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	15	$	2,421	$	(1,709)	$	712
Intellectual property	12	1,472		(1,192)		280
Other	14	156		(106)		50
Total finite-lived intangible assets	14	$	4,049	$	(3,007)	$	1,042

Amortization expense for the three and nine months ended September 30, 2022 was $70 million and $213 million, respectively. Amortization expense for the three and nine months ended September 30, 2021 was $75 million and $228 million, respectively. Amortization expense related to intangible assets is expected to be:

(Millions of dollars)
Remaining Three Months of 2022	2023	2024	2025	2026	Thereafter
$70	$222	$163	$153	$85	$113

B.  Goodwill

No goodwill was impaired during the nine months ended September 30, 2022 or 2021.

The changes in carrying amount of goodwill by reportable segment for the nine months ended September 30, 2022 were as follows: 

(Millions of dollars)	December 31, 2021		Acquisitions		Other Adjustments 1		September 30, 2022
Construction Industries
Goodwill	$	302	$	—	$	(39)	$	263
Impairments	(22)		—		—		(22)
Net goodwill	280		—		(39)		241
Resource Industries
Goodwill	4,182		—		(127)		4,055
Impairments	(1,175)		—		—		(1,175)
Net goodwill	3,007		—		(127)		2,880
Energy & Transportation
Goodwill	2,985		25		(81)		2,929
All Other 2
Goodwill	52		—		(10)		42
Consolidated total
Goodwill	7,521		25		(257)		7,289
Impairments	(1,197)		—		—		(1,197)
Net goodwill	$	6,324	$	25	$	(257)	$	6,092

1 Other adjustments are comprised primarily of foreign currency translation.

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

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Investments in Debt and Equity Securities

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Equity Securities

Investments in debt and equity securities

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

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

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

Available-for-sale debt securities	September 30, 2022						December 31, 2021
(Millions of dollars)	Cost Basis		Unrealized Pretax Net Gains (Losses)		Fair Value		Cost Basis		Unrealized Pretax Net Gains (Losses)		Fair Value
Government debt securities
U.S. treasury bonds	$	10	$	—	$	10	$	10	$	—	$	10
Other U.S. and non-U.S. government bonds	51		(2)		49		61		—		61
Corporate debt securities
Corporate bonds and other debt securities	2,156		(108)		2,048		1,027		19		1,046
Asset-backed securities	185		(5)		180		175		1		176
Mortgage-backed debt securities
U.S. governmental agency	384		(36)		348		319		6		325
Residential	3		—		3		4		—		4
Commercial	139		(10)		129		98		1		99
Total available-for-sale debt securities	$	2,928	$	(161)	$	2,767	$	1,694	$	27	$	1,721

Available-for-sale debt securities in an unrealized loss position:
	September 30, 2022
	Less than 12 months 1				12 months or more 1				Total
(Millions of dollars)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government debt securities
Other U.S. and non-U.S. government bonds	$	31	$	1	$	15	$	1	$	46	$	2
Corporate debt securities
Corporate bonds	1,774		75		218		33		1,992		108
Asset-backed securities	102		4		35		1		137		5
Mortgage-backed debt securities
U.S. governmental agency	293		27		51		9		344		36
Commercial	88		7		41		3		129		10
	$	2,288	$	114	$	360	$	47	$	2,648	$	161

	December 31, 2021
	Less than 12 months 1				12 months or more 1				Total
(Millions of dollars)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Corporate debt securities
Corporate bonds	$	270	$	4	$	33	$	1	$	303	$	5
Mortgage-backed debt securities
U.S. governmental agency	89		1		22		—		111		1
Total	$	359	$	5	$	55	$	1	$	414	$	6
1 Indicates the length of time that individual securities have been in a continuous unrealized loss position.

The unrealized losses on our investments in government debt securities, corporate debt securities, and mortgage-backed debt securities relate to changes in interest rates and credit-related yield spreads since time of purchase. We do not intend to sell the investments, and it is not likely that we will be required to sell the investments before recovery of their respective amortized cost basis. In addition, we did not expect credit-related losses on these investments as of September 30, 2022.

The cost basis and fair value of available-for-sale debt securities at September 30, 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay and creditors may have the right to call obligations.        

	September 30, 2022
(Millions of dollars)	Cost Basis		Fair Value
Due in one year or less	$	696	$	687
Due after one year through five years	1,354		1,277
Due after five years through ten years	282		256
Due after ten years	70		67
U.S. governmental agency mortgage-backed securities	384		348
Residential mortgage-backed securities	3		3
Commercial mortgage-backed securities	139		129
Total debt securities – available-for-sale	$	2,928	$	2,767

Sales of available-for-sale debt securities:
	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
Proceeds from the sale of available-for-sale securities	$	204	$	97	$	474	$	322
Gross gains from the sale of available-for-sale securities	—		1		1		3
Gross losses from the sale of available-for-sale securities	—		—		1		—

We did not have any investments classified as held-to-maturity debt securities as of September 30, 2022. We had $964 million of investments in time deposits classified as held-to-maturity debt securities as of December 31, 2021. All these investments mature within one year and we include them in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. We record held-to-maturity debt securities at amortized cost, which approximates fair value.

For the three months ended September 30, 2022 and 2021, the net unrealized gains (losses) for equity securities held at September 30, 2022 and 2021 were $(12) million and $46 million, respectively. For the nine months ended September 30, 2022 and 2021, the net unrealized gains (losses) for equity securities held at September 30, 2022 and 2021 were $(97) million and $65 million, respectively.

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Postretirement Benefits

9 Months Ended

Sep. 30, 2022

Retirement Benefits [Abstract]

Postretirement Benefits

Postretirement benefits

A.  Pension and postretirement benefit costs    

	U.S. Pension Benefits				Non-U.S. Pension Benefits				Other Postretirement Benefits
	September 30				September 30				September 30
(Millions of dollars)	2022		2021		2022		2021		2022		2021
For the three months ended:
Components of net periodic benefit cost:
Service cost	$	—	$	—	$	15	$	15	$	24	$	25
Interest cost	100		82		17		16		20		16
Expected return on plan assets	(167)		(180)		(33)		(33)		(3)		(1)
Amortization of prior service cost (credit)	—		—		—		—		(1)		(11)
Net periodic benefit cost (benefit) 1	$	(67)	$	(98)	$	(1)	$	(2)	$	40	$	29
For the nine months ended:
Components of net periodic benefit cost:
Service cost	$	—	$	—	$	40	$	44	$	74	$	75
Interest cost	301		247		53		43		60		48
Expected return on plan assets	(502)		(538)		(100)		(98)		(9)		(4)
Amortization of prior service cost (credit)	—		—		—		—		(4)		(31)
Net periodic benefit cost (benefit) 1	$	(201)	$	(291)	$	(7)	$	(11)	$	121	$	88

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

We made $44 million and $299 million of contributions to our pension and other postretirement plans during the three and nine months ended September 30, 2022. We currently anticipate full-year 2022 contributions of approximately $357 million.

B.  Defined contribution benefit costs

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

	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
U.S. Plans	$	87	$	81	$	236	$	321
Non-U.S. Plans	29		29		85		83
	$	116	$	110	$	321	$	404

The decrease in the U.S. defined contribution benefit costs for the nine months ended September 30, 2022 was primarily due to the fair value adjustments related to our non-qualified deferred compensation plans.

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Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Revenue from finance and operating leases

Leases

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

	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
Finance lease revenue	$	105	$	120	$	326	$	369
Operating lease revenue	270		275		819		850
Total	$	375	$	395	$	1,145	$	1,219

We present revenues net of sales and other related taxes.

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Guarantees and Product Warranty

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Guarantees and Product Warranty

Guarantees and product warranty

Caterpillar dealer performance guarantees

We have provided an indemnity to a third-party insurance company for potential losses related to performance bonds issued on behalf of Caterpillar dealers.  The bonds have varying terms and are issued to insure governmental agencies against nonperformance by certain dealers.  We also provided guarantees to third-parties related to the performance of contractual obligations by certain Caterpillar dealers. These guarantees have varying terms and cover potential financial losses incurred by the third parties resulting from the dealers’ nonperformance.

In 2016, we provided a guarantee to an end user related to the performance of contractual obligations by a Caterpillar dealer. Under the guarantee, which was set to expire in 2025, non-performance by the Caterpillar dealer could require Caterpillar to satisfy the contractual obligations by providing goods, services or financial compensation to the end user up to an annual designated cap. This guarantee was terminated during the first quarter of 2022. No payments were made under the guarantee.

Supplier consortium performance guarantee

We provided a guarantee to a customer in Europe related to the performance of contractual obligations by a supplier consortium to which one of our Caterpillar subsidiaries was a member. The guarantee covered potential damages incurred by the customer resulting from the supplier consortium's non-performance. The damages were capped except for failure of the consortium to meet certain obligations outlined in the contract in the normal course of business. The guarantee expired during the second quarter of 2022.

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

No significant loss has been experienced or is anticipated under any of these guarantees.  At September 30, 2022 and December 31, 2021, the related recorded liability was $3 million and $5 million, respectively. The maximum potential amount of future payments that we can estimate (undiscounted and without reduction for any amounts that may possibly be recovered under recourse or collateralized provisions) and we could be required to make under the guarantees was as follows:

(Millions of dollars)	September 30, 2022		December 31, 2021
Caterpillar dealer performance guarantees	$	137	$	747
Supplier consortium performance guarantee	17		242
Other guarantees	284		232
Total guarantees	$	438	$	1,221

Cat Financial provides guarantees to purchase certain loans of Caterpillar dealers from a special-purpose corporation (SPC) that qualifies as a variable interest entity.  The purpose of the SPC is to provide short-term working capital loans to Caterpillar dealers.  This SPC issues commercial paper and uses the proceeds to fund its loan program. Cat Financial receives a fee for providing this guarantee.  Cat Financial is the primary beneficiary of the SPC as its guarantees result in Cat Financial having both the power to direct the activities that most significantly impact the SPC’s economic performance and the obligation to absorb losses, and therefore Cat Financial has consolidated the financial statements of the SPC.  As of September 30, 2022 and December 31, 2021, the SPC’s assets of $1.09 billion and $888 million, respectively, were primarily comprised of loans to dealers, and the SPC’s liabilities of $1.09 billion and $888 million, respectively, were primarily comprised of commercial paper.  The assets of the SPC are not available to pay Cat Financial’s creditors. Cat Financial may be obligated to perform under the guarantee if the SPC experiences losses. No loss has been experienced or is anticipated under this loan purchase agreement.

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

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

	First Nine Months
(Millions of dollars)	2022		2021
Warranty liability, beginning of period	$	1,689	$	1,612
Reduction in liability (payments)	(589)		(638)
Increase in liability (new warranties)	562		716
Warranty liability, end of period	$	1,662	$	1,690

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Profit Per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share Reconciliation [Abstract]

Profit Per Share

Profit per share

Computations of profit per share:	Three Months Ended September 30				Nine Months Ended September 30
(Dollars in millions except per share data)	2022		2021		2022		2021
Profit for the period (A) 1	$	2,041	$	1,426	$	5,251	$	4,369
Determination of shares (in millions):
Weighted-average number of common shares outstanding (B)	525.0		544.0		530.1		545.8
Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price	2.6		3.6		3.1		4.4
Average common shares outstanding for fully diluted computation (C) 2	527.6		547.6		533.2		550.2
Profit per share of common stock:
Assuming no dilution (A/B)	$	3.89	$	2.62	$	9.91	$	8.00
Assuming full dilution (A/C) 2	$	3.87	$	2.60	$	9.85	$	7.94
Shares outstanding as of September 30 (in millions)					520.4		540.9
1 Profit attributable to common shareholders.
2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.

For the three and nine months ended September 30, 2022 and 2021, we excluded 2.1 million and 1.1 million of outstanding stock options, respectively, from the computation of diluted earnings per share because the effect would have been antidilutive.

For the three and nine months ended September 30, 2022, we repurchased 7.6 million and 17.0 million shares of Caterpillar common stock, respectively, at an aggregate cost of $1.4 billion and $3.3 billion, respectively. For the three and nine months ended September 30, 2021, we repurchased 6.6 million and 7.8 million shares of Caterpillar common stock, respectively, at an aggregate cost of $1.4 billion and $1.6 billion, respectively. We made these purchases through a combination of accelerated stock repurchase agreements with third-party financial institutions and open market transactions.

In July 2018, the Board approved a share repurchase authorization (the 2018 Authorization) of up to $10.0 billion of Caterpillar common stock effective January 1, 2019, with no expiration. In May 2022, the Board approved a new share repurchase authorization (the 2022 Authorization) of up to $15.0 billion of Caterpillar common stock effective August 1, 2022, with no expiration. Utilization of the 2022 Authorization for all share repurchases commenced on August 1, 2022, leaving approximately $70 million unutilized under the 2018 Authorization as of September 30, 2022. As of September 30, 2022, $13.7 billion remained available under the 2022 Authorization.

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Accumulated other comprehensive income (loss)

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

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

	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
Foreign currency translation:
Beginning balance	$	(2,282)	$	(1,158)	$	(1,508)	$	(910)
Gains (losses) on foreign currency translation	(592)		(230)		(1,328)		(461)
Less: Tax provision /(benefit)	26		12		64		29
Net gains (losses) on foreign currency translation	(618)		(242)		(1,392)		(490)
(Gains) losses reclassified to earnings	—		—		—		—
Less: Tax provision /(benefit)	—		—		—		—
Net (gains) losses reclassified to earnings	—		—		—		—
Other comprehensive income (loss), net of tax	(618)		(242)		(1,392)		(490)
Ending balance	$	(2,900)	$	(1,400)	$	(2,900)	$	(1,400)
Pension and other postretirement benefits
Beginning balance	$	(64)	$	(47)	$	(62)	$	(32)
Current year prior service credit (cost)	—		—		—		—
Less: Tax provision /(benefit)	—		—		—		—
Net current year prior service credit (cost)	—		—		—		—
Amortization of prior service (credit) cost	(1)		(11)		(4)		(31)
Less: Tax provision /(benefit)	—		(3)		(1)		(8)
Net amortization of prior service (credit) cost	(1)		(8)		(3)		(23)
Other comprehensive income (loss), net of tax	(1)		(8)		(3)		(23)
Ending balance	$	(65)	$	(55)	$	(65)	$	(55)
Derivative financial instruments
Beginning balance	$	(66)	$	12	$	(3)	$	—
Gains (losses) deferred	44		45		298		141
Less: Tax provision /(benefit)	35		3		71		22
Net gains (losses) deferred	9		42		227		119
(Gains) losses reclassified to earnings	(296)		(85)		(636)		(164)
Less: Tax provision /(benefit)	(96)		(12)		(155)		(26)
Net (gains) losses reclassified to earnings	(200)		(73)		(481)		(138)
Other comprehensive income (loss), net of tax	(191)		(31)		(254)		(19)
Ending balance	$	(257)	$	(19)	$	(257)	$	(19)
Available-for-sale securities
Beginning balance	$	(87)	$	39	$	20	$	54
Gains (losses) deferred	(55)		(4)		(188)		(22)
Less: Tax provision /(benefit)	(11)		—		(37)		(4)
Net gains (losses) deferred	(44)		(4)		(151)		(18)
(Gains) losses reclassified to earnings	—		(1)		—		(3)
Less: Tax provision /(benefit)	—		—		—		(1)
Net (gains) losses reclassified to earnings	—		(1)		—		(2)
Other comprehensive income (loss), net of tax	(44)		(5)		(151)		(20)
Ending balance	$	(131)	$	34	$	(131)	$	34
Total AOCI Ending Balance at September 30	$	(3,353)	$	(1,440)	$	(3,353)	$	(1,440)

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Environmental and legal matters

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Environmental and legal matters

Environmental and legal matters

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

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

On January 7, 2015, the Company received a grand jury subpoena from the U.S. District Court for the Central District of Illinois. The subpoena requested documents and information from the Company relating to, among other things, financial information concerning U.S. and non-U.S. Caterpillar subsidiaries (including undistributed profits of non-U.S. subsidiaries and the movement of cash among U.S. and non-U.S. subsidiaries). The Company has received additional subpoenas relating to this investigation requesting additional documents and information relating to, among other things, the purchase and resale of replacement parts by Caterpillar Inc. and non-U.S. Caterpillar subsidiaries, dividend distributions of certain non-U.S. Caterpillar subsidiaries, and Caterpillar SARL (CSARL) and related structures. On March 2-3, 2017, agents with the Department of Commerce, the Federal Deposit Insurance Corporation and the Internal Revenue Service executed search and seizure warrants at three facilities of the Company in the Peoria, Illinois area, including its former corporate headquarters. The warrants identify, and agents seized, documents and information related to, among other things, the export of products from the United States, the movement of products between the United States and Switzerland, the relationship between Caterpillar Inc. and CSARL, and sales outside the United States. It is the Company’s understanding that the warrants, which concern both tax and export activities, are related to the ongoing grand jury investigation. The Company is continuing to cooperate with this investigation. The Company is unable to predict the outcome or reasonably estimate any potential loss; however, we currently believe that this matter will not have a material adverse effect on the Company’s consolidated results of operations, financial position or liquidity.

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

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Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income taxes

The provision for income taxes for the nine months ended September 30, 2022, reflected an estimated annual tax rate of 23 percent, compared with 25 percent for the nine months ended September 30, 2021, excluding the discrete items discussed below. The comparative tax rate for full-year 2021 was approximately 23 percent.

On September 8, 2022, the company reached a settlement with the U.S. Internal Revenue Service (IRS) that resolves all issues for tax years 2007 through 2016, without any penalties. The company's settlement includes, among other issues, the resolution of disputed tax treatment of profits earned by Caterpillar SARL (CSARL) from certain parts transactions. We vigorously contested the IRS's application of the "substance-over-form" or "assignment-of-income" judicial doctrines and its proposed increases to tax and imposition of accuracy related penalties. The settlement does not include any increases to tax in the United States based on those judicial doctrines and does not include any penalties. The final tax assessed by the IRS for all issues under the settlement was $490 million for the ten-year period. This amount was primarily paid in the nine months ending September 30, 2022, and the associated estimated interest of $250 million is expected to be paid by the end of 2022. The settlement was within the total amount of gross unrecognized tax benefits for uncertain tax positions and enables us to avoid the costs and burdens of further disputes with the IRS. As a result of the settlement, we recorded a discrete tax benefit of $41 million to reflect changes in estimates of prior years' taxes and related interest, net of tax. We are subject to the continuous examination of our income tax returns by the IRS, and tax years subsequent to 2016 are not yet under examination.

In the nine months ended September 30, 2022, the company also recorded discrete tax benefits of $49 million to reflect other changes in estimates related to prior years' U.S. taxes, compared to $36 million in the nine months ended September 30, 2021. In addition, the company recorded a discrete tax benefit of $18 million for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense, compared with a $61 million benefit for the nine months ended September 30, 2021.

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Segment Information

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Information

Segment information

A.    Basis for segment information

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

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

Segment information for 2021 has been recast due to a methodology change related to how we assign intersegment sales and segment profit from our technology products and services to Construction Industries, Resource Industries and Energy & Transportation. This methodology change did not have a material impact on our segment results.

B.    Description of segments

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

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

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

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

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

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

C.    Segment measurement and reconciliations

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

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

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

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

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

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

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

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

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

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

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

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

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

For the three and nine months ended September 30, 2022 and 2021, sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows:

Sales and Revenues by Geographic Region
(Millions of dollars)	North America		Latin America		EAME		Asia/ Pacific		External Sales and Revenues			Intersegment Sales and Revenues		Total Sales and Revenues
Three Months Ended September 30, 2022
Construction Industries	$	3,106	$	799	$	1,247	$	1,084	$	6,236		$	40	$	6,276
Resource Industries	1,122		472		526		893		3,013			74		3,087
Energy & Transportation	2,422		468		1,280		827		4,997			1,189		6,186
Financial Products Segment	522		90		100		107		819		1	—		819
Total sales and revenues from reportable segments	7,172		1,829		3,153		2,911		15,065			1,303		16,368
All Other operating segment	16		—		4		15		35			68		103
Corporate Items and Eliminations	(53)		(20)		(12)		(21)		(106)			(1,371)		(1,477)
Total Sales and Revenues	$	7,135	$	1,809	$	3,145	$	2,905	$	14,994		$	—	$	14,994
Three Months Ended September 30, 2021
Construction Industries	$	2,417	$	528	$	1,240	$	1,076	$	5,261		$	(6)	$	5,255
Resource Industries	674		417		456		744		2,291			75		2,366
Energy & Transportation	1,924		329		1,144		744		4,141			936		5,077
Financial Products Segment	478		68		105		111		762		1	—		762
Total sales and revenues from reportable segments	5,493		1,342		2,945		2,675		12,455			1,005		13,460
All Other operating segment	18		—		3		14		35			84		119
Corporate Items and Eliminations	(56)		(13)		(9)		(15)		(93)			(1,089)		(1,182)
Total Sales and Revenues	$	5,455	$	1,329	$	2,939	$	2,674	$	12,397		$	—	$	12,397

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $124 million and $87 million in the three months ended September 30, 2022 and 2021, respectively.

Sales and Revenues by Geographic Region
(Millions of dollars)	North America		Latin America		EAME		Asia/ Pacific		External Sales and Revenues			Intersegment Sales and Revenues		Total Sales and Revenues
Nine Months Ended September 30, 2022
Construction Industries	$	8,832	$	2,061	$	3,726	$	3,694	$	18,313		$	111	$	18,424
Resource Industries	3,167		1,337		1,609		2,554		8,667			211		8,878
Energy & Transportation	6,637		1,160		3,679		2,193		13,669			3,260		16,929
Financial Products Segment	1,530		250		293		327		2,400		1	—		2,400
Total sales and revenues from reportable segments	20,166		4,808		9,307		8,768		43,049			3,582		46,631
All Other operating segment	52		—		14		46		112			227		339
Corporate Items and Eliminations	(175)		(59)		(33)		(64)		(331)			(3,809)		(4,140)
Total Sales and Revenues	$	20,043	$	4,749	$	9,288	$	8,750	$	42,830		$	—	$	42,830
Nine Months Ended September 30, 2021
Construction Industries	$	7,041	$	1,350	$	3,612	$	4,302	$	16,305		$	65	$	16,370
Resource Industries	2,130		1,309		1,455		1,965		6,859			232		7,091
Energy & Transportation	5,698		835		3,433		1,953		11,919			2,640		14,559
Financial Products Segment	1,442		195		301		359		2,297		1	—		2,297
Total sales and revenues from reportable segments	16,311		3,689		8,801		8,579		37,380			2,937		40,317
All Other operating segment	42		1		10		54		107			270		377
Corporate Items and Eliminations	(188)		(36)		(27)		(63)		(314)			(3,207)		(3,521)
Total Sales and Revenues	$	16,165	$	3,654	$	8,784	$	8,570	$	37,173		$	—	$	37,173

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $332 million and $263 million in the nine months ended September 30, 2022 and 2021, respectively.

For the three and nine months ended September 30, 2022 and 2021, Energy & Transportation segment sales by end user application were as follows:

Energy & Transportation External Sales
	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
Oil and gas	$	1,323	$	1,088	$	3,503	$	3,140
Power generation	1,320		1,010		3,518		3,025
Industrial	1,158		948		3,295		2,660
Transportation	1,196		1,095		3,353		3,094
Energy & Transportation External Sales	$	4,997	$	4,141	$	13,669	$	11,919

Reconciliation of Consolidated profit before taxes:
(Millions of dollars)	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
Profit from reportable segments:
Construction Industries	$	1,209	$	866	$	3,255	$	2,937
Resource Industries	506		280		1,222		941
Energy & Transportation	935		706		2,132		2,119
Financial Products Segment	220		173		675		660
Total profit from reportable segments	2,870		2,025		7,284		6,657
Profit from All Other operating segment	8		5		42		(2)
Cost centers	(37)		19		1		51
Corporate costs	(168)		(189)		(670)		(576)
Timing	(84)		(40)		(129)		(230)
Restructuring costs	(49)		(35)		(90)		(124)
Methodology differences:
Inventory/cost of sales	138		73		407		80
Postretirement benefit expense	82		116		293		270
Stock-based compensation expense	(55)		(58)		(162)		(169)
Financing costs	(75)		(103)		(269)		(342)
Currency	53		19		315		255
Other income/expense methodology differences	(109)		(80)		(287)		(201)
Other methodology differences	(16)		23		(82)		(27)
Total consolidated profit before taxes	$	2,558	$	1,775	$	6,653	$	5,642

Reconciliation of Assets:
(Millions of dollars)	September 30, 2022		December 31, 2021
Assets from reportable segments:
Construction Industries	$	5,439	$	4,547
Resource Industries	5,841		5,962
Energy & Transportation	9,394		9,253
Financial Products Segment	33,982		34,860
Total assets from reportable segments	54,656		54,622
Assets from All Other operating segment	1,729		1,678
Items not included in segment assets:
Cash and cash equivalents	5,403		8,428
Deferred income taxes	2,112		1,735
Goodwill and intangible assets	4,681		4,859
Property, plant and equipment – net and other assets	3,714		4,056
Inventory methodology differences	(2,833)		(2,656)
Liabilities included in segment assets	11,973		10,777
Other	(528)		(706)
Total assets	$	80,907	$	82,793

Reconciliation of Depreciation and amortization:
(Millions of dollars)
	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
Depreciation and amortization from reportable segments:
Construction Industries	$	57	$	60	$	172	$	178
Resource Industries	92		101		275		301
Energy & Transportation	136		144		405		428
Financial Products Segment	183		195		556		582
Total depreciation and amortization from reportable segments	468		500		1,408		1,489
Items not included in segment depreciation and amortization:
All Other operating segment	56		59		172		181
Cost centers	20		24		63		74
Other	7		10		18		22
Total depreciation and amortization	$	551	$	593	$	1,661	$	1,766

Reconciliation of Capital expenditures:
(Millions of dollars)
	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
Capital expenditures from reportable segments:
Construction Industries	$	74	$	56	$	149	$	120
Resource Industries	65		44		129		101
Energy & Transportation	167		115		444		339
Financial Products Segment	295		311		870		900
Total capital expenditures from reportable segments	601		526		1,592		1,460
Items not included in segment capital expenditures:
All Other operating segment	54		59		116		106
Cost centers	16		15		41		34
Timing	(35)		(13)		173		96
Other	(19)		—		(31)		(9)
Total capital expenditures	$	617	$	587	$	1,891	$	1,687

XML

Cat Financial Financing Activities Detail C

9 Months Ended

Sep. 30, 2022

Receivables [Abstract]

Cat Financial Financing Activities

Cat Financial financing activities

Allowance for credit losses

Portfolio segments

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

Customer

Cat Financial provides loans and finance leases to end-user customers primarily for the purpose of financing new and used Caterpillar machinery, engines and equipment for commercial use, the majority of which operate in construction-related industries. Cat Financial also provides financing for vehicles, power generation facilities and marine vessels that, in most cases, incorporate Caterpillar products. The average original term of Cat Financial's customer finance receivable portfolio was approximately 50 months with an average remaining term of approximately 26 months as of September 30, 2022.

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

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

During the three and nine months ended September 30, 2022, Cat Financial's forecasts for the markets in which it operates reflected a continuation of the trend of relatively low unemployment rates and delinquencies. However, high inflation rates and consequent central bank actions are weakening global economic growth. The company believes the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long-term trends.

Dealer

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

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

In general, Cat Financial's Dealer portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to its close working relationships with the dealers and their financial strength. Therefore, Cat Financial made no adjustments to historical loss rates during the three and nine months ended September 30, 2022.

Classes of finance receivables

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

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

•EAME - Finance receivables originated in Europe, Africa, the Middle East and the Commonwealth of Independent States.

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

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

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

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

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

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

(Millions of dollars)	Three Months Ended September 30, 2022						Three Months Ended September 30, 2021
	Customer		Dealer		Total		Customer		Dealer		Total
Beginning balance	$	290	$	82	$	372	$	354	$	44	$	398
Write-offs	(30)		—		(30)		(91)		—		(91)
Recoveries	17		—		17		15		—		15
Provision for credit losses 1	(2)		(17)		(19)		17		38		55
Other	(5)		—		(5)		(3)		—		(3)
Ending balance	$	270	$	65	$	335	$	292	$	82	$	374
	Nine Months Ended September 30, 2022						Nine Months Ended September 30, 2021
Allowance for Credit Losses:	Customer		Dealer		Total		Customer		Dealer		Total
Beginning balance	$	251	$	82	$	333	$	431	$	44	$	475
Write-offs	(68)		—		(68)		(193)		—		(193)
Recoveries	47		—		47		39		—		39
Provision for credit losses 1	46		(17)		29		20		38		58
Other	(6)		—		(6)		(5)		—		(5)
Ending balance	$	270	$	65	$	335	$	292	$	82	$	374
Finance Receivables	$	19,363	$	1,737	$	21,100	$	19,967	$	1,931	$	21,898
1 Excludes provision for credit losses on unfunded commitments and other miscellaneous receivables.

Credit quality of finance receivables

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

Customer

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

(Millions of dollars)	September 30, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,151	$	3,632	$	1,765	$	811	$	289	$	64	$	233	$	9,945
31-60 days past due	18		25		19		13		6		2		4		87
61-90 days past due	5		9		4		2		1		1		2		24
91+ days past due	5		16		13		8		5		5		5		57
EAME
Current	873		1,014		511		309		179		81		—		2,967
31-60 days past due	6		12		5		4		—		—		—		27
61-90 days past due	2		4		5		1		1		—		—		13
91+ days past due	3		21		11		5		2		1		—		43
Asia/Pacific
Current	805		765		385		95		23		4		—		2,077
31-60 days past due	5		13		11		2		1		—		—		32
61-90 days past due	1		6		6		2		—		—		—		15
91+ days past due	1		8		6		6		1		—		—		22
Mining
Current	568		625		240		203		117		112		79		1,944
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		3		—		3
91+ days past due	—		—		1		—		3		1		—		5
Latin America
Current	584		443		176		86		24		14		—		1,327
31-60 days past due	5		9		5		2		12		—		—		33
61-90 days past due	4		4		2		1		—		—		—		11
91+ days past due	—		14		14		5		4		17		—		54
Caterpillar Power Finance
Current	40		91		145		75		30		170		118		669
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		8		—		8
Totals by Aging Category
Current	$	6,021	$	6,570	$	3,222	$	1,579	$	662	$	445	$	430	$	18,929
31-60 days past due	34		59		40		21		19		2		4		179
61-90 days past due	12		23		17		6		2		4		2		66
91+ days past due	9		59		45		24		15		32		5		189
Total Customer	$	6,076	$	6,711	$	3,324	$	1,630	$	698	$	483	$	441	$	19,363

(Millions of dollars)	December 31, 2021
	2021		2020		2019		2018		2017		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	4,792	$	2,596	$	1,426	$	630	$	182	$	32	$	182	$	9,840
31-60 days past due	27		32		20		12		4		1		5		101
61-90 days past due	7		8		5		3		1		1		5		30
91+ days past due	9		17		12		13		5		4		5		65
EAME
Current	1,499		836		577		352		140		26		—		3,430
31-60 days past due	5		4		3		1		1		—		—		14
61-90 days past due	3		3		3		1		—		—		—		10
91+ days past due	3		11		2		2		—		2		—		20
Asia/Pacific
Current	1,271		803		307		71		16		2		—		2,470
31-60 days past due	10		14		10		2		—		—		—		36
61-90 days past due	3		7		4		1		—		—		—		15
91+ days past due	2		10		10		3		—		—		—		25
Mining
Current	851		347		307		193		36		161		36		1,931
31-60 days past due	6		—		—		—		—		—		—		6
61-90 days past due	1		—		—		—		4		—		—		5
91+ days past due	—		1		8		9		3		1		—		22
Latin America
Current	617		299		160		70		17		18		—		1,181
31-60 days past due	4		7		3		3		1		—		—		18
61-90 days past due	3		3		1		1		—		—		—		8
91+ days past due	4		9		9		7		7		14		—		50
Caterpillar Power Finance
Current	117		145		97		70		180		104		101		814
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		44		—		44
Totals by Aging Category
Current	$	9,147	$	5,026	$	2,874	$	1,386	$	571	$	343	$	319	$	19,666
31-60 days past due	52		57		36		18		6		1		5		175
61-90 days past due	17		21		13		6		5		1		5		68
91+ days past due	18		48		41		34		15		65		5		226
Total Customer	$	9,234	$	5,152	$	2,964	$	1,444	$	597	$	410	$	334	$	20,135

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

Dealer

As of September 30, 2022 and December 31, 2021, Cat Financial's total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $58 million and $78 million, respectively, that were 91+ days past due in Latin America, all of which were originated in 2017.

Non-accrual finance receivables

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

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

	September 30, 2022						December 31, 2021
	Amortized Cost						Amortized Cost
(Millions of dollars)	Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing		Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing
North America	$	54	$	5	$	10	$	47	$	9	$	12
EAME	42		—		4		18		1		2
Asia/Pacific	15		—		7		19		—		7
Mining	6		1		—		8		1		14
Latin America	57		—		—		52		4		1
Caterpillar Power Finance	9		11		—		40		11		—
Total	$	183	$	17	$	21	$	184	$	26	$	36

There was $2 million and $1 million of interest income recognized during the three months ended September 30, 2022 and 2021, respectively, for customer finance receivables on non-accrual status. There was $11 million and $9 million of interest income recognized during the nine months ended September 30, 2022 and 2021, respectively, for customer finance receivables on non-accrual status.

As of September 30, 2022 and December 31, 2021, finance receivables in Cat Financial's Dealer portfolio segment on non-accrual status were $58 million and $78 million, respectively, all of which was in Latin America. There were no finance receivables in Cat Financial's Dealer portfolio segment more than 90 days past due and still accruing income as of September 30, 2022 and December 31, 2021 and no interest income was recognized on dealer finance receivables on non-accrual status during the three and nine months ended September 30, 2022 and 2021.

Troubled debt restructurings

A restructuring of a finance receivable constitutes a TDR when the lender grants a concession it would not otherwise consider to a borrower experiencing financial difficulties. Concessions granted may include extended contract maturities, inclusion of interest only periods, below market interest rates, payment deferrals and reduction of principal and/or accrued interest. Cat Financial individually evaluates TDR contracts and establishes an allowance based on the present value of expected future cash flows discounted at the receivable's effective interest rate, the fair value of the collateral for collateral-dependent receivables or the observable market price of the receivable.

There were no finance receivables modified as TDRs during the three and nine months ended September 30, 2022 and 2021 for the Dealer portfolio segment. Cat Financial’s finance receivables in the Customer portfolio segment modified as TDRs were as follows:

(Millions of dollars)	Three Months Ended September 30, 2022				Three Months Ended September 30, 2021
	Pre-TDR Amortized Cost		Post-TDR Amortized Cost		Pre-TDR Amortized Cost		Post-TDR Amortized Cost
Customer
North America	$	3	$	3	$	1	$	1
EAME	—		—		1		1
Asia/Pacific	—		—		4		4
Mining	15		15		—		—
Latin America	—		—		4		4
Caterpillar Power Finance	11		11		7		3
Total	$	29	$	29	$	17	$	13
	Nine Months Ended September 30, 2022				Nine Months Ended September 30, 2021
	Pre-TDR Amortized Cost		Post-TDR Amortized Cost		Pre-TDR Amortized Cost		Post-TDR Amortized Cost
North America	$	4	$	4	$	5	$	5
EAME	1		1		1		1
Asia/Pacific	—		—		4		4
Mining	15		15		11		5
Latin America	—		—		10		10
Caterpillar Power Finance	20		19		23		19
Total	$	40	$	39	$	54	$	44

The Post-TDR amortized costs in the Customer portfolio segment with a payment default (defined as 91+ days past due) which had been modified within twelve months prior to the default date, were as follows:

(Millions of dollars)	Three Months Ended September 30				Nine Months Ended September 30
Customer	2022		2021		2022		2021
North America	$	—	$	—	$	—	$	1
Asia/Pacific	—		—		—		6
Mining	—		—		5		—
Latin America	—		—		—		15
Caterpillar Power Finance	—		—		—		5
Total	$	—	$	—	$	5	$	27

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Fair Value Disclosures

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Disclosures

Fair value disclosures

    A. Fair value measurements

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

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

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

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

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

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

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

Investments in debt and equity securities

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

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

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

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

Derivative financial instruments

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

See Note 5 for additional information.

Assets and liabilities measured on a recurring basis at fair value included in our Consolidated Statement of Financial Position as of September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022
(Millions of dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt securities
U.S. treasury bonds	$	10	$	—	$	—	$	—	$	10
Other U.S. and non-U.S. government bonds	—		49		—		—		49
Corporate debt securities
Corporate bonds and other debt securities	—		1,998		50		—		2,048
Asset-backed securities	—		180		—		—		180
Mortgage-backed debt securities
U.S. governmental agency	—		348		—		—		348
Residential	—		3		—		—		3
Commercial	—		129		—		—		129
Total debt securities	10		2,707		50		—		2,767
Equity securities
Large capitalization value	183		—		—		—		183
Smaller company growth	40		—		—		—		40
REIT	—		—		—		208		208
Total equity securities	223		—		—		208		431
Derivative financial instruments - assets
Foreign currency contracts - net	—		338		—		—		338
Total assets	$	233	$	3,045	$	50	$	208	$	3,536
Liabilities
Derivative financial instruments - liabilities
Interest rate contracts - net	$	—	$	208	$	—	$	—	$	208
Commodity contracts - net	—		34		—		—		34
Total liabilities	$	—	$	242	$	—	$	—	$	242

	December 31, 2021
(Millions of dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt securities
U.S. treasury bonds	$	10	$	—	$	—	$	—	$	10
Other U.S. and non-U.S. government bonds	—		61		—		—		61
Corporate debt securities
Corporate bonds and other debt securities	—		1,046		—		—		1,046
Asset-backed securities	—		176		—		—		176
Mortgage-backed debt securities
U.S. governmental agency	—		325		—		—		325
Residential	—		4		—		—		4
Commercial	—		99		—		—		99
Total debt securities	10		1,711		—		—		1,721
Equity securities
Large capitalization value	217		—		—		—		217
Smaller company growth	98		—		—		—		98
REIT	—		—		—		167		167
Total equity securities	315		—		—		167		482
Derivative financial instruments - assets
Foreign currency contracts - net	—		168		—		—		168
Interest rate contracts - net	—		23		—		—		23
Commodity contracts - net	—		21		—		—		21
Total Assets	$	325	$	1,923	$	—	$	167	$	2,415

In addition to the amounts above, certain Cat Financial loans are subject to measurement at fair value on a nonrecurring basis and are classified as Level 3 measurements. A loan is measured at fair value when management determines that collection of contractual amounts due is not probable and the loan is individually evaluated.  In these cases, an allowance for credit losses may be established based either on the present value of expected future cash flows discounted at the receivables’ effective interest rate, the fair value of the collateral for collateral-dependent receivables, or the observable market price of the receivable.  In determining collateral value, Cat Financial estimates the current fair market value of the collateral less selling costs. Cat Financial had loans carried at fair value of $90 million and $100 million as of September 30, 2022 and December 31, 2021, respectively.  

    B. Fair values of financial instruments

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

Cash and cash equivalents

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

Restricted cash and short-term investments

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

Finance receivables

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

Wholesale inventory receivables

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

Short-term borrowings

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

Long-term debt

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

Guarantees

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

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

	September 30, 2022				December 31, 2021
(Millions of dollars)	Carrying  Amount		Fair  Value		Carrying  Amount		Fair  Value		Fair Value Levels	Reference
Assets
Finance receivables – net (excluding finance leases 1 )	$	13,931	$	13,356	$	13,837	$	13,836	3	Note 17
Wholesale inventory receivables – net (excluding finance leases 1)	768		724		773		753		3
Liabilities
Long-term debt (including amounts due within one year)
Machinery, Energy & Transportation	9,599		9,072		9,791		12,420		2
Financial Products	22,724		21,886		22,594		22,797		2

1    Represents finance leases and failed sale leasebacks of $7,083 million and $8,083 million at September 30, 2022 and December 31, 2021, respectively.

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Other Income (expense)

9 Months Ended

Sep. 30, 2022

Other Income and Expenses [Abstract]

Other income (expense)

Other income (expense)

	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
Investment and interest income	$	52	$	20	$	98	$	64
Foreign exchange gains (losses) 1	134		47		405		110
License fee income	37		31		106		88
Net periodic pension and OPEB income (cost), excluding service cost	67		111		201		333
Gains (losses) on securities	—		50		(59)		92
Miscellaneous income (loss)	(48)		(34)		4		64
Total	$	242	$	225	$	755	$	751

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

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Restructuring Costs

9 Months Ended

Sep. 30, 2022

Restructuring Charges [Abstract]

Restructuring Costs

Restructuring costs

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

Restructuring costs for the three and nine months ended September 30, 2022 and 2021 were as follows:

(Millions of dollars)	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
Employee separations 1	$	39	$	17	$	62	$	79
Contract terminations 1	1		1		1		1
Long-lived asset impairments 1	(4)		8		1		12
Other 2	13		9		26		32
Total restructuring costs	$	49	$	35	$	90	$	124
1 Recognized in Other operating (income) expenses.
2 Represents costs related to our restructuring programs, primarily for accelerated depreciation, equipment relocation, inventory write-downs and project management, all of which are primarily included in Cost of goods sold.

For both the nine months ended September 30, 2022 and 2021, the restructuring costs were primarily related to actions across the company including strategic actions to address a small number of products.

In 2022 and 2021, all restructuring costs are excluded from segment profit.

The following table summarizes the 2022 and 2021 employee separation activity:

(Millions of dollars)	Nine Months Ended September 30
	2022		2021
Liability balance, beginning of period	$	61	$	164
Increase in liability (separation charges)	62		79
Reduction in liability (payments)	(63)		(159)
Liability balance, end of period	$	60	$	84

Most of the liability balance at September 30, 2022 is expected to be paid in 2022 and 2023.

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Derivative Financial Instruments and Risk Management (Policies)

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives, Policy

Foreign Currency Exchange Rate Risk

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

Our ME&T operations purchase, manufacture and sell products in many locations around the world. As we have a diversified revenue and cost base, we manage our future foreign currency cash flow exposure on a net basis. We use foreign currency forward and option contracts to manage unmatched foreign currency cash inflow and outflow. Our objective is to minimize the risk of exchange rate movements that would reduce the U.S. dollar value of our foreign currency cash flow. Our policy allows for managing anticipated foreign currency cash flow for up to approximately five years. As of September 30, 2022, the maximum term of these outstanding contracts at inception was approximately 60 months.

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

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

Interest Rate Risk

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

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

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

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

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

Commodity Price Risk

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

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

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

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Schedule of type and fair value of the stock-based compensation awards granted during the period

The following table illustrates the type and fair value of the stock-based compensation awards granted during the nine months ended September 30, 2022 and 2021, respectively:

	Nine Months Ended September 30, 2022					Nine Months Ended September 30, 2021
	Shares Granted	Weighted-Average Fair Value Per Share		Weighted-Average Grant Date Stock Price		Shares Granted	Weighted-Average Fair Value Per Share		Weighted-Average Grant Date Stock Price
Stock options	1,029,202	$	51.69	$	196.70	1,084,821	$	56.30	$	219.76
RSUs	484,025	$	196.70	$	196.70	448,311	$	219.76	$	219.76
PRSUs	258,900	$	196.70	$	196.70	266,894	$	219.76	$	219.76

Schedule providing assumptions used in determining the fair value of stock-based awards

The following table provides the assumptions used in determining the fair value of the stock-based awards for the nine months ended September 30, 2022 and 2021, respectively:

	Grant Year
	2022	2021
Weighted-average dividend yield	2.60%	2.60%
Weighted-average volatility	31.7%	32.9%
Range of volatilities	25.3% - 36.8%	29.2% - 45.8%
Range of risk-free interest rates	1.03% - 2.00%	0.06% - 1.41%
Weighted-average expected lives	8 years	8 years

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Derivative Financial Instruments and Risk Management (Tables)

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Location and fair value of derivative instruments reported in the Consolidated Statement of Financial Position

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

(Millions of dollars)	Fair Value
	September 30, 2022				December 31, 2021
	Assets1		Liabilities2		Assets1		Liabilities2
Designated derivatives
Foreign exchange contracts	$	692	$	(394)	$	228	$	(64)
Interest rate contracts	94		(302)		38		(15)
Total	$	786	$	(696)	$	266	$	(79)
Undesignated derivatives
Foreign exchange contracts	$	118	$	(78)	$	46	$	(42)
Commodity contracts	9		(43)		30		(9)
Total	$	127	$	(121)	$	76	$	(51)
1 Assets are classified on the Consolidated Statement of Financial Position as Receivables - trade and other or Long-term receivables - trade and other.
2 Liabilities are classified on the Consolidated Statement of Financial Position as Accrued expenses or Other liabilities.

Derivative Instruments, Gain (Loss)

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

(Millions of dollars)	Three Months Ended September 30
	Fair Value / Undesignated Hedges				Cash Flow Hedges
	Gains (Losses) Recognized on the Consolidated Statement of Results of Operations1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI2
	2022		2021		2022		2021		2022		2021
Foreign exchange contracts	$	(2)	$	46	$	18	$	42	$	289	$	90
Interest rate contracts	(5)		5		26		3		7		(5)
Commodity contracts	(42)		(30)		—		—		—		—
Total	$	(49)	$	21	$	44	$	45	$	296	$	85
1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products.
2 Foreign exchange contract gains (losses) are primarily included in Other income (expense) in the Consolidated Statement of Results of Operations. Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products in the Consolidated Statement of Results of Operations.

(Millions of dollars)	Nine Months Ended September 30
	Fair Value / Undesignated Hedges				Cash Flow Hedges
	Gains (Losses) Recognized on the Consolidated Statement of Results of Operations1				Gains (Losses) Recognized in AOCI				Gains (Losses) Reclassified from AOCI2
	2022		2021		2022		2021		2022		2021
Foreign exchange contracts	$	(32)	$	77	$	195	$	130	$	638	$	187
Interest rate contracts	12		18		103		11		(2)		(23)
Commodity contract	3		35		—		—		—		—
Total	$	(17)	$	130	$	298	$	141	$	636	$	164
1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense excluding Financial Products.
2 Foreign exchange contract gains (losses) are primarily included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense excluding Financial Products.

Cumulative basis adjustments for fair value hedges

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

(Millions of dollars)	Carrying Value of the Hedged Liabilities				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities
	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Long-term debt due within one year	$	—	$	755	$	—	$	5
Long-term debt due after one year	3,796		1,304		(227)		(2)
Total	$	3,796	$	2,059	$	(227)	$	3

Offsetting Assets and Liabilities

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

(Millions of dollars)	September 30, 2022				December 31, 2021
	Assets		Liabilities		Assets		Liabilities
Gross Amounts Recognized	$	913	$	(817)	$	342	$	(130)
Financial Instruments Not Offset	(282)		282		(114)		114
Cash Collateral Received	—		—		—		—
Net Amount	$	631	$	(535)	$	228	$	(16)

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Inventories (Tables)

9 Months Ended

Sep. 30, 2022

Inventory Disclosure [Abstract]

Inventories

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

(Millions of dollars)	September 30, 2022		December 31, 2021
Raw materials	$	6,335	$	5,528
Work-in-process	1,836		1,318
Finished goods	8,387		6,907
Supplies	302		285
Total inventories	$	16,860	$	14,038

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Intangible Assets and Goodwill (Tables)

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets

Intangible assets were comprised of the following:

		September 30, 2022
(Millions of dollars)	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	16	$	2,183	$	(1,604)	$	579
Intellectual property	12	1,470		(1,287)		183
Other	16	128		(84)		44
Total finite-lived intangible assets	14	$	3,781	$	(2,975)	$	806

		December 31, 2021
	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net
Customer relationships	15	$	2,421	$	(1,709)	$	712
Intellectual property	12	1,472		(1,192)		280
Other	14	156		(106)		50
Total finite-lived intangible assets	14	$	4,049	$	(3,007)	$	1,042

Expected amortization expense related to intangible assets

Amortization expense related to intangible assets is expected to be:

(Millions of dollars)
Remaining Three Months of 2022	2023	2024	2025	2026	Thereafter
$70	$222	$163	$153	$85	$113

Goodwill acquired

The changes in carrying amount of goodwill by reportable segment for the nine months ended September 30, 2022 were as follows: 

(Millions of dollars)	December 31, 2021		Acquisitions		Other Adjustments 1		September 30, 2022
Construction Industries
Goodwill	$	302	$	—	$	(39)	$	263
Impairments	(22)		—		—		(22)
Net goodwill	280		—		(39)		241
Resource Industries
Goodwill	4,182		—		(127)		4,055
Impairments	(1,175)		—		—		(1,175)
Net goodwill	3,007		—		(127)		2,880
Energy & Transportation
Goodwill	2,985		25		(81)		2,929
All Other 2
Goodwill	52		—		(10)		42
Consolidated total
Goodwill	7,521		25		(257)		7,289
Impairments	(1,197)		—		—		(1,197)
Net goodwill	$	6,324	$	25	$	(257)	$	6,092

1 Other adjustments are comprised primarily of foreign currency translation.

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

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Investments in Debt and Equity Securities (Tables)

9 Months Ended

Sep. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Cost basis and fair value of available-for-sale securities

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

Available-for-sale debt securities	September 30, 2022						December 31, 2021
(Millions of dollars)	Cost Basis		Unrealized Pretax Net Gains (Losses)		Fair Value		Cost Basis		Unrealized Pretax Net Gains (Losses)		Fair Value
Government debt securities
U.S. treasury bonds	$	10	$	—	$	10	$	10	$	—	$	10
Other U.S. and non-U.S. government bonds	51		(2)		49		61		—		61
Corporate debt securities
Corporate bonds and other debt securities	2,156		(108)		2,048		1,027		19		1,046
Asset-backed securities	185		(5)		180		175		1		176
Mortgage-backed debt securities
U.S. governmental agency	384		(36)		348		319		6		325
Residential	3		—		3		4		—		4
Commercial	139		(10)		129		98		1		99
Total available-for-sale debt securities	$	2,928	$	(161)	$	2,767	$	1,694	$	27	$	1,721

Investments in an unrealized loss position that are not other-than-temporarily impaired:

Available-for-sale debt securities in an unrealized loss position:
	September 30, 2022
	Less than 12 months 1				12 months or more 1				Total
(Millions of dollars)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government debt securities
Other U.S. and non-U.S. government bonds	$	31	$	1	$	15	$	1	$	46	$	2
Corporate debt securities
Corporate bonds	1,774		75		218		33		1,992		108
Asset-backed securities	102		4		35		1		137		5
Mortgage-backed debt securities
U.S. governmental agency	293		27		51		9		344		36
Commercial	88		7		41		3		129		10
	$	2,288	$	114	$	360	$	47	$	2,648	$	161

	December 31, 2021
	Less than 12 months 1				12 months or more 1				Total
(Millions of dollars)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Corporate debt securities
Corporate bonds	$	270	$	4	$	33	$	1	$	303	$	5
Mortgage-backed debt securities
U.S. governmental agency	89		1		22		—		111		1
Total	$	359	$	5	$	55	$	1	$	414	$	6
1 Indicates the length of time that individual securities have been in a continuous unrealized loss position.

Cost basis and fair value of the available-for-sale debt securities by contractual maturity

The cost basis and fair value of available-for-sale debt securities at September 30, 2022, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay and creditors may have the right to call obligations.        

	September 30, 2022
(Millions of dollars)	Cost Basis		Fair Value
Due in one year or less	$	696	$	687
Due after one year through five years	1,354		1,277
Due after five years through ten years	282		256
Due after ten years	70		67
U.S. governmental agency mortgage-backed securities	384		348
Residential mortgage-backed securities	3		3
Commercial mortgage-backed securities	139		129
Total debt securities – available-for-sale	$	2,928	$	2,767

Schedule of proceeds and gross gain and losses from the sale of available-for-sale securities

Sales of available-for-sale debt securities:
	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
Proceeds from the sale of available-for-sale securities	$	204	$	97	$	474	$	322
Gross gains from the sale of available-for-sale securities	—		1		1		3
Gross losses from the sale of available-for-sale securities	—		—		1		—

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Postretirement Benefits (Tables)

9 Months Ended

Sep. 30, 2022

Retirement Benefits [Abstract]

Schedule of net benefit costs

	U.S. Pension Benefits				Non-U.S. Pension Benefits				Other Postretirement Benefits
	September 30				September 30				September 30
(Millions of dollars)	2022		2021		2022		2021		2022		2021
For the three months ended:
Components of net periodic benefit cost:
Service cost	$	—	$	—	$	15	$	15	$	24	$	25
Interest cost	100		82		17		16		20		16
Expected return on plan assets	(167)		(180)		(33)		(33)		(3)		(1)
Amortization of prior service cost (credit)	—		—		—		—		(1)		(11)
Net periodic benefit cost (benefit) 1	$	(67)	$	(98)	$	(1)	$	(2)	$	40	$	29
For the nine months ended:
Components of net periodic benefit cost:
Service cost	$	—	$	—	$	40	$	44	$	74	$	75
Interest cost	301		247		53		43		60		48
Expected return on plan assets	(502)		(538)		(100)		(98)		(9)		(4)
Amortization of prior service cost (credit)	—		—		—		—		(4)		(31)
Net periodic benefit cost (benefit) 1	$	(201)	$	(291)	$	(7)	$	(11)	$	121	$	88

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

Company costs related to U.S. and non-U.S. defined contribution plans

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

	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
U.S. Plans	$	87	$	81	$	236	$	321
Non-U.S. Plans	29		29		85		83
	$	116	$	110	$	321	$	404

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Leases (Tables)

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Revenue from finance and operating leases

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

	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
Finance lease revenue	$	105	$	120	$	326	$	369
Operating lease revenue	270		275		819		850
Total	$	375	$	395	$	1,145	$	1,219

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Guarantees and Product Warranty (Tables)

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Guarantees

The maximum potential amount of future payments that we can estimate (undiscounted and without reduction for any amounts that may possibly be recovered under recourse or collateralized provisions) and we could be required to make under the guarantees was as follows:

(Millions of dollars)	September 30, 2022		December 31, 2021
Caterpillar dealer performance guarantees	$	137	$	747
Supplier consortium performance guarantee	17		242
Other guarantees	284		232
Total guarantees	$	438	$	1,221

Product warranty

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

	First Nine Months
(Millions of dollars)	2022		2021
Warranty liability, beginning of period	$	1,689	$	1,612
Reduction in liability (payments)	(589)		(638)
Increase in liability (new warranties)	562		716
Warranty liability, end of period	$	1,662	$	1,690

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Profit Per Share (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share Reconciliation [Abstract]

Computations of profit per share

Computations of profit per share:	Three Months Ended September 30				Nine Months Ended September 30
(Dollars in millions except per share data)	2022		2021		2022		2021
Profit for the period (A) 1	$	2,041	$	1,426	$	5,251	$	4,369
Determination of shares (in millions):
Weighted-average number of common shares outstanding (B)	525.0		544.0		530.1		545.8
Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price	2.6		3.6		3.1		4.4
Average common shares outstanding for fully diluted computation (C) 2	527.6		547.6		533.2		550.2
Profit per share of common stock:
Assuming no dilution (A/B)	$	3.89	$	2.62	$	9.91	$	8.00
Assuming full dilution (A/C) 2	$	3.87	$	2.60	$	9.85	$	7.94
Shares outstanding as of September 30 (in millions)					520.4		540.9
1 Profit attributable to common shareholders.
2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.

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Accumulated other comprehensive income (loss) (Tables)

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Changes in Accumulated other comprehensive income (loss), net of tax

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

	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
Foreign currency translation:
Beginning balance	$	(2,282)	$	(1,158)	$	(1,508)	$	(910)
Gains (losses) on foreign currency translation	(592)		(230)		(1,328)		(461)
Less: Tax provision /(benefit)	26		12		64		29
Net gains (losses) on foreign currency translation	(618)		(242)		(1,392)		(490)
(Gains) losses reclassified to earnings	—		—		—		—
Less: Tax provision /(benefit)	—		—		—		—
Net (gains) losses reclassified to earnings	—		—		—		—
Other comprehensive income (loss), net of tax	(618)		(242)		(1,392)		(490)
Ending balance	$	(2,900)	$	(1,400)	$	(2,900)	$	(1,400)
Pension and other postretirement benefits
Beginning balance	$	(64)	$	(47)	$	(62)	$	(32)
Current year prior service credit (cost)	—		—		—		—
Less: Tax provision /(benefit)	—		—		—		—
Net current year prior service credit (cost)	—		—		—		—
Amortization of prior service (credit) cost	(1)		(11)		(4)		(31)
Less: Tax provision /(benefit)	—		(3)		(1)		(8)
Net amortization of prior service (credit) cost	(1)		(8)		(3)		(23)
Other comprehensive income (loss), net of tax	(1)		(8)		(3)		(23)
Ending balance	$	(65)	$	(55)	$	(65)	$	(55)
Derivative financial instruments
Beginning balance	$	(66)	$	12	$	(3)	$	—
Gains (losses) deferred	44		45		298		141
Less: Tax provision /(benefit)	35		3		71		22
Net gains (losses) deferred	9		42		227		119
(Gains) losses reclassified to earnings	(296)		(85)		(636)		(164)
Less: Tax provision /(benefit)	(96)		(12)		(155)		(26)
Net (gains) losses reclassified to earnings	(200)		(73)		(481)		(138)
Other comprehensive income (loss), net of tax	(191)		(31)		(254)		(19)
Ending balance	$	(257)	$	(19)	$	(257)	$	(19)
Available-for-sale securities
Beginning balance	$	(87)	$	39	$	20	$	54
Gains (losses) deferred	(55)		(4)		(188)		(22)
Less: Tax provision /(benefit)	(11)		—		(37)		(4)
Net gains (losses) deferred	(44)		(4)		(151)		(18)
(Gains) losses reclassified to earnings	—		(1)		—		(3)
Less: Tax provision /(benefit)	—		—		—		(1)
Net (gains) losses reclassified to earnings	—		(1)		—		(2)
Other comprehensive income (loss), net of tax	(44)		(5)		(151)		(20)
Ending balance	$	(131)	$	34	$	(131)	$	34
Total AOCI Ending Balance at September 30	$	(3,353)	$	(1,440)	$	(3,353)	$	(1,440)

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Disaggregation of Revenue

For the three and nine months ended September 30, 2022 and 2021, sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows:

Sales and Revenues by Geographic Region
(Millions of dollars)	North America		Latin America		EAME		Asia/ Pacific		External Sales and Revenues			Intersegment Sales and Revenues		Total Sales and Revenues
Three Months Ended September 30, 2022
Construction Industries	$	3,106	$	799	$	1,247	$	1,084	$	6,236		$	40	$	6,276
Resource Industries	1,122		472		526		893		3,013			74		3,087
Energy & Transportation	2,422		468		1,280		827		4,997			1,189		6,186
Financial Products Segment	522		90		100		107		819		1	—		819
Total sales and revenues from reportable segments	7,172		1,829		3,153		2,911		15,065			1,303		16,368
All Other operating segment	16		—		4		15		35			68		103
Corporate Items and Eliminations	(53)		(20)		(12)		(21)		(106)			(1,371)		(1,477)
Total Sales and Revenues	$	7,135	$	1,809	$	3,145	$	2,905	$	14,994		$	—	$	14,994
Three Months Ended September 30, 2021
Construction Industries	$	2,417	$	528	$	1,240	$	1,076	$	5,261		$	(6)	$	5,255
Resource Industries	674		417		456		744		2,291			75		2,366
Energy & Transportation	1,924		329		1,144		744		4,141			936		5,077
Financial Products Segment	478		68		105		111		762		1	—		762
Total sales and revenues from reportable segments	5,493		1,342		2,945		2,675		12,455			1,005		13,460
All Other operating segment	18		—		3		14		35			84		119
Corporate Items and Eliminations	(56)		(13)		(9)		(15)		(93)			(1,089)		(1,182)
Total Sales and Revenues	$	5,455	$	1,329	$	2,939	$	2,674	$	12,397		$	—	$	12,397

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $124 million and $87 million in the three months ended September 30, 2022 and 2021, respectively.

Sales and Revenues by Geographic Region
(Millions of dollars)	North America		Latin America		EAME		Asia/ Pacific		External Sales and Revenues			Intersegment Sales and Revenues		Total Sales and Revenues
Nine Months Ended September 30, 2022
Construction Industries	$	8,832	$	2,061	$	3,726	$	3,694	$	18,313		$	111	$	18,424
Resource Industries	3,167		1,337		1,609		2,554		8,667			211		8,878
Energy & Transportation	6,637		1,160		3,679		2,193		13,669			3,260		16,929
Financial Products Segment	1,530		250		293		327		2,400		1	—		2,400
Total sales and revenues from reportable segments	20,166		4,808		9,307		8,768		43,049			3,582		46,631
All Other operating segment	52		—		14		46		112			227		339
Corporate Items and Eliminations	(175)		(59)		(33)		(64)		(331)			(3,809)		(4,140)
Total Sales and Revenues	$	20,043	$	4,749	$	9,288	$	8,750	$	42,830		$	—	$	42,830
Nine Months Ended September 30, 2021
Construction Industries	$	7,041	$	1,350	$	3,612	$	4,302	$	16,305		$	65	$	16,370
Resource Industries	2,130		1,309		1,455		1,965		6,859			232		7,091
Energy & Transportation	5,698		835		3,433		1,953		11,919			2,640		14,559
Financial Products Segment	1,442		195		301		359		2,297		1	—		2,297
Total sales and revenues from reportable segments	16,311		3,689		8,801		8,579		37,380			2,937		40,317
All Other operating segment	42		1		10		54		107			270		377
Corporate Items and Eliminations	(188)		(36)		(27)		(63)		(314)			(3,207)		(3,521)
Total Sales and Revenues	$	16,165	$	3,654	$	8,784	$	8,570	$	37,173		$	—	$	37,173

1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $332 million and $263 million in the nine months ended September 30, 2022 and 2021, respectively.

For the three and nine months ended September 30, 2022 and 2021, Energy & Transportation segment sales by end user application were as follows:

Energy & Transportation External Sales
	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
Oil and gas	$	1,323	$	1,088	$	3,503	$	3,140
Power generation	1,320		1,010		3,518		3,025
Industrial	1,158		948		3,295		2,660
Transportation	1,196		1,095		3,353		3,094
Energy & Transportation External Sales	$	4,997	$	4,141	$	13,669	$	11,919

Reconciliation of Consolidated profit before taxes

Reconciliation of Consolidated profit before taxes:
(Millions of dollars)	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
Profit from reportable segments:
Construction Industries	$	1,209	$	866	$	3,255	$	2,937
Resource Industries	506		280		1,222		941
Energy & Transportation	935		706		2,132		2,119
Financial Products Segment	220		173		675		660
Total profit from reportable segments	2,870		2,025		7,284		6,657
Profit from All Other operating segment	8		5		42		(2)
Cost centers	(37)		19		1		51
Corporate costs	(168)		(189)		(670)		(576)
Timing	(84)		(40)		(129)		(230)
Restructuring costs	(49)		(35)		(90)		(124)
Methodology differences:
Inventory/cost of sales	138		73		407		80
Postretirement benefit expense	82		116		293		270
Stock-based compensation expense	(55)		(58)		(162)		(169)
Financing costs	(75)		(103)		(269)		(342)
Currency	53		19		315		255
Other income/expense methodology differences	(109)		(80)		(287)		(201)
Other methodology differences	(16)		23		(82)		(27)
Total consolidated profit before taxes	$	2,558	$	1,775	$	6,653	$	5,642

Reconciliation of Assets:

Reconciliation of Assets:
(Millions of dollars)	September 30, 2022		December 31, 2021
Assets from reportable segments:
Construction Industries	$	5,439	$	4,547
Resource Industries	5,841		5,962
Energy & Transportation	9,394		9,253
Financial Products Segment	33,982		34,860
Total assets from reportable segments	54,656		54,622
Assets from All Other operating segment	1,729		1,678
Items not included in segment assets:
Cash and cash equivalents	5,403		8,428
Deferred income taxes	2,112		1,735
Goodwill and intangible assets	4,681		4,859
Property, plant and equipment – net and other assets	3,714		4,056
Inventory methodology differences	(2,833)		(2,656)
Liabilities included in segment assets	11,973		10,777
Other	(528)		(706)
Total assets	$	80,907	$	82,793

Reconciliation of Depreciation and amortization:

Reconciliation of Depreciation and amortization:
(Millions of dollars)
	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
Depreciation and amortization from reportable segments:
Construction Industries	$	57	$	60	$	172	$	178
Resource Industries	92		101		275		301
Energy & Transportation	136		144		405		428
Financial Products Segment	183		195		556		582
Total depreciation and amortization from reportable segments	468		500		1,408		1,489
Items not included in segment depreciation and amortization:
All Other operating segment	56		59		172		181
Cost centers	20		24		63		74
Other	7		10		18		22
Total depreciation and amortization	$	551	$	593	$	1,661	$	1,766

Reconciliation of Capital expenditures:

Reconciliation of Capital expenditures:
(Millions of dollars)
	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
Capital expenditures from reportable segments:
Construction Industries	$	74	$	56	$	149	$	120
Resource Industries	65		44		129		101
Energy & Transportation	167		115		444		339
Financial Products Segment	295		311		870		900
Total capital expenditures from reportable segments	601		526		1,592		1,460
Items not included in segment capital expenditures:
All Other operating segment	54		59		116		106
Cost centers	16		15		41		34
Timing	(35)		(13)		173		96
Other	(19)		—		(31)		(9)
Total capital expenditures	$	617	$	587	$	1,891	$	1,687

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Cat Financial Financing Activities (Tables)

9 Months Ended

Sep. 30, 2022

Receivables [Abstract]

Allowance for credit losses and total finance receivables

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

(Millions of dollars)	Three Months Ended September 30, 2022						Three Months Ended September 30, 2021
	Customer		Dealer		Total		Customer		Dealer		Total
Beginning balance	$	290	$	82	$	372	$	354	$	44	$	398
Write-offs	(30)		—		(30)		(91)		—		(91)
Recoveries	17		—		17		15		—		15
Provision for credit losses 1	(2)		(17)		(19)		17		38		55
Other	(5)		—		(5)		(3)		—		(3)
Ending balance	$	270	$	65	$	335	$	292	$	82	$	374
	Nine Months Ended September 30, 2022						Nine Months Ended September 30, 2021
Allowance for Credit Losses:	Customer		Dealer		Total		Customer		Dealer		Total
Beginning balance	$	251	$	82	$	333	$	431	$	44	$	475
Write-offs	(68)		—		(68)		(193)		—		(193)
Recoveries	47		—		47		39		—		39
Provision for credit losses 1	46		(17)		29		20		38		58
Other	(6)		—		(6)		(5)		—		(5)
Ending balance	$	270	$	65	$	335	$	292	$	82	$	374
Finance Receivables	$	19,363	$	1,737	$	21,100	$	19,967	$	1,931	$	21,898
1 Excludes provision for credit losses on unfunded commitments and other miscellaneous receivables.

Financing Receivable Credit Quality Indicators

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

(Millions of dollars)	September 30, 2022
	2022		2021		2020		2019		2018		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	3,151	$	3,632	$	1,765	$	811	$	289	$	64	$	233	$	9,945
31-60 days past due	18		25		19		13		6		2		4		87
61-90 days past due	5		9		4		2		1		1		2		24
91+ days past due	5		16		13		8		5		5		5		57
EAME
Current	873		1,014		511		309		179		81		—		2,967
31-60 days past due	6		12		5		4		—		—		—		27
61-90 days past due	2		4		5		1		1		—		—		13
91+ days past due	3		21		11		5		2		1		—		43
Asia/Pacific
Current	805		765		385		95		23		4		—		2,077
31-60 days past due	5		13		11		2		1		—		—		32
61-90 days past due	1		6		6		2		—		—		—		15
91+ days past due	1		8		6		6		1		—		—		22
Mining
Current	568		625		240		203		117		112		79		1,944
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		3		—		3
91+ days past due	—		—		1		—		3		1		—		5
Latin America
Current	584		443		176		86		24		14		—		1,327
31-60 days past due	5		9		5		2		12		—		—		33
61-90 days past due	4		4		2		1		—		—		—		11
91+ days past due	—		14		14		5		4		17		—		54
Caterpillar Power Finance
Current	40		91		145		75		30		170		118		669
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		8		—		8
Totals by Aging Category
Current	$	6,021	$	6,570	$	3,222	$	1,579	$	662	$	445	$	430	$	18,929
31-60 days past due	34		59		40		21		19		2		4		179
61-90 days past due	12		23		17		6		2		4		2		66
91+ days past due	9		59		45		24		15		32		5		189
Total Customer	$	6,076	$	6,711	$	3,324	$	1,630	$	698	$	483	$	441	$	19,363

(Millions of dollars)	December 31, 2021
	2021		2020		2019		2018		2017		Prior		Revolving Finance Receivables		Total Finance Receivables
North America
Current	$	4,792	$	2,596	$	1,426	$	630	$	182	$	32	$	182	$	9,840
31-60 days past due	27		32		20		12		4		1		5		101
61-90 days past due	7		8		5		3		1		1		5		30
91+ days past due	9		17		12		13		5		4		5		65
EAME
Current	1,499		836		577		352		140		26		—		3,430
31-60 days past due	5		4		3		1		1		—		—		14
61-90 days past due	3		3		3		1		—		—		—		10
91+ days past due	3		11		2		2		—		2		—		20
Asia/Pacific
Current	1,271		803		307		71		16		2		—		2,470
31-60 days past due	10		14		10		2		—		—		—		36
61-90 days past due	3		7		4		1		—		—		—		15
91+ days past due	2		10		10		3		—		—		—		25
Mining
Current	851		347		307		193		36		161		36		1,931
31-60 days past due	6		—		—		—		—		—		—		6
61-90 days past due	1		—		—		—		4		—		—		5
91+ days past due	—		1		8		9		3		1		—		22
Latin America
Current	617		299		160		70		17		18		—		1,181
31-60 days past due	4		7		3		3		1		—		—		18
61-90 days past due	3		3		1		1		—		—		—		8
91+ days past due	4		9		9		7		7		14		—		50
Caterpillar Power Finance
Current	117		145		97		70		180		104		101		814
31-60 days past due	—		—		—		—		—		—		—		—
61-90 days past due	—		—		—		—		—		—		—		—
91+ days past due	—		—		—		—		—		44		—		44
Totals by Aging Category
Current	$	9,147	$	5,026	$	2,874	$	1,386	$	571	$	343	$	319	$	19,666
31-60 days past due	52		57		36		18		6		1		5		175
61-90 days past due	17		21		13		6		5		1		5		68
91+ days past due	18		48		41		34		15		65		5		226
Total Customer	$	9,234	$	5,152	$	2,964	$	1,444	$	597	$	410	$	334	$	20,135

Investment in finance receivables on non-accrual status

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

	September 30, 2022						December 31, 2021
	Amortized Cost						Amortized Cost
(Millions of dollars)	Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing		Non-accrual With an Allowance		Non-accrual Without an Allowance		91+ Still Accruing
North America	$	54	$	5	$	10	$	47	$	9	$	12
EAME	42		—		4		18		1		2
Asia/Pacific	15		—		7		19		—		7
Mining	6		1		—		8		1		14
Latin America	57		—		—		52		4		1
Caterpillar Power Finance	9		11		—		40		11		—
Total	$	183	$	17	$	21	$	184	$	26	$	36

Finance receivables modified as TDRs

Cat Financial’s finance receivables in the Customer portfolio segment modified as TDRs were as follows:

(Millions of dollars)	Three Months Ended September 30, 2022				Three Months Ended September 30, 2021
	Pre-TDR Amortized Cost		Post-TDR Amortized Cost		Pre-TDR Amortized Cost		Post-TDR Amortized Cost
Customer
North America	$	3	$	3	$	1	$	1
EAME	—		—		1		1
Asia/Pacific	—		—		4		4
Mining	15		15		—		—
Latin America	—		—		4		4
Caterpillar Power Finance	11		11		7		3
Total	$	29	$	29	$	17	$	13
	Nine Months Ended September 30, 2022				Nine Months Ended September 30, 2021
	Pre-TDR Amortized Cost		Post-TDR Amortized Cost		Pre-TDR Amortized Cost		Post-TDR Amortized Cost
North America	$	4	$	4	$	5	$	5
EAME	1		1		1		1
Asia/Pacific	—		—		4		4
Mining	15		15		11		5
Latin America	—		—		10		10
Caterpillar Power Finance	20		19		23		19
Total	$	40	$	39	$	54	$	44

The Post-TDR amortized costs in the Customer portfolio segment with a payment default (defined as 91+ days past due) which had been modified within twelve months prior to the default date, were as follows:

(Millions of dollars)	Three Months Ended September 30				Nine Months Ended September 30
Customer	2022		2021		2022		2021
North America	$	—	$	—	$	—	$	1
Asia/Pacific	—		—		—		6
Mining	—		—		5		—
Latin America	—		—		—		15
Caterpillar Power Finance	—		—		—		5
Total	$	—	$	—	$	5	$	27

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Fair Value Disclosures (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Assets and liabilities measured on a recurring basis at fair value

Assets and liabilities measured on a recurring basis at fair value included in our Consolidated Statement of Financial Position as of September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022
(Millions of dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt securities
U.S. treasury bonds	$	10	$	—	$	—	$	—	$	10
Other U.S. and non-U.S. government bonds	—		49		—		—		49
Corporate debt securities
Corporate bonds and other debt securities	—		1,998		50		—		2,048
Asset-backed securities	—		180		—		—		180
Mortgage-backed debt securities
U.S. governmental agency	—		348		—		—		348
Residential	—		3		—		—		3
Commercial	—		129		—		—		129
Total debt securities	10		2,707		50		—		2,767
Equity securities
Large capitalization value	183		—		—		—		183
Smaller company growth	40		—		—		—		40
REIT	—		—		—		208		208
Total equity securities	223		—		—		208		431
Derivative financial instruments - assets
Foreign currency contracts - net	—		338		—		—		338
Total assets	$	233	$	3,045	$	50	$	208	$	3,536
Liabilities
Derivative financial instruments - liabilities
Interest rate contracts - net	$	—	$	208	$	—	$	—	$	208
Commodity contracts - net	—		34		—		—		34
Total liabilities	$	—	$	242	$	—	$	—	$	242

	December 31, 2021
(Millions of dollars)	Level 1		Level 2		Level 3		Measured at NAV		Total Assets / Liabilities, at Fair Value
Assets
Debt securities
Government debt securities
U.S. treasury bonds	$	10	$	—	$	—	$	—	$	10
Other U.S. and non-U.S. government bonds	—		61		—		—		61
Corporate debt securities
Corporate bonds and other debt securities	—		1,046		—		—		1,046
Asset-backed securities	—		176		—		—		176
Mortgage-backed debt securities
U.S. governmental agency	—		325		—		—		325
Residential	—		4		—		—		4
Commercial	—		99		—		—		99
Total debt securities	10		1,711		—		—		1,721
Equity securities
Large capitalization value	217		—		—		—		217
Smaller company growth	98		—		—		—		98
REIT	—		—		—		167		167
Total equity securities	315		—		—		167		482
Derivative financial instruments - assets
Foreign currency contracts - net	—		168		—		—		168
Interest rate contracts - net	—		23		—		—		23
Commodity contracts - net	—		21		—		—		21
Total Assets	$	325	$	1,923	$	—	$	167	$	2,415

Fair values of financial instruments

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

	September 30, 2022				December 31, 2021
(Millions of dollars)	Carrying  Amount		Fair  Value		Carrying  Amount		Fair  Value		Fair Value Levels	Reference
Assets
Finance receivables – net (excluding finance leases 1 )	$	13,931	$	13,356	$	13,837	$	13,836	3	Note 17
Wholesale inventory receivables – net (excluding finance leases 1)	768		724		773		753		3
Liabilities
Long-term debt (including amounts due within one year)
Machinery, Energy & Transportation	9,599		9,072		9,791		12,420		2
Financial Products	22,724		21,886		22,594		22,797		2

1    Represents finance leases and failed sale leasebacks of $7,083 million and $8,083 million at September 30, 2022 and December 31, 2021, respectively.

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Other income (expense) (Tables)

9 Months Ended

Sep. 30, 2022

Other Income and Expenses [Abstract]

Other income (expense)

	Three Months Ended September 30				Nine Months Ended September 30
(Millions of dollars)	2022		2021		2022		2021
Investment and interest income	$	52	$	20	$	98	$	64
Foreign exchange gains (losses) 1	134		47		405		110
License fee income	37		31		106		88
Net periodic pension and OPEB income (cost), excluding service cost	67		111		201		333
Gains (losses) on securities	—		50		(59)		92
Miscellaneous income (loss)	(48)		(34)		4		64
Total	$	242	$	225	$	755	$	751

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

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Restructuring Costs (Tables)

9 Months Ended

Sep. 30, 2022

Restructuring Charges [Abstract]

Restructuring and related costs

Restructuring costs for the three and nine months ended September 30, 2022 and 2021 were as follows:

(Millions of dollars)	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
Employee separations 1	$	39	$	17	$	62	$	79
Contract terminations 1	1		1		1		1
Long-lived asset impairments 1	(4)		8		1		12
Other 2	13		9		26		32
Total restructuring costs	$	49	$	35	$	90	$	124
1 Recognized in Other operating (income) expenses.
2 Represents costs related to our restructuring programs, primarily for accelerated depreciation, equipment relocation, inventory write-downs and project management, all of which are primarily included in Cost of goods sold.

Summary of separation activity

The following table summarizes the 2022 and 2021 employee separation activity:

(Millions of dollars)	Nine Months Ended September 30
	2022		2021
Liability balance, beginning of period	$	61	$	164
Increase in liability (separation charges)	62		79
Reduction in liability (payments)	(63)		(159)
Liability balance, end of period	$	60	$	84

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Sales and revenue contract information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
Trade receivables from dealers and end users	$ 6,736		$ 6,736		$ 7,267	$ 6,310
Long term trade receivables from dealers and end users	448		448		624	657
Contract liabilities	2,290		2,290		$ 1,557	$ 1,526
Revenue recognized from contract liability balance at beginning of period	124	$ 121	781	$ 795
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Unsatisfied performance obligations with an original contract duration greater than one year	$ 10,900		$ 10,900
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction
Expected period of performance satisfaction	12 months		12 months
Revenue, Remaining Performance Obligation, Percentage	50.00%		50.00%

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Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Stock-based compensation awards
Stock-based compensation expense, before tax (in dollars)	$ 55	$ 58	$ 162	$ 169
Risk-free interest rates, low end of range (as a percent)			1.03%	0.06%
Risk-free interest rates, high end of range (as a percent)			2.00%	1.41%
Rate of volatilities, Minimum			25.30%	29.20%
Rate of volatilities, Maximum			36.80%	45.80%
Assumptions used in determining the fair value of the stock-based awards
Weighted-average dividend yield (as a percent)			2.60%	2.60%
Weighted-average volatility (as a percent)			31.70%	32.90%
Rate of volatilities, Minimum			25.30%	29.20%
Rate of volatilities, Maximum			36.80%	45.80%
Risk-free interest rates, low end of range (as a percent)			1.03%	0.06%
Risk-free interest rates, high end of range (as a percent)			2.00%	1.41%
Weighted-average expected lives (in years)			8 years	8 years
Unrecognized compensation cost related to nonvested stock-based compensation awards (in dollars)	$ 173		$ 173
Term of amortization of unrecognized compensation cost over weighted-average remaining requisite service periods (in years)			1 year 9 months 18 days
Stock Options
Stock-based compensation awards
Shares Granted (in shares)			1,029,202	1,084,821
Weighted-Average Fair Value Per Share (in dollars per share)			$ 51.69	$ 56.30
Weighted-Average Grant Date Stock Price (in dollars per share)	$ 196.70	$ 219.76	196.70	219.76
RSUs
Stock-based compensation awards
Weighted-Average Grant Date Stock Price (in dollars per share)	196.70	219.76	$ 196.70	$ 219.76
Shares Granted (in shares)			484,025	448,311
Weighted-Average Fair Value Per Share (in dollars per share)			$ 196.70	$ 219.76
PRSUs
Stock-based compensation awards
Weighted-Average Grant Date Stock Price (in dollars per share)	$ 196.70	$ 219.76	$ 196.70	$ 219.76
Shares Granted (in shares)			258,900	266,894
Weighted-Average Fair Value Per Share (in dollars per share)			$ 196.70	$ 219.76

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Derivative Financial Instruments and Risk Management (Details)	9 Months Ended
	Sep. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Foreign currency cash flow hedges, maximum allowable period (in years)	5 years
Foreign currency cash flow hedges, maximum period (in months)	60 months
Commodity forward and option contracts, maximum period (in years)	5 years

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Derivative Financial instruments and Risk Management- Location and fair value (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Derivatives Fair Value
Assets	$ 913	$ 342
Liabilities	(817)	(130)
Designated Derivatives
Derivatives Fair Value
Assets	786	266
Liabilities	(696)	(79)
Designated Derivatives | Foreign exchange contracts
Derivatives Fair Value
Assets	692	228
Liabilities	(394)	(64)
Designated Derivatives | Interest rate contracts
Derivatives Fair Value
Assets	94	38
Liabilities	(302)	(15)
Undesignated Derivatives
Derivatives Fair Value
Assets	127	76
Liabilities	(121)	(51)
Undesignated Derivatives | Foreign exchange contracts
Derivatives Fair Value
Assets	118	46
Liabilities	(78)	(42)
Undesignated Derivatives | Commodity contracts
Derivatives Fair Value
Assets	9	30
Liabilities	$ (43)	$ (9)

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Derivative Financial instruments and Risk Management- Notional amounts (Details) - USD ($) $ in Billions	Sep. 30, 2022	Dec. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative, Notional Amount	$ 24.8	$ 18.9

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Derivative Financial instruments and Risk Management- Gain and Loss on Hedging instruments (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Derivative Instruments, Gain (Loss)
Amount of gains (losses) recognized in AOCI	$ 44	$ 45	$ 298	$ 141
Amount of gain (losses) reclassified from AOCI	(296)	(85)	(636)	(164)
Fair Value / Undesignated Hedges
Derivative Instruments, Gain (Loss)
Gains (Losses) recognized on the consolidated statement of results of operations	(49)	21	(17)	130
Fair Value / Undesignated Hedges | Foreign exchange contracts
Derivative Instruments, Gain (Loss)
Gains (Losses) recognized on the consolidated statement of results of operations	(2)	46	(32)	77
Fair Value / Undesignated Hedges | Interest rate contracts
Derivative Instruments, Gain (Loss)
Gains (Losses) recognized on the consolidated statement of results of operations	(5)	5	12	18
Fair Value / Undesignated Hedges | Commodity contracts
Derivative Instruments, Gain (Loss)
Gains (Losses) recognized on the consolidated statement of results of operations	(42)	(30)	3	35
Designated Derivatives | Cash Flow Hedges
Derivative Instruments, Gain (Loss)
Amount of gains (losses) recognized in AOCI	44	45	298	141
Amount of gain (losses) reclassified from AOCI	296	85	636	164
Designated Derivatives | Cash Flow Hedges | Foreign exchange contracts
Derivative Instruments, Gain (Loss)
Amount of gains (losses) recognized in AOCI	18	42	195	130
Amount of gain (losses) reclassified from AOCI	289	90	638	187
Designated Derivatives | Cash Flow Hedges | Interest rate contracts
Derivative Instruments, Gain (Loss)
Amount of gains (losses) recognized in AOCI	26	3	103	11
Amount of gain (losses) reclassified from AOCI	7	(5)	(2)	(23)
Designated Derivatives | Cash Flow Hedges | Commodity contracts
Derivative Instruments, Gain (Loss)
Amount of gains (losses) recognized in AOCI	0	0	0	0
Amount of gain (losses) reclassified from AOCI	$ 0	$ 0	$ 0	$ 0

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Derivative Financial Instruments and Risk Management- Fair value hedges (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Derivatives Fair Value
Carrying Value of the Hedged Liabilities	$ 3,796	$ 2,059
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities	(227)	3
Long-term debt due after one year
Derivatives Fair Value
Carrying Value of the Hedged Liabilities	3,796	1,304
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities	(227)	(2)
Long-term debt due within one year
Derivatives Fair Value
Carrying Value of the Hedged Liabilities	0	755
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities	$ 0	$ 5

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Derivative Financial instruments and Risk Management-Effect of net settlement provisions upon default or termination (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Assets
Gross Amount of Recognized Assets	$ 913	$ 342
Financial Instruments Not Offset- Assets	(282)	(114)
Cash collateral received	0	0
Net Amount of Assets	631	228
Liabilities
Gross Amount of Recognized Liabilities	(817)	(130)
Financial Instruments Not Offset-Liabilities	282	114
Cash collateral pledged	0	0
Net Amount of Liabilities	$ (535)	$ (16)

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Inventories (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 6,335	$ 5,528
Work-in-process	1,836	1,318
Finished goods	8,387	6,907
Supplies	302	285
Total inventories	$ 16,860	$ 14,038

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Intangible Assets and Goodwill (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Intangible assets
Weighted Amortizable Life (in years)			14 years		14 years
Finite-Lived Intangible Assets, Gross	$ 3,781		$ 3,781		$ 4,049
Finite-Lived Intangible Assets, Accumulated Amortization	(2,975)		(2,975)		(3,007)
Net	806		806		$ 1,042
Amortization expense	70	$ 75	213	$ 228
Remaining Three Months of 2022	70		70
2023	222		222
2024	163		163
2025	153		153
2026	85		85
Thereafter	113		$ 113
Customer Relationships
Intangible assets
Weighted Amortizable Life (in years)			16 years		15 years
Finite-Lived Intangible Assets, Gross	2,183		$ 2,183		$ 2,421
Finite-Lived Intangible Assets, Accumulated Amortization	(1,604)		(1,604)		(1,709)
Net	579		$ 579		$ 712
Intellectual Property
Intangible assets
Weighted Amortizable Life (in years)			12 years		12 years
Finite-Lived Intangible Assets, Gross	1,470		$ 1,470		$ 1,472
Finite-Lived Intangible Assets, Accumulated Amortization	(1,287)		(1,287)		(1,192)
Net	183		$ 183		$ 280
Other
Intangible assets
Weighted Amortizable Life (in years)			16 years		14 years
Finite-Lived Intangible Assets, Gross	128		$ 128		$ 156
Finite-Lived Intangible Assets, Accumulated Amortization	(84)		(84)		(106)
Net	$ 44		$ 44		$ 50

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Intangible Assets and Goodwill (Details 2) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Changes in carrying amount of goodwill by reportable segment:
Goodwill, beginning of period	$ 7,521
Impairments, beginning of period	(1,197)
Net goodwill, beginning of period	6,324
Goodwill Acquired	25
Goodwill impairment charge	0	$ 0
Other adjustments	(257)
Goodwill, end of period	7,289
Impairments, end of period	(1,197)
Net goodwill, end of period	6,092
Construction Industries
Changes in carrying amount of goodwill by reportable segment:
Goodwill, beginning of period	302
Impairments, beginning of period	(22)
Net goodwill, beginning of period	280
Goodwill Acquired	0
Other adjustments	(39)
Goodwill, end of period	263
Impairments, end of period	(22)
Net goodwill, end of period	241
Resource Industries
Changes in carrying amount of goodwill by reportable segment:
Goodwill, beginning of period	4,182
Impairments, beginning of period	(1,175)
Net goodwill, beginning of period	3,007
Goodwill Acquired	0
Other adjustments	(127)
Goodwill, end of period	4,055
Impairments, end of period	(1,175)
Net goodwill, end of period	2,880
Energy & Transportation
Changes in carrying amount of goodwill by reportable segment:
Goodwill, beginning of period	2,985
Goodwill Acquired	25
Other adjustments	(81)
Goodwill, end of period	2,929
All Other Operating Segments
Changes in carrying amount of goodwill by reportable segment:
Goodwill, beginning of period	52
Other adjustments	(10)
Goodwill, end of period	$ 42

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Investments in Debt and Equity Securities (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Schedule of Investments in Debt and Equity Securities
Cost basis	$ 2,928	$ 1,694
Unrealized pretax net gains (losses)	(161)	27
Fair Value	2,767	1,721
U.S. treasury bonds
Schedule of Investments in Debt and Equity Securities
Cost basis	10	10
Unrealized pretax net gains (losses)	0	0
Fair Value	10	10
Other U.S. and non-U.S. government bonds
Schedule of Investments in Debt and Equity Securities
Cost basis	51	61
Unrealized pretax net gains (losses)	(2)	0
Fair Value	49	61
Corporate bonds
Schedule of Investments in Debt and Equity Securities
Cost basis	2,156	1,027
Unrealized pretax net gains (losses)	(108)	19
Fair Value	2,048	1,046
Asset-backed securities
Schedule of Investments in Debt and Equity Securities
Cost basis	185	175
Unrealized pretax net gains (losses)	(5)	1
Fair Value	180	176
U.S. governmental agency mortgage-backed securities
Schedule of Investments in Debt and Equity Securities
Cost basis	384	319
Unrealized pretax net gains (losses)	(36)	6
Fair Value	348	325
Residential
Schedule of Investments in Debt and Equity Securities
Cost basis	3	4
Unrealized pretax net gains (losses)	0	0
Fair Value	3	4
Commercial
Schedule of Investments in Debt and Equity Securities
Cost basis	139	98
Unrealized pretax net gains (losses)	(10)	1
Fair Value	$ 129	$ 99

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Investments in Debt and Equity Securities (Details 2) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Available-for-sale Securities, Continuous Unrealized Loss Position
Less than 12 months - Fair Value	$ 2,288	$ 359
Less than 12 months - Unrealized losses	114	5
12 months or more - Fair Value	360	55
12 months or more - Unrealized losses	47	1
Total - Fair Value	2,648	414
Total - Unrealized losses	161	6
Other U.S. and non-U.S. government bonds
Available-for-sale Securities, Continuous Unrealized Loss Position
Less than 12 months - Fair Value	31
Less than 12 months - Unrealized losses	1
12 months or more - Fair Value	15
12 months or more - Unrealized losses	1
Total - Fair Value	46
Total - Unrealized losses	2
Corporate bonds
Available-for-sale Securities, Continuous Unrealized Loss Position
Less than 12 months - Fair Value	1,774	270
Less than 12 months - Unrealized losses	75	4
12 months or more - Fair Value	218	33
12 months or more - Unrealized losses	33	1
Total - Fair Value	1,992	303
Total - Unrealized losses	108	5
Asset-backed securities
Available-for-sale Securities, Continuous Unrealized Loss Position
Less than 12 months - Fair Value	102
Less than 12 months - Unrealized losses	4
12 months or more - Fair Value	35
12 months or more - Unrealized losses	1
Total - Fair Value	137
Total - Unrealized losses	5
U.S. governmental agency mortgage-backed securities
Available-for-sale Securities, Continuous Unrealized Loss Position
Less than 12 months - Fair Value	293	89
Less than 12 months - Unrealized losses	27	1
12 months or more - Fair Value	51	22
12 months or more - Unrealized losses	9	0
Total - Fair Value	344	111
Total - Unrealized losses	36	$ 1
Commercial
Available-for-sale Securities, Continuous Unrealized Loss Position
Less than 12 months - Fair Value	88
Less than 12 months - Unrealized losses	7
12 months or more - Fair Value	41
12 months or more - Unrealized losses	3
Total - Fair Value	129
Total - Unrealized losses	$ 10

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Investments in Debt and Equity Securities (Details 3) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Schedule of Investments in Debt and Equity Securities
Due in one year or less, Cost Basis	$ 696		$ 696
Due in one year or less, Fair Value	687		687
Due after one year through five years, Cost Basis	1,354		1,354
Due after one year through five years, Fair Value	1,277		1,277
Due after five through ten years, Cost Basis	282		282
Due after five years through ten years, Fair Value	256		256
Due after ten years, Cost Basis	70		70
Due after ten years, Fair Value	67		67
Debt Securities, Available-for-sale, Amortized Cost	2,928		2,928		$ 1,694
Debt securities, Available-for-sale, Fair value	2,767		2,767		1,721
Available-for-sale Securities, Proceeds, Gains and Losses
Proceeds from the sale of available-for-sale securities	204	$ 97	474	$ 322
Gross gains from the sale of available-for-sale securities	0	1	1	3
Gross losses from the sale of available-for-sale securities	0	0	1	0
Schedule of Held-to-maturity Securities
Unrealized gain (loss) on equity securities	(12)	$ 46	(97)	$ 65
Bank Time Deposits
Schedule of Held-to-maturity Securities
Time deposit	0		0		964
U.S. governmental agency mortgage-backed securities
Schedule of Investments in Debt and Equity Securities
Debt Securities, Available-for-sale, Amortized Cost	384		384		319
Debt securities, Available-for-sale, Fair value	348		348		325
Residential
Schedule of Investments in Debt and Equity Securities
Debt Securities, Available-for-sale, Amortized Cost	3		3		4
Debt securities, Available-for-sale, Fair value	3		3		4
Commercial
Schedule of Investments in Debt and Equity Securities
Debt Securities, Available-for-sale, Amortized Cost	139		139		98
Debt securities, Available-for-sale, Fair value	$ 129		$ 129		$ 99

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Postretirement Benefits (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Pension and other postretirement benefit contributions
Expected full year contributions to pension and other postretirement benefit plans during the year	$ 357		$ 357
Pension and Other Postretirement Benefits
Pension and other postretirement benefit contributions
Contributions to pension and other postretirement benefit plans	44		299
Other Postretirement Benefits Plan
Components of net periodic benefit cost:
Service cost	24	$ 25	74	$ 75
Interest cost	20	16	60	48
Expected return on plan assets	(3)	(1)	(9)	(4)
Amortization of prior service cost / (credit)	(1)	(11)	(4)	(31)
Net periodic benefit cost (benefit)	40	29	121	88
UNITED STATES
Components of net periodic benefit cost:
Service cost	0	0	0	0
Interest cost	100	82	301	247
Expected return on plan assets	(167)	(180)	(502)	(538)
Amortization of prior service cost / (credit)	0	0	0	0
Net periodic benefit cost (benefit)	(67)	(98)	(201)	(291)
Foreign Plan
Components of net periodic benefit cost:
Service cost	15	15	40	44
Interest cost	17	16	53	43
Expected return on plan assets	(33)	(33)	(100)	(98)
Amortization of prior service cost / (credit)	0	0	0	0
Net periodic benefit cost (benefit)	$ (1)	$ (2)	$ (7)	$ (11)

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Postretirement Benefits (Details 2) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Defined Contribution Plan
Costs related to defined contribution plans	$ 116	$ 110	$ 321	$ 404
U.S. Plans
Defined Contribution Plan
Costs related to defined contribution plans	87	81	236	321
Non-U.S. Plans
Defined Contribution Plan
Costs related to defined contribution plans	$ 29	$ 29	$ 85	$ 83

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Leases Lease revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Leases [Abstract]
Finance lease revenue	$ 105	$ 120	$ 326	$ 369
Operating lease revenue	270	275	819	850
Total	$ 375	$ 395	$ 1,145	$ 1,219
Financial Products
Leases [Abstract]
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration]	Sales and revenues	Sales and revenues	Sales and revenues	Sales and revenues
Lessor, Lease, Description
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration]	Sales and revenues	Sales and revenues	Sales and revenues	Sales and revenues

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Guarantees and Product Warranty (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Related liability	$ 3	$ 5
Guarantor Obligations
Guarantees, maximum potential amount of future payments	438	1,221
SPC assets in consolidated statement	80,907	82,793
SPC liabilities in consolidated statement	65,285	66,277
Caterpillar dealer performance guarantees
Guarantor Obligations
Guarantees, maximum potential amount of future payments	137	747
Supplier consortium performance guarantees
Guarantor Obligations
Guarantees, maximum potential amount of future payments	17	242
Other guarantees
Guarantor Obligations
Guarantees, maximum potential amount of future payments	284	232
Variable Interest Entity, Primary Beneficiary
Guarantor Obligations
SPC assets in consolidated statement	1,090	888
SPC liabilities in consolidated statement	$ 1,090	$ 888

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Guarantees and Product Warranty (Details 2) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Change in product warranty liability balances
Warranty liability, beginning balance	$ 1,689	$ 1,612
Reduction in liability (payments)	(589)	(638)
Increase in liability (new warranties)	562	716
Warranty liability, ending balance	$ 1,662	$ 1,690

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Profit Per Share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended				9 Months Ended
	Sep. 30, 2022		Sep. 30, 2021		Sep. 30, 2022		Sep. 30, 2021		May 12, 2022	Jul. 01, 2018
Earnings Per Share Reconciliation [Abstract]
Profit for the period (A) (in dollars)	$ 2,041	[1]	$ 1,426	[1]	$ 5,251	[2]	$ 4,369	[2]
Determination of shares (in millions)
Weighted-average number of common shares outstanding (B) (in shares)	525,000,000.0		544,000,000.0		530,100,000		545,800,000
Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price (in shares)	2,600,000		3,600,000		3,100,000		4,400,000
Average common shares outstanding for fully diluted computation (C) (in shares)	527,600,000	[3]	547,600,000	[3]	533,200,000	[4]	550,200,000	[4]
Assuming no dilution (A/B) (in dollars per share)	$ 3.89		$ 2.62		$ 9.91		$ 8.00
Assuming full dilution (A/C) (in dollars per share)	$ 3.87	[3]	$ 2.60	[3]	$ 9.85	[4]	$ 7.94	[4]
Common Stock, Shares, Outstanding	520,400,000		540,900,000		520,400,000		540,900,000
Common shares under SARs and stock options not included in the computation of diluted earnings per share (in shares)	2,100,000		1,100,000		2,100,000		1,100,000
Stock repurchase
Common shares repurchased (in shares)	7,575,322		6,610,438		17,007,819		7,772,393
Cost of repurchase	$ 1,385	[1]	$ 1,371	[5]	$ 3,309	[6]	$ 1,622	[6]
2018 Authorization Program
Stock repurchase
Stock repurchase program, authorized amount										$ 10,000
Stock repurchase program, remaining authorized repurchase amount	70				70
Stock Repurchase
Stock repurchase program, remaining authorized repurchase amount	70				70
Stock repurchase program, authorized amount										$ 10,000
2022 Authorization Program
Stock repurchase
Stock repurchase program, authorized amount									$ 15,000
Stock repurchase program, remaining authorized repurchase amount	13,700				13,700
Stock Repurchase
Stock repurchase program, remaining authorized repurchase amount	$ 13,700				$ 13,700
Stock repurchase program, authorized amount									$ 15,000

[1] Profit attributable to common shareholders.

[2] Profit attributable to common shareholders.

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

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

[5] 1 See Note 12 for additional information.

[6] 2 See Note 12 for additional information.

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Accumulated other comprehensive income (loss) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Foreign currency translation
Beginning balance	$ (2,282)	$ (1,158)	$ (1,508)	$ (910)
Gains (losses) on foreign currency translation	(592)	(230)	(1,328)	(461)
Less: Tax provision /(benefit)	26	12	64	29
Net gains (losses) on foreign currency translation	(618)	(242)	(1,392)	(490)
(Gains) losses reclassified to earnings	0	0	0	0
Less: Tax provision /(benefit)	0	0	0	0
Net (gains) losses reclassified to earnings	0	0	0	0
Other comprehensive income (loss), net of tax	(618)	(242)	(1,392)	(490)
Ending balance	(2,900)	(1,400)	(2,900)	(1,400)
Pension and other postretirement benefits:
Beginning balance	(64)	(47)	(62)	(32)
Current year prior service credit (cost)	0	0	0	0
Pension and other postretirement benefits, Current year prior service credit (cost), tax (provision)/benefit	0	0	0	0
Net current year prior service credit (cost)	0	0	0	0
Amortization of prior service credit (cost)	(1)	(11)	(4)	(31)
Less: Tax provision /(benefit)	0	(3)	(1)	(8)
Net amortization of prior service (credit) cost	(1)	(8)	(3)	(23)
Pension and other post retirement benefits	(1)	(8)	(3)	(23)
Ending balance	(65)	(55)	(65)	(55)
Derivative financial instruments:
Beginning balance	(66)	12	(3)	0
Amount of gains (losses) recognized in AOCI	44	45	298	141
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, Tax	35	3	71	22
Gains (losses) deferred, net of tax	9	42	227	119
Amount of gain (losses) reclassified from AOCI	(296)	(85)	(636)	(164)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax	(96)	(12)	(155)	(26)
Net (gains) losses reclassified to earnings	(200)	(73)	(481)	(138)
Other comprehensive income (loss), net of tax	(191)	(31)	(254)	(19)
Ending balance	(257)	(19)	(257)	(19)
Available-for-sale securities:
Beginning balance	(87)	39	20	54
Gains (losses) deferred	(55)	(4)	(188)	(22)
Less: Tax provision /(benefit)	(11)	0	(37)	(4)
Net gains (losses) deferred	(44)	(4)	(151)	(18)
(Gains) losses reclassified to earnings	0	(1)	0	(3)
Available-for-sale securities, (Gains) losses reclassified to earnings, tax (provision)/benefit	0	0	0	(1)
Net (gains) losses reclassified to earnings	0	(1)	0	(2)
Other comprehensive income (loss), net of tax	(44)	(5)	(151)	(20)
Ending balance	(131)	34	(131)	34
Accumulated other comprehensive income (loss)	$ (3,353)	$ (1,440)	$ (3,353)	$ (1,440)	$ (1,553)

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Environmental and legal matters Environmental and legal matters (Details)	Mar. 03, 2017
IRS investigation
Loss Contingencies
Number of facilities served search and seizure warrants	3

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Income Taxes (Details) - USD ($) $ in Millions	9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Estimated annual effective tax rate (as a percent)	23.00%	25.00%	23.00%
Prior year tax adjustment expense (benefit)	$ (49)	$ (36)
Tax benefit for settlement of stock-based compensation awards	18	$ 61
Internal Revenue Service (IRS)
Income Tax Examination
Income Tax Examination, Amount Assessed by Taxing Authorities	490
Income Tax Examination, Interest Accrued	250
Tax adjustment expense (benefit), Tax settlement	$ (41)
Minimum | Internal Revenue Service (IRS)
Income Tax Examination
Income Tax Examination, Year under Examination	2007
Maximum | Internal Revenue Service (IRS)
Income Tax Examination
Income Tax Examination, Year under Examination	2016

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Segment Information (Details)	9 Months Ended
	Sep. 30, 2022 segments group_presidents
Segment Reporting Information
Number of group presidents | group_presidents	4
Number of operating segments	5
Useful life to amortize goodwill for segment assets	20 years
Reportable Segments
Segment Reporting Information
Number of operating segments led by Group Presidents	3
Number of operating segments led by Group President responsible for corporate services	1
Number of reportable segments	4
All Other operating segments
Segment Reporting Information
Number of group presidents | group_presidents	1
Number of smaller operating segments led by Group President | group_presidents	1

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Sales and revenues by geographic region (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Sales and revenues by geographic region
Sales and revenues	$ 14,994	$ 12,397	$ 42,830	$ 37,173
Reportable Segments
Sales and revenues by geographic region
Sales and revenues	16,368	13,460	46,631	40,317
Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	15,065	12,455	43,049	37,380
Reportable Segments | Segment Reconciling Items
Sales and revenues by geographic region
Sales and revenues	1,303	1,005	3,582	2,937
Corporate Items and Eliminations
Sales and revenues by geographic region
Sales and revenues	(1,477)	(1,182)	(4,140)	(3,521)
Corporate Items and Eliminations | Corporate, Non-Segment
Sales and revenues by geographic region
Sales and revenues	(106)	(93)	(331)	(314)
Corporate Items and Eliminations | Intersegment Eliminations
Sales and revenues by geographic region
Sales and revenues	(1,371)	(1,089)	(3,809)	(3,207)
North America
Sales and revenues by geographic region
Sales and revenues	7,135	5,455	20,043	16,165
North America | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	7,172	5,493	20,166	16,311
North America | Corporate Items and Eliminations | Corporate, Non-Segment
Sales and revenues by geographic region
Sales and revenues	(53)	(56)	(175)	(188)
Latin America
Sales and revenues by geographic region
Sales and revenues	1,809	1,329	4,749	3,654
Latin America | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	1,829	1,342	4,808	3,689
Latin America | Corporate Items and Eliminations | Corporate, Non-Segment
Sales and revenues by geographic region
Sales and revenues	(20)	(13)	(59)	(36)
EAME
Sales and revenues by geographic region
Sales and revenues	3,145	2,939	9,288	8,784
EAME | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	3,153	2,945	9,307	8,801
EAME | Corporate Items and Eliminations | Corporate, Non-Segment
Sales and revenues by geographic region
Sales and revenues	(12)	(9)	(33)	(27)
Asia/Pacific
Sales and revenues by geographic region
Sales and revenues	2,905	2,674	8,750	8,570
Asia/Pacific | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	2,911	2,675	8,768	8,579
Asia/Pacific | Corporate Items and Eliminations | Corporate, Non-Segment
Sales and revenues by geographic region
Sales and revenues	(21)	(15)	(64)	(63)
Construction Industries | Reportable Segments
Sales and revenues by geographic region
Sales and revenues	6,276	5,255	18,424	16,370
Construction Industries | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	6,236	5,261	18,313	16,305
Construction Industries | Reportable Segments | Segment Reconciling Items
Sales and revenues by geographic region
Sales and revenues	40	(6)	111	65
Construction Industries | North America | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	3,106	2,417	8,832	7,041
Construction Industries | Latin America | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	799	528	2,061	1,350
Construction Industries | EAME | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	1,247	1,240	3,726	3,612
Construction Industries | Asia/Pacific | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	1,084	1,076	3,694	4,302
Resource Industries | Reportable Segments
Sales and revenues by geographic region
Sales and revenues	3,087	2,366	8,878	7,091
Resource Industries | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	3,013	2,291	8,667	6,859
Resource Industries | Reportable Segments | Segment Reconciling Items
Sales and revenues by geographic region
Sales and revenues	74	75	211	232
Resource Industries | North America | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	1,122	674	3,167	2,130
Resource Industries | Latin America | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	472	417	1,337	1,309
Resource Industries | EAME | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	526	456	1,609	1,455
Resource Industries | Asia/Pacific | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	893	744	2,554	1,965
Energy & Transportation
Sales and revenues by geographic region
Sales and revenues	4,997	4,141	13,669	11,919
Energy & Transportation | Reportable Segments
Sales and revenues by geographic region
Sales and revenues	6,186	5,077	16,929	14,559
Energy & Transportation | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	4,997	4,141	13,669	11,919
Energy & Transportation | Reportable Segments | Segment Reconciling Items
Sales and revenues by geographic region
Sales and revenues	1,189	936	3,260	2,640
Energy & Transportation | North America | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	2,422	1,924	6,637	5,698
Energy & Transportation | Latin America | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	468	329	1,160	835
Energy & Transportation | EAME | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	1,280	1,144	3,679	3,433
Energy & Transportation | Asia/Pacific | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	827	744	2,193	1,953
Financial Products Segment
Sales and revenues by geographic region
Revenue from Related Parties	124	87	332	263
Financial Products Segment | Reportable Segments
Sales and revenues by geographic region
Sales and revenues	819	762	2,400	2,297
Financial Products Segment | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	819	762	2,400	2,297
Financial Products Segment | Reportable Segments | Segment Reconciling Items
Sales and revenues by geographic region
Sales and revenues	0	0	0	0
Financial Products Segment | North America | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	522	478	1,530	1,442
Financial Products Segment | Latin America | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	90	68	250	195
Financial Products Segment | EAME | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	100	105	293	301
Financial Products Segment | Asia/Pacific | Reportable Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	107	111	327	359
All Other Operating Segments
Sales and revenues by geographic region
Sales and revenues	103	119	339	377
All Other Operating Segments | Operating Segments
Sales and revenues by geographic region
Sales and revenues	35	35	112	107
All Other Operating Segments | Segment Reconciling Items
Sales and revenues by geographic region
Sales and revenues	68	84	227	270
All Other Operating Segments | North America | Operating Segments
Sales and revenues by geographic region
Sales and revenues	16	18	52	42
All Other Operating Segments | Latin America | Operating Segments
Sales and revenues by geographic region
Sales and revenues	0	0	0	1
All Other Operating Segments | EAME | Operating Segments
Sales and revenues by geographic region
Sales and revenues	4	3	14	10
All Other Operating Segments | Asia/Pacific | Operating Segments
Sales and revenues by geographic region
Sales and revenues	$ 15	$ 14	$ 46	$ 54

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Energy & Transportation sales (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Energy and transportation sales
Sales and revenues	$ 14,994	$ 12,397	$ 42,830	$ 37,173
Energy & Transportation
Energy and transportation sales
Sales and revenues	4,997	4,141	13,669	11,919
Energy & Transportation | Oil And Gas Customer
Energy and transportation sales
Sales and revenues	1,323	1,088	3,503	3,140
Energy & Transportation | Power generation
Energy and transportation sales
Sales and revenues	1,320	1,010	3,518	3,025
Energy & Transportation | Industrial
Energy and transportation sales
Sales and revenues	1,158	948	3,295	2,660
Energy & Transportation | Transportation
Energy and transportation sales
Sales and revenues	$ 1,196	$ 1,095	$ 3,353	$ 3,094

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Reconciliations of consolidated profit before taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	$ 2,558	$ 1,775	$ 6,653	$ 5,642
Operating Segments | Reportable Segments
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	2,870	2,025	7,284	6,657
Operating Segments | Reportable Segments | Construction Industries
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	1,209	866	3,255	2,937
Operating Segments | Reportable Segments | Resource Industries
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	506	280	1,222	941
Operating Segments | Reportable Segments | Energy & Transportation
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	935	706	2,132	2,119
Operating Segments | Reportable Segments | Financial Products Segment
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	220	173	675	660
Operating Segments | All Other operating segments
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	8	5	42	(2)
Intersegment Eliminations | Cost Centers
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	(37)	19	1	51
Intersegment Eliminations | Corporate Costs
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	(168)	(189)	(670)	(576)
Intersegment Eliminations | Timing
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	(84)	(40)	(129)	(230)
Intersegment Eliminations | Restructuring Costs
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	(49)	(35)	(90)	(124)
Intersegment Eliminations | Inventory/cost of sales
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	138	73	407	80
Intersegment Eliminations | Postretirement Benefits Expense
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	82	116	293	270
Intersegment Eliminations | Stock-Based Compensation Expense
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	(55)	(58)	(162)	(169)
Intersegment Eliminations | Financing Costs
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	(75)	(103)	(269)	(342)
Intersegment Eliminations | Currency
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	53	19	315	255
Intersegment Eliminations | Other Income Expense Methodology Differences
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	(109)	(80)	(287)	(201)
Intersegment Eliminations | Other
Reconciliation of Consolidated profit (loss) before taxes
Reclassifications before tax	$ (16)	$ 23	$ (82)	$ (27)

XML

Reconciliation of assets (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Reconciliation of Assets
Assets	$ 80,907	$ 82,793
Intersegment Eliminations
Reconciliation of Assets
Inventory Methodology Difference	(2,833)	(2,656)
Intersegment Eliminations | Cash and Short Term Investments
Reconciliation of Assets
Assets	5,403	8,428
Intersegment Eliminations | Deferred Income Taxes
Reconciliation of Assets
Assets	2,112	1,735
Intersegment Eliminations | Goodwill and Intangible Assets
Reconciliation of Assets
Assets	4,681	4,859
Intersegment Eliminations | Property Plant and Equipment-Net and Other Assets
Reconciliation of Assets
Assets	3,714	4,056
Intersegment Eliminations | Liabilities Included in Segment Assets
Reconciliation of Assets
Assets	11,973	10,777
Intersegment Eliminations | Other
Reconciliation of Assets
Assets	(528)	(706)
Operating Segments | Reportable Segments
Reconciliation of Assets
Assets	54,656	54,622
Operating Segments | Reportable Segments | Construction Industries
Reconciliation of Assets
Assets	5,439	4,547
Operating Segments | Reportable Segments | Resource Industries
Reconciliation of Assets
Assets	5,841	5,962
Operating Segments | Reportable Segments | Energy & Transportation
Reconciliation of Assets
Assets	9,394	9,253
Operating Segments | Reportable Segments | Financial Products Segment
Reconciliation of Assets
Assets	33,982	34,860
Operating Segments | All Other operating segments
Reconciliation of Assets
Assets	$ 1,729	$ 1,678

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Reconciliations of depreciation and amortization (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Reconciliation of Depreciation and amortization
Depreciation and amortization	$ 551	$ 593	$ 1,661	$ 1,766
Operating Segments | Reportable Segments
Reconciliation of Depreciation and amortization
Depreciation and amortization	468	500	1,408	1,489
Operating Segments | Reportable Segments | Construction Industries
Reconciliation of Depreciation and amortization
Depreciation and amortization	57	60	172	178
Operating Segments | Reportable Segments | Resource Industries
Reconciliation of Depreciation and amortization
Depreciation and amortization	92	101	275	301
Operating Segments | Reportable Segments | Energy & Transportation
Reconciliation of Depreciation and amortization
Depreciation and amortization	136	144	405	428
Operating Segments | Reportable Segments | Financial Products Segment
Reconciliation of Depreciation and amortization
Depreciation and amortization	183	195	556	582
Intersegment Eliminations | All Other operating segments
Reconciliation of Depreciation and amortization
Depreciation and amortization	56	59	172	181
Intersegment Eliminations | Cost Centers
Reconciliation of Depreciation and amortization
Depreciation and amortization	20	24	63	74
Intersegment Eliminations | Other
Reconciliation of Depreciation and amortization
Depreciation and amortization	$ 7	$ 10	$ 18	$ 22

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Reconciliations of capital expenditures (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Reconciliation of Capital expenditures
Segment Reporting Information, Expenditure for Additions Long-Lived Assets	$ 617	$ 587	$ 1,891	$ 1,687
Operating Segments | Reportable Segments
Reconciliation of Capital expenditures
Segment Reporting Information, Expenditure for Additions Long-Lived Assets	601	526	1,592	1,460
Operating Segments | Reportable Segments | Construction Industries
Reconciliation of Capital expenditures
Segment Reporting Information, Expenditure for Additions Long-Lived Assets	74	56	149	120
Operating Segments | Reportable Segments | Resource Industries
Reconciliation of Capital expenditures
Segment Reporting Information, Expenditure for Additions Long-Lived Assets	65	44	129	101
Operating Segments | Reportable Segments | Energy & Transportation
Reconciliation of Capital expenditures
Segment Reporting Information, Expenditure for Additions Long-Lived Assets	167	115	444	339
Operating Segments | Reportable Segments | Financial Products Segment
Reconciliation of Capital expenditures
Segment Reporting Information, Expenditure for Additions Long-Lived Assets	295	311	870	900
Intersegment Eliminations | All Other operating segments
Reconciliation of Capital expenditures
Segment Reporting Information, Expenditure for Additions Long-Lived Assets	54	59	116	106
Intersegment Eliminations | Cost Centers
Reconciliation of Capital expenditures
Segment Reporting Information, Expenditure for Additions Long-Lived Assets	16	15	41	34
Intersegment Eliminations | Timing
Reconciliation of Capital expenditures
Segment Reporting Information, Expenditure for Additions Long-Lived Assets	(35)	(13)	173	96
Intersegment Eliminations | Other
Reconciliation of Capital expenditures
Segment Reporting Information, Expenditure for Additions Long-Lived Assets	$ (19)	$ 0	$ (31)	$ (9)

XML

Cat Financial Financing Activities (Details-Allowance for credit losses) - Finance Receivables - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Allowance for Credit Loss Activity
Beginning balance	$ 372	$ 398	$ 333	$ 475
Write-offs	(30)	(91)	(68)	(193)
Recoveries	17	15	47	39
Provision for credit losses	(19)	55	29	58
Other	(5)	(3)	(6)	(5)
Ending balance	335	374	335	374
Total Finance Receivables	21,100	21,898	21,100	21,898
Customer
Allowance for Credit Loss Activity
Beginning balance	290	354	251	431
Write-offs	(30)	(91)	(68)	(193)
Recoveries	17	15	47	39
Provision for credit losses	(2)	17	46	20
Other	(5)	(3)	(6)	(5)
Ending balance	270	292	270	292
Total Finance Receivables	19,363	19,967	19,363	19,967
Dealer
Allowance for Credit Loss Activity
Beginning balance	82	44	82	44
Write-offs	0	0	0	0
Recoveries	0	0	0	0
Provision for credit losses	(17)	38	(17)	38
Other	0	0	0	0
Ending balance	65	82	65	82
Total Finance Receivables	$ 1,737	$ 1,931	$ 1,737	$ 1,931

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Cat Financial Financing Activities Cat Financing Activities (Details Credit quality- Customer Receivables Aging by origination year -Vintage disclosure) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Receivables [Abstract]
Period after which Unpaid Installments are Considered as Past Due	30 days
Dealer | Latin America | Financing Receivables, Equal to or Greater than 30 Days Past Due
Financing Receivable, Credit Quality Indicator
2018 and 2017, respectively		$ 78
Prior	$ 58
Finance Receivables | Customer
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	6,076	9,234
2021 and 2020, respectively	6,711	5,152
2020 and 2019, respectively	3,324	2,964
2019 and 2018, respectively	1,630	1,444
2018 and 2017, respectively	698	597
Prior	483	410
Revolving Finance Receivables	441	334
Total Finance Receivables	19,363	20,135
Finance Receivables | Customer | Current
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	6,021	9,147
2021 and 2020, respectively	6,570	5,026
2020 and 2019, respectively	3,222	2,874
2019 and 2018, respectively	1,579	1,386
2018 and 2017, respectively	662	571
Prior	445	343
Revolving Finance Receivables	430	319
Total Finance Receivables	18,929	19,666
Finance Receivables | Customer | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	34	52
2021 and 2020, respectively	59	57
2020 and 2019, respectively	40	36
2019 and 2018, respectively	21	18
2018 and 2017, respectively	19	6
Prior	2	1
Revolving Finance Receivables	4	5
Total Finance Receivables	179	175
Finance Receivables | Customer | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	12	17
2021 and 2020, respectively	23	21
2020 and 2019, respectively	17	13
2019 and 2018, respectively	6	6
2018 and 2017, respectively	2	5
Prior	4	1
Revolving Finance Receivables	2	5
Total Finance Receivables	66	68
Finance Receivables | Customer | 91+ days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	9	18
2021 and 2020, respectively	59	48
2020 and 2019, respectively	45	41
2019 and 2018, respectively	24	34
2018 and 2017, respectively	15	15
Prior	32	65
Revolving Finance Receivables	5	5
Total Finance Receivables	189	226
Finance Receivables | Customer | North America | Current
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	3,151	4,792
2021 and 2020, respectively	3,632	2,596
2020 and 2019, respectively	1,765	1,426
2019 and 2018, respectively	811	630
2018 and 2017, respectively	289	182
Prior	64	32
Revolving Finance Receivables	233	182
Total Finance Receivables	9,945	9,840
Finance Receivables | Customer | North America | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	18	27
2021 and 2020, respectively	25	32
2020 and 2019, respectively	19	20
2019 and 2018, respectively	13	12
2018 and 2017, respectively	6	4
Prior	2	1
Revolving Finance Receivables	4	5
Total Finance Receivables	87	101
Finance Receivables | Customer | North America | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	5	7
2021 and 2020, respectively	9	8
2020 and 2019, respectively	4	5
2019 and 2018, respectively	2	3
2018 and 2017, respectively	1	1
Prior	1	1
Revolving Finance Receivables	2	5
Total Finance Receivables	24	30
Finance Receivables | Customer | North America | 91+ days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	5	9
2021 and 2020, respectively	16	17
2020 and 2019, respectively	13	12
2019 and 2018, respectively	8	13
2018 and 2017, respectively	5	5
Prior	5	4
Revolving Finance Receivables	5	5
Total Finance Receivables	57	65
Finance Receivables | Customer | EAME | Current
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	873	1,499
2021 and 2020, respectively	1,014	836
2020 and 2019, respectively	511	577
2019 and 2018, respectively	309	352
2018 and 2017, respectively	179	140
Prior	81	26
Revolving Finance Receivables	0	0
Total Finance Receivables	2,967	3,430
Finance Receivables | Customer | EAME | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	6	5
2021 and 2020, respectively	12	4
2020 and 2019, respectively	5	3
2019 and 2018, respectively	4	1
2018 and 2017, respectively	0	1
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	27	14
Finance Receivables | Customer | EAME | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	2	3
2021 and 2020, respectively	4	3
2020 and 2019, respectively	5	3
2019 and 2018, respectively	1	1
2018 and 2017, respectively	1	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	13	10
Finance Receivables | Customer | EAME | 91+ days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	3	3
2021 and 2020, respectively	21	11
2020 and 2019, respectively	11	2
2019 and 2018, respectively	5	2
2018 and 2017, respectively	2	0
Prior	1	2
Revolving Finance Receivables	0	0
Total Finance Receivables	43	20
Finance Receivables | Customer | Asia/Pacific | Current
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	805	1,271
2021 and 2020, respectively	765	803
2020 and 2019, respectively	385	307
2019 and 2018, respectively	95	71
2018 and 2017, respectively	23	16
Prior	4	2
Revolving Finance Receivables	0	0
Total Finance Receivables	2,077	2,470
Finance Receivables | Customer | Asia/Pacific | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	5	10
2021 and 2020, respectively	13	14
2020 and 2019, respectively	11	10
2019 and 2018, respectively	2	2
2018 and 2017, respectively	1	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	32	36
Finance Receivables | Customer | Asia/Pacific | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	1	3
2021 and 2020, respectively	6	7
2020 and 2019, respectively	6	4
2019 and 2018, respectively	2	1
2018 and 2017, respectively	0	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	15	15
Finance Receivables | Customer | Asia/Pacific | 91+ days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	1	2
2021 and 2020, respectively	8	10
2020 and 2019, respectively	6	10
2019 and 2018, respectively	6	3
2018 and 2017, respectively	1	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	22	25
Finance Receivables | Customer | Mining | Current
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	568	851
2021 and 2020, respectively	625	347
2020 and 2019, respectively	240	307
2019 and 2018, respectively	203	193
2018 and 2017, respectively	117	36
Prior	112	161
Revolving Finance Receivables	79	36
Total Finance Receivables	1,944	1,931
Finance Receivables | Customer | Mining | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	0	6
2021 and 2020, respectively	0	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
2018 and 2017, respectively	0	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	0	6
Finance Receivables | Customer | Mining | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	0	1
2021 and 2020, respectively	0	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
2018 and 2017, respectively	0	4
Prior	3	0
Revolving Finance Receivables	0	0
Total Finance Receivables	3	5
Finance Receivables | Customer | Mining | 91+ days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	0	0
2021 and 2020, respectively	0	1
2020 and 2019, respectively	1	8
2019 and 2018, respectively	0	9
2018 and 2017, respectively	3	3
Prior	1	1
Revolving Finance Receivables	0	0
Total Finance Receivables	5	22
Finance Receivables | Customer | Latin America | Current
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	584	617
2021 and 2020, respectively	443	299
2020 and 2019, respectively	176	160
2019 and 2018, respectively	86	70
2018 and 2017, respectively	24	17
Prior	14	18
Revolving Finance Receivables	0	0
Total Finance Receivables	1,327	1,181
Finance Receivables | Customer | Latin America | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	5	4
2021 and 2020, respectively	9	7
2020 and 2019, respectively	5	3
2019 and 2018, respectively	2	3
2018 and 2017, respectively	12	1
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	33	18
Finance Receivables | Customer | Latin America | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	4	3
2021 and 2020, respectively	4	3
2020 and 2019, respectively	2	1
2019 and 2018, respectively	1	1
2018 and 2017, respectively	0	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	11	8
Finance Receivables | Customer | Latin America | 91+ days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	0	4
2021 and 2020, respectively	14	9
2020 and 2019, respectively	14	9
2019 and 2018, respectively	5	7
2018 and 2017, respectively	4	7
Prior	17	14
Revolving Finance Receivables	0	0
Total Finance Receivables	54	50
Finance Receivables | Customer | Caterpillar Power Finance | Current
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	40	117
2021 and 2020, respectively	91	145
2020 and 2019, respectively	145	97
2019 and 2018, respectively	75	70
2018 and 2017, respectively	30	180
Prior	170	104
Revolving Finance Receivables	118	101
Total Finance Receivables	669	814
Finance Receivables | Customer | Caterpillar Power Finance | 31-60 days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	0	0
2021 and 2020, respectively	0	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
2018 and 2017, respectively	0	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	0	0
Finance Receivables | Customer | Caterpillar Power Finance | 61-90 days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	0	0
2021 and 2020, respectively	0	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
2018 and 2017, respectively	0	0
Prior	0	0
Revolving Finance Receivables	0	0
Total Finance Receivables	0	0
Finance Receivables | Customer | Caterpillar Power Finance | 91+ days past due
Financing Receivable, Credit Quality Indicator
2022 and 2021, respectively	0	0
2021 and 2020, respectively	0	0
2020 and 2019, respectively	0	0
2019 and 2018, respectively	0	0
2018 and 2017, respectively	0	0
Prior	8	44
Revolving Finance Receivables	0	0
Total Finance Receivables	$ 8	$ 44

XML

Cat Financial Financing Activities (Details Non-accrual) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Receivables [Abstract]
Period after which Collection of Future Income is Considered as Not Probable			120 days
Dealer
Financing Receivable, Nonaccrual
Interest income recognized for finance receivables on non-accrual status	$ 0	$ 0	$ 0	$ 0
Customer
Financing Receivable, Nonaccrual
Interest income recognized for finance receivables on non-accrual status	2	$ 1	11	$ 9
Finance Receivables | Dealer
Financing Receivable, Nonaccrual
Financing Receivable, 91 days past due and still accruing	0		0		$ 0
Finance Receivables | Customer
Financing Receivable, Nonaccrual
Amortized Cost, Non-accrual With an Allowance	183		183		184
Amortized Cost, Non-accrual Without an Allowance	17		17		26
Financing Receivable, 91 days past due and still accruing	21		21		36
Finance Receivables | North America | Customer
Financing Receivable, Nonaccrual
Amortized Cost, Non-accrual With an Allowance	54		54		47
Amortized Cost, Non-accrual Without an Allowance	5		5		9
Financing Receivable, 91 days past due and still accruing	10		10		12
Finance Receivables | EAME | Customer
Financing Receivable, Nonaccrual
Amortized Cost, Non-accrual With an Allowance	42		42		18
Amortized Cost, Non-accrual Without an Allowance	0		0		1
Financing Receivable, 91 days past due and still accruing	4		4		2
Finance Receivables | Asia/Pacific | Customer
Financing Receivable, Nonaccrual
Amortized Cost, Non-accrual With an Allowance	15		15		19
Amortized Cost, Non-accrual Without an Allowance	0		0		0
Financing Receivable, 91 days past due and still accruing	7		7		7
Finance Receivables | Mining | Customer
Financing Receivable, Nonaccrual
Amortized Cost, Non-accrual With an Allowance	6		6		8
Amortized Cost, Non-accrual Without an Allowance	1		1		1
Financing Receivable, 91 days past due and still accruing	0		0		14
Finance Receivables | Latin America | Dealer
Financing Receivable, Nonaccrual
Amortized Cost, Non-accrual With an Allowance	58		58		78
Finance Receivables | Latin America | Customer
Financing Receivable, Nonaccrual
Amortized Cost, Non-accrual With an Allowance	57		57		52
Amortized Cost, Non-accrual Without an Allowance	0		0		4
Financing Receivable, 91 days past due and still accruing	0		0		1
Finance Receivables | Caterpillar Power Finance | Customer
Financing Receivable, Nonaccrual
Amortized Cost, Non-accrual With an Allowance	9		9		40
Amortized Cost, Non-accrual Without an Allowance	11		11		11
Financing Receivable, 91 days past due and still accruing	$ 0		$ 0		$ 0

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Cat Financial Financing Activities (Details TDR) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($) Contracts	Sep. 30, 2021 USD ($) Contracts	Sep. 30, 2022 USD ($) Contracts	Sep. 30, 2021 USD ($) Contracts
Customer
Finance receivables modified as TDRs
Pre-TDR Amortized Cost	$ 29	$ 17	$ 40	$ 54
Post-TDR Amortized Cost	29	13	39	44
TDRs which had been modified within twelve months of the default date
Financing Receivable, Troubled Debt Restructuring, Subsequent Default	0	0	5	27
Customer | North America
Finance receivables modified as TDRs
Pre-TDR Amortized Cost	3	1	4	5
Post-TDR Amortized Cost	3	1	4	5
TDRs which had been modified within twelve months of the default date
Financing Receivable, Troubled Debt Restructuring, Subsequent Default	0	0	0	1
Customer | EAME
Finance receivables modified as TDRs
Pre-TDR Amortized Cost	0	1	1	1
Post-TDR Amortized Cost	0	1	1	1
Customer | Asia/Pacific
Finance receivables modified as TDRs
Pre-TDR Amortized Cost	0	4	0	4
Post-TDR Amortized Cost	0	4	0	4
TDRs which had been modified within twelve months of the default date
Financing Receivable, Troubled Debt Restructuring, Subsequent Default	0	0	0	6
Customer | Mining
Finance receivables modified as TDRs
Pre-TDR Amortized Cost	15	0	15	11
Post-TDR Amortized Cost	15	0	15	5
TDRs which had been modified within twelve months of the default date
Financing Receivable, Troubled Debt Restructuring, Subsequent Default	0	0	5	0
Customer | Latin America
Finance receivables modified as TDRs
Pre-TDR Amortized Cost	0	4	0	10
Post-TDR Amortized Cost	0	4	0	10
TDRs which had been modified within twelve months of the default date
Financing Receivable, Troubled Debt Restructuring, Subsequent Default	0	0	0	15
Customer | Caterpillar Power Finance
Finance receivables modified as TDRs
Pre-TDR Amortized Cost	11	7	20	23
Post-TDR Amortized Cost	11	3	19	19
TDRs which had been modified within twelve months of the default date
Financing Receivable, Troubled Debt Restructuring, Subsequent Default	$ 0	$ 0	$ 0	$ 5
Dealer
Finance receivables modified as TDRs
Number of Contracts (in contracts) | Contracts	0	0	0	0

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Fair Value Disclosures (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	$ 2,767	$ 1,721
Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	2,767	1,721
Equity Securities	431	482
Total Assets	3,536	2,415
Total Liabilities	242
Recurring basis | Interest rate contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivative Assets (Liabilities), at Fair Value, Net	(208)	23
Recurring basis | Foreign exchange contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivative Assets (Liabilities), at Fair Value, Net	338	168
Recurring basis | Commodity contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivative Assets (Liabilities), at Fair Value, Net	(34)	21
U.S. treasury bonds
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	10	10
U.S. treasury bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	10	10
Other U.S. and non-U.S. government bonds
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	49	61
Other U.S. and non-U.S. government bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	49	61
Corporate bonds
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	2,048	1,046
Corporate bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	2,048	1,046
Asset-backed securities
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	180	176
Asset-backed securities | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	180	176
U.S. governmental agency | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	348	325
Residential
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	3	4
Residential | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	3	4
Commercial
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	129	99
Commercial | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	129	99
Large capitalization value | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity Securities	183	217
Smaller company growth | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity Securities	40	98
REIT | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity Securities	208	167
Level 1 | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	10	10
Equity Securities	223	315
Total Assets	233	325
Level 1 | U.S. treasury bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	10	10
Level 1 | Large capitalization value | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity Securities	183	217
Level 1 | Smaller company growth | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity Securities	40	98
Level 2 | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	2,707	1,711
Total Assets	3,045	1,923
Total Liabilities	242
Level 2 | Recurring basis | Interest rate contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivative Assets (Liabilities), at Fair Value, Net	(208)	23
Level 2 | Recurring basis | Foreign exchange contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivative Assets (Liabilities), at Fair Value, Net	338	168
Level 2 | Recurring basis | Commodity contracts
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Derivative Assets (Liabilities), at Fair Value, Net	(34)	21
Level 2 | Other U.S. and non-U.S. government bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	49	61
Level 2 | Corporate bonds | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	1,998	1,046
Level 2 | Asset-backed securities | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	180	176
Level 2 | U.S. governmental agency | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	348	325
Level 2 | Residential | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	3	4
Level 2 | Commercial | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	129	99
Fair Value Measured on Net Asset Value (NAV) | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity Securities	208	167
Total Assets	208	167
Fair Value Measured on Net Asset Value (NAV) | REIT | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Equity Securities	208	167
Level 3 | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	50
Total Assets	50
Level 3 | Corporate Debt Securities | Recurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Debt securities, Available-for-sale, Fair value	50
Financial Products | Level 3 | Nonrecurring basis
Assets and liabilities measured on a recurring and non-recurring basis at fair value
Loans carried at fair value	$ 90	$ 100

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Fair Value Disclosures (Details 2) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Carrying Amount
Assets
Finance receivables-net (excluding finance leases)	$ 13,931	$ 13,837
Wholesale inventory receivables-net (excluding finance leases)	768	773
Carrying Amount | Machinery, Energy & Transportation
Liabilities
Long-term debt (including amounts due within one year)	9,599	9,791
Carrying Amount | Financial Products
Liabilities
Long-term debt (including amounts due within one year)	22,724	22,594
Carrying amount of assets excluded from measurement at fair value
Assets
Excluded items: Finance leases and failed sale leasebacks, Carrying Value	7,083	8,083
Level 2 | Fair Value | Machinery, Energy & Transportation
Liabilities
Long-term debt (including amounts due within one year)	9,072	12,420
Level 2 | Fair Value | Financial Products
Liabilities
Long-term debt (including amounts due within one year)	21,886	22,797
Level 3 | Fair Value
Assets
Finance receivables-net (excluding finance leases)	13,356	13,836
Wholesale inventory receivables-net (excluding finance leases)	$ 724	$ 753

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Other income (expense) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Other Income and Expenses [Abstract]
Investment and interest income	$ 52	$ 20	$ 98	$ 64
Foreign exchange gains (losses)	134	47	405	110
License fee income	37	31	106	88
Net periodic pension and OPEB income (cost), excluding service cost	67	111	201	333
Gains (losses) on securities	0	50	(59)	92
Miscellaneous income (loss)	(48)	(34)	4	64
Total	$ 242	$ 225	$ 755	$ 751

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Restructuring Costs (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Restructuring and Related Cost
Restructuring costs	$ 49	$ 35	$ 90	$ 124
Employee Separation Charges [Roll Forward]
Restructuring Reserve, Beginning Balance			61	164
Increase in liability (separation charges)			62	79
Payments for Restructuring			(63)	(159)
Restructuring Reserve, Ending Balance	60	84	60	84
Employee separations | Other Operating Income (Expense)
Restructuring and Related Cost
Restructuring costs	39	17	62	79
Contract terminations | Other Operating Income (Expense)
Restructuring and Related Cost
Restructuring costs	1	1	1	1
Long-lived asset impairments | Other Operating Income (Expense)
Restructuring and Related Cost
Restructuring costs	(4)	8	1	12
Other | Cost of Sales
Restructuring and Related Cost
Restructuring costs	$ 13	$ 9	$ 26	$ 32