Cover Page
Cover Page | 6 Months Ended |
Jun. 30, 2023 shares | |
Entity Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 2023 |
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 | 510,143,097 |
Entity Central Index Key | 0000018230 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | Q2 |
Common Stock | |
Entity Information [Line Items] | |
Title of 12(b) Security | Common Stock ($1.00 par value) |
Trading Symbol | CAT |
Security Exchange Name | NYSE |
5.3% Debentures due September 15, 2035 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 5.3% Debentures due September 15, 2035 |
Trading Symbol | CAT35 |
Security Exchange Name | NYSE |
Consolidated Statement of Resul
Consolidated Statement of Results of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||||
Sales and revenues: | ||||||||
Total sales and revenues | $ 17,318 | $ 14,247 | $ 33,180 | $ 27,836 | ||||
Operating costs: | ||||||||
Cost of goods sold | 11,065 | 9,975 | 21,168 | 19,534 | ||||
Selling, general and administrative expenses | 1,528 | 1,425 | 2,991 | 2,771 | ||||
Research and development expenses | 528 | 480 | 1,000 | 937 | ||||
Other operating (income) expenses | 300 | 303 | 1,176 | 569 | ||||
Total operating costs | 13,666 | 12,303 | 26,797 | 24,037 | ||||
Operating profit | 3,652 | 1,944 | 6,383 | 3,799 | ||||
Other income (expense) | 127 | 260 | 159 | 513 | ||||
Consolidated profit before taxes | 3,652 | 2,096 | 6,286 | 4,095 | ||||
Provision (benefit) for income taxes | 752 | 427 | 1,460 | 896 | ||||
Profit of consolidated companies | 2,900 | 1,669 | 4,826 | 3,199 | ||||
Equity in profit (loss) of unconsolidated affiliated companies | 24 | 4 | 40 | 11 | ||||
Profit of consolidated and affiliated companies | 2,924 | 1,673 | 4,866 | 3,210 | ||||
Less: Profit (loss) attributable to noncontrolling interests | 2 | 0 | 1 | 0 | ||||
Profit | $ 2,922 | [1] | $ 1,673 | [1] | $ 4,865 | [2] | $ 3,210 | [2] |
Profit per common share (in dollars per share) | $ 5.70 | $ 3.15 | $ 9.46 | $ 6.03 | ||||
Profit per common share - diluted (in dollars per share) | $ 5.67 | [3] | $ 3.13 | [3] | $ 9.41 | [4] | $ 5.99 | [4] |
Weighted-average common shares outstanding (millions) | ||||||||
Basic (in shares) | 512.9 | 531 | 514.3 | 532.6 | ||||
Diluted (in shares) | 515 | [3] | 534.1 | [3] | 517.1 | [4] | 536.1 | [4] |
Machinery, Energy & Transportation | ||||||||
Sales and revenues: | ||||||||
Total sales and revenues | $ 16,545 | $ 13,539 | $ 31,644 | $ 26,425 | ||||
Financial Products | ||||||||
Sales and revenues: | ||||||||
Total sales and revenues | 773 | 708 | 1,536 | 1,411 | ||||
Operating costs: | ||||||||
Interest expense of Financial Products | 245 | 120 | 462 | 226 | ||||
All other excluding Financial Products | ||||||||
Operating costs: | ||||||||
Interest expense excluding Financial Products | $ 127 | $ 108 | $ 256 | $ 217 | ||||
[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. |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Profit of consolidated and affiliated companies | $ 2,924 | $ 1,673 | $ 4,866 | $ 3,210 |
Other comprehensive income (loss), net of tax (Note 13): | ||||
Foreign currency translation, net of tax | (142) | (659) | 465 | (774) |
Pension and other postretirement benefits, net of tax | (3) | (1) | (5) | (2) |
Derivative financial instruments: | (41) | (86) | 43 | (63) |
Available-for-sale securities, net of tax | (14) | (43) | 8 | (107) |
Total other comprehensive income (loss), net of tax | (200) | (789) | 511 | (946) |
Comprehensive income | 2,724 | 884 | 5,377 | 2,264 |
Less: comprehensive income attributable to the noncontrolling interests | 2 | 0 | 1 | 0 |
Comprehensive income attributable to shareholders | $ 2,722 | $ 884 | $ 5,376 | $ 2,264 |
Consolidated Statement of Finan
Consolidated Statement of Financial Position - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 7,387 | $ 7,004 |
Receivables – trade and other | 9,416 | 8,856 |
Receivables – finance | 9,288 | 9,013 |
Prepaid expenses and other current assets | 3,163 | 2,642 |
Inventories | 17,746 | 16,270 |
Total current assets | 47,000 | 43,785 |
Property, plant and equipment – net | 12,124 | 12,028 |
Long-term receivables – trade and other | 1,161 | 1,265 |
Long-term receivables – finance | 12,022 | 12,013 |
Noncurrent deferred and refundable income taxes | 2,607 | 2,213 |
Intangible assets | 630 | 758 |
Goodwill | 5,293 | 5,288 |
Other assets | 4,590 | 4,593 |
Total assets | 85,427 | 81,943 |
Short-term borrowings: | ||
Accounts payable | 8,443 | 8,689 |
Accrued expenses | 4,493 | 4,080 |
Accrued wages, salaries and employee benefits | 1,755 | 2,313 |
Customer advances | 2,137 | 1,860 |
Dividends payable | 663 | 620 |
Other current liabilities | 3,109 | 2,690 |
Long-term debt due within one year: | ||
Total current liabilities | 35,314 | 31,531 |
Long-term debt due after one year: | ||
Liability for postemployment benefits | 4,084 | 4,203 |
Other liabilities | 4,788 | 4,604 |
Total liabilities | 67,171 | 66,052 |
Commitments and contingencies (Notes 11 and 14) | ||
Shareholders’ equity | ||
Common stock, authorized and issued | 6,478 | 6,560 |
Treasury stock: (6/30/23 – 304,751,527 shares; 12/31/22 – 298,549,134 shares) at cost | (33,391) | (31,748) |
Profit employed in the business | 47,094 | 43,514 |
Accumulated other comprehensive income (loss) | (1,946) | (2,457) |
Noncontrolling interests | 21 | 22 |
Total shareholders’ equity | 18,256 | 15,891 |
Total liabilities and shareholders’ equity | 85,427 | 81,943 |
Machinery, Energy & Transportation | ||
Short-term borrowings: | ||
Short-term borrowings | 0 | 3 |
Long-term debt due within one year: | ||
Long-term debt due within one year | 1,043 | 120 |
Long-term debt due after one year: | ||
Long-term Debt due after one year | 8,535 | 9,498 |
Financial Products | ||
Short-term borrowings: | ||
Short-term borrowings | 5,548 | 5,954 |
Long-term debt due within one year: | ||
Long-term debt due within one year | 8,123 | 5,202 |
Long-term debt due after one year: | ||
Long-term Debt due after one year | $ 14,450 | $ 16,216 |
Consolidated Statement of Fin_2
Consolidated Statement of Financial Position (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, issued (in shares) | 814,894,624 | 814,894,624 |
Treasury stock (in shares) | 304,751,527 | 298,549,134 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Shareholders' Equity - USD ($) $ in Millions | Total | Common stock | Treasury stock | Profit employed in the business | Accumulated other comprehensive income (loss) | Noncontrolling interests | |
Beginning balance at Dec. 31, 2021 | $ 16,516 | $ 6,398 | $ (27,643) | $ 39,282 | $ (1,553) | $ 32 | |
Increase (Decrease) in Shareholders' Equity | |||||||
Profit of consolidated and affiliated companies | 3,210 | 3,210 | |||||
Foreign currency translation, net of tax | (774) | (774) | |||||
Pension and other postretirement benefits, net of tax | (2) | (2) | |||||
Derivative financial instruments, net of tax | (63) | (63) | |||||
Available-for-sale securities, net of tax | (107) | (107) | |||||
Dividends declared | [1] | (1,229) | (1,229) | ||||
Common shares issued from treasury stock for stock-based compensation | 4 | (61) | 65 | ||||
Stock-based compensation expense | 107 | 107 | |||||
Common shares repurchased | [2] | (1,924) | (1,924) | ||||
Other | 21 | 20 | 1 | ||||
Ending balance at Jun. 30, 2022 | 15,759 | 6,464 | (29,501) | 41,263 | (2,499) | 32 | |
Beginning balance at Mar. 31, 2022 | 17,097 | 6,281 | (28,326) | 40,820 | (1,710) | 32 | |
Increase (Decrease) in Shareholders' Equity | |||||||
Profit of consolidated and affiliated companies | 1,673 | 1,673 | |||||
Foreign currency translation, net of tax | (659) | (659) | |||||
Pension and other postretirement benefits, net of tax | (1) | (1) | |||||
Derivative financial instruments, net of tax | (86) | (86) | |||||
Available-for-sale securities, net of tax | (43) | (43) | |||||
Dividends declared | [3] | (1,230) | (1,230) | ||||
Common shares issued from treasury stock for stock-based compensation | 32 | 4 | 28 | ||||
Stock-based compensation expense | 67 | 67 | |||||
Common shares repurchased | [4] | (1,204) | (1,204) | ||||
Other | 113 | 112 | 1 | ||||
Ending balance at Jun. 30, 2022 | 15,759 | 6,464 | (29,501) | 41,263 | (2,499) | 32 | |
Beginning balance at Dec. 31, 2022 | 15,891 | 6,560 | (31,748) | 43,514 | (2,457) | 22 | |
Increase (Decrease) in Shareholders' Equity | |||||||
Profit of consolidated and affiliated companies | 4,866 | 4,865 | 1 | ||||
Foreign currency translation, net of tax | 465 | 465 | |||||
Pension and other postretirement benefits, net of tax | (5) | (5) | |||||
Derivative financial instruments, net of tax | 43 | 43 | |||||
Available-for-sale securities, net of tax | 8 | 8 | |||||
Dividends declared | [1] | (1,285) | (1,285) | ||||
Common shares issued from treasury stock for stock-based compensation | (22) | (71) | 49 | ||||
Stock-based compensation expense | 118 | 118 | |||||
Common shares repurchased | [2] | (1,679) | (1,679) | ||||
Outstanding authorized accelerated share repurchase | (150) | (150) | |||||
Other | 6 | 21 | (13) | (2) | |||
Ending balance at Jun. 30, 2023 | 18,256 | 6,478 | (33,391) | 47,094 | (1,946) | 21 | |
Beginning balance at Mar. 31, 2023 | 18,170 | 6,546 | (32,108) | 45,457 | (1,746) | 21 | |
Increase (Decrease) in Shareholders' Equity | |||||||
Profit of consolidated and affiliated companies | 2,924 | 2,922 | 2 | ||||
Foreign currency translation, net of tax | (142) | (142) | |||||
Pension and other postretirement benefits, net of tax | (3) | (3) | |||||
Derivative financial instruments, net of tax | (41) | (41) | |||||
Available-for-sale securities, net of tax | (14) | (14) | |||||
Dividends declared | [3] | (1,285) | (1,285) | ||||
Common shares issued from treasury stock for stock-based compensation | 3 | (5) | 8 | ||||
Stock-based compensation expense | 74 | 74 | 0 | ||||
Common shares repurchased | [4] | (1,279) | 0 | (1,279) | |||
Outstanding authorized accelerated share repurchase | (150) | (150) | |||||
Other | (1) | 13 | (12) | (2) | |||
Ending balance at Jun. 30, 2023 | $ 18,256 | $ 6,478 | $ (33,391) | $ 47,094 | $ (1,946) | $ 21 | |
[1] 1 Dividends per share of common stock of $2.50 and $2.31 were declared in the six months ended June 30, 2023 and 2022, respectively. 2 See Note 12 for additional information. 1 Dividends per share of common stock of $2.50 and $2.31 were declared in the three months ended June 30, 2023 and 2022, respectively. 2 See Note 12 for additional information. |
Consolidated Statement of Cha_2
Consolidated Statement of Changes in Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Common shares issued, Shares, from treasury stock for stock-based compensation (in shares) | 137,444 | 416,751 | 1,413,775 | 1,454,219 |
Common shares repurchased (in shares) | 5,914,408 | 5,860,813 | 7,616,168 | 9,432,497 |
Dividends per share of common stock (dollars per share) | $ 2.50 | $ 2.31 | $ 2.50 | $ 2.31 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flow - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flow from operating activities: | ||
Profit of consolidated and affiliated companies | $ 4,866 | $ 3,210 |
Adjustments for non-cash items: | ||
Depreciation and amortization | 1,074 | 1,110 |
Provision (benefit) for deferred income taxes | (355) | (283) |
Loss on divestiture | 572 | 0 |
Other | 106 | 49 |
Changes in assets and liabilities, net of acquisitions and divestitures: | ||
Receivables – trade and other | (465) | 283 |
Inventories | (1,560) | (2,003) |
Accounts payable | 34 | 427 |
Accrued expenses | 381 | (80) |
Accrued wages, salaries and employee benefits | (562) | (445) |
Customer advances | 284 | 514 |
Other assets – net | 81 | 86 |
Other liabilities – net | 366 | (322) |
Net cash provided by (used for) operating activities | 4,822 | 2,546 |
Cash flow from investing activities: | ||
Capital expenditures – excluding equipment leased to others | (683) | (586) |
Expenditures for equipment leased to others | (774) | (688) |
Proceeds from disposals of leased assets and property, plant and equipment | 368 | 468 |
Additions to finance receivables | (6,973) | (6,705) |
Collections of finance receivables | 6,759 | 6,519 |
Proceeds from sale of finance receivables | 29 | 21 |
Investments and acquisitions (net of cash acquired) | (20) | (36) |
Proceeds from sale of businesses and investments (net of cash sold) | (14) | 1 |
Proceeds from sale of securities | 463 | 1,204 |
Investments in securities | (1,078) | (2,118) |
Other – net | 41 | 32 |
Net cash provided by (used for) investing activities | (1,882) | (1,888) |
Cash flow from financing activities: | ||
Dividends paid | (1,238) | (1,187) |
Common stock issued, including treasury shares reissued | (22) | 4 |
Common shares repurchased | (1,829) | (1,924) |
Proceeds from debt issued (original maturities greater than three months): | 3,299 | 4,015 |
Short-term borrowings – net (original maturities three months or less) | (406) | (553) |
Net cash provided by (used for) financing activities | (2,499) | (3,891) |
Effect of exchange rate changes on cash | (60) | (7) |
Increase (decrease) in cash, cash equivalents and restricted cash | 381 | (3,240) |
Cash and short-term investments and restricted cash at beginning of period | 7,013 | 9,263 |
Cash and short-term investments and restricted cash at end of period | 7,394 | 6,023 |
Machinery, Energy & Transportation | ||
Cash flow from financing activities: | ||
Payments on debt (original maturities greater than three months): | (95) | (13) |
Financial Products | ||
Cash flow from financing activities: | ||
Payments on debt (original maturities greater than three months): | $ (2,208) | $ (4,233) |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | A. Nature of operations Information in our financial statements and related commentary are presented in the following categories: Machinery, Energy & Transportation (ME&T) – We define ME&T as Caterpillar Inc. and its subsidiaries, excluding Financial Products. ME&T’s information relates to the design, manufacturing and marketing of our products. Financial Products – We define Financial Products as our finance and insurance subsidiaries, primarily Caterpillar Financial Services Corporation (Cat Financial) and Caterpillar Insurance Holdings Inc. (Insurance Services). Financial Products’ information relates to the financing to customers and dealers for the purchase and lease of Caterpillar and other equipment. B. Basis of presentation In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the consolidated results of operations for the three and six months ended June 30, 2023 and 2022, (b) the consolidated comprehensive income for the three and six months ended June 30, 2023 and 2022, (c) the consolidated financial position at June 30, 2023 and December 31, 2022, (d) the consolidated changes in shareholders’ equity for the three and six months ended June 30, 2023 and 2022 and (e) the consolidated cash flow for the six months ended June 30, 2023 and 2022. The financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in our company’s annual report on Form 10-K for the year ended December 31, 2022 (2022 Form 10-K). The December 31, 2022 financial position data included herein is derived from the audited consolidated financial statements included in the 2022 Form 10-K but does not include all disclosures required by U.S. GAAP. Certain amounts for prior periods have been reclassified to conform to the current period financial statement presentation. |
New Accounting Guidance
New Accounting Guidance | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Guidance | New accounting guidance A. Adoption of new accounting standards Supplier finance programs (ASU 2022-04) - In September 2022, the Financial Accounting Standards Board (FASB) issued guidance to enhance the transparency of supplier finance programs. The new standard requires annual disclosure of the key terms of the program, a description of where in the financial statements amounts outstanding under the program are presented, a rollforward of such amounts, and interim disclosure of amounts outstanding as of the end of each period. The guidance does not affect recognition, measurement, or financial statement presentation of supplier finance programs. The ASU was effective on January 1, 2023, except for the rollforward, which is effective on January 1, 2024. Our adoption of this guidance results in the following disclosures relating to our supplier finance programs and related obligations. We facilitate voluntary supplier finance programs (the “Programs”) through participating financial institutions. The Programs are available to a wide range of suppliers and allow them the option to manage their cash flow. We are not a party to the agreements between the participating financial institutions and the suppliers in connection with the Programs. The range of payment terms, typically 60-90 days, we negotiate with our suppliers is consistent, irrespective of whether a supplier participates in the Programs. The amount of obligations outstanding that are confirmed as valid to the participating financial institutions for suppliers who voluntarily participate in the Programs, included in Accounts payable in the Consolidated Statement of Financial Position, were $901 million and $862 million at June 30, 2023 and December 31, 2022, respectively. We consider the applicability and impact of all ASUs. We adopted the following ASUs effective January 1, 2023, none of which had a material impact on our financial statements: ASU Description 2021-08 Business combinations 2022-02 Financial instruments - Credit losses 2022-06 Reference rate reform B. Accounting standards issued but not yet adopted We consider the applicability and impact of all ASUs. We assessed the ASUs and determined that they either were not applicable or were not expected to have a material impact on our financial statements. |
Sales and revenue contract info
Sales and revenue contract information | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Sales and revenue contract information | Sales and revenue contract information Trade receivables represent amounts due from dealers and end users for the sale of our products, and include amounts due from wholesale inventory financing provided by Cat Financial for a dealer’s purchase of inventory. We recognize trade receivables from dealers and end users in Receivables – trade and other and Long-term receivables – trade and other in the Consolidated Statement of Financial Position. Trade receivables from dealers and end users were $8,079 million, $7,551 million and $7,267 million as of June 30, 2023, December 31, 2022 and December 31, 2021, respectively. Long-term trade receivables from dealers and end users were $482 million, $506 million and $624 million as of June 30, 2023, December 31, 2022 and December 31, 2021, respectively. For certain contracts, we invoice for payment when contractual milestones are achieved. We recognize a contract asset when a sale is recognized before achieving the contractual milestones for invoicing. We reduce the contract asset when we invoice for payment and recognize a corresponding trade receivable. Contract assets are included in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. Contract assets were $225 million, $247 million and $187 million as of June 30, 2023, December 31, 2022 and December 31, 2021, respectively. We invoice in advance of recognizing the sale of certain products. We recognize advanced customer payments as a contract liability in Customer advances and Other liabilities in the Consolidated Statement of Financial Position. Contract liabilities were $2,592 million, $2,314 million and $1,557 million as of June 30, 2023, December 31, 2022 and December 31, 2021, respectively. We reduce the contract liability when revenue is recognized. During the three and six months ended June 30, 2023, we recognized $398 million and $1,135 million, respectively, of revenue that was recorded as a contract liability at the beginning of 2023. During the three and six months ended June 30, 2022, we recognized $220 million and $657 million, respectively. As of June 30, 2023, we have entered into contracts with dealers and end users for which sales have not been recognized as we have not satisfied our performance obligations and transferred control of the products. The dollar amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $13.2 billion, with about one-half of the amount expected to be completed and revenue recognized in the twelve months following June 30, 2023. We have elected the practical expedient not to disclose unsatisfied performance obligations with an original contract duration of one year or less. Contracts with an original duration of one year or less are primarily sales to dealers for machinery, engines and replacement parts. See Note 16 for further disaggregated sales and revenues information. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-based compensation Accounting for stock-based compensation requires that the cost resulting from all stock-based payments be recognized in the financial statements based on the grant date fair value of the award. Our stock-based compensation consists of stock options, restricted stock units (RSUs) and performance-based restricted stock units (PRSUs). We recognized pretax stock-based compensation expense of $74 million and $118 million for the three and six months ended June 30, 2023, respectively, and $67 million and $107 million for the three and six months ended June 30, 2022, respectively. The following table illustrates the type and fair value of the stock-based compensation awards granted during the six months ended June 30, 2023 and 2022, respectively: Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Shares Granted Weighted-Average Fair Value Per Share Weighted-Average Grant Date Stock Price Shares Granted Weighted-Average Fair Value Per Share Weighted-Average Grant Date Stock Price Stock options 777,275 $ 75.79 $ 253.98 1,029,202 $ 51.69 $ 196.70 RSUs 379,426 $ 253.98 $ 253.98 484,025 $ 196.70 $ 196.70 PRSUs 221,869 $ 253.98 $ 253.98 258,900 $ 196.70 $ 196.70 The following table provides the assumptions used in determining the fair value of the stock-based awards for the six months ended June 30, 2023 and 2022, respectively: Grant Year 2023 2022 Weighted-average dividend yield 2.60% 2.60% Weighted-average volatility 31.0% 31.7% Range of volatilities 28.5% - 35.5% 25.3% - 36.8% Range of risk-free interest rates 3.92% - 5.03% 1.03% - 2.00% Weighted-average expected lives 7 years 8 years |
Derivative Financial Instrument
Derivative Financial Instruments and Risk Management | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Risk Management | Derivative financial instruments and risk management Our earnings and cash flow are subject to fluctuations due to changes in foreign currency exchange rates, interest rates and commodity prices. Our Risk Management Policy (policy) allows for the use of derivative financial instruments to prudently manage foreign currency exchange rate, interest rate and commodity price exposures. Our policy specifies that derivatives are not to be used for speculative purposes. Derivatives that we use are primarily foreign currency forward, option and cross currency contracts, interest rate contracts and commodity forward and option contracts. Our derivative activities are subject to the management, direction and control of our senior financial officers. We present at least annually to the Audit Committee of the Board of Directors on our risk management practices, including our use of financial derivative instruments. We recognize all derivatives at their fair value on the Consolidated Statement of Financial Position. On the date the derivative contract is entered into, we designate the derivative as (1) a hedge of the fair value of a recognized asset or liability (fair value hedge), (2) a hedge of a forecasted transaction or the variability of cash flow (cash flow hedge) or (3) an undesignated instrument. We record in current earnings changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged recognized asset or liability that is attributable to the hedged risk. We record in AOCI changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge, to the extent effective, on the Consolidated Statement of Financial Position until we reclassify them to earnings in the same period or periods during which the hedged transaction affects earnings. We report changes in the fair value of undesignated derivative instruments in current earnings. We classify cash flows from designated derivative financial instruments within the same category as the item being hedged on the Consolidated Statement of Cash Flow. We include cash flows from undesignated derivative financial instruments in the investing category on the Consolidated Statement of Cash Flow. We formally document all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities on the Consolidated Statement of Financial Position and linking cash flow hedges to specific forecasted transactions or variability of cash flow. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the designated derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flow of hedged items. When a derivative is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, we discontinue hedge accounting prospectively, in accordance with the derecognition criteria for hedge accounting. Foreign Currency Exchange Rate Risk Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of sales made and costs incurred in foreign currencies. Movements in foreign currency rates also affect our competitive position as these changes may affect business practices and/or pricing strategies of non-U.S.-based competitors. Additionally, we have balance sheet positions denominated in foreign currencies, thereby creating exposure to movements in exchange rates. Our ME&T operations purchase, manufacture and sell products in many locations around the world. As we have a diversified revenue and cost base, we manage our future foreign currency cash flow exposure on a net basis. We use foreign currency forward and option contracts to manage unmatched foreign currency cash inflow and outflow. Our objective is to minimize the risk of exchange rate movements that would reduce the U.S. dollar value of our foreign currency cash flow. Our policy allows for managing anticipated foreign currency cash flow for up to approximately five years. As of June 30, 2023, the maximum term of these outstanding contracts at inception was approximately 60 months. We generally designate as cash flow hedges at inception of the contract any foreign currency forward or option contracts that meet the requirements for hedge accounting and the maturity extends beyond the current quarter-end. We perform designation on a specific exposure basis to support hedge accounting. The remainder of ME&T foreign currency contracts are undesignated. In managing foreign currency risk for our Financial Products operations, our objective is to minimize earnings volatility resulting from conversion and the remeasurement of net foreign currency balance sheet positions and future transactions denominated in foreign currencies. Our policy allows the use of foreign currency forward, option and cross currency contracts to offset the risk of currency mismatch between our assets and liabilities and exchange rate risk associated with future transactions denominated in foreign currencies. Our foreign currency forward and option contracts are primarily undesignated. We designate fixed-to-fixed cross currency contracts as cash flow hedges to protect against movements in exchange rates on foreign currency fixed-rate assets and liabilities. Interest Rate Risk Interest rate movements create a degree of risk by affecting the amount of our interest payments and the value of our fixed-rate debt. Our practice is to use interest rate contracts to manage our exposure to interest rate changes. Our ME&T operations generally use fixed-rate debt as a source of funding. Our objective is to minimize the cost of borrowed funds. Our policy allows us to enter into fixed-to-floating interest rate contracts and forward rate agreements to meet that objective. We designate fixed-to-floating interest rate contracts as fair value hedges at inception of the contract, and we designate certain forward rate agreements as cash flow hedges at inception of the contract. Financial Products operations has a match-funding policy that addresses interest rate risk by aligning the interest rate profile (fixed or floating rate and duration) of Cat Financial’s debt portfolio with the interest rate profile of our receivables portfolio within predetermined ranges on an ongoing basis. In connection with that policy, we use interest rate derivative instruments to modify the debt structure to match assets within the receivables portfolio. This matched funding reduces the volatility of margins between interest-bearing assets and interest-bearing liabilities, regardless of which direction interest rates move. Our policy allows us to use fixed-to-floating, floating-to-fixed and floating-to-floating interest rate contracts to meet the match-funding objective. We designate fixed-to-floating interest rate contracts as fair value hedges to protect debt against changes in fair value due to changes in the benchmark interest rate. We designate most floating-to-fixed interest rate contracts as cash flow hedges to protect against the variability of cash flows due to changes in the benchmark interest rate. We have, at certain times, liquidated fixed-to-floating and floating-to-fixed interest rate contracts at both ME&T and Financial Products. We amortize the gains or losses associated with these contracts at the time of liquidation into earnings over the original term of the previously designated hedged item. Commodity Price Risk Commodity price movements create a degree of risk by affecting the price we must pay for certain raw materials. Our policy is to use commodity forward and option contracts to manage the commodity risk and reduce the cost of purchased materials. Our ME&T operations purchase base and precious metals embedded in the components we purchase from suppliers. Our suppliers pass on to us price changes in the commodity portion of the component cost. In addition, we are subject to price changes on energy products such as natural gas and diesel fuel purchased for operational use. Our objective is to minimize volatility in the price of these commodities. Our policy allows us to enter into commodity forward and option contracts to lock in the purchase price of a portion of these commodities within a five-year horizon. All such commodity forward and option contracts are undesignated. The location and fair value of derivative instruments reported in the Consolidated Statement of Financial Position were as follows: (Millions of dollars) Fair Value June 30, 2023 December 31, 2022 Assets 1 Liabilities 2 Assets 1 Liabilities 2 Designated derivatives Foreign exchange contracts $ 460 $ (159) $ 462 $ (152) Interest rate contracts 71 (284) 93 (288) Total $ 531 $ (443) $ 555 $ (440) Undesignated derivatives Foreign exchange contracts $ 42 $ (62) $ 65 $ (47) Commodity contracts 11 (10) 24 (9) Total $ 53 $ (72) $ 89 $ (56) 1 Assets are classified on the Consolidated Statement of Financial Position as Receivables - trade and other or Long-term receivables - trade and other. 2 Liabilities are classified on the Consolidated Statement of Financial Position as Accrued expenses or Other liabilities. The total notional amounts of the derivative instruments as of June 30, 2023 and December 31, 2022 were $21.9 billion and $24.3 billion, respectively. The notional amounts of the derivative financial instruments do not represent amounts exchanged by the parties. We calculate the amounts exchanged by the parties by referencing the notional amounts and by other terms of the derivatives, such as foreign currency exchange rates, interest rates or commodity prices. Gains (Losses) on derivative instruments are categorized as follows: (Millions of dollars) Three Months Ended June 30 Fair Value / Undesignated Hedges Cash Flow Hedges Gains (Losses) Recognized on the Consolidated Statement of Results of Operations 1 Gains (Losses) Recognized in AOCI Gains (Losses) Reclassified from AOCI 2 2023 2022 2023 2022 2023 2022 Foreign exchange contracts $ 31 $ 33 $ (26) $ 186 $ 28 $ 323 Interest rate contracts (34) 9 14 21 14 (2) Commodity contracts (20) (48) — — — — Total $ (23) $ (6) $ (12) $ 207 $ 42 $ 321 1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense). Interest rate contract gains (losses) are included in Interest expense of Financial Products and Interest expense excluding Financial Products. 2 Foreign exchange contract gains (losses) are primarily included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products. (Millions of dollars) Six Months Ended June 30 Fair Value / Undesignated Hedges Cash Flow Hedges Gains (Losses) Recognized on the Consolidated Statement of Results of Operations 1 Gains (Losses) Recognized in AOCI Gains (Losses) Reclassified from AOCI 2 2023 2022 2023 2022 2023 2022 Foreign exchange contracts $ 3 $ (30) $ 32 $ 177 $ (37) $ 349 Interest rate contracts (60) 17 12 77 27 (9) Commodity contract (12) 45 — — — — Total $ (69) $ 32 $ 44 $ 254 $ (10) $ 340 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). Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products. The following amounts were recorded on the Consolidated Statement of Financial Position related to cumulative basis adjustments for fair value hedges: (Millions of dollars) Carrying Value of the Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022 Long-term debt due within one year $ 195 $ — $ (5) $ — Long-term debt due after one year 4,033 4,173 (271) (280) Total $ 4,228 $ 4,173 $ (276) $ (280) We enter into International Swaps and Derivatives Association (ISDA) master netting agreements within ME&T and Financial Products that permit the net settlement of amounts owed under their respective derivative contracts. Under these master netting agreements, net settlement generally permits the company or the counterparty to determine the net amount payable for contracts due on the same date and in the same currency for similar types of derivative transactions. The master netting agreements may also provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event. Collateral is typically not required of the counterparties or of our company under the master netting agreements. As of June 30, 2023 and December 31, 2022, no cash collateral was received or pledged under the master netting agreements. The effect of the net settlement provisions of the master netting agreements on our derivative balances upon an event of default or termination event was as follows: (Millions of dollars) June 30, 2023 December 31, 2022 Assets Liabilities Assets Liabilities Gross Amounts Recognized $ 584 $ (515) $ 644 $ (496) Financial Instruments Not Offset (224) 224 (233) 233 Net Amount $ 360 $ (291) $ 411 $ (263) |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories (principally using the last-in, first-out (LIFO) method) were comprised of the following: (Millions of dollars) June 30, December 31, Raw materials $ 6,783 $ 6,370 Work-in-process 1,640 1,452 Finished goods 8,979 8,138 Supplies 344 310 Total inventories $ 17,746 $ 16,270 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible assets and goodwill A. Intangible assets Intangible assets were comprised of the following: June 30, 2023 (Millions of dollars) Weighted Gross Carrying Amount 1 Accumulated Amortization 1 Net Customer relationships 16 $ 2,233 $ (1,744) $ 489 Intellectual property 14 650 (551) 99 Other 17 120 (78) 42 Total finite-lived intangible assets 15 $ 3,003 $ (2,373) $ 630 December 31, 2022 Weighted Gross Accumulated Net Customer relationships 16 $ 2,233 $ (1,675) $ 558 Intellectual property 12 1,473 (1,320) 153 Other 16 132 (85) 47 Total finite-lived intangible assets 14 $ 3,838 $ (3,080) $ 758 1 For the six months ended June 30, 2023, $829 million of intangible assets were fully amortized and have been removed. Amortization expense for the three and six months ended June 30, 2023 was $64 million and $130 million, respectively. Amortization expense for the three and six months ended June 30, 2022 was $71 million and $143 million, respectively. Amortization expense related to intangible assets is expected to be: (Millions of dollars) Remaining Six Months of 2023 2024 2025 2026 2027 Thereafter $87 $171 $161 $91 $27 $93 B. Goodwill No goodwill was impaired during the six months ended June 30, 2023 or 2022. The changes in carrying amount of goodwill by reportable segment for the six months ended June 30, 2023 were as follows: (Millions of dollars) December 31, Other Adjustments 1 June 30, Construction Industries Goodwill $ 287 $ (13) $ 274 Impairments (22) — (22) Net goodwill 265 (13) 252 Resource Industries Goodwill 4,130 16 4,146 Impairments (1,175) — (1,175) Net goodwill 2,955 16 2,971 Energy & Transportation Goodwill 2,947 6 2,953 Impairments (925) — (925) Net goodwill 2,022 6 2,028 All Other 2 Goodwill 46 (4) 42 Impairments — — — Net goodwill 46 (4) 42 Consolidated total Goodwill 7,410 5 7,415 Impairments (2,122) — (2,122) Net goodwill $ 5,288 $ 5 $ 5,293 1 Other adjustments are comprised primarily of foreign currency translation. 2 Includes All Other operating segment (See Note 16). |
Investments in Debt and Equity
Investments in Debt and Equity Securities | 6 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in Debt and Equity Securities | Investments in debt and equity securities We have investments in certain debt and equity securities, which we record at fair value and primarily include in Other assets in the Consolidated Statement of Financial Position. We classify debt securities primarily as available-for-sale. We include the unrealized gains and losses arising from the revaluation of available-for-sale debt securities, net of applicable deferred income taxes, in equity (AOCI in the Consolidated Statement of Financial Position). We include the unrealized gains and losses arising from the revaluation of the equity securities in Other income (expense) in the Consolidated Statement of Results of Operations. We generally determine realized gains and losses on sales of investments using the specific identification method for available-for-sale debt and equity securities and include them in Other income (expense) in the Consolidated Statement of Results of Operations. The cost basis and fair value of available-for-sale debt securities with unrealized gains and losses included in equity (AOCI in the Consolidated Statement of Financial Position) were as follows: Available-for-sale debt securities June 30, 2023 December 31, 2022 (Millions of dollars) Cost Basis Unrealized Pretax Net Gains (Losses) Fair Value Cost Basis Unrealized Pretax Net Gains (Losses) Fair Value Government debt securities U.S. treasury bonds $ 10 $ — $ 10 $ 9 $ — $ 9 Other U.S. and non-U.S. government bonds 60 (4) 56 60 (5) 55 Corporate debt securities Corporate bonds and other debt securities 2,585 (85) 2,500 2,561 (95) 2,466 Asset-backed securities 191 (5) 186 187 (5) 182 Mortgage-backed debt securities U.S. governmental agency 390 (31) 359 364 (31) 333 Residential 3 (1) 2 3 (1) 2 Commercial 138 (11) 127 127 (10) 117 Total available-for-sale debt securities $ 3,377 $ (137) $ 3,240 $ 3,311 $ (147) $ 3,164 Available-for-sale debt securities in an unrealized loss position: June 30, 2023 Less than 12 months 1 12 months or more 1 Total (Millions of dollars) Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized Government debt securities Other U.S. and non-U.S. government bonds $ 13 $ — $ 26 $ 4 $ 39 $ 4 Corporate debt securities Corporate bonds 1,414 26 947 62 2,361 88 Asset-backed securities 57 1 92 4 149 5 Mortgage-backed debt securities U.S. governmental agency 131 5 218 26 349 31 Residential — — 2 1 2 1 Commercial 41 2 86 9 127 11 $ 1,656 $ 34 $ 1,371 $ 106 $ 3,027 $ 140 December 31, 2022 Less than 12 months 1 12 months or more 1 Total (Millions of dollars) Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized Government debt securities Other U.S. and non-U.S. government bonds $ 19 $ 1 $ 20 $ 4 $ 39 $ 5 Corporate debt securities Corporate bonds 1,815 46 357 50 2,172 96 Asset-backed securities 75 2 55 3 130 5 Mortgage-backed debt securities U.S. governmental agency 229 16 98 15 327 31 Residential 2 — 1 1 3 1 Commercial 63 5 54 5 117 10 Total $ 2,203 $ 70 $ 585 $ 78 $ 2,788 $ 148 1 Indicates the length of time that individual securities have been in a continuous unrealized loss position. The unrealized losses on our investments in government debt securities, corporate debt securities, and mortgage-backed debt securities relate to changes in underlying interest rates and credit spreads since time of purchase. We do not intend to sell the investments, and it is not likely that we will be required to sell the investments before recovery of their respective amortized cost basis. In addition, we did not expect credit-related losses on these investments as of June 30, 2023. The cost basis and fair value of available-for-sale debt securities at June 30, 2023, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay and creditors may have the right to call obligations. June 30, 2023 (Millions of dollars) Cost Basis Fair Value Due in one year or less $ 973 $ 963 Due after one year through five years 1,539 1,470 Due after five years through ten years 270 257 Due after ten years 64 62 U.S. governmental agency mortgage-backed securities 390 359 Residential mortgage-backed securities 3 2 Commercial mortgage-backed securities 138 127 Total debt securities – available-for-sale $ 3,377 $ 3,240 Sales of available-for-sale debt securities: Three Months Ended June 30 Six Months Ended June 30 (Millions of dollars) 2023 2022 2023 2022 Proceeds from the sale of available-for-sale securities $ 216 $ 174 $ 439 $ 270 Gross gains from the sale of available-for-sale securities — — — 1 Gross losses from the sale of available-for-sale securities — — — 1 In addition, we had $500 million of investments in time deposits classified as held-to-maturity debt securities as of June 30, 2023. We did not have any investments classified as held-to-maturity debt securities as of December 31, 2022. All these investments mature within one year and we include them in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. We record held-to-maturity debt securities at amortized cost, which approximates fair value. For the three months ended June 30, 2023 and 2022, the net unrealized gains (losses) for equity securities held at June 30, 2023 and 2022 were $(4) million and $(48) million, respectively. For the six months ended June 30, 2023 and 2022, the net unrealized gains (losses) for equity securities held at June 30, 2023 and 2022 were $(14) million and $(59) million, respectively. |
Postretirement Benefits
Postretirement Benefits | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
Postretirement Benefits | Postretirement benefits A. Pension and postretirement benefit costs U.S. Pension Benefits Non-U.S. Pension Benefits Other Postretirement Benefits June 30 June 30 June 30 (Millions of dollars) 2023 2022 2023 2022 2023 2022 For the three months ended: Components of net periodic benefit cost: Service cost $ — $ — $ 10 $ 12 $ 17 $ 25 Interest cost 164 101 30 18 36 20 Expected return on plan assets (172) (168) (40) (33) (3) (2) Amortization of prior service cost (credit) — — — — (3) (2) Net periodic benefit cost (benefit) 1 $ (8) $ (67) $ — $ (3) $ 47 $ 41 For the six months ended: Components of net periodic benefit cost: Service cost $ — $ — $ 20 $ 25 $ 34 $ 50 Interest cost 328 201 61 36 72 40 Expected return on plan assets (344) (335) (80) (67) (6) (6) Amortization of prior service cost (credit) — — — — (6) (3) Net periodic benefit cost (benefit) 1 $ (16) $ (134) $ 1 $ (6) $ 94 $ 81 1 The service cost component is included in Operating costs in the Consolidated Statement of Results of Operations. All other components are included in Other income (expense) in the Consolidated Statement of Results of Operations. We made $56 million and $264 million of contributions to our pension and other postretirement plans during the three and six months ended June 30, 2023, respectively. We currently anticipate full-year 2023 contributions of approximately $372 million. B. Defined contribution benefit costs Total company costs related to our defined contribution plans, which are included in Operating Costs in the Consolidated Statement of Results of Operations, were as follows: Three Months Ended June 30 Six Months Ended June 30 (Millions of dollars) 2023 2022 2023 2022 U.S. Plans $ 136 $ 34 $ 285 $ 149 Non-U.S. Plans 29 27 58 56 $ 165 $ 61 $ 343 $ 205 The increase in the U.S. defined contribution benefit costs for the three and six months ended June 30, 2023 was primarily due to the fair value adjustments related to our non-qualified deferred compensation plans. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases Revenues from finance and operating leases, primarily included in Revenues of Financial Products Three Months Ended June 30 Six Months Ended June 30 (Millions of dollars) 2023 2022 2023 2022 Finance lease revenue $ 105 $ 109 $ 209 $ 221 Operating lease revenue 275 271 550 549 Total $ 380 $ 380 $ 759 $ 770 |
Leases | Leases Revenues from finance and operating leases, primarily included in Revenues of Financial Products Three Months Ended June 30 Six Months Ended June 30 (Millions of dollars) 2023 2022 2023 2022 Finance lease revenue $ 105 $ 109 $ 209 $ 221 Operating lease revenue 275 271 550 549 Total $ 380 $ 380 $ 759 $ 770 |
Guarantees and Product Warranty
Guarantees and Product Warranty | 6 Months Ended |
Jun. 30, 2023 | |
Guarantees and Product Warranties [Abstract] | |
Guarantees and Product Warranty | Guarantees and product warranty Caterpillar dealer performance guarantees Dealer performance guarantees mainly consists of an indemnity to a third-party insurance company for potential losses related to performance bonds issued on behalf of Caterpillar dealers. The bonds have varying terms and are issued to insure governmental agencies against nonperformance by certain dealers. 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 June 30, 2023 and December 31, 2022, the related recorded liability was $5 million and $2 million, respectively. The maximum potential amount of future payments that we can estimate (undiscounted and without reduction for any amounts that may possibly be recovered under recourse or collateralized provisions) and we could be required to make under the guarantees was as follows: (Millions of dollars) June 30, December 31, Caterpillar dealer performance guarantees $ 177 $ 188 Other guarantees 390 323 Total guarantees $ 567 $ 511 Cat Financial provides guarantees to purchase certain loans of Caterpillar dealers from a special-purpose corporation (SPC) that qualifies as a variable interest entity. The purpose of the SPC is to provide short-term working capital loans to Caterpillar dealers. This SPC issues commercial paper and uses the proceeds to fund its loan program. Cat Financial receives a fee for providing this guarantee. Cat Financial is the primary beneficiary of the SPC as its guarantees result in Cat Financial having both the power to direct the activities that most significantly impact the SPC’s economic performance and the obligation to absorb losses, and therefore Cat Financial has consolidated the financial statements of the SPC. As of June 30, 2023 and December 31, 2022, the SPC’s assets of $1.24 billion and $971 million, respectively, were primarily comprised of loans to dealers, and the SPC’s liabilities of $1.24 billion and $970 million, respectively, were primarily comprised of commercial paper. The assets of the SPC are not available to pay Cat Financial’s creditors. Cat Financial may be obligated to perform under the guarantee if the SPC experiences losses. No loss has been experienced or is anticipated under this loan purchase agreement. We determine our product warranty liability by applying historical claim rate experience to the current field population and dealer inventory. Generally, we base historical claim rates on actual warranty experience for each product by machine model/engine size by customer or dealer location (inside or outside North America). We develop specific rates for each product shipment month and update them monthly based on actual warranty claim experience. The reconciliation of the change in our product warranty liability balances for the six months ended June 30 was as follows: First Six Months (Millions of dollars) 2023 2022 Warranty liability, beginning of period $ 1,761 $ 1,689 Reduction in liability (payments) (410) (388) Increase in liability (new warranties) 471 350 Warranty liability, end of period $ 1,822 $ 1,651 |
Profit Per Share
Profit Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share Reconciliation [Abstract] | |
Profit Per Share | Profit per share Computations of profit per share: Three Months Ended June 30 Six Months Ended June 30 (Dollars in millions except per share data) 2023 2022 2023 2022 Profit for the period (A) 1 $ 2,922 $ 1,673 $ 4,865 $ 3,210 Determination of shares (in millions): Weighted-average number of common shares outstanding (B) 512.9 531.0 514.3 532.6 Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price 2.1 3.1 2.8 3.5 Average common shares outstanding for fully diluted computation (C) 2 515.0 534.1 517.1 536.1 Profit per share of common stock: Assuming no dilution (A/B) $ 5.70 $ 3.15 $ 9.46 $ 6.03 Assuming full dilution (A/C) 2 $ 5.67 $ 3.13 $ 9.41 $ 5.99 Shares outstanding as of June 30 (in millions) 510.1 527.9 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 six months ended June 30, 2023 and 2022, we excluded 0.8 million and 2.1 million of outstanding stock options, respectively, from the computation of diluted earnings per share because the effect would have been antidilutive. |
Accumulated other comprehensive
Accumulated other comprehensive income (loss) | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive income (loss) We present comprehensive income and its components in the Consolidated Statement of Comprehensive Income. Changes in the balances for each component of AOCI were as follows: Three Months Ended June 30 Six Months Ended June 30 (Millions of dollars) 2023 2022 2023 2022 Foreign currency translation: Beginning balance $ (1,721) $ (1,623) $ (2,328) $ (1,508) Gains (losses) on foreign currency translation (144) (632) (41) (736) Less: Tax provision /(benefit) (2) 27 (12) 38 Net gains (losses) on foreign currency translation (142) (659) (29) (774) (Gains) losses reclassified to earnings — — 494 — Less: Tax provision /(benefit) — — — — Net (gains) losses reclassified to earnings — — 494 — Other comprehensive income (loss), net of tax (142) (659) 465 (774) Ending balance $ (1,863) $ (2,282) $ (1,863) $ (2,282) Pension and other postretirement benefits Beginning balance $ (41) $ (63) $ (39) $ (62) Current year prior service credit (cost) — — — — Less: Tax provision /(benefit) — — — — Net current year prior service credit (cost) — — — — Amortization of prior service (credit) cost (3) (2) (6) (3) Less: Tax provision /(benefit) — (1) (1) (1) Net amortization of prior service (credit) cost (3) (1) (5) (2) Other comprehensive income (loss), net of tax (3) (1) (5) (2) Ending balance $ (44) $ (64) $ (44) $ (64) Derivative financial instruments Beginning balance $ 112 $ 20 $ 28 $ (3) Gains (losses) deferred (12) 207 44 254 Less: Tax provision /(benefit) (3) 26 9 36 Net gains (losses) deferred (9) 181 35 218 (Gains) losses reclassified to earnings (42) (321) 10 (340) Less: Tax provision /(benefit) (10) (54) 2 (59) Net (gains) losses reclassified to earnings (32) (267) 8 (281) Other comprehensive income (loss), net of tax (41) (86) 43 (63) Ending balance $ 71 $ (66) $ 71 $ (66) Available-for-sale securities Beginning balance $ (96) $ (44) $ (118) $ 20 Gains (losses) deferred (16) (54) 10 (133) Less: Tax provision /(benefit) (2) (11) 2 (26) Net gains (losses) deferred (14) (43) 8 (107) (Gains) losses reclassified to earnings — — — — Less: Tax provision /(benefit) — — — — Net (gains) losses reclassified to earnings — — — — Other comprehensive income (loss), net of tax (14) (43) 8 (107) Ending balance $ (110) $ (87) $ (110) $ (87) Total AOCI Ending Balance at June 30 $ (1,946) $ (2,499) $ (1,946) $ (2,499) |
Environmental and legal matters
Environmental and legal matters | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Environmental and legal matters | Environmental and legal matters The Company is regulated by federal, state and international environmental laws governing its use, transport and disposal of substances and control of emissions. In addition to governing our manufacturing and other operations, these laws often impact the development of our products, including, but not limited to, required compliance with air emissions standards applicable to internal combustion engines. We have made, and will continue to make, significant research and development and capital expenditures to comply with these emissions standards. We are engaged in remedial activities at a number of locations, often with other companies, pursuant to federal and state laws. When it is probable we will pay remedial costs at a site, and those costs can be reasonably estimated, we accrue the investigation, remediation, and operating and maintenance costs against our earnings. We accrue costs based on consideration of currently available data and information with respect to each individual site, including available technologies, current applicable laws and regulations, and prior remediation experience. Where no amount within a range of estimates is more likely, we accrue the minimum. Where multiple potentially responsible parties are involved, we consider our proportionate share of the probable costs. In formulating the estimate of probable costs, we do not consider amounts expected to be recovered from insurance companies or others. We reassess these accrued amounts on a quarterly basis. The amount recorded for environmental remediation is not material and is included in Accrued expenses. We believe there is no more than a remote chance that a material amount for remedial activities at any individual site, or at all the sites in the aggregate, will be required. In addition, we are involved in other unresolved legal actions that arise in the normal course of business. The most prevalent of these unresolved actions involve disputes related to product design, manufacture and performance liability (including claimed asbestos exposure), contracts, employment issues, environmental matters, intellectual property rights, taxes (other than income taxes) and securities laws. The aggregate range of reasonably possible losses in excess of accrued liabilities, if any, associated with these unresolved legal actions is not material. In some cases, we cannot reasonably estimate a range of loss because there is insufficient information regarding the matter. However, we believe there is no more than a remote chance that any liability arising from these matters would be material. Although it is not possible to predict with certainty the outcome of these unresolved legal actions, we believe that these actions will not individually or in the aggregate have a material adverse effect on our consolidated results of operations, financial position or liquidity. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income taxes The effective tax rate for the six months ended June 30, 2023 was 23.2 percent compared to 21.9 percent for the six months ended June 30, 2022. The effective tax rate for the three months ended June 30, 2023 was 20.6 percent compared to 20.4 percent for the three months ended June 30, 2022. The provision for income taxes for the six months ended June 30, 2023, reflected an estimated annual tax rate of 23 percent, compared with 23.5 percent for the six months ended June 30, 2022, excluding the discrete items discussed below. The comparative tax rate for full-year 2022 was 23.2 percent. The 2023 estimated annual tax rate excludes the impact of the nondeductible loss of $586 million related to the divestiture of the company's Longwall business. In the six months ended June 30, 2023, the company recorded discrete tax benefits of $88 million due to a change in the valuation allowance for certain deferred tax assets. In addition, the company recorded a discrete tax benefit of $32 million for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense, compared with a $18 million benefit for the six months ended June 30, 2022. In the six months ended June 30, 2022, the company also recorded discrete tax benefits of $49 million for a prior year tax adjustment due to a change in estimate. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment information A. Basis for segment information Our Executive Office is comprised of a Chief Executive Officer (CEO), four Group Presidents, a Chief Financial Officer (CFO), a Chief Legal Officer and a Chief Human Resources Officer. The Group Presidents and CFO are accountable for a related set of end-to-end businesses that they manage. The Chief Legal Officer leads the Law, Security and Public Policy Division. The Chief Human Resources Officer leads the Human Resources Organization. The CEO allocates resources and manages performance at the Group President/CFO level. As such, the CEO serves as our Chief Operating Decision Maker, and operating segments are primarily based on the Group President/CFO reporting structure. Three of our operating segments, Construction Industries, Resource Industries and Energy & Transportation are led by Group Presidents. One operating segment, Financial Products, is led by the CFO who also has responsibility for Corporate Services. Corporate Services is a cost center primarily responsible for the performance of certain support functions globally and to provide centralized services; it does not meet the definition of an operating segment. One Group President leads one smaller operating segment that is included in the All Other operating segment. The Law, Security and Public Policy Division and the Human Resources Organization are cost centers and do not meet the definition of an operating segment. B. Description of segments We have five operating segments, of which four are reportable segments. Following is a brief description of our reportable segments and the business activities included in the All Other operating segment: Construction Industries : A segment primarily responsible for supporting customers using machinery in infrastructure and building construction applications. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes asphalt pavers; backhoe loaders; cold planers; compactors; compact track loaders; forestry machines; material handlers; motor graders; pipelayers; road reclaimers; skid steer loaders; telehandlers; track-type loaders; track-type tractors (small, medium); track excavators (mini, small, medium, large); wheel excavators; wheel loaders (compact, small, medium); and related parts and work tools. Inter-segment sales are a source of revenue for this segment. Resource Industries : A segment primarily responsible for supporting customers using machinery in mining, heavy construction and quarry and aggregates. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes large track-type tractors; large mining trucks; hard rock vehicles; electric rope shovels; draglines; hydraulic shovels; rotary drills; large wheel loaders; off-highway trucks; articulated trucks; wheel tractor scrapers; wheel dozers; landfill compactors; soil compactors; select work tools; machinery components; electronics and control systems and related parts. In addition to equipment, Resource Industries also develops and sells technology products and services to provide customers fleet management, equipment management analytics, autonomous machine capabilities, safety services and mining performance solutions. Resource Industries also manages areas that provide services to other parts of the company, including strategic procurement, lean center of excellence, integrated manufacturing, research and development for hydraulic systems, automation, electronics and software for Cat machines and engines. Inter-segment sales are a source of revenue for this segment. Energy & Transportation : A segment primarily responsible for supporting customers using reciprocating engines, turbines, diesel-electric locomotives and related services across industries serving Oil and Gas, Power Generation, Industrial and Transportation applications, including marine- and rail-related businesses. Responsibilities include business strategy, product design, product management, development and testing, manufacturing, marketing and sales and product support. The product and services portfolio includes turbines, centrifugal gas compressors, and turbine-related services; reciprocating engine-powered generator sets; integrated systems and solutions used in the electric power generation industry; reciprocating engines, drivetrain and integrated systems and solutions for the marine and oil and gas industries; reciprocating engines, drivetrain and integrated systems and solutions supplied to the industrial industry as well as Cat machinery; electrified powertrain and zero-emission power sources and service solutions development; and diesel-electric locomotives and components and other rail-related products and services, including remanufacturing and leasing. Responsibilities also include the remanufacturing of Caterpillar reciprocating engines and components and remanufacturing services for other companies; and product support of on-highway vocational trucks for North America. Inter-segment sales are a source of revenue for this segment. Financial Products Segment : Provides financing alternatives to customers and dealers around the world for Caterpillar products and services, as well as financing for power generation facilities that, in most cases, incorporate Caterpillar products. Financing plans include operating and finance leases, revolving charge accounts, installment sale contracts, repair/rebuild financing, working capital loans and wholesale financing plans. The segment also provides insurance and risk management products and services that help customers and dealers manage their business risk. Insurance and risk management products offered include physical damage insurance, inventory protection plans, extended service coverage and maintenance plans for machines and engines, and dealer property and casualty insurance. The various forms of financing, insurance and risk management products offered to customers and dealers help support the purchase and lease of Caterpillar equipment. The segment also earns revenues from ME&T, but the related costs are not allocated to operating segments. Financial Products’ segment profit is determined on a pretax basis and includes other income/expense items. All Other operating segment : Primarily includes activities such as: business strategy; product management and development; manufacturing and sourcing of filters and fluids, undercarriage, ground-engaging tools, fluid transfer products, precision seals, rubber sealing and connecting components primarily for Cat® products; parts distribution; integrated logistics solutions; distribution services responsible for dealer development and administration, including a wholly owned dealer in Japan; dealer portfolio management and ensuring the most efficient and effective distribution of machines, engines and parts; brand management and marketing strategy; and digital investments for new customer and dealer solutions that integrate data analytics with state-of-the-art digital technologies while transforming the buying experience. Results for the All Other operating segment are included as a reconciling item between reportable segments and consolidated external reporting. C. Segment measurement and reconciliations There are several methodology differences between our segment reporting and our external reporting. The following is a list of the more significant methodology differences: • ME&T segment net assets generally include inventories, receivables, property, plant and equipment, goodwill, intangibles, accounts payable and customer advances. We generally manage at the corporate level liabilities other than accounts payable and customer advances, and we do not include these in segment operations. Financial Products Segment assets generally include all categories of assets. • We value segment inventories and cost of sales using a current cost methodology. • We amortize goodwill allocated to segments using a fixed amount based on a 20-year useful life. This methodology difference only impacts segment assets. We do not include goodwill amortization expense in segment profit. In addition, we have allocated to segments only a portion of goodwill for certain acquisitions made in 2011 or later. • We generally manage currency exposures for ME&T at the corporate level and do not include in segment profit the effects of changes in exchange rates on results of operations within the year. We report the net difference created in the translation of revenues and costs between exchange rates used for U.S. GAAP reporting and exchange rates used for segment reporting as a methodology difference. • We do not include stock-based compensation expense in segment profit. • Postretirement benefit expenses are split; segments are generally responsible for service costs, with the remaining elements of net periodic benefit cost included as a methodology difference. • We determine ME&T segment profit on a pretax basis and exclude interest expense and most other income/expense items. We determine Financial Products Segment profit on a pretax basis and include other income/expense items. Reconciling items are created based on accounting differences between segment reporting and our consolidated external reporting. Please refer to pages 30 to 33 for financial information regarding significant reconciling items. Most of our reconciling items are self-explanatory given the above explanations. For the reconciliation of profit, we have grouped the reconciling items as follows: • Corporate costs: These costs are related to corporate requirements primarily for compliance and legal functions for the benefit of the entire organization. • Restructuring costs: May include costs for employee separation, long-lived asset impairments, contract terminations and divestiture impacts. These costs are included in Other operating (income) expenses except for defined-benefit plan curtailment losses and special termination benefits, which are included in Other income (expense). Restructuring costs also include other exit-related costs, which may consist of accelerated depreciation, inventory write-downs, building demolition, equipment relocation and project management costs and LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold. See Note 20 for more information. • Methodology differences: See previous discussion of significant accounting differences between segment reporting and consolidated external reporting. • Timing: Timing differences in the recognition of costs between segment reporting and consolidated external reporting. For example, we report certain costs on the cash basis for segment reporting and the accrual basis for consolidated external reporting. For the three and six months ended June 30, 2023 and 2022, sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows: Sales and Revenues by Geographic Region (Millions of dollars) North America Latin America EAME Asia/ Pacific External Sales and Revenues Intersegment Sales and Revenues Total Sales and Revenues Three Months Ended June 30, 2023 Construction Industries $ 3,968 $ 566 $ 1,438 $ 1,149 $ 7,121 $ 33 $ 7,154 Resource Industries 1,342 538 517 1,076 3,473 90 3,563 Energy & Transportation 3,120 459 1,479 899 5,957 1,262 7,219 Financial Products Segment 593 102 118 110 923 1 — 923 Total sales and revenues from reportable segments 9,023 1,665 3,552 3,234 17,474 1,385 18,859 All Other operating segment 16 — 4 14 34 82 116 Corporate Items and Eliminations (117) (23) (23) (27) (190) (1,467) (1,657) Total Sales and Revenues $ 8,922 $ 1,642 $ 3,533 $ 3,221 $ 17,318 $ — $ 17,318 Three Months Ended June 30, 2022 Construction Industries $ 3,006 $ 635 $ 1,202 $ 1,148 $ 5,991 $ 42 $ 6,033 Resource Industries 1,027 466 489 913 2,895 66 2,961 Energy & Transportation 2,277 382 1,215 766 4,640 1,065 5,705 Financial Products Segment 505 87 97 109 798 1 — 798 Total sales and revenues from reportable segments 6,815 1,570 3,003 2,936 14,324 1,173 15,497 All Other operating segment 18 — 5 15 38 80 118 Corporate Items and Eliminations (62) (23) (10) (20) (115) (1,253) (1,368) Total Sales and Revenues $ 6,771 $ 1,547 $ 2,998 $ 2,931 $ 14,247 $ — $ 14,247 1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $172 million and $108 million in the three months ended June 30, 2023 and 2022, respectively. Sales and Revenues by Geographic Region (Millions of dollars) North America Latin America EAME Asia/ Pacific External Sales and Revenues Intersegment Sales and Revenues Total Sales and Revenues Six Months Ended June 30, 2023 Construction Industries $ 7,576 $ 1,165 $ 2,774 $ 2,310 $ 13,825 $ 75 $ 13,900 Resource Industries 2,650 1,012 1,116 2,054 6,832 158 6,990 Energy & Transportation 5,692 839 2,863 1,618 11,012 2,461 13,473 Financial Products Segment 1,168 206 232 219 1,825 1 — 1,825 Total sales and revenues from reportable segments 17,086 3,222 6,985 6,201 33,494 2,694 36,188 All Other operating segment 34 — 8 27 69 158 227 Corporate Items and Eliminations (248) (41) (42) (52) (383) (2,852) (3,235) Total Sales and Revenues $ 16,872 $ 3,181 $ 6,951 $ 6,176 $ 33,180 $ — $ 33,180 Six Months Ended June 30, 2022 Construction Industries $ 5,726 $ 1,262 $ 2,479 $ 2,610 $ 12,077 $ 71 $ 12,148 Resource Industries 2,045 865 1,083 1,661 5,654 137 5,791 Energy & Transportation 4,215 692 2,399 1,366 8,672 2,071 10,743 Financial Products Segment 1,008 160 193 220 1,581 1 — 1,581 Total sales and revenues from reportable segments 12,994 2,979 6,154 5,857 27,984 2,279 30,263 All Other operating segment 36 — 10 31 77 159 236 Corporate Items and Eliminations (122) (39) (21) (43) (225) (2,438) (2,663) Total Sales and Revenues $ 12,908 $ 2,940 $ 6,143 $ 5,845 $ 27,836 $ — $ 27,836 1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $334 million and $208 million in the six months ended June 30, 2023 and 2022, respectively. For the three and six months ended June 30, 2023 and 2022, Energy & Transportation segment sales by end user application were as follows: Energy & Transportation External Sales Three Months Ended June 30 Six Months Ended June 30 (Millions of dollars) 2023 2022 2023 2022 Oil and gas $ 1,760 $ 1,232 $ 3,074 $ 2,180 Power generation 1,645 1,186 2,929 2,198 Industrial 1,318 1,117 2,573 2,137 Transportation 1,234 1,105 2,436 2,157 Energy & Transportation External Sales $ 5,957 $ 4,640 $ 11,012 $ 8,672 Reconciliation of Consolidated profit before taxes: (Millions of dollars) Three Months Ended June 30 Six Months Ended June 30 2023 2022 2023 2022 Profit from reportable segments: Construction Industries $ 1,803 $ 989 $ 3,593 $ 2,046 Resource Industries 740 355 1,504 716 Energy & Transportation 1,269 659 2,326 1,197 Financial Products Segment 240 217 472 455 Total profit from reportable segments 4,052 2,220 7,895 4,414 Profit from All Other operating segment 10 31 21 34 Cost centers 13 28 43 38 Corporate costs (211) (304) (449) (502) Timing 95 53 (111) (45) Restructuring costs (31) (28) (642) (41) Methodology differences: Inventory/cost of sales 13 101 139 269 Postretirement benefit expense (40) 130 (71) 211 Stock-based compensation expense (74) (67) (118) (107) Financing costs (52) (94) (102) (194) Currency 54 156 28 262 Other income/expense methodology differences (158) (97) (304) (178) Other methodology differences (19) (33) (43) (66) Total consolidated profit before taxes $ 3,652 $ 2,096 $ 6,286 $ 4,095 Reconciliation of Assets: (Millions of dollars) June 30, 2023 December 31, 2022 Assets from reportable segments: Construction Industries $ 5,619 $ 5,168 Resource Industries 5,648 5,775 Energy & Transportation 9,909 9,455 Financial Products Segment 35,445 34,269 Total assets from reportable segments 56,621 54,667 Assets from All Other operating segment 1,820 1,828 Items not included in segment assets: Cash and cash equivalents 6,323 6,042 Deferred income taxes 2,491 2,098 Goodwill and intangible assets 4,440 4,248 Property, plant and equipment – net and other assets 4,862 4,234 Inventory methodology differences (3,311) (3,063) Liabilities included in segment assets 12,579 12,519 Other (398) (630) Total assets $ 85,427 $ 81,943 Reconciliation of Depreciation and amortization: (Millions of dollars) Three Months Ended June 30 Six Months Ended June 30 2023 2022 2023 2022 Depreciation and amortization from reportable segments: Construction Industries $ 54 $ 57 $ 108 $ 115 Resource Industries 82 91 169 183 Energy & Transportation 133 135 262 269 Financial Products Segment 181 185 359 373 Total depreciation and amortization from reportable segments 450 468 898 940 Items not included in segment depreciation and amortization: All Other operating segment 60 58 117 116 Cost centers 22 22 42 43 Other 10 5 17 11 Total depreciation and amortization $ 542 $ 553 $ 1,074 $ 1,110 Reconciliation of Capital expenditures: (Millions of dollars) Three Months Ended June 30 Six Months Ended June 30 2023 2022 2023 2022 Capital expenditures from reportable segments: Construction Industries $ 51 $ 43 $ 83 $ 75 Resource Industries 44 42 70 64 Energy & Transportation 177 100 346 277 Financial Products Segment 410 334 689 575 Total capital expenditures from reportable segments 682 519 1,188 991 Items not included in segment capital expenditures: All Other operating segment 49 46 75 62 Cost centers 22 16 44 25 Timing (27) 16 185 208 Other (19) (2) (35) (12) Total capital expenditures $ 707 $ 595 $ 1,457 $ 1,274 |
Cat Financial Financing Activit
Cat Financial Financing Activities | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
Cat Financial Financing Activities | Cat Financial financing activities Allowance for credit losses Portfolio segments A portfolio segment is the level at which Cat Financial develops a systematic methodology for determining its allowance for credit losses. Cat Financial's portfolio segments and related methods for estimating expected credit losses are as follows: Customer Cat Financial provides loans and finance leases to end-user customers primarily for the purpose of financing new and used Caterpillar machinery, engines and equipment for commercial use. Cat Financial also provides financing for power generation facilities that, in most cases, incorporate Caterpillar products. The average original term of Cat Financial's customer finance receivable portfolio was approximately 51 months with an average remaining term of approximately 27 months as of June 30, 2023. Cat Financial typically maintains a security interest in financed equipment and requires physical damage insurance coverage on the financed equipment, both of which provide Cat Financial with certain rights and protections. If Cat Financial's collection efforts fail to bring a defaulted account current, Cat Financial generally can repossess the financed equipment, after satisfying local legal requirements, and sell it within the Caterpillar dealer network or through third-party auctions. Cat Financial estimates the allowance for credit losses related to its customer finance receivables based on loss forecast models utilizing probabilities of default and the estimated loss given default based on past loss experience adjusted for current conditions and reasonable and supportable forecasts capturing country and industry-specific economic factors. During the three and six months ended June 30, 2023, Cat Financial's forecasts reflected a continuation of the trend of relatively low unemployment rates and delinquencies within their portfolio. However, industry delinquencies show an increasing trend as persistently high inflation rates and consequent central bank actions are weakening global economic growth. The company believes the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long-term trends. Dealer Cat Financial provides financing to Caterpillar dealers in the form of wholesale financing plans. Cat Financial's wholesale financing plans provide assistance to dealers by financing their mostly new Caterpillar equipment inventory and rental fleets on a secured and unsecured basis. In addition, Cat Financial provides a variety of secured and unsecured loans to Caterpillar dealers. Cat Financial estimates the allowance for credit losses for dealer finance receivables based on historical loss rates with consideration of current economic conditions and reasonable and supportable forecasts. In general, Cat Financial's Dealer portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to its close working relationships with the dealers and their financial strength. Therefore, Cat Financial made no adjustments to historical loss rates during the three and six months ended June 30, 2023. Classes of finance receivables Cat Financial further evaluates portfolio segments by the class of finance receivables, which is defined as a level of information (below a portfolio segment) in which the finance receivables have the same initial measurement attribute and a similar method for assessing and monitoring credit risk. Cat Financial's classes, which align with management reporting for credit losses, are as follows: • North America - Finance receivables originated in the United States and Canada. • EAME - Finance receivables originated in Europe, Africa, the Middle East and Eurasia. • Asia/Pacific - Finance receivables originated in Australia, New Zealand, China, Japan, Southeast Asia and India. • Mining - Finance receivables related to large mining customers worldwide. • Latin America - Finance receivables originated in Mexico and Central and South American countries. • Power - Finance receivables originated worldwide related to Caterpillar electrical power generation, gas compression and co-generation systems and non-Caterpillar equipment that is powered by these systems. Receivable balances, including accrued interest, are written off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible (generally upon repossession of the collateral). The amount of the write-off is determined by comparing the fair value of the collateral, less cost to sell, to the amortized cost. Subsequent recoveries, if any, are credited to the allowance for credit losses when received. An analysis of the allowance for credit losses was as follows: (Millions of dollars) Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Customer Dealer Total Customer Dealer Total Beginning balance $ 278 $ 65 $ 343 $ 271 $ 81 $ 352 Write-offs (21) — (21) (18) — (18) Recoveries 13 — 13 18 — 18 Provision for credit losses 1 (6) (15) (21) 22 1 23 Other 1 — 1 (3) — (3) Ending balance $ 265 $ 50 $ 315 $ 290 $ 82 $ 372 Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Customer Dealer Total Customer Dealer Total Beginning balance $ 277 $ 65 $ 342 $ 251 $ 82 $ 333 Write-offs (41) — (41) (38) — (38) Recoveries 23 — 23 30 — 30 Provision for credit losses 1 4 (15) (11) 48 — 48 Other 2 — 2 (1) — (1) Ending balance $ 265 $ 50 $ 315 $ 290 $ 82 $ 372 Finance Receivables $ 19,814 $ 1,793 $ 21,607 $ 19,888 $ 1,764 $ 21,652 1 Excludes provision for credit losses on unfunded commitments and other miscellaneous receivables. Gross write-offs by origination year for the Customer portfolio segment were as follows: (Millions of dollars) Three Months Ended June 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Total North America $ — $ 2 $ 2 $ 1 $ 1 $ 1 $ 3 $ 10 EAME — — 2 1 — 1 — 4 Asia/Pacific — 1 1 2 — — — 4 Latin America — 2 1 — — — — 3 Total $ — $ 5 $ 6 $ 4 $ 1 $ 2 $ 3 $ 21 Six Months Ended June 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Total North America $ — $ 5 $ 5 $ 1 $ 1 $ 1 $ 7 $ 20 EAME — 1 2 2 — 1 — 6 Asia/Pacific — 1 3 3 1 — — 8 Latin America — 2 2 2 1 — — 7 Total $ — $ 9 $ 12 $ 8 $ 3 $ 2 $ 7 $ 41 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) June 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Total Finance Receivables North America Current $ 2,056 $ 3,251 $ 2,610 $ 1,104 $ 407 $ 109 $ 285 $ 9,822 31-60 days past due 13 31 24 15 10 2 3 98 61-90 days past due 3 13 10 6 2 1 1 36 91+ days past due 1 16 20 11 5 4 2 59 EAME Current 623 1,091 757 361 190 155 — 3,177 31-60 days past due 3 8 11 4 1 1 — 28 61-90 days past due 1 5 6 3 2 — — 17 91+ days past due — 16 18 11 3 1 — 49 Asia/Pacific Current 536 770 452 155 33 9 — 1,955 31-60 days past due — 8 11 7 1 — — 27 61-90 days past due — 4 5 2 1 — — 12 91+ days past due 1 4 5 4 1 — — 15 Mining Current 646 749 439 169 112 69 38 2,222 31-60 days past due — 42 32 — — — — 74 61-90 days past due — — — — — — — — 91+ days past due — 2 1 — — — — 3 Latin America Current 389 658 305 99 38 13 — 1,502 31-60 days past due 2 16 7 3 4 — — 32 61-90 days past due — 5 3 4 1 — — 13 91+ days past due — 16 21 9 9 22 — 77 Power Current 30 71 73 89 31 145 154 593 31-60 days past due — — — — — — — — 61-90 days past due — — — — — — — — 91+ days past due — — — — — 3 — 3 Totals by Aging Category Current $ 4,280 $ 6,590 $ 4,636 $ 1,977 $ 811 $ 500 $ 477 $ 19,271 31-60 days past due 18 105 85 29 16 3 3 259 61-90 days past due 4 27 24 15 6 1 1 78 91+ days past due 2 54 65 35 18 30 2 206 Total Customer $ 4,304 $ 6,776 $ 4,810 $ 2,056 $ 851 $ 534 $ 483 $ 19,814 (Millions of dollars) December 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Total Finance Receivables North America Current $ 3,915 $ 3,276 $ 1,525 $ 653 $ 206 $ 34 $ 240 $ 9,849 31-60 days past due 25 26 18 12 4 1 4 90 61-90 days past due 9 15 7 3 1 — 3 38 91+ days past due 11 16 12 6 4 3 4 56 EAME Current 1,270 953 477 280 155 68 — 3,203 31-60 days past due 10 12 7 1 1 — — 31 61-90 days past due 8 4 3 1 — — — 16 91+ days past due 6 25 16 4 1 1 — 53 Asia/Pacific Current 1,033 684 313 69 18 2 — 2,119 31-60 days past due 10 12 8 1 1 — — 32 61-90 days past due 2 5 4 2 — — — 13 91+ days past due 2 6 6 4 — — — 18 Mining Current 863 575 220 171 93 108 80 2,110 31-60 days past due — 1 — — — — — 1 61-90 days past due — — — — — — — — 91+ days past due — — — — — 1 — 1 Latin America Current 770 400 150 69 26 20 — 1,435 31-60 days past due 7 8 4 2 — 1 — 22 61-90 days past due 2 5 1 1 — — — 9 91+ days past due 2 13 11 2 1 — — 29 Power Current 78 85 142 33 18 161 125 642 31-60 days past due — — — — — — — — 61-90 days past due — — — — — — — — 91+ days past due — — — — — 5 — 5 Totals by Aging Category Current $ 7,929 $ 5,973 $ 2,827 $ 1,275 $ 516 $ 393 $ 445 $ 19,358 31-60 days past due 52 59 37 16 6 2 4 176 61-90 days past due 21 29 15 7 1 — 3 76 91+ days past due 21 60 45 16 6 10 4 162 Total Customer $ 8,023 $ 6,121 $ 2,924 $ 1,314 $ 529 $ 405 $ 456 $ 19,772 Finance receivables in the Customer portfolio segment are substantially secured by collateral, primarily in the form of Caterpillar and other equipment. For those contracts where the borrower is experiencing financial difficulty, repayment of the outstanding amounts is generally expected to be provided through the operation or repossession and sale of the equipment. Dealer As of June 30, 2023 and December 31, 2022, Cat Financial's total amortized cost of finance receivables within the Dealer portfolio segment was current, with the exception of $43 million and $58 million, respectively, that were 91+ days past due in Latin America, all of which were originated in 2017. Non-accrual finance receivables Recognition of income is suspended and the finance receivable is placed on non-accrual status when management determines that collection of future income is not probable. Contracts on non-accrual status are generally more than 120 days past due. Recognition is resumed and previously suspended income is recognized when collection is considered probable. Payments received while the finance receivable is on non-accrual status are applied to interest and principal in accordance with the contractual terms. Interest earned but uncollected prior to the receivable being placed on non-accrual status is written off through Provision for credit losses when, in the judgment of management, it is considered uncollectible. In Cat Financial's Customer portfolio segment, finance receivables which were on non-accrual status and finance receivables over 90 days past due and still accruing income were as follows: (Millions of dollars) June 30, 2023 December 31, 2022 Amortized Cost Amortized Cost Non-accrual Non-accrual 91+ Still Non-accrual Non-accrual 91+ Still North America $ 54 $ — $ 15 $ 52 $ 4 $ 11 EAME 44 — 7 43 — 10 Asia/Pacific 10 — 5 11 — 7 Mining 3 — — — 1 — Latin America 85 — — 45 — — Power 10 — — 5 11 — Total $ 206 $ — $ 27 $ 156 $ 16 $ 28 There were $43 million and $58 million, respectively, in finance receivables in Cat Financial's Dealer portfolio segment on non-accrual status as of June 30, 2023 and December 31, 2022, all of which was in Latin America. Modifications Cat Financial periodically modifies the terms of their finance receivable agreements in response to borrowers’ financial difficulty. Typically, the types of modifications granted are payment deferrals, interest-only payment periods and/or term extensions. Many modifications Cat Financial grants are for commercial reasons or for borrowers experiencing some form of short-term financial stress and may result in insignificant payment delays. Cat Financial does not consider these borrowers to be experiencing financial difficulty. Modifications for borrowers Cat Financial does consider to be experiencing financial difficulty typically result in payment deferrals and/or reduced payments for a period of four months or longer, term extension of six months or longer or a combination of both. During the three and six months ended June 30, 2023, there were no finance receivable modifications granted to borrowers experiencing financial difficulty in Cat Financial's Dealer portfolio segment. The amortized cost basis of finance receivables modified for borrowers experiencing financial difficulty in the Customer portfolio segment during the three and six months ended June 30, 2023, was $22 million and $30 million, respectively. Total modifications with borrowers experiencing financial difficulty represented 0.10 percent and 0.14 percent of Cat Financial's finance receivable portfolio for the same periods, respectively. After Cat Financial modifies a finance receivable, they continue to track its performance under its most recent modified terms. As of June 30, 2023, all of the finance receivables modified with borrowers experiencing financial difficulty are current except for $1 million in EAME that was 31-60 days past due. For the three and six months ended June 30, 2023, the financial effects of term extensions for borrowers experiencing financial difficulty added a weighted average of 18 and 21 months, respectively, to the terms of modified contracts. For the three and six months ended June 30, 2023, the financial effects of payment delays for borrowers experiencing financial difficulty resulted in weighted average paymen t deferrals and/or interest only payment periods of 7 and 8 months, respectively. The effect of most modifications made to finance receivables for borrowers experiencing financial difficulty is already included in the allowance for credit losses based on the methodologies used to estimate the allowance; therefore, a change to the allowance for credit losses is generally not recorded upon modification. On rare occasions when principal forgiveness is provided, the amount forgiven is written off against the allowance for credit losses. |
Fair Value Disclosures
Fair Value Disclosures | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | Fair value disclosures A. Fair value measurements The guidance on fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. This guidance also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. In accordance with this guidance, fair value measurements are classified under the following hierarchy: • Level 1 – Quoted prices for identical instruments in active markets. • Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets. • Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable. When available, we use quoted market prices to determine fair value, and we classify such measurements within Level 1. In some cases where market prices are not available, we make use of observable market based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon valuations in which one or more significant inputs are unobservable, including internally developed models that use, where possible, current market-based parameters such as interest rates, yield curves and currency rates. These measurements are classified within Level 3. We classify fair value measurements according to the lowest level input or value-driver that is significant to the valuation. We may therefore classify a measurement within Level 3 even though there may be significant inputs that are readily observable. Fair value measurement includes the consideration of nonperformance risk. Nonperformance risk refers to the risk that an obligation (either by a counterparty or Caterpillar) will not be fulfilled. For financial assets traded in an active market (Level 1 and certain Level 2), the nonperformance risk is included in the market price. For certain other financial assets and liabilities (certain Level 2 and Level 3), our fair value calculations have been adjusted accordingly. Investments in debt and equity securities We have investments in certain debt and equity securities that are recorded at fair value. Fair values for our U.S. treasury bonds and large capitalization value and smaller company growth equity securities are based upon valuations for identical instruments in active markets. Fair values for other government debt securities, corporate debt securities and mortgage-backed debt securities are based upon models that take into consideration such market-based factors as recent sales, risk-free yield curves and prices of similarly rated bonds. We also have investments in time deposits classified as held-to-maturity debt securities. The fair value of these investments is based upon valuations observed in less active markets than Level 1. These investments have a maturity of less than one year and are recorded at amortized costs, which approximate fair value. In addition, Insurance Services has an equity investment in a real estate investment trust (REIT) which is recorded at fair value based on the net asset value (NAV) of the investment and is not classified within the fair value hierarchy. See Note 8 for additional information on our investments in debt and equity securities. Derivative financial instruments The fair value of interest rate contracts is primarily based on a standard industry accepted valuation model that utilizes the appropriate market-based forward swap curves and zero-coupon interest rates to determine discounted cash flows. The fair value of foreign currency and commodity forward, option and cross currency contracts is based on standard industry accepted valuation models that discount cash flows resulting from the differential between the contract price and the market-based forward rate. See Note 5 for additional information. Assets and liabilities measured on a recurring basis at fair value included in our Consolidated Statement of Financial Position as of June 30, 2023 and December 31, 2022 were as follows: June 30, 2023 (Millions of dollars) Level 1 Level 2 Level 3 Measured at NAV Total Assets Debt securities Government debt securities U.S. treasury bonds $ 10 $ — $ — $ — $ 10 Other U.S. and non-U.S. government bonds — 56 — — 56 Corporate debt securities Corporate bonds and other debt securities — 2,500 — — 2,500 Asset-backed securities — 186 — — 186 Mortgage-backed debt securities U.S. governmental agency — 359 — — 359 Residential — 2 — — 2 Commercial — 127 — — 127 Total debt securities 10 3,230 — — 3,240 Equity securities Large capitalization value 207 — — — 207 Smaller company growth 33 — — — 33 REIT — — — 188 188 Total equity securities 240 — — 188 428 Derivative financial instruments - assets Foreign currency contracts - net — 281 — — 281 Commodity contracts - net — 1 — — 1 Total assets $ 250 $ 3,512 $ — $ 188 $ 3,950 Liabilities Derivative financial instruments - liabilities Interest rate contracts - net $ — $ 213 $ — $ — $ 213 Total liabilities $ — $ 213 $ — $ — $ 213 December 31, 2022 (Millions of dollars) Level 1 Level 2 Level 3 Measured at NAV Total Assets Debt securities Government debt securities U.S. treasury bonds $ 9 $ — $ — $ — $ 9 Other U.S. and non-U.S. government bonds — 55 — — 55 Corporate debt securities Corporate bonds and other debt securities — 2,416 50 — 2,466 Asset-backed securities — 182 — — 182 Mortgage-backed debt securities U.S. governmental agency — 333 — — 333 Residential — 2 — — 2 Commercial — 117 — — 117 Total debt securities 9 3,105 50 — 3,164 Equity securities Large capitalization value 203 — — — 203 Smaller company growth 31 — — — 31 REIT — — — 207 207 Total equity securities 234 — — 207 441 Derivative financial instruments - assets Foreign currency contracts - net — 328 — — 328 Commodity contracts - net — 15 — — 15 Total Assets $ 243 $ 3,448 $ 50 $ 207 $ 3,948 Liabilities Derivative financial instruments - liabilities Interest rate contracts - net $ — $ 195 $ — $ — $ 195 Total liabilities $ — $ 195 $ — $ — $ 195 In addition to the amounts above, certain Cat Financial loans are subject to measurement at fair value on a nonrecurring basis and are classified as Level 3 measurements. A loan is measured at fair value when management determines that collection of contractual amounts due is not probable and the loan is individually evaluated. In these cases, an allowance for credit losses may be established based either on the present value of expected future cash flows discounted at the receivables’ effective interest rate, the fair value of the collateral for collateral-dependent receivables, or the observable market price of the receivable. In determining collateral value, Cat Financial estimates the current fair market value of the collateral less selling costs. Cat Financial had loans carried at fair value of $58 million and $68 million as of June 30, 2023 and December 31, 2022, respectively. B. Fair values of financial instruments In addition to the methods and assumptions we use to record the fair value of financial instruments as discussed in the Fair value measurements section above, we use the following methods and assumptions to estimate the fair value of our financial instruments: Cash and cash equivalents Carrying amount approximates fair value. We classify cash and cash equivalents as Level 1. See Consolidated Statement of Financial Position. Restricted cash and short-term investments Carrying amount approximates fair value. We include restricted cash and short-term investments in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. We classify these instruments as Level 1 except for time deposits which are Level 2, and certain corporate debt securities which are Level 3. See Note 8 for additional information. Finance receivables We estimate fair value by discounting the future cash flows using current rates, representative of receivables with similar remaining maturities. Wholesale inventory receivables We estimate fair value by discounting the future cash flows using current rates, representative of receivables with similar remaining maturities. Short-term borrowings Carrying amount approximates fair value. We classify short-term borrowings as Level 1. See Consolidated Statement of Financial Position. Long-term debt We estimate fair value for fixed and floating rate debt based on quoted market prices. Guarantees The fair value of guarantees is based upon our estimate of the premium a market participant would require to issue the same guarantee in a stand-alone arms-length transaction with an unrelated party. If quoted or observable market prices are not available, fair value is based upon internally developed models that utilize current market-based assumptions. We classify guarantees as Level 3. See Note 11 for additional information. Our financial instruments not carried at fair value were as follows: June 30, 2023 December 31, 2022 (Millions of dollars) Carrying Amount Fair Value Carrying Amount Fair Value Fair Value Levels Reference Assets Finance receivables – net (excluding finance leases 1 ) $ 14,411 $ 13,784 $ 13,965 $ 13,377 3 Note 17 Wholesale inventory receivables – net (excluding finance leases 1 ) 1,063 1,008 827 778 3 Liabilities Long-term debt (including amounts due within one year) Machinery, Energy & Transportation 9,578 9,368 9,618 9,240 2 Financial Products 22,573 21,963 21,418 20,686 2 1 Represents finance leases and failed sale leasebacks of $7,117 million and $7,325 million at June 30, 2023 and December 31, 2022, respectively. |
Other Income (expense)
Other Income (expense) | 6 Months Ended |
Jun. 30, 2023 | |
Other Income and Expenses [Abstract] | |
Other income (expense) | Other income (expense) Three Months Ended June 30 Six Months Ended June 30 (Millions of dollars) 2023 2022 2023 2022 Investment and interest income $ 96 $ 25 $ 189 $ 46 Foreign exchange gains (losses) 1 40 224 (32) 271 License fee income 43 37 74 69 Net periodic pension and OPEB income (cost), excluding service cost (12) 66 (25) 134 Gains (losses) on securities (10) (47) (21) (59) Miscellaneous income (loss) (30) (45) (26) 52 Total $ 127 $ 260 $ 159 $ 513 1 Includes gains (losses) from foreign exchange derivative contracts. See Note 5 for further details. |
Restructuring Costs
Restructuring Costs | 6 Months Ended |
Jun. 30, 2023 | |
Restructuring Charges [Abstract] | |
Restructuring Costs | Restructuring costs Our accounting for employee separations is dependent upon how the particular program is designed. For voluntary programs, we recognize eligible separation costs at the time of employee acceptance unless the acceptance requires explicit approval by the company. For involuntary programs, we recognize eligible costs when management has approved the program, the affected employees have been properly notified and the costs are estimable. Restructuring costs for the three and six months ended June 30, 2023 and 2022 were as follows: (Millions of dollars) Three Months Ended June 30 Six Months Ended June 30 2023 2022 2023 2022 Employee separations 1 $ 10 $ 18 $ 22 $ 23 Longwall divestiture 1 — — 586 — Long-lived asset impairments 1 2 5 2 5 Other 2 19 5 32 13 Total restructuring costs $ 31 $ 28 $ 642 $ 41 1 Recognized in Other operating (income) expenses. 2 Represents costs related to our restructuring programs, primarily for accelerated depreciation, inventory write-downs, project management and equipment relocation, all of which are primarily included in Cost of goods sold. The restructuring costs for the six months ended June 30, 2023 were primarily related to the divestiture of the company's Longwall business within Resource Industries. The divestiture closed on February 1, 2023 and resulted in a pre-tax loss of approximately $586 million, primarily a non-cash item driven by the release of $494 million of accumulated foreign currency translation. The transaction is subject to certain post-closing adjustments. For the six months ended June 30, 2022, the restructuring costs were primarily related to actions across the company including strategic actions to address a small number of products. In 2023 and 2022, all restructuring costs are excluded from segment profit. The following table summarizes the 2023 and 2022 employee separation activity: (Millions of dollars) Six Months Ended June 30 2023 2022 Liability balance, beginning of period $ 39 $ 61 Increase in liability (separation charges) 22 23 Reduction in liability (payments) (44) (50) Liability balance, end of period $ 17 $ 34 |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Basis of presentation In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the consolidated results of operations for the three and six months ended June 30, 2023 and 2022, (b) the consolidated comprehensive income for the three and six months ended June 30, 2023 and 2022, (c) the consolidated financial position at June 30, 2023 and December 31, 2022, (d) the consolidated changes in shareholders’ equity for the three and six months ended June 30, 2023 and 2022 and (e) the consolidated cash flow for the six months ended June 30, 2023 and 2022. The financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in our company’s annual report on Form 10-K for the year ended December 31, 2022 (2022 Form 10-K). |
Revenue | Trade receivables represent amounts due from dealers and end users for the sale of our products, and include amounts due from wholesale inventory financing provided by Cat Financial for a dealer’s purchase of inventory. We recognize trade receivables from dealers and end users in Receivables – trade and other and Long-term receivables – trade and other in the Consolidated Statement of Financial Position. Trade receivables from dealers and end users were $8,079 million, $7,551 million and $7,267 million as of June 30, 2023, December 31, 2022 and December 31, 2021, respectively. Long-term trade receivables from dealers and end users were $482 million, $506 million and $624 million as of June 30, 2023, December 31, 2022 and December 31, 2021, respectively. For certain contracts, we invoice for payment when contractual milestones are achieved. We recognize a contract asset when a sale is recognized before achieving the contractual milestones for invoicing. We reduce the contract asset when we invoice for payment and recognize a corresponding trade receivable. Contract assets are included in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. Contract assets were $225 million, $247 million and $187 million as of June 30, 2023, December 31, 2022 and December 31, 2021, respectively. |
Share-Based Compensation | Accounting for stock-based compensation requires that the cost resulting from all stock-based payments be recognized in the financial statements based on the grant date fair value of the award. Our stock-based compensation consists of stock options, restricted stock units (RSUs) and performance-based restricted stock units (PRSUs). |
Derivatives | Our earnings and cash flow are subject to fluctuations due to changes in foreign currency exchange rates, interest rates and commodity prices. Our Risk Management Policy (policy) allows for the use of derivative financial instruments to prudently manage foreign currency exchange rate, interest rate and commodity price exposures. Our policy specifies that derivatives are not to be used for speculative purposes. Derivatives that we use are primarily foreign currency forward, option and cross currency contracts, interest rate contracts and commodity forward and option contracts. Our derivative activities are subject to the management, direction and control of our senior financial officers. We present at least annually to the Audit Committee of the Board of Directors on our risk management practices, including our use of financial derivative instruments. We recognize all derivatives at their fair value on the Consolidated Statement of Financial Position. On the date the derivative contract is entered into, we designate the derivative as (1) a hedge of the fair value of a recognized asset or liability (fair value hedge), (2) a hedge of a forecasted transaction or the variability of cash flow (cash flow hedge) or (3) an undesignated instrument. We record in current earnings changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged recognized asset or liability that is attributable to the hedged risk. We record in AOCI changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge, to the extent effective, on the Consolidated Statement of Financial Position until we reclassify them to earnings in the same period or periods during which the hedged transaction affects earnings. We report changes in the fair value of undesignated derivative instruments in current earnings. We classify cash flows from designated derivative financial instruments within the same category as the item being hedged on the Consolidated Statement of Cash Flow. We include cash flows from undesignated derivative financial instruments in the investing category on the Consolidated Statement of Cash Flow. We formally document all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities on the Consolidated Statement of Financial Position and linking cash flow hedges to specific forecasted transactions or variability of cash flow. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the designated derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flow of hedged items. When a derivative is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, we discontinue hedge accounting prospectively, in accordance with the derecognition criteria for hedge accounting. Foreign Currency Exchange Rate Risk Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of sales made and costs incurred in foreign currencies. Movements in foreign currency rates also affect our competitive position as these changes may affect business practices and/or pricing strategies of non-U.S.-based competitors. Additionally, we have balance sheet positions denominated in foreign currencies, thereby creating exposure to movements in exchange rates. Our ME&T operations purchase, manufacture and sell products in many locations around the world. As we have a diversified revenue and cost base, we manage our future foreign currency cash flow exposure on a net basis. We use foreign currency forward and option contracts to manage unmatched foreign currency cash inflow and outflow. Our objective is to minimize the risk of exchange rate movements that would reduce the U.S. dollar value of our foreign currency cash flow. Our policy allows for managing anticipated foreign currency cash flow for up to approximately five years. As of June 30, 2023, the maximum term of these outstanding contracts at inception was approximately 60 months. We generally designate as cash flow hedges at inception of the contract any foreign currency forward or option contracts that meet the requirements for hedge accounting and the maturity extends beyond the current quarter-end. We perform designation on a specific exposure basis to support hedge accounting. The remainder of ME&T foreign currency contracts are undesignated. In managing foreign currency risk for our Financial Products operations, our objective is to minimize earnings volatility resulting from conversion and the remeasurement of net foreign currency balance sheet positions and future transactions denominated in foreign currencies. Our policy allows the use of foreign currency forward, option and cross currency contracts to offset the risk of currency mismatch between our assets and liabilities and exchange rate risk associated with future transactions denominated in foreign currencies. Our foreign currency forward and option contracts are primarily undesignated. We designate fixed-to-fixed cross currency contracts as cash flow hedges to protect against movements in exchange rates on foreign currency fixed-rate assets and liabilities. Interest Rate Risk Interest rate movements create a degree of risk by affecting the amount of our interest payments and the value of our fixed-rate debt. Our practice is to use interest rate contracts to manage our exposure to interest rate changes. Our ME&T operations generally use fixed-rate debt as a source of funding. Our objective is to minimize the cost of borrowed funds. Our policy allows us to enter into fixed-to-floating interest rate contracts and forward rate agreements to meet that objective. We designate fixed-to-floating interest rate contracts as fair value hedges at inception of the contract, and we designate certain forward rate agreements as cash flow hedges at inception of the contract. Financial Products operations has a match-funding policy that addresses interest rate risk by aligning the interest rate profile (fixed or floating rate and duration) of Cat Financial’s debt portfolio with the interest rate profile of our receivables portfolio within predetermined ranges on an ongoing basis. In connection with that policy, we use interest rate derivative instruments to modify the debt structure to match assets within the receivables portfolio. This matched funding reduces the volatility of margins between interest-bearing assets and interest-bearing liabilities, regardless of which direction interest rates move. Our policy allows us to use fixed-to-floating, floating-to-fixed and floating-to-floating interest rate contracts to meet the match-funding objective. We designate fixed-to-floating interest rate contracts as fair value hedges to protect debt against changes in fair value due to changes in the benchmark interest rate. We designate most floating-to-fixed interest rate contracts as cash flow hedges to protect against the variability of cash flows due to changes in the benchmark interest rate. We have, at certain times, liquidated fixed-to-floating and floating-to-fixed interest rate contracts at both ME&T and Financial Products. We amortize the gains or losses associated with these contracts at the time of liquidation into earnings over the original term of the previously designated hedged item. Commodity Price Risk Commodity price movements create a degree of risk by affecting the price we must pay for certain raw materials. Our policy is to use commodity forward and option contracts to manage the commodity risk and reduce the cost of purchased materials. Our ME&T operations purchase base and precious metals embedded in the components we purchase from suppliers. Our suppliers pass on to us price changes in the commodity portion of the component cost. In addition, we are subject to price changes on energy products such as natural gas and diesel fuel purchased for operational use. Our objective is to minimize volatility in the price of these commodities. Our policy allows us to enter into commodity forward and option contracts to lock in the purchase price of a portion of these commodities within a five-year horizon. All such commodity forward and option contracts are undesignated. |
Investments | We have investments in certain debt and equity securities, which we record at fair value and primarily include in Other assets in the Consolidated Statement of Financial Position. We classify debt securities primarily as available-for-sale. We include the unrealized gains and losses arising from the revaluation of available-for-sale debt securities, net of applicable deferred income taxes, in equity (AOCI in the Consolidated Statement of Financial Position). We include the unrealized gains and losses arising from the revaluation of the equity securities in Other income (expense) in the Consolidated Statement of Results of Operations. We generally determine realized gains and losses on sales of investments using the specific identification method for available-for-sale debt and equity securities and include them in Other income (expense) in the Consolidated Statement of Results of Operations. |
Guarantees and Product Warranty | Caterpillar dealer performance guarantees Dealer performance guarantees mainly consists of an indemnity to a third-party insurance company for potential losses related to performance bonds issued on behalf of Caterpillar dealers. The bonds have varying terms and are issued to insure governmental agencies against nonperformance by certain dealers. 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. |
Segments | Our Executive Office is comprised of a Chief Executive Officer (CEO), four Group Presidents, a Chief Financial Officer (CFO), a Chief Legal Officer and a Chief Human Resources Officer. The Group Presidents and CFO are accountable for a related set of end-to-end businesses that they manage. The Chief Legal Officer leads the Law, Security and Public Policy Division. The Chief Human Resources Officer leads the Human Resources Organization. The CEO allocates resources and manages performance at the Group President/CFO level. As such, the CEO serves as our Chief Operating Decision Maker, and operating segments are primarily based on the Group President/CFO reporting structure. Three of our operating segments, Construction Industries, Resource Industries and Energy & Transportation are led by Group Presidents. One operating segment, Financial Products, is led by the CFO who also has responsibility for Corporate Services. Corporate Services is a cost center primarily responsible for the performance of certain support functions globally and to provide centralized services; it does not meet the definition of an operating segment. One Group President leads one smaller operating segment that is included in the All Other operating segment. The Law, Security and Public Policy Division and the Human Resources Organization are cost centers and do not meet the definition of an operating segment. B. Description of segments We have five operating segments, of which four are reportable segments. Following is a brief description of our reportable segments and the business activities included in the All Other operating segment: Construction Industries : A segment primarily responsible for supporting customers using machinery in infrastructure and building construction applications. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes asphalt pavers; backhoe loaders; cold planers; compactors; compact track loaders; forestry machines; material handlers; motor graders; pipelayers; road reclaimers; skid steer loaders; telehandlers; track-type loaders; track-type tractors (small, medium); track excavators (mini, small, medium, large); wheel excavators; wheel loaders (compact, small, medium); and related parts and work tools. Inter-segment sales are a source of revenue for this segment. Resource Industries : A segment primarily responsible for supporting customers using machinery in mining, heavy construction and quarry and aggregates. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes large track-type tractors; large mining trucks; hard rock vehicles; electric rope shovels; draglines; hydraulic shovels; rotary drills; large wheel loaders; off-highway trucks; articulated trucks; wheel tractor scrapers; wheel dozers; landfill compactors; soil compactors; select work tools; machinery components; electronics and control systems and related parts. In addition to equipment, Resource Industries also develops and sells technology products and services to provide customers fleet management, equipment management analytics, autonomous machine capabilities, safety services and mining performance solutions. Resource Industries also manages areas that provide services to other parts of the company, including strategic procurement, lean center of excellence, integrated manufacturing, research and development for hydraulic systems, automation, electronics and software for Cat machines and engines. Inter-segment sales are a source of revenue for this segment. Energy & Transportation : A segment primarily responsible for supporting customers using reciprocating engines, turbines, diesel-electric locomotives and related services across industries serving Oil and Gas, Power Generation, Industrial and Transportation applications, including marine- and rail-related businesses. Responsibilities include business strategy, product design, product management, development and testing, manufacturing, marketing and sales and product support. The product and services portfolio includes turbines, centrifugal gas compressors, and turbine-related services; reciprocating engine-powered generator sets; integrated systems and solutions used in the electric power generation industry; reciprocating engines, drivetrain and integrated systems and solutions for the marine and oil and gas industries; reciprocating engines, drivetrain and integrated systems and solutions supplied to the industrial industry as well as Cat machinery; electrified powertrain and zero-emission power sources and service solutions development; and diesel-electric locomotives and components and other rail-related products and services, including remanufacturing and leasing. Responsibilities also include the remanufacturing of Caterpillar reciprocating engines and components and remanufacturing services for other companies; and product support of on-highway vocational trucks for North America. Inter-segment sales are a source of revenue for this segment. Financial Products Segment : Provides financing alternatives to customers and dealers around the world for Caterpillar products and services, as well as financing for power generation facilities that, in most cases, incorporate Caterpillar products. Financing plans include operating and finance leases, revolving charge accounts, installment sale contracts, repair/rebuild financing, working capital loans and wholesale financing plans. The segment also provides insurance and risk management products and services that help customers and dealers manage their business risk. Insurance and risk management products offered include physical damage insurance, inventory protection plans, extended service coverage and maintenance plans for machines and engines, and dealer property and casualty insurance. The various forms of financing, insurance and risk management products offered to customers and dealers help support the purchase and lease of Caterpillar equipment. The segment also earns revenues from ME&T, but the related costs are not allocated to operating segments. Financial Products’ segment profit is determined on a pretax basis and includes other income/expense items. All Other operating segment : Primarily includes activities such as: business strategy; product management and development; manufacturing and sourcing of filters and fluids, undercarriage, ground-engaging tools, fluid transfer products, precision seals, rubber sealing and connecting components primarily for Cat® products; parts distribution; integrated logistics solutions; distribution services responsible for dealer development and administration, including a wholly owned dealer in Japan; dealer portfolio management and ensuring the most efficient and effective distribution of machines, engines and parts; brand management and marketing strategy; and digital investments for new customer and dealer solutions that integrate data analytics with state-of-the-art digital technologies while transforming the buying experience. Results for the All Other operating segment are included as a reconciling item between reportable segments and consolidated external reporting. C. Segment measurement and reconciliations There are several methodology differences between our segment reporting and our external reporting. The following is a list of the more significant methodology differences: • ME&T segment net assets generally include inventories, receivables, property, plant and equipment, goodwill, intangibles, accounts payable and customer advances. We generally manage at the corporate level liabilities other than accounts payable and customer advances, and we do not include these in segment operations. Financial Products Segment assets generally include all categories of assets. • We value segment inventories and cost of sales using a current cost methodology. • We amortize goodwill allocated to segments using a fixed amount based on a 20-year useful life. This methodology difference only impacts segment assets. We do not include goodwill amortization expense in segment profit. In addition, we have allocated to segments only a portion of goodwill for certain acquisitions made in 2011 or later. • We generally manage currency exposures for ME&T at the corporate level and do not include in segment profit the effects of changes in exchange rates on results of operations within the year. We report the net difference created in the translation of revenues and costs between exchange rates used for U.S. GAAP reporting and exchange rates used for segment reporting as a methodology difference. • We do not include stock-based compensation expense in segment profit. • Postretirement benefit expenses are split; segments are generally responsible for service costs, with the remaining elements of net periodic benefit cost included as a methodology difference. • We determine ME&T segment profit on a pretax basis and exclude interest expense and most other income/expense items. We determine Financial Products Segment profit on a pretax basis and include other income/expense items. Reconciling items are created based on accounting differences between segment reporting and our consolidated external reporting. Please refer to pages 30 to 33 for financial information regarding significant reconciling items. Most of our reconciling items are self-explanatory given the above explanations. For the reconciliation of profit, we have grouped the reconciling items as follows: • Corporate costs: These costs are related to corporate requirements primarily for compliance and legal functions for the benefit of the entire organization. • Restructuring costs: May include costs for employee separation, long-lived asset impairments, contract terminations and divestiture impacts. These costs are included in Other operating (income) expenses except for defined-benefit plan curtailment losses and special termination benefits, which are included in Other income (expense). Restructuring costs also include other exit-related costs, which may consist of accelerated depreciation, inventory write-downs, building demolition, equipment relocation and project management costs and LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold. See Note 20 for more information. • Methodology differences: See previous discussion of significant accounting differences between segment reporting and consolidated external reporting. • Timing: |
Allowance for Credit Losses | Allowance for credit losses Portfolio segments A portfolio segment is the level at which Cat Financial develops a systematic methodology for determining its allowance for credit losses. Cat Financial's portfolio segments and related methods for estimating expected credit losses are as follows: Customer Cat Financial provides loans and finance leases to end-user customers primarily for the purpose of financing new and used Caterpillar machinery, engines and equipment for commercial use. Cat Financial also provides financing for power generation facilities that, in most cases, incorporate Caterpillar products. The average original term of Cat Financial's customer finance receivable portfolio was approximately 51 months with an average remaining term of approximately 27 months as of June 30, 2023. Cat Financial typically maintains a security interest in financed equipment and requires physical damage insurance coverage on the financed equipment, both of which provide Cat Financial with certain rights and protections. If Cat Financial's collection efforts fail to bring a defaulted account current, Cat Financial generally can repossess the financed equipment, after satisfying local legal requirements, and sell it within the Caterpillar dealer network or through third-party auctions. Cat Financial estimates the allowance for credit losses related to its customer finance receivables based on loss forecast models utilizing probabilities of default and the estimated loss given default based on past loss experience adjusted for current conditions and reasonable and supportable forecasts capturing country and industry-specific economic factors. During the three and six months ended June 30, 2023, Cat Financial's forecasts reflected a continuation of the trend of relatively low unemployment rates and delinquencies within their portfolio. However, industry delinquencies show an increasing trend as persistently high inflation rates and consequent central bank actions are weakening global economic growth. The company believes the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion to long-term trends. Dealer Cat Financial provides financing to Caterpillar dealers in the form of wholesale financing plans. Cat Financial's wholesale financing plans provide assistance to dealers by financing their mostly new Caterpillar equipment inventory and rental fleets on a secured and unsecured basis. In addition, Cat Financial provides a variety of secured and unsecured loans to Caterpillar dealers. Cat Financial estimates the allowance for credit losses for dealer finance receivables based on historical loss rates with consideration of current economic conditions and reasonable and supportable forecasts. In general, Cat Financial's Dealer portfolio segment has not historically experienced large increases or decreases in credit losses based on changes in economic conditions due to its close working relationships with the dealers and their financial strength. Therefore, Cat Financial made no adjustments to historical loss rates during the three and six months ended June 30, 2023. Classes of finance receivables Cat Financial further evaluates portfolio segments by the class of finance receivables, which is defined as a level of information (below a portfolio segment) in which the finance receivables have the same initial measurement attribute and a similar method for assessing and monitoring credit risk. Cat Financial's classes, which align with management reporting for credit losses, are as follows: • North America - Finance receivables originated in the United States and Canada. • EAME - Finance receivables originated in Europe, Africa, the Middle East and Eurasia. • Asia/Pacific - Finance receivables originated in Australia, New Zealand, China, Japan, Southeast Asia and India. • Mining - Finance receivables related to large mining customers worldwide. • Latin America - Finance receivables originated in Mexico and Central and South American countries. • Power - Finance receivables originated worldwide related to Caterpillar electrical power generation, gas compression and co-generation systems and non-Caterpillar equipment that is powered by these systems. Receivable balances, including accrued interest, are written off against the allowance for credit losses when, in the judgment of management, they are considered uncollectible (generally upon repossession of the collateral). The amount of the write-off is determined by comparing the fair value of the collateral, less cost to sell, to the amortized cost. Subsequent recoveries, if any, are credited to the allowance for credit losses when received. |
Fair Value Measurement | The guidance on fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. This guidance also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. In accordance with this guidance, fair value measurements are classified under the following hierarchy: • Level 1 – Quoted prices for identical instruments in active markets. • Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets. • Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable. When available, we use quoted market prices to determine fair value, and we classify such measurements within Level 1. In some cases where market prices are not available, we make use of observable market based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon valuations in which one or more significant inputs are unobservable, including internally developed models that use, where possible, current market-based parameters such as interest rates, yield curves and currency rates. These measurements are classified within Level 3. We classify fair value measurements according to the lowest level input or value-driver that is significant to the valuation. We may therefore classify a measurement within Level 3 even though there may be significant inputs that are readily observable. Fair value measurement includes the consideration of nonperformance risk. Nonperformance risk refers to the risk that an obligation (either by a counterparty or Caterpillar) will not be fulfilled. For financial assets traded in an active market (Level 1 and certain Level 2), the nonperformance risk is included in the market price. For certain other financial assets and liabilities (certain Level 2 and Level 3), our fair value calculations have been adjusted accordingly. Investments in debt and equity securities We have investments in certain debt and equity securities that are recorded at fair value. Fair values for our U.S. treasury bonds and large capitalization value and smaller company growth equity securities are based upon valuations for identical instruments in active markets. Fair values for other government debt securities, corporate debt securities and mortgage-backed debt securities are based upon models that take into consideration such market-based factors as recent sales, risk-free yield curves and prices of similarly rated bonds. We also have investments in time deposits classified as held-to-maturity debt securities. The fair value of these investments is based upon valuations observed in less active markets than Level 1. These investments have a maturity of less than one year and are recorded at amortized costs, which approximate fair value. In addition, Insurance Services has an equity investment in a real estate investment trust (REIT) which is recorded at fair value based on the net asset value (NAV) of the investment and is not classified within the fair value hierarchy. See Note 8 for additional information on our investments in debt and equity securities. Derivative financial instruments The fair value of interest rate contracts is primarily based on a standard industry accepted valuation model that utilizes the appropriate market-based forward swap curves and zero-coupon interest rates to determine discounted cash flows. The fair value of foreign currency and commodity forward, option and cross currency contracts is based on standard industry accepted valuation models that discount cash flows resulting from the differential between the contract price and the market-based forward rate. In addition to the methods and assumptions we use to record the fair value of financial instruments as discussed in the Fair value measurements section above, we use the following methods and assumptions to estimate the fair value of our financial instruments: Cash and cash equivalents Carrying amount approximates fair value. We classify cash and cash equivalents as Level 1. See Consolidated Statement of Financial Position. Restricted cash and short-term investments Carrying amount approximates fair value. We include restricted cash and short-term investments in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. We classify these instruments as Level 1 except for time deposits which are Level 2, and certain corporate debt securities which are Level 3. See Note 8 for additional information. Finance receivables We estimate fair value by discounting the future cash flows using current rates, representative of receivables with similar remaining maturities. Wholesale inventory receivables We estimate fair value by discounting the future cash flows using current rates, representative of receivables with similar remaining maturities. Short-term borrowings Carrying amount approximates fair value. We classify short-term borrowings as Level 1. See Consolidated Statement of Financial Position. Long-term debt We estimate fair value for fixed and floating rate debt based on quoted market prices. Guarantees |
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. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Type and Fair Value of Stock-Based Compensation Awards | The following table illustrates the type and fair value of the stock-based compensation awards granted during the six months ended June 30, 2023 and 2022, respectively: Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Shares Granted Weighted-Average Fair Value Per Share Weighted-Average Grant Date Stock Price Shares Granted Weighted-Average Fair Value Per Share Weighted-Average Grant Date Stock Price Stock options 777,275 $ 75.79 $ 253.98 1,029,202 $ 51.69 $ 196.70 RSUs 379,426 $ 253.98 $ 253.98 484,025 $ 196.70 $ 196.70 PRSUs 221,869 $ 253.98 $ 253.98 258,900 $ 196.70 $ 196.70 |
Schedule of Assumptions Used for Fair Value | The following table provides the assumptions used in determining the fair value of the stock-based awards for the six months ended June 30, 2023 and 2022, respectively: Grant Year 2023 2022 Weighted-average dividend yield 2.60% 2.60% Weighted-average volatility 31.0% 31.7% Range of volatilities 28.5% - 35.5% 25.3% - 36.8% Range of risk-free interest rates 3.92% - 5.03% 1.03% - 2.00% Weighted-average expected lives 7 years 8 years |
Derivative Financial Instrume_2
Derivative Financial Instruments and Risk Management (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Location and Fair Value of Derivative Instruments | The location and fair value of derivative instruments reported in the Consolidated Statement of Financial Position were as follows: (Millions of dollars) Fair Value June 30, 2023 December 31, 2022 Assets 1 Liabilities 2 Assets 1 Liabilities 2 Designated derivatives Foreign exchange contracts $ 460 $ (159) $ 462 $ (152) Interest rate contracts 71 (284) 93 (288) Total $ 531 $ (443) $ 555 $ (440) Undesignated derivatives Foreign exchange contracts $ 42 $ (62) $ 65 $ (47) Commodity contracts 11 (10) 24 (9) Total $ 53 $ (72) $ 89 $ (56) 1 Assets are classified on the Consolidated Statement of Financial Position as Receivables - trade and other or Long-term receivables - trade and other. 2 Liabilities are classified on the Consolidated Statement of Financial Position as Accrued expenses or Other liabilities. |
Schedule of Gains (Losses) on Derivative Instruments | Gains (Losses) on derivative instruments are categorized as follows: (Millions of dollars) Three Months Ended June 30 Fair Value / Undesignated Hedges Cash Flow Hedges Gains (Losses) Recognized on the Consolidated Statement of Results of Operations 1 Gains (Losses) Recognized in AOCI Gains (Losses) Reclassified from AOCI 2 2023 2022 2023 2022 2023 2022 Foreign exchange contracts $ 31 $ 33 $ (26) $ 186 $ 28 $ 323 Interest rate contracts (34) 9 14 21 14 (2) Commodity contracts (20) (48) — — — — Total $ (23) $ (6) $ (12) $ 207 $ 42 $ 321 1 Foreign exchange contract and Commodity contract gains (losses) are included in Other income (expense). Interest rate contract gains (losses) are included in Interest expense of Financial Products and Interest expense excluding Financial Products. 2 Foreign exchange contract gains (losses) are primarily included in Other income (expense). Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products. (Millions of dollars) Six Months Ended June 30 Fair Value / Undesignated Hedges Cash Flow Hedges Gains (Losses) Recognized on the Consolidated Statement of Results of Operations 1 Gains (Losses) Recognized in AOCI Gains (Losses) Reclassified from AOCI 2 2023 2022 2023 2022 2023 2022 Foreign exchange contracts $ 3 $ (30) $ 32 $ 177 $ (37) $ 349 Interest rate contracts (60) 17 12 77 27 (9) Commodity contract (12) 45 — — — — Total $ (69) $ 32 $ 44 $ 254 $ (10) $ 340 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). Interest rate contract gains (losses) are primarily included in Interest expense of Financial Products. |
Summary of Cumulative Basis Adjustments for Fair Value Hedges | The following amounts were recorded on the Consolidated Statement of Financial Position related to cumulative basis adjustments for fair value hedges: (Millions of dollars) Carrying Value of the Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022 Long-term debt due within one year $ 195 $ — $ (5) $ — Long-term debt due after one year 4,033 4,173 (271) (280) Total $ 4,228 $ 4,173 $ (276) $ (280) |
Summary Offsetting Assets and Liabilities | The effect of the net settlement provisions of the master netting agreements on our derivative balances upon an event of default or termination event was as follows: (Millions of dollars) June 30, 2023 December 31, 2022 Assets Liabilities Assets Liabilities Gross Amounts Recognized $ 584 $ (515) $ 644 $ (496) Financial Instruments Not Offset (224) 224 (233) 233 Net Amount $ 360 $ (291) $ 411 $ (263) |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories (principally using the last-in, first-out (LIFO) method) were comprised of the following: (Millions of dollars) June 30, December 31, Raw materials $ 6,783 $ 6,370 Work-in-process 1,640 1,452 Finished goods 8,979 8,138 Supplies 344 310 Total inventories $ 17,746 $ 16,270 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible assets | Intangible assets were comprised of the following: June 30, 2023 (Millions of dollars) Weighted Gross Carrying Amount 1 Accumulated Amortization 1 Net Customer relationships 16 $ 2,233 $ (1,744) $ 489 Intellectual property 14 650 (551) 99 Other 17 120 (78) 42 Total finite-lived intangible assets 15 $ 3,003 $ (2,373) $ 630 December 31, 2022 Weighted Gross Accumulated Net Customer relationships 16 $ 2,233 $ (1,675) $ 558 Intellectual property 12 1,473 (1,320) 153 Other 16 132 (85) 47 Total finite-lived intangible assets 14 $ 3,838 $ (3,080) $ 758 1 For the six months ended June 30, 2023, $829 million of intangible assets were fully amortized and have been removed. |
Summary of expected amortization expense related to intangible assets | Amortization expense related to intangible assets is expected to be: (Millions of dollars) Remaining Six Months of 2023 2024 2025 2026 2027 Thereafter $87 $171 $161 $91 $27 $93 |
Summary of Goodwill acquired | The changes in carrying amount of goodwill by reportable segment for the six months ended June 30, 2023 were as follows: (Millions of dollars) December 31, Other Adjustments 1 June 30, Construction Industries Goodwill $ 287 $ (13) $ 274 Impairments (22) — (22) Net goodwill 265 (13) 252 Resource Industries Goodwill 4,130 16 4,146 Impairments (1,175) — (1,175) Net goodwill 2,955 16 2,971 Energy & Transportation Goodwill 2,947 6 2,953 Impairments (925) — (925) Net goodwill 2,022 6 2,028 All Other 2 Goodwill 46 (4) 42 Impairments — — — Net goodwill 46 (4) 42 Consolidated total Goodwill 7,410 5 7,415 Impairments (2,122) — (2,122) Net goodwill $ 5,288 $ 5 $ 5,293 1 Other adjustments are comprised primarily of foreign currency translation. 2 Includes All Other operating segment (See Note 16). |
Investments in Debt and Equit_2
Investments in Debt and Equity Securities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of cost basis and fair value of available-for-sale securities | The cost basis and fair value of available-for-sale debt securities with unrealized gains and losses included in equity (AOCI in the Consolidated Statement of Financial Position) were as follows: Available-for-sale debt securities June 30, 2023 December 31, 2022 (Millions of dollars) Cost Basis Unrealized Pretax Net Gains (Losses) Fair Value Cost Basis Unrealized Pretax Net Gains (Losses) Fair Value Government debt securities U.S. treasury bonds $ 10 $ — $ 10 $ 9 $ — $ 9 Other U.S. and non-U.S. government bonds 60 (4) 56 60 (5) 55 Corporate debt securities Corporate bonds and other debt securities 2,585 (85) 2,500 2,561 (95) 2,466 Asset-backed securities 191 (5) 186 187 (5) 182 Mortgage-backed debt securities U.S. governmental agency 390 (31) 359 364 (31) 333 Residential 3 (1) 2 3 (1) 2 Commercial 138 (11) 127 127 (10) 117 Total available-for-sale debt securities $ 3,377 $ (137) $ 3,240 $ 3,311 $ (147) $ 3,164 |
Summary of investments in an unrealized loss position that are not other-than-temporarily impaired | Available-for-sale debt securities in an unrealized loss position: June 30, 2023 Less than 12 months 1 12 months or more 1 Total (Millions of dollars) Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized Government debt securities Other U.S. and non-U.S. government bonds $ 13 $ — $ 26 $ 4 $ 39 $ 4 Corporate debt securities Corporate bonds 1,414 26 947 62 2,361 88 Asset-backed securities 57 1 92 4 149 5 Mortgage-backed debt securities U.S. governmental agency 131 5 218 26 349 31 Residential — — 2 1 2 1 Commercial 41 2 86 9 127 11 $ 1,656 $ 34 $ 1,371 $ 106 $ 3,027 $ 140 December 31, 2022 Less than 12 months 1 12 months or more 1 Total (Millions of dollars) Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized Government debt securities Other U.S. and non-U.S. government bonds $ 19 $ 1 $ 20 $ 4 $ 39 $ 5 Corporate debt securities Corporate bonds 1,815 46 357 50 2,172 96 Asset-backed securities 75 2 55 3 130 5 Mortgage-backed debt securities U.S. governmental agency 229 16 98 15 327 31 Residential 2 — 1 1 3 1 Commercial 63 5 54 5 117 10 Total $ 2,203 $ 70 $ 585 $ 78 $ 2,788 $ 148 1 Indicates the length of time that individual securities have been in a continuous unrealized loss position. |
Summary of cost basis and fair value of the available-for-sale debt securities by contractual maturity | Expected maturities will differ from contractual maturities because borrowers may have the right to prepay and creditors may have the right to call obligations. June 30, 2023 (Millions of dollars) Cost Basis Fair Value Due in one year or less $ 973 $ 963 Due after one year through five years 1,539 1,470 Due after five years through ten years 270 257 Due after ten years 64 62 U.S. governmental agency mortgage-backed securities 390 359 Residential mortgage-backed securities 3 2 Commercial mortgage-backed securities 138 127 Total debt securities – available-for-sale $ 3,377 $ 3,240 |
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 June 30 Six Months Ended June 30 (Millions of dollars) 2023 2022 2023 2022 Proceeds from the sale of available-for-sale securities $ 216 $ 174 $ 439 $ 270 Gross gains from the sale of available-for-sale securities — — — 1 Gross losses from the sale of available-for-sale securities — — — 1 |
Postretirement Benefits (Tables
Postretirement Benefits (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of net benefit costs | U.S. Pension Benefits Non-U.S. Pension Benefits Other Postretirement Benefits June 30 June 30 June 30 (Millions of dollars) 2023 2022 2023 2022 2023 2022 For the three months ended: Components of net periodic benefit cost: Service cost $ — $ — $ 10 $ 12 $ 17 $ 25 Interest cost 164 101 30 18 36 20 Expected return on plan assets (172) (168) (40) (33) (3) (2) Amortization of prior service cost (credit) — — — — (3) (2) Net periodic benefit cost (benefit) 1 $ (8) $ (67) $ — $ (3) $ 47 $ 41 For the six months ended: Components of net periodic benefit cost: Service cost $ — $ — $ 20 $ 25 $ 34 $ 50 Interest cost 328 201 61 36 72 40 Expected return on plan assets (344) (335) (80) (67) (6) (6) Amortization of prior service cost (credit) — — — — (6) (3) Net periodic benefit cost (benefit) 1 $ (16) $ (134) $ 1 $ (6) $ 94 $ 81 1 The service cost component is included in Operating costs in the Consolidated Statement of Results of Operations. All other components are included in Other income (expense) in the Consolidated Statement of Results of Operations. |
Summary of company costs related to U.S. and non-U.S. defined contribution plans | Total company costs related to our defined contribution plans, which are included in Operating Costs in the Consolidated Statement of Results of Operations, were as follows: Three Months Ended June 30 Six Months Ended June 30 (Millions of dollars) 2023 2022 2023 2022 U.S. Plans $ 136 $ 34 $ 285 $ 149 Non-U.S. Plans 29 27 58 56 $ 165 $ 61 $ 343 $ 205 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Revenue from finance and operating leases | Revenues from finance and operating leases, primarily included in Revenues of Financial Products Three Months Ended June 30 Six Months Ended June 30 (Millions of dollars) 2023 2022 2023 2022 Finance lease revenue $ 105 $ 109 $ 209 $ 221 Operating lease revenue 275 271 550 549 Total $ 380 $ 380 $ 759 $ 770 |
Guarantees and Product Warran_2
Guarantees and Product Warranty (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Guarantees and Product Warranties [Abstract] | |
Summary of guarantees | The maximum potential amount of future payments that we can estimate (undiscounted and without reduction for any amounts that may possibly be recovered under recourse or collateralized provisions) and we could be required to make under the guarantees was as follows: (Millions of dollars) June 30, December 31, Caterpillar dealer performance guarantees $ 177 $ 188 Other guarantees 390 323 Total guarantees $ 567 $ 511 |
Summary of product warranty | The reconciliation of the change in our product warranty liability balances for the six months ended June 30 was as follows: First Six Months (Millions of dollars) 2023 2022 Warranty liability, beginning of period $ 1,761 $ 1,689 Reduction in liability (payments) (410) (388) Increase in liability (new warranties) 471 350 Warranty liability, end of period $ 1,822 $ 1,651 |
Profit Per Share (Tables)
Profit Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share Reconciliation [Abstract] | |
Computations of profit per share | Computations of profit per share: Three Months Ended June 30 Six Months Ended June 30 (Dollars in millions except per share data) 2023 2022 2023 2022 Profit for the period (A) 1 $ 2,922 $ 1,673 $ 4,865 $ 3,210 Determination of shares (in millions): Weighted-average number of common shares outstanding (B) 512.9 531.0 514.3 532.6 Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price 2.1 3.1 2.8 3.5 Average common shares outstanding for fully diluted computation (C) 2 515.0 534.1 517.1 536.1 Profit per share of common stock: Assuming no dilution (A/B) $ 5.70 $ 3.15 $ 9.46 $ 6.03 Assuming full dilution (A/C) 2 $ 5.67 $ 3.13 $ 9.41 $ 5.99 Shares outstanding as of June 30 (in millions) 510.1 527.9 1 Profit attributable to common shareholders. 2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method. |
Accumulated other comprehensi_2
Accumulated other comprehensive income (loss) (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Changes in Accumulated other comprehensive income (loss), net of tax | We present comprehensive income and its components in the Consolidated Statement of Comprehensive Income. Changes in the balances for each component of AOCI were as follows: Three Months Ended June 30 Six Months Ended June 30 (Millions of dollars) 2023 2022 2023 2022 Foreign currency translation: Beginning balance $ (1,721) $ (1,623) $ (2,328) $ (1,508) Gains (losses) on foreign currency translation (144) (632) (41) (736) Less: Tax provision /(benefit) (2) 27 (12) 38 Net gains (losses) on foreign currency translation (142) (659) (29) (774) (Gains) losses reclassified to earnings — — 494 — Less: Tax provision /(benefit) — — — — Net (gains) losses reclassified to earnings — — 494 — Other comprehensive income (loss), net of tax (142) (659) 465 (774) Ending balance $ (1,863) $ (2,282) $ (1,863) $ (2,282) Pension and other postretirement benefits Beginning balance $ (41) $ (63) $ (39) $ (62) Current year prior service credit (cost) — — — — Less: Tax provision /(benefit) — — — — Net current year prior service credit (cost) — — — — Amortization of prior service (credit) cost (3) (2) (6) (3) Less: Tax provision /(benefit) — (1) (1) (1) Net amortization of prior service (credit) cost (3) (1) (5) (2) Other comprehensive income (loss), net of tax (3) (1) (5) (2) Ending balance $ (44) $ (64) $ (44) $ (64) Derivative financial instruments Beginning balance $ 112 $ 20 $ 28 $ (3) Gains (losses) deferred (12) 207 44 254 Less: Tax provision /(benefit) (3) 26 9 36 Net gains (losses) deferred (9) 181 35 218 (Gains) losses reclassified to earnings (42) (321) 10 (340) Less: Tax provision /(benefit) (10) (54) 2 (59) Net (gains) losses reclassified to earnings (32) (267) 8 (281) Other comprehensive income (loss), net of tax (41) (86) 43 (63) Ending balance $ 71 $ (66) $ 71 $ (66) Available-for-sale securities Beginning balance $ (96) $ (44) $ (118) $ 20 Gains (losses) deferred (16) (54) 10 (133) Less: Tax provision /(benefit) (2) (11) 2 (26) Net gains (losses) deferred (14) (43) 8 (107) (Gains) losses reclassified to earnings — — — — Less: Tax provision /(benefit) — — — — Net (gains) losses reclassified to earnings — — — — Other comprehensive income (loss), net of tax (14) (43) 8 (107) Ending balance $ (110) $ (87) $ (110) $ (87) Total AOCI Ending Balance at June 30 $ (1,946) $ (2,499) $ (1,946) $ (2,499) |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Disaggregation of Revenue | For the three and six months ended June 30, 2023 and 2022, sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows: Sales and Revenues by Geographic Region (Millions of dollars) North America Latin America EAME Asia/ Pacific External Sales and Revenues Intersegment Sales and Revenues Total Sales and Revenues Three Months Ended June 30, 2023 Construction Industries $ 3,968 $ 566 $ 1,438 $ 1,149 $ 7,121 $ 33 $ 7,154 Resource Industries 1,342 538 517 1,076 3,473 90 3,563 Energy & Transportation 3,120 459 1,479 899 5,957 1,262 7,219 Financial Products Segment 593 102 118 110 923 1 — 923 Total sales and revenues from reportable segments 9,023 1,665 3,552 3,234 17,474 1,385 18,859 All Other operating segment 16 — 4 14 34 82 116 Corporate Items and Eliminations (117) (23) (23) (27) (190) (1,467) (1,657) Total Sales and Revenues $ 8,922 $ 1,642 $ 3,533 $ 3,221 $ 17,318 $ — $ 17,318 Three Months Ended June 30, 2022 Construction Industries $ 3,006 $ 635 $ 1,202 $ 1,148 $ 5,991 $ 42 $ 6,033 Resource Industries 1,027 466 489 913 2,895 66 2,961 Energy & Transportation 2,277 382 1,215 766 4,640 1,065 5,705 Financial Products Segment 505 87 97 109 798 1 — 798 Total sales and revenues from reportable segments 6,815 1,570 3,003 2,936 14,324 1,173 15,497 All Other operating segment 18 — 5 15 38 80 118 Corporate Items and Eliminations (62) (23) (10) (20) (115) (1,253) (1,368) Total Sales and Revenues $ 6,771 $ 1,547 $ 2,998 $ 2,931 $ 14,247 $ — $ 14,247 1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $172 million and $108 million in the three months ended June 30, 2023 and 2022, respectively. Sales and Revenues by Geographic Region (Millions of dollars) North America Latin America EAME Asia/ Pacific External Sales and Revenues Intersegment Sales and Revenues Total Sales and Revenues Six Months Ended June 30, 2023 Construction Industries $ 7,576 $ 1,165 $ 2,774 $ 2,310 $ 13,825 $ 75 $ 13,900 Resource Industries 2,650 1,012 1,116 2,054 6,832 158 6,990 Energy & Transportation 5,692 839 2,863 1,618 11,012 2,461 13,473 Financial Products Segment 1,168 206 232 219 1,825 1 — 1,825 Total sales and revenues from reportable segments 17,086 3,222 6,985 6,201 33,494 2,694 36,188 All Other operating segment 34 — 8 27 69 158 227 Corporate Items and Eliminations (248) (41) (42) (52) (383) (2,852) (3,235) Total Sales and Revenues $ 16,872 $ 3,181 $ 6,951 $ 6,176 $ 33,180 $ — $ 33,180 Six Months Ended June 30, 2022 Construction Industries $ 5,726 $ 1,262 $ 2,479 $ 2,610 $ 12,077 $ 71 $ 12,148 Resource Industries 2,045 865 1,083 1,661 5,654 137 5,791 Energy & Transportation 4,215 692 2,399 1,366 8,672 2,071 10,743 Financial Products Segment 1,008 160 193 220 1,581 1 — 1,581 Total sales and revenues from reportable segments 12,994 2,979 6,154 5,857 27,984 2,279 30,263 All Other operating segment 36 — 10 31 77 159 236 Corporate Items and Eliminations (122) (39) (21) (43) (225) (2,438) (2,663) Total Sales and Revenues $ 12,908 $ 2,940 $ 6,143 $ 5,845 $ 27,836 $ — $ 27,836 1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $334 million and $208 million in the six months ended June 30, 2023 and 2022, respectively. For the three and six months ended June 30, 2023 and 2022, Energy & Transportation segment sales by end user application were as follows: Energy & Transportation External Sales Three Months Ended June 30 Six Months Ended June 30 (Millions of dollars) 2023 2022 2023 2022 Oil and gas $ 1,760 $ 1,232 $ 3,074 $ 2,180 Power generation 1,645 1,186 2,929 2,198 Industrial 1,318 1,117 2,573 2,137 Transportation 1,234 1,105 2,436 2,157 Energy & Transportation External Sales $ 5,957 $ 4,640 $ 11,012 $ 8,672 |
Reconciliation of Consolidated profit before taxes | Reconciliation of Consolidated profit before taxes: (Millions of dollars) Three Months Ended June 30 Six Months Ended June 30 2023 2022 2023 2022 Profit from reportable segments: Construction Industries $ 1,803 $ 989 $ 3,593 $ 2,046 Resource Industries 740 355 1,504 716 Energy & Transportation 1,269 659 2,326 1,197 Financial Products Segment 240 217 472 455 Total profit from reportable segments 4,052 2,220 7,895 4,414 Profit from All Other operating segment 10 31 21 34 Cost centers 13 28 43 38 Corporate costs (211) (304) (449) (502) Timing 95 53 (111) (45) Restructuring costs (31) (28) (642) (41) Methodology differences: Inventory/cost of sales 13 101 139 269 Postretirement benefit expense (40) 130 (71) 211 Stock-based compensation expense (74) (67) (118) (107) Financing costs (52) (94) (102) (194) Currency 54 156 28 262 Other income/expense methodology differences (158) (97) (304) (178) Other methodology differences (19) (33) (43) (66) Total consolidated profit before taxes $ 3,652 $ 2,096 $ 6,286 $ 4,095 |
Reconciliation of Assets: | Reconciliation of Assets: (Millions of dollars) June 30, 2023 December 31, 2022 Assets from reportable segments: Construction Industries $ 5,619 $ 5,168 Resource Industries 5,648 5,775 Energy & Transportation 9,909 9,455 Financial Products Segment 35,445 34,269 Total assets from reportable segments 56,621 54,667 Assets from All Other operating segment 1,820 1,828 Items not included in segment assets: Cash and cash equivalents 6,323 6,042 Deferred income taxes 2,491 2,098 Goodwill and intangible assets 4,440 4,248 Property, plant and equipment – net and other assets 4,862 4,234 Inventory methodology differences (3,311) (3,063) Liabilities included in segment assets 12,579 12,519 Other (398) (630) Total assets $ 85,427 $ 81,943 |
Reconciliation of Depreciation and amortization: | Reconciliation of Depreciation and amortization: (Millions of dollars) Three Months Ended June 30 Six Months Ended June 30 2023 2022 2023 2022 Depreciation and amortization from reportable segments: Construction Industries $ 54 $ 57 $ 108 $ 115 Resource Industries 82 91 169 183 Energy & Transportation 133 135 262 269 Financial Products Segment 181 185 359 373 Total depreciation and amortization from reportable segments 450 468 898 940 Items not included in segment depreciation and amortization: All Other operating segment 60 58 117 116 Cost centers 22 22 42 43 Other 10 5 17 11 Total depreciation and amortization $ 542 $ 553 $ 1,074 $ 1,110 |
Reconciliation of Capital expenditures: | Reconciliation of Capital expenditures: (Millions of dollars) Three Months Ended June 30 Six Months Ended June 30 2023 2022 2023 2022 Capital expenditures from reportable segments: Construction Industries $ 51 $ 43 $ 83 $ 75 Resource Industries 44 42 70 64 Energy & Transportation 177 100 346 277 Financial Products Segment 410 334 689 575 Total capital expenditures from reportable segments 682 519 1,188 991 Items not included in segment capital expenditures: All Other operating segment 49 46 75 62 Cost centers 22 16 44 25 Timing (27) 16 185 208 Other (19) (2) (35) (12) Total capital expenditures $ 707 $ 595 $ 1,457 $ 1,274 |
Cat Financial Financing Activ_2
Cat Financial Financing Activities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
Allowance for credit losses and total finance receivables | An analysis of the allowance for credit losses was as follows: (Millions of dollars) Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Customer Dealer Total Customer Dealer Total Beginning balance $ 278 $ 65 $ 343 $ 271 $ 81 $ 352 Write-offs (21) — (21) (18) — (18) Recoveries 13 — 13 18 — 18 Provision for credit losses 1 (6) (15) (21) 22 1 23 Other 1 — 1 (3) — (3) Ending balance $ 265 $ 50 $ 315 $ 290 $ 82 $ 372 Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Customer Dealer Total Customer Dealer Total Beginning balance $ 277 $ 65 $ 342 $ 251 $ 82 $ 333 Write-offs (41) — (41) (38) — (38) Recoveries 23 — 23 30 — 30 Provision for credit losses 1 4 (15) (11) 48 — 48 Other 2 — 2 (1) — (1) Ending balance $ 265 $ 50 $ 315 $ 290 $ 82 $ 372 Finance Receivables $ 19,814 $ 1,793 $ 21,607 $ 19,888 $ 1,764 $ 21,652 1 Excludes provision for credit losses on unfunded commitments and other miscellaneous receivables. |
Write-offs by origination year | Gross write-offs by origination year for the Customer portfolio segment were as follows: (Millions of dollars) Three Months Ended June 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Total North America $ — $ 2 $ 2 $ 1 $ 1 $ 1 $ 3 $ 10 EAME — — 2 1 — 1 — 4 Asia/Pacific — 1 1 2 — — — 4 Latin America — 2 1 — — — — 3 Total $ — $ 5 $ 6 $ 4 $ 1 $ 2 $ 3 $ 21 Six Months Ended June 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Total North America $ — $ 5 $ 5 $ 1 $ 1 $ 1 $ 7 $ 20 EAME — 1 2 2 — 1 — 6 Asia/Pacific — 1 3 3 1 — — 8 Latin America — 2 2 2 1 — — 7 Total $ — $ 9 $ 12 $ 8 $ 3 $ 2 $ 7 $ 41 |
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) June 30, 2023 2023 2022 2021 2020 2019 Prior Revolving Total Finance Receivables North America Current $ 2,056 $ 3,251 $ 2,610 $ 1,104 $ 407 $ 109 $ 285 $ 9,822 31-60 days past due 13 31 24 15 10 2 3 98 61-90 days past due 3 13 10 6 2 1 1 36 91+ days past due 1 16 20 11 5 4 2 59 EAME Current 623 1,091 757 361 190 155 — 3,177 31-60 days past due 3 8 11 4 1 1 — 28 61-90 days past due 1 5 6 3 2 — — 17 91+ days past due — 16 18 11 3 1 — 49 Asia/Pacific Current 536 770 452 155 33 9 — 1,955 31-60 days past due — 8 11 7 1 — — 27 61-90 days past due — 4 5 2 1 — — 12 91+ days past due 1 4 5 4 1 — — 15 Mining Current 646 749 439 169 112 69 38 2,222 31-60 days past due — 42 32 — — — — 74 61-90 days past due — — — — — — — — 91+ days past due — 2 1 — — — — 3 Latin America Current 389 658 305 99 38 13 — 1,502 31-60 days past due 2 16 7 3 4 — — 32 61-90 days past due — 5 3 4 1 — — 13 91+ days past due — 16 21 9 9 22 — 77 Power Current 30 71 73 89 31 145 154 593 31-60 days past due — — — — — — — — 61-90 days past due — — — — — — — — 91+ days past due — — — — — 3 — 3 Totals by Aging Category Current $ 4,280 $ 6,590 $ 4,636 $ 1,977 $ 811 $ 500 $ 477 $ 19,271 31-60 days past due 18 105 85 29 16 3 3 259 61-90 days past due 4 27 24 15 6 1 1 78 91+ days past due 2 54 65 35 18 30 2 206 Total Customer $ 4,304 $ 6,776 $ 4,810 $ 2,056 $ 851 $ 534 $ 483 $ 19,814 (Millions of dollars) December 31, 2022 2022 2021 2020 2019 2018 Prior Revolving Total Finance Receivables North America Current $ 3,915 $ 3,276 $ 1,525 $ 653 $ 206 $ 34 $ 240 $ 9,849 31-60 days past due 25 26 18 12 4 1 4 90 61-90 days past due 9 15 7 3 1 — 3 38 91+ days past due 11 16 12 6 4 3 4 56 EAME Current 1,270 953 477 280 155 68 — 3,203 31-60 days past due 10 12 7 1 1 — — 31 61-90 days past due 8 4 3 1 — — — 16 91+ days past due 6 25 16 4 1 1 — 53 Asia/Pacific Current 1,033 684 313 69 18 2 — 2,119 31-60 days past due 10 12 8 1 1 — — 32 61-90 days past due 2 5 4 2 — — — 13 91+ days past due 2 6 6 4 — — — 18 Mining Current 863 575 220 171 93 108 80 2,110 31-60 days past due — 1 — — — — — 1 61-90 days past due — — — — — — — — 91+ days past due — — — — — 1 — 1 Latin America Current 770 400 150 69 26 20 — 1,435 31-60 days past due 7 8 4 2 — 1 — 22 61-90 days past due 2 5 1 1 — — — 9 91+ days past due 2 13 11 2 1 — — 29 Power Current 78 85 142 33 18 161 125 642 31-60 days past due — — — — — — — — 61-90 days past due — — — — — — — — 91+ days past due — — — — — 5 — 5 Totals by Aging Category Current $ 7,929 $ 5,973 $ 2,827 $ 1,275 $ 516 $ 393 $ 445 $ 19,358 31-60 days past due 52 59 37 16 6 2 4 176 61-90 days past due 21 29 15 7 1 — 3 76 91+ days past due 21 60 45 16 6 10 4 162 Total Customer $ 8,023 $ 6,121 $ 2,924 $ 1,314 $ 529 $ 405 $ 456 $ 19,772 |
Investment in finance receivables on non-accrual status | In Cat Financial's Customer portfolio segment, finance receivables which were on non-accrual status and finance receivables over 90 days past due and still accruing income were as follows: (Millions of dollars) June 30, 2023 December 31, 2022 Amortized Cost Amortized Cost Non-accrual Non-accrual 91+ Still Non-accrual Non-accrual 91+ Still North America $ 54 $ — $ 15 $ 52 $ 4 $ 11 EAME 44 — 7 43 — 10 Asia/Pacific 10 — 5 11 — 7 Mining 3 — — — 1 — Latin America 85 — — 45 — — Power 10 — — 5 11 — Total $ 206 $ — $ 27 $ 156 $ 16 $ 28 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured on a recurring basis at fair value | Assets and liabilities measured on a recurring basis at fair value included in our Consolidated Statement of Financial Position as of June 30, 2023 and December 31, 2022 were as follows: June 30, 2023 (Millions of dollars) Level 1 Level 2 Level 3 Measured at NAV Total Assets Debt securities Government debt securities U.S. treasury bonds $ 10 $ — $ — $ — $ 10 Other U.S. and non-U.S. government bonds — 56 — — 56 Corporate debt securities Corporate bonds and other debt securities — 2,500 — — 2,500 Asset-backed securities — 186 — — 186 Mortgage-backed debt securities U.S. governmental agency — 359 — — 359 Residential — 2 — — 2 Commercial — 127 — — 127 Total debt securities 10 3,230 — — 3,240 Equity securities Large capitalization value 207 — — — 207 Smaller company growth 33 — — — 33 REIT — — — 188 188 Total equity securities 240 — — 188 428 Derivative financial instruments - assets Foreign currency contracts - net — 281 — — 281 Commodity contracts - net — 1 — — 1 Total assets $ 250 $ 3,512 $ — $ 188 $ 3,950 Liabilities Derivative financial instruments - liabilities Interest rate contracts - net $ — $ 213 $ — $ — $ 213 Total liabilities $ — $ 213 $ — $ — $ 213 December 31, 2022 (Millions of dollars) Level 1 Level 2 Level 3 Measured at NAV Total Assets Debt securities Government debt securities U.S. treasury bonds $ 9 $ — $ — $ — $ 9 Other U.S. and non-U.S. government bonds — 55 — — 55 Corporate debt securities Corporate bonds and other debt securities — 2,416 50 — 2,466 Asset-backed securities — 182 — — 182 Mortgage-backed debt securities U.S. governmental agency — 333 — — 333 Residential — 2 — — 2 Commercial — 117 — — 117 Total debt securities 9 3,105 50 — 3,164 Equity securities Large capitalization value 203 — — — 203 Smaller company growth 31 — — — 31 REIT — — — 207 207 Total equity securities 234 — — 207 441 Derivative financial instruments - assets Foreign currency contracts - net — 328 — — 328 Commodity contracts - net — 15 — — 15 Total Assets $ 243 $ 3,448 $ 50 $ 207 $ 3,948 Liabilities Derivative financial instruments - liabilities Interest rate contracts - net $ — $ 195 $ — $ — $ 195 Total liabilities $ — $ 195 $ — $ — $ 195 |
Fair values of financial instruments | Our financial instruments not carried at fair value were as follows: June 30, 2023 December 31, 2022 (Millions of dollars) Carrying Amount Fair Value Carrying Amount Fair Value Fair Value Levels Reference Assets Finance receivables – net (excluding finance leases 1 ) $ 14,411 $ 13,784 $ 13,965 $ 13,377 3 Note 17 Wholesale inventory receivables – net (excluding finance leases 1 ) 1,063 1,008 827 778 3 Liabilities Long-term debt (including amounts due within one year) Machinery, Energy & Transportation 9,578 9,368 9,618 9,240 2 Financial Products 22,573 21,963 21,418 20,686 2 1 Represents finance leases and failed sale leasebacks of $7,117 million and $7,325 million at June 30, 2023 and December 31, 2022, respectively. |
Other income (expense) (Tables)
Other income (expense) (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Other Income and Expenses [Abstract] | |
Other income (expense) | Three Months Ended June 30 Six Months Ended June 30 (Millions of dollars) 2023 2022 2023 2022 Investment and interest income $ 96 $ 25 $ 189 $ 46 Foreign exchange gains (losses) 1 40 224 (32) 271 License fee income 43 37 74 69 Net periodic pension and OPEB income (cost), excluding service cost (12) 66 (25) 134 Gains (losses) on securities (10) (47) (21) (59) Miscellaneous income (loss) (30) (45) (26) 52 Total $ 127 $ 260 $ 159 $ 513 1 Includes gains (losses) from foreign exchange derivative contracts. See Note 5 for further details. |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Restructuring Charges [Abstract] | |
Restructuring and related costs | Restructuring costs for the three and six months ended June 30, 2023 and 2022 were as follows: (Millions of dollars) Three Months Ended June 30 Six Months Ended June 30 2023 2022 2023 2022 Employee separations 1 $ 10 $ 18 $ 22 $ 23 Longwall divestiture 1 — — 586 — Long-lived asset impairments 1 2 5 2 5 Other 2 19 5 32 13 Total restructuring costs $ 31 $ 28 $ 642 $ 41 1 Recognized in Other operating (income) expenses. 2 Represents costs related to our restructuring programs, primarily for accelerated depreciation, inventory write-downs, project management and equipment relocation, all of which are primarily included in Cost of goods sold. |
Summary of separation activity | The following table summarizes the 2023 and 2022 employee separation activity: (Millions of dollars) Six Months Ended June 30 2023 2022 Liability balance, beginning of period $ 39 $ 61 Increase in liability (separation charges) 22 23 Reduction in liability (payments) (44) (50) Liability balance, end of period $ 17 $ 34 |
New Accounting Guidance (Detail
New Accounting Guidance (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Accounting Changes and Error Corrections [Abstract] | ||
Supplier finance program, obligation outstanding | $ 901 | $ 862 |
Sales and revenue contract in_2
Sales and revenue contract information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||||||
Trade receivables from dealers and end users | $ 8,079 | $ 8,079 | $ 7,551 | $ 7,267 | ||
Long term trade receivables from dealers and end users | 482 | 482 | 506 | 624 | ||
Contract assets | 225 | 225 | 247 | 187 | ||
Contract liabilities | 2,592 | 2,592 | $ 2,314 | $ 1,557 | ||
Revenue recognized from contract liability balance at beginning of period | 398 | $ 220 | 1,135 | $ 657 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | ||||||
Unsatisfied performance obligations with an original contract duration greater than one year | $ 13,200 | $ 13,200 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-07-01 | ||||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | ||||||
Expected period of performance satisfaction | 12 months | 12 months | ||||
Remaining performance obligation, percentage | 50% | 50% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||||
Stock-based compensation expense | $ 74 | $ 67 | $ 118 | $ 107 |
Unrecognized compensation expense | $ 229 | $ 229 | ||
Term of amortization of unrecognized compensation cost over weighted-average remaining requisite service periods (in years) | 1 year 9 months 18 days |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Type and Fair Value of Stock-Based Compensation Awards (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Stock options | ||
Stock-based compensation awards | ||
Shares Granted, stock options (in shares) | 777,275 | 1,029,202 |
Weighted-Average Fair Value Per Share, stock options (in dollars per share) | $ 75.79 | $ 51.69 |
Weighted-Average Grant Date Stock Price (in dollars per share) | 253.98 | 196.70 |
RSUs | ||
Stock-based compensation awards | ||
Weighted-Average Grant Date Stock Price (in dollars per share) | $ 253.98 | $ 196.70 |
Shares Granted, RSUs & PRSUs (in shares) | 379,426 | 484,025 |
Weighted-Average Fair Value Per Share, RSUs & PRSUs (in dollars per share) | $ 253.98 | $ 196.70 |
PRSUs | ||
Stock-based compensation awards | ||
Weighted-Average Grant Date Stock Price (in dollars per share) | $ 253.98 | $ 196.70 |
Shares Granted, RSUs & PRSUs (in shares) | 221,869 | 258,900 |
Weighted-Average Fair Value Per Share, RSUs & PRSUs (in dollars per share) | $ 253.98 | $ 196.70 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Assumptions Used for Fair Value (Details) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Weighted-average dividend yield | 2.60% | 2.60% |
Weighted-average volatility | 31% | 31.70% |
Rate of volatilities, minimum | 28.50% | 25.30% |
Rate of volatilities, maximum | 35.50% | 36.80% |
Risk-free interest rates, minimum | 3.92% | 1.03% |
Risk-free interest rates, maximum | 5.03% | 2% |
Weighted-average expected lives | 7 years | 8 years |
Derivative Financial Instrume_3
Derivative Financial Instruments and Risk Management (Details) - USD ($) $ in Billions | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Foreign currency cash flow hedges, maximum allowable period (in years) | 5 years | |
Foreign currency cash flow hedges, maximum period (in months) | 60 months | |
Commodity forward and option contracts, maximum period (in years) | 5 years | |
Notional amount | $ 21.9 | $ 24.3 |
Derivative Financial instrume_4
Derivative Financial instruments and Risk Management- Summary of Location and Fair Value of Derivative Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Derivatives Fair Value | ||
Assets | $ 584 | $ 644 |
Liabilities | (515) | (496) |
Designated derivatives | ||
Derivatives Fair Value | ||
Assets | 531 | 555 |
Liabilities | (443) | (440) |
Designated derivatives | Foreign exchange contracts | ||
Derivatives Fair Value | ||
Assets | 460 | 462 |
Liabilities | (159) | (152) |
Designated derivatives | Interest rate contracts | ||
Derivatives Fair Value | ||
Assets | 71 | 93 |
Liabilities | (284) | (288) |
Undesignated derivatives | ||
Derivatives Fair Value | ||
Assets | 53 | 89 |
Liabilities | (72) | (56) |
Undesignated derivatives | Foreign exchange contracts | ||
Derivatives Fair Value | ||
Assets | 42 | 65 |
Liabilities | (62) | (47) |
Undesignated derivatives | Commodity contracts | ||
Derivatives Fair Value | ||
Assets | 11 | 24 |
Liabilities | $ (10) | $ (9) |
Derivative Financial instrume_5
Derivative Financial instruments and Risk Management- Schedule of Gains (Losses) on Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Designated derivatives | Cash Flow Hedges | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (losses) deferred | $ (12) | $ 207 | $ 44 | $ 254 |
(Gains) losses reclassified to earnings | 42 | 321 | (10) | 340 |
Designated derivatives | Cash Flow Hedges | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (losses) deferred | (26) | 186 | 32 | 177 |
(Gains) losses reclassified to earnings | 28 | 323 | (37) | 349 |
Designated derivatives | Cash Flow Hedges | Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (losses) deferred | 14 | 21 | 12 | 77 |
(Gains) losses reclassified to earnings | 14 | (2) | 27 | (9) |
Designated derivatives | Cash Flow Hedges | Commodity contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (losses) deferred | 0 | 0 | 0 | 0 |
(Gains) losses reclassified to earnings | 0 | 0 | 0 | 0 |
Undesignated derivatives | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) recognized on the consolidated statement of results of operations | (23) | (6) | (69) | 32 |
Undesignated derivatives | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) recognized on the consolidated statement of results of operations | 31 | 33 | 3 | (30) |
Undesignated derivatives | Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) recognized on the consolidated statement of results of operations | (34) | 9 | (60) | 17 |
Undesignated derivatives | Commodity contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) recognized on the consolidated statement of results of operations | $ (20) | $ (48) | $ (12) | $ 45 |
Derivative Financial Instrume_6
Derivative Financial Instruments and Risk Management- Summary of Cumulative Basis Adjustments for Fair Value Hedges (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Derivatives Fair Value | ||
Carrying Value of the Hedged Liabilities | $ 4,228 | $ 4,173 |
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities | (276) | (280) |
Long-term debt due within one year | ||
Derivatives Fair Value | ||
Carrying Value of the Hedged Liabilities | 195 | 0 |
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities | (5) | 0 |
Long-term debt due after one year | ||
Derivatives Fair Value | ||
Carrying Value of the Hedged Liabilities | 4,033 | 4,173 |
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Value of the Hedged Liabilities | $ (271) | $ (280) |
Derivative Financial instrume_7
Derivative Financial instruments and Risk Management - Summary Offsetting Assets and Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Gross Amounts Recognized | $ 584 | $ 644 |
Financial Instruments Not Offset | (224) | (233) |
Net Amount | 360 | 411 |
Liabilities | ||
Gross Amounts Recognized | (515) | (496) |
Financial Instruments Not Offset | 224 | 233 |
Net Amount | $ (291) | $ (263) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 6,783 | $ 6,370 |
Work-in-process | 1,640 | 1,452 |
Finished goods | 8,979 | 8,138 |
Supplies | 344 | 310 |
Total inventories | $ 17,746 | $ 16,270 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Summary of Intangible assets (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Intangible assets | ||
Weighted Amortizable Life (Years) | 15 years | 14 years |
Gross carrying amount | $ 3,003 | $ 3,838 |
Accumulated Amortization | (2,373) | (3,080) |
Net | 630 | $ 758 |
Fully amortized finite-lived intangibles | $ 829 | |
Customer relationships | ||
Intangible assets | ||
Weighted Amortizable Life (Years) | 16 years | 16 years |
Gross carrying amount | $ 2,233 | $ 2,233 |
Accumulated Amortization | (1,744) | (1,675) |
Net | $ 489 | $ 558 |
Intellectual property | ||
Intangible assets | ||
Weighted Amortizable Life (Years) | 14 years | 12 years |
Gross carrying amount | $ 650 | $ 1,473 |
Accumulated Amortization | (551) | (1,320) |
Net | $ 99 | $ 153 |
Other | ||
Intangible assets | ||
Weighted Amortizable Life (Years) | 17 years | 16 years |
Gross carrying amount | $ 120 | $ 132 |
Accumulated Amortization | (78) | (85) |
Net | $ 42 | $ 47 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 64 | $ 71 | $ 130 | $ 143 |
Goodwill, impairment loss | $ 0 | $ 0 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Summary of expected amortization expense related to intangible assets (Details) $ in Millions | Jun. 30, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining Six Months of 2023 | $ 87 |
2024 | 171 |
2025 | 161 |
2026 | 91 |
2027 | 27 |
Thereafter | $ 93 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Summary of Goodwill acquired (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Goodwill | ||
Goodwill | $ 7,415 | $ 7,410 |
Impairments | (2,122) | (2,122) |
Net goodwill | 5,293 | 5,288 |
Changes in carrying amount of goodwill by reportable segment: | ||
Goodwill, beginning of period | 7,410 | |
Other adjustments | 5 | |
Goodwill, end of period | 7,415 | |
Net goodwill, beginning of period | 5,288 | |
Other adjustments | 5 | |
Net goodwill, end of period | 5,293 | |
Construction Industries | ||
Goodwill | ||
Goodwill | 274 | 287 |
Impairments | (22) | (22) |
Net goodwill | 252 | 265 |
Changes in carrying amount of goodwill by reportable segment: | ||
Goodwill, beginning of period | 287 | |
Other adjustments | (13) | |
Goodwill, end of period | 274 | |
Net goodwill, beginning of period | 265 | |
Other adjustments | (13) | |
Net goodwill, end of period | 252 | |
Resource Industries | ||
Goodwill | ||
Goodwill | 4,146 | 4,130 |
Impairments | (1,175) | (1,175) |
Net goodwill | 2,971 | 2,955 |
Changes in carrying amount of goodwill by reportable segment: | ||
Goodwill, beginning of period | 4,130 | |
Other adjustments | 16 | |
Goodwill, end of period | 4,146 | |
Net goodwill, beginning of period | 2,955 | |
Other adjustments | 16 | |
Net goodwill, end of period | 2,971 | |
Energy & Transportation | ||
Goodwill | ||
Goodwill | 2,953 | 2,947 |
Impairments | (925) | (925) |
Net goodwill | 2,028 | 2,022 |
Changes in carrying amount of goodwill by reportable segment: | ||
Goodwill, beginning of period | 2,947 | |
Other adjustments | 6 | |
Goodwill, end of period | 2,953 | |
Net goodwill, beginning of period | 2,022 | |
Other adjustments | 6 | |
Net goodwill, end of period | 2,028 | |
Other Segments | ||
Goodwill | ||
Goodwill | 42 | 46 |
Impairments | 0 | 0 |
Net goodwill | 42 | $ 46 |
Changes in carrying amount of goodwill by reportable segment: | ||
Goodwill, beginning of period | 46 | |
Other adjustments | (4) | |
Goodwill, end of period | 42 | |
Net goodwill, beginning of period | 46 | |
Other adjustments | (4) | |
Net goodwill, end of period | $ 42 |
Investments in Debt and Equit_3
Investments in Debt and Equity Securities - Schedule of cost basis and fair value of available-for-sale securities (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | $ 3,377 | $ 3,311 |
Unrealized Pretax Net Gains (Losses) | (137) | (147) |
Fair Value | 3,240 | 3,164 |
U.S. treasury bonds | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 10 | 9 |
Unrealized Pretax Net Gains (Losses) | 0 | 0 |
Fair Value | 10 | 9 |
Other U.S. and non-U.S. government bonds | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 60 | 60 |
Unrealized Pretax Net Gains (Losses) | (4) | (5) |
Fair Value | 56 | 55 |
Corporate bonds and other debt securities | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 2,585 | 2,561 |
Unrealized Pretax Net Gains (Losses) | (85) | (95) |
Fair Value | 2,500 | 2,466 |
Asset-backed securities | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 191 | 187 |
Unrealized Pretax Net Gains (Losses) | (5) | (5) |
Fair Value | 186 | 182 |
U.S. governmental agency | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 390 | 364 |
Unrealized Pretax Net Gains (Losses) | (31) | (31) |
Fair Value | 359 | 333 |
Residential | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 3 | 3 |
Unrealized Pretax Net Gains (Losses) | (1) | (1) |
Fair Value | 2 | 2 |
Commercial | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 138 | 127 |
Unrealized Pretax Net Gains (Losses) | (11) | (10) |
Fair Value | $ 127 | $ 117 |
Investments in Debt and Equit_4
Investments in Debt and Equity Securities - Summary of investments in an unrealized loss position that are not other-than-temporarily impaired (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Available-for-sale Securities, Continuous Unrealized Loss Position | ||
Less than 12 months - Fair Value | $ 1,656 | $ 2,203 |
Less than 12 months - Unrealized losses | 34 | 70 |
12 months or more - Fair Value | 1,371 | 585 |
12 months or more - Unrealized losses | 106 | 78 |
Fair Value | 3,027 | 2,788 |
Unrealized Losses | 140 | 148 |
Other U.S. and non-U.S. government bonds | ||
Available-for-sale Securities, Continuous Unrealized Loss Position | ||
Less than 12 months - Fair Value | 13 | 19 |
Less than 12 months - Unrealized losses | 0 | 1 |
12 months or more - Fair Value | 26 | 20 |
12 months or more - Unrealized losses | 4 | 4 |
Fair Value | 39 | 39 |
Unrealized Losses | 4 | 5 |
Corporate bonds and other debt securities | ||
Available-for-sale Securities, Continuous Unrealized Loss Position | ||
Less than 12 months - Fair Value | 1,414 | 1,815 |
Less than 12 months - Unrealized losses | 26 | 46 |
12 months or more - Fair Value | 947 | 357 |
12 months or more - Unrealized losses | 62 | 50 |
Fair Value | 2,361 | 2,172 |
Unrealized Losses | 88 | 96 |
Asset-backed securities | ||
Available-for-sale Securities, Continuous Unrealized Loss Position | ||
Less than 12 months - Fair Value | 57 | 75 |
Less than 12 months - Unrealized losses | 1 | 2 |
12 months or more - Fair Value | 92 | 55 |
12 months or more - Unrealized losses | 4 | 3 |
Fair Value | 149 | 130 |
Unrealized Losses | 5 | 5 |
U.S. governmental agency | ||
Available-for-sale Securities, Continuous Unrealized Loss Position | ||
Less than 12 months - Fair Value | 131 | 229 |
Less than 12 months - Unrealized losses | 5 | 16 |
12 months or more - Fair Value | 218 | 98 |
12 months or more - Unrealized losses | 26 | 15 |
Fair Value | 349 | 327 |
Unrealized Losses | 31 | 31 |
Residential | ||
Available-for-sale Securities, Continuous Unrealized Loss Position | ||
Less than 12 months - Fair Value | 0 | 2 |
Less than 12 months - Unrealized losses | 0 | 0 |
12 months or more - Fair Value | 2 | 1 |
12 months or more - Unrealized losses | 1 | 1 |
Fair Value | 2 | 3 |
Unrealized Losses | 1 | 1 |
Commercial | ||
Available-for-sale Securities, Continuous Unrealized Loss Position | ||
Less than 12 months - Fair Value | 41 | 63 |
Less than 12 months - Unrealized losses | 2 | 5 |
12 months or more - Fair Value | 86 | 54 |
12 months or more - Unrealized losses | 9 | 5 |
Fair Value | 127 | 117 |
Unrealized Losses | $ 11 | $ 10 |
Investments in Debt and Equit_5
Investments in Debt and Equity Securities - Summary of cost basis and fair value of the available-for-sale debt securities by contractual maturity (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Cost Basis | |||||
Due in one year or less | $ 973 | $ 973 | |||
Due after one year through five years | 1,539 | 1,539 | |||
Due after five years through ten years | 270 | 270 | |||
Due after ten years | 64 | 64 | |||
Debt securities, available-for-sale, cost basis | 3,377 | 3,377 | $ 3,311 | ||
Fair Value | |||||
Due in one year or less | 963 | 963 | |||
Due after one year through five years | 1,470 | 1,470 | |||
Due after five years through ten years | 257 | 257 | |||
Due after ten years | 62 | 62 | |||
Debt securities | 3,240 | 3,240 | 3,164 | ||
Available-for-sale Securities, Proceeds, Gains and Losses | |||||
Proceeds from the sale of available-for-sale securities | 216 | $ 174 | 439 | $ 270 | |
Gross gains from the sale of available-for-sale securities | 0 | 0 | 0 | 1 | |
Gross losses from the sale of available-for-sale securities | 0 | $ 0 | 0 | $ 1 | |
U.S. governmental agency | |||||
Cost Basis | |||||
Debt securities, available-for-sale, cost basis | 390 | 390 | 364 | ||
Fair Value | |||||
Debt securities | 359 | 359 | 333 | ||
Residential | |||||
Cost Basis | |||||
Debt securities, available-for-sale, cost basis | 3 | 3 | 3 | ||
Fair Value | |||||
Debt securities | 2 | 2 | 2 | ||
Commercial | |||||
Cost Basis | |||||
Debt securities, available-for-sale, cost basis | 138 | 138 | 127 | ||
Fair Value | |||||
Debt securities | $ 127 | $ 127 | $ 117 |
Investments in Debt and Equit_6
Investments in Debt and Equity Securities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Schedule of Held-to-maturity Securities | |||||
Unrealized gain (loss) on equity securities | $ (4) | $ (48) | $ (14) | $ (59) | |
Bank Time Deposits | |||||
Schedule of Held-to-maturity Securities | |||||
Time deposit | $ 500 | $ 500 | $ 0 |
Postretirement Benefits - Sched
Postretirement Benefits - Schedule of net benefit costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pension Benefits | U.S. Pension Benefits | ||||
Components of net periodic benefit cost: | ||||
Service cost | $ 0 | $ 0 | $ 0 | $ 0 |
Interest cost | 164 | 101 | 328 | 201 |
Expected return on plan assets | (172) | (168) | (344) | (335) |
Amortization of prior service cost (credit) | 0 | 0 | 0 | 0 |
Net periodic benefit cost (benefit) | (8) | (67) | (16) | (134) |
Pension Benefits | Non-U.S. Pension Benefits | ||||
Components of net periodic benefit cost: | ||||
Service cost | 10 | 12 | 20 | 25 |
Interest cost | 30 | 18 | 61 | 36 |
Expected return on plan assets | (40) | (33) | (80) | (67) |
Amortization of prior service cost (credit) | 0 | 0 | 0 | 0 |
Net periodic benefit cost (benefit) | 0 | (3) | 1 | (6) |
Other Postretirement Benefits | ||||
Components of net periodic benefit cost: | ||||
Service cost | 17 | 25 | 34 | 50 |
Interest cost | 36 | 20 | 72 | 40 |
Expected return on plan assets | (3) | (2) | (6) | (6) |
Amortization of prior service cost (credit) | (3) | (2) | (6) | (3) |
Net periodic benefit cost (benefit) | $ 47 | $ 41 | $ 94 | $ 81 |
Postretirement Benefits (Detail
Postretirement Benefits (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | |
Defined Benefit Plan Disclosure | ||
Expected full year contributions to pension and other postretirement benefit plans during the year | $ 372 | $ 372 |
Pension Benefits | ||
Defined Benefit Plan Disclosure | ||
Contributions to pension and other postretirement benefit plans | $ 56 | $ 264 |
Postretirement Benefits - Summa
Postretirement Benefits - Summary of company costs related to U.S. and non-U.S. defined contribution plans (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Defined Contribution Plan | ||||
Costs related to defined contribution plans | $ 165 | $ 61 | $ 343 | $ 205 |
U.S. Pension Benefits | ||||
Defined Contribution Plan | ||||
Costs related to defined contribution plans | 136 | 34 | 285 | 149 |
Non-U.S. Pension Benefits | ||||
Defined Contribution Plan | ||||
Costs related to defined contribution plans | $ 29 | $ 27 | $ 58 | $ 56 |
Leases Lease revenue (Details)
Leases Lease revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Leases [Abstract] | ||||
Finance lease revenue | $ 105 | $ 109 | $ 209 | $ 221 |
Operating lease revenue | 275 | 271 | 550 | 549 |
Total | $ 380 | $ 380 | $ 759 | $ 770 |
Financial Products | ||||
Lessor, Lease, Description | ||||
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration] | Sales and revenues | Sales and revenues | Sales and revenues | Sales and revenues |
Guarantees and Product Warran_3
Guarantees and Product Warranty - Summary of guarantees (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Guarantor Obligations | ||
Guarantees, maximum potential amount of future payments | $ 567 | $ 511 |
Caterpillar dealer performance guarantees | ||
Guarantor Obligations | ||
Guarantees, maximum potential amount of future payments | 177 | 188 |
Other guarantees | ||
Guarantor Obligations | ||
Guarantees, maximum potential amount of future payments | $ 390 | $ 323 |
Guarantees and Product Warran_4
Guarantees and Product Warranty (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Guarantor Obligations | ||
Related liability | $ 5 | $ 2 |
SPC assets in consolidated statement | 85,427 | 81,943 |
SPC liabilities in consolidated statement | 67,171 | 66,052 |
Variable Interest Entity, Primary Beneficiary | ||
Guarantor Obligations | ||
SPC assets in consolidated statement | 1,240 | 971 |
SPC liabilities in consolidated statement | $ 1,240 | $ 970 |
Guarantees and Product Warran_5
Guarantees and Product Warranty - Summary of product warranty (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Change in product warranty liability balances | ||
Warranty liability, beginning of period | $ 1,761 | $ 1,689 |
Reduction in liability (payments) | (410) | (388) |
Increase in liability (new warranties) | 471 | 350 |
Warranty liability, end of period | $ 1,822 | $ 1,651 |
Profit Per Share (Details)
Profit Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||||
Earnings Per Share Reconciliation [Abstract] | ||||||||
Profit for the period (A) (in dollars) | $ 2,922 | [1] | $ 1,673 | [1] | $ 4,865 | [2] | $ 3,210 | [2] |
Determination of shares (in millions): | ||||||||
Weighted-average number of common shares outstanding (B) (in shares) | 512,900,000 | 531,000,000 | 514,300,000 | 532,600,000 | ||||
Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price (in shares) | 2,100,000 | 3,100,000 | 2,800,000 | 3,500,000 | ||||
Average common shares outstanding for fully diluted computation (C) (in shares) | 515,000,000 | [3] | 534,100,000 | [3] | 517,100,000 | [4] | 536,100,000 | [4] |
Profit per share of common stock: | ||||||||
Assuming no dilution (A/B) (in dollars per share) | $ 5.70 | $ 3.15 | $ 9.46 | $ 6.03 | ||||
Assuming full dilution (A/C) (in dollars per share) | $ 5.67 | [3] | $ 3.13 | [3] | $ 9.41 | [4] | $ 5.99 | [4] |
Shares outstanding as of June 30 (in shares) | 510,100,000 | 527,900,000 | 510,100,000 | 527,900,000 | ||||
Common shares under SARs and stock options not included in the computation of diluted earnings per share (in shares) | 800,000 | 2,100,000 | 800,000 | 2,100,000 | ||||
Common shares repurchased (in shares) | 5,914,408 | 5,860,813 | 7,616,168 | 9,432,497 | ||||
Cost of repurchase | $ 1,279 | [5] | $ 1,204 | [5] | $ 1,679 | [6] | $ 1,924 | [6] |
[1]Profit attributable to common shareholders.[2]Profit attributable to common shareholders.[3]Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.[4]Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.[5] 2 See Note 12 for additional information. 2 See Note 12 for additional information. |
Accumulated other comprehensi_3
Accumulated other comprehensive income (loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 18,170 | $ 17,097 | $ 15,891 | $ 16,516 |
Total other comprehensive income (loss), net of tax | (200) | (789) | 511 | (946) |
Ending balance | 18,256 | 15,759 | 18,256 | 15,759 |
Foreign currency translation | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (1,721) | (1,623) | (2,328) | (1,508) |
Gains (losses) on foreign currency translation | (144) | (632) | (41) | (736) |
Less: Tax provision /(benefit) | (2) | 27 | (12) | 38 |
Net gains (losses) on foreign currency translation | (142) | (659) | (29) | (774) |
(Gains) losses reclassified to earnings | 0 | 0 | 494 | 0 |
Less: Tax provision /(benefit) | 0 | 0 | 0 | 0 |
Net (gains) losses reclassified to earnings | 0 | 0 | 494 | 0 |
Total other comprehensive income (loss), net of tax | (142) | (659) | 465 | (774) |
Ending balance | (1,863) | (2,282) | (1,863) | (2,282) |
Pension and other postretirement benefits | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (41) | (63) | (39) | (62) |
Gains (losses) on foreign currency translation | 0 | 0 | 0 | 0 |
Less: Tax provision /(benefit) | 0 | 0 | 0 | 0 |
Net gains (losses) on foreign currency translation | 0 | 0 | 0 | 0 |
(Gains) losses reclassified to earnings | (3) | (2) | (6) | (3) |
Less: Tax provision /(benefit) | 0 | (1) | (1) | (1) |
Net (gains) losses reclassified to earnings | (3) | (1) | (5) | (2) |
Total other comprehensive income (loss), net of tax | (3) | (1) | (5) | (2) |
Ending balance | (44) | (64) | (44) | (64) |
Derivative financial instruments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | 112 | 20 | 28 | (3) |
Gains (losses) on foreign currency translation | (12) | 207 | 44 | 254 |
Less: Tax provision /(benefit) | (3) | 26 | 9 | 36 |
Net gains (losses) on foreign currency translation | (9) | 181 | 35 | 218 |
(Gains) losses reclassified to earnings | (42) | (321) | 10 | (340) |
Less: Tax provision /(benefit) | (10) | (54) | 2 | (59) |
Net (gains) losses reclassified to earnings | (32) | (267) | 8 | (281) |
Total other comprehensive income (loss), net of tax | (41) | (86) | 43 | (63) |
Ending balance | 71 | (66) | 71 | (66) |
Available-for-sale securities | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (96) | (44) | (118) | 20 |
Gains (losses) on foreign currency translation | (16) | (54) | 10 | (133) |
Less: Tax provision /(benefit) | (2) | (11) | 2 | (26) |
Net gains (losses) on foreign currency translation | (14) | (43) | 8 | (107) |
(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 |
Total other comprehensive income (loss), net of tax | (14) | (43) | 8 | (107) |
Ending balance | (110) | (87) | (110) | (87) |
Accumulated other comprehensive income (loss) | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (1,746) | (1,710) | (2,457) | (1,553) |
Ending balance | $ (1,946) | $ (2,499) | $ (1,946) | $ (2,499) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||||
Effective tax rate | 20.60% | 20.40% | 23.20% | 21.90% | |
Estimated annual tax rate | 23% | 23.50% | 23.20% | ||
Gain (loss) on divestiture | $ (586) | ||||
Income tax expense (benefit) due to change in valuation allowance | (88) | ||||
Tax benefit for settlement of stock-based compensation awards | $ 32 | $ 18 | |||
Prior year tax adjustment expense (benefit) | $ (49) |
Segment Information (Details)
Segment Information (Details) | 6 Months Ended |
Jun. 30, 2023 group_presidents segments | |
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 |
Segment Information - Revenue b
Segment Information - Revenue by Geographic Region (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Sales and revenues by geographic region | ||||
Sales and revenues | $ 17,318 | $ 14,247 | $ 33,180 | $ 27,836 |
Intersegment Sales and Revenues | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | (1,467) | (1,253) | (2,852) | (2,438) |
Corporate Items | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | (190) | (115) | (383) | (225) |
Corporate Reconciling Items and Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | (1,657) | (1,368) | (3,235) | (2,663) |
North America | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 8,922 | 6,771 | 16,872 | 12,908 |
North America | Corporate Items | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | (117) | (62) | (248) | (122) |
Latin America | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 1,642 | 1,547 | 3,181 | 2,940 |
Latin America | Corporate Items | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | (23) | (23) | (41) | (39) |
EAME | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 3,533 | 2,998 | 6,951 | 6,143 |
EAME | Corporate Items | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | (23) | (10) | (42) | (21) |
Asia/ Pacific | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 3,221 | 2,931 | 6,176 | 5,845 |
Asia/ Pacific | Corporate Items | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | (27) | (20) | (52) | (43) |
Segments Excluding All Other Segments | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 17,474 | 14,324 | 33,494 | 27,984 |
Segments Excluding All Other Segments | Intersegment Sales and Revenues | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | (1,385) | (1,173) | (2,694) | (2,279) |
Segments Excluding All Other Segments | Operating Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 18,859 | 15,497 | 36,188 | 30,263 |
Segments Excluding All Other Segments | North America | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 9,023 | 6,815 | 17,086 | 12,994 |
Segments Excluding All Other Segments | Latin America | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 1,665 | 1,570 | 3,222 | 2,979 |
Segments Excluding All Other Segments | EAME | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 3,552 | 3,003 | 6,985 | 6,154 |
Segments Excluding All Other Segments | Asia/ Pacific | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 3,234 | 2,936 | 6,201 | 5,857 |
Construction Industries | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 7,121 | 5,991 | 13,825 | 12,077 |
Construction Industries | Intersegment Sales and Revenues | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | (33) | (42) | (75) | (71) |
Construction Industries | Operating Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 7,154 | 6,033 | 13,900 | 12,148 |
Construction Industries | North America | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 3,968 | 3,006 | 7,576 | 5,726 |
Construction Industries | Latin America | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 566 | 635 | 1,165 | 1,262 |
Construction Industries | EAME | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 1,438 | 1,202 | 2,774 | 2,479 |
Construction Industries | Asia/ Pacific | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 1,149 | 1,148 | 2,310 | 2,610 |
Resource Industries | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 3,473 | 2,895 | 6,832 | 5,654 |
Resource Industries | Intersegment Sales and Revenues | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | (90) | (66) | (158) | (137) |
Resource Industries | Operating Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 3,563 | 2,961 | 6,990 | 5,791 |
Resource Industries | North America | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 1,342 | 1,027 | 2,650 | 2,045 |
Resource Industries | Latin America | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 538 | 466 | 1,012 | 865 |
Resource Industries | EAME | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 517 | 489 | 1,116 | 1,083 |
Resource Industries | Asia/ Pacific | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 1,076 | 913 | 2,054 | 1,661 |
Energy & Transportation | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 5,957 | 4,640 | 11,012 | 8,672 |
Energy & Transportation | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 5,957 | 4,640 | 11,012 | 8,672 |
Energy & Transportation | Intersegment Sales and Revenues | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | (1,262) | (1,065) | (2,461) | (2,071) |
Energy & Transportation | Operating Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 7,219 | 5,705 | 13,473 | 10,743 |
Energy & Transportation | North America | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 3,120 | 2,277 | 5,692 | 4,215 |
Energy & Transportation | Latin America | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 459 | 382 | 839 | 692 |
Energy & Transportation | EAME | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 1,479 | 1,215 | 2,863 | 2,399 |
Energy & Transportation | Asia/ Pacific | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 899 | 766 | 1,618 | 1,366 |
Financial Products Segment | Related Party | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 172 | 108 | 334 | 208 |
Financial Products Segment | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 923 | 798 | 1,825 | 1,581 |
Financial Products Segment | Intersegment Sales and Revenues | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 0 | 0 | 0 | 0 |
Financial Products Segment | Operating Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 923 | 798 | 1,825 | 1,581 |
Financial Products Segment | North America | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 593 | 505 | 1,168 | 1,008 |
Financial Products Segment | Latin America | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 102 | 87 | 206 | 160 |
Financial Products Segment | EAME | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 118 | 97 | 232 | 193 |
Financial Products Segment | Asia/ Pacific | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 110 | 109 | 219 | 220 |
Other Segments | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 34 | 38 | 69 | 77 |
Other Segments | Intersegment Sales and Revenues | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | (82) | (80) | (158) | (159) |
Other Segments | Operating Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 116 | 118 | 227 | 236 |
Other Segments | North America | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 16 | 18 | 34 | 36 |
Other Segments | Latin America | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 0 | 0 | 0 | 0 |
Other Segments | EAME | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | 4 | 5 | 8 | 10 |
Other Segments | Asia/ Pacific | Operating Segments Excluding Intersegment Eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues | $ 14 | $ 15 | $ 27 | $ 31 |
Segment Information - Energy &
Segment Information - Energy & Transportation Sales (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Energy and transportation sales | ||||
Sales and revenues | $ 17,318 | $ 14,247 | $ 33,180 | $ 27,836 |
Energy & Transportation | ||||
Energy and transportation sales | ||||
Sales and revenues | 5,957 | 4,640 | 11,012 | 8,672 |
Energy & Transportation | Oil and gas | ||||
Energy and transportation sales | ||||
Sales and revenues | 1,760 | 1,232 | 3,074 | 2,180 |
Energy & Transportation | Power generation | ||||
Energy and transportation sales | ||||
Sales and revenues | 1,645 | 1,186 | 2,929 | 2,198 |
Energy & Transportation | Industrial | ||||
Energy and transportation sales | ||||
Sales and revenues | 1,318 | 1,117 | 2,573 | 2,137 |
Energy & Transportation | Transportation | ||||
Energy and transportation sales | ||||
Sales and revenues | $ 1,234 | $ 1,105 | $ 2,436 | $ 2,157 |
Segment Information - Reconcili
Segment Information - Reconciliations of Consolidated Profit Before Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | $ 3,652 | $ 2,096 | $ 6,286 | $ 4,095 |
Operating Segments | Reportable Segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | 4,052 | 2,220 | 7,895 | 4,414 |
Operating Segments | Reportable Segments | Construction Industries | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | 1,803 | 989 | 3,593 | 2,046 |
Operating Segments | Reportable Segments | Resource Industries | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | 740 | 355 | 1,504 | 716 |
Operating Segments | Reportable Segments | Energy & Transportation | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | 1,269 | 659 | 2,326 | 1,197 |
Operating Segments | Reportable Segments | Financial Products Segment | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | 240 | 217 | 472 | 455 |
Operating Segments | All Other operating segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | 10 | 31 | 21 | 34 |
Intersegment Sales and Revenues | Cost centers | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | 13 | 28 | 43 | 38 |
Intersegment Sales and Revenues | Corporate costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | (211) | (304) | (449) | (502) |
Intersegment Sales and Revenues | Timing | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | 95 | 53 | (111) | (45) |
Intersegment Sales and Revenues | Restructuring costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | (31) | (28) | (642) | (41) |
Intersegment Sales and Revenues | Inventory/cost of sales | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | 13 | 101 | 139 | 269 |
Intersegment Sales and Revenues | Postretirement benefit expense | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | (40) | 130 | (71) | 211 |
Intersegment Sales and Revenues | Stock-based compensation expense | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | (74) | (67) | (118) | (107) |
Intersegment Sales and Revenues | Financing costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | (52) | (94) | (102) | (194) |
Intersegment Sales and Revenues | Currency | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | 54 | 156 | 28 | 262 |
Intersegment Sales and Revenues | Other income/expense methodology differences | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | (158) | (97) | (304) | (178) |
Intersegment Sales and Revenues | Other methodology differences | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Reclassifications before tax | $ (19) | $ (33) | $ (43) | $ (66) |
Segment Information - Reconci_2
Segment Information - Reconciliation of Assets (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Reconciliation of Assets | ||
Assets | $ 85,427 | $ 81,943 |
Intersegment Sales and Revenues | ||
Reconciliation of Assets | ||
Inventory Methodology Difference | (3,311) | (3,063) |
Intersegment Sales and Revenues | Cash and cash equivalents | ||
Reconciliation of Assets | ||
Assets | 6,323 | 6,042 |
Intersegment Sales and Revenues | Deferred income taxes | ||
Reconciliation of Assets | ||
Assets | 2,491 | 2,098 |
Intersegment Sales and Revenues | Goodwill and intangible assets | ||
Reconciliation of Assets | ||
Assets | 4,440 | 4,248 |
Intersegment Sales and Revenues | Property, plant and equipment – net and other assets | ||
Reconciliation of Assets | ||
Assets | 4,862 | 4,234 |
Intersegment Sales and Revenues | Liabilities included in segment assets | ||
Reconciliation of Assets | ||
Assets | 12,579 | 12,519 |
Intersegment Sales and Revenues | Other methodology differences | ||
Reconciliation of Assets | ||
Assets | (398) | (630) |
Operating Segments | Reportable Segments | ||
Reconciliation of Assets | ||
Assets | 56,621 | 54,667 |
Operating Segments | Reportable Segments | Construction Industries | ||
Reconciliation of Assets | ||
Assets | 5,619 | 5,168 |
Operating Segments | Reportable Segments | Resource Industries | ||
Reconciliation of Assets | ||
Assets | 5,648 | 5,775 |
Operating Segments | Reportable Segments | Energy & Transportation | ||
Reconciliation of Assets | ||
Assets | 9,909 | 9,455 |
Operating Segments | Reportable Segments | Financial Products Segment | ||
Reconciliation of Assets | ||
Assets | 35,445 | 34,269 |
Operating Segments | All Other operating segments | ||
Reconciliation of Assets | ||
Assets | $ 1,820 | $ 1,828 |
Segment Information - Reconci_3
Segment Information - Reconciliations of Depreciation and Amortization (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Reconciliation of Depreciation and amortization | ||||
Depreciation and amortization | $ 542 | $ 553 | $ 1,074 | $ 1,110 |
Operating Segments | Reportable Segments | ||||
Reconciliation of Depreciation and amortization | ||||
Depreciation and amortization | 450 | 468 | 898 | 940 |
Operating Segments | Reportable Segments | Construction Industries | ||||
Reconciliation of Depreciation and amortization | ||||
Depreciation and amortization | 54 | 57 | 108 | 115 |
Operating Segments | Reportable Segments | Resource Industries | ||||
Reconciliation of Depreciation and amortization | ||||
Depreciation and amortization | 82 | 91 | 169 | 183 |
Operating Segments | Reportable Segments | Energy & Transportation | ||||
Reconciliation of Depreciation and amortization | ||||
Depreciation and amortization | 133 | 135 | 262 | 269 |
Operating Segments | Reportable Segments | Financial Products Segment | ||||
Reconciliation of Depreciation and amortization | ||||
Depreciation and amortization | 181 | 185 | 359 | 373 |
Intersegment Sales and Revenues | All Other operating segments | ||||
Reconciliation of Depreciation and amortization | ||||
Depreciation and amortization | 60 | 58 | 117 | 116 |
Intersegment Sales and Revenues | Cost centers | ||||
Reconciliation of Depreciation and amortization | ||||
Depreciation and amortization | 22 | 22 | 42 | 43 |
Intersegment Sales and Revenues | Other methodology differences | ||||
Reconciliation of Depreciation and amortization | ||||
Depreciation and amortization | $ 10 | $ 5 | $ 17 | $ 11 |
Segment Information - Reconci_4
Segment Information - Reconciliations of Capital Expenditures (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Reconciliation of Capital expenditures | ||||
Capital expenditures | $ 707 | $ 595 | $ 1,457 | $ 1,274 |
Operating Segments | Reportable Segments | ||||
Reconciliation of Capital expenditures | ||||
Capital expenditures | 682 | 519 | 1,188 | 991 |
Operating Segments | Reportable Segments | Construction Industries | ||||
Reconciliation of Capital expenditures | ||||
Capital expenditures | 51 | 43 | 83 | 75 |
Operating Segments | Reportable Segments | Resource Industries | ||||
Reconciliation of Capital expenditures | ||||
Capital expenditures | 44 | 42 | 70 | 64 |
Operating Segments | Reportable Segments | Energy & Transportation | ||||
Reconciliation of Capital expenditures | ||||
Capital expenditures | 177 | 100 | 346 | 277 |
Operating Segments | Reportable Segments | Financial Products Segment | ||||
Reconciliation of Capital expenditures | ||||
Capital expenditures | 410 | 334 | 689 | 575 |
Intersegment Sales and Revenues | All Other operating segments | ||||
Reconciliation of Capital expenditures | ||||
Capital expenditures | 49 | 46 | 75 | 62 |
Intersegment Sales and Revenues | Cost centers | ||||
Reconciliation of Capital expenditures | ||||
Capital expenditures | 22 | 16 | 44 | 25 |
Intersegment Sales and Revenues | Timing | ||||
Reconciliation of Capital expenditures | ||||
Capital expenditures | (27) | 16 | 185 | 208 |
Intersegment Sales and Revenues | Other methodology differences | ||||
Reconciliation of Capital expenditures | ||||
Capital expenditures | $ (19) | $ (2) | $ (35) | $ (12) |
Cat Financial Financing Activ_3
Cat Financial Financing Activities - Allowance for Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Receivables [Abstract] | |||||
Average term | 51 months | 51 months | |||
Average remaining term | 27 months | 27 months | |||
Allowance for Credit Loss Activity | |||||
Beginning balance | $ 343 | $ 352 | $ 342 | $ 333 | |
Write-offs | (21) | (18) | (41) | (38) | |
Recoveries | 13 | 18 | 23 | 30 | |
Provision for credit losses | (21) | 23 | (11) | 48 | |
Other | 1 | (3) | 2 | (1) | |
Ending balance | 315 | 372 | 315 | 372 | |
Total Finance Receivables | 21,607 | 21,652 | 21,607 | 21,652 | |
Customer | |||||
Allowance for Credit Loss Activity | |||||
Beginning balance | 278 | 271 | 277 | 251 | |
Write-offs | (21) | (18) | (41) | (38) | |
Recoveries | 13 | 18 | 23 | 30 | |
Provision for credit losses | (6) | 22 | 4 | 48 | |
Other | 1 | (3) | 2 | (1) | |
Ending balance | 265 | 290 | 265 | 290 | |
Total Finance Receivables | 19,814 | 19,888 | 19,814 | 19,888 | $ 19,772 |
Dealer | |||||
Allowance for Credit Loss Activity | |||||
Beginning balance | 65 | 81 | 65 | 82 | |
Write-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Provision for credit losses | (15) | 1 | (15) | 0 | |
Other | 0 | 0 | 0 | 0 | |
Ending balance | 50 | 82 | 50 | 82 | |
Total Finance Receivables | $ 1,793 | $ 1,764 | $ 1,793 | $ 1,764 |
Cat Financial Financing Activ_4
Cat Financial Financing Activities - Write Offs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Write-offs by origination year | ||||
Total | $ 21 | $ 18 | $ 41 | $ 38 |
Customer | ||||
Write-offs by origination year | ||||
2023 | 0 | 0 | ||
2022 | 5 | 9 | ||
2021 | 6 | 12 | ||
2020 | 4 | 8 | ||
2019 | 1 | 3 | ||
Prior | 2 | 2 | ||
Revolving Finance Receivables | 3 | 7 | ||
Total | 21 | $ 18 | 41 | $ 38 |
Customer | North America | ||||
Write-offs by origination year | ||||
2023 | 0 | 0 | ||
2022 | 2 | 5 | ||
2021 | 2 | 5 | ||
2020 | 1 | 1 | ||
2019 | 1 | 1 | ||
Prior | 1 | 1 | ||
Revolving Finance Receivables | 3 | 7 | ||
Total | 10 | 20 | ||
Customer | EAME | ||||
Write-offs by origination year | ||||
2023 | 0 | 0 | ||
2022 | 0 | 1 | ||
2021 | 2 | 2 | ||
2020 | 1 | 2 | ||
2019 | 0 | 0 | ||
Prior | 1 | 1 | ||
Revolving Finance Receivables | 0 | 0 | ||
Total | 4 | 6 | ||
Customer | Asia/ Pacific | ||||
Write-offs by origination year | ||||
2023 | 0 | 0 | ||
2022 | 1 | 1 | ||
2021 | 1 | 3 | ||
2020 | 2 | 3 | ||
2019 | 0 | 1 | ||
Prior | 0 | 0 | ||
Revolving Finance Receivables | 0 | 0 | ||
Total | 4 | 8 | ||
Customer | Latin America | ||||
Write-offs by origination year | ||||
2023 | 0 | 0 | ||
2022 | 2 | 2 | ||
2021 | 1 | 2 | ||
2020 | 0 | 2 | ||
2019 | 0 | 1 | ||
Prior | 0 | 0 | ||
Revolving Finance Receivables | 0 | 0 | ||
Total | $ 3 | $ 7 |
Cat Financial Financing Activ_5
Cat Financial Financing Activities - Financing Receivable Credit Quality Indicator (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Receivables [Abstract] | |||
Period after which Unpaid Installments are Considered as Past Due | 30 days | ||
Financing Receivable, Credit Quality Indicator | |||
Total Finance Receivables | $ 21,607 | $ 21,652 | |
Customer | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 4,304 | $ 8,023 | |
2022 and 2021, respectively | 6,776 | 6,121 | |
2021 and 2020, respectively | 4,810 | 2,924 | |
2020 and 2019, respectively | 2,056 | 1,314 | |
2019 and 2018, respectively | 851 | 529 | |
Prior | 534 | 405 | |
Revolving Finance Receivables | 483 | 456 | |
Total Finance Receivables | 19,814 | 19,772 | $ 19,888 |
Customer | Current | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 4,280 | 7,929 | |
2022 and 2021, respectively | 6,590 | 5,973 | |
2021 and 2020, respectively | 4,636 | 2,827 | |
2020 and 2019, respectively | 1,977 | 1,275 | |
2019 and 2018, respectively | 811 | 516 | |
Prior | 500 | 393 | |
Revolving Finance Receivables | 477 | 445 | |
Total Finance Receivables | 19,271 | 19,358 | |
Customer | 31-60 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 18 | 52 | |
2022 and 2021, respectively | 105 | 59 | |
2021 and 2020, respectively | 85 | 37 | |
2020 and 2019, respectively | 29 | 16 | |
2019 and 2018, respectively | 16 | 6 | |
Prior | 3 | 2 | |
Revolving Finance Receivables | 3 | 4 | |
Total Finance Receivables | 259 | 176 | |
Customer | 61-90 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 4 | 21 | |
2022 and 2021, respectively | 27 | 29 | |
2021 and 2020, respectively | 24 | 15 | |
2020 and 2019, respectively | 15 | 7 | |
2019 and 2018, respectively | 6 | 1 | |
Prior | 1 | 0 | |
Revolving Finance Receivables | 1 | 3 | |
Total Finance Receivables | 78 | 76 | |
Customer | 91+ days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 2 | 21 | |
2022 and 2021, respectively | 54 | 60 | |
2021 and 2020, respectively | 65 | 45 | |
2020 and 2019, respectively | 35 | 16 | |
2019 and 2018, respectively | 18 | 6 | |
Prior | 30 | 10 | |
Revolving Finance Receivables | 2 | 4 | |
Total Finance Receivables | 206 | 162 | |
Customer | North America | Current | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 2,056 | 3,915 | |
2022 and 2021, respectively | 3,251 | 3,276 | |
2021 and 2020, respectively | 2,610 | 1,525 | |
2020 and 2019, respectively | 1,104 | 653 | |
2019 and 2018, respectively | 407 | 206 | |
Prior | 109 | 34 | |
Revolving Finance Receivables | 285 | 240 | |
Total Finance Receivables | 9,822 | 9,849 | |
Customer | North America | 31-60 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 13 | 25 | |
2022 and 2021, respectively | 31 | 26 | |
2021 and 2020, respectively | 24 | 18 | |
2020 and 2019, respectively | 15 | 12 | |
2019 and 2018, respectively | 10 | 4 | |
Prior | 2 | 1 | |
Revolving Finance Receivables | 3 | 4 | |
Total Finance Receivables | 98 | 90 | |
Customer | North America | 61-90 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 3 | 9 | |
2022 and 2021, respectively | 13 | 15 | |
2021 and 2020, respectively | 10 | 7 | |
2020 and 2019, respectively | 6 | 3 | |
2019 and 2018, respectively | 2 | 1 | |
Prior | 1 | 0 | |
Revolving Finance Receivables | 1 | 3 | |
Total Finance Receivables | 36 | 38 | |
Customer | North America | 91+ days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 1 | 11 | |
2022 and 2021, respectively | 16 | 16 | |
2021 and 2020, respectively | 20 | 12 | |
2020 and 2019, respectively | 11 | 6 | |
2019 and 2018, respectively | 5 | 4 | |
Prior | 4 | 3 | |
Revolving Finance Receivables | 2 | 4 | |
Total Finance Receivables | 59 | 56 | |
Customer | EAME | Current | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 623 | 1,270 | |
2022 and 2021, respectively | 1,091 | 953 | |
2021 and 2020, respectively | 757 | 477 | |
2020 and 2019, respectively | 361 | 280 | |
2019 and 2018, respectively | 190 | 155 | |
Prior | 155 | 68 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 3,177 | 3,203 | |
Customer | EAME | 31-60 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 3 | 10 | |
2022 and 2021, respectively | 8 | 12 | |
2021 and 2020, respectively | 11 | 7 | |
2020 and 2019, respectively | 4 | 1 | |
2019 and 2018, respectively | 1 | 1 | |
Prior | 1 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 28 | 31 | |
Customer | EAME | 61-90 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 1 | 8 | |
2022 and 2021, respectively | 5 | 4 | |
2021 and 2020, respectively | 6 | 3 | |
2020 and 2019, respectively | 3 | 1 | |
2019 and 2018, respectively | 2 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 17 | 16 | |
Customer | EAME | 91+ days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 0 | 6 | |
2022 and 2021, respectively | 16 | 25 | |
2021 and 2020, respectively | 18 | 16 | |
2020 and 2019, respectively | 11 | 4 | |
2019 and 2018, respectively | 3 | 1 | |
Prior | 1 | 1 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 49 | 53 | |
Customer | Asia/ Pacific | Current | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 536 | 1,033 | |
2022 and 2021, respectively | 770 | 684 | |
2021 and 2020, respectively | 452 | 313 | |
2020 and 2019, respectively | 155 | 69 | |
2019 and 2018, respectively | 33 | 18 | |
Prior | 9 | 2 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 1,955 | 2,119 | |
Customer | Asia/ Pacific | 31-60 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 0 | 10 | |
2022 and 2021, respectively | 8 | 12 | |
2021 and 2020, respectively | 11 | 8 | |
2020 and 2019, respectively | 7 | 1 | |
2019 and 2018, respectively | 1 | 1 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 27 | 32 | |
Customer | Asia/ Pacific | 61-90 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 0 | 2 | |
2022 and 2021, respectively | 4 | 5 | |
2021 and 2020, respectively | 5 | 4 | |
2020 and 2019, respectively | 2 | 2 | |
2019 and 2018, respectively | 1 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 12 | 13 | |
Customer | Asia/ Pacific | 91+ days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 1 | 2 | |
2022 and 2021, respectively | 4 | 6 | |
2021 and 2020, respectively | 5 | 6 | |
2020 and 2019, respectively | 4 | 4 | |
2019 and 2018, respectively | 1 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 15 | 18 | |
Customer | Mining | Current | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 646 | 863 | |
2022 and 2021, respectively | 749 | 575 | |
2021 and 2020, respectively | 439 | 220 | |
2020 and 2019, respectively | 169 | 171 | |
2019 and 2018, respectively | 112 | 93 | |
Prior | 69 | 108 | |
Revolving Finance Receivables | 38 | 80 | |
Total Finance Receivables | 2,222 | 2,110 | |
Customer | Mining | 31-60 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 0 | 0 | |
2022 and 2021, respectively | 42 | 1 | |
2021 and 2020, respectively | 32 | 0 | |
2020 and 2019, respectively | 0 | 0 | |
2019 and 2018, respectively | 0 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 74 | 1 | |
Customer | Mining | 61-90 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 0 | 0 | |
2022 and 2021, respectively | 0 | 0 | |
2021 and 2020, respectively | 0 | 0 | |
2020 and 2019, respectively | 0 | 0 | |
2019 and 2018, respectively | 0 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 0 | 0 | |
Customer | Mining | 91+ days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 0 | 0 | |
2022 and 2021, respectively | 2 | 0 | |
2021 and 2020, respectively | 1 | 0 | |
2020 and 2019, respectively | 0 | 0 | |
2019 and 2018, respectively | 0 | 0 | |
Prior | 0 | 1 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 3 | 1 | |
Customer | Latin America | Current | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 389 | 770 | |
2022 and 2021, respectively | 658 | 400 | |
2021 and 2020, respectively | 305 | 150 | |
2020 and 2019, respectively | 99 | 69 | |
2019 and 2018, respectively | 38 | 26 | |
Prior | 13 | 20 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 1,502 | 1,435 | |
Customer | Latin America | 31-60 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 2 | 7 | |
2022 and 2021, respectively | 16 | 8 | |
2021 and 2020, respectively | 7 | 4 | |
2020 and 2019, respectively | 3 | 2 | |
2019 and 2018, respectively | 4 | 0 | |
Prior | 0 | 1 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 32 | 22 | |
Customer | Latin America | 61-90 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 0 | 2 | |
2022 and 2021, respectively | 5 | 5 | |
2021 and 2020, respectively | 3 | 1 | |
2020 and 2019, respectively | 4 | 1 | |
2019 and 2018, respectively | 1 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 13 | 9 | |
Customer | Latin America | 91+ days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 0 | 2 | |
2022 and 2021, respectively | 16 | 13 | |
2021 and 2020, respectively | 21 | 11 | |
2020 and 2019, respectively | 9 | 2 | |
2019 and 2018, respectively | 9 | 1 | |
Prior | 22 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 77 | 29 | |
Customer | Power Finance | Current | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 30 | 78 | |
2022 and 2021, respectively | 71 | 85 | |
2021 and 2020, respectively | 73 | 142 | |
2020 and 2019, respectively | 89 | 33 | |
2019 and 2018, respectively | 31 | 18 | |
Prior | 145 | 161 | |
Revolving Finance Receivables | 154 | 125 | |
Total Finance Receivables | 593 | 642 | |
Customer | Power Finance | 31-60 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 0 | 0 | |
2022 and 2021, respectively | 0 | 0 | |
2021 and 2020, respectively | 0 | 0 | |
2020 and 2019, respectively | 0 | 0 | |
2019 and 2018, respectively | 0 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 0 | 0 | |
Customer | Power Finance | 61-90 days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 0 | 0 | |
2022 and 2021, respectively | 0 | 0 | |
2021 and 2020, respectively | 0 | 0 | |
2020 and 2019, respectively | 0 | 0 | |
2019 and 2018, respectively | 0 | 0 | |
Prior | 0 | 0 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | 0 | 0 | |
Customer | Power Finance | 91+ days past due | |||
Financing Receivable, Credit Quality Indicator | |||
2023 and 2022, respectively | 0 | 0 | |
2022 and 2021, respectively | 0 | 0 | |
2021 and 2020, respectively | 0 | 0 | |
2020 and 2019, respectively | 0 | 0 | |
2019 and 2018, respectively | 0 | 0 | |
Prior | 3 | 5 | |
Revolving Finance Receivables | 0 | 0 | |
Total Finance Receivables | $ 3 | $ 5 |
Cat Financial Financing Activ_6
Cat Financial Financing Activities - Investment in Finance Receivables on Non-Accrual Status (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Financing Receivable, Nonaccrual | ||
Period after which collection of future income is considered not probable | 120 days | |
Customer | ||
Financing Receivable, Nonaccrual | ||
Amortized cost of finance receivables | $ 534 | $ 405 |
Non-accrual With an Allowance | 206 | 156 |
Non-accrual Without an Allowance | 0 | 16 |
91+ Still Accruing | 27 | 28 |
North America | Customer | ||
Financing Receivable, Nonaccrual | ||
Non-accrual With an Allowance | 54 | 52 |
Non-accrual Without an Allowance | 0 | 4 |
91+ Still Accruing | 15 | 11 |
EAME | Customer | ||
Financing Receivable, Nonaccrual | ||
Non-accrual With an Allowance | 44 | 43 |
Non-accrual Without an Allowance | 0 | 0 |
91+ Still Accruing | 7 | 10 |
Asia/ Pacific | Customer | ||
Financing Receivable, Nonaccrual | ||
Non-accrual With an Allowance | 10 | 11 |
Non-accrual Without an Allowance | 0 | 0 |
91+ Still Accruing | 5 | 7 |
Mining | Customer | ||
Financing Receivable, Nonaccrual | ||
Non-accrual With an Allowance | 3 | 0 |
Non-accrual Without an Allowance | 0 | 1 |
91+ Still Accruing | 0 | 0 |
Latin America | Dealer | ||
Financing Receivable, Nonaccrual | ||
Non-accrual With an Allowance | 43 | 58 |
Latin America | Dealer | Financing Receivables, Equal to or Greater than 30 Days Past Due | ||
Financing Receivable, Nonaccrual | ||
Amortized cost of finance receivables | 43 | 58 |
Latin America | Customer | ||
Financing Receivable, Nonaccrual | ||
Non-accrual With an Allowance | 85 | 45 |
Non-accrual Without an Allowance | 0 | 0 |
91+ Still Accruing | 0 | 0 |
Power Finance | Customer | ||
Financing Receivable, Nonaccrual | ||
Non-accrual With an Allowance | 10 | 5 |
Non-accrual Without an Allowance | 0 | 11 |
91+ Still Accruing | $ 0 | $ 0 |
Cat Financial Financing Activ_7
Cat Financial Financing Activities - Modifications (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | |
Finance receivable, modifications | ||
Financing receivables in relation to total financing receivables, percentage | 0.10% | 0.14% |
Weighted average term increase from modification | 18 months | 21 months |
Weighted average term increase due to payment deferrals or interest only payment periods | 7 months | 8 months |
Dealer | ||
Finance receivable, modifications | ||
Financing receivables, modified | $ 0 | $ 0 |
Customer | ||
Finance receivable, modifications | ||
Financing receivables, modified | 22 | 30 |
31-60 days past due | EAME | ||
Finance receivable, modifications | ||
Financing receivable, 31 - 60 days past due | $ 1 | $ 1 |
Fair Value Disclosures - Assets
Fair Value Disclosures - Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | $ 3,240 | $ 3,164 |
Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 3,240 | 3,164 |
Equity securities | 428 | 441 |
Total Assets | 3,950 | 3,948 |
Total liabilities | 213 | 195 |
Recurring basis | Foreign exchange contracts | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Derivate financial instruments - assets/liabilities | (281) | (328) |
Recurring basis | Interest rate contracts | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Derivate financial instruments - assets/liabilities | 213 | 195 |
Recurring basis | Commodity contracts | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Derivate financial instruments - assets/liabilities | (1) | (15) |
U.S. treasury bonds | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 10 | 9 |
U.S. treasury bonds | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 10 | 9 |
Other U.S. and non-U.S. government bonds | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 56 | 55 |
Other U.S. and non-U.S. government bonds | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 56 | 55 |
Corporate bonds and other debt securities | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 2,500 | 2,466 |
Corporate bonds and other debt securities | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 2,500 | 2,466 |
Asset-backed securities | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 186 | 182 |
Asset-backed securities | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 186 | 182 |
U.S. governmental agency | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 359 | 333 |
Residential | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 2 | 2 |
Residential | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 2 | 2 |
Commercial | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 127 | 117 |
Commercial | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 127 | 117 |
Large capitalization value | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Equity securities | 207 | 203 |
Smaller company growth | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Equity securities | 33 | 31 |
REIT | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Equity securities | 188 | 207 |
Level 1 | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 10 | 9 |
Equity securities | 240 | 234 |
Total Assets | 250 | 243 |
Total liabilities | 0 | 0 |
Level 1 | Recurring basis | Foreign exchange contracts | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Derivate financial instruments - assets/liabilities | 0 | 0 |
Level 1 | Recurring basis | Interest rate contracts | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Derivate financial instruments - assets/liabilities | 0 | 0 |
Level 1 | Recurring basis | Commodity contracts | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Derivate financial instruments - assets/liabilities | 0 | 0 |
Level 1 | U.S. treasury bonds | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 10 | 9 |
Level 1 | Other U.S. and non-U.S. government bonds | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Level 1 | Corporate bonds and other debt securities | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Level 1 | Asset-backed securities | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Level 1 | U.S. governmental agency | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Level 1 | Residential | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Level 1 | Commercial | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Level 1 | Large capitalization value | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Equity securities | 207 | 203 |
Level 1 | Smaller company growth | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Equity securities | 33 | 31 |
Level 1 | REIT | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Equity securities | 0 | 0 |
Level 2 | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 3,230 | 3,105 |
Equity securities | 0 | 0 |
Total Assets | 3,512 | 3,448 |
Total liabilities | 213 | 195 |
Level 2 | Recurring basis | Foreign exchange contracts | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Derivate financial instruments - assets/liabilities | (281) | (328) |
Level 2 | Recurring basis | Interest rate contracts | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Derivate financial instruments - assets/liabilities | 213 | 195 |
Level 2 | Recurring basis | Commodity contracts | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Derivate financial instruments - assets/liabilities | (1) | (15) |
Level 2 | U.S. treasury bonds | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Level 2 | Other U.S. and non-U.S. government bonds | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 56 | 55 |
Level 2 | Corporate bonds and other debt securities | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 2,500 | 2,416 |
Level 2 | Asset-backed securities | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 186 | 182 |
Level 2 | U.S. governmental agency | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 359 | 333 |
Level 2 | Residential | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 2 | 2 |
Level 2 | Commercial | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 127 | 117 |
Level 2 | Large capitalization value | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Equity securities | 0 | 0 |
Level 2 | Smaller company growth | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Equity securities | 0 | 0 |
Level 2 | REIT | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Equity securities | 0 | 0 |
Level 3 | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 50 |
Equity securities | 0 | 0 |
Total Assets | 0 | 50 |
Total liabilities | 0 | 0 |
Level 3 | Recurring basis | Foreign exchange contracts | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Derivate financial instruments - assets/liabilities | 0 | 0 |
Level 3 | Recurring basis | Interest rate contracts | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Derivate financial instruments - assets/liabilities | 0 | 0 |
Level 3 | Recurring basis | Commodity contracts | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Derivate financial instruments - assets/liabilities | 0 | 0 |
Level 3 | Nonrecurring basis | Financial Products | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Loans carried at fair value | 58 | 68 |
Level 3 | U.S. treasury bonds | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Level 3 | Other U.S. and non-U.S. government bonds | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Level 3 | Corporate bonds and other debt securities | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 50 |
Level 3 | Asset-backed securities | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Level 3 | U.S. governmental agency | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Level 3 | Residential | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Level 3 | Commercial | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Level 3 | Large capitalization value | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Equity securities | 0 | 0 |
Level 3 | Smaller company growth | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Equity securities | 0 | 0 |
Level 3 | REIT | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Equity securities | 0 | 0 |
Measured at NAV | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Equity securities | 188 | 207 |
Total Assets | 188 | 207 |
Total liabilities | 0 | 0 |
Measured at NAV | Recurring basis | Foreign exchange contracts | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Derivate financial instruments - assets/liabilities | 0 | 0 |
Measured at NAV | Recurring basis | Interest rate contracts | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Derivate financial instruments - assets/liabilities | 0 | 0 |
Measured at NAV | Recurring basis | Commodity contracts | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Derivate financial instruments - assets/liabilities | 0 | 0 |
Measured at NAV | U.S. treasury bonds | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Measured at NAV | Other U.S. and non-U.S. government bonds | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Measured at NAV | Corporate bonds and other debt securities | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Measured at NAV | Asset-backed securities | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Measured at NAV | U.S. governmental agency | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Measured at NAV | Residential | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Measured at NAV | Commercial | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Debt securities | 0 | 0 |
Measured at NAV | Large capitalization value | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Equity securities | 0 | 0 |
Measured at NAV | Smaller company growth | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Equity securities | 0 | 0 |
Measured at NAV | REIT | Recurring basis | ||
Assets and liabilities measured on a recurring and non-recurring basis at fair value | ||
Equity securities | $ 188 | $ 207 |
Fair Value Disclosures - Fair V
Fair Value Disclosures - Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Carrying Amount | ||
Assets | ||
Finance receivables-net (excluding finance leases) | $ 14,411 | $ 13,965 |
Wholesale inventory receivables-net (excluding finance leases) | 1,063 | 827 |
Carrying Amount | Machinery, Energy & Transportation | ||
Liabilities | ||
Long-term debt (including amounts due within one year) | 9,578 | 9,618 |
Carrying Amount | Financial Products | ||
Liabilities | ||
Long-term debt (including amounts due within one year) | 22,573 | 21,418 |
Carrying amount of assets excluded from measurement at fair value | ||
Assets | ||
Excluded items: Finance leases and failed sale leasebacks, Carrying Value | 7,117 | 7,325 |
Level 2 | Fair Value | Machinery, Energy & Transportation | ||
Liabilities | ||
Long-term debt (including amounts due within one year) | 9,368 | 9,240 |
Level 2 | Fair Value | Financial Products | ||
Liabilities | ||
Long-term debt (including amounts due within one year) | 21,963 | 20,686 |
Level 3 | Fair Value | ||
Assets | ||
Finance receivables-net (excluding finance leases) | 13,784 | 13,377 |
Wholesale inventory receivables-net (excluding finance leases) | $ 1,008 | $ 778 |
Other income (expense) (Details
Other income (expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Other Income and Expenses [Abstract] | ||||
Investment and interest income | $ 96 | $ 25 | $ 189 | $ 46 |
Foreign exchange gains (losses) | 40 | 224 | (32) | 271 |
License fee income | 43 | 37 | 74 | 69 |
Net periodic pension and OPEB income (cost), excluding service cost | (12) | 66 | (25) | 134 |
Gains (losses) on securities | (10) | (47) | (21) | (59) |
Miscellaneous income (loss) | (30) | (45) | (26) | 52 |
Total | $ 127 | $ 260 | $ 159 | $ 513 |
Restructuring Costs - Restructu
Restructuring Costs - Restructuring and Related Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Restructuring Charges [Abstract] | ||||
Gain (loss) on divestiture | $ (586) | |||
(Gains) losses reclassified to earnings | 494 | |||
Restructuring and Related Cost | ||||
Restructuring costs | $ 31 | $ 28 | 642 | $ 41 |
Employee separations | Other Operating Income (Expense) | ||||
Restructuring and Related Cost | ||||
Restructuring costs | 10 | 18 | 22 | 23 |
Longwall Divestiture | Other Operating Income (Expense) | ||||
Restructuring and Related Cost | ||||
Restructuring costs | 0 | 0 | 586 | 0 |
Long-lived asset impairments | Other Operating Income (Expense) | ||||
Restructuring and Related Cost | ||||
Restructuring costs | 2 | 5 | 2 | 5 |
Other | Cost of Sales | ||||
Restructuring and Related Cost | ||||
Restructuring costs | $ 19 | $ 5 | $ 32 | $ 13 |
Restructuring Costs - Summary o
Restructuring Costs - Summary of Separation Activity (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Restructuring Reserve [Roll Forward] | ||
Liability balance, beginning of period | $ 39 | $ 61 |
Increase in liability (separation charges) | 22 | 23 |
Reduction in liability (payments) | (44) | (50) |
Liability balance, end of period | $ 17 | $ 34 |