Caterpillar Inc.

05/06/2026 | Press release | Distributed by Public on 05/06/2026 09:09

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to provide information that will assist the reader in understanding the company's Consolidated Financial Statements, the changes in certain key items in those financial statements between select periods and the primary factors that accounted for those changes. In addition, we discuss how certain accounting principles, policies and critical estimates affect our Consolidated Financial Statements. Our discussion also contains certain forward-looking statements related to future events and expectations as well as a discussion of the many factors that we believe may have an impact on our business on an ongoing basis. This MD&A should be read in conjunction with our discussion of cautionary statements and significant risks to the company's business under Part I, Item 1A. Risk Factors of the 2025 Form 10-K.
Highlights for the first quarter of 2026 include:
•Total sales and revenues for the first quarter of 2026 were $17.415 billion, an increase of $3.166 billion, or 22 percent, compared with $14.249 billion in the first quarter of 2025. Sales were higher across the three primary segments.
•Operating profit margin was 17.7 percent for the first quarter of 2026, compared with 18.1 percent for the first quarter of 2025. Adjusted operating profit margin was 18.0 percent for the first quarter of 2026, compared with 18.3 percent for the first quarter of 2025.
•First-quarter 2026 profit per share was $5.47, and excluding the item in the table below, adjusted profit per share was $5.54. First-quarter 2025 profit per share was $4.20, and excluding the item in the table below, adjusted profit per share was $4.25.
•Caterpillar ended the first quarter of 2026 with $4.1 billion of enterprise cash.
In order for our results to be more meaningful to our readers, we have separately quantified the impact of significant items.
Three Months Ended March 31, 2026 Three Months Ended March 31, 2025
(Dollars in millions except per share data) Profit Before Taxes Profit
Per Share 		Profit Before Taxes Profit
Per Share
Profit $ 3,211 $ 5.47 $ 2,570 $ 4.20
Restructuring (income) costs 41 0.07 33 0.05
Adjusted profit $ 3,252 $ 5.54 $ 2,603 $ 4.25
A detailed reconciliation of GAAP to non-GAAP financial measures is included on pages 57-59.
Overview
Total sales and revenues for the first quarter of 2026 were $17.415 billion, an increase of $3.166 billion, or 22 percent, compared with $14.249 billion in the first quarter of 2025. The increase was primarily due to higher sales volume of $2.3 billion and favorable price realization of $426 million.
First-quarter 2026 profit per share was $5.47, compared with $4.20 profit per share in the first quarter of 2025. In the first quarter of 2026 and 2025, profit per share included restructuring costs. Profit for the first quarter of 2026 was $2.549 billion, an increase of $546 million, or 27 percent, compared with $2.003 billion for the first quarter of 2025. The increase was mainly due to the profit impact of higher sales volume and favorable price realization, partially offset by unfavorable manufacturing costs and higher selling, general and administrative (SG&A) and research and development (R&D) expenses. Unfavorable manufacturing costs largely reflected the impact of higher tariff costs. The increase in SG&A/R&D expenses was primarily driven by higher compensation expenses.
Trends and Economic Conditions
Outlook for Key End Markets
While there is increased uncertainty due to geopolitical events and elevated energy prices, our end markets have been resilient. We are closely monitoring the environment, and we are not forecasting a material impact to our 2026 outlook.
In Power & Energy, the 2026 outlook remains positive as robust backlog growth was driven by continued momentum in both Power Generation and Oil & Gas. We anticipate growth in Power Generation for both reciprocating engines and turbines and turbine-related services, driven by increasing energy demand to support data center build-out related to cloud computing and generative Artificial Intelligence (AI). We continue to see demand for prime power trend higher as data center customers look for alternative power solutions to keep pace with their growth. Oil & Gas is expected to see moderate growth in 2026 as compared to 2025. Reciprocating engine sales are expected to increase, driven by strong demand in gas compression applications. For turbines and turbine-related services used in Oil & Gas applications, we anticipate another year of strong sales in 2026 as backlog remains healthy, with continued solid order and inquiry activity. Services revenues in Oil & Gas applications are also expected to increase in 2026. Demand for products in Industrial applications is projected to grow modestly in 2026 as compared to 2025.
In Construction Industries, in 2026 as compared to 2025, we continue to expect growth in sales of equipment to end users supported by strong order rates. The outlook for North America remains positive, as sales of equipment to end users are anticipated to grow in 2026 as compared to 2025. Construction spending remains at healthy levels supported by the Infrastructure Investment and Jobs Act (IIJA), with the remaining funds to be spent over the next few years. Investment in critical infrastructure programs and data centers is contributing to overall construction spending levels. Dealer rental fleet loading and dealer's rental revenue are both projected to increase in 2026 compared to 2025. In EAME, Europe is expected to remain stable supported by non-residential construction, and construction activity in Africa is projected to remain strong. While softening in the Middle East is anticipated, we expect the impact on sales of equipment to end users in EAME to be limited. In Asia Pacific, outside of China, softer economic conditions are expected in 2026. In China, we anticipate moderate conditions, with growth in the above 10-ton excavator industry in 2026, off of low levels of activity. Growth in Latin America is expected to continue.
In Resource Industries, we are seeing continued positive momentum with strong backlog growth. Sales of equipment to end users are expected to increase in 2026 as compared to 2025, primarily driven by rising demand for copper and gold, and positive dynamics in Heavy Construction and Quarry and Aggregates. In Mining, most key commodities remain above investment thresholds, customer product utilization is high, and the age of the fleet remains elevated. While some commodity prices have increased recently, customers remain focused on the long-term. We continue to expect rebuild activity in 2026 to increase slightly as compared to 2025. Rail services and locomotive deliveries are both anticipated to grow in 2026 as compared to 2025.
Second-Quarter 2026 Company Trends and Expectations
In the second quarter of 2026 as compared to the second quarter of 2025, we anticipate strong sales and revenues growth, primarily driven by higher sales volume and favorable price realization in each of our three primary segments. We expect higher sales volume to be mainly driven by higher sales of equipment to end users, with a higher year-over year increase in sales of equipment to end users in the second quarter of 2026 as compared to the first quarter of 2026. We expect a minimal change in Construction Industries dealer inventory in the second quarter of 2026 as compared to the first quarter of 2026.
In the second quarter of 2026 as compared to the second quarter of 2025, we anticipate strong sales growth in Power & Energy mainly driven by continued strength in Power Generation and in Oil & Gas. We expect favorable price realization in Power & Energy. In Construction Industries, we expect strong sales growth primarily due to higher sales volume and favorable price realization. We expect higher sales volume to be driven by higher sales of equipment to end users. We anticipate a more typical sales increase in the second quarter of 2026 as compared to the first quarter of 2026, in contrast to the sizable sales increase in the second quarter of 2025 as compared to the first quarter of 2025. In Resource Industries, we expect strong sales growth primarily due to higher sales volume and favorable price realization. We expect higher sales volume to be driven by higher sales of equipment to end users. We expect price realization in Resource Industries to improve during 2026 as compared to 2025.
We expect tariff costs to be around $700 million in the second quarter of 2026. We expect about 50 percent of the tariff costs to be incurred in Construction Industries, and about 25 percent of tariff costs to be incurred in both Power & Energy and Resource Industries.
In the second quarter of 2026 as compared to the second quarter of 2025, we expect favorable price realization and the profit impact of higher sales volume to be partially offset by higher manufacturing costs and higher SG&A/R&D expenses.
In the second quarter of 2026 as compared to the second quarter of 2025, in Power & Energy, we anticipate the profit impact of higher sales volume and favorable price realization will be partially offset by higher manufacturing costs. In Construction Industries, we anticipate the profit impact of higher sales volume and favorable price realization to be partially offset by higher manufacturing costs and higher SG&A/R&D expenses. In Resource Industries, we anticipate higher manufacturing costs and higher SG&A/R&D expenses to be partially offset by favorable price realization and by the profit impact of higher sales volume.
Full-Year 2026 Company Trends and Expectations
For the full-year 2026, we anticipate sales and revenues growth in the low double digits as compared to 2025. We expect strong sales growth across each of our three primary segments, mainly driven by higher sales volume and favorable price realization. Services revenues are expected to grow in 2026 as compared to 2025.
Based on tariffs implemented since the beginning of 2025 and in place over the course of 2026, we expect tariff costs to be around $2.2 billion to $2.4 billion in 2026. We remain confident that we will manage the impact of tariffs over time.
In 2026 as compared to 2025, we expect favorable price realization and the profit impact of higher sales volume to be partially offset by higher manufacturing costs and higher SG&A/R&D expenses.
In 2026, we expect restructuring costs of approximately $300 to $350 million, and capital expenditures of around $3.5 billion. We anticipate our estimated annual effective tax rate to be 23.0 percent, excluding discrete items.
Global Business Conditions
We continue to monitor a variety of external factors around the world, such as supply chain disruptions, inflationary cost, labor pressures and the impact of trade policies. Areas of particular focus include transportation, certain components and raw materials. We continue to work to minimize supply chain challenges that may impact our ability to meet customer demand. We continue to assess the environment to determine if additional actions need to be taken.
On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") on goods imported into the United States were unauthorized. As of March 31, 2026, total IEEPA tariff costs were approximately $1.0 billion. The ruling did not address potential refunds, and therefore the ultimate availability, timing and amount of any potential refunds of these tariffs is highly uncertain. Based on the current facts and circumstances, we have determined that recovery of any funds is not probable. We will continue to monitor developments related to U.S. and foreign import and export policies that could impact our consolidated results of operations, financial position and cash flows.
Risk Factors
Risk factors are disclosed within Item 1A. Risk Factors of the 2025 Form 10-K.
Notes:
•Glossary of terms is included on pages 51-53; first occurrence of terms shown in bold italics.
•Information on non-GAAP financial measures is included on pages 57-59.
•Certain amounts may not add due to rounding.
Consolidated Results of Operations
THREE MONTHS ENDED MARCH 31, 2026, COMPARED WITH THREE MONTHS ENDED MARCH 31, 2025
CONSOLIDATED SALES AND REVENUES
The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the first quarter of 2025 (at left) and the first quarter of 2026 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company's board of directors and employees.
Total sales and revenues for the first quarter of 2026 were $17.415 billion, an increase of $3.166 billion, or 22 percent, compared with $14.249 billion in the first quarter of 2025. The increase was primarily due to higher sales volume of $2.3 billion and favorable price realization of $426 million. Higher sales volume was mainly driven by the impact from changes in dealer inventories and higher sales of equipment to end users. Dealer inventory increased more during the first quarter of 2026 than during the first quarter of 2025.
Sales were higher across the three primary segments.
North America sales increased 34 percent primarily due to higher sales volume and favorable price realization. The increase in sales volume was mainly driven by higher sales of equipment to end users and the impact from changes in dealer inventories. Dealer inventory increased more during the first quarter of 2026 than during the first quarter of 2025.
Sales increased 5 percent in Latin America due to favorable currency impacts primarily related to the Brazilian real and higher sales volume. The increase in sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased more during the first quarter of 2026 than during the first quarter of 2025.
EAME sales increased 21 percent primarily due to higher sales volume and favorable currency impacts primarily related to the euro. Higher sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased during the first quarter of 2026 and remained about flat during the first quarter of 2025.
Asia/Pacific sales increased 4 percent mainly due to favorable currency impacts primarily related to the Australian dollar.
Total dealer inventory increased $2.0 billion during the first quarter of 2026, compared with an increase of $100 million during the first quarter of 2025. Construction Industries' dealer inventory increased by $1.5 billion during the first quarter of 2026, compared with a slight decrease during the first quarter of 2025. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers' demand expectations take into account seasonal changes, macroeconomic conditions, machine rentals and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers.
Sales and Revenues by Segment
(Millions of dollars) First Quarter 2025 Sales
Volume 		Price
Realization 		Currency Inter-Segment / Other First Quarter 2026 $
Change 		%
Change
Power & Energy $ 5,783 $ 840 $ 108 $ 111 $ 189 $ 7,031 $ 1,248 22 %
Construction Industries 5,184 1,459 356 143 19 7,161 1,977 38 %
Resource Industries 3,661 85 (39) 78 12 3,797 136 4 %
All Other Segment 70 1 - - 6 77 7 10 %
Corporate Items and Eliminations (1,320) (67) 1 19 (226) (1,593) (273)
Machinery, Power & Energy Sales
13,378 2,318 426 351 - 16,473 3,095 23 %
Financial Products Segment 1,007 - - - 89 1,096 89 9 %
Corporate Items and Eliminations (136) - - - (18) (154) (18)
Financial Products Revenues
871 - - - 71 942 71 8 %
Consolidated Sales and Revenues $ 14,249 $ 2,318 $ 426 $ 351 $ 71 $ 17,415 $ 3,166 22 %
Sales and Revenues by Geographic Region
North America Latin America EAME Asia/Pacific External Sales and Revenues Inter-Segment Total Sales and Revenues
(Millions of dollars) $ % Chg $ % Chg $ % Chg $ % Chg $ % Chg $ % Chg $ % Chg
First Quarter 2026
Power & Energy $ 3,500 33 % $ 278 (15 %) $ 1,141 11 % $ 794 17 % $ 5,713 23 % $ 1,318 17 % $ 7,031 22 %
Construction Industries 4,292 48 % 650 29 % 1,199 38 % 961 11 % 7,102 38 % 59 48 % 7,161 38 %
Resource Industries 1,836 14 % 572 (6 %) 560 10 % 742 (14 %) 3,710 3 % 87 16 % 3,797 4 %
All Other Segment 7 (13 %) - - % 3 200 % 2 - % 12 9 % 65 10 % 77 10 %
Corporate Items and Eliminations (55) - (4) (5) (64) (1,529) (1,593)
Machinery, Power & Energy Sales 9,580 34 % 1,500 5 % 2,899 21 % 2,494 4 % 16,473 23 % - - % 16,473 23 %
Financial Products Segment 741 9 % 111 12 % 133 9 % 111 7 % 1,096
1
9 % - - % 1,096 9 %
Corporate Items and Eliminations (91) (19) (24) (20) (154) - (154)
Financial Products Revenues 650 8 % 92 15 % 109 6 % 91 6 % 942 8 % - - % 942 8 %
Consolidated Sales and Revenues $ 10,230 32 % $ 1,592 5 % $ 3,008 20 % $ 2,585 4 % $ 17,415 22 % $ - - % $ 17,415 22 %
First Quarter 2025
Power & Energy $ 2,625 $ 326 $ 1,026 $ 677 $ 4,654 $ 1,129 $ 5,783
Construction Industries 2,904 504 867 869 5,144 40 5,184
Resource Industries 1,610 606 510 860 3,586 75 3,661
All Other Segment 8 - 1 2 11 59 70
Corporate Items and Eliminations (11) (1) (1) (4) (17) (1,303) (1,320)
Machinery, Power & Energy Sales 7,136 1,435 2,403 2,404 13,378 - 13,378
Financial Products Segment 682 99 122 104 1,007
1
- 1,007
Corporate Items and Eliminations (80) (19) (19) (18) (136) - (136)
Financial Products Revenues 602 80 103 86 871 - 871
Consolidated Sales and Revenues $ 7,738 $ 1,515 $ 2,506 $ 2,490 $ 14,249 $ - $ 14,249
1 Includes revenues from Machinery, Power & Energy of $183 million and $163 million in the first quarter of 2026 and 2025, respectively.
CONSOLIDATED OPERATING PROFIT
The chart above graphically illustrates reasons for the change in consolidated operating profit between the first quarter of 2025 (at left) and the first quarter of 2026 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company's board of directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Power & Energy's other operating (income) expenses.
Operating profit for the first quarter of 2026 was $3.085 billion, an increase of $506 million, or 20 percent, compared with $2.579 billion in the first quarter of 2025. The increase was mainly due to the profit impact of higher sales volume of $940 million and favorable price realization of $426 million. This was partially offset by unfavorable manufacturing costs of $710 million and higher SG&A/R&D expenses of $225 million. Unfavorable manufacturing costs largely reflected the impact of higher tariff costs. The increase in SG&A/R&D expenses was primarily driven by higher compensation expenses.
Operating profit margin was 17.7 percent for the first quarter of 2026, compared with 18.1 percent for the first quarter of 2025.
Profit (Loss) by Segment
(Millions of dollars) First Quarter 2026 First Quarter 2025 $
Change
%
Change
Power & Energy $ 1,450 $ 1,288 $ 162 13 %
Construction Industries 1,535 1,024 511 50 %
Resource Industries 378 623 (245) (39 %)
All Other Segment (43) (19) (24) (126 %)
Corporate Items and Eliminations (321) (401) 80
Machinery, Power & Energy 2,999 2,515 484 19 %
Financial Products Segment 245 215 30 14 %
Corporate Items and Eliminations (8) (14) 6
Financial Products 237 201 36 18 %
Consolidating Adjustments (151) (137) (14)
Consolidated Operating Profit $ 3,085 $ 2,579 $ 506 20 %
Other Profit/Loss and Tax Items
•Interest expense excluding Financial Products in the first quarter of 2026 was $134 million, compared with $116 million in the first quarter of 2025. The increase was primarily due to higher average debt outstanding.
•Other income (expense) in the first quarter of 2026 was income of $260 million, compared with income of $107 million in the first quarter of 2025. The change was primarily driven by favorable impacts from foreign currency, total return swap contracts and commodity hedges.
•The effective tax rate for the first quarter of 2026 was 20.9 percent compared to 22.3 percent for the first quarter of 2025. Excluding the discrete items discussed below, the estimated annual effective tax rate was 23.0 percent for the first quarter of 2026 and 2025.
A discrete tax benefit of $68 million was recorded in the first quarter of 2026, compared with a $17 million benefit in the first quarter of 2025, for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense.
Please see a reconciliation of GAAP to non-GAAP financial measures on pages 57-59.
Power & Energy
Sales by Application
(Millions of dollars) First Quarter 2026 First Quarter 2025 $
Change
%
Change
Power Generation $ 2,817 $ 1,996 $ 821 41 %
Oil and Gas 1,423 1,258 165 13 %
Industrial 1,473 1,400 73 5 %
External Sales 5,713 4,654 1,059 23 %
Inter-segment 1,318 1,129 189 17 %
Total Sales $ 7,031 $ 5,783 $ 1,248 22 %
Power & Energy's total sales were $7.031 billion in the first quarter of 2026, an increase of $1.248 billion, or 22 percent, compared with $5.783 billion in the first quarter of 2025. The increase was primarily due to higher sales volume of $840 million and higher inter-segment sales of $189 million.
•Power Generation - Sales increased in large reciprocating engines and in turbines and turbine-related services, primarily data center applications.
•Oil and Gas - Sales increased in reciprocating engines used in gas compression applications. Sales also increased in turbines and turbine-related services.
•Industrial - Sales increased primarily in EAME and Asia/Pacific.
Power & Energy's segment profit was $1.450 billion in the first quarter of 2026, an increase of $162 million, or 13 percent, compared with $1.288 billion in the first quarter of 2025. The increase was mainly due to the profit impact of higher sales volume of $435 million and favorable price realization of $108 million, partially offset by unfavorable manufacturing costs of $346 million. Unfavorable manufacturing costs primarily reflected the impact of higher tariff costs.
Power & Energy's segment profit as a percent of total sales was 20.6 percent in the first quarter of 2026, compared with 22.3 percent in the first quarter of 2025.
Construction Industries
Construction Industries' total sales were $7.161 billion in the first quarter of 2026, an increase of $1.977 billion, or 38 percent, compared with $5.184 billion in the first quarter of 2025. The increase in sales was mainly due to higher sales volume of $1.5 billion and favorable price realization of $356 million. Higher sales volume was primarily driven by the impact from changes in dealer inventories. Dealer inventory increased during the first quarter of 2026, compared with a slight decrease during the first quarter of 2025.
•In North America, sales increased due to higher sales volume and favorable price realization. Higher sales volume was mainly driven by the impact from changes in dealer inventories.
•Sales increased in Latin America mainly due to higher sales volume and favorable currency impacts primarily related to the Brazilian real. Higher sales volume was mainly driven by the impact from changes in dealer inventories.
•In EAME, sales increased primarily due to higher sales volume and favorable currency impacts mainly related to the euro. Higher sales volume was primarily driven by the impact from changes in dealer inventories.
•Sales increased in Asia/Pacific mainly due to favorable price realization and favorable currency impacts primarily related to the Australian dollar.
Construction Industries' segment profit was $1.535 billion in the first quarter of 2026, an increase of $511 million, or 50 percent, compared with $1.024 billion in the first quarter of 2025. The increase was primarily due to the profit impact of higher sales volume of $505 million and favorable price realization of $356 million, partially offset by unfavorable manufacturing costs of $362 million. Unfavorable manufacturing costs largely reflected the impact of higher tariff costs.
Construction Industries' segment profit as a percent of total sales was 21.4 percent in the first quarter of 2026, compared with 19.8 percent in the first quarter of 2025.
Resource Industries
Sales by Industry
(Millions of dollars) First Quarter 2026 First Quarter 2025 $
Change 		%
Change
Mining, HC and Q&A* $ 2,954 $ 2,842 $ 112 4 %
Rail 756 744 12 2 %
External Sales 3,710 3,586 124 3 %
Inter-segment 87 75 12 16 %
Total Sales $ 3,797 $ 3,661 $ 136 4 %
*Heavy Construction and Quarry & Aggregates (HC and Q&A)
Resource Industries' total sales were $3.797 billion in the first quarter of 2026, an increase of $136 million, or 4 percent, compared with $3.661 billion in the first quarter of 2025. The increase was primarily due to higher sales volume of $85 million and favorable currency impacts of $78 million mainly related to the Australian dollar. Higher sales volume was primarily driven by higher sales of equipment to end users.
•Mining, Heavy Construction and Quarry & Aggregates - Sales increased primarily due to higher sales of equipment to end users in Mining.
•Rail - Sales increased in rail services.
Resource Industries' segment profit was $378 million in the first quarter of 2026, a decrease of $245 million, or 39 percent, compared with $623 million in the first quarter of 2025. The decrease was mainly due to unfavorable manufacturing costs. Unfavorable manufacturing costs largely reflected the impact of higher tariff costs.
Resource Industries' segment profit as a percent of total sales was 10.0 percent in the first quarter of 2026, compared with 17.0 percent in the first quarter of 2025.
Financial Products Segment
Financial Products' segment revenues were $1.096 billion in the first quarter of 2026, an increase of $89 million, or 9 percent, compared with $1.007 billion in the first quarter of 2025. The increase was primarily due to a favorable impact from higher average earning assets across all regions.
Financial Products' segment profit was $245 million in the first quarter of 2026, an increase of $30 million, or 14 percent, compared with $215 million in the first quarter of 2025. The increase was mainly due to a favorable impact from higher average earning assets of $40 million and a favorable impact from higher margins at Insurance Services of $9 million, partially offset by higher SG&A expenses of $22 million.
At the end of the first quarter of 2026, past dues at Cat Financial were 1.39 percent, compared with 1.58 percent at the end of the first quarter of 2025. Write-offs, net of recoveries, were $29 million for the first quarter of 2026, compared with $20 million for the first quarter of 2025. As of March 31, 2026, Cat Financial's allowance for credit losses totaled $283 million, or 0.86 percent of finance receivables, compared with $284 million, or 0.86 percent of finance receivables at December 31, 2025.
Corporate Items and Eliminations
Expense for corporate items and eliminations was $329 million in the first quarter of 2026, a decrease of $86 million from the first quarter of 2025, primarily driven by favorable impacts of segment reporting methodology differences and decreased expenses due to timing differences, partially offset by higher corporate costs and an unfavorable change in fair value adjustments related to deferred compensation plans.
RESTRUCTURING COSTS
In 2026, we expect to incur about $300 million to $350 million of restructuring costs. We expect that prior restructuring actions will result in an incremental benefit to operating costs, primarily Cost of goods sold and SG&A expenses, of about $35 million in 2026 compared with 2025.
Additional information related to restructuring costs is included in Note 20 - "Restructuring income/costs" of Part I, Item 1 "Financial Statements."
GLOSSARY OF TERMS
1.Adjusted Operating Profit Margin - Operating profit excluding restructuring income/costs as a percentage of sales and revenues.
2.Adjusted Profit Per Share - Profit per share excluding restructuring income/costs.
3.All Other Segment - Primarily includes activities such as: business strategy; product management and development; parts distribution; integrated logistics solutions; electronics and control systems; distribution services responsible for dealer development and administration, including a wholly owned dealer in Japan; dealer portfolio management and ensuring the most efficient and effective distribution of machines, engines and parts; brand management and marketing strategy; research and development for automation, electronics and software for machines and engines and digital investments for new customer and dealer solutions that integrate data analytics with state-of-the-art digital technologies while transforming the buying experience.
4.Consolidating Adjustments - Elimination of transactions between Machinery, Power & Energy and Financial Products.
5.Construction Industries - A segment primarily responsible for supporting customers using machinery in infrastructure and building construction applications. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The 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.
6.Corporate Items and Eliminations - Includes corporate-level expenses, timing differences (as some expenses are reported in segment profit on a cash basis), methodology differences between segment and consolidated external reporting, certain restructuring costs and inter-segment eliminations.
7.Currency - With respect to sales and revenues, currency represents the translation impact on sales resulting from changes in foreign currency exchange rates versus the U.S. dollar. With respect to operating profit, currency represents the net translation impact on sales and operating costs resulting from changes in foreign currency exchange rates versus the U.S. dollar. Currency only includes the impact on sales and operating profit for the Machinery, Power & Energy line of business; currency impacts on Financial Products revenues and operating profit are included in the Financial Products portions of the respective analyses. With respect to other income/expense, currency represents the effects of forward and option contracts entered into by the company to reduce the risk of fluctuations in exchange rates (hedging) and the net effect of changes in foreign currency exchange rates on our foreign currency assets and liabilities for consolidated results (translation).
8.Dealer Inventories - Represents dealer machine and engine inventories, excluding aftermarket parts.
9.EAME - A geographic region including Europe, Africa, the Middle East and Eurasia.
10.Earning Assets - Assets consisting primarily of total finance receivables net of unearned income, plus equipment on operating leases net of accumulated depreciation at Cat Financial.
11.Financial Products - The company defines Financial Products as our finance and insurance subsidiaries, primarily Caterpillar Financial Services Corporation (Cat Financial) and Caterpillar Insurance Holdings Inc. (Insurance Services). Financial Products' information relates to the financing to customers and dealers for the purchase and lease of Caterpillar and other equipment.
12.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 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 Machinery, Power & Energy, 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.
13.Latin America - A geographic region including Central and South American countries, Caribbean and Mexico.
14.Machinery, Power & Energy (MP&E) - The company defines MP&E as Caterpillar Inc. and its subsidiaries, excluding Financial Products. MP&E's information relates to the design, manufacturing and marketing of its products.
15.Machinery, Power & Energy Other Operating (Income) Expenses - Comprised primarily of gains/losses on disposal of long-lived assets, gains/losses on divestitures and legal settlements and accruals.
16.Manufacturing Costs - Manufacturing costs exclude the impacts of currency and represent the volume-adjusted change for variable costs and the absolute dollar change for period manufacturing costs. Variable manufacturing costs are defined as having a direct relationship with the volume of production. This includes material costs, direct labor and other costs that vary directly with production volume, such as freight, power to operate machines and supplies that are consumed in the manufacturing process. Period manufacturing costs support production but are defined as generally not having a direct relationship to short-term changes in volume. Examples include machinery and equipment repair, depreciation on manufacturing assets, facility support, procurement, factory scheduling, manufacturing planning and operations management.
17.Mark-to-market gains/losses - Represents the net gain or loss of actual results differing from the company's assumptions and the effects of changing assumptions for our defined benefit pension and OPEB plans. These gains and losses are immediately recognized through earnings upon the annual remeasurement in the fourth quarter, or on an interim basis as triggering events warrant remeasurement.
18.Pension and Other Postemployment Benefits (OPEB) - The company's defined-benefit pension and postretirement benefit plans.
19.Power & Energy - A segment primarily responsible for supporting customers using reciprocating engines, turbines and related services across industries serving Power Generation, Oil and Gas and Industrial applications, including marine applications and product support of on-highway engines. 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 oil and gas industry; reciprocating engines, drivetrain and integrated systems and solutions supplied to the industrial industry as well as Caterpillar machines; and electrified powertrain and zero-emission power sources and service solutions. Responsibilities also include the remanufacturing of Caterpillar reciprocating engines and engine and machine components and remanufacturing services for other companies.
20.Price Realization - The impact of net price changes excluding currency and new product introductions. Price realization includes geographic mix of sales, which is the impact of changes in the relative weighting of sales prices between geographic regions.
21.Resource Industries - A segment primarily responsible for supporting customers using machinery in mining, heavy construction and quarry and aggregates as well as customers using locomotives and rail-related products and services. 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; wide-body trucks; select work tools; machinery components; wear and maintenance components and related parts; diesel-electric, hybrid and battery-electric locomotives and components and other rail-related products and services, including remanufacturing and leasing. In addition, Resource Industries 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 component design and manufacturing and research and development for hydraulic systems and cabs.
22.Restructuring income/costs - May include costs for employee separation, long-lived asset impairments, contract terminations and (gains)/losses on divestitures. These costs are included in Other operating (income) expenses except for defined-benefit plan curtailment losses and special termination benefits, which are included in Other income (expense). Restructuring costs also include other exit-related costs, which may consist of accelerated depreciation, inventory write-downs, building demolition, equipment relocation and project management costs and LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold.
23.Sales Volume - With respect to sales and revenues, sales volume represents the impact of changes in the quantities sold for Machinery, Power & Energy as well as the incremental sales impact of new product introductions, including emissions-related product updates. With respect to operating profit, sales volume represents the impact of changes in the quantities sold for Machinery, Power & Energy combined with product mix as well as the net operating profit impact of new product introductions, including emissions-related product updates. Product mix represents the net operating profit impact of changes in the relative weighting of Machinery, Power & Energy sales with respect to total sales. The impact of sales volume on segment profit includes inter-segment sales.
24.Services - Machinery, Power & Energy services revenues include, but are not limited to, aftermarket parts and other service-related revenues and exclude most Financial Products revenues, discontinued products and captive dealer services.
LIQUIDITY AND CAPITAL RESOURCES
Sources of funds
We generate significant capital resources from operating activities, which are the primary source of funding for our MP&E operations. Funding for these businesses is also available from commercial paper and long-term debt issuances. Financial Products' operations are funded primarily from commercial paper, term debt issuances and collections from its existing portfolio. On a consolidated basis, we had positive operating cash flow in the first three months of 2026 and ended the first quarter with $4.072 billion of cash, a decrease of $5.908 billion from year-end 2025. In addition, MP&E invests in available-for-sale debt securities and bank time deposits that are considered highly liquid and are available for current operations. These MP&E securities were $1.257 billion as of March 31, 2026 and are included in Prepaid expenses and other current assets and Other assets in the Consolidated Statement of Financial Position. We intend to maintain a strong cash and liquidity position.
Consolidated operating cash flow for the first three months of 2026 was $1.870 billion, up $581 million compared to the same period a year ago. The increase was primarily due to higher profit before taxes adjusted for non-cash items.
Total debt as of March 31, 2026 was $43.066 billion, a decrease of $264 million from year-end 2025. Debt related to MP&E increased $1 million in the first three months of 2026. Debt related to Financial Products decreased $257 million.
As of March 31, 2026, we had three global credit facilities with a syndicate of banks totaling $11.500 billion (Credit Facility) available in the aggregate to both Caterpillar and Cat Financial for general liquidity purposes. Based on management's allocation decision, which can be revised from time to time, the portion of the Credit Facility available to MP&E as of March 31, 2026 was $2.875 billion. Information on our Credit Facility is as follows:
•The 364-day facility of $3.500 billion (of which $875 million is available to MP&E) expires in August 2026.
•The three-year facility, as amended in August 2025, of $3.000 billion (of which $750 million is available to MP&E) expires in August 2028.
•The five-year facility, as amended in August 2025, of $5.000 billion (of which $1.250 billion is available to MP&E) expires in August 2030.
At March 31, 2026, Caterpillar's consolidated net worth was $18.730 billion, which was above the $9.000 billion required under the Credit Facility. The consolidated net worth is defined in the Credit Facility as Caterpillar's consolidated shareholders' equity including preferred stock but excluding the pension and other postretirement benefits balance within Accumulated other comprehensive income (loss).
At March 31, 2026, Cat Financial's covenant interest coverage ratio was 1.53 to 1. This was above the 1.15 to 1 minimum ratio calculated as (1) profit excluding income taxes, interest expense and net gain (loss) from interest rate derivatives to (2) interest expense calculated at the end of each fiscal quarter for the prior four consecutive fiscal quarter periods, required by the Credit Facility.
In addition, at March 31, 2026, Cat Financial's six-month covenant leverage ratio was 8.03 to 1. This was below the maximum ratio of debt to net worth of 10 to 1, calculated (1) on a monthly basis as the average of the leverage ratios determined on the last day of each of the six preceding calendar months and (2) at each December 31, required by the Credit Facility.
In the event Caterpillar or Cat Financial does not meet one or more of their respective financial covenants under the Credit Facility in the future (and are unable to obtain a consent or waiver), the syndicate of banks may terminate the commitments allocated to the party that does not meet its covenants. Additionally, in such event, certain of Cat Financial's other lenders under other loan agreements where similar financial covenants or cross default provisions are applicable may, at their election, choose to pursue remedies under those loan agreements, including accelerating the repayment of outstanding borrowings. At March 31, 2026, there were no borrowings under the Credit Facility.
The aforementioned financial covenants are being reported as calculated under the Credit Facility and not pursuant to U.S. GAAP. Please refer to the credit agreements governing the Credit Facility filed as an exhibit to our periodic reports for further information related to the calculation thereof. For risks related to our indebtedness and compliance with these covenants, please refer to the risk factor "Restrictive covenants in our debt agreements could limit our financial and operating flexibility" set forth in Part I, Item 1A of our most recent annual report on Form 10-K.
Our total credit commitments and available credit as of March 31, 2026 were:
March 31, 2026
(Millions of dollars) Consolidated Machinery,
Power &
Energy 		Financial
Products
Credit lines available:
Global credit facilities $ 11,500 $ 2,875 $ 8,625
Other external 4,168 894 3,274
Total credit lines available 15,668 3,769 11,899
Less: Commercial paper outstanding (4,617) - (4,617)
Less: Utilized credit (708) - (708)
Available credit $ 10,343 $ 3,769 $ 6,574
The other external consolidated credit lines with banks as of March 31, 2026 totaled $4.168 billion. These committed and uncommitted credit lines, which may be eligible for renewal at various future dates or have no specified expiration date, are used primarily by our subsidiaries for local funding requirements. Caterpillar or Cat Financial may guarantee subsidiary borrowings under these lines.
We receive debt ratings from the major credit rating agencies. In April 2026, Moody's upgraded our debt rating to "high-A". Fitch and S&P maintain "high-A" and "mid-A" debt ratings, respectively. A downgrade of our credit ratings by any of the major credit rating agencies could result in increased borrowing costs and could make access to certain credit markets more difficult. In the event economic conditions deteriorate such that access to debt markets becomes unavailable, MP&E's operations would rely on cash flow from operations, use of existing cash balances, borrowings from Cat Financial and access to our committed credit facilities. Our Financial Products' operations would rely on cash flow from its existing portfolio, existing cash balances, access to our committed credit facilities and other credit line facilities of Cat Financial, and borrowings from Caterpillar. In addition, we maintain a support agreement with Cat Financial, which requires Caterpillar to remain the sole owner of Cat Financial and may, under certain circumstances, require Caterpillar to make payments to Cat Financial should Cat Financial fail to maintain certain financial ratios.
We facilitate voluntary supplier finance programs (the "Programs") through participating financial institutions. We account for the payments made under the Programs, the same as other accounts payable, as a reduction to our cash flows from operations. We do not believe that changes in the availability of the programs will have a significant impact on our liquidity. Additional information related to the programs is included in Note 21 - "Supplier finance programs" of Part I, Item 1 "Financial Statements."
Machinery, Power & Energy
Net cash provided by operating activities was $1.302 billion in the first three months of 2026, compared with net cash provided of $926 million for the same period in 2025. The increase was primarily due to higher profit before taxes, adjusted for non-cash items, and changes in other assets and liabilities, excluding tax impacts. These increases were partially offset by higher working capital requirements; excluding the impact of changes in accrued wages, salaries, and employee benefits. Within working capital, changes in receivables and inventories unfavorably impacted cash flow but were partially offset by changes in customer advances and accounts payable.
Net cash used for investing activities in the first three months of 2026 was $1.392 billion, compared with net cash provided of $30 million in the first three months of 2025. The change was due to higher investments and acquisitions, primarily due to the acquisition of RPMGlobal Holdings Limited (RPMGlobal), and lower proceeds from maturities and sale of securities. For additional information related to the acquisition of RPMGlobal, see Note 22 - "Acquisitions" of Part I, Item 1 "Financial Statements."
Net cash used for financing activities during the first three months of 2026 was $5.864 billion, compared with net cash used of $4.432 billion in the same period of 2025. The change was primarily due to higher payments to purchase common stock.
While our short-term priorities for the use of cash may vary from time to time as business needs and conditions dictate, our resource allocation framework is focused on the following priorities. Our top priority is to maintain a strong financial position in support of a mid-A rating. Next, we intend to fund operational commitments and strategic growth initiatives assessed using the Operating & Execution Model. Then, we intend to return capital to shareholders through dividend growth and share repurchases. Additional information on the resource allocation framework is as follows:
Strong financial position - Our top priority is to maintain a strong financial position in support of a mid-A rating. We track a diverse group of financial metrics that focus on liquidity, leverage, cash flow and margins which align with our resource allocation framework and the various methodologies used by the major credit rating agencies.
Operating & Execution Model used to assess operational commitments and strategic growth initiatives - Capital expenditures were $723 million during the first three months of 2026, compared to $704 million for the same period in 2025. We expect MP&E's capital expenditures in 2026 to be about $3.5 billion. We made $218 million of contributions to our pension and other postretirement benefit plans during the first three months of 2026. We currently anticipate full-year 2026 contributions of approximately $360 million. In comparison, we made $211 million of contributions to our pension and other postretirement benefit plans during the first three months of 2025.
We intend to utilize our liquidity and debt capacity to fund initiatives targeted to drive long term profitable growth focused on our three strategic growth pillars. Our strategic growth pillars are commercial excellence, advanced technology leadership and transforming how we work. These pillars work together to drive sustainable growth, innovation and operational efficiency for Caterpillar and our customers.
Return to shareholders - Our goal is to return substantially all MP&E free cash flow to shareholders over time in the form of dividends and share repurchases, while maintaining our mid-A rating.
MP&E free cash flow is a liquidity measure we use to determine the cash generated and available for financing activities including debt repayments, dividends and share repurchases. We define MP&E free cash flow as cash from MP&E operations less capital expenditures, excluding discretionary pension and other postretirement benefit plan contributions.
Each quarter, our Board of Directors reviews the company's dividend for the applicable quarter. The Board evaluates the financial condition of the company and considers corporate cash flow, the company's liquidity needs, the economic outlook, and the health and stability of global credit markets to determine whether to maintain or change the quarterly dividend. In April 2026, the Board of Directors approved maintaining our quarterly dividend representing $1.51 per share, and we continue to expect our strong financial position to support the dividend. Dividends paid totaled $703 million in the first three months of 2026.
Our share repurchase plans are subject to the company's resource allocation framework and are evaluated on an ongoing basis considering the financial condition of the company, corporate cash flow, the company's liquidity needs, the economic outlook, and the health and stability of global credit markets. The timing and amount of future repurchases may vary depending on market conditions and investing priorities. In June 2024, the Board approved a share repurchase authorization (the 2024 Authorization) of up to $20.0 billion of Caterpillar common stock, effective June 12, 2024, with no expiration. In the first three months of 2026, we repurchased $5.028 billion of Caterpillar common stock. As of March 31, 2026, $9.910 billion remained available under the 2024 Authorization. Our basic shares outstanding as of March 31, 2026 were approximately 461 million.
Financial Products
Net cash provided by operating activities was $346 million in the first three months of 2026, compared with $297 million for the same period in 2025. Net cash used for investing activities was $135 million in the first three months of 2026, compared with $132 million for the same period in 2025. The change was primarily due to settlements of undesignated derivatives and investments in securities, mostly offset by portfolio-related activity. Net cash used for financing activities was $112 million in the first three months of 2026, compared with $71 million for the same period in 2025. The change was due to net external borrowing activity.
RECENT ACCOUNTING PRONOUNCEMENTS
For a discussion of recent accounting pronouncements, see Note 2 - "New accounting guidance" of Part I, Item 1 "Financial Statements."
CRITICAL ACCOUNTING ESTIMATES
For a discussion of the company's critical accounting estimates, see Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Annual Report on Form 10-K. There have been no significant changes to our critical accounting estimates since our 2025 Annual Report on Form 10-K.
OTHER MATTERS
Information related to legal proceedings appears in Note 14 - "Environmental and legal matters" of Part I, Item 1 "Financial Statements."
Order Backlog
At the end of the first quarter of 2026, the dollar amount of backlog believed to be firm was approximately $62.7 billion, about $11.5 billion higher than the fourth quarter of 2025. The order backlog increased across the three primary segments, with the largest increase in Power & Energy. The backlog for large reciprocating engines and turbine products continues to grow within Power & Energy. Of the total backlog at March 31, 2026, approximately $24.8 billion was not expected to be filled in the following twelve months.
NON-GAAP FINANCIAL MEASURES
We provide the following definitions for the non-GAAP financial measures used in this report. These non-GAAP financial measures have no standardized meaning prescribed by U.S. GAAP and therefore are unlikely to be comparable to the calculation of similar measures for other companies. Management does not intend these items to be considered in isolation or as a substitute for the related GAAP measures.
We believe it is important to separately quantify the profit impact of one significant item in order for the company's results to be meaningful to our readers. This item consists of (i) restructuring income/costs. We do not consider this item indicative of earnings from ongoing business activities and believe the non-GAAP measure provides investors with useful perspective on underlying business results and trends and aids with assessing the company's period-over-period results.
Reconciliations of adjusted results to the most directly comparable GAAP measures are as follows:
(Dollars in millions except per share data) Operating Profit Operating Profit Margin Profit Before Taxes Provision (Benefit) for Income Taxes Profit Profit per Share
Three Months Ended March 31, 2026 - U.S. GAAP
$ 3,085 17.7 % $ 3,211 $ 670 $ 2,549 $ 5.47
Restructuring (income) costs 41 0.3 % 41 9 32 0.07
Three Months Ended March 31, 2026 - Adjusted
$ 3,126 18.0 % $ 3,252 $ 679 $ 2,581 $ 5.54
Three Months Ended March 31, 2025 - U.S. GAAP
$ 2,579 18.1 % $ 2,570 $ 574 $ 2,003 $ 4.20
Restructuring (income) costs 32 0.2 % 33 8 25 0.05
Three Months Ended March 31, 2025 - Adjusted
$ 2,611 18.3 % $ 2,603 $ 582 $ 2,028 $ 4.25
We believe it is important to separately disclose our annual effective tax rate, excluding discrete items for our results to be meaningful to our readers. The annual effective tax rate is discussed using non-GAAP financial measures that exclude the effects of amounts associated with discrete items recorded fully in the quarter they occur. This item consists of (i) the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense. We believe the non-GAAP measures will provide investors with useful perspective on underlying business results and trends and aids with assessing the company's period-over-period results.
A reconciliation of our effective tax rate to annual effective tax rate, excluding discrete items is below:
(Millions of dollars) Profit Before Taxes Provision (Benefit) for Income Taxes Effective Tax Rate
Three Months Ended March 31, 2026 - U.S. GAAP
$ 3,211 $ 670 20.9 %
Excess stock-based compensation - 68
Annual effective tax rate, excluding discrete items 3,211 738 23.0 %
Excess stock-based compensation - (68)
Restructuring (income) costs 41 9
Three Months Ended March 31, 2026 - Adjusted
$ 3,252 $ 679
Three Months Ended March 31, 2025 - U.S. GAAP
$ 2,570 $ 574 22.3 %
Excess stock-based compensation - 17
Annual effective tax rate, excluding discrete items 2,570 591 23.0 %
Excess stock-based compensation - (17)
Restructuring (income) costs 33 8
Three Months Ended March 31, 2025 - Adjusted
$ 2,603 $ 582
In addition, we provide a calculation of MP&E free cash flow as we believe it is an important measure for investors to determine the cash generation available for financing activities including debt repayments, dividends and share repurchases.
Reconciliations of MP&E free cash flow to the most directly comparable GAAP measure, net cash provided by operating activities are as follows:
(Millions of dollars) Three Months Ended March 31,
2026 2025
MP&E net cash provided by operating activities 1
$ 1,302 $ 926
MP&E capital expenditures (723) (704)
MP&E free cash flow $ 579 $ 222
1 See reconciliation of MP&E net cash provided by operating activities to consolidated net cash provided by operating activities on pages 64-65.
Supplemental Consolidating Data
We are providing supplemental consolidating data for the purpose of additional analysis. The data has been grouped as follows:
Consolidated - Caterpillar Inc. and its subsidiaries.
Machinery, Power & Energy - The company defines MP&E as Caterpillar Inc. and its subsidiaries, excluding Financial Products. MP&E's information relates to the design, manufacturing and marketing of its products.
Financial Products - The company defines Financial Products as our finance and insurance subsidiaries, primarily Caterpillar Financial Services Corporation (Cat Financial) and Caterpillar Insurance Holdings Inc. (Insurance Services). Financial Products' information relates to the financing to customers and dealers for the purchase and lease of Caterpillar and other equipment.
Consolidating Adjustments - Elimination of transactions between Machinery, Power & Energy and Financial Products.
The nature of the MP&E and Financial Products businesses is different, especially with regard to the financial position and cash flow items. Caterpillar management utilizes this presentation internally to highlight these differences. We believe this presentation will assist readers in understanding our business.
Pages 60-65 reconcile MP&E and Financial Products to Caterpillar Inc. consolidated financial information.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Three Months Ended March 31, 2026
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery,
Power & Energy 		Financial
Products 		Consolidating
Adjustments
Sales and revenues:
Sales of Machinery, Power & Energy $ 16,473 $ 16,473 $ - $ -
Revenues of Financial Products 942 - 1,143 (201)
1
Total sales and revenues 17,415 16,473 1,143 (201)
Operating costs:
Cost of goods sold 11,306 11,308 - (2)
2
Selling, general and administrative expenses 1,816 1,609 222 (15)
2
Research and development expenses 537 537 - -
Interest expense of Financial Products 345 - 356 (11)
2
Other operating (income) expenses 326 20 328 (22)
2
Total operating costs 14,330 13,474 906 (50)
Operating profit 3,085 2,999 237 (151)
Interest expense excluding Financial Products 134 140 - (6)
3
Other income (expense) 260 99 16 145
4
Consolidated profit before taxes 3,211 2,958 253 -
Provision (benefit) for income taxes 670 607 63 -
Profit of consolidated companies 2,541 2,351 190 -
Equity in profit (loss) of unconsolidated affiliated companies 7 7 - -
Profit of consolidated and affiliated companies 2,548 2,358 190 -
Less: Profit (loss) attributable to noncontrolling interests (1) (1) - -
Profit 5
$ 2,549 $ 2,359 $ 190 $ -
1Elimination of Financial Products' revenues earned from MP&E.
2Elimination of net expenses recorded between MP&E and Financial Products.
3Elimination of interest expense recorded between Financial Products and MP&E.
4Elimination of discount recorded by MP&E on receivables sold to Financial Products and of interest earned between MP&E and Financial Products as well as dividends paid by Financial Products to MP&E.
5Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Three Months Ended March 31, 2025
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery,
Power & Energy 		Financial
Products 		Consolidating
Adjustments
Sales and revenues:
Sales of Machinery, Power & Energy $ 13,378 $ 13,378 $ - $ -
Revenues of Financial Products 871 - 1,048 (177)
1
Total sales and revenues 14,249 13,378 1,048 (177)
Operating costs:
Cost of goods sold 8,965 8,967 - (2)
2
Selling, general and administrative expenses 1,593 1,408 196 (11)
2
Research and development expenses 480 480 - -
Interest expense of Financial Products 326 - 326 -
Other operating (income) expenses 306 8 325 (27)
2
Total operating costs 11,670 10,863 847 (40)
Operating profit 2,579 2,515 201 (137)
Interest expense excluding Financial Products 116 119 - (3)
3
Other income (expense) 107 (45) 18 134
4
Consolidated profit before taxes 2,570 2,351 219 -
Provision (benefit) for income taxes 574 520 54 -
Profit of consolidated companies 1,996 1,831 165 -
Equity in profit (loss) of unconsolidated affiliated companies 7 7 - -
Profit of consolidated and affiliated companies 2,003 1,838 165 -
Less: Profit (loss) attributable to noncontrolling interests - - - -
Profit 5
$ 2,003 $ 1,838 $ 165 $ -
1Elimination of Financial Products' revenues earned from MP&E.
2Elimination of net expenses recorded between MP&E and Financial Products.
3Elimination of interest expense recorded between Financial Products and MP&E.
4Elimination of discount recorded by MP&E on receivables sold to Financial Products and of interest earned between MP&E and Financial Products as well as dividends paid by Financial Products to MP&E.
5Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Financial Position
At March 31, 2026
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery,
Power & Energy 		Financial
Products 		Consolidating
Adjustments
Assets
Current assets:
Cash and cash equivalents $ 4,072 $ 3,316 $ 756 $ -
Receivables - trade and other 11,447 4,515 624 6,308
1,2
Receivables - finance 10,443 - 17,014 (6,571)
2
Prepaid expenses and other current assets 2,980 2,614 446 (80)
3
Inventories 19,626 19,626 - -
Total current assets 48,568 30,071 18,840 (343)
Property, plant and equipment - net 15,249 11,078 4,124 47
4
Long-term receivables - trade and other 2,490 2,323 117 50
1,2
Long-term receivables - finance 14,341 - 15,671 (1,330)
2
Noncurrent deferred and refundable income taxes 2,419 2,728 129 (438)
5
Intangible assets 419 419 - -
Goodwill 5,865 5,865 - -
Other assets 6,199 4,562 2,706 (1,069)
6
Total assets $ 95,550 $ 57,046 $ 41,587 $ (3,083)
Liabilities
Current liabilities:
Short-term borrowings $ 4,729 $ - $ 4,729 $ -
Accounts payable 9,641 9,590 310 (259)
7
Accrued expenses 5,454 4,764 690 -
Accrued wages, salaries and employee benefits 1,434 1,399 35 -
Customer advances 4,382 4,379 3 -
Dividends payable - - - -
Other current liabilities 2,567 2,004 659 (96)
5,8
Long-term debt due within one year 7,695 35 7,660 -
Total current liabilities 35,902 22,171 14,086 (355)
Long-term debt due after one year 30,642 10,956 20,971 (1,285)
9
Liability for postemployment benefits 3,659 3,659 - -
Other liabilities 6,687 5,662 1,525 (500)
5
Total liabilities 76,890 42,448 36,582 (2,140)
Commitments and contingencies
Shareholders' equity
Common stock 5,852 5,852 905 (905)
10
Treasury stock (53,307) (53,307) - -
Profit employed in the business 67,997 62,977 4,989 31
10
Accumulated other comprehensive income (loss) (1,881) (925) (955) (1)
10
Noncontrolling interests (1) 1 66 (68)
10
Total shareholders' equity 18,660 14,598 5,005 (943)
Total liabilities and shareholders' equity $ 95,550 $ 57,046 $ 41,587 $ (3,083)
1 Elimination of receivables between MP&E and Financial Products.
2 Reclassification of MP&E's trade receivables purchased by Financial Products and Financial Products' wholesale inventory receivables.
3 Elimination of MP&E's insurance premiums that are prepaid to Financial Products.
4 Reclassification of Financial Products' other assets to property, plant and equipment.
5 Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction.
6 Elimination of other intercompany assets and liabilities between MP&E and Financial Products.
7 Elimination of payables between MP&E and Financial Products.
8 Elimination of prepaid insurance in Financial Products' other liabilities.
9 Elimination of debt between MP&E and Financial Products.
10 Eliminations associated with MP&E's investments in Financial Products' subsidiaries.
Caterpillar Inc.
Supplemental Data for Financial Position
At December 31, 2025
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery,
Power & Energy 		Financial
Products 		Consolidating
Adjustments
Assets
Current assets:
Cash and cash equivalents $ 9,980 $ 9,333 $ 647 $ -
Receivables - trade and other 10,920 3,883 657 6,380
1,2
Receivables - finance 10,649 - 17,325 (6,676)
2
Prepaid expenses and other current assets 2,801 2,448 441 (88)
3
Inventories 18,135 18,135 - -
Total current assets 52,485 33,799 19,070 (384)
Property, plant and equipment - net 15,140 10,985 4,106 49
4
Long-term receivables - trade and other 2,142 1,982 163 (3)
1,2
Long-term receivables - finance 14,272 - 15,538 (1,266)
2
Noncurrent deferred and refundable income taxes 2,882 3,208 133 (459)
5
Intangible assets 241 241 - -
Goodwill 5,321 5,321 - -
Other assets 6,102 4,525 2,651 (1,074)
6
Total assets $ 98,585 $ 60,061 $ 41,661 $ (3,137)
Liabilities
Current liabilities:
Short-term borrowings $ 5,514 $ - $ 5,514 $ -
Accounts payable 8,968 8,988 268 (288)
7
Accrued expenses 5,587 4,877 710 -
Accrued wages, salaries and employee benefits 2,554 2,494 60 -
Customer advances 3,314 3,311 3 -
Dividends payable 703 703 - -
Other current liabilities 2,798 2,259 645 (106)
5,8
Long-term debt due within one year 7,120 35 7,085 -
Total current liabilities 36,558 22,667 14,285 (394)
Long-term debt due after one year 30,696 10,955 21,018 (1,277)
9
Liability for postemployment benefits 3,838 3,837 1 -
Other liabilities 6,175 5,162 1,516 (503)
5
Total liabilities 77,267 42,621 36,820 (2,174)
Commitments and contingencies
Shareholders' equity
Common stock 7,181 7,181 905 (905)
10
Treasury stock (49,539) (49,539) - -
Profit employed in the business 65,448 60,639 4,799 10
10
Accumulated other comprehensive income (loss) (1,772) (843) (929) -
Noncontrolling interests - 2 66 (68)
10
Total shareholders' equity 21,318 17,440 4,841 (963)
Total liabilities and shareholders' equity $ 98,585 $ 60,061 $ 41,661 $ (3,137)
1 Elimination of receivables between MP&E and Financial Products.
2 Reclassification of MP&E's trade receivables purchased by Financial Products and Financial Products' wholesale inventory receivables.
3 Elimination of MP&E's insurance premiums that are prepaid to Financial Products.
4 Reclassification of Financial Products' other assets to property, plant and equipment.
5 Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction.
6 Elimination of other intercompany assets between MP&E and Financial Products.
7 Elimination of payables between MP&E and Financial Products.
8 Elimination of prepaid insurance in Financial Products' other liabilities.
9 Elimination of debt between MP&E and Financial Products.
10 Eliminations associated with MP&E's investments in Financial Products' subsidiaries.
Caterpillar Inc.
Supplemental Data for Cash Flow
For the Three Months Ended March 31, 2026
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery,
Power & Energy 		Financial
Products 		Consolidating
Adjustments
Cash flow from operating activities:
Profit of consolidated and affiliated companies $ 2,548 $ 2,358 $ 190 $ -
Adjustments to reconcile profit to net cash provided by operating activities:
Depreciation and amortization 595 396 199 -
Provision (benefit) for deferred income taxes 534 550 (16) -
Other 68 4 (96) 160
1
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables - trade and other (801) (817) (2) 18
1,2
Inventories (1,501) (1,501) - -
Accounts payable 938 864 45 29
1
Accrued expenses (202) (183) (19) -
Accrued wages, salaries and employee benefits (1,123) (1,098) (25) -
Customer advances 1,328 1,328 - -
Other assets - net (184) (183) 11 (12)
1
Other liabilities - net (330) (416) 59 27
1
Net cash provided by (used for) operating activities 1,870 1,302 346 222
Cash flow from investing activities:
Capital expenditures - excluding equipment leased to others (728) (719) (10) 1
1
Expenditures for equipment leased to others (323) (4) (320) 1
1
Proceeds from disposals of leased assets and property, plant and equipment 191 22 171 (2)
1
Additions to finance receivables (3,890) - (4,452) 562
2
Collections of finance receivables 3,876 - 4,443 (567)
2
Net intercompany purchased receivables - - 217 (217)
2
Proceeds from sale of finance receivables 13 - 13 -
Collections of intercompany receivables (original maturities greater than three months) - - 26 (26)
3
Investments and acquisitions (net of cash acquired) (788) (788) - -
Proceeds from maturities and sale of securities 361 219 142 -
Investments in securities (467) (213) (254) -
Other - net (20) 91 (111) -
Net cash provided by (used for) investing activities (1,775) (1,392) (135) (248)
Cash flow from financing activities:
Dividends paid (703) (703) - -
Common stock issued, and other stock compensation transactions, net (97) (97) - -
Payments to purchase common stock (5,028) (5,028) - -
Payments on intercompany borrowings (original maturities greater than three months) - (26) - 26
3
Proceeds from debt issued (original maturities greater than three months) 3,908 - 3,908 -
Payments on debt (original maturities greater than three months) (3,222) (10) (3,212) -
Short-term borrowings - net (original maturities three months or less) (808) - (808) -
Net cash provided by (used for) financing activities (5,950) (5,864) (112) 26
Effect of exchange rate changes on cash (55) (64) 9 -
Increase (decrease) in cash, cash equivalents and restricted cash (5,910) (6,018) 108 -
Cash, cash equivalents and restricted cash at beginning of period 9,986 9,336 650 -
Cash, cash equivalents and restricted cash at end of period $ 4,076 $ 3,318 $ 758 $ -
1 Elimination of non-cash adjustments and changes in assets and liabilities related to consolidated reporting.
2 Reclassification of Financial Products' cash flow activity from investing to operating for receivables that arose from the sale of inventory.
3 Elimination of proceeds and payments to/from MP&E and Financial Products.
Caterpillar Inc.
Supplemental Data for Cash Flow
For the Three Months Ended March 31, 2025
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery,
Power & Energy 		Financial
Products 		Consolidating
Adjustments
Cash flow from operating activities:
Profit of consolidated and affiliated companies $ 2,003 $ 1,838 $ 165 $ -
Adjustments to reconcile profit to net cash provided by operating activities:
Depreciation and amortization 540 351 189 -
Provision (benefit) for deferred income taxes (38) (34) (4) -
Other 78 76 (123) 125
1
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables - trade and other 155 215 (19) (41)
1.2
Inventories (990) (990) - -
Accounts payable 401 343 60 (2)
1
Accrued expenses (198) (211) 13 -
Accrued wages, salaries and employee benefits (1,144) (1,117) (27) -
Customer advances 713 713 - -
Other assets - net 69 224 (12) (143)
1
Other liabilities - net (300) (482) 55 127
1
Net cash provided by (used for) operating activities 1,289 926 297 66
Cash flow from investing activities:
Capital expenditures - excluding equipment leased to others (710) (700) (11) 1
1
Expenditures for equipment leased to others (208) (4) (205) 1
1
Proceeds from disposals of leased assets and property, plant and equipment 149 14 137 (2)
1
Additions to finance receivables (3,209) - (3,549) 340
2
Collections of finance receivables 3,049 - 3,458 (409)
2
Net intercompany purchased receivables - - (3) 3
2
Proceeds from sale of finance receivables 7 - 7 -
Collections of intercompany receivables (original maturities greater than 3 months) - - 7 (7)
3
Investments and acquisitions (net of cash acquired) (2) (2) - -
Proceeds from sale of businesses and investments (net of cash sold) 12 12 - -
Proceeds from maturities and sale of securities 923 782 141 -
Investments in securities (177) (28) (149) -
Other - net (9) (44) 35 -
Net cash provided by (used for) investing activities (175) 30 (132) (73)
Cash flow from financing activities:
Dividends paid (674) (674) - -
Common stock issued, including treasury shares reissued (64) (64) - -
Payments to purchase common stock (3,660) (3,660) - -
Payments on intercompany borrowings (original maturities greater than three months) - (7) - 7
3
Proceeds from debt issued (original maturities greater than three months) 2,633 - 2,633 -
Payments on debt (original maturities greater than three months) (1,797) (27) (1,770) -
Short-term borrowings - net (original maturities three months or less) (934) - (934) -
Net cash provided by (used for) financing activities (4,496) (4,432) (71) 7
Effect of exchange rate changes on cash 54 49 5 -
Increase (decrease) in cash, cash equivalents and restricted cash (3,328) (3,427) 99 -
Cash, cash equivalents and restricted cash at beginning of period 6,896 6,170 726 -
Cash, cash equivalents and restricted cash at end of period $ 3,568 $ 2,743 $ 825 $ -
1 Elimination of non-cash adjustments and changes in assets and liabilities related to consolidated reporting.
2 Reclassification of Financial Products' cash flow activity from investing to operating for receivables that arose from the sale of inventory.
3 Elimination of proceeds and payments to/from MP&E and Financial Products.
Forward-looking Statements
Certain statements in this Form 10-Q relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "estimate," "will be," "will," "would," "expect," "anticipate," "plan," "forecast," "target," "guide," "project," "intend," "could," "should" or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These statements do not guarantee future performance and speak only as of the date they are made, and we do not undertake to update our forward-looking statements.
Caterpillar's actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including, but not limited to: (i) global and regional economic conditions and economic conditions in the industries we serve; (ii) commodity price changes, material price increases, fluctuations in demand for our products or significant shortages of material; (iii) government monetary or fiscal policies; (iv) political and economic risks, commercial instability and events beyond our control in the countries in which we operate; (v) international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates; (vi) our ability to develop, produce and market quality products that meet our customers' needs; (vii) the impact of the highly competitive environment in which we operate on our sales and pricing; (viii) information technology security threats and computer crime; (ix) inventory management decisions and sourcing practices of our dealers and our OEM customers; (x) a failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures or divestitures; (xi) union disputes or other employee relations issues; (xii) adverse effects of unexpected events; (xiii) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers; (xiv) failure to maintain our credit ratings and potential resulting increases to our cost of borrowing and adverse effects on our cost of funds, liquidity, competitive position and access to capital markets; (xv) our Financial Products segment's risks associated with the financial services industry; (xvi) changes in interest rates or market liquidity conditions; (xvii) an increase in delinquencies, repossessions or net losses of Cat Financial's customers; (xviii) currency fluctuations; (xix) our or Cat Financial's compliance with financial and other restrictive covenants in debt agreements; (xx) increased pension plan funding obligations; (xxi) alleged or actual violations of trade or anti-corruption laws and regulations; (xxii) additional tax expense or exposure, including the impact of U.S. tax reform; (xxiii) significant legal proceedings, claims, lawsuits or government investigations; (xxiv) new regulations or changes in financial services regulations; (xxv) compliance with environmental laws and regulations; (xxvi) catastrophic events, including global pandemics such as the COVID-19 pandemic; and (xxvii) other factors described in more detail under the section entitled "Part I - Item 1A. Risk Factors" of Caterpillar's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as such factors may be updated from time to time in Caterpillar's periodic filings with the Securities and Exchange Commission.
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