3Q 2023 Analyst Slide Deck
3Q 2023 Analyst Slide Deck
Financial Review
October 31, 2023
3Q 2023 EARNINGS RELEASE
Forward-Looking Statements
Certain statements in this financial review relate to future events and expectations and are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,” “forecast,” “target,” “guide,”
“project,” “intend,” “could,” “should” or other similar words or expressions often identify forward-looking statements. All statements other than statements of
historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These
statements do not guarantee future performance and speak only as of the date they are made, and we do not undertake to update our forward-looking
statements.
Caterpillar’s actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including, but
not limited to: (i) global and regional economic conditions and economic conditions in the industries we serve; (ii) commodity price changes, material price
increases, fluctuations in demand for our products or significant shortages of material; (iii) government monetary or fiscal policies; (iv) political and economic
risks, commercial instability and events beyond our control in the countries in which we operate; (v) international trade policies and their impact on demand for
our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates; (vi) our ability to develop, produce and market
quality products that meet our customers’ needs; (vii) the impact of the highly competitive environment in which we operate on our sales and pricing; (viii)
information technology security threats and computer crime; (ix) inventory management decisions and sourcing practices of our dealers and our OEM
customers; (x) a failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures or divestitures; (xi) union disputes or
other employee relations issues; (xii) adverse effects of unexpected events; (xiii) disruptions or volatility in global financial markets limiting our sources of
liquidity or the liquidity of our customers, dealers and suppliers; (xiv) failure to maintain our credit ratings and potential resulting increases to our cost of
borrowing and adverse effects on our cost of funds, liquidity, competitive position and access to capital markets; (xv) our Financial Products segment’s risks
associated with the financial services industry; (xvi) changes in interest rates or market liquidity conditions; (xvii) an increase in delinquencies, repossessions or
net losses of Cat Financial’s customers; (xviii) currency fluctuations; (xix) our or Cat Financial’s compliance with financial and other restrictive covenants in debt
agreements; (xx) increased pension plan funding obligations; (xxi) alleged or actual violations of trade or anti-corruption laws and regulations; (xxii) additional
tax expense or exposure, including the impact of U.S. tax reform; (xxiii) significant legal proceedings, claims, lawsuits or government investigations; (xxiv) new
regulations or changes in financial services regulations; (xxv) compliance with environmental laws and regulations; (xxvi) catastrophic events, including global
pandemics such as the COVID-19 pandemic; and (xxvii) other factors described in more detail in Caterpillar’s Forms 10-Q, 10-K and other filings with the
Securities and Exchange Commission.
A reconciliation of non-GAAP financial information can be found in our press release describing third-quarter 2023 financial results which is available on our
website at www.caterpillar.com/earnings.
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Strong Performance
EXECUTING OUR
THANK YOU HEALTHY DEMAND STRATEGY FOR
LONG-TERM
TO OUR ACROSS MOST
GLOBAL TEAM END MARKETS PROFITABLE
GROWTH
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Key Takeaways
Third Quarter 2023 vs. Third Quarter 2022
1 Adjustedoperating profit is a non-GAAP measure, and a reconciliation to the most directly comparable GAAP measure is included in the appendix.
2 Third-quarter 2023adjusted profit per share excluded restructuring costs of $0.07 per share.
Third-quarter 2022 adjusted profit per share excluded restructuring costs of $0.08 per share.
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3Q 2023 EARNINGS RELEASE
ME&T Free Cash Flow1 and Capital Deployment
30
$6.8B $4.1B
Years
1 ME&T free cash flow represents ME&T operating cash flow less capital expenditures, excluding discretionary pension contributions. A reconciliation of ME&T net cash provided by operating activities to ME&T free cash flow is included in the appendix.
2 With dividend payable on Nov 20, 2023, Caterpillar will have paid higher dividends for 30 years (announced October 2023).
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End Market Commentary 3Q 2023 EARNINGS RELEASE
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Sustainability
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3Q 2023 EARNINGS RELEASE
Financial Results Summary
Third Quarter 2023 vs. Third Quarter 2022
2022
2022
3Q 2022
1Q 2022
1Q 2023
3Q 2023
2022
2023
3Q2019
3Q2018
3Q
3Q
1 Third-quarter 2023 adjusted profit per share excluded restructuring costs of $0.07 per share.
Third-quarter 2022 adjusted profit per share excluded restructuring costs of $0.08 per share.
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Consolidated Sales and Revenues
Third Quarter 2023 vs. Third Quarter 2022
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Consolidated Operating Profit
Third Quarter 2023 vs. Third Quarter 2022
1 Adjusted operating profit margin is a non-GAAP measure, and a reconciliation to the most directly comparable GAAP measure is included in the appendix.
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Construction Industries
Third Quarter 2023 vs. Third Quarter 2022
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Resource Industries
Third Quarter 2023 vs. Third Quarter 2022
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Energy & Transportation
Third Quarter 2023 vs. Third Quarter 2022
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ME&T Free Cash Flow1 and Capital Deployment
1 ME&T free cash flow represents ME&T operating cash flow less capital expenditures, excluding discretionary pension contributions. A reconciliation of ME&T net cash provided by operating activities to ME&T free cash flow is included in the appendix.
2 Target based on Caterpillar Investor Day held in 2022. Caterpillar communicated a ME&T free cash flow target in the range of $4B to $8B annually.
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Key Thoughts As We Look Ahead
21.0%
vs fourth-quarter 2022
20% 19.0%
17.0% 18.0%
• Adjusted operating profit margin1 in fourth quarter of 2023
15.0% expected to be lower than third quarter of 2023
15% 13.0% 16.0%
14.0%
12.0%
• Full-year 2023 adjusted operating profit margin1 expected to
10% 10.0% be slightly above the targeted range2 relative to the
corresponding expected level of sales
5%
• ME&T free cash flow3 expected to exceed our $4B to $8B
range for the full year
0%
$42B $49.5B $57B $64.5B $72B
Sales & Revenues
1 Adjusted operating profit margin is a non-GAAP measure, and a reconciliation to the most directly comparable GAAP measure is included in the appendix.
2 2023 adjusted operating profit margin target based on expected sales level and was communicated during the 4Q 2022 earnings call.
3 ME&T free cash flow represents ME&T operating cash flow less capital expenditures, excluding discretionary pension contributions. A reconciliation of ME&T net cash provided by operating activities to ME&T free cash flow is included in the appendix.
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Third-Quarter 2023 Key Takeaways
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Q&A
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2024 Caterpillar Earnings Call Schedule
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Dealer Inventory and Order Backlog 3Q 2023 EARNINGS RELEASE
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• Restructuring expense expected to be about $700 million for the full year
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Non-GAAP Financial Measures
3Q 2023 EARNINGS RELEASE
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Reconciliation to U.S. GAAP 3Q 2023 EARNINGS RELEASE
Reconciliation of ME&T Cash Flow from Operations to ME&T Free Cash Flow
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