Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Caterpillar Inc., balance sheet: goodwill and intangible assets

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Customer relationships	2,232)	2,233)	2,421)	2,493)	2,450)
Intellectual property	484)	1,473)	1,472)	1,439)	1,510)
Other	117)	132)	156)	164)	191)
Finite-lived intangible assets, gross carrying amount	2,833)	3,838)	4,049)	4,096)	4,151)
Accumulated amortization	(2,269)	(3,080)	(3,007)	(2,788)	(2,586)
Finite-lived intangible assets, net	564)	758)	1,042)	1,308)	1,565)
Goodwill	5,308)	5,288)	6,324)	6,394)	6,196)
Intangible assets and goodwill	5,872)	6,046)	7,366)	7,702)	7,761)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Finite-lived intangible assets, net	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Caterpillar Inc. finite-lived intangible assets, net decreased from 2021 to 2022 and from 2022 to 2023.
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Caterpillar Inc. goodwill decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.
Intangible assets and goodwill	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Caterpillar Inc. intangible assets and goodwill decreased from 2021 to 2022 and from 2022 to 2023.

Caterpillar Inc., adjustments to financial statements

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported)	87,476)	81,943)	82,793)	78,324)	78,453)
Less: Goodwill	5,308)	5,288)	6,324)	6,394)	6,196)
Total assets (adjusted)	82,168)	76,655)	76,469)	71,930)	72,257)
Adjustment to Equity Attributable To Common Shareholders
Equity attributable to common shareholders (as reported)	19,494)	15,869)	16,484)	15,331)	14,588)
Less: Goodwill	5,308)	5,288)	6,324)	6,394)	6,196)
Equity attributable to common shareholders (adjusted)	14,186)	10,581)	10,160)	8,937)	8,392)
Adjustment to Profit Attributable To Common Stockholders
Profit attributable to common stockholders (as reported)	10,335)	6,705)	6,489)	2,998)	6,093)
Add: Goodwill impairment charge	—)	925)	—)	—)	—)
Profit attributable to common stockholders (adjusted)	10,335)	7,630)	6,489)	2,998)	6,093)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Caterpillar Inc., Financial Data: Reported vs. Adjusted

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Caterpillar Inc., adjusted financial ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net Profit Margin
Reported net profit margin	16.18%	11.85%	13.47%	7.68%	12.00%
Adjusted net profit margin	16.18%	13.49%	13.47%	7.68%	12.00%
Total Asset Turnover
Reported total asset turnover	0.73	0.69	0.58	0.50	0.65
Adjusted total asset turnover	0.78	0.74	0.63	0.54	0.70
Financial Leverage
Reported financial leverage	4.49	5.16	5.02	5.11	5.38
Adjusted financial leverage	5.79	7.24	7.53	8.05	8.61
Return on Equity (ROE)
Reported ROE	53.02%	42.25%	39.37%	19.56%	41.77%
Adjusted ROE	72.85%	72.11%	63.87%	33.55%	72.60%
Return on Assets (ROA)
Reported ROA	11.81%	8.18%	7.84%	3.83%	7.77%
Adjusted ROA	12.58%	9.95%	8.49%	4.17%	8.43%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Caterpillar Inc. adjusted net profit margin ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Caterpillar Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Caterpillar Inc. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Caterpillar Inc. adjusted ROE improved from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Caterpillar Inc. adjusted ROA improved from 2021 to 2022 and from 2022 to 2023.

Caterpillar Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Profit attributable to common stockholders	10,335)	6,705)	6,489)	2,998)	6,093)
Sales of Machinery, Energy & Transportation	63,869)	56,574)	48,188)	39,022)	50,755)
Profitability Ratio
Net profit margin¹	16.18%	11.85%	13.47%	7.68%	12.00%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted profit attributable to common stockholders	10,335)	7,630)	6,489)	2,998)	6,093)
Sales of Machinery, Energy & Transportation	63,869)	56,574)	48,188)	39,022)	50,755)
Profitability Ratio
Adjusted net profit margin²	16.18%	13.49%	13.47%	7.68%	12.00%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Net profit margin = 100 × Profit attributable to common stockholders ÷ Sales of Machinery, Energy & Transportation
= 100 × 10,335 ÷ 63,869 = 16.18%

² Adjusted net profit margin = 100 × Adjusted profit attributable to common stockholders ÷ Sales of Machinery, Energy & Transportation
= 100 × 10,335 ÷ 63,869 = 16.18%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Caterpillar Inc. adjusted net profit margin ratio improved from 2021 to 2022 and from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Sales of Machinery, Energy & Transportation	63,869)	56,574)	48,188)	39,022)	50,755)
Total assets	87,476)	81,943)	82,793)	78,324)	78,453)
Activity Ratio
Total asset turnover¹	0.73	0.69	0.58	0.50	0.65
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Sales of Machinery, Energy & Transportation	63,869)	56,574)	48,188)	39,022)	50,755)
Adjusted total assets	82,168)	76,655)	76,469)	71,930)	72,257)
Activity Ratio
Adjusted total asset turnover²	0.78	0.74	0.63	0.54	0.70

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Total asset turnover = Sales of Machinery, Energy & Transportation ÷ Total assets
= 63,869 ÷ 87,476 = 0.73

² Adjusted total asset turnover = Sales of Machinery, Energy & Transportation ÷ Adjusted total assets
= 63,869 ÷ 82,168 = 0.78

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Caterpillar Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets	87,476)	81,943)	82,793)	78,324)	78,453)
Equity attributable to common shareholders	19,494)	15,869)	16,484)	15,331)	14,588)
Solvency Ratio
Financial leverage¹	4.49	5.16	5.02	5.11	5.38
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets	82,168)	76,655)	76,469)	71,930)	72,257)
Adjusted equity attributable to common shareholders	14,186)	10,581)	10,160)	8,937)	8,392)
Solvency Ratio
Adjusted financial leverage²	5.79	7.24	7.53	8.05	8.61

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Financial leverage = Total assets ÷ Equity attributable to common shareholders
= 87,476 ÷ 19,494 = 4.49

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted equity attributable to common shareholders
= 82,168 ÷ 14,186 = 5.79

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Caterpillar Inc. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Profit attributable to common stockholders	10,335)	6,705)	6,489)	2,998)	6,093)
Equity attributable to common shareholders	19,494)	15,869)	16,484)	15,331)	14,588)
Profitability Ratio
ROE¹	53.02%	42.25%	39.37%	19.56%	41.77%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted profit attributable to common stockholders	10,335)	7,630)	6,489)	2,998)	6,093)
Adjusted equity attributable to common shareholders	14,186)	10,581)	10,160)	8,937)	8,392)
Profitability Ratio
Adjusted ROE²	72.85%	72.11%	63.87%	33.55%	72.60%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROE = 100 × Profit attributable to common stockholders ÷ Equity attributable to common shareholders
= 100 × 10,335 ÷ 19,494 = 53.02%

² Adjusted ROE = 100 × Adjusted profit attributable to common stockholders ÷ Adjusted equity attributable to common shareholders
= 100 × 10,335 ÷ 14,186 = 72.85%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Caterpillar Inc. adjusted ROE improved from 2021 to 2022 and from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Profit attributable to common stockholders	10,335)	6,705)	6,489)	2,998)	6,093)
Total assets	87,476)	81,943)	82,793)	78,324)	78,453)
Profitability Ratio
ROA¹	11.81%	8.18%	7.84%	3.83%	7.77%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted profit attributable to common stockholders	10,335)	7,630)	6,489)	2,998)	6,093)
Adjusted total assets	82,168)	76,655)	76,469)	71,930)	72,257)
Profitability Ratio
Adjusted ROA²	12.58%	9.95%	8.49%	4.17%	8.43%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROA = 100 × Profit attributable to common stockholders ÷ Total assets
= 100 × 10,335 ÷ 87,476 = 11.81%

² Adjusted ROA = 100 × Adjusted profit attributable to common stockholders ÷ Adjusted total assets
= 100 × 10,335 ÷ 82,168 = 12.58%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Caterpillar Inc. adjusted ROA improved from 2021 to 2022 and from 2022 to 2023.

Caterpillar Inc. (NYSE:CAT)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Caterpillar Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Caterpillar Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)