Caterpillar

NYSE: CAT · USD

Caterpillar (CAT) Economic Moat Analysis56

Competitive advantages, dated evidence and erosion risks.

Narrow economic moat

Caterpillar’s established dealer relationships and substantial aftermarket business support a narrow moat. Worldwide distribution and servicing are demonstrated advantages, although superiority over competitors is unquantified. Pricing power is cyclical: favorable realization in 2023–2024 reversed in 2025 and recovered in first-half 2026; geographic mix contributes to that measure. The evidence supports ongoing customer engagement rather than strong lock-in. It does not establish superior manufacturing costs, network effects, exceptional durability or a separate financing moat.

Intangible assets

Established dealer and servicing relationships provide worldwide market access and support an economically substantial aftermarket business. This relationship infrastructure is a current advantage; the passages do not establish exclusive distribution, superior service outcomes or network effects.

Durability: Broad coverage persisted between 2023 and 2025, and 2025 services revenues demonstrate continued commercial relevance. Replication would require establishing comparable distribution and servicing relationships, but the supplied evidence does not quantify that difficulty or establish a particular protection period.
Competitors: Komatsu Ltd., Hitachi Construction Machinery Co., Ltd., Sany Heavy Industry Co., Ltd., Volvo Construction Equipment
Erosion risks: Dealers are nonexclusive. Customers can defer maintenance during downturns, and competitive pricing can weaken equipment economics. Dealer counts and country coverage declined modestly between the disclosed periods; consolidation versus competitive erosion is unexplained.
What would invalidate the thesis: The thesis would fail if sustained dealer departures materially reduced coverage or Caterpillar’s importance to dealers, or if services demand persistently weakened alongside equipment share losses and discounting despite stable relevant end markets. One cyclical decline or dealer consolidation alone would not establish invalidation.

Evidence (8) · Counterevidence (4)

Changes since the previous analysis

Retain the narrow verdict and criterion grades after reassessing the supplied catalog; the dealer and aftermarket advantage remains evidenced, while comparative superiority remains unquantified.
Add the June 2026 annual-meeting results: the proxy nominees were elected, and the written-consent proposal was rejected. The earlier limitation about unavailable election outcomes is resolved.
Explicitly recognize the modest reduction in dealer counts and country coverage between 2023 and 2025 without assuming competitive deterioration.
Qualify incentive alignment for the disclosed tariff adjustment to the 2025 annual incentive; performance-based equity remains demonstrated.

Evidence limitations

All selected evidence is Caterpillar disclosure. Reported results and contractual terms support assessments, but leadership and superiority assertions are not independent demonstrations.
Named competitors establish competitive coverage only. Their dealer economics, service quality, costs, market shares and customer outcomes are not supplied.
Services revenues include aftermarket parts and other service-related revenues and exclude most Financial Products revenues, discontinued products and captive dealer services. They are not a disclosed recurring-revenue or customer-retention measure.
Price realization excludes currency and new product introductions but includes geographic mix; it does not isolate comparable-product price increases.
Customer switching costs, individual repeat purchases, equipment-contract repricing rights and ownership-target compliance by individual executive are not established.
Evidence reaches the October 2026 filings, but the latest supplied operating results cover June 30, 2026. Announced personnel transitions and anticipated capacity or acquisition benefits do not establish subsequent execution.
Source dates are filing dates, retaining dateKind filed; they are not treated as separate publication dates.

Financial indicators to test against the thesis

Calculated from annual filings. Missing data remains unavailable. Detailed financial charts remain in the other topics.

Financial indicators to test against the thesis
Period	Gross margin	Operating margin	ROIC	FCF margin
2021	30.3%	13.5%	—	12.0%
2022	30.4%	13.3%	—	10.9%
2023	36.2%	19.3%	21.2%	16.8%
2024	38.0%	20.2%	20.7%	15.5%
2025	33.8%	16.5%	16.0%	13.2%

Pricing power50

Pricing outcomes
Favorable pricing in 2023–2024, unfavorable realization of $817 million in 2025, and favorable realization of approximately $1.0 billion in first-half 2026 demonstrate meaningful but inconsistent pricing ability. The measure excludes currency and new introductions but includes geographic mix, limiting attribution to comparable-product price changes.
Customer demand
The sizeable services business demonstrates continued engagement with equipment-related needs, while higher first-half 2026 end-user sales support demand indirectly. These are indirect retention indicators, not identified repeat purchasers or renewals. Lower end-user equipment sales in 2024 and possible maintenance deferrals constrain the assessment.
Margin resilience
Pricing helped offset lower volume in 2024, although the divestiture comparison also helped profit. In 2025, unfavorable pricing and manufacturing costs reduced profit. First-half 2026 operating profit increased faster than revenue, with substantial volume support. The combined record demonstrates recovery rather than reliable cost pass-through.
Pricing freedom
Announced price increases and actual dealer discount programs establish discretion over commercial pricing. Customer acceptance constrains that discretion, and finance receivables generally permit penalty-free refinancing. Equipment contract duration and rights to reprice existing orders are missing, so demonstrated pricing flexibility does not establish broad contractual protection.

Management56

Capital discipline
Reported 2025 non-GAAP MP&E free cash flow of $9.5 billion exceeded $7.9 billion of distributions. In first-half 2026, $6.522 billion of buybacks plus $1.399 billion of dividends exceeded $6.241 billion of consolidated operating cash flow before capital expenditures. Cash declined while MP&E debt barely changed; repurchase value and investment returns remain unproven.
Incentive alignment
Actual compensation design combines substantial variable pay with multiyear equity, including PRSUs tied to ROIC and relative shareholder returns; 2026 grants are confirmed. Three-year performance periods support alignment. Historical ROE-only awards, tariff-adjusted annual incentives and missing individual ownership compliance prevent an exceptional assessment.
Execution
First-half 2026 revenue, operating profit and cash-flow growth demonstrate operating delivery; firm backlog supports continued demand, not completed execution. These results follow a 2025 profit decline and include dealer inventory contributions. Execution is assessed indirectly from operating outcomes and cannot be separated fully from end-market conditions.
Governance
Audit Committee activity, lead independent oversight, annual elections and shareholder protections support accountability; June results confirm the nominees’ election. Combined CEO/chair leadership, the 25 percent special-meeting threshold and rejection of written consent limit shareholder control. The disclosures establish governance arrangements, without demonstrating exceptional oversight effectiveness.

Sources and methodology

Current publication · Updated 21/10/2026 · Version 10

AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.

Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 29/10/2026

Moat56

Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.

structural advantage · 3/4 · Distribution across 190 countries, dealers’ principal reliance on Caterpillar sales and servicing, and $24 billion of 2025 services revenues demonstrate an established commercial infrastructure. This supports a relationship-based advantage without inferring a moat from margins. Nonexclusivity and absent competitor service comparisons limit its assessed breadth.

durability · 2/4 · Worldwide coverage persists across the 2023 and 2025 disclosures, supported by a substantial services business. Dealer counts declined from 156 to 150 and countries served from 191 to 190; the cause is undisclosed. Nonexclusive relationships and limited historical evidence support moderate durability rather than exceptional protection.

customer dependency · 2/4 · Services revenues and the remanufacturing core-return deposit demonstrate ongoing equipment-related engagement and some transaction-specific friction. They do not establish dependence on Caterpillar for subsequent equipment purchases. Alternative financing and penalty-free refinancing weaken a separate financing lock-in argument; maintenance can also be deferred.

erosion resilience · 2/4 · First-half 2026 pricing, revenue and operating profit recovered after realized 2025 pricing and manufacturing-cost pressure. That demonstrates resilience with material cyclicality. End-user sales and dealer inventory changes both contributed to growth, so recovery and backlog cannot establish competitive share gains or immunity to erosion.

Pricing power50

Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.

realized pricing · 2/4 · Favorable pricing in 2023–2024, unfavorable realization of $817 million in 2025, and favorable realization of approximately $1.0 billion in first-half 2026 demonstrate meaningful but inconsistent pricing ability. The measure excludes currency and new introductions but includes geographic mix, limiting attribution to comparable-product price changes.

retention · 2/4 · The sizeable services business demonstrates continued engagement with equipment-related needs, while higher first-half 2026 end-user sales support demand indirectly. These are indirect retention indicators, not identified repeat purchasers or renewals. Lower end-user equipment sales in 2024 and possible maintenance deferrals constrain the assessment.

margin resilience · 2/4 · Pricing helped offset lower volume in 2024, although the divestiture comparison also helped profit. In 2025, unfavorable pricing and manufacturing costs reduced profit. First-half 2026 operating profit increased faster than revenue, with substantial volume support. The combined record demonstrates recovery rather than reliable cost pass-through.

contractual freedom · 2/4 · Announced price increases and actual dealer discount programs establish discretion over commercial pricing. Customer acceptance constrains that discretion, and finance receivables generally permit penalty-free refinancing. Equipment contract duration and rights to reprice existing orders are missing, so demonstrated pricing flexibility does not establish broad contractual protection.

Predictability92

5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.

Nondeclining revenue years (%): 75.00
Revenue growth volatility (pp): 7.74
Positive FCF years (%): 100.00
FCF margin volatility (pp): 2.20
observedAnnualPeriods: 5.00

Source 1 Source 2 Source 3 Source 4 Source 5

Financial strength47

Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.

debtFcfGrade: 44.88
netDebtEbitGrade: 40.18
interestCoverageGrade: 48.85
currentRatioGrade: 54.85
Debt / FCF (x): 4.86
Net debt / operating income (x): 2.99
Current ratio (x): 1.44
cashInterestPaid: 1842.00
cashInterestCoverage: 6.37

Source 1 Source 2 Source 3 Source 4 Source 5

Capital allocation100

Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.

3-year pre-tax operating return (%): 24.60
3-year average dilution (%): -3.74
3-year average SBC / revenue (%): 0.34
cashConversionGrade: 100.00

Source 1 Source 2 Source 3 Source 4 Source 5

Management56

Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.

capital discipline · 2/4 · Reported 2025 non-GAAP MP&E free cash flow of $9.5 billion exceeded $7.9 billion of distributions. In first-half 2026, $6.522 billion of buybacks plus $1.399 billion of dividends exceeded $6.241 billion of consolidated operating cash flow before capital expenditures. Cash declined while MP&E debt barely changed; repurchase value and investment returns remain unproven.

incentive alignment · 3/4 · Actual compensation design combines substantial variable pay with multiyear equity, including PRSUs tied to ROIC and relative shareholder returns; 2026 grants are confirmed. Three-year performance periods support alignment. Historical ROE-only awards, tariff-adjusted annual incentives and missing individual ownership compliance prevent an exceptional assessment.

execution · 2/4 · First-half 2026 revenue, operating profit and cash-flow growth demonstrate operating delivery; firm backlog supports continued demand, not completed execution. These results follow a 2025 profit decline and include dealer inventory contributions. Execution is assessed indirectly from operating outcomes and cannot be separated fully from end-market conditions.

governance · 2/4 · Audit Committee activity, lead independent oversight, annual elections and shareholder protections support accountability; June results confirm the nominees’ election. Combined CEO/chair leadership, the 25 percent special-meeting threshold and rejection of written consent limit shareholder control. The disclosures establish governance arrangements, without demonstrating exceptional oversight effectiveness.

Evidence

We distribute our machines principally through a worldwide organization of dealers (dealer network), 41 located in the United States and 109 located outside the United States, serving 190 countries.
2025 Form 10-K, filed 2026-02-13; business—dealer network · Filed 13/02/2026

Our dealers do not deal exclusively with our products; however, in most cases sales and servicing of our products are the dealers’ principal business.
2025 Form 10-K, filed 2026-02-13; business—dealer nonexclusivity and principal business · Filed 13/02/2026

We distribute our machines principally through a worldwide organization of dealers (dealer network), 43 located in the United States and 113 located outside the United States, serving 191 countries.
2023 Form 10-K, filed 2024-02-16; business—historical dealer coverage · Filed 16/02/2024

Services revenues(5) totaled $24 billion in 2025.
2026 proxy, filed 2026-04-30; 2025 services revenues · Filed 30/04/2026

(5) MP&E 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.
2026 proxy, filed 2026-04-30; footnote 5—MP&E services revenue scope and exclusions · Filed 30/04/2026

In connection with the sale of our remanufactured product to dealers, we collect a deposit that is repaid if the dealer returns an acceptable core within a specified time period.
2025 Form 10-K, filed 2026-02-13; business—remanufacturing core-return deposit · Filed 13/02/2026

Examples of global competitors include CASE (part of CNH Industrial N.V.), Deere Construction & Forestry (part of Deere & Company), Doosan Bobcat (Part of Doosan Group), Hitachi Construction Machinery Co., Ltd., Hyundai Construction Equipment Co., Ltd., Hyundai Doosan Infracore Co., Ltd.
2025 Form 10-K, filed 2026-02-13; competition—named global competitors · Filed 13/02/2026

Bamford Excavators Ltd., Kobelco Construction Machinery (part of Kobe Steel, Ltd), Komatsu Ltd., Kubota Farm & Industrial Machinery (part of Kubota Corporation), Sany Heavy Industry Co., Ltd., and Volvo Construction Equipment (part of the Volvo Group).
2025 Form 10-K, filed 2026-02-13; competition—additional named global competitors · Filed 13/02/2026

Reduction in these capital expenditures may lead to decreased demand for Caterpillar products and services as well as aftermarket parts as customers may choose to extend preventative maintenance and delay overhauls when possible.
2025 Form 10-K, filed 2026-02-13; risk—potential maintenance and overhaul deferral · Filed 13/02/2026

Thus, our share of industry sales could be reduced due to aggressive pricing or product strategies pursued by competitors, unanticipated product or manufacturing difficulties, our failure to price our products competitively, our failure to produce our products at a competitive cost or an unexpected buildup in competitors’ new machine or dealer-owned rental fleets, which could lead to downward pressure on machine rental rates and/or used equipment prices.
2025 Form 10-K, filed 2026-02-13; risk—competitive pricing and potential share pressure · Filed 13/02/2026

The increase was primarily driven by higher sales volume of $3.389 billion, partially offset by unfavorable price realization of $817 million.
2025 Form 10-K, filed 2026-02-13; 2025 sales bridge—volume and unfavorable price realization · Filed 13/02/2026

Cat Financial operates in a highly competitive environment, with financing for users of Caterpillar equipment and services available through a variety of sources, principally commercial banks and finance and leasing companies.
2025 Form 10-K, filed 2026-02-13; competition—alternative equipment financing · Filed 13/02/2026

Cat Financial’s finance receivables generally may be repaid or refinanced without penalty prior to contractual maturity.
2025 Form 10-K, filed 2026-02-13; finance receivables—penalty-free repayment or refinancing · Filed 13/02/2026

20.Price Realization – The impact of net price changes excluding currency and new product introductions.
2025 Form 10-K, filed 2026-02-13; glossary—price realization definition · Filed 13/02/2026

Price realization includes geographic mix of sales, which is the impact of changes in the relative weighting of sales prices between geographic regions.
2025 Form 10-K, filed 2026-02-13; glossary—geographic mix included in price realization · Filed 13/02/2026

The increase was primarily due to favorable price realization and higher sales volume.
2023 Form 10-K, filed 2024-02-16; 2023 overview—favorable pricing and higher volume · Filed 16/02/2024

The profit impact of lower sales volume was more than offset by favorable price realization and the absence of the impact of the divestiture of the company's Longwall business in 2023.
2024 Form 10-K, filed 2025-02-14; 2024 profit bridge—pricing, volume and divestiture effects · Filed 14/02/2025

Lower sales volume was primarily driven by lower sales of equipment to end users.
2024 Form 10-K, filed 2025-02-14; 2024 volume decline—equipment sales to end users · Filed 14/02/2025

Profit was $8.884 billion in 2025, compared with $10.792 billion in 2024.
2025 Form 10-K, filed 2026-02-13; overview—2025 versus 2024 profit · Filed 13/02/2026

The decrease was mainly due to unfavorable manufacturing costs and unfavorable price realization, partially offset by the profit impact of higher sales volume.
2025 Form 10-K, filed 2026-02-13; overview—realized profit decline drivers · Filed 13/02/2026

Unfavorable manufacturing costs largely reflected the impact of higher tariffs.
2025 Form 10-K, filed 2026-02-13; overview—tariff contribution to manufacturing costs · Filed 13/02/2026

The increase was primarily due to higher sales volume of $5.4 billion and favorable price realization of $1.0 billion.
June 2026 Form 10-Q, filed 2026-08-05; first-half 2026 sales bridge—volume and pricing · Filed 05/08/2026

The increase in sales volume was mainly driven by higher sales of equipment to end users and the impact from changes in dealer inventories.
June 2026 Form 10-Q, filed 2026-08-05; first-half volume drivers—end users and dealer inventories · Filed 05/08/2026

Consolidated Statement of Results of Operations (Unaudited) (Dollars in millions except per share data) Six Months Ended June 30, 2026 2025 Sales and revenues: Sales of Machinery, Power & Energy $ 36,054 $ 29,052 Revenues of Financial Products 1,904 1,766 Total sales and revenues 37,958 30,818 Operating costs: Cost of goods sold 24,087 19,772 Selling, general and administrative expenses 3,834 3,287 Research and development expenses 1,153 1,031 Interest expense of Financial Products 707 662 Other operating (income) expenses 797 627 Total operating costs 30,578 25,379 Operating profit 7,380 5,439 Interest expense excluding Financial Products 269 242 Other income (expense) 658 191 Consolidated profit before taxes 7,769 5,388 Provision (benefit) for income taxes 1,725 1,220 Profit of consolidated companies 6,044 4,168 Equity in profit (loss) of unconsolidated affiliated companies 97 14 Profit of consolidated and affiliated companies 6,141 4,182 Less: Profit (loss) attributable to noncontrolling interests (1) — Profit 1 $ 6,142 $ 4,182 Profit per common share $ 13.29 $ 8.85 Profit per common share – diluted 2 $ 13.23 $ 8.82 Weighted-average common shares outstanding (millions) – Basic 462.0 472.4 – Diluted 2 464.3 474.5 1 Profit attributable to common shareholders.
June 2026 Form 10-Q, filed 2026-08-05; unaudited consolidated results—six months ended June 30, 2026 and 2025, dollars in millions except per-share data · Filed 05/08/2026

At the end of the second quarter of 2026, the dollar amount of backlog believed to be firm was approximately $72.1 billion, about $9.4 billion higher than the first quarter of 2026.
June 2026 Form 10-Q, filed 2026-08-05; backlog believed firm at second-quarter end · Filed 05/08/2026

We provide discounts to dealers through merchandising programs.
2025 Form 10-K, filed 2026-02-13; commercial pricing—dealer merchandising discounts · Filed 13/02/2026

Lack of customer acceptance of price increases we announce from time to time, changes in customer requirements for price discounts, changes in our customers’ behavior or a weak pricing environment could have an adverse impact on our business, results of operations and financial condition.
2025 Form 10-K, filed 2026-02-13; risk—announced price increases and customer acceptance · Filed 13/02/2026

MP&E free cash flow(3) was $9.5 billion in 2025.
2026 proxy, filed 2026-04-30; 2025 MP&E free cash flow · Filed 30/04/2026

(3) MP&E free cash flow is a non-GAAP measure, and a reconciliation to the most directly comparable GAAP measure is included on page 82.
2026 proxy, filed 2026-04-30; footnote 3—MP&E free cash flow is non-GAAP · Filed 30/04/2026

Deployed $7.9 billion to shareholders through share repurchases and dividends.
2026 proxy, filed 2026-04-30; 2025 shareholder distributions · Filed 30/04/2026

Operating & Execution Model used to assess operational commitments and strategic growth initiatives – Capital expenditures were $1.313 billion during the first six months of 2026, compared to $1.287 billion for the same period in 2025.
June 2026 Form 10-Q, filed 2026-08-05; first-half capital expenditures · Filed 05/08/2026

Consolidated operating cash flow for the first six months of 2026 was $6.241 billion, up $1.830 billion compared to the same period a year ago.
June 2026 Form 10-Q, filed 2026-08-05; first-half consolidated operating cash flow · Filed 05/08/2026

In the first six months of 2026, we deployed $6.522 billion of cash for repurchases of Caterpillar common stock.
June 2026 Form 10-Q, filed 2026-08-05; first-half cash deployed for repurchases · Filed 05/08/2026

Dividends paid totaled $1.399 billion in the first six months of 2026.
June 2026 Form 10-Q, filed 2026-08-05; first-half dividends paid · Filed 05/08/2026

On a consolidated basis, we had positive operating cash flow in the first six months of 2026 and ended the second quarter with $6.713 billion of cash, a decrease of $3.267 billion from year-end 2025.
June 2026 Form 10-Q, filed 2026-08-05; second-quarter-end cash and change from year-end 2025 · Filed 05/08/2026

Debt related to MP&E decreased $7 million in the first six months of 2026.
June 2026 Form 10-Q, filed 2026-08-05; first-half MP&E debt change · Filed 05/08/2026

NEO compensation is composed of three primary components: BASE SALARY Competitive pay to attract and retain talented executives ANNUAL INCENTIVE PLAN (AIP) An opportunity to earn an annual cash award based on the company’s financial performance and strategic business objectives LONG-TERM INCENTIVE A mix of performance-based restricted stock units (PRSUs), time-based restricted stock units (RSUs) and stock options to align management’s interests with long-term shareholders’ interests Approximately 92 percent of our CEO’s 2025 total targeted compensation was variable and/or at-risk compensation, including 50 percentof long-term incentives delivered in the form of PRSUs with two equally-weighted performance metrics, Return on Invested Capital (ROIC) and relative Total Shareholder Return (rTSR) as compared to the S&P Capital Goods peer group, 25 percent delivered in the form of time-based RSUs, and 25 percent delivered in the form of stock options.
2026 proxy, filed 2026-04-30; actual 2025 compensation design and ROIC/rTSR metrics · Filed 30/04/2026

PRSU awards generally have a three-year performance period and cliff vest at the end of the period based upon achievement of performance targets established at the time of grant.
2025 Form 10-K, filed 2026-02-13; PRSU performance period and cliff vesting · Filed 13/02/2026

The following table illustrates the type and fair value of the stock-based compensation awards granted during the six months ended June 30, 2026 and 2025: Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 Shares Granted Weighted-Average Fair Value Per Share Shares Granted Weighted-Average Fair Value Per Share Stock options 126,660 $ 270.41 299,523 $ 106.04 RSUs 224,552 $ 758.15 442,800 $ 333.10 PRSUs 86,114 $ 925.49 199,856 $ 345.60 13 Table of Contents The fair value of our stock options was estimated using the Black-Scholes option-pricing model.
June 2026 Form 10-Q, filed 2026-08-05; awards granted during six months ended June 30, 2026 and 2025 · Filed 05/08/2026

The earned award reflected strong company results against pre-determined performance goals, and was adjusted for tariffs as described on page 54.
2026 proxy, filed 2026-04-30; 2025 annual incentive—tariff adjustment · Filed 30/04/2026

The 2023–2025 performance period was the last one with PRSUs that were composed of a single return on equity (ROE) metric.
2026 proxy, filed 2026-04-30; historical PRSU reliance on ROE · Filed 30/04/2026

Our governance framework includes, but is not limited to, the following highlights: Board and Governance Information* Board and Governance Information Size of the Board 10 Code of Conduct for Directors, Officers and Employees Yes Number of Independent Directors 9 Supermajority Voting Threshold for Mergers No Average Age of Directors 65 Proxy Access Yes Average Director Tenure (in years) 5.5 Shareholder Action by Written Consent No Annual Election of Directors Yes Shareholder Ability to Call Special Meetings Yes Mandatory Retirement Age 75 Poison Pill No Women 50% Stock Ownership Guidelines for Directors and Executive Officers Yes Ethnic/Racial Diversity 30% Anti-Hedging and Pledging Policies Yes Majority Voting in Director Elections Yes Clawback Policy Yes Lead Independent Director Yes * The information in this table reflects only the director nominees standing for election.
2026 proxy, filed 2026-04-30; governance provisions and director-nominee scope qualifier · Filed 30/04/2026

On April 1, 2026, Joe Creed became chairman of the board, succeeding Jim Umpleby after his forty-five years of dedicated service.
2026 proxy, filed 2026-04-30; April 1, 2026 chair succession · Filed 30/04/2026

The AC has discussed with the company’s independent auditor the overall scope and execution of the independent audit and has reviewed and discussed the audited financial statements with management.
2026 proxy, filed 2026-04-30; Audit Committee review and independent-auditor discussions · Filed 30/04/2026

To that end, the Company allows shareholders of 25 percent or more, in the aggregate, of Caterpillar’s shares to call a special shareholder meeting.
2026 proxy, filed 2026-04-30; 25 percent special-meeting threshold · Filed 30/04/2026

Proposal 1 - Company Proposal - Election of Directors All nominees for election to the Company’s Board of Directors named in the Proxy Statement were elected, each to a one-year term, with the following vote: Director For Against Abstain Broker Non-Votes Joseph E.
Annual-meeting results Form 8-K, filed 2026-06-11; all director nominees elected to one-year terms · Filed 11/06/2026

the Company's governing documents to permit shareholder action by written consent was not approved based on the following vote: For Against Abstain Broker Non-Votes 127,707,438 195,268,191 2,477,721 68,032,649 Item 7.01 Regulation FD Disclosure On June 10, 2026, the Board of Directors declared a quarterly cash dividend of one dollar and sixty-three cents ($1.63) per share of Company
Annual-meeting results Form 8-K, filed 2026-06-11; written-consent proposal not approved · Filed 11/06/2026

Publication history

Publication history
Version	Updated	Competitive advantage
10	29/10/2026	narrow
9	27/10/2026	narrow
8	24/10/2026	narrow
7	23/10/2026	narrow
6	22/10/2026	narrow
5	19/10/2026	narrow
4	18/10/2026	narrow
3	18/10/2026	narrow
2	18/10/2026	narrow
1	18/10/2026	Unavailable

Sources

Research methodology and limitations · What is an economic moat?