CATERPILLAR INC (CAT) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that CATERPILLAR INC surfaced in its latest filing.

• Cat Financial's ability to access funding could be adversely affected; it has continued to maintain access to key global medium-term note and commercial paper markets.
• Cat Financial's borrowing agreements are primarily with financial institutions, and their ability to perform could be adversely affected by market volatility.
• Cat Financial must not exceed a certain leverage ratio of consolidated debt to consolidated net worth, calculated as the average of the leverage ratios on the last day of each of the six preceding calendar months and at each December 31.
• Cat Financial must maintain a minimum interest coverage ratio of profit excluding income taxes, interest expense and net gain/loss from interest rate derivatives to interest expense, calculated at each fiscal quarter for the prior four fiscal quarter period.
• Cat Financial must not terminate, amend or modify its support agreement with Caterpillar.
• Subject to the European Union's General Data Protection Regulation, which carries significant potential penalties for noncompliance.
• Subject to the California Consumer Privacy Act, which carries significant potential penalties for noncompliance.
• Subject to U.S. regulations issued by Customs and Border Protection, the Bureau of Industry and Security, the Office of Antiboycott Compliance, the Directorate of Defense Trade Controls, and the Office of Foreign Assets Control.
• U.S. Foreign Corrupt Practices Act and similar foreign anti-corruption laws generally prohibit improper payments.
• Cat Financial is subject to the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
• The Company’s amended and restated bylaws designate the Court of Chancery of the State of Delaware as the exclusive forum for certain legal actions, including derivative actions and claims of breach of fiduciary duty.
• A breach of restrictive covenants could trigger acceleration of amounts outstanding under certain facilities.
• A breach of restrictive covenants could trigger an obligation to redeem certain debt securities.
• Restrictive covenants include limitations on the incurrence of liens and sales and leaseback transactions.
• Restrictive covenants include restrictions on the transfer of certain property.
• Restrictive covenants include certain restrictions on consolidation and merger.
• Certain loans made by Cat Financial and various financing extended to it use variable rates referencing SOFR.
• Cat Financial provides financing support for a significant share of global sales.
• A significant number of loans made by Cat Financial are at fixed interest rates, causing its results to be subject to interest rate fluctuations.
• Prior cybersecurity threats and vulnerabilities have been experienced in our systems and those of third-party providers.