Illinois High Impact Business Dividend Designation

IMPORTANT TAX INFORMATION

PLEASE RETAIN FOR YOUR TAX RETURN PREPARATION

January 10, 2017

Dear Shareholder:

You may be permitted to subtract your Caterpillar Inc. dividends, as reported on Form 1099-DIV, from your base income for Illinois income tax purposes.

Under Illinois law, dividends received from a corporation that conducts business in a Foreign Trade Zone or Sub-Zone and is designated a “High Impact Business” are eligible for the subtraction modification from Illinois base income. The Illinois Department of Commerce and Economic Opportunity has designated Caterpillar Inc. as an Illinois High Impact Business (“HIB”). Additionally, Caterpillar Inc. is located in a federally designated Foreign Trade Sub-Zone (Peoria/Sub Zone 114A).

As each individual's situation can vary, please consult your own tax advisor if you have any questions regarding the appropriate treatment of your 2016 Caterpillar Inc. dividend income.