Caterpillar chairman and chief executive officer Doug Oberhelman said the company had agreed to repurchase $1 billion of its common stock from Citibank, with an immediate delivery of approximately 11 million shares based on current market prices.

“The strength of our balance sheet coupled with our very strong cashflow performance makes this an opportune time to take this important action to reward stockholders through not only dividends but also by the resumption of our stock repurchase program,” he said.

“This $1 billion accelerated stock repurchase program also underscores our confidence in Caterpillar’s long-term prospects for growth and affirms our commitment to deliver superior returns to stockholders through the cycles.”

The final number of shares to be repurchased and the aggregate cost to Caterpillar will be based on Caterpillar's volume-weighted average stock price during the term of the transaction, which is expected to be completed in June 2013.

In February 2007, the board of directors authorized the repurchase of $7.5 billion of Caterpillar stock.

In December 2011 the authorization was extended through December 2015.

Through the end of 2008, $3.8 billion of the $7.5 billion authorization was spent and no shares of stock have been repurchased since then.