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Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

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The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500-2023-068-Caterpillar

The 100-year-old construction equipment company rose five spots in 2023 from No. 73 last year. In the 2022 fiscal year, Caterpillar’s sales and revenue rose 16.6% to $59.4 billion, marking one of the best years in company history. 
<ul> 
 	<li>Caterpillar moved its global headquarters from Deerfield, Ill., to Irving, Texas, in 2022.</li> 
 	<li>To cope with inflation and increasing costs, Caterpillar raised its equipment prices, which helped boost its sales.</li> 
 	<li>But the heavy-machinery maker still had its fair share of struggles in 2022 in the form of COVID-era supply-chain snarls, inflationary forces, and slow pickup in Chinese demand.</li> 
 	<li>In October 2022, Caterpillar waived an internal policy that would have required CEO Jim Umpleby to retire when he turns 65, allowing him to continue as the top executive.</li> 
 	<li>The company is the world’s leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives, and now has roughly 60% of its operations outside the U.S.</li> 
</ul>

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Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

F500-2022-073-Caterpillar

Caterpillar recovered some of the ground it lost in 2020 after the pandemic brought construction to a near standstill worldwide. The company climbed five spots on the list this year, with 2021 revenue increasing 22% to $51 billion. Its profits increased dramatically as well, more than doubling. The gains reflected the pent-up demand for Caterpillar’s heavy machinery as construction projects picked up.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;The 96-year-old construction machinery giant continued to slide in the Fortune 500 rankings, dropping 16 spots in 2020. Caterpillar’s bottom line suffered across all regions throughout the pandemic owing to lower demand. But the manufacturing sector has seen recovery start to pick up as more businesses reopen, and total industrial production rose 2.5% year over year in 2020. That, combined with improved commodity prices, hints at a better year ahead for the world’s largest construction-equipment manufacturer.&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri, Arial&quot;,&quot;16&quot;:11}" data-sheets-textstyleruns="{&quot;1&quot;:0}{&quot;1&quot;:71,&quot;2&quot;:{&quot;6&quot;:1}}{&quot;1&quot;:78}">The 96-year-old construction machinery giant continued to slide in the Global 500 rankings, dropping 79 spots in 2020. Caterpillar’s bottom line suffered across all regions throughout the pandemic owing to lower demand. But the manufacturing sector has seen recovery start to pick up as more businesses reopen, and total industrial production rose 2.5% year over year in 2020. That, combined with improved commodity prices, hints at a better year ahead for the world’s largest construction-equipment manufacturer.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-78-Caterpillar

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;The 96-year-old construction machinery giant continued to slide in the Fortune 500 rankings, dropping 16 spots in 2020. Caterpillar’s bottom line suffered across all regions throughout the pandemic owing to lower demand. But the manufacturing sector has seen recovery start to pick up as more businesses reopen, and total industrial production rose 2.5% year over year in 2020. That, combined with improved commodity prices, hints at a better year ahead for the world’s largest construction-equipment manufacturer.&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri, Arial&quot;,&quot;16&quot;:11}" data-sheets-textstyleruns="{&quot;1&quot;:0}{&quot;1&quot;:71,&quot;2&quot;:{&quot;6&quot;:1}}{&quot;1&quot;:78}">The 96-year-old construction machinery giant continued to slide in the Fortune 500 rankings, dropping 16 spots in 2020. Caterpillar’s bottom line suffered across all regions throughout the pandemic owing to lower demand. But the manufacturing sector has seen recovery start to pick up as more businesses reopen, and total industrial production rose 2.5% year over year in 2020. That, combined with improved commodity prices, hints at a better year ahead for the world’s largest construction-equipment manufacturer.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-204-Caterpillar

After a stellar 2018, the 95-year-old construction and farm machinery maker slipped a bit in 2019. Total revenue for fiscal 2019 came in at $53.8 billion, down 2% from the year prior. Tensions between the U.S. and China, one of Caterpillar's biggest markets, have hurt sales, and the broader economic slowdown presents an even more daunting near-term challenge. But Caterpillar has given investors incentives to stick with it during a slow patch: The manufacturer returned more than $6 billion in capital to shareholders in 2019, and increased its dividend by 20%.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-062-Caterpillar

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

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The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Sector

Industry

Current All-Star Rank

Previous All-Star Rank

Industry Rank

Previous Industry Rank

Overall Score

Innovation

People Management

Use of Corporate Assets

Social Responsibility

Quality of Management

Financial Soundness

Long-Term Investment Value

Quality of Products/Services

Global Competitiveness

Strongest Dimension

Years on list

Previous rank

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Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

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Profits as % of Stockholder Equity

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Caterpillar is a global manufacturer of construction and mining equipment, industrial turbines, engines, and diesel-electric locomotives. Formed from the merger of two competitors in 1925, Caterpillar traces its origins to the fertile San Joaquin Valley, California’s agricultural heartland. The company’s name stems from one of the founders’ inventions, which replaced a steam tractor’s rear wheels with a track system that observers likened to a caterpillar as the machine crawled across soggy terrain. Caterpillar has seen its bright yellow machines become a familiar sight at construction sites around the world, while its employees develop products for industries ranging from oil and gas drilling and power generation to marine and rail technology.

Q2 2026

Q1 2026

Q4 2025

Q2 2025

Q1 2025

Q4 2024

Caterpillar (CAT): Company Profile, Stock Price, News, Rankings

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Caterpillar

caterpillar

Welcome to the 4th Quarter 2024 Caterpillar Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Alex Capper. Thank you, and please go ahead.

Thank you, Audra. Good morning, everyone, and welcome to Caterpillar's Q4 of 2024 Earnings Call. I'm Alex Capper, Vice President-elect of Investor Relations. Joining me today are Jim Ogilby, Chairman and CEO Andrew Bonfield, Chief Financial Officer Kyle Epley, Senior Vice President of Global Finance Services Division Ryan Fiedler, Vice President of IR and Rob Rangel, Senior Director of IR. During our call, we'll be discussing the Q4 earnings release we issued earlier today.

You can find our slides, the news release and a webcast recap at investors. Caterpillar.com under Events and Presentations. The content of this call is protected by U. S. And international copyright law.

Any rebroadcast, retransmission, reproduction or distribution of all or part of this content without Caterpillar's prior written permission is prohibited. Moving to slide 2. During our call today, we'll make forward looking statements, which are subject to risks and uncertainties. We'll also make assumptions that could cause our actual results to be different than the information we're sharing with you on this call. Please refer to our recent SEC filings and the forward looking statements reminder in the news release for details on factors that individually or in aggregate could cause our actual results to vary materially from our forecast.

A detailed discussion of the many factors that we believe may have a material effect on our business on an ongoing basis is contained in our SEC filings. On today's call, we'll also refer to non GAAP numbers. For a reconciliation of any non GAAP numbers to the appropriate U. S. GAAP numbers, please see the appendix of the earnings call slides.

Now let's advance to Slide 3 and turn the call over to our Chairman and CEO, Jim Umpleby.

Thanks, Alex. Good morning, everyone. Thank you for joining us. As we close out 2024, I want to thank our global team for their strong execution and delivering another good year.

Our results continue to reflect the benefit of the diversity of our end markets and the disciplined execution of our strategy for long term profitable growth. For the year, we delivered record adjusted profit per share and higher adjusted operating profit margin that exceeded the top of our target range. Although our top line decreased in the year, services revenue grew to a record level. We also generated ME and T free cash flow near the top of the target range. Our robust ME and T free cash flow, along with our strong balance sheet, allowed us to deploy over $10,000,000,000 to shareholders through share repurchases and dividends during the year.

I'll begin with my perspectives about our performance in the quarter and for the full year. I'll then provide some insights about our end markets, followed by an update on our sustainability journey. For the Q4, sales and revenues were down 5% versus last year, primarily due to lower sales volume. This was slightly below our expectations, mainly due to services growing at a slightly slower rate than we expected and some delivery delays in energy and transportation. Services revenues did increase in the quarter compared to 2023.

Stronger than expected machine sales to users drove a higher than anticipated dealer inventory reduction, which offset each other, resulting in a minimal impact to sales. 4th quarter adjusted operating profit margin was below our expectations at 18.3%, primarily due to lower volume and an unfavorable mix of products. We achieved quarterly adjusted profit per share of $5.14 and generated $3,000,000,000 of ME and T free cash flow. Since last quarter end, our backlog increased by $1,300,000,000 to $30,000,000,000 For the full year, total sales and revenues were $64,800,000,000 a decrease of 3% compared to 2023. Services revenues increased 4% to $24,000,000,000 Adjusted operating profit margin of 20.7 percent exceeded the top end of the target range as we expected and represents a slight improvement from 2023.

We achieved record adjusted profit per share in 2024 of $21.90 a 3% increase over 2023. In addition, we generated $9,400,000,000 of ME and T free cash flow, which was near the top of our target range as we expected. Since 2019, we have generated approximately $40,000,000,000 of ME and T free cash flow, of which we have returned substantially all to shareholders through share repurchases and dividends, including $10,300,000,000 in 2024. Our strong and consistent ME and T free cash flow has allowed us to reduce the average number of shares outstanding by approximately 18% since the beginning of 2019. Turning to slide 4.

As I mentioned earlier, sales and revenues declined 5% in the Q4 to $16,200,000,000 Compared to the Q4 of 2023, machine sales to users, which includes construction industries and resource industries, declined by 3%, but was better than our expectations. Energy and transportation continued to grow as sales to users increased 2%. Sales to users in Construction Industries were down 3% year over year. In North America, sales to users were slightly lower, but better than we expected. Sales to users grew in residential construction, while non residential was down slightly.

Rental fleet loading was down, but in line with expectations, as we described during our last earnings call. Dealers rental revenue continued to grow in the quarter. Sales to users declined in EAME in Asia Pacific, in line with our expectations. Sales to users in Latin America continued to grow, but at a lower rate than we expected. In Resource Industries, sales to users declined 3%, which was better than we expected.

Mining was better than expected due to large mining and off highway trucks being placed into service earlier than we anticipated. Heavy construction and quarrying aggregates were in line with expectations. In energy and transportation, sales to users increased by 2%. Power generation sales to users grew 27% as conditions remained favorable for both reciprocating engines and turbines and turbine related services. Sales to users for reciprocating engines used in oil and gas applications declined primarily due to a challenging comparative to the Q4 of 2023.

For Solar Turbines and Turbine Related Services, 4th quarter sales were down in oil and gas compared to strong shipments in the Q4 of 2023. Most of Solar's 4th quarter decline in oil and gas was offset by growth in power generation. Transportation sales to users increased, while industrial declined. Moving to dealer inventory and backlog. In total, dealer inventory decreased by $1,300,000,000 versus the Q3 of 2024.

For machines, dealer inventory decreased by $1,600,000,000 The decrease was more than we had anticipated due to better expected better than expected sales to users, particularly for Construction Industries in North America and Resource Industries. As I mentioned, backlog increased versus the Q3 to $30,000,000,000 led by Energy and Transportation. This is a $2,500,000,000 increase versus 2023 year end. Our backlog remains elevated as a percentage of revenues compared to historical levels. We continue to see strong order activity for both reciprocating engines and power generation and turbines and turbine related services in both oil and gas and power generation.

Turning to slide 5. I'll now provide full year highlights. In 2024, we generated sales and revenues of $64,800,000,000 down 3% versus last year. This was due to lower sales volume, partially offset by favorable price realization. Our adjusted operating profit margin was 20.7%, a 20 basis point increase over 2023, despite lower sales and revenues.

Adjusted profit per share in 2024 was $21.90 As I mentioned, services revenues increased to $24,000,000,000 in 2024, a 4% increase over 2023. Services continue to grow as we focus on making our customers successful. Working with our dealers, we are leveraging over 1,500,000 connected reporting assets and digital tools. Our cat digital tools allow customers to more efficiently improve uptime, manage their fleets and transact on our e commerce platforms. For example, this year we launched an internal generative AI solution designed to optimize the creation of intelligent leads, which we call prioritized service events or PSCs.

This tool significantly reduces the time and effort required for service recommendations, helping customers avoid unplanned downtime by clearly identifying the recommended repair options and timing for customers. In 2024, we delivered more than 2 thirds of new equipment with a customer value agreement, which remains an important part of our services growth initiatives. We also experienced better than expected growth in our e commerce platforms and have focused on improving our customer onboarding to include key digital products. Also in 2024, we saw record uses of VisionLink, our equipment management application, onboarding and activating thousands of new customers throughout the year. Services growth remains resilient despite the decline in our overall top line.

We continue to execute our various services initiatives as we strive towards our aspirational target of $28,000,000,000 in services revenues. Moving to slide 6. We generated robust ME and T free cash flow of $9,400,000,000 for the full year. We deployed $10,300,000,000 to shareholders through $7,700,000,000 of share repurchases and $2,600,000,000 of dividends paid. We remain proud of our dividend aristocrat status as we have paid higher annual dividends for 31 consecutive years.

We continue to expect to return substantially all ME and T free cash flow to shareholders over time through dividends and share repurchases. Now on slide 7, I'll describe our expectations moving forward. Overall, we currently anticipate 2025 sales and revenues to be slightly lower compared to 2024. In 2025, we expect continued strength in Energy and Transportation to mostly offset lower sales in Construction Industries and Resource Industries. We also expect services revenues to grow in 2025, including growth across all three primary segments.

We currently expect machine dealer inventory to end 2025 at similar levels to year end 2024. Full year adjusted operating profit margin is expected to be lower than 2024, but it is anticipated to be in the top half of the target range based on the corresponding level of sales and revenues. Finally, we expect ME and T free cash flow to be in the top half of our target range of $5,000,000,000 to $10,000,000,000 Now I'll discuss our outlook for key end markets starting with Construction Industries. In North America, we expect moderately lower sales to users in 2025 versus last year. Construction spend in North America remains healthy, primarily driven by large multiyear projects and government related infrastructure investments supported by funding from the IIJA.

Although we anticipate the combined nonresidential and residential construction spend to remain similar to 2024 levels, our current planning assumptions reflect lower demand for new equipment. We also expect lower dealer rental fleet loading compared to 2024, although dealer revenue is expected to grow. Overall, we remain positive about the medium and longer term outlook in North America. In Asia Pacific, outside of China, we expect soft economic conditions to continue into 2025. We anticipate China to remain at relatively low levels for the above 10 ton excavator industry.

In the EME, we anticipate weak economic conditions in Europe will continue and the healthy level of construction activity in Africa and the Middle East. Construction activity in Latin America is expected to decline moderately. We also anticipate the ongoing benefit of our services initiatives will positively impact Construction Industries in 2025. Moving to Resource Industries. We anticipate lower sales to users in 2025 compared to last year, partially offset by higher services revenues, including robust rebuild activity.

Customers continue to display capital discipline, although key commodities remain above investment thresholds. Customer product utilization remains high, the number of parked trucks remains relatively low, the age of the fleet remains elevated, and our autonomous solutions continue to see strong customer acceptance. We continue to believe the energy transition will support increased commodity demand over time, expanding our total addressable market and providing further opportunities for long term profitable growth. Moving to Energy and Transportation, demand is expected to remain strong in power generation and we expect growth for both cat reciprocating engines and solar turbines. Overall strength in power generation for both prime and backup power applications continues to be driven by increasing energy demand to support data center growth related to cloud computing and generative AI.

Through continued focus on improving manufacturing efficiencies along with initial stages of our investment to increase large engine output capacity, we expect growth in reciprocating engines for power generation in 2025. We also expect growth in solar turbines for power generation, driven by increased customer demand. For oil and gas, after a flat year in 2024, we expect moderate growth in 2025. We expect reciprocating engines and services to be slightly down in 2025 due to continuing capital discipline by our customers, industry consolidation and efficiency improvements in our customers' operations. Solar Turbines oil and gas backlog remains strong and we continue and we see continued healthy order and inquiry activity.

We expect growth for turbines and turbine related services in oil and gas. Demand for products in industrial applications is expected to remain at a relatively low level similar to 2024. In transportation, we anticipate full year growth driven by rail services. Moving to Slide 8, I'll now provide an update on our sustainability journey. Caterpillar's legacy of sustainable innovation spans nearly a century.

Throughout that time, we have provided products and services that improve the quality of life and the environment, while helping customers fulfill society's need for infrastructure in a sustainable way. Earlier this month, Caterpillar kicked off its year long centennial celebration at CES 2025 with the theme, The Next 100 Years, Experience What's Possible. We showcased our continuous investment in the core technologies of autonomy, alternative fuels, connectivity and digital and electrification. Our ability to provide these solutions reflects investments of more than $30,000,000,000 in R and D over the past 20 years to deliver best in class innovation. Taking center stage at the Caterpillar CES exhibit was a Cat 972 wheel loader retrofitted to be an extended range electrified machine hybrid technical demonstrator.

The demonstrator can run fully battery electric with 0 exhaust emissions for several hours. It has an onboard generator and charger that enables full day uptime without required investment in direct current or DC charging infrastructure. In initial testing, the demonstrator maintains or exceeds the performance of a CAT 972 internal combustion machine, while providing customers with the benefits of a hybrid system. With that, I'll turn it over to Andrew.

Thank you, Jim, and good morning, everyone. I'll begin with a summary of the 4th quarter and then provide more detailed comments, including some on the performance of the segments. Next, I'll discuss the balance sheet and free cash flow before concluding with comments on our high level assumptions for 2025 as well as expectations for the Q1. Beginning on Slide 9, sales and revenues were $16,200,000,000 a 5% decrease versus the prior year. As Jim mentioned, sales were slightly lower than we had anticipated, which together with unfavorable mix resulted in lower than expected margins for the quarter.

Adjusted operating profit was $3,000,000,000 and our adjusted operating profit margin was 18.3%. Profit per share was $5.78 in the 4th quarter compared to $5.28 in the Q4 of last year. Adjusted profit per share was $5.14 in the quarter, a 2% decrease compared to $5.23 last year. Adjusted profit per share excluded a discrete tax benefit of $0.46 for a tax law change related to currency translation. Mark to market gains of $0.23 for the re measurement of pension and other post employment plans was also excluded in addition to restructuring costs of $0.05 in the quarter.

Other income and expense was $185,000,000 favorable versus the prior year, mostly driven by a positive currency impact related to ME and T balance sheet translation, which compared to a negative impact in the Q4 last year. As I mentioned previously, we do not anticipate currency translation movements, so the positive impact in the Q4 of 2024 helped to offset the impact of operating profit being lower than expected. Excluding discrete items, the provision for income taxes in the Q4 of 2024 reflected a global annual effective tax rate of 22.2%. This was slightly lower than we had expected a quarter ago and benefited the quarter by $0.09 Finally, the year over year impact from the reduction in the average number of shares outstanding, primarily due to share repurchases, resulted in a favorable impact on adjusted profit per share of approximately $0.24 as compared to the Q4 of 2023. Moving on to Slide 10, I'll discuss the top line results for the Q4.

Sales and revenues decreased by 5% compared to the prior year, primarily impacted by lower sales volume. Price was unfavorable year over year and about in line with what we had expected. Lower volume was driven by the impact from changes in dealer inventories and a 2% year over year decrease in total sales to users. Total machine dealer inventory decreased by $1,600,000,000 in the quarter compared to $1,400,000,000 in the decrease in the prior year. The decrease in machine dealer inventory was larger than we had expected and is mostly a function of higher than anticipated sales to users across both construction industries in North America and resource industries.

Service revenues increased in the quarter compared to 2023. As I mentioned, the sales decrease in the quarter was slightly larger than we had anticipated. This was mostly due to services growing at a slightly slower rate than we had expected and some delivery delays in energy and transportation. Moving to operating profit on Slide 11. Operating profit in the 4th quarter decreased by 7% to $2,900,000,000 Adjusted operating profit decreased by 8% to $3,000,000,000 mainly due to the profit impact of lower than expected sales volume.

As I mentioned for the Q4, the adjusted operating profit margin was 18.3%, a 60 basis point decrease compared to the prior year. This was lower than we had anticipated mainly due to a lower than expected sales volume and the impact of unfavorable mix. On Slide 12, construction industry sales decreased by 8% in the Q4 to $6,000,000,000 This is slightly below our expectations on lower than anticipated volume. Compared to the prior year, the 8% sales decrease primarily due to unfavorable price realization and lower sales volume. The decrease in sales volume was mainly driven by lower sales of equipment to end users and dealers reducing their inventory by slightly more than they did during the Q4 of 2023.

By region, construction industry sales in North America decreased by 14%. In Latin America, sales increased by 6%. Sales in the EME region decreased by 1%. In Asia Pacific, sales decreased by 2%. 4th quarter profit for Construction Industries was $1,200,000,000 a 24% decrease versus the prior year.

This is primarily due to unfavorable price realization as a result of the impact of the post sales merchandising programs that we discussed with you in October. The segment's margin of 19.6 percent was a decrease of 3.90 basis points versus the prior year. The margin was lower than we had anticipated, primarily impacted by lower volume and unfavorable mix. Manufacturing costs were also unfavorable versus our expectations principally due to a headwind from cost absorption as our inventory and construction industries declined. Turning to Slide 13.

Resource industry sales decreased by 9% in the Q4 to $3,000,000,000 This is below our expectations mainly due to services growing at a slightly lower rate than we had anticipated. As we compared to the prior year, the 9% sales decrease was primarily due to lower sales volume, mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased more in the Q4 of 2024 than it did in the Q4 of 2023. 4th quarter profit for Resource Industries decreased by 22% versus the prior year to $466,000,000 This is mainly due to the profit impact of lower sales volume. The segment's margin of 15.7% was a decrease of 2 80 basis points versus prior year.

This was lower than we had anticipated primarily due to lower volume. Now on Slide 14, energy and transportation sales of $7,600,000,000 were about flat versus the prior year. Sales were slightly below our expectations due to a lower than expected services growth rate largely in oil and gas and the timing of deliveries of international locomotives. Compared to the prior year, sales were roughly flat as the impact of lower sales volume was mostly offset by favorable price realization. By application, power generation sales increased by 22%, transportation sales were lower by 1%, oil and gas sales decreased by 14% and industrial sales decreased by 14%.

4th quarter profit for energy and transportation increased by 3% versus the prior year to $1,500,000,000 The increase was primarily due to favorable price realization partially offset by the profit impact of lower sales volume. The segment's margin of 19.3% was an increase of 70 basis points versus the prior year. This was lower than we had anticipated, primarily due to lower than expected volume and an unfavorable mix of products. Moving to Slide 15, financial products revenues increased by 4% versus the prior year to about $1,000,000,000 primarily due to higher average earning assets in North America and higher average financing rates across all regions except North America. Segment profit decreased by 29 percent to $166,000,000 This was mainly due to an unfavorable impact from equity securities in addition to lower margin and a higher provision for credit losses.

Our customers financial health remains strong. Past dues were 1.56 percent in the quarter, down 23 basis points versus the prior year and our lowest level since 2,005. The allowance rate was 0.91% remaining near historic lows. Business activity at Care Financial remains healthy. Retail credit applications increased and our retail new business volume grew by 3% versus the prior year.

This was our highest level since 2012 supported by attractive finance packages for customers choosing to buy Caterpillar equipment. We continue to see proportionately more of ourselves financed through Cat Financial. In addition, demand for used equipment remains healthy and inventories remain at low levels. Conversion rates are above historical averages as customers choose to buy equipment at the end of their lease term. Moving on to Slide 16, we continue to generate strong ME and T free cash flow.

The $9,400,000,000 in 2024 was near the top end of our target range and just slightly lower than the prior year despite a larger payment for short term incentive compensation and higher capital expenditure. CapEx for the year was about $2,000,000,000 which was in line with our expectations. Moving to capital deployment, in 2024, we returned $10,300,000,000 to shareholders through repurchase stock and dividends. On share repurchases, we deployed $7,700,000,000 as we continue to fulfill our objective to be in the market on a more consistent basis. Our balance sheet remains strong with an enterprise cash balance of $6,900,000,000 In addition, we hold $2,000,000,000 in slightly longer dated liquid marketable securities to improve yields on that cash.

Now on Slide 17, let me start with a high level overview of our expectations for the full year. We expect a slight decrease in sales for 2025 with an unfavorable impact from both volume and price. Due to the impact of post sales merchandising programs, price realization should account for about a 1% decrease in sales for the full year. Our margins, the impact of price together with higher depreciation costs due to the investments we are making should result in adjusted operating profit margins being in the top half of the target range of the expected level of sales rather than being above the top end of the range as occurred in 2024. Our margin targets are progressive, so while we would expect volume to have an impact on absolute margins, our target is adjusted for lower sales.

We expect a slight headwind in other income and expense in 2025, primarily due to lower interest income, mostly due to lower interest rates as well as the absence of the positive currency benefit from ME and T balance sheet translation that occurred in 2024. As I mentioned, we do not anticipate translation movements in our expectations. We expect restructuring costs of approximately $150,000,000 to $200,000,000 in 2025. We anticipate a global annual effective tax rate of 23% for 2025 excluding discrete items. While the impact of the share buyback should be positive, we expect to have less ME and T free cash flow to deploy in 2025.

This implies a less favorable impact to profit per share in 2025 as compared to 2024. By segment, lower sales and construction industries and resource industries will be partially offset by sales growth in energy and transportation. For construction industries, we expect lower sales in 2025 based on the outlook Jim described and unfavorable price realization. In Resource Industries, we anticipate slightly lower sales versus 2024 driven by unfavorable price realization and slightly lower volume. Higher volumes and favorable price in energy and transportation should drive sales growth, but sales remain constrained until the benefits of the investments we are making in large engines begin to flow through beyond 2025.

We also anticipate another year of services growth in each of our primary segments. Currently, we do not anticipate a significant change in deleveraging machines by the end of 2025. Moving on to ME and T free cash flow, we expect to be in the top half of our target range of $5,000,000,000 to $10,000,000,000 The Q1 of 2025 will be impacted by a $1,400,000,000 cash outflow related to the payout of last year's incentive compensation. We anticipate CapEx of about $2,500,000,000 in 2025 as we continue to make disciplined investments that are right for our business, governed by a focus on growing absolute OpEx dollars. This includes the multiyear capital investment to expand our large engine volume output capability that we mentioned last year.

Turning to Slide 18, to assist with your modeling, I'll provide some color on the Q1. Starting with the top line, we expect lower sales versus the prior year. For perspective, in a typical year, we see our lower sales in the Q1 of the year. In 2025, we anticipate that trend to continue, but be more pronounced as sales in the Q1 should account for a lower percentage of full year sales than is typical by about 100 basis points. This decrease is mainly due to our expectations for dealer inventory movements and price, which primarily impacts machines.

Energy and transportation is expected to show normal seasonality with sales growing throughout the year. Let me explain. Although dealers did reduce machine inventory significantly in the Q4, they remain around the top end of the range as we enter 2025. This compares with dealer inventories in construction industries being towards the middle of the range at the beginning of 2024. As a result, we expect them to build correspondingly less machine inventory during the Q1 than the $1,100,000,000 that they built in the Q1 of 2024.

As we expect machine dealer inventory to be about flat by year end, we should see a tailwind to sales in the Q4 as we don't expect a similar machine dealer inventory change as we have seen in the last 2 years. We also expect unfavorable price realization for machines in the Q1 due to the impact of post sales merchandising programs. We would expect these price impacts to be greater for machines in the first half of the year as the noticeable impact of post sales merchandising programs started in the Q3 of 2024, making for an easier comparison in the second half. So to pull together the impact by segment, we anticipate lower sales in construction industries in the Q1 impacted by lower sales to users, the headwind from changes in dealer inventory and price. The impact of which should be similar to what we saw in the Q4 of 2024.

In resource industries in the Q1, we expect lower sales volume versus the prior year impacted by lower volume and unfavorable price realization. In Energy and Transportation, we anticipate similar sales in the Q1 versus the prior year as continued strength in power generation is about offset by lower oil and gas and transportation sales. Price should be positive for energy and transportation. Now I'll provide some color on Q1 margin expectations. Though enterprise margins are typically stronger in the Q1 compared to the remaining quarters of the year, we do not expect the seasonal trend to occur in 2025.

Compared to the prior year, we anticipate a lower enterprise adjusted operating profit margin in the Q1 due primarily to lower than usual volume and price. Volume is impacted by the lower build of machine dealer inventory and slightly lower sales to users for machines. Unfavorable price realization for machines is principally due to the factors I've discussed previously, which will be partially offset by favorable price in Energy and Transportation. We expect there will be improvement in Q1 margins offsetting the volume impact in the Q1 due to stronger volume in the Q4 than is typical. By segment in the Q1 in construction industries, we anticipate lower margins compared to the prior year due primarily to lower volume and price.

We do not expect to see the margin benefit we typically see in the Q1 of the year as compared to the Q4 of the prior year, which is generally in the range of 100 to 200 basis points. Again, some of this will be offset in the Q4 as volume is favorable and price more neutral. In Resource Industries, we anticipate lower margin in the Q1 compared to the prior year, mainly due to lower volume and unfavorable price realization. In Energy and Transportation, we expect slightly lower margin versus the prior year as favorable price realization is more than offset by higher manufacturing costs and unfavorable mix impacts. Again, as a reminder, this detail is provided to help you model the Q1 and does not impact our expectations for the full year that I set out earlier, which is a slight decrease in sales and revenues for the year and margins in the top half of the target range.

So turning to Slide 19, let me summarize. Adjusted profit per share of $21.90 exceeded last year's record by 3%. This was our 3rd straight year with record adjusted profit per share. Adjusted operating profit margin of 20.7 percent exceeded the top of our target range. ME and T free cash flow of $9,400,000,000 was near the top of the target range of $5,000,000,000 to $10,000,000,000 For 2025, while we expect a slight drop in sales, we expect to be in the top half of the adjusted operating profit margin range and the top half of the MET free cash flow target range and we anticipate another year of services growth.

We continue to execute our strategy for long term profitable growth. And with that, we'll take your questions.

Thank you. We will now begin the question and answer session. Please note, we are only allowing one question per analyst. Your first question comes from the line of Steven Volkmann with Jefferies.

Steve, hello. Good morning, everybody. I guess I'll dive in if I could since it's timely. Just

are you seeing the data center business now? There's obviously some concern about what that's going to look like longer term. I know you're adding some capacity. Can you just discuss any changes in your view relative to data center demand?

Yes. We continue to see strong demand for both our reciprocating engines and our gas turbines. Just in conversations with customers, it's really all about how quickly can you increase capacity for your reciprocating engines and how quickly can you get us our large gas turbine. So we're very encouraged about what we see happening in the marketplace. Many customers are planning orders with us over multiple years to ensure that we can meet their needs.

And as a reminder, we said that with the investments we're making in our larger reciprocating engines, we're expanding capacity by about 125% over 2023 that will happen over the next several years. And with solar, we have a new product, the Titan 350, we're quite we're very encouraged by the acceptance in the market that we're seeing for that product. And of course, a lot of it is being driven by data centers. So again, still very, very positive from our perspective.

We'll go next to Michael Feniger at Bank of America.

morning, guys. Thanks for taking my question. Just on the for dealers, just to see the inventory, I think in 2023, machines built $700,000,000 for the full year, dollars 20 24, inventory was down $700,000,000 I know you guys are thinking North America Construction end user is down a little bit on 25%. So how do you kind of get comfortable with where those dealer inventories are going to stay the same on the machine side? And did anything change post election in terms of the views around the inventories?

Because I think there was some comments that the retail sales end use was a little bit better than expected in terms of how it's informing your view on 2025? Thanks, everyone.

Yes. So as you correctly point out, we did see a dealer inventory build for machines in 2023. Most of that actually was in resource industries, rather than construction industries. And in fact, most of the decline this year year over year actually is in resource industries rather than construction industries. So that's part of the balance.

As we know with Resource Industries, a lot of that is around timing of commissioning. We did see better than we expected commissioning in the Q4, which will have some impact in the Q1 of 2025, but that was a positive as we actually were able dealers were able to deliver more machines to customers, particularly on the RI side. Overall, on the CI side, based on a conversation, obviously, we engage with conversations with dealers. Dealers are independent businesses. They determine what level of inventory they hold.

They base that on their expectations for the outlook for the markets. Obviously, our expectation based on what we're seeing today is, as you know, that not all of our end markets are exactly in sync, as we think about from a CI perspective. And based on our conversations, we don't expect a material reduction in deal inventory as we go through the year. Yes, we did see students were slightly better in North America than we expected in the Q4. That is probably one of the first times we've actually seen that trend and maybe some benefit from some of our post sales merchandising programs, but we're not calling that for 2025 yet.

We still think that's somewhere where we need a lot of work still to be seen to make sure that we're actually seeing that continue to flow through.

We'll move next to Rob Wertheimer at Melius Research.

Hi, good morning. Thank you. So my question is on, you have a large and diverse oil and gas business. I'm wondering if you could characterize, especially if you will on gas compression, kind of where you think you are in the cycle? Obviously, we've had Europe, we've had Russia, we've had lots of different demand shifting around.

And there may be other growth areas, baca, moi, etcetera. I just wondered if you could give a little bit of an outlook on oil and gas. Thank

you. Yes, certainly. We are expecting moderate growth in 2025 for oil and gas in total. For reship, we expect engine services to be slightly down for the year, really driven by gas compression and well servicing. We did see some order pickup in recent gas compression in late 2024.

On the solar turbine side, very healthy backlog, healthy order intake and inquiry activity. We do expect growth in oil and gas in the year. We are seeing to your specific question about gas compression, solar does have a so a lot of activity around gas transmission, gas compression, particularly in United States. So many pipeline customers are adding compression to existing pipelines. So again that business is quite strong and a lot of quotation activity as well.

We'll go next to David Raso at Evercore ISI.

I'm curious, obviously trying to think about margins for 25% for the segments. And I was a little surprised by price cost being negative, right? The manufacturing cost had been a positive year over year. All of a sudden the comp gets harder, right? That's why the Q4 wasn't going to be as easy.

But to see the cost up, I noticed you called out ENT, but that implies CI and RI manufacturing costs were still a benefit year over year and all the cost is an E and T? And maybe if you can just provide that kind of framework from the Q4 to how to think about full year 25 price cost?

Yes. David, if you recall, actually in my comments, I did call out within CI a negative absorption in the Q4 as we did reduce CI inventory. So manufacturing costs were also negative in CI. In ENT, most of that was a function actually of putting more labor in the factories to get more machines out the door or more engines out the door at the end of the year. And that obviously reflects the demand we're seeing.

And obviously remember that we are still trying to build up capacity, particularly on the large engine sides and that really is what's driving that in particular. Our material costs, our expectations are the material costs will decline in 2025. However, there are some offsets within manufacturing costs, which go the other way. Some of that relates to volume and absorption as a result of that, which means that we don't get the cost price benefit offset that we've had in previous years. So most of that is the reason and the rationale by segment for that.

So yes, material costs will be favorable, but manufacturing costs will be broadly in line with our expectations. Remember also other things come in mix and so forth as well. And finally, just one thing to remember, the depreciation I called out actually most of that is within manufacturing costs as well.

We'll go next to Jerry Revich at Goldman Sachs.

Jerry. Hi. Jim, Andrew, I'm wondering if you could just talk about your solar turbine lead times and how are you thinking about potentially adding additional roofline capacity for turbine specifically? We're hearing optimism on the Titan 350 from the customer base and assuming what we saw earlier this week is a blip on the radar, I'm just wondering how are you thinking about capacity for that range of products?

Yes. As I mentioned earlier, we're seeing strong backlog and strong inquiry in order activity for solar for both power generation and gas compression. We can increase capacity without building new factories since you use the roofline mentioned the roofline in your question. So certainly there are things that we can do within our facilities. 1 is just increasingly manufacturing.

You can do things like add an additional test cell to an existing facility, maybe add an engine build pit, things like that. One of the big issues, of course, is working with suppliers to ensure that we get enough components from suppliers. And of course, just given the strength in the business, there's a lot of companies out there working with those same suppliers. So that is that can be a bit of a limiting factor. But in terms of actual investments required to increase capacity based on what we see coming, we don't see a need to build a brand new factor or anything like that.

We'll move next to Chad Dillard at Bernstein.

Hey, good morning guys. Thanks for taking my question. Hi, Chad. So my question is on hey, how are you? So my question is on the 25% operating profit guide.

So you're guiding to the top end of the range for a given level of revenue for the full year. You've been guiding that way I think for the last year and actually have been hitting it. So I guess what would give you or what would what do you think would drive you to bring that guide back to the midpoint? Is it price cost normalizing? And in that same vein, I guess like how are you thinking about the evolution of price cost through 2025?

I guess like when does that pressure peak and comps get easier?

Maybe I'll start and I'll kick it over to Andrew. Firstly, I believe what we said is we expect to be in that top half of the range for margins for 2025. And of course, our key measure here is for our team is to grow absolute OPAC dollars because we believe that most closely aligned with TSR over time, of course, OPAC being operating profit after capital charge, so given the return on the capital that we invest. And so again, a reminder what we expect for 2022 Advise to be in the top half of the range. With that, I'll turn it over to Andy.

And so on the price realization point, this really is relating to the post sales merchandising programs. We discussed a little bit in the Q3. Remind you just that we as I explained in the Q3, that will take about a year to flow through and that relates to the fact that obviously in a world where demand is normalizing and supply is less constrained, obviously we make we have merchandising programs to offer customers, particularly things like buying down interest rates. As we said before, that's also an attractive option for us because obviously we get some margin benefit from that within CAF Financial over the term of the financing deal. What that does mean though is, as you saw from the CAF Financial numbers, new business volume is very high.

Actually their share is up. So effectively over time, we'll recover a little bit through CAAT Financial, but we will have some margin pressure in the short term from those as those programs normalize. That mostly impacts machines, mostly impacts the 1st and second quarters, first half of the year. Once we get past Q3, we'll be past that and actually then return probably much more to the normal evolution of price and cost, which obviously we always try and work to make sure we can offset the 2.

Caterpillar (CAT) Q4 2024 Earnings Call Transcript

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