CATERPILLAR INC
For the period ended Dec 31, 2024. Filed Feb 14, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 14, 2025
CAT$558.63+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-16.
0000018230-24-000009
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-14.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 237 previous paragraphs and 243 current paragraphs.
144 unchanged; 70 reworded; 25 added; 21 removed; 2 previous and 4 current paragraphs rearranged.
Tables are not compared: 14 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
Our results continue to reflect the benefit of the diversity of our end markets.
Current report
In Energy & Transportation, demand is expected to remain strong in Power Generation, as we expect growth for both reciprocating engines and turbines and turbine-related services in 2025 as compared to 2024. Overall strength in Power Generation, for both prime and backup power applications, continues to be driven by increasing energy demands to support data center growth related to cloud computing and generative artificial intelligence (AI). Through continued focus on improving manufacturing efficiencies, along with initial stages of our investment to increase large engine output capability, we expect growth in reciprocating engines for Power Generation in 2025. We also expect growth in turbines and turbine-related services for Power Generation, driven by increased customer demand. For Oil and Gas, we expect moderate growth in 2025 as compared to 2024. 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. We expect growth for turbines and turbine-related services in Oil & Gas in 2025 as compared to 2024. For turbines and turbine-related services used in Oil & Gas applications, backlog remains strong, and we see continued healthy order and inquiry activity. Demand for products in Industrial applications in 2025 is expected to remain at a relatively low level, similar to 2024. In Transportation, we anticipate growth in 2025, driven by rail services.
Current report
For the full-year 2025, we anticipate sales and revenues will be slightly lower compared to 2024, primarily driven by lower sales volume and unfavorable price realization. We expect lower sales in Construction Industries and Resource Industries to be partially offset by higher sales in Energy & Transportation. Currently, we do not anticipate a significant change in machine dealer inventories in 2025. Services revenues increased in 2024, and we expect services revenues to grow across all three primary segments in 2025.
Current report
For Construction Industries, we expect lower sales, including unfavorable price realization. In Resource Industries, we anticipate slightly lower sales, driven by unfavorable price realization and slightly lower sales volume. In Energy and Transportation, we expect an increase in sales driven by higher sales volume and favorable price realization.
Current report
In 2025, we anticipate unfavorable price realization and higher depreciation costs. We expect Other income (expense) to be unfavorable in 2025 as compared to 2024, primarily due to lower interest income as well as the absence of favorable foreign currency impacts. We do not anticipate translation movements in our expectations. In 2025, we expect restructuring costs of approximately $150 million to $200 million and expect capital expenditures of about $2.5 billion. We anticipate the annual effective tax rate, excluding discrete items, to be 23.0 percent in 2025.
Current report
In the first quarter of 2025, we expect lower sales and revenues as compared to the first quarter of 2024, primarily due to the unfavorable impact from changes in machine dealer inventories and unfavorable machine price realization. We expect machine dealer inventory to increase less during the first quarter of 2025 as compared to the $1.1 billion increase in the first quarter of 2024.
Current report
In a typical year, we see our lowest sales of the year in the first quarter. In 2025, we anticipate that trend to continue but be more pronounced as sales in the first quarter should account for a lower percentage of full year sales than is typical, mainly due to our expectations for changes in dealer inventories and price realization for machines. In Energy & Transportation, we expect normal seasonality with sales growing throughout the year.
Current report
In the first quarter of 2025 as compared to the first quarter of 2024, we anticipate lower sales in Construction Industries primarily due to lower sales of equipment to end users, an unfavorable impact from changes in dealer inventories and unfavorable price realization. In Resource Industries, we expect lower sales primarily due to lower sales volume and unfavorable price realization. In Energy & Transportation, we anticipate similar sales in the first quarter of 2025 as compared to the first quarter of 2024, as continued strength in Power Generation is expected to be offset by lower sales in Oil & Gas and in Transportation. We expect favorable price realization for Energy & Transportation in the first quarter of 2025.
Current report
In the first quarter of 2025, we expect the profit impact from lower machine sales volume and unfavorable machine price realization to be partially offset by favorable price realization in Energy & Transportation. In Construction Industries and in Resource Industries, we expect an unfavorable profit impact from lower sales volume and unfavorable price realization in the first quarter of 2025 as compared to the first quarter of 2024. In Energy & Transportation, we expect unfavorable manufacturing costs and the impact of an unfavorable mix of products to be partially offset by favorable price realization.
Current report
Total sales and revenues for 2024 were $64.809 billion, a decrease of $2.251 billion, or 3 percent, compared with $67.060 billion in 2023. The decrease was primarily driven by lower sales volume of $3.543 billion, partially offset by favorable price realization of $1.238 billion. The decrease in sales volume was mainly driven by lower sales of equipment to end users. In addition, changes in dealer inventories had an unfavorable impact to sales volume. Dealer inventory increased less during 2024 than during 2023.
Current report
In the three primary segments, sales were lower in Construction Industries and Resource Industries and higher in Energy & Transportation.
Current report
North America sales decreased 1 percent primarily due to lower sales volume, partially offset by favorable price realization. The decrease in sales volume was mainly due to the impact from changes in dealer inventories. Dealer inventory increased less during 2024 than during 2023.
Current report
EAME sales decreased 10 percent primarily due lower sales volume. The decrease in sales volume was mainly driven by lower sales of equipment to end users.
Current report
Asia/Pacific sales decreased 6 percent primarily due to lower sales volume. The decrease in sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased in 2024, compared to an increase in 2023.
Current report
Operating profit was $13.072 billion in 2024, an increase of $106 million, or 1 percent, compared with $12.966 billion in 2023. The profit impact of lower sales volume of $1.298 billion, higher selling, general and administrative (SG&A) and research and development (R&D) expenses of $201 million, and higher restructuring costs of $165 million were more than offset by favorable price realization of $1.238 billion, the absence of the impact of the divestiture of the company's Longwall business in 2023 of $586 million and favorable manufacturing costs of $246 million. The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives. Favorable manufacturing costs largely reflected lower freight.
Current report
For the twelve months ended December 31, 2024, restructuring costs increased primarily due to the divestitures of certain non-U.S. entities.
Current report
•Sales decreased in Asia/Pacific primarily due to lower sales volume and unfavorable currency impacts, primarily related to the Japanese yen. Lower sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory decreased during 2024, compared with an increase during 2023.
Current report
Resource Industries’ profit was $2.533 billion in 2024, a decrease of $301 million, or 11 percent, compared with $2.834 billion in 2023. The decrease was mainly due to the profit impact of lower sales volume of $655 million, partially offset by favorable price realization of $405 million.
Current report
•Industrial – Sales decreased in EAME and North America.
Current report
•Transportation – Sales increased in marine and rail services, partially offset by lower sales of reciprocating engine aftermarket parts.
Current report
Energy & Transportation’s profit was $5.736 billion in 2024, an increase of $800 million, or 16 percent, compared with $4.936 billion in 2023. The increase was mainly due to favorable price realization.
Current report
Financial Products’ segment profit was $932 million in 2024, an increase of $23 million, or 3 percent, compared with $909 million in 2023. The increase was mainly due to a favorable impact from higher average earning assets of $54 million, an insurance settlement of $33 million, and a favorable impact from equity securities of $32 million. These favorable impacts were partially offset by an increase in SG&A expenses of $54 million and an unfavorable impact from returned or repossessed equipment of $34 million.
Current report
The aforementioned financial covenants are being reported as calculated under the Credit Facility and not pursuant to U.S. GAAP. Please refer to the credit agreements governing the Credit Facility filed as an exhibit to our periodic reports for further information related to the calculation thereof. For risks related to our indebtedness and compliance with these covenants, please refer to the risk factor "Restrictive covenants in our debt agreements could limit our financial and operating flexibility" set forth in Part I, Item 1A of this Form 10-K.
Current report
We believe it is important to separately disclose our annual effective tax rate, excluding discrete items for our results to be meaningful to our readers. The annual effective tax rate is discussed using non-GAAP financial measures that exclude the effects of amounts associated with discrete items recorded fully in the quarter they occur. These items consist of (i) restructuring income/costs related to the divestitures of certain non-U.S. entities in 2024, (ii) pension and OPEB mark-to-market gains/losses resulting from plan remeasurements, (iii) a discrete tax benefit for a tax law change related to currency translation in 2024, (iv) the impact of changes in estimates related to prior years in 2024, (v) a settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense, (vi) restructuring costs related to divestiture of the company's Longwall business in 2023 and (vii) deferred tax valuation allowance adjustments in 2023. We believe the non-GAAP measures will provide investors with useful perspective on underlying business results and trends and aids with assessing the company's period-over-period results.
Current report
A reconciliation of our effective tax rate to annual effective tax rate, excluding discrete items is below:
Removed paragraphs (21)
Previous report
Overall demand remains healthy across most of our end markets for our products and services.
Previous report
In Energy & Transportation, in Oil & Gas, we expect reciprocating engines and services to increase slightly in 2024 compared to 2023. Well servicing in North America is showing some short-term moderation. Gas compression order backlog remains healthy and we continue to remain optimistic about future demand. Power Generation reciprocating engine demand is expected to remain strong due to continued data center growth. Solar Turbines has a strong backlog and continues to experience robust quoting activity. Industrial demand is expected to soften from a strong 2023. In Transportation, we anticipate high-speed marine to increase slightly as customers continue to upgrade aging fleets.
Previous report
For the full-year 2024, we anticipate sales and revenues will be broadly similar to 2023, supported by continued healthy underlying demand across most of our end markets for our products and services and slightly favorable price realization. We anticipate another year of services growth in 2024. We do not expect a significant change in machine dealer inventoriesin 2024, compared to an increase in 2023. In Construction Industries, sales of equipment to end users is expected to be broadly similar to 2023. In Construction Industries, we do not expect dealer inventory to increase in 2024 as it did in 2023. We also anticipate services initiatives will benefit the segment. Resource Industries' sales in 2024 are expected to be lower, driven by lower sales volume primarily in off-highway and articulated trucks. We also expect an unfavorable impact from changes in dealer inventories in Resource Industries. In 2024, we expect services revenues will increase in Resource Industries. Within Energy & Transportation in 2024, we expect slightly higher sales. Power Generation, Oil & Gas and Transportation sales are expected to increase. Industrial sales are expected to be lower compared to historically strong levels in 2023.
Previous report
In 2024, we expect a small benefit from price realization during the first half of the year from price actions taken in the second half of 2023. We expect price realization to modestly exceed manufacturing costs, with moderation throughout the year as we lap favorable price trends from 2023. For 2024, we expect short-term incentive compensation expense to be about $1.2 billion, compared to $1.7 billion in 2023. We expect the short-term incentive compensation expense benefit year over year to be offset by increases in SG&A/R&D expenses as we continue to invest in strategic initiatives aimed at future long-term profitable growth, such as services growth and technology, including autonomy, alternative fuels, connectivity and digital and electrification. In addition, we anticipate an impact due to an unfavorable mix of products. In 2024, we expect restructuring costs to be between $300 million and $450 million and expect capital expenditures to be in the range of $2.0 billion to $2.5 billion. We expect the global annual effective tax rate, excluding discrete items, to be between 22.5 percent and 23.5 percent.
Previous report
In the first quarter of 2024, we expect sales and revenues to be broadly similar to the first quarter of 2023. We expect demand to remain healthy, but anticipate slightly lower machine dealer inventory build as compared to the first quarter of 2023. We anticipate price realization will remain favorable. We expect Construction Industries' sales to remain flat to slightly higher, including favorable price realization. Resource Industries' sales are expected to be lower driven by lower sales volume, partially offset by favorable price realization. In Energy & Transportation, we expect sales to be flat to slightly higher.
Previous report
In the first quarter of 2024, we expect favorable price realization to more than offset unfavorable manufacturing costs. We expect manufacturing costs to increase primarily due to cost absorption. We do not expect an inventory increase as compared to the increase in the first quarter of 2023. We also anticipate an increase in SG&A/R&D expenses due to investment in strategic initiatives. In Construction Industries, we expect favorable price realization to be offset by increased SG&A/R&D expenses and slightly higher manufacturing costs, including cost absorption. In Resource Industries, we expect the profit impact from lower sales volume to be partially offset by favorable price realization. In Energy & Transportation, we anticipate favorable price realization to be offset by higher manufacturing costs.
Previous report
Total sales and revenues for 2023 were $67.060 billion, an increase of $7.633 billion, or 13 percent, compared with $59.427 billion in 2022. The increase was primarily due to favorable price realization and higher sales volume. The increase in sales volume was driven by higher sales of equipment to end users, partially offset by the impact from changes in dealer inventories. Dealer inventory increased about $2.4 billion during 2022, compared to an increase of about $2.1 billion during 2023.
Previous report
North America sales increased 25 percent driven by higher sales of equipment to end users, favorable price realization and the impact from changes in dealer inventories. Dealer inventory increased more during 2023 than during 2022.
Previous report
EAME sales increased 6 percent due to favorable price realization and higher sales of equipment to end users, partially offset by the impact from changes in dealer inventories. Dealer inventory increased more during 2022 than during 2023.
Previous report
Asia/Pacific sales increased 2 percent driven by favorable price realization, partially offset by unfavorable currency impacts, primarily related to the Australian dollar and Japanese yen, lower sales of equipment to end users and the impact from changes in dealer inventories. Dealer inventory increased more during 2022 than during 2023.
Previous report
Operating profit was $12.966 billion in 2023, an increase of $5.062 billion, or 64 percent, compared with $7.904 billion in 2022. The increase was primarily due to favorable price realization, higher sales volume and the absence of a 2022 goodwill impairment charge related to the Rail division, partially offset by higher SG&A/R&D expenses, unfavorable manufacturing costs and the impact of the divestiture of the company's Longwall business. The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives, higher short-term incentive compensation expense and an unfavorable change in fair value adjustments related to deferred compensation plans. Unfavorable manufacturing costs reflected lower freight being more than offset by higher material costs, increased period manufacturing costs, the impact of manufacturing inefficiencies and unfavorable cost absorption. Cost absorption was unfavorable as inventory increased more during 2022 than during 2023.
Previous report
Short-term incentive compensation expense is directly related to financial and operational performance, measured against targets set annually. Expense for 2023 was about $1.7 billion, compared with $1.4 billion in 2022. For 2024, we expect short-term incentive compensation expense will be about $1.2 billion.
Previous report
In the first quarter of 2023, the divestiture of the company’s Longwall business was finalized, resulting in an unfavorable impact to operating profit of $586 million, primarily a non-cash item driven by the release of accumulated foreign currency translation.
Previous report
•In North America, sales increased due to favorable price realization and higher sales volume. Higher sales volume was driven by higher sales of equipment to end users and the impact from changes in dealer inventories. Dealer inventory increased more during 2023 than during 2022.
Previous report
•Sales decreased in Asia/Pacific due to lower sales volume and unfavorable currency impacts, primarily related to the Japanese yen, Australian dollar and Chinese yuan, partially offset by favorable price realization. Lower sales volume was driven by lower sales of equipment to end users.
Previous report
Resource Industries’ profit was $2.834 billion in 2023, an increase of $1.007 billion, or 55 percent, compared with $1.827 billion in 2022. The increase was mainly due to favorable price realization, partially offset by unfavorable manufacturing costs and currency impacts. Unfavorable manufacturing costs were driven by higher materials costs, the impact of manufacturing inefficiencies and unfavorable cost absorption, partially offset by lower freight. Cost absorption was unfavorable as inventory increased more during 2022 than during 2023.
Previous report
•Industrial – Sales were up across all regions.
Previous report
•Transportation – Sales increased in rail services and marine. International locomotive deliveries were also higher.
Previous report
Energy & Transportation’s profit was $4.936 billion in 2023, an increase of $1.627 billion, or 49 percent, compared with $3.309 billion in 2022. The increase was mainly due to favorable price realization and higher sales volume, partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses. Unfavorable manufacturing costs were driven by higher material costs, increased period manufacturing costs and the impact of manufacturing inefficiencies, partially offset by lower freight. The increase in SG&A/R&D expenses was primarily driven by investments aligned with strategic initiatives and higher short-term incentive compensation expense.
Previous report
Financial Products’ segment profit was $909 million in 2023, an increase of $45 million, or 5 percent, compared with $864 million in 2022. The increase was mainly due to higher net yield on average earning assets and lower provision for credit losses at Cat Financial, partially offset by an increase in SG&A expenses.
Previous report
In the first quarter of 2023, the divestiture of the company’s Longwall business was finalized, resulting in an unfavorable impact to operating profit of $586 million, primarily a non-cash item driven by the release of accumulated foreign currency translation. This impact was included in total restructuring costs.
Reworded paragraphs (70)
Previous wording
•Sales and revenues for 2023 were $67.060 billion, an increase of $7.633 billion, or 13 percent, compared with $59.427 billion for 2022. Sales were higher across the three primary segments.
Current wording
•Sales and revenues for 2024 were $64.809 billion, a decrease of $2.251 billion, or 3 percent, compared with $67.060 billion for 2023. In the three primary segments, sales were lower in Construction Industries and Resource Industries and higher in Energy & Transportation.
Previous wording
•Operating profit as a percent of sales and revenues was 19.3 percent in 2023, compared with 13.3 percent in 2022. Adjusted operating profit margin was 20.5 percent in 2023, compared with 15.4 percent in 2022.
Current wording
•Operating profit as a percent of sales and revenues was 20.2 percent in 2024, compared with 19.3 percent in 2023. Adjusted operating profit margin was 20.7 percent in 2024, compared with 20.5 percent in 2023.
Previous wording
•Profit per share for 2023 was $20.12, and excluding the items in the table below, adjusted profit per share was $21.21. Profit per share for 2022 was $12.64, and excluding the items in the table below, adjusted profit per share was $13.84.
Current wording
•Profit per share for 2024 was $22.05, and excluding the items in the table below, adjusted profit per share was $21.90. Profit per share for 2023 was $20.12, and excluding the items in the table below, adjusted profit per share was $21.21.
Previous wording
•In order for our results to be more meaningful to our readers, we have separately quantified the impact of several significant items. A detailed reconciliation of GAAP to non-GAAP financial measures is included on page 47.
Current wording
•In order for our results to be more meaningful to our readers, we have separately quantified the impact of several significant items. A detailed reconciliation of GAAP to non-GAAP financial measures is included on pages 47 - 48.
Previous wording
•Enterprise operating cash flow was $12.9 billion in 2023. Caterpillar ended 2023 with $7.0 billion of enterprise cash.
Current wording
•Enterprise operating cash flow was $12.0 billion in 2024. Caterpillar ended 2024 with $6.9 billion of enterprise cash.
Previous wording
Total sales and revenues for 2023 were $67.060 billion, an increase of $7.633 billion, or 13 percent, compared with $59.427 billion for 2022. The increase was primarily due to favorable price realization and higher sales volume. Profit per share was $20.12 in 2023, compared with profit per share of $12.64 in 2022. Profit was $10.335 billion in 2023, compared with $6.705 billion in 2022. The increase was primarily due to favorable price realization, higher sales volume and the absence of a 2022 goodwill impairment charge related to the Rail division, partially offset by higher selling, general and administrative (SG&A) and research and development (R&D) expenses, unfavorable manufacturing costs, the impact of the divestiture of the company's Longwall business and lower mark-to-market gains for remeasurement ofpension and other postemployment benefit (OPEB) plans.
Current wording
Total sales and revenues for 2024 were $64.809 billion, a decrease of $2.251 billion, or 3 percent, compared with $67.060 billion for 2023. The decrease reflected lower sales volume, partially offset by favorable price realization. Lower sales volume was primarily driven by lower sales of equipment to end users. Profit per share was $22.05 in 2024, compared with profit per share of $20.12 in 2023. Profit was $10.792 billion in 2024, compared with $10.335 billion in 2023. 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.
Previous wording
In Construction Industries, we expect North America to remain healthy in 2024. We expect non-residential construction in North America to remain at similar demand levels as 2023 due to government-related infrastructure investments. Residential construction is expected to remain healthy relative to historical levels. In Asia Pacific, excluding China, we expect some softening in economic conditions. We anticipate China will remain at a relatively low level in the excavator industry above 10-tons. In EAME, we anticipate the region will be slightly down due to economic uncertainty in Europe, partially offset by continuing strong construction demand in the Middle East. Construction activity in Latin America is expected to increase due to easing financial conditions. In addition, we anticipate the ongoing benefit of ourservices initiatives will positively impact Construction Industries in 2024.
Current wording
In Construction Industries, we expect moderately lower sales of equipment to end users in North America in 2025 compared to 2024. Construction spend in North America remains healthy, primarily driven by large, multi-year projects and government-related infrastructure investments supported by funding from the Infrastructure Investment and Jobs Act (IIJA). Although we anticipate the combined non-residential and residential construction spend in 2025 to remain similar to 2024 levels, our current planning assumptions reflect lower demand for new equipment in 2025 as compared to 2024. We also expect lower dealer rental fleet loading in 2025 compared to 2024, although dealer rental revenue is expected to grow. We remain positive about the medium- and long-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 excavator industry above 10-tons. In EAME, we anticipate that weak economic conditions in Europe will continue, and we anticipate a healthy level of construction activity in Africa and in the Middle East in 2025. Construction activity in Latin America is expected to moderately decline in 2025 as compared to 2024. We also anticipate the ongoing benefit of ourservices initiatives will positively impact Construction Industries in 2025.
Previous wording
In Resource Industries, in 2024, for both mining and heavy construction and quarry and aggregates, we anticipate lower sales volume compared to 2023, primarily due to off-highway and articulated trucks. While we continue to see a high level of quoting activity overall, we anticipate lower order rates as customers display capital discipline. Customer product utilization remains high, the number of parked trucks remains low, the age of the fleet remains elevated and our autonomous solutions continue to have strong customer acceptance. We expect higher services revenues, including robust rebuild activity in 2024. 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.
Current wording
In Resource Industries, we anticipate lower sales of equipment to end users in 2025 compared to 2024, 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.
Previous wording
Company Trends and Expectations
Current wording
Full-Year 2025 Company Trends and Expectations
Previous wording
•Information on non-GAAP financial measures is included on page 47.
Current wording
•Information on non-GAAP financial measures is included on pages 47 - 48.
Previous wording
Sales decreased 2 percent in Latin America due to the impact from changes in dealer inventories and lower services sales volume, partially offset by favorable price realization and favorable currency impacts primarily related to the Brazilian real. Dealer inventory increased during 2022, compared to a decrease during 2023.
Current wording
Sales increased 1 percent in Latin America. Unfavorable currency impacts related to the Brazilian real were more than offset by higher sales volume and favorable price realization. The increase in sales volume was primarily due to the impact from changes in dealer inventories. Dealer inventory increased during 2024, compared to a decrease during 2023.
Previous wording
Dealer inventory increased about $2.1 billion during 2023, compared to an increase of about $2.4 billion during 2022. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rental rates and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers. We do not expect a significant change in machine dealer inventories in 2024.
Current wording
Total dealer inventory increased about $400 million during 2024, compared to an increase of about $2.1 billion during 2023. Machine dealer inventory decreased about $700 million during 2024, compared to an increase of $700 million during 2023. Dealers are independent, and the reasons for changes in their inventory levels vary, including their expectations of future demand and product delivery times. Dealers’ demand expectations take into account seasonal changes, macroeconomic conditions, machine rental rates and other factors. Delivery times can vary based on availability of product from Caterpillar factories and product distribution centers. We do not expect a significant change in machine dealer inventories in 2025.
Previous wording
Operating profit margin was 19.3 percent in 2023, compared with 13.3 percent in 2022.
Current wording
Operating profit margin was 20.2 percent in 2024, compared with 19.3 percent in 2023.
Previous wording
•Interest expense excluding Financial Products in 2023 was $511 million, compared with $443 million in 2022. The increase was due to higher average borrowing rates.
Current wording
•Interest expense excluding Financial Products in 2024 was $512 million, compared with $511 million in 2023.
Previous wording
•Other income (expense) in 2023 was income of $595 million, compared with income of $1.291 billion in 2022. The change was primarily driven by lower mark-to-market gains for remeasurement of pension and OPEB plans and unfavorable impacts from pension and OPEB plan costs and foreign currency exchange, partially offset by higher investment and interest income.
Current wording
•Other income (expense) in 2024 was income of $813 million, compared with income of $595 million in 2023. The change was primarily driven by favorable foreign currency impacts, favorable impacts from pension and other postemployment benefit (OPEB) plan costs and higher mark-to-market gains for remeasurement of pension and OPEB plans.
Previous wording
•The provision for income taxes for 2023 reflected an annual effective tax rate of 21.4 percent, compared with 23.2 percent for 2022, excluding the discrete items discussed below. The decrease from 2022 was primarily related to changes in the geographic mix of profits from a tax perspective.
Current wording
•The effective tax rate for 2024 was 19.7 percent compared to 21.3 percent for 2023. Excluding the discrete items discussed below, the annual effective tax rate was 22.2 percent for 2024 compared to 21.4 percent for 2023. The increase from 2023 was primarily related to changes in the geographic mix of profits from a tax perspective.
Previous wording
The 2023 annual effective tax rate excludes the impact of the nondeductible loss of $586 million related to the divestiture of the company’s Longwall business. The company also recorded a tax charge of $26 million related to $97 million of pension and OPEB mark-to-market gains in the fourth quarter of 2023, compared to a tax charge of $124 million related to $606 million of mark-to-market gains in the fourth quarter of 2022. In addition, the company recorded a discrete tax benefit of $57 million in 2023 for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense, compared with a $33 million benefit for 2022. In 2023, the company recorded a discrete tax benefit of $88 million due to a change in the valuation allowance for certain non-U.S. deferred tax assets. In 2022, the company also recorded discrete benefits of $90 million to reflect changes in estimates related to prior years and a tax benefit of $36 million related to the goodwill impairment charge of $925 million.
Current wording
In 2024, the company recorded a discrete tax benefit of $224 million for a tax law change related to currency translation. The 2024 annual effective tax rate excludes the impact of losses of $164 million for the divestitures of certain non-U.S. entities with related tax benefits of $54 million. The 2023 annual effective tax rate excludes the impact of the nondeductible loss of $586 million related to the divestiture of the company’s Longwall business. The company also recorded a tax charge of $43 million related to $154 million of mark-to-market gains for remeasurement of pension and OPEB plans in 2024, compared to a tax charge of $26 million related to $97 million of mark-to-market gains in 2023. In 2024, the company recorded discrete tax benefits of $47 million to reflect changes in estimates related to prior years. In addition, a discrete tax benefit of $57 million was recorded in 2024 and 2023 for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense. In 2023, the company recorded a discrete tax benefit of $88 million due to a change in the valuation allowance for certain non-U.S. deferred tax assets.
Previous wording
Construction Industries’ total sales were $27.418 billion in 2023, an increase of $2.149 billion, or 9 percent, compared with $25.269 billion in 2022. The increase was due to favorable price realization, partially offset by lower sales volume. The decrease in sales volume was driven by the impact from changes in dealer inventories, partially offset by higher sales of equipment to end users. Dealer inventory increased more during 2022 than during 2023.
Current wording
Construction Industries’ total sales were $25.455 billion in 2024, a decrease of $1.963 billion, or 7 percent, compared with $27.418 billion in 2023. The decrease was primarily due to lower sales volume. The decrease in sales volume was mainly driven by lower sales of equipment to end users.
Previous wording
•In EAME, sales increased due to favorable price realization and favorable currency impacts, primarily related to the euro, partially offset by lower sales volume. Lower sales volume was due to the impact from changes in dealer inventories and lower sales of equipment to end users. Dealer inventory increased during 2022, compared with a decrease during 2023.
Current wording
•In North America, sales decreased due to lower sales volume. Lower sales volume was primarily driven by the impact from changes in dealer inventories. Dealer inventory increased less during 2024 than during 2023.
Previous wording
•Sales decreased in Latin America primarily due to lower sales volume, partially offset by favorable price realization. Lower sales volume was driven by the impact from changes in dealer inventories and lower sales of equipment to end users. Dealer inventory increased during 2022, compared with a decrease during 2023.
Current wording
•Sales increased in Latin America primarily due to higher sales volume, partially offset by unfavorable price realization and unfavorable currency impacts primarily related to the Brazilian real. Higher sales volume was mainly driven by the impact from changes in dealer inventories. Dealer inventory increased during 2024, compared with a decrease during 2023.
Previous wording
Construction Industries’ profit was $6.975 billion in 2023, an increase of $2.232 billion, or 47 percent, compared with $4.743 billion in 2022. The increase was mainly due to favorable price realization.
Current wording
Construction Industries’ profit was $6.165 billion in 2024, a decrease of $810 million, or 12 percent, compared with $6.975 billion in 2023. The decrease was mainly due to the profit impact of lower sales volume.
Previous wording
Construction Industries’ profit as a percent of total sales was 25.4 percent in 2023, compared with 18.8 percent in 2022.
Current wording
Construction Industries’ profit as a percent of total sales was 24.2 percent in 2024, compared with 25.4 percent in 2023.
Previous wording
Resource Industries’ total sales were $13.583 billion in 2023, an increase of $1.269 billion, or 10 percent, compared with $12.314 billion in 2022. The increase was due to favorable price realization, partially offset by lower sales volume. Sales volume decreased as higher sales of equipment to end users were more than offset by the impact from changes in dealer inventories and lower aftermarket parts sales volume. Dealer inventory increased more during 2022 than during 2023.
Current wording
Resource Industries’ total sales were $12.389 billion in 2024, a decrease of $1.194 billion, or 9 percent, compared with $13.583 billion in 2023. The decrease was primarily due to lower sales volume, partially offset by favorable price realization. Sales volume decreased primarily due to lower sales of equipment to end users.
Previous wording
Resource Industries’ profit as a percent of total sales was 20.9 percent for 2023, compared with 14.8 percent for 2022.
Current wording
Resource Industries’ profit as a percent of total sales was 20.4 percent for 2024, compared with 20.9 percent for 2023.
Previous wording
Energy & Transportation’s total sales were $28.001 billion in 2023, an increase of $4.249 billion, or 18 percent, compared with $23.752 billion in 2022. Sales increased across all applications and inter-segment sales. The increase in sales was primarily due to higher sales volume and favorable price realization.
Current wording
Energy & Transportation’s total sales were $28.854 billion in 2024, an increase of $853 million, or 3 percent, compared with $28.001 billion in 2023. The increase was primarily due to favorable price realization.
Previous wording
•Oil and Gas – Sales increased for turbines and turbine-related services. Sales also increased in reciprocating engines used in well servicing and gas compression applications.
Current wording
•Oil and Gas – Sales were about flat. Decreased sales in reciprocating engines used in well servicing applications were offset by increased sales in reciprocating engines used in gas compression applications and increased sales for turbines and turbine-related services.
Previous wording
•Power Generation – Sales increased in large reciprocating engines, primarily data center applications, and small reciprocating engines. Turbines and turbine-related services increased as well.
Current wording
•Power Generation – Sales increased in large reciprocating engines, primarily data center applications. Turbines and turbine-related services increased as well.
Previous wording
Energy & Transportation’s profit as a percent of total sales was 17.6 percent in 2023, compared with 13.9 percent in 2022.
Current wording
Energy & Transportation’s profit as a percent of total sales was 19.9 percent in 2024, compared with 17.6 percent in 2023.
Previous wording
Financial Products’ segment revenues were $3.785 billion in 2023, an increase of $532 million, or 16 percent, compared with $3.253 billion in 2022. The increase was primarily due to higher average financing rates across all regions.
Current wording
Financial Products’ segment revenues were $4.053 billion in 2024, an increase of $268 million, or 7 percent, compared with $3.785 billion in 2023. The increase was primarily due to a favorable impact from higher average financing rates across all regions of $153 million and a favorable impact from higher average earning assets of $127 million driven by North America.
Previous wording
Expense for corporate items and eliminations was $2.090 billion in 2023, a decrease of $319 million from 2022, primarily driven by the absence of a 2022 goodwill impairment charge related to the Rail division and decreased expenses due to timing differences, partially offset by higher restructuring costs, which included the impact of the divestiture of the company's Longwall business and other restructuring costs, higher corporate costs, an unfavorable change in fair value adjustments related to deferred compensation plans and unfavorable impacts of segment reporting methodology differences.
Current wording
Expense for corporate items and eliminations was $1.711 billion in 2024, a decrease of $379 million from 2023, primarily driven by the absence of the divestiture of the company's Longwall business in 2023, partially offset by unfavorable impacts of segment reporting methodology differences.
Previous wording
In 2024, we expect to incur about $300 to $450 million of restructuring costs. We expect that prior restructuring actions will result in an incremental benefit to operating costs, primarily Costs of goods sold and SG&A expenses of about $25 million in 2024 compared with 2023.
Current wording
In 2025, we expect to incur about $150 million to $200 million of restructuring costs. We expect that prior restructuring actions will result in an incremental benefit to operating costs, primarily Costs of goods sold and SG&A expenses, of about $25 million in 2025 compared with 2024.
Previous wording
Additional information related to restructuring costs is included in Note 25 — "Restructuring Costs" of Part II, Item 8 "Financial Statements and Supplemental Data."
Current wording
Additional information related to restructuring costs is included in Note 24 — "Restructuring income/costs" of Part II, Item 8 "Financial Statements and Supplemental Data."
Previous wording
Adjusted Operating Profit Margin – Operating profit excluding restructuring costs, which include the divestiture of the company's Longwall business, and 2022 goodwill impairment charges as a percent of sales and revenues.
Current wording
Adjusted Operating Profit Margin – Operating profit excluding restructuring income/costs as a percent of sales and revenues.
Previous wording
Adjusted Profit Per Share – Profit per share excluding restructuring costs, which include the divestiture of the company's Longwall business, certain deferred tax valuation allowance adjustments, pension and OPEB mark-to-market gains/losses and 2022 goodwill impairment charges.
Current wording
Adjusted Profit Per Share – Profit per share excluding restructuring income/costs, a discrete tax benefit for a tax law change related to currency translation, pension and OPEB mark-to-market gains/losses and certain deferred tax valuation allowance adjustments in 2023.
Previous wording
All Other Segment –Primarily includes activities such as: business strategy; product management and development; manufacturing and sourcing of filters and fluids, undercarriage, ground-engaging tools, fluid transfer products, precision seals, rubber sealing and connecting components primarily for Cat® products; parts distribution; integrated logistics solutions; distribution services responsible for dealer development and administration, including a wholly owned dealer in Japan; dealer portfolio management and ensuring the most efficient and effective distribution of machines, engines and parts; brand management and marketing strategy; and digital investments for new customer and dealer solutions that integrate data analytics with state-of-the-art digital technologies while transforming the buying experience.
Current wording
All Other Segment – Primarily includes activities such as: business strategy; product management and development; manufacturing and sourcing of wear and maintenance components primarily for Cat® products; parts distribution; integrated logistics solutions; distribution services responsible for dealer development and administration, including a wholly owned dealer in Japan; dealer portfolio management and ensuring the most efficient and effective distribution of machines, engines and parts; brand management and marketing strategy; and digital investments for new customer and dealer solutions that integrate data analytics with state-of-the-art digital technologies while transforming the buying experience.
Previous wording
Energy & Transportation – A segment primarily responsible for supporting customers using reciprocating engines, turbines, diesel-electric locomotives and related services across industries serving Oil and Gas, Power Generation, Industrial and Transportation applications, including marine- and rail-related businesses. Responsibilities include business strategy, product design, product management, development and testing manufacturing, marketing and sales and product support. The product and services portfolio includes turbines, centrifugal gas compressors, and turbine-related services; reciprocating engine-powered generator sets; integrated systems and solutions used in the electric power generation industry; reciprocating engines, drivetrain and integrated systems and solutions for the marine and oil and gas industries; reciprocating engines, drivetrain and integrated systems and solutions supplied to the industrial industry as well as Caterpillar machines; electrified powertrain and zero-emission power sources and service solutions development; and diesel-electric locomotives and components and other rail-related products and services, including remanufacturing and leasing. Responsibilities also include the remanufacturing of Caterpillar reciprocating engines and components and remanufacturing services for other companies; and product support of on-highway vocational trucks for North America.
Current wording
Energy & Transportation – A segment primarily responsible for supporting customers using reciprocating engines, turbines, diesel-electric locomotives and related services across industries serving Oil and Gas, Power Generation, Industrial and Transportation applications, including marine- and rail-related businesses as well as product support of on-highway engines. Responsibilities include business strategy, product design, product management, development and testing, manufacturing, marketing and sales and product support. The product and services portfolio includes turbines, centrifugal gas compressors, and turbine-related services; reciprocating engine-powered generator sets; integrated systems and solutions used in the electric power generation industry; reciprocating engines, drivetrain and integrated systems and solutions for the marine and oil and gas industries; reciprocating engines, drivetrain and integrated systems and solutions supplied to the industrial industry as well as Caterpillar machines; electrified powertrain and zero-emission power sources and service solutions development; and diesel-electric locomotives and components and other rail-related products and services, including remanufacturing and leasing. Responsibilities also include the remanufacturing of Caterpillar reciprocating engines and components and remanufacturing services for other companies.
Previous wording
Resource Industries – A segment primarily responsible for supporting customers using machinery in mining, heavy construction and quarry and aggregates. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes large track-type tractors; large mining trucks; hard rock vehicles; electric rope shovels; draglines; hydraulic shovels; rotary drills; large wheel loaders; off-highway trucks; articulated trucks; wheel tractor scrapers; wheel dozers; landfill compactors; soil compactors; select work tools; machinery components; electronics and control systems and related parts. In addition to equipment, Resource Industries also develops and sells technology products and services to provide customers fleet management, equipment management analytics, autonomous machine capabilities, safety services and mining performance solutions. Resource Industries also manages areas that provide services to other parts of the company, including strategic procurement, lean center of excellence, integrated manufacturing, research and development for hydraulic systems, automation, electronics and software for Cat machines and engines.
Current wording
Resource Industries – A segment primarily responsible for supporting customers using machinery in mining, heavy construction and quarry and aggregates. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes large track-type tractors; large mining trucks; hard rock vehicles; electric rope shovels; draglines; hydraulic shovels; rotary drills; large wheel loaders; off-highway trucks; articulated trucks; wheel tractor scrapers; wheel dozers; landfill compactors; soil compactors; wide-body trucks; select work tools; machinery components; electronics and control systems and related parts. In addition to equipment, Resource Industries also develops and sells technology products and services to provide customers fleet management, equipment management analytics, autonomous machine capabilities, safety services and mining performance solutions. Resource Industries also manages areas that provide services to other parts of the company, including strategic procurement, lean center of excellence, integrated manufacturing, research and development for hydraulic systems, automation, electronics and software for Caterpillar machines and engines.
Previous wording
Restructuring Costs – May include costs for employee separation, long-lived asset impairments, contract terminations and divestiture impacts. These costs are included in Other operating (income) expenses except for defined-benefit plan curtailment losses and special termination benefits, which are included in Other income (expense). Restructuring costs also include other exit-related costs, which may consist of accelerated depreciation, inventory write-downs, building demolition, equipment relocation and project management costs and LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold.
Current wording
Restructuring income/costs – May include costs for employee separation, long-lived asset impairments, contract terminations and (gains)/losses on divestitures. These costs are included in Other operating (income) expenses except for defined-benefit plan curtailment losses and special termination benefits, which are included in Other income (expense). Restructuring costs also include other exit-related costs, which may consist of accelerated depreciation, inventory write-downs, building demolition, equipment relocation and project management costs and LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold.
Previous wording
Services – Enterprise services include, but are not limited to, aftermarket parts, Financial Products revenues and other service-related revenues. Machinery, Energy & Transportation segments exclude most Financial Products revenues.
Current wording
Services – Machinery, Energy & Transportation 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.
Previous wording
We generate significant capital resources from operating activities, which are the primary source of funding for our ME&T operations. Funding for these businesses is also available from commercial paper and long-term debt issuances. Financial Products’ operations are funded primarily from commercial paper, term debt issuances and collections from its existing portfolio. During 2023, we had positive operating cash flow within both our ME&T and Financial Products' operations. On a consolidated basis, we ended 2023 with $6.98 billion of cash, a decrease of $26 million from year-end 2022. In addition, ME&T has invested in available-for-sale debt securities and bank time deposits that are considered highly liquid and are available for current operations. These ME&T securities were $3.85 billion as of December 31, 2023 and are included in Prepaid expenses and other current assets and Other assets in the Consolidated Statement of Financial Position. We intend to maintain a strong cash and liquidity position.
Current wording
We generate significant capital resources from operating activities, which are the primary source of funding for our ME&T operations. Funding for these businesses is also available from commercial paper and long-term debt issuances. Financial Products’ operations are funded primarily from commercial paper, term debt issuances and collections from its existing portfolio. During 2024, we had positive operating cash flow within both our ME&T and Financial Products' operations. On a consolidated basis, we ended 2024 with $6.89 billion of cash, a decrease of $89 million from year-end 2023. In addition, ME&T invests in available-for-sale debt securities and bank time deposits that are considered highly liquid and are available for current operations. These ME&T securities were $1.98 billion as of December 31, 2024 and are included in Prepaid expenses and other current assets and Other assets in the Consolidated Statement of Financial Position. We intend to maintain a strong cash and liquidity position.
Showing the first 40 of 70 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
First-Quarter 2025 Company Trends and Expectations
Current report — wording carried from elsewhere
•In EAME, sales decreased primarily due to lower sales volume. Lower sales volume was mainly due to lower sales of equipment to end users.
Current report — wording carried from elsewhere
•Decrease in expense in 2024 compared to 2023 — Primarily due to higher mark-to-market gains in 2024 compared to 2023, lower interest cost in 2024 as a result of lower discount rates at year-end 2023 and a higher expected return on plan assets due to a higher asset base at year-end 2023 compared to year-end 2022.
Current report — wording carried from elsewhere
In addition, we provide a calculation of ME&T free cash flow as we believe it is an important measure for investors to determine the cash generation available for financing activities including debt repayments, dividends and share repurchases.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Sales were higher in the three primary segments.
Previous report — wording carried elsewhere
•Increase in expense in 2022 compared to 2021 — Primarily due to lower mark-to-market gains in 2022 compared to 2021 and higher interest cost in 2022 as a result of higher discount rates at year-end 2021.