Caterpillar(CAT)2025-02-14 14:36Construction Industries - The Construction Industries segment focuses on machinery for infrastructure and building construction, with significant sales in heavy and general construction, rental, quarry, and mining industries[17]. - In 2024, the majority of research and development spending in the Construction Industries segment is directed towards the next generation of construction machines[18]. Resource Industries - The Resource Industries segment provides machinery for mining and heavy construction, emphasizing high productivity and low total cost of ownership[22][23]. Energy & Transportation - The Energy & Transportation segment includes products such as reciprocating engines and generator sets, with ongoing investments to meet regulatory emissions standards[27][28]. Cat Financial - Cat Financial, the financial products segment, offers retail and wholesale financing alternatives, significantly supporting sales of Caterpillar products[31][36]. - Cat Financial's operations are influenced by the ability of dealers to sell equipment and customers' willingness to enter financing agreements[36]. - The competitive landscape for Cat Financial includes various banks and finance companies, as well as financial subsidiaries of competing manufacturers[35]. Insurance Operations - Caterpillar Insurance Company operates in all 50 states and is regulated to ensure compliance with solvency requirements[40]. - Caterpillar Life Insurance Company provides reinsurance coverage and is also regulated to meet financial stability standards[41]. - Caterpillar Insurance Co. Ltd. insures its parent and affiliates for general liability and provides reinsurance for employee benefit plans[42]. Order Backlog - The order backlog was approximately $30.0 billion at December 31, 2024, up from $27.5 billion at December 31, 2023, with $8.0 billion not expected to be filled in 2025[48]. Workforce and Safety - Caterpillar employed about 112,900 full-time employees as of December 31, 2024, a slight decrease from 113,200 in 2023, with 51,500 located in the U.S. and 61,400 outside[63]. - The recordable injury frequency rate increased to 0.43 in 2024 from 0.40 in 2023, indicating a focus on improving workplace safety[57]. - Caterpillar's workforce includes 7,386 hourly production employees in the U.S. covered by collective bargaining agreements with various labor unions[63]. Research and Development - The company has made significant investments in research and development to comply with environmental regulations, particularly regarding emissions standards for internal combustion engines[65]. - Research and development expenses for 2024 were $2,107 million, consistent with $2,108 million in 2023, indicating stable investment in innovation[318]. Financial Performance - Total sales and revenues for Caterpillar Inc. in 2024 were $64,809 million, a decrease of 3.7% from $67,060 million in 2023[318]. - Operating profit for 2024 was $13,072 million, slightly up from $12,966 million in 2023, reflecting a 0.8% increase[318]. - Profit attributable to common shareholders for 2024 was $10,792 million, compared to $10,335 million in 2023, representing a 4.4% increase[318]. - Profit per common share for 2024 was $22.17, up from $20.24 in 2023, marking an increase of 9.5%[318]. - Comprehensive income attributable to shareholders in 2024 was $10,141 million, a decrease from $10,972 million in 2023[319]. Costs and Expenses - The cost of goods sold in 2024 was $40,199 million, down from $42,767 million in 2023, reflecting a 6.0% reduction[318]. - Interest expense of Financial Products increased to $1,286 million in 2024 from $1,030 million in 2023, a rise of 24.8%[318]. Assets and Liabilities - Total assets increased to $87,764 million in 2024 from $87,476 million in 2023, reflecting a growth of 0.33%[321]. - Current liabilities decreased to $32,272 million in 2024 from $34,728 million in 2023, a reduction of 7.06%[321]. - Long-term debt due after one year increased to $27,351 million in 2024 from $24,472 million in 2023, an increase of 11.66%[321]. Shareholder Equity and Dividends - Total shareholders' equity slightly decreased to $19,494 million in 2024 from $19,503 million in 2023, a decline of 0.05%[325]. - Dividends declared increased to $2,690 million in 2024 compared to $2,599 million in 2023, marking a rise of 3.51%[325]. Cash Flow and Investments - Net cash provided by operating activities was $12,035 million in 2024, down from $12,885 million in 2023, reflecting a decrease of 6.6%[327]. - The company repurchased 23,417,282 common shares in 2024, totaling $7,997 million[325]. - The company reported a net cash used for financing activities of $9,565 million in 2024, compared to $6,932 million in 2023, reflecting an increase of 38.1%[327]. Credit and Receivables - Trade receivables from dealers and end users were $7,864 million, $7,923 million, and $7,551 million as of December 31 for 2024, 2023, and 2022, respectively[357]. - The total amount of finance receivables that are 91+ days past due was $188 million as of December 31, 2024, compared to $101 million in 2023, showing an increase of approximately 86.1%[440]. - The provision for credit losses for the year ended December 31, 2024, was $84 million, compared to $47 million in 2023, reflecting an increase of approximately 78.7%[437]. Stock-Based Compensation - Stock-based compensation expense before tax for 2024 was $223 million, up from $208 million in 2023[386]. - The total unrecognized compensation cost from stock-based compensation arrangements at December 31, 2024, was $148 million, expected to be recognized over approximately 1.8 years[387]. Taxation - The provision for income taxes in 2024 was $2,629 million, reflecting an effective tax rate of 19.7%[411]. - The company paid net income tax and related interest of $3,126 million in 2024, an increase from $2,949 million in 2023[414].