10-KPeriod: FY2021

CATERPILLAR INC Annual Report, Year Ended Dec 31, 2021

Filed February 16, 2022For Securities:CAT

Summary

Caterpillar Inc.'s (CAT) 2021 10-K filing reveals a strong financial performance, with sales and revenues increasing by 22% to $50.971 billion, driven by higher demand across all regions and segments. The company's operating profit margin improved to 13.5% from 10.9% in the previous year. This growth was fueled by higher sales volume, favorable price realization, and robust demand in key industries like construction and energy. The report highlights Caterpillar's ongoing commitment to operational efficiency and strategic growth initiatives, including investments in new product development and technology. Despite facing supply chain disruptions and rising costs, the company managed to navigate these challenges effectively. The Financial Products segment also showed significant improvement, with profit increasing by 54%, largely due to lower provisions for credit losses. Caterpillar ended the year with a solid liquidity position and a substantial order backlog of $23.1 billion, indicating positive outlook for future performance.

Financial Highlights

55 data points
Beta

Revenue

$50.97B

30.3% Gross Margin

Net Income

$6.49B

12.7% Net Margin

EPS (Diluted)

$11.83

Total Assets

$82.79B

Cash & Equivalents

$9.26B

Free Cash Flow

$6.11B

Financial Statements
Beta
Revenue$50.97B
Cost of Revenue$35.51B
Gross Profit$15.46B
R&D Expenses$1.69B
SG&A Expenses$5.37B
Operating Expenses$44.09B
Operating Income$6.88B
Net Income$6.49B
EPS (Basic)$11.93
EPS (Diluted)$11.83
Shares Outstanding (Basic)544.00M
Shares Outstanding (Diluted)548.50M

Key Highlights

  • 1Sales and revenues increased by 22% to $50.971 billion in 2021, compared to $41.748 billion in 2020.
  • 2Operating profit margin improved to 13.5% in 2021, up from 10.9% in 2020.
  • 3Profit per share was $11.83 in 2021, a significant increase from $5.46 in 2020.
  • 4The order backlog stood at $23.1 billion at the end of 2021, up from $14.2 billion at the end of 2020.
  • 5Enterprise operating cash flow was $7.2 billion in 2021.
  • 6The company acquired the Oil & Gas division of Weir Group PLC for $359 million, strengthening its Energy & Transportation segment.
  • 7Dealer inventories were relatively flat in 2021 after a decrease in 2020, signaling a stabilizing demand environment.

Frequently Asked Questions

Caterpillar's sales growth in 2021 was primarily driven by higher end-user demand for equipment and services across all geographic regions and its three main segments. This was complemented by favorable price realization and a significant shift in dealer inventory levels compared to 2020, where dealers had decreased their inventories.

Caterpillar addressed supply chain disruptions and rising costs by proactively redirecting components, altering assembly processes, and implementing appropriate price actions. The company continues to monitor the evolving situation and expects these challenges to persist, but has taken steps to mitigate their impact on its ability to meet customer demand.

The Financial Products segment showed strong performance with a 54% increase in profit, largely due to a lower provision for credit losses at Cat Financial and favorable impacts from returned equipment and equity securities. Past due accounts and write-offs decreased, reflecting improved economic conditions and the company's risk management practices, indicating a positive outlook for the segment.

Caterpillar's long-term cash deployment strategy prioritizes maintaining a strong financial position to support its 'Mid-A' credit rating. Following this, the company intends to fund operational requirements and strategic growth initiatives. A significant portion of ME&T free cash flow is returned to shareholders through dividend growth and share repurchases.