01—Abstract
Summary
Summary of the 10-K filed February 16, 2022. Cited figures are marked; the original filing is the authoritative source.
Caterpillar Inc.'s (CAT) 2021 10-K filing reveals a strong financial performance, with sales and revenues increasing by 22% to $50.971 billiona, driven by higher demand across all regions and segments.
The company's operating profit margin improved to 13.5%b 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 billionc, indicating positive outlook for future performance.
02—Key points
Key Highlights
- Sales and revenues increased by 22% to $50.971 billion in 2021, compared to $41.748 billion in 2020.
- Operating profit margin improved to 13.5% in 2021, up from 10.9% in 2020.
- Profit per share was $11.83 in 2021, a significant increase from $5.46 in 2020.
- The order backlog stood at $23.1 billion at the end of 2021, up from $14.2 billion at the end of 2020.
- Enterprise operating cash flow was $7.2 billion in 2021.
- The company acquired the Oil & Gas division of Weir Group PLC for $359 million, strengthening its Energy & Transportation segment.
- Dealer inventories were relatively flat in 2021 after a decrease in 2020, signaling a stabilizing demand environment.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Caterpillar Inc kept $0.13.
- Revenue$50.97B100.0%
- Cost of revenue−$35.51B69.7%
- Gross profit$15.46B30.3%
- Operating costs−$8.58B16.8%
- Operating income$6.88B13.5%
- Interest, other & tax−$389.0M0.8%
- Net income$6.49B12.7%
Where FY2021 revenue went
$50.97B- Cost of revenue: $35.51B, 70% of revenue
- Net income: $6.49B, 13% of revenue
- R&D: $1.69B, 3.3% of revenue
- SG&A: $5.37B, 11% of revenue
- Other operating costs: $1.53B, 3.0% of revenue
- Interest, other & tax: $389.0M, 0.8% of revenue
Kept 13% as net incomeInterest, other & tax $389.0M · 0.8%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 16, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $50.97B$41.75B | +22.1% |
| Cost of Revenue | $35.51B$29.08B | +22.1% |
| Gross Profit | $15.46B$12.67B | +22.0% |
| R&D Expenses | $1.69B$1.42B | +19.2% |
| SG&A Expenses | $5.37B$4.64B | +15.6% |
| Operating Expenses | $44.09B$37.20B | +18.5% |
| Operating Income | $6.88B$4.55B | +51.1% |
| Net Income | $6.49B$3.00B | +116.4% |
| EPS (Basic) | $11.93$5.51 | +116.5% |
| EPS (Diluted) | $11.83$5.46 | +116.7% |
| Shares Outstanding (Basic) | 544.00M544.10M | 0.0% |
| Shares Outstanding (Diluted) | 548.50M548.60M | 0.0% |
05—Questions
Frequently Asked Questions
What were the main drivers of Caterpillar's sales growth in 2021?
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.
How did Caterpillar manage supply chain disruptions and rising costs?
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.
What is the outlook for Caterpillar's Financial Products segment?
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.
What is Caterpillar's approach to returning capital to shareholders?
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.
06—Continue