10-KPeriod: FY2022

CATERPILLAR INC Annual Report, Year Ended Dec 31, 2022

Filed February 15, 2023For Securities:CAT

Summary

Caterpillar Inc. (CAT) reported strong sales and revenue growth for the fiscal year 2022, reaching $59.427 billion, a 17% increase over 2021, driven by favorable price realization and higher sales volumes across its Construction Industries, Resource Industries, and Energy & Transportation segments. Despite increased manufacturing costs and SG&A expenses, the company maintained a healthy operating profit margin of 13.3%. A significant event was a $925 million goodwill impairment charge related to the Rail division, impacting the overall profit per share. However, adjusted profit per share saw a notable increase, reflecting underlying operational strength. The company's outlook for 2023 remains positive, with expectations for continued sales growth driven by strong order backlogs and improving supply chain dynamics. Caterpillar is strategically investing in services, digital technologies, electrification, and autonomy to fuel long-term profitable growth. The company's robust operating cash flow and substantial liquidity position underscore its financial stability, enabling continued returns to shareholders through dividends and share repurchases, while maintaining a mid-A credit rating. Investors should monitor commodity price trends and global economic conditions, as these remain key factors influencing demand for Caterpillar's products.

Financial Highlights

55 data points
Beta

Revenue

$59.43B

30.4% Gross Margin

Net Income

$6.71B

11.3% Net Margin

EPS (Diluted)

$12.64

Total Assets

$81.94B

Cash & Equivalents

$7.01B

Free Cash Flow

$6.47B

Financial Statements
Beta
Revenue$59.43B
Cost of Revenue$41.35B
Gross Profit$18.08B
R&D Expenses$1.81B
SG&A Expenses$5.65B
Operating Expenses$51.52B
Operating Income$7.90B
Net Income$6.71B
EPS (Basic)$12.72
EPS (Diluted)$12.64
Shares Outstanding (Basic)526.90M
Shares Outstanding (Diluted)530.40M

Key Highlights

  • 1Total sales and revenues increased by 17% to $59.427 billion in 2022, up from $50.971 billion in 2021.
  • 2Operating profit increased by 15% to $7.904 billion, with an operating profit margin of 13.3%.
  • 3Profit per share was $12.64 in 2022, compared to $11.83 in 2021. Adjusted profit per share was $13.84 in 2022, up from $10.81 in 2021.
  • 4A goodwill impairment charge of $925 million was recorded for the Rail reporting unit.
  • 5Enterprise operating cash flow was $7.8 billion in 2022.
  • 6The order backlog increased to approximately $30.4 billion at December 31, 2022, up from $23.1 billion at December 31, 2021.

Frequently Asked Questions

Caterpillar's sales growth in 2022 was primarily driven by favorable price realization and higher sales volume across its Construction Industries, Resource Industries, and Energy & Transportation segments. Changes in dealer inventories and increased services also contributed to the rise in sales volume.

Caterpillar recorded a goodwill impairment charge of $925 million in 2022, specifically related to the Rail division, due to a lower outlook for its locomotive offerings. This charge negatively impacted reported profit per share but was excluded from the calculation of adjusted profit per share.

Caterpillar expects sales to increase in 2023 compared to 2022, driven by favorable price realization and strong order backlogs, alongside improving supply chain dynamics. The company anticipates continued momentum in services and strategic investments in technology and new offerings.

The Financial Products segment, primarily managed by Cat Financial, provides financing and insurance to customers and dealers. While revenues increased slightly, segment profit decreased by 5% due to an unfavorable impact from equity securities in Insurance Services. Cat Financial maintained healthy financial ratios and managed its risks through a match-funding policy and derivative instruments.