Caterpillar, Inc. · NYSE:CAT
Caterpillar — Q4 2017 Earnings Presentation
15 slides from Caterpillar's earnings presentation, Jan 25, 2018
Slide 1: Fourth-Quarter and Year-End 2017 Financial Review
Fourth-Quarter and Year-End 2017 Financial Review January 25, 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this financial review relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “a
Slide 3: Agenda
Agenda • Fourth-Quarter 2017 Results • Full-Year 2017 Results • 2018 Outlook • Key Takeaways Caterpillar Confidential Green 3
Slide 4: Fourth-Quarter 2017 Financial Results
Fourth-Quarter 2017 Financial Results Adjusted Sales and Revenues Profit (Loss) Per Share Profit Per Share1 Q4 Highlights (in billions of dollars) (in dollars) (in dollars) Sales $12.9 ($2.18) $2.16 • Increased across all regions and the three primary segments • Largest increase in North America: Co
Slide 5: Consolidated Operating Profit (Loss)
Consolidated Operating Profit (Loss) Fourth-Quarter 2017 vs. Fourth-Quarter 2016 Q4 Highlights • Higher sales volume • Favorable price realization • Period costs increased, largely ($ in millions) due to higher short-term incentive compensation expense • Lower mark-to-market losses • Absence of good
Slide 6: Full-Year 2017 Financial Results
Full-Year 2017 Financial Results Adjusted Full-Year Highlights Sales and Revenues Profit (Loss) Per Share Profit Per Share1 Sales (in billions of dollars) (in dollars) (in dollars) • Increased across all regions and three $45.5 $1.26 $6.88 primary segments • About half of sales increase in Construct
Slide 7: Consolidated Operating Profit
Consolidated Operating Profit Full-Year 2017 vs. Full-Year 2016 Full-Year Highlights • Higher sales volume • Favorable price realization and variable manufacturing costs ($ in millions) • Period costs increased, largely due to higher short-term incentive compensation expense • Lower mark-to-market l
Slide 8: Impact of U.S. Tax Reform
Impact of U.S. Tax Reform 2017 Long Term • $2.4 Billion Provisional Charge • Positive for Caterpillar − Write down net deferred tax • A more level playing field with non- assets U.S. competitors − Mandatory deemed repatriation • Greater flexibility to access non-U.S. of non-U.S. earnings cash • Lowe
Slide 9: 2018 Outlook
2018 Outlook 2017 Actual 2018 Outlook2 Profit Per Share $1.26 $7.75 – $8.75 Restructuring Costs $1.3 billion $400 million Adjusted Profit Per Share1 $6.88 $8.25 – $9.25 1 2017 excludes restructuring costs, pension and OPEB mark-to-market losses, state deferred tax valuation allowance reversal, a gai
Slide 10: 2018 Assumptions – Construction Industries
2018 Assumptions – Construction Industries North America 2017 Sales by Region • Improvement in residential, non-residential and infrastructure Latin America • Up from a very low base ASIA/ PACIFIC NORTH EAME AMERICA • Europe up on business confidence and robust growth • AME & CIS – improved oil and
Slide 11: 2018 Assumptions – Resource Industries
2018 Assumptions – Resource Industries • Most miners have returned to profitability 2017 Sales by Region • Commodity prices generally above investment thresholds • Machine utilization increasing ASIA/ PACIFIC NORTH AMERICA • Parked fleet declining, and rebuilds should continue • Mining capital expen
Slide 12: 2018 Assumptions – Energy & Transportation
2018 Assumptions – Energy & Transportation Oil & Gas 2017 Sales by Application • Strong gas compression and well servicing activity in North America • North America drilling demand likely to remain weak Power Generation • Up after a multi-year downturn Oil & Gas Transportation Industrial • Expect sa
Slide 13: Additional Assumptions Included in 2018 Outlook
Additional Assumptions Included in 2018 Outlook • Higher sales across the three primary segments • Increase in period costs due to wage inflation and targeted investments • Short-term incentive compensation expense of about $900 million • Slightly favorable price realization, mostly offset by higher
Slide 14: Key Takeaways
Key Takeaways Great quarter Good cost control Strong balance and great year and strong sheet margins Continue to execute our strategy Improving economic and invest for long-term profitable conditions across many end growth markets Caterpillar Confidential Green 14
Slide 15: Caterpillar Confidential Green
Caterpillar Confidential Green 15