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This Management s Discussion and Analysis of Financial Condition and Results of Op

erations should be read in conjunction with our discussion of cautionary stateme

nts and significant risks to the company s business under Item 1A. Risk Factors of
this Form 10-K.
Our 2015 sales and revenues were $47.011 billion, a decrease of 15 percent from
$55.184 billion in 2014. The two most significant reasons for the decline from
2014 were weakening economic growth and substantially lower commodity prices. Th
e impact of weak economic growth was most pronounced in developing countries, su
ch as China and Brazil. Lower oil prices had a substantial negative impact on th
e portion of Energy & Transportation that supports oil drilling and well servici
ng. Profit in 2015 was $2.102 billion, a decrease of 43 percent from $3.695 bill
ion in 2014. The 2015 profit per share was $3.50, down 40 percent from $5.88 in
2014. Profit declined primarily due to lower sales volume.
Fourth-quarter 2015 sales and revenues were $11.030 billion, down $3.214 billion
from $14.244 billion in the fourth quarter of 2014. Fourth-quarter 2015 loss wa
s $87 million compared with profit of $757 million in the fourth quarter of 2014
. The loss was $0.15 per share in the fourth quarter of 2015 compared with profi
t per share of $1.23 in the fourth quarter of 2014.
Highlights for 2015 include:
2015 sales and revenues were $47.011 billion, down 15 percent from 2014. Sales d
eclined in all regions and in all segments.
Restructuring costs were $908 million in 2015 with an after-tax impact of $1.14
per share.
Profit per share was $3.50 in 2015, or $4.64 per share excluding restructuring c
osts. Profit in 2014 was $5.88 per share, or $6.38 per share excluding restructu
ring costs.
Inventory declined about $1.45 billion during the fourth quarter of 2015. For th
e full year, inventory decreased about $2.5 billion.
Machinery, Energy & Transportation (ME&T) operating cash flow for 2015 was about
$5.2 billion.
ME&T debt-to-capital ratio was 39.1 percent at the end of 2015, compared with 37
.4 percent at the end of 2014. We ended the year with about $6.5 billion of ente
rprise cash.
During the year, we repurchased about $2 billion of Caterpillar stock and increa
sed the quarterly dividend by 10 percent.
Restructuring Costs
For the past several years, we have incurred substantial restructuring costs as
a result of actions to lower our cost structure in response to weak economic con
ditions in the key industries we serve. In 2015, we incurred $908 million of res
tructuring costs for employee separation costs related to a reduction in workfor
ce and for costs related to closure and consolidation of numerous manufacturing
facilities throughout the company. We incurred restructuring costs of $441 milli
on in 2014, including $273 million related to actions at our Gosselies, Belgium,
facility to reduce costs and improve competitiveness. We expect to take additio
nal restructuring actions in 2016 and anticipate that these actions will result
in costs of about $400 million.
* Glossary of terms included on pages 46 to 48; first occurrence of terms shown
in bold italics.