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| | Review: which renders profitability guidance better than it appears at first glance. |
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| | Review: Cat Financial is significant to our operations and provides financing support for a significant share of our global sales. |
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| | Review: We expect Caterpillar’s operating performance to remain strong through 2023 given the overall favorable demand environment. |
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| | Review: We recognize all derivatives at their fair value in Statement 3. |
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| | Review: We believe Amazon is financially sound. |
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| | Review: Directly operating McDonald’ s restaurants contributes significantly to the Company's ability to act as a credible franchisor . |
| | "Review: Fair Value as of 14 Dec 2022 03:58, UTC.Morningstar Equity Company Report | Report as of 15 Feb 2023 21:20, UTC | Reporting Currency: USD | Trading Currency: USD | Exchange: NEW YORK STOCK EXCHANGE, INC. Page 19 of 28 |
| | ©2023 Morningstar." |
| | "Review: Total finite-lived intangible assets 14 $ 4,049 $ (3,007 )$ 1,042 |
| | |
| | Finite-lived intangible assets are amortized over their estimated useful lives and tested for impairment if events or changes in circumstances |
| | indicate that the asset may be impaired." |
| | "Review: Our results of operations are substantially af fected by economic conditions, including inflationary pressures, which can vary significantly by |
| | market and can impact consumer disposable income levels and spending habits." |
| | "Review: Our equity analysts will incorporate this |
| | new U.S. corporate tax rate assumption into their valuation models in the coming weeks." |
| | "Review: In addition to risks described elsewhere in this Item 1A relating to fulfillment network and inventory optimization by us and third parties, we |
| | are exposed to significant inventory risks that may adversely affect our operating results as a result of seasonality, new product launches, rapid |
| | changes in product cycles and pricing, defective merchandise, changes in customer demand and consumer spending patterns, changes in consumer |
| | tastes with respect to our products, spoilage, and other factors." |
| | Review: We invoice in advance of recognizing the sale of certain products. |
| | "Review: ☐ |
| | Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the |
| | registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b) ☐ |
| | Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). |
| | Review: Increases in operating income primarily result from increases in sales of products and services and efficiently managing our |
| | operating costs, partially offset by investments we make in longer-term strategic initiatives, including capital expenditures focused on improving the |
| | customer experience. |
| | Review: Accordingly, we recognized a goodwill impairment charge of $925 million, resulting in a full impairment of Rail’s |
| | goodwill balance as of October 1, 2022. |
| | Review: Information required by Item 7A appears in Note 1 — “Operations and summary of significant accounting policies,” Note 4 — “Derivative financial |
| | instruments and risk management,” Note 18 — “Fair value disclosures” and Note 19 — “Concentration of credit risk” of Part II, Item 8 “Financial |
| | Statements and Supplementary Data.” |
| | Review: Our star ratings are guideposts to a broad audience and |
| | individuals must consider their own specific investment |
| | goals, risk tolerance, tax situation, time horizon, income |
| | needs, and complete investment portfolio, among other |
| | factors. |
| | Review: Sustainalytics’ ESG Risk Ratings measure the degree to |
| | which company’s economic value at risk is driven by en- |
| | vironment, social and governance (ESG) factors. |
| | Review: The company believes the economic forecasts employed represent reasonable and supportable forecasts, followed by a reversion |
| | to long-term trends. |
| | Review: These liability-classified awards are remeasured to fair value at the end of each reporting period |
| | until settlement or expiration. |
| | Review: Breakfast of ferings may include |
| | breakfast sandwiches, such as the Egg McMuf fin, Sausage McMuf fin with Egg and McGriddles, biscuit and bagel sandwiches, oatmeal, hash browns, |
| | breakfast burritos and hotcakes. |
| | Review: In this |
| | measure, equipment acquired under finance leases is reflected as if these assets had been purchased with cash, which is not the case as these assets |
| | have been leased. |
| | Review: Responsibilities include business strategy, product design, product management and development, manufacturing, |
| | marketing and sales and product support. |
| | |
| | Review: In connection with that policy, we use interest rate derivative instruments to modify the debt structure to match assets within the |
| | receivables portfolio. |
| | Review: Our long-term debt is |
| | carried at amortized cost and fluctuations in interest rates do not impact our consolidated financial statements. |
| | Review: See Item 8 of Part II, “Financial |
| | Statements and Supplementary Data — Note 9 — Income Taxes” for additional information. |
| | Review: Caterpillar serves utility customers through its SEM brand, with low-feature products that are |
| | specifically designed with the cost-conscious customer in mind. |
| | Review: Recent technology investments are encouraging, with diversity in ordering options, customization, |
| | and targeted promotions likely representing table stakes in the restaurant industry moving forward. |
| | |
| | Review: Sustainalytics analyzes over 1,300 data points to assess a |
| | company’s exposure to and management of ESG risks. |
| | Review: For Institutional Investor |
| | audiences only. |
| | Review: 22.Restructuring Costs – May include costs for employee separation, long-lived asset impairments and contract terminations. |
| | |
| | Review: The total combined liabilities for international retirement plans were $ 36.6 million and $ 41.7 million at December 31, 2022 and 2021, respectively . |
| | Review: Depreciation and amortization expense is classified within the corresponding operating expense categories on our |
| | consolidated statements of operations. |
| | Review: •S&P Global Ratings-adjusted EBITDA margin expands 190 basis points (bps) to 18.2% in |
| | 2023 and around 19.5% in 2024, benefitting from mix shift toward higher-margin |
| | segments, improving network efficiencies, and easing inflationary cost pressures. |
| | |
| | Review: Source: Moody's Financial Metrics™; Moody's projections |
| | 7 29 June 2023 Caterpillar Inc.: Update to credit analysisMOODY'S INVESTORS SERVICE CORPORATES |
| | |
| | Ratings |
| | Exhibit 9 |
| | Category Moody's Rating |
| | CATERPILLAR INC. |
| | |
| | |
| | Review: Financial Strength Sean Dunlop, Equity Analyst, 1 Feb 2023 |
| | Review: With stability of cash flows driven by an increasingly franchised model and well- |
| | matched future minimum rent receipts and debt service payments, we do not foresee credit problems on the |
| | horizon for McDonald’s. |
| | Review: Aa 19.7x Aa |
| | Factor 5 : Financial Policy (15%) |
| | a) |
| | Review: The plan focuses on a unified marketing approach, a |
| | commitment to the core menu, and an emphasis on the four D's: delivery, digital, drive-thru, and development." |
| | "Review: Curr P-1 |
| | CATERPILLAR FINANCIAL SERVICES LTD." |
| | "Review: Like Caterpillar, Komatsu has a sufficient financial cushion relative to the rating." |
| | "Review: To order reprints, call +1 312-696-6100." |
| | Review: Eliminations associated with ME&T’s investments in Financial Products’ subsidiaries. |
| | "Review: Write-offs, net of recoveries, were |
| | $46 million for 2022, compared with $205 million for 2021." |
| | "Review: Short-term debt totaled $18.9 billion as of March 31, 2023." |
| | "Review: If we do not control the building after the construction period ends, the assets and liabilities for construction costs are derecognized, and we |
| | classify the lease as operating." |
| | "Review: In |
| | the quarter, Caterpillar noted that dealer inventories increased $700 million sequentially compared with the third |
| | quarter." |
| | "Review: To license the research, call +1 312-696-6869." |
| | "Review: -61,078 -60,735" |
| | "Review: To license the research, call +1 312-696-6869." |
| | "Review: which are reported under its Class 2 insurance license and life and disability |
| | coverages, which are reported under its Class B insurance license." |
| | "Review: Beyond investment strategy, financial leverage, and |
| | dividend and share buyback policies, analysts also con-sidered execution, compensation, related party transac- |
| | tions, and accounting practices in the rating." |
| | Review: Last Close as of 15 Feb 2023. |
| | "Review: International (924) (7,746) |
| | AWS 18,532 22,841 |
| | Consolidated $ 24,879 $ 12,248 |
| | Operating income was $24.9 billion and $12.2 billion for 2021 and 2022." |
| | Review: Corporate Methodology: |
| | Review: Yes ☐ |
| | "Review: •Long-lived assets impairment review |
| | Long-lived assets (including goodwill) are reviewed for impairment annually ." |
| | "Review: Jan 2023 |
| | FT S&P Dividend Atrts" |
| | "Review: Communities |
| | McDonald’ s embraces its role and commitment to the communities it serves." |
| | Review: All Rights Reserved. |
| | "Review: To license the research, call +1 312-696-6869." |
| | "Review: In March 2022, the case was stayed pending resolution of review |
| | petitions we filed with the United States Patent and Trademark Office." |
| | "Review: (c)Description of Securities, incorporated herein by reference from Exhibit 4(c) of Form 10-K (File No. 001-05231), for the year |
| | ended December 31, 2019." |
| | "Review: Additionally, |
| | the company benefits from a formidable independent dealer network, and the retail and |
| | wholesale financing provided by CAT Financial." |
| | "Review: Moat Trend Dan Romanoff, Senior Equity Analyst, 3 Jun 2022" |
| | Review: www.spglobal.com/ratingsdirect |
| | "Review: The Company is required to assess the likelihood of |
| | any adverse judgments or outcomes to these matters as well as potential ranges of probable losses." |
| | "Review: Changes in Internal Control Over Financial Reporting |
| | There were no changes in our internal control over financial reporting during the quarter ended December 31, 2022 that materially affected, or |
| | are reasonably likely to materially affect, our internal control over financial reporting." |
| | "Review: These threats pose a risk to the security of |
| | our systems and networks and the confidentiality, availability and integrity of our data." |
| | Review: Item 9A.Controls and Procedures. |
| | Review: 3. |
| | Review: Food safety concerns may have an adverse effect on our business. |
| | "Review: Inc.--Peer Comparisons |
| | Debt/EBITDA (x) 1.2 1.5 0.0 0.0 0.0 |
| | FFO/debt (%) 76.1 54.7 NM NM NM |
| | OCF/debt (%) 55.5 51.2 NM NM NM |
| | FOCF/debt (%) (10.1) 22.7 NM NM NM |
| | DCF/debt (%) (16.3) (5.2) NM NM NM |
| | Amazon.com Inc.--Peer" |
| | "Review: Yes ☒ No ☐ |
| | Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act." |
| | "Review: The estimated number |
| | of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, |
| | such amounts will be recorded as a cumulative adjustment in the period estimates are revised." |
| | "Review: Pro forma results of operations have not been presented because the effects of the 2022 acquisitions, individually and in the aggregate, were not |
| | material to our consolidated results of operations." |
| | "Review: The Company has determined that it is |
| | the principal in these arrangements." |
| | Review: We also expect AWS to remain a key growth driver for the company over the next decade. |
| | "Review: The Company does not hold or issue |
| | derivatives for trading purposes." |
| | "Review: Morningstar is the provider of the regulated finan- |
| | cial advice and takes responsibility for the production of |
| | this report." |
| | "Review: The Content shall not be used for any unlawful or |
| | unauthorized purposes." |
| | Review: The Company returned a total of $8.1 billion to shareholders through dividends and share repurchases in 2022. |
| | Review: A decrease in the rate would increase our expense. |
| | "Review: The company establishes prices to dealers after receiving input from dealers on transactional pricing in the |
| | marketplace." |
| | "Review: Chairman of the Board |
| | and Chief Executive Officer February 15, 2023/s/ D. James Umpleby III |
| | |
| | D. James Umpleby III |
| | |
| | February 15, 2023 /s/" |
| | Review: Caterpillar or Cat Financial may guarantee subsidiary borrowings under these lines. |
| | "Review: This means that when a |
| | stock hits 5 stars, we expect there is a 75% chance that |
| | the intrinsic value of that stock lies above the current |
| | market price." |
| | Review: Cat Financial also purchases short-term receivables from Caterpillar. |
| | Review: 16.5 |
| | "Review: Our global underground competitors include Epiroc AB, |
| | Komatsu Ltd., and Sandvik AB." |
| | "Review: [Reserved] 27 |
| | Item 7." |
| | "Review: The amount of |
| | unused commitments to extend credit to Caterpillar dealers was $11.31 billion at Decemb er 31, 2022." |
| | "Review: To license the research, call +1 312-696-6869." |
| | "Review: •Employees |
| | Hundreds of thousands of people are employed by the Company and in restaurants owned and operated by its subsidiaries." |
| | "Review: 9.EAME – A geographic region including Europe, Africa, the Middle East and the Commonwealth of Independent States (CIS)." |
| | "Review: Employees are eligible for |
| | matching contributions equal to 100 percent of employee contributions to the plan up to 6 percent of cash compensation and an annual employer |
| | contribution that ranges from 3 to 5 percent of cash compensation (depending on years of service and age)." |
| | "Review: To license the research, call +1 312-696-6869." |
| | Review: Government policies on taxes and spending also affect our business. |
| | "Review: Ultimately, the rat- |
| | ing decision rests with the analyst." |
| | "Review: These items consist of (i) goodwill impairment, (ii) restructuring costs and (iii) pension and OPEB mark-to-market (gains) losses resulting from plan |
| | remeasurements." |
| | Review: Caterpillar SARL (“CSARL”) |
| | "Review: 10.4† Form of Restricted Stock Unit Agreement for Officers and Employees (incorporated by reference to the Company’s Annual Report on |
| | Form 10-K for the Year ended December 31, 2002)." |
| | Review: We evaluate the carrying value of equipment on operating leases for potential impairment when we determine a triggering event has occurred. |
| | Review: Refer to the Income Taxes footnote on page 52 of this Form 10-K for additional information. |
| | "Review: To order reprints, call +1 312-696-6100." |
| | "Review: During the year ended December 31, 2022, Cat Financial's forecasts for the markets in which it operates reflected a continuation of the trend of |
| | relatively low unemployment rates and delinquencies. |
| | Review: 238. |
| | Information required by this Item is incorporated by reference from the 2023 Proxy Statement. |
| | |
| | Review: Total debt as of December 31, 2022 was $36.99 billion, a decrease of $796 million from year-end 2021. |
| | Review: We operate customer service centers |
| | globally, which are supplemented by co-sourced arrangements. |
| | Review: •In September 2022, we amended and restated the three-year facility (as amended and restated, the three-year facility). |
| | |
| | Review: In all markets, we compete on the basis of product |
| | performance, customer service, quality and price. |
| | |
| | |
| | |
| | Review: We also hold cash equivalents and/or marketable securities in foreign currencies such as British |
| | Pounds, Canadian Dollars, Euros, and Japanese Yen. |
| | Review: Our computer and communications systems and operations in the past have been, or in the future could be, damaged or interrupted due to |
| | events such as natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), |
| | Review: Also, projections of any |
| | evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the |
| | degree of compliance with the policies or procedures may deteriorate. |
| | Review: The assumptions about future cash flows |
| | and growth rates are based on each reporting unit's long-term forecast and are subject to review and approval by senior management." |
| | "Review: In 2021, the Company opened 1,494 restaurants and closed 661 |
| | restaurants." |
| | "Review: This policy allows the use |
| | of foreign currency forward, option and cross currency contracts to offset the risk of currency mismatch between the assets and liabilities, and |
| | exchange rate risk associated with future transactions denominated in foreign currencies." |
| | "Review: Lease cost recognized in our consolidated statements of operations is summarized as follows (in millions): |
| | Year Ended December 31, |
| | 2020 2021 2022 |
| | Operating lease cost $ 5,019 $ 7,199 $ 8,847 |
| | Finance lease cost: |
| | Amortization of lease assets 8,452 9,857 6,097 |
| | Interest on lease liabilities 617 473 361 |
| | Finance lease cost 9,069 10,330 6,458 |
| | Variable lease cost 1,238 1,556 1,852 |
| | Total lease cost $ 15,326 $ 19,085 $ 17,157 |
| | Other information about lease amounts recognized in our consolidated financial statements is as follows: |
| | December 31, 2021 December 31, 2022 |
| | |
| | Weighted-average remaining lease term – operating leases 11.3 years 11.6 years |
| | Weighted-average remaining lease term – finance leases 8.1 years 10.3 years |
| | Weighted-average discount rate – operating leases 2.2 % 2.8 % |
| | Weighted-average discount rate – finance leases 2.0 % 2.3 %" |
| | "Review: Generally, we base historical claim rates on actual warranty |
| | experience for each product by machine model/engine size by customer or dealer location (inside or outside North America)." |
| | "Review: Allowance for credit losses was 1.27% of finance receivables, which |
| | could also start to pick up if past due accounts were to increase." |
| | "Review: The parent has a support agreement with Caterpillar |
| | Financial that requires Caterpillar to remain the sole owner of Caterpillar Financial and may, under certain circumstances, require |
| | Caterpillar to make payments to Caterpillar Financial if Caterpillar Financial fails to maintain certain financial ratios." |
| | "Review: Debt highlights |
| | 2022 2021 2020 |
| | Fixed-rate debt as a percent of total debt 96 % 95 % 95 % |
| | Weighted-average annual interest rate of total debt 3.5 3.2 3.2 |
| | Foreign currency-denominated debt as a percent of total debt 36 36 36 |
| | Total debt as a percent of total capitalization (total debt and total Shareholders' equity) 120 115 126 |
| | Cash provided by operations as a percent of total debt 20 26 17 |
| | (1) All percentages are as of December 31, except for the weighted-average annual interest rate, which is for the year . |
| | Review: A prolonged |
| | period of economic weakness may also result in increased expenses due to higher allowances for doubtful accounts and potential goodwill and asset |
| | impairment charges. |
| | Review: The contributions to operating margin dif fer |
| | by segment due to each segment's ownership structure, primarily due to the relative percentage of franchised versus Company-operated |
| | restaurants." |
| | "Review: Our Risk Management Policy (policy) allows for the use of derivative financial instruments to prudently manage foreign currency |
| | exchange rate, interest rate and commodity price exposures." |
| | "Review: Restaurants from Ukraine were treated as temporarily closed and |
| | therefore included in the calculations." |
| | "Review: We believe that management's Accelerating the Arches 2.0 framework capitalizes well on the firm's cost |
| | advantages in marketing and technology investments." |
| | "Review: A firm’s |
| | moat trend is positive in cases where we think its sources |
| | of competitive advantage are growing stronger; stable |
| | where we don’t anticipate changes to competitive ad- |
| | vantages over the next several years; or negative when |
| | we see signs of deterioration." |
| | Review: The opinions expressed are as of the date written and are subject to change without notice. |
| | Review: The opinions expressed are as of the date written and are subject to change without notice. |
| | "Review: 42Table of Contents |
| | Subscription services - Our subscription sales include fees associated with Amazon Prime memberships and access to content including digital |
| | video, audiobooks, digital music, e-books, and other non-AWS subscription services." |
| | "Review: Under some of our commercial agreements, we maintain the inventory of other companies, thereby increasing the complexity of tracking |
| | inventory and operating our fulfillment network." |
| | Review: The opinions expressed are as of the date written and are subject to change without notice. |
| | "Review: Thereafter Total |
| | Long-term debt principal and interest $5,165 $10,618 $7,146 $5,253 $10,399 $63,815 $102,396 |
| | Operating lease liabilities 9,574 8,658 8,024 7,393 6,675 40,949 81,273 |
| | Finance lease liabilities, including interest 4,575 2,248 1,422 1,279 1,088 7,407 18,019 |
| | Financing obligations, including interest (1) 465 464 456 464 471 6,712 9,032 |
| | Leases not yet commenced 1,252 2,043 2,185 2,160 2,152 17,237 27,029 |
| | Unconditional purchase obligations (2) 8,156 7,217 5,366 4,525 3,419 6,093 34,776 |
| | Other commitments (3)(4) 3,173 1,608 1,027 982 622 8,652 16,064 |
| | Total commitments $32,360 $32,856 $25,626 $22,056 $24,826 $150,865 $288,589 |
| | ___________________ |
| | (1)Includes non-cancellable financing obligations for fulfillment, sortation, and data center facilities." |
| | "Review: In 2022, approximately 15.8 million shares were |
| | repurchased for $3.9 billion, bringing total purchases under the program to approximately 23.5 million shares or $5.6 billion." |
| | "Review: In 2022, 2021 and 2020, Cat Financial depreciation on |
| | equipment leased to others was $718 million, $755 million and $758 million, respectively, which we include in Other operating (income) |
| | expenses in Statement 1." |
| | "Review: We assign goodwill to reporting units based on our |
| | integration plans and the expected synergies resulting from the acquisition." |
| | "Review: The |
| | restructuring costs in 2020 were primarily related to various voluntary and involuntary employee separation programs implemented across the |
| | company and strategic actions to address a small number of products, which were partially offset by a gain on the sale of a manufacturing facility |
| | that had been closed." |
| | Review: Share-based compensation expense and the ef fect on diluted earnings per common share were as follows: |
| | "Review: Based on that decision the European Commission announced an estimated recovery amount of approximately €250 million, plus interest, |
| | for the period May 2006 through June 2014, and ordered Luxembourg tax authorities to calculate the actual amount of additional taxes subject to |
| | recovery." |
| | "Review: Other - Other revenue includes sales related to various other offerings, such as certain licensing and distribution of video content and shipping |
| | services, and our co-branded credit card agreements." |
| | "Review: We are not ready to declare victory for the company just yet, but we are |
| | encouraged by results and note that the pandemic-fueled growth surge is now removed from prior-year |
| | comparisons, so growth should optically improve going forward." |
| | "Review: Net income $ 6,177.4 $7,545.2 $4,730.5 |
| | Other comprehensive income (loss), net of tax |
| | Foreign currency translation adjustments: |
| | Gain (loss) recognized in accumulated other comprehensive |
| | income (AOCI), including net investment hedges (354.1) (216.2) 46.0 |
| | Reclassification of (gain) loss to net income 504.4 34.7 17.1 |
| | Foreign currency translation adjustments-net of tax |
| | benefit (expense) of $(207.6), $(186.5), and $204.8 150.3 (181.5) 63.1 |
| | Cash flow hedges: |
| | Gain (loss) recognized in AOCI 160.3 57.6 (129.1) |
| | Reclassification of (gain) loss to net income (104.8) 28.9 5.8 |
| | Cash flow hedges-net of tax benefit (expense) of $(16.0), $(24.9), and |
| | $36.6 55.5 86.5 (123.3) |
| | Defined benefit pension plans: |
| | Gain (loss) recognized in AOCI (118.7) 108.1 (43.5) |
| | Reclassification of (gain) loss to net income — — (0.4) |
| | Defined benefit pension plans-net of tax benefit (expense) |
| | of $43.2, $(36.6), and $9.3 (118.7) 108.1 (43.9) |
| | Total other comprehensive income (loss), net of tax 87.1 13.1 (104.1) |
| | Comprehensive income $ 6,264.5 $7,558.3 $4,626.4 |
| | See Notes to consolidated financial statements." |
| | "Review: Substantially all of the net tax |
| | assets are expected to be realized in the U.S. and other profitable markets." |
| | "Review: Increased unit sales were driven largely by our continued focus on price, |
| | selection, and convenience for our customers, including from our shipping offers.23Table of Contents |
| | International sales decreased 8% in 2022, compared to the prior year, primarily due to the impact of changes in foreign currency exchange |
| | rates, partially offset by increased unit sales, including sales by third-party sellers, advertising sales, and subscription services." |
| | Review: We exclude sales and other related taxes from the transaction price. |
| | Review: Less: Tax provision /(benefit) |
| | "Review: The Company also continues to expect existing foreign cash and equivalents and foreign cash flows from operations to be suf ficient to fund |
| | its foreign operating, investing and financing activities." |
| | Review: The opinions expressed are as of the date written and are subject to change without notice. |
| | "Review: Long-term debt |
| | December 31, |
| | (Millions of dollars)Effective Yield to |
| | Maturity 2022 2021 |
| | Machinery , Ener gy & Transportation: |
| | Notes—$ 759 million of 5.200 % due 2041 5.27% $ 752 $ 752 |
| | Debentures—$ 82 million of 8.000 % due 2023 8.06% — 82 |
| | Debentures—$ 1,000 million of 3.400 % due 2024 3.46% 999 999 |
| | Debentures—$ 193 million of 6.625 % due 2028 6.68% 192 192 |
| | Debentures—$ 500 million of 2.600 % due 2029 2.67% 498 498 |
| | Debentures—$ 800 million of 2.600 % due 2030 2.72% 794 793 |
| | Debentures—$ 500 million of 1.900 % due 2031 2.04% 495 495 |
| | Debentures—$ 242 million of 7.300 % due 2031 7.38% 240 240 |
| | Debentures—$ 307 million of 5.300 % due 2035 8.64% 229 226 |
| | Debentures—$ 460 million of 6.050 % due 2036 6.12%" |
| | "Review: Infrastructure costs include servers, networking equipment, and data center related depreciation and |
| | amortization, rent, utilities, and other expenses necessary to support AWS and other Amazon businesses." |
| | "Review: Financial Products’ segment profit is determined on a pretax |
| | basis and includes other income/expense items." |
| | "Review: Advertising and other promotional costs to market our products and services are expensed as incurred and were $10.9 billion, $16.9 billion, and |
| | $20.6 billion in 2020, 2021, and 2022." |
| | "Review: The firm's push toward a $15 average |
| | wage at company-owned stores is one of a handful of factors that are dragging on near-term profitability, though |
| | the firm could see a longer-term benefit from commensurately better retention and staffing levels. |
| | Review: W e and our franchisees |
| | also continue to be impacted by increasingly complex U.S. and international laws and regulations af fecting our respective workforces. |
| | Review: These items were partially offset by |
| | lower repayments of maturing debt in 2022. |
| | Review: Other Definitions |
| | Last Price: Price of the stock as of the close of the mar- |
| | ket of the last trading day before date of the report. |
| | Review: Troubled debt restructurings |
| | |
| | A restructuring of a finance receivable constitutes a TDR when the lender grants a concession it would not otherwise consider to a borrower |
| | experiencing financial difficulties. |
| | Review: Flurry of Leadership Changes at McDonald's Shouldn't Alter Firm's Course; We Maintain Our $227 FVE Sean |
| | Dunlop,Equity Analyst,27 Jun 2022Morningstar Equity Company Report | Report as of 1 Feb 2023 17:23, UTC | Reporting Currency: USD | Trading Currency: USD | Exchange: NEW YORK STOCK EXCHANGE, INC. Page 23 of 28 |
| | ©2023 Morningstar." |
| | "Review: Year Ended December 31, |
| | 2020 2021 2022 |
| | CASH, CASH EQUIV ALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD $ 36,410 $ 42,377 $ 36,477 |
| | OPERA TING ACTIVITIES: |
| | Net income (loss) 21,331 33,364 (2,722 ) |
| | Adjustments to reconcile net income (loss) to net cash from operating activities: |
| | Depreciation and amortization of property and equipment and capitalized content costs, operating |
| | lease assets, and other 25,180 34,433 41,921 |
| | Stock-based compensation 9,208 12,757 19,621 |
| | Other expense (income), net (2,582 ) (14,306 ) 16,966 |
| | Deferred income taxes (554) (310) (8,148 ) |
| | Changes in operating assets and liabilities: |
| | Inventories (2,849 ) (9,487 ) (2,592 ) |
| | Accounts receivable, net and other (8,169 ) (18,163 ) (21,897 ) |
| | Accounts payable 17,480 3,602 2,945 |
| | Accrued expenses and other 5,754 2,123 (1,558 ) |
| | Unearned revenue 1,265 2,314 2,216 |
| | Net cash provided by (used in) operating activities 66,064 46,327 46,752 |
| | INVESTING ACTIVITIES: |
| | Purchases of property and equipment (40,140 ) (61,053 ) (63,645 ) |
| | Proceeds from property and equipment sales and incentives 5,096 5,657 5,324 |
| | Acquisitions, net of cash acquired, and other (2,325 ) (1,985 ) (8,316 ) |
| | Sales and maturities of marketable securities 50,237 59,384 31,601 |
| | Purchases of marketable securities (72,479 ) (60,157 ) (2,565 )" |
| | "Review: Products that are exported from a country for sale |
| | typically transfer title and risk of ownership at the border of the destination country." |
| | "Review: Goodwill impairment char ge 925 — — |
| | Other 701 216 1,000 |
| | Changes in assets and liabilities, net of acquisitions and divestitures: |
| | Receivables – trade and other (220) (1,259 ) 1,442 |
| | Inventories (2,589 ) (2,586 ) (34) |
| | Accounts payable 798 2,041 98 |
| | Accrued expenses 317 196 (366) |
| | Accrued wages, salaries and employee benefits 90 1,107 (544)" |
| | "Review: 110Supplemental information related to leases was as follows: |
| | (Millions of dollars) |
| | December 31, 2022 December 31, 2021 |
| | Operating Leases |
| | Other assets $ 564 $ 625 |
| | Other current liabilities $ 151 $ 158 |
| | Other liabilities $ 428 $ 484 |
| | Weighted average r emaining lease term |
| | Operating leases 7 years 7 years |
| | Weighted average discount rates |
| | Operating leases 2 % 2 % |
| | Maturities of operating lease liabilities were as follows: |
| | (Millions of dollars) December 31, 2022 |
| | Amounts" |
| | Review: The opinions expressed are as of the date written and are subject to change without notice. |
| | "Review: This reduces the impact of fluctuating |
| | foreign currencies on cash flows and shareholders’ equity ." |
| | Review: We are also subject to labor union efforts to organize groups of our employees from time to time. |
| | "Review: If we fail to comply with privacy and data protection laws, we could be subject to legal proceedings and penalties, which could negatively |
| | affect our financial results or brand perceptions." |
| | "Review: We are also subject to taxation in various states and other foreign jurisdictions including China, France, Germany, India, Japan, Luxembourg, |
| | and the United Kingdom." |
| | "Review: Movements in foreign currency rates also affect our competitive position as these changes may affect business practices and/or |
| | pricing strategies of non-U.S.-based competitors." |
| | "Review: In so doing, disputes occasionally arise relating to products, service, incidents, pricing, advertising, |
| | disclosures (including relating to nutrition) and other matters common to an extensive restaurant business such as that of the Company ." |
| | "Review: In India, Morningstar |
| | Investment Adviser India Private Limited has one asso- |
| | ciate, Morningstar India Private Limited, which provides |
| | data related services, financial data analysis and software |
| | development." |
| | "Review: Due after one year through five years 1,642 1,568" |
| | "Review: 7.Currency – With respect to sales and revenues, currency represents the translation impact on sales resulting from changes in foreign currency |
| | exchange rates versus the U.S. dollar." |
| | "Review: Other Income (Expense), Net |
| | Other income (expense), net was $14.6 billion and $(16.8) billion during 2021 and 2022." |
| | "Review: Based on |
| | the balance of foreign funds as of December 31, 2022, of $18.3 billion, an assumed 5%, 10%, and 20% adverse change to foreign exchange would |
| | result in declines of $915 million, $1.8 billion, and $3.7 billion." |
| | "Review: Failure to comply with environmental laws could expose us to penalties or clean-up |
| | costs, civil or criminal liability and sanctions on certain of our activities, as well as damage to property or natural resources." |
| | "Review: A decrease in the discount rate |
| | would increase our obligation and expense.1 |
| | 1 |
| | 92Table of Contents |
| | U.S. Pension BenefitsNon-U.S. |
| | Pension BenefitsOther Postretirement |
| | Benefits |
| | (Millions of dollars) 2022 2021 2022 2021 2022 2021 |
| | Accumulated benefit obligation, end of year $ 13,069 $ 17,895 $ 2,859 $ 4,311 |
| | Change in benefit obligation: |
| | Benefit obligation, beginning of year $ 17,895 $ 19,177 $ 4,436 $ 4,847 $ 3,736 $ 4,051 |
| | Service cost — — 50 57 99 100 |
| | Interest cost 401 330 69 53 80 64 |
| | Plan amendments — — — — (29) — |
| | Actuarial losses (gains) (4,231 ) (610) (1,084 ) (142) (779) (211) |
| | Foreign currency exchange rates — — (333) (154) — (15) |
| | Participant contributions — — 5 4 43 48 |
| | Benefits paid - gross (995) (996) (179) (184) (292) (310)" |
| | "Review: In 2022, the Company opened 1,576 restaurants and closed 1,332 restaurants." |
| | "Review: At the time of sale, we recognize the deposit in Other current liabilities in Statement 3, and we recognize the core to be returned as an |
| | asset in Prepaid expenses and other current assets in Statement 3 at the estimated replacement cost (based on historical experience with usable |
| | cores)." |
| | "Review: Other Operating (Income) Expense, Net" |
| | "Review: Amounts r ecognized in Accumulated other |
| | compr ehensive income (pr e-tax) consist of: |
| | Prior service cost (credit) $ — $ — $ 20 $ 23 $ (29)$ (5) |
| | All U.S. pension benefits are frozen, and accordingly there is no longer any service cost." |
| | "Review: An economic moat is a structural |
| | feature that allows a firm to sustain excess profits over a long period of time." |
| | Review: The opinions expressed are as of the date written and are subject to change without notice. |
| | Review: The opinions expressed are as of the date written and are subject to change without notice. |
| | "Review: We are also |
| | subject to the continuous examination of our income tax returns by the U.S. Internal Revenue Service and other tax authorities." |
| | "Review: 72Table of Contents |
| | In managing foreign currency risk for our Financial Products operations, our objective is to minimize earnings volatility resulting from |
| | conversion and the remeasurement of net foreign currency balance sheet positions and future transactions denominated in foreign currencies." |
| | Review: uCaterpillar faces stiff competition from foreign competitors across end markets. |
| | Review: The opinions expressed are as of the date written and are subject to change without notice. |
| | "Review: Scenario analysis developed by our analysts indicates |
| | that the current market price represents an excessively |
| | pessimistic outlook, limiting downside risk and maximiz- |
| | ing upside potential." |
| | Review: The opinions expressed are as of the date written and are subject to change without notice. |
| | "Review: These obligations total $1.06 billion, |
| | with $537 million due in the next 12 months." |
| | "Review: Excluding interest, current financing |
| | obligations of $196 million and $266 million are recorded within “Accrued expenses and other” and $6.2 billion and $6.7 billion are recorded |
| | within “Other long-term liabilities” as of December 31, 2021 and 2022." |
| | "Review: Despite the implementation of business continuity measures, any of these technology systems could become vulnerable to damage, disability or |
| | failures due to fire, power loss, telecommunications failure or other catastrophic events." |
| | Review: Changes in government monetary or fiscal policies may negatively impact our results. |
| | "Review: The complaint seeks an unspecified amount of damages, enhanced damages, attorneys’ fees, costs, interest, and injunctive relief." |
| | "Review: At this time, it is not |
| | possible to predict how markets will respond to SOFR or other alternative reference rates as the transition away from the LIBOR benchmarks is |
| | anticipated in coming years." |
| | Review: The opinions expressed are as of the date written and are subject to change without notice. |
| | "Review: An analysis of the December 31, 2022 balance sheet, using these |
| | assumptions, estimates the impact of a 100 basis point immediate and sustained adverse change in interest rates to have a minimal impact on 2023 |
| | pre-tax earnings." |
| | "Review: At the end of 2022, past dues at Cat Financial were 1.89 percent, compared with 1.95 percent at the end of 2021." |
| | "Review: Guarantees 183 - - - - - - - - - |
| | Equity: other - (183) - - - - - - - - |
| | D&A: |
| | Impairment |
| | charges/ |
| | (reversals) - - - - (63) - - - - - |
| | OCF: other - - - - - - - 843 - - |
| | Total adjustments (33,248) (4,408)" |
| | Review: We rely on a limited number of shipping companies to deliver inventory to us and completed orders to our customers. |
| | Review: Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries. |
| | "Review: These non-income tax controversies typically relate to |
| | (i) the taxability of products and services, including cross-border intercompany transactions, (ii) collection and withholding on transactions with third |
| | parties, and (iii) the adequacy of compliance with reporting obligations, including evolving documentation requirements." |
| | "Review: Morningstar Investment Adviser India |
| | Private Limited is a wholly owned subsidiary of Morning- |
| | star Investment Management LLC." |
| | "Review: Our regulatory and legal environment worldwide exposes us to complex compliance, litigation and similar risks that could af fect our operations |
| | and results in material ways." |
| | "Review: Except for the U.S., property and equipment, net and operating leases in any single country were less than 10% of |
| | consolidated property and equipment, net and operating leases." |
| | "Review: 10.9 364-Day Revolving Credit Agreement, dated as of November 18, 2022, among Amazon.com, Inc., JPMorgan Chase Bank, N.A., as |
| | administrative agent, and the other lenders party thereto (incorporated by reference to the Company’s Current Report on Form 8-K, |
| | filed November 18, 2022)." |
| | "Review: The firm’s decision to extensively |
| | refranchise its U.S. store base during 2015-18 strikes us as clever, bringing the percentage of franchised stores to |
| | 95% from 81% in the segment and taking $250 million out of the general and administrative cost base." |
| | "Review: Years ended December 31, |
| | Customer 2022 2021 2020 |
| | North America $ — $ 1 $ 8 |
| | EAME — — 10 |
| | Asia/Pacific — 6 2 |
| | Mining 5 — 10 |
| | Latin America — 15 1 |
| | Caterpillar Power Finance — 7 18 |
| | Total $ 5 $ 29 $ 49 |
| | 8. Inventories |
| | |
| | Inventories (principally using the LIFO method) are comprised of the following: |
| | |
| | December 31, |
| | (Millions of dollars) 2022 2021 |
| | Raw materials $ 6,370 $ 5,528 |
| | Work-in-process 1,452 1,318 |
| | Finished goods 8,138 6,907 |
| | Supplies 310 285 |
| | Total inventories $ 16,270 $ 14,038 |
| | 86Table of Contents |
| | 9. Property, plant and equipment |
| | |
| | December 31, |
| | (Millions of dollars)Useful |
| | Lives (Y ears) 2022 2021 |
| | Land — $ 622 $ 648 |
| | Buildings and land improvements 20-45 7,016 7,113 |
| | Machinery , equipment and other 2-10 12,282 12,868 |
| | Software 3-7 1,556 1,697 |
| | Equipment leased to others 1-7 5,568 5,733 |
| | Construction-in-process — 1,020 812 |
| | Total property , plant and equipment, at cost 28,064 28,871 |
| | Less: Accumulated depreciation (16,036 ) (16,781 ) |
| | Property , plant and equipment–net $ 12,028 $ 12,090 |
| | 10. Intangible assets and goodwill |
| | A.Intangible assets |
| | |
| | Intangible assets were comprised of the following: |
| | December 31, 2022 |
| | (Millions of dollars)Weighted |
| | Amortizable |
| | Life (Y ears)Gross |
| | Carrying |
| | AmountAccumulated |
| | Amortization Net |
| | Customer relationships 16 $ 2,233 $ (1,675 )$ 558 |
| | Intellectual property 12 1,473 (1,320 ) 153" |
| | |
