PEORIA, Ill.— Caterpillar Inc. (NYSE: CAT) today announced sales and revenues of $32.396 billion for 2009, a decrease of 37 percent from $51.324 billion in 2008. Profit per share was $1.43, down 75 percent. Excluding redundancy costs of $0.75, 2009 profit was $2.18 per share.
Fourth-quarter sales and revenues were $7.898 billion, down 39 percent from the fourth quarter of 2008. Profit per share for the quarter was $0.36, down 67 percent from the fourth quarter of 2008. Excluding redundancy costs, profit for the fourth quarter was $0.41 per share.

"While the economy in 2009 was the worst our company has experienced since the Great Depression, I'm proud to report that Team Caterpillar responded in an extraordinary way," said Caterpillar Chairman and Chief Executive Officer Jim Owens. "We delivered solid profitability and cash flow and dramatically improved our balance sheet. In addition, we had continued access to debt markets, improved our liquidity position, expanded credit facilities and made a conscious decision to hold more cash. As a result, we maintained our dividend rate, made significant pension contributions and continued to invest in new products and selective new capacity. Our employees, dealers and suppliers in every region of the world pulled together to achieve these results, and we thank them for their hard work and sacrifice. As a result, we are exceptionally well positioned for continued industry leadership and growth as the global economy recovers," Owens continued.

Sales and revenues for 2009 decreased $18.928 billion from 2008, and profit of $895 million was down 75 percent from $3.557 billion in 2008. The decline in profit was primarily due to significantly lower sales volume. The impact of lower volume was partially offset by lower costs, favorable income taxes and improved price realization.

Outlook
Caterpillar expects 2010 sales and revenues to be up 10 to 25 percent from 2009, and profit is expected to be about $2.50 per share at the midpoint of the sales and revenues range.

We continue to see signs of economic improvement, particularly in China and most developing countries. We are also seeing signs of improvement in North America, Europe and Japan, but these economies remain weak and have not rebounded as quickly as developing countries.

We have seen a marked increase in demand for mining equipment—a result of continued strong commodity prices and growing confidence in economic recovery. We have also seen improvement in sales of aftermarket service parts, which is usually an early indicator of growing demand for machines and engines.

In addition to increased end-user demand, Caterpillar sales are expected to improve as a result of changes in dealer inventories in 2009. Dealers reduced new machine inventories by more than $3.3 billion and new engine inventories by more than $600 million during 2009. This means Caterpillar's sales in 2009 were below end-user demand by nearly $4 billion. We expect relatively little change in dealer inventories in 2010 and as a result, Caterpillar's sales should be more in line with end-user demand.

We do not expect significant redundancy costs in 2010. Excluding redundancy, the most significant positive factors driving the profit outlook are higher sales volume, lower material costs and improved factory efficiency utilizing the Caterpillar Production System (CPS) with 6 Sigma. The most significant unfavorable factors are higher taxes and an unfavorable mix of sales.

"We're encouraged by signs of improving demand. Dealer sales to end users are up, order rates are up, dealer inventories came down in 2009, and we're seeing stronger service parts sales," Owens said. "As a result, we are focused on increasing production levels in our plants and with our suppliers. Although we expect efficiency improvements in 2010, higher production will require selective increases in employment, and we've already recalled more than 500 previously laid-off production employees.

"We expect 2010 will be a better year than 2009, and Caterpillar is in an excellent position to benefit from growth in the world economy," Owens said.

Employment
Caterpillar's worldwide employment was 93,813 at the end of 2009, down 19,074 from a year ago. Since late 2008, we have taken a variety of steps to bring our workforce in line with demand. This includes full-time Caterpillar employees who have been laid off or separated and those who have taken advantage of incentive-based voluntary plans offered by the company. In addition, we have long utilized a flexible workforce made up of part-time/temporary, contract and agency workers to better respond to shifts in demand. These workers are not included in our full-time employment. Since late 2008, we have reduced this flexible workforce by about 18,000. Looking forward, we will adjust our workforce as production levels and resource requirements change. We expect the recovery and demand for jobs to vary depending on specific regions of the world, industry and product.

For more than 80 years, Caterpillar Inc. has been making progress possible and driving positive and sustainable change on every continent. With 2009 sales and revenues of $32.396 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company also is a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics Services and Progress Rail Services. More information is available at: http://www.cat.com/