Caterpillar (CAT) risk factors, FY2025 10-K

Other

1. 01We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You should, however, consult any subsequent disclosures we make in our filings with the SEC on Form 10-Q or Form 8-K

MACROECONOMIC RISKS

1. 02Our business and the industries we serve are highly sensitive to global and regional economic conditions
2. 03Catastrophic events could materially adversely affect our business, results of operations and/or financial condition
3. 04Commodity price changes, material price increases, fluctuations in demand for our products and services, significant disruptions to our supply chains or significant shortages of labor and material may adversely impact our financial results or our ability to meet commitments to customers
4. 05Changes in government monetary or fiscal policies may negatively impact our results
5. 06Our global operations are exposed to political and economic risks, commercial instability and events beyond our control in the countries in which we operate

OPERATIONAL RISKS

1. 07The success of our business depends on our ability to develop, produce and market quality products that meet our customers’ needs
2. 08We operate in a highly competitive environment, which could adversely affect our sales and pricing
3. 09Increased information technology security threats and more sophisticated computer crime pose a risk to our systems, networks, products and services
4. 10Our business is subject to the inventory management decisions and sourcing practices of our dealers and our OEM customers
5. 11We may not realize all of the anticipated benefits of our acquisitions, joint ventures or divestitures, or these benefits may take longer to realize than expected
6. 12Many of these factors will be outside of our control and any one of them could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and attention. They may also delay the realization of the benefits we anticipate when we enter into a transaction
7. 13Union disputes or other labor matters could adversely affect our operations and financial results
8. 14Unexpected events may increase our cost of doing business or disrupt our operations

FINANCIAL RISKS

1. 15Disruptions or volatility in global financial markets could limit our sources of liquidity, or the liquidity of our customers, dealers and suppliers
2. 16Failure to maintain our credit ratings could increase our cost of borrowing and could adversely affect our cost of funds, liquidity, competitive position and access to capital markets
3. 17Cat Financial is significant to our operations and provides financing support for a significant share of our global sales. The inability of Cat Financial to access funds to support its financing activities to our customers could have an adverse effect on our business, results of operations and financial condition
4. 18Changes in interest rates or market liquidity conditions could adversely affect Cat Financial's and our earnings and/or cash flow
5. 19An increase in delinquencies, repossessions or net losses of Cat Financial customers could adversely affect its results
6. 20Currency exchange rate fluctuations affect our results of operations
7. 21Restrictive covenants in our debt agreements could limit our financial and operating flexibility
8. 22Sustained increases in funding obligations under our pension plans may impair our liquidity or financial condition

LEGAL & REGULATORY RISKS

1. 23Our global operations are subject to a wide range of trade and anti-corruption laws and regulations
2. 24International trade policies may impact demand for our products and our competitive position
3. 25We may incur additional tax expense or become subject to additional tax exposure
4. 26Costs associated with lawsuits or investigations or adverse rulings in enforcement or other legal proceedings may have an adverse effect on our results of operations
5. 27New regulations or changes in financial services regulation could adversely impact Caterpillar and Cat Financial
6. 28We are subject to stringent environmental laws and regulations that impose significant compliance costs