Press Release

DBRS Morningstar Confirms Long-Term Ratings of Caterpillar Inc. and Subsidiaries at "A" and Commercial Paper Rating at R-1 (low), Stable Trends

May 17, 2021

DBRS Limited (DBRS Morningstar) confirmed the ratings of Caterpillar Inc. (CAT or the Company) and its subsidiaries at "A" and R-1 (low). All trends are Stable. The confirmations reflect that CAT has performed in line with expectations. Although operating results weakened meaningfully in 2020 as a result of the disruptions caused by the Coronavirus Disease (COVID-19) pandemic, CAT's credit profile remains commensurate with the current ratings. With improving conditions in most major markets, DBRS Morningstar anticipates all businesses at CAT to continue to improve since bottoming in Q2 2020. This outlook supports the current Stable trends over the foreseeable future.

CAT is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. CAT's strong technological capabilities have led to the development of a broad range of innovative products, such as autonomous vehicles, which reinforce its competitive advantage. The Company's finance subsidiary and a global independent dealers' network help strengthen customer relationships, further solidifying its market position.

DBRS Morningstar anticipated that the spread of the coronavirus would lead to (1) a sharp decline in economic activity globally, (2) fewer end purchasers/user demand for equipment dropping materially, and (3) reduced activities at CAT's production facilities. Most of CAT's markets behaved as anticipated, with an initial sharp drop in demand followed by a gradual recovery in the last half of 2020. CAT reported a meaningful decline in sales and operating profit on a year-over-year basis despite timely actions to reduce its cost base. Nevertheless, CAT's operating results in 2020, although meaningfully weaker, were less severely affected than DBRS Morningstar expected.

DBRS Morningstar anticipates that the increasing pace of vaccination will quicken the global economic recovery and that governments’ plans to bolster infrastructure spending bodes well for equipment demand. These positive developments should support stronger performance by CAT in 2021 and beyond. However, rising problems in the supply chain such as transportation bottlenecks, semiconductor shortages, and rising material costs could constrain the improvement.

DBRS Morningstar does not expect to take positive rating actions in the near term because CAT is still in recovery mode. Furthermore, the ratings are also constrained because there is still uncertainty regarding the severity and duration of the coronavirus pandemic because of the proliferation of variants of the virus. DBRS Morningstar could take negative rating actions if CAT's financial profile weakens materially to below the “A”-rating range on a sustained basis as a result of, among other things, adverse developments in suppressing the coronavirus and supply chain headwinds, although this is not anticipated at this time.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at

All figures are in U.S. dollars unless otherwise noted.

The principal methodologies are Rating Companies in the Industrial Products Industry (January 29, 2021;, DBRS Morningstar Criteria: Rating Corporate Holding Companies and Parent/Subsidiary Rating Relationships (November 2, 2020;, DBRS Morningstar Criteria: Commercial Paper Liquidity Support for Nonbank Issuers (March 9, 2021;, and DBRS Morningstar Criteria: Guarantees and Other Forms of Support (January 14, 2021;, which can be found on under Methodologies & Criteria. Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (February 3, 2021;

For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release:

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at [email protected].

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

For more information on this credit or on this industry, visit or contact us at [email protected].

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