Cat group president and chief financial officer Brad Halverson said the company had “exceeded expectations” for 2014 despite its Resources Industries arm’s sales dropping $US3 billion, or over 20%.

“Operationally, we face another challenging year in 2015 with sales and revenues expected to be down about $5 billion versus 2014, driven by the relatively slow growth forecast for the world economy and the continued weakness in commodity prices,” Halverson said.

“Thus, we will need to stay keenly focused on cost management.

“Despite the challenges, I am really looking forward to 2015, since we have tremendous momentum on cost management through our Lean initiatives.

“We have proven we know how to manage through challenging times, and I am confident we will do so again in 2015.”

He said the hard work of Cat’s people in partnership with its dealers has meant the company could provide its customers with improved quality products and gained market share again in 2014, which marks the fourth consecutive year of improvement.

“We also saw a significantly greater percentage of dealer deliveries financed through Cat Financial, which is the second consecutive year of improvement in this area,” he said.

“These efforts, coupled with a strong focus on cost management, enabled us to lower our structural cost, improve our cost flexibility and achieve our operating profit pull-through targets.”

The company has continued to invest in future growth opportunities, its factories and research and development, which Halverson said were “so critical” to Cat’s long-term success – something it is able to do due to its balance sheet strength.

He put this strength down to a strong focus on the balance sheet and cash flow that has been in place for the past several years.

Machinery, energy and transportation (ME&T) generated $7.5 billion of operating cash flow last year, which was the third best in the company’s history.

Its ME&T debt to capital ratio of 37.4% is well within its targeted range, and the debt to capital ratio net of $6.3 billion of ME&T cash is at a “very strong” 18%.

This strong financial position was achieved while giving back to its stockholders through a 17% increase in its quarterly dividend and the $4.2 billion of stock the company repurchased during the year.

Halverson said the company was positioned “incredibly well” for the future as it “continues to be in the right industries”

“The world needs what we make possible – energy, infrastructure, sustainability, which are all key challenges the world is going to face in the years ahead, and we have solutions,” Halverson said.

“The world population is growing, the middle class is growing, energy demands are growing, and infrastructure needs are building in developing markets and updating is needed in the developed markets.

“There is a lot of opportunity for Caterpillar and our customers. When our industries recover, we will be well positioned to take advantage of the operational and structural improvements we have made over the past few years as well as the increased investment we are making in research and development.

“We should feel good about what we have accomplished in these challenging times and be excited about the bright future we have before us.”

He said 2014 was a particularly good year for its energy and transportation division, with record sales and profit, and while still well below prior peaks, its construction industries' sales were up about 4%, with profit improving substantially.

Despite overall company sales and revenues being about flat in 2014, solid operational execution by our employees resulted in higher profit per share of $5.88, up $0.13 from 2013, and excluding restructuring costs, profit per share for 2014 was $6.38, up $0.41 from 2013.