Caterpillar Inc. Outlook Revised To Stable From Negative On Improving Credit Metrics; 'A/A-1' Ratings Affirmed

Caterpillar Inc.'s energy, mining, and construction markets have stabilized, and the company has reported improved credit metrics during fiscal 2017. In addition, we expect that continued recovery in Caterpillar's end-markets and the company's cost-reduction efforts will lead to improving profitability and credit ratios over the next two years, providing the company with a buffer to weather unexpected operating challenges or a moderate amount of share repurchases. Therefore, we are revising our outlook on Caterpillar Inc. and its wholly owned subsidiary, Caterpillar Financial Services Corp., to stable from negative. At the same time, we are affirming all of our ratings on the company and its subsidiaries, including our 'A' long-term and 'A-1' short-term corporate credit ratings. The stable outlook reflects our

...+ Caterpillar Inc.'s energy, mining, and construction markets have stabilized, and the company has reported improved credit metrics during fiscal 2017. + In addition, we expect that continued recovery in Caterpillar's end-markets and the company's cost-reduction efforts will lead to improving profitability and credit ratios over the next two years, providing the company with a buffer to weather unexpected operating challenges or a moderate amount of share repurchases. + Therefore, we are revising our outlook on Caterpillar Inc. and its wholly owned subsidiary, Caterpillar Financial Services Corp., to stable from negative. + At the same time, we are affirming all of our ratings on the company and its subsidiaries, including our 'A' long-term and 'A-1' short-term corporate credit ratings. + The stable outlook reflects our expectation that Caterpillar will maintain a funds from operations (FFO) to debt ratio well above 30% over the next 24 months based on revenue growth and progress in cost-saving...

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