PEORIA, Ill. — Marking the fourth straight year of double-digit profit growth, Caterpillar reported 2006 sales and revenues of $41.517 billion and profit of $3.537 billion.

It was also the third consecutive year of record sales and profit for Caterpillar, which equated into $5.17 per share, up 28% from a year ago.

The company also reported a record fourth quarter with sales and revenues of $11.003 billion and profit of $882 million, or $1.32 per share, up 10% from last year.

“2006 was an extraordinary year for Caterpillar. It was the best ever in terms of top-line sales and revenues and profit, said chairman and CEO Jim Owens. The commitment of our employees, dealers and suppliers allowed us to achieve these financial results, and I thank them for their hard work.”

For the year, sales and revenues increased $5.178 billion, specifically $3.321 billion from higher sales volume, $1.464 billion from improved price realization, $315 million from higher Financial Products revenues and $78 million from the effects of currency.

2006 profit increased $683 million from 2005. The increase was largely due to improved price realization and higher sales volume, partially offset by higher core operating costs.

“What Team Caterpillar was able to accomplish in 2006 is a reflection of the diversity of the industries we serve, the global need for our products and services and the strength of our partnership with our dealers and suppliers,” commented Owens. “We took advantage of our financial success-including strong cash flow-to fund growth in capacity, continue
aggressive new product development, complete the strategic acquisition of Progress Rail, increase the dividend rate by 20% and buy back more than $3 billion in stock.”

In 2007, the company expects another record year with sales and revenues in a range of $41.5 to $43.6 billion, which is flat to up 5% from 2006, and profit in a range of $5.20 to $5.70 per share.

“I’m anticipating great things for Caterpillar in 2007. Despite a sharp decline in two key North American industries: on-highway truck engines and US housing; and an expected reduction in dealer inventories, we are projecting another record year in 2007,” Owens said. “We expect to improve profit per share at a higher rate than sales and revenues, and that means a key focus in 2007 will be cost management.”

Looking beyond 2007, Owens commented, “We’re well-positioned to build on the extraordinary results we’ve delivered over the past few years. Our investment in new products has given us our strongest product line in history, and we’re continuing to invest in our facilities around the globe to add capacity and improve our operations.”