Caterpillar Reports Second-Quarter 2020 Results
DEERFIELD, Ill., July 31, 2020 /PRNewswire/ --
-- Second-quarter sales and revenues decreased 31%; profit per share
declined 70%
-- Strong balance sheet; $8.8 billion of enterprise cash
Second Quarter
($ in billions except profit
per share) 2020 2019
Sales and Revenues $10.0 $14.4
---
Profit Per Share $0.84 $2.83
Caterpillar Inc. (NYSE: CAT) today announced second-quarter 2020 sales and revenues of $10.0 billion, a 31% decrease compared with $14.4 billion in the second quarter of 2019. The decline was due to lower sales volume driven by lower end-user demand and the impact from changes in dealer inventories. Dealers decreased machine and engine inventories about $1.4 billion during the second quarter of 2020, compared with an increase of about $500 million during the second quarter of 2019.
Second-quarter 2020 profit per share was $0.84, compared with $2.83 profit per share in the second quarter of 2019. Profit per share in the second quarter of 2020 included pre-tax remeasurement losses of $122 million, or $0.19 per share, resulting from the settlements of pension obligations.
Operating profit margin was 7.8% for the second quarter of 2020, compared with 15.3% for the second quarter of 2019.
For the first half of 2020, enterprise operating cash flow was $2.5 billion. Caterpillar ended the second quarter with $8.8 billion of enterprise cash and $18.5 billion of available liquidity sources. In July, Cat Financial issued $1.5 billion of new three-year and 18-month medium-term notes to supplement its liquidity position.
Response to COVID-19 and Global Business Conditions
"I am proud of the global team's continued focus on safety while executing our strategy and serving our customers," said Caterpillar Chairman and CEO Jim Umpleby. "In the second quarter, our employees and dealers remained dedicated to providing the essential products and services the world needs under very challenging conditions."
Operational Status
Caterpillar continues to implement safeguards in its facilities to protect team members, including increased frequency of cleaning and disinfecting, social distancing practices and other measures consistent with specific regulatory requirements and guidance from health authorities.
As of mid-July 2020, globally and across Caterpillar's three primary segments, nearly all of the company's primary production facilities continued to operate. This continues to fluctuate as conditions warrant, including the pace of economic recovery and the potential for additional COVID-related temporary shutdowns.
The company has continued to take actions to reduce costs and prioritize its spending to provide for investment in services and expanded offerings, key elements of its strategy for profitable growth, which was introduced in 2017.
Outlook
Caterpillar's financial results for the remainder of 2020 will be impacted by continued global economic uncertainty due to the COVID-19 pandemic. As such, Caterpillar withdrew its earnings guidance on March 26 and is not providing a financial outlook for 2020 at this time.
"We are well positioned for these challenging times because of the successful execution of our strategy," said Umpleby. "We are focused on employee safety and maintaining a competitive and flexible cost structure while continuing to invest in services and expanded offerings to better serve our customers. We will adjust production as conditions warrant and are prepared to respond quickly to any positive or negative changes in customer demand."
CONSOLIDATED RESULTS
Consolidated Sales and Revenues
Consolidated Sales and Revenues Comparison
Second Quarter 2020 vs. Second Quarter 2019
To access this chart, go to https://investors.caterpillar.com/financials/quarterly-results/default.aspx for the downloadable version of Caterpillar second-quarter 2020 earnings.
The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the second quarter of 2019 (at left) and the second quarter of 2020 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company's Board of Directors and employees.
Total sales and revenues for the second quarter of 2020 were $9.997 billion, a decrease of $4.435 billion, or 31%, compared with $14.432 billion in the second quarter of 2019. The decline was due to lower sales volume driven by lower end-user demand and the impact from changes in dealer inventories. Dealers decreased machine and engine inventories about $1.4 billion during the second quarter of 2020, compared with an increase of about $500 million during the second quarter of 2019. The changes in dealer inventories came primarily in Construction Industries and Resource Industries.
Unfavorable price realization also contributed to the sales decline due to the geographic mix of sales and competitive market conditions in China. Sales were lower across all regions and in the three primary segments.
Sales and Revenues by Segment
(Millions of dollars) Second Sales Price Currency Inter- Second
$ %
Quarter Segment / Quarter
2019 Volume Realization Other 2020 Change Change
Construction Industries $
6,467 $
(2,075) $
(258) $
(81) $
(5) $
4,048 $
(2,419) (37%)
Resource Industries 2,819 (933) (23) (45) 8 1,826 (993) (35%)
Energy & Transportation 5,486 (942) 23 (64) (354) 4,149 (1,337) (24%)
All Other Segment 125 (5) (1) (4) 115 (10) (8%)
Corporate Items and Eliminations (1,226) 43 (1) 1 355 (828) 398
Machinery, Energy & Transportation 13,671 (3,912) (259) (190) 9,310 (4,361) (32%)
Financial Products Segment 873 (110) 763 (110) (13%)
Corporate Items and Eliminations (112) 36 (76) 36
Financial Products Revenues 761 (74) 687 (74) (10%)
Consolidated Sales and Revenues $
14,432 $
(3,912) $
(259) $
(190) $
(74) $
9,997 $
(4,435) (31%)
Sales and Revenues by Geographic Region
North America Latin America
EAME Asia/Pacific External Sales Inter-Segment Total Sales
and Revenues and Revenues
(Millions of dollars)
$ % Chg
$ % Chg
$ % Chg
$ % Chg
$ % Chg
$ % Chg
$ % Chg
Second Quarter 2020
---
Construction Industries $
1,604 (54%) $
212 (46%) $
933 (16%) $
1,283 (10%) $
4,032 (37%) $
16 (24%) $
4,048 (37%)
Resource Industries 507 (52%) 270 (40%) 379 (15%) 554 (27%) 1,710 (37%) 116 7% 1,826 (35%)
Energy & Transportation 1,816 (21%) 197 (39%) 929 (20%) 599 (19%) 3,541 (22%) 608 (37%) 4,149 (24%)
All Other Segment 7 (50%) 1 -% 5 25% 15 -% 28 (18%) 87 (4%) 115 (8%)
Corporate Items and Eliminations 2 (1) (2) (1) (827) (828)
Machinery, Energy & Transportation 3,936 (42%) 679 (42%) 2,246 (17%) 2,449 (17%) 9,310 (32%) -% 9,310 (32%)
Financial Products Segment 493 (12%) 60 (21%) 96 (6%) 114 (14%) 763 (13%) -% 763 (13%)
Corporate Items and Eliminations (43) (9) (9) (15) (76) (76)
Financial Products Revenues 450 (8%) 51 (22%) 87 (6%) 99 (12%) 687 (10%) -% 687 (10%)
Consolidated Sales and Revenues $
4,386 (40%) $
730 (41%) $
2,333 (17%) $
2,548 (17%) $
9,997 (31%)
$ -% $
9,997 (31%)
Second Quarter 2019
---
Construction Industries $
3,513 $
392 $
1,108 $
1,433 $
6,446 $
21 $
6,467
Resource Industries 1,058 448 446 759 2,711 108 2,819
Energy & Transportation 2,297 325 1,160 742 4,524 962 5,486
All Other Segment 14 1 4 15 34 91 125
Corporate Items and Eliminations (39) (2) (5) 2 (44) (1,182) (1,226)
Machinery, Energy & Transportation 6,843 1,164 2,713 2,951 13,671 13,671
Financial Products Segment 563 76 102 132 873 873
Corporate Items and Eliminations (72) (11) (9) (20) (112) (112)
Financial Products Revenues 491 65 93 112 761 761
Consolidated Sales and Revenues $
7,334 $
1,229 $
2,806 $
3,063 $
14,432
$ $
14,432
Consolidated Operating Profit
Consolidated Operating Profit Comparison
Second Quarter 2020 vs. Second Quarter 2019
To access this chart, go to https://investors.caterpillar.com/financials/quarterly-results/default.aspx for the downloadable version of Caterpillar second-quarter 2020 earnings.
The chart above graphically illustrates reasons for the change in consolidated operating profit between the second quarter of 2019 (at left) and the second quarter of 2020 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company's Board of Directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation's other operating (income) expenses.
Operating profit for the second quarter of 2020 was $784 million, a decrease of $1.429 billion, or 65%, compared with $2.213 billion in the second quarter of 2019. The decrease was due to lower sales volume and unfavorable price realization, partially offset by favorable manufacturing costs and lower selling, general and administrative (SG&A) and research and development (R&D) expenses.
Favorable manufacturing costs were mostly driven by lower period manufacturing costs. Both period manufacturing costs and SG&A/R&D expenses benefited from reduced short-term incentive compensation expense and other cost reductions related to lower sales volumes.
Profit (Loss) by Segment
(Millions of dollars) Second Second
$ %
Quarter Quarter
2020 2019 Change Change
---
Construction Industries $
518 $
1,247 $
(729) (58%)
Resource Industries 152 481 (329) (68%)
Energy & Transportation 624 886 (262) (30%)
All Other Segment (3) 11 (14)
n/a
Corporate Items and Eliminations (542) (441) (101)
Machinery, Energy & Transportation 749 2,184 (1,435) (66%)
Financial Products Segment 148 193 (45) (23%)
Corporate Items and Eliminations (38) (50) 12
Financial Products 110 143 (33) (23%)
Consolidating Adjustments (75) (114) 39
Consolidated Operating Profit $
784 $
2,213 $
(1,429) (65%)
Other Profit/Loss and Tax Items
-- Other income (expense) in the second quarter of 2020 was income of $29
million, compared with income of $68 million in the second quarter of
2019. The change was primarily due to the unfavorable impact of pension
and other postemployment benefit (OPEB) plans, including $122 million of
remeasurement losses resulting from the settlements of pension
obligations, partially offset by favorable impacts from foreign currency
exchange gains (losses), primarily due to the Australian dollar.
-- The provision for income taxes for the second quarter of 2020 reflected
an estimated annual tax rate of 31%, excluding a $21 million discrete
tax benefit related to the $122 million of remeasurement losses
resulting from the settlements of pension obligations. The tax rate was
26% for the second quarter of 2019. The increase in the estimated annual
tax rate was primarily related to changes in the expected geographic mix
of profits from a tax perspective for 2020, including the impact of U.S.
tax on non-U.S. earnings as a result of U.S. tax reform.
CONSTRUCTION INDUSTRIES
(Millions of dollars)
Segment Sales
Second Sales Price Currency Inter- Second
$ %
Quarter 2019 Volume Realization Segment Quarter 2020
Change Change
Total Sales $
6,467 $
(2,075) $
(258) $
(81) $
(5) $
4,048 $
(2,419) (37%)
Sales by Geographic Region
Second Second
$ %
Quarter 2020 Quarter 2019
Change Change
North America $
1,604 $
3,513 $
(1,909) (54%)
Latin America 212 392 (180) (46%)
EAME 933 1,108 (175) (16%)
Asia/Pacific 1,283 1,433 (150) (10%)
External Sales 4,032 6,446 (2,414) (37%)
Inter-segment 16 21 (5) (24%)
Total Sales $
4,048 $
6,467 $
(2,419) (37%)
Segment Profit
Second Second Change %
Quarter 2020 Quarter 2019
Change
Segment Profit $
518 $
1,247 $
(729) (58%)
Segment Profit Margin 12.8% 19.3% (6.5 pts)
Construction Industries' total sales were $4.048 billion in the second quarter of 2020, a decrease of $2.419 billion, or 37%, compared with $6.467 billion in the second quarter of 2019. The decrease was due to lower sales volume, driven by lower end-user demand and the impact from changes in dealer inventories. In all regions, dealers decreased inventories during the second quarter of 2020, compared with an increase during the second quarter of 2019. Unfavorable price realization also contributed to the sales decline due to the geographic mix of sales and competitive market conditions in China.
-- In North America, sales decreased mostly due to lower sales volume
driven by lower end-user demand and the impact from changes in dealer
inventories. The lower end-user demand was driven primarily by pipeline
and road construction.
-- Sales declined in Latin America primarily due to lower end-user demand
across the region, the impact from changes in dealer inventories and
unfavorable currency impacts from a weaker Brazilian real.
-- In EAME, sales decreased mostly because of lower sales volume across the
region, driven by lower end-user demand and the impact from changes in
dealer inventories.
-- Sales declined in Asia/Pacific primarily due to unfavorable price
realization and currency impacts from a weaker Chinese yuan. In China,
sales were about flat as higher end-user demand was mostly offset by the
impact of changes in dealer inventories and unfavorable price
realization.
Construction Industries' profit was $518 million in the second quarter of 2020, a decrease of $729 million, or 58%, compared with $1.247 billion in the second quarter of 2019. The decrease was mainly due to lower sales volume and unfavorable price realization, partially offset by favorable manufacturing costs and lower SG&A/R&D expenses. Favorable manufacturing costs were primarily attributed to lower period manufacturing costs. Both period manufacturing costs and SG&A/R&D expenses benefited from reduced short-term incentive compensation expense and other cost reductions related to lower sales volumes.
RESOURCE INDUSTRIES
(Millions of dollars)
Segment Sales
Second Sales Price Currency Inter- Second
$ %
Quarter 2019 Volume Realization Segment Quarter 2020
Change Change
Total Sales $
2,819 $
(933) $
(23) $
(45) $
8 $
1,826 $
(993) (35)%
Sales by Geographic Region
Second Second
$ %
Quarter 2020 Quarter 2019
Change Change
North America $
507 $
1,058 $
(551) (52%)
Latin America 270 448 (178) (40%)
EAME 379 446 (67) (15%)
Asia/Pacific 554 759 (205) (27%)
External Sales 1,710 2,711 (1,001) (37%)
Inter-segment 116 108 8 7%
Total Sales $
1,826 $
2,819 $
(993) (35%)
Segment Profit
Second Second Change %
Quarter 2020 Quarter 2019
Change
Segment Profit $
152 $
481 $
(329) (68%)
Segment Profit Margin 8.3% 17.1% (8.8 pts)
Resource Industries' total sales were $1.826 billion in the second quarter of 2020, a decrease of $993 million, or 35%, compared with $2.819 billion in the second quarter of 2019. The decrease was due to lower sales volume, driven by changes in dealer inventories and lower end-user demand. Dealers decreased inventories during the second quarter of 2020, compared with an increase during the second quarter of 2019. Lower end-user demand was primarily driven by equipment supporting non-residential construction and quarry and aggregates. Mining equipment end-user demand was down in the quarter, though to a lesser extent. The company's mining customers faced production disruptions impacting machine utilization and aftermarket parts demand.
Resource Industries' profit was $152 million in the second quarter of 2020, a decrease of $329 million, or 68%, compared with $481 million in the second quarter of 2019. The decrease was mainly because of lower sales volume, partially offset by favorable manufacturing costs. Favorable manufacturing costs were mostly due to lower period manufacturing costs driven by lower short-term incentive compensation expense, other cost-reduction actions implemented in response to lower sales volumes and the benefits of prior restructuring programs.
ENERGY & TRANSPORTATION
(Millions of dollars)
Segment Sales
Second Sales Price Currency Inter- Second
$ %
Quarter 2019 Volume Realization Segment Quarter 2020
Change Change
Total Sales $
5,486 $
(942) $
23 $
(64) $
(354) $
4,149 $
(1,337) (24%)
Sales by Application
Second Second
$ %
Quarter 2020 Quarter 2019
Change Change
Oil and Gas $
1,027 $
1,305 $
(278) (21%)
Power Generation 895 1,021 (126) (12%)
Industrial 678 957 (279) (29%)
Transportation 941 1,241 (300) (24%)
External Sales 3,541 4,524 (983) (22%)
Inter-segment 608 962 (354) (37%)
Total Sales $
4,149 $
5,486 $
(1,337) (24%)
Segment Profit
Second Second Change %
Quarter 2020 Quarter 2019
Change
Segment Profit $
624 $
886 $
(262) (30%)
Segment Profit Margin 15.0% 16.2% (1.2 pts)
Energy & Transportation's total sales were $4.149 billion in the second quarter of 2020, a decrease of $1.337 billion, or 24%, compared with $5.486 billion in the second quarter of 2019. Sales declined across all applications and inter-segment engine sales.
-- Oil and Gas - Sales decreased mainly due to lower demand in North
America for reciprocating engines used in gas compression and decreased
sales of engine aftermarket parts, partially offset by higher sales of
turbines and turbine-related services.
-- Power Generation - Sales decreased primarily due to lower sales volume
in small reciprocating engine applications and engine aftermarket parts.
-- Industrial - Sales decreased due to lower demand across all regions.
-- Transportation - Sales declined in rail due to lower deliveries of
locomotives and related services and in marine applications, primarily
in EAME and Asia/Pacific.
Energy & Transportation's profit was $624 million in the second quarter of 2020, a decrease of $262 million, or 30%, compared with $886 million in the second quarter of 2019. The decrease was due to lower sales volume, partially offset by lower manufacturing costs and SG&A/R&D expenses. Manufacturing costs and SG&A/R&D expenses were both impacted by a reduction in short-term incentive compensation expense and other cost reductions related to lower sales volumes.
FINANCIAL PRODUCTS SEGMENT
(Millions of dollars)
Revenues by Geographic Region
Second Second
$ %
Quarter 2020 Quarter 2019
Change Change
North America $
493 $
563 $
(70) (12%)
Latin America 60 76 (16) (21%)
EAME 96 102 (6) (6%)
Asia/Pacific 114 132 (18) (14%)
Total Revenues $
763 $
873 $
(110) (13%)
Segment Profit
Second Second Change %
Quarter 2020 Quarter 2019
Change
Segment Profit $
148 $
193 $
(45) (23%)
Financial Products' segment revenues were $763 million in the second quarter of 2020, a decrease of $110 million, or 13%, from the second quarter of 2019. The decrease was primarily because of lower average financing rates and lower average earning assets across all regions.
Financial Products' segment profit was $148 million in the second quarter of 2020, compared with $193 million in the second quarter of 2019. The decrease was due to lower net yield on average earning assets, lower average earning assets and higher provision for credit losses at Cat Financial. These unfavorable impacts were partially offset by a reduction in SG&A expenses primarily due to lower short-term incentive compensation and employee benefit expenses and a favorable impact from equity securities in Insurance Services.
At the end of the second quarter of 2020, past dues at Cat Financial were 3.74%, compared with 3.38% at the end of the second quarter of 2019. Past dues increased primarily due to the impact of the COVID-19 pandemic. Write-offs, net of recoveries, were $30 million for the second quarter of 2020, compared with $74 million for the second quarter of 2019. As of June 30, 2020, Cat Financial's allowance for credit losses totaled $515 million, or 1.92% of finance receivables, compared with $457 million, or 1.69% of finance receivables at March 31, 2020. The increase in allowance for credit losses was driven in part by expectations of the lingering impact from COVID-19. The allowance for credit losses at year-end 2019 was $424 million, or 1.50% of finance receivables.
Corporate Items and Eliminations
Expense for corporate items and eliminations was $580 million in the second quarter of 2020, an increase of $89 million from the second quarter of 2019, primarily due to an unfavorable change in fair value adjustments related to deferred compensation plans and segment reporting methodology differences.
Notes
I. Glossary of terms is included on the Caterpillar website at https://investors.caterpillar.com/overview/default.aspx.
II. End-user demand is demonstrated by the company's Rolling 3 Month Retail Sales Statistics filed in a Form 8-K on Friday, July 31, 2020.
III. Information on non-GAAP financial measures is included in the appendix on page 12.
IV. Some amounts within this report are rounded to the millions or billions and may not add.
V. Caterpillar will conduct a teleconference and live webcast, with a slide presentation, beginning at 7:30 a.m. Central Time on Friday, July 31, 2020, to discuss its 2020 second-quarter results. The accompanying slides will be available before the webcast on the Caterpillar website at https://investors.caterpillar.com/events-presentations/default.aspx.
About Caterpillar
Since 1925, Caterpillar Inc. has been helping our customers build a better world - making sustainable progress possible and driving positive change on every continent. With 2019 sales and revenues of $53.8 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. Services offered throughout the product life cycle, cutting-edge technology and decades of product expertise set Caterpillar apart, providing exceptional value to help our customers succeed. The company principally operates through three primary segments - Construction Industries, Resource Industries and Energy & Transportation - and provides financing and related services through its Financial Products segment. For more information, visit caterpillar.com. To connect on social media, visit caterpillar.com/social-media.
Caterpillar's latest financial results are also available online:
https://investors.caterpillar.com/overview/default.aspx
https://investors.caterpillar.com/financials/quarterly-results/default.aspx (live broadcast/replays of quarterly conference call)
Forward-Looking Statements
Certain statements in this press release relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "estimate," "will be," "will," "would," "expect," "anticipate," "plan," "forecast," "target," "guide," "project," "intend," "could," "should" or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These statements do not guarantee future performance and speak only as of the date they are made, and we do not undertake to update our forward-looking statements.
Caterpillar's actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including, but not limited to: (i) global and regional economic conditions and economic conditions in the industries we serve; (ii) commodity price changes, material price increases, fluctuations in demand for our products or significant shortages of material; (iii) government monetary or fiscal policies; (iv) political and economic risks, commercial instability and events beyond our control in the countries in which we operate; (v) international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates; (vi) our ability to develop, produce and market quality products that meet our customers' needs; (vii) the impact of the highly competitive environment in which we operate on our sales and pricing; (viii) information technology security threats and computer crime; (ix) inventory management decisions and sourcing practices of our dealers and our OEM customers; (x) a failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures or divestitures; (xi) union disputes or other employee relations issues; (xii) adverse effects of unexpected events; (xiii) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers; (xiv) failure to maintain our credit ratings and potential resulting increases to our cost of borrowing and adverse effects on our cost of funds, liquidity, competitive position and access to capital markets; (xv) our Financial Products segment's risks associated with the financial services industry; (xvi) changes in interest rates or market liquidity conditions; (xvii) an increase in delinquencies, repossessions or net losses of Cat Financial's customers; (xviii) currency fluctuations; (xix) our or Cat Financial's compliance with financial and other restrictive covenants in debt agreements; (xx) increased pension plan funding obligations; (xxi) alleged or actual violations of trade or anti-corruption laws and regulations; (xxii) additional tax expense or exposure, including the impact of U.S. tax reform; (xxiii) significant legal proceedings, claims, lawsuits or government investigations; (xxiv) new regulations or changes in financial services regulations; (xxv) compliance with environmental laws and regulations; (xxvi) the duration and geographic spread of, business disruptions caused by, and the overall global economic impact of, the COVID-19 pandemic; and (xxvii) other factors described in more detail in Caterpillar's Forms 10-Q, 10-K and other filings with the Securities and Exchange Commission.
APPENDIX
NON-GAAP FINANCIAL MEASURES
The following definitions are provided for the non-GAAP financial measures. These non-GAAP financial measures have no standardized meaning prescribed by U.S. GAAP and therefore are unlikely to be comparable to the calculation of similar measures for other companies. Management does not intend these items to be considered in isolation or as a substitute for the related GAAP measures.
Adjusted Profit Per Share
The company believes it is important to separately quantify the profit impact of a significant item in order for the company's results to be meaningful to readers. This item is remeasurement losses resulting from the settlements of pension obligations in the second quarter of 2020. The company does not consider this item indicative of earnings from ongoing business activities and believes the non-GAAP measure provides investors with useful perspective on underlying business results and trends and aids with assessing the company's period-over-period results. The company intends to discuss adjusted profit per share for the fourth quarter and full-year 2020, excluding mark-to-market gains or losses for remeasurement of pension and other postemployment benefit plans along with any other discrete items.
Reconciliations of adjusted profit per share to the most directly comparable GAAP measure, diluted profit per share, are as follows:
Second Quarter
2020 2019
Profit per share $
0.84 $
2.83
Per share remeasurement losses of
pension obligations(1) $
0.19
$
Adjusted profit per share $
1.03 $
2.83
1 At statutory tax rates.
Note: On March 26, 2020, the
company withdrew its
previous financial outlook
due to the continued global
economic uncertainty related
to the COVID-19 pandemic.
Machinery, Energy & Transportation
Caterpillar defines Machinery, Energy & Transportation as it is presented in the supplemental data as Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis. Machinery, Energy & Transportation information relates to the design, manufacture and marketing of Caterpillar products. Financial Products' information relates to the financing to customers and dealers for the purchase and lease of Caterpillar and other equipment. The nature of these businesses is different, especially with regard to the financial position and cash flow items. Caterpillar management utilizes this presentation internally to highlight these differences. The company also believes this presentation will assist readers in understanding Caterpillar's business. Pages 13-23 reconcile Machinery, Energy & Transportation with Financial Products on the equity basis to Caterpillar Inc. consolidated financial information.
Caterpillar Inc.
Condensed Consolidated Statement of Results of Operations
(Unaudited)
(Dollars in millions except per share data)
Three Months Ended Six Months Ended
June 30,
June 30,
2020 2019 2020 2019
---
Sales and revenues:
Sales of Machinery, Energy &
Transportation $
9,310 $
13,671 $
19,224 $
26,395
Revenues of Financial Products 687 761 1,408 1,503
Total sales and revenues 9,997 14,432 20,632 27,898
Operating costs:
Cost of goods sold 7,113 9,941 14,379 18,944
Selling, general and administrative
expenses 1,179 1,309 2,300 2,628
Research and development expenses 341 441 697 876
Interest expense of Financial
Products 149 192 324 382
Other operating (income) expenses 431 336 744 648
Total operating costs 9,213 12,219 18,444 23,478
Operating profit 784 2,213 2,188 4,420
Interest expense excluding Financial
Products 135 103 248 206
Other income (expense) 29 68 251 228
Consolidated profit before taxes 678 2,178 2,191 4,442
Provision (benefit) for income taxes 227 565 652 952
Profit of consolidated companies 451 1,613 1,539 3,490
Equity in profit (loss) of
unconsolidated affiliated companies 8 6 13 13
Profit of consolidated and affiliated
companies 459 1,619 1,552 3,503
Less: Profit (loss) attributable to
noncontrolling interests 1 (1) 2 2
Profit (1) $
458 $
1,620 $
1,550 $
3,501
Profit per common share $
0.84 $
2.85 $
2.85 $
6.14
Profit per common share -diluted (2) $
0.84 $
2.83 $
2.83 $
6.08
Weighted-average common shares outstanding
(millions)
- Basic 541.5 567.8 544.5 569.9
- Diluted (2) 544.5 573.1 548.2 575.8
(1) Profit attributable to common
shareholders.
(2) Diluted by assumed exercise of
stock-based compensation awards
using the treasury stock method.
Caterpillar Inc
Condensed Consolidated Statement of Financial Position
(Unaudited)
(Millions of dollars)
June 30, December 31,
2020 2019
---
Assets
Current assets:
Cash and short-term investments $
8,784 $
8,284
Receivables - trade and other 7,134 8,568
Receivables - finance 8,781 9,336
Prepaid expenses and other current assets 1,792 1,739
Inventories 11,371 11,266
Total current assets 37,862 39,193
Property, plant and equipment - net 12,357 12,904
Long-term receivables - trade and other 1,167 1,193
Long-term receivables - finance 12,560 12,651
Noncurrent deferred and refundable income
taxes 1,459 1,411
Intangible assets 1,420 1,565
Goodwill 6,192 6,196
Other assets 3,549 3,340
Total assets $
76,566 $
78,453
Liabilities
Current liabilities:
Short-term borrowings:
--Machinery, Energy & Transportation $
13 $
5
-- Financial Products 4,301 5,161
Accounts payable 5,083 5,957
Accrued expenses 3,547 3,750
Accrued wages, salaries and employee benefits 958 1,629
Customer advances 1,227 1,187
Dividends payable 558 567
Other current liabilities 2,143 2,155
Long-term debt due within one year:
--Machinery, Energy & Transportation 1,395 16
-- Financial Products 6,006 6,194
Total current liabilities 25,231 26,621
Long-term debt due after one year:
--Machinery, Energy & Transportation 9,729 9,141
-- Financial Products 17,178 17,140
Liability for postemployment benefits 6,285 6,599
Other liabilities 4,366 4,323
Total liabilities 62,789 63,824
Shareholders' equity
Common stock 6,120 5,935
Treasury stock (25,412) (24,217)
Profit employed in the business 34,841 34,437
Accumulated other comprehensive income (loss) (1,815) (1,567)
Noncontrolling interests 43 41
Total shareholders' equity 13,777 14,629
Total liabilities and shareholders' equity $
76,566 $
78,453
Caterpillar Inc.
Condensed Consolidated Statement of Cash Flow
(Unaudited)
(Millions of dollars)
Six Months Ended
June 30,
2020 2019
---
Cash flow from operating activities:
Profit of consolidated and affiliated
companies $
1,552 $
3,503
Adjustments for non-cash items:
Depreciation and amortization 1,222 1,288
Net gain on remeasurement of pension
obligations (132)
Provision (benefit) for deferred
income taxes (32) (34)
Other 674 440
Changes in assets and liabilities, net of
acquisitions and divestitures:
Receivables - trade and other 1,176 (166)
Inventories (145) (487)
Accounts payable (655) 134
Accrued expenses (253) 151
Accrued wages, salaries and employee
benefits (648) (979)
Customer advances (2) 14
Other assets - net (7) (120)
Other liabilities - net (229) (35)
Net cash provided by (used for)
operating activities 2,521 3,709
Cash flow from investing activities:
Capital expenditures - excluding
equipment leased to others (472) (479)
Expenditures for equipment leased to
others (526) (746)
Proceeds from disposals of leased
assets and property, plant and
equipment 382 422
Additions to finance receivables (6,712) (6,181)
Collections of finance receivables 6,801 5,902
Proceeds from sale of finance
receivables 31 119
Investments and acquisitions (net of
cash acquired) (49) (3)
Proceeds from sale of businesses and
investments (net of cash sold) 13
Proceeds from sale of securities 151 170
Investments in securities (369) (243)
Other - net 7 (40)
Net cash provided by (used for)
investing activities (743) (1,079)
Cash flow from financing activities:
Dividends paid (1,125) (986)
Common stock issued, including
treasury shares reissued (10) 39
Common shares repurchased (1,130) (2,105)
Proceeds from debt issued (original
maturities greater than three months) 6,159 5,340
Payments on debt (original maturities
greater than three months) (4,629) (4,901)
Short-term borrowings - net (original
maturities three months or less) (477) (436)
Other - net (1) (2)
Net cash provided by (used for)
financing activities (1,213) (3,051)
Effect of exchange rate changes on
cash (66) (10)
Increase (decrease) in cash and short-
term investments and restricted cash 499 (431)
Cash and short-term investments and
restricted cash at beginning of
period 8,292 7,890
Cash and short-term investments and
restricted cash at end of period $
8,791 $
7,459
All short-term investments, which
consist primarily of highly
liquid investments with original
maturities of three months or
less, are considered to be cash
equivalents.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Three Months Ended June 30, 2020
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery, Financial Consolidating
Energy & Products Adjustments
Transportation(1)
Sales and revenues:
Sales of Machinery, Energy &
Transportation $
9,310 $
9,310
$
$
Revenues of Financial Products 687 780 (93) (2)
Total sales and revenues 9,997 9,310 780 (93)
Operating costs:
Cost of goods sold 7,113 7,114 (1) (3)
Selling, general and
administrative expenses 1,179 984 201 (6) (3)
Research and development
expenses 341 341
Interest expense of Financial
Products 149 149
Other operating (income)
expenses 431 122 320 (11) (3)
Total operating costs 9,213 8,561 670 (18)
Operating profit 784 749 110 (75)
Interest expense excluding
Financial Products 135 135
Other income (expense) 29 (77) 31 75 4
Consolidated profit before
taxes 678 537 141
Provision (benefit) for income
taxes 227 190 37
Profit of consolidated
companies 451 347 104
Equity in profit (loss) of
unconsolidated affiliated
companies 8 8
Equity in profit of Financial
Products' subsidiaries - 99 (99) 5
Profit of consolidated and
affiliated companies 459 454 104 (99)
Less: Profit (loss)
attributable to
noncontrolling interests 1 (4) 5
Profit 6 $
458 $
458 $
99 $
(99)
(1) Represents Caterpillar Inc. and its
subsidiaries with Financial Products
accounted for on the equity basis.
---
(2) Elimination of Financial Products'
revenues earned from Machinery,
Energy & Transportation.
---
(3) Elimination of net expenses recorded
by Machinery, Energy &
Transportation paid to Financial
Products.
---
Elimination of discount recorded by
Machinery, Energy & Transportation
on receivables sold to Financial
Products and of interest earned
between Machinery, Energy &
Transportation and Financial
4 Products.
---
5 Elimination of Financial Products'
profit due to equity method of
accounting.
---
6 Profit attributable to common
shareholders.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Three Months Ended June 30, 2019
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery, Financial Consolidating
Energy & Products Adjustments
Transportation(1)
Sales and revenues:
Sales of Machinery, Energy &
Transportation $
13,671 $
13,671
$
$
Revenues of Financial Products 761 894 (133) (2)
Total sales and revenues 14,432 13,671 894 (133)
Operating costs:
Cost of goods sold 9,941 9,943 (2) (3)
Selling, general and
administrative expenses 1,309 1,102 209 (2) (3)
Research and development
expenses 441 441
Interest expense of Financial
Products 192 201 (9) 4
Other operating (income)
expenses 336 1 341 (6) (3)
Total operating costs 12,219 11,487 751 (19)
Operating profit 2,213 2,184 143 (114)
Interest expense excluding
Financial Products 103 105 (2) 4
Other income (expense) 68 (63) 19 112 5
Consolidated profit before
taxes 2,178 2,016 162
Provision (benefit) for income
taxes 565 502 63
Profit of consolidated
companies 1,613 1,514 99
Equity in profit (loss) of
unconsolidated affiliated
companies 6 6
Equity in profit of Financial
Products' subsidiaries - 94 (94) 6
Profit of consolidated and
affiliated companies 1,619 1,614 99 (94)
Less: Profit (loss)
attributable to
noncontrolling interests (1) (6) 5
Profit 7 $
1,620 $
1,620 $
94 $
(94)
(1) Represents Caterpillar Inc. and its
subsidiaries with Financial Products
accounted for on the equity basis.
---
(2) Elimination of Financial Products'
revenues earned from Machinery,
Energy & Transportation.
---
(3) Elimination of net expenses recorded
by Machinery, Energy &
Transportation paid to Financial
Products.
---
4 Elimination of interest expense
recorded between Financial Products
and Machinery, Energy &
Transportation.
---
Elimination of discount recorded by
Machinery, Energy & Transportation
on receivables sold to Financial
Products and of interest earned
between Machinery, Energy &
Transportation and Financial
5 Products.
---
6 Elimination of Financial Products'
profit due to equity method of
accounting.
---
7 Profit attributable to common
shareholders.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Six Months Ended June 30, 2020
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery, Financial Consolidating
Energy & Products Adjustments
Transportation(1)
Sales and revenues:
Sales of Machinery, Energy &
Transportation $
19,224 $
19,224
$
$
Revenues of Financial Products 1,408 1,610 (202) (2)
Total sales and revenues 20,632 19,224 1,610 (202)
Operating costs:
Cost of goods sold 14,379 14,381 (2) 3
Selling, general and administrative
expenses 2,300 1,924 383 (7) (3)
Research and development expenses 697 697
Interest expense of Financial
Products 324 325 (1) 4
Other operating (income) expenses 744 132 640 (28) (3)
Total operating costs 18,444 17,134 1,348 (38)
Operating profit 2,188 2,090 262 (164)
Interest expense excluding
Financial Products 248 247 1 4
Other income (expense) 251 102 (16) 165 5
Consolidated profit before taxes 2,191 1,945 246
Provision (benefit) for income
taxes 652 587 65
Profit of consolidated companies 1,539 1,358 181
Equity in profit (loss) of
unconsolidated affiliated
companies 13 13
Equity in profit of Financial
Products' subsidiaries - 172 (172) 6
Profit of consolidated and
affiliated companies 1,552 1,543 181 (172)
Less: Profit (loss) attributable to
noncontrolling interests 2 (7) 9
Profit 7 $
1,550 $
1,550 $
172 $
(172)
(1) Represents Caterpillar Inc. and its
subsidiaries with Financial Products
accounted for on the equity basis.
---
(2) Elimination of Financial Products'
revenues earned from Machinery,
Energy & Transportation.
---
(3) Elimination of net expenses recorded
by Machinery, Energy &
Transportation paid to Financial
Products.
---
4 Elimination of interest expense
recorded between Financial Products
and Machinery, Energy &
Transportation.
---
Elimination of discount recorded by
Machinery, Energy & Transportation
on receivables sold to Financial
Products and of interest earned
between Machinery, Energy &
Transportation and Financial
5 Products.
---
6 Elimination of Financial Products'
profit due to equity method of
accounting.
---
7 Profit attributable to common
shareholders.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Six Months Ended June 30, 2019
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery, Financial Consolidating
Energy & Products Adjustments
Transportation(1)
Sales and revenues:
Sales of Machinery, Energy &
Transportation $
26,395 $
26,395
$
$
Revenues of Financial Products 1,503 1,764 (261) (2)
Total sales and revenues 27,898 26,395 1,764 (261)
Operating costs:
Cost of goods sold 18,944 18,946 (2) (3)
Selling, general and administrative
expenses 2,628 2,229 401 (2) (3)
Research and development expenses 876 876
Interest expense of Financial
Products 382 401 (19) 4
Other operating (income) expenses 648 11 654 (17) (3)
Total operating costs 23,478 22,062 1,456 (40)
Operating profit 4,420 4,333 308 (221)
Interest expense excluding
Financial Products 206 215 (9) 4
Other income (expense) 228 (44) 60 212 5
Consolidated profit before taxes 4,442 4,074 368
Provision (benefit) for income
taxes 952 837 115
Profit of consolidated companies 3,490 3,237 253
Equity in profit (loss) of
unconsolidated affiliated
companies 13 13
Equity in profit of Financial
Products' subsidiaries - 242 (242) 6
Profit of consolidated and
affiliated companies 3,503 3,492 253 (242)
Less: Profit (loss) attributable to
noncontrolling interests 2 (9) 11
Profit 7 $
3,501 $
3,501 $
242 $
(242)
(1) Represents Caterpillar Inc. and its
subsidiaries with Financial Products
accounted for on the equity basis.
---
(2) Elimination of Financial Products'
revenues earned from Machinery,
Energy & Transportation.
---
(3) Elimination of net expenses recorded
by Machinery, Energy &
Transportation paid to Financial
Products.
---
4 Elimination of interest expense
recorded between Financial Products
and Machinery, Energy &
Transportation.
---
Elimination of discount recorded by
Machinery, Energy & Transportation
on receivables sold to Financial
Products and of interest earned
between Machinery, Energy &
Transportation and Financial
5 Products.
---
6 Elimination of Financial Products'
profit due to equity method of
accounting.
---
7 Profit attributable to common
shareholders.
Caterpillar Inc.
Supplemental Data for Financial Position
At June 30, 2020
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery, Financial Consolidating
Energy & Products Adjustments
Transportation
(1)
Assets
Current assets:
Cash and short-term investments $
8,784 $
8,030 $
754
$
Receivables - trade and other 7,134 2,599 506 4,029 2,3
Receivables - finance 8,781 13,064 (4,283) (3)
Prepaid expenses and other current
assets 1,792 1,185 618 (11) 4
Inventories 11,371 11,371
Total current assets 37,862 23,185 14,942 (265)
Property, plant and equipment - net 12,357 8,250 4,107
Long-term receivables - trade and
other 1,167 274 194 699 2,3
Long-term receivables - finance 12,560 13,277 (717) (3)
Investments in Financial Products
subsidiaries - 4,257 (4,257) 5
Noncurrent deferred and refundable
income taxes 1,459 1,990 106 (637) 6
Intangible assets 1,420 1,420
Goodwill 6,192 6,192
Other assets 3,549 1,880 1,766 (97) 7
Total assets $
76,566 $
47,448 $
34,392 $
(5,274)
Liabilities
Current liabilities:
Short-term borrowings $
4,314 $
13 $
4,301
$
Short-term borrowings with
consolidated companies - 99 (99) 8
Accounts payable 5,083 5,046 196 (159) 9
Accrued expenses 3,547 3,239 308
Accrued wages, salaries and employee
benefits 958 943 15
Customer advances 1,227 1,227
Dividends payable 558 558
Other current liabilities 2,143 1,521 654 (32) 6,10
Long-term debt due within one year 7,401 1,395 6,006
Total current liabilities 25,231 13,942 11,579 (290)
Long-term debt due after one year 26,907 9,743 17,178 (14) 8
Liability for postemployment
benefits 6,285 6,284 1
Other liabilities 4,366 3,702 1,377 (713) 6
Total liabilities 62,789 33,671 30,135 (1,017)
Shareholders' equity
Common stock 6,120 6,120 919 (919) 5
Treasury stock (25,412) (25,412)
Profit employed in the business 34,841 34,841 4,136 (4,136) 5
Accumulated other comprehensive
income (loss) (1,815) (1,815) (977) 977 5
Noncontrolling interests 43 43 179 (179) 5
Total shareholders' equity 13,777 13,777 4,257 (4,257)
Total liabilities and shareholders'
equity $
76,566 $
47,448 $
34,392 $
(5,274)
(1) Represents Caterpillar Inc. and its
subsidiaries with Financial Products
accounted for on the equity basis.
---
(2) Elimination of receivables between
Machinery, Energy & Transportation and
Financial Products.
---
Reclassification of Machinery, Energy &
Transportation's trade receivables
purchased by Financial Products and
Financial Products' wholesale
(3) inventory receivables.
---
4 Elimination of Machinery, Energy &
Transportation's insurance premiums
that are prepaid to Financial
Products.
---
5 Elimination of Financial Products'
equity which is accounted for by
Machinery, Energy & Transportation on
the equity basis.
---
6 Reclassification reflecting required
netting of deferred tax assets/
liabilities by taxing jurisdiction.
---
7 Elimination of other intercompany
assets between Machinery, Energy &
Transportation and Financial Products.
---
8 Elimination of debt between Machinery,
Energy & Transportation and Financial
Products.
---
9 Elimination of payables between
Machinery, Energy & Transportation and
Financial Products.
10 Elimination of prepaid insurance in
Financial Products' other liabilities.
Caterpillar Inc.
Supplemental Data for Financial Position
At December 31, 2019
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery, Financial Consolidating
Energy & Products Adjustments
Transportation
(1)
Assets
Current assets:
Cash and short-term investments $
8,284 $
7,299 $
985
$
Receivables - trade and other 8,568 3,737 451 4,380 2,3
Receivables - finance 9,336 14,489 (5,153) (3)
Prepaid expenses and other current
assets 1,739 1,290 529 (80) 4
Inventories 11,266 11,266
Total current assets 39,193 23,592 16,454 (853)
Property, plant and equipment - net 12,904 8,606 4,298
Long-term receivables - trade and
other 1,193 348 152 693 2,3
Long-term receivables - finance 12,651 13,354 (703) (3)
Investments in Financial Products
subsidiaries - 4,260 (4,260) 5
Noncurrent deferred and refundable
income taxes 1,411 2,002 117 (708) 6
Intangible assets 1,565 1,565
Goodwill 6,196 6,196
Other assets 3,340 1,868 1,572 (100) 7
Total assets $
78,453 $
48,437 $
35,947 $
(5,931)
Liabilities
Current liabilities:
Short-term borrowings $
5,166 $
5 $
5,161
$
Short-term borrowings with
consolidated companies - 600 (600) 8
Accounts payable 5,957 5,918 212 (173) 9
Accrued expenses 3,750 3,415 335
Accrued wages, salaries and employee
benefits 1,629 1,580 49
Customer advances 1,187 1,187
Dividends payable 567 567
Other current liabilities 2,155 1,689 566 (100) 6,10
Long-term debt due within one year 6,210 16 6,194
Total current liabilities 26,621 14,377 13,117 (873)
Long-term debt due after one year 26,281 9,151 17,140 (10) 8
Liability for postemployment
benefits 6,599 6,599
Other liabilities 4,323 3,681 1,430 (788) 6
Total liabilities 63,824 33,808 31,687 (1,671)
Shareholders' equity
Common stock 5,935 5,935 919 (919) 5
Treasury stock (24,217) (24,217)
Profit employed in the business 34,437 34,437 3,997 (3,997) 5
Accumulated other comprehensive
income (loss) (1,567) (1,567) (828) 828 5
Noncontrolling interests 41 41 172 (172) 5
Total shareholders' equity 14,629 14,629 4,260 (4,260)
Total liabilities and shareholders'
equity $
78,453 $
48,437 $
35,947 $
(5,931)
(1) Represents Caterpillar Inc. and its
subsidiaries with Financial Products
accounted for on the equity basis.
---
(2) Elimination of receivables between
Machinery, Energy & Transportation and
Financial Products.
---
Reclassification of Machinery, Energy &
Transportation's trade receivables
purchased by Financial Products and
Financial Products' wholesale
(3) inventory receivables.
---
4 Elimination of Machinery, Energy &
Transportation's insurance premiums
that are prepaid to Financial
Products.
---
5 Elimination of Financial Products'
equity which is accounted for by
Machinery, Energy & Transportation on
the equity basis.
---
6 Reclassification reflecting required
netting of deferred tax assets/
liabilities by taxing jurisdiction.
---
7 Elimination of other intercompany
assets between Machinery, Energy &
Transportation and Financial Products.
---
8 Elimination of debt between Machinery,
Energy & Transportation and Financial
Products.
---
9 Elimination of payables between
Machinery, Energy & Transportation and
Financial Products.
---
10 Elimination of prepaid insurance in
Financial Products' other liabilities.
Caterpillar Inc.
Supplemental Data for Cash Flow
For the Six Months Ended June 30, 2020
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery, Financial Consolidating
Energy & Products Adjustments
Transportation(1)
Cash flow from operating activities:
Profit of consolidated and
affiliated companies $
1,552 $
1,543 $
181 $
(172) (2)
Adjustments for non-cash items:
Depreciation and amortization 1,222 805 417
Undistributed profit of
Financial Products - (152) 152 (3)
Net gain on remeasurement of
pension obligations (132) (132)
Provision (benefit) for deferred
income taxes (32) 40 (72)
Other 674 347 145 182 4
Changes in assets and liabilities, net of
acquisitions and divestitures:
Receivables - trade and other 1,176 539 (77) 714 4, 5
Inventories (145) (137) (8) 4
Accounts payable (655) (664) (5) 14 4
Accrued expenses (253) (237) (16)
Accrued wages, salaries and
employee benefits (648) (614) (34)
Customer advances (2) (2)
Other assets - net (7) 30 30 (67) 4
Other liabilities - net (229) (391) 84 78 4
Net cash provided by (used for)
operating activities 2,521 975 653 893
Cash flow from investing activities:
Capital expenditures - excluding
equipment leased to others (472) (465) (7)
Expenditures for equipment
leased to others (526) 1 (540) 13 4
Proceeds from disposals of
leased assets and property,
plant and equipment 382 104 283 (5) 4
Additions to finance receivables (6,712) (7,352) 640 5
Collections of finance
receivables 6,801 7,442 (641) 5
Net intercompany purchased
receivables - 920 (920) 5
Proceeds from sale of finance
receivables 31 31
Net intercompany borrowings - 500 2 (502) 6
Investments and acquisitions
(net of cash acquired) (49) (49)
Proceeds from sale of businesses
and investments (net of cash
sold) 13 13
Proceeds from sale of securities 151 12 139
Investments in securities (369) (10) (359)
Other - net 7 (15) 22
Net cash provided by (used for)
investing activities (743) 91 581 (1,415)
Cash flow from financing activities:
Dividends paid (1,125) (1,125) (20) 20 7
Common stock issued, including
treasury shares reissued (10) (10)
Common shares repurchased (1,130) (1,130)
Net intercompany borrowings - (2) (500) 502 6
Proceeds from debt issued > 90
days 6,159 1,991 4,168
Payments on debt > 90 days (4,629) (12) (4,617)
Short-term borrowings - net <
90 days (477) 8 (485)
Other - net (1) (1)
Net cash provided by (used for)
financing activities (1,213) (281) (1,454) 522
Effect of exchange rate changes
on cash (66) (54) (12)
Increase (decrease) in cash and
short-term investments and
restricted cash 499 731 (232)
Cash and short-term investments
and restricted cash at
beginning of period 8,292 7,302 990
Cash and short-term investments
and restricted cash at end of
period $
8,791 $
8,033 $
758
$
(1) Represents Caterpillar Inc. and its
subsidiaries with Financial Products
accounted for on the equity basis.
---
(2) Elimination of Financial Products'
profit after tax due to equity method
of accounting.
---
(3) Elimination of non-cash adjustment
for the undistributed earnings from
Financial Products.
---
4 Elimination of non-cash adjustments
and changes in assets and liabilities
related to consolidated reporting.
---
Reclassification of Financial
Products' cash flow activity from
investing to operating for
receivables that arose from the sale
5 of inventory.
---
6 Elimination of net proceeds and
payments to/from Machinery, Energy &
Transportation and Financial
Products.
---
7 Elimination of dividend from Financial
Products to Machinery, Energy &
Transportation.
---
Caterpillar Inc.
Supplemental Data for Cash Flow
For the Six Months Ended June 30, 2019
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery, Financial Consolidating
Energy & Products Adjustments
Transportation(1)
Cash flow from operating activities:
Profit of consolidated and
affiliated companies $
3,503 $
3,492 $
253 $
(242) (2)
Adjustments for non-cash items:
Depreciation and
amortization 1,288 855 433
Undistributed profit of
Financial Products - (242) 242 (3)
Provision (benefit) for
deferred income taxes (34) (16) (18)
Other 440 264 (51) 227 4
Changes in assets and liabilities, net of
acquisitions and divestitures:
Receivables - trade and
other (166) 161 (5) (322) 4, 5
Inventories (487) (489) 2 4
Accounts payable 134 (94) 279 (51) 4
Accrued expenses 151 158 (5) (2) 4
Accrued wages, salaries and
employee benefits (979) (978) (1)
Customer advances 14 18 (4) 4
Other assets - net (120) (165) 61 (16) 4
Other liabilities - net (35) (144) 89 20 4
Net cash provided by (used
for) operating activities 3,709 2,820 1,035 (146)
Cash flow from investing activities:
Capital expenditures -
excluding equipment leased
to others (479) (468) (11)
Expenditures for equipment
leased to others (746) (24) (725) 3 4
Proceeds from disposals of
leased assets and
property, plant and
equipment 422 97 367 (42) 4
Additions to finance
receivables (6,181) (7,027) 846 5
Collections of finance
receivables 5,902 6,548 (646) 5
Net intercompany purchased
receivables - 15 (15) 5
Proceeds from sale of
finance receivables 119 119
Net intercompany borrowings - 213 1 (214) 6
Investments and
acquisitions (net of cash
acquired) (3) (3)
Proceeds from sale of
securities 170 13 157
Investments in securities (243) (12) (231)
Other - net (40) (9) (31)
Net cash provided by (used
for) investing activities (1,079) (193) (818) (68)
Cash flow from financing activities:
Dividends paid (986) (986)
Common stock issued,
including treasury shares
reissued 39 39
Common shares repurchased (2,105) (2,105)
Net intercompany borrowings - (1) (213) 214 6
Proceeds from debt issued >
90 days 5,340 5,340
Payments on debt > 90 days (4,901) (4) (4,897)
Short-term borrowings -
net < 90 days (436) (436)
Other - net (2) (2)
Net cash provided by (used
for) financing activities (3,051) (3,059) (206) 214
Effect of exchange rate
changes on cash (10) (8) (2)
Increase (decrease) in cash
and short-term
investments and restricted
cash (431) (440) 9
Cash and short-term
investments and restricted
cash at beginning of
period 7,890 6,994 896
Cash and short-term
investments and restricted
cash at end of period $
7,459 $
6,554 $
905
$
(1) Represents Caterpillar Inc. and its
subsidiaries with Financial Products
accounted for on the equity basis.
---
(2) Elimination of Financial Products'
profit after tax due to equity method
of accounting.
---
(3) Elimination of non-cash adjustment
for the undistributed earnings from
Financial Products.
---
4 Elimination of non-cash adjustment
and changes in assets and liabilities
related to consolidated reporting.
---
Reclassification of Financial
Products' cash flow activity from
investing to operating for
receivables that arose from the sale
5 of inventory.
---
6 Elimination of net proceeds and
payments to/from Machinery, Energy &
Transportation and Financial
Products.
---
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SOURCE Caterpillar Inc.
