Caterpillar Reports Third-Quarter 2020 Results

DEERFIELD Ill., Oct. 27, 2020 /PRNewswire/ --

    --  Third-quarter sales and revenues decreased 23%; profit per share
        declined 54%
    --  Strong balance sheet; $9.3 billion of enterprise cash


                                                            Third Quarter



       ($ in billions except profit per share)  2020  2019



       
              Sales and Revenues            $9.9 $12.8

    ---


       
              Profit Per Share             $1.22 $2.66

Caterpillar Inc. (NYSE: CAT) today announced third-quarter 2020 sales and revenues of $9.9 billion, a 23% decrease compared with $12.8 billion in the third quarter of 2019. The decline was primarily due to lower sales volume driven by lower end-user demand for equipment and services.

Third-quarter 2020 profit per share was $1.22, compared with $2.66 profit per share in the third quarter of 2019. Profit per share in the third quarter of 2020 included pre-tax remeasurement losses of $77 million, or $0.12 per share, resulting from the settlements of pension obligations. Profit per share benefited from lower than expected taxes in the quarter.

Operating profit margin was 10.0% for the third quarter of 2020, compared with 15.8% for the third quarter of 2019.

For the nine months ended September 30, 2020, enterprise operating cash flow was $4.3 billion. Caterpillar ended the third quarter with $9.3 billion of enterprise cash and more than $14 billion of available liquidity sources.

"I'm proud of our global team's performance as we continue to safely navigate the pandemic while remaining firmly committed to serving our customers," said Caterpillar Chairman and CEO Jim Umpleby. "Our third-quarter results largely aligned with our expectations, and we're encouraged by positive signs in certain industries and geographies. We're executing our strategy and are ready to respond quickly to changing market conditions."

CONSOLIDATED RESULTS

Consolidated Sales and Revenues
Consolidated Sales and Revenues Comparison

Third Quarter 2020 vs. Third Quarter 2019

To access this chart, go to https://investors.caterpillar.com/financials/quarterly-results/default.aspx for the downloadable version of Caterpillar third-quarter 2020 earnings.

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the third quarter of 2019 (at left) and the third 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 third quarter of 2020 were $9.881 billion, a decrease of $2.877 billion, or 23%, compared with $12.758 billion in the third quarter of 2019. The decline was mostly due to lower sales volume driven by lower end-user demand for equipment and services and the impact from changes in dealer inventories. Dealers decreased inventories more during the third quarter of 2020 than during the third quarter of 2019.

Sales were lower across all regions and the three primary segments.



     
                Sales and Revenues by Segment





     
                (Millions of dollars)               Third                    Sales                   Price            Currency    Inter-             Third   
     
               $                       %
                                                                         Volume               Realization                                                           Change                 
     Change
                                                      Quarter                                                                      Segment /           Quarter

                                                         2019                                                                         Other                2020

                                                                                                                                                                                                  ---




     Construction Industries                                  $
      5,289                                      $
     (1,150)                      $
      (60)                            $
      (17)                  $
       (6)          $
     4,056   $
     (1,233) (23%)



     Resource Industries                               2,310                           (425)                                 (46)                 (4)                      (19)                   1,816               (494)      (21%)



     Energy & Transportation                           5,452                         (1,086)                                 (16)                  15                      (204)                   4,161             (1,291)      (24%)



     All Other Segment                                   111                             (3)                                    1                                            (3)                     106                 (5)       (5%)



     Corporate Items and Eliminations                (1,188)                             45                                                                                 232                    (911)                277



                   Machinery, Energy & Transportation  11,974                         (2,619)                                (121)                 (6)                                             9,228             (2,746)      (23%)





     Financial Products Segment                          865                                                                                                              (141)                     724               (141)      (16%)



     Corporate Items and Eliminations                   (81)                                                                                                                10                     (71)                 10




     
                Financial Products Revenues            784                                                                                                              (131)                     653               (131)      (17%)





     
                Consolidated Sales and Revenues            $
      12,758                                      $
     (2,619)                     $
      (121)                             $
      (6)                $
       (131)          $
     9,881   $
     (2,877) (23%)




       
                Sales and Revenues by Geographic Region


                                                                       North America                    Latin America         
       
            EAME                   Asia/Pacific                      External Sales                   Inter-Segment                             Total Sales and

                                                                                                                                                                                                     and Revenues                                                         
     
          Revenues




       
                (Millions of dollars)                   
     
         $                    % Chg       
          
               $                    % Chg         
     
     $              % Chg        
     
           $                  % Chg        
              
           $                    % Chg            
     
     $                % Chg       
         
     $      % Chg



                                    Third Quarter 2020

    ---


       Construction Industries                                         $
              1,781                             (35%)             $
              230                (44%)                     $
         796                    (24%)                             $
     1,241                             14%                  $
      4,048      (23%)                         $
            8          (43%)                $
       4,056   (23%)



       Resource Industries                                        487                          (38%)                       269                         (23%)            384                            (3%)         564                                   (13%)                     1,704                (22%)                   112      (15%)                 1,816              (21%)



       Energy & Transportation                                  1,584                          (26%)                       221                         (42%)          1,113                            (9%)         557                                   (33%)                     3,475                (24%)                   686      (23%)                 4,161              (24%)



       All Other Segment                                           10                           900%                         1                         (83%)              1                           (88%)          13                                      8%                        25                 (7%)                    81       (4%)                   106               (5%)



       Corporate Items and Eliminations                          (22)                                                           (2)                                                                                                                                                                            (24)                                  (887)                                         (911)



                     Machinery, Energy & Transportation          3,840                          (31%)                       719                         (37%)          2,294                           (14%)       2,375                                    (8%)                     9,228                (23%)                                        -%                  9,228          (23%)





       Financial Products Segment                                 448                          (20%)                        63                         (20%)            100                            (2%)         113                                    (9%)                       724                (16%)                                        -%                    724          (16%)



       Corporate Items and Eliminations                          (37)                                                          (10)                                                 (10)                                                          (14)                                                         (71)                                                                                 (71)




       
                Financial Products Revenues                   411                          (21%)                        53                         (17%)             90                            (4%)          99                                    (9%)                       653                (17%)                                        -%                    653          (17%)





       
                Consolidated Sales and Revenues                    $
              4,251                             (30%)             $
              772                (36%)                   $
         2,384                    (14%)                             $
     2,474                            (8%)                  $
      9,881      (23%)               
         $                          -%               $
       9,881   (23%)





                                    Third Quarter 2019

    ---


       Construction Industries                                         $
              2,728                                               $
              413                                        $
         1,048                                                      $
     1,086                                                  $
      5,275                                   $
            14                               $
       5,289



       Resource Industries                                        789                                                            349                                                   396                                                            645                                                         2,179                                     131                                          2,310



       Energy & Transportation                                  2,129                                                            378                                                 1,224                                                            831                                                         4,562                                     890                                          5,452



       All Other Segment                                            1                                                              6                                                     8                                                             12                                                            27                                      84                                            111



       Corporate Items and Eliminations                          (62)                                                             1                                                   (7)                                                           (1)                                                         (69)                                (1,119)                                       (1,188)



                     Machinery, Energy & Transportation          5,585                                                          1,147                                                 2,669                                                          2,573                                                        11,974                                                                                11,974





       Financial Products Segment                                 560                                                             79                                                   102                                                            124                                                           865                                                                                   865



       Corporate Items and Eliminations                          (43)                                                          (15)                                                  (8)                                                          (15)                                                         (81)                                                                                 (81)




       
                Financial Products Revenues                   517                                                             64                                                    94                                                            109                                                           784                                                                                   784





       
                Consolidated Sales and Revenues                    $
              6,102                                             $
              1,211                                        $
         2,763                                                      $
     2,682                                                 $
      12,758                          
         $                                           $
       12,758

Consolidated Operating Profit

Consolidated Operating Profit Comparison
Third Quarter 2020 vs. Third Quarter 2019

To access this chart, go to https://investors.caterpillar.com/financials/quarterly-results/default.aspx for the downloadable version of Caterpillar third-quarter 2020 earnings.

The chart above graphically illustrates reasons for the change in consolidated operating profit between the third quarter of 2019 (at left) and the third 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 third quarter of 2020 was $985 million, a decrease of $1.035 billion, or 51%, compared with $2.020 billion in the third quarter of 2019. The decrease was primarily due to lower sales volume. Favorable selling, general and administrative (SG&A) and research and development (R&D) expenses were mostly offset by unfavorable price realization and lower profit from financial products.

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)              Third Quarter        Third Quarter         
     
            $                  %
                                                                                                     Change
                                                               2020                  2019                                Change




     Construction Industries                                       $
     585                                      $
       940             $
         (355) (38%)



     Resource Industries                                       167                          311                             (144)          (46%)



     Energy & Transportation                                   492                        1,021                             (529)          (52%)



     All Other Segment                                          27                         (21)                               48       
         n/a



     Corporate Items and Eliminations                        (346)                       (363)                               17



                   Machinery, Energy & Transportation           925                        1,888                             (963)          (51%)





     Financial Products Segment                                142                          218                              (76)          (35%)



     Corporate Items and Eliminations                         (15)                          21                              (36)




     
                Financial Products                           127                          239                             (112)          (47%)





     
                Consolidating Adjustments                   (67)                       (107)                               40





                   Consolidated Operating Profit                    $
     985                                    $
       2,020           $
         (1,035) (51%)

Other Profit/Loss and Tax Items

    --  Other income (expense) in the third quarter of 2020 was income of $14
        million, compared with income of $88 million in the third quarter of
        2019. The change was primarily due to the unfavorable impacts from
        foreign currency exchange gains (losses) and lower investment and
        interest income.
    --  The provision for income taxes for the third quarter of 2020 reflected
        an estimated annual tax rate of 31%, excluding the discrete items
        discussed below, compared with 26% for the third 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.

In the third quarter of 2020, the company recorded discrete tax benefits of $80 million to adjust prior year U.S. taxes and $13 million for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense. In addition, the company recorded a $12 million tax benefit related to the $77 million of remeasurement losses resulting from the settlements of pension obligations.



       
                CONSTRUCTION INDUSTRIES

    ---


       
                (Millions of dollars)



       
                Segment Sales


                                                Third Quarter            Sales Volume                  Price                        Currency   Inter-                 Third Quarter  
     
            $                  %
                                                                                                                                                                                         Change             Change
                                                         2019                                        Realization                                Segment                         2020




       Total Sales                                           $
       5,289                                         $
         (1,150)                           $
       (60)                                 $
     (17)          $
     (6) $
     4,056 $
     (1,233) (23%)





       
                Sales by Geographic Region


                                                Third Quarter            Third Quarter         
     
                $                         %
                                                                                                 Change                         Change
                                                         2020                      2019




       North America                                         $
       1,781                                           $
         2,728                           $
       (947)                          (35%)



       Latin America                                     230                              413                                           (183)                 (44%)



       EAME                                              796                            1,048                                           (252)                 (24%)



       Asia/Pacific                                    1,241                            1,086                                             155                    14%




       External Sales                                  4,048                            5,275                                         (1,227)                 (23%)



       Inter-segment                                       8                               14                                             (6)                 (43%)




       Total Sales                                           $
       4,056                                           $
         5,289                         $
       (1,233)                          (23%)






       
                Segment Profit


                                                Third Quarter            Third Quarter                                                  %
                                                                                                 Change                         Change
                                                         2020                      2019




       Segment Profit                                          $
       585                                             $
         940                           $
       (355)                          (38%)



       Segment Profit Margin                           14.4%                           17.8%                                      (3.4 pts)

Construction Industries' total sales were $4.056 billion in the third quarter of 2020, a decrease of $1.233 billion, or 23%, compared with $5.289 billion in the third 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. During the third quarter of 2020, dealers decreased inventories in all regions except for Asia/Pacific where dealers increased inventories, compared with the third quarter of 2019 when dealer inventories were about flat in all regions except for Asia/Pacific where dealers decreased inventories. Overall, dealers decreased inventories more during the third quarter of 2020 than during the third quarter of 2019.

    --  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 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 increased in Asia/Pacific primarily due to the impact of changes
        in dealer inventories, partially offset by unfavorable price
        realization. The increase in sales was primarily driven by China demand,
        which was partially offset by lower sales in the rest of the region.

Construction Industries' profit was $585 million in the third quarter of 2020, a decrease of $355 million, or 38%, compared with $940 million in the third 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 driven by lower period manufacturing costs and favorable variable labor and burden. SG&A/R&D expenses and period manufacturing costs both benefited from cost reductions related to lower sales volumes.



       
                RESOURCE INDUSTRIES

    ---


       
                (Millions of dollars)



       
                Segment Sales


                                                Third Quarter            Sales Volume                  Price                    Currency   Inter-            Third Quarter  
     
            $                 %
                                                                                                                                                                                Change            Change
                                                         2019                                        Realization                            Segment                    2020




       Total Sales                                           $
       2,310                                         $
       (425)                         $
     (46)                                $
     (4)          $
     (19) $
     1,816 $
     (494) (21%)





       
                Sales by Geographic Region


                                                Third Quarter            Third Quarter         
     
                $                     %
                                                                                                 Change                     Change
                                                         2020                      2019




       North America                                           $
       487                                           $
       789                         $
     (302)                         (38%)



       Latin America                                     269                              349                                        (80)             (23%)



       EAME                                              384                              396                                        (12)              (3%)



       Asia/Pacific                                      564                              645                                        (81)             (13%)




       External Sales                                  1,704                            2,179                                       (475)             (22%)



       Inter-segment                                     112                              131                                        (19)             (15%)




       Total Sales                                           $
       1,816                                         $
       2,310                         $
     (494)                         (21%)






       
                Segment Profit


                                                Third Quarter            Third Quarter                                              %
                                                                                                 Change                     Change
                                                         2020                      2019




       Segment Profit                                          $
       167                                           $
       311                         $
     (144)                         (46%)



       Segment Profit Margin                            9.2%                           13.5%                                  (4.3 pts)

Resource Industries' total sales were $1.816 billion in the third quarter of 2020, a decrease of $494 million, or 21%, compared with $2.310 billion in the third quarter of 2019. The decrease was due to lower sales volume driven by lower end-user demand for equipment and aftermarket parts, partially offset by the impact of changes in dealer inventories. Dealers decreased inventories more during the third quarter of 2019 than during the third quarter of 2020. End-user demand was lower across non-residential construction and quarry and aggregates and mining, primarily in North America.

Resource Industries' profit was $167 million in the third quarter of 2020, a decrease of $144 million, or 46%, compared with $311 million in the third quarter of 2019. The decrease was mainly because of lower sales volume and unfavorable price realization, partially offset by favorable manufacturing costs and lower SG&A/R&D expenses. Favorable manufacturing costs were driven by lower period manufacturing costs, favorable material costs and lower warranty expense, partially offset by unfavorable cost absorption. Cost absorption was unfavorable as inventory increased in the third quarter of 2019, compared with a decrease in the third quarter of 2020. SG&A/R&D expenses, along with period manufacturing costs, benefited from lower short-term incentive compensation expense, other cost-reduction actions implemented in response to lower sales volumes and benefits from prior restructuring programs.



       
                ENERGY & TRANSPORTATION

    ---


       
                (Millions of dollars)



       
                Segment Sales


                                             Third Quarter            Sales Volume                  Price                      Currency   Inter-                Third Quarter  
         
            $           %
                                                                                                                                                                                       Change      Change
                                                      2019                                        Realization                              Segment                        2020




       Total Sales                                        $
       5,452                                         $
       (1,086)                           $
       (16)                         $
           15          $
     (204) $
     4,161 $
     (1,291) (24%)





       
                Sales by Application


                                             Third Quarter            Third Quarter         
     
                $                       %
                                                                                              Change                       Change
                                                      2020                      2019




       Oil and Gas                                          $
       734                                           $
       1,246                           $
       (512)                  (41%)



       Power Generation                             1,034                            1,123                                          (89)                  (8%)



       Industrial                                     730                              980                                         (250)                 (26%)



       Transportation                                 977                            1,213                                         (236)                 (19%)




       External Sales                               3,475                            4,562                                       (1,087)                 (24%)



       Inter-segment                                  686                              890                                         (204)                 (23%)




       Total Sales                                        $
       4,161                                           $
       5,452                         $
       (1,291)                  (24%)






       
                Segment Profit


                                             Third Quarter            Third Quarter                                                %
                                                                                              Change                       Change
                                                      2020                      2019




       Segment Profit                                       $
       492                                           $
       1,021                           $
       (529)                  (52%)



       Segment Profit Margin                        11.8%                           18.7%                                    (6.9 pts)

Energy & Transportation's total sales were $4.161 billion in the third quarter of 2020, a decrease of $1.291 billion, or 24%, compared with $5.452 billion in the third 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. In addition, sales were lower for
        turbines and turbine-related services.
    --  Power Generation - Sales decreased primarily due to lower sales volume
        in engine aftermarket parts, and small reciprocating engine
        applications, as well as turbines and turbine-related services. The
        sales decrease was partially offset by an increase in large
        reciprocating engine applications, mainly for data centers.
    --  Industrial - Sales decreased due to lower demand across all regions.
    --  Transportation - Sales declined in rail due to lower deliveries of
        locomotives and related services, primarily in North America, and in
        marine due to lower sales of engine aftermarket parts, primarily in
        EAME.

Energy & Transportation's profit was $492 million in the third quarter of 2020, a decrease of $529 million, or 52%, compared with $1.021 billion in the third quarter of 2019. The decrease was due to lower sales volume, partially offset by lower SG&A/R&D expenses and period manufacturing costs. SG&A/R&D expenses and period manufacturing costs were mostly impacted by a reduction in short-term incentive compensation expense and other cost-reduction actions implemented in response to lower sales volumes. In addition, segment profit was unfavorably impacted by other operating income/expense and higher inventory write-downs during the third quarter of 2020.



       
                FINANCIAL PRODUCTS SEGMENT

    ---

                     (Millions of dollars)



       
                Revenues by Geographic Region


                                                   Third Quarter        Third Quarter      
     
            $                %
                                                                                               Change          Change
                                                            2020                  2019




       North America                                            $
     448                                 $
     560             $
      (112) (20%)



       Latin America                                         63                        79                            (16)     (20%)



       EAME                                                 100                       102                             (2)      (2%)



       Asia/Pacific                                         113                       124                            (11)      (9%)




       Total Revenues                                           $
     724                                 $
     865             $
      (141) (16%)






       
                Segment Profit


                                                   Third Quarter        Third Quarter                                  %
                                                                                               Change          Change
                                                            2020                  2019




       Segment Profit                                           $
     142                                 $
     218              $
      (76) (35%)

Financial Products' segment revenues were $724 million in the third quarter of 2020, a decrease of $141 million, or 16%, from the third quarter of 2019. The decrease was primarily because of lower average financing rates across all regions and lower average earning assets primarily in North America.

Financial Products' segment profit was $142 million in the third quarter of 2020, compared with $218 million in the third quarter of 2019. The decrease was due to higher provision for credit losses, lower net yield on average earning assets and lower average earning assets 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.

At the end of the third quarter of 2020, past dues at Cat Financial were 3.81%, compared with 3.19% at the end of the third quarter of 2019. Past dues increased primarily due to the impacts of the COVID-19 pandemic, offset by decreases in the Caterpillar Power Finance and Latin American portfolios. Write-offs, net of recoveries, were $125 million for the third quarter of 2020, compared with $103 million for the third quarter of 2019. As of September 30, 2020, Cat Financial's allowance for credit losses totaled $460 million, or 1.74% of finance receivables, compared with $515 million, or 1.92% of finance receivables at June 30, 2020. The decrease in the allowance for credit losses was primarily driven by write-offs of previously reserved accounts in the Caterpillar Power Finance portfolio. 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 $361 million in the third quarter of 2020, an increase of $19 million from the third quarter of 2019, primarily due to higher restructuring costs and an unfavorable change in fair value adjustments related to deferred compensation plans, partially offset by lower corporate costs 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 Tuesday, October 27, 2020.
iii. Information on non-GAAP financial measures is included in the appendix on page 11.
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 Tuesday, October 27, 2020, to discuss its 2020 third-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 third 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:


                                                                                                                                                 Third Quarter



                                                                                                                              2020                          2019




     Profit per share                                                                                                               $
              1.22                     $
     2.66



     Per share remeasurement losses of pension obligations(1)                                                                       $
              0.12                 
     $



     Adjusted profit per share                                                                                                      $
              1.34                     $
     2.66







     
                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.

Supplemental Consolidating Data

The company is providing supplemental consolidating data for the purpose of additional analysis. The data has been grouped as follows:

Consolidated - Caterpillar Inc. and its subsidiaries.

Machinery, Energy & Transportation (ME&T) - The company defines ME&T as it is presented in the supplemental data as Caterpillar Inc. and its subsidiaries, excluding Financial Products. ME&T's information relates to the design, manufacturing and marketing of its products.

Financial Products - The company defines Financial Products as it is presented in the supplemental data as its finance and insurance subsidiaries, primarily Cat Financial and Insurance Services. Financial Products' information relates to the financing to customers and dealers for the purchase and lease of Caterpillar and other equipment.

Consolidating Adjustments - Eliminations of transactions between ME&T and Financial Products.

The nature of the ME&T and Financial Products 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 believes this presentation will assist readers in understanding its business.

Pages 12 to 22 reconcile ME&T and Financial Products 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                                       Nine Months Ended
                                                                            
                September 30,                           
                September 30,


                                                                            2020                             2019                      2020                              2019

                                                                                                                                                                       ---


     
                Sales and revenues:



       Sales of Machinery, Energy & Transportation                                $
              9,228                                         $
              11,974               $
       28,452  $
       38,369



       Revenues of Financial Products                                       653                                          784                                          2,061         2,287




       Total sales and revenues                                           9,881                                       12,758                                         30,513        40,656





     
                Operating costs:



       Cost of goods sold                                                 6,919                                        8,569                                         21,298        27,513



       Selling, general and administrative expenses                       1,126                                        1,251                                          3,426         3,879



       Research and development expenses                                    344                                          431                                          1,041         1,307



       Interest expense of Financial Products                               137                                          189                                            461           571



       Other operating (income) expenses                                    370                                          298                                          1,114           946




       Total operating costs                                              8,896                                       10,738                                         27,340        34,216






     
                Operating profit                                          985                                        2,020                                          3,173         6,440





       Interest expense excluding Financial Products                        136                                          103                                            384           309



       Other income (expense)                                                14                                           88                                            265           316






     
                Consolidated profit before taxes                          863                                        2,005                                          3,054         6,447





       Provision (benefit) for income taxes                                 187                                          518                                            839         1,470




       Profit of consolidated companies                                     676                                        1,487                                          2,215         4,977





       Equity in profit (loss) of unconsolidated affiliated companies       (5)                                           7                                              8            20






     
                Profit of consolidated and affiliated companies           671                                        1,494                                          2,223         4,997





     Less: Profit (loss) attributable to noncontrolling interests             3                                                                                          5             2






     
                Profit (1)                                                        $
              668                                          $
              1,494                $
       2,218   $
       4,995








     
                Profit per common share                                          $
              1.23                                           $
              2.69                 $
       4.08    $
       8.84



     
                Profit per common share - diluted (2)                            $
              1.22                                           $
              2.66                 $
       4.05    $
       8.75





     
                Weighted-average common shares outstanding (millions)



     
                - Basic                                                 542.3                                        556.3                                          543.9         565.2



     
                - Diluted (2)                                           546.4                                        561.2                                          547.8         570.8




              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)




                                                                                                            September 30,              December 31,
                                                                                                                     2020                       2019

                                                                                                                                                ---


     
                Assets



     Current assets:



     Cash and short-term investments                                                                                        $
      9,315                          $
         8,284



     Receivables - trade and other                                                                                 6,969                                8,568



     Receivables - finance                                                                                         8,966                                9,336



     Prepaid expenses and other current assets                                                                     1,831                                1,739



     Inventories                                                                                                  11,453                               11,266




     Total current assets                                                                                         38,534                               39,193





     Property, plant and equipment - net                                                                          12,232                               12,904



     Long-term receivables - trade and other                                                                       1,149                                1,193



     Long-term receivables - finance                                                                              12,209                               12,651



     Noncurrent deferred and refundable income taxes                                                               1,440                                1,411



     Intangible assets                                                                                             1,363                                1,565



     Goodwill                                                                                                      6,304                                6,196



     Other assets                                                                                                  3,510                                3,340




     
                Total assets                                                                                             $
      76,741                         $
         78,453






     
                Liabilities



     Current liabilities:



     Short-term borrowings:



     -- Machinery, Energy & Transportation                                                                  
              $                                          $
         5



     -- Financial Products                                                                                         2,660                                5,161



     Accounts payable                                                                                              5,193                                5,957



     Accrued expenses                                                                                              3,510                                3,750



     Accrued wages, salaries and employee benefits                                                                 1,069                                1,629



     Customer advances                                                                                             1,209                                1,187



     Dividends payable                                                                                                 -                                 567



     Other current liabilities                                                                                     1,978                                2,155



     Long-term debt due within one year:



     -- Machinery, Energy & Transportation                                                                         1,397                                   16



     -- Financial Products                                                                                         7,962                                6,194




     Total current liabilities                                                                                    24,978                               26,621





     Long-term debt due after one year:



     -- Machinery, Energy & Transportation                                                                         9,742                                9,141



     -- Financial Products                                                                                        16,365                               17,140



     Liability for postemployment benefits                                                                         6,254                                6,599



     Other liabilities                                                                                             4,408                                4,323




     
                Total liabilities                                                                               61,747                               63,824






     
                Shareholders' equity



     Common stock                                                                                                  6,204                                5,935



     Treasury stock                                                                                             (25,315)                            (24,217)



     Profit employed in the business                                                                              35,508                               34,437



     Accumulated other comprehensive income (loss)                                                               (1,448)                             (1,567)



     Noncontrolling interests                                                                                         45                                   41




     
                Total shareholders' equity                                                                      14,994                               14,629




     
                Total liabilities and shareholders' equity                                                               $
      76,741                         $
         78,453


                                              
              
                Caterpillar Inc.


                               
              
                Condensed Consolidated Statement of Cash Flow


                                                
              
                (Unaudited)


                                           
              
                (Millions of dollars)




                                                                                     Nine Months Ended
                                                                   
                September 30,


                                                                   2020                             2019

                                                                                                    ---

                   Cash flow from operating activities:


      Profit of consolidated and affiliated
       companies                                                          $
              2,223                       $
     4,997



     Adjustments for non-cash items:



     Depreciation and amortization                               1,815                                     1,933


      Net gain on remeasurement of pension
       obligations                                                 (55)


      Provision (benefit) for deferred income
       taxes                                                       (38)                                     (13)



     Other                                                         919                                       627


      Changes in assets and liabilities, net of acquisitions
       and divestitures:



     Receivables - trade and other                               1,473                                       427



     Inventories                                                 (139)                                    (676)



     Accounts payable                                            (596)                                    (669)



     Accrued expenses                                            (286)                                      114


      Accrued wages, salaries and employee
       benefits                                                   (547)                                    (858)



     Customer advances                                              13                                       169



     Other assets - net                                           (15)                                       19



     Other liabilities - net                                     (512)                                  (1,592)



      Net cash provided by (used for)
       operating activities                                       4,255                                     4,478



                   Cash flow from investing activities:


      Capital expenditures - excluding
       equipment leased to others                                 (686)                                    (723)


      Expenditures for equipment leased to
       others                                                     (805)                                  (1,133)


      Proceeds from disposals of leased assets
       and property, plant and equipment                            550                                       812


      Additions to finance receivables                          (9,278)                                  (9,453)


      Collections of finance receivables                          9,656                                     9,144


      Proceeds from sale of finance
       receivables                                                   37                                       183


      Investments and acquisitions (net of
       cash acquired)                                              (93)                                      (6)


      Proceeds from sale of businesses and
       investments (net of cash sold)                                13                                         3


      Proceeds from sale of securities                              239                                       281



     Investments in securities                                   (512)                                    (425)



     Other - net                                                  (80)                                     (37)



      Net cash provided by (used for)
       investing activities                                       (959)                                  (1,354)



                   Cash flow from financing activities:



     Dividends paid                                            (1,683)                                  (1,564)


      Common stock issued, including treasury
       shares reissued                                              110                                        59



     Common shares repurchased                                 (1,130)                                  (3,283)


      Proceeds from debt issued (original
       maturities greater than three months)                      9,418                                     8,827


      Payments on debt (original maturities
       greater than three months)                               (6,789)                                  (6,062)


      Short-term borrowings - net (original
       maturities three months or less)                         (2,138)                                  (1,006)



     Other - net                                                   (1)                                      (2)



      Net cash provided by (used for)
       financing activities                                     (2,213)                                  (3,031)



      Effect of exchange rate changes on cash                      (56)                                     (47)



                   Increase (decrease) in cash and short-
                    term investments and restricted cash          1,027                                        46


      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                                   $
              9,319                       $
     7,936



                            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 September 30, 2020


                                                                                                            
             
                (Unaudited)


                                                                                                       
             
                (Millions of dollars)




                                                                                                                                                     Supplemental Consolidating Data



                                                                     Consolidated                              Machinery,                                       Financial                        Consolidating
                                                                                                   Energy &                                              Products                          Adjustments
                                                                                                Transportation




     
                Sales and revenues:



     Sales of Machinery, Energy & Transportation                                 $
       9,228                                                                                 $
          9,228                       
     $                
      $



     Revenues of Financial Products                                          653                                                                                                                           740          (87)    1




     Total sales and revenues                                              9,881                                                9,228                                                                       740          (87)





     
                Operating costs:



     Cost of goods sold                                                    6,919                                                6,921                                                                                    (2)    2



     Selling, general and administrative expenses                          1,126                                                  943                                                                       189           (6)    2



     Research and development expenses                                       344                                                  344



     Interest expense of Financial Products                                  137                                                                                                                           137



     Other operating (income) expenses                                       370                                                   95                                                                       287          (12)    2




     Total operating costs                                                 8,896                                                8,303                                                                       613          (20)






     
                Operating profit                                           985                                                  925                                                                       127          (67)





     Interest expense excluding Financial Products                           136                                                  136



     Other income (expense)                                                   14                                                 (62)                                                                        9            67     3






     
                Consolidated profit before taxes                           863                                                  727                                                                       136





     Provision (benefit) for income taxes                                    187                                                  133                                                                        54




     Profit of consolidated companies                                        676                                                  594                                                                        82





     Equity in profit (loss) of unconsolidated affiliated companies          (5)                                                 (4)                                                                                   (1)    4





     
                Profit of consolidated and affiliated companies            671                                                  590                                                                        82           (1)





     Less: Profit (loss) attributable to noncontrolling interests              3                                                                                                                             4           (1)    5






     
                Profit 6                                                         $
       668                                                                                   $
          590                           $
        78        
      $




              1               Elimination of Financial Products'
                                revenues earned from ME&T.

    ---


              2               Elimination of net expenses
                                recorded by ME&T paid to Financial
                                Products.

    ---


              3               Elimination of discount recorded by
                                ME&T on receivables sold to
                                Financial Products and of interest
                                earned between ME&T and Financial
                                Products as well as dividends paid
                                by Financial Products to ME&T.



              4               Elimination of equity profit (loss)
                                earned from Financial Products'
                                subsidiaries partially owned by
                                ME&T subsidiaries.

    ---


              5               Elimination of noncontrolling
                                interest profit (loss) recorded by
                                Financial Products for
                                subsidiaries partially owned by
                                ME&T subsidiaries.

    ---


              6               Profit attributable to common
                                shareholders.


                                                                                                          
             
                Caterpillar Inc.


                                                                                              
            
               Supplemental Data for Results of Operations


                                                                                             
            
               For the Three Months Ended September 30, 2019


                                                                                                            
             
                (Unaudited)


                                                                                                       
             
                (Millions of dollars)




                                                                                                                                                     Supplemental Consolidating Data



                                                                     Consolidated                              Machinery,                                       Financial                         Consolidating
                                                                                                   Energy &                                              Products                           Adjustments
                                                                                                Transportation




     
                Sales and revenues:



     Sales of Machinery, Energy & Transportation                                 $
      11,974                                                                                 $
          11,974                       
     $               
      $



     Revenues of Financial Products                                          784                                                                                                                            920         (136)   1




     Total sales and revenues                                             12,758                                               11,974                                                                        920         (136)





     
                Operating costs:



     Cost of goods sold                                                    8,569                                                8,569



     Selling, general and administrative expenses                          1,251                                                1,095                                                                        163           (7)   2



     Research and development expenses                                       431                                                  431



     Interest expense of Financial Products                                  189                                                                                                                            198           (9)   3



     Other operating (income) expenses                                       298                                                  (9)                                                                       320          (13)   2




     Total operating costs                                                10,738                                               10,086                                                                        681          (29)






     
                Operating profit                                         2,020                                                1,888                                                                        239         (107)





     Interest expense excluding Financial Products                           103                                                  103



     Other income (expense)                                                   88                                                 (27)                                                                         8           107    4






     
                Consolidated profit before taxes                         2,005                                                1,758                                                                        247





     Provision (benefit) for income taxes                                    518                                                  457                                                                         61




     Profit of consolidated companies                                      1,487                                                1,301                                                                        186





     Equity in profit (loss) of unconsolidated affiliated companies            7                                                   12                                                                                     (5)   5





     
                Profit of consolidated and affiliated companies          1,494                                                1,313                                                                        186           (5)





     Less: Profit (loss) attributable to noncontrolling interests              -                                                 (1)                                                                         6           (5)   6






     
                Profit 7                                                        $
      1,494                                                                                  $
          1,314                           $
       180       
      $




              1               Elimination of Financial Products'
                                revenues earned from ME&T.

    ---


              2               Elimination of net expenses
                                recorded by ME&T paid to Financial
                                Products.

    ---


              3               Elimination of interest expense
                                recorded between Financial
                                Products and ME&T.

    ---


              4               Elimination of discount recorded by
                                ME&T on receivables sold to
                                Financial Products and of interest
                                earned between ME&T and Financial
                                Products as well as dividends paid
                                by Financial Products to ME&T.

    ---


              5               Elimination of equity profit (loss)
                                earned from Financial Products'
                                subsidiaries partially owned by
                                ME&T subsidiaries.

    ---


              6               Elimination of noncontrolling
                                interest profit (loss) recorded by
                                Financial Products for
                                subsidiaries partially owned by
                                ME&T subsidiaries.

    ---


              7               Profit attributable to common
                                shareholders.

    ---


                                                                                                          
             
                Caterpillar Inc.


                                                                                              
             
               Supplemental Data for Results of Operations


                                                                                             
             
               For the Nine Months Ended September 30, 2020


                                                                                                             
             
                (Unaudited)


                                                                                                        
             
                (Millions of dollars)




                                                                                                                                                     Supplemental Consolidating Data



                                                                     Consolidated                              Machinery,                                       Financial                         Consolidating
                                                                                                   Energy &                                              Products                           Adjustments
                                                                                                Transportation




     
                Sales and revenues:



     Sales of Machinery, Energy & Transportation                                 $
      28,452                                                                                 $
          28,452                       
     $              
     $



     Revenues of Financial Products                                        2,061                                                                                                                          2,350         (289)  1




     Total sales and revenues                                             30,513                                               28,452                                                                      2,350         (289)





     
                Operating costs:



     Cost of goods sold                                                   21,298                                               21,302                                                                                     (4)  2



     Selling, general and administrative expenses                          3,426                                                2,867                                                                        572          (13)  2



     Research and development expenses                                     1,041                                                1,041



     Interest expense of Financial Products                                  461                                                                                                                            462           (1)  3



     Other operating (income) expenses                                     1,114                                                  227                                                                        927          (40)  2




     Total operating costs                                                27,340                                               25,437                                                                      1,961          (58)






     
                Operating profit                                         3,173                                                3,015                                                                        389         (231)





     Interest expense excluding Financial Products                           384                                                  383                                                                                       1   3



     Other income (expense)                                                  265                                                   60                                                                        (7)          212   4






     
                Consolidated profit before taxes                         3,054                                                2,692                                                                        382          (20)





     Provision (benefit) for income taxes                                    839                                                  720                                                                        119




     Profit of consolidated companies                                      2,215                                                1,972                                                                        263          (20)





     Equity in profit (loss) of unconsolidated affiliated companies            8                                                   18                                                                                    (10)  5





     
                Profit of consolidated and affiliated companies          2,223                                                1,990                                                                        263          (30)





     Less: Profit (loss) attributable to noncontrolling interests              5                                                    2                                                                         13          (10)  6






     
                Profit 7                                                        $
      2,218                                                                                  $
          1,988                           $
       250         $
     (20)




              1               Elimination of Financial Products'
                                revenues earned from ME&T.

    ---


              2               Elimination of net expenses
                                recorded by ME&T paid to Financial
                                Products.

    ---


              3               Elimination of interest expense
                                recorded between Financial
                                Products and ME&T.

    ---


              4               Elimination of discount recorded by
                                ME&T on receivables sold to
                                Financial Products and of interest
                                earned between ME&T and Financial
                                Products as well as dividends paid
                                by Financial Products to ME&T.

    ---


              5               Elimination of equity profit (loss)
                                earned from Financial Products'
                                subsidiaries partially owned by
                                ME&T subsidiaries.

    ---


              6               Elimination of noncontrolling
                                interest profit (loss) recorded by
                                Financial Products for
                                subsidiaries partially owned by
                                ME&T subsidiaries.

    ---


              7               Profit attributable to common
                                shareholders.

    ---


                                                                                                         
             
                Caterpillar Inc.


                                                                                             
            
               Supplemental Data for Results of Operations


                                                                                             
            
               For the Nine Months Ended September 30, 2019


                                                                                                           
             
                (Unaudited)


                                                                                                      
             
                (Millions of dollars)




                                                                                                                                                    Supplemental Consolidating Data



                                                                     Consolidated                             Machinery,                                       Financial                         Consolidating
                                                                                                  Energy &                                              Products                           Adjustments
                                                                                               Transportation




     
                Sales and revenues:



     Sales of Machinery, Energy & Transportation                                 $
      38,369                                                                                $
          38,369                       
     $              
      $



     Revenues of Financial Products                                        2,287                                                                                                                         2,684         (397)  1




     Total sales and revenues                                             40,656                                              38,369                                                                      2,684         (397)





     
                Operating costs:



     Cost of goods sold                                                   27,513                                              27,515                                                                                     (2)  2



     Selling, general and administrative expenses                          3,879                                               3,324                                                                        564           (9)  2



     Research and development expenses                                     1,307                                               1,307



     Interest expense of Financial Products                                  571                                                                                                                           599          (28)  3



     Other operating (income) expenses                                       946                                                   2                                                                        974          (30)  2




     Total operating costs                                                34,216                                              32,148                                                                      2,137          (69)






     
                Operating profit                                         6,440                                               6,221                                                                        547         (328)





     Interest expense excluding Financial Products                           309                                                 318                                                                                     (9)  3



     Other income (expense)                                                  316                                                (71)                                                                        68           319   4






     
                Consolidated profit before taxes                         6,447                                               5,832                                                                        615





     Provision (benefit) for income taxes                                  1,470                                               1,294                                                                        176




     Profit of consolidated companies                                      4,977                                               4,538                                                                        439





     Equity in profit (loss) of unconsolidated affiliated companies           20                                                  36                                                                                    (16)  5





     
                Profit of consolidated and affiliated companies          4,997                                               4,574                                                                        439          (16)





     Less: Profit (loss) attributable to noncontrolling interests              2                                                   1                                                                         17          (16)  6






     
                Profit 7                                                        $
      4,995                                                                                 $
          4,573                           $
       422      
      $




              1               Elimination of Financial Products'
                                revenues earned from ME&T.

    ---


              2               Elimination of net expenses
                                recorded by ME&T paid to Financial
                                Products.

    ---


              3               Elimination of interest expense
                                recorded between Financial
                                Products and ME&T.

    ---


              4               Elimination of discount recorded by
                                ME&T on receivables sold to
                                Financial Products and of interest
                                earned between ME&T and Financial
                                Products as well as dividends paid
                                by Financial Products to ME&T.

    ---


              5               Elimination of equity profit (loss)
                                earned from Financial Products'
                                subsidiaries partially owned by
                                ME&T subsidiaries.

    ---


              6               Elimination of noncontrolling
                                interest profit (loss) recorded by
                                Financial Products for
                                subsidiaries partially owned by
                                ME&T subsidiaries.

    ---


              7               Profit attributable to common
                                shareholders.

    ---


                                                                                           
              
                Caterpillar Inc.


                                                                                      
       
                Supplemental Data for Financial Position


                                                                                        
              
                At September 30, 2020


                                                                                             
              
                (Unaudited)


                                                                                        
              
                (Millions of dollars)




                                                                                                                           
              
              Supplemental Consolidating Data



                                                              Consolidated                              Machinery,                                     Financial                             Consolidating
                                                                                                  Energy &                                      Products                               Adjustments
                                                                                               Transportation




     
                Assets



     Current assets:



     Cash and short-term investments                                       $
      9,315                                                                                $
              8,512                          $
         803        
      $



     Receivables - trade and other                                  6,969                                                2,484                                                                          497          3,988  1,2



     Receivables - finance                                          8,966                                                                                                                           13,120        (4,154)   2



     Prepaid expenses and other current assets                      1,831                                                1,372                                                                          634          (175)   3



     Inventories                                                   11,453                                               11,453




     Total current assets                                          38,534                                               23,821                                                                       15,054          (341)





     Property, plant and equipment - net                           12,232                                                8,156                                                                        4,076



     Long-term receivables - trade and other                        1,149                                                  294                                                                          181            674  1,2



     Long-term receivables - finance                               12,209                                                                                                                           12,900          (691)   2



     Noncurrent deferred and refundable income taxes                1,440                                                1,979                                                                          101          (640)   4



     Intangible assets                                              1,363                                                1,363



     Goodwill                                                       6,304                                                6,304



     Other assets                                                   3,510                                                2,887                                                                        1,815        (1,192)   5




     
                Total assets                                            $
      76,741                                                                               $
              44,804                       $
         34,127             $
     (2,190)






     
                Liabilities



     Current liabilities:



     Short-term borrowings                                                 $
      2,660                                                                
              $                                            $
         2,660        
      $



     Short-term borrowings with consolidated companies                  -



     Accounts payable                                               5,193                                                5,174                                                                          187          (168)   6



     Accrued expenses                                               3,510                                                3,131                                                                          379



     Accrued wages, salaries and employee benefits                  1,069                                                1,055                                                                           14



     Customer advances                                              1,209                                                1,209



     Dividends payable                                                  -



     Other current liabilities                                      1,978                                                1,509                                                                          666          (197) 4,7



     Long-term debt due within one year                             9,359                                                1,397                                                                        7,962




     Total current liabilities                                     24,978                                               13,475                                                                       11,868          (365)





     Long-term debt due after one year                             26,107                                                9,757                                                                       16,365           (15)   8



     Liability for postemployment benefits                          6,254                                                6,253                                                                            1



     Other liabilities                                              4,408                                                3,739                                                                        1,384          (715)   4




     
                Total liabilities                                61,747                                               33,224                                                                       29,618        (1,095)






     
                Shareholders' equity



     Common stock                                                   6,204                                                6,204                                                                          919          (919)   9



     Treasury stock                                              (25,315)                                            (25,315)



     Profit employed in the business                               35,508                                               31,285                                                                        4,214              9    9



     Accumulated other comprehensive income (loss)                (1,448)                                               (636)                                                                       (812)



     Noncontrolling interests                                          45                                                   42                                                                          188          (185)   9




     
                Total shareholders' equity                       14,994                                               11,580                                                                        4,509        (1,095)




     
                Total liabilities and shareholders' equity              $
      76,741                                                                               $
              44,804                       $
         34,127             $
     (2,190)




              1               Elimination of receivables between
                                ME&T and Financial Products.

    ---


              2               Reclassification of  ME&T's trade
                                receivables purchased by Financial
                                Products and Financial Products'
                                wholesale inventory receivables.

    ---


              3               Elimination of ME&T's  insurance
                                premiums that are prepaid to
                                Financial Products.

    ---


              4               Reclassification reflecting required
                                netting of deferred tax assets/
                                liabilities by taxing jurisdiction.

    ---


              5               Elimination of other intercompany
                                assets between ME&T and Financial
                                Products.

    ---


              6               Elimination of payables between ME&T
                                and Financial Products.

    ---


              7               Elimination of prepaid insurance in
                                Financial Products' other
                                liabilities.

    ---


              8               Elimination of debt between ME&T and
                                Financial Products.

    ---


              9               Eliminations associated with ME&T's
                                investments in Financial Products'
                                subsidiaries.

    ---


                                                                                          
            
                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




     
                Assets



     Current assets:



     Cash and short-term investments                                       $
      8,284                                                                             $
              7,299                          $
         985       
     $



     Receivables - trade and other                                  8,568                                               3,737                                                                        451          4,380  1,2



     Receivables - finance                                          9,336                                                                                                                        14,489        (5,153)   2



     Prepaid expenses and other current assets                      1,739                                               1,290                                                                        529           (80)   3



     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  1,2



     Long-term receivables - finance                               12,651                                                                                                                        13,354          (703)   2



     Noncurrent deferred and refundable income taxes                1,411                                               2,002                                                                        117          (708)   4



     Intangible assets                                              1,565                                               1,565



     Goodwill                                                       6,196                                               6,196



     Other assets                                                   3,340                                               2,953                                                                      1,572        (1,185)   5




     
                Total assets                                            $
      78,453                                                                            $
              45,262                       $
         35,947           $
     (2,756)






     
                Liabilities



     Current liabilities:



     Short-term borrowings                                                 $
      5,166                                                                                 $
              5                        $
         5,161       
     $



     Short-term borrowings with consolidated companies                  -                                                                                                                          600          (600)   6



     Accounts payable                                               5,957                                               5,918                                                                        212          (173)   7



     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) 4,8



     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)   6



     Liability for postemployment benefits                          6,599                                               6,599



     Other liabilities                                              4,323                                               3,681                                                                      1,430          (788)   4




     
                Total liabilities                                63,824                                              33,808                                                                     31,687        (1,671)






     
                Shareholders' equity



     Common stock                                                   5,935                                               5,935                                                                        919          (919)   9



     Treasury stock                                              (24,217)                                           (24,217)



     Profit employed in the business                               34,437                                              30,434                                                                      3,997              6    9



     Accumulated other comprehensive income (loss)                (1,567)                                              (739)                                                                     (828)



     Noncontrolling interests                                          41                                                  41                                                                        172          (172)   9




     
                Total shareholders' equity                       14,629                                              11,454                                                                      4,260        (1,085)




     
                Total liabilities and shareholders' equity              $
      78,453                                                                            $
              45,262                       $
         35,947           $
     (2,756)




              1               Elimination of receivables between
                                ME&T and Financial Products.

    ---


              2               Reclassification of ME&T's trade
                                receivables purchased by Financial
                                Products and Financial Products'
                                wholesale inventory receivables.

    ---


              3               Elimination of ME&T's insurance
                                premiums that are prepaid to
                                Financial Products.

    ---


              4               Reclassification reflecting required
                                netting of deferred tax assets/
                                liabilities by taxing jurisdiction.

    ---


              5               Elimination of other intercompany
                                assets between ME&T and Financial
                                Products.

    ---


              6               Elimination of debt between ME&T and
                                Financial Products.

    ---


              7               Elimination of payables between ME&T
                                and Financial Products.

    ---


              8               Elimination of prepaid insurance in
                                Financial Products' other
                                liabilities.

    ---


              9               Eliminations associated with ME&T's
                                investments in Financial Products'
                                subsidiaries.


                                                                                                                         
              
                Caterpillar Inc.


                                                                                                                    
           
                Supplemental Data for Cash Flow


                                                                                                                  
       
                For the Nine Months Ended September 30, 2020


                                                                                                                           
              
                (Unaudited)


                                                                                                                      
              
                (Millions of dollars)




                                                                                                                                                                             Supplemental Consolidating Data


                                                                                              Consolidated                             Machinery,                                       Financial                        Consolidating
                                                                                                                          Energy &                                               Products                          Adjustments
                                                                                                                       Transportation




     
                Cash flow from operating activities:



     Profit of consolidated and affiliated companies                                                      $
     2,223                                                                                  $
          1,990                       $
          263              $
     (30) 
     1, 5



     Adjustments for non-cash items:



     Depreciation and amortization                                                                  1,815                                               1,217                                                                       598



     Net gain on remeasurement of pension obligations                                                (55)                                               (55)



     Provision (benefit) for deferred income taxes                                                   (38)                                                (5)                                                                     (33)



     Other                                                                                            919                                                 494                                                                       167          258       2



     Changes in assets and liabilities, net of acquisitions and divestitures:



     Receivables - trade and other                                                                  1,473                                                 616                                                                      (54)         911  
     2, 3



     Inventories                                                                                    (139)                                              (130)                                                                                  (9)      2



     Accounts payable                                                                               (596)                                              (599)                                                                      (6)           9       2



     Accrued expenses                                                                               (286)                                              (314)                                                                       28



     Accrued wages, salaries and employee benefits                                                  (547)                                              (512)                                                                     (35)



     Customer advances                                                                                 13                                                  13



     Other assets - net                                                                              (15)                                              (136)                                                                       26           95       2



     Other liabilities - net                                                                        (512)                                              (514)                                                                       83         (81)      2




     Net cash provided by (used for) operating activities                                           4,255                                               2,065                                                                     1,037        1,153




     
                Cash flow from investing activities:



     Capital expenditures - excluding equipment leased to others                                    (686)                                              (687)                                                                     (11)          12       2



     Expenditures for equipment leased to others                                                    (805)                                                  2                                                                     (823)          16       2



     Proceeds from disposals of leased assets and property, plant and equipment                       550                                                 119                                                                       451         (20)      2



     Additions to finance receivables                                                             (9,278)                                                                                                                    (10,234)         956       3



     Collections of finance receivables                                                             9,656                                                                                                                       10,822      (1,166)      3



     Net intercompany purchased receivables                                                             -                                                                                                                         971        (971)      3



     Proceeds from sale of finance receivables                                                         37                                                                                                                           37



     Net intercompany borrowings                                                                        -                                                599                                                                         6        (605)      4



     Investments and acquisitions (net of cash acquired)                                             (93)                                               (93)



     Proceeds from sale of businesses and investments (net of cash sold)                               13                                                  13



     Proceeds from sale of securities                                                                 239                                                  17                                                                       222



     Investments in securities                                                                      (512)                                               (15)                                                                    (497)



     Other - net                                                                                     (80)                                               (21)                                                                     (59)




     Net cash provided by (used for) investing activities                                           (959)                                               (66)                                                                      885      (1,778)




     
                Cash flow from financing activities:



     Dividends paid                                                                               (1,683)                                            (1,683)                                                                     (20)          20       5



     Common stock issued, including treasury shares reissued                                          110                                                 110



     Common shares repurchased                                                                    (1,130)                                            (1,130)



     Net intercompany borrowings                                                                        -                                                (6)                                                                    (599)         605       4



     Proceeds from debt issued > 90 days                                                            9,418                                               1,991                                                                     7,427



     Payments on debt > 90 days                                                                   (6,789)                                               (18)                                                                  (6,771)



     Short-term borrowings - net < 90 days                                                        (2,138)                                                (5)                                                                  (2,133)



     Other - net                                                                                      (1)                                                (1)




     Net cash provided by (used for) financing activities                                         (2,213)                                              (742)                                                                  (2,096)         625




     Effect of exchange rate changes on cash                                                         (56)                                               (47)                                                                      (9)



                   Increase (decrease) in cash and short-term investments and restricted cash        1,027                                               1,210                                                                     (183)



     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                                 $
     9,319                                                                                  $
          8,512                       $
          807          
     $




              1               Elimination of equity profit earned
                                from Financial Products' subsidiaries
                                partially owned by ME&T subsidiaries.

    ---


              2               Elimination of non-cash adjustments
                                and changes in assets and liabilities
                                related to consolidated reporting.

    ---


              3               Reclassification of Financial
                                Products' cash flow activity from
                                investing to operating for
                                receivables that arose from the sale
                                of inventory.

    ---


              4               Elimination of net proceeds and
                                payments to/from ME&T and Financial
                                Products.

    ---


              5               Elimination of dividend activity
                                between Financial Products and ME&T.

    ---


                                                                                                                            
              
                Caterpillar Inc.


                                                                                                                      
             
                Supplemental Data for Cash Flow


                                                                                                                    
        
                For the Nine Months Ended September 30, 2019


                                                                                                                               
              
                (Unaudited)


                                                                                                                          
              
                (Millions of dollars)




                                                                                                                                                                              Supplemental Consolidating Data


                                                                                              Consolidated                              Machinery,                                       Financial                        Consolidating
                                                                                                                           Energy &                                               Products                          Adjustments
                                                                                                                        Transportation




     
                Cash flow from operating activities:



     Profit of consolidated and affiliated companies                                                      $
     4,997                                                                                   $
          4,574                         $
          439             $
     (16) 1



     Adjustments for non-cash items:



     Depreciation and amortization                                                                  1,933                                                1,283                                                                       650



     Provision (benefit) for deferred income taxes                                                   (13)                                                   9                                                                      (22)



     Other                                                                                            627                                                  379                                                                     (111)           359       2



     Changes in assets and liabilities, net of acquisitions and divestitures:



     Receivables - trade and other                                                                    427                                                  125                                                                      (16)           318  
     2, 3



     Inventories                                                                                    (676)                                               (702)                                                                                     26       2



     Accounts payable                                                                               (669)                                               (651)                                                                        6           (24)      2



     Accrued expenses                                                                                 114                                                  105                                                                        11            (2)      2



     Accrued wages, salaries and employee benefits                                                  (858)                                               (865)                                                                        7



     Customer advances                                                                                169                                                  171                                                                                     (2)      2



     Other assets - net                                                                                19                                                 (66)                                                                       63             22       2



     Other liabilities - net                                                                      (1,592)                                             (1,730)                                                                      150           (12)      2




     Net cash provided by (used for) operating activities                                           4,478                                                2,632                                                                     1,177            669




     
                Cash flow from investing activities:



     Capital expenditures - excluding equipment leased to others                                    (723)                                               (709)                                                                     (14)



     Expenditures for equipment leased to others                                                  (1,133)                                                (21)                                                                  (1,151)            39       2



     Proceeds from disposals of leased assets and property, plant and equipment                       812                                                  149                                                                       766          (103)      2



     Additions to finance receivables                                                             (9,453)                                                                                                                     (10,633)         1,180       3



     Collections of finance receivables                                                             9,144                                                                                                                        10,166        (1,022)      3



     Net intercompany purchased receivables                                                             -                                                                                                                          763          (763)      3



     Proceeds from sale of finance receivables                                                        183                                                                                                                           183



     Net intercompany borrowings                                                                        -                                                 721                                                                         1          (722)      4



     Investments and acquisitions (net of cash acquired)                                              (6)                                                 (6)



     Proceeds from sale of businesses and investments (net of cash sold)                                3                                                    3



     Proceeds from sale of securities                                                                 281                                                   16                                                                       265



     Investments in securities                                                                      (425)                                                (16)                                                                    (409)



     Other - net                                                                                     (37)                                                   1                                                                      (38)




     Net cash provided by (used for) investing activities                                         (1,354)                                                 138                                                                     (101)       (1,391)




     
                Cash flow from financing activities:



     Dividends paid                                                                               (1,564)                                             (1,564)



     Common stock issued, including treasury shares reissued                                           59                                                   59



     Common shares repurchased                                                                    (3,283)                                             (3,283)



     Net intercompany borrowings                                                                        -                                                 (1)                                                                    (721)           722       4



     Proceeds from debt issued > 90 days                                                            8,827                                                1,479                                                                     7,348



     Payments on debt > 90 days                                                                   (6,062)                                                 (8)                                                                  (6,054)



     Short-term borrowings - net < 90 days                                                        (1,006)                                                                                                                      (1,006)



     Other - net                                                                                      (2)                                                 (2)




     Net cash provided by (used for) financing activities                                         (3,031)                                             (3,320)                                                                    (433)           722




     Effect of exchange rate changes on cash                                                         (47)                                                (38)                                                                      (9)



                   Increase (decrease) in cash and short-term investments and restricted cash           46                                                (588)                                                                      634



     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                                 $
     7,936                                                                                   $
          6,406                       $
          1,530         
     $




              1               Elimination of equity profit earned
                                from Financial Products' subsidiaries
                                partially owned by ME&T subsidiaries.

    ---


              2               Elimination of non-cash adjustments
                                and changes in assets and liabilities
                                related to consolidated reporting.

    ---


              3               Reclassification of Financial
                                Products' cash flow activity from
                                investing to operating for
                                receivables that arose from the sale
                                of inventory.

    ---


              4               Elimination of net proceeds and
                                payments to/from ME&T and Financial
                                Products.

    ---

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SOURCE Caterpillar Inc.