Caterpillar Reports Fourth-Quarter and Full-Year 2020 Results

DEERFIELD, Ill., Jan. 29, 2021 /PRNewswire/ --

    --  Caterpillar reports strong operational performance
    --  Fourth-quarter 2020 profit per share of $1.42; adjusted profit per share
        of $2.12
    --  Full-year operating profit margin percentage of 10.9%; adjusted
        operating profit margin of 11.8%, within 2019 Investor Day target range
    --  Returned $3.4 billion to shareholders through dividends and share
        repurchases in 2020


                                                            Fourth Quarter             Full Year



       ($ in billions except profit per share)  2020  2019                2020   2019



       
              Sales and Revenues           $11.2 $13.1               $41.7  $53.8

    ---


       
              Profit Per Share             $1.42 $1.97               $5.46 $10.74

    ---


       
              Adjusted Profit Per Share    $2.12 $2.71               $6.56 $11.40

Caterpillar Inc. (NYSE: CAT) today announced fourth-quarter and full-year results for 2020.

Sales and revenues for the fourth quarter of 2020 were $11.2 billion, a 15% decrease compared with $13.1 billion in the fourth quarter of 2019. Operating profit margin was 12.3% for the fourth quarter of 2020, compared with 14.1% for the fourth quarter of 2019. Fourth-quarter 2020 profit per share was $1.42, compared with $1.97 profit per share in the fourth quarter of 2019. Adjusted profit per share in the fourth quarter of 2020 was $2.12, compared with fourth-quarter 2019 adjusted profit per share of $2.71. Fourth-quarter 2020 adjusted profit per share of $2.12 reflects strong operational performance and a lower effective tax rate.

Full-year sales and revenues in 2020 were $41.7 billion, down 22% compared with $53.8 billion in 2019. The sales decline reflected lower end-user demand and dealers reducing their inventories by $2.9 billion in 2020. Operating profit margin was 10.9% for 2020, compared with 15.4% for 2019. Full-year profit was $5.46 per share in 2020, compared with profit of $10.74 per share in 2019. Adjusted profit per share in 2020 was $6.56, compared with adjusted profit per share of $11.40 in 2019.

"I'm proud of our global team's continued resilience in safely navigating COVID-19 while continuing to provide the essential products and services the world needs," said Caterpillar Chairman and CEO Jim Umpleby. "Our fourth-quarter and full-year results reflect the team's agility in a challenging environment while executing our strategy for long-term profitable growth. We achieved the adjusted operating profit margin established during our 2019 Investor Day while continuing to invest in products and services. We are well-positioned for the future and will emerge from the pandemic as an even stronger company."

In 2020, adjusted profit per share excluded mark-to-market losses for remeasurement of pension and other postemployment benefit (OPEB) plans and restructuring costs. In 2019, adjusted profit per share excluded mark-to-market losses for remeasurement of pension and OPEB plans, restructuring costs and a discrete tax benefit related to U.S. tax reform. Please see in the appendix on page 14 a reconciliation of GAAP to non-GAAP financial measures.

For the full year of 2020, enterprise operating cash flow was $6.3 billion. During the year, the company paid dividends of $2.2 billion and repurchased $1.1 billion of Caterpillar common stock. Liquidity remains strong with an enterprise cash balance of $9.4 billion at the end of 2020.

CONSOLIDATED RESULTS

Consolidated Sales and Revenues

Consolidated Sales and Revenues Comparison
Fourth Quarter 2020 vs. Fourth Quarter 2019

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

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the fourth quarter of 2019 (at left) and the fourth 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 fourth quarter of 2020 were $11.235 billion, a decrease of $1.909 billion, or 15%, compared with $13.144 billion in the fourth 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 fourth quarter of 2020 than during the fourth quarter of 2019.

Sales were lower across the three primary segments, with the largest decline in Energy & Transportation.



     
                Sales and Revenues by Segment



     
                (Millions of dollars)              Fourth                   Sales                 Price              Currency   Inter-Segment /          Fourth   
          
               $              %
                                                                         Volume              Realization                                                                         Change       
     Change
                                                      Quarter                                                                           Other               Quarter
                                                         2019                                                                                                   2020






     Construction Industries                                  $
      5,020                                     $
       (526)                            $
      (3)                     $
             30                   $
      (13)           $
     4,508     $
      (512)  (10%)



     Resource Industries                               2,395                          (237)                                    7                         7                  8                           2,180              (215)        (9%)



     Energy & Transportation                           5,949                        (1,197)                                   12                        49                (2)                          4,811            (1,138)       (19%)



     All Other Segment                                   143                              3                                   (1)                        1                (9)                            137                (6)        (4%)



     Corporate Items and Eliminations                (1,121)                            36                                     2                         1                 16                         (1,066)                55




     
                Machinery, Energy & Transportation  12,386                        (1,921)                                   17                        88                                            10,570            (1,816)       (15%)





     Financial Products Segment                          846                                                                                                          (103)                            743              (103)       (12%)



     Corporate Items and Eliminations                   (88)                                                                                                            10                            (78)                10




     
                Financial Products Revenues            758                                                                                                           (93)                            665               (93)       (12%)





     
                Consolidated Sales and Revenues            $
      13,144                                   $
       (1,921)                             $
      17                      $
             88                   $
      (93)          $
     11,235   $
      (1,909)  (15%)



       
                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




       
                
                  Fourth Quarter 2020

    ---


       Construction Industries                                         $
              1,895                         (16%)             $
           324             (21%)                          $
       848                                          -%                         $
       1,417                                     (4%)              $
      4,484                    (10%)                  $
            24                         (35%)   $
        4,508   (10%)



       Resource Industries                                        596                          (29%)                   394                          26%       412                              (22%)                                  651                            8%                    2,053                             (10%)               127                       7%          2,180                               (9%)



       Energy & Transportation                                  1,705                          (25%)                   265                        (25%)     1,353                              (14%)                                  707                         (25%)                    4,030                             (22%)               781                              -%               4,811                         (19%)



       All Other Segment                                            5                           150%                                                -%        9                                80%                                   18                         (18%)                       32                               10%               105                     (8%)            137                               (4%)



       Corporate Items and Eliminations                          (27)                                                         1                                                  (2)                                                                    (1)                                                      (29)                                     (1,037)                                           (1,066)




       
                Machinery, Energy & Transportation          4,174                          (22%)                   984                         (9%)     2,620                              (11%)                                2,792                          (8%)                   10,570                             (15%)                                               -%              10,570                         (15%)





       Financial Products Segment                                 464                          (16%)                    64                        (14%)        94                               (8%)                                  121                            4%                      743                             (12%)                                               -%                 743                         (12%)



       Corporate Items and Eliminations                          (41)                                                      (10)                                                (10)                                                                   (17)                                                      (78)                                                                                          (78)




       
                Financial Products Revenues                   423                          (16%)                    54                        (10%)        84                              (10%)                                  104                            3%                      665                             (12%)                                               -%                 665                         (12%)





       
                Consolidated Sales and Revenues                    $
              4,597                         (21%)           $
           1,038              (9%)                        $
       2,704                                       (11%)                          $
       2,896                                     (8%)             $
      11,235                    (15%)         
        $                                          -% $
        11,235   (15%)






       
                
                  Fourth Quarter 2019

    ---


       Construction Industries                                         $
              2,249                                           $
           409                                            $
       850                                                                      $
       1,475                                                       $
      4,983                                           $
            37                                 $
        5,020



       Resource Industries                                        834                                                        313                                                  526                                                                     603                                                      2,276                                          119                                              2,395



       Energy & Transportation                                  2,287                                                        354                                                1,578                                                                     947                                                      5,166                                          783                                              5,949



       All Other Segment                                            2                                                                                                              5                                                                      22                                                         29                                          114                                                143



       Corporate Items and Eliminations                          (50)                                                                                                           (5)                                                                   (13)                                                      (68)                                     (1,053)                                           (1,121)




       
                Machinery, Energy & Transportation          5,322                                                      1,076                                                2,954                                                                   3,034                                                     12,386                                                                                         12,386





       Financial Products Segment                                 554                                                         74                                                  102                                                                     116                                                        846                                                                                            846



       Corporate Items and Eliminations                          (50)                                                      (14)                                                 (9)                                                                   (15)                                                      (88)                                                                                          (88)




       
                Financial Products Revenues                   504                                                         60                                                   93                                                                     101                                                        758                                                                                            758





       
                Consolidated Sales and Revenues                    $
              5,826                                         $
           1,136                                          $
       3,047                                                                      $
       3,135                                                      $
      13,144                                  
        $                                              $
        13,144

Consolidated Operating Profit

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

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

The chart above graphically illustrates reasons for the change in consolidated operating profit between the fourth quarter of 2019 (at left) and the fourth 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 fourth quarter of 2020 was $1.380 billion, a decrease of $470 million, or 25%, compared with $1.850 billion in the fourth quarter of 2019. The decrease was primarily the result of lower sales volume partially offset by lower manufacturing costs and selling, general and administrative (SG&A) and research and development (R&D) expenses. In addition, operating profit declined due to lower profit from Financial Products.

Manufacturing costs were lower due to favorable impact from cost absorption, lower material and period manufacturing costs, partially offset by higher warranty expense. Cost absorption was favorable as inventory decreased more in the fourth quarter of 2019 than in the fourth quarter of 2020.

SG&A/R&D expenses and period manufacturing costs benefited from reduced short-term incentive compensation expense and other cost reductions related to lower sales volumes, partially offset by higher labor and benefits costs.



     
                Profit (Loss) by Segment



     
                (Millions of dollars)              Fourth Quarter            Fourth Quarter         
     
           $                    %
                                                                2020                       2019            Change
                                                                                                                              Change




     Construction Industries                                          $
       630                                      $
       659              $
      (29)   (4%)



     Resource Industries                                        273                               261                                 12         5%



     Energy & Transportation                                    687                             1,165                              (478)     (41%)



     All Other Segment                                          (3)                             (11)                                 8        73%



     Corporate Items and Eliminations                         (281)                            (325)                                44




     
                Machinery, Energy & Transportation          1,306                             1,749                              (443)     (25%)





     Financial Products Segment                                 195                               210                               (15)      (7%)



     Corporate Items and Eliminations                          (47)                              (6)                              (41)




     
                Financial Products                            148                               204                               (56)     (27%)





     
                Consolidating Adjustments                    (74)                            (103)                                29






     
                Consolidated Operating Profit                     $
       1,380                                    $
       1,850             $
      (470)  (25%)

Other Profit/Loss and Tax Items

    --  Other income (expense) in the fourth quarter of 2020 was an expense of
        $309 million, compared with an expense of $373 million in the fourth
        quarter of 2019. The change was primarily driven by lower pension and
        OPEB costs including lower mark-to-market losses for remeasurement of
        pension and OPEB plans and impacts from gains (losses) on marketable
        securities at Insurance Services, partially offset by unfavorable
        impacts from foreign currency exchange gains (losses). The favorable
        impact of gains (losses) on marketable securities reflected unrealized
        gains in the fourth quarter of 2020, compared with unrealized losses in
        the fourth quarter of 2019 and the absence of realized gains that
        occurred in the fourth quarter of 2019.


    --  The provision for income taxes for the fourth quarter of 2020 reflected
        an annual effective tax rate of approximately 28%, compared with 25% for
        the fourth quarter of 2019, excluding the discrete items discussed
        below. The increase from 2019 was primarily related to changes in the
        geographic mix of profits from a tax perspective.In the fourth quarter
        of 2020, the company recorded a $96 million tax benefit due to the
        change from the third quarter estimated annual tax rate of 31%, compared
        to a $64 million tax benefit for the reduction in the annual effective
        tax rate in the fourth quarter of 2019. In addition, the company
        recorded a tax benefit of $92 million related to $438 million of pension
        and OPEB mark-to-market losses in the fourth quarter of 2020, compared
        to a $105 million tax benefit related to $468 million of mark-to-market
        losses in the fourth quarter of 2019. Finally, the company recorded a
        tax benefit of $28 million in the fourth quarter of 2020, compared to
        $13 million in the fourth quarter of 2019, for the settlement of
        stock-based compensation awards with associated tax deductions in excess
        of cumulative U.S. GAAP compensation expense.


       
                CONSTRUCTION INDUSTRIES

    ---


       
                (Millions of dollars)



       
                Segment Sales


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




       Total Sales                                                 $
       5,020                                                     $
       (526)                                $
      (3)                                     $
     30          $
     (13) $
     4,508 $
     (512) (10%)





       
                Sales by Geographic Region


                                                             Fourth                           Fourth           
        
                $                    %
                                                Quarter 2020                   Quarter 2019                      Change                       Change




       North America                                               $
       1,895                                                     $
       2,249                               $
      (354)                              (16%)



       Latin America                                           324                                        409                                          (85)                    (21%)



       EAME                                                    848                                        850                                           (2)                       -%



       Asia/Pacific                                          1,417                                      1,475                                          (58)                     (4%)




       External Sales                                        4,484                                      4,983                                         (499)                    (10%)



       Inter-segment                                            24                                         37                                          (13)                    (35%)




       Total Sales                                                 $
       4,508                                                     $
       5,020                               $
      (512)                              (10%)






       
                Segment Profit


                                                             Fourth                           Fourth                                                  %
                                                Quarter 2020                                                     Change                       Change
                                                                                           Quarter 2019




       Segment Profit                                                $
       630                                                       $
       659                                $
      (29)                               (4%)



       Segment Profit Margin                                 14.0%                                     13.1%                                      0.9 pts

Construction Industries' total sales were $4.508 billion in the fourth quarter of 2020, a decrease of $512 million, or 10%, compared with $5.020 billion in the fourth quarter of 2019. The decrease was due to lower sales volume, driven by the impact from changes in dealer inventories and slightly lower end-user demand. Dealers decreased inventories more during the fourth quarter of 2020 than during the fourth quarter of 2019.

    --  In North America, sales decreased mostly due to lower sales volume
        driven by the impact from changes in dealer inventories and lower
        end-user demand. The lower end-user demand was primarily the result of
        weaker pipeline and road construction. Dealers decreased inventories
        more during the fourth quarter of 2020 than during the fourth quarter of
        2019.
    --  Sales declined in Latin America primarily due to the unfavorable
        currency impacts from a weaker Brazilian real and lower sales volume.
    --  In EAME, sales were about flat as lower sales volume across several
        countries in the region was offset by favorable price realization and
        favorable currency impacts from a stronger euro. Lower sales volume was
        driven by lower end-user demand, partially offset by the impact of
        changes in dealer inventories. Dealers decreased inventories more during
        the fourth quarter of 2019 than during the fourth quarter of 2020.
    --  Sales decreased in Asia/Pacific primarily due to lower sales volume and
        unfavorable price realization, partially offset by favorable currency
        impacts from both a stronger Chinese yuan and Australian dollar. The
        decrease in sales was mainly driven by China, where higher end-user
        demand was more than offset by unfavorable impacts from changes in
        dealer inventories. This was partially offset by higher demand in
        several other countries.

Construction Industries' profit was $630 million in the fourth quarter of 2020, a decrease of $29 million, or 4%, compared with $659 million in the fourth quarter of 2019. The decrease was mainly due to lower sales volume and higher warranty expense, partially offset by favorable impact of cost absorption and lower SG&A/R&D expenses. Cost absorption was favorable as inventory increased during the fourth quarter of 2020, compared with a decrease during the fourth quarter of 2019. SG&A/R&D expenses benefited from reduced short-term incentive compensation expense and other cost reductions related to lower sales volumes.



       
                RESOURCE INDUSTRIES

    ---


       
                (Millions of dollars)



       
                Segment Sales


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




       Total Sales                                                 $
       2,395                                                   $
       (237)                                  $
        7                                       $
     7          $
     8 $
     2,180 $
     (215) (9%)





       
                Sales by Geographic Region


                                                             Fourth                         Fourth        
           
                $                    %
                                                Quarter 2020                   Quarter 2019                          Change                 Change




       North America                                                 $
       596                                                     $
       834                               $
        (238)                               (29%)



       Latin America                                           394                                   313                                               81                         26%



       EAME                                                    412                                   526                                            (114)                      (22%)



       Asia/Pacific                                            651                                   603                                               48                          8%




       External Sales                                        2,053                                 2,276                                            (223)                      (10%)



       Inter-segment                                           127                                   119                                                8                          7%




       Total Sales                                                 $
       2,180                                                   $
       2,395                               $
        (215)                                (9%)






       
                Segment Profit


                                                             Fourth                         Fourth                                                  %
                                                Quarter 2020                   Quarter 2019                          Change                 Change




       Segment Profit                                                $
       273                                                     $
       261                                  $
        12                                   5%



       Segment Profit Margin                                 12.5%                                10.9%                                         1.6 pts

Resource Industries' total sales were $2.180 billion in the fourth quarter of 2020, a decrease of $215 million, or 9%, compared with $2.395 billion in the fourth quarter of 2019. The decrease was due to lower end-user demand for equipment and aftermarket parts. End-user demand was lower for heavy construction and quarry and aggregates and was also lower in mining, but to a lesser extent.

Resource Industries' profit was $273 million in the fourth quarter of 2020, an increase of $12 million, or 5%, compared with $261 million in the fourth quarter of 2019. The increase was mainly due to favorable manufacturing costs and lower SG&A/R&D expenses which was mostly offset by lower sales volume. Favorable manufacturing costs reflected favorable variable labor and burden, impact of cost absorption, period manufacturing costs and material costs. Cost absorption was favorable as inventory decreased in the fourth quarter of 2019 compared with being about flat in the fourth 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 and benefits from prior restructuring programs.



       
                ENERGY & TRANSPORTATION

    ---


       
                (Millions of dollars)



       
                Segment Sales


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




       Total Sales                                              $
       5,949                                                   $
       (1,197)                                   $
         12                               $
          49          $
     (2) $
     4,811 $
     (1,138) (19%)





       
                Sales by Application


                                                          Fourth                         Fourth        
           
                $                      %
                                             Quarter 2020                   Quarter 2019                          Change                   Change




       Oil and Gas                                              $
       1,079                                                     $
       1,523                                 $
         (444)                       (29%)



       Power Generation                                   1,180                                 1,294                                              (114)                          (9%)



       Industrial                                           736                                   908                                              (172)                         (19%)



       Transportation                                     1,035                                 1,441                                              (406)                         (28%)




       External Sales                                     4,030                                 5,166                                            (1,136)                         (22%)



       Inter-segment                                        781                                   783                                                (2)                            -%




       Total Sales                                              $
       4,811                                                     $
       5,949                               $
         (1,138)                       (19%)






       
                Segment Profit


                                                          Fourth                         Fourth                                                    %
                                             Quarter 2020                   Quarter 2019                          Change                   Change




       Segment Profit                                             $
       687                                                     $
       1,165                                 $
         (478)                       (41%)



       Segment Profit Margin                              14.3%                                19.6%                                         (5.3 pts)

Energy & Transportation's total sales were $4.811 billion in the fourth quarter of 2020, a decrease of $1.138 billion, or 19%, compared with $5.949 billion in the fourth quarter of 2019. Sales declined across all applications.

    --  Oil and Gas - Sales decreased mainly due to lower demand in North
        America for reciprocating engines used in gas compression and well
        servicing. In addition, sales were lower for turbines and
        turbine-related services.
    --  Power Generation - Sales decreased primarily due to lower sales volume
        in small reciprocating engines, turbines and turbine-related services
        and engine aftermarket parts.
    --  Industrial - Sales decreased due to lower demand across all regions.
    --  Transportation - Sales declined in rail due to lower rail services and
        locomotives deliveries, primarily in North America. Marine sales were
        also lower.

Energy & Transportation's profit was $687 million in the fourth quarter of 2020, a decrease of $478 million, or 41%, compared with $1.165 billion in the fourth 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.



       
                FINANCIAL PRODUCTS SEGMENT

    ---


       
                (Millions of dollars)



       
                Revenues by Geographic Region


                                                                Fourth                     Fourth     
     
            $                %
                                                   Quarter 2020               Quarter 2019                Change          Change




       North America                                                  $
     464                                      $
     554              $
      (90)  (16%)



       Latin America                                               64                             74                            (10)     (14%)



       EAME                                                        94                            102                             (8)      (8%)



       Asia/Pacific                                               121                            116                               5         4%




       Total Revenues                                                 $
     743                                      $
     846             $
      (103)  (12%)






       
                Segment Profit


                                                                Fourth                     Fourth                                 %
                                                   Quarter 2020               Quarter 2019                Change          Change




       Segment Profit                                                 $
     195                                      $
     210              $
      (15)   (7%)

Financial Products' segment revenues were $743 million in the fourth quarter of 2020, a decrease of $103 million, or 12%, from the fourth quarter of 2019. The decrease was primarily because of lower average financing rates across all regions and lower average earning assets in North America.

Financial Products' segment profit was $195 million in the fourth quarter of 2020, compared with $210 million in the fourth quarter of 2019. The decrease was primarily due to higher provision for credit losses, an unfavorable impact from returned or repossessed equipment 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 a favorable impact from equity securities in Insurance Services.

At the end of 2020, past dues at Cat Financial were 3.49%, compared with 3.14% at the end of 2019. Past dues increased primarily due to the impact of the COVID-19 pandemic, partially offset by decreases in the Caterpillar Power Finance, EAME and Latin American portfolios. Write-offs, net of recoveries, were $222 million for 2020, compared with $237 million for 2019. As of December 31, 2020, Cat Financial's allowance for credit losses totaled $479 million, or 1.77% of finance receivables, compared with $424 million, or 1.50% of finance receivables at December 31, 2019.

Corporate Items and Eliminations

Expense for corporate items and eliminations was $328 million in the fourth quarter of 2020, a decrease of $3 million from the fourth quarter of 2019.

Notes

i. Glossary of terms is included on the Caterpillar website at https://investors.caterpillar.com/overview/default.aspx.
ii. End-user demand is demonstrated by the company's Rolling 3 Month Retail Sales Statistics filed in a Form 8-K on Friday, January 29, 2021.
iii. Information on non-GAAP financial measures is included in the appendix on page 14.
iv. Some amounts within this report are rounded to the millions or billions and may not add.
v. Caterpillar will conduct a teleconference and live webcast, with a slide presentation, beginning at 7:30 a.m. Central Time on Friday, January 29, 2021, to discuss its 2020 fourth-quarter and full-year 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

With 2020 sales and revenues of $41.7 billion, Caterpillar Inc. is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. Since 1925, we've been driving sustainable progress and helping customers build a better world through innovative products and services. Throughout the product life cycle, we offer services built on cutting-edge technology and decades of product expertise. These products and services, backed by our global dealer network, provide exceptional value to help our customers succeed. We do business on every continent, principally operating through three primary segments - Construction Industries, Resource Industries, and Energy & Transportation - and providing financing and related services through our Financial Products segment. Visit us at caterpillar.com or join the conversation on our social media channels at 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

The company believes it is important to separately quantify the profit impact of three significant items in order for the company's results to be meaningful to readers. These items consist of (i) pension and OPEB mark-to-market losses resulting from plan remeasurements, (ii) restructuring costs, which were incurred to generate longer-term benefits, and (iii) U.S. tax reform impact in 2019. The company does not consider these items 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.

Reconciliations of adjusted results to the most directly comparable GAAP measure are as follows:



     (Dollars in millions except per share data)                         Operating                     Operating             Profit             Provision                    Effective     Profit               Profit per
                                                                   Profit                        Profit                Before          (Benefit)                     Tax Rate                           Share
                                                                                                 Margin                 Taxes         for Income
                                                                                                                                         Taxes






     
                Three Months Ended December 31, 2020 - US GAAP                   $
     
       1,380                                12.3%                             $
          
              941             $
          
                167        17.7%           $
       
         780                $
      
        1.42



     Pension/OPEB mark-to-market (gains) losses                                                                                -%                          438                               92                               21.0%           346                   $
          0.63



     Restructuring costs                                                        58                               0.5%                                   58                              18                              31.0%          40                 $
       0.07




     Three Months Ended December 31, 2020 - Adjusted                                   $
     1,438                                12.8%                                    $
            1,437                      $
              277        19.3%               $
       1,166                     $
      2.12






     
                Three Months Ended December 31, 2019 - US GAAP                   $
     
       1,850                                14.1%                           $
          
              1,365             $
          
                276        20.2%         $
       
         1,098                $
      
        1.97



     Pension/OPEB mark-to-market (gains) losses                                                                                -%                          468                              105                               22.4%           363                   $
          0.65



     Restructuring costs                                                        54                               0.4%                                   54                              10                              19.0%          44                 $
       0.08




     Three Months Ended December 31, 2019 - Adjusted                                   $
     1,904                                14.5%                                    $
            1,887                      $
              391        20.7%               $
       1,505                     $
      2.71






     
                Twelve Months Ended December 31, 2020 - US GAAP                  $
     
       4,553                                10.9%                           $
          
              3,995           $
          
                1,006        25.2%         $
       
         2,998                $
      
        5.46



     Pension/OPEB mark-to-market (gains) losses                                                                                -%                          383                               82                               21.4%           301                   $
          0.55



     Restructuring costs                                                       354                               0.8%                                  354                              53                              15.0%         301                 $
       0.55




     Twelve Months Ended December 31, 2020 - Adjusted                                  $
     4,907                                11.8%                                    $
            4,732                    $
              1,141        24.1%               $
       3,600                     $
      6.56






     
                Twelve Months Ended December 31, 2019 - US GAAP                  $
     
       8,290                                15.4%                           $
          
              7,812           $
          
                1,746        22.4%         $
       
         6,093               $
      
        10.74



     Pension/OPEB mark-to-market (gains) losses                                                                                -%                          468                              105                               22.4%           363                   $
          0.64



     Restructuring costs                                                       236                               0.4%                                  236                              45                              19.0%         191                 $
       0.34



     U.S. tax reform impact                                                                                                    -%                                                          178                                  -%        (178)                $
          (0.31)




     Twelve Months Ended December 31, 2019 - Adjusted                                  $
     8,526                                15.8%                                    $
            8,516                    $
              2,074        24.4%               $
       6,469                    $
      11.40

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 Caterpillar Financial Services Corporation (Cat Financial) and Caterpillar Insurance Holdings Inc. (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 16 to 26 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                                 Twelve Months Ended
                                                                                                December 31,                                    December 31,


                                                                                        2020                              2019                2020                              2019

                                                                                                                                                                              ---


     
                Sales and revenues:



     Sales of Machinery, Energy & Transportation                                              $
              10,570                                   $
              12,386               $
       39,022  $
      50,755



     Revenues of Financial Products                                                     665                                           758                                    2,726         3,045




     Total sales and revenues                                                        11,235                                        13,144                                   41,748        53,800





     
                Operating costs:



     Cost of goods sold                                                               7,784                                         9,117                                   29,082        36,630



     Selling, general and administrative expenses                                     1,216                                         1,283                                    4,642         5,162



     Research and development expenses                                                  374                                           386                                    1,415         1,693



     Interest expense of Financial Products                                             128                                           183                                      589           754



     Other operating (income) expenses                                                  353                                           325                                    1,467         1,271




     Total operating costs                                                            9,855                                        11,294                                   37,195        45,510






     
                Operating profit                                                    1,380                                         1,850                                    4,553         8,290





     Interest expense excluding Financial Products                                      130                                           112                                      514           421



     Other income (expense)                                                           (309)                                        (373)                                    (44)         (57)






     
                Consolidated profit before taxes                                      941                                         1,365                                    3,995         7,812





     Provision (benefit) for income taxes                                               167                                           276                                    1,006         1,746




     Profit of consolidated companies                                                   774                                         1,089                                    2,989         6,066





     Equity in profit (loss) of unconsolidated affiliated companies                       6                                             8                                       14            28






     
                Profit of consolidated and affiliated companies                       780                                         1,097                                    3,003         6,094





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






     
                Profit (1)                                                                     $
              780                                    $
              1,098                $
       2,998   $
      6,093








     
                Profit per common share                                                       $
              1.43                                     $
              2.00                 $
       5.51   $
      10.85



     
                Profit per common share - diluted (2)                                         $
              1.42                                     $
              1.97                 $
       5.46   $
      10.74





     
                Weighted-average common shares outstanding (millions)



     
                - Basic                                                             544.5                                         550.3                                    544.1         561.6



     
                - Diluted (2)                                                       549.5                                         556.1                                    548.6         567.5




              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)




                                                                                                            December 31,                 December 31,
                                                                                                                    2020                          2019

                                                                                                                                                  ---


     
                Assets



     Current assets:



     Cash and short-term investments                                                                                       $
         9,352                          $
         8,284



     Receivables - trade and other                                                                                7,317                                   8,568



     Receivables - finance                                                                                        9,463                                   9,336



     Prepaid expenses and other current assets                                                                    1,930                                   1,739



     Inventories                                                                                                 11,402                                  11,266




     Total current assets                                                                                        39,464                                  39,193





     Property, plant and equipment - net                                                                         12,401                                  12,904



     Long-term receivables - trade and other                                                                      1,185                                   1,193



     Long-term receivables - finance                                                                             12,222                                  12,651



     Noncurrent deferred and refundable income taxes                                                              1,523                                   1,411



     Intangible assets                                                                                            1,308                                   1,565



     Goodwill                                                                                                     6,394                                   6,196



     Other assets                                                                                                 3,827                                   3,340




     
                Total assets                                                                                            $
         78,324                         $
         78,453






     
                Liabilities



     Current liabilities:



     Short-term borrowings:



     -- Machinery, Energy & Transportation                                                                                    $
         10                             $
          5



     -- Financial Products                                                                                        2,005                                   5,161



     Accounts payable                                                                                             6,128                                   5,957



     Accrued expenses                                                                                             3,642                                   3,750



     Accrued wages, salaries and employee benefits                                                                1,096                                   1,629



     Customer advances                                                                                            1,108                                   1,187



     Dividends payable                                                                                              562                                     567



     Other current liabilities                                                                                    2,017                                   2,155



     Long-term debt due within one year:



     -- Machinery, Energy & Transportation                                                                        1,420                                      16



     -- Financial Products                                                                                        7,729                                   6,194




     Total current liabilities                                                                                   25,717                                  26,621





     Long-term debt due after one year:



     -- Machinery, Energy & Transportation                                                                        9,749                                   9,141



     -- Financial Products                                                                                       16,250                                  17,140



     Liability for postemployment benefits                                                                        6,872                                   6,599



     Other liabilities                                                                                            4,358                                   4,323




     
                Total liabilities                                                                              62,946                                  63,824






     
                Shareholders' equity



     Common stock                                                                                                 6,230                                   5,935



     Treasury stock                                                                                            (25,178)                               (24,217)



     Profit employed in the business                                                                             35,167                                  34,437



     Accumulated other comprehensive income (loss)                                                                (888)                                (1,567)



     Noncontrolling interests                                                                                        47                                      41




     
                Total shareholders' equity                                                                     15,378                                  14,629




     
                Total liabilities and shareholders' equity                                                              $
         78,324                         $
         78,453


                                                                                                 
          
                Caterpillar Inc.


                                                                                     
            
           Condensed Consolidated Statement of Cash Flow


                                                                                                   
          
                (Unaudited)


                                                                                               
         
                (Millions of dollars)




                                                                                                                                                                     Twelve Months Ended
                                                                                                                                                        
           December 31,


                                                                                                                                                        2020                        2019

                                                                                                                                                                                    ---


     
                Cash flow from operating activities:



     Profit of consolidated and affiliated companies                                                                                                        $
           3,003                        $
     6,094



     Adjustments for non-cash items:



     Depreciation and amortization                                                                                                                    2,432                                 2,577



     Actuarial (gain) loss on pension and postretirement benefits                                                                                       384                                   468



     Provision (benefit) for deferred income taxes                                                                                                     (74)                                   28



     Other                                                                                                                                            1,000                                   675



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



     Receivables - trade and other                                                                                                                    1,442                                   171



     Inventories                                                                                                                                       (34)                                  274



     Accounts payable                                                                                                                                    98                               (1,025)



     Accrued expenses                                                                                                                                 (366)                                  172



     Accrued wages, salaries and employee benefits                                                                                                    (544)                                (757)



     Customer advances                                                                                                                                (126)                                 (10)



     Other assets - net                                                                                                                               (201)                                 (93)



     Other liabilities - net                                                                                                                          (687)                              (1,662)




     Net cash provided by (used for) operating activities                                                                                             6,327                                 6,912




     
                Cash flow from investing activities:



     Capital expenditures - excluding equipment leased to others                                                                                      (978)                              (1,056)



     Expenditures for equipment leased to others                                                                                                    (1,137)                              (1,613)



     Proceeds from disposals of leased assets and property, plant and equipment                                                                         772                                 1,153



     Additions to finance receivables                                                                                                              (12,385)                             (12,777)



     Collections of finance receivables                                                                                                              12,646                                12,183



     Proceeds from sale of finance receivables                                                                                                           42                                   235



     Investments and acquisitions (net of cash acquired)                                                                                              (111)                                 (47)



     Proceeds from sale of businesses and investments (net of cash sold)                                                                                 25                                    41



     Proceeds from sale of securities                                                                                                                   345                                   529



     Investments in securities                                                                                                                        (638)                                (552)



     Other - net                                                                                                                                       (66)                                 (24)




     Net cash provided by (used for) investing activities                                                                                           (1,485)                              (1,928)




     
                Cash flow from financing activities:



     Dividends paid                                                                                                                                 (2,243)                              (2,132)



     Common stock issued, including treasury shares reissued                                                                                            229                                   238



     Common shares repurchased                                                                                                                      (1,130)                              (4,047)



     Proceeds from debt issued (original maturities greater than three months)                                                                       10,431                                 9,841



     Payments on debt (original maturities greater than three months)                                                                               (8,237)                              (8,297)



     Short-term borrowings - net (original maturities three months or less)                                                                         (2,804)                                (138)



     Other - net                                                                                                                                        (1)                                  (3)




     Net cash provided by (used for) financing activities                                                                                           (3,755)                              (4,538)




     Effect of exchange rate changes on cash                                                                                                           (13)                                 (44)




     
                Increase (decrease) in cash and short-term investments and restricted cash                                                          1,074                                   402



     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                                                                                   $
           9,366                        $
     8,292

                            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 December 31, 2020


                                                                                              
          
                (Unaudited)


                                                                                         
          
                (Millions of dollars)




                                                                                                                                              Supplemental Consolidating Data



                                                                     Consolidated                                    Machinery,                          Financial                         Consolidating
                                                                                                        Energy &                                  Products                           Adjustments
                                                                                                     Transportation




     
                Sales and revenues:



     Sales of Machinery, Energy & Transportation                                 $
        10,570                                                                        $
          10,570                       
     $                 
     $



     Revenues of Financial Products                                          665                                                                                                                     760           (95)  (1)




     Total sales and revenues                                             11,235                                                     10,570                                                           760           (95)





     
                Operating costs:



     Cost of goods sold                                                    7,784                                                      7,786                                                                         (2)  (2)



     Selling, general and administrative expenses                          1,216                                                      1,048                                                           174            (6)  (2)



     Research and development expenses                                       374                                                        374



     Interest expense of Financial Products                                  128                                                                                                                     129            (1)  (3)



     Other operating (income) expenses                                       353                                                         56                                                           309           (12)  (2)




     Total operating costs                                                 9,855                                                      9,264                                                           612           (21)






     
                Operating profit                                         1,380                                                      1,306                                                           148           (74)





     Interest expense excluding Financial Products                           130                                                        130



     Other income (expense)                                                (309)                                                     (122)                                                           39          (226)    4






     
                Consolidated profit before taxes                           941                                                      1,054                                                           187          (300)





     Provision (benefit) for income taxes                                    167                                                        133                                                            34




     Profit of consolidated companies                                        774                                                        921                                                           153          (300)





     Equity in profit (loss) of unconsolidated affiliated companies            6                                                         11                                                                         (5)    5





     
                Profit of consolidated and affiliated companies            780                                                        932                                                           153          (305)





     Less: Profit (loss) attributable to noncontrolling interests              -                                                         3                                                             2            (5)    6






     
                Profit 7                                                          $
        780                                                                           $
          929                           $
        151           $
     (300)


              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 Three Months Ended December 31, 2019


                                                                                            
          
                (Unaudited)


                                                                                       
          
                (Millions of dollars)




                                                                                                                                            Supplemental Consolidating Data


                                                                     Consolidated                                  Machinery,                          Financial                         Consolidating
                                                                                                      Energy &                                  Products                           Adjustments
                                                                                                   Transportation




     
                Sales and revenues:



     Sales of Machinery, Energy & Transportation                                 $
      12,386                                                                        $
          12,386                       
     $                
     $



     Revenues of Financial Products                                          758                                                                                                                   887         (129)  (1)




     Total sales and revenues                                             13,144                                                   12,386                                                           887         (129)





     
                Operating costs:



     Cost of goods sold                                                    9,117                                                    9,119                                                                        (2)  (2)



     Selling, general and administrative expenses                          1,283                                                    1,120                                                           173          (10)  (2)



     Research and development expenses                                       386                                                      386



     Interest expense of Financial Products                                  183                                                                                                                   187           (4)  (3)



     Other operating (income) expenses                                       325                                                       12                                                           323          (10)  (2)




     Total operating costs                                                11,294                                                   10,637                                                           683          (26)






     
                Operating profit                                         1,850                                                    1,749                                                           204         (103)





     Interest expense excluding Financial Products                           112                                                      111                                                                          1   (3)



     Other income (expense)                                                (373)                                                   (464)                                                           12            79     4






     
                Consolidated profit before taxes                         1,365                                                    1,174                                                           216          (25)





     Provision (benefit) for income taxes                                    276                                                      218                                                            58




     Profit of consolidated companies                                      1,089                                                      956                                                           158          (25)





     Equity in profit (loss) of unconsolidated affiliated companies            8                                                       13                                                                        (5)    5





     
                Profit of consolidated and affiliated companies          1,097                                                      969                                                           158          (30)





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






     
                Profit 7                                                        $
      1,098                                                                           $
          970                           $
       153           $
     (25)


              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 Twelve Months Ended December 31, 2020


                                                                                            
          
                (Unaudited)


                                                                                       
          
                (Millions of dollars)




                                                                                                                                             Supplemental Consolidating Data



                                                                     Consolidated                                  Machinery,                           Financial                         Consolidating
                                                                                                      Energy &                                   Products                           Adjustments
                                                                                                   Transportation




     
                Sales and revenues:



     Sales of Machinery, Energy & Transportation                                 $
      39,022                                                                         $
          39,022                       
     $                
     $



     Revenues of Financial Products                                        2,726                                                                                                                  3,110         (384)  (1)




     Total sales and revenues                                             41,748                                                   39,022                                                          3,110         (384)





     
                Operating costs:



     Cost of goods sold                                                   29,082                                                   29,088                                                                         (6)  (2)



     Selling, general and administrative expenses                          4,642                                                    3,915                                                            746          (19)  (2)



     Research and development expenses                                     1,415                                                    1,415



     Interest expense of Financial Products                                  589                                                                                                                    591           (2)  (3)



     Other operating (income) expenses                                     1,467                                                      283                                                          1,236          (52)  (2)




     Total operating costs                                                37,195                                                   34,701                                                          2,573          (79)






     
                Operating profit                                         4,553                                                    4,321                                                            537         (305)





     Interest expense excluding Financial Products                           514                                                      513                                                                           1   (3)



     Other income (expense)                                                 (44)                                                    (62)                                                            32          (14)    4






     
                Consolidated profit before taxes                         3,995                                                    3,746                                                            569         (320)





     Provision (benefit) for income taxes                                  1,006                                                      853                                                            153




     Profit of consolidated companies                                      2,989                                                    2,893                                                            416         (320)





     Equity in profit (loss) of unconsolidated affiliated companies           14                                                       29                                                                        (15)    5





     
                Profit of consolidated and affiliated companies          3,003                                                    2,922                                                            416         (335)





     Less: Profit (loss) attributable to noncontrolling interests              5                                                        5                                                             15          (15)    6






     
                Profit 7                                                        $
      2,998                                                                          $
          2,917                           $
       401           $
     (320)


              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 Twelve Months Ended December 31, 2019


                                                                                            
          
                (Unaudited)


                                                                                       
          
                (Millions of dollars)




                                                                                                                                             Supplemental Consolidating Data



                                                                     Consolidated                                  Machinery,                           Financial                         Consolidating
                                                                                                      Energy &                                   Products                           Adjustments
                                                                                                   Transportation




     
                Sales and revenues:



     Sales of Machinery, Energy & Transportation                                 $
      50,755                                                                         $
          50,755                       
     $                
     $



     Revenues of Financial Products                                        3,045                                                                                                                  3,571         (526)  (1)




     Total sales and revenues                                             53,800                                                   50,755                                                          3,571         (526)





     
                Operating costs:



     Cost of goods sold                                                   36,630                                                   36,634                                                                         (4)  (2)



     Selling, general and administrative expenses                          5,162                                                    4,444                                                            737          (19)  (2)



     Research and development expenses                                     1,693                                                    1,693



     Interest expense of Financial Products                                  754                                                                                                                    786          (32)  (3)



     Other operating (income) expenses                                     1,271                                                       14                                                          1,297          (40)  (2)




     Total operating costs                                                45,510                                                   42,785                                                          2,820          (95)






     
                Operating profit                                         8,290                                                    7,970                                                            751         (431)





     Interest expense excluding Financial Products                           421                                                      429                                                                         (8)  (3)



     Other income (expense)                                                 (57)                                                   (535)                                                            80           398     4






     
                Consolidated profit before taxes                         7,812                                                    7,006                                                            831          (25)





     Provision (benefit) for income taxes                                  1,746                                                    1,512                                                            234




     Profit of consolidated companies                                      6,066                                                    5,494                                                            597          (25)





     Equity in profit (loss) of unconsolidated affiliated companies           28                                                       49                                                                        (21)    5





     
                Profit of consolidated and affiliated companies          6,094                                                    5,543                                                            597          (46)





     Less: Profit (loss) attributable to noncontrolling interests              1                                                                                                                     22          (21)    6






     
                Profit 7                                                        $
      6,093                                                                          $
          5,543                           $
       575           $
     (25)


              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 December 31, 2020


                                                                                          
          
                (Unaudited)


                                                                                      
         
                (Millions of dollars)




                                                                                                                          
              
       Supplemental Consolidating Data



                                                              Consolidated                             Machinery,                              Financial                             Consolidating
                                                                                                 Energy &                               Products                               Adjustments
                                                                                              Transportation




     
                Assets



     Current assets:



     Cash and short-term investments                                       $
      9,352                                                                        $
              8,822                          $
          530        
     $



     Receivables - trade and other                                  7,317                                               3,846                                                                   397           3,074   1,2



     Receivables - finance                                          9,463                                                                                                                   13,681         (4,218)  (2)



     Prepaid expenses and other current assets                      1,930                                               1,376                                                                   624            (70)  (3)



     Inventories                                                   11,402                                              11,402




     Total current assets                                          39,464                                              25,446                                                                15,232         (1,214)





     Property, plant and equipment - net                           12,401                                               8,309                                                                 4,092



     Long-term receivables - trade and other                        1,185                                                 363                                                                   164             658   1,2



     Long-term receivables - finance                               12,222                                                                                                                   12,895           (673)  (2)



     Noncurrent deferred and refundable income taxes                1,523                                               2,058                                                                   110           (645)    4



     Intangible assets                                              1,308                                               1,308



     Goodwill                                                       6,394                                               6,394



     Other assets                                                   3,827                                               3,158                                                                 1,871         (1,202)    5




     
                Total assets                                            $
      78,324                                                                       $
              47,036                       $
          34,364            $
     (3,076)






     
                Liabilities



     Current liabilities:



     Short-term borrowings                                                 $
      2,015                                                                           $
              10                        $
          2,005        
     $



     Short-term borrowings with consolidated companies                  -                                                                                                                   1,000         (1,000)    6



     Accounts payable                                               6,128                                               6,060                                                                   212           (144)    7



     Accrued expenses                                               3,642                                               3,099                                                                   543



     Accrued wages, salaries and employee benefits                  1,096                                               1,081                                                                    15



     Customer advances                                              1,108                                               1,108



     Dividends payable                                                562                                                 562



     Other current liabilities                                      2,017                                               1,530                                                                   580            (93)  4,8



     Long-term debt due within one year                             9,149                                               1,420                                                                 7,729




     Total current liabilities                                     25,717                                              14,870                                                                12,084         (1,237)





     Long-term debt due after one year                             25,999                                               9,764                                                                16,250            (15)    6



     Liability for postemployment benefits                          6,872                                               6,872



     Other liabilities                                              4,358                                               3,691                                                                 1,385           (718)    4




     
                Total liabilities                                62,946                                              35,197                                                                29,719         (1,970)






     
                Shareholders' equity



     Common stock                                                   6,230                                               6,230                                                                   919           (919)    9



     Treasury stock                                              (25,178)                                           (25,178)



     Profit employed in the business                               35,167                                              31,091                                                                 4,065              11     9



     Accumulated other comprehensive income (loss)                  (888)                                              (352)                                                                (536)



     Noncontrolling interests                                          47                                                  48                                                                   197           (198)    9




     
                Total shareholders' equity                       15,378                                              11,839                                                                 4,645         (1,106)




     
                Total liabilities and shareholders' equity              $
      78,324                                                                       $
              47,036                       $
          34,364            $
     (3,076)


              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 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 Twelve Months Ended December 31, 2020


                                                                                                             
             
                (Unaudited)


                                                                                                        
             
                (Millions of dollars)




                                                                                                                                        
              
                Supplemental Consolidating Data


                                                                                                Consolidated                                              Machinery,                                           Financial                   Consolidating
                                                                                                                                Energy & Transportation                                         Products                       Adjustments




     
                Cash flow from operating activities:



     Profit of consolidated and affiliated companies                                                          $
             3,003                                                               $
             2,922                                           $
          416              $
     (335) 1, 5



     Adjustments for non-cash items:



     Depreciation and amortization                                                                    2,432                                       1,630                                                                   802



     Actuarial (gain) loss on pension and postretirement benefits                                       384                                         384



     Provision (benefit) for deferred income taxes                                                     (74)                                       (85)                                                                   11



     Other                                                                                            1,000                                         613                                                                    98                                    289     (2)



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



     Receivables - trade and other                                                                    1,442                                         395                                                                    50                                    997    2, 3



     Inventories                                                                                       (34)                                       (29)                                                                                                        (5)    (2)



     Accounts payable                                                                                    98                                          51                                                                    18                                     29     (2)



     Accrued expenses                                                                                 (366)                                      (364)                                                                  (2)



     Accrued wages, salaries and employee benefits                                                    (544)                                      (510)                                                                 (34)



     Customer advances                                                                                (126)                                      (126)



     Other assets - net                                                                               (201)                                      (133)                                                                 (71)                                     3     (2)



     Other liabilities - net                                                                          (687)                                      (694)                                                                 (23)                                    30     (2)




     Net cash provided by (used for) operating activities                                             6,327                                       4,054                                                                 1,265                                  1,008




     
                Cash flow from investing activities:



     Capital expenditures - excluding equipment leased to others                                      (978)                                      (976)                                                                 (14)                                    12     (2)



     Expenditures for equipment leased to others                                                    (1,137)                                       (18)                                                              (1,139)                                    20     (2)



     Proceeds from disposals of leased assets and property, plant and equipment                         772                                         147                                                                   651                                   (26)    (2)



     Additions to finance receivables                                                              (12,385)                                                                                                        (13,525)                                 1,140     (3)



     Collections of finance receivables                                                              12,646                                                                                                           14,077                                (1,431)    (3)



     Net intercompany purchased receivables                                                               -                                                                                                           1,043                                (1,043)    (3)



     Proceeds from sale of finance receivables                                                           42                                                                                                               42



     Net intercompany borrowings                                                                          -                                      (401)                                                                    7                                    394       4



     Investments and acquisitions (net of cash acquired)                                              (111)                                      (111)



     Proceeds from sale of businesses and investments (net of cash sold)                                 25                                          25



     Proceeds from sale of securities                                                                   345                                          24                                                                   321



     Investments in securities                                                                        (638)                                       (21)                                                                (617)



     Other - net                                                                                       (66)                                       (11)                                                                 (55)




     Net cash provided by (used for) investing activities                                           (1,485)                                    (1,342)                                                                  791                                  (934)




     
                Cash flow from financing activities:



     Dividends paid                                                                                 (2,243)                                    (2,243)                                                                (320)                                   320       5



     Common stock issued, including treasury shares reissued                                            229                                         229



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



     Net intercompany borrowings                                                                          -                                        (7)                                                                  401                                  (394)      4



     Proceeds from debt issued > 90 days                                                             10,431                                       1,991                                                                 8,440



     Payments on debt > 90 days                                                                     (8,237)                                       (26)                                                              (8,211)



     Short-term borrowings - net < 90 days                                                          (2,804)                                          5                                                               (2,809)



     Other - net                                                                                        (1)                                        (1)




     Net cash provided by (used for) financing activities                                           (3,755)                                    (1,182)                                                              (2,499)                                  (74)




     Effect of exchange rate changes on cash                                                           (13)                                       (10)                                                                  (3)




     
                Increase (decrease) in cash and short-term investments and restricted cash          1,074                                       1,520                                                                 (446)



     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                                     $
             9,366                                                               $
             8,822                                           $
          544          
     $


              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 Twelve Months Ended December 31, 2019


                                                                                                            
              
                (Unaudited)


                                                                                                       
              
                (Millions of dollars)




                                                                                                                                         
              
                Supplemental Consolidating Data


                                                                                                Consolidated                                               Machinery,                                           Financial                   Consolidating
                                                                                                                                 Energy & Transportation                                         Products                       Adjustments




     
                Cash flow from operating activities:



     Profit of consolidated and affiliated companies                                                          $
              6,094                                                               $
             5,543                                           $
           597              $
     (46) 1,5



     Adjustments for non-cash items:



     Depreciation and amortization                                                                    2,577                                        1,713                                                                   864



     Actuarial (gain) loss on pension and postretirement benefits                                       468                                          468



     Provision (benefit) for deferred income taxes                                                       28                                           15                                                                    13



     Other                                                                                              675                                          435                                                                 (215)                                    455     (2)



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



     Receivables - trade and other                                                                      171                                            4                                                                    15                                     152    2, 3



     Inventories                                                                                        274                                          250                                                                                                           24     (2)



     Accounts payable                                                                               (1,025)                                       (983)                                                                   20                                    (62)    (2)



     Accrued expenses                                                                                   172                                          187                                                                  (13)                                    (2)    (2)



     Accrued wages, salaries and employee benefits                                                    (757)                                       (772)                                                                   15



     Customer advances                                                                                 (10)                                         (8)                                                                                                         (2)    (2)



     Other assets - net                                                                                (93)                                       (166)                                                                   38                                      35     (2)



     Other liabilities - net                                                                        (1,662)                                     (1,815)                                                                  169                                    (16)    (2)




     Net cash provided by (used for) operating activities                                             6,912                                        4,871                                                                 1,503                                     538




     
                Cash flow from investing activities:



     Capital expenditures - excluding equipment leased to others                                    (1,056)                                     (1,036)                                                                 (20)



     Expenditures for equipment leased to others                                                    (1,613)                                        (38)                                                              (1,616)                                     41     (2)



     Proceeds from disposals of leased assets and property, plant and equipment                       1,153                                          164                                                                 1,092                                   (103)    (2)



     Additions to finance receivables                                                              (12,777)                                                                                                         (14,270)                                  1,493     (3)



     Collections of finance receivables                                                              12,183                                                                                                            13,537                                 (1,354)    (3)



     Net intercompany purchased receivables                                                               -                                                                                                              640                                   (640)    (3)



     Proceeds from sale of finance receivables                                                          235                                                                                                               235



     Net intercompany borrowings                                                                          -                                         900                                                                     3                                   (903)      4



     Investments and acquisitions (net of cash acquired)                                               (47)                                        (47)



     Proceeds from sale of businesses and investments (net of cash sold)                                 41                                            3                                                                    38



     Proceeds from sale of securities                                                                   529                                           32                                                                   497



     Investments in securities                                                                        (552)                                        (27)                                                                (525)



     Other - net                                                                                       (24)                                           1                                                                  (25)




     Net cash provided by (used for) investing activities                                           (1,928)                                        (48)                                                                (414)                                (1,466)




     
                Cash flow from financing activities:



     Dividends paid                                                                                 (2,132)                                     (2,132)                                                                 (25)                                     25       5



     Common stock issued, including treasury shares reissued                                            238                                          238



     Common shares repurchased                                                                      (4,047)                                     (4,047)



     Net intercompany borrowings                                                                          -                                         (3)                                                                (900)                                    903       4



     Proceeds from debt issued > 90 days                                                              9,841                                        1,479                                                                 8,362



     Payments on debt > 90 days                                                                     (8,297)                                        (12)                                                              (8,285)



     Short-term borrowings - net < 90 days                                                            (138)                                           5                                                                 (143)



     Other - net                                                                                        (3)                                         (3)




     Net cash provided by (used for) financing activities                                           (4,538)                                     (4,475)                                                                (991)                                    928




     Effect of exchange rate changes on cash                                                           (44)                                        (40)                                                                  (4)




     
                Increase (decrease) in cash and short-term investments and restricted cash            402                                          308                                                                    94



     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                                     $
              8,292                                                               $
             7,302                                           $
           990          
     $


              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.

    ---

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SOURCE Caterpillar Inc.