Caterpillar Reports Third-Quarter 2020 Results

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

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

 



Third Quarter

($ in billions except profit per share)


2020

2019

Sales and Revenues


$9.9

$12.8

Profit Per Share


$1.22

$2.66

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

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

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

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

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

CONSOLIDATED RESULTS

Consolidated Sales and Revenues
Consolidated Sales and Revenues Comparison

Third Quarter 2020 vs. Third Quarter 2019

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

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the third quarter of 2019 (at left) and the third quarter of 2020 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company's Board of Directors and employees.

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

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

Sales and Revenues by Segment


(Millions of dollars)

Third

Quarter

2019


Sales
Volume


Price
Realization


Currency


Inter-

Segment /

Other


Third

 Quarter

2020


$
Change


%
Change

















Construction Industries

$

5,289



$

(1,150)



$

(60)



$

(17)



$

(6)



$

4,056



$

(1,233)



(23%)

Resource Industries

2,310



(425)



(46)



(4)



(19)



1,816



(494)



(21%)

Energy & Transportation

5,452



(1,086)



(16)



15



(204)



4,161



(1,291)



(24%)

All Other Segment

111



(3)



1





(3)



106



(5)



(5%)

Corporate Items and Eliminations

(1,188)



45







232



(911)



277




Machinery, Energy & Transportation

11,974



(2,619)



(121)



(6)





9,228



(2,746)



(23%)

















Financial Products Segment

865









(141)



724



(141)



(16%)

Corporate Items and Eliminations

(81)









10



(71)



10




Financial Products Revenues

784









(131)



653



(131)



(17%)

















Consolidated Sales and Revenues

$

12,758



$

(2,619)



$

(121)



$

(6)



$

(131)



$

9,881



$

(2,877)



(23%)

















 


Sales and Revenues by Geographic Region


North America


Latin America


EAME


Asia/Pacific


External Sales

and Revenues


Inter-Segment


Total Sales and

Revenues

(Millions of dollars)

$


% Chg


$


% Chg


$


% Chg


$


% Chg


$


% Chg


$


% Chg


$


% Chg

Third Quarter 2020




























Construction Industries

$

1,781



(35%)


$

230



(44%)


$

796



(24%)


$

1,241



14%


$

4,048



(23%)


$

8



(43%)


$

4,056



(23%)

Resource Industries

487



(38%)


269



(23%)


384



(3%)


564



(13%)


1,704



(22%)


112



(15%)


1,816



(21%)

Energy & Transportation

1,584



(26%)


221



(42%)


1,113



(9%)


557



(33%)


3,475



(24%)


686



(23%)


4,161



(24%)

All Other Segment

10



900%


1



(83%)


1



(88%)


13



8%


25



(7%)


81



(4%)


106



(5%)

Corporate Items and Eliminations

(22)





(2)













(24)





(887)





(911)




Machinery, Energy & Transportation

3,840



(31%)


719



(37%)


2,294



(14%)


2,375



(8%)


9,228



(23%)




—%


9,228



(23%)





























Financial Products Segment

448



(20%)


63



(20%)


100



(2%)


113



(9%)


724



(16%)




—%


724



(16%)

Corporate Items and Eliminations

(37)





(10)





(10)





(14)





(71)









(71)




Financial Products Revenues

411



(21%)


53



(17%)


90



(4%)


99



(9%)


653



(17%)




—%


653



(17%)





























Consolidated Sales and Revenues

$

4,251



(30%)


$

772



(36%)


$

2,384



(14%)


$

2,474



(8%)


$

9,881



(23%)


$



—%


$

9,881



(23%)





























Third Quarter 2019




























Construction Industries

$

2,728





$

413





$

1,048





$

1,086





$

5,275





$

14





$

5,289




Resource Industries

789





349





396





645





2,179





131





2,310




Energy & Transportation

2,129





378





1,224





831





4,562





890





5,452




All Other Segment

1





6





8





12





27





84





111




Corporate Items and Eliminations

(62)





1





(7)





(1)





(69)





(1,119)





(1,188)




Machinery, Energy & Transportation

5,585





1,147





2,669





2,573





11,974









11,974
































Financial Products Segment

560





79





102





124





865









865




Corporate Items and Eliminations

(43)





(15)





(8)





(15)





(81)









(81)




Financial Products Revenues

517





64





94





109





784









784
































Consolidated Sales and Revenues

$

6,102





$

1,211





$

2,763





$

2,682





$

12,758





$





$

12,758
































Consolidated Operating Profit

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

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

The chart above graphically illustrates reasons for the change in consolidated operating profit between the third quarter of 2019 (at left) and the third quarter of 2020 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company's Board of Directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation's other operating (income) expenses.

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

SG&A/R&D expenses benefited from reduced short-term incentive compensation expense and other cost reductions related to lower sales volumes.

Profit (Loss) by Segment

(Millions of dollars)

Third Quarter

2020


Third Quarter

2019


$
Change


%

 Change

Construction Industries

$

585



$

940



$

(355)



(38%)


Resource Industries

167



311



(144)



(46%)


Energy & Transportation

492



1,021



(529)



(52%)


All Other Segment

27



(21)



48



n/a


Corporate Items and Eliminations

(346)



(363)



17




Machinery, Energy & Transportation

925



1,888



(963)



(51%)










Financial Products Segment

142



218



(76)



(35%)


Corporate Items and Eliminations

(15)



21



(36)




Financial Products

127



239



(112)



(47%)










Consolidating Adjustments

(67)



(107)



40












Consolidated Operating Profit

$

985



$

2,020



$

(1,035)



(51%)










Other Profit/Loss and Tax Items

  • Other income (expense) in the third quarter of 2020 was income of $14 million, compared with income of $88 million in the third quarter of 2019. The change was primarily due to the unfavorable impacts from foreign currency exchange gains (losses) and lower investment and interest income.
  • The provision for income taxes for the third quarter of 2020 reflected an estimated annual tax rate of 31%, excluding the discrete items discussed below, compared with 26% for the third quarter of 2019. The increase in the estimated annual tax rate was primarily related to changes in the expected geographic mix of profits from a tax perspective for 2020, including the impact of U.S. tax on non-U.S. earnings as a result of U.S. tax reform.

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

 

CONSTRUCTION INDUSTRIES

(Millions of dollars)

















Segment Sales

















Third Quarter

2019


Sales Volume


Price

Realization


Currency


Inter-

Segment


Third Quarter

2020


$
 Change


%
 Change

Total Sales


$

5,289



$

(1,150)



$

(60)



$

(17)



$

(6)



$

4,056



$

(1,233)



(23%)


















Sales by Geographic Region











Third Quarter

2020


Third Quarter

2019


$
Change


%
Change









North America


$

1,781



$

2,728



$

(947)



(35%)










Latin America


230



413



(183)



(44%)










EAME


796



1,048



(252)



(24%)










Asia/Pacific


1,241



1,086



155



14%










External Sales


4,048



5,275



(1,227)



(23%)










Inter-segment


8



14



(6)



(43%)










Total Sales


$

4,056



$

5,289



$

(1,233)



(23%)



























Segment Profit











Third Quarter

2020


Third Quarter

2019



Change


%
Change









Segment Profit


$

585



$

940



$

(355)



(38%)










Segment Profit Margin


14.4%



17.8%



(3.4 pts)





























































Construction Industries' total sales were $4.056 billion in the third quarter of 2020, a decrease of $1.233 billion, or 23%, compared with $5.289 billion in the third quarter of 2019. The decrease was due to lower sales volume, driven by lower end-user demand and the impact from changes in dealer inventories. During the third quarter of 2020, dealers decreased inventories in all regions except for Asia/Pacific where dealers increased inventories, compared with the third quarter of 2019 when dealer inventories were about flat in all regions except for Asia/Pacific where dealers decreased inventories. Overall, dealers decreased inventories more during the third quarter of 2020 than during the third quarter of 2019.

  • In North America, sales decreased mostly due to lower sales volume driven by lower end-user demand and the impact from changes in dealer inventories. The lower end-user demand was driven primarily by pipeline and road construction.
  • Sales declined in Latin America primarily due to the impact from changes in dealer inventories and unfavorable currency impacts from a weaker Brazilian real.
  • In EAME, sales decreased mostly because of lower sales volume across the region, driven by lower end-user demand and the impact from changes in dealer inventories.
  • Sales increased in Asia/Pacific primarily due to the impact of changes in dealer inventories, partially offset by unfavorable price realization. The increase in sales was primarily driven by China demand, which was partially offset by lower sales in the rest of the region.

Construction Industries' profit was $585 million in the third quarter of 2020, a decrease of $355 million, or 38%, compared with $940 million in the third quarter of 2019. The decrease was mainly due to lower sales volume and unfavorable price realization, partially offset by favorable manufacturing costs and lower SG&A/R&D expenses. Favorable manufacturing costs were driven by lower period manufacturing costs and favorable variable labor and burden. SG&A/R&D expenses and period manufacturing costs both benefited from cost reductions related to lower sales volumes.

RESOURCE INDUSTRIES

(Millions of dollars)

















Segment Sales

















Third Quarter

2019


Sales Volume


Price

Realization


Currency


Inter-

Segment


Third Quarter

2020


$
 Change


%
 Change

Total Sales


$

2,310



$

(425)



$

(46)



$

(4)



$

(19)



$

1,816



$

(494)



(21%)


















Sales by Geographic Region











Third Quarter

2020


Third Quarter

2019


$
Change


%
Change









North America


$

487



$

789



$

(302)



(38%)










Latin America


269



349



(80)



(23%)










EAME


384



396



(12)



(3%)










Asia/Pacific


564



645



(81)



(13%)










External Sales


1,704



2,179



(475)



(22%)










Inter-segment


112



131



(19)



(15%)










Total Sales


$

1,816



$

2,310



$

(494)



(21%)



























Segment Profit











Third Quarter

2020


Third Quarter

2019



Change


%
Change









Segment Profit


$

167



$

311



$

(144)



(46%)










Segment Profit Margin


9.2%



13.5%



(4.3 pts)





























































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

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

ENERGY & TRANSPORTATION

(Millions of dollars)

















Segment Sales

















Third Quarter

2019


Sales Volume


Price

Realization


Currency


Inter-

Segment


Third Quarter

2020


$
 Change


%
 Change

Total Sales


$

5,452



$

(1,086)



$

(16)



$

15



$

(204)



$

4,161



$

(1,291)



(24%)



















Sales by Application











Third Quarter

2020


Third Quarter

2019


$
Change


%
Change









Oil and Gas


$

734



$

1,246



$

(512)



(41%)










Power Generation


1,034



1,123



(89)



(8%)










Industrial


730



980



(250)



(26%)










Transportation


977



1,213



(236)



(19%)










External Sales


3,475



4,562



(1,087)



(24%)










Inter-segment


686



890



(204)



(23%)










Total Sales


$

4,161



$

5,452



$

(1,291)



(24%)



























Segment Profit











Third Quarter

2020


Third Quarter

2019



Change


%
Change









Segment Profit


$

492



$

1,021



$

(529)



(52%)










Segment Profit Margin


11.8%



18.7%



(6.9 pts)





























































Energy & Transportation's total sales were $4.161 billion in the third quarter of 2020, a decrease of $1.291 billion, or 24%, compared with $5.452 billion in the third quarter of 2019. Sales declined across all applications and inter-segment engine sales.

  • Oil and Gas – Sales decreased mainly due to lower demand in North America for reciprocating engines used in gas compression and decreased sales of engine aftermarket parts. In addition, sales were lower for turbines and turbine-related services.
  • Power Generation – Sales decreased primarily due to lower sales volume in engine aftermarket parts, and small reciprocating engine applications, as well as turbines and turbine-related services. The sales decrease was partially offset by an increase in large reciprocating engine applications, mainly for data centers.
  • Industrial – Sales decreased due to lower demand across all regions.
  • Transportation – Sales declined in rail due to lower deliveries of locomotives and related services, primarily in North America, and in marine due to lower sales of engine aftermarket parts, primarily in EAME.

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

FINANCIAL PRODUCTS SEGMENT

(Millions of dollars)

















Revenues by Geographic Region











Third Quarter

2020


Third Quarter

2019


$
Change


%
Change









North America


$

448



$

560



$

(112)



(20%)










Latin America


63



79



(16)



(20%)










EAME


100



102



(2)



(2%)










Asia/Pacific


113



124



(11)



(9%)










Total Revenues


$

724



$

865



$

(141)



(16%)



























Segment Profit











Third Quarter

2020


Third Quarter

2019



Change


%
Change









Segment Profit


$

142



$

218



$

(76)



(35%)



























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

Financial Products' segment profit was $142 million in the third quarter of 2020, compared with $218 million in the third quarter of 2019. The decrease was due to higher provision for credit losses, lower net yield on average earning assets and lower average earning assets at Cat Financial. These unfavorable impacts were partially offset by a reduction in SG&A expenses primarily due to lower short-term incentive compensation and employee benefit expenses.

At the end of the third quarter of 2020, past dues at Cat Financial were 3.81%, compared with 3.19% at the end of the third quarter of 2019. Past dues increased primarily due to the impacts of the COVID-19 pandemic, offset by decreases in the Caterpillar Power Finance and Latin American portfolios. Write-offs, net of recoveries, were $125 million for the third quarter of 2020, compared with $103 million for the third quarter of 2019. As of September 30, 2020, Cat Financial's allowance for credit losses totaled $460 million, or 1.74% of finance receivables, compared with $515 million, or 1.92% of finance receivables at June 30, 2020. The decrease in the allowance for credit losses was primarily driven by write-offs of previously reserved accounts in the Caterpillar Power Finance portfolio. The allowance for credit losses at year-end 2019 was $424 million, or 1.50% of finance receivables.

Corporate Items and Eliminations

Expense for corporate items and eliminations was $361 million in the third quarter of 2020, an increase of $19 million from the third quarter of 2019, primarily due to higher restructuring costs and an unfavorable change in fair value adjustments related to deferred compensation plans, partially offset by lower corporate costs and segment reporting methodology differences.

Notes
i. Glossary of terms is included on the Caterpillar website at https://investors.caterpillar.com/overview/default.aspx.
ii. End-user demand is demonstrated by the company's Rolling 3 Month Retail Sales Statistics filed in a Form 8-K on Tuesday, October 27, 2020.
iii. Information on non-GAAP financial measures is included in the appendix on page 11.
iv. Some amounts within this report are rounded to the millions or billions and may not add.
v. Caterpillar will conduct a teleconference and live webcast, with a slide presentation, beginning at 7:30 a.m. Central Time on Tuesday, October 27, 2020, to discuss its 2020 third-quarter results. The accompanying slides will be available before the webcast on the Caterpillar website at https://investors.caterpillar.com/events-presentations/default.aspx.

About Caterpillar

Since 1925, Caterpillar Inc. has been helping our customers build a better world – making sustainable progress possible and driving positive change on every continent. With 2019 sales and revenues of $53.8 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. Services offered throughout the product life cycle, cutting-edge technology and decades of product expertise set Caterpillar apart, providing exceptional value to help our customers succeed. The company principally operates through three primary segments – Construction Industries, Resource Industries and Energy & Transportation – and provides financing and related services through its Financial Products segment. For more information, visit caterpillar.com. To connect on social media, visit caterpillar.com/social-media.

Caterpillar's latest financial results are also available online:

https://investors.caterpillar.com/overview/default.aspx

https://investors.caterpillar.com/financials/quarterly-results/default.aspx (live broadcast/replays of quarterly conference call)

Forward-Looking Statements

Certain statements in this press release relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "estimate," "will be," "will," "would," "expect," "anticipate," "plan," "forecast," "target," "guide," "project," "intend," "could," "should" or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These statements do not guarantee future performance and speak only as of the date they are made, and we do not undertake to update our forward-looking statements.

Caterpillar's actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including, but not limited to: (i) global and regional economic conditions and economic conditions in the industries we serve; (ii) commodity price changes, material price increases, fluctuations in demand for our products or significant shortages of material; (iii) government monetary or fiscal policies; (iv) political and economic risks, commercial instability and events beyond our control in the countries in which we operate; (v) international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates; (vi) our ability to develop, produce and market quality products that meet our customers' needs; (vii) the impact of the highly competitive environment in which we operate on our sales and pricing; (viii) information technology security threats and computer crime; (ix) inventory management decisions and sourcing practices of our dealers and our OEM customers; (x) a failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures or divestitures; (xi) union disputes or other employee relations issues; (xii) adverse effects of unexpected events; (xiii) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers; (xiv) failure to maintain our credit ratings and potential resulting increases to our cost of borrowing and adverse effects on our cost of funds, liquidity, competitive position and access to capital markets; (xv) our Financial Products segment's risks associated with the financial services industry; (xvi) changes in interest rates or market liquidity conditions; (xvii) an increase in delinquencies, repossessions or net losses of Cat Financial's customers; (xviii) currency fluctuations; (xix) our or Cat Financial's compliance with financial and other restrictive covenants in debt agreements; (xx) increased pension plan funding obligations; (xxi) alleged or actual violations of trade or anti-corruption laws and regulations; (xxii) additional tax expense or exposure, including the impact of U.S. tax reform; (xxiii) significant legal proceedings, claims, lawsuits or government investigations; (xxiv) new regulations or changes in financial services regulations; (xxv) compliance with environmental laws and regulations; (xxvi) the duration and geographic spread of, business disruptions caused by, and the overall global economic impact of, the COVID-19 pandemic; and (xxvii) other factors described in more detail in Caterpillar's Forms 10-Q, 10-K and other filings with the Securities and Exchange Commission.

APPENDIX

NON-GAAP FINANCIAL MEASURES

The following definitions are provided for the non-GAAP financial measures. These non-GAAP financial measures have no standardized meaning prescribed by U.S. GAAP and therefore are unlikely to be comparable to the calculation of similar measures for other companies. Management does not intend these items to be considered in isolation or as a substitute for the related GAAP measures.

Adjusted Profit Per Share

The company believes it is important to separately quantify the profit impact of a significant item in order for the company's results to be meaningful to readers. This item is remeasurement losses resulting from the settlements of pension obligations in the third quarter of 2020. The company does not consider this item indicative of earnings from ongoing business activities and believes the non-GAAP measure provides investors with useful perspective on underlying business results and trends and aids with assessing the company's period-over-period results. The company intends to discuss adjusted profit per share for the fourth quarter and full-year 2020, excluding mark-to-market gains or losses for remeasurement of pension and other postemployment benefit plans along with any other discrete items.

Reconciliations of adjusted profit per share to the most directly comparable GAAP measure, diluted profit per share, are as follows:


Third Quarter





2020


2019




Profit per share

$

1.22



$

2.66





Per share remeasurement losses of pension obligations1

$

0.12



$





Adjusted profit per share

$

1.34



$

2.66



















1 At statutory tax rates.

Note: On March 26, 2020, the company withdrew its previous financial outlook due to the continued global economic uncertainty related to the COVID-19 pandemic.


Supplemental Consolidating Data

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

Consolidated – Caterpillar Inc. and its subsidiaries.

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

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

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

The nature of the ME&T and Financial Products businesses is different, especially with regard to the financial position and cash flow items. Caterpillar management utilizes this presentation internally to highlight these differences. The company believes this presentation will assist readers in understanding its business.

Pages 12 to 22 reconcile ME&T and Financial Products to Caterpillar Inc. consolidated financial information.

 

Caterpillar Inc.

Condensed Consolidated Statement of Results of Operations

(Unaudited)

(Dollars in millions except per share data)



Three Months Ended
September 30,


Nine Months Ended
September 30,


2020


2019


2020


2019

Sales and revenues:








  Sales of Machinery, Energy & Transportation

$

9,228



$

11,974



$

28,452



$

38,369


  Revenues of Financial Products

653



784



2,061



2,287


  Total sales and revenues

9,881



12,758



30,513



40,656










Operating costs:








  Cost of goods sold

6,919



8,569



21,298



27,513


  Selling, general and administrative expenses

1,126



1,251



3,426



3,879


  Research and development expenses

344



431



1,041



1,307


  Interest expense of Financial Products

137



189



461



571


  Other operating (income) expenses

370



298



1,114



946


  Total operating costs

8,896



10,738



27,340



34,216










Operating profit

985



2,020



3,173



6,440










  Interest expense excluding Financial Products

136



103



384



309


  Other income (expense)

14



88



265



316










Consolidated profit before taxes

863



2,005



3,054



6,447










  Provision (benefit) for income taxes

187



518



839



1,470


  Profit of consolidated companies

676



1,487



2,215



4,977










  Equity in profit (loss) of unconsolidated affiliated companies

(5)



7



8



20










Profit of consolidated and affiliated companies

671



1,494



2,223



4,997










Less: Profit (loss) attributable to noncontrolling interests

3





5



2










Profit 1

$

668



$

1,494



$

2,218



$

4,995


















Profit per common share

$

1.23



$

2.69



$

4.08



$

8.84


Profit per common share — diluted 2

$

1.22



$

2.66



$

4.05



$

8.75










Weighted-average common shares outstanding (millions)








– Basic

542.3



556.3



543.9



565.2


– Diluted 2

546.4



561.2



547.8



570.8












1

Profit attributable to common shareholders.

2

Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.

 

Caterpillar Inc.

Condensed Consolidated Statement of Financial Position

(Unaudited)

(Millions of dollars)



September 30,
2020


December 31,
2019

Assets




Current assets:




Cash and short-term investments

$

9,315



$

8,284


Receivables – trade and other

6,969



8,568


Receivables – finance

8,966



9,336


Prepaid expenses and other current assets

1,831



1,739


Inventories

11,453



11,266


Total current assets

38,534



39,193






Property, plant and equipment – net

12,232



12,904


Long-term receivables – trade and other

1,149



1,193


Long-term receivables – finance

12,209



12,651


Noncurrent deferred and refundable income taxes

1,440



1,411


Intangible assets

1,363



1,565


Goodwill

6,304



6,196


Other assets

3,510



3,340


Total assets

$

76,741



$

78,453






Liabilities




Current liabilities:




Short-term borrowings:




-- Machinery, Energy & Transportation

$



$

5


-- Financial Products

2,660



5,161


Accounts payable

5,193



5,957


Accrued expenses

3,510



3,750


Accrued wages, salaries and employee benefits

1,069



1,629


Customer advances

1,209



1,187


Dividends payable



567


Other current liabilities

1,978



2,155


Long-term debt due within one year:




-- Machinery, Energy & Transportation

1,397



16


-- Financial Products

7,962



6,194


Total current liabilities

24,978



26,621






Long-term debt due after one year:




-- Machinery, Energy & Transportation

9,742



9,141


-- Financial Products

16,365



17,140


Liability for postemployment benefits

6,254



6,599


Other liabilities

4,408



4,323


Total liabilities

61,747



63,824






Shareholders' equity




Common stock

6,204



5,935


Treasury stock

(25,315)



(24,217)


Profit employed in the business

35,508



34,437


Accumulated other comprehensive income (loss)

(1,448)



(1,567)


Noncontrolling interests

45



41


Total shareholders' equity

14,994



14,629


Total liabilities and shareholders' equity

$

76,741



$

78,453



 

Caterpillar Inc.

Condensed Consolidated Statement of Cash Flow

(Unaudited)

(Millions of dollars)



Nine Months Ended
September 30,


2020


2019

Cash flow from operating activities:




Profit of consolidated and affiliated companies

$

2,223



$

4,997


Adjustments for non-cash items:




Depreciation and amortization

1,815



1,933


Net gain on remeasurement of pension obligations

(55)




Provision (benefit) for deferred income taxes

(38)



(13)


Other

919



627


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




Receivables – trade and other

1,473



427


Inventories

(139)



(676)


Accounts payable

(596)



(669)


Accrued expenses

(286)



114


Accrued wages, salaries and employee benefits

(547)



(858)


Customer advances

13



169


Other assets – net

(15)



19


Other liabilities – net

(512)



(1,592)


Net cash provided by (used for) operating activities

4,255



4,478


Cash flow from investing activities:




Capital expenditures – excluding equipment leased to others

(686)



(723)


Expenditures for equipment leased to others

(805)



(1,133)


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

550



812


Additions to finance receivables

(9,278)



(9,453)


Collections of finance receivables

9,656



9,144


Proceeds from sale of finance receivables

37



183


Investments and acquisitions (net of cash acquired)

(93)



(6)


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

13



3


Proceeds from sale of securities

239



281


Investments in securities

(512)



(425)


Other – net

(80)



(37)


Net cash provided by (used for) investing activities

(959)



(1,354)


Cash flow from financing activities:




Dividends paid

(1,683)



(1,564)


Common stock issued, including treasury shares reissued

110



59


Common shares repurchased

(1,130)



(3,283)


Proceeds from debt issued (original maturities greater than three months)

9,418



8,827


Payments on debt (original maturities greater than three months)

(6,789)



(6,062)


Short-term borrowings – net (original maturities three months or less)

(2,138)



(1,006)


Other – net

(1)



(2)


Net cash provided by (used for) financing activities

(2,213)



(3,031)


Effect of exchange rate changes on cash

(56)



(47)


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

1,027



46


Cash and short-term investments and restricted cash at beginning of period

8,292



7,890


Cash and short-term investments and restricted cash at end of period

$

9,319



$

7,936



All short-term investments, which consist primarily of highly liquid investments with original maturities of three months or less, are considered to be cash equivalents.

 

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Three Months Ended September 30, 2020

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,
Energy &
Transportation


Financial
Products


Consolidating
Adjustments


Sales and revenues:









Sales of Machinery, Energy & Transportation

$

9,228



$

9,228



$



$



Revenues of Financial Products

653





740



(87)


1

Total sales and revenues

9,881



9,228



740



(87)












Operating costs:









Cost of goods sold

6,919



6,921





(2)


2

Selling, general and administrative expenses

1,126



943



189



(6)


2

Research and development expenses

344



344







Interest expense of Financial Products

137





137





Other operating (income) expenses

370



95



287



(12)


2

Total operating costs

8,896



8,303



613



(20)












Operating profit

985



925



127



(67)












Interest expense excluding Financial Products

136



136







Other income (expense)

14



(62)



9



67


3










Consolidated profit before taxes

863



727



136














Provision (benefit) for income taxes

187



133



54





Profit of consolidated companies

676



594



82














Equity in profit (loss) of unconsolidated affiliated companies

(5)



(4)





(1)


4










Profit of consolidated and affiliated companies

671



590



82



(1)












Less: Profit (loss) attributable to noncontrolling interests

3





4



(1)


5










Profit 6

$

668



$

590



$

78



$




1

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

2

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

3

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

4

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

5

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

6

Profit attributable to common shareholders.

 

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Three Months Ended September 30, 2019

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,
Energy &
Transportation


Financial
Products


Consolidating
Adjustments


Sales and revenues:









Sales of Machinery, Energy & Transportation

$

11,974



$

11,974



$



$



Revenues of Financial Products

784





920



(136)


1

Total sales and revenues

12,758



11,974



920



(136)












Operating costs:









Cost of goods sold

8,569



8,569







Selling, general and administrative expenses

1,251



1,095



163



(7)


2

Research and development expenses

431



431







Interest expense of Financial Products

189





198



(9)


3

Other operating (income) expenses

298



(9)



320



(13)


2

Total operating costs

10,738



10,086



681



(29)












Operating profit

2,020



1,888



239



(107)












Interest expense excluding Financial Products

103



103







Other income (expense)

88



(27)



8



107


4










Consolidated profit before taxes

2,005



1,758



247














Provision (benefit) for income taxes

518



457



61





Profit of consolidated companies

1,487



1,301



186














Equity in profit (loss) of unconsolidated affiliated companies

7



12





(5)


5










Profit of consolidated and affiliated companies

1,494



1,313



186



(5)












Less: Profit (loss) attributable to noncontrolling interests



(1)



6



(5)


6










Profit 7

$

1,494



$

1,314



$

180



$




1

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

2

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

3

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

4

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

5

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

6

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

7

Profit attributable to common shareholders.

 

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Nine Months Ended September 30, 2020

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,
Energy &
Transportation


Financial
Products


Consolidating
Adjustments


Sales and revenues:









Sales of Machinery, Energy & Transportation

$

28,452



$

28,452



$



$



Revenues of Financial Products

2,061





2,350



(289)


1

Total sales and revenues

30,513



28,452



2,350



(289)












Operating costs:









Cost of goods sold

21,298



21,302





(4)


2

Selling, general and administrative expenses

3,426



2,867



572



(13)


2

Research and development expenses

1,041



1,041







Interest expense of Financial Products

461





462



(1)


3

Other operating (income) expenses

1,114



227



927



(40)


2

Total operating costs

27,340



25,437



1,961



(58)












Operating profit

3,173



3,015



389



(231)












Interest expense excluding Financial Products

384



383





1


3

Other income (expense)

265



60



(7)



212


4










Consolidated profit before taxes

3,054



2,692



382



(20)












Provision (benefit) for income taxes

839



720



119





Profit of consolidated companies

2,215



1,972



263



(20)












Equity in profit (loss) of unconsolidated affiliated companies

8



18





(10)


5










Profit of consolidated and affiliated companies

2,223



1,990



263



(30)












Less: Profit (loss) attributable to noncontrolling interests

5



2



13



(10)


6










Profit 7

$

2,218



$

1,988



$

250



$

(20)




1

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

2

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

3

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

4

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

5

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

6

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

7

Profit attributable to common shareholders.

 

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Nine Months Ended September 30, 2019

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,
Energy &
Transportation


Financial
Products


Consolidating
Adjustments


Sales and revenues:









Sales of Machinery, Energy & Transportation

$

38,369



$

38,369



$



$



Revenues of Financial Products

2,287





2,684



(397)


1


Total sales and revenues

40,656



38,369



2,684



(397)












Operating costs:









Cost of goods sold

27,513



27,515





(2)


2


Selling, general and administrative expenses

3,879



3,324



564



(9)


2


Research and development expenses

1,307



1,307







Interest expense of Financial Products

571





599



(28)


3


Other operating (income) expenses

946



2



974



(30)


2


Total operating costs

34,216



32,148



2,137



(69)












Operating profit

6,440



6,221



547



(328)












Interest expense excluding Financial Products

309



318





(9)


3


Other income (expense)

316



(71)



68



319


4











Consolidated profit before taxes

6,447



5,832



615














Provision (benefit) for income taxes

1,470



1,294



176





Profit of consolidated companies

4,977



4,538



439














Equity in profit (loss) of unconsolidated affiliated companies

20



36





(16)


5











Profit of consolidated and affiliated companies

4,997



4,574



439



(16)












Less: Profit (loss) attributable to noncontrolling interests

2



1



17



(16)


6











Profit 7

$

4,995



$

4,573



$

422



$




1

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

2

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

3

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

4

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

5

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

6

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

7

Profit attributable to common shareholders.

 

Caterpillar Inc.

Supplemental Data for Financial Position

At September 30, 2020

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,
Energy &
Transportation


Financial
Products


Consolidating
Adjustments


Assets









Current assets:









Cash and short-term investments

$

9,315



$

8,512



$

803



$



Receivables – trade and other

6,969



2,484



497



3,988


1,2

Receivables – finance

8,966





13,120



(4,154)


2

Prepaid expenses and other current assets

1,831



1,372



634



(175)


3

Inventories

11,453



11,453







Total current assets

38,534



23,821



15,054



(341)












Property, plant and equipment – net

12,232



8,156



4,076





Long-term receivables – trade and other

1,149



294



181



674


1,2

Long-term receivables – finance

12,209





12,900



(691)


2

Noncurrent deferred and refundable income taxes

1,440



1,979



101



(640)


4

Intangible assets

1,363



1,363







Goodwill

6,304



6,304







Other assets

3,510



2,887



1,815



(1,192)


5

Total assets

$

76,741



$

44,804



$

34,127



$

(2,190)












Liabilities









Current liabilities:









Short-term borrowings

$

2,660



$



$

2,660



$



Short-term borrowings with consolidated companies









Accounts payable

5,193



5,174



187



(168)


6

Accrued expenses

3,510



3,131



379





Accrued wages, salaries and employee benefits

1,069



1,055



14





Customer advances

1,209



1,209







Dividends payable









Other current liabilities

1,978



1,509



666



(197)


4,7

Long-term debt due within one year

9,359



1,397



7,962





Total current liabilities

24,978



13,475



11,868



(365)












Long-term debt due after one year

26,107



9,757



16,365



(15)


8

Liability for postemployment benefits

6,254



6,253



1





Other liabilities

4,408



3,739



1,384



(715)


4

Total liabilities

61,747



33,224



29,618



(1,095)












Shareholders' equity









Common stock

6,204



6,204



919



(919)


9

Treasury stock

(25,315)



(25,315)







Profit employed in the business

35,508



31,285



4,214



9


9

Accumulated other comprehensive income (loss)

(1,448)



(636)



(812)





Noncontrolling interests

45



42



188



(185)


9

Total shareholders' equity

14,994



11,580



4,509



(1,095)



Total liabilities and shareholders' equity

$

76,741



$

44,804



$

34,127



$

(2,190)





1

Elimination of receivables between ME&T and Financial Products.

2

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

3

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

4

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

5

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

6

Elimination of payables between ME&T and Financial Products.

7

Elimination of prepaid insurance in Financial Products' other liabilities.

8

Elimination of debt between ME&T and Financial Products.

9

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


 

Caterpillar Inc.

Supplemental Data for Financial Position

At December 31, 2019

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,
Energy &
Transportation


Financial
Products


Consolidating
Adjustments


Assets









Current assets:









Cash and short-term investments

$

8,284



$

7,299



$

985



$



Receivables – trade and other

8,568



3,737



451



4,380


1,2

Receivables – finance

9,336





14,489



(5,153)


2

Prepaid expenses and other current assets

1,739



1,290



529



(80)


3

Inventories

11,266



11,266







Total current assets

39,193



23,592



16,454



(853)












Property, plant and equipment – net

12,904



8,606



4,298





Long-term receivables – trade and other

1,193



348



152



693


1,2

Long-term receivables – finance

12,651





13,354



(703)


2

Noncurrent deferred and refundable income taxes

1,411



2,002



117



(708)


4

Intangible assets

1,565



1,565







Goodwill

6,196



6,196







Other assets

3,340



2,953



1,572



(1,185)


5

Total assets

$

78,453



$

45,262



$

35,947



$

(2,756)












Liabilities









Current liabilities:









Short-term borrowings

$

5,166



$

5



$

5,161



$



Short-term borrowings with consolidated companies





600



(600)


6

Accounts payable

5,957



5,918



212



(173)


7

Accrued expenses

3,750



3,415



335





Accrued wages, salaries and employee benefits

1,629



1,580



49





Customer advances

1,187



1,187







Dividends payable

567



567







Other current liabilities

2,155



1,689



566



(100)


4,8

Long-term debt due within one year

6,210



16



6,194





Total current liabilities

26,621



14,377



13,117



(873)












Long-term debt due after one year

26,281



9,151



17,140



(10)


6

Liability for postemployment benefits

6,599



6,599







Other liabilities

4,323



3,681



1,430



(788)


4

Total liabilities

63,824



33,808



31,687



(1,671)












Shareholders' equity









Common stock

5,935



5,935



919



(919)


9

Treasury stock

(24,217)



(24,217)







Profit employed in the business

34,437



30,434



3,997



6


9

Accumulated other comprehensive income (loss)

(1,567)



(739)



(828)





Noncontrolling interests

41



41



172



(172)


9

Total shareholders' equity

14,629



11,454



4,260



(1,085)



Total liabilities and shareholders' equity

$

78,453



$

45,262



$

35,947



$

(2,756)





1

Elimination of receivables between ME&T and Financial Products.

2

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

3

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

4

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

5

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

6

Elimination of debt between ME&T and Financial Products.

7

Elimination of payables between ME&T and Financial Products.

8

Elimination of prepaid insurance in Financial Products' other liabilities.

9

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



 

Caterpillar Inc.

Supplemental Data for Cash Flow

For the Nine Months Ended September 30, 2020

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,
Energy &
Transportation


Financial
Products


Consolidating
Adjustments


Cash flow from operating activities:









Profit of consolidated and affiliated companies

$

2,223



$

1,990



$

263



$

(30)


1, 5

Adjustments for non-cash items:









Depreciation and amortization

1,815



1,217



598





Net gain on remeasurement of pension obligations

(55)



(55)







Provision (benefit) for deferred income taxes

(38)



(5)



(33)





Other

919



494



167



258


2

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









Receivables – trade and other

1,473



616



(54)



911


2, 3

Inventories

(139)



(130)





(9)


2

Accounts payable

(596)



(599)



(6)



9


2

Accrued expenses

(286)



(314)



28





Accrued wages, salaries and employee benefits

(547)



(512)



(35)





Customer advances

13



13







Other assets – net

(15)



(136)



26



95


2

Other liabilities – net

(512)



(514)



83



(81)


2

Net cash provided by (used for) operating activities

4,255



2,065



1,037



1,153



Cash flow from investing activities:









Capital expenditures – excluding equipment leased to others

(686)



(687)



(11)



12


2

Expenditures for equipment leased to others

(805)



2



(823)



16


2

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

550



119



451



(20)


2

Additions to finance receivables

(9,278)





(10,234)



956


3

Collections of finance receivables

9,656





10,822



(1,166)


3

Net intercompany purchased receivables





971



(971)


3

Proceeds from sale of finance receivables

37





37





Net intercompany borrowings



599



6



(605)


4

Investments and acquisitions (net of cash acquired)

(93)



(93)







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

13



13







Proceeds from sale of securities

239



17



222





Investments in securities

(512)



(15)



(497)





Other – net

(80)



(21)



(59)





Net cash provided by (used for) investing activities

(959)



(66)



885



(1,778)



Cash flow from financing activities:









Dividends paid

(1,683)



(1,683)



(20)



20


5

Common stock issued, including treasury shares reissued

110



110







Common shares repurchased

(1,130)



(1,130)







Net intercompany borrowings



(6)



(599)



605


4

Proceeds from debt issued > 90 days

9,418



1,991



7,427





Payments on debt > 90 days

(6,789)



(18)



(6,771)





Short-term borrowings – net < 90 days

(2,138)



(5)



(2,133)





Other – net

(1)



(1)







Net cash provided by (used for) financing activities

(2,213)



(742)



(2,096)



625



Effect of exchange rate changes on cash

(56)



(47)



(9)





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

1,027



1,210



(183)





Cash and short-term investments and restricted cash at beginning of period

8,292



7,302



990





Cash and short-term investments and restricted cash at end of period

$

9,319



$

8,512



$

807



$





1

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

2

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

3

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

4

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

5

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

 

Caterpillar Inc.

Supplemental Data for Cash Flow

For the Nine Months Ended September 30, 2019

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,
Energy &
Transportation


Financial
Products


Consolidating
Adjustments


Cash flow from operating activities:









Profit of consolidated and affiliated companies

$

4,997



$

4,574



$

439



$

(16)


1

Adjustments for non-cash items:









Depreciation and amortization

1,933



1,283



650





Provision (benefit) for deferred income taxes

(13)



9



(22)





Other

627



379



(111)



359


2

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









Receivables – trade and other

427



125



(16)



318


2, 3

Inventories

(676)



(702)





26


2

Accounts payable

(669)



(651)



6



(24)


2

Accrued expenses

114



105



11



(2)


2

Accrued wages, salaries and employee benefits

(858)



(865)



7





Customer advances

169



171





(2)


2

Other assets – net

19



(66)



63



22


2

Other liabilities – net

(1,592)



(1,730)



150



(12)


2

Net cash provided by (used for) operating activities

4,478



2,632



1,177



669



Cash flow from investing activities:









Capital expenditures – excluding equipment leased to others

(723)



(709)



(14)





Expenditures for equipment leased to others

(1,133)



(21)



(1,151)



39


2

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

812



149



766



(103)


2

Additions to finance receivables

(9,453)





(10,633)



1,180


3

Collections of finance receivables

9,144





10,166



(1,022)


3

Net intercompany purchased receivables





763



(763)


3

Proceeds from sale of finance receivables

183





183





Net intercompany borrowings



721



1



(722)


4

Investments and acquisitions (net of cash acquired)

(6)



(6)







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

3



3







Proceeds from sale of securities

281



16



265





Investments in securities

(425)



(16)



(409)





Other – net

(37)



1



(38)





Net cash provided by (used for) investing activities

(1,354)



138



(101)



(1,391)



Cash flow from financing activities:









Dividends paid

(1,564)



(1,564)







Common stock issued, including treasury shares reissued

59



59







Common shares repurchased

(3,283)



(3,283)







Net intercompany borrowings



(1)



(721)



722


4

Proceeds from debt issued > 90 days

8,827



1,479



7,348





Payments on debt > 90 days

(6,062)



(8)



(6,054)





Short-term borrowings – net < 90 days

(1,006)





(1,006)





Other – net

(2)



(2)







Net cash provided by (used for) financing activities

(3,031)



(3,320)



(433)



722



Effect of exchange rate changes on cash

(47)



(38)



(9)





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

46



(588)



634





Cash and short-term investments and restricted cash at beginning of period

7,890



6,994



896





Cash and short-term investments and restricted cash at end of period

$

7,936



$

6,406



$

1,530



$





1

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

2

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

3

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

4

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

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/caterpillar-reports-third-quarter-2020-results-301160388.html

SOURCE Caterpillar Inc.

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