Caterpillar Reports Second-Quarter 2020 Results

|Jul 31|magazine120 min read

DEERFIELD, Ill., July 31, 2020 /PRNewswire/ --

  • Second-quarter sales and revenues decreased 31%; profit per share declined 70%
  • Strong balance sheet; $8.8 billion of enterprise cash

 



Second Quarter

($ in billions except profit per share)


2020

2019

Sales and Revenues


$10.0

$14.4

Profit Per Share


$0.84

$2.83

Caterpillar Inc. (NYSE: CAT) today announced second-quarter 2020 sales and revenues of $10.0 billion, a 31% decrease compared with $14.4 billion in the second quarter of 2019. The decline was due to lower sales volume driven by lower end-user demand and the impact from changes in dealer inventories. Dealers decreased machine and engine inventories about $1.4 billion during the second quarter of 2020, compared with an increase of about $500 million during the second quarter of 2019.

Second-quarter 2020 profit per share was $0.84, compared with $2.83 profit per share in the second quarter of 2019. Profit per share in the second quarter of 2020 included pre-tax remeasurement losses of $122 million, or $0.19 per share, resulting from the settlements of pension obligations.

Operating profit margin was 7.8% for the second quarter of 2020, compared with 15.3% for the second quarter of 2019.

For the first half of 2020, enterprise operating cash flow was $2.5 billion. Caterpillar ended the second quarter with $8.8 billion of enterprise cash and $18.5 billion of available liquidity sources. In July, Cat Financial issued $1.5 billion of new three-year and 18-month medium-term notes to supplement its liquidity position.

Response to COVID-19 and Global Business Conditions

"I am proud of the global team's continued focus on safety while executing our strategy and serving our customers," said Caterpillar Chairman and CEO Jim Umpleby. "In the second quarter, our employees and dealers remained dedicated to providing the essential products and services the world needs under very challenging conditions."

Operational Status

Caterpillar continues to implement safeguards in its facilities to protect team members, including increased frequency of cleaning and disinfecting, social distancing practices and other measures consistent with specific regulatory requirements and guidance from health authorities.

As of mid-July 2020, globally and across Caterpillar's three primary segments, nearly all of the company's primary production facilities continued to operate. This continues to fluctuate as conditions warrant, including the pace of economic recovery and the potential for additional COVID-related temporary shutdowns.

The company has continued to take actions to reduce costs and prioritize its spending to provide for investment in services and expanded offerings, key elements of its strategy for profitable growth, which was introduced in 2017.

Outlook

Caterpillar's financial results for the remainder of 2020 will be impacted by continued global economic uncertainty due to the COVID-19 pandemic. As such, Caterpillar withdrew its earnings guidance on March 26 and is not providing a financial outlook for 2020 at this time.

"We are well positioned for these challenging times because of the successful execution of our strategy," said Umpleby. "We are focused on employee safety and maintaining a competitive and flexible cost structure while continuing to invest in services and expanded offerings to better serve our customers. We will adjust production as conditions warrant and are prepared to respond quickly to any positive or negative changes in customer demand."

CONSOLIDATED RESULTS

Consolidated Sales and Revenues
Consolidated Sales and Revenues Comparison 

Second Quarter 2020 vs. Second Quarter 2019 

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

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

Total sales and revenues for the second quarter of 2020 were $9.997 billion, a decrease of $4.435 billion, or 31%, compared with $14.432 billion in the second quarter of 2019. The decline was due to lower sales volume driven by lower end-user demand and the impact from changes in dealer inventories. Dealers decreased machine and engine inventories about $1.4 billion during the second quarter of 2020, compared with an increase of about $500 million during the second quarter of 2019. The changes in dealer inventories came primarily in Construction Industries and Resource Industries.

Unfavorable price realization also contributed to the sales decline due to the geographic mix of sales and competitive market conditions in China. Sales were lower across all regions and in the three primary segments.

Sales and Revenues by Segment

(Millions of dollars)

Second
Quarter
2019


Sales

Volume


Price

Realization


Currency


Inter-
Segment /
Other


Second
Quarter
2020


$

Change


%

Change

















Construction Industries

$

6,467



$

(2,075)



$

(258)



$

(81)



$

(5)



$

4,048



$

(2,419)



(37%)

Resource Industries

2,819



(933)



(23)



(45)



8



1,826



(993)



(35%)

Energy & Transportation

5,486



(942)



23



(64)



(354)



4,149



(1,337)



(24%)

All Other Segment

125



(5)





(1)



(4)



115



(10)



(8%)

Corporate Items and Eliminations

(1,226)



43



(1)



1



355



(828)



398




Machinery, Energy & Transportation

13,671



(3,912)



(259)



(190)





9,310



(4,361)



(32%)

















Financial Products Segment

873









(110)



763



(110)



(13%)

Corporate Items and Eliminations

(112)









36



(76)



36




Financial Products Revenues

761









(74)



687



(74)



(10%)

















Consolidated Sales and Revenues

$

14,432



$

(3,912)



$

(259)



$

(190)



$

(74)



$

9,997



$

(4,435)



(31%)

















 

Sales and Revenues by Geographic Region


North America


Latin America


EAME


Asia/Pacific


External Sales
and Revenues


Inter-Segment


Total Sales
and Revenues

(Millions of dollars)

$


% Chg


$


% Chg


$


% Chg


$


% Chg


$


% Chg


$


% Chg


$


% Chg

Second Quarter 2020




























Construction Industries

$

1,604



(54%)


$

212



(46%)


$

933



(16%)


$

1,283



(10%)


$

4,032



(37%)


$

16



(24%)


$

4,048



(37%)

Resource Industries

507



(52%)


270



(40%)


379



(15%)


554



(27%)


1,710



(37%)


116



7%


1,826



(35%)

Energy & Transportation

1,816



(21%)


197



(39%)


929



(20%)


599



(19%)


3,541



(22%)


608



(37%)


4,149



(24%)

All Other Segment

7



(50%)


1



—%


5



25%


15



—%


28



(18%)


87



(4%)


115



(8%)

Corporate Items and Eliminations

2





(1)









(2)





(1)





(827)





(828)




Machinery, Energy & Transportation

3,936



(42%)


679



(42%)


2,246



(17%)


2,449



(17%)


9,310



(32%)




—%


9,310



(32%)





























Financial Products Segment

493



(12%)


60



(21%)


96



(6%)


114



(14%)


763



(13%)




—%


763



(13%)

Corporate Items and Eliminations

(43)





(9)





(9)





(15)





(76)









(76)




Financial Products Revenues

450



(8%)


51



(22%)


87



(6%)


99



(12%)


687



(10%)




—%


687



(10%)





























Consolidated Sales and Revenues

$

4,386



(40%)


$

730



(41%)


$

2,333



(17%)


$

2,548



(17%)


$

9,997



(31%)


$



—%


$

9,997



(31%)





























Second Quarter 2019




























Construction Industries

$

3,513





$

392





$

1,108





$

1,433





$

6,446





$

21





$

6,467




Resource Industries

1,058





448





446





759





2,711





108





2,819




Energy & Transportation

2,297





325





1,160





742





4,524





962





5,486




All Other Segment

14





1





4





15





34





91





125




Corporate Items and Eliminations

(39)





(2)





(5)





2





(44)





(1,182)





(1,226)




Machinery, Energy & Transportation

6,843





1,164





2,713





2,951





13,671









13,671
































Financial Products Segment

563





76





102





132





873









873




Corporate Items and Eliminations

(72)





(11)





(9)





(20)





(112)









(112)




Financial Products Revenues

491





65





93





112





761









761
































Consolidated Sales and Revenues

$

7,334





$

1,229





$

2,806





$

3,063





$

14,432





$





$

14,432
































Consolidated Operating Profit

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

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

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

Operating profit for the second quarter of 2020 was $784 million, a decrease of $1.429 billion, or 65%, compared with $2.213 billion in the second quarter of 2019. The decrease was due to lower sales volume and unfavorable price realization, partially offset by favorable manufacturing costs and lower selling, general and administrative (SG&A) and research and development (R&D) expenses.

Favorable manufacturing costs were mostly driven by lower period manufacturing costs. Both period manufacturing costs and SG&A/R&D expenses benefited from reduced short-term incentive compensation expense and other cost reductions related to lower sales volumes.

Profit (Loss) by Segment

(Millions of dollars)

Second
Quarter
2020


Second
Quarter
2019


$

Change


%

 Change

Construction Industries

$

518



$

1,247



$

(729)



(58%)


Resource Industries

152



481



(329)



(68%)


Energy & Transportation

624



886



(262)



(30%)


All Other Segment

(3)



11



(14)



n/a


Corporate Items and Eliminations

(542)



(441)



(101)




Machinery, Energy & Transportation

749



2,184



(1,435)



(66%)













Financial Products Segment

148



193



(45)



(23%)


Corporate Items and Eliminations

(38)



(50)



12




Financial Products

110



143



(33)



(23%)













Consolidating Adjustments

(75)



(114)



39
















Consolidated Operating Profit

$

784



$

2,213



$

(1,429)



(65%)








Other Profit/Loss and Tax Items

  • Other income (expense) in the second quarter of 2020 was income of $29 million, compared with income of $68 million in the second quarter of 2019. The change was primarily due to the unfavorable impact of pension and other postemployment benefit (OPEB) plans, including $122 million of remeasurement losses resulting from the settlements of pension obligations, partially offset by favorable impacts from foreign currency exchange gains (losses), primarily due to the Australian dollar.
  • The provision for income taxes for the second quarter of 2020 reflected an estimated annual tax rate of 31%, excluding a $21 million discrete tax benefit related to the $122 million of remeasurement losses resulting from the settlements of pension obligations. The tax rate was 26% for the second quarter of 2019. The increase in the estimated annual tax rate was primarily related to changes in the expected geographic mix of profits from a tax perspective for 2020, including the impact of U.S. tax on non-U.S. earnings as a result of U.S. tax reform.

 

CONSTRUCTION INDUSTRIES

(Millions of dollars)













Segment Sales
















Second
Quarter 2019


Sales
Volume


Price
Realization


Currency


Inter-
Segment


Second
Quarter 2020


$

 Change


%

 Change

Total Sales


$

6,467



$

(2,075)



$

(258)



$

(81)



$

(5)



$

4,048



$

(2,419)



(37%)



















Sales by Geographic Region











Second
Quarter 2020


Second
Quarter 2019


$

Change


%

Change









North America


$

1,604



$

3,513



$

(1,909)



(54%)










Latin America


212



392



(180)



(46%)










EAME


933



1,108



(175)



(16%)










Asia/Pacific


1,283



1,433



(150)



(10%)










External Sales


4,032



6,446



(2,414)



(37%)










Inter-segment


16



21



(5)



(24%)










Total Sales


$

4,048



$

6,467



$

(2,419)



(37%)



























Segment Profit











Second
Quarter 2020


Second
Quarter 2019


Change


%

Change









Segment Profit


$

518



$

1,247



$

(729)



(58%)










Segment Profit Margin


12.8%



19.3%



(6.5 pts)





























































Construction Industries' total sales were $4.048 billion in the second quarter of 2020, a decrease of $2.419 billion, or 37%, compared with $6.467 billion in the second quarter of 2019. The decrease was due to lower sales volume, driven by lower end-user demand and the impact from changes in dealer inventories. In all regions, dealers decreased inventories during the second quarter of 2020, compared with an increase during the second quarter of 2019. Unfavorable price realization also contributed to the sales decline due to the geographic mix of sales and competitive market conditions in China.

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

Construction Industries' profit was $518 million in the second quarter of 2020, a decrease of $729 million, or 58%, compared with $1.247 billion in the second quarter of 2019. The decrease was mainly due to lower sales volume and unfavorable price realization, partially offset by favorable manufacturing costs and lower SG&A/R&D expenses. Favorable manufacturing costs were primarily attributed to lower period manufacturing costs. Both period manufacturing costs and SG&A/R&D expenses benefited from reduced short-term incentive compensation expense and other cost reductions related to lower sales volumes.

RESOURCE INDUSTRIES

(Millions of dollars)













Segment Sales














Second
Quarter 2019


Sales
Volume


Price
Realization


Currency


Inter-
Segment


Second
Quarter 2020


$

 Change


%

 Change

Total Sales


$

2,819



$

(933)



$

(23)



$

(45)



$

8



$

1,826



$

(993)



(35)%



















Sales by Geographic Region











Second
Quarter 2020


Second
Quarter 2019


$

Change


%

Change









North America


$

507



$

1,058



$

(551)



(52%)










Latin America


270



448



(178)



(40%)










EAME


379



446



(67)



(15%)










Asia/Pacific


554



759



(205)



(27%)










External Sales


1,710



2,711



(1,001)



(37%)










Inter-segment


116



108



8



7%










Total Sales


$

1,826



$

2,819



$

(993)



(35%)



























Segment Profit











Second
Quarter 2020


Second
Quarter 2019


Change


%

Change









Segment Profit


$

152



$

481



$

(329)



(68%)










Segment Profit Margin


8.3%



17.1%



(8.8 pts)





























































Resource Industries' total sales were $1.826 billion in the second quarter of 2020, a decrease of $993 million, or 35%, compared with $2.819 billion in the second quarter of 2019. The decrease was due to lower sales volume, driven by changes in dealer inventories and lower end-user demand. Dealers decreased inventories during the second quarter of 2020, compared with an increase during the second quarter of 2019. Lower end-user demand was primarily driven by equipment supporting non-residential construction and quarry and aggregates. Mining equipment end-user demand was down in the quarter, though to a lesser extent. The company's mining customers faced production disruptions impacting machine utilization and aftermarket parts demand.

Resource Industries' profit was $152 million in the second quarter of 2020, a decrease of $329 million, or 68%, compared with $481 million in the second quarter of 2019. The decrease was mainly because of lower sales volume, partially offset by favorable manufacturing costs. Favorable manufacturing costs were mostly due to lower period manufacturing costs driven by lower short-term incentive compensation expense, other cost-reduction actions implemented in response to lower sales volumes and the benefits of prior restructuring programs.

ENERGY & TRANSPORTATION

(Millions of dollars)













Segment Sales

















Second
Quarter 2019


Sales
Volume


Price
Realization


Currency


Inter-
Segment


Second
Quarter 2020


$

 Change


%

 Change

Total Sales


$

5,486



$

(942)



$

23



$

(64)



$

(354)



$

4,149



$

(1,337)



(24%)



















Sales by Application











Second
Quarter 2020


Second
Quarter 2019


$

Change


%

Change









Oil and Gas


$

1,027



$

1,305



$

(278)



(21%)










Power Generation


895



1,021



(126)



(12%)










Industrial


678



957



(279)



(29%)










Transportation


941



1,241



(300)



(24%)










External Sales


3,541



4,524



(983)



(22%)










Inter-segment


608



962



(354)



(37%)










Total Sales


$

4,149



$

5,486



$

(1,337)



(24%)



























Segment Profit











Second
Quarter 2020


Second
Quarter 2019


Change


%

Change









Segment Profit


$

624



$

886



$

(262)



(30%)










Segment Profit Margin


15.0%



16.2%



(1.2 pts)





























































Energy & Transportation's total sales were $4.149 billion in the second quarter of 2020, a decrease of $1.337 billion, or 24%, compared with $5.486 billion in the second quarter of 2019. Sales declined across all applications and inter-segment engine sales.

  • Oil and Gas – Sales decreased mainly due to lower demand in North America for reciprocating engines used in gas compression and decreased sales of engine aftermarket parts, partially offset by higher sales of turbines and turbine-related services.
  • Power Generation – Sales decreased primarily due to lower sales volume in small reciprocating engine applications and engine aftermarket parts.
  • Industrial – Sales decreased due to lower demand across all regions.
  • Transportation – Sales declined in rail due to lower deliveries of locomotives and related services and in marine applications, primarily in EAME and Asia/Pacific.

Energy & Transportation's profit was $624 million in the second quarter of 2020, a decrease of $262 million, or 30%, compared with $886 million in the second quarter of 2019. The decrease was due to lower sales volume, partially offset by lower manufacturing costs and SG&A/R&D expenses. Manufacturing costs and SG&A/R&D expenses were both impacted by a reduction in short-term incentive compensation expense and other cost reductions related to lower sales volumes.

FINANCIAL PRODUCTS SEGMENT

(Millions of dollars)

Revenues by Geographic Region



Second
Quarter 2020


Second
Quarter 2019


$

Change


%

Change

North America


$

493



$

563



$

(70)



(12%)


Latin America


60



76



(16)



(21%)


EAME


96



102



(6)



(6%)


Asia/Pacific


114



132



(18)



(14%)


Total Revenues


$

763



$

873



$

(110)



(13%)











Segment Profit



Second
Quarter 2020


Second
Quarter 2019


Change


%

Change

Segment Profit


$

148



$

193



$

(45)



(23%)











Financial Products' segment revenues were $763 million in the second quarter of 2020, a decrease of $110 million, or 13%, from the second quarter of 2019. The decrease was primarily because of lower average financing rates and lower average earning assets across all regions.

Financial Products' segment profit was $148 million in the second quarter of 2020, compared with $193 million in the second quarter of 2019. The decrease was due to lower net yield on average earning assets, lower average earning assets and higher provision for credit losses at Cat Financial. These unfavorable impacts were partially offset by a reduction in SG&A expenses primarily due to lower short-term incentive compensation and employee benefit expenses and a favorable impact from equity securities in Insurance Services.

At the end of the second quarter of 2020, past dues at Cat Financial were 3.74%, compared with 3.38% at the end of the second quarter of 2019. Past dues increased primarily due to the impact of the COVID-19 pandemic. Write-offs, net of recoveries, were $30 million for the second quarter of 2020, compared with $74 million for the second quarter of 2019. As of June 30, 2020, Cat Financial's allowance for credit losses totaled $515 million, or 1.92% of finance receivables, compared with $457 million, or 1.69% of finance receivables at March 31, 2020. The increase in allowance for credit losses was driven in part by expectations of the lingering impact from COVID-19. The allowance for credit losses at year-end 2019 was $424 million, or 1.50% of finance receivables.

Corporate Items and Eliminations

Expense for corporate items and eliminations was $580 million in the second quarter of 2020, an increase of $89 million from the second quarter of 2019, primarily due to an unfavorable change in fair value adjustments related to deferred compensation plans and segment reporting methodology differences.

Notes

I. Glossary of terms is included on the Caterpillar website at https://investors.caterpillar.com/overview/default.aspx 
II. End-user demand is demonstrated by the company's Rolling 3 Month Retail Sales Statistics filed in a Form 8-K on Friday, July 31, 2020.
III. Information on non-GAAP financial measures is included in the appendix on page 12.

IV. Some amounts within this report are rounded to the millions or billions and may not add.
V. Caterpillar will conduct a teleconference and live webcast, with a slide presentation, beginning at 7:30 a.m. Central Time on Friday, July 31, 2020, to discuss its 2020 second-quarter results. The accompanying slides will be available before the webcast on the Caterpillar website at https://investors.caterpillar.com/events-presentations/default.aspx.

About Caterpillar

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

Caterpillar's latest financial results are also available online:

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

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

Forward-Looking Statements

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

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

APPENDIX

NON-GAAP FINANCIAL MEASURES

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

Adjusted Profit Per Share

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

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


Second Quarter


2020


2019

Profit per share

$

0.84



$

2.83


Per share remeasurement losses of pension obligations1

$

0.19



$


Adjusted profit per share

$

1.03



$

2.83








1 At statutory tax rates.

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


Machinery, Energy & Transportation

Caterpillar defines Machinery, Energy & Transportation as it is presented in the supplemental data as Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis. Machinery, Energy & Transportation information relates to the design, manufacture and marketing of Caterpillar products. Financial Products' information relates to the financing to customers and dealers for the purchase and lease of Caterpillar and other equipment. The nature of these businesses is different, especially with regard to the financial position and cash flow items. Caterpillar management utilizes this presentation internally to highlight these differences. The company also believes this presentation will assist readers in understanding Caterpillar's business. Pages 13-23 reconcile Machinery, Energy & Transportation with Financial Products on the equity basis to Caterpillar Inc. consolidated financial information.

 

Caterpillar Inc.

Condensed Consolidated Statement of Results of Operations

(Unaudited)

(Dollars in millions except per share data)



Three Months Ended

June 30,


Six Months Ended

June 30,


2020


2019


2020


2019

Sales and revenues:








Sales of Machinery, Energy & Transportation

$

9,310



$

13,671



$

19,224



$

26,395


Revenues of Financial Products

687



761



1,408



1,503


Total sales and revenues

9,997



14,432



20,632



27,898










Operating costs:








Cost of goods sold

7,113



9,941



14,379



18,944


Selling, general and administrative expenses

1,179



1,309



2,300



2,628


Research and development expenses

341



441



697



876


Interest expense of Financial Products

149



192



324



382


Other operating (income) expenses

431



336



744



648


Total operating costs

9,213



12,219



18,444



23,478










Operating profit

784



2,213



2,188



4,420










Interest expense excluding Financial Products

135



103



248



206


Other income (expense)

29



68



251



228










Consolidated profit before taxes

678



2,178



2,191



4,442










Provision (benefit) for income taxes

227



565



652



952


Profit of consolidated companies

451



1,613



1,539



3,490










Equity in profit (loss) of unconsolidated affiliated companies

8



6



13



13










Profit of consolidated and affiliated companies

459



1,619



1,552



3,503










Less: Profit (loss) attributable to noncontrolling interests

1



(1)



2



2










Profit 1

$

458



$

1,620



$

1,550



$

3,501


















Profit per common share

$

0.84



$

2.85



$

2.85



$

6.14


Profit per common share — diluted 2

$

0.84



$

2.83



$

2.83



$

6.08










Weighted-average common shares outstanding (millions)








– Basic

541.5



567.8



544.5



569.9


– Diluted 2

544.5



573.1



548.2



575.8












1

Profit attributable to common shareholders.

2

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

 

Caterpillar Inc

Condensed Consolidated Statement of Financial Position

(Unaudited)

(Millions of dollars)



June 30,

2020


December 31,

2019

Assets




Current assets:




Cash and short-term investments

$

8,784



$

8,284


Receivables – trade and other

7,134



8,568


Receivables – finance

8,781



9,336


Prepaid expenses and other current assets

1,792



1,739


Inventories

11,371



11,266


Total current assets

37,862



39,193






Property, plant and equipment – net

12,357



12,904


Long-term receivables – trade and other

1,167



1,193


Long-term receivables – finance

12,560



12,651


Noncurrent deferred and refundable income taxes

1,459



1,411


Intangible assets

1,420



1,565


Goodwill

6,192



6,196


Other assets

3,549



3,340


Total assets

$

76,566



$

78,453






Liabilities




Current liabilities:




Short-term borrowings:




-- Machinery, Energy & Transportation

$

13



$

5


-- Financial Products

4,301



5,161


Accounts payable

5,083



5,957


Accrued expenses

3,547



3,750


Accrued wages, salaries and employee benefits

958



1,629


Customer advances

1,227



1,187


Dividends payable

558



567


Other current liabilities

2,143



2,155


Long-term debt due within one year:




-- Machinery, Energy & Transportation

1,395



16


-- Financial Products

6,006



6,194


Total current liabilities

25,231



26,621






Long-term debt due after one year:




-- Machinery, Energy & Transportation

9,729



9,141


-- Financial Products

17,178



17,140


Liability for postemployment benefits

6,285



6,599


Other liabilities

4,366



4,323


Total liabilities

62,789



63,824






Shareholders' equity




Common stock

6,120



5,935


Treasury stock

(25,412)



(24,217)


Profit employed in the business

34,841



34,437


Accumulated other comprehensive income (loss)

(1,815)



(1,567)


Noncontrolling interests

43



41


Total shareholders' equity

13,777



14,629


Total liabilities and shareholders' equity

$

76,566



$

78,453


 

Caterpillar Inc.

Condensed Consolidated Statement of Cash Flow

(Unaudited)

(Millions of dollars)



Six Months Ended

June 30,


2020


2019

Cash flow from operating activities:




Profit of consolidated and affiliated companies

$

1,552



$

3,503


Adjustments for non-cash items:




Depreciation and amortization

1,222



1,288


Net gain on remeasurement of pension obligations

(132)




Provision (benefit) for deferred income taxes

(32)



(34)


Other

674



440


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




Receivables – trade and other

1,176



(166)


Inventories

(145)



(487)


Accounts payable

(655)



134


Accrued expenses

(253)



151


Accrued wages, salaries and employee benefits

(648)



(979)


Customer advances

(2)



14


Other assets – net

(7)



(120)


Other liabilities – net

(229)



(35)


Net cash provided by (used for) operating activities

2,521



3,709


Cash flow from investing activities:




Capital expenditures – excluding equipment leased to others

(472)



(479)


Expenditures for equipment leased to others

(526)



(746)


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

382



422


Additions to finance receivables

(6,712)



(6,181)


Collections of finance receivables

6,801



5,902


Proceeds from sale of finance receivables

31



119


Investments and acquisitions (net of cash acquired)

(49)



(3)


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

13




Proceeds from sale of securities

151



170


Investments in securities

(369)



(243)


Other – net

7



(40)


Net cash provided by (used for) investing activities

(743)



(1,079)


Cash flow from financing activities:




Dividends paid

(1,125)



(986)


Common stock issued, including treasury shares reissued

(10)



39


Common shares repurchased

(1,130)



(2,105)


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

6,159



5,340


Payments on debt (original maturities greater than three months)

(4,629)



(4,901)


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

(477)



(436)


Other – net

(1)



(2)


Net cash provided by (used for) financing activities

(1,213)



(3,051)


Effect of exchange rate changes on cash

(66)



(10)


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

499



(431)


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

8,292



7,890


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

$

8,791



$

7,459



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

 

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Three Months Ended June 30, 2020

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,

Energy &

Transportation1


Financial

Products


Consolidating

Adjustments


Sales and revenues:









Sales of Machinery, Energy & Transportation

$

9,310



$

9,310



$



$



Revenues of Financial Products

687





780



(93)


2

Total sales and revenues

9,997



9,310



780



(93)












Operating costs:









Cost of goods sold

7,113



7,114





(1)


3

Selling, general and administrative expenses

1,179



984



201



(6)


3

Research and development expenses

341



341







Interest expense of Financial Products

149





149





Other operating (income) expenses

431



122



320



(11)


3

Total operating costs

9,213



8,561



670



(18)












Operating profit

784



749



110



(75)












Interest expense excluding Financial Products

135



135







Other income (expense)

29



(77)



31



75


4










Consolidated profit before taxes

678



537



141














Provision (benefit) for income taxes

227



190



37





Profit of consolidated companies

451



347



104














Equity in profit (loss) of unconsolidated affiliated   companies

8



8







Equity in profit of Financial Products' subsidiaries



99





(99)


5










Profit of consolidated and affiliated companies

459



454



104



(99)












Less: Profit (loss) attributable to noncontrolling interests

1



(4)



5














Profit 6

$

458



$

458



$

99



$

(99)





1

Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis.

2

Elimination of Financial Products' revenues earned from Machinery, Energy & Transportation.

3

Elimination of net expenses recorded by Machinery, Energy & Transportation paid to Financial Products.

4

Elimination of discount recorded by Machinery, Energy & Transportation on receivables sold to Financial Products and of interest earned between Machinery, Energy & Transportation and Financial Products.

5

Elimination of Financial Products' profit due to equity method of accounting.

6

Profit attributable to common shareholders.

 

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Three Months Ended June 30, 2019

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,

Energy &

Transportation1


Financial

Products


Consolidating

Adjustments


Sales and revenues:









Sales of Machinery, Energy & Transportation

$

13,671



$

13,671



$



$



Revenues of Financial Products

761





894



(133)


2

Total sales and revenues

14,432



13,671



894



(133)












Operating costs:









Cost of goods sold

9,941



9,943





(2)


3

Selling, general and administrative expenses

1,309



1,102



209



(2)


3

Research and development expenses

441



441







Interest expense of Financial Products

192





201



(9)


4

Other operating (income) expenses

336



1



341



(6)


3

Total operating costs

12,219



11,487



751



(19)












Operating profit

2,213



2,184



143



(114)












Interest expense excluding Financial Products

103



105





(2)


4

Other income (expense)

68



(63)



19



112


5










Consolidated profit before taxes

2,178



2,016



162














Provision (benefit) for income taxes

565



502



63





Profit of consolidated companies

1,613



1,514



99














Equity in profit (loss) of unconsolidated affiliated companies

6



6







Equity in profit of Financial Products' subsidiaries



94





(94)


6










Profit of consolidated and affiliated companies

1,619



1,614



99



(94)












Less: Profit (loss) attributable to noncontrolling interests

(1)



(6)



5














Profit 7

$

1,620



$

1,620



$

94



$

(94)




1

Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis.

2

Elimination of Financial Products' revenues earned from Machinery, Energy & Transportation.

3

Elimination of net expenses recorded by Machinery, Energy & Transportation paid to Financial Products.

4

Elimination of interest expense recorded between Financial Products and Machinery, Energy & Transportation.

5

Elimination of discount recorded by Machinery, Energy & Transportation on receivables sold to Financial Products and of interest earned between Machinery, Energy & Transportation and Financial Products.

6

Elimination of Financial Products' profit due to equity method of accounting.

7

Profit attributable to common shareholders.

 

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Six Months Ended June 30, 2020

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,

Energy &

Transportation1


Financial

Products


Consolidating

Adjustments


Sales and revenues:









Sales of Machinery, Energy & Transportation

$

19,224



$

19,224



$



$



Revenues of Financial Products

1,408





1,610



(202)


2

Total sales and revenues

20,632



19,224



1,610



(202)












Operating costs:









Cost of goods sold

14,379



14,381





(2)


3

Selling, general and administrative expenses

2,300



1,924



383



(7)


3

Research and development expenses

697



697







Interest expense of Financial Products

324





325



(1)


4

Other operating (income) expenses

744



132



640



(28)


3

Total operating costs

18,444



17,134



1,348



(38)












Operating profit

2,188



2,090



262



(164)












Interest expense excluding Financial Products

248



247





1


4

Other income (expense)

251



102



(16)



165


5










Consolidated profit before taxes

2,191



1,945



246














Provision (benefit) for income taxes

652



587



65





Profit of consolidated companies

1,539



1,358



181














Equity in profit (loss) of unconsolidated affiliated companies

13



13







Equity in profit of Financial Products' subsidiaries



172





(172)


6










Profit of consolidated and affiliated companies

1,552



1,543



181



(172)












Less: Profit (loss) attributable to noncontrolling interests

2



(7)



9














Profit 7

$

1,550



$

1,550



$

172



$

(172)




1

Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis.

2

Elimination of Financial Products' revenues earned from Machinery, Energy & Transportation.

3

Elimination of net expenses recorded by Machinery, Energy & Transportation paid to Financial Products.

4

Elimination of interest expense recorded between Financial Products and Machinery, Energy & Transportation.

5

Elimination of discount recorded by Machinery, Energy & Transportation on receivables sold to Financial Products and of interest earned between Machinery, Energy & Transportation and Financial Products.

6

Elimination of Financial Products' profit due to equity method of accounting.

7

Profit attributable to common shareholders.

 

Caterpillar Inc.

Supplemental Data for Results of Operations

For the Six Months Ended June 30, 2019

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,

Energy &

Transportation1


Financial

Products


Consolidating

Adjustments


Sales and revenues:









Sales of Machinery, Energy & Transportation

$

26,395



$

26,395



$



$



Revenues of Financial Products

1,503





1,764



(261)


2

Total sales and revenues

27,898



26,395



1,764



(261)












Operating costs:









Cost of goods sold

18,944



18,946





(2)


3

Selling, general and administrative expenses

2,628



2,229



401



(2)


3

Research and development expenses

876



876







Interest expense of Financial Products

382





401



(19)


4

Other operating (income) expenses

648



11



654



(17)


3

Total operating costs

23,478



22,062



1,456



(40)












Operating profit

4,420



4,333



308



(221)












Interest expense excluding Financial Products

206



215





(9)


4

Other income (expense)

228



(44)



60



212


5










Consolidated profit before taxes

4,442



4,074



368














Provision (benefit) for income taxes

952



837



115





Profit of consolidated companies

3,490



3,237



253














Equity in profit (loss) of unconsolidated affiliated companies

13



13







Equity in profit of Financial Products' subsidiaries



242





(242)


6










Profit of consolidated and affiliated companies

3,503



3,492



253



(242)












Less: Profit (loss) attributable to noncontrolling interests

2



(9)



11














Profit 7

$

3,501



$

3,501



$

242



$

(242)




1

Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis.

2

Elimination of Financial Products' revenues earned from Machinery, Energy & Transportation.

3

Elimination of net expenses recorded by Machinery, Energy & Transportation paid to Financial Products.

4

Elimination of interest expense recorded between Financial Products and Machinery, Energy & Transportation.

5

Elimination of discount recorded by Machinery, Energy & Transportation on receivables sold to Financial Products and of interest earned between Machinery, Energy & Transportation and Financial Products.

6

Elimination of Financial Products' profit due to equity method of accounting.

7

Profit attributable to common shareholders.

 

Caterpillar Inc.

Supplemental Data for Financial Position

At June 30, 2020

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,

Energy &

Transportation 1


Financial

Products


Consolidating

Adjustments


Assets









Current assets:









Cash and short-term investments

$

8,784



$

8,030



$

754



$



Receivables – trade and other

7,134



2,599



506



4,029


2,3

Receivables – finance

8,781





13,064



(4,283)


3

Prepaid expenses and other current assets

1,792



1,185



618



(11)


4

Inventories

11,371



11,371







Total current assets

37,862



23,185



14,942



(265)












Property, plant and equipment – net

12,357



8,250



4,107





Long-term receivables – trade and other

1,167



274



194



699


2,3

Long-term receivables – finance

12,560





13,277



(717)


3

Investments in Financial Products subsidiaries



4,257





(4,257)


5

Noncurrent deferred and refundable income taxes

1,459



1,990



106



(637)


6

Intangible assets

1,420



1,420







Goodwill

6,192



6,192







Other assets

3,549



1,880



1,766



(97)


7

Total assets

$

76,566



$

47,448



$

34,392



$

(5,274)












Liabilities









Current liabilities:









Short-term borrowings

$

4,314



$

13



$

4,301



$



Short-term borrowings with consolidated companies





99



(99)


8

Accounts payable

5,083



5,046



196



(159)


9

Accrued expenses

3,547



3,239



308





Accrued wages, salaries and employee benefits

958



943



15





Customer advances

1,227



1,227







Dividends payable

558



558







Other current liabilities

2,143



1,521



654



(32)


6,10

Long-term debt due within one year

7,401



1,395



6,006





Total current liabilities

25,231



13,942



11,579



(290)












Long-term debt due after one year

26,907



9,743



17,178



(14)


8

Liability for postemployment benefits

6,285



6,284



1





Other liabilities

4,366



3,702



1,377



(713)


6

Total liabilities

62,789



33,671



30,135



(1,017)












Shareholders' equity









Common stock

6,120



6,120



919



(919)


5

Treasury stock

(25,412)



(25,412)







Profit employed in the business

34,841



34,841



4,136



(4,136)


5

Accumulated other comprehensive income (loss)

(1,815)



(1,815)



(977)



977


5

Noncontrolling interests

43



43



179



(179)


5

Total shareholders' equity

13,777



13,777



4,257



(4,257)



Total liabilities and shareholders' equity

$

76,566



$

47,448



$

34,392



$

(5,274)




1

Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis.

2

Elimination of receivables between Machinery, Energy & Transportation and Financial Products.

3

Reclassification of Machinery, Energy & Transportation's trade receivables purchased by Financial Products and Financial Products' wholesale inventory receivables.

4

Elimination of Machinery, Energy & Transportation's insurance premiums that are prepaid to Financial Products.

5

Elimination of Financial Products' equity which is accounted for by Machinery, Energy & Transportation on the equity basis.

6

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

7

Elimination of other intercompany assets between Machinery, Energy & Transportation and Financial Products.

8

Elimination of debt between Machinery, Energy & Transportation and Financial Products.

9

Elimination of payables between Machinery, Energy & Transportation and Financial Products.

10

Elimination of prepaid insurance in Financial Products' other liabilities.

 

Caterpillar Inc.

Supplemental Data for Financial Position

At December 31, 2019

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,

Energy &

Transportation 1


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


2,3

Receivables – finance

9,336





14,489



(5,153)


3

Prepaid expenses and other current assets

1,739



1,290



529



(80)


4

Inventories

11,266



11,266







Total current assets

39,193



23,592



16,454



(853)












Property, plant and equipment – net

12,904



8,606



4,298





Long-term receivables – trade and other

1,193



348



152



693


2,3

Long-term receivables – finance

12,651





13,354



(703)


3

Investments in Financial Products subsidiaries



4,260





(4,260)


5

Noncurrent deferred and refundable income taxes

1,411



2,002



117



(708)


6

Intangible assets

1,565



1,565







Goodwill

6,196



6,196







Other assets

3,340



1,868



1,572



(100)


7

Total assets

$

78,453



$

48,437



$

35,947



$

(5,931)












Liabilities









Current liabilities:









Short-term borrowings

$

5,166



$

5



$

5,161



$



Short-term borrowings with consolidated companies





600



(600)


8

Accounts payable

5,957



5,918



212



(173)


9

Accrued expenses

3,750



3,415



335





Accrued wages, salaries and employee benefits

1,629



1,580



49





Customer advances

1,187



1,187







Dividends payable

567



567







Other current liabilities

2,155



1,689



566



(100)


6,10

Long-term debt due within one year

6,210



16



6,194





Total current liabilities

26,621



14,377



13,117



(873)












Long-term debt due after one year

26,281



9,151



17,140



(10)


8

Liability for postemployment benefits

6,599



6,599







Other liabilities

4,323



3,681



1,430



(788)


6

Total liabilities

63,824



33,808



31,687



(1,671)












Shareholders' equity









Common stock

5,935



5,935



919



(919)


5

Treasury stock

(24,217)



(24,217)







Profit employed in the business

34,437



34,437



3,997



(3,997)


5

Accumulated other comprehensive income (loss)

(1,567)



(1,567)



(828)



828


5

Noncontrolling interests

41



41



172



(172)


5

Total shareholders' equity

14,629



14,629



4,260



(4,260)



Total liabilities and shareholders' equity

$

78,453



$

48,437



$

35,947



$

(5,931)




1

Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis.

2

Elimination of receivables between Machinery, Energy & Transportation and Financial Products.

3

Reclassification of Machinery, Energy & Transportation's trade receivables purchased by Financial Products and Financial Products' wholesale inventory receivables.

4

Elimination of Machinery, Energy & Transportation's insurance premiums that are prepaid to Financial Products.

5

Elimination of Financial Products' equity which is accounted for by Machinery, Energy & Transportation on the equity basis.

6

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

7

Elimination of other intercompany assets between Machinery, Energy & Transportation and Financial Products.

8

Elimination of debt between Machinery, Energy & Transportation and Financial Products.

9

Elimination of payables between Machinery, Energy & Transportation and Financial Products.

10

Elimination of prepaid insurance in Financial Products' other liabilities.

 

Caterpillar Inc.

Supplemental Data for Cash Flow

For the Six Months Ended June 30, 2020

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,

Energy &

Transportation1


Financial

Products


Consolidating

Adjustments


Cash flow from operating activities:









Profit of consolidated and affiliated companies

$

1,552



$

1,543



$

181



$

(172)


2

Adjustments for non-cash items:









Depreciation and amortization

1,222



805



417





Undistributed profit of Financial Products



(152)





152


3

Net gain on remeasurement of pension obligations

(132)



(132)







Provision (benefit) for deferred income taxes

(32)



40



(72)





Other

674



347



145



182


4

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









Receivables – trade and other

1,176



539



(77)



714


4, 5

Inventories

(145)



(137)





(8)


4

Accounts payable

(655)



(664)



(5)



14


4

Accrued expenses

(253)



(237)



(16)





Accrued wages, salaries and employee benefits

(648)



(614)



(34)





Customer advances

(2)



(2)







Other assets – net

(7)



30



30



(67)


4

Other liabilities – net

(229)



(391)



84



78


4

Net cash provided by (used for) operating activities

2,521



975



653



893



Cash flow from investing activities:









Capital expenditures – excluding equipment leased to others

(472)



(465)



(7)





Expenditures for equipment leased to others

(526)



1



(540)



13


4

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

382



104



283



(5)


4

Additions to finance receivables

(6,712)





(7,352)



640


5

Collections of finance receivables

6,801





7,442



(641)


5

Net intercompany purchased receivables





920



(920)


5

Proceeds from sale of finance receivables

31





31





Net intercompany borrowings



500



2



(502)


6

Investments and acquisitions (net of cash acquired)

(49)



(49)







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

13



13







Proceeds from sale of securities

151



12



139





Investments in securities

(369)



(10)



(359)





Other – net

7



(15)



22





Net cash provided by (used for) investing activities

(743)



91



581



(1,415)



Cash flow from financing activities:









Dividends paid

(1,125)



(1,125)



(20)



20


7

Common stock issued, including treasury shares reissued

(10)



(10)







Common shares repurchased

(1,130)



(1,130)







Net intercompany borrowings



(2)



(500)



502


6

Proceeds from debt issued > 90 days

6,159



1,991



4,168





Payments on debt > 90 days

(4,629)



(12)



(4,617)





Short-term borrowings – net < 90 days

(477)



8



(485)





Other – net

(1)



(1)







Net cash provided by (used for) financing activities

(1,213)



(281)



(1,454)



522



Effect of exchange rate changes on cash

(66)



(54)



(12)





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

499



731



(232)





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

8,292



7,302



990





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

$

8,791



$

8,033



$

758



$




1

Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis.

2

Elimination of Financial Products' profit after tax due to equity method of accounting.

3

Elimination of non-cash adjustment for the undistributed earnings from Financial Products.

4

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

5

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

6

Elimination of net proceeds and payments to/from Machinery, Energy & Transportation and Financial Products.

7

Elimination of dividend from Financial Products to Machinery, Energy & Transportation.

 

Caterpillar Inc.

Supplemental Data for Cash Flow

For the Six Months Ended June 30, 2019

(Unaudited)

(Millions of dollars)





Supplemental Consolidating Data



Consolidated


Machinery,

Energy &

Transportation1


Financial

Products


Consolidating

Adjustments


Cash flow from operating activities:









Profit of consolidated and affiliated companies

$

3,503



$

3,492



$

253



$

(242)


2

Adjustments for non-cash items:









Depreciation and amortization

1,288



855



433





Undistributed profit of Financial Products



(242)





242


3

Provision (benefit) for deferred income taxes

(34)



(16)



(18)





Other

440



264



(51)



227


4

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









Receivables – trade and other

(166)



161



(5)



(322)


4, 5

Inventories

(487)



(489)





2


4

Accounts payable

134



(94)



279



(51)


4

Accrued expenses

151



158



(5)



(2)


4

Accrued wages, salaries and employee benefits

(979)



(978)



(1)





Customer advances

14



18





(4)


4

Other assets – net

(120)



(165)



61



(16)


4

Other liabilities – net

(35)



(144)



89



20


4

Net cash provided by (used for) operating activities

3,709



2,820



1,035



(146)



Cash flow from investing activities:









Capital expenditures – excluding equipment leased to others

(479)



(468)



(11)





Expenditures for equipment leased to others

(746)



(24)



(725)



3


4

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

422



97



367



(42)


4

Additions to finance receivables

(6,181)





(7,027)



846


5

Collections of finance receivables

5,902





6,548



(646)


5

Net intercompany purchased receivables





15



(15)


5

Proceeds from sale of finance receivables

119





119





Net intercompany borrowings



213



1



(214)


6

Investments and acquisitions (net of cash acquired)

(3)



(3)







Proceeds from sale of securities

170



13



157





Investments in securities

(243)



(12)



(231)





Other – net

(40)



(9)



(31)





Net cash provided by (used for) investing activities

(1,079)



(193)



(818)



(68)



Cash flow from financing activities:









Dividends paid

(986)



(986)







Common stock issued, including treasury shares reissued

39



39







Common shares repurchased

(2,105)



(2,105)







Net intercompany borrowings



(1)



(213)



214


6

Proceeds from debt issued > 90 days

5,340





5,340





Payments on debt > 90 days

(4,901)



(4)



(4,897)





Short-term borrowings – net < 90 days

(436)





(436)





Other – net

(2)



(2)







Net cash provided by (used for) financing activities

(3,051)



(3,059)



(206)



214



Effect of exchange rate changes on cash

(10)



(8)



(2)





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

(431)



(440)



9





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

7,890



6,994



896





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

$

7,459



$

6,554



$

905



$




1

Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis.

2

Elimination of Financial Products' profit after tax due to equity method of accounting.

3

Elimination of non-cash adjustment for the undistributed earnings from Financial Products.

4

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

5

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

6

Elimination of net proceeds and payments to/from Machinery, Energy & Transportation and Financial Products.

 

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SOURCE Caterpillar Inc.