PEORIA, Ill., Oct. 25, 2016 /PRNewswire/ --
|
|
|
Third
Quarter
|
($ in billions except
profit per share)
|
2016
|
|
2015
|
|
|
|
|
|
|
Sales and
Revenues
|
|
$9.160
|
|
$10.962
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit Per
Share
|
|
$0.48
|
|
$0.94
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit Per
Share
|
|
$0.85
|
|
$1.05
|
(Excluding
Restructuring Costs)
|
|
|
|
Caterpillar Inc. (NYSE: CAT) today announced profit per share of
$0.48 for the third quarter of 2016,
a decrease from $0.94 per share in
the third quarter of 2015. Excluding restructuring
costs, profit per share was $0.85, down from $1.05 per share in the third quarter of 2015.
Third-quarter 2016 sales and revenues of $9.2 billion were down 16 percent from
$11.0 billion in the third quarter of
2015.
"Economic weakness throughout much of the world persists and, as
a result, most of our end markets remain challenged. In North
America, the market has an abundance of used construction
equipment, rail customers have a substantial number of idle
locomotives, and around the world there are a significant number of
idle mining trucks," said Caterpillar Chairman and Chief Executive
Officer Doug Oberhelman.
"However, there were a few bright spots this quarter. Both
the construction industry and our machine market position improved
in China. Most commodity prices, while low, seem to have
stabilized. Parts sales have increased sequentially in each
of the last two quarters. Our machine market position and
quality remain at high levels and our work on Lean
and restructuring are continuing to help us lower costs.
"I'm pleased with how Caterpillar has responded and our team's
incredible focus on reducing costs and pulling through profit
despite sluggish end markets. In the third quarter, despite a
$1.8 billion decline in sales and
revenues, our operating profit pull through was
significantly better than our target range. Lower
variable manufacturing costs of $234 million and lower period costs
of $420 million enabled us to offset
much of the negative impact from a weak sales environment and
continue investment in products and digital capabilities," said
Oberhelman.
2016 Outlook
The full-year outlook for 2016 sales and revenues is about
$39 billion, and profit is
$2.35 per share, or $3.25 per share excluding restructuring
costs. The outlook does not include potential mark-to-market
gains or losses related to pension and OPEB plans,
which, as discussed in Q&A #10, are likely to significantly
impact full-year 2016 results. The previous outlook for 2016
expected sales and revenues to be in a range of $40.0 to $40.5 billion, with profit at the
midpoint of the sales and revenues range of about $2.75 per share, or about $3.55 per share excluding restructuring
costs. Restructuring costs in 2016, which were expected to be
about $700 million, are now forecast
to be about $800 million, primarily
due to asset write downs recognized in the third quarter.
Preliminary Outlook for 2017 Sales and Revenues
Our preliminary outlook for 2017 is that sales and revenues will
not be significantly different than 2016. The balance of
risk, particularly during the first half of the year, is likely on
the negative side. We are, however, encouraged that most
commodity prices important to our business have improved from the
lows earlier in 2016. Should commodity prices show relative
stability and move higher in 2017, it is reasonable to expect that
our business would respond, and we could see a more positive second
half. Our preliminary outlook for 2017 is based on our
expectation that world economic growth will remain subdued at close
to 2.5 percent – similar to the past few years.
"While we are seeing early signals of improvement in some areas,
we continue to face a number of challenges. We remain
cautious as we look ahead to 2017, but are hopeful as the year
unfolds we will begin to see more positive momentum. Whether
or not that happens, we are continuing to prepare for a better
future. In addition to substantial restructuring and
significant cost reduction actions, we've kept our focus on
customers and on the future by continuing to invest in our
digital capabilities, connecting assets and jobsites and developing
the next generation of more productive and efficient products,"
said Oberhelman.
Following is a summary of positive and negative factors that
could influence 2017 sales and revenues:
Positive factors
- Prices for some commodities important to our business have
improved from earlier lows. Oil prices are currently near
$50 per barrel, but are still
volatile. While about 70 percent below the prior peak in
2014, the U.S. active rig count is up 37 percent since May of
2016.
- Most prices for mined commodities have risen from lows earlier
this year, and we are expecting average prices in 2017 to be flat
to up modestly from 2016. We are seeing recent improvement in
dealer rebuild activity and some firming of aftermarket parts sales
in mining.
- The construction industry and our market position have
continued to improve in China, and
we are expecting a continued small improvement in 2017.
- Construction sales in Brazil
and Russia have likely bottomed at
very low levels in 2016.
- After several years of decline, surveys of capital expenditures
in the mining sector indicate spending should level off in
2017.
Negative factors
- While sentiment around mining has definitely improved, there
are still many idle trucks on customer sites, and we have not seen
an increase in orders for new equipment.
- While mining-related commodity prices have improved, some
remain at levels that we believe are too low to drive additional
investment.
- Construction activity and construction equipment sales in
North America during the second
half of 2016 are now anticipated to be lower than we expected in
our previous 2016 outlook. We are concerned that could
continue into 2017.
- There is continuing uncertainty in Europe, particularly around the impact of
Brexit on European economic growth, business confidence and
investment.
- While sales in China have
improved, there is risk of slowing if Chinese government monetary
and fiscal policy become less supportive.
- Power generation sales are expected to be down, particularly in
the oil-producing regions of Africa/Middle
East where the pace of investment has slowed.
- Marine engines for boats that service offshore oil and gas are
not expected to improve as oil prices, while better, are not
expected to be sufficient to improve offshore rig economics in
2017. Tug markets also are expected to be weak with weak
freight movement.
- We expect continued weakness in industrial engine sales to
agricultural customers and small generator set packagers.
- North American rail is again expected to be a challenged
industry with many idle locomotives.
"As you know, I've decided to retire after 41 years at
Caterpillar, and Jim Umpleby will
succeed me as CEO. He's been a key part of the leadership
team for several years and is absolutely ready to lead
Caterpillar. I'm confident I'm turning over a company that's
ready for a better future. We have a great team, our product
portfolio is the best ever, our machine market position and quality
remain at high levels and we've significantly improved our cost
structure. At some point, and I think we're getting closer to
that point, our businesses will turn up. Many of our
businesses, including mining, oil and gas, rail and construction,
are currently operating well below historical replacement demand
levels in many parts of the world. It's a good time for Jim
to take over, as I know Caterpillar will deliver even better
financial results when key industries begin to improve and get back
to mid-cycle replacement demand levels," said Oberhelman.
Highlights
- Substantially lower costs in the third quarter helped
mitigate the impact of lower sales – restructuring and
cost reduction actions are paying off
- Market position for machines continuing to improve –
including China
- Strong balance sheet and continued commitment to
stockholders – maintained $0.77
per share dividend (announced October 12,
2016)
- Full-year 2016 outlook lowered in challenged
environment
- 2017 sales and revenues are not expected to be
significantly different than 2016
Notes:
- Glossary of terms is included on pages 17-18; first
occurrence of terms shown in bold italics.
- Information on non-GAAP financial measures is included on
page 19.
- Caterpillar will conduct a teleconference and live webcast,
with a slide presentation, beginning at 10
a.m. Central Time on Tuesday, October
25, 2016, to discuss its 2016 third-quarter results.
The accompanying slides will be available before the webcast on the
Caterpillar website at
http://www.caterpillar.com/investors/events-and-presentations.
About Caterpillar:
For 91 years, Caterpillar Inc. has been making sustainable
progress possible and driving positive change on every
continent. Customers turn to Caterpillar to help them develop
infrastructure, energy and natural resource assets. With 2015
sales and revenues of $47.011
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. The
company principally operates through its three product segments -
Construction Industries, Resource Industries and Energy &
Transportation - and also provides financing and related services
through its Financial Products segment. For more information,
visit caterpillar.com. To connect with us on social media,
visit caterpillar.com/social-media.
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," "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 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) government monetary or fiscal policies
and infrastructure spending; (iii) commodity price changes,
component price increases, fluctuations in demand for our products
or significant shortages of component products; (iv) disruptions or
volatility in global financial markets limiting our sources of
liquidity or the liquidity of our customers, dealers and suppliers;
(v) political and economic risks, commercial instability and events
beyond our control in the countries in which we operate; (vi)
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; (vii) our Financial Products segment's risks associated
with the financial services industry; (viii) changes in interest
rates or market liquidity conditions; (ix) an increase in
delinquencies, repossessions or net losses of Cat Financial's
customers; (x) new regulations or changes in financial services
regulations; (xi) a failure to realize, or a delay in realizing,
all of the anticipated benefits of our acquisitions, joint ventures
or divestitures; (xii) international trade policies and their
impact on demand for our products and our competitive position;
(xiii) our ability to develop, produce and market quality products
that meet our customers' needs; (xiv) the impact of the highly
competitive environment in which we operate on our sales and
pricing; (xv) failure to realize all of the anticipated benefits
from initiatives to increase our productivity, efficiency and cash
flow and to reduce costs; (xvi) additional restructuring costs or a
failure to realize anticipated savings or benefits from past or
future cost reduction actions; (xvii) inventory management
decisions and sourcing practices of our dealers and our OEM
customers; (xviii) compliance with environmental laws and
regulations; (xix) alleged or actual violations of trade or
anti-corruption laws and regulations; (xx) additional tax expense
or exposure; (xxi) currency fluctuations; (xxii) our or Cat
Financial's compliance with financial covenants; (xxiii) increased
pension plan funding obligations; (xxiv) union disputes or other
employee relations issues; (xxv) significant legal proceedings,
claims, lawsuits or government investigations; (xxvi) changes in
accounting standards; (xxvii) failure or breach of IT security;
(xxviii) adverse effects of unexpected events including natural
disasters; and (xxix) other factors described in more detail under
"Item 1A. Risk Factors" in our Form 10-K filed with the SEC on
February 16, 2016 for the year ended
December 31, 2015.
CONSOLIDATED RESULTS
Consolidated Sales and Revenues
Consolidated Sales and Revenues Comparison
Third Quarter 2016 vs. Third Quarter 2015
To access this chart, go to
http://www.caterpillar.com/en/investors/quarterly-results.html
for the downloadable version of Caterpillar 3Q
2016 earnings.
The chart above graphically illustrates reasons for the change
in Consolidated Sales and Revenues between the third quarter of
2015 (at left) and the third quarter of 2016 (at right).
Items favorably impacting sales and revenues appear as upward stair
steps with the corresponding dollar amounts above each bar, while
items negatively impacting sales and revenues appear as downward
stair steps with dollar amounts reflected in parentheses above each
bar. Caterpillar management utilizes these charts internally
to visually communicate with the company's Board of Directors and
employees.
Sales and Revenues
Total sales and revenues were $9.160
billion in the third quarter of 2016, a decline of
$1.802 billion, or 16 percent,
compared with $10.962 billion in the
third quarter of 2015. The decrease was primarily due to
lower sales volume, resulting from lower end-user
demand attributable to continued weak commodity prices globally and
economic weakness in many developing countries. While sales
for both new equipment and aftermarket parts declined in all
segments, most of the decrease was for new equipment. The
unfavorable impact of price realization also
contributed to the decline.
Sales declined in all regions. In North America, sales
decreased 20 percent primarily due to lower end-user demand for
infrastructure, continuing declines in mining and the impact of low
oil prices. In EAME, sales declined 20 percent
primarily in Africa/Middle East due to weak economic conditions,
resulting from continued low oil and other commodity prices and an
uncertain investment environment. Sales decreased 22 percent
in Latin America
primarily due to continued widespread economic weakness across the
region. Weak commodity prices and inflation have also
contributed to the decline. Asia/Pacific sales declined 8 percent
primarily due to lower end-user demand for most Energy &
Transportation applications.
Energy & Transportation's sales declined 19 percent largely
due to lower end-user demand for all applications.
Construction Industries' sales decreased 13 percent
primarily due to lower demand from end users and unfavorable price
realization. Resource Industries'
sales declined 25 percent mostly due to continued low end-user
demand. Financial Products' segment revenues
were about flat with the third quarter of 2015.
Consolidated Operating Profit
Consolidated Operating Profit Comparison
Third Quarter 2016 vs. Third Quarter 2015
To access this chart, go to
http://www.caterpillar.com/en/investors/quarterly-results.html for
the downloadable version of Caterpillar 3Q
2016 earnings.
The chart above graphically illustrates reasons for the change
in Consolidated Operating Profit (Loss) between the third quarter
of 2015 (at left) and the third quarter of 2016 (at right).
Items favorably impacting operating profit appear as
upward stair steps with the corresponding dollar amounts above each
bar, while items negatively impacting operating profit appear as
downward stair steps with dollar amounts reflected in parentheses
above each bar. Caterpillar management utilizes these charts
internally to visually communicate with the company's Board of
Directors and employees. The bar entitled Other includes
consolidating adjustments and Machinery, Energy
& Transportation other operating (income) expenses.
Operating profit for the third quarter of 2016 was $481 million, compared with $925 million in the third quarter of 2015.
The decrease of $444 million was
primarily due to lower sales volume, resulting from lower end-user
demand attributable to continued weak commodity prices globally and
economic weakness in many developing countries. In addition,
restructuring costs and price realization were unfavorable.
These items were partially offset by favorable period costs and
variable manufacturing costs. The unfavorable price
realization resulted from competitive market conditions, primarily
in Construction Industries.
Period costs were lower primarily due to substantial
restructuring and cost reduction actions over the past year and
lower short-term incentive compensation expense. The
reductions primarily impacted period manufacturing costs and
selling, general and administrative expenses
(SG&A). About half of the improvement in variable
manufacturing costs was due to lower material costs. In
addition, the impact of cost absorption was favorable as inventory
decreased in the third quarter of 2015 and was about flat in the
third quarter of 2016.
Restructuring costs of $324
million in the third quarter of 2016 were related to
restructuring programs across the company, primarily in Resource
Industries. In the third quarter of 2015, restructuring costs
were $98 million.
Other Profit/Loss Items
- Other income/expense in the third quarter of 2016 was
income of $28 million, compared with
expense of $15 million in the third
quarter of 2015. The favorable change was primarily due to
the net impact from currency translation and hedging
gains and losses, partially offset by lower gains from the sales of
securities in the third quarter of 2016 compared to the third
quarter of 2015. The favorable change in net currency
translation and hedging gains and losses was primarily a result of
the absence of net losses in the third quarter of 2015, mostly due
to the Brazilian real.
- The provision for income taxes in the third quarter
reflects an estimated annual tax rate of 25 percent, compared to 28
percent for the third quarter of 2015, and 25.5 percent for the
full-year 2015 excluding discrete items. The full-year rate
for 2015 of 25.5 percent was lower than the third-quarter 2015 rate
of 28 percent, primarily due to the permanent renewal of the U.S.
research and development tax credit along with changes in the
geographic mix of profits from a tax perspective in the fourth
quarter of 2015.
Global Workforce
Caterpillar worldwide, full-time employment was about 97,100 at
the end of the third quarter of 2016, compared with about 108,900
at the end of the third quarter of 2015, a decrease of about 11,800
full-time employees. The flexible workforce decreased by
about 2,300 for a total decrease in the global workforce of about
14,100. The decrease was primarily the result of
restructuring programs and lower production volumes.
|
|
September
30
|
|
|
2016
|
|
2015
|
|
Increase/
(Decrease)
|
Full-time
employment
|
|
97,100
|
|
108,900
|
|
(11,800)
|
Flexible
workforce
|
|
11,700
|
|
14,000
|
|
(2,300)
|
Total
|
|
108,800
|
|
122,900
|
|
(14,100)
|
|
|
|
|
|
|
|
Geographic summary of
change
|
|
|
|
|
|
|
U.S.
workforce
|
|
|
|
|
|
(8,600)
|
Non-U.S.
workforce
|
|
|
|
|
|
(5,500)
|
Total
|
|
|
|
|
|
(14,100)
|
SEGMENT RESULTS
Sales and Revenues
by Geographic Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
|
|
North
|
|
%
|
|
Latin
|
|
%
|
|
|
|
%
|
|
Asia/
|
|
%
|
(Millions of
dollars)
|
Total
|
|
Change
|
|
America
|
|
Change
|
|
America
|
|
Change
|
|
EAME
|
|
Change
|
|
Pacific
|
|
Change
|
Third Quarter
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
Industries¹
|
$
3,554
|
|
(13)
|
%
|
|
$
1,655
|
|
(19)
|
%
|
|
$
287
|
|
(20)
|
%
|
|
$
789
|
|
(18)
|
%
|
|
$
823
|
|
14
|
%
|
Resource
Industries²
|
1,377
|
|
(25)
|
%
|
|
454
|
|
(35)
|
%
|
|
254
|
|
(19)
|
%
|
|
303
|
|
(29)
|
%
|
|
366
|
|
(8)
|
%
|
Energy &
Transportation³
|
3,534
|
|
(19)
|
%
|
|
1,583
|
|
(15)
|
%
|
|
280
|
|
(25)
|
%
|
|
1,094
|
|
(17)
|
%
|
|
577
|
|
(28)
|
%
|
All Other
Segments⁴
|
28
|
|
(28)
|
%
|
|
6
|
|
(63)
|
%
|
|
-
|
|
(100)
|
%
|
|
5
|
|
(50)
|
%
|
|
17
|
|
70
|
%
|
Corporate Items and
Eliminations
|
(30)
|
|
|
|
|
(26)
|
|
|
|
|
-
|
|
|
|
|
(3)
|
|
|
|
|
(1)
|
|
|
|
Machinery, Energy
& Transportation
|
$
8,463
|
|
(18)
|
%
|
|
$
3,672
|
|
(20)
|
%
|
|
$
821
|
|
(22)
|
%
|
|
$2,188
|
|
(20)
|
%
|
|
$1,782
|
|
(8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Products
Segment
|
$
749
|
|
-
|
%
|
|
$
466
|
|
3
|
%
|
|
$
84
|
|
(8)
|
%
|
|
$
101
|
|
-
|
%
|
|
$
98
|
|
(8)
|
%
|
Corporate Items and
Eliminations
|
(52)
|
|
|
|
|
(28)
|
|
|
|
|
(10)
|
|
|
|
|
(4)
|
|
|
|
|
(10)
|
|
|
|
Financial
Products Revenues
|
$
697
|
|
3
|
%
|
|
$
438
|
|
9
|
%
|
|
$
74
|
|
(10)
|
%
|
|
$
97
|
|
2
|
%
|
|
$
88
|
|
(11)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Sales
and Revenues
|
$
9,160
|
|
(16)
|
%
|
|
$
4,110
|
|
(18)
|
%
|
|
$
895
|
|
(21)
|
%
|
|
$2,285
|
|
(19)
|
%
|
|
$1,870
|
|
(8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
Industries¹
|
$
4,075
|
|
|
|
|
$
2,037
|
|
|
|
|
$
360
|
|
|
|
|
$
958
|
|
|
|
|
$
720
|
|
|
|
Resource
Industries²
|
1,842
|
|
|
|
|
702
|
|
|
|
|
312
|
|
|
|
|
429
|
|
|
|
|
399
|
|
|
|
Energy &
Transportation³
|
4,352
|
|
|
|
|
1,858
|
|
|
|
|
371
|
|
|
|
|
1,326
|
|
|
|
|
797
|
|
|
|
All Other
Segments⁴
|
39
|
|
|
|
|
16
|
|
|
|
|
3
|
|
|
|
|
10
|
|
|
|
|
10
|
|
|
|
Corporate Items and
Eliminations
|
(23)
|
|
|
|
|
(25)
|
|
|
|
|
-
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
Machinery, Energy
& Transportation
|
$10,285
|
|
|
|
|
$
4,588
|
|
|
|
|
$
1,046
|
|
|
|
|
$2,724
|
|
|
|
|
$1,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Products
Segment
|
$
752
|
|
|
|
|
$
453
|
|
|
|
|
$
91
|
|
|
|
|
$
101
|
|
|
|
|
$
107
|
|
|
|
Corporate Items and
Eliminations
|
(75)
|
|
|
|
|
(52)
|
|
|
|
|
(9)
|
|
|
|
|
(6)
|
|
|
|
|
(8)
|
|
|
|
Financial
Products Revenues
|
$
677
|
|
|
|
|
$
401
|
|
|
|
|
$
82
|
|
|
|
|
$
95
|
|
|
|
|
$
99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Sales
and Revenues
|
$10,962
|
|
|
|
|
$
4,989
|
|
|
|
|
$
1,128
|
|
|
|
|
$2,819
|
|
|
|
|
$2,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Does not include inter-segment sales of $27 million and $17 million
in third quarter 2016 and 2015, respectively.
|
|
|
|
2
Does not include inter-segment sales of $69 million and $88 million
in third quarter 2016 and 2015, respectively.
|
|
|
|
3
Does not include inter-segment sales of $629 million and $702
million in third quarter 2016 and 2015, respectively.
|
|
|
|
4
Does not include inter-segment sales of $95 million and $88 million
in third quarter 2016 and 2015, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and Revenues
by Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
|
|
Sales
|
|
Price
|
|
|
|
|
|
Third
|
|
$
|
|
%
|
(Millions of
dollars)
|
Quarter
2015
|
|
Volume
|
|
Realization
|
|
Currency
|
|
Other
|
|
Quarter
2016
|
|
Change
|
|
Change
|
Construction
Industries
|
$
4,075
|
|
$
(384)
|
|
$
(165)
|
|
$
28
|
|
$
-
|
|
$
3,554
|
|
$
(521)
|
|
(13)
|
%
|
Resource
Industries
|
1,842
|
|
(439)
|
|
(29)
|
|
3
|
|
-
|
|
1,377
|
|
(465)
|
|
(25)
|
%
|
Energy &
Transportation
|
4,352
|
|
(777)
|
|
(19)
|
|
(22)
|
|
-
|
|
3,534
|
|
(818)
|
|
(19)
|
%
|
All Other
Segments
|
39
|
|
(11)
|
|
-
|
|
-
|
|
-
|
|
28
|
|
(11)
|
|
(28)
|
%
|
Corporate Items and
Eliminations
|
(23)
|
|
(9)
|
|
-
|
|
2
|
|
-
|
|
(30)
|
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Machinery, Energy
& Transportation
|
$
10,285
|
|
$(1,620)
|
|
$
(213)
|
|
$
11
|
|
$
-
|
|
$
8,463
|
|
$(1,822)
|
|
(18)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Products
Segment
|
752
|
|
-
|
|
-
|
|
-
|
|
(3)
|
|
749
|
|
(3)
|
|
-
|
%
|
Corporate Items and
Eliminations
|
(75)
|
|
-
|
|
-
|
|
-
|
|
23
|
|
(52)
|
|
23
|
|
|
|
Financial Products
Revenues
|
$
677
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$ 20
|
|
$
697
|
|
$
20
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Sales
and Revenues
|
$
10,962
|
|
$(1,620)
|
|
$
(213)
|
|
$
11
|
|
$ 20
|
|
$
9,160
|
|
$(1,802)
|
|
(16)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
(Loss) by Segment
|
|
|
|
|
|
|
|
Third
|
|
Third
|
|
$
|
|
%
|
(Millions of
dollars)
|
Quarter
2016
|
|
Quarter
2015
|
|
Change
|
|
Change
|
Construction
Industries
|
$
326
|
|
$
354
|
|
$
(28)
|
|
(8)
|
%
|
Resource
Industries
|
(77)
|
|
(42)
|
|
(35)
|
|
(83)
|
%
|
Energy &
Transportation
|
572
|
|
683
|
|
(111)
|
|
(16)
|
%
|
All Other
Segments
|
(22)
|
|
(11)
|
|
(11)
|
|
(100)
|
%
|
Corporate Items and
Eliminations
|
(433)
|
|
(182)
|
|
(251)
|
|
|
|
Machinery, Energy
& Transportation
|
$
366
|
|
$
802
|
|
$
(436)
|
|
(54)
|
%
|
Financial Products
Segment
|
183
|
|
207
|
|
(24)
|
|
(12)
|
%
|
Corporate Items and
Eliminations
|
(12)
|
|
(22)
|
|
10
|
|
|
|
Financial
Products
|
$
171
|
|
$
185
|
|
$
(14)
|
|
(8)
|
%
|
Consolidating
Adjustments
|
(56)
|
|
(62)
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Operating Profit (Loss)
|
$
481
|
|
$
925
|
|
$
(444)
|
|
(48)
|
%
|
CONSTRUCTION
INDUSTRIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
Comparison
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter 2015
|
|
Sales
Volume
|
|
Price
Realization
|
|
Currency
|
|
Third
Quarter 2016
|
|
$
Change
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
Comparison1
|
$4,075
|
|
($384)
|
|
($165)
|
|
$28
|
|
$3,554
|
|
($521)
|
|
(13)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales by
Geographic Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter 2016
|
|
Third
Quarter 2015
|
|
$
Change
|
|
%
Change
|
|
|
|
|
|
|
|
|
North
America
|
$1,655
|
|
$2,037
|
|
($382)
|
|
(19)
|
%
|
|
|
|
|
|
|
|
Latin
America
|
287
|
|
360
|
|
(73)
|
|
(20)
|
%
|
|
|
|
|
|
|
|
EAME
|
789
|
|
958
|
|
(169)
|
|
(18)
|
%
|
|
|
|
|
|
|
|
Asia/Pacific
|
823
|
|
720
|
|
103
|
|
14
|
%
|
|
|
|
|
|
|
|
Total1
|
$3,554
|
|
$4,075
|
|
($521)
|
|
(13)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter 2016
|
|
Third
Quarter 2015
|
|
$
Change
|
|
%
Change
|
|
|
|
|
|
|
|
|
Operating
Profit
|
$326
|
|
$354
|
|
($28)
|
|
(8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Does not include
inter-segment sales of $27 million and $17 million in third quarter
2016 and 2015, respectively.
|
Construction Industries' sales were $3.554 billion in the third quarter of 2016, a
decrease of $521 million, or 13
percent, from the third quarter of 2015. The decrease in
sales was due to lower volume and unfavorable price
realization. While sales declined for both new equipment and
aftermarket parts, most of the decrease was for new equipment.
- Sales volume declined primarily due to lower end-user
demand.
- Unfavorable price realization resulted from competitive market
conditions.
Sales decreased in North
America, EAME and Latin
America and increased in Asia/Pacific.
- In North America, the sales
decline was primarily due to lower end-user demand. Although
residential and non-residential construction activity improved, we
believe declines in other sectors, such as oil and gas, have
resulted in the availability of used equipment to support the
increased activity. The decline was also due to unfavorable
price realization, resulting from competitive market
conditions.
- Sales in EAME decreased primarily due to the unfavorable impact
of changes in dealer inventories and unfavorable price realization
due to competitive market conditions. Dealers decreased
inventories in the third quarter of 2016, compared to a slight
increase in the third quarter of 2015. The sales decline was
primarily in oil-producing economies in Africa/Middle
East due to continued low oil prices and an uncertain
investment environment.
- In Latin America, end-user
demand was down across the region, with the most significant
decline in Brazil due to weak
economic conditions.
- Sales in Asia/Pacific were
slightly higher as a result of an increase in end-user demand
primarily in China stemming from
increased government support in infrastructure and residential
investment. In addition, changes in Asia/Pacific dealer inventories were favorable
as dealers increased inventories in the third quarter of 2016,
compared to a decrease in the third quarter of 2015.
Construction Industries' profit was $326
million in the third quarter of 2016, compared with
$354 million in the third quarter of
2015. The decrease in profit was primarily due to unfavorable
price realization resulting from competitive market conditions and
lower sales volume. The decline was mostly offset by the
favorable impact of restructuring and cost reduction actions, lower
short-term incentive compensation expense and improved material
costs.
RESOURCE
INDUSTRIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
Comparison
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter 2015
|
|
Sales
Volume
|
|
Price
Realization
|
|
Currency
|
|
|
Third
Quarter 2016
|
|
$
Change
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
Comparison1
|
$1,842
|
|
($439)
|
|
($29)
|
|
$3
|
|
|
$1,377
|
|
($465)
|
|
(25)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales by
Geographic Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter 2016
|
|
Third
Quarter 2015
|
|
$
Change
|
|
%
Change
|
|
|
|
|
|
|
|
|
North
America
|
$454
|
|
$702
|
|
($248)
|
|
(35)
|
%
|
|
|
Latin
America
|
254
|
|
312
|
|
(58)
|
|
(19)
|
%
|
|
|
EAME
|
303
|
|
429
|
|
(126)
|
|
(29)
|
%
|
|
|
Asia/Pacific
|
366
|
|
399
|
|
(33)
|
|
(8)
|
%
|
|
|
Total1
|
$1,377
|
|
$1,842
|
|
($465)
|
|
(25)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter 2016
|
|
Third
Quarter 2015
|
|
$
Change
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
Operating Profit
(Loss)
|
($77)
|
|
($42)
|
|
($35)
|
|
(83)
|
%
|
|
|
|
1 Does not include
inter-segment sales of $69 million and $88 million in third quarter
2016 and 2015, respectively.
|
Resource Industries' sales were $1.377
billion in the third quarter of 2016, a decrease of
$465 million, or 25 percent, from the
third quarter of 2015. The decline was primarily due to lower
sales volume. While sales for both new equipment and
aftermarket parts declined, nearly all of the decrease was for new
equipment. Part sales have increased sequentially in each of
the last two quarters.
The sales decrease was primarily due to lower end-user demand
across all regions. While commodity prices have improved from
their recent lows, it is not clear at this time if the current
prices are sufficient to drive increased demand for new
equipment. Mining customers continued to focus on improving
productivity in existing mines and reducing their total capital
expenditures, as they have for several years. In addition,
sales of large construction equipment, including articulated
trucks, are lower primarily in North
America. As a result, sales and new orders in Resource
Industries continue to be weak.
Resource Industries incurred a loss of $77 million in the third quarter of 2016,
compared with a loss of $42 million
in the third quarter of 2015. The unfavorable change was due
to lower sales volume and unfavorable price realization, partially
offset by the impact of restructuring and cost reduction actions,
lower short-term incentive compensation expense and improved
material costs.
ENERGY &
TRANSPORTATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
Comparison
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter 2015
|
|
Sales
Volume
|
|
Price
Realization
|
|
Currency
|
|
|
Third
Quarter 2016
|
|
$
Change
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
Comparison1
|
$4,352
|
|
($777)
|
|
($19)
|
|
($22)
|
|
|
$3,534
|
|
($818)
|
|
(19)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales by
Geographic Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter 2016
|
|
Third
Quarter 2015
|
|
$
Change
|
|
%
Change
|
|
|
|
|
|
|
|
|
North
America
|
$1,583
|
|
$1,858
|
|
($275)
|
|
(15)
|
%
|
|
|
Latin
America
|
280
|
|
371
|
|
(91)
|
|
(25)
|
%
|
|
|
EAME
|
1,094
|
|
1,326
|
|
(232)
|
|
(17)
|
%
|
|
|
Asia/Pacific
|
577
|
|
797
|
|
(220)
|
|
(28)
|
%
|
|
|
Total1
|
$3,534
|
|
$4,352
|
|
($818)
|
|
(19)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter 2016
|
|
Third
Quarter 2015
|
|
$
Change
|
|
%
Change
|
|
|
|
|
|
|
|
|
Operating
Profit
|
$572
|
|
$683
|
|
($111)
|
|
(16)
|
%
|
|
|
|
1 Does not include
inter-segment sales of $629 million and $702 million in third
quarter 2016 and 2015, respectively.
|
Energy & Transportation's sales were $3.534 billion in the third quarter of 2016, a
decrease of $818 million, or 19
percent, from the third quarter of 2015. The decrease was
primarily the result of lower sales volume across all
applications.
- Transportation – Sales decreased in all geographic
regions primarily due to continued weakness in the rail industry,
with the most significant declines in North America and Asia/Pacific. The North American rail
industry continues to be depressed with a significant number of
idle locomotives that impacted demand for rail services and
aftermarket. In Asia/Pacific, the decrease was primarily due
to the absence of a large sale of locomotives that occurred in the
third quarter of 2015.
- Power Generation – Sales decreased in all regions with
the largest declines in EAME and Asia/Pacific. The decline in EAME was
primarily a result of continued weakness in the Middle East with continued low oil prices
limiting investments. The decline in Asia/Pacific was due to the absence of several
large projects that occurred in third quarter of 2015.
- Oil and Gas – Sales continued to decrease in much of the
world due to low oil prices. The sales decline was most
significant in Asia/Pacific and
North America. In Asia/Pacific, the decrease was primarily
due to lower demand for equipment used for production, drilling and
gas compression. The decline in sales in North America was mostly due to lower demand
for turbines used for production.
- Industrial – Sales were lower primarily in EAME and
North America. The decline in sales was primarily due to
lower end-user demand for most industrial applications.
Energy & Transportation's profit was $572 million in the third quarter of 2016,
compared with $683 million in the
third quarter of 2015. The decline was primarily due to a
decrease in sales volume, partially offset by the impact of
restructuring and cost reduction actions, improved material costs
and a favorable impact of cost absorption as inventory decreased in
the third quarter of 2015 and was about flat in the third quarter
of 2016.
FINANCIAL PRODUCTS
SEGMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions of
dollars)
|
|
|
|
|
|
|
|
Revenues by
Geographic Region
|
|
|
|
|
|
|
|
Third
Quarter 2016
|
|
Third
Quarter 2015
|
|
$
Change
|
|
%
Change
|
|
North
America
|
$466
|
|
$453
|
|
$13
|
|
3
|
%
|
|
Latin
America
|
84
|
|
91
|
|
(7)
|
|
(8)
|
%
|
|
EAME
|
101
|
|
101
|
|
-
|
|
-
|
%
|
|
Asia/Pacific
|
98
|
|
107
|
|
(9)
|
|
(8)
|
%
|
|
Total
|
$749
|
|
$752
|
|
($3)
|
|
-
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter 2016
|
|
Third
Quarter 2015
|
|
$
Change
|
|
%
Change
|
|
Operating
Profit
|
$183
|
|
$207
|
|
($24)
|
|
(12)
|
%
|
|
|
|
|
|
|
|
|
|
|
Financial Products' revenues were $749
million in the third quarter of 2016, a decrease of
$3 million, from the third quarter of
2015. Unfavorable impacts from returned or repossessed
equipment, primarily in North
America, and lower average earning assets in
Latin America and Asia/Pacific were about offset by higher
average financing rates, primarily in North America.
Financial Products' profit was $183
million in the third quarter of 2016, compared with
$207 million in the third quarter of
2015. The decrease was primarily due to lower gains on sales
of securities at Insurance Services in the third quarter of 2016,
compared to the third quarter of 2015.
At the end of the third quarter of 2016, past dues at Cat
Financial were 2.77 percent, compared with 2.68 percent at the end
of the third quarter of 2015. Write-offs, net of recoveries,
were $29 million for the third
quarter of 2016, compared with $69
million for the third quarter of 2015.
As of September 30, 2016, Cat
Financial's allowance for credit losses totaled $346 million, or 1.28 percent of net finance
receivables, compared with $348
million, or 1.26 percent of net finance receivables at
September 30, 2015. The
allowance for credit losses at year-end 2015 was $338 million, or 1.22 percent of net finance
receivables.
Corporate Items and Eliminations
Expense for corporate items and eliminations was $445 million in the third quarter of 2016, an
increase of $241 million from the
third quarter of 2015. Corporate items and eliminations
include: corporate-level expenses; restructuring costs; timing
differences, as some expenses are reported in segment profit on a
cash basis; retirement benefit costs other than service cost;
currency differences for ME&T, as segment profit is reported
using annual fixed exchange rates; cost of sales methodology
differences as segments use a current cost methodology; and
inter-segment eliminations.
The increase in expense from the third quarter of 2015 was
primarily due to a $226 million
increase in restructuring costs.
QUESTIONS AND ANSWERS
Q1:
|
Price realization
was lower in the third quarter of 2016, compared with the third
quarter of 2015, especially in Construction Industries. What
do you expect for the remainder of the year?
|
|
|
A:
|
While we expect to
see a competitive pricing environment in the fourth quarter, driven
by excess industry capacity and an overall weak economic
environment, we are not expecting further deterioration from
third-quarter levels in the fourth quarter.
|
|
|
Q2:
|
Could you
summarize the status of the restructuring actions announced on
September 24, 2015?
|
|
|
A:
|
On September 24,
2015, Caterpillar announced a significant restructuring and cost
reduction initiative, with actions expected through 2018. It
included plans to lower operating costs by about $1.5 billion
annually once fully implemented, reduce the workforce by more than
10,000 people, consolidate or close more than 20 facilities and
decrease manufacturing square footage by more than 10
percent.
|
|
|
|
With our most recent
restructuring and consolidation announcements, all significant
actions included in the September 2015 announcement have been made
public. Since September 2015, the company has announced the
closure, consolidation or contemplated closure of nearly 30
facilities around the world, which would eliminate more than 11
percent of manufacturing square footage. Additionally, the
company has reduced the global workforce by about 14,000, which
resulted from a combination of restructuring actions and lower
volume.
|
|
|
|
Through the first
nine months of 2016, we reduced period costs, primarily period cost
of sales and SG&A expense, by approximately $1.2 billion,
compared with the first nine months of 2015. About $330
million of the decrease was a result of lower short-term incentive
compensation expense. The remaining decrease of about $880
million was a result of ongoing restructuring and cost reduction
actions, including those announced on September 24,
2015.
|
|
|
Q3:
|
Have you announced
restructuring actions this year that were not related to your
September 2015 announcement?
|
|
|
A:
|
Yes. The
ongoing weakness in many key end markets Caterpillar serves has
resulted in more aggressive cost reduction and restructuring
actions than we anticipated in our announcement last September.
Over the past year, the company has taken additional
restructuring actions, including ending production of on-highway
vocational trucks and track drills; pursuing strategic
alternatives, including a possible divestiture of room and pillar
products; and consolidating two product development divisions
within Resource Industries. Additional actions could still be
taken as Caterpillar continues to align its cost structure with the
economic conditions in its industries.
|
|
|
|
Restructuring costs
for 2016 are expected to be about $800 million, an increase from
our expectation of $700 million during the second quarter of
2016. The increase is primarily due to asset write downs
recognized in the third quarter resulting from additional
restructuring actions in Resource Industries.
|
|
|
Q4:
|
Can you discuss
changes in dealer inventories during 2016?
|
|
|
A:
|
Changes in dealer
inventories had a negative impact on sales in both the third
quarter of 2016 and the third quarter of 2015. Dealer machine
and engine inventories decreased about $700 million in the third
quarter of 2016 and about $600 million in the third quarter of
2015.
|
|
|
|
During the first nine
months of 2016, dealer machine and engine inventories decreased
about $800 million. We expect dealers will make substantial
inventory reductions during the fourth quarter, resulting in lower
year-end inventories in 2016, compared to 2015.
|
|
|
Q5:
|
Can you discuss
changes to your order backlog?
|
|
|
A:
|
At the end of the
third quarter of 2016, the order backlog was $11.6 billion, a
reduction of about $150 million from the end of the second quarter
of 2016, with no significant changes in any segment. Compared
to the third quarter of 2015, the order backlog has declined about
$2.1 billion with decreases in all segments.
|
|
|
Q6:
|
Can you comment on
expense related to your 2016 short-term incentive compensation
plans?
|
|
|
A:
|
Short-term incentive
compensation expense is directly related to financial and
operational performance, measured against targets set annually.
As a result of lowering the 2016 profit outlook, we expect
full-year incentive compensation expense to be lower than our
second-quarter estimate. As a result, no short-term incentive
compensation expense was recognized in the third quarter of
2016. Third-quarter 2015 expense was about $120 million.
Through the first nine months, 2016 short-term incentive
compensation expense was about $200 million.
|
|
|
|
For 2016, our outlook
includes short-term incentive compensation expense of about $265
million. Full-year 2015 short-term incentive compensation
expense was about $585 million.
|
|
|
Q7:
|
Can you give us an
update on how Cat Financial is performing?
|
|
|
A:
|
Cat Financial's
portfolio continues to perform well overall despite ongoing
weakness in many key end markets. Third-quarter 2016 past
dues were 2.77 percent, compared with 2.68 percent in the third
quarter of 2015, with current past dues remaining lower than
historical averages. Write-offs in the third quarter of 2016
were $29 million, or 0.44 percent of the average retail portfolio,
compared with $69 million, or 1.04 percent of the average retail
portfolio in third quarter of 2015, and slightly below historical
averages for the third quarter. We believe customer risk
exposure is well managed, with a broad distribution of portfolio
exposure across a global customer base. Cat Financial
continues to work closely with its customers to provide financing
support for new Caterpillar product purchases and to actively
monitor global portfolio health.
|
|
|
Q8:
|
Can you comment on
your balance sheet and cash priorities?
|
|
|
A:
|
The ME&T
debt-to-capital ratio was 37.1 percent at the end of
the third quarter of 2016, compared with 39.0 percent at the end of
the second quarter. Our cash and liquidity positions remain
strong with an enterprise cash balance of $6.1 billion as of
September 30, 2016. ME&T operating cash flow for the
third quarter of 2016 was $400 million, compared with $766 million
in the third quarter of 2015. For 2016, we expect ME&T
operating cash flow to exceed dividends and capital expenditures.
Our cash deployment priorities are unchanged, and we remain focused
on the continued strength of our balance sheet.
|
|
|
Q9:
|
Do you expect 2017
funding for your pension and OPEB plans to increase substantially
from 2016?
|
|
|
A:
|
Through September
2016, we have contributed about $270 million to our pension and
OPEB plans and we expect full-year contributions of about $350
million. We expect full-year contributions in 2017 to be
about $550 million.
|
|
|
Q10:
|
Can you provide
more information on the accounting change you made for pension and
OPEB plans and the potential impact on 2016?
|
|
|
A:
|
Effective January 1,
2016, we made a change in accounting principle related to pension
and OPEB plans. The expense recognized is essentially split
into two components. The first component, annual benefits
earned by employees along with interest cost on the liability and
an expected return on plan assets, is recognized throughout the
year. We consider this "ongoing" pension and OPEB
expense. In the fourth quarter, we will recognize the second
component, a mark-to-market adjustment, to reflect changes
occurring during the year. Generally, changes in interest
rates have the most significant impact on the mark-to-market
adjustment. In years when interest rates drop, the
present value of future benefit payments is higher and we incur a
loss. In years when interest rates increase, the present
value decreases and we incur a gain. The impact of changing
interest rates can be volatile to earnings; however our pension and
OPEB obligations will be paid through many years in the future and
actual cash payments are expected to be relatively stable.
Differences in actual versus expected investment performance of
plan assets and changes in other economic and demographic factors
also impact the adjustment.
|
|
|
|
While this year's
impact could change significantly over the next quarter, based on
interest rates (which are lower than year-end 2015) and investment
returns as of the end of the third quarter, the year-end impact
would be negative to profit after tax by approximately $2 billion
or $3.50 per share. This adjustment will have no impact on
2016 cash flow, our pension funding obligations or benefits paid to
plan participants.
|
GLOSSARY OF TERMS
1.
|
All Other
Segments – Primarily includes activities such as: the business
strategy, product management, development, and manufacturing of
filters and fluids, undercarriage, tires and rims, ground engaging
tools, fluid transfer products, precision seals and rubber, and
sealing and connecting components primarily for Cat® products;
parts distribution; distribution services responsible for dealer
development and administration including a wholly owned dealer in
Japan, dealer portfolio management and ensuring the most efficient
and effective distribution of machines, engines and parts; digital
investments for new customer and dealer solutions that integrate
data analytics with state-of-the art digital technologies while
transforming the buying experience.
|
|
|
2.
|
Consolidating
Adjustments – Elimination of transactions between Machinery,
Energy & Transportation and Financial Products.
|
|
|
3.
|
Construction
Industries – A segment primarily responsible for supporting
customers using machinery in infrastructure, forestry and building
construction applications. Responsibilities include business
strategy, product design, product management and development,
manufacturing, marketing and sales and product support. The
product portfolio includes backhoe loaders, small wheel loaders,
small track-type tractors, skid steer loaders, multi-terrain
loaders, mini excavators, compact wheel loaders, telehandlers,
select work tools, small, medium and large track excavators, wheel
excavators, medium wheel loaders, compact track loaders, medium
track-type tractors, track-type loaders, motor graders, pipelayers,
forestry and paving products.
|
|
|
4.
|
Currency –
With respect to sales and revenues, currency represents the
translation impact on sales resulting from changes in foreign
currency exchange rates versus the U.S. dollar. With respect
to operating profit, currency represents the net translation impact
on sales and operating costs resulting from changes in foreign
currency exchange rates versus the U.S. dollar. Currency
includes the impact on sales and operating profit for the
Machinery, Energy & Transportation lines of business only;
currency impacts on Financial Products' revenues and operating
profit are included in the Financial Products' portions of the
respective analyses. With respect to other income/expense,
currency represents the effects of forward and option contracts
entered into by the company to reduce the risk of fluctuations in
exchange rates (hedging) and the net effect of changes in foreign
currency exchange rates on our foreign currency assets and
liabilities for consolidated results (translation).
|
|
|
5.
|
Debt-to-Capital
Ratio – A key measure of Machinery, Energy &
Transportation's financial strength used by management. The
metric is defined as Machinery, Energy & Transportation's
short-term borrowings, long-term debt due within one year and
long-term debt due after one year (debt) divided by the sum of
Machinery, Energy & Transportation's debt and stockholders'
equity. Debt also includes Machinery, Energy &
Transportation's long-term borrowings from Financial
Products.
|
|
|
6.
|
EAME – A
geographic region including Europe, Africa, the Middle East and the
Commonwealth of Independent States (CIS).
|
|
|
7.
|
Earning Assets
– Assets consisting primarily of total finance receivables net of
unearned income, plus equipment on operating leases, less
accumulated depreciation at Cat Financial.
|
|
|
8.
|
Energy &
Transportation – A segment primarily responsible for supporting
customers using reciprocating engines, turbines, diesel-electric
locomotives and related parts across industries serving power
generation, industrial, oil and gas and transportation
applications, including marine and rail-related businesses.
Responsibilities include business strategy, product design,
product management and development, manufacturing, marketing and
sales and product support of turbines and turbine-related services,
reciprocating engine powered generator sets, integrated systems
used in the electric power generation industry, reciprocating
engines and integrated systems and solutions for the marine and oil
and gas industries; reciprocating engines supplied to the
industrial industry as well as Cat machinery; the remanufacturing
of Cat engines and components and remanufacturing services for
other companies; the business strategy, product design, product
management and development, manufacturing, remanufacturing, leasing
and service of diesel-electric locomotives and components and other
rail-related products and services and product support of
on-highway vocational trucks for North America.
|
|
|
9.
|
Financial Products
Segment – Provides financing to customers and dealers for
the purchase and lease of Cat and other equipment, as well as some
financing for Caterpillar sales to dealers. Financing plans
include operating and finance leases, installment sale contracts,
working capital loans and wholesale financing plans. The
segment also provides various forms of insurance to customers and
dealers to help support the purchase and lease of our
equipment. Financial Products segment profit is determined on
a pretax basis and includes other income/expense items.
|
|
|
10.
|
Latin America
– A geographic region including Central and South American
countries and Mexico.
|
|
|
11.
|
Lean
Management – A holistic management system that uses a
sequential cadence of principles to drive the highest quality and
lowest total cost to achieve customer
requirements.
|
|
|
12.
|
Machinery, Energy
& Transportation (ME&T) – Represents the aggregate
total of Construction Industries, Resource Industries, Energy &
Transportation and All Other Segments and related corporate items
and eliminations.
|
|
|
13.
|
Machinery, Energy
& Transportation Other Operating (Income) Expenses
– Comprised primarily of gains/losses on disposal of
long-lived assets, gains/losses on divestitures and legal
settlements and accruals. Restructuring costs classified as
other operating expenses on the Results of Operations are presented
separately on the Operating Profit Comparison.
|
|
|
14.
|
Operating Profit
Pull Through – A key metric used by management to measure the
rate of operating profit change relative to the change in sales and
revenues. The metric is defined as the change in operating
profit divided by the change in sales and revenues. Excludes
restructuring costs and mark-to-market gains or losses resulting
from pension and OPEB plan remeasurements.
|
|
|
15.
|
Pension and other
postemployment benefit (OPEB) costs – The company's
defined benefit pension and postretirement benefit
plans.
|
|
|
16.
|
Period Costs –
Includes period manufacturing costs, ME&T selling, general and
administrative (SG&A) and research and development (R&D)
expenses excluding the impact of currency and exit related costs
that are included in restructuring costs (see definition
below). Period manufacturing costs support production but are
defined as generally not having a direct relationship to short-term
changes in volume. Examples include machinery and equipment
repair, depreciation on manufacturing assets, facility support,
procurement, factory scheduling, manufacturing planning and
operations management. SG&A and R&D costs are not
linked to the production of goods or services and include
marketing, legal and financial services and the development of new
and significant improvements in products or processes.
|
|
|
17.
|
Price
Realization – The impact of net price changes excluding
currency and new product introductions. Price realization
includes geographic mix of sales, which is the impact of changes in
the relative weighting of sales prices between geographic
regions.
|
|
|
18.
|
Resource
Industries – A segment primarily responsible for supporting
customers using machinery in mining, quarry, waste, and material
handling applications. Responsibilities include business strategy,
product design, product management and development, manufacturing,
marketing and sales and product support. The product
portfolio includes large track-type tractors, large mining trucks,
hard rock vehicles, longwall miners, electric rope shovels,
draglines, hydraulic shovels, track and rotary drills, highwall
miners, large wheel loaders, off-highway trucks, articulated
trucks, wheel tractor scrapers, wheel dozers, landfill compactors,
soil compactors, material handlers, continuous miners, scoops and
haulers, hardrock continuous mining systems, select work tools,
machinery components and electronics and control systems. In
addition to equipment, Resource Industries also develops and sells
technology to provide customers fleet management systems, equipment
management analytics and autonomous machine capabilities.
Resource Industries also manages areas that provide services to
other parts of the company, including integrated manufacturing and
research and development.
|
|
|
19.
|
Restructuring
Costs – Primarily costs for employee separation costs,
long-lived asset impairments and contract terminations. These
costs are included in Other Operating (Income) Expenses.
Restructuring costs also include other exit-related costs primarily
for accelerated depreciation and equipment relocation (primarily
included in Cost of goods sold) and sales discounts and payments to
dealers and customers related to discontinued products (included in
Sales of ME&T).
|
|
|
20.
|
Sales Volume –
With respect to sales and revenues, sales volume represents the
impact of changes in the quantities sold for Machinery, Energy
& Transportation as well as the incremental revenue impact of
new product introductions, including emissions-related product
updates. With respect to operating profit, sales volume
represents the impact of changes in the quantities sold for
Machinery, Energy & Transportation combined with product mix as
well as the net operating profit impact of new product
introductions, including emissions-related product updates.
Product mix represents the net operating profit impact of changes
in the relative weighting of Machinery, Energy & Transportation
sales with respect to total sales.
|
|
|
21.
|
Variable
Manufacturing Costs – Represents volume-adjusted costs
excluding the impact of currency. Variable manufacturing
costs are defined as having a direct relationship with the volume
of production. This includes material costs, direct labor and
other costs that vary directly with production volume such as
freight, power to operate machines and supplies that are consumed
in the manufacturing process.
|
NON-GAAP FINANCIAL MEASURES
The following definition is provided for "non-GAAP financial
measures" in connection with Regulation G issued by the Securities
and Exchange Commission. The non-GAAP financial measures we
use 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 substituted for
the related GAAP
measure.
Profit Per Share Excluding Restructuring Costs
We incurred restructuring costs in 2015 and in the first three
quarters of 2016 and expect to incur additional restructuring costs
in the fourth quarter of 2016. We believe it is important to
separately quantify the profit per share impact of restructuring
costs in order for our results and outlook to be meaningful to our
readers as these costs are incurred in the current year to generate
longer-term benefits. We have also provided 2015 profit per
share excluding restructuring costs comparable to the 2016
presentation. Reconciliation of profit per share excluding
restructuring costs to the most directly comparable GAAP measure,
diluted profit per share, are as follows:
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
2016
Outlook
|
|
|
2015
|
|
2016
|
|
Previous
1
|
|
Current
2
|
Profit per
share
|
$0.94
|
|
$0.48
|
|
$2.75
|
|
$2.35
|
Per share
restructuring costs3
|
$0.11
|
|
$0.37
|
|
$0.80
|
|
$0.90
|
Profit per share
excluding restructuring costs
|
$1.05
|
|
$0.85
|
|
$3.55
|
|
$3.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 2016
Sales and Revenues Outlook in a range of $40.0-40.5 billion (as of
July 26, 2016). Profit per share at midpoint.
|
|
|
2 2016
current outlook as of October 25, 2016. Sales and Revenues Outlook
of about $39 billion.
|
1-2 2016
Outlook does not include any impact from mark-to-market gains or
losses resulting from pension and OPEB plan remeasurements.
See Q&A #10 on page 15 for further discussion.
|
3 At
statutory tax rates.
|
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 our
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.
We also believe this presentation will assist readers in
understanding our business. Pages 20-28 reconcile Machinery,
Energy & Transportation with Financial Products on the equity
basis to Caterpillar Inc. consolidated financial information.
Caterpillar's latest financial results and outlook are also
available via:
Telephone:
|
800-228-7717 (Inside
the United States and Canada)
|
|
858-764-9492 (Outside
the United States and Canada)
|
Internet:
|
|
|
http://www.caterpillar.com/en/investors.html
|
|
http://www.caterpillar.com/en/investors/quarterly-results.html
(live broadcast/replays of quarterly conference call)
|
Caterpillar
Inc.
Condensed
Consolidated Statement of Results of Operations
(Unaudited)
(Dollars in
millions except per share data)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of Machinery,
Energy & Transportation
|
$
|
8,463
|
|
|
|
$
|
10,285
|
|
|
|
$
|
26,888
|
|
|
|
$
|
33,829
|
|
|
|
Revenues of Financial
Products
|
|
697
|
|
|
|
|
677
|
|
|
|
|
2,075
|
|
|
|
|
2,152
|
|
|
|
Total sales and
revenues
|
|
9,160
|
|
|
|
|
10,962
|
|
|
|
|
28,963
|
|
|
|
|
35,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
6,527
|
|
|
|
|
7,872
|
|
|
|
|
20,768
|
|
|
|
|
25,306
|
|
|
|
Selling, general and
administrative expenses
|
|
992
|
|
|
|
|
1,129
|
|
|
|
|
3,203
|
|
|
|
|
3,696
|
|
|
|
Research and
development expenses
|
|
453
|
|
|
|
|
513
|
|
|
|
|
1,429
|
|
|
|
|
1,547
|
|
|
|
Interest expense of
Financial Products
|
|
147
|
|
|
|
|
142
|
|
|
|
|
447
|
|
|
|
|
440
|
|
|
|
Other operating
(income) expenses
|
|
560
|
|
|
|
|
381
|
|
|
|
|
1,356
|
|
|
|
|
1,032
|
|
|
|
Total operating
costs
|
|
8,679
|
|
|
|
|
10,037
|
|
|
|
|
27,203
|
|
|
|
|
32,021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
481
|
|
|
|
|
925
|
|
|
|
|
1,760
|
|
|
|
|
3,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
excluding Financial Products
|
|
126
|
|
|
|
|
127
|
|
|
|
|
385
|
|
|
|
|
381
|
|
|
|
Other income
(expense)
|
|
28
|
|
|
|
|
(15)
|
|
|
|
|
112
|
|
|
|
|
107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
profit before taxes
|
|
383
|
|
|
|
|
783
|
|
|
|
|
1,487
|
|
|
|
|
3,686
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
96
|
|
|
|
|
218
|
|
|
|
|
372
|
|
|
|
|
1,074
|
|
|
|
Profit of
consolidated companies
|
|
287
|
|
|
|
|
565
|
|
|
|
|
1,115
|
|
|
|
|
2,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in profit
(loss) of unconsolidated affiliated companies
|
|
(4)
|
|
|
|
|
(3)
|
|
|
|
|
(7)
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
|
283
|
|
|
|
|
562
|
|
|
|
|
1,108
|
|
|
|
|
2,613
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Profit
(loss) attributable to noncontrolling interests
|
|
—
|
|
|
|
|
3
|
|
|
|
|
4
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
1
|
$
|
283
|
|
|
|
$
|
559
|
|
|
|
$
|
1,104
|
|
|
|
$
|
2,606
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit per common
share
|
$
|
0.48
|
|
|
|
$
|
0.95
|
|
|
|
$
|
1.89
|
|
|
|
$
|
4.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit per common
share – diluted 2
|
$
|
0.48
|
|
|
|
$
|
0.94
|
|
|
|
$
|
1.88
|
|
|
|
$
|
4.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding (millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Basic
|
|
584.7
|
|
|
|
|
588.4
|
|
|
|
|
583.8
|
|
|
|
|
597.9
|
|
|
|
- Diluted
2
|
|
589.6
|
|
|
|
|
594.8
|
|
|
|
|
588.7
|
|
|
|
|
605.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
1.54
|
|
|
|
$
|
1.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Profit attributable
to common stockholders.
|
2
|
Diluted by assumed
exercise of stock-based compensation awards using the treasury
stock method.
|
Caterpillar
Inc.
Condensed
Consolidated Statement of Financial Position
(Unaudited)
(Millions of
dollars)
|
|
September
30,
|
|
December
31,
|
|
2016
|
|
2015
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and short-term
investments
|
$
|
6,113
|
|
|
|
$
|
6,460
|
|
|
|
|
Receivables - trade
and other
|
|
5,797
|
|
|
|
|
6,695
|
|
|
|
|
Receivables -
finance
|
|
8,719
|
|
|
|
|
8,991
|
|
|
|
|
Prepaid expenses and
other current assets
|
|
1,892
|
|
|
|
|
1,662
|
|
|
|
|
Inventories
|
|
9,478
|
|
|
|
|
9,700
|
|
|
|
Total current
assets
|
|
31,999
|
|
|
|
|
33,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment – net
|
|
15,680
|
|
|
|
|
16,090
|
|
|
|
Long-term receivables
- trade and other
|
|
1,102
|
|
|
|
|
1,170
|
|
|
|
Long-term receivables
- finance
|
|
13,835
|
|
|
|
|
13,651
|
|
|
|
Noncurrent deferred
and refundable income taxes
|
|
2,579
|
|
|
|
|
2,489
|
|
|
|
Intangible
assets
|
|
2,453
|
|
|
|
|
2,821
|
|
|
|
Goodwill
|
|
6,725
|
|
|
|
|
6,615
|
|
|
|
Other
assets
|
|
2,029
|
|
|
|
|
1,998
|
|
|
Total
assets
|
$
|
76,402
|
|
|
|
$
|
78,342
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
-- Machinery, Energy
& Transportation
|
$
|
263
|
|
|
|
$
|
9
|
|
|
|
|
|
-- Financial
Products
|
|
6,702
|
|
|
|
|
6,958
|
|
|
|
|
Accounts
payable
|
|
4,713
|
|
|
|
|
5,023
|
|
|
|
|
Accrued
expenses
|
|
3,022
|
|
|
|
|
3,116
|
|
|
|
|
Accrued wages,
salaries and employee benefits
|
|
1,286
|
|
|
|
|
1,994
|
|
|
|
|
Customer
advances
|
|
1,161
|
|
|
|
|
1,146
|
|
|
|
|
Dividends
payable
|
|
—
|
|
|
|
|
448
|
|
|
|
|
Other current
liabilities
|
|
1,620
|
|
|
|
|
1,671
|
|
|
|
|
Long-term debt due
within one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
-- Machinery, Energy
& Transportation
|
|
553
|
|
|
|
|
517
|
|
|
|
|
|
-- Financial
Products
|
|
5,970
|
|
|
|
|
5,360
|
|
|
|
Total current
liabilities
|
|
25,290
|
|
|
|
|
26,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt due
after one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
-- Machinery, Energy
& Transportation
|
|
8,432
|
|
|
|
|
8,960
|
|
|
|
|
|
-- Financial
Products
|
|
15,190
|
|
|
|
|
16,209
|
|
|
|
Liability for
postemployment benefits
|
|
8,499
|
|
|
|
|
8,843
|
|
|
|
Other
liabilities
|
|
3,276
|
|
|
|
|
3,203
|
|
|
Total
liabilities
|
|
60,687
|
|
|
|
|
63,457
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
5,266
|
|
|
|
|
5,238
|
|
|
|
Treasury
stock
|
|
(17,544)
|
|
|
|
|
(17,640)
|
|
|
|
Profit employed in
the business
|
|
29,450
|
|
|
|
|
29,246
|
|
|
|
Accumulated other
comprehensive income (loss)
|
|
(1,527)
|
|
|
|
|
(2,035)
|
|
|
|
Noncontrolling
interests
|
|
70
|
|
|
|
|
76
|
|
|
Total
stockholders' equity
|
|
15,715
|
|
|
|
|
14,885
|
|
|
Total liabilities
and stockholders' equity
|
$
|
76,402
|
|
|
|
$
|
78,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Caterpillar
Inc.
Condensed
Consolidated Statement of Cash Flow
(Unaudited)
(Millions of
dollars)
|
|
Nine Months
Ended
|
|
September
30,
|
|
2016
|
|
2015
|
Cash flow from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
$
|
1,108
|
|
|
|
$
|
2,613
|
|
|
|
Adjustments for
non-cash items:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
2,255
|
|
|
|
|
2,272
|
|
|
|
|
Other
|
|
640
|
|
|
|
|
323
|
|
|
|
Changes in assets and
liabilities, net of acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
|
|
|
Receivables – trade
and other
|
|
1,128
|
|
|
|
|
614
|
|
|
|
|
Inventories
|
|
331
|
|
|
|
|
840
|
|
|
|
|
Accounts
payable
|
|
(163)
|
|
|
|
|
(893)
|
|
|
|
|
Accrued
expenses
|
|
(153)
|
|
|
|
|
(25)
|
|
|
|
|
Accrued wages,
salaries and employee benefits
|
|
(727)
|
|
|
|
|
(704)
|
|
|
|
|
Customer
advances
|
|
(24)
|
|
|
|
|
(36)
|
|
|
|
|
Other assets –
net
|
|
(141)
|
|
|
|
|
96
|
|
|
|
|
Other liabilities –
net
|
|
(291)
|
|
|
|
|
(236)
|
|
|
Net cash provided by
(used for) operating activities
|
|
3,963
|
|
|
|
|
4,864
|
|
|
Cash flow from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
– excluding equipment leased to others
|
|
(807)
|
|
|
|
|
(946)
|
|
|
|
Expenditures for
equipment leased to others
|
|
(1,393)
|
|
|
|
|
(1,251)
|
|
|
|
Proceeds from
disposals of leased assets and property, plant and
equipment
|
|
572
|
|
|
|
|
473
|
|
|
|
Additions to finance
receivables
|
|
(6,911)
|
|
|
|
|
(7,099)
|
|
|
|
Collections of
finance receivables
|
|
6,968
|
|
|
|
|
6,849
|
|
|
|
Proceeds from sale of
finance receivables
|
|
55
|
|
|
|
|
101
|
|
|
|
Investments and
acquisitions (net of cash acquired)
|
|
(72)
|
|
|
|
|
(140)
|
|
|
|
Proceeds from sale of
businesses and investments (net of cash sold)
|
|
—
|
|
|
|
|
174
|
|
|
|
Proceeds from sale of
securities
|
|
304
|
|
|
|
|
238
|
|
|
|
Investments in
securities
|
|
(339)
|
|
|
|
|
(296)
|
|
|
|
Other –
net
|
|
5
|
|
|
|
|
(76)
|
|
|
Net cash provided by
(used for) investing activities
|
|
(1,618)
|
|
|
|
|
(1,973)
|
|
|
Cash flow from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
|
(1,348)
|
|
|
|
|
(1,309)
|
|
|
|
Distribution to
noncontrolling interests
|
|
(8)
|
|
|
|
|
(7)
|
|
|
|
Common stock issued,
including treasury shares reissued
|
|
(54)
|
|
|
|
|
34
|
|
|
|
Treasury shares
purchased
|
|
—
|
|
|
|
|
(2,025)
|
|
|
|
Excess tax benefit
from stock-based compensation
|
|
12
|
|
|
|
|
20
|
|
|
|
Proceeds from debt
issued (original maturities greater than three months)
|
|
4,430
|
|
|
|
|
4,082
|
|
|
|
Payments on debt
(original maturities greater than three months)
|
|
(5,602)
|
|
|
|
|
(6,772)
|
|
|
|
Short-term borrowings
- net (original maturities three months or less)
|
|
(111)
|
|
|
|
|
1,922
|
|
|
Net cash provided by
(used for) financing activities
|
|
(2,681)
|
|
|
|
|
(4,055)
|
|
|
Effect of exchange
rate changes on cash
|
|
(11)
|
|
|
|
|
(131)
|
|
|
Increase
(decrease) in cash and short-term investments
|
|
(347)
|
|
|
|
|
(1,295)
|
|
|
Cash and short-term
investments at beginning of period
|
|
6,460
|
|
|
|
|
7,341
|
|
|
Cash and short-term
investments at end of period
|
$
|
6,113
|
|
|
|
$
|
6,046
|
|
|
|
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, 2016
(Unaudited)
(Millions of dollars)
|
|
|
|
Supplemental
Consolidating Data
|
|
|
|
Machinery,
|
|
|
|
|
|
Consolidated
|
|
Energy &
Transportation 1
|
|
Financial
Products
|
|
Consolidating
Adjustments
|
Sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of Machinery,
Energy & Transportation
|
$
|
8,463
|
|
|
|
$
|
8,463
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
Revenues of Financial
Products
|
|
697
|
|
|
|
|
—
|
|
|
|
|
768
|
|
|
|
|
(71)
|
2
|
|
Total sales and
revenues
|
|
9,160
|
|
|
|
|
8,463
|
|
|
|
|
768
|
|
|
|
|
(71)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
6,527
|
|
|
|
|
6,528
|
|
|
|
|
—
|
|
|
|
|
(1)
|
3
|
|
Selling, general and
administrative expenses
|
|
992
|
|
|
|
|
858
|
|
|
|
|
138
|
|
|
|
|
(4)
|
3
|
|
Research and
development expenses
|
|
453
|
|
|
|
|
453
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Interest expense of
Financial Products
|
|
147
|
|
|
|
|
—
|
|
|
|
|
151
|
|
|
|
|
(4)
|
4
|
|
Other operating
(income) expenses
|
|
560
|
|
|
|
|
258
|
|
|
|
|
308
|
|
|
|
|
(6)
|
3
|
|
Total operating
costs
|
|
8,679
|
|
|
|
|
8,097
|
|
|
|
|
597
|
|
|
|
|
(15)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
481
|
|
|
|
|
366
|
|
|
|
|
171
|
|
|
|
|
(56)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
excluding Financial Products
|
|
126
|
|
|
|
|
139
|
|
|
|
|
—
|
|
|
|
|
(13)
|
4
|
|
Other income
(expense)
|
|
28
|
|
|
|
|
(25)
|
|
|
|
|
10
|
|
|
|
|
43
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
profit before taxes
|
|
383
|
|
|
|
|
202
|
|
|
|
|
181
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
96
|
|
|
|
|
36
|
|
|
|
|
60
|
|
|
|
|
—
|
|
|
Profit of
consolidated companies
|
|
287
|
|
|
|
|
166
|
|
|
|
|
121
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in profit
(loss) of unconsolidated affiliated companies
|
|
(4)
|
|
|
|
|
(4)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Equity in profit of
Financial Products' subsidiaries
|
|
—
|
|
|
|
|
120
|
|
|
|
|
—
|
|
|
|
|
(120)
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
|
283
|
|
|
|
|
282
|
|
|
|
|
121
|
|
|
|
|
(120)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Profit
(loss) attributable to noncontrolling interests
|
|
—
|
|
|
|
|
(1)
|
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
7
|
$
|
283
|
|
|
|
$
|
283
|
|
|
|
$
|
120
|
|
|
|
$
|
(120)
|
|
|
|
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 stockholders.
|
Caterpillar
Inc.
Supplemental Data for Results of Operations
For the Three Months Ended September 30, 2015
(Unaudited)
(Millions of dollars)
|
|
|
|
Supplemental
Consolidating Data
|
|
|
|
Machinery,
|
|
|
|
|
|
Consolidated
|
|
Energy &
Transportation 1
|
|
Financial
Products
|
|
Consolidating
Adjustments
|
Sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of Machinery,
Energy & Transportation
|
$
|
10,285
|
|
|
|
$
|
10,285
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
Revenues of Financial
Products
|
|
677
|
|
|
|
|
—
|
|
|
|
|
772
|
|
|
|
|
(95)
|
2
|
|
Total sales and
revenues
|
|
10,962
|
|
|
|
|
10,285
|
|
|
|
|
772
|
|
|
|
|
(95)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
7,872
|
|
|
|
|
7,871
|
|
|
|
|
—
|
|
|
|
|
1
|
3
|
|
Selling, general and
administrative expenses
|
|
1,129
|
|
|
|
|
1,015
|
|
|
|
|
139
|
|
|
|
|
(25)
|
3
|
|
Research and
development expenses
|
|
513
|
|
|
|
|
513
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Interest expense of
Financial Products
|
|
142
|
|
|
|
|
—
|
|
|
|
|
144
|
|
|
|
|
(2)
|
4
|
|
Other operating
(income) expenses
|
|
381
|
|
|
|
|
84
|
|
|
|
|
304
|
|
|
|
|
(7)
|
3
|
|
Total operating
costs
|
|
10,037
|
|
|
|
|
9,483
|
|
|
|
|
587
|
|
|
|
|
(33)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
925
|
|
|
|
|
802
|
|
|
|
|
185
|
|
|
|
|
(62)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
excluding Financial Products
|
|
127
|
|
|
|
|
138
|
|
|
|
|
—
|
|
|
|
|
(11)
|
4
|
|
Other income
(expense)
|
|
(15)
|
|
|
|
|
(87)
|
|
|
|
|
21
|
|
|
|
|
51
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
profit before taxes
|
|
783
|
|
|
|
|
577
|
|
|
|
|
206
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
218
|
|
|
|
|
156
|
|
|
|
|
62
|
|
|
|
|
—
|
|
|
Profit of
consolidated companies
|
|
565
|
|
|
|
|
421
|
|
|
|
|
144
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in profit
(loss) of unconsolidated affiliated companies
|
|
(3)
|
|
|
|
|
(3)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Equity in profit of
Financial Products' subsidiaries
|
|
—
|
|
|
|
|
144
|
|
|
|
|
—
|
|
|
|
|
(144)
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
|
562
|
|
|
|
|
562
|
|
|
|
|
144
|
|
|
|
|
(144)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Profit
(loss) attributable to noncontrolling interests
|
|
3
|
|
|
|
|
3
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
7
|
$
|
559
|
|
|
|
$
|
559
|
|
|
|
$
|
144
|
|
|
|
$
|
(144)
|
|
|
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 stockholders.
|
Caterpillar
Inc.
Supplemental Data for Results of Operations
For the Nine Months Ended September 30, 2016
(Unaudited)
(Millions of dollars)
|
|
|
|
Supplemental
Consolidating Data
|
|
|
|
Machinery,
|
|
|
|
|
|
Consolidated
|
|
Energy &
Transportation 1
|
|
Financial
Products
|
|
Consolidating
Adjustments
|
Sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of Machinery,
Energy & Transportation
|
$
|
26,888
|
|
|
|
$
|
26,888
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
Revenues of Financial
Products
|
|
2,075
|
|
|
|
|
—
|
|
|
|
|
2,305
|
|
|
|
|
(230)
|
2
|
|
Total sales and
revenues
|
|
28,963
|
|
|
|
|
26,888
|
|
|
|
|
2,305
|
|
|
|
|
(230)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
20,768
|
|
|
|
|
20,769
|
|
|
|
|
—
|
|
|
|
|
(1)
|
3
|
|
Selling, general and
administrative expenses
|
|
3,203
|
|
|
|
|
2,794
|
|
|
|
|
424
|
|
|
|
|
(15)
|
3
|
|
Research and
development expenses
|
|
1,429
|
|
|
|
|
1,429
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Interest expense of
Financial Products
|
|
447
|
|
|
|
|
—
|
|
|
|
|
458
|
|
|
|
|
(11)
|
4
|
|
Other operating
(income) expenses
|
|
1,356
|
|
|
|
|
462
|
|
|
|
|
914
|
|
|
|
|
(20)
|
3
|
|
Total operating
costs
|
|
27,203
|
|
|
|
|
25,454
|
|
|
|
|
1,796
|
|
|
|
|
(47)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
1,760
|
|
|
|
|
1,434
|
|
|
|
|
509
|
|
|
|
|
(183)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
excluding Financial Products
|
|
385
|
|
|
|
|
422
|
|
|
|
|
—
|
|
|
|
|
(37)
|
4
|
|
Other income
(expense)
|
|
112
|
|
|
|
|
(72)
|
|
|
|
|
38
|
|
|
|
|
146
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
profit before taxes
|
|
1,487
|
|
|
|
|
940
|
|
|
|
|
547
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
372
|
|
|
|
|
198
|
|
|
|
|
174
|
|
|
|
|
—
|
|
|
Profit of
consolidated companies
|
|
1,115
|
|
|
|
|
742
|
|
|
|
|
373
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in profit
(loss) of unconsolidated affiliated companies
|
|
(7)
|
|
|
|
|
(7)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Equity in profit of
Financial Products' subsidiaries
|
|
—
|
|
|
|
|
369
|
|
|
|
|
—
|
|
|
|
|
(369)
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
|
1,108
|
|
|
|
|
1,104
|
|
|
|
|
373
|
|
|
|
|
(369)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Profit
(loss) attributable to noncontrolling interests
|
|
4
|
|
|
|
|
—
|
|
|
|
|
4
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
7
|
$
|
1,104
|
|
|
|
$
|
1,104
|
|
|
|
$
|
369
|
|
|
|
$
|
(369)
|
|
|
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 stockholders.
|
Caterpillar
Inc.
Supplemental Data for Results of Operations
For the Nine Months Ended September 30, 2015
(Unaudited)
(Millions of dollars)
|
|
|
|
|
Supplemental
Consolidating Data
|
|
|
|
|
Machinery,
|
|
|
|
|
|
|
Consolidated
|
|
Energy &
Transportation 1
|
|
Financial
Products
|
|
Consolidating
Adjustments
|
Sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of Machinery,
Energy & Transportation
|
$
|
33,829
|
|
|
|
$
|
33,829
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
Revenues of Financial
Products
|
|
2,152
|
|
|
|
|
—
|
|
|
|
|
2,390
|
|
|
|
|
(238)
|
2
|
|
Total sales and
revenues
|
|
35,981
|
|
|
|
|
33,829
|
|
|
|
|
2,390
|
|
|
|
|
(238)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
25,306
|
|
|
|
|
25,306
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Selling, general and
administrative expenses
|
|
3,696
|
|
|
|
|
3,269
|
|
|
|
|
444
|
|
|
|
|
(17)
|
3
|
|
Research and
development expenses
|
|
1,547
|
|
|
|
|
1,547
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Interest expense of
Financial Products
|
|
440
|
|
|
|
|
—
|
|
|
|
|
445
|
|
|
|
|
(5)
|
4
|
|
Other operating
(income) expenses
|
|
1,032
|
|
|
|
|
149
|
|
|
|
|
903
|
|
|
|
|
(20)
|
3
|
|
Total operating
costs
|
|
32,021
|
|
|
|
|
30,271
|
|
|
|
|
1,792
|
|
|
|
|
(42)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
3,960
|
|
|
|
|
3,558
|
|
|
|
|
598
|
|
|
|
|
(196)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
excluding Financial Products
|
|
381
|
|
|
|
|
413
|
|
|
|
|
—
|
|
|
|
|
(32)
|
4
|
|
Other income
(expense)
|
|
107
|
|
|
|
|
(79)
|
|
|
|
|
22
|
|
|
|
|
164
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
profit before taxes
|
|
3,686
|
|
|
|
|
3,066
|
|
|
|
|
620
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
1,074
|
|
|
|
|
885
|
|
|
|
|
189
|
|
|
|
|
—
|
|
|
Profit of
consolidated companies
|
|
2,612
|
|
|
|
|
2,181
|
|
|
|
|
431
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in profit
(loss) of unconsolidated affiliated companies
|
|
1
|
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Equity in profit of
Financial Products' subsidiaries
|
|
—
|
|
|
|
|
429
|
|
|
|
|
—
|
|
|
|
|
(429)
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
|
2,613
|
|
|
|
|
2,611
|
|
|
|
|
431
|
|
|
|
|
(429)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Profit
(loss) attributable to noncontrolling interests
|
|
7
|
|
|
|
|
5
|
|
|
|
|
2
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
7
|
$
|
2,606
|
|
|
|
$
|
2,606
|
|
|
|
$
|
429
|
|
|
|
$
|
(429)
|
|
|
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 stockholders.
|
Caterpillar
Inc.
Supplemental Data
for Cash Flow
For the Nine
Months Ended September 30, 2016
(Unaudited)
(Millions of
dollars)
|
|
|
|
Supplemental
Consolidating Data
|
|
|
|
Machinery,
|
|
|
|
|
|
Consolidated
|
|
Energy &
Transportation 1
|
|
Financial
Products
|
|
Consolidating
Adjustments
|
Cash flow from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
$
|
1,108
|
|
|
|
$
|
1,104
|
|
|
|
$
|
373
|
|
|
|
$
|
(369)
|
2
|
|
Adjustments for
non-cash items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
2,255
|
|
|
|
|
1,591
|
|
|
|
|
664
|
|
|
|
|
—
|
|
|
|
Undistributed profit
of Financial Products
|
|
—
|
|
|
|
|
(362)
|
|
|
|
|
—
|
|
|
|
|
362
|
3
|
|
|
Other
|
|
640
|
|
|
|
|
503
|
|
|
|
|
(11)
|
|
|
|
|
148
|
4
|
|
Changes in assets and
liabilities, net of acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables - trade
and other
|
|
1,128
|
|
|
|
|
252
|
|
|
|
|
42
|
|
|
|
|
834
|
4,5
|
|
|
Inventories
|
|
331
|
|
|
|
|
335
|
|
|
|
|
—
|
|
|
|
|
(4)
|
4
|
|
|
Accounts
payable
|
|
(163)
|
|
|
|
|
(130)
|
|
|
|
|
16
|
|
|
|
|
(49)
|
4
|
|
|
Accrued
expenses
|
|
(153)
|
|
|
|
|
(93)
|
|
|
|
|
(60)
|
|
|
|
|
—
|
|
|
|
Accrued wages,
salaries and employee benefits
|
|
(727)
|
|
|
|
|
(713)
|
|
|
|
|
(14)
|
|
|
|
|
—
|
|
|
|
Customer
advances
|
|
(24)
|
|
|
|
|
(24)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Other assets -
net
|
|
(141)
|
|
|
|
|
(278)
|
|
|
|
|
102
|
|
|
|
|
35
|
4
|
|
|
Other liabilities -
net
|
|
(291)
|
|
|
|
|
(402)
|
|
|
|
|
146
|
|
|
|
|
(35)
|
4
|
Net cash provided by
(used for) operating activities
|
|
3,963
|
|
|
|
|
1,783
|
|
|
|
|
1,258
|
|
|
|
|
922
|
|
Cash flow from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
- excluding equipment leased to others
|
|
(807)
|
|
|
|
|
(802)
|
|
|
|
|
(6)
|
|
|
|
|
1
|
4
|
|
Expenditures for
equipment leased to others
|
|
(1,393)
|
|
|
|
|
(56)
|
|
|
|
|
(1,377)
|
|
|
|
|
40
|
4
|
|
Proceeds from
disposals of leased assets and property, plant and
equipment
|
|
572
|
|
|
|
|
89
|
|
|
|
|
510
|
|
|
|
|
(27)
|
4
|
|
Additions to finance
receivables
|
|
(6,911)
|
|
|
|
|
—
|
|
|
|
|
(8,888)
|
|
|
|
|
1,977
|
5
|
|
Collections of
finance receivables
|
|
6,968
|
|
|
|
|
—
|
|
|
|
|
9,308
|
|
|
|
|
(2,340)
|
5
|
|
Net intercompany
purchased receivables
|
|
—
|
|
|
|
|
—
|
|
|
|
|
580
|
|
|
|
|
(580)
|
5
|
|
Proceeds from sale of
finance receivables
|
|
55
|
|
|
|
|
—
|
|
|
|
|
55
|
|
|
|
|
—
|
|
|
Net intercompany
borrowings
|
|
—
|
|
|
|
|
(716)
|
|
|
|
|
(999)
|
|
|
|
|
1,715
|
6
|
|
Investments and
acquisitions (net of cash acquired)
|
|
(72)
|
|
|
|
|
(72)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Proceeds from sale of
securities
|
|
304
|
|
|
|
|
25
|
|
|
|
|
279
|
|
|
|
|
—
|
|
|
Investments in
securities
|
|
(339)
|
|
|
|
|
(22)
|
|
|
|
|
(317)
|
|
|
|
|
—
|
|
|
Other -
net
|
|
5
|
|
|
|
|
15
|
|
|
|
|
(17)
|
|
|
|
|
7
|
8
|
Net cash provided by
(used for) investing activities
|
|
(1,618)
|
|
|
|
|
(1,539)
|
|
|
|
|
(872)
|
|
|
|
|
793
|
|
Cash flow from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
|
(1,348)
|
|
|
|
|
(1,348)
|
|
|
|
|
(7)
|
|
|
|
|
7
|
7
|
|
Distribution to
noncontrolling interests
|
|
(8)
|
|
|
|
|
(8)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Common stock issued,
including treasury shares reissued
|
|
(54)
|
|
|
|
|
(54)
|
|
|
|
|
7
|
|
|
|
|
(7)
|
8
|
|
Excess tax benefit
from stock-based compensation
|
|
12
|
|
|
|
|
12
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Net intercompany
borrowings
|
|
—
|
|
|
|
|
999
|
|
|
|
|
716
|
|
|
|
|
(1,715)
|
6
|
|
Proceeds from debt
issued (original maturities greater than three months)
|
|
4,430
|
|
|
|
|
6
|
|
|
|
|
4,424
|
|
|
|
|
—
|
|
|
Payments on debt
(original maturities greater than three months)
|
|
(5,602)
|
|
|
|
|
(525)
|
|
|
|
|
(5,077)
|
|
|
|
|
—
|
|
|
Short-term borrowings
- net (original maturities three months or less)
|
|
(111)
|
|
|
|
|
254
|
|
|
|
|
(365)
|
|
|
|
|
—
|
|
Net cash provided by
(used for) financing activities
|
|
(2,681)
|
|
|
|
|
(664)
|
|
|
|
|
(302)
|
|
|
|
|
(1,715)
|
|
Effect of exchange
rate changes on cash
|
|
(11)
|
|
|
|
|
(26)
|
|
|
|
|
15
|
|
|
|
|
—
|
|
Increase
(decrease) in cash and short-term investments
|
|
(347)
|
|
|
|
|
(446)
|
|
|
|
|
99
|
|
|
|
|
—
|
|
Cash and short-term
investments at beginning of period
|
|
6,460
|
|
|
|
|
5,340
|
|
|
|
|
1,120
|
|
|
|
|
—
|
|
Cash and short-term
investments at end of period
|
$
|
6,113
|
|
|
|
$
|
4,894
|
|
|
|
$
|
1,219
|
|
|
|
$
|
—
|
|
|
|
|
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.
|
|
8
|
Elimination of change
in investment and common stock related to Financial
Products.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Caterpillar
Inc.
Supplemental Data
for Cash Flow
For the Nine
Months Ended September 30, 2015
(Unaudited)
(Millions of
dollars)
|
|
|
|
Supplemental
Consolidating Data
|
|
|
|
Machinery,
|
|
|
|
|
|
Consolidated
|
|
Energy &
Transportation 1
|
|
Financial
Products
|
|
Consolidating
Adjustments
|
Cash flow from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
$
|
2,613
|
|
|
|
$
|
2,611
|
|
|
|
$
|
431
|
|
|
|
$
|
(429)
|
2
|
|
Adjustments for
non-cash items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
2,272
|
|
|
|
|
1,608
|
|
|
|
|
664
|
|
|
|
|
—
|
|
|
|
Undistributed profit
of Financial Products
|
|
—
|
|
|
|
|
(179)
|
|
|
|
|
—
|
|
|
|
|
179
|
3
|
|
|
Other
|
|
323
|
|
|
|
|
221
|
|
|
|
|
(92)
|
|
|
|
|
194
|
4
|
|
Changes in assets and
liabilities, net of acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables - trade
and other
|
|
614
|
|
|
|
|
342
|
|
|
|
|
(65)
|
|
|
|
|
337
|
4,5
|
|
|
Inventories
|
|
840
|
|
|
|
|
845
|
|
|
|
|
—
|
|
|
|
|
(5)
|
4
|
|
|
Accounts
payable
|
|
(893)
|
|
|
|
|
(988)
|
|
|
|
|
56
|
|
|
|
|
39
|
4
|
|
|
Accrued
expenses
|
|
(25)
|
|
|
|
|
(41)
|
|
|
|
|
3
|
|
|
|
|
13
|
4
|
|
|
Accrued wages,
salaries and employee benefits
|
|
(704)
|
|
|
|
|
(695)
|
|
|
|
|
(9)
|
|
|
|
|
—
|
|
|
|
Customer
advances
|
|
(36)
|
|
|
|
|
(36)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Other assets -
net
|
|
96
|
|
|
|
|
1
|
|
|
|
|
58
|
|
|
|
|
37
|
4
|
|
|
Other liabilities -
net
|
|
(236)
|
|
|
|
|
(243)
|
|
|
|
|
57
|
|
|
|
|
(50)
|
4
|
Net cash provided by
(used for) operating activities
|
|
4,864
|
|
|
|
|
3,446
|
|
|
|
|
1,103
|
|
|
|
|
315
|
|
Cash flow from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
- excluding equipment leased to others
|
|
(946)
|
|
|
|
|
(938)
|
|
|
|
|
(9)
|
|
|
|
|
1
|
4
|
|
Expenditures for
equipment leased to others
|
|
(1,251)
|
|
|
|
|
(157)
|
|
|
|
|
(1,116)
|
|
|
|
|
22
|
4
|
|
Proceeds from
disposals of leased assets and property, plant and
equipment
|
|
473
|
|
|
|
|
51
|
|
|
|
|
429
|
|
|
|
|
(7)
|
4
|
|
Additions to finance
receivables
|
|
(7,099)
|
|
|
|
|
—
|
|
|
|
|
(9,434)
|
|
|
|
|
2,335
|
5,8
|
|
Collections of
finance receivables
|
|
6,849
|
|
|
|
|
—
|
|
|
|
|
9,001
|
|
|
|
|
(2,152)
|
5
|
|
Net intercompany
purchased receivables
|
|
—
|
|
|
|
|
—
|
|
|
|
|
758
|
|
|
|
|
(758)
|
5
|
|
Proceeds from sale of
finance receivables
|
|
101
|
|
|
|
|
—
|
|
|
|
|
101
|
|
|
|
|
—
|
|
|
Net intercompany
borrowings
|
|
—
|
|
|
|
|
(21)
|
|
|
|
|
1
|
|
|
|
|
20
|
6
|
|
Investments and
acquisitions (net of cash acquired)
|
|
(140)
|
|
|
|
|
(140)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Proceeds from sale of
businesses and investments (net of cash sold)
|
|
174
|
|
|
|
|
180
|
|
|
|
|
—
|
|
|
|
|
(6)
|
8
|
|
Proceeds from sale of
securities
|
|
238
|
|
|
|
|
16
|
|
|
|
|
222
|
|
|
|
|
—
|
|
|
Investments in
securities
|
|
(296)
|
|
|
|
|
(20)
|
|
|
|
|
(276)
|
|
|
|
|
—
|
|
|
Other -
net
|
|
(76)
|
|
|
|
|
(34)
|
|
|
|
|
(42)
|
|
|
|
|
—
|
|
Net cash provided by
(used for) investing activities
|
|
(1,973)
|
|
|
|
|
(1,063)
|
|
|
|
|
(365)
|
|
|
|
|
(545)
|
|
Cash flow from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
|
(1,309)
|
|
|
|
|
(1,309)
|
|
|
|
|
(250)
|
|
|
|
|
250
|
7
|
|
Distribution to
noncontrolling interests
|
|
(7)
|
|
|
|
|
(7)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Common stock issued,
including treasury shares reissued
|
|
34
|
|
|
|
|
34
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Treasury shares
purchased
|
|
(2,025)
|
|
|
|
|
(2,025)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Excess tax benefit
from stock-based compensation
|
|
20
|
|
|
|
|
20
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Net intercompany
borrowings
|
|
—
|
|
|
|
|
(1)
|
|
|
|
|
21
|
|
|
|
|
(20)
|
6
|
|
Proceeds from debt
issued (original maturities greater than three months)
|
|
4,082
|
|
|
|
|
3
|
|
|
|
|
4,079
|
|
|
|
|
—
|
|
|
Payments on debt
(original maturities greater than three months)
|
|
(6,772)
|
|
|
|
|
(513)
|
|
|
|
|
(6,259)
|
|
|
|
|
—
|
|
|
Short-term borrowings
- net (original maturities three months or less)
|
|
1,922
|
|
|
|
|
5
|
|
|
|
|
1,917
|
|
|
|
|
—
|
|
Net cash provided by
(used for) financing activities
|
|
(4,055)
|
|
|
|
|
(3,793)
|
|
|
|
|
(492)
|
|
|
|
|
230
|
|
Effect of exchange
rate changes on cash
|
|
(131)
|
|
|
|
|
(99)
|
|
|
|
|
(32)
|
|
|
|
|
—
|
|
Increase
(decrease) in cash and short-term investments
|
|
(1,295)
|
|
|
|
|
(1,509)
|
|
|
|
|
214
|
|
|
|
|
—
|
|
Cash and short-term
investments at beginning of period
|
|
7,341
|
|
|
|
|
6,317
|
|
|
|
|
1,024
|
|
|
|
|
—
|
|
Cash and short-term
investments at end of period
|
$
|
6,046
|
|
|
|
$
|
4,808
|
|
|
|
$
|
1,238
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
8
|
Elimination of
proceeds received from Financial Products related to Machinery,
Energy & Transportation's sale of businesses and
investments.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/caterpillar-reports-third-quarter-2016-results-300350231.html
SOURCE Caterpillar Inc.