PEORIA, Illinois, April 25, 2017 /PRNewswire/ --
Company announces higher year-over-year sales and revenues for
first time in ten quarters
April 25, 2017 --
First Quarter
($ in billions except profit per share) 2017 2016
Sales and Revenues $9.822 $9.461
Profit Per Share $0.32 $0.46
Profit Per Share $1.28 $0.64
(Excluding Restructuring Costs)
- First-quarter sales and revenues up from 2016
- Outstanding operational performance in quarter
- Full-year sales and revenues outlook raised to a range of
$38 billion to $41 billion
- Continued uncertainty and economic volatility for remainder of
2017
Caterpillar Inc. (NYSE: CAT) today announced first-quarter 2017
sales and revenues of $9.8 billion,
compared with $9.5 billion in the
first quarter of 2016. First-quarter 2017 profit per share was
$0.32, compared with $0.46 per share in the first quarter of 2016.
Excluding restructuring costs, first-quarter 2017
profit per share was $1.28, double
first-quarter 2016 profit per share excluding restructuring costs
of $0.64 per share.
"Our team delivered outstanding operational performance and, for
the first time in more than two years, same quarter sales and
revenues increased," said Caterpillar Chief Executive Officer
Jim Umpleby. "We're also benefiting
from our significant cost reduction and restructuring actions,
which have improved cash flow and further strengthened an already
healthy balance sheet. With this momentum, we will continue to
focus investment on improving our competitive position by investing
in new technologies and improving our productivity to deliver
profit growth and shareholder value."
2017 Outlook
While Caterpillar had strong first-quarter performance and is
seeing signs of recovery in several of the industries it serves,
geopolitical and market uncertainty along with volatility in
commodity prices continue to present risks for the rest of the
year.
In January 2017, Caterpillar
provided an outlook range for sales and revenues for the full year
of $36 billion to $39 billion with a
midpoint of $37.5 billion. As a
result of a stronger than expected start to the year, the company's
expectations for full-year 2017 sales and revenues have increased.
The current sales and revenues outlook is now a range of
$38 billion to $41 billion with a
midpoint of $39.5 billion.
For the full year of 2017, Caterpillar expects profit per share
of about $2.10 at the midpoint of the
sales and revenues outlook range, or about $3.75 per share excluding restructuring costs.
The previous outlook for 2017 profit per share was about
$2.30 per share at the midpoint of
the sales and revenues outlook, or about $2.90 per share excluding restructuring
costs.
Restructuring costs expected in 2017 are significantly higher
than the prior outlook primarily due to ongoing manufacturing
facility consolidations. The company expects to incur about
$1.25 billion of restructuring costs
in 2017, an increase of $750 million
from the prior outlook, as the current outlook now includes
restructuring costs for recently announced actions at manufacturing
facilities in Gosselies, Belgium,
and Aurora, Illinois.
"There are encouraging signs, with promising quoting activity in
many of the markets we serve and retail sales to users turning
positive for both machines and Energy &
Transportation for the first time in several years,"
continued Umpleby. "While we are raising the full-year outlook for
sales and revenues, there continues to be uncertainty across the
globe, potential for volatility in commodity prices, and weakness
in key markets."
The 2017 outlook does not include a mark-to-market gain or loss
for remeasurement of pension and OPEB plans.
Notes:
- Glossary of terms is included on pages 15-16; first
occurrence of terms shown in bold italics.
- Information on non-GAAP financial measures is included on
page 17.
- Caterpillar will conduct a teleconference and live webcast,
with a slide presentation, beginning at 10
a.m. Central Time on Tuesday, April
25, 2017, to discuss its 2017 first-quarter financial
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 more than 90 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 2016 sales
and revenues of $38.537 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 speak only as of the date they are made, and
we do not undertake to update our forward-looking statements.
Caterpillar's actual results may differ materially from those
described or implied in our forward-looking statements based on a
number of factors, including, but not limited to: (i) global and
regional economic conditions and economic conditions in the
industries we serve; (ii) commodity price changes, material price
increases, fluctuations in demand for our products or significant
shortages of material; (iii) government monetary or fiscal
policies; (iv) political and economic risks, commercial instability
and events beyond our control in the countries in which we operate;
(v) our ability to develop, produce and market quality products
that meet our customers' needs; (vi) the impact of the highly
competitive environment in which we operate on our sales and
pricing; (vii) information technology security threats and computer
crime; (viii) additional restructuring costs or a failure to
realize anticipated savings or benefits from past or future cost
reduction actions; (ix) failure to realize all of the anticipated
benefits from initiatives to increase our productivity, efficiency
and cash flow and to reduce costs; (x) inventory management
decisions and sourcing practices of our dealers and our OEM
customers; (xi) a failure to realize, or a delay in realizing, all
of the anticipated benefits of our acquisitions, joint ventures or
divestitures; (xii) union disputes or other employee relations
issues; (xiii) adverse effects of unexpected events including
natural disasters; (xiv) disruptions or volatility in global
financial markets limiting our sources of liquidity or the
liquidity of our customers, dealers and suppliers; (xv) 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;
(xvi) our Financial Products segment's risks associated with the
financial services industry; (xvii) changes in interest rates or
market liquidity conditions; (xviii) an increase in delinquencies,
repossessions or net losses of Cat Financial's customers; (xix)
currency fluctuations; (xx) our or Cat Financial's compliance with
financial and other restrictive covenants in debt agreements; (xxi)
increased pension plan funding obligations; (xxii) alleged or
actual violations of trade or anti-corruption laws and regulations;
(xxiii) international trade policies and their impact on demand for
our products and our competitive position; (xxiv) additional tax
expense or exposure; (xxv) significant legal proceedings, claims,
lawsuits or government investigations; (xxvi) new regulations or
changes in financial services regulations; (xxvii) compliance with
environmental laws and regulations; and (xxviii) other factors
described in more detail in Caterpillar's Forms 10-Q, 10-K and
other filings with the Securities and Exchange Commission.
CONSOLIDATED RESULTS
Consolidated Sales and Revenues
Consolidated Sales and Revenues
Comparison
First Quarter 2017
vs. First Quarter 2016
To access this chart, go to
http://www.caterpillar.com/en/investors/quarterly-results.html
for the downloadable version of Caterpillar 1Q
2017earnings.
The chart above graphically illustrates reasons for the change
in Consolidated Sales and Revenues between the first quarter of
2016 (at left) and the first quarter of 2017 (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 $9.822
billion in the first quarter of 2017, an increase of
$361 million, or 4 percent, compared
with $9.461 billion in the first
quarter of 2016. The increase was primarily due to higher
sales volume, with the most significant increase in
Resource Industries mostly due to higher end-user
demand for aftermarket parts. Sales volume for Energy &
Transportation increased slightly mostly due to aftermarket parts
for reciprocating engines. Construction Industries'
sales volume was about flat. Favorable price
realization also contributed to the sales improvement.
Financial Products' segment revenues increased 2
percent primarily due to higher average financing rates.
Sales increased in Asia/Pacific
and Latin America
and were about flat in EAME and North America. Asia/Pacific sales increased 12 percent
primarily due to an increase in construction equipment sales in
China resulting from increased
infrastructure and residential investment. In addition, higher
commodity prices and increased mining production favorably impacted
demand for aftermarket parts in Australia. Sales increased 14 percent in
Latin America primarily due to
stabilizing economic conditions in several countries in the region
that resulted in improved end-user demand from low levels. In
North America, sales were flat as
higher demand for aftermarket parts was offset by lower end-user
demand for new equipment and the unfavorable impact of changes in
dealer inventories as dealers increased inventories more in the
first quarter of 2016 than in the first quarter of 2017. Also,
increased demand in North America
for oil and gas applications was about offset by lower sales for
infrastructure construction equipment.
Consolidated Operating Profit
Consolidated Operating Profit
Comparison
First Quarter 2017
vs. First Quarter 2016
To access this chart, go to
http://www.caterpillar.com/en/investors/quarterly-results.html
for the downloadable version of Caterpillar 1Q 2017
earnings.
The chart above graphically illustrates reasons for the change
in Consolidated Operating Profit between the first quarter of 2016
(at left) and the first quarter of 2017 (at right). Items favorably
impacting operating profitappear 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 first quarter of 2017 was $417 million, compared with $494 million in the first quarter of 2016, an
unfavorable change of $77 million
driven by a significant increase in restructuring costs. Excluding
restructuring costs, operating profit improved by $514 million, compared with the first quarter of
2016. The increase was primarily due to higher sales volume, with
nearly half of that increase due to a favorable mix of products.
Lower period costs, improved variable
manufacturing costs and favorable price realization also
contributed to the increase in operating profit. About half of the
variable manufacturing cost improvement was from lower material
costs, and price realization was favorable in Construction
Industries.
Period costs were lower primarily due to substantial
restructuring and cost reduction actions over the past year. The
reductions impacted period manufacturing costs, selling, general
and administrative expenses and research and development expenses
(R&D), with the most significant reduction in R&D. In
addition, stock-based compensation expense was lower, as discussed
in Q&A #5. These reductions were partially offset by higher
short-term incentive compensation expense.
Restructuring costs of $752
million in the first quarter of 2017 were primarily related
to the announced closure of the facility in Gosselies, Belgium. In the first quarter of 2016,
restructuring costs were $161
million.
Other Profit/Loss Items
- Other income/expense in the first quarter of 2017 was
expense of $5 million, compared with
zero income/expense in the first quarter of 2016. The unfavorable
change was primarily due to the impact from currency
translation and hedging gains and losses. Net losses were higher in
the first quarter of 2017, compared with the first quarter of
2016.
- The provision for income taxes in the first quarter
reflects an estimated annual tax rate of 32 percent, which excludes
the discrete items discussed in the following paragraph, compared
to 25 percent for the first quarter of 2016. The increase is
primarily due to higher non-U.S. restructuring costs in 2017 that
are taxed at relatively lower non-U.S. tax rates, along with other
changes in the geographic mix of profits from a tax
perspective.
In addition, a tax benefit of $17
million was recorded for the settlement of stock-based
compensation awards with tax deductions in excess of cumulative
U.S. GAAP compensation expense. This benefit was offset by a
$15 million increase to prior year
taxes related to non-U.S. restructuring costs.
Excluding restructuring costs and discrete items, the 2017
estimated annual tax rate is expected to be 28 percent.
Global Workforce
Caterpillar worldwide, full-time employment was about 95,300 at
the end of the first quarter of 2017, compared with about 101,400
at the end of the first quarter of 2016, a decrease of about 6,100
full-time employees. The flexible workforce decreased by about 300
for a total decrease in the global workforce of about 6,400. The
decrease was primarily the result of restructuring programs.
March 31
Increase/
2017 2016 (Decrease)
Full-time employment 95,300 101,400 (6,100)
Flexible workforce 12,600 12,900 (300)
Total 107,900 114,300 (6,400)
Geographic summary
U.S. workforce 46,500 50,500 (4,000)
Non-U.S. workforce 61,400 63,800 (2,400)
Total 107,900 114,300 (6,400)
SEGMENT RESULTS
Sales and Revenues by Geographic Region
% North % Latin % % Asia/ %
(Millions of Cha- Amer- Cha- Amer- Cha- Cha- Pac- Cha-
dollars) Total nge ica nge ica nge EAME nge ific nge
First
Quarter
2017
Constru-
ction
Indust-
ries(1) $4,091 1% $ 1,913 (7)% $ 250 8% 812 (4)% $1,116 23%
Resource
Indust-
ries(2) 1,670 15% 598 (1)% 269 -% 416 59% 387 23%
Energy &
Transpor-
tation(3) 3,356 2% 1,722 10% 275 38% 900 (8)% 459 (13)%
All Other
Segments(4) 37 (3)% 8 (47)% - (100)% 16 78% 13 -%
Corporate
Items and
Elimin-
ations (24) (23) - (2) 1
Machinery,
Energy &
Transpor-
tation $9,130 4% $ 4,218 -% $ 794 14% $2,142 2% $1,976 12%
Financial
Products
Segment $ 760 2% $ 486 6% $ 83 (5)% $ 100 2% $ 91 (8)%
Corporate
Items and
Eliminations (68) (38) (14) (4) (12)
Financial
Products
Revenues $ 692 2% $ 448 5% $ 69 (5)% $ 96 2% $ 79 (11)%
Consoli-
dated
Sales
and
Revenues $9,822 4% $ 4,666 -% $ 863 12% $2,238 2% $2,055 11%
First
Quarter
2016
Construc-
tion
Indust-
ries(1) $4,043 $ 2,058 $ 231 847 $ 907
Resource
Indust-
ries(2) 1,449 604 268 262 315
Energy &
Transpor-
tation(3) 3,278 1,566 200 982 530
All Other
Segments(4) 38 15 1 9 13
Corporate
Items and
Eliminat-
ions (28) (24) (1) (2) (1)
Machinery,
Energy &
Transpor-
tation $8,780 $ 4,219 $ 699 $2,098 $1,764
Financial
Products
Segment $ 743 $ 459 $ 87 $ 98 $ 99
Corporate
Items and
Eliminat-
ions (62) (34) (14) (4) (10)
Financial
Products
Revenues $ 681 $ 425 $ 73 $ 94 $ 89
Consoli-
dated
Sales and
Revenues $9,461 $ 4,644 $ 772 $2,192 $1,853
1. Does not include inter-segment sales of $25 million and $8 million in
first quarter 2017 and 2016, respectively.
2. Does not include inter-segment sales of $91 million and $71 million in
first quarter 2017 and 2016, respectively.
3. Does not include inter-segment sales of $780 million and $632 million in
first quarter 2017 and 2016, respectively.
4. Does not include inter-segment sales of $95 million and $92 million in
first quarter 2017 and 2016, respectively.
Sales and Revenues by Segment
(Millions First Price First $ %
of Quarter Sales Reali- Cur- Quarter Cha- Cha-
dollars) 2016 Volume zation rency Other 2017 nge nge
Construction
Industries $ 4,043 $ (68) $ 123 $ (7) $ - $ 4,091 $ 48 1%
Resource
Industries 1,449 246 (32) 7 - 1,670 221 15%
Energy &
Transpor-
tation 3,278 93 (1) (14) - 3,356 78 2%
All Other
Segments 38 (1) - - - 37 (1) (3)%
Corporate
Items and
Eliminations (28) 5 (2) 1 - (24) 4
Machinery,
Energy &
Transpor-
tation $ 8,780 $ 275 $ 88 $ (13) $ - $ 9,130 $ 350 4%
Financial
Products
Segment $ 743 $ - $ - $ - $ 17 $ 760 $ 17 2%
Corporate
Items and
Eliminations (62) - - - (6) (68) (6)
Financial
Products
Revenues $ 681 $ - $ - $ - $ 11 $ 692 $ 11 2%
Consolidated
Sales
and
Revenues $ 9,461 $ 275 $ 88 $ (13) $ 11 $ 9,822 $ 361 4%
Operating Profit (Loss) by Segment
First First
(Millions of Quarter Quarter $ %
dollars) 2017 2016 Change Change
Construction
Industries $ 635 $ 440 $ 195 44 %
Resource
Industries 158 (96) 254 265 %
Energy &
Transportation 552 410 142 35 %
All Other
Segments (13) (7) (6) (86) %
Corporate
Items and
Eliminations (1,030) (357) (673)
Machinery,
Energy &
Transportation $ 302 $ 390 $ (88) (23) %
Financial
Products
Segment $ 183 $ 168 $ 15 9 %
Corporate
Items and
Eliminations 3 (1) 4
Financial
Products $ 186 $ 167 $ 19 11 %
Consolidating
Adjustments (71) (63) (8)
Consolidated
Operating
Profit $ 417 $ 494 $ (77) (16) %
CONSTRUCTION INDUSTRIES
(Millions of dollars)
Sales Comparison
First First
Quarter Sales Price Curr- Quarter $ %
2016 Volume Realization ency 2017 Change Change
Sales
Comparison(1) $4,043 ($68) $123 ($7) $4,091 $48 1%
Sales by
Geographic
Region
First Quarter First Quarter $ %
2017 2016 Change Change
North America $1,913 $2,058 ($145) (7) %
Latin America 250 231 19 8 %
EAME 812 847 (35) (4) %
Asia/Pacific 1,116 907 209 23 %
Total1 $4,091 $4,043 $48 1 %
Segment Profit
First Quarter First Quarter $ %
2017 2016 Change Change
Segment Profit $635 $440 $195 44 %
1. Does not include inter-segment sales of $25 million and $8 million in first quarter 2017 and
2016, respectively.
Construction Industries' sales were $4.091 billion in the first quarter of 2017,
compared with $4.043 billion in the
first quarter of 2016. The increase was due to favorable price
realization, partially offset by slightly lower volume.
- Although market conditions remain competitive, price
realization was favorable due to a particularly weak pricing
environment in the first quarter of 2016 and previously announced
price increases impacting the first quarter of 2017.
- Sales volume declined primarily due to the unfavorable impact
of changes in dealer inventories resulting from a more significant
increase in dealer inventories in the first quarter of 2016 than in
the first quarter of 2017. This was partially offset by higher
end-user demand, primarily for equipment in Asia/Pacific.
Sales increased in Asia/Pacific
and decreased in North America.
Sales were about flat in EAME and Latin
America.
- Sales in Asia/Pacific were
higher as a result of an increase in end-user demand, primarily in
China, stemming from increased
government support for infrastructure and strong residential
investment. This increase was partially offset by an unfavorable
impact from changes in dealer inventories, primarily in
China, which were about flat in
the first quarter of 2016 and decreased in the first quarter of
2017.
- In North America, the sales
decline was primarily due to an unfavorable impact from changes in
dealer inventories and lower end-user demand, partially offset by
favorable price realization. End-user demand was lower in part due
to lower deliveries into rental fleets in the first quarter of
2017, compared with the first quarter of 2016. Although residential
and non-residential building construction activity improved, the
company believes demand for new construction equipment has remained
low due to end users' utilization of existing used equipment and
weak infrastructure development. The unfavorable impact of changes
in dealer inventories resulted from a more significant increase in
dealer inventories in the first quarter of 2016 than in the first
quarter of 2017.
Construction Industries' profit was $635
million in the first quarter of 2017, compared with
$440 million in the first quarter of
2016. The increase in profit was primarily due to favorable price
realization and lower period costs. The lower period costs were
mostly a result of the favorable impact of restructuring and cost
reduction actions.
RESOURCE INDUSTRIES
(Millions of dollars)
Sales Comparison
First First
Quarter Sales Price Curr- Quarter $ %
2016 Volume Realization ency 2017 Change Change
Sales
Comparison(1) $1,449 $246 ($32) $7 $1,670 $221 15%
Sales by
Geographic Region
First Quarter First Quarter $ %
2017 2016 Change Change
North America $598 $604 ($6) (1) %
Latin America 269 268 1 - %
EAME 416 262 154 59 %
Asia/Pacific 387 315 72 23 %
Total1 $1,670 $1,449 $221 15 %
Segment Profit (Loss)
First Quarter First Quarter $ %
2017 2016 Change Change
Segment Profit $158 ($96) $254 265 %
1. Does not include inter-segment sales of $91 million and $71 million in first quarter 2017 and 2016, respectively.
Resource Industries' sales were $1.670
billion in the first quarter of 2017, an increase of
$221 million, or 15 percent, from the
first quarter of 2016. The increase was primarily due to higher
sales volume. While sales improved for both new equipment and
aftermarket parts, most of the increase was for aftermarket parts,
which have increased sequentially in each of the last four
quarters. Sales for new equipment were favorably impacted by
changes in dealer inventories, which more than offset lower
end-user demand. Dealer inventories increased slightly in the first
quarter of 2017, compared with a decrease in the first quarter of
2016. Increases in certain commodity prices over the past year,
along with continued commodity consumption, have resulted in
increased mining production driving the need for maintenance and
rebuild activities. The company believes commodity prices need to
stabilize at these higher levels to drive stronger activity and
longer-term demand for both equipment and aftermarket parts.
Resource Industries' profit was $158
million in the first quarter of 2017, compared with a loss
of $96 million in the first quarter
of 2016. The favorable change was due to higher sales volume and
lower period costs. Period costs were lower primarily due to the
favorable impact of restructuring and cost reduction actions,
partially offset by an increase in short-term incentive
compensation expense.
ENERGY & TRANSPORTATION
(Millions of dollars)
Sales Comparison
First First
Quarter Sales Price Curr- Quarter $ %
2016 Volume Realization ency 2017 Change Change
Sales
Comparison(1) $3,278 $93 ($1) ($14) $3,356 $78 2%
Sales by
Geographic
Region
First Quarter First Quarter $ %
2017 2016 Change Change
North America $1,722 $1,566 $156 10 %
Latin America 275 200 75 38 %
EAME 900 982 (82) (8) %
Asia/Pacific 459 530 (71) (13) %
Total1 $3,356 $3,278 $78 2 %
Segment Profit
First Quarter First Quarter $ %
2017 2016 Change Change
Segment Profit $552 $410 $142 35 %
1. Does not include inter-segment sales of $780 million and $632 million in first quarter 2017 and 2016, respectively.
Energy & Transportation's sales were $3.356 billion in the first quarter of 2017,
compared with $3.278 billion in the
first quarter of 2016. The increase was primarily due to higher
sales of aftermarket parts for reciprocating engines.
- Oil and Gas - The sales increase was primarily in
North America, due to higher
demand for aftermarket parts as a result of relatively stable oil
prices and increasing fleet utilization as well as for
reciprocating engines used in gas compression as natural gas
pipeline build-out continued. This was partially offset by a
decrease in Asia/Pacific primarily
due to lower demand for equipment used in drilling and production
applications.
- Power Generation - Sales decreased in EAME and were
about flat in all other regions. The decline in EAME was primarily
a result of continued weakness in the Middle East with oil prices continuing to
limit investments.
- Industrial - Sales were about flat as increases in
Asia/Pacific and Latin America were mostly offset by a decrease
in EAME, reflecting changes in end-user demand for industrial
applications.
- Transportation - Sales were about flat with an increase
in demand for rail applications mostly offset by a decrease in
sales for marine applications. Rail application sales increased
primarily for rail services and aftermarket in North America despite continued weakness in
the rail industry. The North American rail industry continues to be
depressed with a significant number of idle locomotives. Sales
declined in marine applications mostly due to lower demand,
primarily for work boats and offshore vessels.
Energy & Transportation's profit was $552 million in the first quarter of 2017,
compared with $410 million in the
first quarter of 2016. The increase was primarily due to higher
sales volume, a favorable impact from cost absorption and improved
material costs. Cost absorption was favorable as inventory
increased more in the first quarter of 2017 than in the first
quarter of 2016. Period costs were about flat as the favorable
impact of restructuring and cost reduction actions was about offset
by higher short-term incentive compensation expense.
FINANCIAL PRODUCTS SEGMENT
(Millions of dollars)
Revenues by Geographic Region
First Quarter First Quarter $ %
2017 2016 Change Change
North America $486 $459 $27 6 %
Latin America 83 87 (4) (5) %
EAME 100 98 2 2 %
Asia/Pacific 91 99 (8) (8) %
Total $760 $743 $17 2 %
Segment Profit
First Quarter First Quarter $ %
2017 2016 Change Change
Segment Profit $183 $168 $15 9 %
Financial Products' revenues were $760
million in the first quarter of 2017, an increase of
$17 million, or 2 percent, from the
first quarter of 2016. The increase was primarily due to higher
average financing rates in North
America, partially offset by lower average earning
assets in North America,
Latin America and Asia/Pacific and lower average financing rates
in Asia/Pacific.
Financial Products' profit was $183
million in the first quarter of 2017, compared with
$168 million in the first quarter of
2016. The increase was primarily due to a decrease in the provision
for credit losses at Cat Financial.
At the end of the first quarter of 2017, past dues at Cat
Financial were 2.64 percent, compared with 2.78 percent at the end
of the first quarter of 2016. Write-offs, net of recoveries, in the
first quarter of 2017 were $15
million, or 0.23 percent of the average retail portfolio,
compared with $31 million, or 0.47
percent of the average retail portfolio in the first quarter of
2016, and were below historical averages for the first quarter.
As of March 31, 2017, Cat
Financial's allowance for credit losses totaled $346 million, or 1.28 percent of finance
receivables, compared with $340
million, or 1.21 percent of finance receivables at
March 31, 2016. The allowance for
credit losses at year-end 2016 was $343
million, or 1.29 percent of finance receivables.
Corporate Items and Eliminations
Expense for corporate items and eliminations was $1.027 billion in the first quarter of 2017, an
increase of $669 million from the
first quarter of 2016. Corporate items and eliminations include:
restructuring costs; corporate-level expenses; 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.
Restructuring costs in the first quarter of 2017 were
$752 million, $591 million higher than the first quarter of
2016, primarily due to the announced closure of the facility in
Gosselies, Belgium. Excluding
restructuring costs, expense for corporate items and eliminations
was $275 million, an increase of
$78 million from the first quarter of
2016, primarily due to timing differences.
QUESTIONS AND ANSWERS
Can you comment on first-quarter restructuring costs and your 2017 outlook for
Q1: restructuring costs?
During the first quarter of 2017, we incurred $752 million of restructuring costs
with approximately $670 million related to our manufacturing facility in
Gosselies, Belgium. On March 27, 2017, Caterpillar informed Belgian authorities of
the decision to proceed to a collective dismissal, which will lead to the closure
of the Gosselies site, impacting about 2,000 employees. Production operations at
Gosselies are expected to end by mid-year 2017. The restructuring costs are
A: primarily for severance costs and asset impairment charges.
First-quarter 2017 restructuring costs also include charges related to our
decision to move production from the Aurora, Illinois, facility into other U.S.
manufacturing facilities by the end of 2018, as well as ongoing manufacturing
facility consolidations that have been previously announced. We expect to incur
about $1.25 billion of restructuring costs during 2017, with costs for the
remainder of the year primarily for these announced restructuring actions.
Q2: Can you discuss changes in dealer inventories during the first quarter of 2017?
Dealers generally increase inventories in the first quarter in preparation for the
spring selling season. Dealer machine and engine inventories increased about $200
million in the first quarter of 2017, compared to an increase of about $300
A: million in the first quarter of 2016.
Q3: Can you discuss changes to your order backlog by segment?
At the end of the first quarter of 2017, the order backlog was about $14.8
billion. This represents about a $2.7 billion increase from the end of 2016. The
increase was across all segments, but primarily in Energy & Transportation and
A: Construction Industries.
Compared with the first quarter of 2016, the order backlog increased $1.7 billion.
The increase was across all segments, primarily in Construction Industries.
Can you comment on first-quarter 2017 expense related to your short-term incentive
Q4: compensation plan? What is included in your 2017 outlook?
Short-term incentive compensation expense is directly related to financial and
operational performance, measured against targets set annually. First-quarter 2017
expense was about $235 million, compared with first-quarter 2016 expense of about
A: $120 million.
For 2017, our current outlook includes short-term incentive compensation expense
of about $950 million, up from $750 million in our previous outlook. Short-term
incentive compensation expense was about $250 million in 2016, significantly below
targeted levels.
Why did your stock-based compensation expense decrease in the first quarter of
Q5: 2017 compared with the first quarter of 2016?
The decrease of $52 million was primarily related to timing. In 2017, we changed
the vesting policy for the annual equity award to require six months of continuous
employment prior to separation for participants who meet certain criteria
(generally, 55 years of age or older and at least five years of service with the
company) rather than to permit immediate vesting upon separation. Stock-based
compensation expense for these individuals is now recognized over a six-month
period, rather than in the first quarter. This change will not impact stock-based
A: compensation expense for the year but does impact the quarterly expense pattern.
Q6: Can you comment on your balance sheet and cash priorities?
The ME&T debt-to-capital ratio was 41.7 percent at the end of the first quarter of
2017, compared with 41.0 percent at the end of 2016. Our cash and liquidity
positions remain strong with an enterprise cash balance of $9.472 billion as of
March 31, 2017. ME&T operating cash flow for the first quarter of 2017 was $1.524
billion, compared with $219 million in the first quarter of 2016. The increase was
primarily due to higher profit excluding restructuring costs in the first quarter
of 2017, compared with the first quarter of 2016. First-quarter 2017 restructuring
costs were primarily for severance costs that have not yet been paid and for
non-cash impairment charges. In addition, there were lower severance and
short-term incentive compensation payments in the first quarter of 2017 versus the
A: first quarter of 2016.
Although our short-term priorities for the use of cash may vary from time to time
as business needs and conditions dictate, our long-term cash deployment strategy
remains unchanged: maintain a strong financial position in support of our credit
rating, provide capital to support growth, appropriately fund employee benefit
plans, pay dividends and repurchase common stock.
GLOSSARY OF TERMS
All Other Segments - Primarily includes activities such as: the business strategy,
product management and development, and manufacturing of filters and fluids,
undercarriage, tires and rims, ground engaging tools, fluid transfer products,
precision seals, and rubber sealing and connecting components primarily for Cat(R)
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
1. while transforming the buying experience.
Consolidating Adjustments - Elimination of transactions between Machinery, Energy
2. & Transportation and Financial Products.
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,
3. pipelayers, forestry and paving products and related parts.
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 excluding restructuring costs; 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
4. assets and liabilities for consolidated results (translation).
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 shareholders' equity. Debt also includes Machinery,
5. Energy & Transportation's long-term borrowings from Financial Products.
EAME - A geographic region including Europe, Africa, the Middle East and the
6. Commonwealth of Independent States (CIS).
Earning Assets - Assets consisting primarily of total finance receivables net of
unearned income, plus equipment on operating leases, less accumulated depreciation
7. at Cat Financial.
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
8. trucks for North America.
Financial Products Segment - Provides financing alternatives to customers and
dealers around the world for Caterpillar products, as well as financing for
vehicles, power generation facilities and marine vessels that, in most cases,
incorporate Caterpillar products. Financing plans include operating and finance
leases, installment sale contracts, working capital loans and wholesale financing
plans. The segment also provides insurance and risk management products and
services that help customers and dealers manage their business risk. Insurance and
risk management products offered include physical damage insurance, inventory
protection plans, extended service coverage for machines and engines, and dealer
property and casualty insurance. The various forms of financing, insurance and
risk management products offered to customers and dealers help support the
purchase and lease of our equipment. Financial Products segment profit is
9. determined on a pretax basis and includes other income/expense items.
Latin America - A geographic region including Central and South American countries
10. and Mexico.
Machinery, Energy & Transportation (ME&T) - Represents the aggregate total of
Construction Industries, Resource Industries, Energy & Transportation and All
11. Other Segments and related corporate items and eliminations.
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
12. the Operating Profit Comparison.
Pension and other postemployment benefit (OPEB) - The company's defined benefit
13. pension and postretirement benefit plans.
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
finance services and the development of new and significant improvements in
14. products or processes.
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
15. geographic regions.
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,
electronics and control systems and related parts. In addition to equipment,
Resource Industries also develops and sells technology products and services to
provide customers fleet management, 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
16. development.
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, inventory write-downs 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
17. Sales of ME&T).
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.
18. The impact of sales volume on segment profit includes intersegment sales.
Variable Manufacturing Costs - Represents volume-adjusted costs excluding the
impact of currency and restructuring costs (see definition above). 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
19. 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
Caterpillar uses 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
The company incurred restructuring costs in 2016 and in the
first quarter of 2017 and expects to incur additional restructuring
costs during the remainder of 2017. The company believes it is
important to separately quantify the profit per share impact of
restructuring costs in order for Caterpillar's results and outlook
to be meaningful to readers as these costs are incurred in the
current year to generate longer-term benefits.
Reconciliations of profit per share excluding restructuring
costs to the most directly comparable GAAP measure, diluted profit
per share, are as follows:
First Quarter 2017 Outlook
Previous Current
2016 2017 (1) (2)
Profit per share $0.46 $0.32 $2.30 $2.10
Per share restructuring
costs3 $0.18 $0.96 $0.60 $1.65
Profit per share excluding
restructuring costs $0.64 $1.28 $2.90 $3.75
1. 2017 Sales and Revenues Outlook in a range of $36-$39 billion (as of
January 26, 2017). Profit per share at midpoint.
2. 2017 Sales and Revenues Outlook in a range of $38-$41 billion. Profit
per share at midpoint.
3. At estimated annual tax rate based on full-year outlook for per share
restructuring costs at statutory tax rates. First-quarter 2017 and
Current 2017 Outlook at estimated annual tax rate of 22 percent plus a
$15 million increase to prior year taxes related to non-U.S.
restructuring costs. First-quarter 2017 also includes a favorable interim
adjustment of $0.06 per share resulting from the difference in the
estimated annual tax rate for consolidated reporting of 32 percent and
the estimated annual tax rate for profit per share excluding
restructuring costs and discrete items of 28 percent.
Machinery, Energy &
Transportation
Caterpillar defines Machinery, Energy & Transportation as it
is presented in the supplemental data as Caterpillar Inc. and its
subsidiaries with Financial Products accounted for on the equity
basis. Machinery, Energy & Transportation information relates
to the design, manufacture and marketing of Caterpillar products.
Financial Products' information relates to the financing to
customers and dealers for the purchase and lease of Caterpillar and
other equipment. The nature of these businesses is different,
especially with regard to the financial position and cash flow
items. Caterpillar management utilizes this presentation internally
to highlight these differences. The company also believes this
presentation will assist readers in understanding Caterpillar's
business. Pages 18-24 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:
www.caterpillar.com/en/investors.html
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
March 31,
2017 2016
Sales and revenues:
Sales of Machinery,
Energy & Transportation $ 9,130 $ 8,780
Revenues of Financial
Products 692 681
Total sales and revenues 9,822 9,461
Operating costs:
Cost of goods sold 6,758 6,822
Selling, general and
administrative expenses 1,045 1,088
Research and development
expenses 418 508
Interest expense of
Financial Products 159 152
Other operating (income)
expenses 1,025 397
Total operating costs 9,405 8,967
Operating profit 417 494
Interest expense
excluding Financial
Products 123 129
Other income (expense) (5) -
Consolidated profit before taxes 289 365
Provision (benefit) for
income taxes 90 92
Profit of consolidated
companies 199 273
Equity in profit (loss)
of unconsolidated
affiliated companies (5) (1)
Profit of consolidated and
affiliated companies 194 272
Less: Profit (loss) attributable to
noncontrolling interests 2 1
Profit (1) $ 192 $ 271
Profit per common share $ 0.33 $ 0.46
Profit per common share - diluted (2) $ 0.32 $ 0.46
Weighted-average common shares
outstanding (millions)
- Basic 587.5 582.8
- Diluted(2) 593.2 587.7
Cash dividends declared per common
share $ - $ -
1 Profit attributable to common shareholders.
Diluted by assumed exercise of stock-based compensation awards using the
2 treasury stock method.
Caterpillar Inc.
Condensed Consolidated Statement of Financial Position
(Unaudited)
(Millions of dollars)
March 31, December 31,
2017 2016
Assets
Current assets:
Cash and
short-term
investments $ 9,472 $ 7,168
Receivables -
trade and other 6,533 5,981
Receivables -
finance 8,684 8,522
Prepaid
expenses and
other current
assets 1,777 1,682
Inventories 9,082 8,614
Total current assets 35,548 31,967
Property, plant and
equipment - net 14,727 15,322
Long-term receivables
- trade and other 944 1,029
Long-term receivables
- finance 13,426 13,556
Noncurrent deferred
and refundable income
taxes 2,940 2,790
Intangible assets 2,287 2,349
Goodwill 6,051 6,020
Other assets 1,626 1,671
Total assets $ 77,549 $ 74,704
Liabilities
Current liabilities:
Short-term
borrowings:
--
Machinery,
Energy &
Transpor
tation $ 436 $ 209
--
Financial
Products 7,385 7,094
Accounts
payable 5,302 4,614
Accrued
expenses 3,086 3,003
Accrued wages,
salaries and
employee
benefits 1,666 1,296
Customer
advances 1,383 1,167
Dividends
Payable - 452
Other current
liabilities 1,641 1,635
Long-term debt
due within one
year:
--
Machinery,
Energy &
Transpor
tation 505 507
--
Financial
Products 6,231 6,155
Total current
liabilities 27,635 26,132
Long-term debt due
after one year:
--
Machinery,
Energy &
Transpor
tation 8,804 8,436
--
Financial
Products 14,921 14,382
Liability for
postemployment
benefits 9,291 9,357
Other liabilities 3,238 3,184
Total liabilities 63,889 61,491
Shareholders' equity
Common stock 5,222 5,277
Treasury stock (17,391) (17,478)
Profit employed in
the business 27,584 27,377
Accumulated other
comprehensive income
(loss) (1,827) (2,039)
Noncontrolling
interests 72 76
Total shareholders' equity 13,660 13,213
Total liabilities and
shareholders' equity $ 77,549 $ 74,704
Caterpillar Inc.
Condensed Consolidated Statement of Cash Flow
(Unaudited)
(Millions of dollars)
Three Months Ended
March 31,
2017 2016
Cash flow from operating
activities:
Profit of consolidated
and affiliated companies $ 194 $ 272
Adjustments for non-cash
items:
Depreciation
and
amortization 710 740
Other 301 269
Changes in assets and
liabilities, net of
acquisitions and
divestitures:
Receivables -
trade and
other (353) 14
Inventories (444) (74)
Accounts
payable 732 211
Accrued
expenses 132 33
Accrued
wages,
salaries and
employee
benefits 360 (852)
Customer
advances 193 174
Other assets
- net (261) (145)
Other
liabilities -
net (23) (152)
Net cash provided by (used
for) operating activities 1,541 490
Cash flow from investing
activities:
Capital expenditures -
excluding equipment
leased to others (204) (357)
Expenditures for
equipment leased to
others (305) (383)
Proceeds from disposals
of leased assets and
property, plant and
equipment 234 173
Additions to finance
receivables (2,122) (2,014)
Collections of finance
receivables 2,272 2,047
Proceeds from sale of
finance receivables 17 10
Investments and
acquisitions (net of
cash acquired) (18) (12)
Proceeds from sale of
securities 89 49
Investments in
securities (65) (62)
Other - net (23) (23)
Net cash provided by (used
for) investing activities (125) (572)
Cash flow from financing
activities:
Dividends paid (452) (448)
Distribution to
noncontrolling interests (6) (1)
Common stock issued,
including treasury
shares reissued (19) (45)
Proceeds from debt
issued (original
maturities greater than
three months) 2,715 1,211
Payments on debt
(original maturities
greater than three
months) (1,977) (1,706)
Short-term borrowings -
net (original maturities
three months or less) 618 486
Net cash provided by (used
for) financing activities 879 (503)
Effect of exchange rate
changes on cash 9 11
Increase (decrease) in cash
and short-term investments 2,304 (574)
Cash and short-term
investments at beginning of
period 7,168 6,460
Cash and short-term
investments at end of period $ 9,472 $ 5,886
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 March 31, 2017
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery,
Energy & Financial Consolidating
Consolidated Transportation(1) Products Adjustments
Sales and
revenues:
Sales of
Machinery
, Energy
&
Transport
ation $ 9,130 $ 9,130 $ - $ -
Revenues
of
Financial
Products 692 - 777 (85)[2]
Total
sales and
revenues 9,822 9,130 777 (85)
Operating
costs:
Cost of
goods
sold 6,758 6,758 - -
Selling,
general
and
administr
ative
expenses 1,045 924 126 (5)[3]
Research
and
developme
nt
expenses 418 418 - -
Interest
expense
of
Financial
Products 159 - 163 (4)[4]
Other
operating
(income)
expenses 1,025 728 302 (5)[3]
Total
operating
costs 9,405 8,828 591 (14)
Operating
profit 417 302 186 (71)
Interest
expense
excluding
Financial
Products 123 144 - (21)[4]
Other
income
(expense) (5) (53) (2) 50 [5]
Consolidated
profit before
taxes 289 105 184 -
Provision
(benefit)
for
income
taxes 90 34 56 -
Profit of
consolida
ted
companies 199 71 128 -
Equity in
profit
(loss) of
unconsoli
dated
affiliate
d
companies (5) (5) - -
Equity in
profit of
Financial
Products'
subsidiar
ies - 126 - (126)[6]
Profit of
consolidated
and affiliated
companies 194 192 128 (126)
Less: Profit
(loss)
attributable to
noncontrolling
interests 2 - 2 -
Profit 7 $ 192 $ 192 $ 126 $ (126)
Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted
1. for on the equity basis.
Elimination of Financial Products' revenues earned from Machinery, Energy &
2. Transportation.
Elimination of net expenses recorded by Machinery, Energy & Transportation paid to
3. Financial Products.
Elimination of interest expense recorded between Financial Products and Machinery,
4. Energy & Transportation.
Elimination of discount recorded by Machinery, Energy & Transportation on
receivables sold to Financial Products and of interest earned between Machinery,
5. Energy & Transportation and Financial Products.
6. Elimination of Financial Products' profit due to equity method of accounting.
7. Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Three Months Ended March 31, 2016
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery,
Energy & Financial Consolidating
Consolidated Transportation (1) Products Adjustments
Sales and
revenues:
Sales of
Machinery
, Energy
&
Transport
ation $ 8,780 $ 8,780 $ - $ -
Revenues
of
Financial
Products 681 - 759 (78)[2]
Total
sales and
revenues 9,461 8,780 759 (78)
Operating
costs:
Cost of
goods
sold 6,822 6,822 - -
Selling,
general
and
administr
ative
expenses 1,088 955 139 (6) [3]
Research
and
developme
nt
expenses 508 508 - -
Interest
expense
of
Financial
Products 152 - 155 (3) [4]
Other
operating
(income)
expenses 397 105 298 (6) [3]
Total
operating
costs 8,967 8,390 592 (15)
Operating
profit 494 390 167 (63)
Interest
expense
excluding
Financial
Products 129 140 - (11) [4]
Other
income
(expense) - (52) - 52 [5]
Consolidated
profit before
taxes 365 198 167 -
Provision
(benefit)
for
income
taxes 92 40 52 -
Profit of
consolida
ted
companies 273 158 115 -
Equity in
profit
(loss) of
unconsoli
dated
affiliate
d
companies (1) (1) - -
Equity in
profit of
Financial
Products'
subsidiar
ies - 114 (114)[6]
Profit of
consolidated
and affiliated
companies 272 271 115 (114)
Less: Profit
(loss)
attributable to
noncontrolling
interests 1 - 1 -
Profit [7] $ 271 $ 271 $ 114 $ (114)
Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted
1. for on the equity basis.
Elimination of Financial Products' revenues earned from Machinery, Energy &
2. Transportation.
Elimination of net expenses recorded by Machinery, Energy & Transportation paid to
3. Financial Products.
Elimination of interest expense recorded between Financial Products and Machinery,
4. Energy & Transportation.
Elimination of discount recorded by Machinery, Energy & Transportation on
receivables sold to Financial Products and of interest earned between Machinery,
5. Energy & Transportation and Financial Products.
6. Elimination of Financial Products' profit due to equity method of accounting.
7. Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Cash Flow
For the Three Months Ended March 31, 2017
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery,
Energy & Financial Consolidating
Consolidated Transportation 1 Products Adjustments
Cash flow from
operating activities:
Profit of
consolidated and
affiliated
companies $ 194 $ 192 $ 128 $ (126) [2]
Adjustments for
non-cash items:
Depreciation
and
amortization 710 491 219 -
Undistributed
profit of
Financial
Products - (126) - 126 [3]
Other 301 302 (48) 47 [4]
Changes in assets
and liabilities,
net of acquisitions
and divestitures:
Receivables -
trade and
other (353) (8) 52 (397)[4,5]
Inventories (444) (444) - -
Accounts
payable 732 734 6 (8) [4]
Accrued
expenses 132 130 2 -
Accrued
wages,
salaries and
employee
benefits 360 364 (4) -
Customer
advances 193 193 - -
Other assets
- net (261) (196) (25) (40) [4]
Other
liabilities -
net (23) (108) 45 40 [4]
Net cash provided by
(used for) operating
activities 1,541 1,524 375 (358)
Cash flow from
investing activities:
Capital
expenditures -
excluding equipment
leased to others (204) (203) (1) -
Expenditures for
equipment leased to
others (305) (6) (302) 3 [4]
Proceeds from
disposals of leased
assets and
property, plant and
equipment 234 41 194 (1) [4]
Additions to
finance receivables (2,122) - (2,535) 413 [5]
Collections of
finance receivables 2,272 - 2,788 (516) [5]
Net intercompany
purchased
receivables - - (459) 459 [5]
Proceeds from sale
of finance
receivables 17 - 17 -
Net intercompany
borrowings - 50 (1,500) 1,450 [6]
Investments and
acquisitions (net
of cash acquired) (18) (18) - -
Proceeds from sale
of securities 89 6 83 -
Investments in
securities (65) (2) (63) -
Other - net (23) (34) 11 -
Net cash provided by
(used for) investing
activities (125) (166) (1,767) 1,808
Cash flow from
financing activities:
Dividends paid (452) (452) - -
Distribution to
noncontrolling
interests (6) (6) - -
Common stock
issued, including
treasury shares
reissued (19) (19) - -
Net intercompany
borrowings - 1,500 (50) (1,450)[6]
Proceeds from debt
issued (original
maturities greater
than three months) 2,715 360 2,355 -
Payments on debt
(original
maturities greater
than three months) (1,977) (4) (1,973) -
Short-term
borrowings - net
(original
maturities three
months or less) 618 226 392 -
Net cash provided by
(used for) financing
activities 879 1,605 724 (1,450)
Effect of exchange
rate changes on cash 9 3 6 -
Increase (decrease) in
cash and short-term
investments 2,304 2,966 (662) -
Cash and short-term
investments at
beginning of period 7,168 5,257 1,911 -
Cash and short-term
investments at end of
period $ 9,472 $ 8,223 $ 1,249 $ -
Represents Caterpillar Inc. and its subsidiaries with
1. Financial Products accounted for on the equity basis.
Elimination of Financial Products' profit after tax due to
2. equity method of accounting.
Elimination of non-cash adjustment for the undistributed
3. earnings from Financial Products.
Elimination of non-cash adjustments and changes in assets and
4. liabilities related to consolidated reporting.
Reclassification of Financial Products' cash flow activity
from investing to operating for receivables that arose from
5. the sale of inventory.
Elimination of net proceeds and payments to/from Machinery,
6. Energy & Transportation and Financial Products.
Caterpillar Inc.
Supplemental Data for Cash Flow
For the Three Months Ended March 31, 2016
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery,
Energy & Financial Consolidating
Consolidated Transportation [1] Products Adjustments
Cash flow from
operating activities:
Profit of
consolidated and
affiliated
companies $ 272 $ 271 $ 115 $ (114) [2]
Adjustments for
non-cash items:
Depreciation
and
amortization 740 525 215 -
Undistributed
profit of
Financial
Products - (107) - 107 [3]
Other 269 204 16 49 [4]
Changes in assets
and liabilities,
net of acquisitions
and divestitures:
Receivables -
trade and
other 14 41 20 (47) [4,5]
Inventories (74) (74) - -
Accounts
payable 211 288 2 (79) [4]
Accrued
expenses 33 34 (1) -
Accrued
wages,
salaries and
employee
benefits (852) (831) (21) -
Customer
advances 174 174 - -
Other assets
- net (145) (118) 17 (44) [4]
Other
liabilities -
net (152) (188) (8) 44 [4]
Net cash provided by
(used for) operating
activities 490 219 355 (84)
Cash flow from
investing activities:
Capital
expenditures -
excluding equipment
leased to others (357) (356) (1) -
Expenditures for
equipment leased to
others (383) (23) (369) 9 [4]
Proceeds from
disposals of leased
assets and
property, plant and
equipment 173 21 159 (7) [4]
Additions to
finance receivables (2,014) - (2,662) 648 [5]
Collections of
finance receivables 2,047 - 2,849 (802) [5]
Net intercompany
purchased
receivables - - (229) 229 [5]
Proceeds from sale
of finance
receivables 10 - 10 -
Net intercompany
borrowings - (927) (1,000) 1,927 [6]
Investments and
acquisitions (net
of cash acquired) (12) (12) - -
Proceeds from sale
of securities 49 4 45 -
Investments in
securities (62) (5) (57) -
Other - net (23) (23) (7) 7 [8]
Net cash provided by
(used for) investing
activities (572) (1,321) (1,262) 2,011
Cash flow from
financing activities:
Dividends paid (448) (448) (7) 7 [7]
Distribution to
noncontrolling
interests (1) (1) - -
Common stock
issued, including
treasury shares
reissued (45) (45) 7 (7) [8]
Net intercompany
borrowings - 1,000 927 (1,927) [6]
Proceeds from debt
issued (original
maturities greater
than three months) 1,211 1 1,210 -
Payments on debt
(original
maturities greater
than three months) (1,706) (3) (1,703) -
Short-term
borrowings - net
(original
maturities three
months or less) 486 4 482 -
Net cash provided by
(used for) financing
activities (503) 508 916 (1,927)
Effect of exchange
rate changes on cash 11 (2) 13 -
Increase (decrease) in
cash and short-term
investments (574) (596) 22 -
Cash and short-term
investments at
beginning of period 6,460 5,340 1,120 -
Cash and short-term
investments at end of
period $ 5,886 $ 4,744 $ 1,142 $ -
Represents Caterpillar Inc. and its subsidiaries with
1. Financial Products accounted for on the equity basis.
Elimination of Financial Products' profit after tax due to
2. equity method of accounting.
Elimination of non-cash adjustment for the undistributed
3. earnings from Financial Products.
Elimination of non-cash adjustments and changes in assets and
4. liabilities related to consolidated reporting.
Reclassification of Financial Products' cash flow activity
from investing to operating for receivables that arose from
5. the sale of inventory.
Elimination of net proceeds and payments to/from Machinery,
6. Energy & Transportation and Financial Products.
Elimination of dividend from Financial Products to Machinery,
7. Energy & Transportation.
Elimination of change in investment and common stock related
8. to Financial Products.
CONTACT: Corrie Scott,
309-675-0425 (Office), 808-351-3865 (Mobile),
Scott_Corrie@cat.com
This is a disclosure announcement from PR Newswire.