DEERFIELD, Illinois,
April 24, 2018 /PRNewswire/ --
Delivered Higher Sales and
Revenues and Record First-Quarter Profit Per Share; Raised
Full-Year Outlook
First Quarter
($ in billions except profit per share) 2018 2017
Sales and Revenues $12.9 $9.8
Profit Per Share $2.74 $0.32
Adjusted Profit Per Share $2.82 $1.28
- First-quarter sales and revenues up 31 percent
- Significant increase in profit per share; adjusted profit per
share more than doubled
- Raised full-year profit per share outlook
- Repurchased $500 million of
common stock
Caterpillar Inc. (NYSE: CAT) today announced first-quarter 2018
sales and revenues of $12.9 billion,
compared with $9.8 billion in the
first quarter of 2017. First-quarter 2018 profit of $2.74 per share was a first-quarter record.
Profit was $0.32 per share in the
first quarter of 2017. Adjusted profit per
share in the first quarter of 2018 was $2.82, compared with first-quarter 2017 adjusted
profit per share of $1.28.
Caterpillar's financial position remains strong. During the
first quarter of 2018, Machinery, Energy &
Transportation (ME&T) operating cash flow was
$948 million and the company
repurchased $500 million of
Caterpillar common stock. The company ended the first quarter of
2018 with an enterprise cash balance of $7.9
billion.
"I'd like to thank our global Caterpillar team for outstanding
results. The combination of strength in many of our end markets and
our team's continued focus on operational excellence - including
strong cost control - helped us deliver improved margins and a
record first-quarter profit," said Caterpillar CEO Jim Umpleby.
2018 Outlook
In January, Caterpillar provided a 2018 profit outlook range of
$7.75 to $8.75 per share. The company is increasing its
2018 profit outlook by $2.00 per
share to a range of $9.75 to
$10.75 per share, primarily due to
growing demand for products and services. The outlook includes
about $400 million
of restructuring costs, unchanged from the
previous outlook. The revised outlook range for adjusted profit is
$10.25 to $11.25 per share.
"Based on our strong first-quarter results and higher demand
across all regions and most end markets, we are raising our outlook
for 2018. We will continue to make targeted investments in expanded
offerings and services, consistent with our strategy for long-term
profitable growth," said Umpleby.
Following is a summary of sales assumptions for 2018 as compared
to 2017:
Construction Industries - The company expects
broad-based growth in all regions in 2018, with the biggest drivers
being continued strength for construction activity in North America and infrastructure development
in China. EAME is expected to continue to
grow amid high business confidence and stability in oil-producing
countries. The recovery that has started in Latin America is expected to
continue.
Resource Industries - The company believes
global economic conditions and favorable commodity price levels
will drive miners to increase capital expenditures in 2018 for both
equipment replacement cycles and expansions. In addition, higher
machine utilization levels should support aftermarket parts growth.
Strong global demand for commodities is also expected to be a
positive for heavy construction and quarry and aggregate
customers.
Energy & Transportation - Sales into Oil
and Gas applications are expected to increase in 2018, led by
continued strong demand for reciprocating engines for well
servicing and gas compression applications in North America. The current turbines backlog
remains healthy in support of the midstream Oil and Gas business.
Rail traffic in North America has
increased, with reductions in the number of idled locomotives and
railcars. As a result, the company expects an increase in
Transportation sales primarily from growth in rail services. After
a multi-year downturn, the company expects Power Generation sales
to increase as global economic conditions improve. Sales of engines
into Industrial applications are expected to be up in 2018
primarily due to projected demand in EAME.
Following are key elements of the revised 2018 profit
outlook:
- Better than expected sales volume is
the primary driver of the raised profit outlook, with higher volume
expected across the three primary segments when compared with the
prior outlook.
- Improved price realization is expected
to be partially offset by material cost increases primarily driven
by higher commodity prices.
- Despite the anticipated increase in volume, the company expects
period costs, excluding short-term incentive compensation expense,
to be in line with the prior outlook.
- Short-term incentive compensation expense is now expected to be
about $1.4 billion, nearly the same
as 2017.
- The outlook assumes continued global economic growth. Any
potential impacts from future geopolitical risks and increased
trade restrictions have not been included in the outlook.
- The outlook does not include a mark-to-market gain or loss for
remeasurement of pension and other postemployment
benefit (OPEB) plans or changes to provisional
estimates recorded in 2017 for U.S. tax reform.
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 24, 2018, to discuss its
2018 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 2017 sales
and revenues of $45.462 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 primary 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, including the impact of U.S. tax reform; (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 2018 vs. First Quarter 2017
To access this chart, go
to http://www.caterpillar.com/en/investors/quarterly-results.html for
the downloadable version of Caterpillar 1Q
2018 earnings.
The chart above graphically illustrates reasons for the change
in Consolidated Sales and Revenues between the first quarter of
2017 (at left) and the first quarter of 2018 (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 $12.859
billion in the first quarter of 2018, an increase of
$3.037 billion, or 31 percent,
compared with $9.822 billion in the
first quarter of 2017. The increase was primarily due to higher
sales volume driven by improved end-user demand across all regions
and most end markets as well as favorable changes in dealer
inventories. The impact of changes in dealer inventories was
favorable as there was a more significant increase in the first
quarter of 2018 than in the first quarter of 2017. The company
believes the increase in dealer inventories is reflective of
current end-user demand.
Strong end-user demand and favorable changes in dealer
inventories drove higher sales volume across the three primary
segments with the largest increase in Construction Industries.
Sales were also higher due
to currency impacts, primarily from a
stronger euro and Chinese yuan. Favorable price realization across
the three primary segments also contributed to the sales
improvement.
The largest sales increase was in North America, which improved 33 percent as
strong economic conditions in key end markets drove higher end-user
demand. Also contributing to the increase was the impact of a more
significant increase in dealer inventories in the first quarter of
2018 than in the first quarter of 2017.
Asia/Pacific sales increased 44
percent mostly due to higher end-user demand, primarily for
construction equipment in China,
the impact of favorable changes in dealer inventories and a
stronger Chinese yuan. The impact of changes in dealer inventories
was favorable as dealer inventories increased slightly in the first
quarter of 2018, compared to a decrease in the first quarter of
2017.
EAME sales increased 25 percent primarily due to the impact of a
stronger euro, the impact of favorable changes in dealer
inventories and higher end-user demand as economic conditions have
improved. The impact of changes in dealer inventories was favorable
as increases were greater in the first quarter of 2018 than in the
first quarter of 2017.
Sales increased 24 percent in Latin
America primarily due to stabilizing economic conditions in
several countries in the region that resulted in improved demand
from low levels.
Consolidated Operating Profit
Consolidated Operating Profit Comparison
First Quarter 2018 vs. First Quarter 2017
To access this chart, go
to http://www.caterpillar.com/en/investors/quarterly-results.html for
the downloadable version of Caterpillar 1Q
2018 earnings.
The chart above graphically illustrates reasons for the change
in Consolidated Operating Profit between the first quarter of 2017
(at left) and the first quarter of 2018 (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 2018 was $2.108 billion, compared to $380 million in the first quarter of 2017. The
increase of $1.728 billion was mostly
due to higher sales volume and lower restructuring costs. Favorable
price realization was largely offset by higher selling, general and
administrative (SG&A) and research and development (R&D)
expenses and lower operating profit from Financial Products.
Manufacturing costs were about flat as lower
warranty expense and the favorable impact from cost absorption were
about offset by higher material costs, freight costs and short-term
incentive compensation expense. Cost absorption was favorable as
inventory increased more in the first quarter of 2018 than in the
first quarter of 2017, as production volumes continue to increase
in 2018. Material costs were unfavorable primarily due to increases
in steel prices. SG&A/R&D expenses were unfavorable mostly
due to higher short-term incentive compensation expense and
targeted investments that primarily impacted SG&A.
Restructuring costs were $69
million in the first quarter of 2018. In the first quarter
of 2017, restructuring costs of $723
million were primarily related to the announced closure of
the facility in Gosselies, Belgium.
Other Profit/Loss Items
- Interest expense excluding Financial Products in
the first quarter of 2018 was $101
million, a decrease of $22
million from the first quarter of 2017, primarily due to an
early debt retirement in the fourth quarter of 2017.
- Other income/expense in the first quarter of 2018
was income of $127 million, compared
with income of $32 million in the
first quarter of 2017. The favorable change was primarily due to
pension and OPEB plans, including the absence of restructuring
costs and higher expected return on plan assets (see Q&A #7 for
additional information). Also contributing to the favorable change
were lower net losses from currency translation and hedging in the
first quarter of 2018 than in the first quarter of 2017.
- The provision for income taxes in the first
quarter of 2018 reflects an estimated annual tax rate of 24
percent, compared to 32 percent for the first quarter of 2017,
excluding the discrete items discussed in the following paragraph.
The decrease is primarily due to the reduction in the U.S.
corporate tax rate beginning January 1,
2018, along with other changes in the geographic mix of
profits from a tax perspective.
In addition, a discrete tax benefit of $40 million was recorded in the first quarter of
2018, compared to $17 million in the
first quarter of 2017, for the settlement of stock-based
compensation awards with associated tax deductions in excess of
cumulative U.S. GAAP compensation expense. The provision for income
taxes in the first quarter of 2017 also included a $15 million increase to prior year taxes related
to non-U.S. restructuring costs.
Global Workforce
Caterpillar worldwide full-time employment was about 99,700 at
the end of the first quarter of 2018. The increase of about 4,400
full-time employees from the end of the first quarter of 2017 was
due to an increase in production employment primarily to support
higher volumes. Support and management employment was about flat.
The flexible workforce increased by about 6,500, also primarily due
to higher production volumes. In total, the global workforce
increased by about 10,900.
March 31
2018 2017 Increase
Full-time employment 99,700 95,300 4,400
Flexible workforce 19,100 12,600 6,500
Total 118,800 107,900 10,900
Geographic Summary
U.S. workforce 51,500 46,500 5,000
Non-U.S. workforce 67,300 61,400 5,900
Total 118,800 107,900 10,900
SEGMENT RESULTS
Sales and Revenues by Geographic Region
North Latin
America America EAME Asia/Pacific
(Millions of
dollars) $ % Chg $ % Chg $ % Chg $ % Chg
First Quarter 2018
Construction
Industries $2,620 37% $344 38% $1,067 31% $ 1,628 46%
Resource
Industries 798 33% 360 34% 520 25% 530 37%
Energy &
Transportation 2,225 29% 280 2% 1,092 21% 679 48%
All Other Segments 15 88% - - 4 (75%) 18 38%
Corporate Items
and Eliminations (28) 1 (3) -
Machinery, Energy
& Transportation $5,630 33% $985 24% $2,680 25% $ 2,855 44%
Financial Products
Segment $512 5% $74 (11%) $101 1% $106 16%
Corporate Items
and Eliminations (49) (13) (5) (17)
Financial Products
Revenues $463 3% $61 (12%) $96 - $89 13%
Consolidated Sales
and Revenues $6,093 31% $1,046 21% $2,776 24% $2,944 43%
First Quarter 2017
Construction
Industries $1,913 $250 $812 $1,116
Resource
Industries 598 269 416 387
Energy &
Transportation 1,722 275 900 459
All Other Segments 8 - 16 13
Corporate Items
and Eliminations (23) - (2) 1
Machinery, Energy
& Transportation $4,218 $794 $2,142 $1,976
Financial Products
Segment $486 $83 $100 $91
Corporate Items
and Eliminations (38) (14) (4) (12)
Financial Products
Revenues $448 $69 $96 $79
Consolidated Sales
and Revenues $4,666 $863 $2,238 $2,055
Sales and Revenues by Segment
First Sales Price Inter-Segment
Quarter 2017 Volume Realization Currency / Other
(Millions of
dollars)
Construction
Industries $4,100 $1,340 $59 $169 $9
Resource
Industries 1,761 424 86 28 10
Energy &
Transportation 4,136 769 41 110 163
All Other
Segments 132 (1) - 1 (16)
Corporate
Items and
Eliminations (999) (6) - - (166)
Machinery,
Energy &
Transportation $9,130 $2,526 $186 $308 -
Financial
Products
Segment 760 - - - 33
Corporate
Items and
Eliminations (68) - - - (16)
Financial
Products
Revenues $692 - - - $17
Consolidated
Sales and
Revenues $9,822 $2,526 $186 $308 $17
Table continues...
SEGMENT RESULTS
Sales and Revenues by Geographic Region
External
Sales Total Sales
and Revenues Inter-Segment and Revenues
(Millions of
dollars) $ % Chg $ % Chg $ % Chg
First Quarter 2018
Construction
Industries $5,659 38% $18 100% $5,677 38%
Resource
Industries 2,208 32% 101 11% 2,309 31%
Energy &
Transportation 4,276 27% 943 21% 5,219 26%
All Other Segments 37 - 79 (17%) 116 (12%)
Corporate Items
and Eliminations (30) (1,141) (1,171)
Machinery, Energy
& Transportation $12,150 33% - -12,150 33%
Financial Products
Segment $793 4% - - $793 4%
Corporate Items
and Eliminations (84) - (84)
Financial Products
Revenues $709 2% - - $709 2%
Consolidated Sales
and Revenues $12,859 31% - -$12,859 31%
First Quarter 2017
Construction
Industries $4,091 $9 $4,100
Resource
Industries 1,670 91 1,761
Energy & 1,72
Transportation 3,356 780 4,136
All Other Segments 37 95 132
Corporate Items
and Eliminations (24) (975) (999)
Machinery, Energy
& Transportation $9,130 - $9,130
Financial Products
Segment $760 - $760
Corporate Items
and Eliminations (68) - (68)
Financial Products
Revenues $692 - $692
Consolidated Sales
and Revenues $9,822 - $9,822
Sales and Revenues by Segment
First $ %
Quarter 2018 Change Change
(Millions of
dollars)
Construction
Industries $5,677 $1,577 38%
Resource
Industries 2,309 548 31%
Energy &
Transportation 5,219 1,083 26%
All Other
Segments 116 (16) (12%)
Corporate
Items and
Eliminations (1,171) (172)
Machinery,
Energy &
Transportation $12,150 $3,020 33%
Financial
Products
Segment 793 33 4%
Corporate
Items and
Eliminations (84) (16)
Financial
Products
Revenues $709 $17 2%
Consolidated
Sales and
Revenues $12,859 $3,037 31%
First First $ %
Profit by Segment Quarter 2018 Quarter 2017 Change Change
(Millions of dollars)
Construction Industries $1,117 $634 $483 76%
Resource Industries 378 160 218 136%
Energy & Transportation 874 545 329 60%
All Other Segments 57 (14) 71 n/a
Corporate Items and
Eliminations (371) (1,060) 689
Machinery, Energy &
Transportation $2,055 $265 $1,790 675%
Financial Products Segment $141 $183 ($42) (23%)
Corporate Items and
Eliminations (2) 3 (5)
Financial Products $139 $186 ($47) (25%)
Consolidating Adjustments (86) (71) (15)
Consolidated Operating Profit $2,108 $380 $1,728 455%
CONSTRUCTION INDUSTRIES
(Millions of dollars)
Segment Sales
First Price Inter- First $ %
Quarter 2017 Sales Volume Realization Currency Segment Quarter 2018 Change Change
Total
Sales $4,100 $1,340 $59 $169 $9 $5,677 $1,577 38%
Sales by Geographic Region
First First $ %
Quarter 2018 Quarter 2017 Change Change
North America $2,620 $1,913 $707 37%
Latin America 344 250 94 38%
EAME 1,067 812 255 31%
Asia/Pacific 1,628 1,116 512 46%
External
Sales $5,659 $4,091 $1,568 38%
Inter-Segment 18 9 9 100%
Total Sales $5,677 $4,100 $1,577 38%
Segment Profit
First First %
Quarter 2018 Quarter 2017 Change Change
Segment
Profit $1,117 $634 $483 76%
Segment
Profit Margin 19.7% 15.5% 4.2 pts 27%
`
Construction Industries' total sales were $5.677 billion in the first quarter of 2018,
compared with $4.100 billion in the
first quarter of 2017. The increase was primarily due to higher
sales volume.
- Sales volume increased primarily due to the impact of favorable
changes in dealer inventories and higher end-user demand for
construction equipment. Dealer inventories increased significantly
more in the first quarter of 2018 than in the first quarter of
2017. The company believes the increase in dealer inventories is
reflective of current end-user demand.
Sales increased across all regions with the largest increases in
North America and Asia/Pacific.
- In North America, the sales
increase was mostly due to the impact of favorable changes in
dealer inventories, which increased significantly more in the first
quarter of 2018 than in the first quarter of 2017. In addition,
sales increased due to higher end-user demand for construction
equipment, primarily due to non-residential, infrastructure and oil
and gas construction activities, including pipelines.
- Sales in Asia/Pacific were
higher across the region, with about half due to improved end-user
demand in China stemming from
increased building construction and infrastructure investment. In
addition, the impact of changes in dealer inventories was favorable
as dealer inventories decreased more in the first quarter of 2017
than in the first quarter of 2018. The favorable impact of a
stronger Chinese yuan also contributed to the increase.
- Sales increased in EAME primarily due to the impact of
favorable changes in dealer inventories, the impact from a stronger
euro and higher end-user demand for construction equipment. Dealer
inventories increased more in the first quarter of 2018 than in the
first quarter of 2017.
- Although construction activity remained weak in Latin America, sales were higher as end-user
demand increased from low levels due to stabilizing economic
conditions in several countries in the region.
Construction Industries' profit was $1.117 billion in the first quarter of 2018,
compared with $634 million in the
first quarter of 2017. The increase in profit was a result of
higher sales volume and favorable price realization. The increase
was partially offset by higher SG&A/R&D expenses, material
costs, primarily for steel, and freight costs. The increase in
SG&A/R&D expenses was primarily due to higher short-term
incentive compensation expense and targeted investments.
RESOURCE INDUSTRIES
(Millions of dollars)
Segment Sales
First Price Inter- First $ %
Quarter 2017 Sales Volume Realization Currency Segment Quarter 2018 Change Change
Total
Sales $1,761 $424 $86 $28 $10 $2,309 $548 31%
Sales by Geographic Region
First First $ %
Quarter 2018 Quarter 2017 Change Change
North America $798 $598 $200 33%
Latin America 360 269 91 34%
EAME 520 416 104 25%
Asia/Pacific 530 387 143 37%
External
Sales $2,208 $1,670 $538 32%
Inter-Segment 101 91 10 11%
Total Sales $2,309 $1,761 $548 31%
Segment Profit
First First %
Quarter 2018 Quarter 2017 Change Change
Segment
Profit $378 $160 $218 136%
Segment
Profit Margin 16.4% 9.1% 7.3pts 80%
`
Resource Industries' total sales were $2.309
billion in the first quarter of 2018, an increase of
$548 million from the first quarter
of 2017. The increase was primarily due to higher end-user demand
for equipment in all regions. Compared to the first quarter of
2017, commodity prices remained strong and drove improved market
conditions and financial health of mining companies. As a result,
mining customers invested in delayed replacement cycles and
initiated expansions, resulting in higher equipment sales in the
first quarter of 2018. Macroeconomic growth globally also
contributed to stronger sales for quarry and aggregate and heavy
construction equipment. In addition, favorable price realization
and the favorable impact of changes in dealer inventories
contributed to increased sales. Dealer inventories increased more
in the first quarter of 2018 than in the first quarter of 2017.
Aftermarket parts sales have also experienced growth related to
increased production and higher machine utilization in the
industries the company serves.
Resource Industries' profit was $378
million in the first quarter of 2018, compared with
$160 million in the first quarter of
2017. The improvement was primarily due to higher sales volume.
Favorable price realization and variable manufacturing costs,
including cost absorption, were partially offset by higher
short-term incentive compensation expense and a slightly
unfavorable impact from currency. Cost absorption was favorable as
inventory increased in the first quarter of 2018 to support higher
production and was about flat in the first quarter of 2017.
ENERGY & TRANSPORTATION
(Millions of dollars)
Segment Sales
First Price Inter- First $ %
Quarter 2017 Sales Volume Realization Currency Segment Quarter 2018 Change Change
Total
Sales $4,136 $769 $41 $110 $163 $5,219 $1,083 26%
Sales by Application
First First $ %
Quarter 2018 Quarter 2017 Change Change
Oil and Gas $1,215 $809 $406 50%
Power
Generation 969 716 253 35%
Industrial 906 777 129 17%
Transportation 1,186 1,054 132 13%
External Sales $4,276 $3,356 $920 27%
Inter-Segment 943 780 163 21%
Total Sales $5,219 $4,136 $1,083 26%
Segment Profit
First First %
Quarter 2018 Quarter 2017 Change Change
Segment Profit $874 $545 $329 60%
Segment Profit
Margin 16.7% 13.2% 3.5pts 27%
Energy & Transportation's total sales were $5.219 billion in the first quarter of 2018,
compared with $4.136 billion in the
first quarter of 2017. The increase was primarily due to higher
external sales volume across all applications.
- Oil and Gas - Sales increased primarily due to
higher demand in North America for
gas compression, production and well servicing applications. Higher
energy prices and growth in U.S. onshore oil and gas drove
increased sales for reciprocating engines and related aftermarket
parts. Sales in North America were
also positively impacted by the timing of turbine project
deliveries.
- Power Generation - Sales improved across all
regions, with the largest increase in EAME primarily due to the
timing of several large projects and favorable impacts from
currency. In addition, sales in North
America increased due to higher sales for turbines and
aftermarket parts for reciprocating engines.
- Industrial - Sales were higher across all regions
except Latin America, primarily
due to improving global economic conditions supporting higher
engine sales into industrial end-user applications. Sales in EAME
were also positively impacted by favorable currency.
- Transportation - Sales were higher in Asia/Pacific and North America for rail services, driven
primarily by growth in Australia
and increased rail traffic in North
America. Marine sales were higher primarily in Asia/Pacific due to timing of deliveries.
Energy & Transportation's profit was $874 million in the first quarter of 2018,
compared with $545 million in the
first quarter of 2017. The increase was mostly due to higher sales
volume and favorable price realization, partially offset by higher
short-term incentive compensation expense and targeted
investments.
FINANCIAL PRODUCTS SEGMENT
(Millions of dollars)
Revenues by Geographic Region
First First $ %
Quarter 2018 Quarter 2017 Change Change
North America $512 $486 $26 5%
Latin America 74 83 (9) (11%)
EAME 101 100 1 1%
Asia/Pacific 106 91 15 16%
Total $793 $760 $33 4%
Segment Profit
First First $ %
Quarter 2018 Quarter 2017 Change Change
Segment Profit $141 $183 ($42) (23%)
Financial Products' segment revenues were
$793 million in the first quarter of
2018, an increase of $33 million, or
4 percent, from the first quarter of 2017. The increase was
primarily due to higher average earning
assets in Asia/Pacific and higher average financing
rates in North America, partially
offset by an unfavorable impact from lower intercompany lending
activity in North America.
Financial Products' segment profit was $141 million in the first quarter of 2018,
compared with $183 million in the
first quarter of 2017. The decrease was primarily due to an
increase in the provision for credit losses at Cat Financial,
partially offset by an increase in net yield on average earning
assets.
At the end of the first quarter of 2018, past dues at Cat
Financial were 3.17 percent, compared with 2.64 percent at the end
of the first quarter of 2017, primarily due to increases in the
Caterpillar Power Finance and Latin
America portfolios. Write-offs, net of recoveries, in the
first quarter of 2018 were $30
million, compared with $15
million in the first quarter of 2017. The largest
contributors to the increase were the Latin America and Caterpillar Power Finance
portfolios.
As of March 31, 2018, Cat
Financial's allowance for credit losses totaled $403 million, or 1.45 percent of finance
receivables, compared with $346
million, or 1.28 percent of finance receivables at
March 31, 2017. The allowance for
credit losses at year-end 2017 was $365
million, or 1.33 percent of finance receivables. The
increase in the allowance for credit losses was primarily driven by
the Caterpillar Power Finance and mining portfolios.
Corporate Items and Eliminations
Expense for corporate items and eliminations was $373 million in the first quarter of 2018, a
decrease of $684 million from the
first quarter of 2017. Corporate items and eliminations include:
restructuring costs; corporate-level expenses; timing differences,
as some expenses are reported in segment profit on a cash basis;
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 decrease in expense was primarily due to lower restructuring
costs, which were $69 million in the
first quarter of 2018. In the first quarter of 2017, restructuring
costs of $723 million were primarily
related to the announced closure of the facility in Gosselies,
Belgium.
QUESTIONS AND ANSWERS
Q1: Can you discuss changes in dealer inventories during
the first quarter of 2018?
Dealers generally increase inventories during the first
quarter in preparation for the spring selling season.
Dealer machine and engine inventories increased about
$1.2 billion in the first quarter of 2018,
compared to an increase of about $200 million in the first quarter
of 2017. The increase in the first quarter of
A: 2018 was
primarily in Construction Industries. We believe the
increase in dealer inventories is reflective of current
end-user demand.
Q2: Can you discuss changes to your order backlog by
segment?
At the end of the first quarter of 2018, the order
backlog was about $17.5 billion, an increase of about
$1.7 billion from the end of 2017. The increase was in
A:
Energy & Transportation and Construction Industries,
while Resource Industries was about flat.
Q3: Can you comment on expense related to your 2018
short-term incentive compensation plans and the impact on the 2018 outlook?
Short-term incentive compensation expense is directly
related to financial and operational performance,
measured against targets set annually. First-quarter
A: 2018 expense was about $360 million, compared to
first-quarter 2017 expense of about $235 million.
For the full year of 2018, our current outlook includes
short-term incentive compensation expense of about $1.4
billion, nearly the same as 2017.
Q4: In January, you commented that significant increases in
demand could impact your growth potential in 2018 due
to supplier constraints. Can you provide an update?
We continue to work with our global suppliers to
respond to significant increases in demand. Although
constraints remain for some parts and components, we
A: are seeing improvements in material flows.
Q5: Can you give us an update on the quality of Cat
Financial's asset portfolio? How are write-offs, past
dues and allowance for credit losses performing?
Cat Financial's core asset portfolio continues to
perform well overall. Write-offs during the first
quarter of 2018 were $30 million, or 0.45 percent
of
average retail portfolio, which is about the same level
as our 10-year average of 0.44 percent for the first
quarter. This total compares with
write-offs of $15
million during the first quarter of 2017, which was an
unusually low quarterly write-off period based on Cat
Financial's
historical performance.
The increase from a
year ago was driven by higher write-offs in the Latin
America and Cat Power Finance portfolios.
Past dues increased
during the first quarter to 3.17 percent,
which is slightly above the first-quarter historical
average of 3.09 percent, and was impacted by higher
delinquencies in Cat Power Finance and Latin America.
The provision for credit losses was higher in the first
quarter of 2018 by
$51 million, primarily due to higher
provision expense in Cat Power Finance and on a small
number of transactions in our mining portfolio. In
addition, higher
write-offs compared with a low quarter
A: for write-offs in the first quarter of 2017 were also a
contributor.
Q6: Can you comment on your balance sheet and cash
priorities?
Our cash and liquidity positions remain strong with an
enterprise cash balance of $7.9 billion as of March 31,
2018.
ME&T operating cash flow for the first quarter of
2018 was $948 million, compared with $1.5 billion in
2017. The decrease was primarily due to higher
short-term incentive compensation payments in the first
quarter of
2018, compared with the first quarter of
2017. We repurchased $500 million of common stock in
A: the first quarter of 2018.
While 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 is
focused on the following priorities:
Our top priority is to maintain a strong financial position in support
of a Mid-A rating. Next, we intend to fund operational
requirements and commitments. Then, we intend to fund
priorities that profitably grow the company and return
capital to shareholders through dividend growth and
stock repurchases.
Q7: Your 2017 operating costs and other income/expense
changed from what you reported last year. Can you
explain the change?
Effective January 1, 2018, we adopted a new U.S. GAAP
accounting standard related to pension and OPEB costs.
Components of
pension and OPEB costs, other than
service costs, have been reclassified from operating
costs to other income/expense. The change was made to
prior periods and the table below provides the recast
2017 amounts by quarter. This change had a small impact
on 2017 profit for the segments within ME&T, which has
A: also been recast to be consistent with the revised
classification. There was no impact on Financial
Products.
2017 Recast
(Millions of First Second Third Fourth Full Year
dollars) Quarter Quarter Quarter Quarter 2017
Cost of goods sold $6,801 $7,816 $7,678 $8,966 $31,261
Selling, general
and administrative
expenses 940 1,169 1,084 1,218 4,411
Research and
development
expenses 425 458 461 498 1,842
Other operating
(income) expenses 699 111 51 195 1,056
ME&T operating
costs $8,865 $9,554 $9,274 $10,877 $38,570
Financial Products
operating costs 591 607 645 648 2,491
Consolidating
adjustments (14) (14) (15) (16) (59)
Consolidated
operating costs $9,442 $10,147 $9,904 $11,509 $41,002
Consolidated
operating profit 380 1,184 1,509 1,387 4,460
Consoliated other
income (expense) $32 $96 $132 ($107) $153
Reclassification to
other income
(expense) * $37 $67 $68 ($226) ($54)
* First-quarter 2017 includes $29 million of curtailment losses and
termination benefits included in restructuring costs and
fourth-quarter 2017 includes $301 million of mark-to-market losses.
GLOSSARY OF TERMS
1.
Adjusted Profit Per Share - Profit per share excluding restructuring costs for
2018 and 2017.
All Other Segments - Primarily includes activities such as: business strategy,
product management and development, manufacturing of filters and fluids,
undercarriage, ground engaging tools, fluid transfer products, precision seals,
rubber sealing and connecting components primarily for Cat(R) products; parts
distribution; integrated logistics solutions, 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
2. and dealer solutions that integrate data analytics with state-of-the-art digital
technologies while transforming the buying experience.
3. Consolidating Adjustments - Elimination of transactions between Machinery, Energy
& 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 asphalt pavers, backhoe loaders,
compactors, cold planers, compact track and multi-terrain loaders, mini, small,
medium and large track excavators, forestry excavators, feller bunchers,
harvesters, knuckleboom loaders, motor graders, pipelayers, road reclaimers, site
prep tractors, skidders, skid steer loaders, telehandlers, small and medium
track-type tractors, track-type loaders, wheel excavators, compact, small and
4. medium wheel loaders and related parts and work tools.
5. 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 only includes the impact
on sales and operating profit for the Machinery, Energy & Transportation lines of
business 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 assets and liabilities
for consolidated results (translation).
6.
EAME - A geographic region including Europe, Africa, the Middle East and the
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 Oil and Gas, Power Generation, Industrial 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 turbine
machinery and integrated systems and solutions 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
8. on-highway vocational 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.
10.Latin America - A geographic region including Central and South American countries
and Mexico.
11.Machinery, Energy & Transportation (ME&T) - Represents the aggregate total of
Construction Industries, Resource Industries,
Energy & Transportation, All 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
12.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.
Manufacturing Costs - Manufacturing costs exclude the impacts of currency and
restructuring costs (see definition below) and represent the volume-adjusted
change for variable costs and the absolute dollar change for period manufacturing
costs. 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.
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
13.support, procurement, factory scheduling, manufacturing planning and operations
management.
14.Pension and Other Postemployment Benefit (OPEB) - The company's defined-benefit
pension and postretirement benefit plans.
Price Realization - The impact of net price changes excluding currency and new
product introductions. Price realization includes geographic mix of sales, which
15.is the impact of changes in the relative weighting of sales prices between
geographic regions.
Resource Industries - A segment primarily responsible for supporting customers
using machinery in mining, quarry and aggregates, 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, rotary drills, large wheel loaders, off-highway trucks,
articulated trucks, wheel tractor scrapers, wheel dozers, landfill compactors,
soil compactors, hard rock 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
16.and research and development.
Restructuring Costs - Primarily costs for employee separation, long-lived asset
impairments and contract terminations. These costs are included in Other operating
(income) expenses except for defined-benefit plan curtailment losses and special
termination benefits, which are included in Other income (expense). Restructuring
costs also include other exit-related costs primarily for accelerated
depreciation, inventory write-downs, equipment relocation and project management
17.costs and LIFO inventory decrement benefits from inventory liquidations at closed
facilities, primarily included in Cost of goods sold.
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 sales 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 inter-segment sales.
NON-GAAP FINANCIAL MEASURES
The following definitions are provided for the non-GAAP
financial measures used in this report. These non-GAAP financial
measures have no standardized meaning prescribed by U.S. GAAP and
therefore are unlikely to be comparable to the calculation of
similar measures for other companies. Management does not intend
these items to be considered in isolation or as a substitute for
the related GAAP measures.
Adjusted Profit Per Share
The company incurred restructuring costs in 2017 and in the
first quarter of 2018 and expects to incur additional restructuring
costs during the remainder of 2018. 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 adjusted profit per share to the most
directly comparable GAAP measure, diluted profit per share, are as
follows:
First Quarter 2018 Outlook
2017 2018 Previous [1] Current [2]
Profit per
share $0.32 $2.74 $7.75-$8.75 $9.75-$10.75
Per share
restructuring
costs[3] $0.96 $0.08 $0.50 $0.50
Adjusted profit
per share $1.28 $2.82 $8.25-$9.25 $10.25-$11.25
[1]2018 profit per share outlook range as of January 25, 2018.
[2]2018 profit per share outlook range as of April 24, 2018.
[3]At estimated annual tax rate based on full-year outlook for per share
restructuring costs at statutory tax rates. 2018 at estimated annual tax
rate of 24 percent.
First-quarter 2017 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,
2018 2017
Sales and revenues:
Sales of Machinery, Energy
& Transportation $ 12,150 $ 9,130
Revenues of Financial
Products 709 692
Total sales and revenues 12,859 9,822
Operating costs:
Cost of goods sold 8,566 6,801
Selling, general and
administrative expenses 1,276 1,061
Research and development
expenses 443 425
Interest expense of
Financial Products 166 159
Other operating (income)
expenses 300 996
Total operating costs 10,751 9,442
Operating profit 2,108 380
Interest expense excluding
Financial Products 101 123
Other income (expense) 127 32
Consolidated profit before taxes 2,134 289
Provision (benefit) for
income taxes 472 90
Profit of consolidated
companies 1,662 199
Equity in profit (loss) of
unconsolidated affiliated
companies 5 (5)
Profit of consolidated and affiliated
companies 1,667 194
Less: Profit (loss) attributable to
noncontrolling interests 2 2
Profit [1] $ 1,665 $ 192
Profit per common share $ 2.78 $ 0.33
Profit per common share - diluted [2] $ 2.74 $ 0.32
Weighted-average common shares
outstanding (millions)
- Basic 598.0 587.5
- Diluted[2] 608.0 593.2
Cash dividends declared per common
share $ - $ -
[1] Profit attributable to common shareholders.
[2] Diluted by assumed exercise of stock-based compensation
awards using the treasury stock method.
Caterpillar Inc.
Condensed Consolidated Statement of Financial Position
(Unaudited)
(Millions of dollars)
March 31, December 31,
2018 2017
Assets
Current assets:
Cash and short-term
investments $ 7,888 $ 8,261
Receivables -
trade and other 7,894 7,436
Receivables -
finance 8,772 8,757
Prepaid expenses and
other current assets 1,856 1,772
Inventories 10,947 10,018
Total current assets 37,357 36,244
Property, plant and
equipment - net 13,912 14,155
Long-term receivables
- trade and other 1,004 990
Long-term receivables
- finance 13,359 13,542
Noncurrent deferred
and refundable income
taxes 1,687 1,693
Intangible assets 2,163 2,111
Goodwill 6,376 6,200
Other assets 2,156 2,027
Total assets $ 78,014 $ 76,962
Liabilities
Current liabilities:
Short-term borrowings:
--Machinery, Energy &
Transportation $ 7 $ 1
--Financial Products 5,726 4,836
Accounts payable 6,938 6,487
Accrued expenses 3,551 3,220
Accrued wages,
salaries and employee
benefits 1,474 2,559
Customer advances 1,399 1,426
Dividends payable - 466
Other current liabilities 1,890 1,742
Long-term debt
due within one year:
--Machinery, Energy &
Transportation 8 6
--Financial Products 6,409 6,188
Total current
liabilities 27,402 26,931
Long-term debt due
after one year:
--Machinery, Energy &
Transportation 7,980 7,929
--Financial Products 15,185 15,918
Liability for
postemployment benefits 8,233 8,365
Other liabilities 3,942 4,053
Total liabilities 62,742 63,196
Shareholders' equity
Common stock 5,640 5,593
Treasury stock (17,347) (17,005)
Profit employed in
the business 27,929 26,301
Accumulated other
comprehensive income
(loss) (1,016) (1,192)
Noncontrolling
interests 66 69
Total shareholders' equity 15,272 13,766
Total liabilities and
shareholders' equity $ 78,014 $ 76,962
Caterpillar Inc.
Condensed Consolidated Statement of Cash Flow
(Unaudited)
(Millions of dollars)
Three Months Ended
March 31,
2018 2017
Cash flow from operating
activities:
Profit of consolidated
and affiliated
companies $ 1,667 $ 194
Adjustments for
non-cash items:
Depreciation
and
amortization 681 710
Other 148 302
Changes in assets and
liabilities, net of
acquisitions and
divestitures:
Receivables -
trade and
other (326) (353)
Inventories (803) (444)
Accounts
payable 486 732
Accrued
expenses 66 132
Accrued
wages,
salaries and
employee
benefits (1,110) 360
Customer
advances (46) 234
Other assets
- net 165 (261)
Other
liabilities -
net 7 (64)
Net cash provided by (used
for) operating activities 935 1,542
Cash flow from investing
activities:
Capital expenditures -
excluding equipment
leased to others (412) (204)
Expenditures for
equipment leased to
others (345) (305)
Proceeds from disposals
of leased assets and
property, plant and
equipment 258 234
Additions to finance (2,621) (2,122)
receivables
Collections of finance
receivables 2,671 2,272
Proceeds from sale of
finance receivables 69 17
Investments and
acquisitions (net of
cash acquired) (340) (18)
Proceeds from sale of
business and
investments (net of
cash sold) 12 -
Proceeds from sale of
securities 89 89
Investments in
securities (197) (65)
Other - net 16 9
Net cash provided by (used
for) investing activities (800) (93)
Cash flow from financing
activities:
Dividends paid (467) (452)
Common stock issued,
including treasury
shares reissued 149 (19)
Treasury shares
purchased (500) -
Proceeds from debt
issued (original
maturities greater than
three months) 1,541 2,715
Payments on debt
(original maturities
greater than three (2,409) (1,978)
months)
Short-term borrowings -
net (original
maturities three months
or less) 1,151 618
Other - net (3) (6)
Net cash provided by (used
for) financing activities (538) 878
Effect of exchange rate
changes on cash 10 9
Increase (decrease) in cash
and short-term investments
and restricted cash (393) 2,336
Cash and short-term
investments and restricted
cash at beginning of period 8,320 7,199
Cash and short-term
investments and restricted
cash at end of period $ 7,927 $ 9,535
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, 2018
(Unaudited)
(Millions of dollars)
Supplemental
Consolidating Data
Machinery,
Energy & Financial Consolidating
Consolidated Transportation [1] Products Adjustments
Sales and revenues:
Sales of
Machinery,
Energy &
Transportation $ 12,150 $ 12,150 $ - $ -
Revenues of
Financial
Products 709 - 811 (102) [2]
Total sales
and revenues 12,859 12,150 811 (102)
Operating costs:
Cost of goods
sold 8,566 8,566 - -
Selling,
general and
administrative
expenses 1,276 1,087 189 -
Research and
development
expenses 443 443 - -
Interest
expense of
Financial
Products 166 - 173 (7) [4]
Other
operating
(income)
expenses 300 (1) 310 (9) [3]
Total
operating
costs 10,751 10,095 672 (16)
Operating profit 2,108 2,055 139 (86)
Interest
expense
excluding
Financial
Products 101 112 - (11) [4]
Other income
(expense) 127 54 (2) 75 [5]
Consolidated profit before
taxes 2,134 1,997 137 -
Provision
(benefit) for
income taxes 472 441 31 -
Profit of
consolidated
companies 1,662 1,556 106 -
Equity in
profit (loss)
of
unconsolidated
affiliated
companies 5 5 - -
Equity in
profit of
Financial
Products'
subsidiaries - 102 - (102) [6]
Profit of consolidated and
affiliated companies 1,667 1,663 106 (102)
Less: Profit (loss)
attributable to
noncontrolling interests 2 (2) 4 -
Profit [7] $ 1,665 $ 1,665 $ 102 $ (102)
[1] Represents Caterpillar Inc. and its subsidiaries with
Financial Products accounted for on the equity basis.
[2] Elimination of Financial Products' revenues earned from
Machinery, Energy & Transportation.
[3] Elimination of net expenses recorded by Machinery, Energy
& Transportation paid to Financial Products.
[4] Elimination of interest expense recorded between Financial
Products and Machinery, Energy & Transportation.
[5] Elimination of discount recorded by Machinery, Energy
& Transportation on receivables sold to Financial Products and
of interest earned between Machinery, Energy & Transportation
and Financial Products.
[6] Elimination of Financial Products' profit due to equity
method of accounting.
[7] Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Three Months Ended March 31, 2017
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery,
Consolidated Energy & Financial Consolidating
Transportation[1] Products Adjustments
Sales and revenues:
Sales of Machinery,
Energy & Transportation $ 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 6,801 6,801 - -
Selling, general
and
administrative
expenses 1,061 940 126 (5) [3]
Research and
development expenses 425 425 - -
Interest expense of
Financial Products 159 - 163 (4) [4]
Other operating
(income) expenses 996 699 302 (5) [3]
Total operating
costs 9,442 8,865 591 (14)
Operating profit 380 265 186 (71)
Interest expense
excluding Financial
Products 123 144 - (21) [4]
Other income
(expense) 32 (16) (2) 50 [5]
Consolidated profit
before taxes 289 105 184 -
Provision (benefit)
for income taxes 90 34 56 -
Profit of
consolidated
companies 199 71 128 -
Equity in profit
(loss) of unconsolidated
affiliated companies (5) (5) - -
Equity in profit of
Financial Products'
subsidiaries - 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)
[1] Represents Caterpillar Inc. and its subsidiaries with
Financial Products accounted for on the equity basis.
[2] Elimination of Financial Products' revenues earned from
Machinery, Energy & Transportation.
[3] Elimination of net expenses recorded by Machinery, Energy
& Transportation paid to Financial Products.
[4] Elimination of interest expense recorded between Financial
Products and Machinery, Energy & Transportation.
[5] Elimination of discount recorded by Machinery, Energy
& Transportation on receivables sold to Financial Products and
of interest earned between Machinery, Energy & Transportation
and Financial Products.
[6] Elimination of Financial Products' profit due to equity
method of accounting.
[7] Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Cash Flow
For the Three Months Ended March 31, 2018
(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 $ 1,667 $ 1,663 $ 106 $ (102) [2]
Adjustments for
non-cash items:
Depreciation
and
amortization 681 468 213 -
Undistributed
profit of
Financial
Products - (102) - 102 [3]
Other 148 62 (6) 92 [4]
Changes in assets
and liabilities,
net of acquisitions
and divestitures:
Receivables -
trade and
other (326) 90 - (416) [4],[5]
Inventories (803) (803) - -
Accounts
payable 486 505 (19) -
Accrued
expenses 66 43 23 -
Accrued
wages,
salaries and
employee
benefits (1,110) (1,083) (27) -
Customer
advances (46) (46) - -
Other assets
- net 165 173 28 (36) [4]
Other
liabilities -
net 7 (22) (7) 36 [4]
Net cash provided by
(used for) operating
activities 935 948 311 (324)
Cash flow from
investing activities:
Capital
expenditures -
excluding equipment
leased to others (412) (321) (92) 1 [4]
Expenditures for
equipment leased to
others (345) (2) (346) 3 [4]
Proceeds from
disposals of leased
assets and
property, plant and
equipment 258 54 207 (3) [4]
Additions to
finance receivables (2,621) - (2,955) 334 [5]
Collections of
finance receivables 2,671 - 3,171 (500) [5]
Net intercompany
purchased
receivables - - (489) 489 [5]
Proceeds from sale
of finance
receivables 69 - 69 -
Net intercompany
borrowings - 107 - (107) [6]
Investments and
acquisitions (net
of cash acquired) (340) (340) - -
Proceeds from sale
of businesses and
investments (net of
cash sold) 12 12 - -
Proceeds from sale
of securities 89 5 84 -
Investments in
securities (197) (18) (179) -
Other - net 16 19 (3) -
Net cash provided by
(used for) investing
activities (800) (484) (533) 217
Cash flow from
financing activities:
Dividends paid (467) (467) - -
Common stock
issued, including
treasury shares
reissued 149 149 - -
Treasury shares
purchased (500) (500) - -
Net intercompany
borrowings - - (107) 107 [6]
Proceeds from debt
issued (original
maturities greater
than three months) 1,541 - 1,541 -
Payments on debt
(original
maturities greater
than three months) (2,409) (1) (2,408) -
Short-term
borrowings - net
(original
maturities three
months or less) 1,151 6 1,145 -
Other - net (3) (3) - -
Net cash provided by
(used for) financing
activities (538) (816) 171 107
Effect of exchange
rate changes on cash 10 6 4 -
Increase (decrease) in
cash and short-term
investments and
restricted cash (393) (346) (47) -
Cash and short-term
investments and
restricted cash at
beginning of period 8,320 7,416 904 -
Cash and short-term
investments and
restricted cash at end
of period $ 7,927 $ 7,070 $ 857 $ -
[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.
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 302 302 (47) 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 234 234 - -
Other assets
- net (261) (196) (25) (40) [4]
Other
liabilities -
net (64) (149) 45 40 [4]
Net cash provided by
(used for) operating
activities 1,542 1,524 376 (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 9 (1) 10 -
Net cash provided by
(used for) investing
activities (93) (133) (1,768) 1,808
Cash flow from
financing activities:
Dividends paid (452) (452) - -
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) (1,978) (4) (1,974) -
Short-term
borrowings - net
(original
maturities three
months or less) 618 226 392 -
Other - net (6) (6) - -
Net cash provided by
(used for) financing
activities 878 1,605 723 (1,450)
Effect of exchange
rate changes on cash 9 3 6 -
Increase (decrease) in
cash and short-term
investments and
restricted cash 2,336 2,999 (663) -
Cash and short-term
investments and
restricted cash at
beginning of period 7,199 5,259 1,940 -
Cash and short-term
investments and
restricted cash at end
of period $ 9,535 $ 8,258 $ 1,277 $ -
[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.
CONTACT: Caterpillar contact: Corrie
Scott, 224-551-4133 (Office), 808-351-3865 (Mobile) or
Scott_Corrie@cat.com
This is a disclosure announcement from PR Newswire.