NASHVILLE, Tenn., Jan. 31, 2020 /PRNewswire/ --
Full-Year 2019 vs. Full-Year 2018
Cat Financial
reported revenues of $2.97 billion
for 2019, an increase of $119
million, or 4%, compared with 2018. Profit was $410 million for 2019, a $105 million, or 34%, increase from 2018.
The increase in revenues was primarily due to a $108 million favorable impact from higher average
financing rates and a $21 million
favorable impact from higher average earning assets, partially
offset by a $35 million unfavorable
impact due to the termination of a committed credit facility with
Caterpillar.
Profit before income taxes was $628
million for 2019, a $195
million, or 45%, increase from 2018. Most of the increase
was due to a $192 million decrease in
provision for credit losses, driven by a lower allowance rate
compared with 2018. The lower allowance rate was due to write-offs
of accounts in 2019 that were reserved for in 2018, primarily in
the Caterpillar Power Finance portfolio. In addition, there was a
$99 million increase in net yield on
average earning assets. These favorable impacts were partially
offset by a $73 million increase in
general, operating and administrative expenses and the $35 million unfavorable impact mentioned above
related to the termination of a committed credit facility with
Caterpillar.
The provision for income taxes reflected an annual tax rate of
31% for 2019, compared with 25% for 2018. The increase in the
annual tax rate was primarily due to changes in the geographic mix
of profits.
During 2019, retail new business volume was $11.89 billion, a decrease of $189 million, or 2%, from 2018. The decrease was
primarily driven by lower volume in Asia/Pacific and EAME, partially offset by
higher volume in Mining.
At the end of 2019, past dues were 3.14%, compared with 3.55% at
the end of 2018. Write-offs, net of recoveries, were $237 million for 2019, an increase from
$189 million for 2018, primarily due
to Mining, Caterpillar Power Finance and EAME, partially offset by
a decrease in Latin America. The
increase in Mining was due to a small number of customer balances
written off in 2019, while the increases in Caterpillar Power
Finance and EAME were concentrated in the marine portfolio and the
Middle East, respectively. As of
December 31, 2019, the allowance for
credit losses totaled $424 million,
or 1.50% of finance receivables, compared with $511 million, or 1.80% of finance receivables at
December 31, 2018.
Fourth-Quarter 2019 vs. Fourth-Quarter 2018
Cat
Financial reported fourth-quarter 2019 revenues of $725 million, an increase of $26 million, or 4%, compared with the fourth
quarter of 2018. Fourth-quarter 2019 profit was $104 million, an $86
million, or 478%, increase from the fourth quarter of
2018.
The increase in revenues was primarily due to a $23 million favorable impact from returned or
repossessed equipment and a $20
million favorable impact from higher average financing
rates, partially offset by a $10
million unfavorable impact from lower average earning assets
and a $10 million unfavorable impact
due to the termination of a committed credit facility with
Caterpillar.
Fourth-quarter 2019 profit before income taxes was $161 million, a $115
million, or 250%, increase from the fourth quarter of 2018.
Most of the increase was due to a $118
million decrease in provision for credit losses, driven by a
lower allowance rate compared with 2018. The lower allowance rate
was due to write-offs of accounts in 2019 that were reserved for in
2018, primarily in the Caterpillar Power Finance portfolio. In
addition, there was a $26 million
increase in net yield on average earning assets and a $23 million favorable impact from returned or
repossessed equipment. These favorable impacts were partially
offset by a $36 million increase in
general, operating and administrative expenses and the $10 million unfavorable impact mentioned above
related to the termination of a committed credit facility with
Caterpillar.
The provision for income taxes reflected an effective tax rate
of 32% in the fourth quarter of 2019, compared with 48% in the
fourth quarter of 2018. The decrease in the effective tax rate was
primarily due to changes in the geographic mix of profits.
During the fourth quarter of 2019, retail new business volume
was $3.26 billion, an increase of
$160 million, or 5%, from the fourth
quarter of 2018. The increase was primarily driven by higher volume
in North America, partially offset
by lower volume in Latin
America.
"We were very pleased with the overall performance of our
business during 2019, especially the portfolio health improvements
and solid operational execution delivered by our dedicated global
team," said Dave Walton, president
of Cat Financial and vice president with responsibility for the
Financial Products Division of Caterpillar Inc. "With our ongoing
focus on expanding our ability to serve customers globally through
financial services solutions, we remain well-positioned to serve
the needs of Caterpillar, Cat dealers and our growing customer base
worldwide."
For over 35 years, Cat Financial, a wholly owned subsidiary of
Caterpillar, has provided financial service excellence to
customers. The company offers a wide range of financing solutions
to customers and Cat® dealers for machines, engines, Solar® gas
turbines, marine vessels and various operational needs. Cat
Financial has offices and subsidiaries located throughout North and
South America, Asia, Australia, Europe, Africa and the Middle East, with its headquarters in
Nashville, Tennessee.
STATISTICAL
HIGHLIGHTS:
|
|
FOURTH-QUARTER
2019 VS. FOURTH-QUARTER 2018
(ENDED DECEMBER
31)
(Millions of
dollars)
|
|
|
2019
|
|
2018
|
|
CHANGE
|
Revenues
|
$
|
725
|
|
$
|
699
|
|
4%
|
Profit Before Income
Taxes
|
$
|
161
|
|
$
|
46
|
|
250%
|
Profit (excluding
profit attributable to noncontrolling interests)
|
$
|
104
|
|
$
|
18
|
|
478%
|
Retail New Business
Volume
|
$
|
3,262
|
|
$
|
3,102
|
|
5%
|
Total
Assets
|
$
|
33,693
|
|
$
|
34,181
|
|
(1)%
|
|
|
FULL-YEAR 2019 VS.
FULL-YEAR 2018
(ENDED DECEMBER
31)
(Millions of
dollars)
|
|
|
2019
|
|
2018
|
|
CHANGE
|
Revenues
|
$
|
2,966
|
|
$
|
2,847
|
|
4%
|
Profit Before Income
Taxes
|
$
|
628
|
|
$
|
433
|
|
45%
|
Profit (excluding
profit attributable to noncontrolling interests)
|
$
|
410
|
|
$
|
305
|
|
34%
|
Retail New Business
Volume
|
$
|
11,888
|
|
$
|
12,077
|
|
(2)%
|
CAUTIONARY STATEMENT REGARDING 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.
Cat Financial'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) disruptions
or volatility in global financial markets limiting our sources of
liquidity; (ii) 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; (iii) changes in interest rates,
currency fluctuations or market liquidity conditions; (iv) an
increase in delinquencies, repossessions or net losses of our
customers; (v) residual values of leased equipment; (vi) our
compliance with financial and other restrictive covenants in debt
agreements; (vii) government monetary or fiscal policies; (viii)
political and economic risks, commercial instability and events
beyond our control in the countries in which we operate; (ix)
demand for Caterpillar products; (x) marketing, operational or
administrative support received from Caterpillar; (xi) our ability
to develop, produce and market quality products that meet our
customers' needs; (xii) information technology security threats and
computer crime; (xiii) alleged or actual violations of trade or
anti-corruption laws and regulations; (xiv) new regulations or
changes in financial services regulations; (xv) additional tax
expense or exposure; (xvi) changes in accounting guidance; and
(xvii) other factors described in more detail in Cat Financial's
Forms 10-Q, 10-K and other filings with the Securities and Exchange
Commission.
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SOURCE Cat Financial