NASHVILLE, Tenn., Oct. 27, 2020 /PRNewswire/ -- Cat Financial
reported third-quarter 2020 revenues of $598
million, a decrease of $150
million, or 20%, compared with the third quarter of 2019.
Third-quarter 2020 profit was $48
million, an $81 million, or
63%, decrease from the third quarter of 2019.
The decrease in revenues was primarily due to a $76 million unfavorable impact from lower average
financing rates and a $40 million
unfavorable impact from lower average earning assets.
Third-quarter 2020 profit before income taxes was $96 million, an $88
million, or 48%, decrease from the third quarter of 2019.
The decrease was primarily due to a $50
million increase in provision for credit losses, a
$29 million decrease in net yield on
average earning assets and an $18
million unfavorable impact from lower average earning
assets. These unfavorable impacts were partially offset by a
$20 million decrease in general,
operating and administrative expenses primarily due to lower
short-term incentive compensation and employee benefit
expenses.
The provision for income taxes reflected an estimated annual tax
rate of 33% in the third quarter of 2020 compared with 28% in the
third quarter of 2019. The increase in the estimated annual tax
rate was primarily due to changes in the geographic mix of
profits.
During the third quarter of 2020, retail new business volume was
$2.60 billion, a decrease of
$329 million, or 11%, from the third
quarter of 2019. The decrease was driven by lower volume across all
segments with the exception of a slight increase in Asia/Pacific.
At the end of the third quarter of 2020, past dues were 3.81%,
compared with 3.19% at the end of the third quarter of 2019. Past
dues increased primarily due to the impact of the COVID-19
pandemic, offset by decreases in the Caterpillar Power Finance and
Latin American portfolios. Write-offs, net of recoveries, were
$125 million for the third quarter of
2020, compared with $103 million for
the third quarter of 2019. As of September
30, 2020, the allowance for credit losses totaled
$460 million, or 1.74% of finance
receivables, compared with $515
million, or 1.92% of finance receivables at June 30, 2020. The decrease in the allowance for
credit losses was primarily driven by write-offs of previously
reserved accounts in the Caterpillar Power Finance portfolio. The
allowance for credit losses at year-end 2019 was $424 million, or 1.50% of finance
receivables.
"The Cat Financial team delivered solid results in the third
quarter while managing customer challenges from COVID-19 and the
remaining Caterpillar Power Finance portfolio," said Dave Walton, president of Cat Financial and vice
president with responsibility for the Financial Products Division
of Caterpillar Inc. "We saw modest improvement versus second
quarter 2020 for most key business drivers, and Cat Financial
remains well-positioned to serve Caterpillar customers and dealers
worldwide through financial services solutions."
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:
|
|
|
|
|
|
|
THIRD-QUARTER 2020
VS. THIRD-QUARTER 2019
(ENDED SEPTEMBER
30, EXCEPT TOTAL ASSETS)
(Millions of
dollars)
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
CHANGE
|
Revenues
|
$
|
598
|
|
$
|
748
|
|
(20)%
|
Profit Before Income
Taxes
|
$
|
96
|
|
$
|
184
|
|
(48)%
|
Profit (excluding
profit attributable to noncontrolling interests)
|
$
|
48
|
|
$
|
129
|
|
(63)%
|
Retail New Business
Volume
|
$
|
2,600
|
|
$
|
2,929
|
|
(11)%
|
Total Assets at
September 30 and December 31, respectively
|
$
|
31,765
|
|
$
|
33,693
|
|
(6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
NINE-MONTHS 2020
VS. NINE-MONTHS 2019
(ENDED SEPTEMBER
30)
(Millions of
dollars)
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
CHANGE
|
Revenues
|
$
|
1,934
|
|
$
|
2,241
|
|
(14)%
|
Profit Before Income
Taxes
|
$
|
312
|
|
$
|
467
|
|
(33)%
|
Profit (excluding
profit attributable to noncontrolling interests)
|
$
|
197
|
|
$
|
306
|
|
(36)%
|
Retail New Business
Volume
|
$
|
7,650
|
|
$
|
8,626
|
|
(11)%
|
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; (xvii)
the recent global coronavirus pandemic, which has led to periods of
significant volatility in financial and other markets; and (xviii)
other factors described in more detail in Cat Financial's Forms
10-Q, 10-K and other filings with the Securities and Exchange
Commission.
View original
content:http://www.prnewswire.com/news-releases/cat-financial-announces-third-quarter-2020-results-301160390.html
SOURCE Cat Financial