DJ Caterpillar Inc.: Reports Third Quarter 2019 Results_Exhibit 99.1
Caterpillar Inc.
Caterpillar Inc.: Reports Third Quarter 2019 Results_Exhibit 99.1
23-Oct-2019 / 16:19 CET/CEST
Dissemination of a French Regulatory News, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Exhibit 99.1
Caterpillar Inc.
3Q 2019 Earnings Release
October 23, 2019
FOR IMMEDIATE RELEASE
Caterpillar Reports Third-Quarter 2019 Results
Third Quarter
Highlights:
($ in billions 2019 2018 - Sales and revenues
except profit down 6%; profit per
per share) share down 8%
Sales and $12.8 $13.5 - Returned about $1.8
Revenues billion in share
repurchases and
dividends
Profit Per $2.66 $2.88 - Full-year profit
Share per share outlook
range lowered to
$10.90 to $11.40
DEERFIELD, Ill. - Caterpillar Inc. (NYSE: CAT) today announced third-quarter 2019 sales and revenues of $12.8 billion, a 6% decrease compared with
$13.5 billion in the third quarter of 2018. Third-quarter 2019 profit per share was $2.66, compared with $2.88 profit per share in the third quarter of
2018.
The primary driver of the decline in sales and revenues was a $1.2 billion movement in dealers' inventories. Dealers decreased their inventories about
$400 million during the third quarter of 2019, after increasing their inventories about $800 million during the third quarter of 2018.
During the third quarter of 2019, the company made a $1.5 billion discretionary pension contribution financed from proceeds of a debt issuance. As a
result, Machinery, Energy & Transportation (ME&T) operating cash flow was negative $188 million. The company also repurchased $1.2 billion of
Caterpillar common stock and paid dividends of $0.6 billion in the third quarter of 2019. The enterprise cash balance at the end of the third quarter
of 2019 was $7.9 billion.
"Our volumes declined as dealers reduced their inventories, and end-user demand, while positive, was lower than our expectations," said Caterpillar
Chairman and CEO Jim Umpleby. "We remain focused on executing our strategy and continuing to achieve our Investor Day targets for margin improvement
and free cash flow."
2019 Outlook
The company is lowering its full-year profit per share outlook range to $10.90 to $11.40, compared to the previous outlook which was at the low end of
the $12.06 to $13.06 range. Both ranges include the first-quarter $0.31 per share discrete tax benefit. The revised guidance now assumes modestly lower
sales in 2019. The company remains focused on maintaining a competitive and flexible cost structure, including managing production levels.
"In the fourth quarter, we now expect end-user demand to be flat and dealers to make further inventory reductions due to global economic uncertainty,"
said Umpleby. "Caterpillar's improved lead times, along with these dealer inventory reductions, will enable us to respond quickly to positive or
negative developments in the global economy in 2020. We are expanding our offerings and investing in services, including digital capabilities, to drive
long-term profitable growth, while continuing to achieve our Investor Day targets for improved financial performance."
The outlook does not include a mark-to-market gain or loss for remeasurement of pension and other postemployment benefit plans, which will be excluded
from adjusted profit per share in the fourth quarter of 2019 along with any other material discrete items.
CONSOLIDATED RESULTS
Consolidated Sales and Revenues
The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the third quarter of 2018 (at left) and the
third quarter of 2019 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company's Board of Directors
and employees.
Total sales and revenues of $12.758 billion in the third quarter of 2019 decreased $752 million, or 6%, compared with $13.510 billion in the third
quarter of 2018. The decline was due to lower sales volume driven by the unfavorable impact from changes in dealer inventories, partially offset by
higher end-user demand across the three primary segments. Dealers decreased machine and engine inventories about $400 million during the third quarter
of 2019, compared with an increase of about $800 million during the third quarter of 2018. Sales decreased across the three primary segments and in all
regions except for Latin America, which was about flat.
Sales and Revenues by Segment
(Millions of Third Sales Price Currency Inter-Segment / Third $ %
dollars) Quarte Other Quarte
r 2018 r 2019
Volume Realization Change Change
Construction $ 5, $ (358 ) $ 26 $ (47 ) $ (15 ) $ 5, $ (394 ) (7%)
Industries 68 28
3 9
Resource 2,63 (389 ) 50 (20 ) 32 2,31 (327 ) (12%)
Industries 8 1
Energy & 5,55 31 11 (57 ) (88 ) 5,45 (103 ) (2%)
Transportati 5 2
on
All Other 113 (9 ) - (1 ) 8 111 (2 ) (2%)
Segment
Corporate (1,2 ) (26 ) (1 ) 1 63 (1,1 ) 37
Items and 26 89
Eliminations
Machinery, 12,7 (751 ) 86 (124 ) - 11,9 (789 ) (6%)
Energy & 63 74
Transportati
on
Financial 845 - - - 20 865 20 2%
Products
Segment
Corporate (98 ) - - - 17 (81 ) 17
Items and
Eliminations
Financial 747 - - - 37 784 37 5%
Products
Revenues
Consolidated $ 13 $ (751 ) $ 86 $ (124 ) $ 37 $ 12 $ (752 ) (6%)
Sales and ,5 ,7
Revenues 10 58
Sales and Revenues by Geographic Region
North Latin EAME Asia/Pacific External Inter-Segment Total Sales
America America Sales and and
Revenues Revenues
(Millions of $ % Chg $ % Chg $ % Chg $ % Chg $ % Chg $ % Chg $ % Chg
dollars)
Third
Quarter 2019
Construction $ 2, 3% $ 413 12% $ 1, (6%) $ 1,0 (29%) $ 5, (7%) $ 14 (52%) $ 5, (7%)
Industries 72 04 86 27 28
8 8 5 9
Resource 789 (7%) 349 (18%) 396 (31%) 645 (6%) 2,17 (14%) 132 32% 2,31 (12%)
Industries 9 1
Energy & 2,12 (8%) 378 15% 1,22 4% 831 10% 4,56 -% 890 (9%) 5,45 (2%)
Transportati 9 4 2 2
on
All Other 1 (93%) 6 -% 8 100% 12 (33%) 27 (27%) 84 11% 111 (2%)
Segment
Corporate (62 ) 1 (7 ) (1 ) (69 ) (1,120 ) (1,1 )
Items and 89
Eliminations
Machinery, 5,58 (3%) 1,147 2% 2,66 (7%) 2,573 (14%) 11,9 (6%) - -% 11,9 (6%)
Energy & 5 9 74 74
Transportati
on
Financial 560 -% 79 16% 102 1% 124 6% 865 2% - -% 865 2%
Products
Segment
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Corporate (43 ) (15 ) (8 ) (15 ) (81 ) - (81 )
Items and
Eliminations
Financial 517 4% 64 14% 94 (1%) 109 10% 784 5% - -% 784 5%
Products
Revenues
Consolidated $ 6, (3%) $ 1,2 2% $ 2, (7%) $ 2,6 (13%) $ 12 (6%) $ - -% $ 12 (6%)
Sales and 10 11 76 82 ,7 ,7
Revenues 2 3 58 58
Third
Quarter 2018
Construction $ 2, $ 369 $ 1, $ 1,5 $ 5, $ 29 $ 5,
Industries 64 10 30 65 68
6 9 4 3
Resource 849 427 574 688 2,53 100 2,63
Industries 8 8
Energy & 2,30 330 1,18 758 4,57 978 5,55
Transportati 9 0 7 5
on
All Other 15 - 4 18 37 76 113
Segment
Corporate (40 ) 1 (5 ) 1 (43 ) (1,183 ) (1,2 )
Items and 26
Eliminations
Machinery, 5,77 1,127 2,86 2,995 12,7 - 12,7
Energy & 9 2 63 63
Transportati
on
Financial 559 68 101 117 845 - 845
Products
Segment
Corporate (62 ) (12 ) (6 ) (18 ) (98 ) - (98 )
Items and
Eliminations
Financial 497 56 95 99 747 - 747
Products
Revenues
Consolidated $ 6, $ 1,1 $ 2, $ 3,0 $ 13 $ - $ 13
Sales and 27 83 95 94 ,5 ,5
Revenues 6 7 10 10
Consolidated Operating Profit
The chart above graphically illustrates reasons for the change in consolidated operating profit between the third quarter of 2018 (at left) and the
third quarter of 2019 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company's Board of Directors
and employees. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation's other operating (income) expenses.
Operating profit for the third quarter of 2019 was $2.020 billion, a decrease of $115 million, or 5%, compared with $2.135 billion in the third quarter
of 2018. The decrease was primarily due to lower sales volume. This decrease was partially offset by favorable price realization and lower selling,
general and administrative (SG&A) and research and development (R&D) expenses.
Favorable price realization continued to offset manufacturing costs and lower SG&A/R&D expenses were mostly due to a reduction in short-term incentive
compensation expense.
Operating profit margin was 15.8% for both the third quarters of 2019 and 2018.
Profit by Segment
(Millions of Third Third $ %
dollars) Quarter Quarter
2019 2018
Change Change
Construction $ 940 $ 1,0 $ (118 ) (11 %)
Industries 58
Resource 311 414 (103 ) (25 %)
Industries
Energy & 1,021 973 48 5 %
Transportatio
n
All Other (21 ) (10 ) (11 ) (110 %)
Segment
Corporate (363 ) (371 ) 8
Items and
Eliminations
Machinery, 1,888 2,064 (176 ) (9 %)
Energy &
Transportatio
n
Financial 218 201 17 8 %
Products
Segment
Corporate 21 (30 ) 51
Items and
Eliminations
Financial 239 171 68 40 %
Products
Consolidating (107 ) (100 ) (7 )
Adjustments
Consolidated $ 2,0 $ 2,1 $ (115 ) (5 %)
Operating 20 35
Profit
Other Profit/Loss and Tax Items
The provision for income taxes for the third quarter of 2019 reflected an estimated annual tax rate of 26%, compared with 24% for the third quarter of
2018. The increase was largely driven by the application of U.S. tax reform provisions to the earnings of certain non-U.S. subsidiaries, which do not
have a calendar fiscal year-end. These provisions did not apply to these subsidiaries in 2018.
CONSTRUCTION INDUSTRIES
(Millions of
dollars)
Segment Sales
Third Sales Price Currency Inter-Segment Third $ %
Quarter Volume Realizatio Quarte
2018 n r 2019
Change Change
Total Sales $ 5,6 $ (358 ) $ 26 $ (47 ) $ (15 ) $ 5, $ (394 ) (7 %)
83 28
9
Sales by Geographic Region
Third Third $ %
Quarter Quarter
2019 2018
Change Change
North America $ 2,7 $ 2,64 $ 82 3 %
28 6
Latin America 413 369 44 12 %
EAME 1,048 1,109 (61 ) (6 %)
Asia/Pacific 1,086 1,530 (444 ) (29 %)
External 5,275 5,654 (379 ) (7 %)
Sales
Inter-segment 14 29 (15 ) (52 %)
Total Sales $ 5,2 $ 5,68 $ (394 ) (7 %)
89 3
Segment Profit
Third Third %
Quarter Quarter
2019 2018
Change Change
Segment $ 940 $ 1,05 $ (118 ) (11 %)
Profit 8
Segment 17.8 % 18.6 % (0.8 pts)
Profit Margin
Construction Industries' total sales were $5.289 billion in the third quarter of 2019, a decrease of $394 million, or 7%, compared with $5.683 billion
in the third quarter of 2018. The decrease was due to lower sales volume driven by the unfavorable impact from changes in dealer inventories, partially
offset by higher end-user demand for construction equipment. Dealers increased inventories during the third quarter of 2018, compared with a decrease
in the third quarter of 2019.
1) In North America, sales increased primarily due to favorable price realization and higher demand for equipment, mostly to support road and
non-residential building construction activities.
2) Sales were higher in Latin America, but construction activities remained at low levels.
3) In EAME, the sales decrease was primarily due to currency impacts related to the euro. Unfavorable price realization and lower sales volume also
contributed to the decrease.
4) Sales in Asia/Pacific were lower across most of the region primarily due to lower demand in China, including unfavorable changes in dealer
inventories, amid continued competitive pressures.
Construction Industries' profit was $940 million in the third quarter of 2019, a decrease of $118 million, or 11%, compared with $1.058 billion in the
third quarter of 2018. The decrease was primarily due to lower sales volume, partially offset by lower SG&A/R&D expenses and favorable price
realization. Lower SG&A/R&D expenses were primarily due to lower short-term incentive compensation expense.
RESOURCE INDUSTRIES
(Millions of
dollars)
Segment Sales
Third Sales Price Currency Inter-Segment Third $ %
Quarter Volume Realizatio Quarte
2018 n r 2019
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Change Change
Total Sales $ 2,6 $ (389 ) $ 50 $ (20 ) $ 32 $ 2, $ (327 ) (12 %)
38 31
1
Sales by Geographic Region
Third Third $ %
Quarter Quarter
2019 2018
Change Change
North America $ 789 $ 849 $ (60 ) (7 %)
Latin America 349 427 (78 ) (18 %)
EAME 396 574 (178 ) (31 %)
Asia/Pacific 645 688 (43 ) (6 %)
External 2,179 2,538 (359 ) (14 %)
Sales
Inter-segment 132 100 32 32 %
Total Sales $ 2,3 $ 2,63 $ (327 ) (12 %)
11 8
Segment Profit
Third Third %
Quarter Quarter
2019 2018
Change Change
Segment $ 311 $ 414 $ (103 ) (25 %)
Profit
Segment 13.5 % 15.7 % (2.2 pts)
Profit Margin
Resource Industries' total sales were $2.311 billion in the third quarter of 2019, a decrease of $327 million, or 12%, compared with $2.638 billion in
the third quarter of 2018. The decrease was due to lower sales volume driven by the unfavorable impact from changes in dealer inventories, partially
offset by higher end-user demand for equipment and favorable price realization. Dealers decreased inventories during the third quarter of 2019,
compared with an increase in the third quarter of 2018. While commodity prices are generally supportive of reinvestment, the company believes mining
customers are cautious due to economic uncertainty. Mining sales were also impacted by lower thermal coal prices. In addition, sales decreased for
equipment supporting non-residential construction and quarry and aggregates driven by a reduction in dealer inventories.
Resource Industries' profit was $311 million in the third quarter of 2019, a decrease of $103 million, or 25%, compared with $414 million in the third
quarter of 2018. The decrease was primarily due to lower sales volume, partially offset by favorable price realization.
ENERGY & TRANSPORTATION
(Millions of
dollars)
Segment Sales
Third Sales Price Currency Inter-Segment Third $ %
Quarte Volume Realizati Quarte
r 2018 on r 2019
Change Change
Total Sales $ 5, $ 31 $ 11 $ (57 ) $ (88 ) $ 5, $ (103 ) (2 %)
55 45
5 2
Sales by Application
Third Third $ %
Quarte Quarter
r 2019 2018
Change Change
Oil and Gas $ 1, $ 1,3 $ (116 ) (9 %)
24 62
6
Power 1,12 1,102 21 2 %
Generation 3
Industrial 980 863 117 14 %
Transportation 1,21 1,250 (37 ) (3 %)
3
External Sales 4,56 4,577 (15 ) - %
2
Inter-segment 890 978 (88 ) (9 %)
Total Sales $ 5, $ 5,5 $ (103 ) (2 %)
45 55
2
Segment Profit
Third Third %
Quarte Quarter
r 2019 2018
Change Change
Segment Profit $ 1, $ 973 $ 48 5 %
02
1
Segment Profit 18.7 % 17.5 % 1.2 pts
Margin
Energy & Transportation's total sales were $5.452 billion in the third quarter of 2019, a decrease of $103 million, or 2%, compared with $5.555 billion
in the third quarter of 2018. Sales decreased primarily due to lower inter-segment engine sales.
1) Oil and Gas - Sales decreased for reciprocating engines in North America primarily due to lower demand in well servicing applications. This was
partially offset by higher sales of turbines and turbine-related services.
2) Power Generation - Sales increased mostly due to higher deliveries in North America for large diesel reciprocating engines and turbines, partially
offset by lower sales of reciprocating engines in EAME.
3) Industrial - Sales improved primarily in EAME and Asia/Pacific driven by higher end-user demand.
4) Transportation - Sales were lower primarily due to timing of locomotive deliveries.
Energy & Transportation's profit was $1.021 billion in the third quarter of 2019, an increase of $48 million, or 5%, compared with $973 million in the
third quarter of 2018. Lower sales volume, including an unfavorable mix of products, was more than offset by favorable other operating income/expense
and SG&A/R&D expenses mostly due to a reduction in short-term incentive compensation expense.
FINANCIAL PRODUCTS SEGMENT
(Millions of
dollars)
Revenues by Geographic Region
Third Third $ %
Quarter Quarter
2019 2018
Change Change
North $ 560 $ 559 $ 1 - %
America
Latin 79 68 11 16 %
America
EAME 102 101 1 1 %
Asia/Pacific 124 117 7 6 %
Total $ 865 $ 845 $ 20 2 %
Revenues
Segment Profit
Third Third %
Quarter Quarter
2019 2018
Change Change
Segment $ 218 $ 201 $ 17 8 %
Profit
Financial Products' segment revenues were $865 million in the third quarter of 2019, an increase of $20 million, or 2%, from the third quarter of 2018.
The increase was primarily due to higher average financing rates in North America and Asia/Pacific, partially offset by an unfavorable impact due to
the absence of fees associated with an intercompany credit facility in North America.
Financial Products' segment profit was $218 million in the third quarter of 2019, up 8% compared with $201 million in the third quarter of 2018. The
favorable change was primarily due to an increase in net yield on average earning assets and a decrease in the provision for credit losses at Cat
Financial, partially offset by unfavorable impacts from higher SG&A expenses, the mark-to-market on equity securities in Insurance Services and the
absence of the intercompany credit facility.
At the end of the third quarter of 2019, past dues at Cat Financial were 3.19%, compared with 3.47% at the end of the third quarter of 2018.
Write-offs, net of recoveries, were $103 million for the third quarter of 2019, compared with $40 million for the third quarter of 2018. The increase
in write-offs, net of recoveries, was primarily driven by Caterpillar Power Finance, concentrated in the marine portfolio, and EAME, mostly in the
Middle East. As of September 30, 2019, Cat Financial's allowance for credit losses totaled $434 million, or 1.57% of finance receivables, compared with
$523 million, or 1.81% of finance receivables at June 30, 2019. The allowance for credit losses at year-end 2018 was $511 million, or 1.80% of finance
receivables.
Corporate Items and Eliminations
Expense for corporate items and eliminations was $342 million in the third quarter of 2019, a decrease of $59 million from the third quarter of 2018,
primarily due to lower restructuring costs.
Dealer Inventories and Order Backlog
Dealers decreased machine and engine inventories about $400 million during the third quarter of 2019, compared with an increase of about $800 million
during the third quarter of 2018, led by Construction Industries and Resource Industries.
At the end of the third quarter of 2019, the order backlog was $14.6 billion, about $400 million lower than the second quarter of 2019.
Notes
1) Glossary of terms is included on the Caterpillar website at http://www.caterpillar.com/investors/.
2) Information on non-GAAP financial measures is included in the appendix on page 21.
3) Caterpillar will conduct a teleconference and live webcast, with a slide presentation, beginning at 7:30 a.m. Central Time on Wednesday, October
23, 2019, to discuss its 2019 third-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 2018 sales and revenues of $54.722 billion, Caterpillar is
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DJ Caterpillar Inc.: Reports Third Quarter 2019 -4-
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," "forecast,"
"target," "guide," "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)
international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or
changes in existing tariff rates; (vi) our ability to develop, produce and market quality products that meet our customers' needs; (vii) the impact of
the highly competitive environment in which we operate on our sales and pricing; (viii) information technology security threats and computer crime;
(ix) inventory management decisions and sourcing practices of our dealers and our OEM customers; (x) a failure to realize, or a delay in realizing, all
of the anticipated benefits of our acquisitions, joint ventures or divestitures; (xi) union disputes or other employee relations issues; (xii) adverse
effects of unexpected events including natural disasters; (xiii) disruptions or volatility in global financial markets limiting our sources of
liquidity or the liquidity of our customers, dealers and suppliers; (xiv) 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; (xv) our Financial
Products segment's risks associated with the financial services industry; (xvi) changes in interest rates or market liquidity conditions; (xvii) an
increase in delinquencies, repossessions or net losses of Cat Financial's customers; (xviii) currency fluctuations; (xix) our or Cat Financial's
compliance with financial and other restrictive covenants in debt agreements; (xx) increased pension plan funding obligations; (xxi) alleged or actual
violations of trade or anti-corruption laws and regulations; (xxii) additional tax expense or exposure, including the impact of U.S. tax reform;
(xxiii) significant legal proceedings, claims, lawsuits or government investigations; (xxiv) new regulations or changes in financial services
regulations; (xxv) compliance with environmental laws and regulations; and (xxvi) other factors described in more detail in Caterpillar's Forms 10-Q,
10-K and other filings with the Securities and Exchange Commission.
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 12-20 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 online:
http://www.caterpillar.com/en/investors.html
http://www.caterpillar.com/en/investors/quarterly-results.html (live broadcast/replays of quarterly conference call)
Caterpillar investor relations contact: Jennifer Driscoll, 224-551-4382 or Driscoll_Jennifer@cat.com
Caterpillar media contact: Kate Kenny, 224-551-4133 or Kenny_Kate@cat.com
Caterpillar Inc.
Condensed Consolidated Statement of Results of Operations
(Unaudited)
(Dollars in millions except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
Sales and
revenues:
Sales of $ 11,9 $ 12,7 $ 38,3 $ 38,1
Machinery, 74 63 69 92
Energy &
Transportation
Revenues of 784 747 2,287 2,188
Financial
Products
Total sales and 12,758 13,510 40,656 40,380
revenues
Operating costs:
Cost of goods 8,569 9,022 27,513 27,010
sold
Selling, general 1,251 1,299 3,879 4,015
and
administrative
expenses
Research and 431 479 1,307 1,384
development
expenses
Interest expense 189 185 571 533
of Financial
Products
Other operating 298 390 946 1,028
(income)
expenses
Total operating 10,738 11,375 34,216 33,970
costs
Operating profit 2,020 2,135 6,440 6,410
Interest expense 103 102 309 305
excluding
Financial
Products
Other income 88 102 316 350
(expense)
Consolidated 2,005 2,135 6,447 6,455
profit before
taxes
Provision 518 415 1,470 1,377
(benefit) for
income taxes
Profit of 1,487 1,720 4,977 5,078
consolidated
companies
Equity in profit 7 7 20 21
(loss) of
unconsolidated
affiliated
companies
Profit of 1,494 1,727 4,997 5,099
consolidated and
affiliated
companies
Less: Profit - - 2 -
(loss)
attributable to
noncontrolling
interests
Profit 1 $ 1,49 $ 1,72 $ 4,99 $ 5,09
4 7 5 9
Profit per $ 2.69 $ 2.92 $ 8.84 $ 8.57
common share
Profit per $ 2.66 $ 2.88 $ 8.75 $ 8.45
common share -
diluted 2
Weighted-average
common shares
outstanding
(millions)
- Basic 556.3 592.1 565.2 595.3
- Diluted 2 561.2 599.4 570.8 603.8
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)
September 30, December 31,
2019 2018
Assets
Current
assets:
Cash and $ 7,906 $ 7,857
short-term
investments
Receivables - 8,275 8,802
trade and
other
Receivables - 9,192 8,650
finance
Prepaid 1,607 1,765
expenses and
other current
assets
Inventories 12,180 11,529
Total current 39,160 38,603
assets
Property, 12,842 13,574
plant and
equipment -
net
Long-term 1,193 1,161
receivables -
trade and
other
Long-term 12,412 13,286
receivables -
finance
Noncurrent 1,372 1,439
deferred and
refundable
income taxes
Intangible 1,630 1,897
assets
Goodwill 6,142 6,217
Other assets 3,242 2,332
Total assets $ 77,993 $ 78,509
Liabilities
Current
liabilities:
Short-term
borrowings:
=- Machinery, $ - $ -
Energy &
Transportation
=- Financial 4,268 5,723
Products
Accounts 6,141 7,051
payable
Accrued 3,727 3,573
expenses
Accrued wages, 1,518 2,384
salaries and
employee
benefits
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DJ Caterpillar Inc.: Reports Third Quarter 2019 -5-
Customer 1,309 1,243
advances
Dividends - 495
payable
Other current 2,188 1,919
liabilities
Long-term debt
due within one
year:
=- Machinery, 25 10
Energy &
Transportation
=- Financial 8,025 5,820
Products
Total current 27,201 28,218
liabilities
Long-term debt
due after one
year:
=- Machinery, 9,134 8,005
Energy &
Transportation
=- Financial 16,454 16,995
Products
Liability for 5,900 7,455
postemployment
benefits
Other 4,311 3,756
liabilities
Total 63,000 64,429
liabilities
Shareholders'
equity
Common stock 5,951 5,827
Treasury stock (23,693 ) (20,531 )
Profit 34,477 30,427
employed in
the business
Accumulated (1,783 ) (1,684 )
other
comprehensive
income (loss)
Noncontrolling 41 41
interests
Total 14,993 14,080
shareholders'
equity
Total $ 77,993 $ 78,509
liabilities
and
shareholders'
equity
Caterpillar Inc.
Condensed Consolidated Statement of Cash Flow
(Unaudited)
(Millions of dollars)
Nine Months Ended
September 30,
2019 2018
Cash flow
from
operating
activities:
Profit of $ 4,997 $ 5,099
consolidated
and
affiliated
companies
Adjustments
for non-cash
items:
Depreciation 1,933 2,065
and
amortization
Other 627 630
Changes in
assets and
liabilities,
net of
acquisitions
and
divestitures
:
Receivables 427 (725 )
- trade and
other
Inventories (676 ) (1,822 )
Accounts (669 ) 496
payable
Accrued 114 (32 )
expenses
Accrued (858 ) (418 )
wages,
salaries and
employee
benefits
Customer 169 59
advances
Other assets 3 394
- net
Other (1,589 ) (1,271 )
liabilities
- net
Net cash 4,478 4,475
provided by
(used for)
operating
activities
Cash flow
from
investing
activities:
Capital (723 ) (921 )
expenditures
- excluding
equipment
leased to
others
Expenditures (1,133 ) (1,208 )
for
equipment
leased to
others
Proceeds 812 732
from
disposals of
leased
assets and
property,
plant and
equipment
Additions to (9,453 ) (9,092 )
finance
receivables
Collections 9,144 8,032
of finance
receivables
Proceeds 183 416
from sale of
finance
receivables
Investments (6 ) (357 )
and
acquisitions
(net of cash
acquired)
Proceeds 3 14
from sale of
businesses
and
investments
(net of cash
sold)
Proceeds 281 363
from sale of
securities
Investments (425 ) (417 )
in
securities
Other - net (37 ) 24
Net cash (1,354 ) (2,414 )
provided by
(used for)
investing
activities
Cash flow
from
financing
activities:
Dividends (1,564 ) (1,444 )
paid
Common stock 59 292
issued,
including
treasury
shares
reissued
Common (3,283 ) (2,000 )
shares
repurchased
Proceeds 8,827 7,073
from debt
issued
(original
maturities
greater than
three
months)
Payments on (6,062 ) (5,642 )
debt
(original
maturities
greater than
three
months)
Short-term (1,006 ) (465 )
borrowings -
net
(original
maturities
three months
or less)
Other - net (2 ) (32 )
Net cash (3,031 ) (2,218 )
provided by
(used for)
financing
activities
Effect of (47 ) (117 )
exchange
rate changes
on cash
Increase 46 (274 )
(decrease)
in cash and
short-term
investments
and
restricted
cash
Cash and 7,890 8,320
short-term
investments
and
restricted
cash at
beginning of
period
Cash and $ 7,936 $ 8,046
short-term
investments
and
restricted
cash at end
of period
All short-term investments, which consist primarily of highly
liquid investments with original maturities of three months or
less, are considered to be cash equivalents.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Three Months Ended September 30, 2019
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery, Financial Consolidating
Energy & Products Adjustments
Transportation
1
Sales and
revenues:
Sales of $ 11,9 $ 11,97 $ - $ -
Machinery, 74 4
Energy &
Transportati
on
Revenues of 784 - 920 (136 ) 2
Financial
Products
Total sales 12,758 11,974 920 (136 )
and revenues
Operating
costs:
Cost of 8,569 8,569 - -
goods sold
Selling, 1,251 1,095 163 (7 ) 3
general and
administrati
ve expenses
Research and 431 431 - -
development
expenses
Interest 189 - 198 (9 ) 4
expense of
Financial
Products
Other 298 (9 ) 320 (13 ) 3
operating
(income)
expenses
Total 10,738 10,086 681 (29 )
operating
costs
Operating 2,020 1,888 239 (107 )
profit
Interest 103 103 - -
expense
excluding
Financial
Products
Other income 88 (27 ) 8 107 5
(expense)
Consolidated 2,005 1,758 247 -
profit
before taxes
Provision 518 457 61 -
(benefit)
for income
taxes
Profit of 1,487 1,301 186 -
consolidated
companies
Equity in 7 7 - -
profit
(loss) of
unconsolidat
ed
affiliated
companies
Equity in - 180 - (180 ) 6
profit of
Financial
Products'
subsidiaries
Profit of 1,494 1,488 186 (180 )
consolidated
and
affiliated
companies
Less: Profit - (6 ) 6 -
(loss)
attributable
to
noncontrolli
ng interests
Profit 7 $ 1,49 $ 1,494 $ 180 $ (180 )
4
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 September 30, 2018
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery, Financial Consolidating
Energy & Products Adjustments
Transportation
1
Sales and
revenues:
Sales of $ 12,7 $ 12,76 $ - $ -
Machinery, 63 3
Energy &
Transportati
on
Revenues of 747 - 867 (120 ) 2
Financial
Products
Total sales 13,510 12,763 867 (120 )
and revenues
Operating
costs:
(MORE TO FOLLOW) Dow Jones Newswires
October 23, 2019 10:21 ET (14:21 GMT)
DJ Caterpillar Inc.: Reports Third Quarter 2019 -6-
Cost of 9,022 9,022 - -
goods sold
Selling, 1,299 1,135 169 (5 ) 3
general and
administrati
ve expenses
Research and 479 479 - -
development
expenses
Interest 185 - 194 (9 ) 4
expense of
Financial
Products
Other 390 63 333 (6 ) 3
operating
(income)
expenses
Total 11,375 10,699 696 (20 )
operating
costs
Operating 2,135 2,064 171 (100 )
profit
Interest 102 114 - (12 ) 4
expense
excluding
Financial
Products
Other income 102 (5 ) 19 88 5
(expense)
Consolidated 2,135 1,945 190 -
profit
before taxes
Provision 415 376 39 -
(benefit)
for income
taxes
Profit of 1,720 1,569 151 -
consolidated
companies
Equity in 7 7 - -
profit
(loss) of
unconsolidat
ed
affiliated
companies
Equity in - 145 - (145 ) 6
profit of
Financial
Products'
subsidiaries
Profit of 1,727 1,721 151 (145 )
consolidated
and
affiliated
companies
Less: Profit - (6 ) 6 -
(loss)
attributable
to
noncontrolli
ng interests
Profit 7 $ 1,72 $ 1,727 $ 145 $ (145 )
7
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 Nine Months Ended September 30, 2019
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery, Financial Consolidating
Energy & Products Adjustments
Transportation
1
Sales and
revenues:
Sales of $ 38,3 $ 38,36 $ - $ -
Machinery, 69 9
Energy &
Transportati
on
Revenues of 2,287 - 2,684 (397 ) 2
Financial
Products
Total sales 40,656 38,369 2,684 (397 )
and revenues
Operating
costs:
Cost of 27,513 27,515 - (2 ) 3
goods sold
Selling, 3,879 3,324 564 (9 ) 3
general and
administrati
ve expenses
Research and 1,307 1,307 - -
development
expenses
Interest 571 - 599 (28 ) 4
expense of
Financial
Products
Other 946 2 974 (30 ) 3
operating
(income)
expenses
Total 34,216 32,148 2,137 (69 )
operating
costs
Operating 6,440 6,221 547 (328 )
profit
Interest 309 318 - (9 ) 4
expense
excluding
Financial
Products
Other income 316 (71 ) 68 319 5
(expense)
Consolidated 6,447 5,832 615 -
profit
before taxes
Provision 1,470 1,294 176 -
(benefit)
for income
taxes
Profit of 4,977 4,538 439 -
consolidated
companies
Equity in 20 20 - -
profit
(loss) of
unconsolidat
ed
affiliated
companies
Equity in - 422 - (422 ) 6
profit of
Financial
Products'
subsidiaries
Profit of 4,997 4,980 439 (422 )
consolidated
and
affiliated
companies
Less: Profit 2 (15 ) 17 -
(loss)
attributable
to
noncontrolli
ng interests
Profit 7 $ 4,99 $ 4,995 $ 422 $ (422 )
5
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 Nine Months Ended September 30, 2018
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery, Financial Consolidating
Energy & Products Adjustments
Transportation
1
Sales and
revenues:
Sales of $ 38,1 $ 38,19 $ - $ -
Machinery, 92 2
Energy &
Transportati
on
Revenues of 2,188 - 2,527 (339 ) 2
Financial
Products
Total sales 40,380 38,192 2,527 (339 )
and revenues
Operating
costs:
Cost of 27,010 27,010 - -
goods sold
Selling, 4,015 3,445 581 (11 ) 3
general and
administrati
ve expenses
Research and 1,384 1,384 - -
development
expenses
Interest 533 - 558 (25 ) 4
expense of
Financial
Products
Other 1,028 100 949 (21 ) 3
operating
(income)
expenses
Total 33,970 31,939 2,088 (57 )
operating
costs
Operating 6,410 6,253 439 (282 )
profit
Interest 305 337 - (32 ) 4
expense
excluding
Financial
Products
Other income 350 76 24 250 5
(expense)
Consolidated 6,455 5,992 463 -
profit
before taxes
Provision 1,377 1,274 103 -
(benefit)
for income
taxes
Profit of 5,078 4,718 360 -
consolidated
companies
Equity in 21 21 - -
profit
(loss) of
unconsolidat
ed
affiliated
companies
Equity in - 345 - (345 ) 6
profit of
Financial
Products'
subsidiaries
Profit of 5,099 5,084 360 (345 )
consolidated
and
affiliated
companies
Less: Profit - (15 ) 15 -
(loss)
attributable
to
noncontrolli
ng interests
Profit 7 $ 5,09 $ 5,099 $ 345 $ (345 )
9
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
(MORE TO FOLLOW) Dow Jones Newswires
October 23, 2019 10:21 ET (14:21 GMT)
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 Nine Months Ended September 30, 2019
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery, Financial Consolidating
Energy & Products Adjustments
Transportation
1
Cash flow
from
operating
activities:
Profit of $ 4,99 $ 4,980 $ 439 $ (422 ) 2
consolidated 7
and
affiliated
companies
Adjustments
for non-cash
items:
Depreciation 1,933 1,283 650 -
and
amortization
Undistributed - (422 ) - 422 3
profit of
Financial
Products
Other 627 395 (111 ) 343 4
Changes in
assets and
liabilities,
net of
acquisitions
and
divestitures:
Receivables - 427 125 (16 ) 318 4
trade and ,
other 5
Inventories (676 ) (702 ) - 26 4
Accounts (669 ) (651 ) 6 (24 ) 4
payable
Accrued 114 105 11 (2 ) 4
expenses
Accrued (858 ) (865 ) 7 -
wages,
salaries and
employee
benefits
Customer 169 171 - (2 ) 4
advances
Other assets 3 (47 ) 47 3 4
- net
Other (1,589 ) (1,740 ) 144 7 4
liabilities -
net
Net cash 4,478 2,632 1,177 669
provided by
(used for)
operating
activities
Cash flow
from
investing
activities:
Capital (723 ) (709 ) (14 ) -
expenditures
- excluding
equipment
leased to
others
Expenditures (1,133 ) (21 ) (1,151 ) 39 4
for equipment
leased to
others
Proceeds from 812 149 766 (103 ) 4
disposals of
leased assets
and property,
plant and
equipment
Additions to (9,453 ) - (10,63 ) 1,180 5
finance 3
receivables
Collections 9,144 - 10,166 (1,022 ) 5
of finance
receivables
Net - - 763 (763 ) 5
intercompany
purchased
receivables
Proceeds from 183 - 183 -
sale of
finance
receivables
Net - 721 1 (722 ) 6
intercompany
borrowings
Investments (6 ) (6 ) - -
and
acquisitions
(net of cash
acquired)
Proceeds from 3 3 - -
sale of
businesses
and
investments
(net of cash
sold)
Proceeds from 281 16 265 -
sale of
securities
Investments (425 ) (16 ) (409 ) -
in securities
Other - net (37 ) 1 (38 ) -
Net cash (1,354 ) 138 (101 ) (1,391 )
provided by
(used for)
investing
activities
Cash flow
from
financing
activities:
Dividends (1,564 ) (1,564 ) - -
paid
Common stock 59 59 - -
issued,
including
treasury
shares
reissued
Common shares (3,283 ) (3,283 ) - -
repurchased
Net - (1 ) (721 ) 722 6
intercompany
borrowings
Proceeds from 8,827 1,479 7,348 -
debt issued >
90 days
Payments on (6,062 ) (8 ) (6,054 ) -
debt > 90
days
Short-term (1,006 ) - (1,006 ) -
borrowings -
net < 90 days
Other - net (2 ) (2 ) - -
Net cash (3,031 ) (3,320 ) (433 ) 722
provided by
(used for)
financing
activities
Effect of (47 ) (38 ) (9 ) -
exchange rate
changes on
cash
Increase 46 (588 ) 634 -
(decrease) in
cash and
short-term
investments
and
restricted
cash
Cash and 7,890 6,994 896 -
short-term
investments
and
restricted
cash at
beginning of
period
Cash and $ 7,93 $ 6,406 $ 1,5 $ -
short-term 6 30
investments
and
restricted
cash at end
of period
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 Nine Months Ended September 30, 2018
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Consolidated Machinery, Financial Consolidating
Energy & Products Adjustments
Transportation
1
Cash flow
from
operating
activities:
Profit of $ 5,09 $ 5,084 $ 360 $ (345 ) 2
consolidated 9
and
affiliated
companies
Adjustments
for non-cash
items:
Depreciation 2,065 1,410 655 -
and
amortization
Undistributed - (345 ) - 345 3
profit of
Financial
Products
Other 630 327 36 267 4
Changes in
assets and
liabilities,
net of
acquisitions
and
divestitures:
Receivables - (725 ) 19 (33 ) (711 ) 4
trade and ,
other 5
Inventories (1,822 ) (1,774 ) - (48 ) 4
Accounts 496 544 (55 ) 7 4
payable
Accrued (32 ) (63 ) 31 -
expenses
Accrued (418 ) (403 ) (15 ) -
wages,
salaries and
employee
benefits
Customer 59 59 - -
advances
Other assets 394 343 (9 ) 60 4
- net
Other (1,271 ) (1,321 ) 110 (60 ) 4
liabilities -
net
Net cash 4,475 3,880 1,080 (485 )
provided by
(used for)
operating
activities
Cash flow
from
investing
activities:
Capital (921 ) (822 ) (99 ) -
expenditures
- excluding
equipment
leased to
others
Expenditures (1,208 ) (23 ) (1,258 ) 73 4
for equipment
leased to
others
Proceeds from 732 122 632 (22 ) 4
disposals of
leased assets
and property,
plant and
equipment
Additions to (9,092 ) - (10,15 ) 1,059 5
finance 1 ,
receivables 7
Collections 8,032 - 9,135 (1,103 ) 5
of finance
receivables
Net - - (484 ) 484 5
intercompany
purchased
receivables
Proceeds from 416 - 416 -
sale of
finance
receivables
Net - 66 - (66 ) 6
intercompany
borrowings
Investments (357 ) (357 ) - -
and
acquisitions
(net of cash
acquired)
Proceeds from 14 20 - (6 ) 7
sale of
(MORE TO FOLLOW) Dow Jones Newswires
October 23, 2019 10:21 ET (14:21 GMT)
