DJ Caterpillar Inc.: Form 8-K Exhibit 99.1
Caterpillar Inc. Caterpillar Inc.: Form 8-K Exhibit 99.1 07-Aug-2020 / 00:20 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. 2Q 2020 Earnings Release July 31, 2020 FOR IMMEDIATE RELEASE Caterpillar Reports Second-Quarter 2020 Results ($ in billions except profit per Second Quarter share) Sales and Revenues 2020 2019 $10.0 $14.4 Profit Per Share $0.84 $2.83 Second-quarter sales and revenues decreased 31%; profit per share declined 70% Strong balance sheet; $8.8 billion of enterprise cash DEERFIELD, Ill. - Caterpillar Inc. (NYSE: CAT) today announced second-quarter 2020 sales and revenues of $10.0 billion, a 31% decrease compared with $14.4 billion in the second quarter of 2019. The decline was due to lower sales volume driven by lower end-user demand and the impact from changes in dealer inventories. Dealers decreased machine and engine inventories about $1.4 billion during the second quarter of 2020, compared with an increase of about $500 million during the second quarter of 2019. Second-quarter 2020 profit per share was $0.84, compared with $2.83 profit per share in the second quarter of 2019. Profit per share in the second quarter of 2020 included pre-tax remeasurement losses of $122 million, or $0.19 per share, resulting from the settlements of pension obligations. Operating profit margin was 7.8% for the second quarter of 2020, compared with 15.3% for the second quarter of 2019. For the first half of 2020, enterprise operating cash flow was $2.5 billion. Caterpillar ended the second quarter with $8.8 billion of enterprise cash and $18.5 billion of available liquidity sources. In July, Cat Financial issued $1.5 billion of new three-year and 18-month medium-term notes to supplement its liquidity position. Response to COVID-19 and Global Business Conditions "I am proud of the global team's continued focus on safety while executing our strategy and serving our customers," said Caterpillar Chairman and CEO Jim Umpleby. "In the second quarter, our employees and dealers remained dedicated to providing the essential products and services the world needs under very challenging conditions." (more) 2 Operational Status Caterpillar continues to implement safeguards in its facilities to protect team members, including increased frequency of cleaning and disinfecting, social distancing practices and other measures consistent with specific regulatory requirements and guidance from health authorities. As of mid-July 2020, globally and across Caterpillar's three primary segments, nearly all of the company's primary production facilities continued to operate. This continues to fluctuate as conditions warrant, including the pace of economic recovery and the potential for additional COVID-related temporary shutdowns. The company has continued to take actions to reduce costs and prioritize its spending to provide for investment in services and expanded offerings, key elements of its strategy for profitable growth, which was introduced in 2017. Outlook Caterpillar's financial results for the remainder of 2020 will be impacted by continued global economic uncertainty due to the COVID-19 pandemic. As such, Caterpillar withdrew its earnings guidance on March 26 and is not providing a financial outlook for 2020 at this time. "We are well positioned for these challenging times because of the successful execution of our strategy," said Umpleby. "We are focused on employee safety and maintaining a competitive and flexible cost structure while continuing to invest in services and expanded offerings to better serve our customers. We will adjust production as conditions warrant and are prepared to respond quickly to any positive or negative changes in customer demand." (more) 3 CONSOLIDATED RESULTS Consolidated Sales and Revenues The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the second quarter of 2019 (at left) and the second quarter of 2020 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company's Board of Directors and employees. Total sales and revenues for the second quarter of 2020 were $9.997 billion, a decrease of $4.435 billion, or 31%, compared with $14.432 billion in the second quarter of 2019. The decline was due to lower sales volume driven by lower end-user demand and the impact from changes in dealer inventories. Dealers decreased machine and engine inventories about $1.4 billion during the second quarter of 2020, compared with an increase of about $500 million during the second quarter of 2019. The changes in dealer inventories came primarily in Construction Industries and Resource Industries. Unfavorable price realization also contributed to the sales decline due to the geographic mix of sales and competitive market conditions in China. Sales were lower across all regions and in the three primary segments. Sales and Revenues by Segment (Millions of Second Sales Price Currency Inter- Second $ % dollars) Quarter Volume Reali Segment Quarter Change Chang zatio / e n Other 2019 2020 Construction $ 6,467 $ $ $ (81) $ (5) $ 4,048 $ (37%) Industries (2,075 (258) (2,419 ) ) Resource 2,819 (933) (23) (45) 8 1,826 (993) (35%) Industries Energy & 5,486 (942) 23 (64) (354) 4,149 (1,337 (24%) Transportati ) on All Other 125 (5) - (1) (4) 115 (10) (8%) Segment Corporate (1,226) 43 (1) 1 355 (828) 398 Items and Eliminations Machinery, 13,671 (3,912 (259) (190) - 9,310 (4,361 (32%) Energy & ) ) Transportati on Financial 873 - - - (110) 763 (110) (13%) Products Segment Corporate (112) - - - 36 (76) 36 Items and Eliminations Financial 761 - - - (74) 687 (74) (10%) Products Revenues Consolidated $ $ $ $ (190) $ (74) $ 9,997 $ (31%) Sales and 14,432 (3,912 (259) (4,435 Revenues ) ) (more) 4 Sales and Revenues by Geographic Region (Millions of North Latin EAME Asia/Pacific External Inter-Segment Total dollars) America America Sales and Sales and Second Revenues Revenues Quarter 2020 $ % Chg $ % Chg $ % Chg $ % Chg $ % Chg $ % Chg $ % Chg Construction $ (54%) $ (46%) $ (16%) $ (10%) $ (37%) $ 16 (24%) $ (37%) Industries 1,60 212 933 1,283 4,032 4,048 4 Resource 507 (52%) 270 (40%) 379 (15%) 554 (27%) 1,710 (37%) 116 7% 1,826 (35%) Industries Energy & 1,81 (21%) 197 (39%) 929 (20%) 599 (19%) 3,541 (22%) 608 (37%) 4,149 (24%) Transportati 6 on All Other 7 (50%) 1 -% 5 25% 15 -% 28 (18%) 87 (4%) 115 (8%) Segment Corporate 2 - (2) (1) (827) (828) Items and Eliminations 1) Machinery, 3,93 (42%) 679 (42%) 2,2 (17%) 2,449 (17%) 9,310 (32%) - -% 9,310 (32%) Energy & 6 46 Transportati on Financial 493 (12%) 60 (21%) 96 (6%) 114 (14%) 763 (13%) - -% 763 (13%) Products Segment Corporate (43) (9) (9) (15) (76) - (76) Items and Eliminations Financial 450 (8%) 51 (22%) 87 (6%) 99 (12%) 687 (10%) - -% 687 (10%) Products Revenues Consolidated $ (40%) $ (41%) $ (17%) $ (17%) $ (31%) $ - -% $ (31%) Sales and 4,38 730 2,3 2,548 9,997 9,997 Revenues 6 33 Second Quarter 2019 Construction $ $ $ $ $ $ 21 $ Industries 3,51 392 1,1 1,433 6,446 6,467 3 08 Resource 1,05 448 446 759 2,711 108 2,819 Industries 8 Energy & 2,29 325 1,1 742 4,524 962 5,486 Transportati 7 60 on All Other 14 1 4 15 34 91 125 Segment Corporate (39) (5) 2 (44) (1,182) (1,22 Items and 6) Eliminations 2) Machinery, 6,84 1,16 2,7 2,951 13,67 - 13,67 Energy & 3 4 13 1 1 Transportati on Financial 563 76 102 132 873 - 873 Products Segment Corporate (72) (11) (9) (20) (112) - (112) Items and Eliminations
(MORE TO FOLLOW) Dow Jones Newswires
August 06, 2020 18:21 ET (22:21 GMT)
Financial 491 65 93 112 761 - 761 Products Revenues Consolidated $ $ $ $ $ $ - $ Sales and 7,33 1,22 2,8 3,063 14,43 14,43 Revenues 4 9 06 2 2 (more) 5 Consolidated Operating Profit The chart above graphically illustrates reasons for the change in consolidated operating profit between the second quarter of 2019 (at left) and the second quarter of 2020 (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 second quarter of 2020 was $784 million, a decrease of $1.429 billion, or 65%, compared with $2.213 billion in the second quarter of 2019. The decrease was due to lower sales volume and unfavorable price realization, partially offset by favorable manufacturing costs and lower selling, general and administrative (SG&A) and research and development (R&D) expenses. Favorable manufacturing costs were mostly driven by lower period manufacturing costs. Both period manufacturing costs and SG&A/R&D expenses benefited from reduced short-term incentive compensation expense and other cost reductions related to lower sales volumes. Profit (Loss) by Segment Second Quarter Second Quarter $ % (Millions of 2020 2019 Change Change dollars) Construction $ 518 $ 1,247 $ (58%) Industries (729) Resource 152 481 (329) (68%) Industries Energy & 624 886 (262) (30%) Transportatio n All Other (3) 11 (14) n/a Segment Corporate (542) (441) (101) Items and Eliminations Machinery, 749 2,184 (1,435 (66%) Energy & ) Transportatio n Financial 148 193 (45) (23%) Products Segment Corporate (38) (50) 12 Items and Eliminations Financial 110 143 (33) (23%) Products Consolidating (75) (114) 39 Adjustments Consolidated $ 784 $ 2,213 $ (65%) Operating (1,429 Profit ) (more) 6 Other Profit/Loss and Tax Items ? Other income (expense) in the second quarter of 2020 was income of $29 million, compared with income of $68 million in the second quarter of 2019. The change was primarily due to the unfavorable impact of pension and other postemployment benefit (OPEB) plans, including $122 million of remeasurement losses resulting from the settlements of pension obligations, partially offset by favorable impacts from foreign currency exchange gains (losses), primarily due to the Australian dollar. ? The provision for income taxes for the second quarter of 2020 reflected an estimated annual tax rate of 31%, excluding a $21 million discrete tax benefit related to the $122 million of remeasurement losses resulting from the settlements of pension obligations. The tax rate was 26% for the second quarter of 2019. The increase in the estimated annual tax rate was primarily related to changes in the expected geographic mix of profits from a tax perspective for 2020, including the impact of U.S. tax on non-U.S. earnings as a result of U.S. tax reform. (more) 7 CONSTRUCTION INDUSTRIES (Millions of dollars) Segment Sales Second Sales Price Inter- Second $ % Quarter 2019 Volume Realization Currency Segment Quarter 2020 Change Change Total Sales $ 6,467 $ (2,075) $ (258) $ (81) $ (5) $ 4,048 $ (2,419) (37%) Sales by Geographic Region Second Second $ % Quarter 2020 Quarter 2019 Change Change North America $ 1,604 $ 3,513 $ (1,909) (54%) Latin America 212 392 (180) (46%) EAME 933 1,108 (175) (16%) Asia/Pacific 1,283 1,433 (150) (10%) External Sales 4,032 6,446 (2,414) (37%) Inter-segment 16 21 (5) (24%) Total Sales $ 4,048 $ 6,467 $ (2,419) (37%) Segment Profit Second Second % Quarter 2020 Quarter 2019 Change Change Segment Profit $ 518 $ 1,247 $ (729) (58%) Segment Profit Margin 12.8% 19.3% (6.5 pts) Construction Industries' total sales were $4.048 billion in the second quarter of 2020, a decrease of $2.419 billion, or 37%, compared with $6.467 billion in the second quarter of 2019. The decrease was due to lower sales volume, driven by lower end-user demand and the impact from changes in dealer inventories. In all regions, dealers decreased inventories during the second quarter of 2020, compared with an increase during the second quarter of 2019. Unfavorable price realization also contributed to the sales decline due to the geographic mix of sales and competitive market conditions in China. In North America, sales decreased mostly due to lower sales volume driven by lower end-user demand and the impact from changes in dealer inventories. The lower end-user demand was driven primarily by pipeline and road construction. Sales declined in Latin America primarily due to lower end-user demand across the region, the impact from changes in dealer inventories and unfavorable currency impacts from a weaker Brazilian real. In EAME, sales decreased mostly because of lower sales volume across the region, driven by lower end-user demand and the impact from changes in dealer inventories. Sales declined in Asia/Pacific primarily due to unfavorable price realization and currency impacts from a weaker Chinese yuan. In China, sales were about flat as higher end-user demand was mostly offset by the impact of changes in dealer inventories and unfavorable price realization. Construction Industries' profit was $518 million in the second quarter of 2020, a decrease of $729 million, or 58%, compared with $1.247 billion in the second quarter of 2019. The decrease was mainly due to lower sales volume and unfavorable price realization, partially offset by favorable manufacturing costs and lower SG&A/R&D expenses. Favorable manufacturing costs were primarily attributed to lower period manufacturing costs. Both period manufacturing costs and SG&A/R&D expenses benefited from reduced short-term incentive compensation expense and other cost reductions related to lower sales volumes. (more) 8 RESOURCE INDUSTRIES (Millions of dollars) Segment Sales Second Sales Price Inter- Second $ % Quarter 2019 Volume Realization Currency Segment Quarter 2020 Change Change Total Sales $ 2,819 $ (933) $ (23) $ (45) $ 8 $ 1,826 $ (993) (35%) Sales by Geographic Region Second Second $ % Quarter 2020 Quarter 2019 Change Change North America $ 507 $ 1,058 $ (551) (52%) Latin America 270 448 (178) (40%) EAME 379 446 (67) (15%) Asia/Pacific 554 759 (205) (27%) External Sales 1,710 2,711 (1,001) (37%) Inter-segment 116 108 8 7% Total Sales $ 1,826 $ 2,819 $ (993) (35%) Segment Profit Second Second % Quarter 2020 Quarter 2019 Change Change Segment Profit $ 152 $ 481 $ (329) (68%) Segment Profit Margin 8.3% 17.1% (8.8 pts) Resource Industries' total sales were $1.826 billion in the second quarter of 2020, a decrease of $993 million, or 35%, compared with $2.819 billion in the second quarter of 2019. The decrease was due to lower sales volume, driven by changes in dealer inventories and lower end-user demand. Dealers decreased inventories during the second quarter of 2020, compared with an increase during the second quarter of 2019. Lower end-user demand was primarily driven by equipment supporting non-residential construction and quarry and aggregates. Mining equipment end-user demand was down in the quarter, though to a lesser extent. The company's mining customers faced production disruptions impacting machine utilization and aftermarket parts demand. Resource Industries' profit was $152 million in the second quarter of 2020, a decrease of $329 million, or 68%, compared with $481 million in the second quarter of 2019. The decrease was mainly because of lower sales volume, partially offset by favorable manufacturing costs. Favorable manufacturing costs were mostly due to lower period manufacturing costs driven by lower short-term incentive compensation expense, other cost-reduction actions implemented in response to lower sales volumes and the benefits of prior restructuring programs. (more) 9 ENERGY & TRANSPORTATION (Millions of dollars) Segment Sales Second Sales Price Inter- Second $ % Quarter 2019 Volume Realization Currency Segment Quarter 2020 Change Change Total Sales $ 5,486 $ (942) $ 23 $ (64) $ (354) $ 4,149 $ (1,337) (24%) Sales by Application Second Second $ % Quarter 2020 Quarter 2019 Change Change Oil and Gas $ 1,027 $ 1,305 $ (278) (21%) Power Generation 895 1,021 (126) (12%) Industrial 678 957 (279) (29%) Transportation 941 1,241 (300) (24%) External Sales 3,541 4,524 (983) (22%)
(MORE TO FOLLOW) Dow Jones Newswires
August 06, 2020 18:21 ET (22:21 GMT)