DJ Caterpillar Inc.: Exhibit 99.1 to Form 8-K Earnings Release Dated October 23, 2018
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Caterpillar Inc. Caterpillar Inc.: Exhibit 99.1 to Form 8-K Earnings Release Dated October 23, 2018 23-Oct-2018 / 23:06 CET/CEST Dissemination of a French Regulatory News, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. Caterpillar Inc. **************** 3Q 2018 Earnings Release October 23, 2018 FOR IMMEDIATE RELEASE Caterpillar Reports Third-Quarter 2018 Results ********************************************** Record Third-Quarter Profit Per Share Driven by Higher Sales and Strong Operational Performance DEERFIELD, Ill. - Caterpillar Inc. (NYSE: CAT) today announced third-quarter 2018 sales and revenues of $13.5 billion, compared with $11.4 billion in the third quarter of 2017, an 18 percent increase. Third-quarter 2018 profit per share of $2.88 was a third-quarter record. Profit per share was $1.77 in the third quarter of 2017. Excluding restructuring costs and a net tax benefit to adjust deferred tax balances, adjusted profit per share in the third quarter of 2018 was $2.86, compared with third-quarter 2017 adjusted profit per share of $1.95. During the third quarter of 2018, Machinery, Energy & Transportation (ME&T) operating cash flow was $848 million. In the quarter, the company deployed significant capital, including a discretionary pension contribution of $1.0 billion, the repurchase of $750 million of Caterpillar common stock and a dividend payment of $511 million. The enterprise cash balance at the end of the third quarter of 2018 was $8.0 billion. "This was the best third-quarter profit per share in our company's history," said Caterpillar CEO Jim Umpleby. "Our global team continues to do excellent work focusing on our customers' success and executing our strategy for profitable growth." 2018 Outlook The company's 2018 profit per share outlook is a range of $10.65 to $11.65. The company is maintaining the adjusted profit per share outlook range of $11.00 to $12.00. The current profit per share outlook now includes a net tax benefit of $95 million that was recorded in the third quarter of 2018 to adjust deferred tax balances. The outlook for adjusted profit per share excludes restructuring costs of about $400 million and the net tax benefit. Most end markets continue to improve. Order rates and backlog remain healthy. In the fourth quarter, price realization, operational excellence and cost discipline are expected to more than offset higher material and freight costs, including tariffs. The outlook does not include a mark-to-market gain or loss for remeasurement of pension and other postemployment benefit (OPEB) plans and any additional changes to provisional estimates recorded in 2017 for U.S. tax reform. Notes: - Glossary of terms is included on pages 11-12; first occurrence of terms shown in bold italics. - Information on non-GAAP financial measures is included on page 13. - Caterpillar will conduct a teleconference and live webcast, with a slide presentation, beginning at 10 a.m. Central Time on Tuesday, October 23, 2018, to discuss its 2018 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 [1]. 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 [2]. To connect with us on social media, visit caterpillar.com/social-media [3]. Caterpillar contact: Corrie Scott, 224-551-4133 (Office), 808-351-3865 (Mobile) or Scott_Corrie@cat.com 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) 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) additional restructuring costs or a failure to realize anticipated savings or benefits from past or future cost reduction actions; (x) failure to realize all of the anticipated benefits from initiatives to increase our productivity, efficiency and cash flow and to reduce costs; (xi) inventory management decisions and sourcing practices of our dealers and our OEM customers; (xii) a failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures or divestitures; (xiii) union disputes or other employee relations issues; (xiv) adverse effects of unexpected events including natural disasters; (xv) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers; (xvi) 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; (xvii) our Financial Products segment's risks associated with the financial services industry; (xviii) changes in interest rates or market liquidity conditions; (xix) an increase in delinquencies, repossessions or net losses of Cat Financial's customers; (xx) currency fluctuations; (xxi) our or Cat Financial's compliance with financial and other restrictive covenants in debt agreements; (xxii) increased pension plan funding obligations; (xxiii) alleged or actual violations of trade or anti-corruption laws and regulations; (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 The chart above graphically illustrates reasons for the change in Consolidated Sales and Revenues between the third quarter of 2017 (at left) and the third 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. Total sales and revenues were $13.510 billion in the third quarter of 2018, an increase of $2.097 billion, or 18 percent, compared with $11.413 billion in the third quarter of 2017. The increase was due to higher sales volume driven by improved demand across the three primary segments, including an increase in dealer inventories. Favorable price realization, primarily in Resource Industries, also contributed to the sales improvement. The increase was partially offset by unfavorable currency impacts, primarily due to a weaker Australian dollar and Brazilian real. Consolidated Operating Profit The chart above graphically illustrates reasons for the change in Consolidated Operating Profit between the third quarter of 2017 (at left) and the third quarter of 2018 (at right). Items favorably impacting operating profit appear 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
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DJ Caterpillar Inc.: Exhibit 99.1 to Form 8-K -2-
Machinery, Energy & Transportation other operating (income) expenses.
Operating profit for the third quarter of 2018 was $2.135 billion, compared to $1.509 billion in the third quarter of 2017. The
increase of $626 million was mostly due to higher sales volume and favorable price realization.
Manufacturing costs were higher due to increased material and freight costs. Material costs were higher primarily due to increases
in steel prices and tariffs. Freight costs were unfavorable primarily due to supply chain inefficiencies as the industry continues
to respond to strong global demand. Selling, general and administrative (SG&A) and research and development (R&D) expenses
increased primarily due to investments aligned with the company's strategic growth initiatives.
Other Profit/Loss Items
- Other income/expense in the third quarter of 2018 was income of $102 million, compared with income of $132 million in the third
quarter of 2017. The unfavorable change was primarily a result of higher currency translation and hedging net losses.
- The provision for income taxes in the third quarter of 2018 reflected an estimated annual tax rate of 24 percent, compared to
32 percent in the third quarter of 2017, excluding the discrete items discussed in the following paragraph. The decrease was
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.
The provision for income taxes in the third quarter of 2018 included a $95 million net benefit to adjust deferred tax balances. In
addition, a discrete tax benefit of $3 million was recorded in the third quarter of 2018, compared to $18 million in the third
quarter of 2017, for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S.
GAAP compensation expense.
Global Workforce
The global workforce increased about 8,200 from the end of the third quarter of 2017, primarily due to higher production volumes.
September 30
2018 2017 Increase
Full-time employment 103,000 96,700 6,300
Flexible workforce 20,100 18,200 1,900
Total 123,100 114,900 8,200
Geographic summary
U.S. workforce 53,400 49,700 3,700
Non-U.S. workforce 69,700 65,200 4,500
Total 123,100 114,900 8,200
Construction Industries' total sales were $5.683 billion in the third quarter of 2018, compared with $4.886 billion in the third
quarter of 2017. The increase was mostly due to higher sales volume for construction equipment.
Sales increased in all regions except Latin America.
? In North America, the sales increase was mostly due to higher demand for new equipment, primarily to support oil and gas
activities, including pipelines, and non-residential building construction activities.
? Construction activities remained weak in Latin America.
? Sales increased in EAME as infrastructure and building construction activities drove higher demand across several countries in
the region.
? Sales in Asia/Pacific were higher across the region, with the most significant impact from improved demand in China, including
an increase in dealer inventories from low levels, stemming from increased non-residential building construction and
infrastructure activities.
Construction Industries' profit was $1.058 billion in the third quarter of 2018, compared with $884 million in the third quarter of
2017. The increase in profit was a result of higher sales volume, partially offset by higher manufacturing costs. Manufacturing
costs were higher primarily due to increased material and freight costs.
Resource Industries' total sales were $2.638 billion in the third quarter of 2018, an increase of $682 million from the third
quarter of 2017. The increase was primarily due to higher demand for both mining and heavy construction equipment. Commodity market
fundamentals remained positive, contributing to higher mining equipment sales. In addition, increased sales to heavy construction
and quarry and aggregate customers were driven by positive global economic growth. Resource Industries' customers globally continue
to focus on improving the productivity and efficiency of existing machine assets, thereby extending equipment life cycles and
lowering operating costs. Rebuild, overhaul and maintenance activity remains strong, resulting in higher aftermarket parts sales.
Favorable price realization also contributed to the sales improvement.
Resource Industries' profit was $414 million in the third quarter of 2018, compared with $229 million in the third quarter of 2017.
The improvement was mostly due to higher sales volume and favorable price realization. The increase was partially offset by higher
manufacturing costs, including freight and material costs, and increased SG&A/R&D expenses primarily due to investments aligned
with strategic growth initiatives.
Energy & Transportation's total sales were $5.555 billion in the third quarter of 2018, compared with $4.838 billion in the third
quarter of 2017. The increase was primarily due to higher sales volume across all applications except Industrial.
? Oil and Gas - Sales increased due to higher demand in North America for well servicing and gas compression applications. Higher
energy prices and growth in U.S. onshore oil and gas drove increased sales for reciprocating engines.
? Power Generation - Sales improved across all regions, with the largest increases in North America and Asia/Pacific primarily
for reciprocating engine applications, including data centers and power plants, and for aftermarket parts.
? Industrial - Sales were lower in EAME primarily due to economic uncertainty in a few countries in the Middle East, partially
offset by slightly higher sales in Asia/Pacific and North America.
? Transportation - Sales were higher primarily due to rail services, driven by acquisitions in Asia/Pacific and EAME, and
increased rail traffic in North America.
Energy & Transportation's profit was $973 million in the third quarter of 2018, compared with $743 million in the third quarter of
2017. The improvement was mostly due to higher sales volume. The increase was partially offset by higher manufacturing costs,
including freight costs, and increased SG&A/R&D expenses primarily due to investments aligned with strategic growth initiatives.
Financial Products' segment revenues were $845 million in the third quarter of 2018, an increase of $71 million, or 9 percent, from
the third quarter of 2017. The increase was primarily due to higher average financing rates and higher average earning assets in
North America and Asia/Pacific as well as a favorable impact from returned or repossessed equipment. These favorable impacts were
partially offset by lower intercompany lending activity in North America, lower average earning assets in Latin America and lower
average financing rates in Europe.
Financial Products' segment profit was $201 million in the third quarter of 2018, compared with $185 million in the third quarter
of 2017. The increase was primarily due to a favorable impact from returned or repossessed equipment, higher average earning assets
and an increase in net yield on average earning assets. This was partially offset by an unfavorable impact from available for sale
securities in Insurance Services.
At the end of the third quarter of 2018, past dues at Cat Financial were 3.47 percent, compared with 2.73 percent at the end of the
third quarter of 2017. The increase in past dues was primarily driven by the Cat Power Finance portfolio. Write-offs, net of
recoveries, in the third quarter of 2018 were $40 million, compared with $47 million in the third quarter of 2017.
As of September 30, 2018, Cat Financial's allowance for credit losses totaled $416 million, or 1.49 percent of finance receivables,
compared with $416 million, or 1.48 percent of finance receivables at June 30, 2018. The allowance for credit losses at December
31, 2017, was $365 million, or 1.33 percent of finance receivables.
Corporate Items and Eliminations
Expense for corporate items and eliminations was $401 million in the third quarter of 2018, a decrease of $58 million from the
third quarter of 2017, primarily due to methodology differences and lower corporate costs. Restructuring costs were $110 million in
the third quarter of 2018, compared to $90 million in the third quarter of 2017.
QUESTIONS AND ANSWERS
*********************
Q1: Can you discuss changes in dealer inventories during the third quarter of 2018?
A: Dealer machine and engine inventories increased about $800 million during the third quarter of 2018, compared to an increase of
about $200 million during the third quarter of 2017. The favorable change impacted sales for the three primary segments about
equally. During the first nine months of 2018, dealer machine and engine inventories increased about $2.1 billion, compared to an
increase of about $100 million during the first nine months of 2017. 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?
A: At the end of the third quarter of 2018, the order backlog was $17.3 billion, about $400 million lower than the second quarter
of 2018, with decreases across the three primary segments.
The order backlog increased about $1.9 billion from the end of the third quarter of 2017, with increases across the three primary
segments.
Q3: Can you comment on expense related to your 2018 short-term incentive compensation plans and the impact on the 2018 outlook?
A: Short-term incentive compensation expense is directly related to financial and operational performance, measured against targets
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DJ Caterpillar Inc.: Exhibit 99.1 to Form 8-K -3-
set annually. Third-quarter 2018 expense was about $350 million, compared to third-quarter 2017 expense of about $400 million. For the full year of 2018, across the current outlook range, short-term incentive compensation expense is expected to be about $1.4 billion, nearly the same as 2017. Q4: Can you provide more information on the adjustment to deferred tax balances made during the third quarter of 2018? A: The net tax benefit of $95 million includes a $154 million reduction to the provisionally estimated charge recognized during the fourth quarter of 2017 due to the enactment of U.S. tax reform legislation, partially offset by a $59 million adjustment to the valuation allowance against net deferred tax assets for prior years. The $154 million benefit revises the estimated impact of the write-down of U.S. net deferred tax assets to reflect the reduction in the U.S. corporate tax rate from 35 percent to 21 percent. This benefit primarily related to the decision to make an additional discretionary pension contribution of $1.0 billion to U.S. pension plans in the third quarter of 2018, treated as deductible on the 2017 U.S. tax return. Q5: What was the impact of recently imposed tariffs on material costs in the third quarter of 2018? A: The impact of recently imposed tariffs was about $40 million in the third quarter of 2018. For the full year of 2018, we expect the impact of recently imposed tariffs will be at the low end of the previously provided range of $100 million to $200 million. Q6: Sales and revenues for the first nine months of 2018 were up 24 percent. Is this significant ramp in demand impacting availability? A: The sharp increase in demand has led to supply chain challenges across the industry. Although the company is making efforts to improve material flows, constraints remain for some parts and components that are impacting lead times and availability. Q7: What price action are you anticipating for 2019? A: In the third quarter of 2018, we notified our dealers of an upcoming price action of 1 to 4 percent worldwide on machines and engines with exceptions on specific products and regions. This price action will be effective in January 2019, and is a result of current industry factors and general economic conditions. Q8: Do you expect to exclude restructuring costs from adjusted profit per share in 2019? A: On September 24, 2015, we announced a significant restructuring program expected to be completed by the end of 2018. Although we expect restructuring to continue as part of ongoing business activities, restructuring costs should decline in 2019, and we do not plan to exclude restructuring costs from adjusted profit per share in 2019. GLOSSARY OF TERMS ***************** 1) Adjusted Profit Per Share - Profit per share excluding restructuring costs for 2018 and 2017. For 2018, adjusted profit per share also excludes a net tax benefit to adjust deferred tax balances. 2) 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 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. 4) 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, utility vehicles, wheel excavators, compact, small and medium wheel loaders and related parts and work tools. 5) Corporate Items and Eliminations - Includes restructuring costs; corporate-level expenses; timing differences, as some expenses are reported in segment profit on a cash basis; methodology differences between segment and consolidated external reporting; and inter-segment eliminations. 6) 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). 7) EAME - A geographic region including Europe, Africa, the Middle East and the Commonwealth of Independent States (CIS). 8) Earning Assets - Assets consisting primarily of total finance receivables net of unearned income, plus equipment on operating leases, less accumulated depreciation at Cat Financial. 9) 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 on-highway vocational trucks for North America. 10) 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. The segment also earns revenues from Machinery, Energy & Transportation, but the related costs are not allocated to operating segments. Financial Products segment profit is determined on a pretax basis and includes other income/expense items. 11) Latin America - A geographic region including Central and South American countries and Mexico. 12) 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. 13) Machinery, Energy & Transportation Other Operating (Income) Expenses - Comprised primarily of gains/losses on disposal of long-lived assets, gains/losses on 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. 14) 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
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DJ Caterpillar Inc.: Exhibit 99.1 to Form 8-K -4-
having a direct relationship to short-term changes in volume. Examples include machinery and equipment repair, depreciation on
manufacturing assets, facility support, procurement, factory scheduling, manufacturing planning and operations management.
15) Pension and Other Postemployment Benefit (OPEB) - The company's defined-benefit pension and postretirement benefit plans.
16) Price Realization - The impact of net price changes excluding currency and new product introductions. Price realization
includes geographic mix of sales, which is the impact of changes in the relative weighting of sales prices between geographic
regions.
17) 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 and
research and development.
18) 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 costs and LIFO
inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of
goods sold.
19) 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. 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 believes it is important to separately quantify the profit impact of two significant items in order for the company's
results to be meaningful to readers. These items consist of restructuring costs, which are incurred in the current year to generate
longer-term benefits, and a net tax benefit to adjust deferred tax balances in the third quarter of 2018. The company does not
consider these items indicative of earnings from ongoing business activities and believes the non-GAAP measure provides investors
with useful perspective on underlying business results and trends and aids with assessing the company's period-over-period results.
Reconciliations of adjusted profit per share to the most directly comparable GAAP measure, diluted profit per share, are as
follows:
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 14-22 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:
http://www.caterpillar.com/en/investors.html [4]
http://www.caterpillar.com/en/investors/quarterly-results.html [5] (live broadcast/replays of quarterly conference call)
Caterpillar contact: Corrie Scott, 224-551-4133 (Office), 808-351-3865 (Mobile) or Scott_Corrie@cat.com
Caterpillar Inc.
Condensed Consolidated Statement of Results of
Operations
(Unaudited)
(Dollars in millions except per share data)
Three Months Nine Months Ended
Ended
September 30, September 30,
2018 2017 2018 2017
Sales and
revenues:
Sales of $ 12,76 $ 10,71 $ 38,19 $ 30,48
Machinery, 3 3 2 2
Energy &
Transportati
on
Revenues of 747 700 2,188 2,084
Financial
Products....
......
Total sales 13,51 11,41 40,38 32,56
and 0 3 0 6
revenues....
...........
Operating costs:
Cost of 9,022 7,678 27,01 22,29
goods 0 5
sold........
............
Selling, 1,299 1,254 4,015 3,619
general and
administrati
ve expenses
Research and 479 461 1,384 1,344
development
expenses....
.
Interest 185 163 533 484
expense of
Financial
Products....
.
Other 390 348 1,028 1,751
operating
(income)
expenses....
...
Total 11,37 9,904 33,97 29,49
operating 5 0 3
costs.......
...........
Operating 2,135 1,509 6,410 3,073
profit............
...........
Interest 102 118 305 362
expense
excluding
Financial
Products
Other income 102 132 350 260
(expense)...
............
.
Consolidated 2,135 1,523 6,455 2,971
profit before
taxes..........
Provision 415 470 1,377 921
(benefit)
for income
taxes.......
Profit of 1,720 1,053 5,078 2,050
consolidated
companies...
......
Equity in 7 8 21 8
profit
(loss) of
unconsolidat
ed
affiliated
companies
Profit of 1,727 1,061 5,099 2,058
consolidated and
affiliated
companies
Less: Profit - 2 - 5
(loss)
attributable to
noncontrolling
interests
Profit $ 1,727 $ 1,059 $ 5,099 $ 2,053
1.................
.............
Profit per common $ 2.92 $ 1.79 $ 8.57 $ 3.48
share.............
..................
Profit per common $ 2.88 $ 1.77 $ 8.45 $ 3.44
share - diluted
2.................
.....
Weighted-average
common shares
outstanding
(millions)
- 592.1 592.9 595.3 590.3
Basic.
......
......
......
......
......
......
.....
- 599.4 600.1 603.8 596.5
Dilute
d
2.....
......
......
......
......
......
....
Cash dividends $ - $ - $ 1.64 $ 1.55
declared per
common
(MORE TO FOLLOW) Dow Jones Newswires
October 23, 2018 17:10 ET (21:10 GMT)
DJ Caterpillar Inc.: Exhibit 99.1 to Form 8-K -5-
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)
September December
30, 31,
2018 2017
Assets
Current assets:
Cash and short-term $ 8,0 $ 8,2
investments...................... 07 61
Receivables - trade and 8,0 7,4
other......................... 28 36
Receivables - 8,8 8,7
finance............................... 24 57
Prepaid expenses and other current 1,8 1,7
assets............... 35 72
Inventories....................................... 11, 10,
814 018
Total current assets.................................... 38, 36,
508 244
Property, plant and equipment - net........................ 13, 14,
607 155
Long-term receivables - trade and other..................... 1,1 990
29
Long-term receivables - finance........................... 13, 13,
244 542
Noncurrent deferred and refundable income taxes.............. 1,2 1,6
88 93
Intangible assets...................................... 1,9 2,1
76 11
Goodwill............................................ 6,2 6,2
33 00
Other assets......................................... 2,2 2,0
78 27
Total assets............................................ $ 78, $ 76,
263 962
Liabilities
Current liabilities:
Short-term borrowings:
-- Machinery, Energy & $ 59 $ 1
Transportation...........
....
-- Financial 4,4 4,8
Products................. 62 36
...........
Accounts payable.................................. 6,8 6,4
42 87
Accrued expenses................................. 3,4 3,2
23 20
Accrued wages, salaries and employee 2,1 2,5
benefits............ 32 59
Customer advances................................ 1,4 1,4
91 26
Dividends payable................................. - 466
Other current liabilities 1,8 1,7
.............................. 67 42
Long-term debt due within one year:
-- Machinery, Energy & 10 6
Transportation...........
....
-- Financial 5,8 6,1
Products................. 01 88
...........
Total current liabilities.................................. 26, 26,
087 931
Long-term debt due after one year:
-- Machinery, Energy & 7,9 7,9
Transportation........... 91 29
....
-- Financial 17, 15,
Products................. 450 918
...........
Liability for postemployment benefits....................... 7,0 8,3
46 65
Other liabilities....................................... 3,7 4,0
99 53
Total liabilities.......................................... 62, 63,
373 196
Shareholders' equity
Common stock....................................... 5,7 5,5
15 93
Treasury stock....................................... (18 ) (17 )
,68 ,00
1 5
Profit employed in the business........................... 30, 26,
384 301
Accumulated other comprehensive income (loss).............. (1, ) (1, )
568 192
Noncontrolling interests................................. 40 69
Total shareholders' equity................................. 15, 13,
890 766
Total liabilities and shareholders' equity...................... $ 78, $ 76,
263 962
Caterpillar Inc.
Condensed Consolidated Statement of Cash Flow
(Unaudited)
(Millions of dollars)
Nine Months
Ended
September 30,
2018 2017
Cash flow from operating activities:
Profit of consolidated and affiliated $ 5,09 $ 2,05
companies................... 9 8
Adjustments for non-cash items:
Depreciation and 2,06 2,15
amortization............................ 5 3
(MORE TO FOLLOW) Dow Jones Newswires
October 23, 2018 17:10 ET (21:10 GMT)
DJ Caterpillar Inc.: Exhibit 99.1 to Form 8-K -6-
Other.............................................. 630 596
Changes in assets and liabilities, net of acquisitions and
divestitures:
Receivables - trade and (779 ) (455 )
other............................
Inventories.......................................... (1,8 ) (1,4 )
22 89
Accounts payable..................................... 550 1,37
1
Accrued expenses.................................... (32 ) 121
Accrued wages, salaries and employee (418 ) 962
benefits...............
Customer advances................................... 59 358
Other assets - 394 (137 )
net....................................
Other liabilities - (1,2 ) (373 )
net................................... 71
Net cash provided by (used for) operating 4,47 5,16
activities................... 5 5
Cash flow from investing activities:
Capital expenditures - excluding equipment leased to (921 ) (566 )
others.........
Expenditures for equipment leased to (1,2 ) (1,0 )
others..................... 08 71
Proceeds from disposals of leased assets and property, 732 864
plant and equipment
Additions to finance (9,0 ) (8,2 )
receivables.............................. 92 46
Collections of finance 8,03 8,53
receivables............................ 2 2
Proceeds from sale of finance 416 98
receivables......................
Investments and acquisitions (net of cash (357 ) (47 )
acquired)...............
Proceeds from sale of businesses and investments (net of 14 93
cash sold)..
Proceeds from sale of 363 431
securities.............................
Investments in (417 ) (594 )
securities...................................
Other - net............................................. 24 73
Net cash provided by (used for) investing (2,4 ) (433 )
activities................... 14
Cash flow from financing activities:
Dividends paid.......................................... (1,4 ) (1,3 )
44 67
Common stock issued, including treasury shares 292 353
reissued...........
Common shares repurchased ............................... (2,0 ) -
00
Proceeds from debt issued (original maturities greater than 7,07 7,33
three months) 3 4
Payments on debt (original maturities greater than three (5,6 ) (6,2 )
months)...... 42 24
Short-term borrowings - net (original maturities three (465 ) (2,4 )
months or less).. 03
Other - net ............................................ (32 ) (7 )
Net cash provided by (used for) financing (2,2 ) (2,3 )
activities................... 18 14
Effect of exchange rate changes on (117 ) 40
cash..........................
Increase (decrease) in cash and short-term investments and (274 ) 2,45
restricted cash 8
Cash and short-term investments and restricted cash at 8,32 7,19
beginning of period. 0 9
Cash and short-term investments and restricted cash at end of $ 8,04 $ 9,65
period..... 6 7
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, 2018
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery,
Consolidated Energy & Financial Consolidating
Transportati Products Adjustments
on 1
Sales and
revenues:
Sales of $ 12, $ 12, $ - $ -
Machinery 763 763
, Energy
&
Transport
ation.
Revenues 747 - 867 (120 ) 2
of
Financial
Products.
.........
Total 13, 12, 867 (120 )
sales and 510 763
revenues.
.........
.....
Operating
costs:
Cost of 9,0 9,0 - -
goods 22 22
sold.....
.........
......
Selling, 1,2 1,1 169 (5 ) 3
general 99 35
and
administr
ative
expenses.
Research 479 479 - -
and
developme
nt
expenses.
.....
Interest 185 - 194 (9 ) 4
expense
of
Financial
Products.
.....
Other 390 63 333 (6 ) 3
operating
(income)
expenses.
.......
Total 11, 10, 696 (20 )
operating 375 699
costs....
.........
.....
Operating 2,1 2,0 171 (100 )
profit......... 35 64
..............
Interest 102 114 - (12 ) 4
expense
excluding
Financial
Products
Other 102 (5) 19 88 5
income
(expense)
.........
.......
Consolidated 2,1 1,9 190 -
profit before 35 45
taxes..........
Provision 415 376 39 -
(benefit)
for
income
taxes....
....
Profit of 1,7 1,5 151 -
consolida 20 69
ted
companies
.........
.
Equity in 7 7 - -
profit
(loss) of
unconsoli
dated
affiliate
d
companies
Equity in - 145 - (145 ) 6
profit of
Financial
Products'
subsidiar
ies
Profit of 1,7 1,7 151 (145 )
consolidated 27 21
and affiliated
companies
Less: Profit - (6) 6 -
(loss)
attributable to
noncontrolling
interests
Profit $ 1,7 $ 1,7 $ 145 $ (145 )
7.............. 27 27
...............
.
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
(MORE TO FOLLOW) Dow Jones Newswires
October 23, 2018 17:10 ET (21:10 GMT)
DJ Caterpillar Inc.: Exhibit 99.1 to Form 8-K -7-
of accounting.
7 Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Three Months Ended September 30, 2017
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery,
Consolidated Energy & Financial Consolidating
Transportati Products Adjustments
on 1
Sales and
revenues:
Sales of $ 10, $ 10, $ - $ -
Machinery 713 713
, Energy
&
Transport
ation.
Revenues 700 - 793 (93 ) 2
of
Financial
Products.
.........
Total 11, 10, 793 (93 )
sales and 413 713
revenues.
.........
.....
Operating
costs:
Cost of 7,6 7,6 - -
goods 78 78
sold.....
.........
......
Selling, 1,2 1,0 173 (3 ) 3
general 54 84
and
administr
ative
expenses.
Research 461 461 - -
and
developme
nt
expenses.
.....
Interest 163 - 169 (6 ) 4
expense
of
Financial
Products.
.....
Other 348 51 303 (6 ) 3
operating
(income)
expenses.
.......
Total 9,9 9,2 645 (15 )
operating 04 74
costs....
.........
.....
Operating 1,5 1,4 148 (78 )
profit......... 09 39
..............
Interest 118 143 - (25 ) 4
expense
excluding
Financial
Products
Other 132 46 33 53 5
income
(expense)
.........
.......
Consolidated 1,5 1,3 181 -
profit before 23 42
taxes..........
Provision 470 413 57 -
(benefit)
for
income
taxes....
....
Profit of 1,0 929 124 -
consolida 53
ted
companies
.........
.
Equity in 8 8 - -
profit
(loss) of
unconsoli
dated
affiliate
d
companies
Equity in - 122 - (122 ) 6
profit of
Financial
Products'
subsidiar
ies
Profit of 1,0 1,0 124 (122 )
consolidated 61 59
and affiliated
companies
Less: Profit 2 - 2 -
(loss)
attributable to
noncontrolling
interests
Profit $ 1,0 $ 1,0 $ 122 $ (122 )
7.............. 59 59
...............
.
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
Machinery,
Consolidated Energy & Financial Consolidating
Transportatio Products Adjustments
n 1
Sales and
revenues:
Sales of $ 38, $ 38,1 $ - $ -
Machinery 192 92
, Energy
&
Transport
ation
Revenues 2,1 - 2,5 (339 ) 2
of 88 27
Financial
Products.
.........
Total 40, 38,1 2,5 (339 )
sales and 380 92 27
revenues.
.........
.....
Operating
costs:
Cost of 27, 27,0 - -
goods 010 10
sold.....
.........
.....
Selling, 4,0 3,44 581 (11 ) 3
general 15 5
and
administr
ative
expenses
Research 1,3 1,38 - -
and 84 4
developme
nt
expenses.
....
Interest 533 - 558 (25 ) 4
expense
of
Financial
Products.
....
Other 1,0 100 949 (21 ) 3
operating 28
(income)
expenses.
......
Total 33, 31,9 2,0 (57 )
operating 970 39 88
costs....
.........
.....
Operating 6,4 6,25 439 (282 )
profit......... 10 3
..............
Interest 305 337 - (32 ) 4
expense
excluding
Financial
Products
Other 350 76 24 250 5
income
(expense)
.........
......
Consolidated 6,4 5,99 463 -
profit before 55 2
taxes..........
Provision 1,3 1,27 103 -
(benefit) 77 4
for
income
taxes....
...
Profit of 5,0 4,71 360 -
consolida 78 8
ted
companies
.........
Equity in 21 21 - -
profit
(loss) of
unconsoli
dated
affiliate
d
companies
Equity in - 345 - (345 ) 6
profit of
Financial
Products'
subsidiar
ies
Profit of 5,0 5,08 360 (345 )
consolidated 99 4
and affiliated
companies
Less: Profit - (15) 15 -
(loss)
attributable to
noncontrolling
interests
Profit $ 5,0 $ 5,09 $ 345 $ (345 )
7.............. 99 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
of interest earned between Machinery, Energy & Transportation
and Financial Products.
6 Elimination of Financial Products' profit due to equity method
(MORE TO FOLLOW) Dow Jones Newswires
October 23, 2018 17:10 ET (21:10 GMT)
DJ Caterpillar Inc.: Exhibit 99.1 to Form 8-K -8-
of accounting.
7 Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Nine Months Ended September 30, 2017
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery,
Consolidated Energy & Financial Consolidating
Transportati Products Adjustments
on 1
Sales and
revenues:
Sales of $ 30, $ 30, $ - $ -
Machinery 482 482
, Energy
&
Transport
ation.
Revenues 2,0 - 2,3 (279 ) 2
of 84 63
Financial
Products.
.........
Total 32, 30, 2,3 (279 )
sales and 566 482 63
revenues.
.........
.....
Operating
costs:
Cost of 22, 22, - -
goods 295 295
sold.....
.........
......
Selling, 3,6 3,1 438 (12 ) 3
general 19 93
and
administr
ative
expenses.
Research 1,3 1,3 - -
and 44 44
developme
nt
expenses.
.....
Interest 484 - 499 (15 ) 4
expense
of
Financial
Products.
.....
Other 1,7 861 906 (16 ) 3
operating 51
(income)
expenses.
.......
Total 29, 27, 1,8 (43 )
operating 493 693 43
costs....
.........
.....
Operating 3,0 2,7 520 (236 )
profit......... 73 89
..............
Interest 362 433 - (71 ) 4
expense
excluding
Financial
Products
Other 260 62 33 165 5
income
(expense)
.........
.......
Consolidated 2,9 2,4 553 -
profit before 71 18
taxes..........
Provision 921 750 171 -
(benefit)
for
income
taxes....
....
Profit of 2,0 1,6 382 -
consolida 50 68
ted
companies
.........
.
Equity in 8 8 - -
profit
(loss) of
unconsoli
dated
affiliate
d
companies
Equity in - 377 - (377 ) 6
profit of
Financial
Products'
subsidiar
ies
Profit of 2,0 2,0 382 (377 )
consolidated 58 53
and affiliated
companies
Less: Profit 5 - 5 -
(loss)
attributable to
noncontrolling
interests
Profit $ 2,0 $ 2,0 $ 377 $ (377 )
7.............. 53 53
...............
.
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 Nine Months Ended September 30, 2018
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery,
Consolidated Energy & Financial Consolidating
Transportatio Products Adjustments
n 1
Cash flow from operating activities:
Profit of consolidated and affiliated $ 5,09 $ 5,08 $ 360 $ (345 ) 2
companies....... 9 4
Adjustments for non-cash items:
Depreciation and 2,06 1,41 655 -
amortization................. 5 0
Undistributed profit of Financial - (345 ) - 345 3
Products.........
Other................................... 630 327 36 267 4
Changes in assets and liabilities, net of
acquisitions and divestitures:
Receivables - trade and (779 ) (35 ) (33 ) (711 ) 4,5
other.................
Inventories............................... (1,8 ) (1,7 ) - (48 ) 4
22 74
Accounts payable.......................... 550 598 (55 ) 7 4
Accrued expenses.......................... (32 ) (63 ) 31 -
Accrued wages, salaries and employee (418 ) (403 ) (15 ) -
benefits ....
Customer advances......................... 59 59 - -
Other assets - 394 343 (9 ) 60 4
net..........................
Other liabilities - (1,2 ) (1,3 ) 110 (60 ) 4
net........................ 71 21
Net cash provided by (used for) operating 4,47 3,88 1,08 (485 )
activities..... 5 0 0
Cash flow from investing activities:
Capital expenditures - excluding equipment (921 ) (822 ) (99 ) -
leased to others
Expenditures for equipment leased to (1,2 ) (23 ) (1,2 ) 73 4
others........ 08 58
Proceeds from disposals of leased assets and 732 122 632 (22 ) 4
property, plant and equipment
Additions to finance (9,0 ) - (10, ) 1,05 5,7
receivables.................. 92 151 9
Collections of finance 8,03 - 9,13 (1,1 ) 5
receivables................ 2 5 03
Net intercompany purchased - - (484 ) 484 5
receivables...........
Proceeds from sale of finance 416 - 416 -
receivables..........
Net intercompany borrowings................... - 66 - (66 ) 6
Investments and acquisitions (net of cash (357 ) (357 ) - -
(MORE TO FOLLOW) Dow Jones Newswires
October 23, 2018 17:10 ET (21:10 GMT)
acquired)...
Proceeds from sale of businesses and investments 14 20 - (6 ) 7
(net of cash sold)
Proceeds from sale of 363 154 209 -
securities.................
Investments in securities....................... (417 ) (21 ) (396 ) -
Other - net................................. 24 25 (2 ) 1 8
Net cash provided by (used for) investing (2,4 ) (836 ) (1,9 ) 420
activities...... 14 98
Cash flow from financing activities:
Dividends paid.............................. (1,4 ) (1,4 ) - -
44 44
Common stock issued, including treasury shares 292 292 1 (1 ) 8
reissued
Common shares repurchased................... (2,0 ) (2,0 ) - -
00 00
Net intercompany borrowings................... - - (66 ) 66 6
Proceeds from debt issued > 90 7,07 47 7,02 -
days.............. 3 6
Payments on debt > 90 days.................... (5,6 ) (6 ) (5,6 ) -
42 36
Short-term borrowings - net < 90 (465 ) 14 (479 ) -
days.............
Other - net................................. (32 ) (32 ) - -
Net cash provided by (used for) financing (2,2 ) (3,1 ) 846 65
activities...... 18 29
Effect of exchange rate changes on (117 ) (106 ) (11 ) -
cash.............
Increase (decrease) in cash and short-term (274 ) (191 ) (83 ) -
investments and restricted cash
Cash and short-term investments and restricted cash 8,32 7,41 904 -
at beginning of period 0 6
Cash and short-term investments and restricted cash $ 8,04 $ 7,22 $ 821 $ -
at end of period 6 5
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.
7 Elimination of proceeds received from Financial Products related to Machinery, Energy &
Transportation's sale of businesses and investments.
8 Elimination of change in investment and common stock related to Financial Products.
Caterpillar Inc.
Supplemental Data for Cash Flow
For the Nine Months Ended September 30, 2017
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery,
Consolidated Energy & Financial Consolidating
Transportatio Products Adjustments
n 1
Cash flow from operating activities:
Profit of consolidated and affiliated $ 2,05 $ 2,05 $ 382 $ (377 ) 2
companies....... 8 3
Adjustments for non-cash items:
Depreciation and 2,15 1,50 646 -
amortization................. 3 7
Undistributed profit of Financial - (377 ) - 377 3
Products.........
Other................................... 596 524 (107 ) 179 4
Changes in assets and liabilities, net of
acquisitions and divestitures:
Receivables - trade and (455 ) (324 ) 62 (193 ) 4,5
other.................
Inventories............................... (1,4 ) (1,4 ) - (2 ) 4
89 87
Accounts payable.......................... 1,37 1,41 (33 ) (8 ) 4
1 2
Accrued expenses.......................... 121 118 3 -
Accrued wages, salaries and employee 962 943 19 -
benefits ....
Customer advances......................... 358 358 - -
Other assets - (137 ) 18 (54 ) (101 ) 4
net.........................
Other liabilities - (373 ) (581 ) 107 101 4
net........................
Net cash provided by (used for) operating 5,16 4,16 1,02 (24 )
activities..... 5 4 5
Cash flow from investing activities:
Capital expenditures - excluding equipment (566 ) (561 ) (6 ) 1 4
leased to others
Expenditures for equipment leased to (1,0 ) (13 ) (1,0 ) 16 4
others........ 71 74
Proceeds from disposals of leased assets and 864 142 733 (11 ) 4
property, plant and equipment
Additions to finance (8,2 ) - (9,7 ) 1,51 5
receivables.................. 46 65 9
Collections of finance 8,53 - 10,1 (1,6 ) 5
receivables................ 2 94 62
Net intercompany purchased - - (161 ) 161 5
receivables...........
Proceeds from sale of finance 98 - 98 -
receivables..........
Net intercompany borrowings................... - 165 (1,0 ) 835 6
00
Investments and acquisitions (net of cash (47 ) (47 ) - -
acquired)...
Proceeds from sale of businesses and investments 93 93 - -
(net of cash sold)
Proceeds from sale of 431 36 395 -
securities.................
(MORE TO FOLLOW) Dow Jones Newswires
October 23, 2018 17:10 ET (21:10 GMT)
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