DJ Caterpillar Inc.: Files Form 8-K Earnings Release and Retail Statistics - Exhibit 99.1 & 99.2 FQE 30 June 2021
Caterpillar Inc. Caterpillar Inc.: Files Form 8-K Earnings Release and Retail Statistics - Exhibit 99.1 & 99.2 FQE 30 June 2021 30-Jul-2021 / 15:02 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 2021 Earnings Release July 30, 2021 FOR IMMEDIATE RELEASE
Caterpillar Reports Second-Quarter 2021 Results
Second Quarter (USD in billions except profit per share) 2021 2020 Sales and Revenues USD12.9 USD10.0 Profit Per Share USD2.56 USD0.84 Adjusted Profit Per Share USD2.60 USD1.27 ? Second-quarter 2021 sales and revenues increased 29% to USD12.9 billion ? Second-quarter 2021 profit per share of USD2.56; adjusted profit per share of USD2.60 ? Strong balance sheet; returned USD0.8 billion to shareholders through dividends and share repurchases
DEERFIELD, Ill. - Caterpillar Inc. (NYSE: CAT) today announced second-quarter 2021 sales and revenues of USD12.9 billion, a 29% increase compared with USD10.0 billion in the second quarter of 2020. The increase was primarily due to higher sales volume driven by higher end-user demand for equipment and services and the impact from changes in dealer inventories. Dealers decreased their inventories more during the second quarter of 2020 than during the second quarter of 2021.
Operating profit margin was 13.9% for the second quarter of 2021, compared with 7.8% for the second quarter of 2020. Second-quarter 2021 profit per share was USD2.56, compared with USD0.84 profit per share in the second quarter of 2020. Adjusted profit per share in the second quarter of 2021 was USD2.60, compared with second-quarter 2020 adjusted profit per share of USD1.27. Adjusted profit per share for both quarters excluded restructuring costs, while the second quarter of 2020 also excluded remeasurement losses of USD0.19 per share, resulting from the settlements of pension obligations. Please see a reconciliation of GAAP to non-GAAP financial measures in the appendix on page 13.
For the first half of 2021, enterprise operating cash flow was USD4.0 billion. In total, the company returned USD0.8 billion to shareholders in the quarter, after increasing the dividend and reinstating share repurchases. The company ended the period with USD10.8 billion of enterprise cash.
"Our dedicated global team remains focused on serving our customers, executing our strategy and investing for future profitable growth," said Caterpillar Chairman and CEO Jim Umpleby. "We're encouraged by higher sales and revenues across all regions and in our three primary segments, which reflect continued improvement in our end markets."
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 2020 (at left) and the second quarter of 2021 (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 2021 were USD12.889 billion, an increase of USD2.892 billion, or 29%, compared with USD9.997 billion in the second quarter of 2020. The increase was primarily due to higher sales volume driven by higher end-user demand for equipment and services and the impact from changes in dealer inventories. Dealers decreased inventories by USD1.4 billion during the second quarter of 2020, compared with a decrease of USD400 million during the second quarter of 2021. Favorable currency impacts were related to the Australian dollar, euro and Chinese yuan. Favorable price realization also contributed to the sales improvement.
Sales were higher across all regions and in the three primary segments.
Sales and Revenues by Segment
Second Sales Price Inter-Segment Second USD %
(Millions of dollars) Quarter 2020 Currency / Other Quarter 2021
Volume Realization Change Change
Construction USD 4,048 USD 1,171 USD 238 USD 162 USD 37 USD 5,656 USD 1,608 40%
Industries
Resource Industries 1,826 712 (17) 66 (8) 2,579 753 41%
Energy & 4,149 456 12 111 247 4,975 826 20%
Transportation
All Other Segment 115 4 - 2 7 128 13 11%
Corporate Items and (828) (34) - - (283) (1,145) (317)
Eliminations
Machinery, Energy & 9,310 2,309 233 341 - 12,193 2,883 31%
Transportation
Financial Products 763 - - - 11 774 11 1%
Segment
Corporate Items and (76) - - - (2) (78) (2)
Eliminations
Financial Products 687 - - - 9 696 9 1%
Revenues
Consolidated Sales USD 9,997 USD 2,309 USD 233 USD 341 USD 9 USD 12,889 USD 2,892 29%
and Revenues
Sales and Revenues by Geographic Region
North America Latin America EAME Asia/Pacific External Sales and Inter-Segment Total Sales and
Revenues Revenues
(Millions of dollars) USD % USD % USD % Chg USD % USD % Chg USD % USD % Chg
Chg Chg Chg Chg
Second Quarter 2021
Construction Industries USD 2,498 56% USD 430 103% USD 1,291 38% USD 1,384 8% USD 5,603 39% USD 53 231% USD 5,656 40%
Resource Industries 799 58% 487 80% 525 39% 660 19% 2,471 45% 108 (7%) 2,579 41%
Energy & Transportation 1,992 10% 250 27% 1,196 29% 682 14% 4,120 16% 855 41% 4,975 20%
All Other Segment 11 57% 1 -% 4 (20%) 18 20% 34 21% 94 8% 128 11%
Corporate Items and (31) (1) (1) (2) (35) (1,110) (1,145)
Eliminations
Machinery, Energy & 5,269 34% 1,167 72% 3,015 34% 2,742 12% 12,193 31% - -% 12,193 31%
Transportation
Financial Products 488 (1%) 65 8% 96 -% 125 10% 774 1% - -% 774 1%
Segment
Corporate Items and (38) (11) (9) (20) (78) - (78)
Eliminations
Financial Products 450 -% 54 6% 87 -% 105 6% 696 1% - -% 696 1%
Revenues
Consolidated Sales and USD 5,719 30% USD 1,221 67% USD 3,102 33% USD 2,847 12% USD 12,889 29% USD - -% USD 12,889 29%
Revenues
Second Quarter 2020
Construction Industries USD 1,604 USD 212 USD 933 USD 1,283 USD 4,032 USD 16 USD 4,048
Resource Industries 507 270 379 554 1,710 116 1,826
Energy & Transportation 1,816 197 929 599 3,541 608 4,149
All Other Segment 7 1 5 15 28 87 115
Corporate Items and 2 (1) - (2) (1) (827) (828)
Eliminations
Machinery, Energy & 3,936 679 2,246 2,449 9,310 - 9,310
Transportation
Financial Products 493 60 96 114 763 - 763
Segment
Corporate Items and (43) (9) (9) (15) (76) - (76)
Eliminations
Financial Products 450 51 87 99 687 - 687
Revenues
Consolidated Sales and USD 4,386 USD 730 USD 2,333 USD 2,548 USD 9,997 USD - USD 9,997
Revenues
Consolidated Operating Profit
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DJ Caterpillar Inc.: Files Form 8-K Earnings Release -2-
The chart above graphically illustrates reasons for the change in consolidated operating profit between the second quarter of 2020 (at left) and the second quarter of 2021 (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 2021 was USD1.789 billion, an increase of USD1.005 billion, or 128%, compared with USD784 million in the second quarter of 2020. The increase was primarily due to higher sales volume. Favorable price realization, lower restructuring expenses (included in other) and higher profit from Financial Products were mostly offset by higher selling, general and administrative (SG&A) and research and development (R&D) expenses and higher manufacturing costs.
The increase in SG&A/R&D expenses was mainly driven by higher short-term incentive compensation expense, which was reinstated in 2021.
Unfavorable manufacturing costs reflected higher period manufacturing and material costs, partially offset by favorable cost absorption. Period manufacturing costs increased primarily due to higher short-term incentive compensation expense and higher labor-related costs. Cost absorption was favorable as inventory increased during the second quarter of 2021, compared with a decrease during the second quarter of 2020.
Profit (Loss) by Segment
USD %
(Millions of dollars) Second Quarter 2021 Second Quarter 2020
Change Change
Construction Industries USD 1,024 USD 518 USD 506 98 %
Resource Industries 361 152 209 138 %
Energy & Transportation 731 624 107 17 %
All Other Segment (10) (3) (7) (233 %)
Corporate Items and Eliminations (453) (542) 89
Machinery, Energy & Transportation 1,653 749 904 121 %
Financial Products Segment 243 148 95 64 %
Corporate Items and Eliminations (29) (38) 9
Financial Products 214 110 104 95 %
Consolidating Adjustments (78) (75) (3)
Consolidated Operating Profit USD 1,789 USD 784 USD 1,005 128 %
Other Profit/Loss and Tax Items 1. Other income (expense) in the second quarter of 2021 was income of USD201 million, compared with income of USD29
million in the second quarter of 2020. The change was primarily due to the absence of remeasurement losses
resulting from the settlements of pension obligations that occurred in the second quarter of 2020, as well as
favorable pension and other postemployment benefit (OPEB) costs. 2. The provision for income taxes for the second quarter of 2021 reflected a lower estimated annual tax rate of 26%,
compared with 31% for the second quarter of 2020, excluding the discrete items discussed below. The comparative tax
rate for full-year 2020 was approximately 28%. The decrease in the estimated annual tax rate from full-year 2020
was mainly related to changes in the expected geographic mix of profits from a tax perspective for 2021.
In addition, a discrete tax benefit of USD17 million was recorded in the second quarter of 2021 for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense. A USD21 million tax benefit was also recorded in the second quarter of 2020 related to the USD122 million of remeasurement losses resulting from the settlements of pension obligations.
CONSTRUCTION INDUSTRIES
(Millions of
dollars)
Segment Sales
Second Sales Price Second USD %
Quarter Volume Realization Currency Inter-Segment Quarter
2020 2021 Change Change
Total Sales USD 4,048 USD 1,171 USD 238 USD 162 USD 37 USD 5,656 USD 1,608 40 %
Sales by Geographic Region
Second Second USD %
Quarter Quarter
2021 2020 Change Change
North America USD 2,498 USD 1,604 USD 894 56 %
Latin America 430 212 218 103 %
EAME 1,291 933 358 38 %
Asia/Pacific 1,384 1,283 101 8 %
External 5,603 4,032 1,571 39 %
Sales
Inter-segment 53 16 37 231 %
Total Sales USD 5,656 USD 4,048 USD 1,608 40 %
Segment Profit
Second Second %
Quarter Quarter
2021 2020 Change Change
Segment USD 1,024 USD 518 USD 506 98 %
Profit
Segment 18.1 % 12.8 % 5.3 pts
Profit Margin
Construction Industries' total sales were USD5.656 billion in the second quarter of 2021, an increase of USD1.608 billion, or 40%, compared with USD4.048 billion in the second quarter of 2020. The increase was due to higher sales volume, favorable price realization and favorable currency impacts from the euro, Australian dollar and Chinese yuan. The increase in sales volume was driven by higher end-user demand for equipment and aftermarket parts and the impact from changes in dealer inventories. Overall, dealers decreased inventories more during the second quarter of 2020 than during the second quarter of 2021. 1. In North America, sales increased due to higher sales volume and favorable price realization. Higher sales volume
was driven by higher end-user demand primarily in residential construction and the impact from changes in dealer
inventories. Dealers decreased inventories more during the second quarter of 2020 than during the second quarter of
2021. 2. Sales increased in Latin America mostly due to higher sales volume driven by higher end-user demand across the
region for equipment and aftermarket parts and the impact of changes in dealer inventories. Dealers increased
inventories during the second quarter of 2021, compared with a decrease during the second quarter of 2020. 3. In EAME, sales increased due to higher sales volume and favorable currency impacts primarily from a stronger euro.
Higher sales volume was driven by higher end-user demand and the impact from changes in dealer inventories. Dealers
increased inventories during the second quarter of 2021, compared with a decrease during the second quarter of
2020. 4. Sales increased in Asia/Pacific primarily due to favorable currency impacts from a stronger Australian dollar and
Chinese yuan and favorable price realization, partially offset by lower sales volume. Lower sales volume was driven
by lower end-user demand for equipment, primarily in China, partially offset by the impacts from changes in dealer
inventories and higher end-user demand for aftermarket parts. Dealers decreased inventories more during the second
quarter of 2020 than during the second quarter of 2021.
Construction Industries' profit was USD1.024 billion in the second quarter of 2021, an increase of USD506 million, or 98%, compared with USD518 million in the second quarter of 2020. The increase was mainly due to higher sales volume and favorable price realization, partially offset by higher SG&A/R&D expenses and unfavorable manufacturing costs.
The increase in SG&A/R&D expenses was driven by higher short-term incentive compensation expense.
Increased manufacturing costs reflected higher period manufacturing and material costs partially offset by favorable impacts of cost absorption and variable labor and burden. The increase in period manufacturing costs was driven by higher short-term incentive compensation expense and higher labor costs. Cost absorption was favorable as inventory increased during the second quarter of 2021, compared with a decrease during the second quarter of 2020.
RESOURCE INDUSTRIES
(Millions of
dollars)
Segment Sales
Second Price Second USD %
Quarter 2020 Sales Volume Realization Currency Inter-Segment Quarter 2021
Change Change
Total Sales USD 1,826 USD 712 USD (17) USD 66 USD (8) USD 2,579 USD 753 41 %
Sales by Geographic Region
Second Second USD %
Quarter 2021 Quarter 2020
Change Change
North America USD 799 USD 507 USD 292 58 %
Latin America 487 270 217 80 %
EAME 525 379 146 39 %
Asia/Pacific 660 554 106 19 %
External 2,471 1,710 761 45 %
Sales
Inter-segment 108 116 (8) (7 %)
Total Sales USD 2,579 USD 1,826 USD 753 41 %
Segment Profit
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DJ Caterpillar Inc.: Files Form 8-K Earnings Release -3-
Second Second %
Quarter 2021 Quarter 2020
Change Change
Segment USD 361 USD 152 USD 209 138 %
Profit
Segment 14.0 % 8.3 % 5.7 pts
Profit Margin
Resource Industries' total sales were USD2.579 billion in the second quarter of 2021, an increase of USD753 million, or 41%, compared with USD1.826 billion in the second quarter of 2020. The increase was due to higher sales volume driven by higher end-user demand for equipment and aftermarket parts and the impacts of changes in dealer inventories. Dealers decreased inventories during the second quarter of 2020, compared to remaining about flat during the second quarter of 2021. End-user demand was higher in heavy construction and quarry and aggregates; it was also higher in mining, although to a lesser extent.
Resource Industries' profit was USD361 million in the second quarter of 2021, an increase of USD209 million, or 138%, compared with USD152 million in the second quarter of 2020. The increase was mainly due to higher sales volume, partially offset by higher SG&A/R&D expenses. The increase in SG&A/R&D expenses was driven by higher short-term incentive compensation expense.
ENERGY & TRANSPORTATION
(Millions of
dollars)
Segment Sales
Second Price Second USD %
Quarter 2020 Sales Volume Realization Currency Inter-Segment Quarter 2021
Change Change
Total Sales USD 4,149 USD 456 USD 12 USD 111 USD 247 USD 4,975 USD 826 20 %
Sales by Application
Second Second USD %
Quarter 2021 Quarter 2020
Change Change
Oil and Gas USD 1,137 USD 1,027 USD 110 11 %
Power 1,052 895 157 18 %
Generation
Industrial 899 678 221 33 %
Transportation 1,032 941 91 10 %
External Sales 4,120 3,541 579 16 %
Inter-segment 855 608 247 41 %
Total Sales USD 4,975 USD 4,149 USD 826 20 %
Segment Profit
Second Second %
Quarter 2021 Quarter 2020
Change Change
Segment Profit USD 731 USD 624 USD 107 17 %
Segment Profit 14.7 % 15.0 % (0.3 pts)
Margin
Energy & Transportation's total sales were USD4.975 billion in the second quarter of 2021, an increase of USD826 million, or 20%, compared with USD4.149 billion in the second quarter of 2020. Sales increased across all applications. 1. Oil and Gas - Sales increased mainly due to higher sales of reciprocating engine aftermarket parts in all regions.
The increase was partially offset by lower sales in reciprocating engines used in well servicing applications and
turbines and turbine-related services. 2. Power Generation - Sales increased due to higher sales volume in large reciprocating engines, primarily driven by
data centers, and reciprocating engine aftermarket parts. 3. Industrial - Sales were up due to higher demand across all regions. 4. Transportation - Sales increased in rail services and marine.
Energy & Transportation's profit was USD731 million in the second quarter of 2021, an increase of USD107 million, or 17%, compared with USD624 million in the second quarter of 2020. The increase was due to higher sales volume partially offset by higher SG&A/R&D expenses and period manufacturing costs. Both SG&A/R&D expenses and period manufacturing costs were driven by higher short-term incentive compensation expense and acquisition-related expenses.
FINANCIAL PRODUCTS SEGMENT
(Millions of dollars)
Revenues by Geographic Region
USD %
Second Quarter 2021 Second Quarter 2020
Change Change
North America USD 488 USD 493 USD (5) (1 %)
Latin America 65 60 5 8 %
EAME 96 96 - - %
Asia/Pacific 125 114 11 10 %
Total Revenues USD 774 USD 763 USD 11 1 %
Segment Profit
%
Second Quarter 2021 Second Quarter 2020
Change Change
Segment Profit USD 243 USD 148 USD 95 64 %
Financial Products' segment revenues were USD774 million in the second quarter of 2021, an increase of USD11 million, or 1%, from the second quarter of 2020.
Financial Products' segment profit was USD243 million in the second quarter of 2021, compared with USD148 million in the second quarter of 2020. The increase was mainly due to lower provision for credit losses at Cat Financial, higher net yield on average earning assets and a favorable impact from returned or repossessed equipment. These favorable impacts were partially offset by an increase in SG&A expenses primarily due to higher short-term incentive compensation expense.
At the end of the second quarter of 2021, past dues at Cat Financial were 2.58%, compared with 3.74% at the end of the second quarter of 2020. Past dues decreased across all portfolio segments as global markets generally improved. Write-offs, net of recoveries, were USD54 million for the second quarter of 2021, compared with USD30 million for the second quarter of 2020. As of June 30, 2021, Cat Financial's allowance for credit losses totaled USD402 million, or 1.46% of finance receivables, compared with USD441 million, or 1.64% of finance receivables at March 31, 2021. The allowance for credit losses at year-end 2020 was USD479 million, or 1.77% of finance receivables.
Corporate Items and Eliminations
Expense for corporate items and eliminations was USD482 million in the second quarter of 2021, a decrease of USD98 million from the second quarter of 2020, primarily due to favorable impacts of segment reporting methodology differences and lower restructuring costs, partially offset by higher expenses due to timing differences.
Notes i. Glossary of terms is included on the Caterpillar website at https://investors.caterpillar.com/overview/default.aspx
. ii. End-user demand is demonstrated by the company's Rolling 3 Month Retail Sales Statistics filed in a Form 8-K on
Friday, July 30, 2021. iii. Information on non-GAAP financial measures is included in the appendix on page 13. iv. Some amounts within this report are rounded to the millions or billions and may not add. v. Caterpillar will conduct a teleconference and live webcast, with a slide presentation, beginning at 7:30 a.m.
Central Time on Friday, July 30, 2021, to discuss its 2021 second-quarter results. The accompanying slides will be
available before the webcast on the Caterpillar website at https://investors.caterpillar.com/events-presentations/
default.aspx.
About Caterpillar
With 2020 sales and revenues of USD41.7 billion, Caterpillar Inc. is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. Since 1925, we've been driving sustainable progress and helping customers build a better world through innovative products and services. Throughout the product life cycle, we offer services built on cutting-edge technology and decades of product expertise. These products and services, backed by our global dealer network, provide exceptional value to help our customers succeed. We do business on every continent, principally operating through three primary segments - Construction Industries, Resource Industries and Energy & Transportation - and providing financing and related services through our Financial Products segment. Visit us at caterpillar.com or join the conversation on our social media channels at caterpillar.com/social-media.
Caterpillar's latest financial results are also available online:
https://investors.caterpillar.com/overview/default.aspx
https://investors.caterpillar.com/financials/quarterly-results/default.aspx (live broadcast/replays of quarterly conference call)
Caterpillar investor relations contact: Jennifer Driscoll, +1 224-551-4382 or Driscoll_Jennifer@cat.com
Caterpillar media contact: Kate Kenny, +1 309-361-9333 or Kenny_Kate@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," "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.
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