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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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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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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Caterpillar's actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including, but not limited to: (i) global and regional economic conditions and economic conditions in the industries we serve; (ii) commodity price changes, material price increases, fluctuations in demand for our products or significant shortages of material; (iii) government monetary or fiscal policies; (iv) political and economic risks, commercial instability and events beyond our control in the countries in which we operate; (v) international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates; (vi) our ability to develop, produce and market quality products that meet our customers' needs; (vii) the impact of the highly competitive environment in which we operate on our sales and pricing; (viii) information technology security threats and computer crime; (ix) inventory management decisions and sourcing practices of our dealers and our OEM customers; (x) a failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures or divestitures; (xi) union disputes or other employee relations issues; (xii) adverse effects of unexpected events; (xiii) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers; (xiv) failure to maintain our credit ratings and potential resulting increases to our cost of borrowing and adverse effects on our cost of funds, liquidity, competitive position and access to capital markets; (xv) our Financial Products segment's risks associated with the financial services industry; (xvi) changes in interest rates or market liquidity conditions; (xvii) an increase in delinquencies, repossessions or net losses of Cat Financial's customers; (xviii) currency fluctuations; (xix) our or Cat Financial's compliance with financial and other restrictive covenants in debt agreements; (xx) increased pension plan funding obligations; (xxi) alleged or actual violations of trade or anti-corruption laws and regulations; (xxii) additional tax expense or exposure, including the impact of U.S. tax reform; (xxiii) significant legal proceedings, claims, lawsuits or government investigations; (xxiv) new regulations or changes in financial services regulations; (xxv) compliance with environmental laws and regulations; (xxvi) the duration and geographic spread of, business disruptions caused by, and the overall global economic impact of, the COVID-19 pandemic; and (xxvii) other factors described in more detail in Caterpillar's Forms 10-Q, 10-K and other filings with the Securities and Exchange Commission.
APPENDIX
NON-GAAP FINANCIAL MEASURES
The following definitions are provided for the non-GAAP financial measures. 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.
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 (i) restructuring costs, which were incurred to generate longer-term benefits and (ii) remeasurement losses resulting from the settlements of pension obligations in the second quarter of 2020. 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. The company intends to discuss adjusted profit per share for the fourth quarter and full-year 2021, excluding mark-to-market gains or losses for remeasurement of pension and other postemployment benefit plans along with any other discrete items.
Reconciliations of adjusted results to the most directly comparable GAAP measure are as follows:
(Dollars in Operating Operating Profit Provision (Benefit) Effective Profit millions except Profit Profit Before for Income Taxes Tax Rate Profit per Share per share data) Margin Taxes Three Months Ended June 30, USD 1,789 13.9 % USD 1,870 USD 470 25.1 % USD 1,413 USD 2.56 2021 - U.S. GAAP Restructuring 25 0.2 % 25 3 15.0 % 22 USD 0.04 costs Three Months Ended June 30, USD 1,814 14.1 % USD 1,895 USD 473 25.0 % USD 1,435 USD 2.60 2021 - Adjusted Three Months Ended June 30, USD 784 7.8 % USD 678 USD 227 33.5 % USD 458 USD 0.84 2020 - U.S. GAAP Restructuring 147 1.5 % 147 15 10.2 % 132 USD 0.24 costs Remeasurement losses of pension - - % 122 21 17.2 % 101 USD 0.19 obligations Three Months Ended June 30, USD 931 9.3 % USD 947 USD 263 27.8 % USD 691 USD 1.27 2020 - Adjusted
Supplemental Consolidating Data
The company is providing supplemental consolidating data for the purpose of additional analysis. The data has been grouped as follows:
Consolidated - Caterpillar Inc. and its subsidiaries.
Machinery, Energy & Transportation (ME&T) - The company defines ME&T as it is presented in the supplemental data as Caterpillar Inc. and its subsidiaries, excluding Financial Products. ME&T's information relates to the design, manufacturing and marketing of its products.
Financial Products - The company defines Financial Products as it is presented in the supplemental data as its finance and insurance subsidiaries, primarily Caterpillar Financial Services Corporation (Cat Financial) and Caterpillar Insurance Holdings Inc. (Insurance Services). Financial Products' information relates to the financing to customers and dealers for the purchase and lease of Caterpillar and other equipment.
Consolidating Adjustments - Eliminations of transactions between ME&T and Financial Products.
The nature of the ME&T and Financial Products 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 believes this presentation will assist readers in understanding its business.
Pages 15 to 25 reconcile ME&T and Financial Products to Caterpillar Inc. consolidated financial information.
Caterpillar Inc.
Condensed Consolidated Statement of Results of Operations
(Unaudited)
(Dollars in millions except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
Sales and revenues:
Sales of Machinery, Energy & Transportation USD 12,193 USD 9,310 USD 23,384 USD 19,224
Revenues of Financial Products 696 687 1,392 1,408
Total sales and revenues 12,889 9,997 24,776 20,632
Operating costs:
Cost of goods sold 8,881 7,113 16,893 14,379
Selling, general and administrative expenses 1,364 1,179 2,603 2,300
Research and development expenses 446 341 820 697
Interest expense of Financial Products 116 149 241 324
Other operating (income) expenses 293 431 616 744
Total operating costs 11,100 9,213 21,173 18,444
Operating profit 1,789 784 3,603 2,188
Interest expense excluding Financial Products 120 135 262 248
Other income (expense) 201 29 526 251
Consolidated profit before taxes 1,870 678 3,867 2,191
Provision (benefit) for income taxes 470 227 945 652
Profit of consolidated companies 1,400 451 2,922 1,539
Equity in profit (loss) of unconsolidated affiliated companies 14 8 23 13
Profit of consolidated and affiliated companies 1,414 459 2,945 1,552
Less: Profit (loss) attributable to noncontrolling interests 1 1 2 2
Profit 1 USD 1,413 USD 458 USD 2,943 USD 1,550
Profit per common share USD 2.58 USD 0.84 USD 5.38 USD 2.85
Profit per common share - diluted 2 USD 2.56 USD 0.84 USD 5.33 USD 2.83
Weighted-average common shares outstanding (millions)
- Basic 547.9 541.5 547.1 544.5
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- Diluted 2 552.1 544.5 551.8 548.2 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)
June 30, December 31,
2021 2020
Assets
Current assets:
Cash and short-term investments USD 10,831 USD 9,352
Receivables - trade and other 7,840 7,317
Receivables - finance 9,523 9,463
Prepaid expenses and other current assets 2,080 1,930
Inventories 12,672 11,402
Total current assets 42,946 39,464
Property, plant and equipment - net 12,014 12,401
Long-term receivables - trade and other 1,206 1,185
Long-term receivables - finance 12,590 12,222
Noncurrent deferred and refundable income taxes 1,455 1,523
Intangible assets 1,176 1,308
Goodwill 6,372 6,394
Other assets 3,938 3,827
Total assets USD 81,697 USD 78,324
Liabilities
Current liabilities:
Short-term borrowings:
=- Machinery, Energy & Transportation USD 4 USD 10
=- Financial Products 3,421 2,005
Accounts payable 6,921 6,128
Accrued expenses 3,556 3,642
Accrued wages, salaries and employee benefits 1,759 1,096
Customer advances 1,157 1,108
Dividends payable 608 562
Other current liabilities 2,126 2,017
Long-term debt due within one year:
=- Machinery, Energy & Transportation 50 1,420
=- Financial Products 7,906 7,729
Total current liabilities 27,508 25,717
Long-term debt due after one year:
=- Machinery, Energy & Transportation 9,752 9,749
=- Financial Products 16,452 16,250
Liability for postemployment benefits 6,581 6,872
Other liabilities 4,524 4,358
Total liabilities 64,817 62,946
Shareholders' equity
Common stock 6,293 6,230
Treasury stock (25,240) (25,178)
Profit employed in the business 36,934 35,167
Accumulated other comprehensive income (loss) (1,154) (888)
Noncontrolling interests 47 47
Total shareholders' equity 16,880 15,378
Total liabilities and shareholders' equity USD 81,697 USD 78,324
Caterpillar Inc.
Condensed Consolidated Statement of Cash Flow
(Unaudited)
(Millions of dollars)
Six Months Ended
June 30,
2021 2020
Cash flow from operating activities:
Profit of consolidated and affiliated companies USD 2,945 USD 1,552
Adjustments for non-cash items:
Depreciation and amortization 1,173 1,222
Net gain on remeasurement of pension obligations - (132)
Provision (benefit) for deferred income taxes 68 (32)
Other (20) 674
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables - trade and other (343) 1,176
Inventories (1,179) (145)
Accounts payable 893 (655)
Accrued expenses 22 (253)
Accrued wages, salaries and employee benefits 618 (648)
Customer advances 49 (2)
Other assets - net (47) (7)
Other liabilities - net (133) (229)
Net cash provided by (used for) operating activities 4,046 2,521
Cash flow from investing activities:
Capital expenditures - excluding equipment leased to others (419) (472)
Expenditures for equipment leased to others (681) (526)
Proceeds from disposals of leased assets and property, plant and equipment 636 382
Additions to finance receivables (6,203) (6,712)
Collections of finance receivables 5,580 6,801
Proceeds from sale of finance receivables 27 31
Investments and acquisitions (net of cash acquired) (398) (49)
Proceeds from sale of businesses and investments (net of cash sold) 28 13
Proceeds from sale of securities 276 151
Investments in securities (500) (369)
Other - net (63) 7
Net cash provided by (used for) investing activities (1,717) (743)
Cash flow from financing activities:
Dividends paid (1,126) (1,125)
Common stock issued, including treasury shares reissued 123 (10)
Common shares repurchased (251) (1,130)
Proceeds from debt issued (original maturities greater than three months) 4,906 6,159
Payments on debt (original maturities greater than three months) (5,966) (4,629)
Short-term borrowings - net (original maturities three months or less) 1,460 (477)
Other - net (2) (1)
Net cash provided by (used for) financing activities (856) (1,213)
Effect of exchange rate changes on cash 3 (66)
Increase (decrease) in cash and short-term investments and restricted cash 1,476 499
Cash and short-term investments and restricted cash at beginning of period 9,366 8,292
Cash and short-term investments and restricted cash at end of period USD 10,842 USD 8,791
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 June 30, 2021
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery, Energy & Financial Consolidating
Consolidated Transportation
Products Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation USD 12,193 USD 12,193 USD - USD -
Revenues of Financial Products 696 - 796 (100) 1
Total sales and revenues 12,889 12,193 796 (100)
Operating costs:
Cost of goods sold 8,881 8,884 - (3) 2
Selling, general and administrative expenses 1,364 1,210 159 (5) 2
Research and development expenses 446 446 - -
Interest expense of Financial Products 116 - 116 -
Other operating (income) expenses 293 - 307 (14) 2
Total operating costs 11,100 10,540 582 (22)
Operating profit 1,789 1,653 214 (78)
Interest expense excluding Financial Products 120 120 - -
Other income (expense) 201 445 28 (272) 3
Consolidated profit before taxes 1,870 1,978 242 (350)
Provision (benefit) for income taxes 470 415 55 -
Profit of consolidated companies 1,400 1,563 187 (350)
(MORE TO FOLLOW) Dow Jones Newswires
July 30, 2021 09:02 ET (13:02 GMT)
DJ Caterpillar Inc.: Files Form 8-K Earnings Release -6-
Equity in profit (loss) of unconsolidated 14 17 - (3) 4
affiliated companies
Profit of consolidated and affiliated companies 1,414 1,580 187 (353)
Less: Profit (loss) attributable to 1 1 3 (3) 5
noncontrolling interests
Profit 6 USD 1,413 USD 1,579 USD 184 USD (350)
1 Elimination of Financial Products' revenues earned from ME&T.
2 Elimination of net expenses recorded by ME&T paid to Financial Products.
3 Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned
between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.
4 Elimination of equity profit (loss) earned from Financial Products' subsidiaries partially owned by ME&T
subsidiaries.
5 Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries
partially owned by ME&T subsidiaries.
6 Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Three Months Ended June 30, 2020
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery, Energy & Financial Consolidating
Consolidated Transportation
Products Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation USD 9,310 USD 9,310 USD - USD -
Revenues of Financial Products 687 - 780 (93) 1
Total sales and revenues 9,997 9,310 780 (93)
Operating costs:
Cost of goods sold 7,113 7,114 - (1) 2
Selling, general and administrative expenses 1,179 984 201 (6) 2
Research and development expenses 341 341 - -
Interest expense of Financial Products 149 - 149 -
Other operating (income) expenses 431 122 320 (11) 2
Total operating costs 9,213 8,561 670 (18)
Operating profit 784 749 110 (75)
Interest expense excluding Financial Products 135 135 - -
Other income (expense) 29 (57) 31 55 3
Consolidated profit before taxes 678 557 141 (20)
Provision (benefit) for income taxes 227 190 37 -
Profit of consolidated companies 451 367 104 (20)
Equity in profit (loss) of unconsolidated 8 13 - (5) 4
affiliated companies
Profit of consolidated and affiliated companies 459 380 104 (25)
Less: Profit (loss) attributable to 1 1 5 (5) 5
noncontrolling interests
Profit 6 USD 458 USD 379 USD 99 USD (20)
1 Elimination of Financial Products' revenues earned from ME&T.
2 Elimination of net expenses recorded by ME&T paid to Financial Products.
3 Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned
between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.
4 Elimination of equity profit (loss) earned from Financial Products' subsidiaries partially owned by ME&T
subsidiaries.
5 Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries
partially owned by ME&T subsidiaries.
6 Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Six Months Ended June 30, 2021
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery, Energy & Financial Consolidating
Consolidated Transportation
Products Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation USD 23,384 USD 23,384 USD - USD -
Revenues of Financial Products 1,392 - 1,584 (192) 1
Total sales and revenues 24,776 23,384 1,584 (192)
Operating costs:
Cost of goods sold 16,893 16,897 - (4) 2
Selling, general and administrative expenses 2,603 2,324 283 (4) 2
Research and development expenses 820 820 - -
Interest expense of Financial Products 241 - 241 -
Other operating (income) expenses 616 26 621 (31) 2
Total operating costs 21,173 20,067 1,145 (39)
Operating profit 3,603 3,317 439 (153)
Interest expense excluding Financial Products 262 262 - -
Other income (expense) 526 676 47 (197) 3
Consolidated profit before taxes 3,867 3,731 486 (350)
Provision (benefit) for income taxes 945 827 118 -
Profit of consolidated companies 2,922 2,904 368 (350)
Equity in profit (loss) of unconsolidated 23 29 - (6) 4
affiliated companies
Profit of consolidated and affiliated companies 2,945 2,933 368 (356)
Less: Profit (loss) attributable to 2 2 6 (6) 5
noncontrolling interests
Profit 6 USD 2,943 USD 2,931 USD 362 USD (350)
1 Elimination of Financial Products' revenues earned from ME&T.
2 Elimination of net expenses recorded by ME&T paid to Financial Products.
3 Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned
between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.
4 Elimination of equity profit (loss) earned from Financial Products' subsidiaries partially owned by ME&T
subsidiaries.
5 Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries
partially owned by ME&T subsidiaries.
6 Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Six Months Ended June 30, 2020
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery, Energy & Financial Consolidating
Consolidated Transportation
Products Adjustments
Sales and revenues:
Sales of Machinery, Energy & Transportation USD 19,224 USD 19,224 USD - USD -
Revenues of Financial Products 1,408 - 1,610 (202) 1
Total sales and revenues 20,632 19,224 1,610 (202)
Operating costs:
Cost of goods sold 14,379 14,381 - (2) 2
Selling, general and administrative expenses 2,300 1,924 383 (7) 2
Research and development expenses 697 697 - -
Interest expense of Financial Products 324 - 325 (1) 3
Other operating (income) expenses 744 132 640 (28) 2
(MORE TO FOLLOW) Dow Jones Newswires
July 30, 2021 09:02 ET (13:02 GMT)
DJ Caterpillar Inc.: Files Form 8-K Earnings Release -7-
Total operating costs 18,444 17,134 1,348 (38)
Operating profit 2,188 2,090 262 (164)
Interest expense excluding Financial Products 248 247 - 1 3
Other income (expense) 251 122 (16) 145 4
Consolidated profit before taxes 2,191 1,965 246 (20)
Provision (benefit) for income taxes 652 587 65 -
Profit of consolidated companies 1,539 1,378 181 (20)
Equity in profit (loss) of unconsolidated 13 22 - (9) 5
affiliated companies
Profit of consolidated and affiliated companies 1,552 1,400 181 (29)
Less: Profit (loss) attributable to 2 2 9 (9) 6
noncontrolling interests
Profit 7 USD 1,550 USD 1,398 USD 172 USD (20)
1 Elimination of Financial Products' revenues earned from ME&T.
2 Elimination of net expenses recorded by ME&T paid to Financial Products.
3 Elimination of interest expense recorded between Financial Products and ME&T.
4 Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned
between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.
5 Elimination of equity profit (loss) earned from Financial Products' subsidiaries partially owned by ME&T
subsidiaries.
6 Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries
partially owned by ME&T subsidiaries.
7 Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Financial Position
At June 30, 2021
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery,
Financial Consolidating
Consolidated Energy &
Products Adjustments
Transportation
Assets
Current assets:
Cash and short-term investments USD 10,831 USD 10,028 USD 803 USD -
Receivables - trade and other 7,840 3,169 455 4,216 1,2
Receivables - finance 9,523 - 13,863 (4,340) 2
Prepaid expenses and other current assets 2,080 1,756 479 (155) 3
Inventories 12,672 12,672 - -
Total current assets 42,946 27,625 15,600 (279)
Property, plant and equipment - net 12,014 8,035 3,979 -
Long-term receivables - trade and other 1,206 375 176 655 1,2
Long-term receivables - finance 12,590 - 13,273 (683) 2
Noncurrent deferred and refundable income taxes 1,455 1,980 103 (628) 4
Intangible assets 1,176 1,176 - -
Goodwill 6,372 6,372 - -
Other assets 3,938 3,250 1,899 (1,211) 5
Total assets USD 81,697 USD 48,813 USD 35,030 USD (2,146)
Liabilities
Current liabilities:
Short-term borrowings USD 3,425 USD 4 USD 3,421 USD -
Short-term borrowings with consolidated companies - - - -
Accounts payable 6,921 6,830 215 (124) 6
Accrued expenses 3,556 3,191 365 -
Accrued wages, salaries and employee benefits 1,759 1,719 40 -
Customer advances 1,157 1,157 - -
Dividends payable 608 608 - -
Other current liabilities 2,126 1,658 646 (178) 4,7
Long-term debt due within one year 7,956 50 7,906 -
Total current liabilities 27,508 15,217 12,593 (302)
Long-term debt due after one year 26,204 9,780 16,452 (28) 8
Liability for postemployment benefits 6,581 6,580 1 -
Other liabilities 4,524 3,851 1,374 (701) 4
Total liabilities 64,817 35,428 30,420 (1,031)
Shareholders' equity
Common stock 6,293 6,293 919 (919) 9
Treasury stock (25,240) (25,240) - -
Profit employed in the business 36,934 32,846 4,077 11 9
Accumulated other comprehensive income (loss) (1,154) (563) (591) -
Noncontrolling interests 47 49 205 (207) 9
Total shareholders' equity 16,880 13,385 4,610 (1,115)
Total liabilities and shareholders' equity USD 81,697 USD 48,813 USD 35,030 USD (2,146)
1 Elimination of receivables between ME&T and Financial Products.
2 Reclassification of ME&T's trade receivables purchased by Financial Products and Financial Products'
wholesale inventory receivables.
3 Elimination of ME&T's insurance premiums that are prepaid to Financial Products.
4 Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction.
5 Elimination of other intercompany assets between ME&T and Financial Products.
6 Elimination of payables between ME&T and Financial Products.
7 Elimination of prepaid insurance in Financial Products' other liabilities.
8 Elimination of debt between ME&T and Financial Products.
9 Eliminations associated with ME&T's investments in Financial Products' subsidiaries.
Caterpillar Inc.
Supplemental Data for Financial Position
At December 31, 2020
(Unaudited)
(Millions of dollars)
Supplemental Consolidating Data
Machinery,
Financial Consolidating
Consolidated Energy &
Products Adjustments
Transportation
Assets
Current assets:
Cash and short-term investments USD 9,352 USD 8,822 USD 530 USD -
Receivables - trade and other 7,317 3,846 397 3,074 1,2
Receivables - finance 9,463 - 13,681 (4,218) 2
Prepaid expenses and other current assets 1,930 1,376 624 (70) 3
Inventories 11,402 11,402 - -
Total current assets 39,464 25,446 15,232 (1,214)
Property, plant and equipment - net 12,401 8,309 4,092 -
Long-term receivables - trade and other 1,185 363 164 658 1,2
Long-term receivables - finance 12,222 - 12,895 (673) 2
Noncurrent deferred and refundable income taxes 1,523 2,058 110 (645) 4
Intangible assets 1,308 1,308 - -
Goodwill 6,394 6,394 - -
Other assets 3,827 3,158 1,871 (1,202) 5
Total assets USD 78,324 USD 47,036 USD 34,364 USD (3,076)
Liabilities
Current liabilities:
Short-term borrowings USD 2,015 USD 10 USD 2,005 USD -
(MORE TO FOLLOW) Dow Jones Newswires
July 30, 2021 09:02 ET (13:02 GMT)
