PEORIA, Ill., July 24, 2014 /PRNewswire/ -- Caterpillar Inc.
(NYSE: CAT) today announced profit per share of $1.57 for the second quarter of 2014, an increase
from $1.45 per share in the second
quarter of 2013. The second quarter of 2014 included a
negative impact of $0.12 per share
for previously announced restructuring activities. Excluding
restructuring costs, profit per share was
$1.69. Second-quarter 2014
sales and revenues were $14.150
billion, slightly lower than second-quarter 2013 sales and
revenues of $14.621 billion.
"We're pleased with our second-quarter results, particularly the
improvement in profit. We increased the bottom line despite a
weak quarter for our Resource Industries segment,
which is principally mining. Three key things are
contributing to the continuing strength of our financial
results—the diversity of our businesses, substantial success in
operational improvements through the execution of our strategy and
the strength of our cash flow and balance sheet," said Caterpillar
Chairman and Chief Executive Officer Doug
Oberhelman.
"Our Construction Industries and Energy
& Transportation segments continue to improve.
Construction Industries had a good quarter with sales up 11 percent
and operating profit up 83 percent from the second quarter of
2013. The improvement in Construction Industries, along with
sales stability and record profit from Energy & Transportation,
has helped us improve profit despite the downturn in the mining
industry," added Oberhelman.
"We understand that we don't control the economy or the timing
of a turnaround in mining. That's why we've been so focused
on executing our strategy and improving our operational
performance, which have helped us control costs with year-to-date
manufacturing costs and SG&A and R&D expenses
improving nearly $500 million.
We've also improved our balance sheet and cash flow over the
past few years, and that's contributed to our ability to return
value to our stockholders—including today's announcement that we
intend to repurchase $2.5 billion of
Caterpillar stock in the third quarter," Oberhelman said.
2014 Outlook
The outlook for 2014 sales and revenues has been reasonably
consistent with the preliminary outlook that was provided with the
third quarter financial release in October of 2013. With half
of 2014 now complete, we have tightened the outlook range for the
year. The updated outlook for 2014 sales and revenues is a
range of $54 to $56 billion.
The previous outlook for sales and revenues was $56 billion in a range of plus or minus 5 percent
($53.2 to $58.8 billion). The
range of expectations is tighter and the mid-point of the outlook
is slightly lower. Most of the change in the mid-point of the
range is in Construction Industries and reflects weaker sales in
China, the CIS and in the
Africa/Middle East region.
Despite a slightly lower mid-point of the sales and revenues
outlook the company is increasing its 2014 profit per share
outlook. To provide a better understanding of the company's
expectations for 2014 profit, the profit outlook is being provided
with and without anticipated restructuring costs. The
expectation for restructuring costs in 2014 is now about
$400 million—the bottom end of the
$400 to $500 million range that was
previously expected. With sales and revenues at $55 billion, the mid-point of the outlook range,
the revised profit outlook for 2014 including restructuring costs
of about $400 million is $5.75 per share, an improvement from the previous
outlook of $5.55 per share.
Excluding restructuring costs, the profit outlook is $6.20 per share, an increase from the previous
outlook of $6.10 per share.
"After a sizable drop in sales and revenues in 2013, our ongoing
forecasting process has, since the third quarter of last year,
pegged 2014 as a roughly flat year for sales. That's still
the case. There have been plusses and minuses, but they've
both been relatively muted in the context of our total sales and
revenues. While we'd certainly like to see improvement in
economies around the world, and more specifically, the mining
industry, the stability that we've seen this year has helped.
Even though sales and revenues are relatively flat compared to last
year, we've improved the bottom line with better execution and
continued focus on costs," Oberhelman said.
Stock Repurchase
Caterpillar is announcing its intention to repurchase
approximately $2.5 billion of
Caterpillar common stock during the third quarter of 2014.
This repurchase is part of the $10
billion stock repurchase authorization previously approved
by the Board of Directors in the first quarter of 2014. The
$2.5 billion repurchase expected in
the third quarter is in addition to the approximately $1.7 billion that was repurchased by the company
in the first quarter of 2014.
"With a strong balance sheet, positive cash flow, sufficient
cash on hand and more modest needs for capital expenditures, it
makes sense to continue to reward stockholders. In 2013, we
repurchased $2 billion of stock and
raised the dividend by 15 percent. In June of 2014, we
increased the dividend an additional 17 percent, and by the end of
the third quarter, we expect to have repurchased about $4.2 billion of stock in 2014. Rewarding
stockholders is an important goal and our actions demonstrate our
commitment," Oberhelman said.
Notes:
- Glossary of terms is included on pages 18-19; first
occurrence of terms shown in bold italics.
- Information on non-GAAP financial measures is included on
page 20.
About Caterpillar:
For nearly 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 2013 sales
and revenues of $55.656 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 product segments - Construction
Industries, Resource Industries and Energy & Transportation -
and also provides financing and related services through its
Financial Products segment. For more information, visit
caterpillar.com. To connect with us on social media,
visit caterpillar.com/social-media.
Forward-Looking Statements
Certain statements in this press release relate to future events
and expectations and are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of
1995. Words such as "believe," "estimate," "will be," "will,"
"would," "expect," "anticipate," "plan," "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 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
economic conditions and economic conditions in the industries we
serve; (ii) government monetary or fiscal policies and
infrastructure spending; (iii) commodity price changes, component
price increases, fluctuations in demand for our products or
significant shortages of component products; (iv) disruptions or
volatility in global financial markets limiting our sources of
liquidity or the liquidity of our customers, dealers and suppliers;
(v) political and economic risks, commercial instability and events
beyond our control in the countries in which we operate; (vi)
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; (vii) our Financial Products segment's risks associated
with the financial services industry; (viii) changes in interest
rates or market liquidity conditions; (ix) an increase in
delinquencies, repossessions or net losses of Cat Financial's
customers; (x) new regulations or changes in financial services
regulations; (xi) a failure to realize, or a delay in realizing,
all of the anticipated benefits of our acquisitions, joint ventures
or divestitures; (xii) international trade policies and their
impact on demand for our products and our competitive position;
(xiii) our ability to develop, produce and market quality products
that meet our customers' needs; (xiv) the impact of the highly
competitive environment in which we operate on our sales and
pricing; (xv) failure to realize all of the anticipated benefits
from initiatives to increase our productivity, efficiency and cash
flow and to reduce costs; (xvi) additional restructuring costs or a
failure to realize anticipated savings or benefits from past or
future cost reduction actions; (xvii) inventory management
decisions and sourcing practices of our dealers and our OEM
customers; (xviii) compliance with environmental laws and
regulation; (xix) alleged or actual violations of trade or
anti-corruption laws and regulations; (xx) additional tax expense
or exposure; (xxi) currency fluctuations; (xxii) our or Cat
Financial's compliance with financial covenants; (xxiii) increased
pension plan funding obligations; (xxiv) union disputes or other
employee relations issues; (xxv) significant legal proceedings,
claims, lawsuits or investigations; (xxvi) compliance requirements
imposed if additional carbon emissions legislation and/or
regulations are adopted; (xxvii) changes in accounting standards;
(xxviii) failure or breach of IT security; (xxix) adverse effects
of unexpected events including natural disasters; and (xxx) other
factors described in more detail under "Item 1A. Risk
Factors" in our Form 10-K filed with the SEC on February 18, 2014, for the year ended
December 31, 2013.
|
Key
Points
|
|
|
Second Quarter
2014
(Dollars in
millions except per share data)
|
|
Second
Quarter
2014
|
|
Second
Quarter
2013
|
|
$
Change
|
|
%
Change
|
|
Machinery, Energy &
Transportation Sales
|
$
|
13,391
|
|
|
$
|
13,886
|
|
|
$
|
(495)
|
|
|
(4)
|
%
|
|
Financial Products
Revenues
|
|
759
|
|
|
|
735
|
|
|
|
24
|
|
|
3
|
%
|
|
Total Sales and
Revenues
|
$
|
14,150
|
|
|
$
|
14,621
|
|
|
$
|
(471)
|
|
|
(3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
|
$
|
999
|
|
|
$
|
960
|
|
|
$
|
39
|
|
|
4
|
%
|
|
Profit per common share
- diluted
|
$
|
1.57
|
|
|
$
|
1.45
|
|
|
$
|
0.12
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit per common share
- diluted (excluding restructuring)
|
$
|
1.69
|
|
|
$
|
1.48
|
|
|
$
|
0.21
|
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Second-quarter sales and revenues were $14.150 billion, compared with $14.621 billion in the second quarter of
2013. Decreases in Resource Industries' sales were partially
offset by increases in Construction Industries' sales. Energy
& Transportation's sales and Financial Products' revenues were
about flat.
- Restructuring costs were $114
million in the second quarter of 2014 with an after-tax
impact of $0.12 per share.
- Profit per share was $1.57 in the
second quarter of 2014 and excluding restructuring costs of
$0.12 per share was $1.69 per share. Profit in the second
quarter of 2013 was $1.45 per
share.
- Machinery, Energy & Transportation (ME&T)
operating cash flow was $2.064
billion in the second quarter of 2014, compared with
$3.049 billion in the second quarter
of 2013.
- ME&T debt-to-capital ratio was 32.5 percent
compared with 30.2 percent at the end of the first quarter of
2014.
- Caterpillar announced its intention to repurchase approximately
$2.5 billion of Caterpillar common
stock during the third quarter of 2014. This repurchase is
part of the $10 billion stock
repurchase authorization previously approved by the Board of
Directors in the first quarter of 2014.
2014 Outlook
- Our outlook for sales and revenues is now a range of
$54 to $56 billion. The
previous outlook expected sales and revenues of about $56 billion in a range of plus or minus 5 percent
($53.2 to $58.8 billion).
- While our expectations for 2014 sales and revenues have not
changed significantly, the 2 percent decline in the mid-point of
our outlook is primarily related to expected lower sales of
construction equipment in developing countries.
- At the mid-point of the sales and revenues outlook range, our
revised profit outlook for 2014, excluding restructuring costs, is
$6.20 per share, an improvement of
$0.10 per share from the previous
outlook and including restructuring costs of $0.45 per share, our profit outlook for 2014
improved $0.20 per share to
$5.75 per share.
- The company expects ME&T capital expenditures for 2014 will
be about $2 billion.
CONSOLIDATED RESULTS
Consolidated Sales and Revenues
Consolidated Sales and Revenues Comparison
Second Quarter 2014 vs. Second Quarter 2013
To access this chart, go to
http://www.caterpillar.com/en/investors/quarterly-results.html and
download the full version of the Caterpillar 2Q 2014 earnings
release.
Sales and Revenues
Total sales and revenues were $14.150
billion in the second quarter of 2014, down $471 million or 3 percent from the second quarter
of 2013. When reviewing the change in sales and revenues, we
focus on the following perspectives:
- Reason for the change: Sales volume
decreased $610 million primarily due
to lower volume in Resource Industries, partially offset by higher
volume in Construction Industries. The sales volume decrease
was partially offset by favorable price
realization.
The volume decrease was primarily the result of lower end-user
demand for mining equipment in Resource Industries, as customers
are continuing to reduce their capital expenditures. This
decrease was partially offset by the favorable impact of changes in
dealer machine and engine inventories, as dealers reduced
inventories about $500 million in the
second quarter of 2014 compared to a decrease of more than
$1 billion in the second quarter of
2013. Aftermarket parts sales were about flat with the second
quarter of 2013.
- Sales by geographic region: Sales declines in Asia/Pacific and Latin America were partially offset by
an increase in North America. Asia/Pacific sales declined 14 percent as a
result of weak mining sales across the region, timing of large
Energy & Transportation projects and a slowing construction
equipment industry in China. Sales decreased in Latin America 16 percent, primarily due to
lower end-user demand for mining equipment. In North America,
sales increased 6 percent, primarily due to improving demand for
construction equipment in the United States. Sales into
EAME were about flat as lower end-user demand was
about offset by the absence of unfavorable changes in dealer
inventory during the second quarter of 2013. While EAME sales
were about flat, the impact from strengthening economic conditions
in Europe was about offset by
sales declines in the CIS and Africa/Middle East. The declines were a
result of political unrest in the CIS and lower mining sales in
Africa/Middle East.
- Sales by segment: Sales decreases in Resource Industries were
partially offset by increases in Construction Industries'
sales. Resource Industries' sales decreased 29 percent,
primarily due to lower end-user demand for mining equipment.
Construction Industries' sales increased 11 percent, primarily due
to the favorable impact of changes in dealer inventories and
increases in dealer deliveries to end users. Energy &
Transportation's sales and Financial Products segment
revenues were about flat.
Consolidated Operating Profit
Consolidated Operating Profit Comparison
Second Quarter 2014 vs. Second Quarter 2013
To access this chart, go to
http://www.caterpillar.com/en/investors/quarterly-results.html and
download the full version of the Caterpillar 2Q 2014 earnings
release.
Operating profit for the second quarter of 2014 was $1.475 billion, down $82
million or 5 percent from the second quarter of 2013.
Restructuring costs in the second quarter of 2014 were $114 million compared with $28 million in the second quarter of 2013, an
increase of $86 million. The
second quarter of 2014 restructuring costs were primarily related
to a reduction in workforce at our Gosselies, Belgium, facility. Excluding
restructuring costs operating profit was about flat as lower sales
volume and the absence of a $135
million gain related to a settlement with previous owners of
Caterpillar (Zhengzhou)
Ltd. were about offset by lower manufacturing costs and
favorable price realization.
Manufacturing costs decreased $110
million. The improvement was primarily due to
favorable changes in cost absorption as inventory decreased
significantly in the second quarter of 2013 compared with a modest
increase in the second quarter of 2014. Material costs were
also favorable. These items were partially offset by higher
period manufacturing costs and increased warranty expense.
The increase in period manufacturing costs was primarily driven by
higher incentive compensation expense. SG&A and R&D
expenses were about flat despite an increase in incentive
compensation expense.
Other Profit/Loss Items
- Other income/expense was income of $65 million
compared with expense of $84 million
in the second quarter of 2013. The change was primarily due
to the favorable net impact from currency translation
and hedging gains and losses. The second quarter of 2014
included net gains related to currency translation and hedging
compared to significant net losses in the second quarter of
2013.
- The provision for income taxes in the second quarter of
2014 reflects an estimated annual tax rate of 29.5 percent compared
with 29 percent for the second quarter of 2013. The increase
from the full-year 2013 rate of 28.5 percent is primarily due to
the expiration of the U.S. research and development tax
credit.
Global Workforce
Caterpillar worldwide full-time employment was 115,292 at the
end of the second quarter of 2014 compared with 122,402 at the end
of the second quarter of 2013, a decrease of 7,110 full-time
employees. The flexible workforce increased by 370 for a
total decrease in the global workforce of 6,740. The decrease
was primarily the result of restructuring programs.
|
|
June
30
|
|
|
2014
|
|
2013
|
|
Increase
/
(Decrease)
|
|
Full-time
employment
|
|
115,292
|
|
122,402
|
|
(7,110)
|
|
Flexible
workforce
|
|
16,339
|
|
15,969
|
|
370
|
|
Total
|
|
131,631
|
|
138,371
|
|
(6,740)
|
|
|
|
|
|
|
|
|
Summary of
change
|
|
|
|
|
|
|
|
U.S.
workforce
|
|
|
|
|
|
(2,430)
|
|
Non-U.S.
workforce
|
|
|
|
|
|
(4,310)
|
|
Total
|
|
|
|
|
|
(6,740)
|
|
SEGMENT
RESULTS
|
|
|
Sales and Revenues
by Geographic Region
|
|
|
|
%
|
|
North
|
|
%
|
|
Latin
|
|
%
|
|
|
|
%
|
|
Asia/
|
|
%
|
|
(Millions of
dollars)
|
Total
|
|
Change
|
|
America
|
|
Change
|
|
America
|
|
Change
|
|
EAME
|
|
Change
|
|
Pacific
|
|
Change
|
|
Second Quarter
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
Industries¹
|
$ 5,407
|
|
11
|
%
|
|
$ 2,402
|
|
20
|
%
|
|
$ 711
|
|
1
|
%
|
|
$1,192
|
|
14
|
%
|
|
$1,102
|
|
(2)
|
%
|
|
Resource
Industries²
|
2,241
|
|
(29)
|
%
|
|
866
|
|
(9)
|
%
|
|
342
|
|
(40)
|
%
|
|
523
|
|
(35)
|
%
|
|
510
|
|
(37)
|
%
|
|
Energy &
Transportation³
|
5,175
|
|
(2)
|
%
|
|
2,259
|
|
2
|
%
|
|
470
|
|
(17)
|
%
|
|
1,406
|
|
4
|
%
|
|
1,040
|
|
(8)
|
%
|
|
All Other
Segments⁴
|
583
|
|
(7)
|
%
|
|
369
|
|
-
|
%
|
|
71
|
|
13
|
%
|
|
83
|
|
(26)
|
%
|
|
60
|
|
(25)
|
%
|
|
Corporate Items and
Eliminations
|
(15)
|
|
|
|
|
(15)
|
|
|
|
|
1
|
|
|
|
|
(2)
|
|
|
|
|
1
|
|
|
|
|
Machinery, Energy
& Transportation
|
$13,391
|
|
(4)
|
%
|
|
$ 5,881
|
|
6
|
%
|
|
$ 1,595
|
|
(16)
|
%
|
|
$3,202
|
|
(3)
|
%
|
|
$2,713
|
|
(14)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Products
Segment
|
$ 834
|
|
3
|
%
|
|
$ 448
|
|
7
|
%
|
|
$ 117
|
|
7
|
%
|
|
$ 121
|
|
1
|
%
|
|
$ 148
|
|
(7)
|
%
|
|
Corporate Items and
Eliminations
|
(75)
|
|
|
|
|
(41)
|
|
|
|
|
(13)
|
|
|
|
|
(8)
|
|
|
|
|
(13)
|
|
|
|
|
Financial
Products Revenues
|
$ 759
|
|
3
|
%
|
|
$ 407
|
|
8
|
%
|
|
$ 104
|
|
5
|
%
|
|
$ 113
|
|
1
|
%
|
|
$ 135
|
|
(8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Sales
and Revenues
|
$14,150
|
|
(3)
|
%
|
|
$ 6,288
|
|
7
|
%
|
|
$ 1,699
|
|
(15)
|
%
|
|
$3,315
|
|
(3)
|
%
|
|
$2,848
|
|
(13)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction
Industries¹
|
$ 4,875
|
|
|
|
|
$ 2,008
|
|
|
|
|
$ 701
|
|
|
|
|
$1,045
|
|
|
|
|
$1,121
|
|
|
|
|
Resource
Industries²
|
3,135
|
|
|
|
|
948
|
|
|
|
|
573
|
|
|
|
|
802
|
|
|
|
|
812
|
|
|
|
|
Energy &
Transportation³
|
5,263
|
|
|
|
|
2,215
|
|
|
|
|
568
|
|
|
|
|
1,352
|
|
|
|
|
1,128
|
|
|
|
|
All Other
Segments⁴
|
624
|
|
|
|
|
369
|
|
|
|
|
63
|
|
|
|
|
112
|
|
|
|
|
80
|
|
|
|
|
Corporate Items and
Eliminations
|
(11)
|
|
|
|
|
(14)
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
|
Machinery, Energy
& Transportation
|
$13,886
|
|
|
|
|
$ 5,526
|
|
|
|
|
$ 1,906
|
|
|
|
|
$3,312
|
|
|
|
|
$3,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Products
Segment
|
$ 806
|
|
|
|
|
$ 418
|
|
|
|
|
$ 109
|
|
|
|
|
$ 120
|
|
|
|
|
$ 159
|
|
|
|
|
Corporate Items and
Eliminations
|
(71)
|
|
|
|
|
(41)
|
|
|
|
|
(10)
|
|
|
|
|
(8)
|
|
|
|
|
(12)
|
|
|
|
|
Financial
Products Revenues
|
$ 735
|
|
|
|
|
$ 377
|
|
|
|
|
$ 99
|
|
|
|
|
$ 112
|
|
|
|
|
$ 147
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Sales
and Revenues
|
$14,621
|
|
|
|
|
$ 5,903
|
|
|
|
|
$ 2,005
|
|
|
|
|
$3,424
|
|
|
|
|
$3,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Does not include inter-segment sales of $56 million and $91 million
in second quarter 2014 and 2013, respectively.
|
|
|
|
|
2
Does not include inter-segment sales of $145 million and $126
million in second quarter 2014 and 2013, respectively.
|
|
|
|
|
3
Does not include inter-segment sales of $586 million and $461
million in second quarter 2014 and 2013, respectively.
|
|
|
|
|
4
Does not include inter-segment sales of $890 million and $830
million in second quarter 2014 and 2013, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and Revenues
by Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
|
|
Sales
|
|
Price
|
|
|
|
|
|
Second
|
|
$
|
|
%
|
|
|
(Millions of
dollars)
|
Quarter
2013
|
|
Volume
|
|
Realization
|
|
Currency
|
|
Other
|
|
Quarter
2014
|
|
Change
|
|
Change
|
|
|
Construction
Industries
|
$ 4,875
|
|
$ 511
|
|
$
58
|
|
$ (37)
|
|
$ -
|
|
$ 5,407
|
|
$ 532
|
|
11
|
%
|
|
|
Resource
Industries
|
3,135
|
|
(875)
|
|
(15)
|
|
(4)
|
|
-
|
|
2,241
|
|
(894)
|
|
(29)
|
%
|
|
|
Energy &
Transportation
|
5,263
|
|
(186)
|
|
48
|
|
50
|
|
-
|
|
5,175
|
|
(88)
|
|
(2)
|
%
|
|
|
All Other
Segments
|
624
|
|
(55)
|
|
14
|
|
-
|
|
-
|
|
583
|
|
(41)
|
|
(7)
|
%
|
|
|
Corporate Items and
Eliminations
|
(11)
|
|
(5)
|
|
3
|
|
(2)
|
|
-
|
|
(15)
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Machinery, Energy
& Transportation
|
$ 13,886
|
|
$ (610)
|
|
$ 108
|
|
$ 7
|
|
$ -
|
|
$ 13,391
|
|
$ (495)
|
|
(4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Products
Segment
|
806
|
|
-
|
|
-
|
|
-
|
|
28
|
|
834
|
|
28
|
|
3
|
%
|
|
|
Corporate Items and
Eliminations
|
(71)
|
|
-
|
|
-
|
|
-
|
|
(4)
|
|
(75)
|
|
(4)
|
|
|
|
|
|
Financial Products
Revenues
|
$
735
|
|
$ -
|
|
$
-
|
|
$
-
|
|
$ 24
|
|
$
759
|
|
$ 24
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Sales
and Revenues
|
$ 14,621
|
|
$ (610)
|
|
$ 108
|
|
$ 7
|
|
$ 24
|
|
$ 14,150
|
|
$ (471)
|
|
(3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
by Segment
|
|
|
|
|
|
|
|
|
|
Second
|
|
Second
|
|
$
|
|
%
|
|
(Millions of
dollars)
|
Quarter 2014
|
|
Quarter 2013
|
|
Change
|
|
Change
|
|
Construction
Industries
|
$
674
|
|
$
368
|
|
$ 306
|
|
83
|
%
|
|
Resource
Industries
|
133
|
|
524
|
|
(391)
|
|
(75)
|
%
|
|
Energy &
Transportation
|
1,009
|
|
953
|
|
56
|
|
6
|
%
|
|
All Other
Segments
|
223
|
|
208
|
|
15
|
|
7
|
%
|
|
Corporate Items and
Eliminations
|
(722)
|
|
(666)
|
|
(56)
|
|
|
|
|
Machinery, Energy
& Transportation
|
$
1,317
|
|
$
1,387
|
|
$ (70)
|
|
(5)
|
%
|
|
Financial Products
Segment
|
244
|
|
233
|
|
11
|
|
5
|
%
|
|
Corporate Items and
Eliminations
|
(12)
|
|
8
|
|
(20)
|
|
|
|
|
Financial
Products
|
$
232
|
|
$
241
|
|
$ (9)
|
|
(4)
|
%
|
|
Consolidating
Adjustments
|
(74)
|
|
(71)
|
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Operating Profit
|
$
1,475
|
|
$
1,557
|
|
$ (82)
|
|
(5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSTRUCTION
INDUSTRIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
Comparison
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
2013
|
|
Sales
Volume
|
|
Price
Realization
|
|
Currency
|
|
Second
Quarter
2014
|
|
$
Change
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
Comparison1
|
$4,875
|
|
$511
|
|
$58
|
|
($37)
|
|
$5,407
|
|
$532
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales by
Geographic Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
2014
|
|
Second
Quarter
2013
|
|
$
Change
|
|
%
Change
|
|
|
|
|
|
|
|
|
North
America
|
$2,402
|
|
$2,008
|
|
$394
|
|
20
|
%
|
|
|
|
|
|
|
|
Latin
America
|
711
|
|
701
|
|
10
|
|
1
|
%
|
|
|
|
|
|
|
|
EAME
|
1,192
|
|
1,045
|
|
147
|
|
14
|
%
|
|
|
|
|
|
|
|
Asia/Pacific
|
1,102
|
|
1,121
|
|
(19)
|
|
(2)
|
%
|
|
|
|
|
|
|
|
Total1
|
$5,407
|
|
$4,875
|
|
$532
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
2014
|
|
Second
Quarter
2013
|
|
$
Change
|
|
%
Change
|
|
|
|
|
|
|
|
|
Operating
Profit
|
$674
|
|
$368
|
|
$306
|
|
83
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Does not
include inter-segment sales of $56 million and $91 million in the
second quarter 2014 and 2013, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction Industries' sales were $5.407 billion in the second quarter of 2014, an
increase of $532 million, or 11
percent, from the second quarter of 2013. The sales increase
was primarily due to higher sales volume in North America.
Price realization was also favorable. Sales of new equipment
increased, and sales of aftermarket parts were about
flat.
- The sales volume increase was primarily related to favorable
changes in dealer inventories as dealers lowered their inventories
more significantly in the second quarter of 2013 than in the second
quarter of 2014. Generally dealer inventories decline in the
second quarter due to seasonal selling patterns.
Additionally, dealer deliveries to end users increased primarily
due to higher demand in North
America, partially offset by lower demand in Asia/Pacific.
Sales increased in North
America and EAME and were about flat in Latin America and Asia/Pacific.
- In North America, the sales
increase was primarily due to higher dealer deliveries to end users
resulting from an increase in construction-related spending in the
United States. Although still below the 2006 peak,
construction-related sales are improving in the United
States.
- In EAME, higher sales were primarily due to favorable changes
in dealer inventories as dealers increased inventory in the second
quarter of 2014 and decreased inventory in the second quarter of
2013.
- In Asia/Pacific, sales were
about flat as lower deliveries to end users due to weaker economic
conditions across the region were about offset by favorable changes
in dealer inventories.
Construction Industries' profit was $674
million in the second quarter of 2014, compared with
$368 million in the second quarter of
2013. The increase in profit was primarily due to higher
sales volume, the favorable impact of currency, improved price
realization and lower manufacturing costs.
Manufacturing costs improved primarily due to lower material
costs and favorable changes in cost absorption resulting from a
significantly larger decrease in inventory during the second
quarter of 2013 than in the second quarter of 2014. These
favorable impacts were partially offset by increased depreciation
and incentive compensation expense.
SG&A and R&D expenses were about flat despite the
increase in sales volume and higher incentive compensation
expense.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RESOURCE
INDUSTRIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
Comparison
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
2013
|
|
Sales
Volume
|
|
Price
Realization
|
|
Currency
|
|
|
Second
Quarter
2014
|
|
$
Change
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
Comparison1
|
$3,135
|
|
($875)
|
|
($15)
|
|
($4)
|
|
|
$2,241
|
|
($894)
|
|
(29)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales by
Geographic Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
2014
|
|
Second
Quarter
2013
|
|
$
Change
|
|
%
Change
|
|
North
America
|
$866
|
|
$948
|
|
($82)
|
|
(9)
|
%
|
|
Latin
America
|
342
|
|
573
|
|
(231)
|
|
(40)
|
%
|
|
EAME
|
523
|
|
802
|
|
(279)
|
|
(35)
|
%
|
|
Asia/Pacific
|
510
|
|
812
|
|
(302)
|
|
(37)
|
%
|
|
Total1
|
$2,241
|
|
$3,135
|
|
($894)
|
|
(29)
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
2014
|
|
Second
Quarter
2013
|
|
$
Change
|
|
%
Change
|
|
|
Operating
Profit
|
$133
|
|
$524
|
|
($391)
|
|
(75)
|
%
|
|
|
|
|
|
|
|
|
|
|
1 Does not
include inter-segment sales of $145 million and $126 million in the
second quarter 2014 and 2013, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Resource Industries' sales were $2.241
billion in the second quarter of 2014, a decrease of
$894 million, or 29 percent, from the
second quarter of 2013. Sales declined in all geographic
regions primarily due to lower end-user demand partially offset by
favorable changes in dealer inventories. While dealers
continued to reduce machine inventories worldwide during the second
quarter of 2014, the reductions were much less significant than in
the second quarter of 2013. Although prices of most mined
commodities remained above investment thresholds, customers in all
geographic regions have reduced spending across the mining
industry. We believe that mining companies are increasing
productivity at existing mines, rather than investing in expansions
or new mine openings, which results in lower demand for our mining
products. New orders for mining equipment continued to be
weak in the quarter.
Aftermarket part sales declined in Asia/Pacific and EAME and were about flat in
Latin America and North
America. We believe some companies are continuing to delay
maintenance and rebuild activities.
Resource Industries' profit was $133
million in the second quarter of 2014 compared with
$524 million in the second quarter of
2013. The decrease was primarily the result of lower sales
volume and the absence of a $135
million gain related to the settlement with previous owners
of Caterpillar (Zhengzhou)
Ltd., partially offset by an improvement in manufacturing
costs.
The improvement in manufacturing costs was primarily driven by
favorable changes in cost absorption as inventory remained about
flat during the second quarter of 2014, compared with a decrease in
inventory during the second quarter of 2013. Material costs
were also favorable. These improvements were partially offset
by increased warranty expense.
SG&A and R&D expenses were about flat as cost cutting
measures offset higher incentive compensation expense.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ENERGY &
TRANSPORTATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
Comparison
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
2013
|
|
Sales
Volume
|
|
Price
Realization
|
|
Currency
|
|
|
Second
Quarter
2014
|
|
$
Change
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
Comparison1
|
$5,263
|
|
($186)
|
|
$48
|
|
$50
|
|
|
$5,175
|
|
($88)
|
|
(2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales by
Geographic Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
2014
|
|
Second
Quarter
2013
|
|
$
Change
|
|
%
Change
|
|
North
America
|
$2,259
|
|
$2,215
|
|
$44
|
|
2
|
%
|
|
Latin
America
|
470
|
|
568
|
|
(98)
|
|
(17)
|
%
|
|
EAME
|
1,406
|
|
1,352
|
|
54
|
|
4
|
%
|
|
Asia/Pacific
|
1,040
|
|
1,128
|
|
(88)
|
|
(8)
|
%
|
|
Total1
|
$5,175
|
|
$5,263
|
|
($88)
|
|
(2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
2014
|
|
Second
Quarter
2013
|
|
$
Change
|
|
%
Change
|
|
Operating
Profit
|
$1,009
|
|
$953
|
|
$56
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
1 Does not
include inter-segment sales of $586 million and $461 million in the
second quarter 2014 and 2013, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy & Transportation's sales were $5.175 billion in the second quarter of 2014,
about flat with the second quarter of 2013. Sales decreased
slightly into power generation applications and were about flat for
transportation, industrial and oil and gas applications.
While overall sales were about flat, sales of aftermarket parts
increased.
- Power Generation – Sales decreased in North America and EAME and were about flat in
Latin America and Asia/Pacific. The decline in
North America and EAME was due to
lower end-user demand resulting primarily from the timing of large
projects.
- Oil and Gas – Sales were about flat, as increases in
North America and EAME were about
offset by decreases in Asia/Pacific and Latin America. In North
America, higher sales were primarily the result of increased demand
for gas compression and well servicing. The increase in sales
in EAME, as well as the declines in Asia/Pacific and Latin America, were primarily due to the
timing of large turbine projects.
- Industrial and Transportation – Sales for both
applications were about flat across all geographic regions.
Energy & Transportation's profit was $1.009 billion in the second quarter of 2014,
compared with $953 million in the
second quarter of 2013. The increase was primarily due to
favorable price realization.
Manufacturing costs were about flat as the favorable impact of
cost absorption and lower material costs were about offset by
increased period manufacturing costs, including higher incentive
compensation expense. The favorable impact of cost absorption
resulted from an increase in inventory in the second quarter of
2014 compared to a decrease in inventory in the second quarter of
2013.
SG&A and R&D expenses were about flat as reduced program
spending offset higher incentive compensation expense.
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL PRODUCTS
SEGMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions of
dollars)
|
|
|
|
|
|
|
|
|
|
Revenues by
Geographic Region
|
|
|
|
|
|
|
|
|
Second
Quarter
2014
|
|
Second
Quarter
2013
|
|
$
Change
|
|
%
Change
|
|
North
America
|
$448
|
|
$418
|
|
$30
|
|
7
|
%
|
|
Latin
America
|
117
|
|
109
|
|
8
|
|
7
|
%
|
|
EAME
|
121
|
|
120
|
|
1
|
|
1
|
%
|
|
Asia/Pacific
|
148
|
|
159
|
|
(11)
|
|
(7)
|
%
|
|
Total
|
$834
|
|
$806
|
|
$28
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second
Quarter
2014
|
|
Second
Quarter
2013
|
|
$
Change
|
|
%
Change
|
|
Operating
Profit
|
$244
|
|
$233
|
|
$11
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Financial Products' revenues were $834
million, an increase of $28
million, or 3 percent, from the second quarter of 2013.
The increase was primarily due to the favorable impact from
higher average earning assets in North America, EAME and Latin America, partially offset by a decrease
in Asia/Pacific.
Financial Products' profit was $244
million in the second quarter of 2014, compared with
$233 million in the second quarter of
2013. The increase was primarily due to the absence of a
$23 million currency loss in the
second quarter of 2013 and a $17
million favorable impact from higher average earning
assets. These increases were partially offset by the absence
of $23 million in favorable reserve
adjustments in the second quarter of 2013 at Insurance
Services.
At the end of the second quarter of 2014, past dues at Cat
Financial were 2.63 percent compared with 2.44 percent at the end
of the first quarter of 2014, 2.37 percent at the end of 2013 and
2.64 percent at the end of the second quarter of 2013. The
increase in past dues from the first quarter of 2014 and the end of
2013 reflects higher past dues in Cat Financial's Latin American,
Asia/Pacific, and European
portfolios. Write-offs, net of recoveries, were $19 million for the second quarter of 2014,
compared with $27 million for the
second quarter of 2013.
As of June 30, 2014, Cat
Financial's allowance for credit losses totaled $387 million, or 1.27 percent of net finance
receivables, compared with $373
million or 1.25 percent of net finance receivables as of
March 31, 2014 and $378 million or 1.30 percent of net finance
receivables at year-end 2013. The allowance for credit losses
as of June 30, 2013, was $422 million or 1.46 percent of net finance
receivables.
Corporate Items and Eliminations
Expense for corporate items and eliminations was $734 million in the second quarter of 2014, an
increase of $76 million from the
second quarter of 2013. Corporate items and eliminations
include: corporate-level expenses; restructuring costs; timing
differences, as some expenses are reported in segment profit on a
cash basis; retirement benefit costs other than service cost and
currency differences for ME&T, as segment profit is reported
using annual fixed exchange rates and inter-segment
eliminations.
The increase in expense from the second quarter of 2013 was
primarily due to restructuring costs and the unfavorable impact of
currency. Segment profit for 2014 is based on fixed exchange
rates set at the beginning of 2014, while segment profit for 2013
is based on fixed exchange rates set at the beginning of
2013. The difference in actual exchange rates compared with
fixed exchange rates is included in corporate items and
eliminations and is not reflected in segment profit. These
unfavorable items were partially offset by other methodology
differences and decreased retirement benefit costs.
2014 Outlook
Economic Outlook
We anticipate global economic growth in 2014 of about 2.5
percent, a modest improvement from 2013 levels. Most
developed countries continue to pursue pro-growth policies, which
should continue to benefit those economies. However, many
developing countries have raised interest rates and in many of
those countries rates are near the peak reached in 2011. At
that time, higher rates slowed those economies, and similar
problems are occurring now. Our economic outlook assumes that
developed economies will continue to improve while developing
economies will remain challenged.
We expect global economic growth in 2014 to be sufficient to
increase demand for mined commodities and energy, keeping commodity
prices at levels that support production. Mining company
profits improved in 2013, and increased production and cost cutting
should support further improvement. While most commodity
prices should remain high enough to make investments attractive, we
expect mining companies will continue to be cautious about resuming
equipment investments, and we expect mining capital expenditures in
2014 to be below 2013.
Developed Countries
- Economic policies in most developed countries should continue
to support growth in 2014. Average short-term interest rates
are at a record low and major central banks are expected to
keep rates low for an extended period. We expect inflation
will remain subdued, allowing central banks to focus less on
austerity measures and more on promoting growth and
employment. We expect economic growth in developed countries
to exceed 1.5 percent in 2014. While this is lower than our
previous outlook, due in part to weak first-quarter U.S. GDP
growth, the underlying economic trends are improving and most
sectors important to our business are performing well.
Developing Countries
- High interest rates, as well as political and labor issues, are
affecting growth in many developing countries. Inflation
eased throughout the recovery but central banks started increasing
interest rates in mid-2013, we believe either to defend their
currencies or address inflation concerns. We believe interest
rates are near a peak and will remain at current levels in 2014,
which could further limit growth. We expect economic growth
in developing countries will fall below 4.5 percent this year.
Risks
- Most economies are growing slower than before the financial
crisis and the first two years of recovery. We believe this
reflects decisions to remove policy stimulus before these economies
had fully recovered. Developing countries recently tightened
policies prematurely and signs of improving growth in developed
countries may prompt similar premature policy tightening.
These policy shifts may contribute to a more sluggish recovery and
undermine business confidence.
- China's actions to slow credit
growth contributed to a sharp decline in building construction and
some slowing of the overall economy in 2014. Policies have
eased recently but we expect building construction will remain weak
the rest of the year.
- Political conflicts and social unrest disrupted economic
activity in several developing regions, in particular CIS,
Africa and the Middle East.
Further disruption is a risk to our economic outlook and could
lower growth more than we are currently projecting.
Sales and Revenues Outlook
Our outlook for 2014 sales and revenues has remained relatively
consistent with our preliminary outlook for 2014 that we provided
with our third-quarter 2013 financial release in October of
2013. However, with half of 2014 complete, we are tightening
the range around the outlook for 2014 sales and
revenues.
Our outlook for sales and revenues is now a range of
$54 to $56 billion. The
previous outlook expected sales and revenues of about $56 billion in a range of plus or minus 5 percent
($53.2 billion to $58.8
billion).
While our expectations for 2014 sales and revenues have not
changed significantly, the 2 percent decline in the mid-point of
our outlook is primarily related to our expectation of lower sales
of construction equipment in developing countries such as
China, the CIS and the
Africa/Middle East region. The construction
industry in China has softened
since the end of the first quarter and the political problems in
the CIS and Africa/Middle East are concerning.
Profit Outlook
In 2013, we took substantial actions to reduce costs and are
taking additional actions in 2014. The restructuring actions
expected for 2014 are widespread across the company. To
provide a better understanding of our profit expectations for 2014,
we are providing our outlook with and without restructuring
costs.
Despite a slightly lower mid-point of the sales and revenues
outlook the company is increasing its 2014 profit per share
outlook. The expectation for restructuring costs in 2014 is
now about $400 million—the bottom end
of the $400 to $500 million range
that was previously expected. With sales and revenues at
$55 billion, the mid-point of the
outlook range, the revised profit outlook for 2014, including
restructuring costs of about $400
million is $5.75 per share, an
improvement from the previous outlook of $5.55 per share. Excluding restructuring
costs, the profit outlook is $6.20
per share, an increase from the previous outlook of $6.10 per share.
|
QUESTIONS AND
ANSWERS
|
|
|
|
Q1:
|
Can you discuss
changes in dealer inventories in the second quarter?
|
|
|
|
A:
|
Dealer machine and
engine inventories decreased in the second quarter of 2014 by about
$500 million. This compares with a decrease of more than $1
billion in the second quarter of 2013. We expect that dealers
will continue to decrease inventory in the third and fourth
quarters of 2014. We believe that dealer inventory levels for
construction equipment are reasonably aligned to expected end-user
demand. For the full year, we expect the reduction to be more
than we had previously expected, primarily related to Resource
Industries' products as dealers are satisfying more customer demand
from inventory. Customer demand for mining equipment has not
improved, and as a result, dealers need less inventory and are
making reductions to align inventory with demand.
|
|
|
|
Q2:
|
Can you comment on
expense related to your short-term incentive compensation
plans?
|
|
|
|
A:
|
Short-term incentive
compensation expense is directly related to financial and
operational performance measured against targets set
annually. The second-quarter 2014 expense was about $360
million, and we expect the full year will be about $1.2
billion. Short-term incentive compensation in the second
quarter of 2013 was about $125 million, and full-year 2013 was
about $545 million.
|
|
|
|
Q3:
|
Can you comment on
the change in your order backlog during the second quarter of
2014?
|
|
|
|
A:
|
At the end of the
second quarter, the backlog was $19.3 billion and about flat with
the end of the first quarter of 2014. Decreases in Resource
Industries and Construction Industries were offset by increases in
Energy & Transportation. The decline in Resource
Industries reflects continuing weakness in mining and the decline
in Construction Industries is impacted by seasonality and weakness
in developing markets.
|
|
|
|
Q4:
|
Can you comment on
your balance sheet and ME&T operating cash flow in the second
quarter of 2014?
|
|
|
|
A:
|
ME&T operating
cash flow for the second quarter of 2014 was $2.064 billion
compared with $3.049 billion in the second quarter of 2013.
The decrease was primarily due to the absence of a significant
decline in inventory that occurred during the second quarter of
2013.
|
|
|
|
Our top cash
deployment priority is to maintain a strong financial position to
support our credit rating. ME&T debt-to-capital ratio was
32.5 percent, up from 30.2 percent at the end of the first
quarter. The increase was mostly due to a net increase in
debt of $1.25 billion in the second quarter. Our cash and
liquidity positions remain strong with an enterprise cash balance
of $7.927 billion at June 30, 2014.
|
|
|
|
Our priorities for
the uses of cash are providing capital to support growth,
appropriately funding employee benefit plans, paying dividends and
repurchasing common stock. During the second quarter, capital
expenditures totaled $0.3 billion, funding for defined benefit
pension plans was $0.1 billion, and the quarterly dividend payment
was $0.4 billion. We further demonstrated our commitment to
deliver superior returns to stockholders through the business
cycles with the announcement to increase the quarterly cash
dividend by 17 percent to $0.70 per share of common stock.
Through dividends and the repurchase of common stock, we have
returned a total of about $2.5 billion to stockholders in the first
half of 2014.
|
|
|
|
Q5:
|
In the June Retail
Statistics published yesterday, July 23, 2014, the total retail
sales for Energy & Transportation units dropped to "down 10
percent" from the same three-month period ending June 2013.
Are these numbers representative of your 2014
outlook?
|
|
|
|
A:
|
The large project
nature of many of the Energy & Transportation end markets,
including Oil & Gas, Power Generation and Transportation, can
cause short-term volatility in the three-month Retail Statistics
that may not be indicative of our full-year sales and revenues
outlook. We base our full-year outlook on a number of
factors, including recent order rates, quotation activity, our
current backlog, trends in retail statistics and discussions with
our dealers and customers.
|
|
|
|
Q6:
|
Based on what you
are currently seeing, can you provide an update on prospects for
improvement in mining?
|
|
|
|
A:
|
We have not yet seen
signs that an upturn in mining is going to occur this year.
Parts sales, while lower than the second quarter of 2013, have
improved modestly from the first quarter of 2014. The mining
industry remains weak and quoting activity and order rates remain
at low levels. While we have not seen evidence of an upturn
in the industry, because of the low level of sales of new
equipment, we believe the likelihood of significant decline from
current levels is limited.
|
|
|
|
Q7:
|
Over the last
three quarters, Construction Industries margins have shown strong
improvement. Should we expect this favorable result to
continue through the rest of 2014?
|
|
|
|
A:
|
Construction
Industries' performance has improved over the past few
quarters. However, we expect sales in the second half to be
lower than in the first half of the year in developing
markets. As a result of lower sales and production in the
second half we are expecting margins to be lower than in the first
half of 2014.
|
|
|
|
Q8:
|
Can you provide an
update on China, your expectations about the construction equipment
industry and how Caterpillar is performing?
|
|
|
|
A:
|
In the first half of
2014, the overall China construction machinery market was
approximately five percent lower than the same period in 2013 in
part due to the decline of China's property market. Despite
the lower industry, our dealer deliveries to end users
improved. We believe our success in China is a result of the
continuing build out of our Caterpillar business model. Over
the past few months the construction equipment industry in China
has seen more significant declines. We expect it to continue
to be weaker in the second half, and for the full year to be down
about 10 percent. The construction industry in China is one
of the largest and most important in the world. We are
pleased with the progress we are making in China and expect to
build on the solid foundation we have in place.
|
|
|
|
Q9:
|
Why did you lower
your expectations for 2014 restructuring costs from $400 to $500
million to about $400 million?
|
|
|
|
A:
|
We lowered our
estimate because we expect some of the costs related to 2014
restructuring activities will now be incurred in 2015. This
reduction is primarily for programs in Europe and is due to the
timing of when the expenses will be recognized.
|
|
GLOSSARY OF
TERMS
|
|
|
|
1.
|
All Other
Segments – Primarily includes activities such as: the
remanufacturing of Cat® engines and components and remanufacturing
services for other companies as well as the business strategy,
product management, development, manufacturing, marketing and
product support of undercarriage, specialty products, hardened bar
stock components and ground engaging tools primarily for Cat
products, paving products, forestry products, industrial and waste
products and tunnel boring equipment; the product management,
development, marketing, sales and product support of on-highway
vocational trucks for North America; parts distribution;
distribution services responsible for dealer development and
administration including three wholly-owned dealers in Japan,
dealer portfolio management and ensuring the most efficient and
effective distribution of machines, engines and
parts.
|
|
|
|
2.
|
Caterpillar
(Zhengzhou) Ltd. – A wholly-owned subsidiary (formerly known as
Siwei) which primarily designs, manufactures, sells and supports
underground coal mining equipment in China and is included in our
Resource Industries segment.
|
|
|
|
3.
|
Consolidating
Adjustments – Eliminations of transactions between Machinery,
Energy & Transportation and Financial Products.
|
|
|
|
4.
|
Construction
Industries – A segment primarily responsible for supporting
customers using machinery in infrastructure 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 backhoe loaders, small wheel loaders,
small track-type tractors, skid steer loaders, multi-terrain
loaders, mini excavators, compact wheel loaders, telehandlers,
select work tools, small, medium and large track excavators, wheel
excavators, medium wheel loaders, compact track loaders, medium
track-type tractors, track-type loaders, motor graders and pipe
layers. In addition, Construction Industries has
responsibility for an integrated manufacturing cost
center.
|
|
|
|
5.
|
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
includes the impact on sales and operating profit for the
Machinery, Energy & Transportation lines of business only;
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).
|
|
|
|
6.
|
Debt-to-Capital
Ratio – A key measure of Machinery, Energy &
Transportation's financial strength used by both management and our
credit rating agencies. The metric is defined as Machinery,
Energy & Transportation's short-term borrowings, long-term debt
due within one year and long-term debt due after one year (debt)
divided by the sum of Machinery, Energy & Transportation's debt
and stockholders' equity. Debt also includes Machinery,
Energy & Transportation's borrowings from Financial
Products.
|
|
|
|
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 (formerly Power Systems) – A segment primarily
responsible for supporting customers using reciprocating engines,
turbines, diesel-electric locomotives and related parts across
industries serving power generation, industrial, oil and gas and
transportation applications, including marine and rail-related
businesses. Responsibilities include business strategy,
product design, product management, development, manufacturing,
marketing, sales and product support of turbines 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 Caterpillar
machinery; the business strategy, product design, product
management, development, manufacturing, remanufacturing, leasing,
and service of diesel-electric locomotives and components and other
rail-related products and services.
|
|
|
|
10.
|
Financial Products
Segment – Provides financing to customers and dealers for the
purchase and lease of Caterpillar and other equipment, as well as
some financing for Caterpillar sales to dealers. Financing plans
include operating and finance leases, installment sale contracts,
working capital loans and wholesale financing plans. The segment
also provides various forms of insurance to customers and dealers
to help support the purchase and lease of our equipment.
|
|
|
|
11.
|
Latin America
– 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 and 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, long-lived asset impairment
charges and legal settlements. Restructuring costs, which are
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
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 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.
|
Price
Realization – The impact of net price changes excluding
currency and new product introductions. Consolidated price
realization includes the impact of changes in the relative
weighting of sales between geographic regions.
|
|
|
|
16.
|
Resource
Industries – A segment primarily responsible for supporting
customers using machinery in mining and quarrying
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, drills, highwall miners, large wheel
loaders, off-highway trucks, articulated trucks, wheel tractor
scrapers, wheel dozers, select work tools, machinery components and
electronics and control systems. Resource Industries also
manages areas that provide services to other parts of the company,
including integrated manufacturing and research and
development. In addition, segment profit includes the
impact from divestiture of
portions of the Bucyrus distribution business.
|
|
|
|
17.
|
Restructuring
Costs – Primarily costs for employee severance and long-lived
asset impairments.
|
|
|
|
18.
|
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 revenue 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.
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES
The following definition is provided for "non-GAAP financial
measures" in connection with Regulation G issued by the Securities
and Exchange Commission. This non-GAAP financial measure has
no standardized meaning prescribed by U.S. GAAP and therefore is
unlikely to be comparable to the calculation of similar measures
for other companies. Management does not intend this item to
be considered in isolation or substituted for the related GAAP
measure.
Profit Per Share Excluding Restructuring Costs
We anticipate incurring significant restructuring costs in
2014. We believe it is important to separately quantify the
profit-per-share impact of restructuring costs in order for our
second-quarter 2014 results and the 2014 outlook to be meaningful
to our readers. We have also provided second quarter of 2013
profit per share excluding restructuring costs comparable to the
2014 presentation. Reconciliation of profit per share
excluding restructuring costs to the most directly comparable GAAP
measure, profit per share is as follows:
|
|
2013
|
|
2014
|
|
2014 Outlook
Midpoint
|
|
|
Second
Quarter
|
|
Second
Quarter
|
|
Previous
1
|
Current
2
|
|
Profit per
share
|
|
$
1.45
|
|
$
1.57
|
|
$ 5.55
|
$ 5.75
|
|
Per share
restructuring costs
|
|
$
0.03
|
|
$
0.12
|
|
$ 0.55
|
$ 0.45
|
|
Profit per share
excluding restructuring costs
|
|
$
1.48
|
|
$
1.69
|
|
$ 6.10
|
$ 6.20
|
|
|
|
|
|
|
|
|
|
1 2014
Outlook Sales and Revenues of $56 billion.
|
|
|
|
|
|
|
2 2014
Outlook Sales and Revenues of $55 billion.
|
|
|
|
|
|
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 our
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.
We also believe this presentation will assist readers in
understanding our business. Pages 24-29 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.htm
|
|
http://www.caterpillar.com/en/investors/quarterly-results.html
(live broadcast/replays of quarterly conference call)
|
|
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,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of Machinery,
Energy & Transportation
|
$
|
13,391
|
|
|
|
$
|
13,886
|
|
|
|
$
|
25,884
|
|
|
|
$
|
26,370
|
|
|
|
Revenues of Financial
Products
|
|
759
|
|
|
|
|
735
|
|
|
|
|
1,507
|
|
|
|
|
1,461
|
|
|
|
Total sales and
revenues
|
|
14,150
|
|
|
|
|
14,621
|
|
|
|
|
27,391
|
|
|
|
|
27,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
10,197
|
|
|
|
|
10,773
|
|
|
|
|
19,634
|
|
|
|
|
20,412
|
|
|
|
Selling, general and
administrative expenses
|
|
1,437
|
|
|
|
|
1,421
|
|
|
|
|
2,729
|
|
|
|
|
2,811
|
|
|
|
Research and
development expenses
|
|
516
|
|
|
|
|
548
|
|
|
|
|
1,024
|
|
|
|
|
1,110
|
|
|
|
Interest expense of
Financial Products
|
|
153
|
|
|
|
|
185
|
|
|
|
|
313
|
|
|
|
|
374
|
|
|
|
Other operating
(income) expenses
|
|
372
|
|
|
|
|
137
|
|
|
|
|
818
|
|
|
|
|
349
|
|
|
|
Total operating
costs
|
|
12,675
|
|
|
|
|
13,064
|
|
|
|
|
24,518
|
|
|
|
|
25,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
1,475
|
|
|
|
|
1,557
|
|
|
|
|
2,873
|
|
|
|
|
2,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
excluding Financial Products
|
|
120
|
|
|
|
|
120
|
|
|
|
|
230
|
|
|
|
|
240
|
|
|
|
Other income
(expense)
|
|
65
|
|
|
|
|
(84)
|
|
|
|
|
119
|
|
|
|
|
(55)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
profit before taxes
|
|
1,420
|
|
|
|
|
1,353
|
|
|
|
|
2,762
|
|
|
|
|
2,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
419
|
|
|
|
|
387
|
|
|
|
|
837
|
|
|
|
|
633
|
|
|
|
Profit of
consolidated companies
|
|
1,001
|
|
|
|
|
966
|
|
|
|
|
1,925
|
|
|
|
|
1,847
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in profit
(loss) of unconsolidated affiliated companies
|
|
1
|
|
|
|
|
(1)
|
|
|
|
|
2
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
|
1,002
|
|
|
|
|
965
|
|
|
|
|
1,927
|
|
|
|
|
1,847
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Profit
(loss) attributable to noncontrolling interests
|
|
3
|
|
|
|
|
5
|
|
|
|
|
6
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
1
|
$
|
999
|
|
|
|
$
|
960
|
|
|
|
$
|
1,921
|
|
|
|
$
|
1,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit per common
share
|
$
|
1.60
|
|
|
|
$
|
1.48
|
|
|
|
$
|
3.06
|
|
|
|
$
|
2.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit per common
share – diluted 2
|
$
|
1.57
|
|
|
|
$
|
1.45
|
|
|
|
$
|
3.00
|
|
|
|
$
|
2.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares
outstanding (millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Basic
|
|
626.3
|
|
|
|
|
649.9
|
|
|
|
|
626.8
|
|
|
|
|
652.4
|
|
|
|
- Diluted
2
|
|
638.3
|
|
|
|
|
662.7
|
|
|
|
|
639.3
|
|
|
|
|
666.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
$
|
1.30
|
|
|
|
$
|
1.12
|
|
|
|
$
|
1.30
|
|
|
|
$
|
1.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Profit attributable
to common stockholders.
|
|
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,
|
|
2014
|
|
2013
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and short-term
investments
|
$
|
7,927
|
|
|
|
$
|
6,081
|
|
|
|
|
Receivables - trade
and other
|
|
8,057
|
|
|
|
|
8,413
|
|
|
|
|
Receivables -
finance
|
|
9,467
|
|
|
|
|
8,763
|
|
|
|
|
Deferred and
refundable income taxes
|
|
1,463
|
|
|
|
|
1,553
|
|
|
|
|
Prepaid expenses and
other current assets
|
|
1,307
|
|
|
|
|
900
|
|
|
|
|
Inventories
|
|
13,055
|
|
|
|
|
12,625
|
|
|
|
Total current
assets
|
|
41,276
|
|
|
|
|
38,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment – net
|
|
16,690
|
|
|
|
|
17,075
|
|
|
|
Long-term receivables
- trade and other
|
|
1,548
|
|
|
|
|
1,397
|
|
|
|
Long-term receivables
- finance
|
|
15,118
|
|
|
|
|
14,926
|
|
|
|
Investments in
unconsolidated affiliated companies
|
|
259
|
|
|
|
|
272
|
|
|
|
Noncurrent deferred
and refundable income taxes
|
|
737
|
|
|
|
|
594
|
|
|
|
Intangible
assets
|
|
3,398
|
|
|
|
|
3,596
|
|
|
|
Goodwill
|
|
6,969
|
|
|
|
|
6,956
|
|
|
|
Other
assets
|
|
1,832
|
|
|
|
|
1,745
|
|
|
|
Total
assets
|
$
|
87,827
|
|
|
|
$
|
84,896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
-- Machinery, Energy
& Transportation
|
$
|
20
|
|
|
|
$
|
16
|
|
|
|
|
|
-- Financial
Products
|
|
5,534
|
|
|
|
|
3,663
|
|
|
|
|
Accounts
payable
|
|
6,860
|
|
|
|
|
6,560
|
|
|
|
|
Accrued
expenses
|
|
3,473
|
|
|
|
|
3,493
|
|
|
|
|
Accrued wages,
salaries and employee benefits
|
|
1,910
|
|
|
|
|
1,622
|
|
|
|
|
Customer
advances
|
|
2,344
|
|
|
|
|
2,360
|
|
|
|
|
Dividends
payable
|
|
439
|
|
|
|
|
382
|
|
|
|
|
Other current
liabilities
|
|
1,779
|
|
|
|
|
1,849
|
|
|
|
|
Long-term debt due
within one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
-- Machinery, Energy
& Transportation
|
|
509
|
|
|
|
|
760
|
|
|
|
|
|
-- Financial
Products
|
|
6,873
|
|
|
|
|
6,592
|
|
|
|
Total current
liabilities
|
|
29,741
|
|
|
|
|
27,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt due
after one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
-- Machinery, Energy
& Transportation
|
|
9,495
|
|
|
|
|
7,999
|
|
|
|
|
|
-- Financial
Products
|
|
17,812
|
|
|
|
|
18,720
|
|
|
|
Liability for
postemployment benefits
|
|
6,597
|
|
|
|
|
6,973
|
|
|
|
Other
liabilities
|
|
3,259
|
|
|
|
|
3,029
|
|
|
|
Total
liabilities
|
|
66,904
|
|
|
|
|
64,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
4,890
|
|
|
|
|
4,709
|
|
|
|
.
|
Treasury
stock
|
|
(13,312)
|
|
|
|
|
(11,854)
|
|
|
|
Profit employed in
the business
|
|
32,961
|
|
|
|
|
31,854
|
|
|
|
Accumulated other
comprehensive income (loss)
|
|
(3,683)
|
|
|
|
|
(3,898)
|
|
|
|
Noncontrolling
interests
|
|
67
|
|
|
|
|
67
|
|
|
|
Total
stockholders' equity
|
|
20,923
|
|
|
|
|
20,878
|
|
|
|
Total liabilities
and stockholders' equity
|
$
|
87,827
|
|
|
|
$
|
84,896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Caterpillar
Inc.
Condensed
Consolidated Statement of Cash Flow
(Unaudited)
(Millions of
dollars)
|
|
Six Months
Ended
|
|
June
30,
|
|
2014
|
|
2013
|
|
Cash flow from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
$
|
1,927
|
|
|
|
$
|
1,847
|
|
|
|
Adjustments for
non-cash items:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
1,570
|
|
|
|
|
1,484
|
|
|
|
|
Other
|
|
240
|
|
|
|
|
236
|
|
|
|
Changes in assets and
liabilities, net of acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
|
|
|
Receivables – trade
and other
|
|
138
|
|
|
|
|
231
|
|
|
|
|
Inventories
|
|
(439)
|
|
|
|
|
1,364
|
|
|
|
|
Accounts
payable
|
|
551
|
|
|
|
|
305
|
|
|
|
|
Accrued
expenses
|
|
7
|
|
|
|
|
(129)
|
|
|
|
|
Accrued wages,
salaries and employee benefits
|
|
283
|
|
|
|
|
(580)
|
|
|
|
|
Customer
advances
|
|
(14)
|
|
|
|
|
(95)
|
|
|
|
|
Other assets –
net
|
|
(105)
|
|
|
|
|
(100)
|
|
|
|
|
Other liabilities –
net
|
|
(24)
|
|
|
|
|
30
|
|
|
|
Net cash provided by
(used for) operating activities
|
|
4,134
|
|
|
|
|
4,593
|
|
|
|
Cash flow from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
– excluding equipment leased to others
|
|
(710)
|
|
|
|
|
(1,387)
|
|
|
|
Expenditures for
equipment leased to others
|
|
(825)
|
|
|
|
|
(810)
|
|
|
|
Proceeds from
disposals of leased assets and property, plant and
equipment
|
|
442
|
|
|
|
|
358
|
|
|
|
Additions to finance
receivables
|
|
(5,760)
|
|
|
|
|
(5,544)
|
|
|
|
Collections of
finance receivables
|
|
4,719
|
|
|
|
|
4,548
|
|
|
|
Proceeds from sale of
finance receivables
|
|
104
|
|
|
|
|
89
|
|
|
|
Investments and
acquisitions (net of cash acquired)
|
|
(15)
|
|
|
|
|
(26)
|
|
|
|
Proceeds from sale of
businesses and investments (net of cash sold)
|
|
139
|
|
|
|
|
100
|
|
|
|
Proceeds from sale of
securities
|
|
222
|
|
|
|
|
207
|
|
|
|
Investments in
securities
|
|
(673)
|
|
|
|
|
(267)
|
|
|
|
Other –
net
|
|
(25)
|
|
|
|
|
(68)
|
|
|
|
Net cash provided by
(used for) investing activities
|
|
(2,382)
|
|
|
|
|
(2,800)
|
|
|
|
Cash flow from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
|
(757)
|
|
|
|
|
(342)
|
|
|
|
Distribution to
noncontrolling interests
|
|
(7)
|
|
|
|
|
(8)
|
|
|
|
Contribution from
noncontrolling interests
|
|
2
|
|
|
|
|
—
|
|
|
|
Common stock issued,
including treasury shares reissued
|
|
194
|
|
|
|
|
56
|
|
|
|
Treasury shares
purchased
|
|
(1,738)
|
|
|
|
|
(1,000)
|
|
|
|
Excess tax benefit
from stock-based compensation
|
|
131
|
|
|
|
|
62
|
|
|
|
Proceeds from debt
issued (original maturities greater than three months)
|
|
6,951
|
|
|
|
|
5,186
|
|
|
|
Payments on debt
(original maturities greater than three months)
|
|
(6,344)
|
|
|
|
|
(6,303)
|
|
|
|
Short-term borrowings
- net (original maturities three months or less)
|
|
1,749
|
|
|
|
|
1,217
|
|
|
|
Net cash provided by
(used for) financing activities
|
|
181
|
|
|
|
|
(1,132)
|
|
|
|
Effect of exchange
rate changes on cash
|
|
(87)
|
|
|
|
|
(41)
|
|
|
|
Increase
(decrease) in cash and short-term investments
|
|
1,846
|
|
|
|
|
620
|
|
|
|
Cash and short-term
investments at beginning of period
|
|
6,081
|
|
|
|
|
5,490
|
|
|
|
Cash and short-term
investments at end of period
|
$
|
7,927
|
|
|
|
$
|
6,110
|
|
|
|
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, 2014
(Unaudited)
(Millions of dollars)
|
|
|
|
Supplemental
Consolidating Data
|
|
|
|
Machinery,
|
|
|
|
|
|
Consolidated
|
|
Energy &
Transportation 1
|
|
Financial
Products
|
|
Consolidating
Adjustments
|
|
Sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of Machinery,
Energy & Transportation
|
$
|
13,391
|
|
|
|
$
|
13,391
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
Revenues of Financial
Products
|
|
759
|
|
|
|
|
—
|
|
|
|
|
851
|
|
|
|
|
(92)
|
|
2
|
|
Total sales and
revenues
|
|
14,150
|
|
|
|
|
13,391
|
|
|
|
|
851
|
|
|
|
|
(92)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
10,197
|
|
|
|
|
10,197
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Selling, general and
administrative expenses
|
|
1,437
|
|
|
|
|
1,284
|
|
|
|
|
159
|
|
|
|
|
(6)
|
|
3
|
|
Research and
development expenses
|
|
516
|
|
|
|
|
516
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Interest expense of
Financial Products
|
|
153
|
|
|
|
|
—
|
|
|
|
|
155
|
|
|
|
|
(2)
|
|
4
|
|
Other operating
(income) expenses
|
|
372
|
|
|
|
|
77
|
|
|
|
|
305
|
|
|
|
|
(10)
|
|
3
|
|
Total operating
costs
|
|
12,675
|
|
|
|
|
12,074
|
|
|
|
|
619
|
|
|
|
|
(18)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
1,475
|
|
|
|
|
1,317
|
|
|
|
|
232
|
|
|
|
|
(74)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
excluding Financial Products
|
|
120
|
|
|
|
|
131
|
|
|
|
|
—
|
|
|
|
|
(11)
|
|
4
|
|
Other income
(expense)
|
|
65
|
|
|
|
|
(6)
|
|
|
|
|
8
|
|
|
|
|
63
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
profit before taxes
|
|
1,420
|
|
|
|
|
1,180
|
|
|
|
|
240
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
419
|
|
|
|
|
349
|
|
|
|
|
70
|
|
|
|
|
—
|
|
|
|
Profit of
consolidated companies
|
|
1,001
|
|
|
|
|
831
|
|
|
|
|
170
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in profit
(loss) of unconsolidated affiliated companies
|
|
1
|
|
|
|
|
1
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Equity in profit of
Financial Products' subsidiaries
|
|
—
|
|
|
|
|
168
|
|
|
|
|
—
|
|
|
|
|
(168)
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
|
1,002
|
|
|
|
|
1,000
|
|
|
|
|
170
|
|
|
|
|
(168)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Profit
(loss) attributable to noncontrolling interests
|
|
3
|
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
7
|
$
|
999
|
|
|
|
$
|
999
|
|
|
|
$
|
168
|
|
|
|
$
|
(168)
|
|
|
|
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 stockholders.
|
|
Caterpillar
Inc.
Supplemental Data for Results of Operations
For the Three Months Ended June 30, 2013
(Unaudited)
(Millions of dollars)
|
|
|
|
Supplemental
Consolidating Data
|
|
|
|
Machinery,
|
|
|
|
|
|
Consolidated
|
|
Energy &
Transportation 1
|
|
Financial
Products
|
|
Consolidating
Adjustments
|
|
Sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of Machinery,
Energy & Transportation
|
$
|
13,886
|
|
|
|
$
|
13,886
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
Revenues of Financial
Products
|
|
735
|
|
|
|
|
—
|
|
|
|
|
823
|
|
|
|
|
(88)
|
|
2
|
|
Total sales and
revenues
|
|
14,621
|
|
|
|
|
13,886
|
|
|
|
|
823
|
|
|
|
|
(88)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
10,773
|
|
|
|
|
10,773
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Selling, general and
administrative expenses
|
|
1,421
|
|
|
|
|
1,278
|
|
|
|
|
150
|
|
|
|
|
(7)
|
|
3
|
|
Research and
development expenses
|
|
548
|
|
|
|
|
548
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Interest expense of
Financial Products
|
|
185
|
|
|
|
|
—
|
|
|
|
|
187
|
|
|
|
|
(2)
|
|
4
|
|
Other operating
(income) expenses
|
|
137
|
|
|
|
|
(100)
|
|
|
|
|
245
|
|
|
|
|
(8)
|
|
3
|
|
Total operating
costs
|
|
13,064
|
|
|
|
|
12,499
|
|
|
|
|
582
|
|
|
|
|
(17)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
1,557
|
|
|
|
|
1,387
|
|
|
|
|
241
|
|
|
|
|
(71)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
excluding Financial Products
|
|
120
|
|
|
|
|
130
|
|
|
|
|
—
|
|
|
|
|
(10)
|
|
4
|
|
Other income
(expense)
|
|
(84)
|
|
|
|
|
(134)
|
|
|
|
|
(11)
|
|
|
|
|
61
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
profit before taxes
|
|
1,353
|
|
|
|
|
1,123
|
|
|
|
|
230
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
387
|
|
|
|
|
317
|
|
|
|
|
70
|
|
|
|
|
—
|
|
|
|
Profit of
consolidated companies
|
|
966
|
|
|
|
|
806
|
|
|
|
|
160
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in profit
(loss) of unconsolidated affiliated companies
|
|
(1)
|
|
|
|
|
(1)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Equity in profit of
Financial Products' subsidiaries
|
|
—
|
|
|
|
|
157
|
|
|
|
|
—
|
|
|
|
|
(157)
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
|
965
|
|
|
|
|
962
|
|
|
|
|
160
|
|
|
|
|
(157)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Profit
(loss) attributable to noncontrolling interests
|
|
5
|
|
|
|
|
2
|
|
|
|
|
3
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
7
|
$
|
960
|
|
|
|
$
|
960
|
|
|
|
$
|
157
|
|
|
|
$
|
(157)
|
|
|
|
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 stockholders.
|
|
Caterpillar
Inc.
Supplemental Data for Results of Operations
For the Six Months Ended June 30, 2014
(Unaudited)
(Millions of dollars)
|
|
|
|
Supplemental
Consolidating Data
|
|
|
|
Machinery,
|
|
|
|
|
|
Consolidated
|
|
Energy &
Transportation 1
|
|
Financial
Products
|
|
Consolidating
Adjustments
|
|
Sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of Machinery,
Energy & Transportation
|
$
|
25,884
|
|
|
|
$
|
25,884
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
Revenues of Financial
Products
|
|
1,507
|
|
|
|
|
—
|
|
|
|
|
1,682
|
|
|
|
|
(175)
|
|
2
|
|
Total sales and
revenues
|
|
27,391
|
|
|
|
|
25,884
|
|
|
|
|
1,682
|
|
|
|
|
(175)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
19,634
|
|
|
|
|
19,634
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Selling, general and
administrative expenses
|
|
2,729
|
|
|
|
|
2,439
|
|
|
|
|
305
|
|
|
|
|
(15)
|
|
3
|
|
Research and
development expenses
|
|
1,024
|
|
|
|
|
1,024
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Interest expense of
Financial Products
|
|
313
|
|
|
|
|
—
|
|
|
|
|
317
|
|
|
|
|
(4)
|
|
4
|
|
Other operating
(income) expenses
|
|
818
|
|
|
|
|
231
|
|
|
|
|
603
|
|
|
|
|
(16)
|
|
3
|
|
Total operating
costs
|
|
24,518
|
|
|
|
|
23,328
|
|
|
|
|
1,225
|
|
|
|
|
(35)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
2,873
|
|
|
|
|
2,556
|
|
|
|
|
457
|
|
|
|
|
(140)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
excluding Financial Products
|
|
230
|
|
|
|
|
251
|
|
|
|
|
—
|
|
|
|
|
(21)
|
|
4
|
|
Other income
(expense)
|
|
119
|
|
|
|
|
(23)
|
|
|
|
|
23
|
|
|
|
|
119
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
profit before taxes
|
|
2,762
|
|
|
|
|
2,282
|
|
|
|
|
480
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
837
|
|
|
|
|
699
|
|
|
|
|
138
|
|
|
|
|
—
|
|
|
|
Profit of
consolidated companies
|
|
1,925
|
|
|
|
|
1,583
|
|
|
|
|
342
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in profit
(loss) of unconsolidated affiliated companies
|
|
2
|
|
|
|
|
2
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Equity in profit of
Financial Products' subsidiaries
|
|
—
|
|
|
|
|
337
|
|
|
|
|
—
|
|
|
|
|
(337)
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
|
1,927
|
|
|
|
|
1,922
|
|
|
|
|
342
|
|
|
|
|
(337)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Profit
(loss) attributable to noncontrolling interests
|
|
6
|
|
|
|
|
1
|
|
|
|
|
5
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
7
|
$
|
1,921
|
|
|
|
$
|
1,921
|
|
|
|
$
|
337
|
|
|
|
$
|
(337)
|
|
|
|
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 stockholders.
|
|
Caterpillar
Inc.
Supplemental Data for Results of Operations
For the Six Months Ended June 30, 2013
(Unaudited)
(Millions of dollars)
|
|
|
|
|
Supplemental
Consolidating Data
|
|
|
|
|
Machinery,
|
|
|
|
|
|
|
Consolidated
|
|
Energy &
Transportation 1
|
|
Financial
Products
|
|
Consolidating
Adjustments
|
|
Sales and
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of Machinery,
Energy & Transportation
|
$
|
26,370
|
|
|
|
$
|
26,370
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
Revenues of Financial
Products
|
|
1,461
|
|
|
|
|
—
|
|
|
|
|
1,637
|
|
|
|
|
(176)
|
|
2
|
|
Total sales and
revenues
|
|
27,831
|
|
|
|
|
26,370
|
|
|
|
|
1,637
|
|
|
|
|
(176)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
20,412
|
|
|
|
|
20,412
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Selling, general and
administrative expenses
|
|
2,811
|
|
|
|
|
2,553
|
|
|
|
|
279
|
|
|
|
|
(21)
|
|
3
|
|
Research and
development expenses
|
|
1,110
|
|
|
|
|
1,110
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Interest expense of
Financial Products
|
|
374
|
|
|
|
|
—
|
|
|
|
|
378
|
|
|
|
|
(4)
|
|
4
|
|
Other operating
(income) expenses
|
|
349
|
|
|
|
|
(95)
|
|
|
|
|
457
|
|
|
|
|
(13)
|
|
3
|
|
Total operating
costs
|
|
25,056
|
|
|
|
|
23,980
|
|
|
|
|
1,114
|
|
|
|
|
(38)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
2,775
|
|
|
|
|
2,390
|
|
|
|
|
523
|
|
|
|
|
(138)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
excluding Financial Products
|
|
240
|
|
|
|
|
261
|
|
|
|
|
—
|
|
|
|
|
(21)
|
|
4
|
|
Other income
(expense)
|
|
(55)
|
|
|
|
|
(169)
|
|
|
|
|
(3)
|
|
|
|
|
117
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
profit before taxes
|
|
2,480
|
|
|
|
|
1,960
|
|
|
|
|
520
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision (benefit)
for income taxes
|
|
633
|
|
|
|
|
485
|
|
|
|
|
148
|
|
|
|
|
—
|
|
|
|
Profit of
consolidated companies
|
|
1,847
|
|
|
|
|
1,475
|
|
|
|
|
372
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in profit
(loss) of unconsolidated affiliated companies
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Equity in profit of
Financial Products' subsidiaries
|
|
—
|
|
|
|
|
366
|
|
|
|
|
—
|
|
|
|
|
(366)
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
|
1,847
|
|
|
|
|
1,841
|
|
|
|
|
372
|
|
|
|
|
(366)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Profit
(loss) attributable to noncontrolling interests
|
|
7
|
|
|
|
|
1
|
|
|
|
|
6
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
7
|
$
|
1,840
|
|
|
|
$
|
1,840
|
|
|
|
$
|
366
|
|
|
|
$
|
(366)
|
|
|
|
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 stockholders.
|
|
Caterpillar
Inc.
Supplemental Data
for Cash Flow
For the Six Months
Ended June 30, 2014
(Unaudited)
(Millions of
dollars)
|
|
|
|
Supplemental
Consolidating Data
|
|
|
|
Machinery,
|
|
|
|
|
|
Consolidated
|
|
Energy &
Transportation 1
|
|
Financial
Products
|
|
Consolidating
Adjustments
|
|
Cash flow from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
$
|
1,927
|
|
|
|
$
|
1,922
|
|
|
|
$
|
342
|
|
|
|
$
|
(337)
|
|
2
|
|
Adjustments for
non-cash items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
1,570
|
|
|
|
|
1,122
|
|
|
|
|
448
|
|
|
|
|
—
|
|
|
|
|
Undistributed profit
of Financial Products
|
|
—
|
|
|
|
|
(87)
|
|
|
|
|
—
|
|
|
|
|
87
|
|
3
|
|
|
Other.
|
|
240
|
|
|
|
|
199
|
|
|
|
|
(60)
|
|
|
|
|
101
|
|
4
|
|
Changes in assets and
liabilities, net of acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables - trade
and other
|
|
138
|
|
|
|
|
594
|
|
|
|
|
35
|
|
|
|
|
(491)
|
|
4,5
|
|
|
Inventories
|
|
(439)
|
|
|
|
|
(431)
|
|
|
|
|
—
|
|
|
|
|
(8)
|
|
4
|
|
|
Accounts
payable
|
|
551
|
|
|
|
|
544
|
|
|
|
|
(69)
|
|
|
|
|
76
|
|
4
|
|
|
Accrued
expenses
|
|
7
|
|
|
|
|
81
|
|
|
|
|
(74)
|
|
|
|
|
—
|
|
|
|
|
Accrued wages,
salaries and employee benefits
|
|
283
|
|
|
|
|
286
|
|
|
|
|
(3)
|
|
|
|
|
—
|
|
|
|
|
Customer
advances
|
|
(14)
|
|
|
|
|
(14)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
Other assets -
net
|
|
(105)
|
|
|
|
|
(40)
|
|
|
|
|
(15)
|
|
|
|
|
(50)
|
|
4
|
|
|
Other liabilities -
net
|
|
(24)
|
|
|
|
|
(234)
|
|
|
|
|
159
|
|
|
|
|
51
|
|
4
|
|
Net cash provided by
(used for) operating activities
|
|
4,134
|
|
|
|
|
3,942
|
|
|
|
|
763
|
|
|
|
|
(571)
|
|
|
|
Cash flow from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
- excluding equipment leased to others
|
|
(710)
|
|
|
|
|
(707)
|
|
|
|
|
(3)
|
|
|
|
|
—
|
|
|
|
Expenditures for
equipment leased to others
|
|
(825)
|
|
|
|
|
(31)
|
|
|
|
|
(828)
|
|
|
|
|
34
|
|
4
|
|
Proceeds from
disposals of leased assets and property, plant and
equipment
|
|
442
|
|
|
|
|
48
|
|
|
|
|
398
|
|
|
|
|
(4)
|
|
4
|
|
Additions to finance
receivables
|
|
(5,760)
|
|
|
|
|
—
|
|
|
|
|
(7,223)
|
|
|
|
|
1,463
|
|
5,8
|
|
Collections of
finance receivables
|
|
4,719
|
|
|
|
|
—
|
|
|
|
|
5,994
|
|
|
|
|
(1,275)
|
|
5
|
|
Net intercompany
purchased receivables
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(109)
|
|
|
|
|
109
|
|
5
|
|
Proceeds from sale of
finance receivables
|
|
104
|
|
|
|
|
—
|
|
|
|
|
107
|
|
|
|
|
(3)
|
|
5
|
|
Net intercompany
borrowings
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
|
(1)
|
|
6
|
|
Investments and
acquisitions (net of cash acquired)
|
|
(15)
|
|
|
|
|
(15)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Proceeds from sale of
businesses and investments (net of cash sold)
|
|
139
|
|
|
|
|
142
|
|
|
|
|
—
|
|
|
|
|
(3)
|
|
8
|
|
Proceeds from sale of
securities
|
|
222
|
|
|
|
|
12
|
|
|
|
|
210
|
|
|
|
|
—
|
|
|
|
Investments in
securities
|
|
(673)
|
|
|
|
|
(417)
|
|
|
|
|
(256)
|
|
|
|
|
—
|
|
|
|
Other -
net
|
|
(25)
|
|
|
|
|
28
|
|
|
|
|
(53)
|
|
|
|
|
—
|
|
|
|
Net cash provided by
(used for) investing activities
|
|
(2,382)
|
|
|
|
|
(940)
|
|
|
|
|
(1,762)
|
|
|
|
|
320
|
|
|
|
Cash flow from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
|
(757)
|
|
|
|
|
(757)
|
|
|
|
|
(250)
|
|
|
|
|
250
|
|
7
|
|
Distribution to
noncontrolling interests
|
|
(7)
|
|
|
|
|
(7)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Contribution from
noncontrolling interests
|
|
2
|
|
|
|
|
2
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Common stock issued,
including treasury shares reissued
|
|
194
|
|
|
|
|
194
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Treasury shares
purchased
|
|
(1,738)
|
|
|
|
|
(1,738)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Excess tax benefit
from stock-based compensation
|
|
131
|
|
|
|
|
131
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Net intercompany
borrowings
|
|
—
|
|
|
|
|
(1)
|
|
|
|
|
—
|
|
|
|
|
1
|
|
6
|
|
Proceeds from debt
issued (original maturities greater than three months)
|
|
6,951
|
|
|
|
|
1,990
|
|
|
|
|
4,961
|
|
|
|
|
—
|
|
|
|
Payments on debt
(original maturities greater than three months)
|
|
(6,344)
|
|
|
|
|
(770)
|
|
|
|
|
(5,574)
|
|
|
|
|
—
|
|
|
|
Short-term borrowings
- net (original maturities three months or less)
|
|
1,749
|
|
|
|
|
9
|
|
|
|
|
1,740
|
|
|
|
|
—
|
|
|
|
Net cash provided by
(used for) financing activities
|
|
181
|
|
|
|
|
(947)
|
|
|
|
|
877
|
|
|
|
|
251
|
|
|
|
Effect of exchange
rate changes on cash
|
|
(87)
|
|
|
|
|
(37)
|
|
|
|
|
(50)
|
|
|
|
|
—
|
|
|
|
Increase
(decrease) in cash and short-term investments
|
|
1,846
|
|
|
|
|
2,018
|
|
|
|
|
(172)
|
|
|
|
|
—
|
|
|
|
Cash and short-term
investments at beginning of period
|
|
6,081
|
|
|
|
|
4,597
|
|
|
|
|
1,484
|
|
|
|
|
—
|
|
|
|
Cash and short-term
investments at end of period
|
$
|
7,927
|
|
|
|
$
|
6,615
|
|
|
|
$
|
1,312
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
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
dividend from Financial Products to Machinery, Energy &
Transportation.
|
|
|
8
|
Elimination of
proceeds received from Financial Products related to Machinery,
Energy & Transportation's sale of portions of the Bucyrus
distribution business to Cat dealers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Caterpillar
Inc.
Supplemental Data
for Cash Flow
For the Six Months
Ended June 30, 2013
(Unaudited)
(Millions of
dollars)
|
|
|
|
Supplemental
Consolidating Data
|
|
|
|
Machinery,
|
|
|
|
|
|
Consolidated
|
|
Energy &
Transportation 1
|
|
Financial
Products
|
|
Consolidating
Adjustments
|
|
Cash flow from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit of
consolidated and affiliated companies
|
$
|
1,847
|
|
|
|
$
|
1,841
|
|
|
|
$
|
372
|
|
|
|
$
|
(366)
|
|
2
|
|
Adjustments for
non-cash items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
1,484
|
|
|
|
|
1,104
|
|
|
|
|
380
|
|
|
|
|
—
|
|
|
|
|
Undistributed profit
of Financial Products
|
|
—
|
|
|
|
|
(266)
|
|
|
|
|
—
|
|
|
|
|
266
|
|
3
|
|
|
Other
|
|
236
|
|
|
|
|
140
|
|
|
|
|
(41)
|
|
|
|
|
137
|
|
4
|
|
Changes in assets and
liabilities, net of acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables - trade
and other
|
|
231
|
|
|
|
|
435
|
|
|
|
|
5
|
|
|
|
|
(209)
|
|
4,5
|
|
|
Inventories
|
|
1,364
|
|
|
|
|
1,368
|
|
|
|
|
—
|
|
|
|
|
(4)
|
|
4
|
|
|
Accounts
payable
|
|
305
|
|
|
|
|
287
|
|
|
|
|
(44)
|
|
|
|
|
62
|
|
4
|
|
|
Accrued
expenses
|
|
(129)
|
|
|
|
|
(47)
|
|
|
|
|
(82)
|
|
|
|
|
—
|
|
|
|
|
Accrued wages,
salaries and employee benefits
|
|
(580)
|
|
|
|
|
(569)
|
|
|
|
|
(11)
|
|
|
|
|
—
|
|
|
|
|
Customer
advances
|
|
(95)
|
|
|
|
|
(95)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
Other assets -
net
|
|
(100)
|
|
|
|
|
(71)
|
|
|
|
|
(2)
|
|
|
|
|
(27)
|
|
4
|
|
|
Other liabilities -
net
|
|
30
|
|
|
|
|
11
|
|
|
|
|
(8)
|
|
|
|
|
27
|
|
4
|
|
Net cash provided by
(used for) operating activities
|
|
4,593
|
|
|
|
|
4,138
|
|
|
|
|
569
|
|
|
|
|
(114)
|
|
|
|
Cash flow from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
- excluding equipment leased to others
|
|
(1,387)
|
|
|
|
|
(1,379)
|
|
|
|
|
(8)
|
|
|
|
|
—
|
|
|
|
Expenditures for
equipment leased to others
|
|
(810)
|
|
|
|
|
(34)
|
|
|
|
|
(811)
|
|
|
|
|
35
|
|
4
|
|
Proceeds from
disposals of leased assets and property, plant and
equipment
|
|
358
|
|
|
|
|
47
|
|
|
|
|
324
|
|
|
|
|
(13)
|
|
4
|
|
Additions to finance
receivables
|
|
(5,544)
|
|
|
|
|
—
|
|
|
|
|
(6,917)
|
|
|
|
|
1,373
|
|
5,8
|
|
Collections of
finance receivables
|
|
4,548
|
|
|
|
|
—
|
|
|
|
|
5,966
|
|
|
|
|
(1,418)
|
|
5
|
|
Net intercompany
purchased receivables
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(63)
|
|
|
|
|
63
|
|
5
|
|
Proceeds from sale of
finance receivables
|
|
89
|
|
|
|
|
—
|
|
|
|
|
90
|
|
|
|
|
(1)
|
|
5
|
|
Net intercompany
borrowings
|
|
—
|
|
|
|
|
—
|
|
|
|
|
35
|
|
|
|
|
(35)
|
|
6
|
|
Investments and
acquisitions (net of cash acquired)
|
|
(26)
|
|
|
|
|
(26)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Proceeds from sale of
businesses and investments (net of cash sold)
|
|
100
|
|
|
|
|
125
|
|
|
|
|
—
|
|
|
|
|
(25)
|
|
8
|
|
Proceeds from sale of
securities
|
|
207
|
|
|
|
|
14
|
|
|
|
|
193
|
|
|
|
|
—
|
|
|
|
Investments in
securities
|
|
(267)
|
|
|
|
|
(11)
|
|
|
|
|
(256)
|
|
|
|
|
—
|
|
|
|
Other -
net
|
|
(68)
|
|
|
|
|
(38)
|
|
|
|
|
(30)
|
|
|
|
|
—
|
|
|
|
Net cash provided by
(used for) investing activities
|
|
(2,800)
|
|
|
|
|
(1,302)
|
|
|
|
|
(1,477)
|
|
|
|
|
(21)
|
|
|
|
Cash flow from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
|
(342)
|
|
|
|
|
(342)
|
|
|
|
|
(100)
|
|
|
|
|
100
|
|
7
|
|
Distribution to
noncontrolling interests
|
|
(8)
|
|
|
|
|
(8)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Common stock issued,
including treasury shares reissued
|
|
56
|
|
|
|
|
56
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Treasury shares
purchased
|
|
(1,000)
|
|
|
|
|
(1,000)
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Excess tax benefit
from stock-based compensation
|
|
62
|
|
|
|
|
62
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
Net intercompany
borrowings
|
|
—
|
|
|
|
|
(35)
|
|
|
|
|
—
|
|
|
|
|
35
|
|
6
|
|
Proceeds from debt
issued (original maturities greater than three months)
|
|
5,186
|
|
|
|
|
119
|
|
|
|
|
5,067
|
|
|
|
|
—
|
|
|
|
Payments on debt
(original maturities greater than three months)
|
|
(6,303)
|
|
|
|
|
(1,003)
|
|
|
|
|
(5,300)
|
|
|
|
|
—
|
|
|
|
Short-term borrowings
- net (original maturities three months or less)
|
|
1,217
|
|
|
|
|
1
|
|
|
|
|
1,216
|
|
|
|
|
—
|
|
|
|
Net cash provided by
(used for) financing activities
|
|
(1,132)
|
|
|
|
|
(2,150)
|
|
|
|
|
883
|
|
|
|
|
135
|
|
|
|
Effect of exchange
rate changes on cash
|
|
(41)
|
|
|
|
|
(18)
|
|
|
|
|
(23)
|
|
|
|
|
—
|
|
|
|
Increase
(decrease) in cash and short-term investments
|
|
620
|
|
|
|
|
668
|
|
|
|
|
(48)
|
|
|
|
|
—
|
|
|
|
Cash and short-term
investments at beginning of period
|
|
5,490
|
|
|
|
|
3,306
|
|
|
|
|
2,184
|
|
|
|
|
—
|
|
|
|
Cash and short-term
investments at end of period
|
$
|
6,110
|
|
|
|
$
|
3,974
|
|
|
|
$
|
2,136
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 adjustments 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
dividend from Financial Products to Machinery, Energy &
Transportation.
|
|
8
|
Elimination of
proceeds received from Financial Products related to Machinery,
Energy & Transportation's sale of portions of the Bucyrus
distribution business to Cat dealers.
|
SOURCE Caterpillar Inc.