NASHVILLE, Tenn., Oct. 23, 2019 /PRNewswire/ -- Cat Financial
reported third-quarter 2019 revenues of $748
million, an increase of $13
million, or 2%, compared with the third quarter of 2018.
Third-quarter 2019 profit was $129
million, a $4 million, or 3%,
increase from the third quarter of 2018.
The increase in revenues was primarily due to a $29 million favorable impact from higher average
financing rates, partially offset by a $10
million unfavorable impact due to the termination of a
committed credit facility with Caterpillar.
Third-quarter 2019 profit before income taxes was $184 million, a $21
million, or 13%, increase from the third quarter of 2018.
The increase was primarily due to a $31
million increase in net yield on average earning assets and
a $27 million decrease in provision
for credit losses. These favorable impacts were partially offset by
a $14 million increase in general,
operating and administrative expenses and the $10 million unfavorable impact mentioned above
related to the termination of a committed credit facility with
Caterpillar.
The provision for income taxes reflected an estimated annual tax
rate of 28% in the third quarter of 2019, compared with 24% in the
third quarter of 2018, excluding the discrete item discussed in the
following paragraph. The increase in the estimated annual tax rate
was primarily due to changes in the geographic mix of profits.
A discrete tax benefit of $7
million was recorded in the third quarter of 2018 for the
write-down of net deferred tax liabilities resulting from the 2017
tax year return to provision adjustments. The write-down reflected
the reduction in the U.S. corporate tax rate from 35% to 21%
beginning January 1, 2018.
During the third quarter of 2019, retail new business volume was
$2.93 billion, an increase of
$51 million, or 2%, from the third
quarter of 2018. The increase was primarily driven by higher volume
in North America, partially offset
by lower volume in Caterpillar Power Finance.
At the end of the third quarter of 2019, past dues were 3.19%,
compared with 3.47% at the end of the third quarter of 2018.
Write-offs, net of recoveries, were $103
million for the third quarter of 2019, compared with
$40 million for the third quarter of
2018. The increase in write-offs, net of recoveries, was primarily
driven by Caterpillar Power Finance, concentrated in the marine
portfolio, and EAME, mostly in the Middle
East. As of September 30,
2019, the allowance for credit losses totaled $434 million, or 1.57% of finance receivables,
compared with $523 million, or 1.81%
of finance receivables at June 30,
2019. The allowance for credit losses at year-end 2018 was
$511 million, or 1.80% of finance
receivables.
"The Cat Financial team delivered solid results in the third
quarter," said Dave Walton,
president of Cat Financial and vice president with responsibility
for the Financial Products Division of Caterpillar Inc. "I was
pleased to see most of our key operating and portfolio health
metrics improved quarter over quarter, and Cat Financial remains
committed to serve Caterpillar customers and dealers worldwide
through financial services solutions."
For over 35 years, Cat Financial, a wholly owned subsidiary of
Caterpillar, has provided financial service excellence to
customers. The company offers a wide range of financing solutions
to customers and CatĀ® dealers for machines, engines, SolarĀ® gas
turbines, marine vessels and various operational needs. Cat
Financial has offices and subsidiaries located throughout North and
South America, Asia, Australia, Europe, Africa and the Middle East, with its headquarters in
Nashville, Tennessee.
STATISTICAL
HIGHLIGHTS:
|
|
THIRD-QUARTER 2019
VS. THIRD-QUARTER 2018
|
(ENDED SEPTEMBER
30, EXCEPT TOTAL ASSETS)
|
(Millions of
dollars)
|
|
|
2019
|
|
2018
|
|
CHANGE
|
Revenues
|
$
|
748
|
|
$
|
735
|
|
2%
|
Profit Before Income
Taxes
|
$
|
184
|
|
$
|
163
|
|
13%
|
Profit (excluding
profit attributable to noncontrolling interests)
|
$
|
129
|
|
$
|
125
|
|
3%
|
Retail New Business
Volume
|
$
|
2,929
|
|
$
|
2,878
|
|
2%
|
Total Assets at
September 30 and December 31, respectively
|
$
|
33,907
|
|
$
|
34,181
|
|
(1)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NINE-MONTHS 2019
VS. NINE-MONTHS 2018
|
(ENDED SEPTEMBER
30)
|
(Millions of
dollars)
|
|
|
2019
|
|
2018
|
|
CHANGE
|
Revenues
|
$
|
2,241
|
|
$
|
2,148
|
|
4%
|
Profit Before Income
Taxes
|
$
|
467
|
|
$
|
387
|
|
21%
|
Profit (excluding
profit attributable to noncontrolling interests)
|
$
|
306
|
|
$
|
287
|
|
7%
|
Retail New Business
Volume
|
$
|
8,626
|
|
$
|
8,975
|
|
(4)%
|
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
Certain statements in this press release relate to future events
and expectations and are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Words such as "believe," "estimate," "will be," "will," "would,"
"expect," "anticipate," "plan," "project," "intend," "could,"
"should" or other similar words or expressions often identify
forward-looking statements. All statements other than statements of
historical fact are forward-looking statements, including, without
limitation, statements regarding our outlook, projections,
forecasts or trend descriptions. These statements do not guarantee
future performance and speak only as of the date they are made, and
we do not undertake to update our forward-looking statements.
Cat Financial'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) government
monetary or fiscal policies; (ii) political and economic risks,
commercial instability and events beyond our control in the
countries in which we operate; (iii) demand for Caterpillar
products; (iv) our ability to develop, produce and market quality
products that meet our customers' needs; (v) information technology
security threats and computer crime; (vi) disruptions or volatility
in global financial markets limiting our sources of liquidity or
the liquidity of our customers, dealers and suppliers; (vii)
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; (viii) changes in interest rates, currency fluctuations or
market liquidity conditions; (ix) an increase in delinquencies,
repossessions or net losses of our customers; (x) our compliance
with financial and other restrictive covenants in debt agreements;
(xi) alleged or actual violations of trade or anti-corruption laws
and regulations; (xii) additional tax expense or exposure; (xiii)
new regulations or changes in financial services regulations; (xiv)
residual values of leased equipment; (xv) marketing, operational or
administrative support received from Caterpillar; (xvi) changes in
accounting guidance; and (xvii) other factors described in more
detail in Cat Financial's Forms 10-Q, 10-K and other filings with
the Securities and Exchange Commission.
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SOURCE Cat Financial