GLOSSARY OF TERMS 1. Consolidating Adjustments -- Eliminations of
transactions between Machinery and Engines and Financial Products.
2. Core Operating Costs -- Machinery and Engines variable
manufacturing cost change adjusted for volume and change in period
costs. Excludes the impact of currency and stock-based
compensation. 3. 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 impacts on sales and operating profit for the
Machinery and Engines 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 and the net effect of
changes in foreign currency exchange rates on our foreign currency
assets and liabilities for consolidated results. 4. EAME --
Geographic region including Europe, Africa, the Middle East and the
Commonwealth of Independent States (CIS). 5. Earning Assets --
These assets consist primarily of total finance receivables net of
unearned income, plus equipment on operating leases, less
accumulated depreciation at Cat Financial. 6. Engines -- A
principal line of business including the design, manufacture,
marketing and sales of engines for Caterpillar machinery; electric
power generation systems; on-highway vehicles and locomotives;
marine, petroleum, construction, industrial, agricultural and other
applications; and related parts. Reciprocating engines meet power
needs ranging from 5 to 21,500 horsepower (4 to over 16 000
kilowatts). Turbines range from 1,600 to 20,500 horsepower (1 200
to 15 000 kilowatts). 7. Financial Products -- A principal line of
business consisting primarily of Caterpillar Financial Services
Corporation (Cat Financial), Caterpillar Insurance Holdings, Inc.
(Cat Insurance), Caterpillar Power Ventures Corporation (Cat Power
Ventures) and their respective subsidiaries. Cat Financial provides
a wide range of financing alternatives to customers and dealers for
Caterpillar machinery and engines, Solar gas turbines as well as
other equipment and marine vessels. Cat Financial also extends
loans to customers and dealers. Cat Insurance provides various
forms of insurance to customers and dealers to help support the
purchase and lease of our equipment. Cat Power Ventures is an
investor in independent power projects using Caterpillar power
generation equipment and services. 8. Latin America -- Geographic
region including Central and South American countries and Mexico.
9. Machinery -- A principal line of business which includes the
design, manufacture, marketing and sales of construction, mining
and forestry machinery -- track and wheel tractors, track and wheel
loaders, pipelayers, motor graders, wheel tractor-scrapers, track
and wheel excavators, backhoe loaders, log skidders, log loaders,
off-highway trucks, articulated trucks, paving products,
telehandlers, skid steer loaders and related parts. Also includes
logistics services for other companies and rail-related products
and services. 10. Machinery and Engines (M&E) -- Due to the
highly integrated nature of operations, it represents the aggregate
total of the Machinery and Engines lines of business and includes
primarily our manufacturing, marketing and parts distribution
operations. 11. Managed Distribution -- The process to provide a
fair and equitable allocation of available machine and engine
production positions to worldwide dealers on models where demand
exceeds factory supply. 12. Manufacturing Costs -- Manufacturing
costs 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
machine and equipment repair, depreciation on manufacturing assets,
facility support, procurement, factory scheduling, manufacturing
planning and operations management. Excludes the impact of currency
and stock-based compensation. 13. M&E Other Operating Expenses
-- Comprised primarily of gains (losses) on disposal of long-lived
assets, long-lived asset impairment charges and impairment of
goodwill. 14. Period Costs -- Comprised of Machinery and Engines
period manufacturing costs, SG&A expense and R&D expense.
Excludes the impact of currency and stock-based compensation. 15.
Price Realization -- The impact of net price changes excluding
currency. Includes the impact of changes in the relative weighting
of sales between geographic regions. 16. Sales Volume -- With
respect to sales and revenues, sales volume represents the impact
of changes in the quantities sold for machines, engines and parts.
With respect to operating profit, sales volume represents the
impact of changes in the quantities sold for machines, engines and
parts combined with the net operating profit impact of changes in
the relative weighting of machines, engines and parts sales with
respect to total sales. 17. Stock-Based Compensation -- As required
by Statement of Financial Accounting Standards 123R, we began
expensing stock-based compensation awards in 2006. Compensation
cost is based on the fair value of the award on the date of grant.
Our awards consist of stock options and stock-settled stock
appreciation rights (SARs). 18. 6 Sigma -- On a technical level, 6
Sigma represents a measure of variation that achieves 3.4 defects
per million opportunities. At Caterpillar, 6 Sigma represents a
much broader cultural philosophy to drive continuous improvement
throughout the value chain. It is a fact-based, data-driven
methodology that we are using to improve processes, enhance
quality, cut costs, grow our business and deliver greater value to
our customers through Black Belt-led project teams. At Caterpillar,
6 Sigma goes beyond mere process improvement -- it has become the
way we work as teams to process business information, solve
problems and manage our business successfully. 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 as a substitute for the related GAAP
measure. Machinery and Engines Caterpillar defines Machinery and
Engines as it is presented in the supplemental data as Caterpillar
Inc. and its subsidiaries with Financial Products accounted for on
the equity basis. Machinery and Engines 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 29-34 reconcile
Machinery and Engines with Financial Products on the equity basis
to Caterpillar Inc. Consolidated financial information. The
information included in the Outlook section is forward-looking and
involves risks and uncertainties that could significantly affect
expected results. A discussion of these risks and uncertainties is
contained in Form 8-K filed with the Securities & Exchange
Commission (SEC) on October 20, 2006. This filing is available on
our website at http://www.cat.com/sec_filings . Caterpillar's
latest financial results and current outlook are also available
via: Telephone: (800) 228-7717 (Inside the United States and
Canada) (858) 244-2080 (Outside the United States and Canada)
Internet: http://www.cat.com/investor http://www.cat.com/irwebcast
(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 Nine Months Ended September 30, September 30, 2006
2005 2006 2005 Sales and revenues: Sales of Machinery and Engines
$9,842 $8,392 $28,541 $24,965 Revenues of Financial Products 675
585 1,973 1,711 Total sales and revenues 10,517 8,977 30,514 26,676
Operating costs: Cost of goods sold 7,610 6,547 21,578 19,652
Selling, general and administrative expenses 988 775 2,690 2,308
Research and development expenses 329 285 979 794 Interest expense
of Financial Products 266 197 754 551 Other operating expenses 246
233 738 654 Total operating costs 9,439 8,037 26,739 23,959
Operating profit 1,078 940 3,775 2,717 Interest expense excluding
Financial Products 72 68 206 198 Other income (expense) 72 80 165
278 Consolidated profit before taxes 1,078 952 3,734 2,797
Provision for income taxes 334 303 1,153 850 Profit of consolidated
companies 744 649 2,581 1,947 Equity in profit (loss) of
unconsolidated affiliated companies 25 18 74 61 Profit $769 $667
$2,655 $2,008 Profit per common share $1.18 $.98 $4.01 $2.95 Profit
per common share - diluted (1) $1.14 $.94 $3.86 $2.84 Weighted
average common shares outstanding (millions) - Basic 653.2 678.8
662.4 680.5 - Diluted (1) 677.2 710.7 688.5 707.4 Cash dividends
declared per common share $- $- $.55 $.46 (1) Diluted by assumed
exercise of stock options and SARs, using the treasury stock
method. Caterpillar Inc. Condensed Consolidated Statement of
Financial Position (Unaudited) (Millions of dollars) Assets Sep.
30, Dec. 31, Current assets: 2006 2005 Cash and short-term
investments $553 $1,108 Receivables - trade and other 8,246 7,526
Receivables - finance 6,376 6,442 Deferred and refundable income
taxes 403 255 Prepaid expenses 2,107 2,146 Inventories 6,411 5,224
Total current assets 24,096 22,701 Property, plant and equipment -
net 8,424 7,988 Long-term receivables - trade and other 742 1,037
Long-term receivables - finance 11,178 10,301 Investments in
unconsolidated affiliated companies 606 565 Deferred income taxes
986 857 Intangible assets 646 424 Goodwill 1,877 1,451 Other assets
1,928 1,745 Total assets $50,483 $47,069 Liabilities Current
liabilities: Short-term borrowings: -- Machinery and Engines $745
$871 -- Financial Products 4,930 4,698 Accounts payable 3,857 3,412
Accrued expenses 2,747 2,617 Accrued wages, salaries and employee
benefits 1,388 1,601 Customer advances 742 454 Dividends payable -
168 Deferred and current income taxes payable 685 528 Long-term
debt due within one year: -- Machinery and Engines 99 340 --
Financial Products 3,492 4,159 Total current liabilities 18,685
18,848 Long-term debt due after one year: -- Machinery and Engines
4,007 2,717 -- Financial Products 14,138 12,960 Liability for
postemployment benefits 3,510 3,161 Deferred income taxes and other
liabilities 1,115 951 Total liabilities 41,455 38,637 Stockholders'
equity Common stock 2,441 1,859 Treasury stock (7,031) (4,637)
Profit employed in the business 14,100 11,808 Accumulated other
comprehensive income (482) (598) Total stockholders' equity 9,028
8,432 Total liabilities and stockholders' equity $50,483 $47,069
Caterpillar Inc. Condensed Consolidated Statement of Cash Flow
(Unaudited) (Millions of dollars) Nine Months Ended September 30,
Cash flow from operating activities: 2006 2005 Profit $2,655 $2,008
Adjustments for non-cash items: Depreciation and amortization 1,220
1,113 Other 110 (89) Changes in assets and liabilities: Receivables
- trade and other (165) (521) Inventories (902) (794) Accounts
payable and accrued expenses 327 313 Other assets - net (345) 69
Other liabilities - net 666 31 Net cash provided by (used for)
operating activities 3,566 2,130 Cash flow from investing
activities: Capital expenditures - excluding equipment leased to
others (905) (709) Expenditures for equipment leased to others
(798) (965) Proceeds from disposals of property, plant and
equipment 440 447 Additions to finance receivables (7,817) (7,310)
Collections of finance receivables 6,204 4,889 Proceeds from the
sale of finance receivables 1,004 916 Investments and acquisitions
(net of cash acquired) (512) (12) Proceeds from sale of
available-for-sale securities 255 443 Investments in
available-for-sale securities (357) (508) Other - net 201 145 Net
cash provided by (used for) investing activities (2,285) (2,664)
Cash flow from financing activities: Dividends paid (531) (449)
Common stock issued, including treasury shares reissued 383 412
Treasury shares purchased (2,858) (1,039) Excess tax benefit from
stock-based compensation 159 - Proceeds from debt issued (original
maturities greater than three months) 8,629 9,796 Payments on debt
(original maturities greater than three months) (8,517) (7,619)
Short-term borrowings (original maturities three months or less) -
net 905 (58) Net cash provided by (used for) financing activities
(1,830) 1,043 Effect of exchange rate changes on cash (6) 13
Increase (decrease) in cash and short-term investments (555) 522
Cash and short-term investments at beginning of period 1,108 445
Cash and short-term investments at end of period $553 $967 All
short-term investments, which consist primarily of highly liquid
investments with original maturities of three months or less, are
considered to be cash equivalents. Caterpillar Inc. Supplemental
Data for Results of Operations For The Three Months Ended September
30, 2006 (Unaudited) (Millions of dollars) Supplemental
Consolidating Data Machinery Financial Consolidating Consolidated
and Engines(1) Products Adjustments Sales and revenues: Sales of
Machinery and Engines $9,842 $9,842 $- $- Revenues of Financial
Products 675 - 801 (126)(2) Total sales and revenues 10,517 9,842
801 (126) Operating costs: Cost of goods sold 7,610 7,610 - -
Selling, general and administrative expenses 988 877 110 1 (3)
Research and development expenses 329 329 - - Interest expense of
Financial Products 266 - 269 (3)(4) Other operating expenses 246 2
251 (7)(3) Total operating costs 9,439 8,818 630 (9) Operating
profit 1,078 1,024 171 (117) Interest expense excluding Financial
Products 72 76 - (4)(4) Other income (expense) 72 (63) 22 113 (5)
Consolidated profit before taxes 1,078 885 193 - Provision for
income taxes 334 269 65 - Profit of consolidated companies 744 616
128 - Equity in profit (loss) of unconsolidated affiliated
companies 25 24 1 - Equity in profit of Financial Products'
subsidiaries - 129 - (129)(6) Profit $769 $769 $129 $(129) (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 and Engines. (3)
Elimination of net expenses recorded by Machinery and Engines paid
to Financial Products. (4) Elimination of interest expense recorded
between Financial Products and Machinery and Engines. (5)
Elimination of discount recorded by Machinery and Engines on
receivables sold to Financial Products and of interest earned
between Machinery and Engines and Financial Products. (6)
Elimination of Financial Products profit due to equity method of
accounting. Caterpillar Inc. Supplemental Data for Results of
Operations For The Three Months Ended September 30, 2005
(Unaudited) (Millions of dollars) Supplemental Consolidating Data
Machinery Financial Consolidating Consolidated and Engines(1)
Products Adjustments Sales and revenues: Sales of Machinery and
Engines $8,392 $8,392 $- $- Revenues of Financial Products 585 -
667 (82)(2) Total sales and revenues 8,977 8,392 667 (82) Operating
costs: Cost of goods sold 6,547 6,547 - - Selling, general and
administrative expenses 775 676 110 (11)(3) Research and
development expenses 285 285 - - Interest expense of Financial
Products 197 - 203 (6)(4) Other operating expenses 233 4 231 (2)(3)
Total operating costs 8,037 7,512 544 (19) Operating profit 940 880
123 (63) Interest expense excluding Financial Products 68 69 -
(1)(4) Other income (expense) 80 1 17 62 (5) Consolidated profit
before taxes 952 812 140 - Provision for income taxes 303 256 47 -
Profit of consolidated companies 649 556 93 - Equity in profit
(loss) of unconsolidated affiliated companies 18 16 2 - Equity in
profit of Financial Products' subsidiaries - 95 - (95)(6) Profit
$667 $667 $95 $(95) (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 and Engines. (3) Elimination of net expenses recorded by
Machinery and Engines paid to Financial Products. (4) Elimination
of interest expense recorded between Financial Products and
Machinery and Engines. (5) Elimination of discount recorded by
Machinery and Engines on receivables sold to Financial Products and
of interest earned between Machinery and Engines and Financial
Products. (6) Elimination of Financial Products profit due to
equity method of accounting. Caterpillar Inc. Supplemental Data for
Results of Operations For The Nine Months Ended September 30, 2006
(Unaudited) (Millions of dollars) Supplemental Consolidating Data
Machinery Financial Consolidating Consolidated and Engines(1)
Products Adjustments Sales and revenues: Sales of Machinery and
Engines $28,541 $28,541 $- $- Revenues of Financial Products 1,973
- 2,315 (342)(2) Total sales and revenues 30,514 28,541 2,315 (342)
Operating costs: Cost of goods sold 21,578 21,578 - - Selling,
general and administrative expenses 2,690 2,378 326 (14)(3)
Research and development expenses 979 979 - - Interest expense of
Financial Products 754 - 761 (7)(4) Other operating expenses 738 30
730 (22)(3) Total operating costs 26,739 24,965 1,817 (43)
Operating profit 3,775 3,576 498 (299) Interest expense excluding
Financial Products 206 214 - (8)(4) Other income (expense) 165
(194) 68 291 (5) Consolidated profit before taxes 3,734 3,168 566 -
Provision for income taxes 1,153 962 191 - Profit of consolidated
companies 2,581 2,206 375 - Equity in profit (loss) of
unconsolidated affiliated companies 74 72 2 - Equity in profit of
Financial Products' subsidiaries - 377 - (377)(6) Profit $2,655
$2,655 $377 $(377) (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 and Engines. (3) Elimination of net expenses recorded by
Machinery and Engines paid to Financial Products. (4) Elimination
of interest expense recorded between Financial Products and
Machinery and Engines. (5) Elimination of discount recorded by
Machinery and Engines on receivables sold to Financial Products and
of interest earned between Machinery and Engines and Financial
Products. (6) Elimination of Financial Products profit due to
equity method of accounting. Caterpillar Inc. Supplemental Data for
Results of Operations For The Nine Months Ended September 30, 2005
(Unaudited) (Millions of dollars) Supplemental Consolidating Data
Machinery Financial Consolidating Consolidated and Engines(1)
Products Adjustments Sales and revenues: Sales of Machinery and
Engines $24,965 $24,965 $- $- Revenues of Financial Products 1,711
- 1,935 (224)(2) Total sales and revenues 26,676 24,965 1,935 (224)
Operating costs: Cost of goods sold 19,652 19,652 - - Selling,
general and administrative expenses 2,308 2,013 328 (33)(3)
Research and development expenses 794 794 - - Interest expense of
Financial Products 551 - 565 (14)(4) Other operating expenses 654 6
653 (5)(3) Total operating costs 23,959 22,465 1,546 (52) Operating
profit 2,717 2,500 389 (172) Interest expense excluding Financial
Products 198 202 - (4)(4) Other income (expense) 278 76 34 168 (5)
Consolidated profit before taxes 2,797 2,374 423 - Provision for
income taxes 850 704 146 - Profit of consolidated companies 1,947
1,670 277 - Equity in profit (loss) of unconsolidated affiliated
companies 61 54 7 - Equity in profit of Financial Products'
subsidiaries - 284 - (284)(6) Profit $2,008 $2,008 $284 $(284) (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 and Engines. (3)
Elimination of net expenses recorded by Machinery and Engines paid
to Financial Products. (4) Elimination of interest expense recorded
between Financial Products and Machinery and Engines. (5)
Elimination of discount recorded by Machinery and Engines on
receivables sold to Financial Products and of interest earned
between Machinery and Engines and Financial Products. (6)
Elimination of Financial Products profit due to equity method of
accounting. Caterpillar Inc. Supplemental Data for Cash Flow For
The Nine Months Ended September 30, 2006 (Unaudited) (Millions of
dollars) Supplemental Consolidating Data Machinery Financial
Consolidating Consolidated and Engines(1) Products Adjustments Cash
flow from operating activities: Profit $2,655 $2,655 $377 $(377)(2)
Adjustments for non-cash items: Depreciation and amortization 1,220
721 499 - Undistributed profit of Financial Products - (377) - 377
(3) Other 110 113 (279) 276 (4) Changes in assets and liabilities:
Receivables - trade and other (165) 15 78 (258)(4/5) Inventories
(902) (902) - - Accounts payable and accrued expenses 327 258 51 18
(4) Other assets - net (345) (280) (27) (38)(4) Other liabilities -
net 666 571 73 22 (4) Net cash provided by (used for) operating
activities 3,566 2,774 772 20 Cash flow from investing activities:
Capital expenditures - excluding equipment leased to others (905)
(900) (33) 28 (4) Expenditures for equipment leased to others (798)
- (822) 24 (4) Proceeds from disposals of property, plant and
equipment 440 22 456 (38)(4) Additions to finance receivables
(7,817) - (26,783) 18,966 (5) Collections of finance receivables
6,204 - 24,465 (18,261)(5) Proceeds from the sale of finance
receivables 1,004 - 1,747 (743)(5) Net intercompany borrowings - 36
(235) 199 (6) Investments and acquisitions (net of cash acquired)
(512) (512) - - Proceeds from sale of available-for-sale securities
255 17 238 - Investments in available-for-sale securities (357)
(34) (323) - Other - net 201 5 204 (8)(7) Net cash provided by
(used for) investing activities (2,285) (1,366) (1,086) 167 Cash
flow from financing activities: Dividends paid (531) (531) - -
Common stock issued, including treasury shares reissued 383 383
(12) 12 (7) Treasury shares purchased (2,858) (2,858) - - Excess
tax benefit from stock-based compensation 159 159 - - Net
intercompany borrowings - 235 (36) (199)(6) Proceeds from debt
issued (original maturities greater than three months) 8,629 1,378
7,251 - Payments on debt (original maturities greater than three
months) (8,517) (766) (7,751) - Short-term borrowings (original
maturities three months or less) - net 905 (10) 915 - Net cash
provided by (used for) financing activities (1,830) (2,010) 367
(187) Effect of exchange rate changes on cash (6) 12 (18) -
Increase (decrease) in cash and short-term investments (555) (590)
35 - Cash and short-term investments at beginning of period 1,108
951 157 - Cash and short-term investments at end of period $553
$361 $192 $- (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) 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 Cat Financial's
cash flow activity from investing to operating for receivables that
arose from the sale of inventory. (6) Net proceeds and payments
to/from Machinery and Engines and Financial Products. (7) Change in
investment and common stock related to Financial Products.
Caterpillar Inc. Supplemental Data for Cash Flow For The Nine
Months Ended September 30, 2005 (Unaudited) (Millions of dollars)
Supplemental Consolidating Data Machinery Financial Consolidating
Consolidated and Engines(1) Products Adjustments Cash flow from
operating activities: Profit $2,008 $2,008 $284 $(284)(2)
Adjustments for non-cash items: Depreciation and amortization 1,113
633 480 - Undistributed profit of Financial Products - (284) - 284
(3) Other (89) (150) (141) 202 (4) Changes in assets and
liabilities: Receivables - trade and other (521) 248 10 (779)(4/5)
Inventories (794) (794) - - Accounts payable and accrued expenses
313 207 114 (8)(4) Other assets - net 69 100 (23) (8)(4) Other
liabilities - net 31 (26) 58 (1)(4) Net cash provided by (used for)
operating activities 2,130 1,942 782 (594) Cash flow from investing
activities: Capital expenditures - excluding equipment leased to
others (709) (677) (32) - Expenditures for equipment leased to
others (965) - (965) - Proceeds from disposals of property, plant
and equipment 447 31 416 - Additions to finance receivables (7,310)
- (24,898) 17,588 (5) Collections of finance receivables 4,889 -
21,589 (16,700)(5) Proceeds from the sale of finance receivables
916 - 1,178 (262)(5) Net intercompany borrowings - (315) (11) 326
(6) Investments and acquisitions (net of cash acquired) (12) (12) -
- Proceeds from sale of available-for-sale securities 443 17 426 -
Investments in available-for-sale securities (508) (19) (489) -
Other - net 145 (5) 150 - Net cash provided by (used for) investing
activities (2,664) (980) (2,636) 952 Cash flow from financing
activities: Dividends paid (449) (449) - - Common stock issued,
including treasury shares reissued 412 412 - - Treasury shares
purchased (1,039) (1,039) - - Net intercompany borrowings - 11 315
(326)(6) Proceeds from debt issued (original maturities greater
than three months) 9,796 146 9,650 - Payments on debt (original
maturities greater than three months) (7,619) (85) (7,534) -
Short-term borrowings (original maturities three months or less) -
net (58) 474 (532) - Net cash provided by (used for) financing
activities 1,043 (530) 1,899 (326) Effect of exchange rate changes
on cash 13 52 (7) (32)(7) Increase (decrease) in cash and
short-term investments 522 484 38 - Cash and short-term investments
at beginning of period 445 270 175 - Cash and short-term
investments at end of period $967 $754 $213 $- (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)
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 Cat Financial's cash flow activity from
investing to operating for receivables that arose from the sale of
inventory. (6) Net proceeds and payments to/from Machinery and
Engines and Financial Products. (7) Elimination of the effect of
exchange on intercompany balances. DATASOURCE: Caterpillar Inc. Web
site: http://www.cat.com/
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