Drop in Sales on Year
CATERPILLAR INC
15 October 1999
CATERPILLAR REPORTS THIRD-OUARTER
PROFIT PER SHARE OF 61 CENTS
PEORIA, Ill. -- Caterpillar Inc. (NYSE: CAT) today reported third-quarter sales
and revenues of $4.72 billion, $458 million lower than third-quarter 1998. The
decrease was primarily due to an 8 percent decline in physical sales volume,
partially offset by a 10 percent increase in Financial Products revenues
Profit of $219 million or 61 cents per share, was $117 million less than
1998's third quarter of $336 million. The decrease was due primarily to lower
sales volume, lower price realization and an unfavorable change in product sales
mix. Lower selling, general and administrative (SG&A) and research and
development (R&D) costs partially offset these unfavorable item.
'Lower retail sales in several key geographic and industry segments caused a
decline in company sales this quarter,' said Caterpillar Chairman and CEO Glen
Barton. 'While sales of large machines remained weak, truck engine sales
continued at historic high levels and demand for large reciprocating, engines is
picking up. The diversity of our business continues to provide positive
contributions to results and the organization has demonstrated its ability to
effectively manage costs during a period of lower volume-'
'We expect company sales and revenues to decline about 5 percent in 1999 from
the record level set in 1998. In 2000, better worldwide growth, higher commodity
prices and less dealer inventory reduction should generate higher sales for both
machines and engines.'
DETAILED ANALYSIS
THIRD-QUARTER 1999 COMPARED WITH THIRD-OUARTER 1998
Sales and revenues for third-quarter 1999 were $4.72 billion, $458 million lower
than third-quarter 1998. The decrease was primarily due to an 8 percent decrease
in physical sales volume, partially offset by a 10 percent increase in Financial
Products revenues. Profit of $219 million was $117 million less than
third-quarter 1998. The decrease was due primarily to lower sales volume, lower
price realization (primarily geographic mix) and an unfavorable change in
product sales mix. Lower selling, general and administrative (SG&A) and
research and development (R&D) costs, as well as higher other income (primarily
foreign exchange) partially offset these unfavorable items. Profit per share of
61 cents was down 31 cents from third-quarter 1998.
MACHINERY AND ENGINES
Sales Table
North Latin Asia/
(Millions of dollars) Total America EAME* America Pacific
Third-Ouarter 1999
Machinery $2,661 $1,373 $737 $205 $346
Engines** 1,761 925 493 173 170
$4,422 $2,298 $1,230 $378 $516
Third-Ouarter 1998
Machinery $3,229 $1,963 $733 $299 $234
Engines** 1,677 795 589 150 143
$4,906 $2,758 $1,322 $449 $377
* Europe, Africa & Middle East and Commonwealth of Independent States
** Does not include internal engine transfers of $281 million and $319 million
in 1999 and 1998, respectively. Internal engine transfers are valued at
prices comparable to those for unrelated parties.
HIGHLIGHTS
THIRD-OUARTER 1999 COMPARED WITH THIRD-OUARTER 1998
* Sales and revenues of $4.72 billion were $458 million or 9 percent lower than
the third-quarter 1998.
* Revenues from Financial Products increased 10 percent.
* Sales inside the United States were 47 percent of world-wide sales compared
with 51 percent a year ago.
* Machinery and Engines SG&A and R&D expenses were reduced 8 percent and 7
percent, respectively, from third-quarter 1998.
* Profit of $219 million and profit per share of 61 cents were down 35 percent
and 34 percent, respectively, from third-quarter 1998. Profit per share
continues to benefit from the company's share repurchase programs.
* 1.2 million shares were repurchased during the quarter under the program
announced in October 1998 to reduce the number of shares outstanding to 320
million within the next three to five years. On September 30, 1999 there were
354.6 million shares outstanding (359.2 million assuming dilution).
OUTLOOK
We expect full-year 1999 sales and revenues to be lower than previously
anticipated, about 5 percent below 1998, and profit per share to be about $3.00.
Based on our preliminary outlook, increases in both sales and profits are
expected in 2000.
DETAILED ANALYSIS
THIRD-QUARTER 1999 COMPARED WITH THIRD-QUARTER 1998
Sales and revenues for third-quarter 1999 were $4.72 billion, $458 million lower
than third-quarter 1998. The decrease was primarily due to an 8 percent decrease
in physical sales volume, partially offset by a 10 percent increase in Financial
Products revenues. Profit of $219 million was $117 million less than
third-quarter 1998. The decrease was due primarily to lower sales volume, lower
price realization (primarily geographic mix) and an unfavorable change in
product sales mix. Lower selling, general and administrative (SG&A) and research
and development (R&D) costs, as well as higher other income (primarily foreign
exchange) partially offset these unfavorable items. Profit per share of 61 cents
was down 31 cents from third-quarter 1998.
MACHINERY AND ENGINES
Sales Table
(Millions of dollars) North Latin Asia/
Total America EAME* America Pacific
Third-Quarter 1999
Machinery $2,661 $1,373 $737 $205 $346
Engines ** 1,761 925 493 173 170
$4,422 $2,298 $1,230 $378 $516
Third-Ouarter 1998
Machinery $3,229 $1,963 $733 $299 $234
Engines ** 1,677 795 589 150 143
$4,906 $2,758 $1,322 $449 $377
* Europe, Africa & Middle East and Commonwealth of Independent States
** Does not include internal engine transfers of $281 million and $319 million
in 1999 and 1998, respectively. Internal engine transfers are valued at prices
comparable to those for unrelated parties.
Machinery sales were $2.66 billion, a decrease of $568 million or 18 percent
from third-quarter 1998. The lower sales resulted primarily from a 14 percent
decrease in physical sales volume due to lower sales to end users and a larger
reduction in dealer new machine inventory than occurred in the third quarter
last year. Price realization also declined primarily due to unfavorable
geographic mix.
Sales rose in the Asia/Pacific region, remained near year-earlier levels in EAME
and declined elsewhere. In North America, sales fell due to lower retail
industry demand and the reduction of dealer new machine inventories. In EAME,
higher retail demand led to higher sales in Europe while the opposite occurred
in Africa & Middle East and Commonwealth of Independent States (CIS). In the
Asia/Pacific region, sales were higher due to a reversal of last year's
reduction in dealer new machine inventories and improved retail demand. In Latin
America, sales were lower due to the decline in retail industry demand.
Engine sales were $1.76 billion, an increase of $84 million from third-quarter
1998, reflecting a 4 percent increase in physical sales volume and slightly
better price realization (primarily geographic mix).
Sales were up in North America, Asia/Pacific and Latin America reflecting higher
sales in on-highway truck and power generation applications. Sales of large
engines into the petroleum sector were lower due to the impact of last year's
drop in oil prices. In North America, sales were up in both the United States
and Canada due to the very strong on-highway truck market and an increased share
of industry sales, as well as higher demand for power generation applications.
Sales were lower in EAME reflecting the impact of weak growth in Africa & Middle
East, low oil prices, and continued weakness in the agricultural equipment
sector. Sales were up in Asia/Pacific as higher sales of reciprocating engines
more than offset a decline in turbine engines. In Latin America, sales began to
improve from last year's levels as economic growth picked up.
Operating Profit Table
(Millions of dollars) Third-Ouarter Third-Ouarter
1999 1998
Machinery $160 $344
Engines 141 106
------------- -------------
$301 $450
Caterpillar operations are highly integrated; therefore, the company uses a
number of allocations to determine lines of business operating profit.
Machinery operating profit decreased $184 million, or 53 percent from
third-quarter 1998. Margin (sales less cost of goods sold) declined primarily
due to the lower sales volume and price realization, as well as the impact of
lower production volumes on manufacturing efficiencies. SG&A and R&D expenses
were lower reflecting the impact of ongoing cost reduction actions.
Engine operating profit increased $35 million, or 33 percent from third-quarter
1998 due to the higher sales volume and slightly better price realization. SG&A
and R&D expenses were about the same.
Interest expense was $3 million higher than a year ago.
Other income/expense reflects a net increase in income of $23 million due mostly
to a favorable change in foreign exchange gains and losses.
FINANCIAL PRODUCTS
Revenues for the third quarter were $326 million, up $30 million or 10 percent
compared with third-quarter 1998. The increase resulted primarily from continued
growth in Cat Financial's portfolio.
Before tax profit decreased $15 million or 19 percent from third-quarter 1998.
Less favorable reserve adjustments at Caterpillar Insurance Co. Ltd. (Cat
Insurance) were the principal cause of the lower profit.
INCOME TAXES
Third-quarter 1999 tax expense reflects an effective annual tax rate of 32
percent. Third-quarter 1998 tax expense reflected a 32 percent rate and a
favorable adjustment of $13 million to recognize the impact of a tax rate
change from 33 percent to 32 percent for the first six months of 1998.
UNCONSOLIDATED AFFILIATED COMPANIES
The company's share of unconsolidated affiliated companies' results declined $7
million from a year ago, primarily due to weaker results at Shin Caterpillar
Mitsubishi Ltd. and the conversion of F.G. Wilson from an affiliated company to
a consolidated subsidiary.
SUPPLEMENTAL INFORMATION
Dealer Machine Sales to End Users and Deliveries to Dealer Rental Operations
Sales and deliveries in North America were below third-quarter 1998 levels.
Sales were lower in both the United States and Canada reflecting lower industry
demand. Sales were lower in all sectors except metals mining. Slower growth in
dealer rental operations also contributed to lower deliveries.
Sales and deliveries in the EAME region declined slightly as lower sales in
Africa & Middle East and CIS more than offset higher sales in Europe. Germany,
France, Italy, Spain and the United Kingdom all posted higher sales while South
Africa, Turkey and Russia posted lower sales. For EAME as a whole, sales were
lower in most applications, with the exception of highway construction and
forestry where sales were higher. The decrease in sales was partially offset by
higher deliveries to dealer rental operations.
Sales and deliveries in Latin America fell due to recession and weak growth
throughout much of the region over the past year. Sales in the third quarter
were lower in all key countries, except Peru, where sales improved. Sales were
lower in most major applications.
Sales and deliveries in Asia/Pacific exceeded year-earlier levels as higher
sales in developing countries and Japan more than oftset lower sales in
Australia. Sales were higher in India, Indonesia, China, Korea, Malaysia and
Thailand. For the region as a whole, sales were higher in key applications
except metals mining, industrial and petroleum.
Dealer Inventories of New Machines
Worldwide dealer new machine inventories at the end of the third quarter were
lower than a year ago and about normal relative to current selling rates
Inventories were lower in Latin America, EAME and Asia/Pacific, and virtually
unchanged in North America. At quarter's end, inventories compared with current
selling rates were slightly below normal in Asia/Pacific, moderately below
normal in EAME, and moderately above normal in Latin America. Inventories in
North America, although still declining, were slightly above normal compared
with current selling rates.
Engine Sales to End Users and OEMs
Sales in North America were up as higher demand for on-highway truck engine and
power generation applications more than offset lower demand in the petroleum and
marine sectors. Sales of on-highway truck engines continued to be very strong
due to record industry demand and our increased share of industry sales.
Consequently, reciprocating engine sales were up in both the United States and
Canada. Turbine engine demand, however, was lower due principally to the impact
of low oil prices late last year and early this year on sales into the petroleum
sector.
Sales in EAME were down due to lower sales in both Europe and Africa & Middle
East. Weak growth in Africa & Middle East and last year's low oil prices
contributed to a decline in turbine engine sales to the petroleum sector.
Sales in Latin America were lower due to a decline in turbine engine demand
reflecting the impact of low oil prices. Sales of reciprocating engines remained
near last year's level. Higher sales into the on-highway truck engine sector
were more than offset by lower sales into the petroleum and power generation
sectors.
Sales in Asia/Pacific also declined due to the impact of low oil prices as a
decrease in petroleum sector sales more than offset an increase in sales to the
power generation and marine markets.
CONDENSED CASH FLOW
Net free cash flow (profit after tax adjusted for depreciation, changes in
working capital, capital expenditures, and dividends) for Machinery and Engines
was $569 million for 1999, a decrease of $888 million from 1998. This decrease
was primarily due to lower profit after tax and an unfavorable change in working
capital. The unfavorable change in working capital reflects lower benefits from
the revolving sale of receivables to Cat Financial, partially offset by the
positive impact of a reduction in inventory.
For the Nine Months Ended
(Millions of dollars Consolidated Machinery &
Engines *
Sept 30, Sept 30, Sept 30, Sept, 30,
1999 1998 1999 1998
Profit after tax $707 $1,212 $707 $1,212
Depreciation and 702 652 559 532
amotization
Change in working capital -
excluding cash, debt and
dividends payable (565) (1,854) 56 516
Capital expenditures excluding
equipment leased to others (438) (520) (435) (516)
Expenditures for equipment
leased to others, net of
disposals (150) (150) 12 6
Dividends paid (330) (293) (330) (293)
---------------------------------------------
Net Free Cash Flow (74) (953) 569 1,457
Other significant cash flow items:
Treasury shares purchased (218) (491) (218) (491)
Net (increase) decrease in
long-term finance (388) (874) - -
receivables
Net increase (decrease) 1,143 3,663 235 609
in debt
Investments and acquisitions -
(net of cash acquired) (282) (1,326) (258) (1,326)
Prefunding of employee benefit
plans - - - -
Other (258) (76) (410) (328)
Change in cash and short-term
Investments $(77) $(57) $(82) $(79)
CONDENSED CASH FLOW
For the Nine Months Ended
(Millions of dollars)
Financial Products
Sept. 30, Sept. 30,
1999 1998
Profit after tax $125 $141
Depreciation and 143 120
amortization
Change in working capital -
excluding cash, debt and
dividends payable (620) (2,370)
Capital expenditures excluding
equipment leased (3) (4)
to others
Expenditures for equipment
leased to others, net of
disposals (162) (156)
Dividends paid (36) (49)
--------------------------
Net Free Cash Flow (553) (2,318)
Other significant cash flow items:
Treasury shares purchased - -
Net (increase) decrease in
long-term finance (388) (874)
receivables
Net increase (decrease) 908 3,054
in debt
Investments and acquisitions -
(net of cash acquired) (24) -
Prefunding of employee benefit
plans - -
Other 62 160
Change in cash and short-term
Investments $5 $22
*Represents Caterpillar Inc. and its subsidiaries, except for Financial Products
which is accounted for on the equity basis. Note: Lines titled 'Change in
working capital - excluding cash, debt and dividends payable' and 'Capital
Expenditures excluding equipment leased to others' exclude $88 million and $91
million, respectively, included in the 'Investments and acquisitions - (net of
cash acquired)' and 'Other' lines for the nine months ended September 30, 1999;
Lines titled 'Change in working capital - excluding cash, debt and dividends
payable' and 'Capital expenditures excluding equipment leased to others '
exclude $10 million and $368 million, respectively, included in the 'Investments
and acquisitions - ( net of cash acquired)' line for the nine months ended
September 30,1998.
EMPLOYMENT
At the end of the third quarter, Caterpillar's worldwide employment was 67,302
compared with 66,223 one year ago. Acquisitions added 2,517 during, this period.
OUTLOOK
Summary
Company sales and revenues for 1999 are forecast to be lower than previously
anticipated, about 5 percent below 1998 levels as lower machine sales will more
than offset higher engine sales. The decline in machine sales reflects
significant dealer inventory reduction and weaker retail demand in North
America, recession in Latin America, pronounced weakness in Africa & Middle East
and the impact of low commodity prices on worldwide sales into the mining, oil,
agricultural and forestry sectors. Engine sales are up in North America
(particularly for on-highway trucks) and in Asia/Pacific, but the increase will
not be sufficient to offset the decline in worldwide machine sales. In total,
company sales are expected to exceed last year's level in Asia/Pacific, decline
slightly in North America and EAME, and decline significantly in Latin America-
Given this sales forecast, profit per share is expected to be about $3.00.
North America
In North America, engine sales are forecast to register another year of
outstanding growth, primarily due to continued very strong demand for on-highway
truck engines. Engine sales are also forecast to be higher for power generation
applications. Machine sales, however, will be lower due to a significant
reduction in dealer new machine inventory and to a decline in retail industry
demand. For construction and mining equipment, industry sales are expected to be
down about 10 percent reflecting the impact of low worldwide commodity prices as
well as lower demand in most construction sectors. Sales into the agricultural
sector will be down more sharply due to continued depressed commodity prices. In
addition, the six-year Federal highway bill has not boosted United States sales
this year as much as anticipated due to delays in getting major capital projects
underway, although the benefit is still expected in 2000 and 2001. Machine sales
in Canada this year will also be down, reflecting the impact of high interest
rates late last year and lower commodity prices. In total, company sales for
North America will be down this year, as lower machine sales will more than
offset higher engine sales.
EAME
In Western Europe, economic growth has picked up in the second half,
particularly in the United Kingdom and Germany. For the year as a whole, machine
sales are forecast to be higher due primarily to an increased share of industry
sales although unit industry demand will also be up. Engine sales, however, are
still expected to be down reflecting weakness in OEM markets, especially for
agricultural equipment. In Africa & Middle East, weak growth and low commodity
prices will result in lower sales for both machines and engines. Current oil
prices should boost sales next year. Sales also will be lower in Russia. For the
region as a whole, company sales are forecast to be down primarily due to
weakness in Africa & Middle East.
Latin America
The region is slowly recovering from recessions experienced by many countries
over the last fifteen months. Higher oil prices will help a number of countries
and interest rates have come down substantially. Mexico is registering solid
growth and the Brazilian economy is recovering faster than expected. Venezuela,
Chile and Peru are emerging from recession and Argentina has stopped
contracting. Colombia and Ecuador have not improved. Demand has recently begun
to pick up for the region as a whole, but company sales will still be
considerably lower for the year due to the significant decline year-to-date for
both machines and engines.
Asia/Pacific
Recovery has been stronger than expected for both developing Asia and Japan this
year. Gross Domestic Product (GDP) for developing Asia is now forecast to grow 5
percent this year and even Japan is now expected to register some growth. In
developing Asia, this strong growth combined with infrastructure spending in
China should lead to higher sales of both machines and reciprocating engines.
Turbine demand, however, is significantly lower due to project delays. In Japan,
business conditions are expected to remain relatively weak despite some growth
in the economy, keeping industry demand for machines near 1998 levels. In
Australia, continued good economic growth should keep sales near last year's
level. For the region as a whole, company sales are forecast to be up due to
higher industry demand and the expectation that dealers will end the year with
more inventory than a year ago.
Preliminary 2000 Outlook
In North America, United States GDP growth of 3 percent should lead to another
year of very strong engine sales, particularly for on-highway trucks. Industry
demand for machines is expected to increase moderately in Canada and decline
slightly in the United States, but company machine sales are forecast to
increase as shipments come back into line with retail demand.
In EAME, sales should increase as the Africa & Middle East region begins to
recover and as demand continues to grow in Europe where GDP growth is forecast
to approach 3 percent.
In Latin America, economic recovery should boost GDP growth to 3 to 4 percent,
leading to higher sales throughout most of the region.
In Asia/Pacific, higher sales are forecast for developing Asia as recovery
continues and GDP growth remains near 5 percent. Sales in Australia are
projected to decline slightly from 1999 levels as economic growth moderates,
while demand in Japan should improve from very depressed levels.
In summary, company sales are forecast to improve in 2000 due to better
worldwide growth, higher commodity prices and less dealer inventory reduction.
Higher sales are expected in all regions for both machines and engines.
Considering this sales forecast, profit is expected to improve from 1999 levels.
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 15, 1999. That filing is
available from the SEC web site at http://www.sec.gov/cgi-bin/srch-edgar.
Caterpillar's latest financial results and current outlook are also available
via:
Telephone:
(800) 228-7717 (Inside the United States and Canada)
(201) 332-8602 (Outside the United States and Canada)
Internet:
http://www.CAT.com
Caterpillar contact:
Marsha Hausser
Corporate Public Affairs
(309) 675-1307
E-mail: hausser_marsha_m@cat.com
Note: Information contained on our website is not incorporated by reference into
this release.
CATERPILLAR INC.
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
(Millions of dollars except per share data)
Consolidated Machinery &
Engines *
Sept 30, Sept 30, Sept 30, Sept, 30,
1999 1998 1999 1998
Sales and revenues
Sales of Machinery $4,422 $4,906 $4,422 $4,906
and Engines
Revenues of Financial Products 293 267 - -
------ ------- ------- ------
Total sales and revenues 4,715 5,173 4,422 4,906
------ ------- ------- ------
Operating costs:
Cost of goods sold 3,470 3,748 3,470 3,748
Selling, general, and
administrative expenses 616 631 500 545
Research and development
expenses 151 163 151 163
Interest expense of
Financial Products 142 135 - -
------- ------- ------ ------
Total operating costs 4,379 4,677 4,121 4,456
------- ------- ------ ------
Operating Profit 336 496 301 450
Interest expense excluding
Financial Products 71 68 71 68
Other income (expense) 62 43 33 10
Consolidated profit 327 471 263 392
before taxes
Provision for income taxes 104 138 81 108
Profit of consolidated 223 333 182 284
companies
Equity in profit of (4) 3 (4) 3
unconsolidated affiliates
Equity in profit of Financial - - 41 49
Products subsidiaries
Profit $219 $336 $219 $336
EPS of common stock $0.62 $0.93
EPS of common stock $0.61 $0.92
- assuming dilution
Weighted average shares
outstanding (thousands)
Basic 355,042 361,908
Assuming dilution 359,876 366,765
Financial Products
Sept 30, Sept 30,
1999 1998
Sales and revenues
Sales of Machinery $- $-
and Engines
Revenues of Financial 326 296
Products
------ ------
Total sales and revenues 326 296
------ ------
Operating costs:
Cost of goods sold - -
Selling, general, and 124 94
administrative expenses
Research and development - -
expenses
Interest expense of
Financial Products 149 136
------ ------
Total operating costs 273 230
------ ------
Operating Profit 53 66
Interest expense excluding - -
Financial Products
Other income (expense) 11 13
Consolidated profit 64 79
before taxes
Provision for income taxes 23 30
Profit of consolidated 41 49
companies
Equity in profit of
unconsolidated affiliates - -
Equity in profit of Financial - -
Products subsidiaries
Profit $41 $49
* Represents Caterpillar Inc. and its subsidiaries, except for Financial
Products which is accounted for on the equity basis. Transactions between
Machinery and Engines and Financial Products have been elimated to arrive at the
Consolidated data.
CATERPILLAR INC.
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
FOR THE NINE MONTHS ENDED
(Millions of dollars except per share data)
Consolidated Machinery &
Engines *
----------------------- -----------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1999 1998 1999 1998
----------------------- -----------------------
Sales and revenues:
Sales of Machinery & Engines $13,841 $14,836 $13,841 $14,836
Revenues of Financial Products 842 735 - -
--------- --------- --------- ----------
Total sales and revenues 14,683 15,571 13,841 14,836
--------- --------- --------- ----------
Operating costs:
Cost of goods sold 10,791 11,060 10,791 11,060
Selling, general, and
administrative expenses 1,901 1,852 1,567 1,605
Research and development
expenses 458 483 458 483
Interest expense of
Financial Products 407 357 - -
--------- --------- --------- ----------
Total operating costs 13,557 13,752 12,816 13,148
--------- --------- --------- ----------
Operating Profit 1,126 1,819 1,025 1,688
Interest expense excluding
Financial Products 203 198 203 198
Other income (expense) 127 145 31 52
--------- --------- --------- ----------
Consolidated profit before
taxes 1,050 1,766 853 1,542
Provision for income taxes 336 565 264 482
--------- --------- --------- ----------
Profit of consolidated
companies 714 1,201 589 1,060
Equity in profit of
unconsolidated affiliates (7) 11 (7) 11
Equity in profit of Financial
Products subsidiaries - - 125 141
--------- --------- --------- ----------
Profit $707 $1,212 $707 $1,212
--------- --------- --------- ----------
EPS of common stock $1.99 $3.32
--------- ---------
EPS of common stock
- assuming dilution $1.97 $3.28
--------- --------- --------- ----------
Weighted average shares
outstanding (thousands)
Basic 355,772 364,785
Assuming dilution 359,897 370,022
Financial
Products
-------------------------
Sept. 30, Sept. 30,
1999 1998
-------------------------
Sales and revenues:
Sales of Machinery & Engines $ - $ -
Revenues of Financial Products 944 812
--------- ---------
Total sales and revenues 944 812
--------- ---------
Operating costs:
Cost of goods sold - -
Selling, general, and
administrative expenses 356 267
Research and development
expenses - -
Interest expense of
Financial Products 425 365
--------- ---------
Total operating costs 781 632
--------- ---------
Operating Profit 163 180
Interest expense excluding
Financial Products - -
Other income (expense) 34 44
--------- ---------
Consolidated profit before
taxes 197 224
Provision for income taxes 72 83
--------- ---------
Profit of consolidated companies 125 141
Equity in profit of
unconsolidated affiliates - -
Equity in profit of Financial
Products subsidiaries - -
--------- ---------
Profit $125 $141
--------- ---------
EPS of common stock
EPS of common stock
- assuming dilution
Weighted average shares
outstanding (thousands)
Basic
Assuming dilution
* Represents Caterpillar Inc. and its subsidiaries, except for Financial
Products which is accounted for on the equity basis. Transactions between
Machinery and Engines and Financial Products have been eliminated to arrive
at the Consolidated data.
CATERPILLAR INC.
CONDENSED FINANCIAL POSITION
(millions of dollars)
Consolidated
(Caterpillar Inc. and Subsidiaries)
Sept. 30, Dec. 31, Sept. 30,
1999 1998 1998
--------- -------- ---------
Assets
Current assets:
Cash and short-term investments $283 $360 $235
Receivables - trade and other 3,399 3,660 3,605
Receivables - finance 4,289 3,516 3,862
Deferred income taxes 563 474 432
Prepaid expenses 724 607 536
Inventories 2,719 2,842 3,116
-------- -------- --------
Total current assets 11,977 11,459 11,786
Property, plant, and equipment - net 4,936 4,866 4,517
Long-term receivables - trade and other 97 85 124
Long-term receivables - finance 5,446 5,058 4,755
Investments in unconsolidated affiliated
companies 518 773 769
Deferred income taxes 925 955 1,002
Intangible assets 1,563 1,241 1,236
Other assets 997 691 945
-------- -------- --------
Total Assets $26,459 $25,128 $25,134
-------- -------- --------
Liabilities
Current liabilities:
Short-term borrowings:
- Machinery & Engines $60 $49 $47
- Financial Products 151 760 536
Accounts payable 2,102 2,250 2,366
Accrued expenses 1,094 928 946
Accrued wages, salaries, and employee
benefits 1,089 1,217 1,125
Dividends payable - 107 -
Deferred and current income taxes payable 67 15 97
Long-term debt due within one year:
- Machinery & Engines 152 60 69
- Financial Products 2,885 2,179 1,853
-------- -------- --------
Total current liabilities 7,600 7,565 7,039
Long-term debt due after one year:
- Machinery & Engines 3,125 2,993 2,967
- Financial Products 7,222 6,411 6,759
Liability for post-employment benefits 2,620 2,590 2,714
Deferred income taxes and other liabilities 494 438 485
-------- -------- --------
Total Liabilities 21,061 19,997 19,964
-------- -------- --------
Stockholders' Equity
Common stock 1,044 1,063 1,066
Profit employed in the business 6,608 6,123 6,037
Accumulated other comprehensive income (19) 1 52
Treasury stock (2,235) (2,056) (1,985)
-------- -------- --------
Total Stockholders' Equity 5,398 5,131 5,170
-------- -------- --------
Total Liabilities and Stockholders' Equity $26,459 $25,128 $25,134
-------- -------- --------
Certain amounts for 1998 have been reclassified to conform with the 1999
financial statement presentation.
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