UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | |
FORM 10-Q | |
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ | |
Commission File Number: 1-768 | |
CATERPILLAR INC. (Exact name of registrant as specified in its charter) | |
Delaware (State or other jurisdiction of incorporation) | 37-0602744 (IRS Employer I.D. No.) |
100 NE Adams Street, Peoria, Illinois (Address of principal executive offices) | 61629 (Zip Code) |
Registrant's telephone number, including area code: (309) 675-1000 | |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [ X ] No Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]. Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [ X ] No [ ] | |
At |
Caterpillar Inc. Consolidated Statement of Results of Operations (Unaudited) (Dollars in millions except per share data) | ||||||||
Three Months Ended | ||||||||
June 30, | ||||||||
2005 | 2004 | |||||||
Sales and revenues: | ||||||||
Sales of Machinery and Engines | $ | 8,784 | $ | 7,100 | ||||
Revenues of Financial Products | 576 | 483 | ||||||
Total sales and revenues | 9,360 | 7,583 | ||||||
Operating costs: | ||||||||
Cost of goods sold | 6,890 | 5,563 | ||||||
Selling, general and administrative expenses | 789 | 744 | ||||||
Research and development expenses | 268 | 214 | ||||||
Interest expense of Financial Products | 184 | 121 | ||||||
Other operating expenses | 208 | 171 | ||||||
Total operating costs | 8,339 | 6,813 | ||||||
Operating profit | 1,021 | 770 | ||||||
Interest expense excluding Financial Products | 65 | 59 | ||||||
Other income (expense) | 90 | 50 | ||||||
Consolidated profit before taxes | 1,046 | 761 | ||||||
Provision for income taxes | 315 | 209 | ||||||
Profit of consolidated companies | 731 | 552 | ||||||
Equity in profit (loss) of unconsolidated affiliated companies | 29 | 14 | ||||||
Profit | $ | 760 | $ | 566 | ||||
Profit per common share | $ | 1.12 | $ | .83 | ||||
Profit per common share - diluted 1 | $ | 1.08 | $ | .80 | ||||
Weighted average common shares outstanding (millions) | ||||||||
- Basic | 678.3 | 684.8 | ||||||
- Diluted 1 | 705.1 | 709.5 | ||||||
Cash dividends declared per common share | $ | .46 | $ | .39 | ||||
(1) Diluted by assumed exercise of stock options, using the treasury stock method. | ||||||||
See accompanying notes to Consolidated Financial Statements. |
Caterpillar Inc. Consolidated Statement of Results of Operations (Unaudited) (Dollars in millions except per share data) | ||||||||
Three Months Ended | ||||||||
September 30, | ||||||||
2005 | 2004 | |||||||
Sales and revenues: | ||||||||
Sales of Machinery and Engines | $ | 8,392 | $ | 7,175 | ||||
Revenues of Financial Products | 585 | 484 | ||||||
Total sales and revenues | 8,977 | 7,659 | ||||||
Operating costs: | ||||||||
Cost of goods sold | 6,547 | 5,745 | ||||||
Selling, general and administrative expenses | 775 | 701 | ||||||
Research and development expenses | 285 | 240 | ||||||
Interest expense of Financial Products | 197 | 130 | ||||||
Other operating expenses | 233 | 180 | ||||||
Total operating costs | 8,037 | 6,996 | ||||||
Operating profit | 940 | 663 | ||||||
Interest expense excluding Financial Products | 68 | 60 | ||||||
Other income (expense) | 80 | 60 | ||||||
Consolidated profit before taxes | 952 | 663 | ||||||
Provision for income taxes | 303 | 182 | ||||||
Profit of consolidated companies | 649 | 481 | ||||||
Equity in profit (loss) of unconsolidated affiliated companies | 18 | 17 | ||||||
Profit | $ | 667 | $ | 498 | ||||
Profit per common share | $ | .98 | $ | .73 | ||||
Profit per common share - diluted 1 | $ | .94 | $ | .70 | ||||
Weighted average common shares outstanding (millions) | ||||||||
- Basic | 678.8 | 683.6 | ||||||
- Diluted 1 | 710.7 | 706.0 | ||||||
Cash dividends declared per common share | $ | - | $ | - | ||||
(1) Diluted by assumed exercise of stock options, using the treasury stock method. | ||||||||
See accompanying notes to Consolidated Financial Statements. |
Caterpillar Inc. Consolidated Statement of Results of Operations (Unaudited) (Dollars in millions except per share data) | ||||||||
Six Months Ended | ||||||||
June 30, | ||||||||
2005 | 2004 | |||||||
Sales and revenues: | ||||||||
Sales of Machinery and Engines | $ | 16,573 | $ | 13,102 | ||||
Revenues of Financial Products | 1,126 | 961 | ||||||
Total sales and revenues | 17,699 | 14,063 | ||||||
Operating costs: | ||||||||
Cost of goods sold | 13,105 | 10,264 | ||||||
Selling, general and administrative expenses | 1,533 | 1,417 | ||||||
Research and development expenses | 509 | 445 | ||||||
Interest expense of Financial Products | 354 | 240 | ||||||
Other operating expenses | 421 | 359 | ||||||
Total operating costs | 15,922 | 12,725 | ||||||
Operating profit | 1,777 | 1,338 | ||||||
Interest expense excluding Financial Products | 130 | 116 | ||||||
Other income (expense) | 198 | 111 | ||||||
Consolidated profit before taxes | 1,845 | 1,333 | ||||||
Provision for income taxes | 547 | 367 | ||||||
Profit of consolidated companies | 1,298 | 966 | ||||||
Equity in profit (loss) of unconsolidated affiliated companies | 43 | 20 | ||||||
Profit | $ | 1,341 | $ | 986 | ||||
Profit per common share | $ | 1.97 | $ | 1.44 | ||||
Profit per common share - diluted 1 | $ | 1.89 | $ | 1.39 | ||||
Weighted average common shares outstanding (millions) | ||||||||
- Basic | 680.9 | 685.2 | ||||||
- Diluted 1 | 707.9 | 710.4 | ||||||
Cash dividends declared per common share | $ | .46 | $ | .39 | ||||
(1) Diluted by assumed exercise of stock options, using the treasury stock method. | ||||||||
See accompanying notes to Consolidated Financial Statements. |
Caterpillar Inc. Consolidated Statement of Results of Operations (Unaudited) (Dollars in millions except per share data) | ||||||||
Nine Months Ended | ||||||||
September 30, | ||||||||
2005 | 2004 | |||||||
Sales and revenues: | ||||||||
Sales of Machinery and Engines | $ | 24,965 | $ | 20,277 | ||||
Revenues of Financial Products | 1,711 | 1,445 | ||||||
Total sales and revenues | 26,676 | 21,722 | ||||||
Operating costs: | ||||||||
Cost of goods sold | 19,652 | 16,009 | ||||||
Selling, general and administrative expenses | 2,308 | 2,118 | ||||||
Research and development expenses | 794 | 685 | ||||||
Interest expense of Financial Products | 551 | 370 | ||||||
Other operating expenses | 654 | 539 | ||||||
Total operating costs | 23,959 | 19,721 | ||||||
Operating profit | 2,717 | 2,001 | ||||||
Interest expense excluding Financial Products | 198 | 176 | ||||||
Other income (expense) | 278 | 171 | ||||||
Consolidated profit before taxes | 2,797 | 1,996 | ||||||
Provision for income taxes | 850 | 549 | ||||||
Profit of consolidated companies | 1,947 | 1,447 | ||||||
Equity in profit (loss) of unconsolidated affiliated companies | 61 | 37 | ||||||
Profit | $ | 2,008 | $ | 1,484 | ||||
Profit per common share | $ | 2.95 | $ | 2.17 | ||||
Profit per common share - diluted 1 | $ | 2.84 | $ | 2.10 | ||||
Weighted average common shares outstanding (millions) | ||||||||
- Basic | 680.5 | 684.5 | ||||||
- Diluted 1 | 707.4 | 708.4 | ||||||
Cash dividends declared per common share | $ | .46 | $ | .39 | ||||
(1) Diluted by assumed exercise of stock options, using the treasury stock method. | ||||||||
See accompanying notes to Consolidated Financial Statements. |
Caterpillar Inc. Consolidated Statement of Changes in Stockholders' Equity For the Six Months Ended (Unaudited) (Dollars in millions) | |||||||||||||||||
June 30, 2005 | June 30, 2004 | ||||||||||||||||
Common stock: | |||||||||||||||||
Balance at beginning of period | $ | 1,231 | $ | 1,059 | |||||||||||||
Common shares issued from treasury stock | 135 | 59 | |||||||||||||||
Impact of 2-for-1 stock split | 338 | - | |||||||||||||||
Balance at end of period | 1,704 | 1,118 | |||||||||||||||
Treasury stock: | |||||||||||||||||
Balance at beginning of period | (3,277 | ) | (2,914 | ) | |||||||||||||
Shares issued: 2005 -9,376,792; 2004 - 4,360,260 | 151 | 59 | |||||||||||||||
Shares repurchased: 2005 - 18,473,200; 2004 - 6,420,000 | (839 | ) | (250 | ) | |||||||||||||
Balance at end of period | (3,965 | ) | (3,105 | ) | |||||||||||||
Profit employed in the business: | |||||||||||||||||
Balance at beginning of period | 9,937 | 8,450 | |||||||||||||||
Profit | 1,341 | $ | 1,341 | 986 | $ | 986 | |||||||||||
Dividends declared | (308 | ) | (268 | ) | |||||||||||||
Impact of 2-for-1 stock split | (338 | ) | - | ||||||||||||||
Balance at end of period | 10,632 | 9,168 | |||||||||||||||
Accumulated other comprehensive income: | |||||||||||||||||
Foreign currency translation adjustment: | |||||||||||||||||
Balance at beginning of period | 489 | 348 | |||||||||||||||
Aggregate adjustment for period | (132 | ) | (132 | ) | (21 | ) | (21 | ) | |||||||||
Balance at end of period | 357 | 327 | |||||||||||||||
Minimum pension liability adjustment - consolidated companies: | |||||||||||||||||
Balance at beginning of period (net of tax of: 2005-$485; 2004-$460) | (993 | ) | (934 | ) | |||||||||||||
Aggregate adjustment for period (net of tax of: 2005-$24) | (45 | ) | (45 | ) | - | ||||||||||||
Balance at end of period (net of tax of: 2005-$509; 2004-$460) | (1,038 | ) | (934 | ) | |||||||||||||
Minimum pension liability adjustment - unconsolidated companies: | |||||||||||||||||
Balance at beginning of period | (48 | ) | (48 | ) | |||||||||||||
Aggregate adjustment for period | (1 | ) | (1 | ) | (3 | ) | (3 | ) | |||||||||
Balance at end of period | (49 | ) | (51 | ) | |||||||||||||
Derivative financial instruments: | |||||||||||||||||
Balance at beginning of period (net of tax of: 2005-$58; 2004-$54) | 110 | 104 | |||||||||||||||
Gains/(losses) deferred during period (net of tax of: 2005-$5; 2004-$7) | (10 | ) | (10 | ) | 12 | 12 | |||||||||||
(Gains)/losses reclassified to earnings during period (net of tax of: 2005-$31; 2004-$11) | (57 | ) | (57 | ) | (15 | ) | (15 | ) | |||||||||
Balance at end of period (net of tax of: 2005-$22; 2004-$50) | 43 | 101 | |||||||||||||||
Available-for-sale securities: | |||||||||||||||||
Balance at beginning of period (net of tax of: 2005-$10; 2004-$7) | 18 | 13 | |||||||||||||||
Gains/(losses) deferred during period (net of tax of: 2005-$2; 2004-$3) | 4 | 4 | (5 | ) | (5 | ) | |||||||||||
(Gains)/losses reclassified to earnings during period (net of tax of 2005-$1; 2004-$0) | (1 | ) | (1 | ) | - | ||||||||||||
Balance at end of period (net of tax of: 2005-$11; 2004-$4) | 21 | 8 | |||||||||||||||
Total accumulated other comprehensive income | (666 | ) | (549 | ) | |||||||||||||
Comprehensive income | $ | 1,099 | $ | 954 | |||||||||||||
Stockholders' equity at end of period | $ | 7,705 | $ | 6,632 | |||||||||||||
See accompanying notes to Consolidated Financial Statements. |
Caterpillar Inc. Consolidated Statement of Changes in Stockholders' Equity For the Nine Months Ended (Unaudited) (Dollars in millions) | |||||||||||||||||
September 30, 2005 | September 30, 2004 | ||||||||||||||||
Common stock: | |||||||||||||||||
Balance at beginning of period | $ | 1,231 | $ | 1,059 | |||||||||||||
Common shares issued from treasury stock | 252 | 73 | |||||||||||||||
Impact of 2-for-1 stock split | 338 | - | |||||||||||||||
Balance at end of period | 1,821 | 1,132 | |||||||||||||||
Treasury stock: | |||||||||||||||||
Balance at beginning of period | (3,277 | ) | (2,914 | ) | |||||||||||||
Shares issued: 2005 -16,391,795; 2004 - 5,541,832 | 277 | 76 | |||||||||||||||
Shares repurchased: 2005 - 22,057,200; 2004 - 10,594,000 | (1,039 | ) | (400 | ) | |||||||||||||
Balance at end of period | (4,039 | ) | (3,238 | ) | |||||||||||||
Profit employed in the business: | |||||||||||||||||
Balance at beginning of period | 9,937 | 8,450 | |||||||||||||||
Profit | 2,008 | $ | 2,008 | 1,484 | $ | 1,484 | |||||||||||
Dividends declared | (309 | ) | (267 | ) | |||||||||||||
Impact of 2-for-1 stock split | (338 | ) | - | ||||||||||||||
Balance at end of period | 11,298 | 9,667 | |||||||||||||||
Accumulated other comprehensive income: | |||||||||||||||||
Foreign currency translation adjustment: | |||||||||||||||||
Balance at beginning of period | 489 | 348 | |||||||||||||||
Aggregate adjustment for period | (141 | ) | (141 | ) | 5 | 5 | |||||||||||
Balance at end of period | 348 | 353 | |||||||||||||||
Minimum pension liability adjustment - consolidated companies: | |||||||||||||||||
Balance at beginning of period (net of tax of: 2005-$485; 2004-$460) | (993 | ) | (934 | ) | |||||||||||||
Aggregate adjustment for period (net of tax of: 2005-$24) | (46 | ) | (46 | ) | - | - | |||||||||||
Balance at end of period (net of tax of: 2005-$509; 2004-$460) | (1,039 | ) | (934 | ) | |||||||||||||
Minimum pension liability adjustment - unconsolidated companies: | |||||||||||||||||
Balance at beginning of period | (48 | ) | (48 | ) | |||||||||||||
Aggregate adjustment for period | 1 | 1 | (1 | ) | (1 | ) | |||||||||||
Balance at end of period | (47 | ) | (49 | ) | |||||||||||||
Derivative financial instruments: | |||||||||||||||||
Balance at beginning of period (net of tax of: 2005-$58; 2004-$54) | 110 | 104 | |||||||||||||||
Gains/(losses) deferred during period (net of tax of: 2005-$2; 2004-$4) | (5 | ) | (5 | ) | 8 | 8 | |||||||||||
(Gains)/losses reclassified to earnings during period (net of tax of: 2005-$40; 2004-$17) | (75 | ) | (75 | ) | (33 | ) | (33 | ) | |||||||||
Balance at end of period (net of tax of: 2005-$16; 2004-$41) | 30 | 79 | |||||||||||||||
Available-for-sale securities: | |||||||||||||||||
Balance at beginning of period (net of tax of: 2005-$10; 2004-$7) | 18 | 13 | |||||||||||||||
Gains/(losses) deferred during period (net of tax of: 2005-$2; 2004-$1) | 4 | 4 | (2 | ) | (2 | ) | |||||||||||
(Gains)/losses reclassified to earnings during period (net of tax of 2005-$1; 2004-$0) | (2 | ) | (2 | ) | - | ||||||||||||
Balance at end of period (net of tax of: 2005-$11; 2004-$6) | 20 | 11 | |||||||||||||||
Total accumulated other comprehensive income | (688 | ) | (540 | ) | |||||||||||||
Comprehensive income | $ | 1,744 | $ | 1,461 | |||||||||||||
Stockholders' equity at end of period | $ | 8,392 | $ | 7,021 | |||||||||||||
See accompanying notes to Consolidated Financial Statements. |
Caterpillar Inc. Consolidated Statement of Financial Position (Unaudited) (Dollars in millions) | |||||||||||
June 30, 2005 | December 31, 2004 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and short-term investments | $ | 749 | $ | 445 | |||||||
Receivables - trade and other | 7,577 | 7,463 | |||||||||
Receivables - finance | 5,489 | 5,182 | |||||||||
Deferred and refundable income taxes | 552 | 398 | |||||||||
Prepaid expenses | 1,278 | 1,369 | |||||||||
Inventories | 5,349 | 4,675 | |||||||||
Total current assets | 20,994 | 19,532 | |||||||||
Property, plant and equipment - net | 7,593 | 7,682 | |||||||||
Long-term receivables - trade and other | 845 | 764 | |||||||||
Long-term receivables - finance | 9,932 | 9,903 | |||||||||
Investments in unconsolidated affiliated companies | 555 | 517 | |||||||||
Deferred income taxes | 700 | 674 | |||||||||
Intangible assets | 468 | 315 | |||||||||
Goodwill | 1,451 | 1,450 | |||||||||
Other assets | 2,285 | 2,258 | |||||||||
Total assets | $ | 44,823 | $ | 43,095 | |||||||
Liabilities | |||||||||||
Current liabilities: | |||||||||||
Short-term borrowings: | |||||||||||
Machinery and Engines | 612 | 93 | |||||||||
Financial Products | 4,567 | 4,064 | |||||||||
Accounts payable | 3,495 | 3,580 | |||||||||
Accrued expenses | 2,332 | 2,261 | |||||||||
Accrued wages, salaries and employee benefits | 1,551 | 1,730 | |||||||||
Customer advances | 536 | 447 | |||||||||
Dividends payable | 169 | 141 | |||||||||
Deferred and current income taxes payable | 493 | 259 | |||||||||
Long-term debt due within one year: | |||||||||||
Machinery and Engines | 232 | 6 | |||||||||
Financial Products | 3,209 | 3,525 | |||||||||
Total current liabilities | 17,196 | 16,106 | |||||||||
Long-term debt due after one year: | |||||||||||
Machinery and Engines | 3,438 | 3,663 | |||||||||
Financial Products | 12,419 | 12,174 | |||||||||
Liability for postemployment benefits | 3,271 | 2,986 | |||||||||
Deferred income taxes and other liabilities | 794 | 699 | |||||||||
Total liabilities | 37,118 | 35,628 | |||||||||
Stockholders' equity | |||||||||||
Common stock of $1.00 par: | |||||||||||
Authorized shares: 900,000,000 Issued shares: (6/30/05 and 12/31/04 - 814,894,624) at paid in amount | 1,704 | 1,231 | |||||||||
Treasury stock (6/30/05 - 138,117,134; 12/31/04 - 129,020,726) at cost | (3,965 | ) | (3,277 | ) | |||||||
Profit employed in the business | 10,632 | 9,937 | |||||||||
Accumulated other comprehensive income | (666 | ) | (424 | ) | |||||||
Total stockholders' equity | 7,705 | 7,467 | |||||||||
Total liabilities and stockholders' equity | $ | 44,823 | $ | 43,095 | |||||||
See accompanying notes to Consolidated Financial Statements. |
Caterpillar Inc. Consolidated Statement of Financial Position (Unaudited) (Dollars in millions) | |||||||||||
September 30, 2005 | December 31, 2004 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and short-term investments | $ | 967 | $ | 445 | |||||||
Receivables - trade and other | 7,319 | 7,463 | |||||||||
Receivables - finance | 5,725 | 5,182 | |||||||||
Deferred and refundable income taxes | 581 | 398 | |||||||||
Prepaid expenses | 1,301 | 1,369 | |||||||||
Inventories | 5,469 | 4,675 | |||||||||
Total current assets | 21,362 | 19,532 | |||||||||
Property, plant and equipment - net | 7,817 | 7,682 | |||||||||
Long-term receivables - trade and other | 893 | 764 | |||||||||
Long-term receivables - finance | 10,336 | 9,903 | |||||||||
Investments in unconsolidated affiliated companies | 563 | 517 | |||||||||
Deferred income taxes | 707 | 674 | |||||||||
Intangible assets | 462 | 315 | |||||||||
Goodwill | 1,451 | 1,450 | |||||||||
Other assets | 2,274 | 2,258 | |||||||||
Total assets | $ | 45,865 | $ | 43,095 | |||||||
Liabilities | |||||||||||
Current liabilities: | |||||||||||
Short-term borrowings: | |||||||||||
Machinery and Engines | 603 | 93 | |||||||||
Financial Products | 5,361 | 4,064 | |||||||||
Accounts payable | 3,425 | 3,580 | |||||||||
Accrued expenses | 2,508 | 2,261 | |||||||||
Accrued wages, salaries and employee benefits | 1,735 | 1,730 | |||||||||
Customer advances | 554 | 447 | |||||||||
Dividends payable | - | 141 | |||||||||
Deferred and current income taxes payable | 583 | 259 | |||||||||
Long-term debt due within one year: | �� | ||||||||||
Machinery and Engines | 234 | 6 | |||||||||
Financial Products | 3,850 | 3,525 | |||||||||
Total current liabilities | 18,853 | 16,106 | |||||||||
Long-term debt due after one year: | |||||||||||
Machinery and Engines | 3,406 | 3,663 | |||||||||
Financial Products | 11,578 | 12,174 | |||||||||
Liability for postemployment benefits | 2,827 | 2,986 | |||||||||
Deferred income taxes and other liabilities | 809 | 699 | |||||||||
Total liabilities | 37,473 | 35,628 | |||||||||
Stockholders' equity | |||||||||||
Common stock of $1.00 par: | |||||||||||
Authorized shares: 900,000,000 Issued shares: (9/30/05 and 12/31/04 - 814,894,624) at paid in amount | 1,821 | 1,231 | |||||||||
Treasury stock (9/30/05 - 134,686,131; 12/31/04 - 129,020,726) at cost | (4,039 | ) | (3,277 | ) | |||||||
Profit employed in the business | 11,298 | 9,937 | |||||||||
Accumulated other comprehensive income | (688 | ) | (424 | ) | |||||||
Total stockholders' equity | 8,392 | 7,467 | |||||||||
Total liabilities and stockholders' equity | $ | 45,865 | $ | 43,095 | |||||||
See accompanying notes to Consolidated Financial Statements. |
Caterpillar Inc. Consolidated Statement of Cash Flow (Unaudited) (Millions of dollars) | Caterpillar Inc. Consolidated Statement of Cash Flow (Unaudited) (Millions of dollars) | Caterpillar Inc. Consolidated Statement of Cash Flow (Unaudited) (Millions of dollars) | ||||||||||||||||
Six Months Ended | Nine Months Ended | |||||||||||||||||
June 30, | September 30, | |||||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||||
Cash flow from operating activities: | Cash flow from operating activities: | Cash flow from operating activities: | ||||||||||||||||
Profit | $ | 1,341 | $ | 986 | Profit | $ | 2,008 | $ | 1,484 | |||||||||
Adjustments for non-cash items: | Adjustments for non-cash items: | |||||||||||||||||
Depreciation and amortization | 744 | 703 | Depreciation and amortization | 1,113 | 1,055 | |||||||||||||
Other | (113 | ) | (58 | ) | Other | (89 | ) | (83 | ) | |||||||||
Changes in assets and liabilities: | Changes in assets and liabilities: | |||||||||||||||||
Receivables - trade and other (see non-cash item below) | (742 | ) | (5,508 | ) | Receivables - trade and other (see non-cash item below) | (521 | ) | (7,110 | ) | |||||||||
Inventories | (674 | ) | (921 | ) | Inventories | (794 | ) | (1,225 | ) | |||||||||
Accounts payable and accrued expenses | 236 | 476 | Accounts payable and accrued expenses | 313 | 728 | |||||||||||||
Other - net | 204 | (275 | ) | Other assets - net | 69 | 76 | ||||||||||||
Other liabilities - net | 31 | (2 | ) | |||||||||||||||
Net cash provided by (used for) operating activities | Net cash provided by (used for) operating activities | 996 | (4,597 | ) | Net cash provided by (used for) operating activities | 2,130 | (5,077 | ) | ||||||||||
Cash flow from investing activities: | Cash flow from investing activities: | Cash flow from investing activities: | ||||||||||||||||
Capital expenditures - excluding equipment leased to others | (402 | ) | (293 | ) | Capital expenditures - excluding equipment leased to others | (709 | ) | (519 | ) | |||||||||
Expenditures for equipment leased to others | (608 | ) | (535 | ) | Expenditures for equipment leased to others | (965 | ) | (827 | ) | |||||||||
Proceeds from disposals of property, plant and equipment | 304 | 281 | Proceeds from disposals of property, plant and equipment | 447 | 378 | |||||||||||||
Additions to finance receivables | (5,159 | ) | (4,221 | ) | Additions to finance receivables | (7,310 | ) | (6,423 | ) | |||||||||
Collections of finance receivables | 3,444 | 2,939 | Collections of finance receivables | 4,889 | 4,617 | |||||||||||||
Proceeds from the sale of finance receivables | 859 | 645 | Proceeds from the sale of finance receivables | 916 | 647 | |||||||||||||
Collections of retained interests in securitized trade receivables | - | 4,476 | Collections of retained interests in securitized trade receivables | - | 5,722 | |||||||||||||
Investments and acquisitions (net of cash acquired) | (8 | ) | (5 | ) | Investments and acquisitions (net of cash acquired) | (12 | ) | (284 | ) | |||||||||
Other - net | 51 | (10 | ) | Other - net | 80 | (40 | ) | |||||||||||
Net cash provided by (used for) investing activities | Net cash provided by (used for) investing activities | (1,519 | ) | 3,277 | Net cash provided by (used for) investing activities | (2,664 | ) | 3,271 | ||||||||||
Cash flow from financing activities: | Cash flow from financing activities: | Cash flow from financing activities: | ||||||||||||||||
Dividends paid | (280 | ) | (254 | ) | Dividends paid | (449 | ) | (395 | ) | |||||||||
Common stock issued, including treasury shares reissued | 278 | 107 | Common stock issued, including treasury shares reissued | 412 | 137 | |||||||||||||
Treasury shares purchased | (839 | ) | (250 | ) | Treasury shares purchased | (1,039 | ) | (400 | ) | |||||||||
Proceeds from long-term debt issued | 3,719 | 3,322 | Proceeds from long-term debt issued | 4,358 | 4,532 | |||||||||||||
Payments on long-term debt | (2,390 | ) | (1,571 | ) | Payments on long-term debt | (3,324 | ) | (2,615 | ) | |||||||||
Short-term borrowings - net | 325 | 45 | Short-term borrowings - net | 1,085 | 563 | |||||||||||||
Net cash provided by financing activities | Net cash provided by financing activities | 813 | 1,399 | Net cash provided by financing activities | 1,043 | 1,822 | ||||||||||||
Effect of exchange rate changes on cash | Effect of exchange rate changes on cash | 14 | 46 | Effect of exchange rate changes on cash | 13 | 59 | ||||||||||||
Increase in cash and short-term investments | Increase in cash and short-term investments | 304 | 125 | Increase in cash and short-term investments | 522 | 75 | ||||||||||||
Cash and short-term investments at beginning of period | Cash and short-term investments at beginning of period | 445 | 342 | Cash and short-term investments at beginning of period | 445 | 342 | ||||||||||||
Cash and short-term investments at end of period | Cash and short-term investments at end of period | $ | 749 | $ | 467 | Cash and short-term investments at end of period | $ | 967 | $ | 417 | ||||||||
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. | ||||||||||||||||||
Non-cash operating and investing activities: Trade receivables of $0 and $5,090 million were exchanged for retained interests in securitized trade receivables during the six months ended June 30, 2005 and 2004, respectively. | ||||||||||||||||||
Non-cash operating and investing activities: Trade receivables of $0 and $6,786 million were exchanged for retained interests in securitized trade receivables during the nine months ended September 30, 2005 and 2004, respectively. | Non-cash operating and investing activities: Trade receivables of $0 and $6,786 million were exchanged for retained interests in securitized trade receivables during the nine months ended September 30, 2005 and 2004, respectively. | |||||||||||||||||
See accompanying notes to Consolidated Financial Statements. | See accompanying notes to Consolidated Financial Statements. | See accompanying notes to Consolidated Financial Statements. |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
1. | A. Financial Statement Presentation In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of (a) the consolidated results of operations for the three and In the fourth quarter of 2004, we changed how we classify cash flows related to trade receivables securitized through Cat Financial and wholesale inventory receivables financed by Cat Financial. Amounts reported in Consolidated cash flow for the |
Nine Months Ended September 30, 2004 | ||||||||||||
(Millions of dollars) | Previous Classification1 | Change | As Reclassified | |||||||||
Consolidated Statement of Cash Flow | ||||||||||||
Receivables - trade and other | $ | (461 | ) | $ | (6,649 | ) | $ | (7,110 | ) | |||
Net cash provided by (used for) operating activities | 1,535 | (6,612 | ) | (5,077 | ) | |||||||
Additions to finance receivables | (16,493 | ) | 10,070 | (6,423 | ) | |||||||
Collections of finance receivables | 13,010 | (8,393 | ) | 4,617 | ||||||||
Proceeds from sale of finance receivables | 1,434 | (787 | ) | 647 | ||||||||
Collections of retained interests in securitized trade receivables_ | - | 5,722 | 5,722 | |||||||||
Net cash provided by (used for) investing activities | (3,341 | ) | 6,612 | 3,271 | ||||||||
(1) Certain amounts do not agree to prior period reported amounts due to unrelated reclassifications. |
Six Months Ended June 30, 2004 | ||||||||||||
(Millions of dollars) | Previous Classification1 | Change | As Reclassified | |||||||||
Consolidated Statement of Cash Flow | ||||||||||||
Receivables - trade and other | $ | (340 | ) | $ | (5,168 | ) | $ | (5,508 | ) | |||
Net cash provided by (used for) operating activities | 571 | (5,168 | ) | (4,597 | ) | |||||||
Additions to finance receivables | (10,802 | ) | 6,581 | (4,221 | ) | |||||||
Collections of finance receivables | 8,292 | (5,353 | ) | 2,939 | ||||||||
Proceeds from sale of finance receivables | 1,181 | (536 | ) | 645 | ||||||||
Collections of retained interests in securitized trade receivables_ | - | 4,476 | 4,476 | |||||||||
Net cash provided by (used for) investing activities | (1,891 | ) | 5,168 | 3,277 | ||||||||
(1) Certain amounts do not agree to prior period reported amounts due to unrelated reclassifications. | ||||||||||||
Comprehensive income is comprised of profit, as well as gains and losses from currency translation, derivative instruments designated as cash flow hedges and available-for-sale securities and adjustments in the minimum pension liability. Total comprehensive income for the three months ended September 30, 2005 and The December 31, 2004 financial position data included herein is derived from the audited consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2004. |
B. Nature of Operations We operate in three principal lines of business: | ||
(1) | 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, telescopic handlers, skid steer loaders and related parts. Also includes logistics services for other companies. |
(2) | 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 over 22,000 horsepower (4 to over 16 200 kilowatts). Turbines range from 1,200 to 20,500 horsepower (900 to 15 000 kilowatts). | |
(3) | 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 active investor in independent power projects using Caterpillar power generation equipment and services. | |
Our Machinery and Engines operations are highly integrated. Throughout the Notes, Machinery and Engines represents the aggregate total of these principal lines of business. |
C. Stock-Based Compensation We currently use the intrinsic value method of accounting for stock-based employee compensation in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees." Therefore, no compensation expense is recognized in association with our options. In 2004, we switched from using the Black-Scholes option-pricing model to the binomial option-pricing model in order to calculate the fair value of our options. We believe this model more accurately reflects the value of the options than the Black-Scholes option-pricing model. Grants made prior to 2004 continue to be valued using the Black-Scholes model. |
Three Months Ended September 30, | ||||||||||
(Dollars in millions except per share data) | 2005 | 2004 | ||||||||
Profit, as reported | $ | 667 | $ | 498 | ||||||
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects | (6 | ) | (58 | ) | ||||||
Pro forma profit | $ | 661 | $ | 440 | ||||||
Profit per share of common stock: | ||||||||||
As reported: | ||||||||||
Basic | $ | .98 | $ | .73 | ||||||
Diluted | $ | .94 | $ | .70 | ||||||
Pro forma: | ||||||||||
Basic | $ | .97 | $ | .64 | ||||||
Diluted | $ | .93 | $ | .62 |
Three Months Ended June 30, | ||||||||||
(Dollars in millions except per share data) | 2005 | 2004 | ||||||||
Profit, as reported | $ | 760 | $ | 566 | ||||||
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects | 11 | 28 | ||||||||
Pro forma profit | $ | 749 | $ | 538 | ||||||
Profit per share of common stock: | ||||||||||
As reported: | ||||||||||
Basic | $ | 1.12 | $ | 0.83 | ||||||
Diluted | $ | 1.08 | $ | 0.80 | ||||||
Pro forma: | ||||||||||
Basic | $ | 1.10 | $ | 0.79 | ||||||
Diluted | $ | 1.06 | $ | 0.76 | ||||||
Six Months Ended June 30, | ||||||||||
(Dollars in millions except per share data) | 2005 | 2004 | ||||||||
Profit, as reported | $ | 1,341 | $ | 986 | ||||||
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects | 123 | 46 | ||||||||
Pro forma profit | $ | 1,218 | $ | 940 | ||||||
Profit per share of common stock: | ||||||||||
As reported: | ||||||||||
Basic | $ | 1.97 | $ | 1.44 | ||||||
Diluted | $ | 1.89 | $ | 1.39 | ||||||
Pro forma: | ||||||||||
Basic | $ | 1.79 | $ | 1.37 | ||||||
Diluted | $ | 1.72 | $ | 1.32 | ||||||
Nine Months Ended September 30, | ||||||||||
(Dollars in millions except per share data) | 2005 | 2004 | ||||||||
Profit, as reported | $ | 2,008 | $ | 1,484 | ||||||
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects | (129 | ) | (103 | ) | ||||||
Pro forma profit | $ | 1,879 | $ | 1,381 | ||||||
Profit per share of common stock: | ||||||||||
As reported: | ||||||||||
Basic | $ | 2.95 | $ | 2.17 | ||||||
Diluted | $ | 2.84 | $ | 2.10 | ||||||
Pro forma: | ||||||||||
Basic | $ | 2.76 | $ | 2.02 | ||||||
Diluted | $ | 2.66 | $ | 1.95 |
Pro forma profit for the |
2. | The results for the three and |
3. |
New Accounting Pronouncements | |
In November 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 151 (SFAS 151), “Inventory Costs - an amendment of ARB No. 43, Chapter 4.” SFAS 151 discusses the general principles applicable to the pricing of inventory. Paragraph 5 of ARB 43, Chapter 4 provides guidance on allocating certain costs to inventory. This Statement amends ARB 43, Chapter 4, to clarify that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges. In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of production facilities. As required by SFAS 151, we will adopt this new accounting standard on January 1, 2006. The adoption of SFAS 151 is not expected to have a material impact on our financial statements. |
In December 2004, the FASB issued FASB Staff Position No. 109-1, “Application of FASB Statement No. 109, Accounting for Income Taxes, to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004”, (FSP 109-1). FSP 109-1 provides accounting guidance for companies that will be eligible for a tax deduction resulting from “qualified production activities income” as defined in the American Jobs Creation Act of 2004 (the Act). FSP 109-1 requires this deduction be treated as a special deduction in accordance with SFAS 109, which does not require a revaluation of our U.S. deferred tax assets. We applied the guidance in FSP 109-1 upon recognition of this tax deduction beginning January 1, 2005. The application of FSP 109-1 did not have a material impact on our financial statements. In December 2004, the FASB issued FASB Staff Position No. 109-2, “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004”, (FSP 109-2). FSP 109-2 provides accounting guidance for the one-time tax deduction of 85% of non-U.S. earnings that are repatriated in excess of a base amount as defined in the Act. SFAS 109 requires a company to reflect in the period of enactment the effect of a new tax law. Due to the lack of clarification on certain provisions within the Act, FSP 109-2 allowed companies time beyond the financial reporting period of enactment to evaluate the effect of the Act. In the second quarter of 2005, we completed our evaluation and recognized a provision for income taxes of $49 million under the provisions of the Act. We expect to repatriate earnings of approximately $1.4 billion in 2005, which includes $500 million subject to the preferential treatment allowed by the Act. We have provided U.S. tax on earnings of non-U.S. subsidiaries that were not considered indefinitely reinvested prior to our evaluation of the Act. In connection with our current repatriation plan, we now intend to indefinitely reinvest earnings of a few selected non-U.S. subsidiaries and have reversed the associated deferred tax liability of $38 million. The net impact of these items |
In December 2004, the FASB issued Statement of Financial Accounting Standards No. 153 (SFAS 153), “Exchanges of Non-monetary Assets - an amendment of APB Opinion No. 29.” SFAS 153 addresses the measurement of exchanges of non-monetary assets. It eliminates the exception from fair value measurement for non-monetary exchanges of similar productive assets in paragraph 21(b) of APB Opinion No. 29 “Accounting for Non-monetary Transactions” and replaces it with an exception for exchanges that do not have commercial substance. A non-monetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. As required by SFAS 153, we | |
In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123R (revised 2004) “Share-Based Payment,” (SFAS 123R). SFAS 123R requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. SFAS 123R also establishes fair value as the measurement method in accounting for share-based payments with employees. The FASB required the provisions of SFAS 123R be adopted for interim or annual periods beginning after June 15, 2005. In April 2005, the SEC adopted a new rule amending the compliance dates for SFAS 123R. In accordance with this rule, we will adopt this new accounting standard effective January 1, 2006. We will transition to the new guidance using the modified prospective method. In anticipation of delaying vesting until three years after the grant date for future grants, the 2004 employee stock option grant (issued in June) fully vested on December 31, 2004. In order to better align our employee stock option program with the overall market, the number of options granted in 2005 (issued in February) was significantly reduced from the previous year. In response to this decrease, we elected to immediately vest the 2005 option grant. Based on the same assumptions used to value our 2005 stock option grant (including number of options granted and exercise price of options), we expect the application of the expensing provisions of SFAS 123R will result in a pretax expense of approximately $100 million in 2006. As a result of the vesting decisions discussed above, a full complement of expense related to stock options will not be recognized in our results of operations until 2009. We estimate our pretax expense associated with our stock option grants will range from approximately $110 million in 2007 to approximately $160 million in 2009. |
In June 2005, the FASB issued Statement of Financial Accounting Standards No. 154 (SFAS 154), “Accounting Changes and Error Corrections.” SFAS 154 changes the requirements for the accounting for and reporting of a change in accounting principle. This Statement requires retrospective applications to prior periods’ financial statements of a voluntary change in accounting principle unless it is impracticable. In addition, this Statement requires that a change in depreciation, amortization, or depletion for long-lived, non-financial assets be accounted for as a change in accounting estimate effected by a change in accounting principle. This new accounting standard is effective January 1, 2006. The adoption of SFAS 154 is not expected to have a material impact on our financial statements. |
Derivative Instruments and Hedging Activities |
Our earnings and cash flow are subject to fluctuations due to changes in foreign currency exchange rates, interest rates and commodity prices. Our Risk Management Policy (policy) allows for the use of derivative financial instruments to prudently manage foreign currency exchange rate, interest rate and commodity price exposure. Our policy specifies that derivatives are not to be used for speculative purposes. Derivatives that we use are primarily foreign currency forward and option contracts, interest rate swaps and commodity forward and option contracts. Our derivative activities are subject to the management, direction and control of our senior financial officers. Risk management practices, including the use of financial derivative instruments, are presented to the Audit Committee of the Board of Directors at least annually. Foreign Currency Exchange Rate Risk Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of sales made and costs incurred in foreign currencies. Movements in foreign currency rates also affect our competitive position as these changes may affect business practices and/or pricing strategies of non-U.S. based competitors. Additionally, we have balance sheet positions denominated in foreign currency thereby creating exposure to movements in exchange rates. |
Our Machinery and Engines operations purchase, manufacture and sell products in many locations around the world. As we have a diversified revenue and cost base, we manage our future foreign currency cash flow exposure on a net basis. We use foreign currency forward and option contracts to manage unmatched foreign currency cash inflow and outflow. Our objective is to minimize the risk of exchange rate movements that would reduce the U.S. dollar value of our foreign currency cash flow. Our policy allows for managing anticipated foreign currency cash flow for up to four years. |
We generally designate as cash flow hedges at inception of the contract any Australian dollar, Brazilian real, British pound, Canadian dollar, euro, Japanese yen, Mexican peso, Singapore dollar, Chinese yuan, New Zealand dollar or Swiss franc forward or option contracts that exceed 90 days in duration. Designation is performed on a specific exposure basis to support hedge accounting. The remainder of Machinery and Engines foreign currency contracts are undesignated. We also designate as fair value hedges specific euro forward contracts used to hedge firm commitments. | |
As of In managing foreign currency risk for our Financial Products operations, our objective is to minimize earnings volatility resulting from conversion and the re-measurement of net foreign currency balance sheet positions. Our policy allows the use of foreign currency forward contracts to offset the risk of currency mismatch between our receivables and debt. All such foreign currency forward contracts are undesignated. |
Gains / (losses) included in current earnings [Other income (expense)] on undesignated contracts: | ||||||||||
Three Months Ended June 30, | ||||||||||
(Millions of dollars) | 2005 | 2004 | ||||||||
Machinery and Engines: | ||||||||||
On undesignated contracts | $ | 6 | $ | (1 | ) | |||||
Financial Products: | ||||||||||
On undesignated contracts | $ | 22 | $ | 1 | ||||||
Gains / (losses) included in current earnings [Other income (expense)] on undesignated contracts: | ||||||||||
Three Months Ended September 30, | ||||||||||
(Millions of dollars) | 2005 | 2004 | ||||||||
Machinery and Engines: | ||||||||||
On undesignated contracts | $ | 9 | $ | - | ||||||
Financial Products: | ||||||||||
On undesignated contracts | $ | 16 | $ | 2 | ||||||
Gains / (losses) included in current earnings [Other income (expense)] on undesignated contracts: | ||||||||||
Nine Months Ended September 30, | ||||||||||
(Millions of dollars) | 2005 | 2004 | ||||||||
Machinery and Engines: | ||||||||||
On undesignated contracts | $ | 25 | $ | (3 | ) | |||||
Financial Products: | ||||||||||
On undesignated contracts | $ | 49 | $ | 19 | ||||||
Gains / (losses) included in current earnings [Other income (expense)] on undesignated contracts: | ||||||||||
Six Months Ended June 30, | ||||||||||
(Millions of dollars) | 2005 | 2004 | ||||||||
Machinery and Engines: | ||||||||||
On undesignated contracts | $ | 16 | $ | (3 | ) | |||||
Financial Products: | ||||||||||
On undesignated contracts | $ | 34 | $ | 17 | ||||||
Gains on the Financial Products contracts above are substantially offset by balance sheet translation losses. Interest Rate Risk Interest rate movements create a degree of risk by affecting the amount of our interest payments and the value of our fixed rate debt. Our practice is to use interest rate swap agreements and forward rate agreements to manage our exposure to interest rate changes and lower the cost of borrowed funds. Machinery and Engines operations generally use fixed rate debt as a source of funding. Our objective is to minimize the cost of borrowed funds. Our policy allows us to enter into fixed-to-floating interest rate swaps and forward rate agreements to meet that objective with the intent to designate as fair value hedges at inception of the contract all fixed-to-floating interest rate swaps. Designation as a hedge of the fair value of our fixed rate debt is performed to support hedge accounting. During 2001, our Machinery and Engines operations liquidated all fixed-to-floating interest rate swaps. Deferred gains on liquidated fixed-to-floating interest rate swaps, which were previously designated as fair value hedges, are being amortized to earnings ratably over the remaining life of the hedged debt. We designate as cash flow hedges at inception of the contract all forward rate agreements. Designation as a hedge of the anticipated issuance of debt is performed to support hedge accounting. Machinery and Engines forward rate agreements are 100% effective. |
Financial Products operations have a match funding policy that addresses interest rate risk by aligning the interest rate profile (fixed or floating rate) of their debt portfolio with the interest rate profile of their receivables portfolio within pre-determined ranges on an Our policy allows us to use floating-to-fixed, fixed-to-floating, and floating-to-floating interest rate swaps to meet the match funding objective. To support hedge accounting, we designate fixed-to-floating interest rate swaps as fair value hedges of the fair value of our fixed rate debt at the inception of the contract. Financial Products practice is to designate most floating-to-fixed interest rate swaps as cash flow hedges of the variability of future cash flows at inception of the swap contract. Designation as a hedge of the variability of cash flow is performed to support hedge accounting. Financial Products liquidated fixed-to-floating interest rate swaps during 2005, 2004, and 2002. As a result, the gain ($ |
Gains / (losses) included in current earnings [Other income (expense)]: | ||||||||||
Three Months Ended June 30, | ||||||||||
(Millions of dollars) | 2005 | 2004 | ||||||||
Fixed-to-floating interest rate swaps | ||||||||||
Machinery and Engines: | ||||||||||
Gain/(loss) on liquidated swaps | $ | 1 | $ | 1 | ||||||
Financial Products: | ||||||||||
Gain/(loss) on designated interest rate derivatives | 50 | (73 | ) | |||||||
Gain/(loss) on hedged debt | (50 | ) | 73 | |||||||
Gain/(loss) on liquidated swaps - included in interest expense | 1 | 1 | ||||||||
$ | 2 | $ | 2 | |||||||
Gains / (losses) included in current earnings [Other income (expense)]: | ||||||||||
Six Months Ended June 30, | ||||||||||
(Millions of dollars) | 2005 | 2004 | ||||||||
Fixed-to-floating interest rate swaps | ||||||||||
Machinery and Engines: | ||||||||||
Gain/(loss) on liquidated swaps | $ | 2 | $ | 2 | ||||||
Financial Products: | ||||||||||
Gain/(loss) on designated interest rate derivatives | 3 | (39 | ) | |||||||
Gain/(loss) on hedged debt | (3 | ) | 39 | |||||||
Gain/(loss) on liquidated swaps - included in interest expense | 2 | 1 | ||||||||
$ | 4 | $ | 3 | |||||||
Gains / (losses) included in current earnings [Other income (expense)]: | ||||||||||
Three Months Ended September 30, | ||||||||||
(Millions of dollars) | 2005 | 2004 | ||||||||
Fixed-to-floating interest rate swaps | ||||||||||
Machinery and Engines: | ||||||||||
Gain/(loss) on liquidated swaps | $ | 1 | $ | 1 | ||||||
Financial Products: | ||||||||||
Gain/(loss) on designated interest rate derivatives | (53 | ) | 42 | |||||||
Gain/(loss) on hedged debt | 53 | (42 | ) | |||||||
Gain/(loss) on liquidated swaps - included in interest expense | 1 | - | ||||||||
$ | 2 | $ | 1 | |||||||
Gains / (losses) included in current earnings [Other income (expense)]: | ||||||||||
Nine Months Ended September 30, | ||||||||||
(Millions of dollars) | 2005 | 2004 | ||||||||
Fixed-to-floating interest rate swaps | ||||||||||
Machinery and Engines: | ||||||||||
Gain/(loss) on liquidated swaps | $ | 3 | $ | 3 | ||||||
Financial Products: | ||||||||||
Gain/(loss) on designated interest rate derivatives | (50 | ) | 3 | |||||||
Gain/(loss) on hedged debt | 50 | (3 | ) | |||||||
Gain/(loss) on liquidated swaps - included in interest expense | 3 | 1 | ||||||||
$ | 6 | $ | 4 | |||||||
As of |
Commodity Price Risk Commodity price movements create a degree of risk by affecting the price we must pay for certain raw materials. Our policy is to use commodity forward and option contracts to manage the commodity risk and reduce the cost of purchased materials. Our Machinery and Engines operations purchase aluminum, copper and nickel embedded in the components we purchase from suppliers. Our suppliers pass on to us price changes in the commodity portion of the component cost. In addition, we are also subjected to price changes on natural gas purchased for operational use. Our objective is to minimize volatility in the price of these commodities. Our policy allows us to enter into commodity forward and option contracts to lock in the purchase price of a portion of these commodities within a four-year horizon. All such commodity forward and option contracts are undesignated. |
Inventories Inventories (principally "last-in, first-out" method) are comprised of the following: |
(Millions of dollars) | June 30, | December 31, | ||||||
2005 | 2004 | |||||||
Raw materials | $ | 1,698 | $ | 1,592 | ||||
Work-in-process | 831 | 664 | ||||||
Finished goods | 2,597 | 2,209 | ||||||
Supplies | 223 | 210 | ||||||
Total inventories | $ | 5,349 | $ | 4,675 | ||||
(Millions of dollars) | September 30, | December 31, | ||||||
2005 | 2004 | |||||||
Raw materials | $ | 1,628 | $ | 1,592 | ||||
Work-in-process | 925 | 664 | ||||||
Finished goods | 2,685 | 2,209 | ||||||
Supplies | 231 | 210 | ||||||
Total inventories | $ | 5,469 | $ | 4,675 | ||||
Investments in Unconsolidated Affiliated Companies | |
Our investments in affiliated companies accounted for by the equity method consist primarily of a |
Results of Operations | Results of Operations | |||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Millions of dollars) | 2005 | 2004 | 2005 | 2004 | ||||||||||||
Sales | $ | 1,057 | $ | 899 | $ | 2,023 | $ | 1,713 | ||||||||
Cost of sales | 810 | 698 | 1,567 | 1,327 | ||||||||||||
Gross profit | $ | 247 | $ | 201 | $ | 456 | $ | 386 | ||||||||
Profit (loss) | $ | 58 | $ | 29 | $ | 92 | $ | 50 | ||||||||
Caterpillar's profit (loss) | $ | 29 | $ | 14 | $ | 43 | $ | 20 | ||||||||
Results of Operations | Results of Operations | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
(Millions of dollars) | 2005 | 2004 | 2005 | 2004 | ||||||||||||
Sales | $ | 1,077 | $ | 986 | $ | 3,100 | $ | 2,699 | ||||||||
Cost of sales | 844 | 743 | 2,410 | 2,070 | ||||||||||||
Gross profit | $ | 233 | $ | 243 | $ | 690 | $ | 629 | ||||||||
Profit (loss) | $ | 41 | $ | 35 | $ | 132 | $ | 81 | ||||||||
Caterpillar's profit (loss) | $ | 18 | $ | 17 | $ | 61 | $ | 37 | ||||||||
Financial Position | |||||||
September 30, | December 31, | ||||||
(Millions of dollars) | 2005 | 2004 | |||||
Assets: | |||||||
Current assets | $ | 1,736 | $ | 1,540 | |||
Property, plant and equipment - net | 1,160 | 1,097 | |||||
Other assets | 225 | 145 | |||||
3,121 | 2,782 | ||||||
Liabilities: | |||||||
Current liabilities | 1,444 | 1,345 | |||||
Long-term debt due after one year | 356 | 276 | |||||
Other liabilities | 223 | 214 | |||||
2,023 | 1,835 | ||||||
Ownership | $ | 1,098 | $ | 947 | |||
Caterpillar's investments in unconsolidated affiliated companies | |||||||
Investments in equity method companies | $ | 535 | $ | 487 | |||
Plus: Investments in cost method companies | 28 | 30 | |||||
Total investments in unconsolidated affiliated companies | $ | 563 | $ | 517 | |||
Financial Position | |||||||
June 30, | December 31, | ||||||
(Millions of dollars) | 2005 | 2004 | |||||
Assets: | |||||||
Current assets | $ | 1,676 | $ | 1,540 | |||
Property, plant and equipment - net | 1,139 | 1,097 | |||||
Other assets | 221 | 145 | |||||
3,036 | 2,782 | ||||||
Liabilities: | |||||||
Current liabilities | 1,350 | 1,345 | |||||
Long-term debt due after one year | 351 | 276 | |||||
Other liabilities | 213 | 214 | |||||
1,914 | 1,835 | ||||||
Ownership | $ | 1,122 | $ | 947 | |||
Caterpillar's investments in unconsolidated affiliated companies | |||||||
Investments in equity method companies | $ | 525 | $ | 487 | |||
Plus: Investments in cost method companies | 30 | 30 | |||||
Total investments in unconsolidated affiliated companies | $ | 555 | $ | 517 | |||
Intangible Assets and Goodwill | |
A. Intangible assets Intangible assets are comprised of the following: |
(Millions of dollars) | June 30, | December 31, | ||||||
2005 | 2004 | |||||||
Intellectual property | $ | 212 | $ | 213 | ||||
Pension-related | 283 | 120 | ||||||
Other | 73 | 73 | ||||||
Total intangible assets - gross | 568 | 406 | ||||||
Less: Accumulated amortization of finite lived intangible assets | (100 | ) | (91 | ) | ||||
Intangible assets - net | $ | 468 | $ | 315 | ||||
(Millions of dollars) | September 30, | December 31, | ||||||
2005 | 2004 | |||||||
Intellectual property | $ | 212 | $ | 213 | ||||
Pension-related | 283 | 120 | ||||||
Other | 73 | 73 | ||||||
Total intangible assets - gross | 568 | 406 | ||||||
Less: Accumulated amortization of finite lived intangible assets | (106 | ) | (91 | ) | ||||
Intangible assets - net | $ | 462 | $ | 315 | ||||
Amortization expense for the three and |
(Millions of dollars) | |||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | Thereafter | ||||||||||||||||||
$ | 23 | $ | 22 | $ | 19 | $ | 17 | $ | 16 | $ | 97 | ||||||||||||
B. Goodwill | |
During the three and |
Available-For-Sale Securities | |
Caterpillar Insurance and Caterpillar Investment Management Ltd. have investments in certain debt and equity securities that are classified as available-for-sale in accordance with Statement of Financial Accounting Standards No. 115 (SFAS 115) and recorded at fair value based upon quoted market prices. These fair values are included in "Other assets" in the Consolidated Statement of Financial Position. Unrealized gains and losses arising from the revaluation of available-for-sale securities are included, net of applicable deferred income taxes, in equity ("Accumulated other comprehensive income" in the Consolidated Statement of Financial Position). Realized gains and losses on sales of investments are generally determined using the FIFO method for debt instruments and the specific identification method for equity securities. Realized gains and losses are included in "Other income (expense)" in the Consolidated Statement of Results of Operations. |
June 30, 2005 | ||||||||||||
(Millions of dollars) | Cost Basis | Unrealized Pretax Net Gains (Losses) | Fair Value | |||||||||
Government debt | $ | 277 | $ | (2 | ) | $ | 275 | |||||
Corporate bonds | 390 | (1 | ) | 389 | ||||||||
Equity securities | 176 | 31 | 207 | |||||||||
Total | $ | 843 | $ | 28 | $ | 871 | ||||||
September 30, 2005 | ||||||||||||
Unrealized | ||||||||||||
Pretax Net | ||||||||||||
(Millions of dollars) | Cost Basis | Gains (Losses) | Fair Value | |||||||||
Government debt | $ | 282 | $ | (4 | ) | $ | 278 | |||||
Corporate bonds | 415 | (6 | ) | 409 | ||||||||
Equity securities | 159 | 37 | 196 | |||||||||
Total | $ | 856 | $ | 27 | $ | 883 | ||||||
December 31, 2004 | ||||||||||||
(Millions of dollars) | Cost Basis | Unrealized Pretax Net Gains (Losses) | Fair Value | |||||||||
Government debt | $ | 239 | $ | (1 | ) | $ | 238 | |||||
Corporate bonds | 342 | - | 342 | |||||||||
Equity securities | 203 | 21 | 224 | |||||||||
Total | $ | 784 | $ | 20 | $ | 804 | ||||||
Investments in an unrealized loss position that are not other-than-temporarily impaired: | ||||||||||||||||||||||||
June 30, 2005 | ||||||||||||||||||||||||
Less than 12 months (1) | More than 12 months (1) | Total | ||||||||||||||||||||||
(Millions of dollars) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
Government debt | $ | 143 | $ | 1 | $ | 67 | $ | 1 | $ | 210 | $ | 2 | ||||||||||||
Corporate bonds | 156 | 1 | 86 | 2 | 242 | 3 | ||||||||||||||||||
Equity securities | 30 | 2 | 12 | - | 42 | 2 | ||||||||||||||||||
Total | $ | 329 | $ | 4 | $ | 165 | $ | 3 | $ | 494 | $ | 7 | ||||||||||||
(1) Indicates length of time that individual securities have been in a continuous unrealized loss position. | ||||||||||||||||||||||||
Investments in an unrealized loss position that are not other-than-temporarily impaired: | ||||||||||||||||||||||||
September 30, 2005 | ||||||||||||||||||||||||
Less than 12 months (1) | More than 12 months (1) | Total | ||||||||||||||||||||||
(Millions of dollars) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||
Government debt | $ | 167 | $ | 2 | $ | 75 | $ | 2 | $ | 242 | $ | 4 | ||||||||||||
Corporate bonds | 233 | 3 | 97 | 3 | 330 | 6 | ||||||||||||||||||
Equity securities | 31 | 2 | 2 | - | 33 | 2 | ||||||||||||||||||
Total | $ | 431 | $ | 7 | $ | 174 | $ | 5 | $ | 605 | $ | 12 | ||||||||||||
(1) Indicates length of time that individual securities have been in a continuous unrealized loss position. |
The fair value of the available-for-sale debt securities at |
(Millions of dollars) | Fair Value | |||
Due in one year or less | $ | 49 | ||
Due after one year through five years | $ | 280 | ||
Due after five years through ten years | $ | 69 | ||
Due after ten years | $ | 267 | ||
(Millions of dollars) | Fair Value | |||
Due in one year or less | $ | 47 | ||
Due after one year through five years | $ | 294 | ||
Due after five years through ten years | $ | 75 | ||
Due after ten years | $ | 271 | ||
Proceeds from sales of investments in debt and equity securities during the three and |
Postretirement Benefits |
A. Pension and postretirement benefit costs | |
In January 2005, amendments were made to both U.S. pension and other postretirement benefit plans due to the company and the United Auto Workers reaching a new six-year labor agreement that will expire on March 1, 2011. These plans were re-measured as of January In April 2005, amendments were made to our U.S. salaried and management other postretirement benefit plan. The plan was re-measured, resulting in a reduction of |
2004 other postretirement benefit cost reflects the adoption of FASB Staff Position No. 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” in the third quarter of 2004, retroactive to December 31, 2003. The impact of the anticipated federal subsidy for prescription drugs was a decrease in other postretirement benefit cost of |
(Millions of Dollars) | U.S. Pension Benefits | Non-U.S. Pension Benefits | Other Postretirement Benefits | ||||||||||||||||||||||||
June 30, | June 30, | June 30, | |||||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||||||||
For the three months ended: | |||||||||||||||||||||||||||
Components of net periodic benefit cost: | |||||||||||||||||||||||||||
Service cost | $ | 37 | $ | 36 | $ | 16 | $ | 12 | $ | 22 | $ | 16 | |||||||||||||||
Interest cost | 137 | 137 | 27 | 22 | 75 | 67 | |||||||||||||||||||||
Expected return on plan assets | (178 | ) | (174 | ) | (26 | ) | (24 | ) | (21 | ) | (18 | ) | |||||||||||||||
Amortization of: | |||||||||||||||||||||||||||
Net asset existing at adoption of SFAS 87/106 | - | - | - | 1 | 1 | - | |||||||||||||||||||||
Prior service cost 1 | 14 | 11 | 2 | 2 | (9 | ) | (12 | ) | |||||||||||||||||||
Net actuarial loss (gain) | 49 | 35 | 12 | 9 | 24 | 12 | |||||||||||||||||||||
Total cost (benefit) included in results of operations | $ | 59 | $ | 45 | $ | 31 | $ | 22 | $ | 92 | $ | 65 | |||||||||||||||
Weighted-average assumptions used to determine net cost: | |||||||||||||||||||||||||||
Discount rate 2 | 5.8/5.9 | % | 6.2 | % | 5.2 | % | 5.1 | % | 5.7-5.9 | % | 6.2 | % | |||||||||||||||
Expected return on plan assets | 9.0 | % | 9.0 | % | 7.2 | % | 7.4 | % | 9.0 | % | 9.0 | % | |||||||||||||||
Rate of compensation increase | 4.0 | % | 4.0 | % | 3.5 | % | 3.2 | % | 4.0 | % | 4.0 | % | |||||||||||||||
(1) Prior service costs for both pension and other postretirement benefits are generally amortized using the straight-line method over the average remaining service period to the full retirement eligibility date of employees expected to receive benefits from the plan amendment. For other postretirement benefit plans in which all or almost all of the plan’s participants are fully eligible for benefits under the plan, prior service costs are amortized using the straight-line method over the remaining life expectancy of those employees. | |||||||||||||||||||||||||||
(2) For U.S. plans impacted by the January 2005 plan amendments, a 5.8% discount rate was utilized for valuing the plan re-measurement. For the April 2005 amendment, a 5.7% discount rate was utilized for valuing the plan re-measurement. | |||||||||||||||||||||||||||
(Millions of Dollars) | U.S. Pension Benefits | Non-U.S. Pension Benefits | Other Postretirement Benefits | ||||||||||||||||||||||||
September 30, | September 30, | September 30, | |||||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||||||||
For the three months ended: | |||||||||||||||||||||||||||
Components of net periodic benefit cost: | |||||||||||||||||||||||||||
Service cost | $ | 37 | $ | 36 | $ | 14 | $ | 12 | $ | 21 | $ | 16 | |||||||||||||||
Interest cost | 139 | 137 | 26 | 22 | 73 | 66 | |||||||||||||||||||||
Expected return on plan assets | (178 | ) | (178 | ) | (26 | ) | (24 | ) | (22 | ) | (19 | ) | |||||||||||||||
Amortization of: | |||||||||||||||||||||||||||
Net asset existing at adoption of SFAS 87/106 | - | - | 1 | 1 | - | - | |||||||||||||||||||||
Prior service cost 1 | 15 | 11 | 1 | 2 | (9 | ) | (12 | ) | |||||||||||||||||||
Net actuarial loss (gain) | 49 | 35 | 12 | 9 | 23 | 10 | |||||||||||||||||||||
Total cost included in results of operations | $ | 62 | $ | 41 | $ | 28 | $ | 22 | $ | 86 | $ | 61 | |||||||||||||||
Weighted-average assumptions used to determine net cost: | |||||||||||||||||||||||||||
Discount rate 2 | 5.8/5.9 | % | 6.2 | % | 5.2 | % | 5.1 | % | 5.7-5.9 | % | 6.2 | % | |||||||||||||||
Expected return on plan assets | 9.0 | % | 9.0 | % | 7.2 | % | 7.4 | % | 9.0 | % | 9.0 | % | |||||||||||||||
Rate of compensation increase | 4.0 | % | 4.0 | % | 3.5 | % | 3.2 | % | 4.0 | % | 4.0 | % | |||||||||||||||
(1) Prior service costs for both pension and other postretirement benefits are generally amortized using the straight-line method over the average remaining service period to the full retirement eligibility date of employees expected to receive benefits from the plan amendment. For other postretirement benefit plans in which all or almost all of the plan’s participants are fully eligible for benefits under the plan, prior service costs are amortized using the straight-line method over the remaining life expectancy of those participants. | |||||||||||||||||||||||||||
(2) For U.S. plans impacted by the January 2005 plan amendments, a 5.8% discount rate was utilized for valuing the plan re-measurement. For the April 2005 amendment, a 5.7% discount rate was utilized for valuing the plan re-measurement. |
(Millions of Dollars) | U.S. Pension Benefits | Non-U.S. Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
June 30, | June 30, | June 30, | ||||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | |||||||||||||||||||||
For the six months ended: | ||||||||||||||||||||||||||
Components of net periodic benefit cost: | ||||||||||||||||||||||||||
Service cost | $ | 75 | $ | 72 | $ | 30 | $ | 24 | $ | 44 | $ | 33 | ||||||||||||||
Interest cost | 277 | 274 | 55 | 44 | 150 | 134 | ||||||||||||||||||||
Expected return on plan assets | (356 | ) | (341 | ) | (52 | ) | (48 | ) | (43 | ) | (36 | ) | ||||||||||||||
Amortization of: | ||||||||||||||||||||||||||
Net asset existing at adoption of SFAS 87/106 | - | - | - | 2 | 1 | - | ||||||||||||||||||||
Prior service cost 1 | 30 | 22 | 3 | 4 | (12 | ) | (24 | ) | ||||||||||||||||||
Net actuarial loss (gain) | 99 | 70 | 25 | 18 | 41 | 25 | ||||||||||||||||||||
Total cost (benefit) included in results of operations | $ | 125 | $ | 97 | $ | 61 | $ | 44 | $ | 181 | $ | 132 | ||||||||||||||
Weighted-average assumptions used to determine net cost: | ||||||||||||||||||||||||||
Discount rate 2 | 5.8/5.9 | % | 6.2 | % | 5.2 | % | 5.1 | % | 5.7-5.9 | % | 6.2 | % | ||||||||||||||
Expected return on plan assets | 9.0 | % | 9.0 | % | 7.2 | % | 7.4 | % | 9.0 | % | 9.0 | % | ||||||||||||||
Rate of compensation increase | 4.0 | % | 4.0 | % | 3.5 | % | 3.2 | % | 4.0 | % | 4.0 | % | ||||||||||||||
(1) Prior service costs for both pension and other postretirement benefits are generally amortized using the straight-line method over the average remaining service period to the full retirement eligibility date of employees expected to receive benefits from the plan amendment. For other postretirement benefit plans in which all or almost all of the plan’s participants are fully eligible for benefits under the plan, prior service costs are amortized using the straight-line method over the remaining life expectancy of those employees. | ||||||||||||||||||||||||||
(2) For U.S. plans impacted by the January 2005 plan amendments, a 5.8% discount rate was utilized for valuing the plan re-measurement. For the April 2005 amendment, a 5.7% discount rate was utilized for valuing the plan re-measurement. | ||||||||||||||||||||||||||
(Millions of Dollars) | U.S. Pension Benefits | Non-U.S. Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
September 30, | September 30, | September 30, | ||||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | |||||||||||||||||||||
For the nine months ended: | ||||||||||||||||||||||||||
Components of net periodic benefit cost: | ||||||||||||||||||||||||||
Service cost | $ | 112 | $ | 108 | $ | 44 | $ | 36 | $ | 65 | $ | 49 | ||||||||||||||
Interest cost | 416 | 411 | 81 | 66 | 223 | 200 | ||||||||||||||||||||
Expected return on plan assets | (534 | ) | (519 | ) | (78 | ) | (72 | ) | (65 | ) | (55 | ) | ||||||||||||||
Amortization of: | ||||||||||||||||||||||||||
Net asset existing at adoption of SFAS 87/106 | - | - | 1 | 3 | 1 | - | ||||||||||||||||||||
Prior service cost 1 | 45 | 33 | 4 | 6 | (21 | ) | (36 | ) | ||||||||||||||||||
Net actuarial loss (gain) | 148 | 105 | 37 | 27 | 64 | 35 | ||||||||||||||||||||
Total cost included in results of operations | $ | 187 | $ | 138 | $ | 89 | $ | 66 | $ | 267 | $ | 193 | ||||||||||||||
Weighted-average assumptions used to determine net cost: | ||||||||||||||||||||||||||
Discount rate 2 | 5.8/5.9 | % | 6.2 | % | 5.2 | % | 5.1 | % | 5.7-5.9 | % | 6.2 | % | ||||||||||||||
Expected return on plan assets | 9.0 | % | 9.0 | % | 7.2 | % | 7.4 | % | 9.0 | % | 9.0 | % | ||||||||||||||
Rate of compensation increase | 4.0 | % | 4.0 | % | 3.5 | % | 3.2 | % | 4.0 | % | 4.0 | % | ||||||||||||||
(1) Prior service costs for both pension and other postretirement benefits are generally amortized using the straight-line method over the average remaining service period to the full retirement eligibility date of employees expected to receive benefits from the plan amendment. For other postretirement benefit plans in which all or almost all of the plan’s participants are fully eligible for benefits under the plan, prior service costs are amortized using the straight-line method over the remaining life expectancy of those participants. | ||||||||||||||||||||||||||
(2) For U.S. plans impacted by the January 2005 plan amendments, a 5.8% discount rate was utilized for valuing the plan re-measurement. For the April 2005 amendment, a 5.7% discount rate was utilized for valuing the plan re-measurement. |
We have no ERISA funding requirements in 2005 and do not expect to make any significant contributions to our U.S. pension plans this year. |
B. Defined contribution benefit costs | |
Total company costs related to U.S. and non-U.S. defined contribution plans were as follows: |
Three Months Ended June 30, | ||||||
(Millions of dollars) | 2005 | 2004 | ||||
U.S. Plans | $ | 28 | $ | 23 | ||
Non-U.S. Plans | 9 | 3 | ||||
$ | 37 | $ | 26 | |||
Three Months Ended September 30, | ||||||
(Millions of dollars) | 2005 | 2004 | ||||
U.S. Plans | $ | 42 | $ | 21 | ||
Non-U.S. Plans | 1 | 3 | ||||
$ | 43 | $ | 24 | |||
Six Months Ended June 30, | ||||||
(Millions of dollars) | 2005 | 2004 | ||||
U.S. Plans | $ | 61 | $ | 53 | ||
Non-U.S. Plans | 13 | 6 | ||||
$ | 74 | $ | 59 | |||
Nine Months Ended September 30, | ||||||
(Millions of dollars) | 2005 | 2004 | ||||
U.S. Plans | $ | 103 | $ | 74 | ||
Non-U.S. Plans | 14 | 9 | ||||
$ | 117 | $ | 83 | |||
Guarantees and Product Warranty |
We have guaranteed to repurchase loans of certain Caterpillar dealers from third party lenders in the event of default. These guarantees arose in conjunction with Cat Financial's relationship with third party dealers who sell Caterpillar equipment. These guarantees generally have Cat Financial has provided a limited indemnity to a third party bank for No loss has been experienced or is anticipated under any of these guarantees. At |
(Millions of dollars) | June 30, | December 31, | ||||||
2005 | 2004 | |||||||
Guarantees with Caterpillar dealers | $ | 395 | $ | 364 | ||||
Guarantees - other | 77 | 62 | ||||||
Total guarantees | $ | 472 | $ | 426 | ||||
(Millions of dollars) | September 30, | December 31, | ||||||
2005 | 2004 | |||||||
Guarantees with Caterpillar dealers | $ | 426 | $ | 364 | ||||
Guarantees - other | 86 | 62 | ||||||
Total guarantees | $ | 512 | $ | 426 | ||||
Our product warranty liability is determined by applying historical claim rate experience to the current field population and dealer inventory. Historical claim rates are developed using a rolling average of actual warranty payments. Our product warranty liability also includes deferred revenue related to extended warranty contracts, which is recognized in income when the related costs are incurred. The amount of this deferred revenue was |
(Millions of dollars) | 2005 | |||
Warranty liability, January 1 | $ | 914 | ||
Reduction in liability (payments) | (380 | ) | ||
Increase in liability (new warranties) | 413 | |||
Warranty liability, June 30 | $ | 947 | ||
| ||||
(Millions of dollars) | 2005 | |||
Warranty liability, January 1 | $ | 914 | ||
Reduction in liability (payments) | (524 | ) | ||
Increase in liability (new warranties) | 587 | |||
Warranty liability, September 30 | $ | 977 | ||
(Millions of dollars) | 2004 | |||
Warranty liability, January 1 | $ | 695 | ||
Reduction in liability (payments) | (586 | ) | ||
Increase in liability (new warranties) | 772 | |||
Additional liability from acquisition | 33 | |||
Warranty liability, December 31 | $ | 914 | ||
Computations of Profit Per Share |
Three Months Ended June 30, | |||||||
(Dollars in millions except per share data) | 2005 | 2004 | |||||
I. | Profit for the period (A): | $ | 760 | $ | 566 | ||
II. | Determination of shares (millions): | ||||||
Weighted average number of common shares outstanding (B) | 678.3 | 684.8 | |||||
Shares issuable on exercise of stock options, net of shares assumed to be purchased out of proceeds at average market price | 26.8 | 24.7 | |||||
Average common shares outstanding for fully diluted computation (C) | 705.1 | 709.5 | |||||
III. | Profit per share of common stock: | ||||||
Assuming no dilution (A/B) | $ | 1.12 | $ | 0.83 | |||
Assuming full dilution (A/C) | $ | 1.08 | $ | 0.80 | |||
Three Months Ended September 30, | |||||||
(Dollars in millions except per share data) | 2005 | 2004 | |||||
I. | Profit for the period (A): | $ | 667 | $ | 498 | ||
II. | Determination of shares (millions): | ||||||
Weighted average number of common shares outstanding (B) | 678.8 | 683.6 | |||||
Shares issuable on exercise of stock options, net of shares assumed to be purchased out of proceeds at average market price | 31.9 | 22.4 | |||||
Average common shares outstanding for fully diluted computation (C) | 710.7 | 706.0 | |||||
III. | Profit per share of common stock: | ||||||
Assuming no dilution (A/B) | $ | 0.98 | $ | 0.73 | |||
Assuming full dilution (A/C) | $ | 0.94 | $ | 0.70 |
Six Months Ended June 30, | |||||||
(Dollars in millions except per share data) | 2005 | 2004 | |||||
I. | Profit for the period (A): | $ | 1,341 | $ | 986 | ||
II. | Determination of shares (millions): | ||||||
Weighted average number of common shares outstanding (B) | 680.9 | 685.2 | |||||
Shares issuable on exercise of stock options, net of shares assumed to be purchased out of proceeds at average market price | 27.0 | 25.2 | |||||
Average common shares outstanding for fully diluted computation (C) | 707.9 | 710.4 | |||||
III. | Profit per share of common stock: | ||||||
Assuming no dilution (A/B) | $ | 1.97 | $ | 1.44 | |||
Assuming full dilution (A/C) | $ | 1.89 | $ | 1.39 | |||
Nine Months Ended September 30, | |||||||
(Dollars in millions except per share data) | 2005 | 2004 | |||||
I. | Profit for the period (A): | $ | 2,008 | $ | 1,484 | ||
II. | Determination of shares (millions): | ||||||
Weighted average number of common shares outstanding (B) | 680.5 | 684.5 | |||||
Shares issuable on exercise of stock options, net of shares assumed to be purchased out of proceeds at average market price | 26.9 | 23.9 | |||||
Average common shares outstanding for fully diluted computation (C) | 707.4 | 708.4 | |||||
III. | Profit per share of common stock: | ||||||
Assuming no dilution (A/B) | $ | 2.95 | $ | 2.17 | |||
Assuming full dilution (A/C) | $ | 2.84 | $ | 2.10 |
Environmental and Legal Matters |
The company is regulated by federal, state, and international environmental laws governing our use of substances and control of emissions in all our operations. Compliance with these existing laws has not had a material impact on our capital expenditures or earnings. |
We are cleaning up hazardous waste at a number of locations, often with other companies, pursuant to federal and state laws. When it is |
The amount recorded for environmental We have disclosed certain individual legal proceedings in this filing. Additionally, we are involved in other unresolved legal actions that arise in the normal course of |
On January 16, 2002, Caterpillar commenced an action in the Circuit Court of the Tenth Judicial Circuit of Illinois in Peoria, Illinois, against Navistar International Transportation Corporation and International Truck and Engine Corporation (collectively Navistar). The lawsuit arises out of a long-term purchase contract between Caterpillar and Navistar effective May 31, 1988, as amended from time to time (the Purchase Agreement). The pending complaint alleges, among other things, that Navistar breached its contractual obligations by: (i) paying Caterpillar $8.08 less per fuel injector than the agreed upon price for new unit injectors delivered by Caterpillar; (ii) refusing to pay contractually agreed upon surcharges owed as a result of Navistar ordering less than planned volumes of replacement unit injectors; and (iii) refusing to pay contractually agreed upon interest stemming from Navistar's late payments. As of On On May 7, 2002, International commenced an action against Caterpillar in the Circuit Court of DuPage County, Illinois regarding a long-term agreement term sheet ("term sheet") (the “first lawsuit”). In its sixth amended complaint in the first lawsuit, International alleged that the term sheet constitutes a legally binding contract for the sale of heavy-duty engines at specified prices through the end of 2006, alleged that Caterpillar breached the term sheet by, among other things, raising certain prices effective October 1, 2002, and also alleged that Caterpillar breached an obligation to negotiate a comprehensive long-term agreement referenced in the term sheet. International sought declaratory and injunctive relief as well as damages in an amount to be determined at trial. Caterpillar denied International's claims and filed a counterclaim seeking a declaration that the term sheet had been effectively terminated. Caterpillar also asserted that pursuant to a subsequent agreement International released Caterpillar from certain of its claims. On September 24, 2003 the Appellate Court of Illinois, ruling on an interlocutory appeal, issued an order consistent with Caterpillar's position that, even if the court subsequently determines that the term sheet is a binding contract, it is indefinite in duration and was therefore terminable at will by Caterpillar upon reasonable notice. On April 12, 2005 International commenced a second, related action against Caterpillar in the Circuit Court of DuPage County, Illinois (the “second lawsuit”). The second lawsuit In a letter dated November 15, 2004, the EPA proposed a civil penalty of $641,392 to Caterpillar for the alleged failure to comply with certain requirements of the Federal Clean Air Act. The EPA alleges that Caterpillar constructed a facility in Emporia, Kansas, and failed to comply with Section 112(g)(2)(B) of the Clean Air Act. Caterpillar sold the Emporia facility in December 2002. We are seeking a settlement of this matter with all concerned parties and we believe the outcome will not have a material impact on our consolidated financial position, liquidity, or results of operations. During the second quarter of 2005, the Internal Revenue Service (IRS) completed its field examination of our 1995 through 1999 U.S. tax returns. In connection with this examination, we received notices of certain adjustments proposed by the IRS, primarily related to foreign sales corporation (FSC) commissions, foreign tax credit calculations and R&D credits. We disagree with these proposed adjustments and intend to vigorously dispute this matter through applicable IRS and judicial procedures, as appropriate. Although the final resolution of the proposed adjustments is uncertain, in the opinion of our management, the ultimate disposition of these matters will not have a material adverse effect on our consolidated financial position, liquidity, or results of operations. |
Segment Information |
Caterpillar is organized based on a decentralized structure that has established accountabilities to continually improve business focus and increase our ability to react quickly to changes in both the global business cycle and competitors' actions. Our current structure uses a product, geographic matrix organization comprised of multiple profit center and service center divisions. Caterpillar is a highly integrated company. The majority of our profit centers are product focused. They are primarily responsible for the design, manufacture and ongoing support of their products. However, some of these product-focused profit centers also have marketing responsibilities. We also have geographically-based profit centers that are focused primarily on marketing. However, most of these profit centers also have some manufacturing responsibilities. One of our profit centers provides various financial services to our customers and dealers. The service center divisions perform corporate functions and provide centralized services. We have developed an internal measurement system to evaluate performance and to drive continuous improvement. This measurement system, which is not based on generally accepted accounting principles (GAAP), is intended to motivate desired behavior of employees and drive performance. It is not intended to measure a division’s contribution to enterprise results. The sales and cost information used for internal purposes varies significantly from our consolidated externally reported information, resulting in substantial reconciling items. Each division has specific performance targets and is evaluated and compensated based on achieving those targets. Performance targets differ from division to division; therefore, meaningful comparisons cannot be made among the profit or service center divisions. It is the comparison of actual results to budgeted results that makes our internal reporting valuable to management. Consequently, we feel that the financial information required by Statement of Financial Accounting Standards No. 131 (SFAS 131), "Disclosures about Segments of an Enterprise and Related Information" has limited value to our external readers. In the first quarter of 2005, we made several organizational changes that impacted our segment reporting. No individual segment was materially impacted as a result of the changes and prior period amounts have been restated to conform to the current period presentation. Due to Caterpillar’s high level of integration and our concern that segment disclosures based on SFAS 131 requirements have limited value to external readers, we are continuing to disclose financial results for our three principal lines of business (Machinery, Engines and Financial Products) in our Management’s Discussion and Analysis beginning on page |
Business Segments Three Months Ended June 30, (Millions of dollars) | ||||||||||||||||||||||||||||
Machinery and Engines | ||||||||||||||||||||||||||||
2005 | Asia/ Pacific Marketing | Construction & Mining Products | EAME Marketing | Latin America Marketing | Power Products | North America Marketing | All Other | Total | Financing & Insurance Services | Consolidated Total | ||||||||||||||||||
External sales and revenues | $ | 648 | $ | 114 | $ | 1,205 | $ | 598 | $ | 2,591 | $ | 2,985 | $ | 605 | $ | 8,746 | $ | 712 | $ | 9,458 | ||||||||
Inter-segment sales & revenues | 37 | 4,027 | 1,126 | 421 | 1,953 | 116 | 952 | 8,632 | 7 | 8,639 | ||||||||||||||||||
Total sales and revenues | $ | 685 | $ | 4,141 | $ | 2,331 | $ | 1,019 | $ | 4,544 | $ | 3,101 | $ | 1,557 | $ | 17,378 | $ | 719 | $ | 18,097 | ||||||||
Depreciation and amortization | $ | 3 | $ | 46 | $ | 16 | $ | 12 | $ | 74 | $ | 1 | $ | 30 | $ | 182 | $ | 161 | $ | 343 | ||||||||
Imputed interest expense | $ | 4 | $ | 20 | $ | 9 | $ | 6 | $ | 28 | $ | 2 | $ | 30 | $ | 99 | $ | 192 | $ | 291 | ||||||||
Accountable profit (loss) | $ | 38 | $ | 471 | $ | 128 | $ | 67 | $ | 251 | $ | 93 | $ | 247 | $ | 1,295 | $ | 149 | $ | 1,444 | ||||||||
Accountable assets at June 30, 2005 | $ | 531 | $ | 2,697 | $ | 1,158 | $ | 876 | $ | 3,739 | $ | 416 | $ | 4,056 | $ | 13,473 | $ | 24,965 | $ | 38,438 | ||||||||
Capital Expenditures | $ | 2 | $ | 62 | $ | 28 | $ | 9 | $ | 62 | $ | - | $ | 25 | $ | 188 | $ | 330 | $ | 518 | ||||||||
Machinery and Engines | ||||||||||||||||||||||||||||
2004 | Asia/ Pacific Marketing | Construction & Mining Products | EAME Marketing | Latin America Marketing | Power Products | North America Marketing | All Other | Total | Financing & Insurance Services | Consolidated Total | ||||||||||||||||||
External sales and revenues | $ | 565 | $ | 64 | $ | 1,025 | $ | 398 | $ | 2,129 | $ | 2,396 | $ | 478 | $ | 7,055 | $ | 667 | $ | 7,722 | ||||||||
Inter-segment sales & revenues | 22 | 3,148 | 923 | 313 | 1,677 | 91 | 748 | 6,922 | - | 6,922 | ||||||||||||||||||
Total sales and revenues | $ | 587 | $ | 3,212 | $ | 1,948 | $ | 711 | $ | 3,806 | $ | 2,487 | $ | 1,226 | $ | 13,977 | $ | 667 | $ | 14,644 | ||||||||
Depreciation and amortization | $ | 3 | $ | 45 | $ | 15 | $ | 11 | $ | 77 | $ | - | $ | 25 | $ | 176 | $ | 147 | $ | 323 | ||||||||
Imputed interest expense | $ | 5 | $ | 16 | $ | 7 | $ | 5 | $ | 28 | $ | 1 | $ | 24 | $ | 86 | $ | 124 | $ | 210 | ||||||||
Accountable profit (loss) | $ | 42 | $ | 339 | $ | 96 | $ | 51 | $ | 82 | $ | 145 | $ | 165 | $ | 920 | $ | 113 | $ | 1,033 | ||||||||
Accountable assets at December 31, 2004 | $ | 525 | $ | 2,572 | $ | 1,097 | $ | 775 | $ | 3,900 | $ | 28 | $ | 3,896 | $ | 12,793 | $ | 24,450 | $ | 37,243 | ||||||||
Capital Expenditures | $ | 1 | $ | 36 | $ | 14 | $ | 6 | $ | 44 | $ | 1 | $ | 21 | $ | 123 | $ | 302 | $ | 425 | ||||||||
Business Segments Six Months Ended June 30, (Millions of dollars) | ||||||||||||||||||||||||||||
Machinery and Engines | ||||||||||||||||||||||||||||
2005 | Asia/ Pacific Marketing | Construction & Mining Products | EAME Marketing | Latin America Marketing | Power Products | North America Marketing | All Other | Total | Financing & Insurance Services | Consolidated Total | ||||||||||||||||||
External sales and revenues | $ | 1,246 | $ | 207 | $ | 2,318 | $ | 1,085 | $ | 4,822 | $ | 5,567 | $ | 1,205 | $ | 16,450 | $ | 1,392 | $ | 17,842 | ||||||||
Inter-segment sales & revenues | 73 | 7,684 | 2,169 | 788 | 4,069 | 218 | 1,833 | 16,834 | 27 | 16,861 | ||||||||||||||||||
Total sales and revenues | $ | 1,319 | $ | 7,891 | $ | 4,487 | $ | 1,873 | $ | 8,891 | $ | 5,785 | $ | 3,038 | $ | 33,284 | $ | 1,419 | $ | 34,703 | ||||||||
Depreciation and amortization | $ | 7 | $ | 91 | $ | 33 | $ | 24 | $ | 148 | $ | 1 | $ | 43 | $ | 347 | $ | 320 | $ | 667 | ||||||||
Imputed interest expense | $ | 8 | $ | 40 | $ | 17 | $ | 12 | $ | 57 | $ | 3 | $ | 59 | $ | 196 | $ | 368 | $ | 564 | ||||||||
Accountable profit (loss) | $ | 72 | $ | 854 | $ | 244 | $ | 115 | $ | 385 | $ | 129 | $ | 459 | $ | 2,258 | $ | 278 | $ | 2,536 | ||||||||
Accountable assets at June 30, 2005 | $ | 531 | $ | 2,697 | $ | 1,159 | $ | 876 | $ | 3,739 | $ | 416 | $ | 4,055 | $ | 13,473 | $ | 24,965 | $ | 38,438 | ||||||||
Capital Expenditures | $ | 3 | $ | 105 | $ | 41 | $ | 14 | $ | 120 | $ | 1 | $ | 42 | $ | 326 | $ | 569 | $ | 895 | ||||||||
Machinery and Engines | ||||||||||||||||||||||||||||
2004 | Asia/ Pacific Marketing | Construction & Mining Products | EAME Marketing | Latin America Marketing | Power Products | North America Marketing | All Other | Total | Financing & Insurance Services | Consolidated Total | ||||||||||||||||||
External sales and revenues | $ | 1,098 | $ | 128 | $ | 1,855 | $ | 744 | $ | 3,856 | $ | 4,433 | $ | 905 | $ | 13,019 | $ | 1,214 | $ | 14,233 | ||||||||
Inter-segment sales & revenues | 49 | 5,976 | 1,789 | 588 | 3,096 | 177 | 1,395 | 13,070 | 1 | 13,071 | ||||||||||||||||||
Total sales and revenues | $ | 1,147 | $ | 6,104 | $ | 3,644 | $ | 1,332 | $ | 6,952 | $ | 4,610 | $ | 2,300 | $ | 26,089 | $ | 1,215 | $ | 27,304 | ||||||||
Depreciation and amortization | $ | 6 | $ | 89 | $ | 30 | $ | 22 | $ | 150 | $ | 1 | $ | 49 | $ | 347 | $ | 296 | $ | 643 | ||||||||
Imputed interest expense | $ | 9 | $ | 32 | $ | 14 | $ | 9 | $ | 56 | $ | 1 | $ | 46 | $ | 167 | $ | 248 | $ | 415 | ||||||||
Accountable profit (loss) | $ | 89 | $ | 637 | $ | 187 | $ | 98 | $ | 97 | $ | 231 | $ | 316 | $ | 1,655 | $ | 220 | $ | 1,875 | ||||||||
Accountable assets at December 31, 2004 | $ | 525 | $ | 2,572 | $ | 1,097 | $ | 775 | $ | 3,900 | $ | 28 | $ | 3,896 | $ | 12,793 | $ | 24,450 | $ | 37,243 | ||||||||
Capital Expenditures | $ | 2 | $ | 58 | $ | 20 | $ | 11 | $ | 76 | $ | 1 | $ | 37 | $ | 205 | $ | 553 | $ | 758 | ||||||||
Business Segments Three Months Ended September 30, (Millions of dollars) | ||||||||||||||||||||||||||||||
Machinery and Engines | ||||||||||||||||||||||||||||||
2005 | Asia/ Pacific Marketing | Construction & Mining Products | EAME Marketing | Latin America Marketing | Power Products | North America Marketing | All Other | Total | Financing & Insurance Services | Consolidated Total | ||||||||||||||||||||
External sales and revenues | $ | 601 | $ | 96 | $ | 1,060 | $ | 594 | $ | 2,579 | $ | 2,835 | $ | 574 | $ | 8,339 | $ | 723 | $ | 9,062 | ||||||||||
Inter-segment sales & revenues | 48 | 3,828 | 986 | 447 | 2,077 | 110 | 892 | 8,388 | 5 | 8,393 | ||||||||||||||||||||
Total sales and revenues | $ | 649 | $ | 3,924 | $ | 2,046 | $ | 1,041 | $ | 4,656 | $ | 2,945 | $ | 1,466 | $ | 16,727 | $ | 728 | $ | 17,455 | ||||||||||
Depreciation and amortization | $ | 3 | $ | 44 | $ | 16 | $ | 11 | $ | 71 | $ | 1 | $ | 29 | $ | 175 | $ | 163 | $ | 338 | ||||||||||
Imputed interest expense | $ | 4 | $ | 19 | $ | 9 | $ | 7 | $ | 27 | $ | 2 | $ | 32 | $ | 100 | $ | 206 | $ | 306 | ||||||||||
Accountable profit (loss) | $ | 28 | $ | 471 | $ | 76 | $ | 52 | $ | 240 | $ | 98 | $ | 188 | $ | 1,153 | $ | 139 | $ | 1,292 | ||||||||||
Accountable assets at September 30, 2005 | $ | 489 | $ | 2,756 | $ | 1,211 | $ | 897 | $ | 3,845 | $ | 52 | $ | 4,151 | $ | 13,401 | $ | 26,002 | $ | 39,403 | ||||||||||
Capital Expenditures | $ | 3 | $ | 73 | $ | 24 | $ | 12 | $ | 93 | $ | 1 | $ | 30 | $ | 236 | $ | 362 | $ | 598 | ||||||||||
Machinery and Engines | ||||||||||||||||||||||||||||||
2004 | Asia/ Pacific Marketing | Construction & Mining Products | EAME Marketing | Latin America Marketing | Power Products | North America Marketing | All Other | Total | Financing & Insurance Services | Consolidated Total | ||||||||||||||||||||
External sales and revenues | $ | 484 | $ | 73 | $ | 947 | $ | 484 | $ | 2,340 | $ | 2,289 | $ | 500 | $ | 7,117 | $ | 581 | $ | 7,698 | ||||||||||
Inter-segment sales & revenues | 29 | 3,122 | 837 | 308 | 1,763 | 105 | 735 | 6,899 | - | 6,899 | ||||||||||||||||||||
Total sales and revenues | $ | 513 | $ | 3,195 | $ | 1,784 | $ | 792 | $ | 4,103 | $ | 2,394 | $ | 1,235 | $ | 14,016 | $ | 581 | $ | 14,597 | ||||||||||
Depreciation and amortization | $ | 3 | $ | 43 | $ | 15 | $ | 11 | $ | 72 | $ | 1 | $ | 26 | $ | 171 | $ | 150 | $ | 321 | ||||||||||
Imputed interest expense | $ | 4 | $ | 17 | $ | 8 | $ | 5 | $ | 29 | $ | 1 | $ | 25 | $ | 89 | $ | 135 | $ | 224 | ||||||||||
Accountable profit (loss) | $ | 10 | $ | 249 | $ | 63 | $ | 63 | $ | 108 | $ | 113 | $ | 162 | $ | 768 | $ | 124 | $ | 892 | ||||||||||
Accountable assets at December 31, 2004 | $ | 525 | $ | 2,572 | $ | 1,097 | $ | 775 | $ | 3,900 | $ | 28 | $ | 3,896 | $ | 12,793 | $ | 24,450 | $ | 37,243 | ||||||||||
Capital Expenditures | $ | - | $ | 46 | $ | 19 | $ | 10 | $ | 48 | $ | 1 | $ | 38 | $ | 162 | $ | 348 | $ | 510 | ||||||||||
Business Segments Nine Months Ended September 30, (Millions of dollars) | ||||||||||||||||||||||||||||||
Machinery and Engines | ||||||||||||||||||||||||||||||
2005 | Asia/ Pacific Marketing | Construction & Mining Products | EAME Marketing | Latin America Marketing | Power Products | North America Marketing | All Other | Total | Financing & Insurance Services | Consolidated Total | ||||||||||||||||||||
External sales and revenues | $ | 1,848 | $ | 303 | $ | 3,377 | $ | 1,679 | $ | 7,400 | $ | 8,402 | $ | 1,780 | $ | 24,789 | $ | 2,115 | $ | 26,904 | ||||||||||
Inter-segment sales & revenues | 121 | 11,512 | 3,155 | 1,235 | 6,147 | 328 | 2,725 | 25,223 | 32 | 25,255 | ||||||||||||||||||||
Total sales and revenues | $ | 1,969 | $ | 11,815 | $ | 6,532 | $ | 2,914 | $ | 13,547 | $ | 8,730 | $ | 4,505 | $ | 50,012 | $ | 2,147 | $ | 52,159 | ||||||||||
Depreciation and amortization | $ | 10 | $ | 136 | $ | 49 | $ | 36 | $ | 218 | $ | 1 | $ | 72 | $ | 522 | $ | 483 | $ | 1,005 | ||||||||||
Imputed interest expense | $ | 12 | $ | 59 | $ | 26 | $ | 19 | $ | 85 | $ | 5 | $ | 91 | $ | 297 | $ | 574 | $ | 871 | ||||||||||
Accountable profit (loss) | $ | 100 | $ | 1,325 | $ | 319 | $ | 167 | $ | 625 | $ | 227 | $ | 647 | $ | 3,410 | $ | 418 | $ | 3,828 | ||||||||||
Accountable assets at September 30, 2005 | $ | 489 | $ | 2,756 | $ | 1,211 | $ | 897 | $ | 3,845 | $ | 52 | $ | 4,151 | $ | 13,401 | $ | 26,002 | $ | 39,403 | ||||||||||
Capital Expenditures | $ | 6 | $ | 178 | $ | 65 | $ | 26 | $ | 213 | $ | 2 | $ | 72 | $ | 562 | $ | 931 | $ | 1,493 | ||||||||||
Machinery and Engines | ||||||||||||||||||||||||||||||
2004 | Asia/ Pacific Marketing | Construction & Mining Products | EAME Marketing | Latin America Marketing | Power Products | North America Marketing | All Other | Total | Financing & Insurance Services | Consolidated Total | ||||||||||||||||||||
External sales and revenues | $ | 1,582 | $ | 202 | $ | 2,802 | $ | 1,227 | $ | 6,196 | $ | 6,722 | $ | 1,405 | $ | 20,136 | $ | 1,795 | $ | 21,931 | ||||||||||
Inter-segment sales & revenues | 78 | 9,098 | 2,626 | 896 | 4,859 | 282 | 2,130 | 19,969 | 1 | 19,970 | ||||||||||||||||||||
Total sales and revenues | $ | 1,660 | $ | 9,300 | $ | 5,428 | $ | 2,123 | $ | 11,055 | $ | 7,004 | $ | 3,535 | $ | 40,105 | $ | 1,796 | $ | 41,901 | ||||||||||
Depreciation and amortization | $ | 9 | $ | 132 | $ | 45 | $ | 33 | $ | 222 | $ | 1 | $ | 75 | $ | 517 | $ | 446 | $ | 963 | ||||||||||
Imputed interest expense | $ | 13 | $ | 49 | $ | 22 | $ | 15 | $ | 85 | $ | 1 | $ | 71 | $ | 256 | $ | 383 | $ | 639 | ||||||||||
Accountable profit (loss) | $ | 99 | $ | 886 | $ | 251 | $ | 160 | $ | 205 | $ | 345 | $ | 478 | $ | 2,424 | $ | 344 | $ | 2,768 | ||||||||||
Accountable assets at December 31, 2004 | $ | 525 | $ | 2,572 | $ | 1,097 | $ | 775 | $ | 3,900 | $ | 28 | $ | 3,896 | $ | 12,793 | $ | 24,450 | $ | 37,243 | ||||||||||
Capital Expenditures | $ | 2 | $ | 104 | $ | 39 | $ | 21 | $ | 124 | $ | 2 | $ | 76 | $ | 368 | $ | 900 | $ | 1,268 |
Reconciliation of Sales and Revenues: | |||||||||||||||
(Millions of dollars) | Machinery and Engines | Financing & Insurance Services | Consolidating Adjustments | Consolidated Total | |||||||||||
Three Months Ended June 30, 2005: | |||||||||||||||
Total external sales and revenues from business segments | $ | 8,746 | $ | 712 | $ | - | $ | 9,458 | |||||||
Other | 38 | (56 | ) | (80 | ) 1 | (98 | ) | ||||||||
Total sales and revenues | $ | 8,784 | $ | 656 | $ | (80 | ) | $ | 9,360 | ||||||
Three Months Ended June 30, 2004: | |||||||||||||||
Total external sales and revenues from business segments | $ | 7,055 | $ | 667 | $ | - | $ | 7,722 | |||||||
Other | 45 | (34 | ) | (150 | ) 1 | (139 | ) | ||||||||
Total sales and revenues | $ | 7,100 | $ | 633 | $ | (150 | ) | $ | 7,583 | ||||||
(1) Elimination of Financial Products revenues from Machinery and Engines. |
Reconciliation of Sales and Revenues: | |||||||||||||||
(Millions of dollars) | Machinery and Engines | Financing & Insurance Services | Consolidating Adjustments | Consolidated Total | |||||||||||
Three Months Ended September 30, 2005: | |||||||||||||||
Total external sales and revenues from business segments | $ | 8,339 | $ | 723 | $ | - | $ | 9,062 | |||||||
Other | 53 | (56 | ) | (82 | )1 | (85 | ) | ||||||||
Total sales and revenues | $ | 8,392 | $ | 667 | $ | (82 | ) | $ | 8,977 | ||||||
Three Months Ended September 30, 2004: | |||||||||||||||
Total external sales and revenues from business segments | $ | 7,117 | $ | 581 | $ | - | $ | 7,698 | |||||||
Other | 58 | (144 | ) | 47 | 1 | (39 | ) | ||||||||
Total sales and revenues | $ | 7,175 | $ | 437 | $ | 47 | $ | 7,659 | |||||||
(1) Elimination of Financial Products revenues from Machinery and Engines. |
Reconciliation of Sales and Revenues: | ||||||||||||||||||||||||||||||
(Millions of dollars) | Machinery and Engines | Financing & Insurance Services | Consolidating Adjustments | Consolidated Total | Machinery and Engines | Financing & Insurance Services | Consolidating Adjustments | Consolidated Total | ||||||||||||||||||||||
Six Months Ended June 30, 2005: | ||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2005: | ||||||||||||||||||||||||||||||
Total external sales and revenues from business segments | $ | 16,450 | $ | 1,392 | $ | - | $ | 17,842 | $ | 24,789 | $ | 2,115 | $ | - | $ | 26,904 | ||||||||||||||
Other | 123 | (124 | ) | (142 | ) 1 | (143 | ) | 176 | (180 | ) | (224 | )1 | (228 | ) | ||||||||||||||||
Total sales and revenues | $ | 16,573 | $ | 1,268 | $ | (142 | ) | $ | 17,699 | $ | 24,965 | $ | 1,935 | $ | (224 | ) | $ | 26,676 | ||||||||||||
Six Months Ended June 30, 2004: | ||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2004: | ||||||||||||||||||||||||||||||
Total external sales and revenues from business segments | $ | 13,019 | $ | 1,214 | $ | - | $ | 14,233 | $ | 20,136 | $ | 1,795 | $ | - | $ | 21,931 | ||||||||||||||
Other | 83 | (64 | ) | (189 | ) 1 | (170 | ) | 141 | (208 | ) | (142 | )1 | (209 | ) | ||||||||||||||||
Total sales and revenues | $ | 13,102 | $ | 1,150 | $ | (189 | ) | $ | 14,063 | $ | 20,277 | $ | 1,587 | $ | (142 | ) | $ | 21,722 | ||||||||||||
(1) Elimination of Financial Products revenues from Machinery and Engines. |
Reconciliation of Profit Before Taxes: | ||||||||||||
(Millions of dollars) | Machinery and Engines | Financing & Insurance Services | Consolidated Total | |||||||||
Three Months Ended September 30, 2005: | ||||||||||||
Total accountable profit from business segments | $ | 1,153 | $ | 139 | $ | 1,292 | ||||||
Corporate costs | (155 | ) | - | (155 | ) | |||||||
Timing | (38 | ) | - | (38 | ) | |||||||
Methodology differences: | ||||||||||||
Inventory/cost of sales | 2 | - | 2 | |||||||||
Postretirement benefit expense | (97 | ) | - | (97 | ) | |||||||
Financing costs | (7 | ) | - | (7 | ) | |||||||
Equity in profit of unconsolidated affiliated companies | (16 | ) | (2 | ) | (18 | ) | ||||||
Currency | (23 | ) | - | (23 | ) | |||||||
Other methodology differences | (7 | ) | 3 | (4 | ) | |||||||
Other | - | - | - | |||||||||
Total profit before taxes | $ | 812 | $ | 140 | $ | 952 | ||||||
Three Months Ended September 30, 2004: | ||||||||||||
Total accountable profit from business segments | $ | 768 | $ | 124 | $ | 892 | ||||||
Corporate costs | (148 | ) | - | (148 | ) | |||||||
Timing | (20 | ) | - | (20 | ) | |||||||
Methodology differences: | ||||||||||||
Inventory/cost of sales | - | - | - | |||||||||
Postretirement benefit expense | (62 | ) | - | (62 | ) | |||||||
Financing costs | 9 | - | 9 | |||||||||
Equity in profit of unconsolidated affiliated companies | (17 | ) | - | (17 | ) | |||||||
Currency | 7 | - | 7 | |||||||||
Other methodology differences | (20 | ) | 20 | - | ||||||||
Other | 2 | - | 2 | |||||||||
Total profit before taxes | $ | 519 | $ | 144 | $ | 663 | ||||||
Reconciliation of Profit Before Taxes: | ||||||||||||
(Millions of dollars) | Machinery and Engines | Financing & Insurance Services | Consolidated Total | |||||||||
Three Months Ended June 30, 2005: | ||||||||||||
Total accountable profit from business segments | $ | 1,295 | $ | 149 | $ | 1,444 | ||||||
Corporate costs | (218 | ) | - | (218 | ) | |||||||
Timing | (41 | ) | - | (41 | ) | |||||||
Methodology differences: | ||||||||||||
Inventory/cost of sales | (8 | ) | - | (8 | ) | |||||||
Postretirement benefit expense | (98 | ) | - | (98 | ) | |||||||
Financing costs | (5 | ) | - | (5 | ) | |||||||
Equity in profit of unconsolidated affiliated companies | (26 | ) | (3 | ) | (29 | ) | ||||||
Currency | 4 | - | 4 | |||||||||
Other methodology differences | (13 | ) | 5 | (8 | ) | |||||||
Other | 5 | - | 5 | |||||||||
Total profit before taxes | $ | 895 | $ | 151 | $ | 1,046 | ||||||
Three Months Ended June 30, 2004: | ||||||||||||
Total accountable profit from business segments | $ | 920 | $ | 113 | $ | 1,033 | ||||||
Corporate costs | (132 | ) | - | (132 | ) | |||||||
Timing | (34 | ) | - | (34 | ) | |||||||
Methodology differences: | ||||||||||||
Inventory/cost of sales | (25 | ) | - | (25 | ) | |||||||
Postretirement benefit expense | (72 | ) | - | (72 | ) | |||||||
Financing costs | 9 | - | 9 | |||||||||
Equity in profit of unconsolidated affiliated companies | (13 | ) | (1 | ) | (14 | ) | ||||||
Currency | (2 | ) | - | (2 | ) | |||||||
Other methodology differences | (22 | ) | 7 | (15 | ) | |||||||
Other | 13 | - | 13 | |||||||||
Total profit before taxes | $ | 642 | $ | 119 | $ | 761 | ||||||
Reconciliation of Profit Before Taxes: | Reconciliation of Profit Before Taxes: | Reconciliation of Profit Before Taxes: | ||||||||||||||||||||||
(Millions of dollars) | (Millions of dollars) | Machinery and Engines | Financing & Insurance Services | Consolidated Total | (Millions of dollars) | Machinery and Engines | Financing & Insurance Services | Consolidated Total | ||||||||||||||||
Six Months Ended June 30, 2005: | ||||||||||||||||||||||||
Nine Months Ended September 30, 2005: | Nine Months Ended September 30, 2005: | |||||||||||||||||||||||
Total accountable profit from business segments | Total accountable profit from business segments | $ | 2,258 | $ | 278 | $ | 2,536 | Total accountable profit from business segments | $ | 3,410 | $ | 418 | $ | 3,828 | ||||||||||
Corporate costs | Corporate costs | (387 | ) | - | (387 | ) | Corporate costs | (542 | ) | - | (542 | ) | ||||||||||||
Timing | Timing | (67 | ) | - | (67 | ) | Timing | (105 | ) | - | (105 | ) | ||||||||||||
Methodology differences: | Methodology differences: | Methodology differences: | ||||||||||||||||||||||
Inventory/cost of sales | (25 | ) | - | (25 | ) | Inventory/cost of sales | (23 | ) | - | (23 | ) | |||||||||||||
Postretirement benefit expense | (196 | ) | - | (196 | ) | Postretirement benefit expense | (292 | ) | - | (292 | ) | |||||||||||||
Financing costs | 2 | - | 2 | Financing costs | (5 | ) | - | (5 | ) | |||||||||||||||
Equity in profit of unconsolidated affiliated companies | (38 | ) | (5 | ) | (43 | ) | Equity in profit of unconsolidated affiliated companies | (54 | ) | (7 | ) | (61 | ) | |||||||||||
Currency | 12 | - | 12 | Currency | (11 | ) | - | (11 | ) | |||||||||||||||
Other methodology differences | (10 | ) | 10 | - | Other methodology differences | (18 | ) | 12 | (6 | ) | ||||||||||||||
Other | Other | 13 | - | 13 | Other | 14 | - | 14 | ||||||||||||||||
Total profit before taxes | Total profit before taxes | $ | 1,562 | $ | 283 | $ | 1,845 | Total profit before taxes | $ | 2,374 | $ | 423 | $ | 2,797 | ||||||||||
Six Months Ended June 30, 2004: | ||||||||||||||||||||||||
Nine Months Ended September 30, 2004: | Nine Months Ended September 30, 2004: | |||||||||||||||||||||||
Total accountable profit from business segments | Total accountable profit from business segments | $ | 1,655 | $ | 220 | $ | 1,875 | Total accountable profit from business segments | $ | 2,424 | $ | 344 | $ | 2,768 | ||||||||||
Corporate costs | Corporate costs | (262 | ) | - | (262 | ) | Corporate costs | (409 | ) | - | (409 | ) | ||||||||||||
Timing | Timing | (89 | ) | - | (89 | ) | Timing | (106 | ) | - | (106 | ) | ||||||||||||
Methodology differences: | Methodology differences: | Methodology differences: | ||||||||||||||||||||||
Inventory/cost of sales | (54 | ) | - | (54 | ) | Inventory/cost of sales | (54 | ) | - | (54 | ) | |||||||||||||
Postretirement benefit expense | (147 | ) | - | (147 | ) | Postretirement benefit expense | (209 | ) | - | (209 | ) | |||||||||||||
Financing costs | 26 | - | 26 | Financing costs | 35 | - | 35 | |||||||||||||||||
Equity in profit of unconsolidated affiliated companies | (18 | ) | (2 | ) | (20 | ) | Equity in profit of unconsolidated affiliated companies | (35 | ) | (2 | ) | (37 | ) | |||||||||||
Currency | 10 | - | 10 | Currency | 18 | - | 18 | |||||||||||||||||
Other methodology differences | (38 | ) | 15 | (23 | ) | Other methodology differences | (64 | ) | 35 | (29 | ) | |||||||||||||
Other | Other | 17 | - | 17 | Other | 19 | - | 19 | ||||||||||||||||
Total profit before taxes | Total profit before taxes | $ | 1,100 | $ | 233 | $ | 1,333 | Total profit before taxes | $ | 1,619 | $ | 377 | $ | 1,996 | ||||||||||
Reconciliation of Assets: | ||||||||||||||||
(Millions of dollars) | Machinery and Engines | Financing & Insurance Services | Consolidating Adjustments | Consolidated Total | ||||||||||||
September 30, 2005: | ||||||||||||||||
Total accountable assets from business segments | $ | 13,402 | $ | 26,002 | $ | - | $ | 39,404 | ||||||||
Items not included in segment assets: | ||||||||||||||||
Cash and short-term investments | 754 | 213 | - | 967 | ||||||||||||
Intercompany receivables | 715 | 47 | (762 | ) | - | |||||||||||
Trade and other receivables | 407 | - | - | 407 | ||||||||||||
Investment in unconsolidated affiliated companies | 402 | - | (1 | ) | 401 | |||||||||||
Investment in Financial Products | 3,202 | - | (3,202 | ) | - | |||||||||||
Deferred income taxes and prepaids | 2,625 | 104 | (343 | ) | 2,386 | |||||||||||
Intangible assets and other assets | 2,255 | - | - | 2,255 | ||||||||||||
Service center assets | 994 | - | - | 994 | ||||||||||||
Liabilities included in segment assets | 1,364 | 10 | - | 1,374 | ||||||||||||
Inventory methodology differences | (2,336 | ) | - | - | (2,336 | ) | ||||||||||
Other | 79 | (66 | ) | - | 13 | |||||||||||
Total assets | $ | 23,863 | $ | 26,310 | $ | (4,308 | ) | $ | 45,865 | |||||||
December 31, 2004: | ||||||||||||||||
Total accountable assets from business segments | $ | 12,793 | $ | 24,450 | $ | - | $ | 37,243 | ||||||||
Items not included in segment assets: | ||||||||||||||||
Cash and short-term investments | 270 | 175 | - | 445 | ||||||||||||
Intercompany receivables | 443 | 18 | (461 | ) | - | |||||||||||
Trade and other receivables | 547 | - | - | 547 | ||||||||||||
Investment in unconsolidated affiliated companies | 367 | - | (1 | ) | 366 | |||||||||||
Investment in Financial Products | 3,012 | - | (3,012 | ) | - | |||||||||||
Deferred income taxes and prepaids | 2,477 | 92 | (317 | ) | 2,252 | |||||||||||
Intangible assets and other assets | 2,158 | - | - | 2,158 | ||||||||||||
Service center assets | 1,001 | - | - | 1,001 | ||||||||||||
Liabilities included in segment assets | 1,346 | - | - | 1,346 | ||||||||||||
Inventory methodology differences | (2,235 | ) | - | - | (2,235 | ) | ||||||||||
Other | 90 | (123 | ) | 5 | (28 | ) | ||||||||||
Total assets | $ | 22,269 | $ | 24,612 | $ | (3,786 | ) | $ | 43,095 | |||||||
Reconciliation of Assets: | ||||||||||||||||
(Millions of dollars) | Machinery and Engines | Financing & Insurance Services | Consolidating Adjustments | Consolidated Total | ||||||||||||
June 30, 2005: | ||||||||||||||||
Total accountable assets from business segments | $ | 13,473 | $ | 24,965 | $ | - | $ | 38,438 | ||||||||
Items not included in segment assets: | ||||||||||||||||
Cash and short-term investments | 464 | 285 | - | 749 | ||||||||||||
Intercompany receivables | 482 | 46 | (528 | ) | - | |||||||||||
Trade and other receivables | 517 | - | - | 517 | ||||||||||||
Investment in unconsolidated affiliated companies | 396 | - | - | 396 | ||||||||||||
Investment in Financial Products | 3,088 | - | (3,088 | ) | - | |||||||||||
Deferred income taxes and prepaids | 2,607 | 97 | (344 | ) | 2,360 | |||||||||||
Intangible assets and other assets | 2,275 | - | - | 2,275 | ||||||||||||
Service center assets | 990 | - | - | 990 | ||||||||||||
Liabilities included in segment assets | 1,393 | 14 | - | 1,407 | ||||||||||||
Inventory methodology differences | (2,316 | ) | - | - | (2,316 | ) | ||||||||||
Other | 90 | (83 | ) | - | 7 | |||||||||||
Total assets | $ | 23,459 | $ | 25,324 | $ | (3,960 | ) | $ | 44,823 | |||||||
December 31, 2004: | ||||||||||||||||
Total accountable assets from business segments | $ | 12,793 | $ | 24,450 | $ | - | $ | 37,243 | ||||||||
Items not included in segment assets: | ||||||||||||||||
Cash and short-term investments | 270 | 175 | - | 445 | ||||||||||||
Intercompany receivables | 443 | 18 | (461 | ) | - | |||||||||||
Trade and other receivables | 547 | - | - | 547 | ||||||||||||
Investment in unconsolidated affiliated companies | 367 | - | (1 | ) | 366 | |||||||||||
Investment in Financial Products | 3,012 | - | (3,012 | ) | - | |||||||||||
Deferred income taxes and prepaids | 2,477 | 92 | (317 | ) | 2,252 | |||||||||||
Intangible assets and other assets | 2,158 | - | - | 2,158 | ||||||||||||
Service center assets | 1,001 | - | - | 1,001 | ||||||||||||
Liabilities included in segment assets | 1,346 | - | - | 1,346 | ||||||||||||
Inventory methodology differences | (2,235 | ) | - | - | (2,235 | ) | ||||||||||
Other | 90 | (123 | ) | 5 | (28 | ) | ||||||||||
Total assets | $ | 22,269 | $ | 24,612 | $ | (3,786 | ) | $ | 43,095 | |||||||
The chart above graphically illustrates reasons for the change in Consolidated Sales and Revenues between |
Sales and Revenues by Geographic Region | ||||||||||||||||||||||||
(Millions of dollars) | Total | % Change | North America | % Change | EAME | % Change | Latin America | % Change | Asia/ Pacific | % Change | ||||||||||||||
2nd Quarter 2005 | ||||||||||||||||||||||||
Machinery | $ | 6,026 | 25% | $ | 3,321 | 24% | $ | 1,430 | 23% | $ | 526 | 52% | $ | 749 | 15% | |||||||||
Engines (1) | 2,758 | 22% | 1,226 | 22% | 949 | 29% | 251 | 42% | 332 | -6% | ||||||||||||||
Financial Products (2) | 576 | 19% | 410 | 20% | 84 | 1% | 35 | 21% | 47 | 57% | ||||||||||||||
$ | 9,360 | 23% | $ | 4,957 | 23% | $ | 2,463 | 24% | $ | 812 | 47% | $ | 1,128 | 9% | ||||||||||
2nd Quarter 2004 | ||||||||||||||||||||||||
Machinery | $ | 4,836 | $ | 2,674 | $ | 1,163 | $ | 346 | $ | 653 | ||||||||||||||
Engines (1) | 2,264 | 1,001 | 733 | 177 | 353 | |||||||||||||||||||
Financial Products (2) | 483 | 341 | 83 | 29 | 30 | |||||||||||||||||||
$ | 7,583 | $ | 4,016 | $ | 1,979 | $ | 552 | $ | 1,036 | |||||||||||||||
(1) Does not include internal engine transfers of $537 million and $447 million in 2005 and 2004, respectively. Internal engine transfers are valued at prices comparable to those for unrelated parties. | ||||||||||||||||||||||||
(2) Does not include revenues earned from Machinery and Engines of $80 million and $150 million in 2005 and 2004, respectively. |
Sales and Revenues by Geographic Region | ||||||||||||||||||||||||
(Millions of dollars) | Total | % Change | North America | % Change | EAME | % Change | Latin America | % Change | Asia/ Pacific | % Change | ||||||||||||||
3rd Quarter 2005 | ||||||||||||||||||||||||
Machinery | $ | 5,648 | 20% | $ | 3,198 | 23% | $ | 1,199 | 8% | $ | 551 | 31% | $ | 700 | 22% | |||||||||
Engines1 | 2,744 | 11% | 1,299 | 18% | 816 | 9% | 287 | 34% | 342 | (18%) | ||||||||||||||
Financial Products2 | 585 | 21% | 412 | 20% | 85 | 2% | 39 | 56% | 49 | 48% | ||||||||||||||
$ | 8,977 | 17% | $ | 4,909 | 22% | $ | 2,100 | 8% | $ | 877 | 33% | $ | 1,091 | 7% | ||||||||||
3rd Quarter 2004 | ||||||||||||||||||||||||
Machinery | $ | 4,699 | $ | 2,597 | $ | 1,106 | $ | 422 | $ | 574 | ||||||||||||||
Engines1 | 2,476 | 1,100 | 747 | 214 | 415 | |||||||||||||||||||
Financial Products2 | 484 | 343 | 83 | 25 | 33 | |||||||||||||||||||
$ | 7,659 | $ | 4,040 | $ | 1,936 | $ | 661 | $ | 1,022 | |||||||||||||||
(1) Does not include internal engine transfers of $451 million and $387 million in 2005 and 2004, respectively. Internal engine transfers are valued at prices comparable to those for unrelated parties. |
(2) Does not include revenues earned from Machinery and Engines of $82 million and ($47) million in 2005 and 2004, respectively. |
· | North America sales were up |
· | EAME sales |
· | Latin America sales |
· | Asia/Pacific third-quarter sales were |
· | North America sales were up |
· | EAME sales increased about 9 percent. Electric power engine sales were up |
· | Latin Americasales were up |
· | Asia/Pacific sales were down |
The chart above graphically illustrates reasons for the change in Consolidated Operating Profit between |
Operating Profit by Principal Line of Business | |||||||||||
(Millions of dollars) | 2nd Quarter 2004 | 2nd Quarter 2005 | Change $ | ||||||||
Machinery1 | $ | 538 | $ | 676 | $ | 138 | |||||
Engines1 | 149 | 265 | 116 | ||||||||
Financial Products | 114 | 142 | 28 | ||||||||
Consolidating Adjustments | (31 | ) | (62 | ) | (31 | ) | |||||
Consolidated Operating Profit | $ | 770 | $ | 1,021 | $ | 251 | |||||
(1) Caterpillar operations are highly integrated; therefore, the company uses a number of allocations to determine lines of business operating profit for Machinery and Engines. |
Operating Profit by Principal Line of Business | |||||||||||||||
(Millions of dollars) | 3rd Quarter 2004 | 3rd Quarter 2005 | Change $ | Change % | |||||||||||
Machinery1 | $ | 411 | $ | 615 | $ | 204 | 50% | ||||||||
Engines1 | 155 | 265 | 110 | 71% | |||||||||||
Financial Products | 132 | 123 | (9 | ) | (7% | ) | |||||||||
Consolidating Adjustments | (35 | ) | (63 | ) | (28 | ) | |||||||||
Consolidated Operating Profit | $ | 663 | $ | 940 | $ | 277 | 42% | ||||||||
(1) Caterpillar operations are highly integrated; therefore, the company uses a number of allocations to determine lines of business operating profit for Machinery and Engines. |
· | Machinery operating profit of |
· | Enginesoperating profit of $265 million was up |
· | Financial Products operating profit of |
Reconciliation of Machinery and Engine Sales by Geographic Region to External Sales by Marketing Segment | |||||||
Three months ended September 30, | |||||||
(Millions of Dollars) | 2005 | 2004 | |||||
North America Geographic Region | $ | 4,497 | $ | 3,697 | |||
Engine sales included in the Power Products segment | (1,299 | ) | (1,100 | ) | |||
Company owned dealer sales included in the All Other segment | (216 | ) | (137 | ) | |||
Other* | (147 | ) | (171 | ) | |||
North America Marketing external sales | $ | 2,835 | $ | 2,289 | |||
EAME Geographic Region | $ | 2,015 | $ | 1,853 | |||
Power Products sales not included in the EAME Marketing segment | (729 | ) | (735 | ) | |||
Other* | (226 | ) | (171 | ) | |||
EAME Marketing external sales | $ | 1,060 | $ | 947 | |||
Latin America Geographic Region | $ | 838 | $ | 636 | |||
Power Products sales not included in the Latin America Marketing segment | (269 | ) | (211 | ) | |||
Other* | 25 | 59 | |||||
Latin America Marketing external sales | $ | 594 | $ | 484 | |||
Asia/Pacific Geographic Region | $ | 1,042 | $ | 989 | |||
Power Products sales not included in the Asia/Pacific Marketing segment | (282 | ) | (294 | ) | |||
Other* | (159 | ) | (211 | ) | |||
Asia/Pacific Marketing external sales | $ | 601 | $ | 484 | |||
* Mostly represents external sales of Construction and Mining Products and All Other segments. |
Reconciliation of Machinery and Engine Sales by Geographic Region to External Sales by Marketing Segment | |||||||
Three months ended June 30, | |||||||
(Millions of Dollars) | 2005 | 2004 | |||||
North America Geographic Region | $ | 4,547 | $ | 3,675 | |||
Engine sales included in the Power Products segment | (1,226 | ) | (1,001 | ) | |||
Company owned dealer sales included in the All Other segment | (207 | ) | (133 | ) | |||
Other* | (129 | ) | (145 | ) | |||
North America Marketing external sales | $ | 2,985 | $ | 2,396 | |||
EAME Geographic Region | $ | 2,379 | $ | 1,896 | |||
Power Products sales not included in the EAME Marketing segment | (907 | ) | (713 | ) | |||
Other* | (267 | ) | (158 | ) | |||
EAME Marketing external sales | $ | 1,205 | $ | 1,025 | |||
Latin America Geographic Region | $ | 777 | $ | 523 | |||
Power Products sales not included in the Latin America Marketing segment | (212 | ) | (164 | ) | |||
Other* | 33 | 39 | |||||
Latin America Marketing external sales | $ | 598 | $ | 398 | |||
Asia/Pacific Geographic Region | $ | 1,081 | $ | 1,006 | |||
Power Products sales not included in the Asia/Pacific Marketing segment | (246 | ) | (251 | ) | |||
Other* | (187 | ) | (190 | ) | |||
Asia/Pacific Marketing external sales | $ | 648 | $ | 565 | |||
* Mostly represents external sales of Construction and Mining Products and All Other segments. |
· | Other income/expense was income of |
· | The provision for income taxes in the The third quarter 2005 provision for income taxes includes an unfavorable adjustment of $18 million related to the first six months of 2005 resulting from an increase in the estimated annual tax rate from 29 to 30 percent. The change in the estimated rate was primarily from changes in our estimated tax benefits from ETI. |
The chart above graphically illustrates reasons for the change in Consolidated Sales and Revenues between the |
Sales and Revenues by Geographic Region | ||||||||||||||||||||||||
(Millions of dollars) | Total | % Change | North America | % Change | EAME | % Change | Latin America | % Change | Asia/ Pacific | % Change | ||||||||||||||
Six months ended June 30, 2005 | ||||||||||||||||||||||||
Machinery | $ | 11,426 | 27% | $ | 6,249 | 26% | $ | 2,785 | 31% | $ | 966 | 51% | $ | 1,426 | 13% | |||||||||
Engines(1) | 5,147 | 25% | 2,426 | 30% | 1,692 | 31% | 408 | 10% | 621 | 7% | ||||||||||||||
Financial Products(2) | 1,126 | 17% | 800 | 18% | 171 | 2% | 66 | 12% | 89 | 53% | ||||||||||||||
$ | 17,699 | 26% | $ | 9,475 | 26% | $ | 4,648 | 30% | $ | 1,440 | 34% | $ | 2,136 | 12% | ||||||||||
Six months ended June 30, 2004 | ||||||||||||||||||||||||
Machinery | $ | 8,988 | $ | 4,957 | $ | 2,126 | $ | 641 | $ | 1,264 | ||||||||||||||
Engines(1) | 4,114 | 1,871 | 1,292 | 372 | 579 | |||||||||||||||||||
Financial Products(2) | 961 | 677 | 167 | 59 | 58 | |||||||||||||||||||
$ | 14,063 | $ | 7,505 | $ | 3,585 | $ | 1,072 | $ | 1,901 | |||||||||||||||
(1) Does not include internal engine transfers of $1,156 million and $931 million in 2005 and 2004, respectively. Internal engine transfers are valued at prices comparable to those for unrelated parties. | ||||||||||||||||||||||||
(2) Does not include revenues earned from Machinery and Engines of $142 million and $189 million in 2005 and 2004, respectively. |
Sales and Revenues by Geographic Region | ||||||||||||||||||||||||
(Millions of dollars) | Total | % Change | North America | % Change | EAME | % Change | Latin America | % Change | Asia/ Pacific | % Change | ||||||||||||||
Nine months ended September 30, 2005 | ||||||||||||||||||||||||
Machinery | $ | 17,074 | 25% | $ | 9,447 | 25% | $ | 3,984 | 23% | $ | 1,517 | 43% | $ | 2,126 | 16% | |||||||||
Engines1 | 7,891 | 20% | 3,725 | 25% | 2,508 | 23% | 695 | 19% | 963 | (3%) | ||||||||||||||
Financial Products2 | 1,711 | 18% | 1,212 | 19% | 256 | 2% | 105 | 25% | 138 | 52% | ||||||||||||||
$ | 26,676 | 23% | $ | 14,384 | 25% | $ | 6,748 | 22% | $ | 2,317 | 34% | $ | 3,227 | 10% | ||||||||||
Nine months ended September 30, 2004 | ||||||||||||||||||||||||
Machinery | $ | 13,687 | $ | 7,554 | $ | 3,232 | $ | 1,063 | $ | 1,838 | ||||||||||||||
Engines1 | 6,590 | 2,971 | 2,039 | 586 | 994 | |||||||||||||||||||
Financial Products2 | 1,445 | 1,020 | 250 | 84 | 91 | |||||||||||||||||||
$ | 21,722 | $ | 11,545 | $ | 5,521 | $ | 1,733 | $ | 2,923 | |||||||||||||||
(1) Does not include internal engine transfers of $1,607 million and $1,318 million in 2005 and 2004, respectively. Internal engine transfers are valued at prices comparable to those for unrelated parties. | ||||||||||||||||||||||||
(2) Does not include revenues earned from Machinery and Engines of $224 million and $142 million in 2005 and 2004, respectively. |
· | North America sales were up |
· | EAME sales |
· | Latin America sales |
· | Asia/Pacific sales for the first nine months of 2005 were |
· | North America sales were up |
· | EAME sales increased about 23 percent. Electric power engine sales were up |
· | Latin America sales were up |
· | Asia/Pacific sales were down 3 percent. Marine engine sales were up |
The chart above graphically illustrates reasons for the change in Consolidated Operating Profit between the |
Operating Profit by Principal Line of Business | Operating Profit by Principal Line of Business | Operating Profit by Principal Line of Business | ||||||||||||||||||||||||
(Millions of dollars) | Six Months Ended June 30, 2004 | Six Months Ended June 30, 2005 | Change $ | Nine Months Ended September 30, 2004 | Nine Months Ended September 30, 2005 | Change $ | Change % | |||||||||||||||||||
Machinery1 | $ | 979 | $ | 1,172 | $ | 193 | $ | 1,390 | $ | 1,787 | $ | 397 | 29% | |||||||||||||
Engines1 | 190 | 448 | 258 | 345 | 713 | 368 | 107% | |||||||||||||||||||
Financial Products | 225 | 266 | 41 | 357 | 389 | 32 | 9% | |||||||||||||||||||
Consolidating Adjustments | (56 | ) | (109 | ) | (53 | ) | (91 | ) | (172 | ) | (81 | ) | ||||||||||||||
Consolidated Operating Profit | $ | 1,338 | $ | 1,777 | $ | 439 | $ | 2,001 | $ | 2,717 | $ | 716 | 36% | |||||||||||||
(1) Caterpillar operations are highly integrated; therefore, the company uses a number of allocations to determine lines of business operating profit for Machinery and Engines. |
· | Machinery operating profit of |
· | Engines operating profit of |
· | Financial Productsoperating profit of |
Reconciliation of Machinery and Engine Sales by Geographic Region to External Sales by Marketing Segment | |||||||
Nine months ended September 30, | |||||||
(Millions of Dollars) | 2005 | 2004 | |||||
North America Geographic Region | $ | 13,172 | $ | 10,525 | |||
Engine sales included in the Power Products segment | (3,725 | ) | (2,971 | ) | |||
Company owned dealer sales included in the All Other segment | (624 | ) | (393 | ) | |||
Other* | (421 | ) | (439 | ) | |||
North America Marketing external sales | $ | 8,402 | $ | 6,722 | |||
EAME Geographic Region | $ | 6,492 | $ | 5,271 | |||
Power Products sales not included in the EAME Marketing segment | (2,308 | ) | (1,981 | ) | |||
Other* | (807 | ) | (488 | ) | |||
EAME Marketing external sales | $ | 3,377 | $ | 2,802 | |||
Latin America Geographic Region | $ | 2,212 | $ | 1,649 | |||
Power Products sales not included in the Latin America Marketing segment | (648 | ) | (560 | ) | |||
Other* | 115 | 138 | |||||
Latin America Marketing external sales | $ | 1,679 | $ | 1,227 | |||
Asia/Pacific Geographic Region | $ | 3,089 | $ | 2,832 | |||
Power Products sales not included in the Asia/Pacific Marketing segment | (719 | ) | (684 | ) | |||
Other* | (522 | ) | (566 | ) | |||
Asia/Pacific Marketing external sales | $ | 1,848 | $ | 1,582 | |||
* Mostly represents external sales of Construction and Mining Products and All Other segments. |
Reconciliation of Machinery and Engine Sales by Geographic Region to External Sales by Marketing Segment | |||||||
Six months ended June 30, | |||||||
(Millions of Dollars) | 2005 | 2004 | |||||
North America Geographic Region | $ | 8,675 | $ | 6,828 | |||
Engine sales included in the Power Products segment | (2,426 | ) | (1,871 | ) | |||
Company owned dealer sales included in the All Other segment | (408 | ) | (256 | ) | |||
Other* | (274 | ) | (268 | ) | |||
North America Marketing external sales | $ | 5,567 | $ | 4,433 | |||
EAME Geographic Region | $ | 4,477 | $ | 3,418 | |||
Power Products sales not included in the EAME Marketing segment | (1,579 | ) | (1,246 | ) | |||
Other* | (580 | ) | (317 | ) | |||
EAME Marketing external sales | $ | 2,318 | $ | 1,855 | |||
Latin America Geographic Region | $ | 1,374 | $ | 1,013 | |||
Power Products sales not included in the Latin America Marketing segment | (379 | ) | (349 | ) | |||
Other* | 90 | 80 | |||||
Latin America Marketing external sales | $ | 1,085 | $ | 744 | |||
Asia/Pacific Geographic Region | $ | 2,047 | $ | 1,843 | |||
Power Products sales not included in the Asia/Pacific Marketing segment | (438 | ) | (390 | ) | |||
Other* | (363 | ) | (355 | ) | |||
Asia/Pacific Marketing external sales | $ | 1,246 | $ | 1,098 | |||
* Mostly represents external sales of Construction and Mining Products and All Other segments. |
· | Other income/expense was income of |
· | The provision for income taxesin the |
In the second quarter, we completed our evaluation of the repatriation provisions of the American Jobs Creation Act and recognized an income tax charge of $49 million under the provisions of the Act. We expect to repatriate earnings of approximately $1.4 billion in 2005, which includes $500 million subject to the preferential tax treatment allowed by the Act. In connection with our current repatriation plan, we have changed our intention of repatriating earnings of a few selected non-U.S. subsidiaries and have recognized an income tax benefit of $38 million. The net impact of these items was an $11 million discrete charge to our second quarter provision for income taxes. |
· | The equity in profit/loss of unconsolidated affiliated companies favorably impacted profit by |
1. | Consolidating Adjustments - Eliminations of transactions between Machinery and Engines and Financial Products. |
2. | Core Operating Costs - Machinery and Engines |
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 the Financial Products line of business are included in the Financial Products portions of the respective analyses. With respect to profit before tax, currency represents the net translation impact on sales, operating costs and other income/expense resulting from changes in foreign currency exchange rates versus the U.S. dollar. Also included in the currency impact on other income/expense are the effects of currency 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. |
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 net finance receivables plus retained interests in securitized trade receivables, plus equipment on operating leases, less accumulated depreciation at Cat Financial. Net finance receivables represent the gross receivables amount less unearned income and the allowance for credit losses. |
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 over 22,000 horsepower (4 to over 16 200 kilowatts). Turbines range from 1,200 to 20,500 horsepower (900 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 active investor in independent power projects using Caterpillar power generation equipment and services. |
8. | Latin America - Geographic region including the 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 |
10. | Machinery and Engines - Due to the highly integrated nature of operations, represents the aggregate total of the Machinery and Engines lines of business and includes primarily our manufacturing, marketing and parts distribution operations. |
11. | Manufacturing Costs - Represents our cost of goods sold. Comprised of variable costs adjusted for volume and 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 retirement benefits. |
Period Costs - Comprised of Machinery and Engines period manufacturing costs, SG&A expense, R&D expense and other operating costs. Excludes the impact of currency and retirement benefits. |
13. | Price Realization - The impact of net price changes excluding currency. |
Retirement Benefits - Cost of defined benefit pension plans, defined contribution plans and retirement healthcare and life insurance. |
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. |
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 |
(Millions of dollars) | (Millions of dollars) | |||||||||||||||||||||||||
Machinery | Financial | Machinery | Financial | |||||||||||||||||||||||
Consolidated | and Engines | Products | Consolidated | and Engines | Products | |||||||||||||||||||||
Credit lines available: | Credit lines available: | Credit lines available: | ||||||||||||||||||||||||
Global credit facility | $ | 5,000 | $ | 600 | $ | 4,400 | Global credit facility | $ | 5,750 | $ | 600 | $ | 5,150 | |||||||||||||
Other external | 2,100 | 820 | 1,280 | Other external | 2,210 | 864 | 1,346 | |||||||||||||||||||
Total credit lines available | Total credit lines available | 7,100 | 1,420 | 5,680 | Total credit lines available | 7,960 | 1,464 | 6,496 | ||||||||||||||||||
Less: Global credit facility supporting commercial paper | Less: Global credit facility supporting commercial paper | 4,373 | 508 | 3,865 | Less: Global credit facility supporting commercial paper | 5,174 | 500 | 4,674 | ||||||||||||||||||
Less: Utilized credit | Less: Utilized credit | 661 | 105 | 556 | Less: Utilized credit | 720 | 104 | 616 | ||||||||||||||||||
Available credit | Available credit | $ | 2,066 | $ | 807 | $ | 1,259 | Available credit | $ | 2,066 | $ | 860 | $ | 1,206 | ||||||||||||
Nine Months Ended September 30, 2004 | |||||||||||
(Millions of dollars) | Previous Classification1 | Change | As Reclassified | ||||||||
Consolidated Statement of Cash Flow | |||||||||||
Receivables - trade and other | $ | (461 | ) | $ | (6,649 | ) | $ | (7,110 | ) | ||
Net cash provided by (used for) operating activities | 1,535 | (6,612 | ) | (5,077 | ) | ||||||
Additions to finance receivables | (16,493 | ) | 10,070 | (6,423 | ) | ||||||
Collections of finance receivables | 13,010 | (8,393 | ) | 4,617 | |||||||
Proceeds from sale of finance receivables | 1,434 | (787 | ) | 647 | |||||||
Collections of retained interests in securitized trade receivables | - | 5,722 | 5,722 | ||||||||
Net cash provided by (used for) investing activities | (3,341 | ) | 6,612 | 3,271 | |||||||
(1) Certain amounts do not agree to prior period reported amounts due to unrelated reclassifications. |
Six Months Ended June 30, 2004 | |||||||||||
(Millions of dollars) | Previous Classification1 | Change | As Reclassified | ||||||||
Consolidated Statement of Cash Flow | |||||||||||
Receivables - trade and other | $ | (340 | ) | $ | (5,168 | ) | $ | (5,508 | ) | ||
Net cash provided by (used for) operating activities | 571 | (5,168 | ) | (4,597 | ) | ||||||
Additions to finance receivables | (10,802 | ) | 6,581 | (4,221 | ) | ||||||
Collections of finance receivables | 8,292 | (5,353 | ) | 2,939 | |||||||
Proceeds from sale of finance receivables | 1,181 | (536 | ) | 645 | |||||||
Collections of retained interests in securitized trade receivables | - | 4,476 | 4,476 | ||||||||
Net cash provided by (used for) investing activities | (1,891 | ) | 5,168 | 3,277 | |||||||
(1) Certain amounts do not agree to prior period reported amounts due to unrelated reclassifications. |
· | The U.S. expected long-term rate of return on plan assets is based on our estimate of long-term passive returns for equities and fixed income securities weighted by the allocation of our plan assets. Based on historical performance, we increase the passive returns due to our active management of the plan assets. A similar process is used to determine the rate for our non-U.S. pension plans. This rate is impacted by changes in general market conditions, but because it represents a long-term rate, it is not significantly impacted by short-term market swings. Changes in our allocation of plan assets would also impact this rate. For example, a shift to more fixed income securities would lower the rate. A decrease in the rate would increase our expense. |
· | The assumed discount rate is used to discount future benefit obligations back to today's dollars. The U.S. discount rate is based on the Moody's Aa bond yield as of our measurement date, November 30, and represents the rate at which our benefit obligations could effectively be settled. A similar process is used to determine the assumed discount rate for our non-U.S. plans. This rate is sensitive to changes in interest rates. A decrease in the discount rate would increase our obligation and future expense. |
· | The expected rate of compensation increase is used to develop benefit obligations using projected pay at retirement. It represents average long-term salary increases. This rate is influenced by our long-term compensation policies. An increase in the rate would increase our obligation and expense. |
· | The assumed health care trend rate represents the rate at which health care costs are assumed to increase and is based on historical and expected experience. Changes in our projections of future health care costs due to general economic conditions and those specific to health care (e.g. technology driven cost changes) will impact this trend rate. An increase in the trend rate would increase our obligation and expense. |
· | Changes to the pension plan resulted in an increase in the pension obligation of approximately $230 million. This reflects a discount rate of 5.8%. The increase will be amortized into earnings on a straight-line basis over 10 years, the average remaining service period of active employees impacted by the plan change. In addition, there will be an ongoing increase in expense as a result of the benefit changes. In total, full year 2005 pension expense (and annual expense until the plan change is fully amortized) will increase approximately $30 million. In addition to the increase in pension expense, the plan changes increased the Additional Minimum Pension Liability by approximately $230 million. |
· | Changes to the other postretirement plan resulted in an increase in the benefit obligation of approximately $620 million. This also reflects a discount rate of 5.8%. The increase will be amortized into earnings on a straight-line basis over 16 years, the average remaining life expectancy of plan participants that are fully eligible for benefits (as they comprise almost all of the plan). In addition, there will be an ongoing increase in expense as a result of the benefit changes. In total, full year 2005 other postretirement benefit expense (and annual expense until the plan change is fully amortized) will increase approximately $70 million. |
Caterpillar Inc. Supplemental Data for Results of Operations For The Three Months Ended September 30, 2005 (Unaudited) (Millions of dollars) | ||||||||||||||||
Supplemental Consolidating Data | ||||||||||||||||
Consolidated | Machinery and Engines1 | Financial Products | Consolidating 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 Three Months Ended September 30, 2004 (Unaudited) (Millions of dollars) | |||||||||||||||||
Supplemental Consolidating Data | |||||||||||||||||
Consolidated | Machinery and Engines1 | Financial Products | Consolidating Adjustments | ||||||||||||||
Sales and revenues: | |||||||||||||||||
Sales of Machinery and Engines | $ | 7,175 | $ | 7,175 | $ | - | $ | - | |||||||||
Revenues of Financial Products | 484 | - | 437 | 47 | 2 | ||||||||||||
Total sales and revenues | 7,659 | 7,175 | 437 | 47 | |||||||||||||
Operating costs: | |||||||||||||||||
Cost of goods sold | 5,745 | 5,745 | - | - | |||||||||||||
Selling, general and administrative expenses | 701 | 622 | 98 | (19) | 3 | ||||||||||||
Research and development expenses | 240 | 240 | - | - | |||||||||||||
Interest expense of Financial Products | 130 | - | 133 | (3) | 4 | ||||||||||||
Other operating expenses | 180 | 2 | 74 | 104 | 3 | ||||||||||||
Total operating costs | 6,996 | 6,609 | 305 | 82 | |||||||||||||
Operating profit | 663 | 566 | 132 | (35) | |||||||||||||
Interest expense excluding Financial Products | 60 | 62 | - | (2) | 4 | ||||||||||||
Other income (expense) | 60 | 15 | 12 | 33 | 5 | ||||||||||||
Consolidated profit before taxes | 663 | 519 | 144 | - | |||||||||||||
Provision for income taxes | 182 | 141 | 41 | - | |||||||||||||
Profit of consolidated companies | 481 | 378 | 103 | - | |||||||||||||
Equity in profit (loss) of unconsolidated affiliated companies | 17 | 17 | - | - | |||||||||||||
Equity in profit of Financial Products' subsidiaries | - | 103 | - | (103) | 6 | ||||||||||||
Profit | $ | 498 | $ | 498 | $ | 103 | $ | (103) | |||||||||
(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 June 30, 2005 (Unaudited) (Millions of dollars) | ||||||||||||||||
Supplemental Consolidating Data | ||||||||||||||||
Consolidated | Machinery and Engines (1) | Financial Products | Consolidating Adjustments | |||||||||||||
Sales and revenues: | ||||||||||||||||
Sales of Machinery and Engines | $ | 8,784 | $ | 8,784 | $ | - | $ | - | ||||||||
Revenues of Financial Products | 576 | - | 656 | (80 | )2 | |||||||||||
Total sales and revenues | 9,360 | 8,784 | 656 | (80 | ) | |||||||||||
Operating costs: | ||||||||||||||||
Cost of goods sold | 6,890 | 6,890 | - | - | ||||||||||||
Selling, general and administrative expenses | 789 | 689 | 111 | (11 | )3 | |||||||||||
Research and development expenses | 268 | 268 | - | - | ||||||||||||
Interest expense of Financial Products | 184 | - | 189 | (5 | )4 | |||||||||||
Other operating expenses | 208 | (4 | ) | 214 | (2 | )3 | ||||||||||
Total operating costs | 8,339 | 7,843 | 514 | (18 | ) | |||||||||||
Operating profit | 1,021 | 941 | 142 | (62 | ) | |||||||||||
Interest expense excluding Financial Products | 65 | 67 | - | (2 | )4 | |||||||||||
Other income (expense) | 90 | 21 | 9 | 60 | 5 | |||||||||||
Consolidated profit before taxes | 1,046 | 895 | 151 | - | ||||||||||||
Provision for income taxes | 315 | 262 | 53 | - | ||||||||||||
Profit of consolidated companies | 731 | 633 | 98 | - | ||||||||||||
Equity in profit (loss) of unconsolidated affiliated companies | 29 | 26 | 3 | - | ||||||||||||
Equity in profit of Financial Products' subsidiaries | - | 101 | - | (101 | )6 | |||||||||||
Profit | $ | 760 | $ | 760 | $ | 101 | $ | (101 | ) | |||||||
(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 | ||||||||||||||||
Consolidated | Machinery and Engines1 | Financial Products | Consolidating 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 Results of Operations For The Three Months Ended June 30, 2004 (Unaudited) (Millions of dollars) | |||||||||||||||||
Supplemental Consolidating Data | |||||||||||||||||
Consolidated | Machinery and Engines (1) | Financial Products | Consolidating Adjustments | ||||||||||||||
Sales and revenues: | |||||||||||||||||
Sales of Machinery and Engines | $ | 7,100 | $ | 7,100 | $ | - | $ | - | |||||||||
Revenues of Financial Products | 483 | - | 633 | (150 | )2 | ||||||||||||
Total sales and revenues | 7,583 | 7,100 | 633 | (150 | ) | ||||||||||||
Operating costs: | |||||||||||||||||
Cost of goods sold | 5,563 | 5,563 | - | - | |||||||||||||
Selling, general and administrative expenses | 744 | 638 | 118 | (12 | )3 | ||||||||||||
Research and development expenses | 214 | 214 | - | - | |||||||||||||
Interest expense of Financial Products | 121 | - | 123 | (2 | )4 | ||||||||||||
Other operating expenses | 171 | (2 | ) | 278 | (105 | )3 | |||||||||||
Total operating costs | 6,813 | 6,413 | 519 | (119 | ) | ||||||||||||
Operating profit | 770 | 687 | 114 | (31 | ) | ||||||||||||
Interest expense excluding Financial Products | 59 | 60 | - | (1 | )4 | ||||||||||||
Other income (expense) | 50 | 15 | 5 | 30 | 5 | ||||||||||||
Consolidated profit before taxes | 761 | 642 | 119 | - | |||||||||||||
Provision for income taxes | 209 | 168 | 41 | - | |||||||||||||
Profit of consolidated companies | 552 | 474 | 78 | - | |||||||||||||
Equity in profit (loss) of unconsolidated affiliated companies | 14 | 13 | 1 | - | |||||||||||||
Equity in profit of Financial Products' subsidiaries | - | 79 | - | (79 | )6 | ||||||||||||
Profit | $ | 566 | $ | 566 | $ | 79 | $ | (79 | ) | ||||||||
(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, 2004 (Unaudited) (Millions of dollars) | |||||||||||||||||
Supplemental Consolidating Data | |||||||||||||||||
Consolidated | Machinery and Engines1 | Financial Products | Consolidating Adjustments | ||||||||||||||
Sales and revenues: | |||||||||||||||||
Sales of Machinery and Engines | $ | 20,277 | $ | 20,277 | $ | - | $ | - | |||||||||
Revenues of Financial Products | 1,445 | - | 1,587 | (142) | 2 | ||||||||||||
Total sales and revenues | 21,722 | 20,277 | 1,587 | (142) | |||||||||||||
Operating costs: | |||||||||||||||||
Cost of goods sold | 16,009 | 16,009 | - | - | |||||||||||||
Selling, general and administrative expenses | 2,118 | 1,846 | 315 | (43) | 3 | ||||||||||||
Research and development expenses | 685 | 685 | - | - | |||||||||||||
Interest expense of Financial Products | 370 | - | 378 | (8) | 4 | ||||||||||||
Other operating expenses | 539 | 2 | 537 | - | |||||||||||||
Total operating costs | 19,721 | 18,542 | 1,230 | (51) | |||||||||||||
Operating profit | 2,001 | 1,735 | 357 | (91) | |||||||||||||
Interest expense excluding Financial Products | 176 | 180 | - | (4) | 4 | ||||||||||||
Other income (expense) | 171 | 64 | 20 | 87 | 5 | ||||||||||||
Consolidated profit before taxes | 1,996 | 1,619 | 377 | - | |||||||||||||
Provision for income taxes | 549 | 428 | 121 | - | |||||||||||||
Profit of consolidated companies | 1,447 | 1,191 | 256 | - | |||||||||||||
Equity in profit (loss) of unconsolidated affiliated companies | 37 | 35 | 2 | - | |||||||||||||
Equity in profit of Financial Products' subsidiaries | - | 258 | - | (258) | 6 | ||||||||||||
Profit | $ | 1,484 | $ | 1,484 | $ | 258 | $ | (258) | |||||||||
(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 Six Months Ended June 30, 2005 (Unaudited) (Millions of dollars) | ||||||||||||||||
Supplemental Consolidating Data | ||||||||||||||||
Consolidated | Machinery and Engines (1) | Financial Products | Consolidating Adjustments | |||||||||||||
Sales and revenues: | ||||||||||||||||
Sales of Machinery and Engines | $ | 16,573 | $ | 16,573 | $ | - | $ | - | ||||||||
Revenues of Financial Products | 1,126 | - | 1,268 | (142 | )2 | |||||||||||
Total sales and revenues | 17,699 | 16,573 | 1,268 | (142 | ) | |||||||||||
Operating costs: | ||||||||||||||||
Cost of goods sold | 13,105 | 13,105 | - | - | ||||||||||||
Selling, general and administrative expenses | 1,533 | 1,337 | 218 | (22 | )3 | |||||||||||
Research and development expenses | 509 | 509 | - | - | ||||||||||||
Interest expense of Financial Products | 354 | - | 362 | (8 | )4 | |||||||||||
Other operating expenses | 421 | 2 | 422 | (3 | )3 | |||||||||||
Total operating costs | 15,922 | 14,953 | 1,002 | (33 | ) | |||||||||||
Operating profit | 1,777 | 1,620 | 266 | (109 | ) | |||||||||||
Interest expense excluding Financial Products | 130 | 133 | - | (3 | )4 | |||||||||||
Other income (expense) | 198 | 75 | 17 | 106 | 5 | |||||||||||
Consolidated profit before taxes | 1,845 | 1,562 | 283 | - | ||||||||||||
Provision for income taxes | 547 | 448 | 99 | - | ||||||||||||
Profit of consolidated companies | 1,298 | 1,114 | 184 | - | ||||||||||||
Equity in profit (loss) of unconsolidated affiliated companies | 43 | 38 | 5 | - | ||||||||||||
Equity in profit of Financial Products' subsidiaries | - | 189 | - | (189 | )6 | |||||||||||
Profit | $ | 1,341 | $ | 1,341 | $ | 189 | $ | (189 | ) | |||||||
(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 Six Months Ended June 30, 2004 (Unaudited) (Millions of dollars) | |||||||||||||||||
Supplemental Consolidating Data | |||||||||||||||||
Consolidated | Machinery and Engines (1) | Financial Products | Consolidating Adjustments | ||||||||||||||
Sales and revenues: | |||||||||||||||||
Sales of Machinery and Engines | $ | 13,102 | $ | 13,102 | $ | - | $ | - | |||||||||
Revenues of Financial Products | 961 | - | 1,150 | (189 | )2 | ||||||||||||
Total sales and revenues | 14,063 | 13,102 | 1,150 | (189 | ) | ||||||||||||
Operating costs: | |||||||||||||||||
Cost of goods sold | 10,264 | 10,264 | - | - | |||||||||||||
Selling, general and administrative expenses | 1,417 | 1,224 | 217 | (24 | )3 | ||||||||||||
Research and development expenses | 445 | 445 | - | - | |||||||||||||
Interest expense of Financial Products | 240 | - | 245 | (5 | )4 | ||||||||||||
Other operating expenses | 359 | - | 463 | (104 | )3 | ||||||||||||
Total operating costs | 12,725 | 11,933 | 925 | (133 | ) | ||||||||||||
Operating profit | 1,338 | 1,169 | 225 | (56 | ) | ||||||||||||
Interest expense excluding Financial Products | 116 | 118 | - | (2 | )4 | ||||||||||||
Other income (expense) | 111 | 49 | 8 | 54 | 5 | ||||||||||||
Consolidated profit before taxes | 1,333 | 1,100 | 233 | - | |||||||||||||
Provision for income taxes | 367 | 287 | 80 | - | |||||||||||||
Profit of consolidated companies | 966 | 813 | 153 | - | |||||||||||||
Equity in profit (loss) of unconsolidated affiliated companies | 20 | 18 | 2 | - | |||||||||||||
Equity in profit of Financial Products' subsidiaries | - | 155 | - | (155 | )6 | ||||||||||||
Profit | $ | 986 | $ | 986 | $ | 155 | $ | (155 | ) | ||||||||
(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 Financial Position At June 30, 2005 (Unaudited) (Millions of dollars) | |||||||||||||||||
Supplemental Consolidating Data | |||||||||||||||||
Consolidated | Machinery and Engines (1) | Financial Products | Consolidating Adjustments | ||||||||||||||
Assets: | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and short-term investments | $ | 749 | $ | 464 | $ | 285 | $ | - | |||||||||
Receivables - trade and other | 7,577 | 3,308 | 435 | 3,834 | 2,3 | ||||||||||||
Receivables - finance | 5,489 | - | 9,814 | (4,325 | )3 | ||||||||||||
Deferred and refundable income taxes | 552 | 487 | 65 | - | |||||||||||||
Prepaid expenses | 1,278 | 1,268 | 20 | (10 | )4 | ||||||||||||
Inventories | 5,349 | 5,349 | - | - | |||||||||||||
Total current assets | 20,994 | 10,876 | 10,619 | (501 | ) | ||||||||||||
Property, plant and equipment - net | 7,593 | 4,757 | 2,836 | - | |||||||||||||
Long-term receivables - trade and other | 845 | 266 | 36 | 543 | 3 | ||||||||||||
Long-term receivables - finance | 9,932 | - | 10,512 | (580 | )3 | ||||||||||||
Investments in unconsolidated affiliated companies | 555 | 514 | 41 | - | |||||||||||||
Investments in Financial Products subsidiaries | - | 3,088 | - | (3,088 | )5 | ||||||||||||
Deferred income taxes | 700 | 1,002 | 32 | (334 | )6 | ||||||||||||
Intangible assets | 468 | 461 | 7 | - | |||||||||||||
Goodwill | 1,451 | 1,451 | - | - | |||||||||||||
Other assets | 2,285 | 1,044 | 1,241 | - | |||||||||||||
Total assets | $ | 44,823 | $ | 23,459 | $ | 25,324 | $ | (3,960 | ) | ||||||||
Liabilities | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Short-term borrowings | 5,179 | 612 | 4,942 | (375 | )7 | ||||||||||||
Accounts payable | 3,495 | 3,340 | 271 | (116 | )8 | ||||||||||||
Accrued expenses | 2,332 | 1,443 | 899 | (10 | )9 | ||||||||||||
Accrued wages, salaries and employee benefits | 1,551 | 1,540 | 11 | - | |||||||||||||
Customer advances | 536 | 536 | - | - | |||||||||||||
Dividends payable | 169 | 169 | - | - | |||||||||||||
Deferred and current income taxes payable | 493 | 400 | 100 | (7 | )6 | ||||||||||||
Long-term debt due within one year | 3,441 | 232 | 3,209 | - | |||||||||||||
Total current liabilities | 17,196 | 8,272 | 9,432 | (508 | ) | ||||||||||||
Long-term debt due after one year | 15,857 | 3,473 | 12,421 | (37 | )7 | ||||||||||||
Liability for postemployment benefits | 3,271 | 3,271 | - | - | |||||||||||||
Deferred income taxes and other liabilities | 794 | 738 | 383 | (327 | )6 | ||||||||||||
Total liabilities | 37,118 | 15,754 | 22,236 | (872 | ) | ||||||||||||
Stockholders' equity | |||||||||||||||||
Common stock | 1,704 | 1,704 | 888 | (888 | )5 | ||||||||||||
Treasury stock | (3,965 | ) | (3,965 | ) | - | - | |||||||||||
Profit employed in the business | 10,632 | 10,632 | 2,013 | (2,013 | )5 | ||||||||||||
Accumulated other comprehensive income | (666 | ) | (666 | ) | 187 | (187 | )5 | ||||||||||
Total stockholders' equity | 7,705 | 7,705 | 3,088 | (3,088 | ) | ||||||||||||
Total liabilities and stockholders' equity | $ | 44,823 | $ | 23,459 | $ | 25,324 | $ | (3,960 | ) | ||||||||
(1) Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis. | |||||||||||||||||
(2) Elimination of receivables between Machinery and Engines and Financial Products. | |||||||||||||||||
(3) Reclassification of Machinery and Engines trade receivables purchased by Cat Financial and Cat Financial’s wholesale inventory receivables. | |||||||||||||||||
(4) Elimination of Machinery and Engines insurance premiums that are prepaid to Financial Products. | |||||||||||||||||
(5) Elimination of Financial Products equity which is accounted for on Machinery and Engines on the equity basis. | |||||||||||||||||
(6) Reclassification reflecting required netting of deferred tax assets / liabilities by taxing jurisdiction. | |||||||||||||||||
(7) Elimination of debt between Machinery and Engines and Financial Products. | |||||||||||||||||
(8) Elimination of payables between Machinery and Engines and Financial Products. | |||||||||||||||||
(9) Elimination of prepaid insurance in Financial Products' accrued expenses. |
Caterpillar Inc. Supplemental Data for Financial Position At September 30, 2005 (Unaudited) (Millions of dollars) | |||||||||||||||||
Supplemental Consolidating Data | |||||||||||||||||
Consolidated | Machinery and Engines1 | Financial Products | Consolidating Adjustments | ||||||||||||||
Assets: | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and short-term investments | $ | 967 | $ | 754 | $ | 213 | $ | - | |||||||||
Receivables - trade and other | 7,319 | 3,054 | 427 | 3,838 | 2,3 | ||||||||||||
Receivables - finance | 5,725 | - | 10,290 | (4,565) | 3 | ||||||||||||
Deferred and refundable income taxes | 581 | 514 | 67 | - | |||||||||||||
Prepaid expenses | 1,301 | 1,283 | 24 | (6) | 4 | ||||||||||||
Inventories | 5,469 | 5,469 | - | - | |||||||||||||
Total current assets | 21,362 | 11,074 | 11,021 | (733) | |||||||||||||
Property, plant and equipment - net | 7,817 | 4,861 | 2,956 | - | |||||||||||||
Long-term receivables - trade and other | 893 | 265 | 36 | 592 | 2,3 | ||||||||||||
Long-term receivables - finance | 10,336 | - | 10,963 | (627) | 3 | ||||||||||||
Investments in unconsolidated affiliated companies | 563 | 520 | 44 | (1) | 5 | ||||||||||||
Investments in Financial Products subsidiaries | - | 3,202 | - | (3,202) | 6 | ||||||||||||
Deferred income taxes | 707 | 1,007 | 37 | (337) | 7 | ||||||||||||
Intangible assets | 462 | 455 | 7 | - | |||||||||||||
Goodwill | 1,451 | 1,451 | - | - | |||||||||||||
Other assets | 2,274 | 1,028 | 1,246 | - | |||||||||||||
Total assets | $ | 45,865 | $ | 23,863 | $ | 26,310 | $ | (4,308) | |||||||||
Liabilities | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Short-term borrowings | 5,964 | 603 | 5,971 | (610) | 8 | ||||||||||||
Accounts payable | 3,425 | 3,310 | 232 | (117) | 9 | ||||||||||||
Accrued expenses | 2,508 | 1,555 | 959 | (6) | 10 | ||||||||||||
Accrued wages, salaries and employee benefits | 1,735 | 1,721 | 14 | - | |||||||||||||
Customer advances | 554 | 554 | - | - | |||||||||||||
Dividends payable | - | - | - | - | |||||||||||||
Deferred and current income taxes payable | 583 | 476 | 115 | (8) | 7 | ||||||||||||
Long-term debt due within one year | 4,084 | 234 | 3,850 | - | |||||||||||||
Total current liabilities | 18,853 | 8,453 | 11,141 | (741) | |||||||||||||
Long-term debt due after one year | 14,984 | 3,441 | 11,578 | (35) | 8 | ||||||||||||
Liability for postemployment benefits | 2,827 | 2,827 | - | - | |||||||||||||
Deferred income taxes and other liabilities | 809 | 750 | 389 | (330) | 7 | ||||||||||||
Total liabilities | 37,473 | 15,471 | 23,108 | (1,106) | |||||||||||||
Stockholders' equity | |||||||||||||||||
Common stock | 1,821 | 1,821 | 888 | (888) | 6 | ||||||||||||
Treasury stock | (4,039 | ) | (4,039 | ) | - | - | |||||||||||
Profit employed in the business | 11,298 | 11,298 | 2,108 | (2,108) | 6 | ||||||||||||
Accumulated other comprehensive income | (688 | ) | (688 | ) | 206 | (206) | 6 | ||||||||||
Total stockholders' equity | 8,392 | 8,392 | 3,202 | (3,202) | |||||||||||||
Total liabilities and stockholders' equity | $ | 45,865 | $ | 23,863 | $ | 26,310 | $ | (4,308) | |||||||||
Caterpillar Inc. Supplemental Data for Financial Position At December 31, 2004 (Unaudited) (Millions of dollars) | |||||||||||||||||
Supplemental Consolidating Data | |||||||||||||||||
Consolidated | Machinery and Engines (1) | Financial Products | Consolidating Adjustments | ||||||||||||||
Assets: | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and short-term investments | $ | 445 | $ | 270 | $ | 175 | $ | - | |||||||||
Receivables - trade and other | 7,463 | 3,276 | 465 | 3,722 | 2,3 | ||||||||||||
Receivables - finance | 5,182 | - | 9,325 | (4,143 | )3 | ||||||||||||
Deferred and refundable income taxes | 398 | 333 | 65 | - | |||||||||||||
Prepaid expenses | 1,369 | 1,367 | 16 | (14 | )4 | ||||||||||||
Inventories | 4,675 | 4,675 | - | - | |||||||||||||
Total current assets | 19,532 | 9,921 | 10,046 | (435 | ) | ||||||||||||
Property, plant and equipment - net | 7,682 | 4,820 | 2,862 | - | |||||||||||||
Long-term receivables - trade and other | 764 | 255 | 37 | 472 | 3 | ||||||||||||
Long-term receivables - finance | 9,903 | - | 10,410 | (507 | )3 | ||||||||||||
Investments in unconsolidated affiliated companies | 517 | 479 | 39 | (1 | )5 | ||||||||||||
Investments in Financial Products subsidiaries | - | 3,012 | - | (3,012 | )6 | ||||||||||||
Deferred income taxes | 674 | 950 | 27 | (303 | )7 | ||||||||||||
Intangible assets | 315 | 307 | 8 | - | |||||||||||||
Goodwill | 1,450 | 1,450 | - | - | |||||||||||||
Other assets | 2,258 | 1,075 | 1,183 | - | |||||||||||||
Total assets | $ | 43,095 | $ | 22,269 | $ | 24,612 | $ | (3,786 | ) | ||||||||
Liabilities | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Short-term borrowings | 4,157 | 93 | 4,396 | (332 | )8 | ||||||||||||
Accounts payable | 3,580 | 3,459 | 205 | (84 | )9 | ||||||||||||
Accrued expenses | 2,261 | 1,426 | 855 | (20 | )10 | ||||||||||||
Accrued wages, salaries and employee benefits | 1,730 | 1,716 | 14 | - | |||||||||||||
Customer advances | 447 | 447 | - | - | |||||||||||||
Dividends payable | 141 | 141 | - | - | |||||||||||||
Deferred and current income taxes payable | 259 | 212 | 47 | - | |||||||||||||
Long-term debt due within one year | 3,531 | 6 | 3,525 | - | |||||||||||||
Total current liabilities | 16,106 | 7,500 | 9,042 | (436 | ) | ||||||||||||
Long-term debt due after one year | 15,837 | 3,697 | 12,175 | (35 | )8 | ||||||||||||
Liability for postemployment benefits | 2,986 | 2,986 | - | - | |||||||||||||
Deferred income taxes and other liabilities | 699 | 619 | 383 | (303 | )7 | ||||||||||||
Total liabilities | 35,628 | 14,802 | 21,600 | (774 | ) | ||||||||||||
Stockholders' equity | |||||||||||||||||
Common stock | 1,231 | 1,231 | 888 | (888 | )6 | ||||||||||||
Treasury stock | (3,277 | ) | (3,277 | ) | - | - | |||||||||||
Profit employed in the business | 9,937 | 9,937 | 1,824 | (1,824 | )6 | ||||||||||||
Accumulated other comprehensive income | (424 | ) | (424 | ) | 300 | (300 | )6 | ||||||||||
Total stockholders' equity | 7,467 | 7,467 | 3,012 | (3,012 | ) | ||||||||||||
Total liabilities and stockholders' equity | $ | 43,095 | $ | 22,269 | $ | 24,612 | $ | (3,786 | ) | ||||||||
(1) Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis. | |||||||||||||||||
(2) Elimination of receivables between Machinery and Engines and Financial Products. | |||||||||||||||||
(3) Reclassification of Machinery and Engines trade receivables purchased by Cat Financial and Cat Financial’s wholesale inventory receivables. | |||||||||||||||||
(4) Elimination of Machinery and Engines insurance premiums that are prepaid to Financial Products. | |||||||||||||||||
(5) Elimination of Machinery and Engines investment in Financial Products subsidiary. | |||||||||||||||||
(6) Elimination of Financial Products equity which is accounted for on Machinery and Engines on the equity basis. | |||||||||||||||||
(7) Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction. | |||||||||||||||||
(8) Elimination of debt between Machinery and Engines and Financial Products. | |||||||||||||||||
(9) Elimination of payables between Machinery and Engines and Financial Products. | |||||||||||||||||
(10) Elimination of prepaid insurance in Financial Products' accrued expenses. |
Caterpillar Inc. Supplemental Data for Cash Flow For the Six Months Ended June 30, 2005 (Unaudited) (Millions of dollars) | |||||||||||||||||
Supplemental Consolidating Data | |||||||||||||||||
Consolidated | Machinery and Engines (1) | Financial Products | Consolidating Adjustments | ||||||||||||||
Cash flow from operating activities: | |||||||||||||||||
Profit | $ | 1,341 | $ | 1,341 | $ | 189 | $ | (189 | )2 | ||||||||
Adjustments for non-cash items: | |||||||||||||||||
Depreciation and amortization | 744 | 426 | 318 | - | |||||||||||||
Undistributed profit of Financial Products | - | (189 | ) | - | 189 | 3 | |||||||||||
Other | (113 | ) | (129 | ) | (94 | ) | 110 | 4 | |||||||||
Changes in assets and liabilities: | |||||||||||||||||
Receivables - trade and other | (742 | ) | (256 | ) | 19 | (505 | )4,5 | ||||||||||
Inventories | (674 | ) | (674 | ) | - | - | |||||||||||
Accounts payable and accrued expenses | 236 | 118 | 131 | (13 | )4 | ||||||||||||
Other - net | 204 | 216 | (7 | ) | (5 | )4 | |||||||||||
Net cash provided by (used for) operating activities | 996 | 853 | 556 | (413 | ) | ||||||||||||
Cash flow from investing activities: | |||||||||||||||||
Capital expenditures - excluding equipment leased to others | (402 | ) | (385 | ) | (17 | ) | - | ||||||||||
Expenditures for equipment leased to others | (608 | ) | - | (608 | ) | - | |||||||||||
Proceeds from disposals of property, plant and equipment | 304 | 18 | 286 | - | |||||||||||||
Additions to finance receivables | (5,159 | ) | - | (16,035 | ) | 10,876 | 5 | ||||||||||
Collection of finance receivables | 3,444 | - | 13,894 | (10,450 | )5 | ||||||||||||
Proceeds from the sale of finance receivables | 859 | - | 859 | - | |||||||||||||
Net intercompany borrowings | - | (67 | ) | (9 | ) | 76 | 6 | ||||||||||
Investments and acquisitions (net of cash acquired) | (8 | ) | (8 | ) | - | - | |||||||||||
Other - net | 51 | 13 | 38 | - | |||||||||||||
Net cash provided by (used for) investing activities | (1,519 | ) | (429 | ) | (1,592 | ) | 502 | ||||||||||
Cash flow from financing activities: | |||||||||||||||||
Dividends paid | (280 | ) | (280 | ) | - | - | |||||||||||
Common stock issued, including treasury shares reissued | 278 | 278 | - | - | |||||||||||||
Treasury shares purchased | (839 | ) | (839 | ) | - | - | |||||||||||
Net intercompany borrowings | - | 9 | 67 | (76 | )6 | ||||||||||||
Proceeds from long-term debt issued | 3,719 | 130 | 3,589 | - | |||||||||||||
Payments on long-term debt | (2,390 | ) | (30 | ) | (2,360 | ) | - | ||||||||||
Short-term borrowings - net | 325 | 479 | (154 | ) | - | ||||||||||||
Net cash provided by (used for) financing activities | 813 | (253 | ) | 1,142 | (76 | ) | |||||||||||
Effect of exchange rate changes on cash | 14 | 23 | 4 | (13 | )7 | ||||||||||||
Increase in cash and short-term investments | 304 | 194 | 110 | - | |||||||||||||
Cash and short-term investments at beginning of period | 445 | 270 | 175 | - | |||||||||||||
Cash and short-term investments at end of period | $ | 749 | $ | 464 | $ | 285 | $ | - | |||||||||
(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. |
Caterpillar Inc. Supplemental Data for Cash Flow For the Six Months Ended June 30, 2004 (Unaudited) (Millions of dollars) | |||||||||||||||||
Supplemental Consolidating Data | |||||||||||||||||
Consolidated | Machinery and Engines (1) | Financial Products | Consolidating Adjustments | ||||||||||||||
Cash flow from operating activities: | |||||||||||||||||
Profit | $ | 986 | $ | 986 | $ | 155 | $ | (155 | )2 | ||||||||
Adjustments for non-cash items: | |||||||||||||||||
Depreciation and amortization | 703 | 408 | 295 | - | |||||||||||||
Undistributed profit of Financial Products | - | (155 | ) | - | 155 | 3 | |||||||||||
Other | (58 | ) | (51 | ) | (66 | ) | 59 | 4 | |||||||||
Changes in assets and liabilities: | |||||||||||||||||
Receivables - trade and other | (5,508 | ) | (131 | ) | 116 | (5,493 | )4,5 | ||||||||||
Inventories | (921 | ) | (921 | ) | - | - | |||||||||||
Accounts payable and accrued expenses | 476 | 345 | (25 | ) | 156 | 4 | |||||||||||
Other - net | (275 | ) | (385 | ) | 90 | 20 | 4 | ||||||||||
Net cash provided by (used for) operating activities | (4,597 | ) | 96 | 565 | (5,258 | ) | |||||||||||
Cash flow from investing activities: | |||||||||||||||||
Capital expenditures - excluding equipment leased to others | (293 | ) | (262 | ) | (31 | ) | - | ||||||||||
Expenditures for equipment leased to others | (535 | ) | (1 | ) | (534 | ) | - | ||||||||||
Proceeds from disposals of property, plant and equipment | 281 | 13 | 268 | - | |||||||||||||
Additions to finance receivables | (4,221 | ) | - | (7,702 | ) | 3,481 | 5 | ||||||||||
Collection of finance receivables | 2,939 | - | 5,670 | (2,731 | )5 | ||||||||||||
Proceeds from sale of finance receivables | 645 | - | 1,181 | (536 | ) 5 | ||||||||||||
Additions to retained interests in securitized trade receivables | - | - | (5,038 | ) | 5,038 | 6 | |||||||||||
Collection of retained interests in securitized trade receivables | 4,476 | - | 4,476 | - | |||||||||||||
Net intercompany borrowings | - | 201 | (43 | ) | (158 | ) 7 | |||||||||||
Investments and acquisitions (net of cash acquired) | (5 | ) | (7 | ) | 2 | - | |||||||||||
Other - net | (10 | ) | (8 | ) | (2 | ) | - | ||||||||||
Net cash provided by (used for) investing activities | 3,277 | (64 | ) | (1,753 | ) | 5,094 | |||||||||||
Cash flow from financing activities: | |||||||||||||||||
Dividends paid | (254 | ) | (254 | ) | - | - | |||||||||||
Common stock issued, including treasury shares reissued | 107 | 107 | - | - | |||||||||||||
Treasury shares purchased | (250 | ) | (250 | ) | - | - | |||||||||||
Net intercompany borrowings | - | 43 | (201 | ) | 158 | 7 | |||||||||||
Proceeds from long-term debt issued | 3,322 | 255 | 3,067 | - | |||||||||||||
Payments on long-term debt | (1,571 | ) | (29 | ) | (1,542 | ) | - | ||||||||||
Short-term borrowings - net | 45 | 133 | (88 | ) | - | ||||||||||||
Net cash provided by financing activities | 1,399 | 5 | 1,236 | 158 | |||||||||||||
Effect of exchange rate changes on cash | 46 | 39 | 1 | 6 | 8 | ||||||||||||
Increase in cash and short-term investments | 125 | 76 | 49 | - | |||||||||||||
Cash and short-term investments at beginning of period | 342 | 220 | 122 | - | |||||||||||||
Cash and short-term investments at end of period | $ | 467 | $ | 296 | $ | 171 | $ | - | |||||||||
(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. Receivables amounts include adjustment for consolidated non-cash receipt of retained interests in securitized trade receivables. | |||||||||||||||||
(5) Reclassification of Cat Financial’s cash flow activity from investing to operating for receivables that arose from the sale of inventory. | |||||||||||||||||
(6) Elimination of Cat Financial’s additions to retained interests in securitized trade receivables that arose from an intercompany purchase of receivables. | |||||||||||||||||
(7) Net proceeds and payments to/from Machinery and Engines and Financial Products. | |||||||||||||||||
(8) Elimination of the effect of exchange on intercompany balances. |
(1) Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis. | |||||||||||||||||
(2) Elimination of receivables between Machinery and Engines and Financial Products. | |||||||||||||||||
(3) Reclassification of Machinery and Engines trade receivables purchased by Cat Financial and Cat Financial’s wholesale inventory receivables. | |||||||||||||||||
(4) Elimination of Machinery and Engines insurance premiums that are prepaid to Financial Products. | |||||||||||||||||
(5) Elimination of Machinery and Engines investment in Financial Products subsidiary. | |||||||||||||||||
(6) Elimination of Financial Products equity which is accounted for on Machinery and Engines on the equity basis. | |||||||||||||||||
(7) Reclassification reflecting required netting of deferred tax assets / liabilities by taxing jurisdiction. | |||||||||||||||||
(8) Elimination of debt between Machinery and Engines and Financial Products. | |||||||||||||||||
(9) Elimination of payables between Machinery and Engines and Financial Products. | |||||||||||||||||
(10) Elimination of prepaid insurance in Financial Products' accrued expenses. |
Caterpillar Inc. Supplemental Data for Financial Position At December 31, 2004 (Unaudited) (Millions of dollars) | |||||||||||||||||
Supplemental Consolidating Data | |||||||||||||||||
Consolidated | Machinery and Engines1 | Financial Products | Consolidating Adjustments | ||||||||||||||
Assets: | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and short-term investments | $ | 445 | $ | 270 | $ | 175 | $ | - | |||||||||
Receivables - trade and other | 7,463 | 3,276 | 465 | 3,722 | 2,3 | ||||||||||||
Receivables - finance | 5,182 | - | 9,325 | (4,143) | 3 | ||||||||||||
Deferred and refundable income taxes | 398 | 333 | 65 | - | |||||||||||||
Prepaid expenses | 1,369 | 1,367 | 16 | (14) | 4 | ||||||||||||
Inventories | 4,675 | 4,675 | - | - | |||||||||||||
Total current assets | 19,532 | 9,921 | 10,046 | (435) | |||||||||||||
Property, plant and equipment - net | 7,682 | 4,820 | 2,862 | - | |||||||||||||
Long-term receivables - trade and other | 764 | 255 | 37 | 472 | 2,3 | ||||||||||||
Long-term receivables - finance | 9,903 | - | 10,410 | (507) | 3 | ||||||||||||
Investments in unconsolidated affiliated companies | 517 | 479 | 39 | (1) | 5 | ||||||||||||
Investments in Financial Products subsidiaries | - | 3,012 | - | (3,012) | 6 | ||||||||||||
Deferred income taxes | 674 | 950 | 27 | (303) | 7 | ||||||||||||
Intangible assets | 315 | 307 | 8 | - | |||||||||||||
Goodwill | 1,450 | 1,450 | - | - | |||||||||||||
Other assets | 2,258 | 1,075 | 1,183 | - | |||||||||||||
Total assets | $ | 43,095 | $ | 22,269 | $ | 24,612 | $ | (3,786) | |||||||||
Liabilities | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Short-term borrowings | 4,157 | 93 | 4,396 | (332) | 8 | ||||||||||||
Accounts payable | 3,580 | 3,459 | 205 | (84) | 9 | ||||||||||||
Accrued expenses | 2,261 | 1,426 | 855 | (20) | 10 | ||||||||||||
Accrued wages, salaries and employee benefits | 1,730 | 1,716 | 14 | - | |||||||||||||
Customer advances | 447 | 447 | - | - | |||||||||||||
Dividends payable | 141 | 141 | - | - | |||||||||||||
Deferred and current income taxes payable | 259 | 212 | 47 | - | |||||||||||||
Long-term debt due within one year | 3,531 | 6 | 3,525 | - | |||||||||||||
Total current liabilities | 16,106 | 7,500 | 9,042 | (436) | |||||||||||||
Long-term debt due after one year | 15,837 | 3,697 | 12,175 | (35) | 8 | ||||||||||||
Liability for postemployment benefits | 2,986 | 2,986 | - | - | |||||||||||||
Deferred income taxes and other liabilities | 699 | 619 | 383 | (303) | 7 | ||||||||||||
Total liabilities | 35,628 | 14,802 | 21,600 | (774) | |||||||||||||
Stockholders' equity | |||||||||||||||||
Common stock | 1,231 | 1,231 | 888 | (888) | 6 | ||||||||||||
Treasury stock | (3,277 | ) | (3,277 | ) | - | - | |||||||||||
Profit employed in the business | 9,937 | 9,937 | 1,824 | (1,824) | 6 | ||||||||||||
Accumulated other comprehensive income | (424 | ) | (424 | ) | 300 | (300) | 6 | ||||||||||
Total stockholders' equity | 7,467 | 7,467 | 3,012 | (3,012) | |||||||||||||
Total liabilities and stockholders' equity | $ | 43,095 | $ | 22,269 | $ | 24,612 | $ | (3,786) | |||||||||
(1) Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis. | |||||||||||||||||
(2) Elimination of receivables between Machinery and Engines and Financial Products. | |||||||||||||||||
(3) Reclassification of Machinery and Engines trade receivables purchased by Cat Financial and Cat Financial’s wholesale inventory receivables. | |||||||||||||||||
(4) Elimination of Machinery and Engines insurance premiums that are prepaid to Financial Products. | |||||||||||||||||
(5) Elimination of Machinery and Engines investment in Financial Products subsidiary. | |||||||||||||||||
(6) Elimination of Financial Products equity which is accounted for on Machinery and Engines on the equity basis. | |||||||||||||||||
(7) Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction. | |||||||||||||||||
(8) Elimination of debt between Machinery and Engines and Financial Products. | |||||||||||||||||
(9) Elimination of payables between Machinery and Engines and Financial Products. | |||||||||||||||||
(10) Elimination of prepaid insurance in Financial Products' accrued expenses. |
Caterpillar Inc. Supplemental Data for Cash Flow For the Nine Months Ended September 30, 2005 (Unaudited) (Millions of dollars) | |||||||||||||||||
Supplemental Consolidating Data | |||||||||||||||||
Consolidated | Machinery and Engines1 | Financial Products | Consolidating 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 | ||||||||||
Collection 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 | ) | - | - | |||||||||||
Other - net | 80 | (7 | ) | 87 | - | ||||||||||||
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 long-term debt issued | 4,358 | 129 | 4,229 | - | |||||||||||||
Payments on long-term debt | (3,324 | ) | (64 | ) | (3,260 | ) | - | ||||||||||
Short-term borrowings - net | 1,085 | 470 | 615 | - | |||||||||||||
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 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. |
Caterpillar Inc. Supplemental Data for Cash Flow For the Nine Months Ended September 30, 2004 (Unaudited) (Millions of dollars) | |||||||||||||||||
Supplemental Consolidating Data | |||||||||||||||||
Consolidated | Machinery and Engines1 | Financial Products | Consolidating Adjustments | ||||||||||||||
Cash flow from operating activities: | |||||||||||||||||
Profit | $ | 1,484 | $ | 1,484 | $ | 258 | $ | (258) | 2 | ||||||||
Adjustments for non-cash items: | |||||||||||||||||
Depreciation and amortization | 1,055 | 612 | 443 | - | |||||||||||||
Undistributed profit of Financial Products | - | (258 | ) | - | 258 | 3 | |||||||||||
Other | (83 | ) | (103 | ) | (80 | ) | 100 | 4 | |||||||||
Changes in assets and liabilities: | |||||||||||||||||
Receivables - trade and other | (7,110 | ) | (284 | ) | 89 | (6,915) | 4,5 | ||||||||||
Inventories | (1,225 | ) | (1,225 | ) | - | - | |||||||||||
Accounts payable and accrued expenses | 728 | 570 | (33 | ) | 191 | 4 | |||||||||||
Other assets - net | 76 | 52 | 30 | (6) | 4 | ||||||||||||
Other liabilities- net | (2 | ) | (90 | ) | 89 | (1) | 4 | ||||||||||
Net cash provided by (used for) operating activities | (5,077 | ) | 758 | 796 | (6,631) | ||||||||||||
Cash flow from investing activities: | |||||||||||||||||
Capital expenditures - excluding equipment leased to others | (519 | ) | (460 | ) | (59 | ) | - | ||||||||||
Expenditures for equipment leased to others | (827 | ) | (2 | ) | (825 | ) | - | ||||||||||
Proceeds from disposals of property, plant and equipment | 378 | 19 | 359 | - | |||||||||||||
Additions to finance receivables | (6,423 | ) | - | (12,728 | ) | 6,305 | 5 | ||||||||||
Collection of finance receivables | 4,617 | - | 10,313 | (5,696) | 5 | ||||||||||||
Proceeds from sale of finance receivables | 647 | - | 1,311 | (664) | 5 | ||||||||||||
Additions to retained interests in securitized trade receivables | - | - | (6,686 | ) | 6,686 | 6 | |||||||||||
Collection of retained interests in securitized trade receivables | 5,722 | - | 5,722 | - | |||||||||||||
Net intercompany borrowings | - | 203 | 30 | (233) | 7 | ||||||||||||
Investments and acquisitions (net of cash acquired) | (284 | ) | (284 | ) | - | - | |||||||||||
Other - net | (40 | ) | (94 | ) | 54 | - | |||||||||||
Net cash provided by (used for) investing activities | 3,271 | (618 | ) | (2,509 | ) | 6,398 | |||||||||||
Cash flow from financing activities: | |||||||||||||||||
Dividends paid | (395 | ) | (395 | ) | - | - | |||||||||||
Common stock issued, including treasury shares reissued | 137 | 137 | - | - | |||||||||||||
Treasury shares purchased | (400 | ) | (400 | ) | - | - | |||||||||||
Net intercompany borrowings | - | (30 | ) | (203 | ) | 233 | 7 | ||||||||||
Proceeds from long-term debt issued | 4,532 | 263 | 4,269 | - | |||||||||||||
Payments on long-term debt | (2,615 | ) | (28 | ) | (2,587 | ) | - | ||||||||||
Short-term borrowings - net | 563 | 264 | 299 | - | |||||||||||||
Net cash provided by financing activities | 1,822 | (189 | ) | 1,778 | 233 | ||||||||||||
Effect of exchange rate changes on cash | 59 | 70 | (11 | ) | - | ||||||||||||
Increase in cash and short-term investments | 75 | 21 | 54 | - | |||||||||||||
Cash and short-term investments at beginning of period | 342 | 220 | 122 | - | |||||||||||||
Cash and short-term investments at end of period | $ | 417 | $ | 241 | $ | 176 | $ | - | |||||||||
(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. Receivables amounts include adjustment for consolidated non-cash receipt of retained interests in securitized trade receivables. | |||||||||||||||||
(5) Reclassification of Cat Financial’s cash flow activity from investing to operating for receivables that arose from the sale of inventory. | |||||||||||||||||
(6) Elimination of Cat Financial’s additions to retained interests in securitized trade receivables that arose from an intercompany purchase of receivables. | |||||||||||||||||
(7) Net proceeds and payments to/from Machinery and Engines and Financial Products. |
· |
· | World demand for energy and most base metals has continued to grow, maintaining pressure on production capacities and inventories. As a result, |
· |
· |
· |
Sales and Revenues Outlook | ||||||||||||
(Millions of dollars) | 2004 | 2005 | % | |||||||||
Actual | Outlook | Change | ||||||||||
Machinery and Engines | ||||||||||||
North America | $ | 14,521 | $ | 17,700 | 22% | |||||||
EAME | 7,505 | 8,950 | 19% | |||||||||
Latin America | 2,372 | 3,050 | 29% | |||||||||
Asia/Pacific | 3,938 | 4,250 | 8% | |||||||||
Total Machinery and Engines | 28,336 | 33,950 | 20% | |||||||||
Financial Products1 | 1,970 | 2,350 | 19% | |||||||||
Total | $ | 30,306 | $ | 36,300 | 20% | |||||||
(1) Does not include revenues earned from Machinery and Engines of $199 million and $307 million in 2004 and 2005 outlook, respectively. |
Sales and Revenue Outlook - Midpoint of Range1 | ||||||||||||
(Millions of dollars) | 2004 | 2005 | % | |||||||||
Actual | Outlook2 | Change | ||||||||||
Machinery and Engines | ||||||||||||
North America | $ | 14,521 | $ | 17,700 | 22% | |||||||
EAME | 7,505 | 9,000 | 20% | |||||||||
Latin America | 2,372 | 2,800 | 18% | |||||||||
Asia/Pacific | 3,938 | 4,200 | 7% | |||||||||
Total Machinery and Engines | 28,336 | 33,700 | 19% | |||||||||
Financial Products3 | 1,970 | 2,400 | 22% | |||||||||
Total | $ | 30,306 | $ | 36,100 | 19% | |||||||
(1) The volume stair step in the Consolidating Operating Profit chart on page 56 reflects sales and revenue at the midpoint of the range. | ||||||||||||
(2) Based on the sales expectations by geographic region, the forecast of Consolidated Sales and Revenues is an increase of 18 to 20 percent versus 2004. For purposes of this chart, numbers are shown at the middle of the outlook range (i.e., 19 percent). | ||||||||||||
(3) Does not include revenues earned from Machinery and Engines of $199 million and $275 million in 2004 and 2005 outlook, respectively. |
· |
· |
· |
· | Prices for metals and energy commodities |
· | The North American truck fleet is growing in response to higher freight volume and improved profits. Demand for on-highway trucks is expected to |
· | Canadian |
· | The |
· |
· |
· |
· |
· |
(1) The PPS outlook is between |
(2) Includes the impact of currency on operating profit. Currency is a separate stair step in the actual charts. |
(3) Includes $100 million of potential charges. |
· | Low interest rates, rising employment and better home prices should allow some growth in housing construction, particularly outside the United States. Hurricane damage repair in the U.S. Gulf region will be a positive catalyst for building construction in 2006. |
· | Another year of good economic growth will leave nonresidential structures increasingly inadequate to efficiently support production. We expect businesses will use record cash flows to increase spending on construction and standby power. |
· | Economic growth will put increasing stress on many countries’ infrastructure. Governments are expected to use improved finances to increase infrastructure spending. We expect the U.S. highway bill will increase federal funds available for highway construction. |
· | We believe the investment in mining and energy development that has occurred so far in this cycle has not been sufficient to restore adequate production capacity worldwide. Next year should be another good year for these industries, with prices down only slightly from this year. |
· | Our preliminary projection is for about 10 percent increase in company sales and revenues over expected 2005 results. |
· | The profit outlook for 2006 is expected to be up 15 to 25 percent from the middle of the profit range in the 2005 outlook. |
· | Included in the 2006 profit outlook is approximately $100 million of pretax expense for the impact of expensing stock options as required by SFAS 123R, "Share-Based Payment". In addition, our 2006 outlook assumes increased expense for employee benefits costs and a higher effective tax rate because of the continued phase-out of ETI. The American Jobs Creation Act provides for the phase-out of ETI with 80 percent of benefits in 2005, 60 percent of benefits in 2006 and complete phase-out in 2007. |
Period | Total number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased Under the Program | Maximum Number of Shares that May Yet Be Purchased Under the Program | |||||||||
April 1-30, 2005 | 4,440,000 | $ | 45.02 | 4,440,000 | 39,244,440 | 1 | |||||||
May 1-31, 2005 | 6,284,000 | 44.92 | 6,284,000 | 33,887,784 | 1 | ||||||||
June 1-30, 2005 | - | - | - | 36,777,490 | 1 | ||||||||
Total | 10,724,000 | $ | 44.96 | 10,724,000 | |||||||||
(1) On October 8, 2003, the board of directors approved an extension of the share repurchase program (through October 2008) with the goal of reducing the company's outstanding shares to 320,000,000. The share repurchase program goal has been adjusted for the stock split announced on June 8, 2005 to reflect an adjusted goal of 640,000,000 shares outstanding by October 2008. Amount represents the shares outstanding at the end of the period less 640,000,000. |
Period | Total number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased Under the Program | Maximum Number of Shares that May Yet Be Purchased Under the Program | |||||||||
July 1-31, 2005 | 925,000 | $ | 54.05 | 925,000 | 38,304,732 | 1 | |||||||
August 1-31, 2005 | 925,000 | 54.04 | 925,000 | 39,835,245 | 1 | ||||||||
September 1-30, 2005 | 1,734,000 | 57.66 | 1,734,000 | 40,208,493 | 1 | ||||||||
Total | 3,584,000 | $ | 55.79 | 3,584,000 | |||||||||
(1) On October 8, 2003, the Board of Directors approved an extension of the share repurchase program (through October 2008) with the goal of reducing the company's outstanding shares to 320,000,000. The share repurchase program goal has been adjusted for the stock split announced on June 8, 2005 to reflect an adjusted goal of 640,000,000 shares outstanding by October 2008. Amount represents the shares outstanding at the end of the period less 640,000,000. | |||||||||||||
Period | Total number of Shares Purchased1 | Average Price Paid per Share | Total Number of Shares Purchased Under the Program | Maximum Number of Shares that May Yet Be Purchased Under the Program | Total number of Shares Purchased1 | Average Price Paid per Share | Total Number of Shares Purchased Under the Program | Maximum Number of Shares that May Yet Be Purchased Under the Program | ||||||||||||||||||
April 1-30, 2005 | 984 | $ | 44.69 | NA | NA | |||||||||||||||||||||
May 1-31, 2005 | - | - | NA | NA | ||||||||||||||||||||||
June 1-30, 2005 | - | - | NA | NA | ||||||||||||||||||||||
July 1-31, 2005 | 4,802 | $ | 46.97 | NA | NA | |||||||||||||||||||||
August 1-31, 2005 | - | - | NA | NA | ||||||||||||||||||||||
September 1-30, 2005 | - | - | NA | NA | ||||||||||||||||||||||
Total | 984 | $ | 44.69 | 4,802 | $ | 46.97 | ||||||||||||||||||||
(1) Represents shares delivered back to issuer for the payment of taxes resulting from the release of restricted stock. |
Item 6. Exhibits | |||
Exhibits: | |||
3 | Amendment to Certificate of Designation, Preferences and Rights of the Terms of the Series A Junior Participating Preferred Stock. | ||
31.1 | Certification of James W. Owens, Chairman and Chief Executive Officer of Caterpillar Inc., as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
31.2 | Certification of David B. Burritt, Chief Financial Officer of Caterpillar Inc., as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
32 | Certification of James W. Owens, Chairman and Chief Executive Officer of Caterpillar Inc. and David B. Burritt, Chief Financial Officer of Caterpillar Inc., as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
SIGNATURES | |||
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. | |||
CATERPILLAR INC. | |||
/s/ James W. Owens | Chairman of the Board and Chief Executive Officer | ||
(James W. Owens) | |||
/s/ David B. Burritt | Vice President and Chief Financial Officer | ||
(David B. Burritt) | |||
/s/ Bradley M. Halverson | Controller and Chief Accounting Officer | ||
(Bradley M. Halverson) | |||
/s/ James B. Buda | Secretary | ||
(James B. Buda) |