Summary Page
Financial Statements
Notes to Financial Statements
MD&A
Safe Harbor Statement
Other Information
UNITED STATES | |
FORM 10-Q | |
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES | |
Commission File Number: 1-768 | |
CATERPILLAR INC. | |
Delaware | 37-0602744 |
100 NE Adams Street, Peoria, Illinois | 61629 |
Registrant's telephone number, including area code: | |
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. YesX No __. | |
At June 30, 2001, 343,373,985 shares of common stock of the Registrant were outstanding. |
This summary page highlights selected information and may not contain all of the information that is important to you. For a detailed analysis of the company's results for the first quarter, you should read the entire document.
SUMMARY OF RESULTS
On July 17, 2001, Caterpillar Inc. reported second-quarter sales and revenues of $5.49 billion and profit of $271 million or 78 cents per share. "Continued strength in electric power and heavy construction and improved demand in coal mining and oil and gas sectors helped fuel second-quarter sales," said Caterpillar Chairman Glen Barton.
Sales and revenues were $125 million or 2 percent higher than second-quarter 2000. A 2 percent increase in physical sales volume and a 16 percent increase in Financial Products revenues were partially offset by the unfavorable impact of the stronger U.S. dollar on sales denominated in currencies other than U.S. dollars. Company profit was $44 million or 14 percent lower than second-quarter 2000, due primarily to the unfavorable impact of cost inefficiencies caused by significant volume shifts at some manufacturing facilities, and higher selling, general and administrative (SG&A) expenses. These unfavorable items were partially offset by the slightly higher sales volume and favorable other income and expense.
"Our performance through the first half of the year was in line with our expectations. The diversification of our business has allowed us to achieve solid financial results despite a collapse in North American truck engine demand and prolonged weakness in general construction. For the full year, we expect to achieve our 2001 sales and revenue and profit outlook. We remain steadfastly focused on achieving our long-term growth and cost reduction goals and delivering improved shareholder value," Barton stated.
HIGHLIGHTS - SECOND-QUARTER 2001 COMPARED WITH SECOND-QUARTER 2000
- Sales and revenues of $5.49 billion were $125 million or 2 percent higher compared to second-quarter 2000. Financial Products revenues increased 16 percent.
- Sales inside the United States were 51 percent of worldwide sales compared with 52 percent a year ago.
- Profit was $271 million or 78 cents per share.
- 264,000 shares were repurchased during the quarter. On June 30, 2001 there were 343.4 million shares outstanding.
- As previously announced, the dividend was increased 3 percent in June, the eighth consecutive year dividends have been increased. The current quarterly payout is 35 cents per share.
OUTLOOK
We expect full-year 2001 sales and revenues to be about flat with 2000. Full-year profit is projected to be down about 5 to 10 percent. This sales and profit projection is unchanged from our outlook in January, even though the forecast for worldwide economic growth is lower than anticipated at the beginning of the year (complete outlook begins on page 17).
Page 1
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Caterpillar Inc. | ||||||||||||||||||
Statement of Results of Operations | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
(Dollars in millions except per share data) | ||||||||||||||||||
Consolidated | Machinery & Engines(1) | Financial Products | ||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||
June 30, | June 30, | June 30, | ||||||||||||||||
2001 | 2000 | 2001 | 2000 | 2001 | 2000 | |||||||||||||
Sales and revenues: | ||||||||||||||||||
Sales of Machinery and Engines | $ | 5,132 | $ | 5,056 | $ | 5,132 | $ | 5,056 | $ | - | $ | - | ||||||
Revenues of Financial Products | 356 | 307 | - | - | 408 | 359 | ||||||||||||
Total sales and revenues | 5,488 | 5,363 | 5,132 | 5,056 | 408 | 359 | ||||||||||||
| ||||||||||||||||||
Cost of goods sold | 3,955 | 3,840 | 3,955 | 3,840 | - | - | ||||||||||||
Selling, general, and administrative expenses | 655 | 589 | 568 | 514 | 98 | 85 | ||||||||||||
Research and development expenses | 172 | 157 | 172 | 157 | - | - | ||||||||||||
Interest expense of Financial Products | 175 | 170 | - | - | 182 | 181 | ||||||||||||
Other operating expenses | 73 | 58 | - | - | 73 | 58 | ||||||||||||
Total operating costs | 5,030 | 4,814 | 4,695 | 4,511 | 353 | 324 | ||||||||||||
Operating profit | 458 | 549 | 437 | 545 | 55 | 35 | ||||||||||||
|
|
|
|
|
|
| ||||||||||||
Other income (expense) | 19 | (1) | (28) | (50) | 13 | 18 | ||||||||||||
|
|
|
|
|
|
| ||||||||||||
Provision for income taxes | 128 | 151 | 103 | 134 | 25 | 17 | ||||||||||||
Profit of consolidated companies | 274 | 323 | 231 | 287 | 43 | 36 | ||||||||||||
Equity in profit (loss) of unconsolidated |
|
|
|
|
|
| ||||||||||||
Equity in profit of Financial Products' subsidiaries | - | - | 45 | 36 | - | - | ||||||||||||
Profit | $ | 271 | $ | 315 | $ | 271 | $ | 315 | $ | 45 | $ | 36 | ||||||
Profit per common share | $ | 0.79 | $ | 0.91 | ||||||||||||||
Profit per common share - diluted(2) | $ | 0.78 | $ | 0.90 | ||||||||||||||
Weighted-average common shares | 343.3 | 347.1 | ||||||||||||||||
Weighted-average common shares - diluted(2) | 347.8 | 349.4 | ||||||||||||||||
Cash dividends paid per common share | $ | 0.340 | $ | 0.325 | ||||||||||||||
(1) Represents Caterpillar Inc. and its subsidiaries except for Financial Products, which is accounted for on the equity basis. | ||||||||||||||||||
(2)Diluted by assumed exercise of stock options, using the treasury stock method. | ||||||||||||||||||
The supplemental consolidating data is presented for the purpose of additional analysis. Transactions between Machinery & Engines and Financial Products have been eliminated to arrive at the consolidated data. | ||||||||||||||||||
See accompanying notes to Consolidated Financial Statements. | ||||||||||||||||||
Page 2
Caterpillar Inc. | ||||||||||||||||||
Statement of Results of Operations | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
(Dollars in millions except per share data) | ||||||||||||||||||
Consolidated | Machinery & Engines(1) | Financial Products | ||||||||||||||||
Six Months Ended | Six Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | June 30, | ||||||||||||||||
2001 | 2000 | 2001 | 2000 | 2001 | 2000 | |||||||||||||
Sales and revenues: | ||||||||||||||||||
Sales of Machinery and Engines | $ | 9,593 | $ | 9,681 | $ | 9,593 | $ | 9,681 | $ | - | $ | - | ||||||
Revenues of Financial Products | 705 | 601 | - | - | 813 | 689 | ||||||||||||
Total sales and revenues | 10,298 | 10,282 | 9,593 | 9,681 | 813 | 689 | ||||||||||||
| ||||||||||||||||||
Cost of goods sold | 7,417 | 7,398 | 7,417 | 7,398 | - | - | ||||||||||||
Selling, general, and administrative expenses | 1,276 | 1,172 | 1,122 | 1,037 | 175 | 153 | ||||||||||||
Research and development expenses | 339 | 312 | 339 | 312 | - | - | ||||||||||||
Interest expense of Financial Products | 357 | 323 | - | - | 375 | 344 | ||||||||||||
Other operating expenses | 142 | 112 | - | - | 142 | 112 | ||||||||||||
Total operating costs | 9,531 | 9,317 | 8,878 | 8,747 | 692 | 609 | ||||||||||||
Operating profit | 767 | 965 | 715 | 934 | 121 | 80 | ||||||||||||
|
|
|
|
|
|
| ||||||||||||
Other income (expense) | 23 | 40 | (76) | (42) | 30 | 33 | ||||||||||||
|
|
|
|
|
|
| ||||||||||||
Provision for income taxes | 203 | 274 | 148 | 235 | 55 | 39 | ||||||||||||
Profit of consolidated companies | 434 | 586 | 338 | 512 | 96 | 74 | ||||||||||||
Equity in profit (loss) of unconsolidated |
|
|
|
|
|
| ||||||||||||
Equity in profit of Financial Products' subsidiaries | - | - | 99 | 75 | - | - | ||||||||||||
Profit | $ | 433 | $ | 573 | $ | 433 | $ | 573 | $ | 99 | $ | 75 | ||||||
Profit per common share | $ | 1.26 | $ | 1.64 | ||||||||||||||
Profit per common share - diluted(2) | $ | 1.25 | $ | 1.63 | ||||||||||||||
Weighted-average common shares | 343.3 | 349.4 | ||||||||||||||||
Weighted-average common shares - diluted(2) | 347.1 | 352.1 | ||||||||||||||||
Cash dividends paid per common share | $ | 0.68 | $ | 0.65 | ||||||||||||||
(1) Represents Caterpillar Inc. and its subsidiaries except for Financial Products, which is accounted for on the equity basis. | ||||||||||||||||||
(2) Diluted by assumed exercise of stock options, using the treasury stock method. | ||||||||||||||||||
The supplemental consolidating data is presented for the purpose of additional analysis. Transactions between Machinery & Engines and Financial Products have been eliminated to arrive at the consolidated data. | ||||||||||||||||||
See accompanying notes to Consolidated Financial Statements. | ||||||||||||||||||
Page 3
Caterpillar Inc. | ||||||||||||||
Statement of Changes in Stockholders' Equity | ||||||||||||||
For the Six Months Ended | ||||||||||||||
(Unaudited) | ||||||||||||||
(Dollars in millions) | ||||||||||||||
Consolidated | ||||||||||||||
June 30, | June 30, | |||||||||||||
2001 | 2000 | |||||||||||||
Common stock: | ||||||||||||||
Balance at beginning of period | $ | (1,628) | $ | (1,230) | ||||||||||
Common shares issued, including treasury shares reissued: |
|
| ||||||||||||
Treasury shares purchased: |
|
| ||||||||||||
Balance at end of period | (1,646) | (1,543) | ||||||||||||
Profit employed in the business: | ||||||||||||||
Balance at beginning of period | 7,205 | 6,617 | ||||||||||||
Profit | 433 | $ | 433 | 573 | $ | 573 | ||||||||
Dividends declared | (236) | (231) | ||||||||||||
Balance at end of period | 7,402 | 6,959 | ||||||||||||
| ||||||||||||||
Foreign currency translation adjustment:(1) | ||||||||||||||
Balance at beginning of period | 55 | 125 | ||||||||||||
Aggregate adjustment for period | (105) | (105) | (23) | (23) | ||||||||||
Balance at end of period | (50) | 102 | ||||||||||||
Minimum pension liability adjustment:(1) | ||||||||||||||
Balance at beginning of period | (32) | (47) | ||||||||||||
Aggregate adjustment for period | 4 | 4 | (13) | (13) | ||||||||||
Balance at end of period | (28) | (60) | ||||||||||||
Derivative financial instruments: (1)(Note 8) | ||||||||||||||
Balance at beginning of period | - | - | ||||||||||||
Gains (losses) deferred during period | (24) | (24) | - | - | ||||||||||
(Gains) losses reclassified to earnings | 5 | 5 | - | - | ||||||||||
Balance at end of period | (19) | - | ||||||||||||
|
|
|
|
| ||||||||||
Stockholders' equity at end of period | $ | 5,659 | $ | 5,458 | ||||||||||
(1) No reclassification adjustments to report. | ||||||||||||||
See accompanying notes to Consolidated Financial Statements. | ||||||||||||||
Page 4
Caterpillar Inc. | |||||||||||||||||||||
Statement of Financial Position* | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
Consolidated | Machinery & Engines(1) | Financial Products | |||||||||||||||||||
June 30, | Dec. 31, | June 30, | Dec. 31, | June 30, | Dec. 31, | ||||||||||||||||
| 2001 | 2000 | 2001 | 2000 | 2001 | 2000 | |||||||||||||||
Assets | |||||||||||||||||||||
Current assets: | |||||||||||||||||||||
Cash and short-term investments | $ | 272 | $ | 334 | $ | 187 | $ | 206 | $ | 85 | $ | 128 | |||||||||
Receivables - trade and other |
| 2,880 | 2,608 | 2,424 | 2,411 | 1,248 | 1,201 | ||||||||||||||
Receivables - finance | 6,306 | 5,471 | - | - | 6,306 | 5,471 | |||||||||||||||
Deferred income taxes | 279 | 397 | 246 | 377 | 33 | 20 | |||||||||||||||
Prepaid expenses | 1,161 | 1,019 | 1,169 | 1,038 | 4 | 2 | |||||||||||||||
Inventories (Note 5) | 2,846 | 2,692 | 2,846 | 2,692 | - | - | |||||||||||||||
Total current assets | 13,744 | 12,521 | 6,872 | 6,724 | 7,676 | 6,822 | |||||||||||||||
Property, plant and equipment - net | 6,158 | 5,951 | 4,751 | 4,713 | 1,407 | 1,238 | |||||||||||||||
Long-term receivables - trade and other | 61 | 76 | 61 | 76 | - | - | |||||||||||||||
Long-term receivables - finance (Note 9) | 6,100 | 6,095 | - | - | 6,100 | 6,095 | |||||||||||||||
Investments in unconsolidated affiliated |
|
|
|
|
|
| |||||||||||||||
Investments in Financial Products' subsidiaries | - | - | 1,655 | 1,620 | - | - | |||||||||||||||
Deferred income taxes | 955 | 907 | 998 | 960 | 13 | 10 | |||||||||||||||
Intangible assets | 1,502 | 1,507 | 1,499 | 1,504 | 3 | 3 | |||||||||||||||
Other assets | 920 | 856 | 436 | 453 | 484 | 403 | |||||||||||||||
Total assets | $ | 30,277 | $ | 28,464 | $ | 16,776 | $ | 16,554 | $ | 16,016 | $ | 14,618 | |||||||||
| |||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||
Short-term borrowings | $ | 1,694 | $ | 971 | $ | 191 | $ | 369 | $ | 1,729 | $ | 919 | |||||||||
Accounts payable | 2,329 | 2,339 | 2,439 | 2,556 | 127 | 147 | |||||||||||||||
Accrued expenses | 1,120 | 1,048 | 731 | 720 | 529 | 451 | |||||||||||||||
Accrued wages, salaries, and employee benefits | 1,311 | 1,274 | 1,301 | 1,262 | 10 | 12 | |||||||||||||||
Dividends payable | 120 | 117 | 120 | 117 | - | 5 | |||||||||||||||
Deferred and current income taxes payable | 29 | 57 | (13) | 28 | 42 | 29 | |||||||||||||||
Deferred liability | - | - | - | - | 329 | 316 | |||||||||||||||
Long-term debt due within one year | 3,028 | 2,762 | 245 | 204 | 2,783 | 2,558 | |||||||||||||||
Total current liabilities | 9,631 | 8,568 | 5,014 | 5,256 | 5,549 | 4,437 | |||||||||||||||
Long-term debt due after one year | 12,032 | 11,334 | 3,293 | 2,854 | 8,739 | 8,480 | |||||||||||||||
Liability for postemployment benefits | 2,481 | 2,514 | 2,481 | 2,514 | - | - | |||||||||||||||
Deferred income taxes and other liabilities | 474 | 448 | 329 | 330 | 73 | 81 | |||||||||||||||
Total liabilities | 24,618 | 22,864 | 11,117 | 10,954 | 14,361 | 12,998 | |||||||||||||||
Stockholders' equity | |||||||||||||||||||||
Common Stock of $1.00 par |
|
|
|
|
|
| |||||||||||||||
Profit employed in the business | 7,402 | 7,205 | 7,402 | 7,205 | 1,021 | 922 | |||||||||||||||
Accumulated other comprehensive income | (97) | 23 | (97) | 23 | (160) | (89) | |||||||||||||||
Treasury stock (06/30/01 - 64,073,327; |
|
|
|
|
|
| |||||||||||||||
Total stockholders' equity | 5,659 | 5,600 | 5,659 | 5,600 | 1,655 | 1,620 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 30,277 | $ | 28,464 | $ | 16,776 | $ | 16,554 | $ | 16,016 | $ | 14,618 | |||||||||
(1) Represents Caterpillar Inc. and its subsidiaries except for Financial Products, which is accounted for on the equity basis. | |||||||||||||||||||||
* Unaudited except for Consolidated December 31, 2000 amounts. | |||||||||||||||||||||
The supplemental consolidating data is presented for the purpose of additional analysis. Transactions between Machinery & Engines and Financial Products have been eliminated to arrive at the consolidated data. | |||||||||||||||||||||
See accompanying notes to Consolidated Financial Statements. |
Page 5
Caterpillar Inc. | |||||||||||||||||||
Statement of Cash Flow for the Six Months Ended | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||
Consolidated | Machinery & Engines(1) | Financial Products | |||||||||||||||||
June 30, | June 30, | June 30, | |||||||||||||||||
2001 | 2000 | 2001 | 2000 | 2001 | 2000 | ||||||||||||||
Cash Flow from Operating Activities: | |||||||||||||||||||
Profit | $ | 433 | $ | 573 | $ | 433 | $ | 573 | $ | 99 | $ | 75 | |||||||
Adjustments for non-cash items: | |||||||||||||||||||
Depreciation and amortization | 582 | 533 | 430 | 415 | 152 | 118 | |||||||||||||
Profit of Financial Products | - | - | (99) | (75) | - | - | |||||||||||||
Other | 146 | 87 | 143 | 30 | (27) | 49 | |||||||||||||
Changes in assets and liabilities: | |||||||||||||||||||
Receivables - trade and other | (229) | (263) | (67) | 40 | (100) | (199) | |||||||||||||
Inventories | (132) | 39 | (132) | 39 | - | - | |||||||||||||
Accounts payable and accrued expenses | 114 | 315 | (15) | 126 | 103 | 127 | |||||||||||||
Other - net | (131) | (86) | (133) | (104) | 13 | 28 | |||||||||||||
Net cash provided by (used for) operating activities | 783 | 1,198 | 560 | 1,044 | 240 | 198 | |||||||||||||
| |||||||||||||||||||
Capital expenditures - excluding equipment |
|
|
|
|
|
| |||||||||||||
Expenditures for equipment leased to others | (427) | (318) | (16) | (6) | (411) | (312) | |||||||||||||
Proceeds from disposals of property, plant |
|
|
|
|
|
| |||||||||||||
Additions to finance receivables | (8,343) | (7,711) | - | - | (8,343) | (7,711) | |||||||||||||
Collection of finance receivables | 5,894 | 5,059 | - | - | 5,894 | 5,059 | |||||||||||||
Proceeds from the sale of finance receivables | 1,244 | 1,568 | - | - | 1,244 | 1,568 | |||||||||||||
Net intercompany borrowings | - | - | 79 | (206) | 84 | (98) | |||||||||||||
Investments and acquisitions (net of cash acquired) | (395) | (78) | (108) | (70) | (287) | (8) | |||||||||||||
Other - net | (84) | (77) | (22) | (26) | (69) | (71) | |||||||||||||
Net cash (used for) provided by investing activities | (2,308) | (1,776) | (420) | (614) | (1,732) | (1,486) | |||||||||||||
| |||||||||||||||||||
Cash Flow from Financing Activities: | |||||||||||||||||||
Dividends paid | (234) | (228) | (234) | (228) | (5) | (29) | |||||||||||||
Common stock issued, including treasury |
|
|
|
|
|
| |||||||||||||
Treasury shares purchased | (33) | (326) | (33) | (326) | - | - | |||||||||||||
Net intercompany borrowings | - | - | (84) | 98 | (79) | 206 | |||||||||||||
Proceeds from long-term debt issued | 2,816 | 2,418 | 629 | 10 | 2,187 | 2,408 | |||||||||||||
Payments on long-term debt | (1,585) | (1,547) | (166) | (46) | (1,419) | (1,501) | |||||||||||||
Short-term borrowings - net | 564 | 195 | (196) | 24 | 760 | 171 | |||||||||||||
Net cash provided by (used for) financing activities | 1,532 | 515 | (80) | (465) | 1,451 | 1,275 | |||||||||||||
Effect of exchange rate on cash | (69) | (16) | (79) | (31) | (2) | - | |||||||||||||
(Decrease) Increase in cash and short-term |
|
|
|
|
|
| |||||||||||||
| |||||||||||||||||||
Cash and short-term investments at the beginning |
|
|
|
|
|
| |||||||||||||
Cash and short-term investments at the end |
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| |||||||||||||||||||
(1) Represents Caterpillar Inc. and its subsidiaries except for Financial Products, which is accounted for on the equity basis. | |||||||||||||||||||
The supplemental consolidating data is presented for the purpose of additional analysis. Transactions between Machinery & Engines and Financial Products have been eliminated to arrive at the consolidated data. | |||||||||||||||||||
See accompanying notes to Consolidated Financial Statements. | |||||||||||||||||||
Page 6
2. | The results for the three and six-month periods ended June 30, 2001 are not necessarily indicative of the results for the entire year 2001. |
3. | The company has reviewed the status of its environmental and legal contingencies and believes that there are no material changes from that disclosed in Form 10-K for the year ended December 31, 2000. |
4. | Unconsolidated Affiliated Companies |
Results of Operations | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
March 31, | March 31, | March 31, | March 31, | |||||||||
2001 | 2000 | 2001 | 2000 | |||||||||
Sales | $ | 675 | $ | 769 | $ | 1,330 | $ | 1,393 | ||||
Cost of sales | 523 | 624 | 1,044 | 1,108 | ||||||||
Gross profit | $ | 152 | $ | 145 | $ | 286 | $ | 285 | ||||
Profit (Loss) | $ | (4) | $ | (14) | $ | (2) | $ | (24) | ||||
Financial Position | ||||||||
(unaudited) | Sept. 30, | |||||||
Assets: | ||||||||
Current assets | $ | 1,632 | $ | 1,583 | ||||
Property, plant and equipment - net | 942 | 1,000 | ||||||
Other | 273 | 352 | ||||||
2,847 | 2,935 | |||||||
Liabilities: | ||||||||
Current liabilities | 1,391 | 1,284 | ||||||
Long-term debt due after one year | 434 | 557 | ||||||
Other liabilities | 238 | 253 | ||||||
2,063 | 2,094 | |||||||
Ownership | $ | 784 | $ | 841 | ||||
|
Page 7
| |||||||
5. | Inventories | ||||||
(unaudited) | Dec. 31, | ||||||
Raw materials and work-in-process | $ | 1,115 | $ | 1,022 | |||
Finished goods | 1,549 | 1,485 | |||||
Supplies | 182 | 185 | |||||
Total inventories | $ | 2,846 | $ | 2,692 | |||
6. |
| ||||||
(unaudited) | Dec. 31, | ||||||
Write down of property, plant, and equipment | $ | 61 | $ | 61 | |||
Employee severance benefits | 7 | 9 | |||||
Rearrangement, start-up costs, and other | 2 | 3 | |||||
Total reserve | $ | 70 | $ | 73 | |||
| |||||||
7. | Segment Information | ||||||
Page 8 |
Business Segments | ||||||||||||||||||||||||||||||||||||
2001 | Asia | Construction | EAME | Financial & Insurance | Latin | Power | North | All | Total | |||||||||||||||||||||||||||
External sales and revenues | $ | 356 | $ | 60 | $ | 861 | $ | 431 | $ | 370 | $ | 1,361 | $ | 1,770 | $ | 319 | $ | 5,528 | ||||||||||||||||||
Intersegment sales and revenues | 3 | 2,052 | 186 | - | 36 | 1,158 | 84 | 502 | 4,021 | |||||||||||||||||||||||||||
Total sales and revenues | $ | 359 | $ | 2,112 | $ | 1,047 | $ | 431 | $ | 406 | $ | 2,519 | $ | 1,854 | $ | 821 | $ | 9,549 | ||||||||||||||||||
Accountable profit (loss) | $ | 3 | $ | 192 | $ | 59 | $ | 61 | $ | 16 | $ | 60 | $ | 48 | $ | 76 | $ | 515 | ||||||||||||||||||
Accountable assets at June 30, 2001 | $ | 343 | $ | 2,261 |
| $ | 949 | $ | 15,579 | $ | 554 | $ | 3,861 | $ | 2,254 | $ | 2,317 | $ | 28,118 |
2000 | Asia | Construction | EAME | Financial & Insurance | Latin | Power | North | All | Total | |||||||||||||||||||||||||||
External sales and revenues | $ | 354 | $ | 42 | $ | 881 | $ | 370 | $ | 329 | $ | 1,408 | $ | 1,766 | $ | 251 | $ | 5,401 | ||||||||||||||||||
Intersegment sales and revenues | 1 | 2,030 | 194 | - | 37 | 1,239 | 42 | 507 | 4,050 | |||||||||||||||||||||||||||
Total sales and revenues | $ | 355 | $ | 2,072 | $ | 1,075 | $ | 370 | $ | 366 | $ | 2,647 | $ | 1,808 | $ | 758 | $ | 9,451 | ||||||||||||||||||
Accountable profit (loss) | $ | 16 | $ | 234 | $ | 61 | $ | 48 | $ | 8 | $ | 111 | $ | 29 | $ | 55 | $ | 562 | ||||||||||||||||||
Accountable assets at | $ | 373 | $ | 2,229 | $ | 967 | $ | 14,185 | $ | 580 | $ | 3,810 | $ | 1,739 | $ | 2,383 | $ | 26,266 |
Business Segments | ||||||||||||||||||||||||||||||||||||
2001 | Asia | Construction | EAME | Financial & Insurance | Latin | Power | North | All | Total | |||||||||||||||||||||||||||
External sales and revenues | $ | 675 | $ | 101 | $ | 1,711 | $ | 849 | $ | 663 | $ | 2,524 | $ | 3,256 | $ | 583 | $ | 10,362 | ||||||||||||||||||
Intersegment sales and revenues | 6 | 3,910 | 384 | - | 70 | 2,265 | 133 | 971 | 7,739 | |||||||||||||||||||||||||||
Total sales and revenues | $ | 681 | $ | 4,011 | $ | 2,095 | $ | 849 | $ | 733 | $ | 4,789 | $ | 3,389 | $ | 1,554 | $ | 18,101 | ||||||||||||||||||
Accountable profit (loss) | $ | 11 | $ | 322 | $ | 110 | $ | 140 | $ | 24 | $ | 39 | $ | 92 | $ | 124 | $ | 862 |
2000 | Asia | Construction | EAME | Financial & Insurance | Latin | Power | North | All | Total | |||||||||||||||||||||||||||
External sales and revenues | $ | 697 | $ | 84 | $ | 1,683 | $ | 722 | $ | 604 | $ | 2,752 | $ | 3,341 | $ | 478 | $ | 10,361 | ||||||||||||||||||
Intersegment sales and revenues | 3 | 3,964 | 395 | - | 72 | 2,505 | 79 | 1,007 | 8,025 | |||||||||||||||||||||||||||
Total sales and revenues | $ | 700 | $ | 4,048 | $ | 2,078 | $ | 722 | $ | 676 | $ | 5,257 | $ | 3,420 | $ | 1,485 | $ | 18,386 | ||||||||||||||||||
Accountable profit (loss) | $ | 35 | $ | 434 | $ | 114 | $ | 104 | $ | 12 | $ | 210 | $ | 72 | $ | 114 | $ | 1,095 |
Reconciliation of Profit Before Tax: | (unaudited) | ||||||||||||
Three months ended | Six months ended | ||||||||||||
June 30, | June 30, | June 30, | June 30, | ||||||||||
2001 | 2000 | 2001 | 2000 | ||||||||||
Total accountable profit from business segments | $ | 515 | $ | 562 | $ | 862 | $ | 1,095 | |||||
Methodology differences | (29) | (69) | (94) | (174) | |||||||||
Corporate costs | (89) | (49) | (142) | (112) | |||||||||
Other | 5 | 30 | 11 | 51 | |||||||||
Total consolidated profit before tax | $ | 402 | $ | 474 | $ | 637 | $ | 860 | |||||
Page 9 | |||||||||||||
8. | Derivative Instruments and Hedging Activities Page 10 Our 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 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. Gains on undesignated contracts of $.2 and $.3 were recorded in current earnings ("Other income (expense)") for the quarter and six months ended June 30, 2001, respectively. Losses on designated interest rate derivatives of $3 were offset by gains on hedged debt of $8 in current earnings ("Other income (expense)") for the quarter ended June 30, 2001. For the six months ended June 30, 2001, gains on designated interest rate derivatives of $20 were offset by losses on hedged debt of $10 in current earnings ("Other income (expense)"). 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. Gains of $1 and $2 on the liquidated swaps were amortized to current earnings ("Other income (expense)") for the quarter and six months ended June 30, 2001, respectively. 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. As of June 30, 2001, $.3 of deferred net gains included in equity ("Accumulated other comprehensive income") is expected to be reclassified to current earnings ("Other income (expense)") over the next twelve months. The reclassification of the remaining deferred amount to current earnings ("Other income (expense)") will occur over a maximum of thirty years. No hedges were discontinued during the quarter ended June 30, 2001. Page 11 Commodity Price Risk | ||||||||||||
9. | Securitized Receivables | ||||||||||||
|
Dealer | Finance | |||||||
Receivables | Receivables | |||||||
Proceeds from securitization of receivables into revolving facility | $ | 995 | $ | - | ||||
Servicing fees received | $ | 3 | $ | 2 |
Page 12 | |
|
Dealer | Finance | |||||||
Receivables | Receivables | |||||||
Total securitized principal balance | $ | 500 | $ | 284 | ||||
Average securitized principal balance | $ | 509 | $ | 341 | ||||
Loans > 30 days past due | $ | - | $ | 13 | ||||
Net credit losses | $ | - | $ | 2 | ||||
Weighted-average maturity (in months) | 3 | 18 |
| |
10. | Future Accounting Changes |
Machinery sales were $3.42 billion, an increase of $99 million or 3 percent from second-quarter 2000. The higher sales resulted from a 3 percent increase in volume. |
Page 14 |
Sales in North America increased due to continuing strong demand in heavy construction, increased demand in the energy related coal mining industry and growth in the Cat Rental Store network as well as less inventory reduction by dealers compared to a year ago. These positive items more than offset overall lower industry demand in North America. Sales in EAME declined as inventory cutbacks by dealers more than offset higher retail sales. Sales in Latin America improved as dealers brought inventories more in line with sales. Sales in Asia/Pacific gained due to energy related coal mining activity. |
Operating Profit | |||||||||
Three Months Ended | |||||||||
June 30, | June 30, | ||||||||
Machinery | $ | 324 | $ | 374 | |||||
Engines | 113 | 171 | |||||||
$ | 437 | $ | 545 | ||||||
Caterpillar operations are highly integrated; therefore, the company uses a number of allocations to determine lines of business operating profit. |
|
Page 15 |
|
Page 16 |
OUTLOOK |
Page 17 |
|
Page 18 |
| ||||||||||||||||||||
Sales | ||||||||||||||||||||
Total | North | EAME ** | Latin | Asia/ | ||||||||||||||||
Six Months Ended June 30, 2001 | ||||||||||||||||||||
Machinery | $ | 6,380 | $ | 3,699 | $ | 1,628 | $ | 451 | $ | 602 | ||||||||||
Engines* | 3,213 | 1,766 | 885 | 226 | 336 | |||||||||||||||
$ | 9,593 | $ | 5,465 | $ | 2,513 | $ | 677 | $ | 938 | |||||||||||
Six Months Ended June 30, 2000 | ||||||||||||||||||||
Machinery | $ | 6,286 | $ | 3,694 | $ | 1,575 | $ | 413 | $ | 604 | ||||||||||
Engines* | 3,395 | 1,977 | 868 | 215 | 335 | |||||||||||||||
$ | 9,681 | $ | 5,671 | $ | 2,443 | $ | 628 | $ | 939 | |||||||||||
* Does not include internal engine transfers of $632 and $702 in 2001 and 2000, respectively. Internal engine transfers are valued at prices comparable to those for unrelated parties. |
|
Page 19 |
Operating Profit | |||||||||
Six Months Ended | |||||||||
June 30, | June 30, | ||||||||
Machinery | $ | 539 | $ | 610 | |||||
Engines | 176 | 324 | |||||||
$ | 715 | $ | 934 | ||||||
Caterpillar operations are highly integrated; therefore, the company uses a number of allocations to determine lines of business operating profit. |
|
Page 20 |
|
Page 21 |
Reconciliation of Machinery and Engine Sales by Geographic Region to | |||||||||||
| (unaudited) | ||||||||||
Three months ended | Six months ended | ||||||||||
June 30, | June 30, | June 30, | June 30, | ||||||||
North American Geographic Region | $ | 2,948 | $ | 2,944 | $ | 5,465 | $ | 5,671 | |||
Engine sales included in the Power Products segment | (922) | (999) | (1,766) | (1,972) | |||||||
Company owned dealer sales included in the All Other segment | (139) | (85) | (229) | (158) | |||||||
Certain governmental sales included in the All Other segment | (53) | (47) | (92) | (75) | |||||||
Other* | (64) | (47) | (122) | (125) | |||||||
North American Marketing external sales | $ | 1,770 | $ | 1,766 | $ | 3,256 | $ | 3,341 | |||
EAME Geographic Region | $ | 1,299 | $ | 1,274 | $ | 2,513 | $ | 2,443 | |||
Power Products sales not included in the EAME Marketing segment | (318) | (298) | (550) | (579) | |||||||
Other* | (120) | (95) | (252) | (181) | |||||||
EAME Marketing external sales | $ | 861 | $ | 881 | $ | 1,711 | $ | 1,683 | |||
Latin America Geographic Region | $ | 370 | $ | 344 | $ | 677 | $ | 628 | |||
Power Products sales not included in the Latin America Marketing segment | (35) | (30) | (72) | (69) | |||||||
Other* | 35 | 15 | 58 | 45 | |||||||
Latin America Marketing external sales | $ | 370 | $ | 329 | $ | 663 | $ | 604 | |||
Asia Pacific Geographic Region | $ | 515 | $ | 494 | $ | 938 | $ | 939 | |||
Power Products sales not included in the Asia/Pacific Marketing segment | (86) | (81) | (136) | (132) | |||||||
Other* | (73) | (59) | (127) | (110) | |||||||
Asia Pacific Marketing external sales | $ | 356 | $ | 354 | $ | 675 | $ | 697 | |||
|
Page 22 |
|
Page 24 |
Item 6. Exhibits and Reports on Form 8-K | ||
(b) | Reports on Form 8-K, dated April 11, April 17 (3), April 23, May 9, May 16, and June 13 were filed during the quarter ending June 30, 2001, pursuant to Item 5 of that form. Additional reports on Form 8-K were filed on July 17 (2) and July 23, 2001 pursuant to Item 5. No financial statements were filed as part of those reports. |
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. | |||
August 9, 2001 | /s/ F. Lynn McPheeters | Vice President and Chief Financial Officer | |
August 9, 2001 | /s/ R. Rennie Atterbury III | Secretary | |
|
Page 25 |