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2016 2015 Change Change
Operating Profit $168 $227 ($59) (26) %
Financial Products' revenues were $743 million in the first quarter of 2016, a
decrease of $52 million, or 7 percent, from the first quarter of 2015. The
decline was primarily due to lower average earning assets and lower average
financing rates. Average earning assets were down in Asia/Pacific, Latin
America and EAME, partially offset by higher average earning assets in North
America. Average financing rates decreased across all regions.
Financial Products' profit was $168 million in the first quarter of 2016,
compared with $227 million in the first quarter of 2015. The decrease was
primarily due to a $17 million decrease in net yield on average earning assets
reflecting geographic mix changes and currency impacts, an $11 million increase
in the provision for credit losses at Cat Financial and a $10 million
unfavorable impact from lower average earning assets.
At the end of the first quarter of 2016, past dues at Cat Financial were 2.78
percent, compared with 3.08 percent at the end of the first quarter of 2015 and
2.14 percent at the end of 2015. There is some seasonality in past due
percentages and it is common to see an increase in the first quarter.
Write-offs, net of recoveries, were $31 million for the first quarter of 2016,
compared with $12 million for the first quarter of 2015. The increase in
write-offs, net of recoveries, was primarily driven by Caterpillar Power
Finance and North American portfolios.
As of March 31, 2016, Cat Financial's allowance for credit losses totaled $340
million, or 1.21 percent of net finance receivables, compared with $392
million, or 1.38 percent of net finance receivables at March 31, 2015. The
allowance for credit losses at year-end 2015 was $338 million, or 1.22 percent
of net finance receivables.
Corporate Items and Eliminations
Expense for corporate items and eliminations was $358 million in the first
quarter of 2016, an increase of $42 million from the first quarter of 2015.
Corporate items and eliminations include: corporate-level expenses;
restructuring costs; timing differences, as some expenses are reported in
segment profit on a cash basis; retirement benefit costs other than service
cost; currency differences for ME&T, as segment profit is reported using annual
fixed exchange rates; cost of sales methodology differences as segments use a
current cost methodology; and inter-segment eliminations.
The increase in expense from the first quarter of 2015 was primarily due to a
$126 million increase in restructuring costs, partially offset by lower
stock-based compensation expense and methodology differences.
2016 OUTLOOK
We have seen recent increases in commodity prices, some signs of improvement in
construction equipment in China and better order activity than we expected at
bauma, the world's leading trade fair for many of the industries we serve.
While we are seeing a few positive signals, other parts of our business remain
challenged. As a result, we have lowered the midpoint of the outlook for 2016
sales and revenues about 2 percent.
Sales and revenues in 2016 are expected to be in a range of $40 to $42 billion
with a midpoint of $41 billion. The previous outlook was a range of $40 to $44
billion with a midpoint of $42 billion. The decline in the midpoint of the
sales and revenues outlook range is a result of several factors that, while not
individually large in the context of the outlook, collectively add up to about
$1 billion. Those factors include lower transportation sales (rail, marine and
the ending of production of on-highway vocational trucks), lower mining sales
and weaker price realization than previously expected.
The profit outlook at the midpoint of the sales and revenues range is now $3.00
per share, or $3.70 per share excluding restructuring costs. The previous
profit outlook was $3.50 per share, or $4.00 per share excluding restructuring
costs at the midpoint of the previous sales and revenues outlook. The expected
decline in sales and revenues and an increase in expected restructuring costs
are the primary reasons for the decline in the profit outlook.
Restructuring costs are now expected to be about $550 million in 2016, up $150
million from the previous outlook. The decision to end production of
on-highway vocational trucks is the primary reason for the increase in
restructuring costs.
2016 REPORTING CHANGES
We made several reporting changes effective January 1, 2016. Our 2015
financial information has been recast to be consistent with the 2016
presentation.
Pension and OPEB Costs
Effective January 1, 2016, we changed our accounting principle for recognizing
actuarial gains and losses and expected returns on assets for our pension and
OPEB plans. Gains and losses historically recognized as a component of equity
and amortized to earnings in future periods will be recognized in earnings in
the period in which they occur. In addition, we changed our policy for
recognizing expected returns on plan assets from a market-related value method
(based on a three-year smoothing of asset returns) to a fair value method.
Under the new principle, we will immediately recognize actuarial gains and
losses as a mark-to-market gain or loss through earnings upon the annual
remeasurement in the fourth quarter, or on an interim basis as triggering
events warrant remeasurement.
The change in accounting principle has no impact on future pension or OPEB
funding or benefits paid to plan participants.
The impact of the change in accounting principle on our 2015 Results of
Operations is presented on page 15. Actuarial losses (mark-to-market
adjustments) for 2015 are shown separately from the other impacts of the
change, which are primarily reversals of actuarial losses that had been
amortized to earnings under the prior accounting principle.
Segment Reporting
Effective January 1, 2016, we made the following changes that impacted our
segment reporting. These changes were made to reflect changes in
organizational accountabilities and refinements to our internal reporting.
* Responsibility for remanufacturing of Cat engines and components and
responsibility for on-highway vocational trucks moved from the All Other
segments to Energy & Transportation.
* Responsibility for forestry and paving products moved from All Other
segments to Construction Industries.
* Responsibility for industrial and waste products moved from All Other
segments to Resource Industries.
* Internal charges for component manufacturing and logistics services
provided by All Other segments to Construction Industries, Resource
Industries and Energy & Transportation in excess of cost have been adjusted
to approximate actual cost, resulting in a reduction in profit in the All
Other segments and corresponding increases in profit in the other three
segments.
* Costs that previously had been included in ME&T Corporate Items, primarily
for company-wide strategies such as information technology and
manufacturing process transformation, have been included in the ME&T
segments that benefit from the costs.
The impacts of both the pension and OPEB and segment reporting changes on our
2015 quarterly operating profit are presented on page 16. The pension and OPEB
change is reported in ME&T Corporate Items and had no impact on segment
results.
Impact of Pension and OPEB Accounting Principle Change on Consolidated
Statement of Results of Operations
Twelve Months Ended December 31, 2015
(Unaudited)
(Dollars in millions except per share data)
Effect of Accounting Change
Previously 2015 Other Recast
Reported Actuarial
Losses
Sales and revenues:
Sales of Machinery, Energy & $ 44,147 $ - $ - $ 44,147
Transportation
Revenues of Financial Products 2,864 - - 2,864
Total sales and revenues 47,011 - - 47,011
Operating costs:
Cost of goods sold 33,742 122 (318) 33,546
Selling, general and 5,199 18 (266) 4,951
administrative expenses
Research and development expenses 2,165 39 (85) 2,119
Interest expense of Financial 587 - - 587
Products
Other operating (income) expenses 2,062 - (39) 2,023
Total operating costs 43,755 179 (708) 43,226
Operating profit 3,256 (179) 708 3,785
Interest expense excluding 507 - - 507
Financial Products
Other income (expense) 106 - 55 161
Consolidated profit before taxes 2,855 (179) 763 3,439
Provision (benefit) for income 742 (66) 240 916
taxes
Profit of consolidated companies 2,113 (113) 523 2,523
Equity in profit (loss) of - - - -
unconsolidated affiliated
companies
Profit of consolidated and 2,113 (113) 523 2,523
affiliated companies
Less: Profit (loss) attributable 11 - - 11
to noncontrolling interests
Profit 1 $ 2,102 $ (113) $ 523 $ 2,512
Profit per common share $ 3.54 $ 4.23
Profit per common share - diluted 2 $ 3.50 $ 4.18
1 Profit attributable to common stockholders.
2 Diluted by assumed exercise of stock-based compensation awards using the
treasury stock method.
2015 Recast Sales and Revenues by Segment
(Millions of First Second Third Fourth Full Year
dollars) Quarter Quarter Quarter Quarter 2015
Construction $ 5,014 $ 4,803 $ 4,075 $ 3,905 $ 17,797
Industries¹
Resource 1,971 2,048 1,842 1,878 7,739
Industries²
Energy & 4,915 4,708 4,352 4,544 18,519
Transportation
³
All Other 72 55 39 37 203
Segments?
Corporate (11) (31) (23) (46) (111)
Items and
Eliminations
Machinery, $ 11,961 $ 11,583 $ 10,285 $ 10,318 $ 44,147
Energy &
Transportation
Financial 795 785 752 746 3,078
Products
Segment
Corporate (54) (51) (75) (34) (214)
Items and
Eliminations
Financial $ 741 $ 734 $ 677 $ 712 $ 2,864
Products
Consolidated $ 12,702 $ 12,317 $ 10,962 $ 11,030 $ 47,011
Sales and
Revenues
1 Does not $ 23 $ 26 $ 17 $ 43 $ 109
include
inter-segment
sales
2 Does not 87 75 88 82 332
include
inter-segment
sales
3 Does not 794 766 702 615 2,877
include
inter-segment
sales
4 Does not 103 100 88 99 390
include
inter-segment
sales
2015 Recast Operating Profit (Loss) by Segment
(Millions of First Second Third Fourth Full Year
dollars) Quarter Quarter Quarter Quarter 2015
Construction $ 745 $ 588 $ 354 $ 178 $ 1,865
Industries
Resource 96 27 (42) (80) 1
Industries
Energy & 1,024 942 683 741 3,390
Transportation
All Other (7) (18) (11) (39) (75)
Segments
Corporate (319) (322) (182) (1,088) (1,911)
Items and
Eliminations
Machinery, $ 1,539 $ 1,217 $ 802 $ (288) $ 3,270
Energy &
Transportation
Financial 227 184 207 191 809
Products
Segment
Corporate 3 (1) (22) (15) (35)
Items and
Eliminations
Financial $ 230 $ 183 $ 185 $ 176 $ 774
Products
Consolidating (67) (67) (62) (63) (259)
Adjustments
Consolidated $ 1,702 $ 1,333 $ 925 $ (175) $ 3,785
Operating
Profit (Loss)
QUESTIONS AND ANSWERS
Q1: Your 2015 profit changed from what you reported last year. Can you please
explain the change?
A: Effective January 1, 2016, we changed how we account for pension and OPEB
costs. Under the new accounting principle, we will recognize actuarial
gains and losses as a mark-to-market gain or loss when they occur rather
than amortizing them to earnings over time. The presentation of 2015
results has been recast to be consistent with the new method. The change
resulted in an increase to 2015 pre-tax profit of $584 million or $0.68 per
share. This is an accounting principle change only and has no impact on
future pension or OPEB funding or benefits paid to plan participants.
Below is the impact on 2015 profit per share.
First Quarter 2015 Full Year 2015
Previously Previously
Reported Recast Reported Recast
Profit Per Share $1.81 $2.03 $3.50 $4.18
2015 Actuarial Losses (MTM) $0.19
Restructuring Costs $0.05 $0.04 $1.14 $1.10
Profit Per Share - Excluding $1.86 $2.07 $4.64 $5.47
Restructuring Costs and MTM
Q2: Can you update us on the progress of the restructuring actions announced on
September 24, 2015?
A: Since September 30, 2015, our global workforce is down approximately 8,600,
which is a combination of restructuring actions and production
volume-related actions. Restructuring has resulted in the elimination of
approximately 5,300 positions since the September 24 announcement through
the first quarter of 2016. We are delivering significant cost reduction as
a result of these actions. We continue to contemplate facility
consolidations and closures in order to right size our capacity needs.
Since the September 24 announcement, we've announced the closure or
consolidation of about 15 facilities.
Q3: What caused the price deterioration in the first quarter, especially in
Construction Industries? What do you expect for the balance of the year?
A: We continue to see competitive pressure that started in the last half of
2015 driven by excess industry capacity, unfavorable currency pressure and
an overall weak economic environment. We expect the current competitive
pressure to continue for the remainder of the year, although it is expected
most of the year-over-year weakness will occur in the first half of 2016,
as price realization was more negative in the second half of 2015 compared
to the first half.
Q4: Oil prices have improved from the beginning of 2016. How does this affect
your thinking about shipments of reciprocating engines and turbines to this
important end market for 2016?
A: While oil prices have improved since the beginning of 2016, it is not clear
at this time that the current price level is either sustainable or
sufficient to drive increased demand for equipment. We monitor a number of
factors in addition to oil prices that shape our outlook, including recent
order rates, quotation activity, our current backlog, trends in retail
statistics and discussions with our customers. Based on all of these
factors, we do not see the current oil price driving a turnaround in demand
for our products in 2016.
Q5: Can you discuss changes in dealer inventories in the first quarter of 2016?
A: Dealers generally increase inventories in the first quarter in preparation
for the spring selling season. Dealer machine and engine inventories
increased about $300 million in the first quarter of 2016, compared with an
increase of about $900 million in the first quarter of 2015.
Q6: Can you comment on your order backlog by segment?
A: At the end of the first quarter of 2016, the order backlog was $13.1
billion, about the same in total and by segment as the end of 2015.
Compared to the first quarter of 2015, the order backlog declined about
$3.5 billion with decreases in all segments.
Q7: Can you comment on expense related to your 2016 short-term incentive
compensation plans?
A: Short-term incentive compensation expense is directly related to financial
and operational performance, measured against targets set annually.
First-quarter 2016 expense was about $120 million. First-quarter 2015
expense was about $215 million.
For 2016, our outlook includes short-term incentive compensation expense of
about $480 million.
Q8: Can you give us an update on how Cat Financial is performing?
A: Cat Financial's portfolio continues to perform well overall despite ongoing
weakness in many key end markets. The first quarter of 2016 past dues were
2.78 percent, compared with 3.08 percent in the first quarter of 2015, with
current past dues remaining lower than historical averages for the first
quarter. Write-offs in the first quarter of 2016 were $31 million, or 0.47
percent of the average retail portfolio. Although an increase from $12
million in the first quarter of 2015, write-offs were only slightly above
historical averages for the first quarter. We believe customer risk
exposure is well managed, with broad distribution of portfolio exposure
across a global customer base. Cat Financial continues to work closely
with its customers to provide financing support for new Caterpillar product
purchases and to actively monitor global portfolio health.
Q9: Can you comment on your balance sheet and cash priorities?
A: The ME&T debt-to-capital ratio was 37.7 percent, improved from 39.0 percent
at the end of 2015. Our cash and liquidity positions remain strong with an
enterprise cash balance of $5.886 billion as of March 31, 2016. ME&T
operating cash flow for the first quarter of 2016 was $218 million compared
with $1.042 billion in the first quarter of 2015. The decline was
primarily due to lower profit.
While our long-term priorities for cash deployment are unchanged, we are
very focused on the continuing strength of our balance sheet to maintain
our credit rating and the dividend.
GLOSSARY OF TERMS
1. All Other Segments - Primarily includes activities such as: the business
strategy, product management, development, and manufacturing of filters and
fluids, undercarriage, tires and rims, ground engaging tools, fluid
transfer products, precision seals and rubber, and sealing and connecting
components primarily for Cat products; parts distribution; distribution
services responsible for dealer development and administration including a
wholly owned dealer in Japan, dealer portfolio management and ensuring the
most efficient and effective distribution of machines, engines and parts;
digital investments for new customer and dealer solutions that integrate
data analytics with state-of-the art digital technologies while
transforming the buying experience.
2. Consolidating Adjustments - Elimination of transactions between Machinery,
Energy & Transportation and Financial Products.
3. Construction Industries - A segment primarily responsible for supporting
customers using machinery in infrastructure, forestry and building
construction applications. Responsibilities include business strategy,
product design, product management and development, manufacturing,
marketing and sales and product support. The product portfolio includes
backhoe loaders, small wheel loaders, small track-type tractors, skid steer
loaders, multi-terrain loaders, mini excavators, compact wheel loaders,
telehandlers, select work tools, small, medium and large track excavators,
wheel excavators, medium wheel loaders, compact track loaders, medium
track-type tractors, track-type loaders, motor graders, pipelayers,
forestry and paving products.
4. 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 impact on sales and operating profit for the
Machinery, Energy & Transportation lines of business only; currency impacts
on Financial Products' revenues and operating profit are included in the
Financial Products' portions of the respective analyses. With respect to
other income/expense, currency represents the effects of forward and option
contracts entered into by the company to reduce the risk of fluctuations in
exchange rates (hedging) and the net effect of changes in foreign currency
exchange rates on our foreign currency assets and liabilities for
consolidated results (translation).
5. Debt-to-Capital Ratio - A key measure of Machinery, Energy &
Transportation's financial strength used by management. The metric is
defined as Machinery, Energy & Transportation's short-term borrowings,
long-term debt due within one year and long-term debt due after one year
(debt) divided by the sum of Machinery, Energy & Transportation's debt and
stockholders' equity. Debt also includes Machinery, Energy &
Transportation's long-term borrowings from Financial Products.
6. EAME - A geographic region including Europe, Africa, the Middle East and
the Commonwealth of Independent States (CIS).
7. Earning Assets - Assets consisting primarily of total finance receivables
net of unearned income, plus equipment on operating leases, less
accumulated depreciation at Cat Financial.
8. Energy & Transportation - A segment primarily responsible for supporting
customers using reciprocating engines, turbines, diesel-electric
locomotives and related parts across industries serving power generation,
industrial, oil and gas and transportation applications, including marine
and rail-related businesses. Responsibilities include business strategy,
product design, product management and development, manufacturing,
marketing and sales and product support of turbines and turbine-related
services, reciprocating engine powered generator sets, integrated systems
used in the electric power generation industry, reciprocating engines and
integrated systems and solutions for the marine and oil and gas industries;
reciprocating engines supplied to the industrial industry as well as Cat
machinery; the remanufacturing of Cat® engines and components and
remanufacturing services for other companies; the business strategy,
product design, product management and development, manufacturing,
remanufacturing, leasing and service of diesel-electric locomotives and
components and other rail-related products and services and product support
of on-highway vocational trucks for North America.
9. Financial Products Segment - Provides financing to customers and dealers
for the purchase and lease of Cat and other equipment, as well as some
financing for Caterpillar sales to dealers. Financing plans include
operating and finance leases, installment sale contracts, working capital
loans and wholesale financing plans. The segment also provides various
forms of insurance to customers and dealers to help support the purchase
and lease of our equipment. Financial Products Segment profit is
determined on a pretax basis and includes other income/expense items.
10. Latin America - A geographic region including Central and South American
countries and Mexico.
11. Lean Management - A holistic management system that uses a sequential
cadence of principles to drive the highest quality and lowest total cost to
achieve customer requirements.
12. Machinery, Energy & Transportation (ME&T) - Represents the aggregate total
of Construction Industries, Resource Industries, Energy & Transportation
and All Other Segments and related corporate items and eliminations.
13. Machinery, Energy & Transportation Other Operating (Income) Expenses
- Comprised primarily of gains/losses on disposal of long-lived assets,
gains/losses on divestitures and legal settlements and accruals.
Restructuring costs classified as other operating expenses on the Results
of Operations are presented separately on the Operating Profit Comparison.
14. Pension and other postemployment benefit (OPEB) costs - Costs for the
company's defined benefit pension and postretirement benefit plans.
15. Period Costs - Includes period manufacturing costs, selling, general and
administrative (SG&A) and research and development (R&D) expenses excluding
the impact of currency. Period manufacturing costs support production but
are defined as generally not having a direct relationship to short-term
changes in volume. Examples include machinery and equipment repair,
depreciation on manufacturing assets, facility support, procurement,
factory scheduling, manufacturing planning and operations management. SG&A
and R&D costs are not linked to the production of goods or services and
include marketing, legal and financial services and the development of new
and significant improvements in products or processes.
16. Price Realization - The impact of net price changes excluding currency and
new product introductions. Price realization includes geographic mix of
sales, which is the impact of changes in the relative weighting of sales
prices between geographic regions.
17. Resource Industries - A segment primarily responsible for supporting
customers using machinery in mining, quarry, waste, and material handling
applications. Responsibilities include business strategy, product design,
product management and development, manufacturing, marketing and sales and
product support. The product portfolio includes large track-type tractors,
large mining trucks, hard rock vehicles, longwall miners, electric rope
shovels, draglines, hydraulic shovels, track and rotary drills, highwall
miners, large wheel loaders, off-highway trucks, articulated trucks, wheel
tractor scrapers, wheel dozers, landfill compactors, soil compactors,
material handlers, continuous miners, scoops and haulers, hardrock
continuous mining systems, select work tools, machinery components and
electronics and control systems. Resource Industries also manages areas
that provide services to other parts of the company, including integrated
manufacturing and research and development.
18. Restructuring Costs - Primarily costs for employee separation costs,
long-lived asset impairments and contract terminations. These costs are
included in Other Operating (Income) Expenses. Restructuring costs also
include other exit-related costs primarily for accelerated depreciation and
equipment relocation (primarily included in Cost of goods sold) and sales
discounts and payments to dealers and customers related to discontinued
products (included in Sales of ME&T).
19. Sales Volume - With respect to sales and revenues, sales volume represents
the impact of changes in the quantities sold for Machinery, Energy &
Transportation as well as the incremental revenue impact of new product
introductions, including emissions-related product updates. With respect
to operating profit, sales volume represents the impact of changes in the
quantities sold for Machinery, Energy & Transportation combined with
product mix as well as the net operating profit impact of new product
introductions, including emissions-related product updates. Product mix
represents the net operating profit impact of changes in the relative
weighting of Machinery, Energy & Transportation sales with respect to total
sales.
20. Variable Manufacturing Costs - Represents volume-adjusted costs excluding
the impact of currency. 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.
NON-GAAP FINANCIAL MEASURES
The following definition is provided for "non-GAAP financial measures" in
connection with Regulation G issued by the Securities and Exchange Commission.
The non-GAAP financial measures we use have no standardized meaning prescribed
by U.S. GAAP and therefore are unlikely to be comparable to the calculation of
similar measures for other companies. Management does not intend these items
to be considered in isolation or substituted for the related GAAP
measure.
Profit Per Share Excluding Restructuring Costs and Mark-to-Market Losses
We incurred significant restructuring costs in 2015 and expect to incur
additional restructuring costs in 2016. We believe it is important to
separately quantify the profit per share impact of restructuring costs in order
for our 2016 results and the 2016 outlook to be meaningful to our readers. We
have also provided 2015 profit per share excluding restructuring costs
comparable to the 2016 presentation. In addition, we believe it is important
to separately quantify the per share impact of the pension and OPEB
mark-to-market losses resulting from plan remeasurements for our 2015 results
to be meaningful. We have provided recast 2015 results comparable to the 2016
presentation. Reconciliations of profit per share excluding restructuring
costs and mark-to-market losses (2015 only) to the most directly comparable
GAAP measure, diluted profit per share, are as follows:
First Quarter 2016 Outlook
2015 2016 Original 1 Current 2
Profit (Loss) per share $2.03 $0.46 $3.50 $3.00
Per share restructuring costs 3 $0.04 $0.21 $0.50 $0.70
Profit per share excluding $2.07 $0.67 $4.00 $3.70
restructuring costs
First Quarter 2015 Full Year 2015
Previously Recast Previously Recast
Reported Reported
Profit (Loss) per share $1.81 $2.03 $3.50 $4.18
Per share mark-to-market losses - - - $0.19
Per share restructuring costs 3 $0.05 $0.04 $1.14 $1.10
Profit per share excluding $1.86 $2.07 $4.64 $5.47
restructuring costs and
mark-to-market losses
1 2016 Sales and Revenues Outlook in a range of $40-44 billion (as of January
28, 2016). Profit per share at midpoint.
2 2016 Sales and Revenues Outlook in a range of $40-42 billion (as of April 22,
2016). Profit per share at midpoint.
1-2 2016 Outlook does not include any impact from mark-to-market gains or
losses resulting from pension and OPEB plan remeasurements.
3At effective tax rate excluding discrete items
Machinery, Energy & Transportation
Caterpillar defines Machinery, Energy & Transportation as it is presented in
the supplemental data as Caterpillar Inc. and its subsidiaries with Financial
Products accounted for on the equity basis. Machinery, Energy & Transportation
information relates to the design, manufacture and marketing of our products.
Financial Products' information relates to the financing to customers and
dealers for the purchase and lease of Caterpillar and other equipment. The
nature of these businesses is different, especially with regard to the
financial position and cash flow items. Caterpillar management utilizes this
presentation internally to highlight these differences. We also believe this
presentation will assist readers in understanding our business. Pages 22-28
reconcile Machinery, Energy & Transportation with Financial Products on the
equity basis to Caterpillar Inc. consolidated financial information.
Caterpillar's latest financial results and outlook are also available via:
Telephone: 800-228-7717 (Inside the United States and Canada)
858-764-9492 (Outside the United States and Canada)
Internet:
www.caterpillar.com/en/investors.html
www.caterpillar.com/en/investors/quarterly-results.html (live
broadcast/replays of quarterly conference call)
Caterpillar Inc.
Condensed Consolidated Statement of Results of Operations
(Unaudited)
(Dollars in millions except per share data)
Three Months Ended
March 31,
2016 2015
Sales and revenues:
Sales of Machinery, Energy & Transportation $ 8,780 $ 11,961
Revenues of Financial Products 681 741
Total sales and revenues 9,461 12,702
Operating costs:
Cost of goods sold 6,822 8,760
Selling, general and administrative expenses 1,088 1,249
Research and development expenses 508 524
Interest expense of Financial Products 152 150
Other operating (income) expenses 397 317
Total operating costs 8,967 11,000
Operating profit 494 1,702
Interest expense excluding Financial Products 129 129
Other income (expense) - 194
Consolidated profit before taxes 365 1,767
Provision (benefit) for income taxes 92 521
Profit of consolidated companies 273 1,246
Equity in profit (loss) of unconsolidated (1) 2
affiliated companies
Profit of consolidated and affiliated companies 272 1,248
Less: Profit (loss) attributable to noncontrolling 1 3
interests
Profit 1 $ 271 $ 1,245
Profit per common share $ 0.46 $ 2.06
Profit per common share - diluted 2 $
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