Caterpillar Inc
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Industrials : Machinery | Large Cap Blend
Company profile

Caterpillar Inc. is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The Company operates through segments, including Construction Industries, which is engaged in supporting customers using machinery in infrastructure, forestry and building construction; Resource Industries, which is engaged in supporting customers using machinery in mining, heavy construction, quarry, waste and material handling applications; Energy & Transportation, which supports customers in oil and gas, power generation, marine, rail and industrial applications, including Cat machines; Financial Products segment, which provides financing and related services, and All Other operating segments, which includes activities, such as product management and development, and manufacturing of filters and fluids, undercarriage, ground engaging tools, fluid transfer products, and sealing and connecting components for Cat products.

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Caterpillar Reports Third-Quarter 2021 Results

6:30 am ET October 28, 2021 (PR Newswire) Print

-- Third-quarter 2021 sales and revenues increased 25% to $12.4 billion

-- Third-quarter 2021 profit per share of $2.60; adjusted profit per share of $2.66

-- Strong balance sheet; returned $2.0 billion to shareholders through dividends and share repurchases in the quarter

                                         Third Quarter
($ in billions except profit per share)  2021   2020
Sales and Revenues                       $12.4  $9.9
Profit Per Share                         $2.60  $1.22
Adjusted Profit Per Share                $2.66  $1.52

Caterpillar Inc. (NYSE: CAT) today announced third-quarter 2021 sales and revenues of $12.4 billion, a 25% increase compared with $9.9 billion in the third quarter of 2020. The increase was primarily due to higher sales volume, driven by higher end-user demand for equipment and services, and favorable price realization.

Operating profit margin was 13.4% for the third quarter of 2021, compared with 10.0% for the third quarter of 2020. Third-quarter 2021 profit per share was $2.60, compared with third-quarter 2020 profit per share of $1.22. Adjusted profit per share in the third quarter of 2021 was $2.66, compared with third-quarter 2020 adjusted profit per share of $1.52. Third-quarter 2021 adjusted profit per share of $2.66 reflected strong operational performance and a lower-than-expected effective tax rate. Adjusted profit per share for both quarters excluded restructuring costs, while the third quarter of 2020 also excluded remeasurement losses of $0.12 per share, resulting from the settlements of pension obligations. Please see a reconciliation of GAAP to non-GAAP financial measures in the appendix on page 13.

For the nine months ended September 30, 2021, enterprise operating cash flow was $5.8 billion and the company ended the third quarter with $9.4 billion of enterprise cash. In the quarter, the company repurchased $1.4 billion of Caterpillar common stock and paid dividends of $0.6 billion.

"Our global team continues to execute our long-term strategy for profitable growth while working to mitigate supply chain challenges as we serve our customers," said Chairman and CEO Jim Umpleby. "Our third-quarter results reflect higher sales and revenues across our three primary segments and in all regions."

CONSOLIDATED RESULTS

Consolidated Sales and Revenues

Consolidated Sales and Revenues Comparison Third Quarter 2021 vs. Third Quarter 2020

To access this chart, go to https://investors.caterpillar.com/financials/quarterly-results/default.aspx for the downloadable version of Caterpillar third-quarter 2021 earnings.

The chart above graphically illustrates reasons for the change in consolidated sales and revenues between the third quarter of 2020 (at left) and the third quarter of 2021 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company's Board of Directors and employees.

Total sales and revenues for the third quarter of 2021 were $12.397 billion, an increase of $2.516 billion, or 25%, compared with $9.881 billion in the third quarter of 2020. The increase was primarily due to higher sales volume driven by higher end-user demand for equipment and services and the impact from changes in dealer inventories, along with favorable price realization. Dealers decreased inventories by $600 million during the third quarter of 2020, compared with a decrease of $300 million during the third quarter of 2021.

Sales were higher across the three primary segments.

Sales and Revenues by Segment
(Millions of dollars)              Third      Sales      Price        Currency Inter-     Third        $          %
                                   Quarter    Volume     Realization           Segment /  Quarter      Change     Change
                                   2020                                        Other      2021
Construction Industries            $  4,056   $  957     $   218      $  38    $   (14)   $   5,255    $  1,199   30%
Resource Industries                1,816      522        43           22       3          2,406        590        32%
Energy & Transportation            4,161      628        (6)          44       250        5,077        916        22%
All Other Segment                  106        10         (1)          1        3          119          13         12%
Corporate Items and Eliminations   (911)      1          2            --       (242)      (1,150)      (239)
Machinery, Energy & Transportation 9,228      2,118      256          105      --         11,707       2,479      27%
Financial Products Segment         724        --         --           --       38         762          38         5%
Corporate Items and Eliminations   (71)       --         --           --       (1)        (72)         (1)
Financial Products Revenues        653        --         --           --       37         690          37         6%
Consolidated Sales and Revenues    $  9,881   $  2,118   $   256      $  105   $   37     $   12,397   $  2,516   25%
Sales and Revenues by Geographic Region
                                   North America     Latin America      EAME              Asia/Pacific      External Sales      Inter-Segment     Total Sales
                                                                                                            and Revenues                          and Revenues
(Millions of dollars)              $          % Chg  $          % Chg   $          % Chg  $          % Chg  $            % Chg  $         % Chg   $            % Chg
Third Quarter 2021
Construction Industries            $  2,417   36%    $  528     130%    $  1,240   56%    $  1,076   (13%)  $   5,261    30%    $   (6)   (175%)  $   5,255    30%
Resource Industries                674        38%    417        55%     456        19%    744        32%    2,291        34%    115       3%      2,406        32%
Energy & Transportation            1,924      21%    329        49%     1,144      3%     744        34%    4,141        19%    936       36%     5,077        22%
All Other Segment                  18         80%    --         (100%)  3          200%   14         8%     35           40%    84        4%      119          12%
Corporate Items and Eliminations   (19)              --                 --                (2)               (21)                (1,129)           (1,150)
Machinery, Energy & Transportation 5,014      31%    1,274      77%     2,843      24%    2,576      8%     11,707       27%    --        --%     11,707       27%
Financial Products Segment         478        7%     68         8%      105        5%     111        (2%)   762          5%     --        --%     762          5%
Corporate Items and Eliminations   (37)              (13)               (9)               (13)              (72)                --                (72)
Financial Products Revenues        441        7%     55         4%      96         7%     98         (1%)   690          6%     --        --%     690          6%
Consolidated Sales and Revenues    $  5,455   28%    $  1,329   72%     $  2,939   23%    $  2,674   8%     $   12,397   25%    $   --    --%     $   12,397   25%
Third Quarter 2020
Construction Industries            $  1,781          $  230             $  796            $  1,241          $   4,048           $   8             $   4,056
Resource Industries                487               269                384               564               1,704               112               1,816
Energy & Transportation            1,584             221                1,113             557               3,475               686               4,161
All Other Segment                  10                1                  1                 13                25                  81                106
Corporate Items and Eliminations   (22)              (2)                --                --                (24)                (887)             (911)
Machinery, Energy & Transportation 3,840             719                2,294             2,375             9,228               --                9,228
Financial Products Segment         448               63                 100               113               724                 --                724
Corporate Items and Eliminations   (37)              (10)               (10)              (14)              (71)                --                (71)
Financial Products Revenues        411               53                 90                99                653                 --                653
Consolidated Sales and Revenues    $  4,251          $  772             $  2,384          $  2,474          $   9,881           $   --            $   9,881

Consolidated Operating Profit

Consolidated Operating Profit Comparison Third Quarter 2021 vs. Third Quarter 2020

To access this chart, go to https://investors.caterpillar.com/financials/quarterly-results/default.aspx for the downloadable version of Caterpillar third-quarter 2021 earnings.

The chart above graphically illustrates reasons for the change in consolidated operating profit between the third quarter of 2020 (at left) and the third quarter of 2021 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company's Board of Directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation's other operating (income) expenses.

Operating profit for the third quarter of 2021 was $1.664 billion, an increase of $679 million, or 69%, compared with $985 million in the third quarter of 2020. The increase was primarily due to higher sales volume and favorable price realization, partially offset by higher selling, general and administrative (SG&A) and research and development (R&D) expenses as well as higher manufacturing costs.

Unfavorable manufacturing costs reflected higher variable labor and burden, primarily freight, and higher period manufacturing and material costs, partially offset by favorable cost absorption and lower warranty expense. Cost absorption was favorable as inventory increased during the third quarter of 2021.

The increase in both SG&A/R&D expenses and period manufacturing costs was mainly driven by higher short-term incentive compensation expense, which was reinstated in 2021, and investments aligned with the company's strategy for profitable growth, including acquisition-related expenses.

Profit (Loss) by Segment
(Millions of dollars)              Third Quarter  Third Quarter  $        %
                                   2021           2020           Change   Change
Construction Industries            $    859       $    585       $  274   47%
Resource Industries                297            167            130      78%
Energy & Transportation            696            492            204      41%
All Other Segment                  5              27             (22)     (81%)
Corporate Items and Eliminations   (286)          (346)          60
Machinery, Energy & Transportation 1,571          925            646      70%
Financial Products Segment         173            142            31       22%
Corporate Items and Eliminations   (7)            (15)           8
Financial Products                 166            127            39       31%
Consolidating Adjustments          (73)           (67)           (6)
Consolidated Operating Profit      $    1,664     $    985       $  679   69%

Other Profit/Loss and Tax Items

-- Other income (expense) in the third quarter of 2021 was income of $225 million, compared with income of $14 million in the third quarter of 2020. The change was primarily due to favorable impacts from foreign currency exchange gains (losses), the absence of remeasurement losses resulting from the settlements of pension obligations that occurred in the third quarter of 2020 and favorable pension and other postemployment benefit (OPEB) plan costs.

The company experienced foreign currency exchange net gains in the third quarter of 2021, primarily due to the euro, compared with net losses in the third quarter of 2020.

-- The provision for income taxes for the third quarter of 2021 reflected a lower estimated annual tax rate of 25%, compared with 31% for the third quarter of 2020, excluding the discrete items discussed below. The comparative tax rate for full-year 2020 was approximately 28%. The decrease in the estimated annual tax rate from full-year 2020 was primarily related to changes in the expected geographic mix of profits from a tax perspective for 2021.

In the third quarter of 2021, the company recorded a $39 million benefit due to the change from the second-quarter estimated annual tax rate of 26%. In addition, the company recorded discrete tax benefits of $36 million to reflect changes in estimates related to prior year U.S. taxes in the third quarter of 2021 compared to $80 million in the third quarter of 2020. In the third quarter of 2020, a discrete tax benefit of $13 million was recorded for settlement of stock-based compensation awards along with a $12 million tax benefit related to the $77 million of remeasurement losses resulting from the settlements of pension obligations.

CONSTRUCTION INDUSTRIES
(Millions of dollars)
Segment Sales
                       Third Quarter  Sales          Price       Currency  Inter-    Third Quarter  $          %
                       2020           Volume         Realization           Segment   2021           Change     Change
Total Sales            $    4,056     $    957       $   218     $  38     $  (14)   $    5,255     $  1,199   30%
Sales by Geographic Region
                       Third Quarter  Third Quarter  $           %
                       2021           2020           Change      Change
North America          $    2,417     $    1,781     $   636     36%
Latin America          528            230            298         130%
EAME                   1,240          796            444         56%
Asia/Pacific           1,076          1,241          (165)       (13%)
External Sales         5,261          4,048          1,213       30%
Inter-segment          (6)            8              (14)        (175%)
Total Sales            $    5,255     $    4,056     $   1,199   30%
Segment Profit
                       Third Quarter  Third Quarter  Change      %
                       2021           2020                       Change
Segment Profit         $    859       $    585       $   274     47%
Segment Profit Margin  16.3%          14.4%          1.9 pts

Construction Industries' total sales were $5.255 billion in the third quarter of 2021, an increase of $1.199 billion, or 30%, compared with $4.056 billion in the third quarter of 2020. The increase was due to higher sales volume and favorable price realization. The increase in sales volume was driven by higher end-user demand and the impact from changes in dealer inventories. Overall, dealers decreased inventories more during the third quarter of 2020 than during the third quarter of 2021.

-- In North America, sales increased due to higher sales volume and favorable price realization. Higher sales volume was driven by higher end-user demand from improving non-residential construction, as well as continued strength in residential construction and the impact from changes in dealer inventories. Dealers decreased inventories more during the third quarter of 2020 than during the third quarter of 2021.

-- Sales increased in Latin America mostly due to higher sales volume led by the impact of changes in dealer inventories and higher end-user demand across the region. Dealers decreased inventories during the third quarter of 2020, compared with an increase during the third quarter of 2021.

-- In EAME, sales increased due to higher sales volume from the impact of changes in dealer inventories and higher end-user demand. Dealers decreased inventories during the third quarter of 2020, compared with an increase during the third quarter of 2021.

-- Sales decreased in Asia/Pacific mainly due to lower sales volume, reflecting the impact of changes in dealer inventory. Dealers decreased inventories during the third quarter of 2021, compared with an increase during the third quarter of 2020. Lower sales in China, driven by lower end-user demand and impacts of changes in dealer inventory, were partially offset by increased sales across the rest of the region.

Construction Industries' profit was $859 million in the third quarter of 2021, an increase of $274 million, or 47%, compared with $585 million in the third quarter of 2020. The increase was mainly due to higher sales volume and favorable price realization, partially offset by unfavorable manufacturing costs, which largely reflected higher variable labor and burden, primarily freight, and material costs.

RESOURCE INDUSTRIES
(Millions of dollars)
Segment Sales
                       Third Quarter  Sales          Price        Currency  Inter-  Third Quarter  $        %
                       2020           Volume         Realization            Segment 2021           Change   Change
Total Sales            $    1,816     $    522       $   43       $  22     $  3    $    2,406     $  590   32%
Sales by Geographic Region
                       Third Quarter  Third Quarter  $            %
                       2021           2020           Change       Change
North America          $    674       $    487       $   187      38%
Latin America          417            269            148          55%
EAME                   456            384            72           19%
Asia/Pacific           744            564            180          32%
External Sales         2,291          1,704          587          34%
Inter-segment          115            112            3            3%
Total Sales            $    2,406     $    1,816     $   590      32%
Segment Profit
                       Third Quarter  Third Quarter  Change       %
                       2021           2020                        Change
Segment Profit         $    297       $    167       $   130      78%
Segment Profit Margin  12.3%          9.2%           3.1 pts

Resource Industries' total sales were $2.406 billion in the third quarter of 2021, an increase of $590 million, or 32%, compared with $1.816 billion in the third quarter of 2020. The increase was primarily due to higher sales volume driven by higher end-user demand for equipment and aftermarket parts, partially offset by the impacts of changes in dealer inventories. Dealers decreased inventories more during the third quarter of 2021 than during the third quarter of 2020. End-user demand was higher in both mining and heavy construction and quarry and aggregates.

Resource Industries' profit was $297 million in the third quarter of 2021, an increase of $130 million, or 78%, compared with $167 million in the third quarter of 2020. The increase was mainly due to higher sales volume and favorable price realization, partially offset by unfavorable manufacturing costs. Increased manufacturing costs reflected higher variable labor and burden, primarily freight, and material costs.

ENERGY & TRANSPORTATION
(Millions of dollars)
Segment Sales
                       Third Quarter  Sales          Price        Currency  Inter-   Third Quarter  $        %
                       2020           Volume         Realization            Segment  2021           Change   Change
Total Sales            $    4,161     $    628       $   (6)      $  44     $  250   $    5,077     $  916   22%
Sales by Application
                       Third Quarter  Third Quarter  $            %
                       2021           2020           Change       Change
Oil and Gas            $    1,088     $    734       $   354      48%
Power Generation       1,010          1,034          (24)         (2%)
Industrial             948            730            218          30%
Transportation         1,095          977            118          12%
External Sales         4,141          3,475          666          19%
Inter-segment          936            686            250          36%
Total Sales            $    5,077     $    4,161     $   916      22%
Segment Profit
                       Third Quarter  Third Quarter  Change       %
                       2021           2020                        Change
Segment Profit         $    696       $    492       $   204      41%
Segment Profit Margin  13.7%          11.8%          1.9 pts

Energy & Transportation's total sales were $5.077 billion in the third quarter of 2021, an increase of $916 million, or 22%, compared with $4.161 billion in the third quarter of 2020. Sales increased across all applications and inter-segment sales except Power Generation, which decreased slightly.

-- Oil and Gas - Sales increased for reciprocating engines aftermarket parts, primarily in North America, turbines and turbine-related services and reciprocating engines used in gas compression.

-- Power Generation - Sales decreased slightly due to timing of turbines and turbine-related services. Reciprocating engines were about flat compared to the third quarter of 2020, with aftermarket parts slightly higher offset by slightly lower engine sales.

-- Industrial - Sales were up due to higher demand across all regions.

-- Transportation - Sales increased in rail services and marine.

Energy & Transportation's profit was $696 million in the third quarter of 2021, an increase of $204 million, or 41%, compared with $492 million in the third quarter of 2020. The increase was due to higher sales volume, partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses. Increased manufacturing costs were mainly driven by higher variable labor and burden, primarily freight, period manufacturing costs and material, partially offset by the absence of inventory write-downs that occurred in the third quarter of 2020. In addition, segment profit was favorably impacted by other operating income/expense.

Both SG&A/R&D expenses and period manufacturing costs were driven by higher short-term incentive compensation expense and investments aligned with growth initiatives, including acquisition-related expenses.

FINANCIAL PRODUCTS SEGMENT
(Millions of dollars)
Revenues by Geographic Region
                       Third         Third         $       %
                       Quarter 2021  Quarter 2020  Change  Change
North America          $    478      $    448      $  30   7%
Latin America          68            63            5       8%
EAME                   105           100           5       5%
Asia/Pacific           111           113           (2)     (2%)
Total Revenues         $    762      $    724      $  38   5%
Segment Profit
                       Third         Third         Change  %
                       Quarter 2021  Quarter 2020          Change
Segment Profit         $    173      $    142      $  31   22%

Financial Products' segment revenues were $762 million in the third quarter of 2021, an increase of $38 million, or 5%, from the third quarter of 2020.

Financial Products' segment profit was $173 million in the third quarter of 2021, an increase of $31 million, or 22%, compared with $142 million in the third quarter of 2020. The increase was mainly due to a favorable impact from returned or repossessed equipment, lower provision for credit losses at Cat Financial and higher net yield on average earning assets. These favorable impacts were partially offset by an increase in SG&A expenses primarily due to higher short-term incentive compensation expense.

At the end of the third quarter of 2021, past dues at Cat Financial were 2.41%, compared with 3.81% at the end of the third quarter of 2020. Past dues decreased across all portfolio segments as global markets generally improved. Write-offs, net of recoveries, were $76 million for the third quarter of 2021, compared with $125 million for the third quarter of 2020. As of September 30, 2021, Cat Financial's allowance for credit losses totaled $378 million, or 1.41% of finance receivables, compared with $402 million, or 1.46% of finance receivables, at June 30, 2021. The allowance for credit losses at year-end 2020 was $479 million, or 1.77% of finance receivables.

Corporate Items and Eliminations

Expense for corporate items and eliminations was $293 million in the third quarter of 2021, a decrease of $68 million from the third quarter of 2020. Higher corporate costs were more than offset by lower restructuring costs, favorable impacts of segment methodology differences and a favorable change in fair value adjustments related to deferred compensation plans.

Notes

i. Glossary of terms is included on the Caterpillar website at https://investors.caterpillar.com/overview/default.aspx. ii. End-user demand is demonstrated by the company's Rolling 3 Month Retail Sales Statistics filed in a Form 8-K on Thursday, October 28, 2021. iii. Information on non-GAAP financial measures is included in the appendix on page 13. iv. Some amounts within this report are rounded to the millions or billions and may not add. v. Caterpillar will conduct a teleconference and live webcast, with a slide presentation, beginning at 7:30 a.m. Central Time on Thursday, October 28, 2021, to discuss its 2021 third-quarter results. The accompanying slides will be available before the webcast on the Caterpillar website at https://investors.caterpillar.com/events-presentations/default.aspx.

About Caterpillar

With 2020 sales and revenues of $41.7 billion, Caterpillar Inc. is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. Since 1925, we've been driving sustainable progress and helping customers build a better world through innovative products and services. Throughout the product life cycle, we offer services built on cutting-edge technology and decades of product expertise. These products and services, backed by our global dealer network, provide exceptional value to help our customers succeed. We do business on every continent, principally operating through three primary segments - Construction Industries, Resource Industries and Energy & Transportation - and providing financing and related services through our Financial Products segment. Visit us at caterpillar.com or join the conversation on our social media channels at caterpillar.com/social-media.

Caterpillar's latest financial results are also available online:

https://investors.caterpillar.com/overview/default.aspx

https://investors.caterpillar.com/financials/quarterly-results/default.aspx (live broadcast/replays of quarterly conference call)

Forward-Looking Statements

Certain statements in this press release relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "estimate," "will be," "will," "would," "expect," "anticipate," "plan," "forecast," "target," "guide," "project," "intend," "could," "should" or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions. These statements do not guarantee future performance and speak only as of the date they are made, and we do not undertake to update our forward-looking statements.

Caterpillar's actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors, including, but not limited to: (i) global and regional economic conditions and economic conditions in the industries we serve; (ii) commodity price changes, material price increases, fluctuations in demand for our products or significant shortages of material; (iii) government monetary or fiscal policies; (iv) political and economic risks, commercial instability and events beyond our control in the countries in which we operate; (v) international trade policies and their impact on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff rates; (vi) our ability to develop, produce and market quality products that meet our customers' needs; (vii) the impact of the highly competitive environment in which we operate on our sales and pricing; (viii) information technology security threats and computer crime; (ix) inventory management decisions and sourcing practices of our dealers and our OEM customers; (x) a failure to realize, or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures or divestitures; (xi) union disputes or other employee relations issues; (xii) adverse effects of unexpected events; (xiii) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers; (xiv) failure to maintain our credit ratings and potential resulting increases to our cost of borrowing and adverse effects on our cost of funds, liquidity, competitive position and access to capital markets; (xv) our Financial Products segment's risks associated with the financial services industry; (xvi) changes in interest rates or market liquidity conditions; (xvii) an increase in delinquencies, repossessions or net losses of Cat Financial's customers; (xviii) currency fluctuations; (xix) our or Cat Financial's compliance with financial and other restrictive covenants in debt agreements; (xx) increased pension plan funding obligations; (xxi) alleged or actual violations of trade or anti-corruption laws and regulations; (xxii) additional tax expense or exposure, including the impact of U.S. tax reform; (xxiii) significant legal proceedings, claims, lawsuits or government investigations; (xxiv) new regulations or changes in financial services regulations; (xxv) compliance with environmental laws and regulations; (xxvi) the duration and geographic spread of, business disruptions caused by, and the overall global economic impact of, the COVID-19 pandemic; and (xxvii) other factors described in more detail in Caterpillar's Forms 10-Q, 10-K and other filings with the Securities and Exchange Commission.

APPENDIX

NON-GAAP FINANCIAL MEASURES

The following definitions are provided for the non-GAAP financial measures. These non-GAAP financial measures 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 as a substitute for the related GAAP measures.

The company believes it is important to separately quantify the profit impact of two significant items in order for the company's results to be meaningful to readers. These items consist of (i) restructuring costs, which were incurred to generate longer-term benefits and (ii) remeasurement losses resulting from the settlements of pension obligations in the third quarter of 2020. The company does not consider these items indicative of earnings from ongoing business activities and believes the non-GAAP measure provides investors with useful perspective on underlying business results and trends and aids with assessing the company's period-over-period results. The company intends to discuss adjusted profit per share for the fourth quarter and full-year 2021, excluding mark-to-market gains or losses for remeasurement of pension and other postemployment benefit plans along with any other discrete items.

Reconciliations of adjusted results to the most directly comparable GAAP measure are as follows:

(Dollars in millions except per share data)        Operating   Operating  Profit     Provision   Effective  Profit     Profit per
                                                   Profit      Profit     Before     (Benefit)   Tax Rate              Share
                                                               Margin     Taxes      for Income
                                                                                     Taxes
Three Months Ended September 30, 2021 - U.S. GAAP  $   1,664   13.4%      $  1,775   $   368     20.7%      $  1,426   $   2.60
Restructuring costs                                35          0.3%       35         6           15.0%      29         $   0.06
Three Months Ended September 30, 2021 - Adjusted   $   1,699   13.7%      $  1,810   $   374     20.7%      $  1,455   $   2.66
Three Months Ended September 30, 2020 - U.S. GAAP  $   985     10.0%      $  863     $   187     21.7%      $  668     $   1.22
Restructuring costs                                112         1.1%       112        13          12.0%      99         $   0.18
Remeasurement losses of pension obligations        --          --%        77         12          15.6%      65         $   0.12
Three Months Ended September 30, 2020 - Adjusted   $   1,097   11.1%      $  1,052   $   212     20.2%      $  832     $   1.52

Supplemental Consolidating Data

The company is providing supplemental consolidating data for the purpose of additional analysis. The data has been grouped as follows:

Consolidated - Caterpillar Inc. and its subsidiaries.

Machinery, Energy & Transportation (ME&T) - The company defines ME&T as it is presented in the supplemental data as Caterpillar Inc. and its subsidiaries, excluding Financial Products. ME&T's information relates to the design, manufacturing and marketing of its products.

Financial Products - The company defines Financial Products as it is presented in the supplemental data as its finance and insurance subsidiaries, primarily Caterpillar Financial Services Corporation (Cat Financial) and Caterpillar Insurance Holdings Inc. (Insurance Services). Financial Products' information relates to the financing to customers and dealers for the purchase and lease of Caterpillar and other equipment.

Consolidating Adjustments - Eliminations of transactions between ME&T and Financial Products.

The nature of the ME&T and Financial Products businesses is different, especially with regard to the financial position and cash flow items. Caterpillar management utilizes this presentation internally to highlight these differences. The company believes this presentation will assist readers in understanding its business.

Pages 14 to 24 reconcile ME&T and Financial Products to Caterpillar Inc. consolidated financial information.

Caterpillar Inc.
Condensed Consolidated Statement of Results of Operations
(Unaudited)
(Dollars in millions except per share data)
                                                               Three Months Ended       Nine Months Ended
                                                               September 30,            September 30,
                                                               2021         2020        2021         2020
Sales and revenues:
Sales of Machinery, Energy & Transportation                    $   11,707   $   9,228   $   35,091   $   28,452
Revenues of Financial Products                                 690          653         2,082        2,061
Total sales and revenues                                       12,397       9,881       37,173       30,513
Operating costs:
Cost of goods sold                                             8,617        6,919       25,510       21,298
Selling, general and administrative expenses                   1,340        1,126       3,943        3,426
Research and development expenses                              427          344         1,247        1,041
Interest expense of Financial Products                         111          137         352          461
Other operating (income) expenses                              238          370         854          1,114
Total operating costs                                          10,733       8,896       31,906       27,340
Operating profit                                               1,664        985         5,267        3,173
Interest expense excluding Financial Products                  114          136         376          384
Other income (expense)                                         225          14          751          265
Consolidated profit before taxes                               1,775        863         5,642        3,054
Provision (benefit) for income taxes                           368          187         1,313        839
Profit of consolidated companies                               1,407        676         4,329        2,215
Equity in profit (loss) of unconsolidated affiliated companies 21           (5)         44           8
Profit of consolidated and affiliated companies                1,428        671         4,373        2,223
Less: Profit (loss) attributable to noncontrolling interests   2            3           4            5
Profit 1                                                       $   1,426    $   668     $   4,369    $   2,218
Profit per common share                                        $   2.62     $   1.23    $   8.00     $   4.08
Profit per common share -- diluted 2                           $   2.60     $   1.22    $   7.94     $   4.05
Weighted-average common shares outstanding (millions)
- Basic                                                        544.0        542.3       545.8        543.9
- Diluted 2                                                    547.6        546.4       550.2        547.8
1 Profit attributable to common shareholders.
2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.
Caterpillar Inc.
Condensed Consolidated Statement of Financial Position
(Unaudited)
(Millions of dollars)
                                                September 30,   December 31,
                                                2021            2020
Assets
Current assets:
Cash and cash equivalents                       $      9,446    $      9,352
Receivables - trade and other                   7,647           7,317
Receivables - finance                           8,919           9,463
Prepaid expenses and other current assets       2,215           1,930
Inventories                                     13,666          11,402
Total current assets                            41,893          39,464
Property, plant and equipment - net             11,904          12,401
Long-term receivables - trade and other         1,273           1,185
Long-term receivables - finance                 12,605          12,222
Noncurrent deferred and refundable income taxes 1,744           1,523
Intangible assets                               1,121           1,308
Goodwill                                        6,353           6,394
Other assets                                    3,891           3,827
Total assets                                    $      80,784   $      78,324
Liabilities
Current liabilities:
Short-term borrowings:
-- Machinery, Energy & Transportation           $      --       $      10
-- Financial Products                           3,247           2,005
Accounts payable                                7,218           6,128
Accrued expenses                                3,579           3,642
Accrued wages, salaries and employee benefits   2,075           1,096
Customer advances                               1,155           1,108
Dividends payable                               --              562
Other current liabilities                       2,319           2,017
Long-term debt due within one year:
-- Machinery, Energy & Transportation           48              1,420
-- Financial Products                           6,335           7,729
Total current liabilities                       25,976          25,717
Long-term debt due after one year:
-- Machinery, Energy & Transportation           9,759           9,749
-- Financial Products                           17,395          16,250
Liability for postemployment benefits           6,395           6,872
Other liabilities                               4,564           4,358
Total liabilities                               64,089          62,946
Shareholders' equity
Common stock                                    6,352           6,230
Treasury stock                                  (26,608)        (25,178)
Profit employed in the business                 38,361          35,167
Accumulated other comprehensive income (loss)   (1,440)         (888)
Noncontrolling interests                        30              47
Total shareholders' equity                      16,695          15,378
Total liabilities and shareholders' equity      $      80,784   $      78,324
Caterpillar Inc.
Condensed Consolidated Statement of Cash Flow
(Unaudited)
(Millions of dollars)
                                                                           Nine Months Ended
                                                                           September 30,
                                                                           2021          2020
Cash flow from operating activities:
Profit of consolidated and affiliated companies                            $     4,373   $     2,223
Adjustments for non-cash items:
Depreciation and amortization                                              1,766         1,815
Net gain on remeasurement of pension obligations                           --            (55)
Provision (benefit) for deferred income taxes                              (321)         (38)
Other                                                                      102           919
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables - trade and other                                              (326)         1,473
Inventories                                                                (2,195)       (139)
Accounts payable                                                           1,232         (596)
Accrued expenses                                                           46            (286)
Accrued wages, salaries and employee benefits                              934           (547)
Customer advances                                                          39            13
Other assets - net                                                         138           (15)
Other liabilities - net                                                    (2)           (512)
Net cash provided by (used for) operating activities                       5,786         4,255
Cash flow from investing activities:
Capital expenditures - excluding equipment leased to others                (673)         (686)
Expenditures for equipment leased to others                                (1,014)       (805)
Proceeds from disposals of leased assets and property, plant and equipment 877           550
Additions to finance receivables                                           (9,603)       (9,278)
Collections of finance receivables                                         9,221         9,656
Proceeds from sale of finance receivables                                  44            37
Investments and acquisitions (net of cash acquired)                        (449)         (93)
Proceeds from sale of businesses and investments (net of cash sold)        23            13
Proceeds from sale of securities                                           424           239
Investments in securities                                                  (934)         (512)
Other - net                                                                (8)           (80)
Net cash provided by (used for) investing activities                       (2,092)       (959)
Cash flow from financing activities:
Dividends paid                                                             (1,733)       (1,683)
Common stock issued, including treasury shares reissued                    122           110
Common shares repurchased                                                  (1,622)       (1,130)
Proceeds from debt issued (original maturities greater than three months)  6,931         9,418
Payments on debt (original maturities greater than three months)           (8,620)       (6,789)
Short-term borrowings - net (original maturities three months or less)     1,324         (2,138)
Other - net                                                                (4)           (1)
Net cash provided by (used for) financing activities                       (3,602)       (2,213)
Effect of exchange rate changes on cash                                    (9)           (56)
Increase (decrease) in cash, cash equivalents and restricted cash          83            1,027
Cash, cash equivalents and restricted cash at beginning of period          9,366         8,292
Cash, cash equivalents and restricted cash at end of period                $     9,449   $     9,319
Cash equivalents primarily represent short-term, highly liquid investments with original maturities of generally three months or less.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Three Months Ended September 30, 2021
(Unaudited)
(Millions of dollars)
                                                                             Supplemental Consolidating Data
                                                               Consolidated  Machinery,      Financial Consolidating
                                                                             Energy &        Products  Adjustments
                                                                             Transportation
Sales and revenues:
Sales of Machinery, Energy & Transportation                    $    11,707   $    11,707     $   --    $    --
Revenues of Financial Products                                 690           --              787       (97)          1
Total sales and revenues                                       12,397        11,707          787       (97)
Operating costs:
Cost of goods sold                                             8,617         8,618           --        (1)           2
Selling, general and administrative expenses                   1,340         1,147           200       (7)           2
Research and development expenses                              427           427             --        --
Interest expense of Financial Products                         111           --              111       --
Other operating (income) expenses                              238           (56)            310       (16)          2
Total operating costs                                          10,733        10,136          621       (24)
Operating profit                                               1,664         1,571           166       (73)
Interest expense excluding Financial Products                  114           114             --        --
Other income (expense)                                         225           143             9         73            3
Consolidated profit before taxes                               1,775         1,600           175       --
Provision (benefit) for income taxes                           368           331             37        --
Profit of consolidated companies                               1,407         1,269           138       --
Equity in profit (loss) of unconsolidated affiliated companies 21            23              --        (2)           4
Profit of consolidated and affiliated companies                1,428         1,292           138       (2)
Less: Profit (loss) attributable to noncontrolling interests   2             1               3         (2)           5
Profit 6                                                       $    1,426    $    1,291      $   135   $    --
1 Elimination of Financial Products' revenues earned from ME&T.
2 Elimination of net expenses recorded by ME&T paid to Financial Products.
3 Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.
4 Elimination of equity profit (loss) earned from Financial Products' subsidiaries partially owned by ME&T subsidiaries.
5 Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries.
6 Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Three Months Ended September 30, 2020
(Unaudited)
(Millions of dollars)
                                                                            Supplemental Consolidating Data
                                                               Consolidated Machinery,      Financial Consolidating
                                                                            Energy &        Products  Adjustments
                                                                            Transportation
Sales and revenues:
Sales of Machinery, Energy & Transportation                    $    9,228   $    9,228      $   --    $    --
Revenues of Financial Products                                 653          --              740       (87)          1
Total sales and revenues                                       9,881        9,228           740       (87)
Operating costs:
Cost of goods sold                                             6,919        6,921           --        (2)           2
Selling, general and administrative expenses                   1,126        943             189       (6)           2
Research and development expenses                              344          344             --        --
Interest expense of Financial Products                         137          --              137       --
Other operating (income) expenses                              370          95              287       (12)          2
Total operating costs                                          8,896        8,303           613       (20)
Operating profit                                               985          925             127       (67)
Interest expense excluding Financial Products                  136          136             --        --
Other income (expense)                                         14           (62)            9         67            3
Consolidated profit before taxes                               863          727             136       --
Provision (benefit) for income taxes                           187          133             54        --
Profit of consolidated companies                               676          594             82        --
Equity in profit (loss) of unconsolidated affiliated companies (5)          (4)             --        (1)           4
Profit of consolidated and affiliated companies                671          590             82        (1)
Less: Profit (loss) attributable to noncontrolling interests   3            --              4         (1)           5
Profit 6                                                       $    668     $    590        $   78    $    --
1 Elimination of Financial Products' revenues earned from ME&T.
2 Elimination of net expenses recorded by ME&T paid to Financial Products.
3 Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.
4 Elimination of equity profit (loss) earned from Financial Products' subsidiaries partially owned by ME&T subsidiaries.
5 Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries.
6 Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Nine Months Ended September 30, 2021
(Unaudited)
(Millions of dollars)
                                                                             Supplemental Consolidating Data
                                                               Consolidated  Machinery,      Financial Consolidating
                                                                             Energy &        Products  Adjustments
                                                                             Transportation
Sales and revenues:
Sales of Machinery, Energy & Transportation                    $    35,091   $    35,091     $   --    $    --
Revenues of Financial Products                                 2,082         --              2,371     (289)         1
Total sales and revenues                                       37,173        35,091          2,371     (289)
Operating costs:
Cost of goods sold                                             25,510        25,515          --        (5)           2
Selling, general and administrative expenses                   3,943         3,471           483       (11)          2
Research and development expenses                              1,247         1,247           --        --
Interest expense of Financial Products                         352           --              352       --
Other operating (income) expenses                              854           (30)            931       (47)          2
Total operating costs                                          31,906        30,203          1,766     (63)
Operating profit                                               5,267         4,888           605       (226)
Interest expense excluding Financial Products                  376           376             --        --
Other income (expense)                                         751           819             56        (124)         3
Consolidated profit before taxes                               5,642         5,331           661       (350)
Provision (benefit) for income taxes                           1,313         1,158           155       --
Profit of consolidated companies                               4,329         4,173           506       (350)
Equity in profit (loss) of unconsolidated affiliated companies 44            52              --        (8)           4
Profit of consolidated and affiliated companies                4,373         4,225           506       (358)
Less: Profit (loss) attributable to noncontrolling interests   4             3               9         (8)           5
Profit 6                                                       $    4,369    $    4,222      $   497   $    (350)
1 Elimination of Financial Products' revenues earned from ME&T.
2 Elimination of net expenses recorded by ME&T paid to Financial Products.
3 Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.
4 Elimination of equity profit (loss) earned from Financial Products' subsidiaries partially owned by ME&T subsidiaries.
5 Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries.
6 Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Results of Operations
For the Nine Months Ended September 30, 2020
(Unaudited)
(Millions of dollars)
                                                                             Supplemental Consolidating Data
                                                               Consolidated  Machinery,      Financial Consolidating
                                                                             Energy &        Products  Adjustments
                                                                             Transportation
Sales and revenues:
Sales of Machinery, Energy & Transportation                    $    28,452   $    28,452     $   --    $    --
Revenues of Financial Products                                 2,061         --              2,350     (289)         1
Total sales and revenues                                       30,513        28,452          2,350     (289)
Operating costs:
Cost of goods sold                                             21,298        21,302          --        (4)           2
Selling, general and administrative expenses                   3,426         2,867           572       (13)          2
Research and development expenses                              1,041         1,041           --        --
Interest expense of Financial Products                         461           --              462       (1)           3
Other operating (income) expenses                              1,114         227             927       (40)          2
Total operating costs                                          27,340        25,437          1,961     (58)
Operating profit                                               3,173         3,015           389       (231)
Interest expense excluding Financial Products                  384           383             --        1             3
Other income (expense)                                         265           60              (7)       212           4
Consolidated profit before taxes                               3,054         2,692           382       (20)
Provision (benefit) for income taxes                           839           720             119       --
Profit of consolidated companies                               2,215         1,972           263       (20)
Equity in profit (loss) of unconsolidated affiliated companies 8             18              --        (10)          5
Profit of consolidated and affiliated companies                2,223         1,990           263       (30)
Less: Profit (loss) attributable to noncontrolling interests   5             2               13        (10)          6
Profit 7                                                       $    2,218    $    1,988      $   250   $    (20)
1 Elimination of Financial Products' revenues earned from ME&T.
2 Elimination of net expenses recorded by ME&T paid to Financial Products.
3 Elimination of interest expense recorded between Financial Products and ME&T.
4 Elimination of discount recorded by ME&T on receivables sold to Financial Products and of interest earned between ME&T and Financial Products as well as dividends paid by Financial Products to ME&T.
5 Elimination of equity profit (loss) earned from Financial Products' subsidiaries partially owned by ME&T subsidiaries.
6 Elimination of noncontrolling interest profit (loss) recorded by Financial Products for subsidiaries partially owned by ME&T subsidiaries.
7 Profit attributable to common shareholders.
Caterpillar Inc.
Supplemental Data for Financial Position
At September 30, 2021
(Unaudited)
(Millions of dollars)
                                                              Supplemental Consolidating Data
                                                Consolidated  Machinery,      Financial    Consolidating
                                                              Energy &        Products     Adjustments
                                                              Transportation
Assets
Current assets:
Cash and cash equivalents                       $    9,446    $    8,554      $   892      $    --
Receivables - trade and other                   7,647         3,175           430          4,042         1,2
Receivables - finance                           8,919         --              13,095       (4,176)       2
Prepaid expenses and other current assets       2,215         1,831           425          (41)          3
Inventories                                     13,666        13,666          --           --
Total current assets                            41,893        27,226          14,842       (175)
Property, plant and equipment - net             11,904        7,957           3,947        --
Long-term receivables - trade and other         1,273         389             215          669           1,2
Long-term receivables - finance                 12,605        --              13,301       (696)         2
Noncurrent deferred and refundable income taxes 1,744         2,279           105          (640)         4
Intangible assets                               1,121         1,121           --           --
Goodwill                                        6,353         6,353           --           --
Other assets                                    3,891         3,233           1,869        (1,211)       5
Total assets                                    $    80,784   $    48,558     $   34,279   $    (2,053)
Liabilities
Current liabilities:
Short-term borrowings                           $    3,247    $    --         $   3,247    $    --
Accounts payable                                7,218         7,112           240          (134)         6
Accrued expenses                                3,579         3,234           345          --
Accrued wages, salaries and employee benefits   2,075         2,031           44           --
Customer advances                               1,155         1,155           --           --
Dividends payable                               --            --              --           --
Other current liabilities                       2,319         1,694           689          (64)          4,7
Long-term debt due within one year              6,383         48              6,335        --
Total current liabilities                       25,976        15,274          10,900       (198)
Long-term debt due after one year               27,154        9,786           17,395       (27)          8
Liability for postemployment benefits           6,395         6,394           1            --
Other liabilities                               4,564         3,905           1,371        (712)         4
Total liabilities                               64,089        35,359          29,667       (937)
Shareholders' equity
Common stock                                    6,352         6,352           919          (919)         9
Treasury stock                                  (26,608)      (26,608)        --           --
Profit employed in the business                 38,361        34,138          4,212        11            9
Accumulated other comprehensive income (loss)   (1,440)       (715)           (725)        --
Noncontrolling interests                        30            32              206          (208)         9
Total shareholders' equity                      16,695        13,199          4,612        (1,116)
Total liabilities and shareholders' equity      $    80,784   $    48,558     $   34,279   $    (2,053)
1 Elimination of receivables between ME&T and Financial Products.
2 Reclassification of ME&T's trade receivables purchased by Financial Products and Financial Products' wholesale inventory receivables.
3 Elimination of ME&T's insurance premiums that are prepaid to Financial Products.
4 Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction.
5 Elimination of other intercompany assets between ME&T and Financial Products.
6 Elimination of payables between ME&T and Financial Products.
7 Elimination of prepaid insurance in Financial Products' other liabilities.
8 Elimination of debt between ME&T and Financial Products.
9 Eliminations associated with ME&T's investments in Financial Products' subsidiaries.
Caterpillar Inc.
Supplemental Data for Financial Position
At December 31, 2020
(Unaudited)
(Millions of dollars)
                                                                Supplemental Consolidating Data
                                                  Consolidated  Machinery,      Financial    Consolidating
                                                                Energy &        Products     Adjustments
                                                                Transportation
Assets
Current assets:
Cash and cash equivalents                         $    9,352    $    8,822      $   530      $    --
Receivables - trade and other                     7,317         3,846           397          3,074         1,2
Receivables - finance                             9,463         --              13,681       (4,218)       2
Prepaid expenses and other current assets         1,930         1,376           624          (70)          3
Inventories                                       11,402        11,402          --           --
Total current assets                              39,464        25,446          15,232       (1,214)
Property, plant and equipment - net               12,401        8,309           4,092        --
Long-term receivables - trade and other           1,185         363             164          658           1,2
Long-term receivables - finance                   12,222        --              12,895       (673)         2
Noncurrent deferred and refundable income taxes   1,523         2,058           110          (645)         4
Intangible assets                                 1,308         1,308           --           --
Goodwill                                          6,394         6,394           --           --
Other assets                                      3,827         3,158           1,871        (1,202)       5
Total assets                                      $    78,324   $    47,036     $   34,364   $    (3,076)
Liabilities
Current liabilities:
Short-term borrowings                             $    2,015    $    10         $   2,005    $    --
Short-term borrowings with consolidated companies --            --              1,000        (1,000)       6
Accounts payable                                  6,128         6,060           212          (144)         7
Accrued expenses                                  3,642         3,099           543          --
Accrued wages, salaries and employee benefits     1,096         1,081           15           --
Customer advances                                 1,108         1,108           --           --
Dividends payable                                 562           562             --           --
Other current liabilities                         2,017         1,530           580          (93)          4,8
Long-term debt due within one year                9,149         1,420           7,729        --
Total current liabilities                         25,717        14,870          12,084       (1,237)
Long-term debt due after one year                 25,999        9,764           16,250       (15)          6
Liability for postemployment benefits             6,872         6,872           --           --
Other liabilities                                 4,358         3,691           1,385        (718)         4
Total liabilities                                 62,946        35,197          29,719       (1,970)
Shareholders' equity
Common stock                                      6,230         6,230           919          (919)         9
Treasury stock                                    (25,178)      (25,178)        --           --
Profit employed in the business                   35,167        31,091          4,065        11            9
Accumulated other comprehensive income (loss)     (888)         (352)           (536)        --
Noncontrolling interests                          47            48              197          (198)         9
Total shareholders' equity                        15,378        11,839          4,645        (1,106)
Total liabilities and shareholders' equity        $    78,324   $    47,036     $   34,364   $    (3,076)
1 Elimination of receivables between ME&T and Financial Products.
2 Reclassification of ME&T's trade receivables purchased by Financial Products and Financial Products' wholesale inventory receivables.
3 Elimination of ME&T's insurance premiums that are prepaid to Financial Products.
4 Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction.
5 Elimination of other intercompany assets between ME&T and Financial Products.
6 Elimination of debt between ME&T and Financial Products.
7 Elimination of payables between ME&T and Financial Products.
8 Elimination of prepaid insurance in Financial Products' other liabilities.
9 Eliminations associated with ME&T's investments in Financial Products' subsidiaries.
Caterpillar Inc.
Supplemental Data for Cash Flow
For the Nine Months Ended September 30, 2021
(Unaudited)
(Millions of dollars)
                                                                                        Supplemental Consolidating Data
                                                                           Consolidated Machinery,               Financial   Consolidating
                                                                                        Energy & Transportation  Products    Adjustments
Cash flow from operating activities:
Profit of consolidated and affiliated companies                            $    4,373   $       4,225            $    506    $    (358)    1, 5
Adjustments for non-cash items:
Depreciation and amortization                                              1,766        1,162                    604         --
Provision (benefit) for deferred income taxes                              (321)        (255)                    (66)        --
Other                                                                      102          104                      (135)       133           2
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables - trade and other                                              (326)        (338)                    40          (28)          2, 3
Inventories                                                                (2,195)      (2,194)                  --          (1)           2
Accounts payable                                                           1,232        1,194                    28          10            2
Accrued expenses                                                           46           117                      (71)        --
Accrued wages, salaries and employee benefits                              934          905                      29          --
Customer advances                                                          39           39                       --          --
Other assets - net                                                         138          133                      24          (19)          2
Other liabilities - net                                                    (2)          (193)                    144         47            2
Net cash provided by (used for) operating activities                       5,786        4,899                    1,103       (216)
Cash flow from investing activities:
Capital expenditures - excluding equipment leased to others                (673)        (670)                    (11)        8             2
Expenditures for equipment leased to others                                (1,014)      (23)                     (997)       6             2
Proceeds from disposals of leased assets and property, plant and equipment 877          71                       818         (12)          2
Additions to finance receivables                                           (9,603)      --                       (10,292)    689           3
Collections of finance receivables                                         9,221        --                       9,946       (725)         3
Net intercompany purchased receivables                                     --           --                       100         (100)         3
Proceeds from sale of finance receivables                                  44           --                       44          --
Net intercompany borrowings                                                --           1,000                    3           (1,003)       4
Investments and acquisitions (net of cash acquired)                        (449)        (449)                    --          --
Proceeds from sale of businesses and investments (net of cash sold)        23           23                       --          --
Proceeds from sale of securities                                           424          44                       380         --
Investments in securities                                                  (934)        (542)                    (392)       --
Other - net                                                                (8)          59                       (67)        --
Net cash provided by (used for) investing activities                       (2,092)      (487)                    (468)       (1,137)
Cash flow from financing activities:
Dividends paid                                                             (1,733)      (1,733)                  (350)       350           5
Common stock issued, including treasury shares reissued                    122          122                      --          --
Common shares repurchased                                                  (1,622)      (1,622)                  --          --
Net intercompany borrowings                                                --           (3)                      (1,000)     1,003         4
Proceeds from debt issued > 90 days                                        6,931        494                      6,437       --
Payments on debt > 90 days                                                 (8,620)      (1,910)                  (6,710)     --
Short-term borrowings - net !!!! 90 days                                   1,324        (10)                     1,334       --
Other - net                                                                (4)          (4)                      --          --
Net cash provided by (used for) financing activities                       (3,602)      (4,666)                  (289)       1,353
Effect of exchange rate changes on cash                                    (9)          (14)                     5           --
Increase (decrease) in cash, cash equivalents and restricted cash          83           (268)                    351         --
Cash, cash equivalents and restricted cash at beginning of period          9,366        8,822                    544         --
Cash, cash equivalents and restricted cash at end of period                $    9,449   $       8,554            $    895    $    --
1 Elimination of equity profit earned from Financial Products' subsidiaries partially owned by ME&T subsidiaries.
2 Elimination of non-cash adjustments and changes in assets and liabilities related to consolidated reporting.
3 Reclassification of Financial Products' cash flow activity from investing to operating for receivables that arose from the sale of inventory.
4 Elimination of net proceeds and payments to/from ME&T and Financial Products.
5 Elimination of dividend activity between Financial Products and ME&T.
Caterpillar Inc.
Supplemental Data for Cash Flow
For the Nine Months Ended September 30, 2020
(Unaudited)
(Millions of dollars)
                                                                                        Supplemental Consolidating Data
                                                                           Consolidated Machinery,               Financial   Consolidating
                                                                                        Energy & Transportation  Products    Adjustments
Cash flow from operating activities:
Profit of consolidated and affiliated companies                            $    2,223   $       1,990            $    263    $    (30)     1, 5
Adjustments for non-cash items:
Depreciation and amortization                                              1,815        1,217                    598         --
Net gain on remeasurement of pension obligations                           (55)         (55)                     --          --
Provision (benefit) for deferred income taxes                              (38)         (5)                      (33)        --
Other                                                                      919          494                      167         258           2
Changes in assets and liabilities, net of acquisitions and divestitures:
Receivables - trade and other                                              1,473        616                      (54)        911           2, 3
Inventories                                                                (139)        (130)                    --          (9)           2
Accounts payable                                                           (596)        (599)                    (6)         9             2
Accrued expenses                                                           (286)        (314)                    28          --
Accrued wages, salaries and employee benefits                              (547)        (512)                    (35)        --
Customer advances                                                          13           13                       --          --
Other assets - net                                                         (15)         (136)                    26          95            2
Other liabilities - net                                                    (512)        (514)                    83          (81)          2
Net cash provided by (used for) operating activities                       4,255        2,065                    1,037       1,153
Cash flow from investing activities:
Capital expenditures - excluding equipment leased to others                (686)        (687)                    (11)        12            2
Expenditures for equipment leased to others                                (805)        2                        (823)       16            2
Proceeds from disposals of leased assets and property, plant and equipment 550          119                      451         (20)          2
Additions to finance receivables                                           (9,278)      --                       (10,234)    956           3
Collections of finance receivables                                         9,656        --                       10,822      (1,166)       3
Net intercompany purchased receivables                                     --           --                       971         (971)         3
Proceeds from sale of finance receivables                                  37           --                       37          --
Net intercompany borrowings                                                --           599                      6           (605)         4
Investments and acquisitions (net of cash acquired)                        (93)         (93)                     --          --
Proceeds from sale of businesses and investments (net of cash sold)        13           13                       --          --
Proceeds from sale of securities                                           239          17                       222         --
Investments in securities                                                  (512)        (15)                     (497)       --
Other - net                                                                (80)         (21)                     (59)        --
Net cash provided by (used for) investing activities                       (959)        (66)                     885         (1,778)
Cash flow from financing activities:
Dividends paid                                                             (1,683)      (1,683)                  (20)        20            5
Common stock issued, including treasury shares reissued                    110          110                      --          --
Common shares repurchased                                                  (1,130)      (1,130)                  --          --
Net intercompany borrowings                                                --           (6)                      (599)       605           4
Proceeds from debt issued > 90 days                                        9,418        1,991                    7,427       --
Payments on debt > 90 days                                                 (6,789)      (18)                     (6,771)     --
Short-term borrowings - net !!!! 90 days                                   (2,138)      (5)                      (2,133)     --
Other - net                                                                (1)          (1)                      --          --
Net cash provided by (used for) financing activities                       (2,213)      (742)                    (2,096)     625
Effect of exchange rate changes on cash                                    (56)         (47)                     (9)         --
Increase (decrease) in cash, cash equivalents and restricted cash          1,027        1,210                    (183)       --
Cash, cash equivalents and restricted cash at beginning of period          8,292        7,302                    990         --
Cash, cash equivalents and restricted cash at end of period                $    9,319   $       8,512            $    807    $    --
1 Elimination of equity profit earned from Financial Products' subsidiaries partially owned by ME&T subsidiaries.
2 Elimination of non-cash adjustments and changes in assets and liabilities related to consolidated reporting.
3 Reclassification of Financial Products' cash flow activity from investing to operating for receivables that arose from the sale of inventory.
4 Elimination of net proceeds and payments to/from ME&T and Financial Products.
5 Elimination of dividend activity between Financial Products and ME&T.

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