July 23, 2015
Cat Financial Announces Second-Quarter 2015 Results
Cat Financial reported second-quarter 2015 revenues of $683 million, a decrease of $45 million, or 6 percent, compared with the second quarter of 2014. Second-quarter 2015 profit after tax was $104 million, a $44 million, or 30 percent decrease from the second quarter of 2014.
The decrease in revenues was primarily due to a $29 million unfavorable impact from lower average earning assets and an $18 million unfavorable impact from lower average financing rates.
Profit before income taxes was $150 million for the second quarter of 2015, compared with $208 million for the second quarter of 2014. The decrease was primarily due to a $25 million decrease in net yield on average earning assets, an $18 million increase in provision for credit losses and a $14 million unfavorable net impact from lower average earning assets.
The provision for income taxes reflects an estimated annual tax rate of 29 percent in the second quarter of 2015, compared with 27 percent in the second quarter of 2014. The increase in the estimated annual tax rate is primarily due to changes in the geographic mix of pre-tax profits.
During the second quarter of 2015, retail new business volume was $2.74 billion, a decrease of $703 million, or 20 percent, from the second quarter of 2014. The decrease was related to lower volume across all geographic regions, except for North America, which was relatively flat.
At the end of the second quarter of 2015, past dues were 2.97 percent, compared with 2.77 percent at the end of the second quarter of 2014. The increase was primarily due to higher delinquencies in the Latin America and Mining portfolios. At the end of 2014, past dues were 2.17 percent. Write-offs, net of recoveries, were $38 million for the second quarter of 2015, compared with $19 million for the second quarter of 2014.
As of June 30, 2015, Cat Financial's allowance for credit losses totaled $405 million, or 1.42 percent of net finance receivables, compared with $395 million, or 1.30 percent of net finance receivables at June 30, 2014. The allowance for credit losses at year-end 2014 was $401 million, or 1.36 percent of net finance receivables.
"Our portfolio performance has remained relatively stable despite challenging market conditions in some of our key segments,” said Kent Adams, president of Cat Financial and vice president with responsibility for the Financial Products Division of Caterpillar Inc. “The global Cat Financial team remains focused on helping Caterpillar customers and Cat dealers succeed through financial services excellence."
For over 30 years, Cat Financial, a wholly owned subsidiary of Caterpillar Inc., has been providing financial service excellence to customers. The company offers a wide range of financing alternatives to customers and Cat dealers for Cat machinery and engines, Solar® gas turbines and other equipment and marine vessels. Cat Financial has offices and subsidiaries located throughout North and South America, Asia, Australia and Europe, with its headquarters in Nashville, Tennessee.
Click here to download the full version of the Cat Financial 2Q 2015 results release, including Statistical Highlights.
Caterpillar contact: Rachel Potts, 309-675-6892 or 309-573-3444, Potts_Rachel_A@cat.com