July 26, 2016
Cat Financial Announces Second-Quarter 2016 Results
Cat Financial reported second-quarter 2016 revenues of $659 million, a decrease of $24 million, or 4 percent, compared with the second quarter of 2015. Second-quarter 2016 profit was $102 million, a $2 million, or 2 percent, decrease from the second quarter of 2015.
The decrease in revenues was primarily due to a $15 million unfavorable impact from lower average earning assets.
Profit before income taxes was $148 million for the second quarter of 2016, compared with $150 million for the second quarter of 2015. The decrease was primarily due to an $11 million unfavorable impact from the sale of returned or repossessed equipment primarily driven by the absence of gains recorded in the second quarter of 2015, a $7 million unfavorable impact from lower average earning assets and an unfavorable impact from other miscellaneous items. These unfavorable impacts were partially offset by an $11 million decrease in provision for credit losses and an $11 million decrease in general, operating and administrative expenses.
The provision for income taxes reflects an estimated annual tax rate of 30 percent in the second quarter of 2016, compared with 29 percent in the second quarter of 2015. The increase in the estimated annual tax rate is primarily due to changes in the geographic mix of profits.
During the second quarter of 2016, retail new business volume was $3.06 billion, an increase of $319 million, or 12 percent, from the second quarter of 2015. The increase was related to higher volume primarily in North America and Europe.
At the end of the second quarter of 2016, past dues were 2.93 percent, compared with 2.97 percent at the end of the second quarter of 2015. Write-offs, net of recoveries, were $33 million for the second quarter of 2016, compared with $38 million for the second quarter of 2015.
As of June 30, 2016, the allowance for credit losses totaled $346 million, or 1.25 percent of net finance receivables, compared with $405 million, or 1.42 percent of net finance receivables at June 30, 2015. The allowance for credit losses at year-end 2015 was $338 million, or 1.22 percent of net finance receivables.
"Our focus has remained on maintaining solid portfolio performance during the current period of weakness in some of the key end markets we serve," 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 dedicated to 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 2016 results release, including Statistical Highlights.
Caterpillar contact: Rachel Potts, 309-675-6892 or 309-573-3444, Potts_Rachel_A@cat.com