Highlights for the third quarter of 2022 include:
•Caterpillar ended the third quarter of 2022 with $6.3 billion of enterprise cash.
Highlights for the nine months ended September 30, 2022 include:
•Total sales and revenues were $42.830 billion for the nine months ended September 30, 2022, an increase of $5.657 billion, or 15 percent, compared with $37.173 billion for the nine months ended September 30, 2021.
•Enterprise operating cash flow was $5.0 billion for the nine months ended September 30, 2022.
•Glossary of terms is included on pages 58 - 60; first occurrence of terms shown in bold italics.
•Information on non-GAAP financial measures is included on page 65.
•Certain amounts may not add due to rounding.
THREE MONTHS ENDED SEPTEMBER 30, 2022 COMPARED WITH THREE MONTHS ENDED SEPTEMBER 30, 2021
Sales were higher across the three primary segments.
Sales and Revenues by Geographic Region
1 Includes revenues from Machinery, Energy & Transportation of $124 million and $87 million in the third quarter of 2022 and 2021, respectively.
Short-term incentive compensation expense was about $400 million in the third quarter of 2022, compared to about $350 million in the third quarter of 2021.
Operating profit margin was 16.2 percent for the third quarter of 2022, compared with 13.4 percent for the third quarter of 2021.
Other Profit/Loss and Tax Items
?In EAME, sales were about flat. Unfavorable currency impacts, primarily related to the euro, were offset by favorable price realization.
?Sales were about flat in Asia/Pacific. Favorable price realization was offset by unfavorable currency impacts, primarily related to the Japanese yen and Australian dollar.
Resource Industries' profit as a percent of total sales was 16.4 percent in the third quarter of 2022, compared with 11.8 percent in the third quarter of 2021.
•Oil and Gas - Sales increased due to higher sales of reciprocating engine aftermarket parts and engines used in gas compression and well servicing applications. Turbines and turbine-related services were about flat.
•Power Generation - Sales increased in large reciprocating engines, primarily data center applications, and small reciprocating engines. Turbines and turbine-related services increased as well.
•Industrial - Sales were up across all regions.
•Transportation - Sales increased in reciprocating engine aftermarket parts and marine applications. International locomotive deliveries were also higher.
Expense for corporate items and eliminations was $343 million in the third quarter of 2022, an increase of $50 million from the third quarter of 2021, primarily driven by increased expenses due to timing differences, partially offset by favorable impacts of segment reporting methodology differences and lower corporate costs.
NINE MONTHS ENDED SEPTEMBER 30, 2022 COMPARED WITH NINE MONTHS ENDED SEPTEMBER 30, 2021
Sales were higher in the three primary segments.
Sales and Revenues by Geographic Region
1 Includes revenues from Machinery, Energy & Transportation of $332 million and $263 million in the nine months ended September 30, 2022 and 2021, respectively.
Operating profit for the nine months ended September 30, 2022, was $6.224 billion, an increase of $957 million, or 18 percent, compared with $5.267 billion for the nine months ended September 30, 2021. The increase was due to favorable price realization and higher sales volume, partially offset by unfavorable manufacturing costs and higher SG&A/R&D expenses.
Corporate Items and Eliminations included corporate-level expenses, timing differences (as some expenses are reported in segment profit on a cash basis), methodology differences between segment and consolidated external reporting (the company values segment inventories and cost of sales using a current cost methodology), certain restructuring costs and inter-segment eliminations.
Other Profit/Loss and Tax Items
•Sales increased in Latin America primarily due to higher sales of equipment to end users and favorable price realization.
•Power Generation - Sales increased in small reciprocating engine applications, reciprocating engine aftermarket parts and turbines and turbine-related services.
•Industrial - Sales were up across all regions.
•Transportation - Sales increased primarily in reciprocating engine aftermarket parts and marine applications. Rail services and international locomotives deliveries were also higher.
Additional information related to restructuring costs is included in Note 20 - "Restructuring Costs" of Part I, Item 1 "Financial Statements".
1.Adjusted Operating Profit Margin - Operating profit excluding restructuring costs as a percent of sales and revenues.
2.Adjusted Profit Per Share - Profit per share excluding restructuring costs.
4.Consolidating Adjustments - Elimination of transactions between Machinery, Energy & Transportation and Financial Products.
8.Dealer Inventories - Represents dealer machine and engine inventories, excluding aftermarket parts.
9.EAME - A geographic region including Europe, Africa, the Middle East and the Commonwealth of Independent States (CIS).
10.Earning Assets - Assets consisting primarily of total finance receivables net of unearned income, plus equipment on operating leases, less accumulated depreciation at Cat Financial.
14.Latin America - A geographic region including Central and South American countries and Mexico.
15.Machinery, Energy & Transportation (ME&T) - The company defines ME&T as Caterpillar Inc. and its subsidiaries, excluding Financial Products. ME&T's information relates to the design, manufacturing and marketing of its products.
16.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.
19.Pension and Other Postemployment Benefits (OPEB) - The company's defined-benefit pension and postretirement benefit plans.
24.Services - Enterprise services include, but are not limited to, aftermarket parts, Financial Products revenues and other service-related revenues. Machinery, Energy & Transportation segments exclude most Financial Products revenues.
•In September 2022, we amended and restated the three-year facility (as amended and restated, the "three-year facility"). The three-year facility of $2.73 billion (of which $715 million is available to ME&T) expires in August 2025.
Our total credit commitments and available credit as of September 30, 2022 were:
For a discussion of recent accounting pronouncements, see Part I, Item 1. Note 2 - "New accounting guidance".
Information related to legal proceedings appears in Note 14-Environmental and Legal Matters of Part II, Item 8 "Financial Statements and Supplementary Data."
Reconciliations of adjusted results to the most directly comparable GAAP measures are as follows:
per share data) Profit Margin Taxes Income Taxes Tax Rate Profit Share
Reconciliations of ME&T free cash flow to the most directly comparable GAAP measure, net cash provided by operating activities are as follows:
Cash payments related to settlements with the U.S. Internal Revenue Service
2,778 $ 4,206 1 See reconciliation of ME&T net cash provided by operating activities to consolidated net cash provided by operating activities on pages 73 - 74.
We are providing supplemental consolidating data for the purpose of additional analysis. The data has been grouped as follows:
Consolidated - Caterpillar Inc. and its subsidiaries.
Consolidating Adjustments - Eliminations of transactions between ME&T and Financial Products.
Pages 67 to 74 reconcile ME&T and Financial Products to Caterpillar Inc. consolidated financial information. Certain amounts for prior periods have been reclassified to conform to the current period presentation.
Total liabilities and shareholders' equity $ 80,907 $
Cash flow from operating activities: Profit of consolidated and affiliated companies $ 5,250 $ 4,750
Payments on debt (original maturities greater than three months)
Payments on debt (original maturities greater than three months)
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