GLOSSARY OF TERMS 1. Consolidating Adjustments - Eliminations of
transactions between Machinery and Engines and Financial Products.
2. Core Operating Costs - Machinery and Engines variable
manufacturing cost change adjusted for volume and change in period
costs. Excludes the impact of currency and retirement benefits for
periods comparing 2005 to 2004. For periods comparing 2006 to 2005,
excludes the impact of currency and stock based compensation. 3.
Currency - With respect to sales and revenues, currency represents
the translation impact on sales resulting from changes in foreign
currency exchange rates versus the U.S. dollar. With respect to
operating profit, currency represents the net translation impact on
sales and operating costs resulting from changes in foreign
currency exchange rates versus the U.S. dollar. Currency includes
the impacts on sales and operating profit for the Machinery and
Engines lines of business only; currency impacts on Financial
Products revenues and operating profit are included in the
Financial Products portions of the respective analyses. With
respect to other income / expense, currency represents the effects
of forward and option contracts entered into by the company to
reduce the risk of fluctuations in exchange rates and the net
effect of changes in foreign currency exchange rates on our foreign
currency assets and liabilities for consolidated results. 4. EAME -
Geographic region including Europe, Africa, the Middle East and the
Commonwealth of Independent States (CIS). 5. Earning Assets - These
assets consist primarily of total finance receivables net of
unearned income, plus retained interests in securitized trade
receivables, plus equipment on operating leases, less accumulated
depreciation at Cat Financial. 6. Engines - A principal line of
business including the design, manufacture, marketing and sales of
engines for Caterpillar machinery, electric power generation
systems; on-highway vehicles and locomotives; marine, petroleum,
construction, industrial, agricultural and other applications; and
related parts. Reciprocating engines meet power needs ranging from
5 to over 22,000 horsepower (4 to over 16 200 kilowatts). Turbines
range from 1,200 to 20,500 horsepower (900 to 15 000 kilowatts). 7.
Financial Products - A principal line of business consisting
primarily of Caterpillar Financial Services Corporation (Cat
Financial), Caterpillar Insurance Holdings, Inc. (Cat Insurance),
Caterpillar Power Ventures Corporation (Cat Power Ventures) and
their respective subsidiaries. Cat Financial provides a wide range
of financing alternatives to customers and dealers for Caterpillar
machinery and engines, Solar gas turbines, as well as other
equipment and marine vessels. Cat Financial also extends loans to
customers and dealers. Cat Insurance provides various forms of
insurance to customers and dealers to help support the purchase and
lease of our equipment. Cat Power Ventures is an active investor in
independent power projects using Caterpillar power generation
equipment and services. 8. Latin America - Geographic region
including the Central and South American countries and Mexico. 9.
Machinery - A principal line of business which includes the design,
manufacture, marketing and sales of construction, mining and
forestry machinery -- track and wheel tractors, track and wheel
loaders, pipelayers, motor graders, wheel tractor-scrapers, track
and wheel excavators, backhoe loaders, log skidders, log loaders,
off-highway trucks, articulated trucks, paving products,
telehandlers, skid steer loaders and related parts. Also includes
logistics services for other companies. 10. Machinery and Engines -
Due to the highly integrated nature of operations, represents the
aggregate total of the Machinery and Engines lines of business and
includes primarily our manufacturing, marketing and parts
distribution operations. 11. Managed Distribution - The process to
provide a fair and equitable allocation of available machine and
engine production positions to worldwide dealers on models where
demand exceeds factory supply. 12. Manufacturing Costs -
Manufacturing costs represent the volume- adjusted change for
variable costs and the absolute dollar change for period
manufacturing costs. Variable manufacturing costs are defined as
having a direct relationship with the volume of production. This
includes material costs, direct labor and other costs that vary
directly with production volume such as freight, power to operate
machines, and supplies that are consumed in the manufacturing
process. Period manufacturing costs support production but are
defined as generally not having a direct relationship to short-term
changes in volume. Examples include machine and equipment repair,
depreciation on manufacturing assets, facility support,
procurement, factory scheduling, manufacturing planning and
operations management. For 2005, manufacturing costs exclude the
impact of currency and retirement benefits for periods comparing
2005 to 2004. For periods comparing 2006 to 2005, excludes the
impact of currency and stock based compensation. 13. Period Costs -
Comprised of Machinery and Engines period manufacturing costs,
SG&A expense, R&D expense and other operating costs.
Excludes the impact of currency and retirement benefits for periods
comparing 2005 to 2004. For periods comparing 2006 to 2005,
excludes the impact of currency and stock based compensation. 14.
Price Realization - The impact of net price changes excluding
currency. Includes the impact of changes in the relative weighting
of sales between geographic regions. 15. Retirement Benefits - Cost
of defined benefit pension plans, defined contribution plans and
retirement healthcare and life insurance. 16. Sales Volume - With
respect to sales and revenues, sales volume represents the impact
of changes in the quantities sold for machines, engines and parts.
With respect to operating profit, sales volume represents the
impact of changes in the quantities sold for machines, engines and
parts combined with the net operating profit impact of changes in
the relative weighting of machines, engines and parts sales with
respect to total sales. 17. Stock-Based Compensation - As required
by Statement of Financial Accounting Standard 123R, we will begin
expensing stock-based compensation awards in 2006. Compensation
cost is based on the fair value of the award on the date of grant.
18. 6 Sigma - On a technical level, 6 Sigma represents a measure of
variation that achieves 3.4 defects per million opportunities. At
Caterpillar, 6 Sigma represents a much broader cultural philosophy
to drive continuous improvement throughout the value chain. It is a
fact-based, data-driven methodology that we are using to improve
processes, enhance quality, cut costs, grow our business and
deliver greater value to our customers through Black Belt-led
project teams. At Caterpillar, 6 Sigma goes beyond mere process
improvement -- it has become the way we work as teams to process
business information, solve problems and manage our business
successfully. 19. 2010 Goals - The Company's 2010 goals are a part
of its enterprise strategy to achieve its "Vision 2020," which was
made public on October 31, 2005. The 2010 goals are grouped under
the "3Ps" of people, performance, and profitable growth. The people
goals include a highly engaged workforce and world-class safety.
The performance goals are related to quality and market leadership
and product and service parts availability. Profitable growth goals
include the 2010 sales and revenues target and a goal for earnings
per share growth. More information on Vision 2020 and the 2010
goals can be found in the Company's 8-K filing with the SEC from
October 31, 2005. A copy is available on the Caterpillar's website
under the SEC Filings section at http://www.cat.com/investor.
NON-GAAP FINANCIAL MEASURES The following definition is provided
for "non-GAAP financial measures" in connection with Regulation G
issued by the Securities and Exchange Commission. This non-GAAP
financial measure has no standardized meaning prescribed by U.S.
GAAP, and therefore is unlikely to be comparable to the calculation
of similar measures for other companies. Management does not intend
this item to be considered in isolation or as a substitute for the
related GAAP measure. Machinery and Engines Caterpillar defines
Machinery and Engines as it is presented in the supplemental data
as Caterpillar Inc. and its subsidiaries with Financial Products
accounted for on the equity basis. Machinery and Engines
information relates to the design, manufacture and marketing of our
products. Financial Products information relates to the financing
to customers and dealers for the purchase and lease of Caterpillar
and other equipment. The nature of these businesses is different,
especially with regard to the financial position and cash flow
items. Caterpillar management utilizes this presentation internally
to highlight these differences. We also believe this presentation
will assist readers in understanding our business. Pages 37-42
reconcile Machinery and Engines with Financial Products on the
equity basis to Caterpillar Inc. Consolidated financial
information. The information included in the Outlook section is
forward-looking and involves risks and uncertainties that could
significantly affect expected results. A discussion of these risks
and uncertainties is contained in Form 8-K filed with the
Securities & Exchange Commission (SEC) on January 26, 2006.
This filing is available on our website at
http://www.cat.com/sec_filings. Caterpillar's latest financial
results and current outlook are also available via: Telephone:
(800) 228-7717 (Inside the United States and Canada) (858) 244-2080
(Outside the United States and Canada) Internet:
http://www.cat.com/investor http://www.cat.com/irwebcast (live
broadcast/replays of quarterly conference call) Caterpillar Inc.
Condensed Consolidated Statement of Results of Operations
(Unaudited) (Dollars in millions except per share data) Three
Months Ended Twelve Months Ended December 31, December 31, 2005
2004 2005 2004 Sales and revenues: Sales of Machinery and Engines
$9,041 $8,059 $34,006 $28,336 Revenues of Financial Products 622
525 2,333 1,970 Total sales and revenues 9,663 8,584 36,339 30,306
Operating costs: Cost of goods sold 6,906 6,488 26,558 22,497
Selling, general and administrative expenses 882 808 3,190 2,926
Research and development expenses 290 243 1,084 928 Interest
expense of Financial Products 217 154 768 524 Other operating
expenses 301 208 955 747 Total operating costs 8,596 7,901 32,555
27,622 Operating profit 1,067 683 3,784 2,684 Interest expense
excluding Financial Products 62 54 260 230 Other income (expense)
99 82 377 253 Consolidated profit before taxes 1,104 711 3,901
2,707 Provision for income taxes 270 182 1,120 731 Profit of
consolidated companies 834 529 2,781 1,976 Equity in profit (loss)
of unconsolidated affiliated companies 12 22 73 59 Profit $846 $551
$2,854 $2,035 Profit per common share $1.26 $.81 $4.21 $2.97 Profit
per common share - diluted (1) $1.20 $.77 $4.04 $2.88 Weighted
average common shares outstanding (millions) - Basic 673.6 684.0
678.4 684.5 - Diluted (1) 705.4 712.2 705.8 707.4 Cash dividends
declared per common share $.50 $.41 $.96 $.80 (1) Diluted by
assumed exercise of stock options, using the treasury stock method.
Certain amounts for prior periods have been reclassified to conform
to current financial statement presentation. Caterpillar Inc.
Condensed Consolidated Statement of Financial Position (Unaudited)
(Millions of dollars) Assets Dec. 31, Dec. 31, Current assets: 2005
2004 Cash and short-term investments $1,108 $445 Receivables -
trade and other 7,526 7,463 Receivables - finance 6,442 5,182
Deferred and refundable income taxes 344 398 Prepaid expenses 2,146
1,369 Inventories 5,224 4,675 Total current assets 22,790 19,532
Property, plant and equipment - net 7,988 7,682 Long-term
receivables - trade and other 1,037 764 Long-term receivables -
finance 10,301 9,903 Investments in unconsolidated affiliated
companies 565 517 Deferred income taxes 768 674 Intangible assets
424 315 Goodwill 1,451 1,450 Other assets 1,745 2,258 Total assets
$47,069 $43,095 Liabilities Current liabilities: Short-term
borrowings: -- Machinery and Engines $871 $93 -- Financial Products
4,665 4,064 Accounts payable 3,471 3,580 Accrued expenses 2,617
2,261 Accrued wages, salaries and employee benefits 1,845 1,730
Customer advances 395 447 Dividends payable 168 141 Deferred and
current income taxes payable 528 259 Long-term debt due within one
year: -- Machinery and Engines 340 6 -- Financial Products 4,000
3,525 Total current liabilities 18,900 16,106 Long-term debt due
after one year: -- Machinery and Engines 2,717 3,663 -- Financial
Products 13,152 12,174 Liability for postemployment benefits 2,991
2,986 Deferred income taxes and other liabilities 877 699 Total
liabilities 38,637 35,628 Stockholders' equity Common stock 1,859
1,231 Treasury stock (4,637) (3,277) Profit employed in the
business 11,808 9,937 Accumulated other comprehensive income (598)
(424) Total stockholders' equity 8,432 7,467 Total liabilities and
stockholders' equity $47,069 $43,095 Certain amounts for prior
periods have been reclassified to conform to current financial
statement presentation. Caterpillar Inc. Condensed Consolidated
Statement of Cash Flow (Unaudited) (Millions of dollars) Twelve
Months Ended December 31, Cash flow from operating activities: 2005
2004 Profit $2,854 $2,035 Adjustments for non-cash items:
Depreciation and amortization 1,477 1,397 Other (20) (113) Changes
in assets and liabilities: Receivables - trade and other (908)
(7,616) Inventories (568) (1,391) Accounts payable and accrued
expenses 532 1,457 Other assets - net (866) 337 Other liabilities -
net 612 (97) Net cash provided by (used for) operating activities
3,113 (3,991) Cash flow from investing activities: Capital
expenditures - excluding equipment leased to others (1,201) (926)
Expenditures for equipment leased to others (1,214) (1,188)
Proceeds from disposals of property, plant and equipment 637 486
Additions to finance receivables (10,334) (8,930) Collections of
finance receivables 7,057 6,216 Proceeds from the sale of finance
receivables 900 700 Collections of retained interests in
securitized trade receivables - 5,722 Investments and acquisitions
(net of cash acquired) (13) (290) Proceeds from sale of partnership
investment - 290 Proceeds from release of security deposit 530 -
Proceeds from sale of available-for-sale securities 646 408
Investments in available-for-sale securities (727) (609) Other -
net 194 198 Net cash provided by (used for) investing activities
(3,525) 2,077 Cash flow from financing activities: Dividends paid
(618) (534) Common stock issued, including treasury shares reissued
482 317 Treasury shares purchased (1,684) (539) Proceeds from
long-term debt issued 6,043 5,088 Payments on long-term debt
(4,095) (3,008) Short-term borrowings - net 1,025 550 Net cash
provided by financing activities 1,153 1,874 Effect of exchange
rate changes on cash (78) 143 Increase in cash and short-term
investments 663 103 Cash and short-term investments at beginning of
period 445 342 Cash and short-term investments at end of period
$1,108 $445 All short-term investments, which consist primarily of
highly liquid investments with original maturities of three months
or less, are considered to be cash equivalents. Certain amounts for
prior periods have been reclassified to conform to current
financial statement presentation. Caterpillar Inc. Supplemental
Data for Results of Operations For The Three Months Ended December
31, 2005 (Unaudited) (Millions of dollars) Supplemental
Consolidating Data Machinery Consoli- and Financial dating
Consolidated Engines(1) Products Adjustments Sales and revenues:
Sales of Machinery and Engines $9,041 $9,041 $- $- Revenues of
Financial Products 622 - 715 (93)(2) Total sales and revenues 9,663
9,041 715 (93) Operating costs: Cost of goods sold 6,906 6,906 - -
Selling, general and administrative expenses 882 773 118 (9)(3)
Research and development expenses 290 290 - - Interest expense of
Financial Products 217 - 221 (4)(4) Other operating expenses 301 70
234 (3)(3) Total operating costs 8,596 8,039 573 (16) Operating
profit 1,067 1,002 142 (77) Interest expense excluding Financial
Products 62 64 - (2)(4) Other income (expense) 99 9 15 75(5)
Consolidated profit before taxes 1,104 947 157 - Provision for
income taxes 270 222 48 - Profit of consolidated companies 834 725
109 - Equity in profit (loss) of unconsolidated affiliated
companies 12 10 2 - Equity in profit of Financial Products'
subsidiaries - 111 - (111)(6) Profit $846 $846 $111 $(111) (1)
Represents Caterpillar Inc. and its subsidiaries with Financial
Products accounted for on the equity basis. (2) Elimination of
Financial Products revenues earned from Machinery and Engines. (3)
Elimination of net expenses recorded by Machinery and Engines paid
to Financial Products. (4) Elimination of interest expense recorded
between Financial Products and Machinery and Engines. (5)
Elimination of discount recorded by Machinery and Engines on
receivables sold to Financial Products and of interest earned
between Machinery and Engines and Financial Products. (6)
Elimination of Financial Products profit due to equity method of
accounting. Caterpillar Inc. Supplemental Data for Results of
Operations For The Three Months Ended December 31, 2004 (Unaudited)
(Millions of dollars) Supplemental Consolidating Data Machinery
Consoli- and Financial dating Consolidated Engines(1) Products
Adjustments Sales and revenues: Sales of Machinery and Engines
$8,059 $8,059 $- $- Revenues of Financial Products 525 - 582
(57)(2) Total sales and revenues 8,584 8,059 582 (57) Operating
costs: Cost of goods sold 6,488 6,488 - - Selling, general and
administrative expenses 808 702 126 (20)(3) Research and
development expenses 243 243 - - Interest expense of Financial
Products 154 - 158 (4)(4) Other operating expenses 208 16 185 7(3)
Total operating costs 7,901 7,449 469 (17) Operating profit 683 610
113 (40) Interest expense excluding Financial Products 54 55 -
(1)(4) Other income (expense) 82 28 15 39(5) Consolidated profit
before taxes 711 583 128 - Provision for income taxes 182 138 44 -
Profit of consolidated companies 529 445 84 - Equity in profit
(loss) of unconsolidated affiliated companies 22 21 1 - Equity in
profit of Financial Products' subsidiaries - 85 - (85)(6) Profit
$551 $551 $85 $(85) (1) Represents Caterpillar Inc. and its
subsidiaries with Financial Products accounted for on the equity
basis. (2) Elimination of Financial Products revenues earned from
Machinery and Engines. (3) Elimination of net expenses recorded by
Machinery and Engines paid to Financial Products. (4) Elimination
of interest expense recorded between Financial Products and
Machinery and Engines. (5) Elimination of discount recorded by
Machinery and Engines on receivables sold to Financial Products and
of interest earned between Machinery and Engines and Financial
Products. (6) Elimination of Financial Products profit due to
equity method of accounting. Certain amounts have been reclassified
to conform to the 2005 financial statement presentation.
Caterpillar Inc. Supplemental Data for Results of Operations For
The Twelve Months Ended December 31, 2005 (Unaudited) (Millions of
dollars) Supplemental Consolidating Data Machinery Consoli- and
Financial dating Consolidated Engines(1) Products Adjustments Sales
and revenues: Sales of Machinery and Engines $34,006 $34,006 $- $-
Revenues of Financial Products 2,333 - 2,650 (317)(2) Total sales
and revenues 36,339 34,006 2,650 (317) Operating costs: Cost of
goods sold 26,558 26,558 - - Selling, general and administrative
expenses 3,190 2,786 446 (42)(3) Research and development expenses
1,084 1,084 - - Interest expense of Financial Products 768 - 786
(18)(4) Other operating expenses 955 76 887 (8)(3) Total operating
costs 32,555 30,504 2,119 (68) Operating profit 3,784 3,502 531
(249) Interest expense excluding Financial Products 260 266 -
(6)(4) Other income (expense) 377 85 49 243(5) Consolidated profit
before taxes 3,901 3,321 580 - Provision for income taxes 1,120 926
194 - Profit of consolidated companies 2,781 2,395 386 - Equity in
profit (loss) of unconsolidated affiliated companies 73 64 9 -
Equity in profit of Financial Products' subsidiaries - 395 -
(395)(6) Profit $2,854 $2,854 $395 $(395) (1) Represents
Caterpillar Inc. and its subsidiaries with Financial Products
accounted for on the equity basis. (2) Elimination of Financial
Products revenues earned from Machinery and Engines. (3)
Elimination of net expenses recorded by Machinery and Engines paid
to Financial Products. (4) Elimination of interest expense recorded
between Financial Products and Machinery and Engines. (5)
Elimination of discount recorded by Machinery and Engines on
receivables sold to Financial Products and of interest earned
between Machinery and Engines and Financial Products. (6)
Elimination of Financial Products profit due to equity method of
accounting. Caterpillar Inc. Supplemental Data for Results of
Operations For The Twelve Months Ended December 31, 2004
(Unaudited) (Millions of dollars) Supplemental Consolidating Data
Machinery Consoli- and Financial dating Consolidated Engines(1)
Products Adjustments Sales and revenues: Sales of Machinery and
Engines $28,336 $28,336 $- $- Revenues of Financial Products 1,970
- 2,169 (199)(2) Total sales and revenues 30,306 28,336 2,169 (199)
Operating costs: Cost of goods sold 22,497 22,497 - - Selling,
general and administrative expenses 2,926 2,548 441 (63)(3)
Research and development expenses 928 928 - - Interest expense of
Financial Products 524 - 536 (12)(4) Other operating expenses 747
18 722 7(3) Total operating costs 27,622 25,991 1,699 (68)
Operating profit 2,684 2,345 470 (131) Interest expense excluding
Financial Products 230 235 - (5)(4) Other income (expense) 253 92
35 126(5) Consolidated profit before taxes 2,707 2,202 505 -
Provision for income taxes 731 566 165 - Profit of consolidated
companies 1,976 1,636 340 - Equity in profit (loss) of
unconsolidated affiliated companies 59 56 3 - Equity in profit of
Financial Products' subsidiaries - 343 - (343)(6) Profit $2,035
$2,035 $343 $(343) (1) Represents Caterpillar Inc. and its
subsidiaries with Financial Products accounted for on the equity
basis. (2) Elimination of Financial Products revenues earned from
Machinery and Engines. (3) Elimination of net expenses recorded by
Machinery and Engines paid to Financial Products. (4) Elimination
of interest expense recorded between Financial Products and
Machinery and Engines. (5) Elimination of discount recorded by
Machinery and Engines on receivables sold to Financial Products and
of interest earned between Machinery and Engines and Financial
Products. (6) Elimination of Financial Products profit due to
equity method of accounting. Certain amounts have been reclassified
to conform to the 2005 financial statement presentation.
Caterpillar Inc. Supplemental Data for Cash Flow For The Twelve
Months Ended December 31, 2005 (Unaudited) (Millions of dollars)
Supplemental Consolidating Data Machinery and Financial
Consolidating Consolidated Engines(1) Products Adjustments Cash
flow from operating activities: Profit $2,854 $2,854 $395 $(395)(2)
Adjustments for non-cash items: Depreciation and amortization 1,477
835 642 - Undistributed profit of Financial Products - (373) -
373(3) Other (20) 7 (205) 178(4) Changes in assets and liabilities:
Receivables - trade and other (908) (39) 7 (876)(4/5) Inventories
(568) (568) - - Accounts payable and accrued expenses 532 353 238
(59)(4) Other assets - net (866) (854) (34) 22(4) Other liabilities
- net 612 595 34 (17)(4) Net cash provided by (used for) operating
activities 3,113 2,810 1,077 (774) Cash flow from investing
activities: Capital expenditures - excluding equipment leased to
others (1,201) (1,162) (39) - Expenditures for equipment leased to
others (1,214) - (1,265) 51(4) Proceeds from disposals of property,
plant and equipment 637 45 592 - Additions to finance receivables
(10,334) - (33,961) 23,627(5) Collections of finance receivables
7,057 - 29,449 (22,392)(5) Proceeds from the sale of finance
receivables 900 - 1,430 (530)(5) Net intercompany borrowings - 111
- (111)(6) Investments and acquisitions (net of cash acquired) (13)
(13) - - Proceeds from release of security deposit 530 530 - -
Proceeds from sale of available-for-sale securities 646 29 617 -
Investments in available-for-sale securities (727) (34) (693) -
Other - net 194 10 197 (13)(7) Net cash provided by (used for)
investing activities (3,525) (484) (3,673) 632 Cash flow from
financing activities: Dividends paid (618) (618) (22) 22(8) Common
stock issued, including treasury shares reissued 482 482 (14) 14(7)
Treasury shares purchased (1,684) (1,684) - - Net intercompany
borrowings - - (111) 111(6) Proceeds from long-term debt issued
6,043 130 5,913 - Payments on long-term debt (4,095) (631) (3,464)
- Short-term borrowings - net 1,025 738 287 - Net cash provided by
(used for) financing activities 1,153 (1,583) 2,589 147 Effect of
exchange rate changes on cash (78) (62) (11) (5)(9) Increase
(decrease) in cash and short-term investments 663 681 (18) - Cash
and short-term investments at beginning of period 445 270 175 -
Cash and short-term investments at end of period $1,108 $951 $157
$- (1) Represents Caterpillar Inc. and its subsidiaries with
Financial Products accounted for on the equity basis. (2)
Elimination of Financial Products profit after tax due to equity
method of accounting. (3) Non-cash adjustment for the undistributed
earnings from Financial Products. (4) Elimination of non-cash
adjustments and changes in assets and liabilities related to
consolidated reporting. (5) Reclassification of Cat Financial's
cash flow activity from investing to operating for receivables that
arose from the sale of inventory. (6) Net proceeds and payments
to/from Machinery and Engines and Financial Products. (7) Change in
investment and common stock related to Financial Products. (8)
Elimination of dividend from Financial Products to Machinery and
Engines. (9) Elimination of the effect of exchange on intercompany
balances. Caterpillar Inc. Supplemental Data for Cash Flow For The
Twelve Months Ended December 31, 2004 (Unaudited) (Millions of
dollars) Supplemental Consolidating Data Machinery and Financial
Consolidating Consolidated Engines(1) Products Adjustments Cash
flow from operating activities: Profit $2,035 $2,035 $343 $(343)(2)
Adjustments for non-cash items: Depreciation and amortization 1,397
795 602 - Undistributed profit of Financial Products - (328) -
328(3) Other (113) (111) (145) 143(4) Changes in assets and
liabilities: Receivables - trade and other (7,616) (531) 43
(7,128)(4/5) Inventories (1,391) (1,391) - - Accounts payable and
accrued expenses 1,457 1,325 11 121(4) Other assets - net 337 240 7
90(4) Other liabilities - net (97) (116) 101 (82)(4) Net cash
provided by (used for) operating activities (3,991) 1,918 962
(6,871) Cash flow from investing activities: Capital expenditures -
excluding equipment leased to others (926) (841) (85) -
Expenditures for equipment leased to others (1,188) (2) (1,186) -
Proceeds from disposals of property, plant and equipment 486 27 459
- Additions to finance receivables (8,930) - (20,515) 11,585(5)
Collections of finance receivables 6,216 - 16,963 (10,747)(5)
Proceeds from the sale of finance receivables 700 - 1,363 (663)(5)
Additions to retained interests in securitized trade receivables -
- (6,686) 6,686(10) Collections of retained interests in
securitized trade receivables 5,722 - 5,722 - Net intercompany
borrowings - 159 209 (368)(6) Investments and acquisitions (net of
cash acquired) (290) (295) - 5(4) Proceeds from sale of partnership
investment 290 - 290 - Proceeds from sale of available-for-sale
securities 408 13 395 - Investments in available-for-sale
securities (609) (107) (502) - Other - net 198 12 192 (6)(7) Net
cash provided by (used for) investing activities 2,077 (1,034)
(3,381) 6,492 Cash flow from financing activities: Dividends paid
(534) (534) (15) 15(8) Common stock issued, including treasury
shares reissued 317 317 (2) 2(7) Treasury shares purchased (539)
(539) - - Net intercompany borrowings - (209) (159) 368(6) Proceeds
from long-term debt issued 5,088 9 5,079 - Payments on long-term
debt (3,008) (35) (2,973) - Short-term borrowings - net 550 21 529
- Net cash provided by (used for) financing activities 1,874 (970)
2,459 385 Effect of exchange rate changes on cash 143 136 13 (6)(9)
Increase in cash and short-term investments 103 50 53 - Cash and
short-term investments at beginning of period 342 220 122 - Cash
and short-term investments at end of period $445 $270 $175 $- (1)
Represents Caterpillar Inc. and its subsidiaries with Financial
Products accounted for on the equity basis. (2) Elimination of
Financial Products profit after tax due to equity method of
accounting. (3) Non-cash adjustment for the undistributed earnings
from Financial Products. (4) Elimination of non-cash adjustments
and changes in assets and liabilities related to consolidated
reporting. Receivables amounts include adjustment for consolidated
non-cash receipt of retained interests in securitized trade
receivables. (5) Reclassification of Cat Financial's cash flow
activity from investing to operating for receivables that arose
from the sale of inventory. (6) Net proceeds and payments to/from
Machinery and Engines and Financial Products. (7) Change in
investment and common stock related to Financial Products. (8)
Elimination of dividend from Financial Products to Machinery and
Engines. (9) Elimination of the effect of exchange on intercompany
balances. (10) Elimination of Cat Financial's additions to retained
interests in securitized trade receivables that arose from an
intercompany purchase of receivables. Certain amounts have been
reclassified to conform to the 2005 financial statement
presentation. SAFE HARBOR Certain statements in this release relate
to future events and expectations and as such constitute
forward-looking statements involving known and unknown factors that
may cause actual results of Caterpillar Inc. to be different from
those expressed or implied in the forward-looking statements. In
this context, words such as "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "will," or other similar words and
phrases often identify forward-looking statements made on behalf of
Caterpillar. It is important to note that actual results of the
company may differ materially from those described or implied in
such forward looking statements based on a number of factors and
uncertainties, including, but not limited to, changes in economic
conditions, currency exchange rates or political stability; market
acceptance of the company's products and services; significant
changes in the competitive environment; changes in law, regulations
and tax rates; and other general economic, business and financing
conditions and factors described in more detail in the company's
filings with the Securities and Exchange Commission, including in
its Annual Report on Form 10-K for the year ended December 31,
2004. We do not undertake to update our forward-looking statements.
PRNewswire - Jan. 26 First Call Analyst: FCMN Contact: END FIRST
AND FINAL ADD DATASOURCE: Caterpillar Inc. Web site:
http://www.cat.com/
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