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 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 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 21,500 horsepower (4 to over 16 000
kilowatts). Turbines range from 1,600 to 20,500 horsepower (1 200
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
investor in independent power projects using Caterpillar power
generation equipment and services. 8. Latin America -- Geographic
region including 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 and rail-related products
and services. 10. Machinery and Engines (M&E) -- Due to the
highly integrated nature of operations, it 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. Excludes the impact of currency
and stock-based compensation. 13. M&E Other Operating Expenses
-- Comprised primarily of gains (losses) on disposal of long-lived
assets, long-lived asset impairment charges and impairment of
goodwill. 14. Period Costs -- Comprised of Machinery and Engines
period manufacturing costs, SG&A expense and R&D expense.
Excludes the impact of currency and stock-based compensation. 15.
Price Realization -- The impact of net price changes excluding
currency. Includes the impact of changes in the relative weighting
of sales between geographic regions. 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 Standards 123R, we began
expensing stock-based compensation awards in 2006. Compensation
cost is based on the fair value of the award on the date of grant.
Our awards consist of stock options and stock-settled stock
appreciation rights (SARs). 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. 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 27-32 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 July 21, 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 Six Months Ended June 30, June 30, 2006 2005 2006 2005
Sales and revenues: Sales of Machinery and Engines $9,956 $8,784
$18,699 $16,573 Revenues of Financial Products 649 576 1,298 1,126
Total sales and revenues 10,605 9,360 19,997 17,699 Operating
costs: Cost of goods sold 7,416 6,890 13,968 13,105 Selling,
general and administrative expenses 881 789 1,702 1,533 Research
and development expenses 343 268 650 509 Interest expense of
Financial Products 256 184 488 354 Other operating expenses 230 208
492 421 Total operating costs 9,126 8,339 17,300 15,922 Operating
profit 1,479 1,021 2,697 1,777 Interest expense excluding Financial
Products 66 65 134 130 Other income (expense) 50 90 93 198
Consolidated profit before taxes 1,463 1,046 2,656 1,845 Provision
for income taxes 449 315 819 547 Profit of consolidated companies
1,014 731 1,837 1,298 Equity in profit (loss) of unconsolidated
affiliated companies 32 29 49 43 Profit $1,046 $760 $1,886 $1,341
Profit per common share $1.58 $1.12 $2.83 $1.97 Profit per common
share - diluted(1) $1.52 $1.08 $2.72 $1.89 Weighted average common
shares outstanding (millions) - Basic 662.1 678.3 666.7 680.9 -
Diluted(1) 688.5 705.1 693.8 707.9 Cash dividends declared per
common share $.55 $.46 $.55 $.46 (1) Diluted by assumed exercise of
stock options and SARS, using the treasury stock method.
Caterpillar Inc. Condensed Consolidated Statement of Financial
Position (Unaudited) (Millions of dollars) Assets Jun. 30, Dec. 31,
Current assets: 2006 2005 Cash and short-term investments $648
$1,108 Receivables - trade and other 8,679 7,526 Receivables -
finance 6,221 6,442 Deferred and refundable income taxes 368 344
Prepaid expenses 2,161 2,146 Inventories 6,254 5,224 Total current
assets 24,331 22,790 Property, plant and equipment - net 8,281
7,988 Long-term receivables - trade and other 970 1,037 Long-term
receivables - finance 10,801 10,301 Investments in unconsolidated
affiliated companies 571 565 Deferred income taxes 692 768
Intangible assets 655 424 Goodwill 1,834 1,451 Other assets 1,770
1,745 Total assets $49,905 $47,069 Liabilities Current liabilities:
Short-term borrowings: -- Machinery and Engines $1,689 $871 --
Financial Products 5,205 4,698 Accounts payable 3,936 3,412 Accrued
expenses 2,782 2,617 Accrued wages, salaries and employee benefits
1,541 1,845 Customer advances 677 454 Dividends payable 197 168
Deferred and current income taxes payable 641 528 Long-term debt
due within one year: -- Machinery and Engines 129 340 -- Financial
Products 4,330 4,159 Total current liabilities 21,127 19,092
Long-term debt due after one year: -- Machinery and Engines 2,736
2,717 -- Financial Products 13,203 12,960 Liability for
post-employment benefits 3,247 2,991 Deferred income taxes and
other liabilities 959 877 Total liabilities 41,272 38,637
Stockholders' equity Common stock 2,393 1,859 Treasury stock
(6,613) (4,637) Profit employed in the business 13,330 11,808
Accumulated other comprehensive income (477) (598) Total
stockholders' equity 8,633 8,432 Total liabilities and
stockholders' equity $49,905 $47,069 Caterpillar Inc. Condensed
Consolidated Statement of Cash Flow (Unaudited) (Millions of
dollars) Six Months Ended June 30, Cash flow from operating
activities: 2006 2005 Profit $1,886 $1,341 Adjustments for non-cash
items: Depreciation and amortization 802 744 Other 94 (113) Changes
in assets and liabilities: Receivables - trade and other (762)
(742) Inventories (755) (674) Accounts payable and accrued expenses
356 236 Other assets - net 23 (24) Other liabilities - net 304 228
Net cash provided by (used for) operating activities 1,948 996 Cash
flow from investing activities: Capital expenditures - excluding
equipment leased to others (552) (402) Expenditures for equipment
leased to others (532) (608) Proceeds from disposals of property,
plant and equipment 319 304 Additions to finance receivables
(5,114) (5,159) Collections of finance receivables 4,079 3,444
Proceeds from the sale of finance receivables 980 859 Investments
and acquisitions (net of cash acquired) (419) (8) Proceeds from
sale of available-for-sale securities 219 182 Investments in
available-for-sale securities (296) (239) Other - net 167 108 Net
cash provided by (used for) investing activities (1,149) (1,519)
Cash flow from financing activities: Dividends paid (335) (280)
Common stock issued, including treasury shares reissued 349 278
Treasury shares purchased (2,411) (839) Excess tax benefit from
stock-based compensation 120 - Proceeds from debt issued (original
maturities greater than three months) 5,033 6,318 Payments on debt
(original maturities greater than three months) (5,595) (4,197)
Short-term borrowings (original maturities three months or less) --
net 1,564 (467) Net cash provided by (used for) financing
activities (1,275) 813 Effect of exchange rate changes on cash 16
14 Increase (decrease) in cash and short-term investments (460) 304
Cash and short-term investments at beginning of period 1,108 445
Cash and short-term investments at end of period $648 $749 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. Caterpillar Inc. Supplemental
Data for Results of Operations For The Three Months Ended June 30,
2006 (Unaudited) (Millions of dollars) Supplemental Consolidating
Data Machinery and Financial Consolidating Consolidated Engines(1)
Products Adjustments Sales and revenues: Sales of Machinery and
Engines $9,956 $9,956 $- $- Revenues of Financial Products 649 -
768 (119)(2) Total sales and revenues 10,605 9,956 768 (119)
Operating costs: Cost of goods sold 7,416 7,416 - - Selling,
general and administrative expenses 881 777 113 (9)(3) Research and
development expenses 343 343 - - Interest expense of Financial
Products 256 - 259 (3)(4) Other operating expenses 230 (1) 239
(8)(3) Total operating costs 9,126 8,535 611 (20) Operating profit
1,479 1,421 157 (99) Interest expense excluding Financial Products
66 70 - (4)(4) Other income (expense) 50 (80) 35 95(5) Consolidated
profit before taxes 1,463 1,271 192 - Provision for income taxes
449 384 65 - Profit of consolidated companies 1,014 887 127 -
Equity in profit (loss) of unconsolidated affiliated companies 32
32 - - Equity in profit of Financial Products' subsidiaries - 127 -
(127)(6) Profit $1,046 $1,046 $127 $(127) (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 June 30, 2005 (Unaudited)
(Millions of dollars) Supplemental Consolidating Data Machinery and
Financial Consolidating Consolidated Engines(1) Products
Adjustments Sales and revenues: Sales of Machinery and Engines
$8,784 $8,784 $- $- Revenues of Financial Products 576 - 656
(80)(2) Total sales and revenues 9,360 8,784 656 (80) Operating
costs: Cost of goods sold 6,890 6,890 - - Selling, general and
administrative expenses 789 689 111 (11)(3) Research and
development expenses 268 268 - - Interest expense of Financial
Products 184 - 189 (5)(4) Other operating expenses 208 (4) 214
(2)(3) Total operating costs 8,339 7,843 514 (18) Operating profit
1,021 941 142 (62) Interest expense excluding Financial Products 65
67 - (2)(4) Other income (expense) 90 21 9 60(5) Consolidated
profit before taxes 1,046 895 151 - Provision for income taxes 315
262 53 - Profit of consolidated companies 731 633 98 - Equity in
profit (loss) of unconsolidated affiliated companies 29 26 3 -
Equity in profit of Financial Products' subsidiaries - 101 -
(101)(6) Profit $760 $760 $101 $(101) (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 Six Months Ended June 30, 2006
(Unaudited) (Millions of dollars) Supplemental Consolidating Data
Machinery and Financial Consolidating Consolidated Engines(1)
Products Adjustments Sales and revenues: Sales of Machinery and
Engines $18,699 $18,699 $- $- Revenues of Financial Products 1,298
- 1,514 (216)(2) Total sales and revenues 19,997 18,699 1,514 (216)
Operating costs: Cost of goods sold 13,968 13,968 - - Selling,
general and administrative expenses 1,702 1,501 216 (15)(3)
Research and development expenses 650 650 - - Interest expense of
Financial Products 488 - 492 (4)(4) Other operating expenses 492 28
479 (15)(3) Total operating costs 17,300 16,147 1,187 (34)
Operating profit 2,697 2,552 327 (182) Interest expense excluding
Financial Products 134 138 - (4)(4) Other income (expense) 93 (131)
46 178(5) Consolidated profit before taxes 2,656 2,283 373 -
Provision for income taxes 819 693 126 - Profit of consolidated
companies 1,837 1,590 247 - Equity in profit (loss) of
unconsolidated affiliated companies 49 48 1 - Equity in profit of
Financial Products' subsidiaries - 248 - (248)(6) Profit $1,886
$1,886 $248 $(248) (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 Six Months Ended June 30, 2005
(Unaudited) (Millions of dollars) Supplemental Consolidating Data
Machinery and Financial Consolidating Consolidated Engines(1)
Products Adjustments Sales and revenues: Sales of Machinery and
Engines $16,573 $16,573 $- $- Revenues of Financial Products 1,126
- 1,268 (142)(2) Total sales and revenues 17,699 16,573 1,268 (142)
Operating costs: Cost of goods sold 13,105 13,105 - - Selling,
general and administrative expenses 1,533 1,337 218 (22)(3)
Research and development expenses 509 509 - - Interest expense of
Financial Products 354 - 362 (8)(4) Other operating expenses 421 2
422 (3)(3) Total operating costs 15,922 14,953 1,002 (33) Operating
profit 1,777 1,620 266 (109) Interest expense excluding Financial
Products 130 133 - (3)(4) Other income (expense) 198 75 17 106(5)
Consolidated profit before taxes 1,845 1,562 283 - Provision for
income taxes 547 448 99 - Profit of consolidated companies 1,298
1,114 184 - Equity in profit (loss) of unconsolidated affiliated
companies 43 38 5 - Equity in profit of Financial Products'
subsidiaries - 189 - (189)(6) Profit $1,341 $1,341 $189 $(189) (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 Cash Flow For
The Six Months Ended June 30, 2006 (Unaudited) (Millions of
dollars) Supplemental Consolidating Data Machinery and Financial
Consolidating Consolidated Engines(1) Products Adjustments Cash
flow from operating activities: Profit $1,886 $1,886 $248 $(248)(2)
Adjustments for non-cash items: Depreciation and amortization 802
470 332 - Undistributed profit of Financial Products - (248) -
248(3) Other 94 90 (186) 190(4) Changes in assets and liabilities:
Receivables - trade and other (762) (53) 7 (716)(4/5) Inventories
(755) (755) - - Accounts payable and accrued expenses 356 271 72
13(4) Other assets - net 23 9 (5) 19(4) Other liabilities - net 304
300 31 (27)(4) Net cash provided by (used for) operating activities
1,948 1,970 499 (521) Cash flow from investing activities: Capital
expenditures - excluding equipment leased to others (552) (536)
(27) 11(4) Expenditures for equipment leased to others (532) -
(548) 16(4) Proceeds from disposals of property, plant and
equipment 319 20 310 (11)(4) Additions to finance receivables
(5,114) - (18,013) 12,899(5) Collections of finance receivables
4,079 - 15,969 (11,890)(5) Proceeds from the sale of finance
receivables 980 - 1,484 (504)(5) Net intercompany borrowings - 36
(383) 347(6) Investments and acquisitions (net of cash acquired)
(419) (419) - - Proceeds from sale of available-for-sale securities
219 13 206 - Investments in available-for-sale securities (296)
(30) (266) - Other - net 167 13 166 (12)7 Net cash provided by
(used for) investing activities (1,149) (903) (1,102) 856 Cash flow
from financing activities: Dividends paid (335) (335) - - Common
stock issued, including treasury shares reissued 349 349 (12) 12(7)
Treasury shares purchased (2,411) (2,411) - - Excess tax benefit
from stock-based compensation 120 120 - - Net intercompany
borrowings - 383 (36) (347)(6) Proceeds from debt issued (original
maturities greater than three months) 5,033 102 4,931 - Payments on
debt (original maturities greater than three months) (5,595) (501)
(5,094) - Short-term borrowings (original maturities three months
or less) -- net 1,564 721 843 - Net cash provided by (used for)
financing activities (1,275) (1,572) 632 (335) Effect of exchange
rate changes on cash 16 9 7 - Increase (decrease) in cash and
short-term investments (460) (496) 36 - Cash and short-term
investments at beginning of period 1,108 951 157 - Cash and
short-term investments at end of period $648 $455 $193 $- (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.
Caterpillar Inc. Supplemental Data for Cash Flow For The Six Months
Ended June 30, 2005 (Unaudited) (Millions of dollars) Supplemental
Consolidating Data Machinery and Financial Consolidating
Consolidated Engines(1) Products Adjustments Cash flow from
operating activities: Profit $1,341 $1,341 $189 $(189)(2)
Adjustments for non-cash items: Depreciation and amortization 744
426 318 - Undistributed profit of Financial Products - (189) -
189(3) Other (113) (129) (94) 110(4) Changes in assets and
liabilities: Receivables - trade and other (742) (256) 19
(505)(4/5) Inventories (674) (674) - - Accounts payable and accrued
expenses 236 118 131 (13)(4) Other assets - net (24) (46) (4) 26(4)
Other liabilities - net 228 262 (3) (31)(4) Net cash provided by
(used for) operating activities 996 853 556 (413) Cash flow from
investing activities: Capital expenditures - excluding equipment
leased to others (402) (385) (17) - Expenditures for equipment
leased to others (608) - (608) - Proceeds from disposals of
property, plant and equipment 304 18 286 - Additions to finance
receivables (5,159) - (16,035) 10,876(5) Collections of finance
receivables 3,444 - 13,894 (10,450)(5) Proceeds from the sale of
finance receivables 859 - 859 - Net intercompany borrowings - (67)
(9) 76(6) Investments and acquisitions (net of cash acquired) (8)
(8) - - Proceeds from sale of available-for-sale securities 182 8
174 - Investments in available-for-sale securities (239) (9) (230)
- Other - net 108 14 94 - Net cash provided by (used for) investing
activities (1,519) (429) (1,592) 502 Cash flow from financing
activities: Dividends paid (280) (280) - - Common stock issued,
including treasury shares reissued 278 278 - - Treasury shares
purchased (839) (839) - - Net intercompany borrowings - 9 67
(76)(6) Proceeds from debt issued (original maturities greater than
three months) 6,318 147 6,171 - Payments on debt (original
maturities greater than three months) (4,197) (51) (4,146) -
Short-term borrowings (original maturities three months or less) --
net (467) 483 (950) - Net cash provided by (used for) financing
activities 813 (253) 1,142 (76) Effect of exchange rate changes on
cash 14 23 4 (13)(7) Increase (decrease) in cash and short-term
investments 304 194 110 - Cash and short-term investments at
beginning of period 445 270 175 - Cash and short-term investments
at end of period $749 $464 $285 $- (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) Elimination of the effect of exchange on intercompany balances.
DATASOURCE: Caterpillar Inc. Web site: http://www.cat.com/
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