Cat Financial Announces Third Quarter 2008 Results
21 October 2008 - 10:31PM
PR Newswire (US)
NASHVILLE, Tenn., Oct. 21 /PRNewswire-FirstCall/ -- Caterpillar
Financial Services Corporation (Cat Financial) today reported
third-quarter revenues of $774 million, an increase of $16 million,
or 2 percent, compared with the third quarter of 2007.
Third-quarter profit after tax was $118 million, a $15 million, or
11 percent, decrease over the third quarter of 2007. Of the
increase in revenues, $106 million resulted from the impact of
continued growth of earning assets (finance receivables and
operating leases at constant interest rates). This increase was
offset by an $87 million decrease from the impact of lower interest
rates on new and existing finance receivables and a $3 million net
decrease in various other net revenue items. On a pre-tax basis,
profit was $156 million, down $31 million, or 17 percent, compared
with the third quarter of 2007. The decrease was principally due to
a $38 million impact from decreased net yield on average earning
assets, a $16 million increase in general, operating and
administrative expense, a higher provision expense of $13 million
and a $4 million net decrease in various other net items, partially
offset by a $40 million favorable impact from higher average
earning assets. Provision for income taxes decreased $16 million,
or 30 percent, compared with the third quarter of 2007. The
decrease was primarily attributable to lower pre-tax profits and
favorable changes in the geographic mix of pre-tax profits,
partially offset by the absence of net tax benefits related to
changes in tax laws of certain non-U.S. jurisdictions that occurred
in 2007. New retail financing was $4.38 billion, an increase of
$803 million, or 22 percent, from the third quarter of 2007. The
increase was primarily attributable to our Asia-Pacific and
Diversified Services operating segments. Past dues over 30 days at
September 30, 2008 were 3.64 percent compared to 2.52 percent at
September 30, 2007. This increase began with the downturn in the
U.S. housing market but has recently spread to Europe as global
credit challenges continue. Write-offs net of recoveries were $22
million for the third quarter of 2008 compared to $15 million for
the third quarter of 2007. This increase is primarily attributable
to North America. Cat Financial's allowance for credit losses,
totaling $390 million at the end of the third quarter of 2008, is
appropriate for the current and expected global economic
environment. The third quarter 2008 allowance for credit losses is
1.41 percent of net finance receivables compared with 1.39 percent
in the third quarter of 2007. "Despite the challenging market
conditions, our portfolio performance has remained solid," said
Kent Adams, vice president of Caterpillar Inc. and Cat Financial
President. "Past dues, at 3.64 percent, remain well below the most
recent recessionary period of 2001-2002. Similarly, September 2008
year-to- date annualized net write-offs, at .32 percent of our
average retail portfolio are also well below what we experienced in
2001-2002. Our diversified global funding platform has enabled us
to maintain access to funding throughout the recent credit market
disruptions to support ongoing operations and new business funding
needs. Cat Financial continues to be a reliable source of financing
for Caterpillar customers and dealers." For more than 25 years, Cat
Financial, a wholly owned subsidiary of Caterpillar Inc., has been
providing a wide range of financing alternatives to customers and
Caterpillar dealers for Caterpillar machinery and engines, Solar
(R) gas turbines and other equipment and marine vessels. Cat
Financial has offices and subsidiaries located throughout the
Americas, Asia, Australia, Latin America and Europe, with
headquarters in Nashville, Tennessee. STATISTICAL HIGHLIGHTS: THIRD
QUARTER 2008 VS. THIRD QUARTER 2007 (ENDING SEPTEMBER 30) (Millions
of dollars) 2008 2007 CHANGE Revenues $ 774 $ 758 2% Profit Before
Tax $ 156 $ 187 (17%) Profit After Tax $ 118 $ 133 (11%) New Retail
$ 4,380 $ 3,577 22% Financing Total Assets $32,735 $28,150 16% NINE
MONTHS 2008 VS. NINE MONTHS 2007 (ENDING SEPTEMBER 30) (Millions of
dollars) 2008 2007 CHANGE Revenues $ 2,338 $ 2,218 5% Profit Before
Tax $ 515 $ 556 (7%) Profit After Tax $ 372 $ 381 (2%) New Retail
$12,451 $ 9,974 25% Financing SAFE HARBOR STATEMENT UNDER THE
SECURITIES LITIGATION REFORM ACT OF 1995 Certain statements
contained in this earnings release may be considered
"forward-looking statements" and involve risks and uncertainties
that could significantly impact results. In this context, words
such as "believes," "expects," "estimates," "anticipates," "will,"
"should" and similar words or phrases often identify
forward-looking statements made on behalf of Cat Financial. 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 or interest rates; 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
Form 10-K filed with the Securities and Exchange Commission on
February 22, 2008. We do not undertake to update our
forward-looking statements. DATASOURCE: Caterpillar Financial
Services Corporation CONTACT: Jim Dugan, Corporate Public Affairs
of Caterpillar, +1-309-494-4410, mobile, +1-309-360-7311, Web site:
http://www.cat.com/
Copyright