Financial Products Segment 476 (9%) 62 (11%) 100 (2%) 123 5% 761 (7%) - -% 761 (7%)

Corporate Items and Eliminations (24) (11) (8) (22) (65) - (65)

Financial Products Revenues 452 (4%) 51 (12%) 92 (1%) 101 2% 696 (3%) - -% 696 (3%)

Consolidated Sales and Revenues USD 4,991 -% USD 1,104 24% USD 2,743 13% USD 3,049 31% USD 11,887 12% USD - -% USD 11,887 12%

First Quarter 2020

Construction Industries USD 2,085 USD 265 USD 889 USD 1,073 USD 4,312 USD (6) USD 4,306

Resource Industries 696 320 395 568 1,979 105 2,084

Energy & Transportation 1,738 249 1,053 578 3,618 731 4,349

All Other Segment 5 2 11 10 28 81 109

Corporate Items and Eliminations (15) (2) (4) (2) (23) (911) (934)

Machinery, Energy & Transportation 4,509 834 2,344 2,227 9,914 - 9,914

Financial Products Segment 525 70 102 117 814 - 814

Corporate Items and Eliminations (54) (12) (9) (18) (93) - (93)

Financial Products Revenues 471 58 93 99 721 - 721

Consolidated Sales and Revenues USD 4,980 USD 892 USD 2,437 USD 2,326 USD 10,635 USD - USD 10,635

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Consolidated Operating Profit

The chart above graphically illustrates reasons for the change in consolidated operating profit between the first quarter of 2020 (at left) and the first quarter of 2021 (at right). Caterpillar management utilizes these charts internally to visually communicate with the company's Board of Directors and employees. The bar titled Other includes consolidating adjustments and Machinery, Energy & Transportation's other operating (income) expenses.

Operating profit for the first quarter of 2021 was USD1.814 billion, an increase of USD410 million, or 29%, compared with USD1.404 billion in the first quarter of 2020. The increase was primarily due to higher sales volume and higher profit from Financial Products, partially offset by higher selling, general and administrative (SG&A) and research and development (R&D) expenses, unfavorable price realization and higher manufacturing costs.

The increase in SG&A/R&D expenses was driven by higher short-term incentive compensation expense, which was reinstated in 2021. Unfavorable manufacturing costs were driven by higher short-term incentive compensation expense, partially offset by favorable material costs and lower warranty expense.

Profit (Loss) by Segment 


                                     First Quarter   First Quarter   USD      % 
(Millions of dollars)                                                       Change 
                                     2021            2020            Change 
Construction Industries            USD 1,035         USD 640           USD 395    62% 
Resource Industries                  328             304             24     8% 
Energy & Transportation              666             602             64     11% 
All Other Segment                    3               7               (4)    (57%) 
Corporate Items and Eliminations     (368)           (212)           (156) 
Machinery, Energy & Transportation   1,664           1,341           323    24% 
Financial Products Segment           244             105             139    132% 
Corporate Items and Eliminations     (19)            47              (66) 
Financial Products                   225             152             73     48% 
Consolidating Adjustments            (75)            (89)            14 
Consolidated Operating Profit      USD 1,814         USD 1,404         USD 410    29%

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Other Profit/Loss and Tax Items ? Other income (expense) in the first quarter of 2021 was income of USD325 million, compared with income of USD222

million in the first quarter of 2020. The change was due to the absence of a remeasurement gain resulting from the

settlement of a non-U.S. pension obligation that occurred in the first quarter of 2020, which was more than offset

by the favorable impacts from foreign currency exchange gains (losses), unrealized gains (losses) on marketable

securities at Insurance Services, gains (losses) on commodity hedges and favorable pension and other postemployment

benefit (OPEB) plan costs.

The company experienced foreign currency exchange net gains in the first quarter of 2021 across several currencies, compared with net losses in the first quarter of 2020. The favorable impact of unrealized gains (losses) on marketable securities was due to unrealized losses in the first quarter of 2020, compared with unrealized gains in the first quarter of 2021. The company experienced net losses in commodity hedges in the first quarter of 2020, compared with net gains in the first quarter of 2021. ? The provision for income taxes for the first quarter of 2021 reflected a lower estimated annual tax rate of 26%,

compared with 31% for the first quarter of 2020, excluding the discrete items discussed below. The comparative tax

rate for full year 2020 was approximately 28%. The decrease in the estimated annual tax rate from full-year 2020 is

primarily related to changes in the expected geographic mix of profits from a tax perspective for 2021.

In addition, a discrete tax benefit of USD43 million was recorded in the first quarter of 2021, compared with an USD8 million benefit in the first quarter of 2020, for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense. A USD43 million tax charge was also recorded in the first quarter of 2020 related to the USD254 million remeasurement gain resulting from the settlement of a non-U.S. pension obligation.

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CONSTRUCTION INDUSTRIES

(Millions of dollars)

Segment Sales

First Quarter Sales Price Inter- First Quarter USD %

2020 Volume Realization Currency Segment 2021 Change Change

Total Sales USD 4,306 USD 1,006 USD (23) USD 146 USD 24 USD 5,459 USD 1,153 27%

Sales by Geographic Region

First Quarter First Quarter USD %

2021 2020 Change Change 


North America   USD 2,126       USD 2,085       USD 41    2% 
Latin America   392           265           127     48% 
EAME            1,081         889           192     22% 
Asia/Pacific    1,842         1,073         769     72% 
External Sales  5,441         4,312         1,129   26% 
Inter-segment   18            (6)           24      400% 
Total Sales     USD 5,459       USD 4,306       USD 1,153 27% 
Segment Profit 
                First Quarter First Quarter         % 
                2021          2020          Change  Change

Segment Profit USD 1,035 USD 640 USD 395 62%

Segment Profit Margin 19.0 % 14.9 % 4.1 pts

Construction Industries' total sales were USD5.459 billion in the first quarter of 2021, an increase of USD1.153 billion, or 27%, compared with USD4.306 billion in the first quarter of 2020. The increase was due to higher sales volume driven by higher end-user demand and the impact from changes in dealer inventories. Overall, dealers increased inventories more during the first quarter of 2021 than during the first quarter of 2020. ? In North America, sales increased slightly due to higher end-user demand partially offset by the impact from

changes in dealer inventories and unfavorable price realization. The higher end-user demand was driven primarily by

residential construction. Dealers increased inventories more during the first quarter of 2020 than during the first

quarter of 2021. ? Sales increased in Latin America mostly due to higher sales volume driven by higher end-user demand across the

region and the impact of changes in dealer inventories, partially offset by unfavorable currency impacts from a

weaker Brazilian real. Dealers decreased inventories during the first quarter of 2020, compared with an increase

during the first quarter of 2021. ? In EAME, sales increased due to higher sales volume and favorable currency impacts from a stronger euro. Higher

sales volume was driven by higher end-user demand and the impact from changes in dealer inventories. Dealers

increased inventories more during the first quarter of 2021 than during the first quarter of 2020. ? Sales increased in Asia/Pacific primarily due to higher sales volume and favorable currency impacts from a stronger

Chinese yuan. The increase in sales was primarily due to higher end-user demand across the region driven mainly by

China, reflecting the impact of the pandemic in the first quarter of 2020, and the impact from changes in dealer

inventories. Dealers increased inventories during the first quarter of 2021, compared with a decrease during the

first quarter of 2020 due to the timing of Chinese New Year.

Construction Industries' profit was USD1.035 billion in the first quarter of 2021, an increase of USD395 million, or 62%, compared with USD640 million in the first quarter of 2020. The increase was mainly due to higher sales volume.

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RESOURCE INDUSTRIES

(Millions of dollars)

Segment Sales

First Quarter Sales Price Inter- First Quarter USD %

2020 Volume Realization Currency Segment 2021 Change Change

Total Sales USD 2,084 USD 132 USD (47) USD 33 USD 14 USD 2,216 USD 132 6%

Sales by Geographic Region

First Quarter First Quarter USD %

2021 2020 Change Change 


North America   USD 657   USD 696   USD (39) (6%) 
Latin America   405     320     85     27% 
EAME            474     395     79     20% 
Asia/Pacific    561     568     (7)    (1%) 
External Sales  2,097   1,979   118    6% 
Inter-segment   119     105     14     13% 
Total Sales     USD 2,216 USD 2,084 USD 132  6%

Segment Profit

First Quarter First Quarter %

2021 2020 Change Change

Segment Profit USD 328 USD 304 USD 24 8%

Segment Profit Margin 14.8 % 14.6 % 0.2 pts

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May 12, 2021 19:22 ET (23:22 GMT)