Cat Financial Announces 2021 Year-End Results

Full-Year 2021 vs. Full-Year 2020

Cat Financial reported revenues of $2.56 billion for 2021, an increase of $12 million compared with 2020. Profit was $505 million for 2021, a $212 million, or 72%, increase from 2020.

Profit before income taxes was $695 million for 2021, a $261 million, or 60%, increase from 2020. The increase was primarily due to a $196 million decrease in provision for credit losses and a $100 million favorable impact from returned or repossessed equipment, partially offset by a $96 million increase in general, operating and administrative expenses, mostly due to higher short-term incentive compensation expense.

The provision for income taxes reflected an annual tax rate of 26% for 2021, compared with 29% for 2020. The decrease in the annual tax rate was primarily due to changes in the geographic mix of profits.

During 2021, retail new business volume was $13.10 billion, an increase of $2.34 billion, or 22%, from 2020. The increase was driven by higher volume across all segments with the exception of a slight decrease in Caterpillar Power Finance.

At the end of 2021, past dues were 1.95%, compared with 3.49% at the end of 2020. Past dues decreased across all portfolio segments as global markets generally improved. Write-offs, net of recoveries, were $205 million for 2021, compared with $222 million for 2020. As of December 31, 2021, the allowance for credit losses totaled $337 million, or 1.22% of finance receivables, compared with $479 million, or 1.77% of finance receivables at December 31, 2020.

Fourth-Quarter 2021 vs. Fourth-Quarter 2020

Cat Financial reported fourth-quarter 2021 revenues of $643 million, an increase of $27 million, or 4%, compared with the fourth quarter of 2020. Fourth-quarter 2021 profit was $122 million, a $26 million, or 27%, increase from the fourth quarter of 2020.

Fourth-quarter 2021 profit before income taxes was $179 million, a $57 million, or 47%, increase from the fourth quarter of 2020. The increase was primarily due to a $53 million favorable impact from returned or repossessed equipment and a $39 million decrease in provision for credit losses, partially offset by a $33 million increase in general, operating and administrative expenses, mostly due to higher short-term incentive compensation expense.

The provision for income taxes reflected an effective tax rate of 30% in the fourth quarter of 2021, compared with 20% in the fourth quarter of 2020.  The increase in the effective tax rate was primarily due to changes in the geographic mix of profits.

During the fourth quarter of 2021, retail new business volume was $3.42 billion, an increase of $313 million, or 10%, from the fourth quarter of 2020. The increase was driven by higher volume across all segments with the exception of a decrease in Asia/Pacific.

"We were pleased with the overall performance of our business during 2021, especially the strong health of our global portfolio and solid operational results delivered by our dedicated global team," said Dave Walton, president of Cat Financial and vice president with responsibility for the Financial Products Division of Caterpillar Inc. “We continue to focus on expanding our ability to serve our customers through financial services solutions."

About Cat Financial

Celebrating 40 years in 2021, Cat Financial is a subsidiary of Caterpillar, the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. Cat Financial provides a wide range of financing solutions to customers and Cat® dealers for machines, engines, Solar® turbines, genuine Cat parts and services. Headquartered in Nashville, Tennessee, Cat Financial serves customers globally with offices and subsidiaries located throughout North and South America, Asia, Australia, Europe, Africa and the Middle East. Visit cat.com to learn more about Cat Financial.