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Cat Financial Announces 2016 Year-End Results

THIS POST WAS ORIGINALLY PUBLISHED ON THIS SITE Click Here To Read Entire Article

NASHVILLE, Tenn., Jan. 26, 2017 /PRNewswire/ — 

Full-Year 2016 vs. Full-Year 2015

Cat Financial reported revenues of $2.60 billion for 2016, a decrease of $78 million, or 3 percent, compared with 2015. Profit was $384 million, a $76 million, or 17 percent, decrease from 2015.

The decrease in revenues was primarily due to a $66 million unfavorable impact from lower average earning assets and a $43 million unfavorable impact from returned or repossessed equipment, partially offset by a $33 million favorable impact from higher average financing rates.

Profit before income taxes was $561 million for 2016, compared with $619 million for 2015. The decrease was primarily due to a $43 million unfavorable impact from returned or repossessed equipment and a $30 million unfavorable impact from lower average earning assets, partially offset by a $24 million decrease in general, operating and administrative expenses.

The provision for income taxes reflects an annual tax rate of 30 percent for 2016, compared with 26 percent for 2015. The increase in the annual tax rate is primarily due to a reduction in available foreign tax credits and changes in the geographic mix of profits.

Retail new business volume for 2016 was $10.91 billion, a decrease of $511 million, or 4 percent, from 2015. The decrease was primarily related to lower volume across North America, marine and mining, partially offset by an increase in Asia/Pacific and Europe.

At the end of 2016, past dues were 2.38 percent, compared with 2.14 percent at the end of 2015. The increase in past dues was primarily driven by the European marine portfolio. Write-offs, net of recoveries, were $123 million for 2016, compared with $155 million for 2015.

As of December 31, 2016, the allowance for credit losses totaled $343 million, or 1.29 percent of net finance receivables, compared with $338 million, or 1.22 percent of net finance receivables at year-end 2015.

Fourth-Quarter 2016 vs. Fourth-Quarter 2015

Cat Financial reported fourth-quarter 2016 revenues of $642 million, a decrease of $6 million, or 1 percent, compared with the fourth quarter of 2015. Fourth-quarter 2016 profit was $85 million, a $29 million, or 25 percent, decrease from the fourth quarter of 2015.

The decrease in revenues was primarily due to a $19 million unfavorable impact from lower average earning assets and a $13 million unfavorable impact from returned or repossessed equipment, partially offset by a $24 million favorable impact from higher average financing rates.

Profit before income taxes was $122 million for the fourth quarter

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