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Cat Financial Announces First-Quarter 2016 Results

NASHVILLE, Tenn., April 22, 2016 /PRNewswire/ -- Cat Financial reported first-quarter 2016 revenues of $643 million, a decrease of $46 million, or 7 percent, compared with the first quarter of 2015. First-quarter 2016 profit was $100 million, a $33 million, or 25 percent, decrease from the first quarter of 2015.

The decrease in revenues was primarily due to a $23 million unfavorable impact from lower average earning assets and a $13 million unfavorable impact from lower average financing rates.

Profit before income taxes was $145 million for the first quarter of 2016, compared with $187 million for the first quarter of 2015. The decrease was primarily due to a $17 million decrease in net yield on average earning assets reflecting geographic mix changes and currency impacts, an $11 million increase in provision for credit losses and a $10 million unfavorable impact from lower average earning assets.

The provision for income taxes reflects an estimated annual tax rate of 30 percent in the first quarter of 2016, compared with 28 percent in the first quarter of 2015. The increase in the estimated annual tax rate is primarily due to changes in the geographic mix of profits.

During the first quarter of 2016, retail new business volume was $2.29 billion, a decrease of $173 million, or 7 percent, from the first quarter of 2015. The decrease was primarily related to lower volume in the mining and marine portfolios.

At the end of the first quarter of 2016, past dues were 2.78 percent, compared with 3.08 percent at the end of the first quarter of 2015. Write-offs, net of recoveries, were $31 million for the first quarter of 2016, compared with $12 million for the first quarter of 2015. The increase in write-offs, net of recoveries, was primarily driven by the Caterpillar Power Finance and North American portfolios.

As of March 31, 2016, the allowance for credit losses totaled $340 million, or 1.21 percent of net finance receivables, compared with $392 million, or 1.38 percent of net finance receivables at March 31, 2015. The allowance for credit losses at year-end 2015 was $338 million, or 1.22...


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