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Cat Financial Announces Second-Quarter 2020 Results

NASHVILLE, Tenn., July 31, 2020 /CNW/ -- Cat Financial reported second-quarter 2020 revenues of $641 million, a decrease of $116 million, or 15%, compared with the second quarter of 2019. Second-quarter 2020 profit was $59 million, a $20 million, or 25%, decrease from the second quarter of 2019.The decrease in revenues was primarily due to a $60 million unfavorable impact from lower average financing rates and a $48 million unfavorable impact from lower average earning assets.Second-quarter 2020 profit before income taxes was $89 million, a $52 million, or 37%, decrease from the second quarter of 2019. The decrease was primarily due to a $25 million decrease in net yield on average earning assets, a $23 million unfavorable impact from lower average earning assets and a $15 million increase in provision for credit losses. These unfavorable impacts were partially offset by a $22 million decrease in general, operating and administrative expenses primarily due to lower short-term incentive compensation and employee benefit expenses.The provision for income taxes reflected an estimated annual tax rate of 27% in the second quarter of 2020 compared with 29% in the second quarter of 2019, excluding a discrete item in the second quarter of 2019 of $13 million for a valuation allowance against the deferred tax assets of a non-U.S. subsidiary.A  The decrease in the estimated annual tax rate was primarily due to changes in the geographic mix of profits.During the second quarter of 2020, retail new business volume was $2.74 billion, a decrease of $607 million, or 18%, from the second quarter of 2019. The decrease was driven by lower volume across all segments with the exception of a slight increase in Asia/Pacific.
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