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Caterpillar Owner Earnings per Share (TTM)

: 7.94 (As of Jun. 2022)
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In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

Caterpillar's Owner Earnings per Share (TTM) ended in Jun. 2022 was $7.94. It's Price-to-Owner-Earnings ratio for today is 21.54.


The historical rank and industry rank for Caterpillar's Owner Earnings per Share (TTM) or its related term are showing as below:

CAT' s Price-to-Owner-Earnings Range Over the Past 10 Years
Min: 8.4   Med: 25   Max: 1670.11
Current: 21.54


During the past 13 years, the highest Price-to-Owner-Earnings ratio of Caterpillar was 1670.11. The lowest was 8.40. And the median was 25.00.


CAT's Price-to-Owner-Earnings is ranked worse than
52.27% of 88 companies
in the Farm & Heavy Construction Machinery industry
Industry Median: 19.31 vs CAT: 21.54

Caterpillar's Earnings per Share (Diluted) for the three months ended in Jun. 2022 was $3.13. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Jun. 2022 was $12.50. It's PE Ratio ratio for today is 13.68.

Caterpillar's EPS without NRI for the three months ended in Jun. 2022 was $3.13. Its EPS without NRI for the trailing twelve months (TTM) ended in Jun. 2022 was $12.50. It's PE Ratio without NRI ratio for today is 13.68.


Caterpillar Owner Earnings per Share (TTM) Historical Data

The historical data trend for Caterpillar's Owner Earnings per Share (TTM) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Caterpillar Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
Owner Earnings per Share (TTM)
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.20 4.01 6.18 5.30 10.93

Caterpillar Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
Owner Earnings per Share (TTM) Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 9.36 9.75 10.93 7.84 7.94

Competitive Comparison

For the Farm & Heavy Construction Machinery subindustry, Caterpillar's Owner Earnings per Share (TTM), along with its competitors' market caps and Owner Earnings per Share (TTM) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Caterpillar Owner Earnings per Share (TTM) Distribution

For the Farm & Heavy Construction Machinery industry and Industrials sector, Caterpillar's Owner Earnings per Share (TTM) distribution charts can be found below:

* The bar in red indicates where Caterpillar's Owner Earnings per Share (TTM) falls into.



Caterpillar Owner Earnings per Share (TTM) Calculation

In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

To make it simple, then you will have:

Owner Earnings per Share (TTM) = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)

Caterpillar's Owner Earnings per Share (TTM) Calculation:

TTM / Last Quarter Average of Last 20 Quarters
Net Income 6,756
Depreciation, Depletion and Amortization 2,289
Change In Deferred Tax -734
5Y Average of Maintenance Capital Expenditure 2,002
Change In Working Capital -2,067
Shares Outstanding (Diluted Average) 534

1. Start with "Net Income" from income statement. Caterpillar's Net Income for the trailing twelve months (TTM) ended in Jun. 2022 was $6,756 Mil.

2. "Depreciation, Depletion and Amortization" is from cashflow statement. Caterpillar's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Jun. 2022 was $2,289 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.

3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income. Caterpillar's Change In Deferred Tax for the trailing twelve months (TTM) ended in Jun. 2022 was $-734 Mil.

4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $2,002 Mil

It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.

The following shows how to get maintenance capital expenditure.

First, calculate the revenue change regarding to the previous year. If the revenue decreased from the previous year, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous year, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.

Caterpillar's 5-Year Average Maintenance Capital Expenditure = $2,002 Mil

5. "Change In Working Capital" is from cashflow statement. Caterpillar's Change In Working Capital for the trailing twelve months (TTM) ended in Jun. 2022 was $-2,067 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.

6. Caterpillar's Shares Outstanding (Diluted Average) for the months ended in Jun. 2022 was 534.100 Mil.

Caterpillar's Onwer Earnings Per Share for Jun. 2022 is calculated as:

Owner Earnings per Share (TTM)
=( Net Income+Depreciation, Depletion and Amortization+Change In Deferred Tax
=( 6756 +2289+-734
-5Y Avg of Maintenance CAPEX+Change In Working Capital )/Shares Outstanding (Diluted Average)
-2001.6216128817+-2067)/534.100
=7.94

Price-to-Owner-Earnings=Current Price/Owner Earnings per Share (TTM)
=170.995/7.94
=21.54

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.

Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.


Caterpillar Owner Earnings per Share (TTM) Related Terms

Thank you for viewing the detailed overview of Caterpillar's Owner Earnings per Share (TTM) provided by GuruFocus.com. Please click on the following links to see related term pages.


Caterpillar Business Description

Caterpillar logo
Address
510 Lake Cook Road, Suite 100, Deerfield, IL, USA, 60015
Caterpillar is an iconic manufacturer of heavy equipment, power solutions, and locomotives. It is currently the world's largest manufacturer of heavy equipment with over 13% market share in 2021. The company is divided into four reportable segments: construction industries, resource industries, energy and transportation, and Caterpillar Financial Services. Its products are available through a dealer network that covers the globe with over 2,000 branches maintained by 168 dealers. Caterpillar Financial Services provides retail financing for machinery and engines to its customers, in addition to wholesale financing for dealers, which increases the likelihood of Caterpillar product sales.
Executives
Schaupp William E officer: Chief Accounting Officer PPG INDUSTRIES, INC. ONE PPG PLACE PITTSBURGH PA 15272
Maclennan David director 14701 CHARLSON ROAD EDEN PRAIRIE MN 55347
Johnson Gerald director 300 RENAISSANCE CENTER M/C: 482-C23-A68 DETROIT MI 48265
Fassino Anthony D. officer: Group President 510 LAKE COOK ROAD SUITE 100 DEERFIELD IL 60015
Marvel Gary Michael officer: Chief Accounting Officer 510 LAKE COOK ROAD SUITE 100 DEERFIELD IL 60015
Ainsworth William P officer: Group President 510 LAKE COOK ROAD SUITE 100 DEERFIELD X1 60015
Bonfield Andrew R J officer: Chief Financial Officer C/O BRISTOL MYERS SQUIBB CO 345 PARK AVE NEW YORK NY 10164
Younessi Ramin officer: Group President 510 LAKE COOK ROAD SUITE 100 DEERFIELD IL 60015
Creed Joseph E officer: Interim CFO 510 LAKE COOK ROAD SUITE 100 DEERFIELD IL 60015
Ayotte Kelly director C/O NEWS CORPORATION 1211 AVENUE OF THE AMERICAS NEW YORK NY 10036
Johnson Cheryl H officer: Chief Human Resources Officer 40 WESTMINSTER STREET PROVIDENCE RI 02903
Wilkins Rayford Jr director 208 S. AKARD ST. -- DALLAS TX 75202
Long Suzette M officer: Int. Executive Vice President 510 LAKE COOK ROAD SUITE 100 DEERFILED IL 60015
De Lange Bob officer: Group President 510 LAKE COOK ROAD SUITE 100 DEERFIELD IL 60015
Johnson Denise C officer: Group President C/O CATERPILLAR, INCORPORATED 901 WEST WASHINGTON, CV41110 EAST PEORIA IL 61630

Caterpillar Headlines

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