SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 15, 1996
CATERPILLAR INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-768
(Commission File Number)
37-0602744
(IRS Employer I.D. No.)
100 NE Adams Street, Peoria, Illinois
(Address of principal executive offices)
61629
(Zip Code)
Registrant's telephone number, including area code:
(309) 675-1000
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Item 5. Other Events
SAFE HARBOR STATEMENT UNDER THE SECURITIES
LITIGATION REFORM ACT OF 1995
The information included in the "Economic and Industry Outlook" and
"Company Outlook" sections of the Company's Third Quarter 1996 Financial
Review dated October 15, 1996 is forward looking and involves uncertainties
that could significantly impact expected results. These uncertainties
include factors that affect all international businesses, as well as matters
specific to the Company and markets it serves.
For most companies operating in a global economy, monetary and fiscal
policies implemented in the U.S. and abroad could have a significant impact
on economic growth, and, accordingly, demand for a product. For example,
if the Federal Reserve raises interest rates later this year or next, the
U.S. economy could slow and negatively impact demand for the Company's
products. If low interest rates in Europe do not stimulate that economy
or if government spending is significantly reduced, the demand for Company
products in that region could be negatively impacted.
Political factors in the U.S. and abroad also have a major impact
on global companies. The Company is one of the largest U.S. exporters
as a percentage of sales. International trade and fiscal policies
implemented in the U.S. resulting from national elections or other political
actions this year could impact the Company's ability to grow its business
abroad. U.S. foreign relations with certain countries and any related
restrictions imposed could also have a significant impact on foreign sales.
In addition, political instability in regions such as the CIS and China
make potential economic growth difficult to predict for those countries.
Currency fluctuations are also a significant unknown for global
companies. If the U.S. dollar continues to strengthen against foreign
currencies, the Company's ability to realize price increases on sales
outside the U.S. could be negatively impacted. Partially offsetting
this negative is the fact that weaker foreign currencies may reduce costs
related to manufacturing Company products abroad.
In addition to these factors, there are uncertainties related to the
Company's industry and specific operations. A major factor contributing
to the Company's success is its dealer distribution network. Dealer
practices, such as changes in inventory levels for both new and rental
equipment, are not within the Company's control (primarily because these
practices depend upon the dealer's assessment of anticipated sales) and
may have a significant positive or negative impact on our results.
The rate of infrastructure spending, housing starts, commercial
construction and mining also play a significant role in the Company's
results. Our products are an integral component of these activities and
as they increase or decrease in the U.S. or abroad, demand for our
products may be significantly impacted.
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The Company operates in a highly competitive environment and our
outlook depends on a forecast of the Company's percentage of industry sales. A
reduction in that percentage could result from unanticipated pricing or
product strategies pursued by competitors, unanticipated product or
manufacturing difficulties, a failure to price the product competitively,
or an unexpected buildup in competitors' new machine or dealer owned
rental fleets. Competitive pressures have resulted in a decline in
percentage of industry sales in the U.S. and Canada in the first nine months
of the year. If those pressures continue to have an impact, sales for the
last quarter or next year could fall below current projections.
Labor relations with the United Auto Workers remain an uncertainty.
The Company has demonstrated its ability to address a prolonged strike
by the UAW, as well as the return-to-work process following strike recess,
with no material impact on Company results. Because the UAW recently
rejected a new six-year contract proposal from the Company, however,
their future actions and potential impact are a contingency.
This discussion of uncertainties is by no means exhaustive but is
designed to highlight important factors that may impact our outlook.
Obvious factors such as general economic conditions throughout the world
do not warrant further discussion but are noted to further emphasize the
myriad of contingencies that may cause the Company's actual results to
differ from those currently anticipated.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
CATERPILLAR INC.
By: /s/R. Rennie Atterbury III
R. Rennie Atterbury III
Vice President
Date: October 15, 1996
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