FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to _______________
Commission File No. 1-768
CATERPILLAR INC.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
37-0602744
(I.R.S. Employer Identification No.)
100 NE Adams Street, Peoria, Illinois
(Address of principal executive offices)
61629
(Zip Code)
(309) 675-1000
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No __.
At March 31, 1997, 188,897,312 shares of common stock of the Registrant
were outstanding.
<PAGE>
SUMMARY
This summary highlights selected information from this document and may not
contain all of the information that is important to you. For a detailed
analysis of the company's results for the first quarter, you should read this
entire document carefully.
SUMMARY OF RESULTS
Caterpillar reported best ever profit for a quarter of $394 million and
best ever profit per share of $2.08 for first-quarter 1997. Sales and
revenues of $4.26 billion were a record for any first quarter and the second
best quarter in company history. Compared with first-quarter 1996, profit and
profit per share were up 33% and 36%, respectively, while sales and revenues
increased 11%.
Caterpillar has posted record profit in 11 of the last 13 quarters.
"Our financial results are strong. Margin and operating profit rates
continued their steady improvement. We are investing to enhance our long-term
growth. Business is good. We are well positioned with our global strategies
to capitalize on opportunities worldwide," said Donald V. Fites, chairman and
chief executive officer.
HIGHLIGHTS -- FIRST-QUARTER 1997 COMPARED WITH FIRST-QUARTER 1996
* Profit per share was up 36% to a best ever $2.08 per share.
* Profit of $394 million was 33% or $98 million over the previous
first-quarter record established in 1996.
* Sales and revenues of $4.26 billion, the second highest quarter
ever, rose 11% from the previous first-quarter record established
in 1996.
* Margin (sales less cost of goods sold) as a percent of sales
increased to 26.8% from 24.5%.
* Operating profit for Machinery and Engines as a percent of sales
increased to 13.5% from 11.4%.
* Physical sales volume was up 9%; price realization improved 2%.
* Revenues from financial subsidiaries were up 17%.
* Sales inside the United States rose 15%; sales outside the
United States were up 6%.
* Caterpillar's share of industry sales improved in North America.
* Outlook improved for 1997 based on increased machine industry
demand in North America.
* At the end of the first quarter, 12.6 million shares had been
repurchased under the previously announced share repurchase plan.
The number of shares outstanding on March 31, 1997, was 188.9 million.
The company anticipates the 10% share repurchase will be largely
completed by year-end 1997. After the 10% repurchase is complete, the
company will assess whether additional share repurchases are warranted.
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
CATERPILLAR INC.
Statement of Results of Operations
(Unaudited)
(Millions of dollars except per share data)
CONSOLIDATED
(Caterpillar Inc.
and subsidiaries)
Three Months Ended
Mar. 31, Mar. 31,
1997 1996
SALES AND REVENUES:
Sales of Machinery & Engines ........................ $4,072 $3,682
Revenues of Financial Products ...................... 190 162
------ ------
Total sales and revenues ............................ 4,262 3,844
OPERATING COSTS:
Cost of goods sold .................................. 2,981 2,780
Selling, general and administrative expenses ........ 498 449
Research and development expenses ................... 117 98
Interest expense of Financial Products .............. 79 69
------ ------
Total operating costs ............................... 3,675 3,396
------ ------
OPERATING PROFIT ...................................... 587 448
Interest expense excluding Financial Products ........ 52 49
Other income (expense) ............................... 42 35
------ ------
CONSOLIDATED PROFIT BEFORE TAXES ...................... 577 434
Provision for income taxes ........................... 196 143
------ ------
Profit of consolidated companies...................... 381 291
Equity in profit of unconsolidated affiliated
companies (Note 4) ................................. 13 5
Equity in profit of Financial Products subsidiaries .. - -
------ ------
PROFIT ................................................ $ 394 $ 296
====== ======
PROFIT PER SHARE OF COMMON STOCK (NOTE 6):
Profit .............................................. $ 2.08 $ 1.53
====== ======
Cash dividends paid per share of
common stock ........................................ $ .40 $ .35
See accompanying notes to Consolidated Financial Statements.
<PAGE>
CATERPILLAR INC.
Statement of Results of Operations
(Unaudited)
(Millions of dollars except per share data)
SUPPLEMENTAL CONSOLIDATING DATA
MACHINERY AND ENGINES1
Three Months Ended
Mar. 31, Mar. 31,
1997 1996
SALES AND REVENUES:
Sales of Machinery & Engines ........................ $4,072 $3,682
Revenues of Financial Products ...................... - -
------ ------
Total sales and revenues ............................ 4,072 3,682
OPERATING COSTS:
Cost of goods sold .................................. 2,981 2,780
Selling, general and administrative expenses ........ 424 386
Research and development expenses ................... 117 98
Interest expense of Financial Products .............. - -
------ ------
Total operating costs ............................... 3,522 3,264
------ ------
OPERATING PROFIT ...................................... 550 418
Interest expense excluding Financial Products ........ 52 49
Other income (expense) ............................... 36 29
------ ------
CONSOLIDATED PROFIT BEFORE TAXES ...................... 534 398
Provision for income taxes ........................... 181 129
------ ------
Profit of consolidated companies...................... 353 269
Equity in profit of unconsolidated affiliated
companies (Note 4) ................................. 13 5
Equity in profit of Financial Products subsidiaries .. 28 22
------ ------
PROFIT ................................................ $ 394 $ 296
====== ======
1 Represents Caterpillar Inc. and its subsidiaries except for Financial
Products, which is accounted for on the equity basis.
The supplemental consolidating data is presented for the purpose of
additional analysis and to provide required supplemental disclosure
of information about the Financial Products subsidiaries.
See accompanying notes to Consolidated Financial Statements.
<PAGE>
CATERPILLAR INC.
Statement of Results of Operations
(Unaudited)
(Millions of dollars except per share data)
SUPPLEMENTAL CONSOLIDATING DATA
FINANCIAL PRODUCTS
Three Months Ended
Mar. 31, Mar. 31,
1997 1996
SALES AND REVENUES:
Sales of Machinery & Engines ........................ $ - $ -
Revenues of Financial Products ...................... 196 168
------ ------
Total sales and revenues ............................ 196 168
OPERATING COSTS:
Cost of goods sold .................................. - -
Selling, general and administrative expenses ........ 80 69
Research and development expenses ................... - -
Interest expense of Financial Products .............. 81 73
------ ------
Total operating costs ............................... 161 142
------ ------
OPERATING PROFIT ...................................... 35 26
Interest expense excluding Financial Products ........ - -
Other income (expense) ............................... 8 10
------ ------
CONSOLIDATED PROFIT BEFORE TAXES ...................... 43 36
Provision for income taxes ........................... 15 14
------ ------
Profit of consolidated companies...................... 28 22
Equity in profit of unconsolidated affiliated
companies (Note 4) ................................. - -
Equity in profit of Financial Products subsidiaries .. - -
------ ------
PROFIT ................................................ $ 28 $ 22
====== ======
The supplemental consolidating data is presented for the purpose of
additional analysis and to provide required supplemental disclosure
of information about the Financial Products subsidiaries.
See accompanying notes to Consolidated Financial Statements.
<PAGE>
CATERPILLAR INC.
Statement of Financial Position *
(Dollars in millions)
CONSOLIDATED
(Caterpillar Inc.
and subsidiaries)
Mar. 31, Dec. 31,
1997 1996
ASSETS
Current assets:
Cash and short-term investments ................. $ 518 $ 487
Receivables -- trade and other .................. 3,057 2,956
Receivables -- finance .......................... 2,221 2,266
Deferred income taxes and prepaid expenses ...... 805 852
Inventories (Note 5) ............................ 2,478 2,222
------- -------
Total current assets .............................. 9,079 8,783
Land, buildings, machinery, and equipment -- net .. 3,765 3,767
Long-term receivables -- trade and other .......... 135 128
Long-term receivables -- finance .................. 3,615 3,380
Investments in unconsolidated affiliated
companies (Note 4) ............................. 697 701
Investments in Financial Products subsidiaries .... - -
Deferred income taxes ............................. 1,088 1,093
Intangible assets ................................. 229 233
Other assets ...................................... 684 643
------- -------
TOTAL ASSETS ........................................ $19,292 $18,728
======= =======
LIABILITIES
Current liabilities:
Short-term borrowings ........................... $ 901 $ 1,192
Accounts payable and accrued expenses ........... 2,904 2,858
Accrued wages, salaries, and employee benefits .. 902 1,010
Dividends payable ............................... - 76
Deferred and current income taxes payable ....... 293 142
Long-term debt due within one year .............. 1,289 1,180
------- -------
Total current liabilities ......................... 6,289 6,458
Long-term debt due after one year ................. 5,603 5,087
Liability for postemployment benefits ............. 2,981 3,019
Deferred income taxes ............................. 53 48
------- -------
TOTAL LIABILITIES ................................... 14,926 14,612
------- -------
STOCKHOLDERS' EQUITY
Common stock of $1.00 par value:
Authorized shares: 450,000,000
Issued shares (March 31, 1997 -- 203,723,656;
Dec. 31, 1996 -- 203,723,656) at paid in amount . 879 881
Profit employed in the business ................... 4,298 3,904
Foreign currency translation adjustment ........... 140 162
Treasury stock (March 31, 1997 -- 14,826,344
shares; Dec. 31, 1996 -- 13,372,546 shares)
at cost.......................................... (951) (831)
------- -------
TOTAL STOCKHOLDERS' EQUITY .......................... 4,366 4,116
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .......... $19,292 $18,728
======= =======
See accompanying notes to Consolidated Financial Statements.
* Unaudited except for Consolidated December 31, 1996 amounts.
<PAGE>
CATERPILLAR INC.
Statement of Financial Position *
(Dollars in millions)
SUPPLEMENTAL CONSOLIDATING DATA
MACHINERY AND ENGINES1
Mar. 31, Dec. 31,
1997 1996
ASSETS
Current assets:
Cash and short-term investments ................. $ 469 $ 445
Receivables -- trade and other .................. 3,189 2,960
Receivables -- finance .......................... - -
Deferred income taxes and prepaid expenses ...... 816 876
Inventories (Note 5) ............................ 2,478 2,222
------- -------
Total current assets .............................. 6,952 6,503
Land, buildings, machinery, and equipment -- net .. 3,224 3,242
Long-term receivables -- trade and other .......... 135 128
Long-term receivables -- finance .................. - -
Investments in unconsolidated affiliated
companies (Note 4) ............................. 697 701
Investments in Financial Products subsidiaries .... 777 759
Deferred income taxes ............................. 1,126 1,132
Intangible assets ................................. 229 233
Other assets ...................................... 366 368
------- -------
TOTAL ASSETS ........................................ $13,506 $13,066
======= =======
LIABILITIES
Current liabilities:
Short-term borrowings ........................... $ 43 $ 36
Accounts payable and accrued expenses ........... 2,533 2,556
Accrued wages, salaries, and employee benefits .. 897 1,005
Dividends payable ............................... - 76
Deferred and current income taxes payable ....... 209 70
Long-term debt due within one year .............. 167 122
------- -------
Total current liabilities ......................... 3,849 3,865
Long-term debt due after one year ................. 2,257 2,018
Liability for postemployment benefits ............. 2,981 3,019
Deferred income taxes ............................. 53 48
------- -------
TOTAL LIABILITIES ................................... 9,140 8,950
------- -------
STOCKHOLDERS' EQUITY
Common stock of $1.00 par value:
Authorized shares: 450,000,000
Issued shares (March 31, 1997 -- 203,723,656;
Dec. 31, 1996 -- 203,723,656) at paid in amount . 879 881
Profit employed in the business ................... 4,298 3,904
Foreign currency translation adjustment ........... 140 162
Treasury stock (March 31, 1997 -- 14,826,344
shares; Dec. 31, 1996 -- 13,372,546 shares)
at cost.......................................... (951) (831)
------- -------
TOTAL STOCKHOLDERS' EQUITY .......................... 4,366 4,116
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .......... $13,506 $13,066
======= =======
1 Represents Caterpillar Inc. and its subsidiaries except for Financial
Products, which is accounted for on the equity basis.
The supplemental consolidating data is presented for the purpose of
additional analysis and to provide required supplemental disclosure
of information about the Financial Products subsidiaries.
See accompanying notes to Consolidated Financial Statements.
* Unaudited except for Consolidated December 31, 1996 amounts.
<PAGE>
CATERPILLAR INC.
Statement of Financial Position *
(Dollars in millions)
SUPPLEMENTAL CONSOLIDATING DATA
FINANCIAL PRODUCTS
Mar. 31, Dec. 31,
1997 1996
ASSETS
Current assets:
Cash and short-term investments ................. $ 49 $ 42
Receivables -- trade and other .................. 185 175
Receivables -- finance .......................... 2,221 2,266
Deferred income taxes and prepaid expenses ...... 15 15
Inventories (Note 5) ............................ - -
------- -------
Total current assets .............................. 2,470 2,498
Land, buildings, machinery, and equipment -- net .. 541 525
Long-term receivables -- trade and other .......... - -
Long-term receivables -- finance .................. 3,615 3,380
Investments in unconsolidated affiliated
companies (Note 4) ............................. - -
Investments in Financial Products subsidiaries .... - -
Deferred income taxes ............................. 3 3
Intangible assets ................................. - -
Other assets ...................................... 318 275
------- -------
TOTAL ASSETS ........................................ $ 6,947 $ 6,681
======= =======
LIABILITIES
Current liabilities:
Short-term borrowings ........................... $ 858 $ 1,156
Accounts payable and accrued expenses ........... 715 520
Accrued wages, salaries, and employee benefits .. 5 5
Dividends payable ............................... - -
Deferred and current income taxes payable ....... 84 72
Long-term debt due within one year .............. 1,122 1,058
------- -------
Total current liabilities ......................... 2,784 2,811
Long-term debt due after one year ................. 3,346 3,069
Liability for postemployment benefits ............. - -
Deferred income taxes ............................. 40 42
------- -------
TOTAL LIABILITIES ................................... 6,170 5,922
------- -------
STOCKHOLDERS' EQUITY
Common stock of $1.00 par value:
Authorized shares: 450,000,000
Issued shares (March 31, 1997 -- 203,723,656
Dec. 31, 1996 -- 203,723,656) at paid in amount . 353 353
Profit employed in the business ................... 432 404
Foreign currency translation adjustment ........... (8) 2
Treasury stock (March 31, 1997 -- 14,826,344
shares; Dec. 31, 1996 -- 13,372,546 shares)
at cost.......................................... - -
------- -------
TOTAL STOCKHOLDERS' EQUITY .......................... 777 759
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .......... $ 6,947 $ 6,681
======= =======
The supplemental consolidating data is presented for the purpose of
additional analysis and to provide required supplemental disclosure
of information about the Financial Products subsidiaries.
See accompanying notes to Consolidated Financial Statements.
* Unaudited except for Consolidated December 31, 1996 amounts.
<PAGE>
CATERPILLAR INC.
Statement of Cash Flow for Three Months Ended
(Unaudited)
(Millions of dollars)
CONSOLIDATED
(Caterpillar Inc.
and subsidiaries)
Mar. 31, Mar. 31,
1997 1996
CASH FLOW FROM OPERATING ACTIVITIES:
Profit ............................................ $ 394 $ 296
Adjustments for noncash items:
Depreciation and amortization ................... 189 174
Profit of Financial Products .................... - -
Other ........................................... 20 23
Changes in assets and liabilities:
Receivables -- trade and other .................. (123) (248)
Inventories ..................................... (250) (161)
Accounts payable and accrued expenses ........... 78 112
Other -- net .................................... 32 68
------- -------
Net cash provided by operating activities ........... 340 264
------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures -- excluding equipment
leased to others ................................ (81) (35)
Expenditures for equipment leased to others ....... (72) (46)
Proceeds from disposals of land, buildings,
machinery, and equipment ........................ 35 19
Additions to finance receivables .................. (1,302) (966)
Collections of finance receivables ................ 679 528
Proceeds from the sale of finance receivables...... 326 309
Net short-term loans to Financial Products......... - -
Investments and acquisitions....................... (13) (76)
Other -- net ...................................... (72) (82)
------- -------
Net cash used for investing activities .............. (500) (349)
------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Dividends paid .................................... (76) (68)
Common stock issued, including treasury
shares reissued ................................. 3 4
Treasury shares purchased ......................... (133) (31)
Net short-term loans from Machinery and Engines ... - -
Proceeds from long-term debt issued ............... 768 15
Payments on long-term debt ........................ (222) (123)
Short-term borrowings -- net ...................... (127) 264
------- -------
Net cash provided by financing activities ........... 213 61
------- -------
Effect of exchange rate changes on cash ............. (22) (9)
------- -------
Increase (decrease) in cash and
short-term investments ............................ 31 (33)
Cash and short-term investments at the
beginning of the period ........................... 487 638
------- -------
Cash and short-term investments at the
end of the period ................................. $ 518 $ 605
======= =======
All short-term investments, which consist primarily of highly liquid
investments with original maturities of three months or less, are considered
to be cash equivalents.
See accompanying notes to Consolidated Financial Statements.
<PAGE>
CATERPILLAR INC.
Statement of Cash Flow for Three Months Ended
(Unaudited)
(Millions of dollars)
SUPPLEMENTAL CONSOLIDATING DATA
MACHINERY AND ENGINES1
Mar. 31, Mar. 31,
1997 1996
CASH FLOW FROM OPERATING ACTIVITIES:
Profit ............................................ $ 394 $ 296
Adjustments for noncash items:
Depreciation and amortization ................... 157 146
Profit of Financial Products .................... (28) (22)
Other ........................................... 8 5
Changes in assets and liabilities:
Receivables -- trade and other .................. (99) (240)
Inventories ..................................... (250) (161)
Accounts payable and accrued expenses ........... 13 27
Other -- net .................................... 33 93
------- -------
Net cash provided by operating activities ........... 228 144
------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures -- excluding equipment
leased to others ................................ (80) (34)
Expenditures for equipment leased to others ....... - -
Proceeds from disposals of land, buildings,
machinery, and equipment ........................ - 3
Additions to finance receivables .................. - -
Collections of finance receivables ................ - -
Proceeds from sale of finance receivables.......... - -
Net short-term loans to Financial Products......... (158) 91
Investments and acquisitions....................... (13) (76)
Other -- net ...................................... (29) (41)
------- -------
Net cash used for investing activities .............. (280) (57)
------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Dividends paid .................................... (76) (68)
Common stock issued, including treasury
shares reissued ................................. 3 4
Treasury shares purchased ......................... (133) (31)
Net short-term loans from Machinery and Engines.... - -
Proceeds from long-term debt issued ............... 300 14
Payments on long-term debt ........................ (5) (8)
Short-term borrowings -- net ...................... 7 (13)
------- -------
Net cash provided by (used for) financing
activities ........................................ 96 (102)
------- -------
Effect of exchange rate changes on cash ............. (20) (9)
------- -------
Increase (decrease) in cash and
short-term investments ............................ 24 (24)
Cash and short-term investments at the
beginning of the period ........................... 445 580
------- -------
Cash and short-term investments at the
end of the period ................................. $ 469 $ 556
======= =======
1 Represents Caterpillar Inc. and its subsidiaries except for Financial
Products, which is accounted for on the equity basis.
The supplemental consolidating data is presented for the purpose of
additional analysis and to provide supplemental disclosure of
information about the Financial Products subsidiaries.
See accompanying notes to Consolidated Financial Statements.
<PAGE>
CATERPILLAR INC.
Statement of Cash Flow for Three Months Ended
(Unaudited)
(Millions of dollars)
SUPPLEMENTAL CONSOLIDATING DATA
FINANCIAL PRODUCTS
Mar. 31, Mar. 31,
1997 1996
CASH FLOW FROM OPERATING ACTIVITIES:
Profit ............................................ $ 28 $ 22
Adjustments for noncash items:
Depreciation and amortization ................... 32 28
Profit of Financial Products .................... - -
Other ........................................... 12 18
Changes in assets and liabilities:
Receivables -- trade and other .................. (4) 1
Inventories ..................................... - -
Accounts payable and accrued expenses ........... 33 56
Other -- net .................................... 11 (5)
------- -------
Net cash provided by operating activities ........... 112 120
------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures -- excluding equipment
leased to others ................................ (1) (1)
Expenditures for equipment leased to others ....... (72) (46)
Proceeds from disposals of land, buildings,
machinery, and equipment ........................ 35 16
Additions to finance receivables .................. (1,302) (966)
Collections of finance receivables ................ 679 528
Proceeds from the sale of finance receivables...... 326 309
Net short-term loans to Financial Products......... - -
Investments and acquisitions....................... - -
Other -- net ...................................... (43) (41)
------- -------
Net cash used for investing activities .............. (378) (201)
------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Dividends paid .................................... - -
Common stock issued, including treasury
shares reissued ................................. - -
Treasury shares purchased ......................... - -
Net short-term loans from Machinery and Engines.... 158 (91)
Proceeds from long-term debt issued ............... 468 1
Payments on long-term debt ........................ (217) (116)
Short-term borrowings -- net ...................... (134) 277
------- -------
Net cash provided by financing activities ........... 275 71
------- -------
Effect of exchange rate changes on cash ............. (2) 1
------- -------
Increase (decrease) in cash and
short-term investments ............................ 7 (9)
Cash and short-term investments at the
beginning of the period ........................... 42 58
------- -------
Cash and short-term investments at the
end of the period ................................. $ 49 $ 49
======= =======
The supplemental consolidating data is presented for the purpose of
additional analysis and to provide supplemental disclosure of
information about the Financial Products subsidiaries.
See accompanying notes to Consolidated Financial Statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions except per share data)
1. In the opinion of management, all adjustments, consisting only of normal
recurring adjustments necessary for a fair presentation of (a) the
consolidated results of operations for the three-month periods
ended March 31, 1997 and 1996, (b) the consolidated financial
position at March 31, 1997 and December 31, 1996, and (c) the
consolidated statement of cash flow for the three-month periods ended
March 31, 1997 and 1996 have been made. Certain amounts for prior
periods have been reclassified to conform with the current period
financial statement presentation.
2. The results for the three-month period ended March 31, 1997 are not
necessarily indicative of the results for the entire year 1997.
3. The company has reviewed the status of its environmental and legal
contingencies and believes there are no material changes from that
disclosed in Form 10-K for the year ended December 31, 1996.
4. Unconsolidated Affiliated Companies
The company's investments in unconsolidated affiliated companies consist
principally of a 50% interest in Shin Caterpillar Mitsubishi Ltd., Japan
of $392. The other 50% owner of this company is Mitsubishi Heavy
Industries, Ltd., Japan.
Combined financial information of the unconsolidated affiliated
companies, as translated to U.S. dollars, was as follows:
Three Months Ended
RESULTS OF OPERATION Dec. 31, Dec. 31,
(Unaudited) 1996 1995
Sales ..................... $ 996 $ 908
====== ======
Profit .................... $ 28 $ 11
====== ======
Dec. 31, Sept. 30,
1996 1996
FINANCIAL POSITION (Unaudited)
Assets:
Current assets ................................. $2,168 $1,995
Land, buildings, machinery and equipment - net.. 703 733
Other assets ................................... 379 395
------ ------
3,250 3,123
------ ------
Liabilities:
Current liabilities ............................ 1,751 1,683
Long-term debt due after one year .............. 195 133
Other liabilities .............................. 137 145
------ ------
2,083 1,961
------ ------
Ownership ........................................ $1,167 $1,162
====== ======
<PAGE>
5. Inventories (principally "last- in, first-out" method) comprised the
following
Mar. 31, Dec. 31,
1997 1996
(unaudited)
Raw materials and work-in-process ................ $1,019 $ 909
Finished goods ................................... 1,246 1,103
Supplies ......................................... 213 210
------ ------
$2,478 $2,222
====== ======
6. Following is a computation of profit per share:
Three Months Ended
Mar. 31, Mar. 31,
1997 1996
(Unaudited)
I. Net profit for period:
Profit - consolidated (A) .. $ 394 $ 296
====== ======
II. Determination of shares (millions):
Weighted average number of
common shares outstanding (B) .. 189.6 193.9
Shares issuable on exercise of
stock options, net of shares
assumed to be purchased out
of proceeds at market price .... 2.4 2.1
------ ------
Average common shares
outstanding for fully diluted
computation (C) ................ 192.0 196.0
====== ======
III. Profit per share of common
stock:
Assuming no dilution (A/B) ...... $2.08 $1.53
Assuming full dilution (A/C) .... $2.05 $1.51
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND LIQUIDITY AND CAPITAL RESOURCES
A. Consolidated Results of Operations
THREE MONTHS ENDED MARCH 31, 1997 VS. THREE MONTHS ENDED MARCH 31, 1996
First-quarter profit and profit per share were up 33% and 36%,
respectively, while sales and revenues increased 11%. Profit of $394 million
or $2.08 per share was $98 million higher than first-quarter 1996 profit of
$296 million or $1.53 per share. A 9% increase in physical sales volume was
the most significant factor contributing to the increased profit.
Machinery and Engines
Profit before tax of $534 million was up 34% or $136 million from last
year's first quarter. Sales of Machinery and Engines of $4.07 billion were
up 11%. The higher sales resulted from a 9% increase in physical sales
volume and a 2% improvement in price realization.
The increase in physical sales volume resulted from higher machine and
engine sales both inside and outside the United States. Price realization
improved because of price increases taken over the past year, a favorable
change in geographic sales mix, and lower sales discounts, partially offset
by the negative effect of the stronger dollar.
Margin (sales less cost of goods sold) of $1.09 billion increased $189
million from the first quarter a year ago. Margin as a percent of sales was
26.8%, up from 24.5%, primarily because of price increases taken over the
past year, the favorable impact of higher physical sales volume, a favorable
change in geographic sales mix, lower sales discounts, and the net effect of
the stronger dollar. (The favorable effect of the stronger dollar on costs
incurred in Japanese yen and European currencies was substantially offset by
the negative impact on price realization.) Partially offsetting these
favorable items were increased fixed manufacturing costs in support of major
growth initiatives. These include electric power generation, agricultural
products, mining systems, and compact machines.
Selling, general and administrative expenses were $424 million,
compared with $386 million during the first-quarter 1996. The $38 million
increase primarily reflects increased spending levels in support of major
growth initiatives, the effect of inflation on costs, higher incentive pay
expense, and volume-related parts distribution expenses. Partially
offsetting these unfavorable items was the favorable effect of the dollar on
costs incurred in European currencies.
Research and development expenses of $117 million were up $19 million
from the first quarter a year ago. The increase primarily reflects higher
spending in support of product line expansion.
Operating profit was $550 million, up $132 million from the first
quarter a year ago. Operating profit, as a percent of sales, was 13.5%
compared with 11.4% a year ago.
Interest expense was $3 million higher than the first quarter a year
ago.
Other income/expense was income of $36 million compared with income of
$29 million last year. The change reflects several favorable items recorded
during the quarter.
<PAGE>
Financial Products
Before-tax profit for Financial Products was $43 million, an
improvement of $7 million from last year's first quarter. The increase
resulted primarily from continued growth in the portfolio of earning assets
at Caterpillar Financial Services Corporation (Cat Financial), partially
offset by the absence of $7 million in gains recognized on the sale of
securities at Caterpillar Insurance Company Limited (Cat Insurance) in the
first quarter of 1996.
Record first-quarter revenues of $196 million were up $28 million
compared with first-quarter 1996, primarily the result of Cat Financial's
larger portfolio. Selling, general and administrative expenses were up $11
million, primarily due to an increase in depreciation on leased equipment and
other increases due to portfolio growth. Interest expense was $8 million
higher due to increased borrowings to support the larger Cat Financial
portfolio, partially offset by lower borrowing rates.
Income Taxes
The provision for income taxes was $196 million compared with $143
million for the first quarter last year. The increase was due to the higher
before-tax profit and the use of a higher effective tax rate. The effective
tax rate was 34% compared with 33% for the first quarter of 1996.
Unconsolidated Affiliated Companies
The company's share of unconsolidated affiliated companies' results was
$13 million, up $8 million from a year ago. Increased profit from Shin
Caterpillar Mitsubishi Ltd., along with profits from recent investments in
unconsolidated affiliates, largely F.G. Wilson, L.L.C., were the reasons for
the increase.
THREE MONTHS ENDED MARCH 31, 1997 VS THREE MONTHS ENDED DECEMBER 31, 1996
First-quarter profit and profit per share were up 3% and 5%,
respectively, while sales and revenues decreased 5%. Profit of $394 million
or $2.08 per share was $13 million higher than fourth-quarter profit of $381
million or $1.99 per share.
Machinery and Engines
Profit before tax for Machinery and Engines was $534 million, a $49
million increase from the previous quarter. Sales of $4.07 billion decreased
$203 million because of 7% lower physical sales volume, partially offset by a
2% improvement in price realization. The decrease in physical sales volume
was primarily the result of lower engine and machine sales outside the United
States and lower engine sales inside the United States. Partially offsetting
these lower sales were higher machine sales inside the United States. Price
realization improved because of lower sales discounts, price increases taken
during the first quarter, and a favorable change in geographic sales mix.
These favorable items were partially offset by the negative effect of the
stronger dollar.
<PAGE>
Margin was $13 million lower than the fourth quarter, primarily the
result of the lower physical sales volume. As a percent of sales, the margin
rate improved to 26.8% from 25.8% last quarter. The higher margin rate is
primarily the result of lower sales discounts and the favorable impact of an
increase in inventory in the first quarter compared with a decrease in
inventory in the fourth quarter. When inventory increases, certain fixed
costs incurred in the current period are inventoried. These inventoried
fixed costs are then charged to cost of goods sold in later periods when
inventory decreases.
Also contributing to the improved margin rate were price increases taken
during the first quarter, a favorable change in geographic sales mix, and the
net effect of the stronger dollar. (The favorable effect of the stronger
dollar on costs incurred in Japanese yen and European currencies was mostly
offset by the negative effect on price realization.) Partially offsetting
the impact of these favorable items on the margin rate was the unfavorable
impact of lower physical sales volume, increased fixed manufacturing costs in
support of major growth initiatives, and a less favorable mix of product
sold.
Selling, general and administrative expenses were $424 million, down $73
million from the fourth quarter. The decrease was somewhat typical, as the
fourth quarter is generally a higher cost quarter for these types of
expenses. As such, the decrease is primarily reflective of the timing of
expenses and is not indicative of a significant decrease in expenses for the
year. Also contributing to the decreased level of expense during the first
quarter was volume-related parts distribution expenses, lower incentive pay
expense and the favorable effect of the dollar on costs as costs incurred in
European currencies translated into fewer U.S. dollars.
Research and development expenses of $117 million were up $6 million
from the fourth quarter. The increase primarily reflects higher spending in
support of product line expansion.
Operating profit of $550 million increased $54 million. As a percent of
sales, operating profit was 13.5%, up from 11.6% in the fourth quarter.
Interest expense of $52 million was $4 million higher than the fourth
quarter.
Other income/expense was income of $36 million, about the same as the
fourth quarter.
Financial Products
Financial Products' before-tax profit was $43 million, an increase of
$8 million from fourth-quarter 1996. Revenues were about the same.
Selling, general and administrative expenses were down $11 million, mostly
due to a lower provision for credit losses at Cat Financial. Other
income/expense was income of $8 million, down $6 million from the
fourth-quarter, primarily due to lower investment income from Cat Insurance's
investment portfolio.
Income Taxes
Income tax expense of $196 million increased $45 million from the
previous quarter. The increase reflects the use of a higher effective tax
rate during the first quarter and the higher profit before tax. The
effective tax rate was 34% compared with 29% for the fourth quarter of 1996.
Unconsolidated Affiliated Companies
The company's share of unconsolidated affiliated companies' results was
$13 million, about the same as the previous quarter.
<PAGE>
SALES
Following are summaries of first-quarter company sales and dealer
deliveries compared with the same quarter in 1996.
Company Sales Inside the United States
Company sales inside the United States were $2.17 billion, a $289
million or 15% increase from the same quarter a year ago. Both machine and
engine sales were higher. The increase was due primarily to volume although
price realization also improved.
Sales inside the United States during the first quarter were 53% of
total sales, an increase from 51% a year ago.
U.S. Dealer Machine Sales to End-Users
U.S. dealer machine sales to end-users increased in response to stronger
industry demand and an increased share of industry sales.
Sales to end-users (including rental purchase options) were higher in
all construction sectors.
- Housing-related sales were up reflecting continued strong activity in
the residential housing market.
- Sales to the highway sector were higher although highway-related
construction spending remained near last year's levels.
- Commercial, industrial and government building-related sales were
above year-earlier levels in response to the higher levels of
construction spending in these areas.
- Sales to other construction sectors, particularly dams, ports and
harbors were also greater than last year.
Sales into commodity applications also increased with gains registered
in all sectors but metal mining.
- Sand and quarry mining-related sales were higher reflecting greater
production.
- Sales to the coal mining sector were also higher. Production was up
while prices remained near last year's levels.
- Agricultural-related sales rose reflecting a healthy farm economy.
- Sales to the metal mining sector were lower. Production was up but
metals prices remained below year-earlier levels.
- Forestry sector sales were above year-earlier levels.
Sales to industrial users were higher while sales to landfills were
lower.
Deliveries to U.S. Dealer Rental Fleets
Deliveries to U.S. dealer rental fleets were up from first-quarter 1996.
U.S. dealer dedicated rental units were below 1996 year-end levels, but
greater than a year ago.
U.S. Dealer New Machine Inventories
U.S. dealer new machine inventories were up from the end of the fourth
quarter and from first quarter last year. This higher inventory level,
however, is about normal relative to the current higher selling rates.
Company Engine Sales Inside the United States
Company engine sales inside the United States were above year-earlier
levels due primarily to increased demand in power generation and industrial
applications. Truck engine sales to Original Equipment Manufacturers (OEMs)
were unchanged.
Sales of turbine engines also were higher with increases in both oil and
gas applications as well as power generation.
Company Sales Outside the United States
Company sales outside the United States were $1.90 billion, a $101
million or 6% increase over first-quarter 1996. Company sales of both
machines and engines were higher with the improvement coming from an increase
in volume.
Sales outside the United States represented 47% of worldwide sales
compared with 49% for the first quarter of last year.
Dealer Machine Sales to End-Users Outside the United States
Dealer machine sales to end-users outside the United States were higher
than year earlier with gains in Asia/Pacific, Canada, and Africa/Middle East
more than offsetting declines elsewhere.
- Europe: Sales for the region were lower with declines in nearly all
Western European countries including the United Kingdom, Germany and
France. Sales were higher in Central Europe.
- Asia (excluding Japan): Sales were up as good economic growth and
strong infrastructure spending continues. Sales rose in all major
countries except China.
- Africa/Middle East: Demand continues to run above year-earlier
levels in response to good commodity prices and moderate economic
growth. Sales were lower in South Africa, but higher in Turkey.
- Latin America: Sales declined despite improved economic activity in
the region as higher demand in Mexico failed to offset lower demand
in other major countries.
- Canada: Sales to users rose primarily due to higher industry demand.
Results were mixed by application with gains in sand and quarry
mining, coal mining and petroleum.
- Australia: Sales were lower due primarily to a decrease in coal and
gold mining-related sales.
- Japan: Sales of imported product were up as customers purchased
machines in advance of the April 1 sales tax increase.
- Commonwealth of Independent States (CIS): Sales declined as the
Russian economy remained weak.
Dealer New Machine Inventories Outside the United States
Dealer new machine inventories outside the United States were up from
the end of the fourth quarter but down from year-earlier levels. At the end
of the first quarter, dealer inventories were about normal relative to
current selling rates.
<PAGE>
Company Engine Sales Outside the United States
Company engine sales outside the United States were above year-ago
levels primarily due to higher truck engine sales to OEMs.
Sales of turbine engines also were higher with gains in power generation
more than offsetting declines in oil and gas applications.
PLANT CLOSING AND CONSOLIDATION COSTS
At March 31, 1997 the reserve for plant closing and consolidation costs
was $259 million. Of this balance, $164 million is related to costs
associated with the closure of the Component Products Division's Precision
Barstock Products (PBP) operation located in York, Pennsylvania.
The probable closing of the York PBP manufacturing operation was
announced in December 1991. In March 1996, it was announced that the
facility would be closed. The company is currently in the process of
closing the unit.
Also in the reserve for plant closing and consolidation costs at
March 31, 1997, was $69 million for write-downs of buildings, machinery and
equipment at previously closed facilities. The remainder of the reserve
related to severance benefits provided to former employees at previously
closed facilities. The reserve for such benefits is reduced as the benefits
are provided. Currently, benefits are expected to be provided through 2003.
EMPLOYMENT
At the end of the first quarter, Caterpillar's worldwide employment was
57,412, compared with 54,955 one year ago. Hourly employment increased 1,068
to 33,202; salaried and management employment increased 1,389 to 24,210. The
increased employment is the result of acquisitions, expanded operations, and
major growth initiatives.
1997 ECONOMIC AND INDUSTRY OUTLOOK
The economic and industry outlook has improved somewhat from that issued
in January because the U.S. and Canada are now expected to have better
economic growth and higher machine industry demand than originally
anticipated. Consequently, world economic growth (excluding the CIS) and
machine industry demand should be slightly better than last year. Worldwide
industry demand for engines is forecast to remain near 1996 levels as lower
demand for truck engines is offset by higher demand for other commercial
engines. Demand for turbines is still expected to meet or exceed last year's
levels.
The U.S. economy entered 1997 with surprising momentum which is forecast
to boost first-half growth. U.S. Gross Domestic Product (GDP) is now
expected to grow 3% in 1997 which is an acceleration from the 2.4% growth
registered in 1996 and a significant improvement over the 2% anticipated
earlier. Faster overall economic growth will translate into higher than
expected housing starts and a greater acceleration in nonresidential
construction spending. In response to better growth, the Federal Reserve is
likely to raise interest rates further before year end to preempt any
increase in inflation. As a result of better economic activity, industry
demand for machines is now expected to rise slightly instead of declining,
although further Federal Reserve tightening does pose a risk for second-half
sales.
<PAGE>
In contrast to North America, Europe has yet to establish any momentum.
The economy is still forecast to pick up some due to low interest rates and
favorable currencies, but the risk is increasing that this growth may not
occur soon enough to offset the impact of tight fiscal policies in the
construction industry. In this case, demand could fall below 1996 levels.
Very tight fiscal policies also will depress economic growth in Japan making
any improvement in industry demand unlikely. Excellent growth will continue
in developing Asia leading to higher industry demand, while faster growth in
Latin America should lead to increased demand. In other areas, moderate
economic growth should continue in Australia and Africa/Middle East with
industry demand just below 1996 levels. In the CIS, the Russian economy is
likely to be weaker than expected with little or no growth now forecast for
the year.
Global currency markets have moved significantly in recent months and
the U.S. dollar continued to strengthen during the first quarter of 1997. A
strong dollar over the long term has an unfavorable impact on Caterpillar and
other U.S. exporters. An overvalued dollar undermines the competitive
position of companies that have developed a strong manufacturing base to serve
global markets from the United States. As a major net exporter from the
United States, an overvalued dollar, would over time have an unfavorable
impact on Caterpillar's global competitive position. However, Caterpillar's
ability to weather a period of dollar overvaluation has improved in recent
years. We now have cost competitive manufacturing operations for models
produced and sold in both Europe and Japan. Further, key
foreign-headquartered competitors in our industry have geographically
diversified their manufacturing operations.
COMPANY OUTLOOK
The updated company outlook for 1997 consolidated sales and revenues
(including previously reported acquisitions) calls for sales to be moderately
higher than 1996 levels.
It is anticipated that profit for 1997 will be higher than 1996,
basically consistent with the higher sales. The previously announced higher
levels of investment (both capital and expense) to enhance the long-term
growth of the company will take place as planned in 1997. Profit per share
for 1997 is now expected to be moderately higher than 1996, reflecting the
benefit of the share repurchase program.
The forecast for 1997 could be affected by greater than anticipated
Federal Reserve tightening and lingering weakness in European demand.
Further, if the dollar remains overvalued versus the yen, price erosion will
likely occur.
The information included in the Outlook section is forward looking and
involves risks and uncertainties that could significantly impact expected
results. A discussion of these risks and uncertainties is contained in Form
8-K filed with the Securities & Exchange Commission on April 15, 1997.
B. Liquidity & Capital Resources
Consolidated operating cash flow totaled $340 million in the first
quarter of 1997, compared with $264 million in the first quarter of 1996.
Total debt at the end of the quarter was $7.79 billion, an increase of
$334 million from year-end 1996. Over this period, debt related to
Machinery & Engines increased $291 million, to $2.47 billion, while debt
related to Financial Products increased $43 million to $5.33 billion.
During 1995, the company announced a plan to repurchase up to 10% of its
outstanding common stock over the next three to five years. At March 31,
1997, 12.6 million shares had been purchased under the plan.
<PAGE>
Machinery and Engines
Operating cash flow totaled $228 million in the first quarter of 1997,
compared with $144 million in the first quarter of 1996. The increase in
operating cash flow primarily results from the $98 million increase in
profits over the same period a year ago.
Capital expenditures, excluding equipment leased to others, totaled $80
million in the first quarter compared with $34 million a year ago. During the
first quarter, debt related to M&E increased primarily from the issuance of
$300 million of 100 year debentures. This new debt increased the percent of
debt to debt plus stockholders equity from 35% at December 31, 1996, to 36%
at March 31, 1997.
Financial Products
Operating cash flow totaled $112 million in the first quarter of 1997,
compared with $120 million in the first quarter of 1996. Cash used to
purchase equipment leased to others totaled $72 million in the first quarter
of 1997. In addition, first-quarter 1997 net cash used for finance
receivables was $297 million, compared with $129 million during the first
quarter of 1996.
Financial Products' debt was $5.33 billion at March 31, 1997, an
increase of $43 million from December 31, 1996 and was primarily comprised of
$2.8 billion of medium term notes, $224 million of notes payable to banks and
$2.2 billion of commercial paper. At the end of the first quarter, finance
receivables past due over 30 days were 2.7%, compared with 2.2% at the end of
the same period one year ago. The ratio of debt to equity of Cat Financial
was 7.9:1 at March 31, 1997, compared with 7.8:1 at December 31, 1996.
Financial Products had outstanding credit lines totaling $3.76 billion
at March 31, 1997, which included $1.84 billion of the company's revolving
credit agreement. These credit lines are with a number of banks and are
considered support for the company's outstanding commercial paper, commercial
paper guarantees, the discounting of bank and trade bills, and bank
borrowings.
100-Year Bonds
As part of the company's long-term plans, $300 million of 100-year bonds
were issued during the quarter. The bonds are due March 1, 2097 and have a
50-year call feature. They were priced to yield 7.449% with a coupon of
7.375%. These bonds allow the company to take advantage of very favorable
long-term rates and increase resources available for a number of purposes,
including expanded product offerings, new growth initiatives, and new
business opportunities that fit into our long-term growth strategies. The
bonds were very well received in the market, reflecting confidence in
Caterpillar's longer-term growth and profitability strategies.
Reclassification
During first quarter 1997, management reclassified $646 million of short-
term borrowings to long-term debt due after one year. This reclassification
reflects a change in management's intent to finance for periods greater than a
year certain portions of debt under revolving credit agreements. For purposes
of improving comparability, $555 million and $406 million were reclassified at
December 31, 1996 and March 31, 1996, respectively, from short-term borrowings
to long-term debt due after one year. This change impacted the Consolidated
and Financial Products' portion of the Financial Position, but had no impact
on the Machinery and Engines' portion. Furthermore, this change had no impact
on the Results of Operations. All comparisons to first quarter 1996 and
fourth quarter 1996 are with the reclassified amounts.
<PAGE>
PART II. OTHER INFORMATION
Item 2. Changes in Securities
The Company has eight employee stock purchase plans administered
outside the United States for our foreign employees. Those plans have
approximately 1,684 participants in the aggregate. During the First
Quarter of 1997, a total of 43,045 shares of Caterpillar common stock
or foreign denominated equivalents were distributed under the plans.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of Caterpillar Inc. was held on
April 9, 1997, for the purpose of electing a board of directors,
approving the appointment of auditors, and voting on the proposal
described below. Proxies for the meeting were solicited pursuant to
Section 14(a) of the Securities Exchange Act of 1934 and there was no
solicitation in opposition to management's solicitations.
All of management's nominees for directors as listed in the proxy
statement were elected with the following vote:
Shares
Voted Shares
"For" "Withheld"
L. H. Affinito 149,033,737 6,192,784
D. V. Fites 149,066,487 6,160,034
D. R. Goode 149,180,086 6,046,435
J. I. Smith 149,177,907 6,048,614
The appointment of Price Waterhouse LLP as independent auditor was
approved by the following vote:
Shares Shares Shares
Voted Voted Shares Not
"FOR" "AGAINST" "ABSTAINING" Voted
154,389,058 490,938 346,525 0
The stockholder proposal requesting the Board of Directors to establish
guidelines regarding investments in certain countries was defeated with
the following vote:
Shares Shares Shares
Voted Voted Shares Not
"FOR" "AGAINST" "ABSTAINING" Voted
6,149,340 122,353,086 11,086,069 15,638,026
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description
27 Financial Data Schedule
(b) Two reports on Form 8-K, January 21, 1997 and February 13, 1997,
were filed during the quarter ending March 31, 1997, both pursuant
to Item 5 of that form. An additional Form 8-K was filed on
April 15, 1997 pursuant to Item 5. No financial statements were
filed as part of those reports.
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.
Date: April 30, 1997 By: /s/ D. R. Oberhelman
D. R. Oberhelman, Vice President
and Chief Financial Officer
Date: April 30, 1997 By: /s/ R. R. Atterbury III
R. R. Atterbury III, Secretary
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM FINANCIAL STATEMENTS FOR THE PERIOD
ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 147
<SECURITIES> 371
<RECEIVABLES> 3,057<F1>
<ALLOWANCES> 0<F1><F2>
<INVENTORY> 2,478
<CURRENT-ASSETS> 9,079
<PP&E> 8,946
<DEPRECIATION> 5,181
<TOTAL-ASSETS> 19,292
<CURRENT-LIABILITIES> 6,289
<BONDS> 5,603
0<F2>
0<F2>
<COMMON> 204
<OTHER-SE> 4,162
<TOTAL-LIABILITY-AND-EQUITY> 19,292
<SALES> 4,072
<TOTAL-REVENUES> 4,262
<CGS> 2,981
<TOTAL-COSTS> 3,675
<OTHER-EXPENSES> (42)
<LOSS-PROVISION> 0<F2>
<INTEREST-EXPENSE> 52
<INCOME-PRETAX> 577
<INCOME-TAX> 196
<INCOME-CONTINUING> 394
<DISCONTINUED> 0<F2>
<EXTRAORDINARY> 0<F2>
<CHANGES> 0<F2>
<NET-INCOME> 394
<EPS-PRIMARY> 2.08
<EPS-DILUTED> 2.05
<FN>
<F1> Notes and accounts receivable - trade are reported net of allowances
for doubtful accounts in the Statement of Financial Position.
<F2> Amounts inapplicable or not disclosed as a separate line on the
Statement of Financial Position or Results of Operations are reported as 0
herein.
</FN>
</TABLE>
