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): July 15, 1998
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
Item 5. Other Events
July 15, 1998
CATERPILLAR POSTS BEST SECOND QUARTER EVER
PROFIT PER SHARE UP 6% - EQUALS ALL-TIME BEST QUARTER
REAFFIRMS 1998 OUTLOOK
PEORIA, Ill. -- Caterpillar Inc. (NYSE: CAT) reported its
best second quarter ever for sales and revenues, profit, and
profit per share. Sales and revenues of $5.60 billion, rose 15%
(including 6% from Perkins) from second-quarter 1997. Profit of
$446 million was up 3%, primarily due to the higher sales volume.
This increase was achieved despite higher spending for major
growth initiatives and product line expansions as well as
additional cost associated with the first-quarter acquisition of
Perkins. Profit per share of $1.22 ($1.20 assuming dilution) was
up 6%, as it continued to benefit from the ongoing share
repurchase program.
Caterpillar has now posted record profit in 16 of the last
18 quarters.
In June, the Board of Directors voted to increase the
quarterly cash dividend from 25 cents to 30 cents per share of
common stock -- a 20% increase. This is the sixth time since
1993 that the Board has increased the dividend.
Commenting on this excellent performance, Caterpillar
Chairman and CEO Donald V. Fites said, "Once again our
organization has delivered record financial results, while
continuing to invest strategically for long-term growth. The
company's product, service, and geographic diversification
strategies are proving to be very effective in generating
earnings growth. This is especially rewarding given the severe
economic downturn in several Southeast Asian countries and Japan.
The dividend increase reflects our Board's confidence about
the company's future financial performance, and its commitment to
increasing shareholder value."
HIGHLIGHTS
SECOND-QUARTER 1998 COMPARED WITH SECOND-QUARTER 1997
* Sales and revenues of $5.60 billion, the highest quarter
ever, rose 15%.
* Profit of $446 million, a second-quarter record and the
second highest quarter ever, was up 3%.
* Profit per share of $1.22 ($1.20 assuming dilution),
equaling the all-time record, was up 6%.
* Margin (sales less cost of goods sold) as a percent of
sales was 25.7% compared with 26.2% a year ago. Excluding
Perkins, margins would have been higher than a year ago.
* Operating profit for Machinery and Engines as a percent of
sales was 12.4% compared with 13.0% a year ago.
* Physical sales volume was up 14%, with Perkins adding 6%.
* Sales, excluding Perkins, were up 12% inside the United
States and 6% outside the United States.
* Revenues from Financial Products were up 38%.
* From inception in June 1995 through June 30, 1998, 39.9
million shares have been repurchased under our share
repurchase plan. The number of shares outstanding at June
30, 1998, was 364.8 million. When the 10% share
repurchase program is completed later this year,
approximately 360 million shares will be outstanding.
Outlook
The company's outlook for 1998 worldwide sales and revenues
remains unchanged from that issued with our third-quarter 1997
results, which called for sales and revenues (excluding Perkins)
to slightly surpass 1997's record levels. The company's outlook
for 1998 profit remains unchanged from that issued with our
fourth-quarter 1997 results, which called for profit to be near
1997's record. (Complete outlook begins on page 10.)
DETAILED ANALYSIS
SECOND-QUARTER 1998 COMPARED WITH SECOND-QUARTER 1997
Second-quarter sales and revenues rose 15%. Profit was up
3% and profit per share of common stock increased 6% as it also
reflected the impact of the ongoing share repurchase program.
Profit of $446 million was a second-quarter record and the second
best quarter ever, an improvement of $11 million over profit of
$435 million in second-quarter 1997. Profit per share of $1.22
($1.20 assuming dilution) was up 6% and equaled the all-time
record for any quarter. Sales and revenues of $5.60 billion were
$734 million higher, setting an all-time record for any quarter.
An increase in physical sales volume of 14% was the most
significant factor contributing to the record sales and revenues,
and higher profit.
Machinery and Engines
Sales of Machinery and Engines were $5.36 billion, an
increase of $681 million or 15% from second-quarter 1997. The
higher sales were primarily due to the increase in physical sales
volume which resulted from higher machine and engine sales both
inside and outside the United States. Physical sales volume was
up 14%, including Perkins which contributed 6%. Price
realization improved slightly.
Profit before tax was $597 million, $13 million higher than
the second quarter a year ago. The primary reasons for the
higher profit were the higher physical sales volume and price
increases taken over the past year. Partially offsetting were
increased spending for major growth initiatives and product line
expansions that include electric power generation, agricultural
products, and compact machines. Also offsetting were the
additional costs associated with the first-quarter acquisition of
Perkins.
Margin (sales less cost of goods sold) of $1.38 billion
increased $153 million or 12% over second-quarter 1997. Margin
as a percent of sales was 25.7%, compared with 26.2% a year ago
as the favorable impact of price increases and a change in
geographic sales mix were more than offset by higher fixed
manufacturing costs, slightly lower manufacturing efficiency, and
a net unfavorable effect of the dollar. Excluding Perkins,
margins would have been higher than a year ago.
Fixed manufacturing costs were higher and manufacturing
efficiency was lower primarily due to the major growth
initiatives and product line expansions.
Selling, general, and administrative expenses (SG&A) were
$548 million compared with $483 million in second-quarter 1997.
The $65 million increase primarily reflects increased spending
levels in support of major growth initiatives and product line
expansions. The effect of inflation on costs also contributed to
the increase. SG&A expenses, as a percent of sales, were 10.2%,
about the same as the second quarter a year ago.
Research and development expenses (R&D) of $165 million were
up $30 million from second-quarter 1997. The increase reflects
expected higher spending in support of new and improved products.
R&D expenses, as a percent of sales, were 3.1% compared with 2.9%
a year ago.
Operating profit of $666 million was $58 million or 10%
higher than second-quarter 1997. Operating profit, as a percent
of sales, was 12.4% compared with 13.0% a year ago.
Interest expense of $69 million was $11 million higher than
a year ago, mostly due to higher average debt levels to finance
the acquisition of Perkins during first-quarter 1998.
Other income/expense reflects a net decrease in income of
$34 million from second-quarter 1997 mostly due to the discount
taken on the sale of receivables to Caterpillar Financial
Services Corporation (Cat Financial) and also due to an
unfavorable change in foreign exchange gains and losses.
Financial Products
Financial Products' second-quarter revenues were a record
$276 million, up $76 million or 38% compared with second-quarter
1997. The increase resulted primarily from continued growth in
Cat Financial's portfolio. The portfolio was up $3 billion or
45% from the same period last year, the result of new business
and the purchase of $1 billion of trade receivables from
Caterpillar Inc. in the first half of 1998.
Before-tax profit was $69 million, an increase of $15
million or 28% from the second quarter a year ago. The increase
resulted primarily from favorable reserve adjustments and higher
investment income at Caterpillar Insurance Co. Ltd. (Cat
Insurance), and the portfolio growth at Cat Financial.
Selling, general, and administrative expenses were $92
million, up $22 million from a year ago, principally the result
of provisions for credit losses and increased depreciation on
leased equipment due to Cat Financial's record new business and
other increases due to growth.
Interest expense was up $35 million, a result of increased
borrowings to support the larger portfolio which includes the
receivables purchased from Caterpillar Inc.
Other income and expense was income of $9 million, a
decrease of $4 million from a year ago.
Income Taxes
The provision for income taxes was $220 million, compared
with $217 million last year. The $3 million increase reflects
the higher taxes due on the increased before-tax profit,
partially offset by the impact of a lower effective tax rate of
33% compared with 34% in second-quarter 1997. The lower tax rate
accounted for $7 million in lower taxes.
Unconsolidated Affiliated Companies
Our share of unconsolidated affiliated companies' results
decreased $14 million from the second quarter a year ago. The
major factor was unfavorable results at Shin Caterpillar
Mitsubishi Ltd. due primarily to lower sales volume resulting
from the severe economic downturn in Japan and Southeast Asia.
SALES
Following are summaries of second-quarter company sales and
dealer deliveries compared with the same quarter in 1997.
CATERPILLAR SALES INSIDE THE UNITED STATES were $2.72
billion, a $303 million or 13% increase over second quarter last
year. Both machine and engine sales benefited from the strong
U.S. economy. End-user demand rose in most applications
reflecting the strong economy, low inflation, stable interest
rates, and high levels of consumer and business confidence. In
addition to higher physical sales volume, price realization also
increased.
Sales inside the United States during the second quarter
were 51% of worldwide sales compared with 52% a year ago.
U.S. Dealer Machine Sales to End Users increased due to
higher industry demand. Sales into all key construction sectors
rose reflecting the robust activity of the economy over the past
year and more than offset a decline in coal and metal mining, and
agricultural applications. However, sales into the largest commodity
sector, non-metal mining, rose in response to higher aggregate production.
Sales also were higher in the petroleum and forestry sectors.
In other applications, sales to landfills increased while sales
to industrial users declined.
Deliveries to U.S. Dealer Dedicated Rental Fleets increased
from second-quarter 1997. At the end of the second quarter, U.S.
dealer dedicated rental units were higher than year-earlier
levels, and up from the end of the first quarter.
U.S. Dealer New Machine Inventories fell from the end of the
first quarter reflecting strong end-user demand. At the end of
the second quarter, dealer inventories were above year-ago levels
and about normal relative to current selling rates.
Company Engine Sales Inside the United States were above
year-earlier levels reflecting good economic growth and strong
industry demand. Sales of reciprocating engines were higher in
all major applications, including on-highway trucks, power
generation, industrial, and marine. Sales of turbine engines
also exceeded year-earlier levels due to gains in industrial
power generation.
CATERPILLAR SALES OUTSIDE THE UNITED STATES were $2.64
billion, a $378 million or 17% increase over second-quarter 1997.
Approximately two-thirds of the increase is due to the
acquisition of Perkins in the first quarter of 1998. Sales of
both machines and engines increased as higher sales in Europe,
Latin America, Canada, and Africa/Middle East more than offset
lower sales in the Asia/Pacific region. The increase was due to
higher physical sales volume as price realization declined.
Sales outside the United States represented 49% of worldwide
sales compared with 48% a year ago.
Dealer Machine Sales to End Users Outside the United States
rose from year-earlier levels as higher sales in Latin America,
Canada, Europe, and Australia more than offset lower sales
elsewhere.
* Europe: Sales for the region were higher, reflecting
continued improvement in economic activity and business
confidence. Sales were up in Germany, France, and Italy,
but lower in the United Kingdom and Spain.
* Canada: Sales increased in response to higher industry
demand, reflecting continued good economic growth,
moderate interest rates and higher housing starts. Sales
into construction and petroleum applications were
particularly strong while sales into coal and metal mining
applications were down.
* Latin America: Sales improved as moderate to good
economic growth continued for most of the region. Sales
were up in the key countries of Brazil, Argentina, Mexico,
Peru, and Chile.
* Africa/Middle East: Sales remained near year-earlier
levels reflecting the impact of low prices for oil and
other commodities. Sales were higher in Turkey but lower
in South Africa.
* Asia (excluding Japan): Sales continued to decline
sharply in response to the severe economic downturn in
Southeast Asia and South Korea. In China, economic growth
has slowed from year earlier but demand is still rising.
* Australia: Sales increased as higher demand in the
construction and coal mining sectors more than offset a
decline in metal mining applications.
* Japan: Sales of imported product fell significantly in
response to the ongoing recession.
* Commonwealth of Independent States (CIS): Sales declined
as Russia slipped back into recession.
Dealer New Machine Inventories Outside the United States
were down from the end of the first quarter due to a large
reduction in Asia. Dealer new machine inventories were still
above year-earlier levels, however, due to increases in Canada,
Latin America, and Europe where end-user demand is growing. At
the end of the second quarter, dealer inventories were about
normal relative to current selling rates.
Company Engine Sales Outside the United States exceeded
year-earlier levels with growth in all regions, especially
Europe, Latin America, and Canada. (Without Perkins, sales still
would have been higher in all regions, including Asia.) Sales of
reciprocating engines were higher, reflecting increased demand
for on-highway trucks. Sales of turbine engines also increased
due to gains in oil and gas applications.
SECOND-QUARTER 1998 COMPARED WITH FIRST-QUARTER 1998
Second-quarter profit of $446 million or $1.22 per share
($1.20 assuming dilution) was $16 million higher than
first-quarter profit of $430 million or $1.17 per share ($1.15
assuming dilution). An 18% increase in physical sales volume was
the most significant factor contributing to the higher profit.
Machinery and Engines
Profit before tax for Machinery and Engines was $597
million, a $44 million increase from the previous quarter. Sales
of $5.36 billion increased $784 million or 17%, primarily because
of the higher physical sales volume. Price realization was about
1% lower.
The increase in physical sales volume was the result of
higher machine and engine sales inside and outside the United
States. Physical sales volume was up 18%, including 4% from
Perkins. Price realization was about 1% lower as price increases
realized during the quarter were more than offset by higher sales
discounts and the effect of the stronger dollar on sales
denominated in currencies other than the U.S. dollar.
Margin was $140 million higher than the first quarter,
primarily the result of the 18% increase in physical sales
volume. As a percent of sales, the margin rate was 25.7%
compared with 27.1% last quarter. The lower margin rate was
primarily due to the higher sales discounts, higher fixed
manufacturing costs, slightly lower manufacturing efficiency, and
an unfavorable net effect of the dollar, partially offset by the
price increases realized during the quarter.
Fixed manufacturing costs were higher and manufacturing
efficiency was lower primarily due to the major growth
initiatives and product line expansions.
Selling, general, and administrative expenses were $548
million, up $36 million from the first quarter. The increase
reflects continued higher spending levels in support of major
growth initiatives and product line expansions.
Research and development expenses of $165 million were up
$10 million from the first quarter. The increase reflects
continued higher spending in support of new and improved
products.
Operating profit of $666 million increased $94 million. As
a percent of sales, operating profit was 12.4% compared with
12.5% in the first quarter.
Interest expense of $69 million was $8 million higher than
the first quarter, mostly due to higher average debt levels to
finance the Perkins acquisition.
Other income/expense reflects a net decrease in income of
$42 million from last quarter primarily due to an unfavorable
change in foreign exchange gains and losses, and discounts taken
on the sale of receivables to Cat Financial.
Financial Products
Financial Products' revenues of $276 million were up $36
million from the first quarter, primarily due to Cat Financial's
portfolio growth.
Before-tax profit was $69 million, a decrease of $7 million,
primarily the result of lower investment income at Cat Insurance,
partially offset by higher earnings from Cat Financial's larger
portfolio.
Income Taxes
Income tax expense of $220 million increased $13 million
from the previous quarter. The increase reflects the higher
profit before tax. The tax rate was 33% in both quarters.
Unconsolidated Affiliated Companies
Our share of unconsolidated affiliated companies' results
decreased $8 million from the previous quarter. The major factor
was unfavorable results at Shin Caterpillar Mitsubishi Ltd. due
primarily to lower sales volume resulting from the severe
economic downturn in Japan and Southeast Asia.
CONDENSED CASH FLOW
Net free cash flow (profit after tax adjusted for
depreciation, changes in working capital, capital expenditures,
and dividends) for Machinery and Engines was $968 million for the
first six months of 1998, an increase of $620 million as compared
with the corresponding period in 1997. This increase was
primarily due to the sale of $1 billion in receivables to Cat
Financial that was largely offset by a decrease in accounts
payable. The sale of receivables to Cat Financial (and a portion
of Cat Financial's increased debt) were related to the Perkins
acquisition.
For the Six Months Ended Machinery & Financial
(Millions of dollars) Consolidated Engines * Products
June June June June June June
30, 30, 30, 30, 30, 30,
1998 1997 1998 1997 1998 1997
Profit after tax $876 $829 $876 $829 $92 $61
Depreciation and 429 376 351 310 78 66
amortization
Change in
working capital -
excluding (1,826) (662) 221 (419) (2,048) (243)
cash and debt
Capital expenditures
excluding equipment
leased to others (307) (223) (304) (222) (3) (1)
Expenditures for
equipment leased to
others, net of disposals(107) (86) 7 1 (114) (87)
Dividends paid (183) (151) (183) (151) (35) -
Net Free Cash Flow (1,118) 83 968 348 (2,030) (204)
Other significant cash flow items:
Treasury shares (200) (218) (200) (218) - -
purchased
Net (increase)
decrease in long-term
finance receivables (898) (221) - - (898) (221)
Net increase 3,683 923 832 341 2,851 582
(decrease) in debt
Investments and
acquisitions - (net of
cash acquired) (1,324) (22) (1,324) (22) - -
Prefunding of
employee benefit plans - (100) - (100) - -
Other (214) (375) (349) (328) 79 (108)
Change in cash and
short-term investments $(71) $70 $(73) $21 $2 $49
* Represents Caterpillar Inc. and its subsidiaries,
except for Financial Products which is accounted for on
the equity basis.
Note: Lines titled "Change in working capital -excluding cash and
debt" and "Capital expenditures excluding equipment leased to others"
exclude $22 million and $354 million, respectively, included in the
"Investments and acquisitions - (net of cash acquired)" line for the
six months ended June 30, 1998; line titled "Change in working
capital - excluding cash and debt" excludes $7 million for the six
months ended June 30, 1997.
EMPLOYMENT
At the end of the second quarter, Caterpillar's worldwide
employment was 65,947 compared with 58,336 one year ago. Hourly
employment increased 3,843 to 37,400; salaried and management
employment increased 3,768 to 28,547. The increases were largely
due to acquisitions.
ECONOMIC AND INDUSTRY OUTLOOK
In the United States, Gross Domestic Product (GDP) is now
expected to grow almost 3.5% in 1998, slightly better than
anticipated in April. Demand for goods and services has recently
been growing at the fastest pace since 1983-1984. The economy is
forecast to slow some in the second half, but this will be an
outstanding year in terms of industry demand for both machines
and engines. Overall, industry demand for machines in 1998 is
expected to be up about 10% for the year. Industry demand for
engines also is forecast to be moderately higher with gains in
all markets, especially truck Original Equipment Manufacturers.
In Canada, continued strong economic growth in 1998 should
result in higher machine and engine industry demand for the
year.
In Western Europe, economic activity picked up in the first
half. This momentum should carry through the remainder of the
year, resulting in GDP growth of 3% for the year as a whole.
Consumer and business confidence should continue to rise as
unemployment falls contributing to an excellent investment
environment. Industry demand is forecast to increase for both
machines and engines.
In Central Europe, good economic growth should continue
throughout 1998 with industry demand exceeding 1997 levels.
The outlook for the Asia/Pacific region continues to
deteriorate. Indonesia, Thailand, and Korea are experiencing
severe recessions. China is still growing but at a much slower
pace than in 1997. Overall, developing Asia is now forecast to
register no growth in 1998, and industry demand for both
machines and engines will fall significantly from 1997 levels.
Japan is now expected to remain in deep recession
throughout this year. Consequently, industry demand will
decline significantly in 1998.
The Australian economy continues to register moderate
growth despite much lower Asian exports. A strong construction
sector should offset weakness in mining and agriculture
resulting in slightly higher industry demand for the year.
Engine industry demand should remain near 1997 levels.
In Latin America, GDP growth is still expected to be 3.5%
this year leading to higher industry demand for both machines
and engines.
The Africa/Middle East region has been hurt by lower
commodity prices, especially for oil. With weak economic
growth, industry demand will likely decline in 1998 for machines
and engines.
In the CIS, Russia has slipped back into recession,
struggling with currency and budget problems. Consequently,
industry demand for machines and engines is forecast to decline
in 1998.
In summary, the economic and industry outlook has improved
since April for North America, but continues to deteriorate for
Asia. In total, worldwide industry demand for machines is still
expected to decline only slightly in 1998, unchanged from our
January 1998 and April 1998 outlook. Worldwide industry demand
for engines is still expected to exceed 1997 levels due to
continued strength in North America.
COMPANY OUTLOOK
Our outlook for 1998 worldwide sales and revenues remains
unchanged from that issued with our third-quarter 1997 results,
which called for sales and revenues (excluding Perkins, which was
acquired during the first quarter) to slightly surpass 1997's
record levels.
Investments in major initiatives to enhance long-term growth
and shareholder returns continue in 1998. These initiatives
include electric power generation, agricultural products, compact
machines, and further strengthening of our product support
network to better link customer, dealer, and company operations.
For Machinery and Engines (excluding Perkins), total capital
expenditures, which were $819 million in 1997, are expected to be
slightly higher in 1998. R&D and SG&A expenditures will increase
in 1998 in support of expanded operations and the major growth
initiatives, however, the rate of increase is expected to be less
than in recent years.
Despite these expenditures for major growth initiatives, our
outlook for profit in 1998 remains unchanged from that issued
with our fourth-quarter 1997 results and is expected to be near
1997's record. Profit per share will be favorably impacted by
the share buy-back program announced in June 1995, which we
anticipate will be completed during 1998. Cash flow from
operations and our financial position are expected to remain
strong.
* * *
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 July 15, 1998.
Caterpillar's latest financial results and current outlook are
also available via :
Telephone:
(800) 228-7717 (Inside the United States and Canada)
(201) 332-8602 (Outside the United States and Canada)
Internet:
http://www.CAT.com
CATERPILLAR INC.
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
(Millions of dollars except per share data)
Machinery & Financial
Consolidated Engines * Products
June June June June June June
30, 30, 30, 30, 30, 30,
1998 1997 1998 1997 1998 1997
Sales and revenues:
Sales of Machinery $5,357 $4,676 $5,357 $4,676 $ - $ -
& Engines
Revenues of 247 194 - - 276 200
Financial Products
Total sales 5,604 4,870 5,357 4,676 276 200
and revenues
Operating costs:
Cost of goods sold 3,978 3,450 3,978 3,450 - -
Selling, general,
and administrative
expenses 634 547 548 483 92 70
Research and
development expenses 165 135 165 135 - -
Interest expense of
Financial Products 121 85 - - 124 89
Total 4,898 4,217 4,691 4,068 216 159
operating costs
Operating Profit 706 653 666 608 60 41
Interest expense
excluding Financial
Products 69 58 69 58 - -
Other income 29 43 - 34 9 13
(expense)
Consolidated profit 666 638 597 584 69 54
before taxes
Provision for 220 217 195 196 25 21
income taxes
Profit of 446 421 402 388 44 33
consolidated
companies
Equity in profit of
unconsolidated
affiliates - 14 - 14 - -
Equity in profit of
Financial Products
subsidiaries - - 44 33 - -
Profit $446 $435 $446 $435 $44 $33
Profit per share of $1.22 $1.15
common stock
Profit per share of
common stock -
assuming dilution $1.20 $1.13
Weighted average
shares outstanding
Basic (thousands) 365,841 377,083
Assuming dilution 371,756 382,628
(thousands)
* Represents Caterpillar Inc. and its subsidiaries, except for
Financial Products which is accounted for on the equity basis.
Transactions between Machinery and Engines and Financial Products
have been eliminated to arrive at the Consolidated data.
CATERPILLAR INC.
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
FOR THE SIX MONTHS ENDED
(Millions of dollars except per share data)
Machinery & Financial
Consolidated Engines * Products
June June June June June June
30, 30, 30, 30, 30, 30,
1998 1997 1998 1997 1998 1997
Sales and revenues:
Sales of Machinery $9,930 $8,748 $9,930 $8,748 $ - $ -
& Engines
Revenues of 468 384 - - 516 396
Financial Products
Total sales 10,398 9,132 9,930 8,748 516 396
and revenues
Operating costs:
Cost of goods sold 7,312 6,431 7,312 6,431 - -
Selling, general,
and administrative
expenses 1,221 1,045 1,060 907 173 150
Research and
development
expenses 320 252 320 252 - -
Interest expense of
Financial Products 222 164 - - 229 170
Total 9,075 7,892 8,692 7,590 402 320
operating costs
Operating Profit 1,323 1,240 1,238 1,158 114 76
Interest expense
excluding Financial
Products 130 110 130 110 - -
Other income 102 85 42 70 31 21
(expense)
Consolidated profit 1,295 1,215 1,150 1,118 145 97
before taxes
Provision for 427 413 374 377 53 36
income taxes
Profit of 868 802 776 741 92 61
consolidated companies
Equity in profit of
unconsolidated
affiliates 8 27 8 27 - -
Equity in profit of
Financial Products
subsidiaries - - 92 61 - -
Profit $876 $829 $876 $829 $92 $61
Profit per share of $2.39 $2.19
common stock
Profit per share of
common stock -
assuming dilution $2.36 $2.16
Weighted average
shares outstanding
Basic (thousands) 366,424 378,169
Assuming dilution 372,008 383,108
(thousands)
* Represents Caterpillar Inc. and its subsidiaries, except for
Financial Products which is accounted for on the equity basis.
Transactions between Machinery and Engines and Financial Products
have been eliminated to arrive at the Consolidated data.
CATERPILLAR INC.
CONDENSED FINANCIAL POSITION
(Millions of dollars)
Consolidated
(Caterpillar Inc. and
Subsidiaries)
June Dec. June
30, 31, 30,
1998 1997 1997
Assets
Current assets:
Cash and short-term investments $221 $292 $557
Receivables -- trade and other 3,760 3,331 3,195
Receivables -- finance 3,563 2,660 2,704
Deferred income taxes and prepaid 1,010 928 837
expenses
Inventories 3,132 2,603 2,526
Total current assets 11,686 9,814 9,819
Property, plant, and equipment -- 4,444 4,058 3,786
net
Long-term receivables -- trade and 132 134 118
other
Long-term receivables -- finance 4,779 3,881 3,601
Investments in unconsolidated 805 751 695
affiliated companies
Deferred income taxes 988 1,040 1,113
Intangible assets 1,253 228 223
Other assets 1,019 850 842
Total Assets $25,106 $20,756 $20,197
Liabilities
Current liabilities:
Short-term borrowings:
-- Machinery & Engines $587 $53 $40
-- Financial Products 607 431 904
Accounts payable and accrued 3,587 3,358 3,098
expenses
Accrued wages, salaries, and 1,043 1,128 988
employee benefits
Dividends payable 109 92 94
Deferred and current income taxes 153 175 203
payable
Long-term debt due within one
year:
-- Machinery & Engines 33 54 78
-- Financial Products 1,560 1,088 1,093
Total current liabilities 7,679 6,379 6,498
Long-term debt due after one year:
-- Machinery & Engines 2,686 2,367 2,399
-- Financial Products 6,778 4,575 3,868
Liability for postemployment 2,707 2,698 2,856
benefits
Deferred income taxes and other 123 58 60
liabilities
Total Liabilities 19,973 16,077 15,681
Stockholders' Equity
Common stock 1,066 1,071 1,074
Profit employed in the business 5,701 5,026 4,375
Accumulated other comprehensive 62 95 104
income
Treasury stock (1,696) (1,513) (1,037)
Total Stockholders' Equity 5,133 4,679 4,516
Total Liabilities and Stockholders' $25,106 $20,756 $20,197
Equity
#####
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: July 15, 1998
