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
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 First Quarter Financial
Release dated July 15, 1998 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.
Unforeseen events in Asia could impact sales. Our current
assessment calls for continued deep recession in Japan, Korea,
Thailand and Indonesia and recession or weak growth in many other
Southeast Asian developing countries. This assessment presumes
the region's currencies and stock markets stabilize over the next
several months and that the impact of these events in Asia is limited
outside the region to slightly slower economic growth in the U.S. and
Latin America (particularly Brazil) and to lower world commodity
prices. If the region's currencies and/or stock markets fail to
stabilize, if China or Hong Kong were to devalue, or if Japan were to
experience a financial collapse, then the impact on world growth and
industry demand would be more severe which could result in lower
company sales. Company sales also could be negatively impacted by a
greater than anticipated flow of new and used equipment from weak Asian
markets to the rest of the world which could exert pressure on both
price realization and share of industry sales.
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 fails to cut interest rates quickly
enough in response to a significant decline in world stock prices, the
U.S. economy could slow and negatively impact demand for the Company's
products. In general, high interest rates, reductions in government
spending, higher taxes, significant currency devaluations, and
uncertainty over key policies are some factors likely to lead to slower
economic growth and lower industry demand.
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. 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
could be negatively impacted. Most of the Company's key competitors
have their principal manufacturing operations based in Japan or
European countries. The majority of Caterpillar's manufacturing assets
are in the United States. Consequently, with an overvalued dollar, the
Company's costs compared with these competitors are relatively higher.
As a major net exporter from the United States, an overvalued dollar,
over time, could have an unfavorable impact on Caterpillar's global
competitive position.
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.
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 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.
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: July 15, 1998
