SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 16, 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
CATERPILLAR POSTS BEST EVER THIRD-QUARTER SALES AND REVENUES; PROFIT
AND PROFIT PER SHARE SECOND HIGHEST FOR A THIRD QUARTER
OUTLOOK FOR 1998 UNCHANGED
ANNOUNCES PLAN TO REDUCE OUTSTANDING SHARES TO 320 MILLION
On October 16, 1998 Caterpillar Inc. reported its best
third quarter ever for sales and revenues. Profit and profit per share
were the second highest for a third quarter. Sales and revenues of
$5.17 billion, rose 12% (including 5% from Perkins) from third-quarter
1997. Profit of $336 million was down 13% from the third-quarter
record set in 1997 as the additional margin from higher sales and
revenues was more than offset by continued higher spending for growth
initiatives, including the first-quarter acquisition of Perkins.
Profit per share of $.92 assuming dilution was down 9% and benefited
from the share repurchase program which was completed during the
quarter. Today, the company is announcing a new share repurchase
program to reduce the number of outstanding shares to 320 million.
Commenting on the announcements, Caterpillar Chairman and CEO
Donald V. Fites said, "Our organization continues to deliver solid
financial results, despite current global economic uncertainties,
severe economic conditions in Southeast Asia and Japan, and our ongoing
investments for long-term growth. Our strategy is to maintain a
balance which will allow us to continue delivering strong financial
performance, and at the same time remain focused on achieving our
aggressive growth targets. The new stock repurchase initiative sends a
strong signal regarding the company's future cash flows and directors'
confidence that Caterpillar stock is an excellent long-term
investment."
HIGHLIGHTS
THIRD-QUARTER 1998 COMPARED WITH THIRD-QUARTER 1997
* Sales and revenues of $5.17 billion, the highest ever for a
third quarter, rose 12% (5% from Perkins).
* Profit of $336 million, the second best ever for a third
quarter, was down 13%.
* Profit per share of $.92 assuming dilution, also the second best
ever for a third quarter, was down 9%.
* Physical sales volume rose 13%, with Perkins adding 6%.
* Sales, excluding Perkins, were up 19% inside the United States
and down 5% outside the United States.
* Revenues from Financial Products increased 34%.
SHARE REPURCHASES
The 10% share repurchase program initiated in 1995 was completed
during the quarter. The number of shares outstanding at September 30,
1998, was 358.7 million. The Board of Directors has authorized another
share repurchase program to reduce the number of outstanding shares to
320 million within the next three to five years.
OUTLOOK
The company's outlook for 1998 worldwide sales and revenues
remains unchanged from that issued with our third-quarter 1997 results
that called for sales and revenues (excluding Perkins) to slightly
surpass 1997's record levels. The company's profit outlook for 1998
remains unchanged from the one issued in January 1998, which called for
profit to be near 1997's record. Our preliminary 1999 outlook is for
company sales and revenues to be near 1998 record levels. (Complete
outlook begins on page 10.)
DETAILED ANALYSIS
THIRD-QUARTER 1998 COMPARED WITH THIRD-QUARTER 1997
Third-quarter sales and revenues of $5.17 billion were a
third-quarter record, increasing $573 million or 12% due to higher
physical sales volume. Profit of $336 million and profit per share
of common stock of $.92 assuming dilution were the second highest
ever for a third quarter but declined 13% and 9%, respectively,
from the third-quarter record set in 1997. Planned higher spending
for growth initiatives and the Perkins acquisition more than offset
additional margin from higher sales and revenues.
MACHINERY AND ENGINES
Sales of Machinery and Engines were $4.91 billion, an increase of
$521 million or 12% from third-quarter 1997. The higher sales were due
to a 13% increase (6% from Perkins) in physical sales volume. Price
realization was about 1% lower as price increases taken over the past
year were more than offset by higher sales discounts and the effect of
the stronger dollar on sales denominated in currencies other than U.S.
dollars.
Profit before tax was $392 million, $100 million lower than the
third-quarter record set a year ago. The primary reason for the lower
profit was planned higher spending for growth initiatives as higher
costs more than offset the additional margin from higher sales.
Margin (sales less cost of goods sold) of $1.16 billion increased
$51 million or 5% over third-quarter 1997. Margin as a percent of
sales was 23.6% (24.1% excluding Perkins), compared with 25.2% a year
ago as the favorable impact of price increases and higher manufacturing
efficiency were more than offset by higher sales discounts, higher
fixed manufacturing costs, and an unfavorable change in product sales
mix.
Selling, general, and administrative expenses (SG&A) were $545
million, compared with $481 million in third-quarter 1997. The $64
million increase (about one-third from Perkins) primarily reflects
increased spending levels in support of major growth initiatives. Cost
inflation also contributed to the increase. SG&A expenses as a percent
of sales were 11.1%, compared with 11.0% for the third quarter a year
ago.
Research and development expenses (R&D) of $163 million rose $31
million (about one-third from Perkins) from third-quarter 1997. The
increase reflects higher spending in support of new and improved
products. R&D expenses as a percent of sales were 3.3%, compared with
3.0% a year ago.
Operating profit of $450 million was $44 million or 9% lower than
third-quarter 1997. Operating profit as a percent of sales was 9.2%,
compared with 11.3% a year ago.
Interest expense of $68 million was $15 million higher than a year
ago, mostly due to higher average debt levels to finance the Perkins
acquisition in the first quarter.
Other income/expense reflects a net decrease in income of $41
million from third-quarter 1997, primarily due to discounts taken on
the sale of trade receivables to Caterpillar Financial Services
Corporation (Cat Financial) to partially finance the purchase of
Perkins earlier this year, and an unfavorable change in foreign
exchange gains and losses. Discounts taken on this revolving sale of
receivables to Cat Financial are reflected in Machinery and Engines as
other expense. Revenues offsetting these discounts and related
borrowing costs are reflected in Financial Products.
FINANCIAL PRODUCTS
Financial Products' third-quarter revenues were a record $296
million, up $75 million or 34% compared with third-quarter 1997. The
increase resulted primarily from continued growth in Cat Financial's
portfolio. The portfolio rose $3.0 billion or 41% from the same period
last year, the result of new business and the program started in the
first quarter this year to purchase trade receivables from Caterpillar
Inc.
Before-tax profit was $79 million, an increase of $29 million or
58% from third-quarter 1997. The increase resulted primarily from the
portfolio growth and gain on sale of receivables at Cat Financial plus
favorable insurance reserve adjustments at Caterpillar Insurance Co.
Ltd. (Cat Insurance), partially offset by lower investment income at
Cat Insurance.
Selling, general, and administrative expenses were $94 million, up
$8 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, as well as other increases related to
growth.
Interest expense was up $37 million, a result of increased
borrowings to support the larger portfolio which includes the trade
receivables purchased from Caterpillar Inc.
Other income and expense was income of $13 million, a decrease of
$1 million from a year ago.
INCOME TAXES
The provision for income taxes was $138 million, compared with
$166 million last year. Third-quarter 1998 tax expense reflects an
effective annual tax rate of 32% and a favorable adjustment of $13
million to recognize the impact of a tax rate change from 33% used for
the first six months of the year. Third-quarter 1997 tax expense
reflected an effective annual tax rate of 33% and a favorable
adjustment of $12 million to recognize the impact of a change from 34%
used for the first six months of the year.
UNCONSOLIDATED AFFILIATED COMPANIES
Our share of unconsolidated affiliated companies' results
decreased $6 million from the third quarter a year ago. The major
factor was less favorable results at Shin Caterpillar Mitsubishi Ltd.
due primarily to lower sales volume resulting from the severe economic
conditions in Japan and Southeast Asia.
SALES
Following are summaries of third-quarter company sales and dealer
deliveries, compared with the same quarter in 1997.
CATERPILLAR SALES INSIDE THE UNITED STATES were $2.49 billion, a
$410 million or 20% increase over third quarter last year. Both
machine and engine sales benefited from continued strong industry
demand. End-user demand rose in most applications reflecting good
economic growth, low inflation, lower interest rates, and high levels
of consumer and business confidence. Price realization was unchanged
from a year earlier.
Sales inside the United States during the third quarter were 51%
of worldwide sales compared with 47% 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 construction activity over the past year. Sales
also were higher in commodity-related applications with increases in
petroleum and coal mining more than offsetting declines in metals
mining and forestry. Sales into the non-metals sector were unchanged
from a year earlier. Sales to industrial users increased.
Deliveries to U.S. Dealer Dedicated Rental Fleets increased from
third-quarter 1997. At the end of third-quarter 1998, U.S. dealer
dedicated rental units were higher than year-earlier levels, and up
from the end of the second quarter.
U.S. Dealer New Machine Inventories fell from the end of the
second quarter. At the end of the third 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 were higher for on-highway trucks, power generation,
petroleum and industrial applications.
CATERPILLAR SALES OUTSIDE THE UNITED STATES were $2.42 billion, a
$111 million or 5% increase over third-quarter 1997. All of the
increase was due to the acquisition of Perkins in the first quarter of
1998. Without Perkins, sales would have been $115 million or 5% below
year-earlier levels as lower machine sales more than offset higher
engine sales. Geographically, lower sales in the Asia/Pacific region
and Latin America more than offset higher sales in Europe and
Africa/Middle East. Price realization was lower than a year ago.
Sales outside the United States represented 49% of worldwide
sales, compared with 53% a year ago.
Dealer Machine Sales to End Users Outside the United States
declined from year-earlier levels as lower sales in Asia and Latin
America more than offset gains elsewhere.
* Europe: Sales for the region were higher, reflecting continued
improvement in economic activity and business confidence. Sales
rose in Spain, France, Italy, and Germany but were lower in the
United Kingdom.
* Africa/Middle East: Sales increased despite low commodity
prices. Sales were higher in the United Arab Emirates and
Turkey but lower in South Africa.
* Latin America: Sales declined due to lower commodity prices and
slower growth. Lower sales in Colombia, Peru, Chile, and
Argentina more than offset increases in Brazil and Mexico.
* Canada: Sales were higher reflecting gains in equipment
services and non-metal mining applications.
* Asia (excluding Japan): Sales declined sharply in response to
the severe recession in Southeast Asia and South Korea. In
China, economic growth has slowed from a year ago but demand is
still rising.
* Australia: Sales increased due primarily to higher demand in
coal mining.
* Japan: Sales of imported product increased slightly despite the
ongoing, severe recession.
* Commonwealth of Independent States (CIS): Sales also increased
in Russia despite the severe recession.
Dealer New Machine Inventories Outside the United States were down
from the end of the second quarter due almost entirely to a large
reduction in Asia. Dealer new machine inventories were about flat with
year-earlier levels as increases in Latin America, Canada, Europe, and
Africa/Middle East offset the decreases in Asia and Australia. At the
end of the third quarter, dealer inventories outside the United States
were about normal relative to current selling rates.
Company Engine Sales Outside the United States exceeded
year-earlier levels due to the first quarter acquisition of Perkins and
higher turbine engine sales. Without Perkins, sales of reciprocating
engines would have been flat as higher demand in Canada and Europe
offset lower demand in Asia, Latin America, and Australia. Sales of
turbine engines were higher with increases in Latin America,
Africa/Middle East, Asia, and Australia more than offsetting a decline
in Europe. Higher engine sales for oil and gas applications and
on-highway trucks more than offset lower sales for power generation,
industrial, and marine.
THIRD-QUARTER 1998 COMPARED WITH SECOND-QUARTER 1998
Third-quarter profit of $336 million or $.92 per share assuming
dilution was $110 million lower than second-quarter profit of $446
million or $1.20 per share assuming dilution. A 7% decrease in
physical sales volume and lower price realization were the most
significant factors contributing to the lower profit.
MACHINERY AND ENGINES
Profit before tax for Machinery and Engines was $392 million, a
$205 million decrease from the previous quarter. Sales of $4.91
billion decreased $451 million or 8%, primarily because of the decrease
in physical sales volume and lower price realization. Price
realization was lower due to higher sales discounts.
Margin was $221 million lower than the second quarter, primarily
the result of the decrease in physical sales volume. As a percent of
sales, the margin rate was 23.6%, compared with 25.7% last quarter.
The decrease in margin rate was primarily due to higher sales discounts
and lower production volumes, partially offset by improved
manufacturing efficiency.
Selling, general, and administrative expenses were $545 million,
down $3 million from the second quarter.
Research and development expenses of $163 million were down $2
million from the second quarter.
Operating profit of $450 million decreased $216 million. As a
percent of sales, operating profit was 9.2%, compared with 12.4% in the
second quarter.
Interest expense of $68 million was $1 million lower than the
second quarter.
Other income/expense reflects a net increase in income of $10
million from last quarter.
FINANCIAL PRODUCTS
Financial Products' revenues of $296 million were up $20 million
from the second quarter, primarily due to Cat Financial's portfolio
growth.
Before-tax profit was $79 million, an increase of $10 million,
primarily the result of higher earnings from Cat Financial's larger
portfolio and a $7 million gain on sale of receivables.
INCOME TAXES
Income tax expense of $138 million decreased $82 million from the
previous quarter. The decrease reflects the lower profit before tax, a
change in the effective annual tax rate from 33% to 32%, and a
favorable adjustment of $13 million to recognize the impact of the tax
rate change for the first six months.
UNCONSOLIDATED AFFILIATED COMPANIES
Our share of unconsolidated affiliated companies' results
increased $3 million from the previous quarter, primarily due to
improved results at Shin Caterpillar Mitsubishi Ltd.
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 $1.42 billion for the first nine months of
1998, an increase of $701 million as compared with the corresponding
period in 1997. This increase was primarily due to the sale of $1.1
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) was related to the
Perkins acquisition.
For the Nine Months Machinery & Financial
Ended Consolidated Engines * Products
(Millions of dollars)
Sept. Sept. Sept. Sept. Sept. Sept.
30, 30, 30, 30, 30, 30,
1998 1997 1998 1997 1998 1997
Profit after tax $1,212 $1,214 $1,212 $1,214 $141 $92
Depreciation and 652 565 532 462 120 103
amortization
Change in working
capital -
excluding cash
and debt (1,892) (840) 478 (303) (2,370) (538)
Capital expenditures
excluding equipment
leased to others (520) (419) (516) (416) (4) (3)
Expenditures for
equipment leased to
others, net of
disposals (150) (116) 6 6 (156) (122)
Dividends paid (293) (245) (293) (245) (49) -
Net Free Cash Flow (991) 159 1,419 718 (2,318) (468)
Other significant cash
flow items:
Treasury shares
purchased (491) (470) (491) (470) - -
Net (increase)
decrease in
long-term finance
receivables (874) (459) - - (874) (459)
Net increase
(decrease) in debt 3,663 1,372 609 361 3,054 1,011
Investments and
acquisitions -
(net of cash
acquired) (1,326) (25) (1,326) (25) - -
Prefunding of
employee benefit
plans - (100) - (100) - -
Other (38) (177) (290) (190) 160 (78)
Change in cash and
short-term
investments $(57) $300 $(79) $294 $22 $6
* 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 $10 million and $368 million, respectively, included in the
"Investments and acquisitions - (net of cash acquired)" line for the
nine months ended September 30, 1998; line titled "Change in working
capital - excluding cash and debt" excludes $7 million for the nine
months ended September 30, 1997.
EMPLOYMENT
At the end of the third quarter, Caterpillar's worldwide
employment was 66,223 compared with 59,246 one year ago. Hourly
employment increased 3,351 to 37,349; salaried and management
employment increased 3,626 to 28,874. The increases were largely the
result of acquisitions.
ECONOMIC AND INDUSTRY OUTLOOK FOR 1998
World economic growth has slowed in 1998 as severe recessions in
Asia, Japan, and Russia more than offset improvement in Europe and
continued strength in the United States. Worldwide industry demand for
machines will decline slightly as steep declines in Japan and much of
Asia will more than offset increases in North America, Europe, and
Latin America. Industry demand for agricultural machines also is
expected to be lower due to the drop in commodity prices. Industry
demand for engines, however, should exceed 1997 levels due to the
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 to enhance long-term growth and shareholder value
continue in 1998. Major initiatives include electric power generation,
agricultural products, compact machines, Perkins, 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 the growth
initiatives; however, the rate of increase is still expected to be less
than in recent years.
Our current growth initiatives are expected to unfavorably affect
profit by about 10% in 1998, about one-fourth of which is due to
Perkins. The effect on profit of these current growth initiatives is
expected to be less dilutive in 1999, and then accretive in 2000.
Perkins, which was earlier expected to have a neutral impact on profit
in 1998 and 1999, is now expected to have a negative impact in 1998 and
1999, largely due to softening agricultural demand.
Despite the impact of the 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 has been and will continue to be favorably affected by
share repurchases. Cash flow from operations and our financial
position are expected to remain strong.
PRELIMINARY ECONOMIC AND SALES OUTLOOK FOR 1999
The current turmoil in worldwide financial markets makes it very
difficult to forecast sales for 1999. The U.S. and Europe, which will
account for almost 70% of company sales in 1998, should continue to
provide solid industry demand. U.S. economic growth is forecast to
slow considerably, but further easing by the Federal Reserve and the
new highway spending bill should allow industry demand for machines to
about match 1998 record levels. In Europe, continued good economic
growth should lead to higher industry demand.
In Canada, Latin America, and Australia, slower growth is likely
to result in lower industry demand while demand in Africa/Middle East
should remain near current levels. Little improvement is expected for
Japan and most of developing Asia next year; therefore, industry demand
is forecast to decline further. In China, a large stimulus program
should help the economy and boost our industry while in Russia severe
recession is likely to continue resulting in lower demand.
In total, industry demand for machines and engines is likely to be
down slightly due to weakness in Asia/Pacific and Latin American
regions, weaker North American demand for on-highway trucks and the
worldwide impact of low commodity prices. In this challenging
environment, our preliminary 1999 outlook is for company sales and
revenues to be near 1998 record levels.
* * *
The information included in the Outlook section is forward looking
and involves risks and uncertainties that could significantly affect
expected results. A discussion of these risks and uncertainties is
contained in Form 8-K filed with the Securities & Exchange Commission
on October 16, 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
Sept. Sept Sept. Sept. Sept. Sept
30, 30, 30, 30, 30, 30,
1998 1997 1998 1997 1998 1997
Sales and revenues:
Sales of Machinery
& Engines $4,906 $4,385 $4,906 $4,385 $ - $ -
Revenues of
Financial Products 267 215 - - 296 221
Total sales
and revenues 5,173 4,600 4,906 4,385 296 221
Operating costs:
Cost of goods sold 3,748 3,278 3,748 3,278 - -
Selling, general,
and administrative
expenses 631 561 545 481 94 86
Research and
development expenses 163 132 163 132 - -
Interest expense of
Financial Products 135 96 - - 136 99
Total operating
costs 4,677 4,067 4,456 3,891 230 185
Operating Profit 496 533 450 494 66 36
Interest expense
excluding Financial
Products 68 53 68 53 - -
Other income
(expense) 43 62 10 51 13 14
Consolidated profit
before taxes 471 542 392 492 79 50
Provision for
income taxes 138 166 108 147 30 19
Profit of
consolidated
companies 333 376 284 345 49 31
Equity in profit of
unconsolidated
affiliates 3 9 3 9 - -
Equity in profit of
Financial Products
subsidiaries - - 49 31 - -
Profit $336 $385 $336 $385 $49 $31
Profit per share of
common stock $0.93 $1.03
Profit per share of
common stock
- assuming
dilution $0.92 $1.01
Weighted average
shares outstanding
Basic (thousands) 361,909 374,705
Assuming dilution
(thousands) 366,765 381,422
* 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 NINE MONTHS ENDED
(Millions of dollars except per share data)
Machinery & Financial
Consolidated Engines* Products
Sept. Sept. Sept. Sept. Sept. Sept.
30, 30, 30, 30, 30, 30,
1998 1997 1998 1997 1998 1997
Sales and
revenues:
Sales of Machinery
& Engines $14,836 $13,133 $14,836 $13,133 $ - $ -
Revenues of
Financial Products 735 599 - - 812 617
Total sales
and revenues 15,571 13,732 14,836 13,133 812 617
Operating costs:
Cost of goods sold 11,060 9,709 11,060 9,709 - -
Selling, general,
and administrative
expenses 1,852 1,606 1,605 1,388 267 236
Research and
development
expenses 483 384 483 384 - -
Interest expense
of Financial
Products 357 260 - - 365 269
Total
operating
costs 13,752 11,959 13,148 11,481 632 505
Operating Profit 1,819 1,773 1,688 1,652 180 112
Interest expense
excluding
Financial Products 198 163 198 163 - -
Other income
(expense) 145 147 52 121 44 35
Consolidated
profit before
taxes 1,766 1,757 1,542 1,610 224 147
Provision for
income taxes 565 579 482 524 83 55
Profit of
consolidated
companies 1,201 1,178 1,060 1,086 141 92
Equity in profit
of unconsolidated
affiliates 11 36 11 36 - -
Equity in profit
of Financial
Products subsidiaries - - 141 92 - -
Profit $1,212 $1,214 $1,212 $1,214 $141 $92
Profit per share
of common stock $3.32 $3.22
Profit per share
of common stock
- assuming dilution $3.28 $3.17
Weighted average
shares outstanding
Basic (thousands) 364,785 376,958
Assuming dilution 370,022 382,348
(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)
Sept Dec. Sept
30, 31, 30,
1998 1997 1997
Assets
Current assets:
Cash and short-term investments $235 $292 $787
Receivables -- trade and other 3,605 3,331 3,009
Receivables -- finance 3,862 2,660 2,914
Deferred income taxes and prepaid
expenses 968 928 865
Inventories 3,116 2,603 2,621
Total current assets 11,786 9,814 10,196
Property, plant, and equipment -- net 4,517 4,058 3,819
Long-term receivables -- trade and
other 124 134 109
Long-term receivables -- finance 4,755 3,881 3,839
Investments in unconsolidated
affiliated companies 769 751 715
Deferred income taxes 1,002 1,040 1,016
Intangible assets 1,236 228 224
Other assets 945 850 840
Total Assets $25,134 $20,756 $20,758
Liabilities
Current liabilities:
Short-term borrowings:
-- Machinery & Engines $47 $53 $73
-- Financial Products 536 431 960
Accounts payable and accrued
expenses 3,678 3,358 3,173
Accrued wages, salaries, and
employee benefits 1,125 1,128 1,039
Dividends payable - 92 -
Deferred and current income taxes
payable 97 175 140
Long-term debt due within one year:
-- Machinery & Engines 69 54 75
-- Financial Products 1,853 1,088 1,078
Total current liabilities 7,405 6,379 6,538
Long-term debt due after one year:
-- Machinery & Engines 2,967 2,367 2,389
-- Financial Products 6,759 4,575 4,256
Liability for postemployment benefits 2,714 2,698 2,832
Deferred income taxes and other
liabilities 119 58 57
Total Liabilities 19,964 16,077 16,072
Stockholders' Equity
Common stock 1,066 1,071 1,071
Profit employed in the business 6,037 5,026 4,759
Accumulated other comprehensive
income 52 95 135
Treasury stock (1,985) (1,513) (1,279)
Total Stockholders' Equity 5,170 4,679 4,686
Total Liabilities and Stockholders'
Equity $25,134 $20,756 $20,758
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
CATERPILLAR INC.
By: /s/ R. Rennie Atterbury III
R. Rennie Atterbury III
Vice President
Date: October 16, 1998
