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): April 17, 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 Fourth Quarter Financial
Release dated January 21, 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.
Events in Asia may impact the Company outlook in 1998. Our current
continued assessment calls for recession in Japan, Korea, Thailand and
Indonesia and weak growth in many other Southeast Asian developing
countries. This assessment presumes the region's currencies and stock
markets have stabilized 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 were
to begin falling again, if China or Hong Kong were to devalue, or if Japan
were to enter deep recession, then the impact on world growth and industry
demand would be more severe which could result in lower company sales.
Company sales also would 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 raises interest rates, the
U.S. economy could slow and negatively impact demand for the Company's
products. In general, higher 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 share of industry sales.
A reduction in that share 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: April 17, 1998