<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For the Fiscal Year Ended November 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
For the transition period from _____ to _____
Commission File Number 1-768
EMPLOYEES' INVESTMENT PLAN
(Full title of the Plan)
CATERPILLAR INC.
(Name of issuer of the securities held
pursuant to the Plan)
100 NE ADAMS STREET, PEORIA, ILLINOIS 61629
(Address of principal executive offices)
<PAGE>
REQUIRED INFORMATION
Item 1.
The audited statement of net assets available for plan benefits as of the end of
the latest two fiscal years of the Plan is attached hereto as Exhibit A.
Item 2.
The audited statement of changes in net assets available for plan benefits for
each of the latest two fiscal years of the Plan is attached hereto as Exhibit B.
Item 3.
The statements required by Items 1 and 2 have been prepared in accordance with
the applicable financial reporting requirements of ERISA.
Item 4.
The Consent of Independent Accountants is attached hereto as Exhibit C.
<PAGE>
Caterpillar Inc.
Employees' Investment Plan
Financial Statements and Additional Information
November 30, 1998 and 1997
<PAGE>
Report of Independent Accountants
To the Participants, Investment Plan Committee
and Benefits Funds Committee of the Caterpillar Inc.
Employees' Investment Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statements of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Caterpillar Inc. Employees' Investment Plan (the Plan) at
November 30, 1998 and 1997, and the changes in net assets available for plan
benefits for the years ended November 30, 1998 and 1997, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and of reportable (5%) transactions are presented
for the purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974 (ERISA). The fund
information in the statements of net assets available for plan benefits and the
statements of changes in net assets available for plan benefits is presented for
purposes of additional analysis rather than to present the net assets available
for plan benefits and changes in net assets available for plan benefits of each
fund. These supplemental schedules and fund information are the responsibility
of the Plan's management. The supplemental schedules and fund information have
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
The schedule of assets held for investment purposes that accompanies the Plan's
financial statements does not disclose the historical cost of certain plan
assets held by a Plan custodian. Disclosure of this information is required by
ERISA.
/s/PricewaterhouseCoopers LLP
Peoria, Illinois
May 26, 1999
<PAGE>
EXHIBIT A
---------
CATERPILLAR INC.
----------------
EMPLOYEES' INVESTMENT PLAN
--------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
-------------------------------------------------------------------------
NOVEMBER 30, 1998
-----------------
(Dollars in 000's)
<TABLE>
<CAPTION>
---------------------------------------------------------------------
PART 1
------------------------- ------------------------------------------
Caterpillar Government Caterpillar -----------------------------
Common Short-term Common Stable
Stock Investment Stock Principal Short-term Money
Fund Fund Fund Fund Government Market
------------ ----------- ----------- --------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Investments, at fair value
(Notes 2 and 4):
Caterpillar Inc. common
stock, 18,056,623 shares $892,674 $ $ $ $ $
Collective trust fund 12,805
Registered investment
companies
Investment in Master Trust
Net Assets 310,947 79,879 14,783 84,794
-------- ------- -------- --------- ---------- -------
Total cash and
investments 892,674 12,805 310,947 79,879 14,783 84,794
Employer and participant
contributions receivable 3,176 111
Interest and dividends
receivable 14 52
Transfers payable to EIP II (3,712) (14)
Other payables (5)
-------- ------- -------- --------- ---------- -------
Total net assets $892,147 $12,954 $310,947 $79,879 $14,783 $84,794
======== ======= ======== ========= ========== =======
<CAPTION>
Fund Information
------------------------------------------------------------------------------------
PART 2
------------------------------------------------------------------------------------
Preferred Group of Mutual Funds
--------------------------------------------------------------
Self-
Asset Fixed Small Loan Directed
Value International Growth Allocation Income Cap Fund Fund Total
------- ------------- -------- ---------- ------- ------- ------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value
(Notes 2 and 4):
Caterpillar Inc. common
stock, 18,056,623 shares $ $ $ $ $ $ $ $ $ 892,674
Collective trust fund 12,805
Registered investment
companies 15,618 15,618
Investment in Master Trust
Net Assets 222,513 73,811 269,098 79,339 34,243 34,920 16,529 1,220,856
-------- ------------- -------- ---------- ------- ------- ------- -------- ----------
Total cash and
investments 222,513 73,811 269,098 79,339 34,243 34,920 16,529 15,618 2,141,953
Employer and participant
contributions receivable 3,287
Interest and dividends
receivable 66
Transfers payable to EIP II (3,726)
Other payables (5)
-------- ------------- -------- ---------- ------- ------- ------- -------- ----------
Total net assets $222,513 $73,811 $269,098 $79,339 $34,243 $34,920 $16,529 $15,618 $2,141,575
======== ============= ======== ========== ======= ======= ======= ======== ==========
</TABLE>
(See notes to financial statements)
-2-
<PAGE>
EXHIBIT A
---------
CATERPILLAR INC.
----------------
EMPLOYEES' INVESTMENT PLAN
--------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
-------------------------------------------------------------------------
NOVEMBER 30, 1997
-----------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Fund Information
-------------------------------------------------------------------------------------------------------
PART 1 PART 2
------------------------- ---------------------------------------------------------------------------
Preferred Group of Mutual Funds
Caterpillar Government Caterpillar ---------------------------------------------------------------
Common Short-term Common Stable
Stock Investment Stock Principal Short-term Money
Fund Fund Fund Fund Government Market Value International Growth
------------ ----------- ----------- --------- ---------- ------- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value
(Notes 2 and 4):
Cash and cash equivalents $ 157 $ $ $ $ $ $ $ $
Caterpillar Inc. common
stock, 18,598,394 shares 891,561
Collective trust fund 13,078
Registered investment
companies
Investment in Master Trust
Net Assets 287,108 66,845 10,942 52,945 194,930 70,390 209,302
-------- ------- -------- --------- ---------- ------- -------- ------------- --------
Total cash and
investments 891,718 13,078 287,108 66,845 10,942 52,945 194,930 70,390 209,302
Employer and participant
contributions receivable 3,191 81
Interest and dividends
receivable 11 59
Transfers payable to EIP II (2,955) (42)
Other payables (161)
-------- ------- -------- --------- ---------- ------- -------- ------------- --------
Total net assets $891,804 $13,176 $287,108 $66,845 $10,942 $52,945 $194,930 $70,390 $209,302
======== ======= ======== ========= ========== ======= ======== ============= ========
<CAPTION>
---------------------------------------------------
---------------------------------------------------
------------------------------
Self-
Asset Fixed Small Loan Directed
Allocation Income Cap Fund Fund Total
---------- ------- ------- ------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investments, at fair value
(Notes 2 and 4):
Cash and cash equivalents $ $ $ $ $ $ 157
Caterpillar Inc. common
stock, 18,598,394 shares 891,561
Collective trust fund 13,078
Registered investment
companies 14,108 14,108
Investment in Master Trust
Net Assets 49,400 20,411 37,154 15,554 1,014,981
---------- ------- ------- ------- -------- ----------
Total cash and
investments 49,400 20,411 37,154 15,554 14,108 1,933,885
Employer and participant
contributions receivable 3,272
Interest and dividends
receivable 70
Transfers payable to EIP II (2,997)
Other payables (161)
---------- ------- ------- ------- -------- ----------
Total net assets $49,400 $20,411 $37,154 $15,554 $14,108 $1,934,069
========== ======= ======= ======= ======== ==========
</TABLE>
(See notes to financial statements)
-3-
<PAGE>
EXHIBIT B
---------
CATERPILLAR INC.
----------------
EMPLOYEES' INVESTMENT PLAN
--------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
------------------------------------------------------------------------
INFORMATION
-----------
FOR THE YEAR ENDED NOVEMBER 30, 1998
------------------------------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Fund Information
----------------------------------------------------------------------------------------------------
PART 1 PART 2
------------------------- -------------------------------------------------------------------------
Preferred Group of Mutual Funds
Caterpillar Government Caterpillar -----------------------------------------------------------
Common Short-Term Common Stable
Stock Investment Stock Principal Short-term Money
Fund Fund Fund Fund Government Market Value International
---- ---- ---- ---- ---------- ------ ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Participant (Note 1) $ 58,167 $ 1,398 $ 7,400 $ 3,267 $ 745 $ 2,998 $ 15,820 $ 6,893
Employer (Notes 1 and 2) 32,627
--------- ------- -------- ------- ------- -------- -------- -------
90,794 1,398 7,400 3,267 745 2,998 15,820 6,893
--------- ------- -------- ------- ------- -------- -------- -------
Investment income:-
Interest 103
Dividends 19,877
Net appreciation in fair
value of:
Common stock 32,107
Collective trust fund 692
Registered investment
companies
Plan interest in net
investment income of
Master Trust (Note 4) 16,885 4,487 594 3,529 22,511 4,901
--------- ------- -------- ------- ------- -------- -------- -------
Net investment income 52,087 692 16,885 4,487 594 3,529 22,511 4,901
--------- ------- -------- ------- ------- -------- -------- -------
Withdrawals (59,632) (1,152) (16,370) (5,996) (565) (13,921) (7,881) (2,628)
Transfers (to)/from other
plans, net 552 269 16 76 254 98
Interfund transfers, net (82,906) (1,160) 15,372 11,007 3,051 39,167 (3,121) (5,843)
--------- ------- -------- ------- ------- -------- -------- -------
Withdrawals and
transfers, net (142,538) (2,312) (446) 5,280 2,502 25,322 (10,748) (8,373)
--------- ------- -------- ------- ------- -------- -------- -------
Increase (decrease) in net
assets 343 (222) 23,839 13,034 3,841 31,849 27,583 3,421
Net assets:
Beginning of year 891,804 13,176 287,108 66,845 10,942 52,945 194,930 70,390
--------- ------- -------- ------- ------- -------- -------- -------
End of year $ 892,147 $12,954 $310,947 $79,879 $14,783 $ 84,794 $222,513 $73,811
========= ======= ======== ======= ======= ======== ======== =======
<CAPTION>
-----------------------------------------------------------------
-----------------------------------------------------------------
--------------------------------------------
Self-
Asset Fixed Small Loan Directed
Growth Allocation Income Cap Fund Fund Total
------ ---------- ------ --- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Participant (Note 1) $ 18,912 $ 6,814 $ 2,339 $ 5,268 $ $ $ 130,021
Employer (Notes 1 and 2) 32,627
-------- ------- ------- ------- ------- -------- ----------
18,912 6,814 2,339 5,268 162,648
-------- ------- ------- ------- ------- -------- ----------
Investment income:-
Interest 103
Dividends 19,877
Net appreciation in fair
value of:
Common stock 32,107
Collective trust fund 692
Registered investment
companies 1,073 1,073
Plan interest in net
investment income of
Master Trust (Note 4) 45,044 13,177 1,852 (4,340) 1,445 110,085
-------- ------- ------- ------- ------- -------- ----------
Net investment income 45,044 13,177 1,852 (4,340) 1,445 1,073 163,937
-------- ------- ------- ------- ------- -------- ----------
Withdrawals (7,044) (2,665) (1,469) (1,525) (384) (121,232)
Transfers (to)/from other
plans, net 519 59 41 152 86 31 2,153
Interfund transfers, net 2,365 12,554 11,069 (1,789) (172) 406
-------- ------- ------- ------- ------- -------- ----------
Withdrawals and
transfers, net (4,160) 9,948 9,641 (3,162) (470) 437 (119,079)
-------- ------- ------- ------- ------- -------- ----------
Increase (decrease) in net
assets 59,796 29,939 13,832 (2,234) 975 1,510 207,506
Net assets:
Beginning of year 209,302 49,400 20,411 37,154 15,554 14,108 1,934,069
-------- ------- ------- ------- ------- -------- ----------
End of year $269,098 $79,339 $34,243 $34,920 $16,529 $15,618 $2,141,575
======== ======= ======= ======= ======= ======== ==========
</TABLE>
(See notes to financial statements)
-4-
<PAGE>
EXHIBIT B
---------
CATERPILLAR INC.
----------------
EMPLOYEES' INVESTMENT PLAN
--------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
------------------------------------------------------------------------
INFORMATION
-----------
FOR THE YEAR ENDED NOVEMBER 30, 1997
------------------------------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Fund Information
-----------------------------------------------------------------------------------------------------
PART 1 PART 2
------------------------ --------------------------------------------------------------------------
Preferred Group of Mutual Funds
Caterpillar Government Caterpillar ------------------------------------------------------------
Common Short-Term Common Stable
Stock Investment Stock Principal Short-term Money
Fund Fund Fund Fund Government Market Value International
---- ---- ---- ---- ---------- ------ ----- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Participant (Note 1) $ 49,157 $ 1,615 $ 4,900 $ 2,923 $ 559 $ 2,871 $ 10,628 $ 6,336
Employer (Notes 1 and 2) 28,517
--------- ------- -------- -------- ------- -------- -------- --------
77,674 1,615 4,900 2,923 559 2,871 10,628 6,336
--------- ------- -------- -------- ------- -------- -------- --------
Investment income:-
Interest 95
Dividends 16,859
Net appreciation in fair
value of:
Common stock 160,222
Collective trust fund 686
Registered investment
companies
Plan interest in net
investment income of
Master Trust (Note 4) 33,703 4,400 593 3,551 42,029 6,354
--------- ------- -------- -------- ------- -------- -------- --------
Net investment income 177,176 686 33,703 4,400 593 3,551 42,029 6,354
--------- ------- -------- -------- ------- -------- -------- --------
Withdrawals (72,176) (1,288) (10,615) (3,416) (379) (9,226) (5,055) (2,231)
Transfers (to)/from other
plans, net 281 155 21 265 298 117
Interfund transfers, net (55,794) (618) 101,183 (11,609) (1,233) (22,208) (4,246) (12,895)
--------- ------- -------- -------- ------- -------- -------- --------
Withdrawals and
transfers, net (127,970) (1,906) 90,849 (14,870) (1,591) (31,169) (9,003) (15,009)
--------- ------- -------- -------- ------- -------- -------- --------
Increase (decrease) in net
assets 126,880 395 129,452 (7,547) (439) (24,747) 43,654 (2,319)
Net assets:
Beginning of year 764,924 12,781 157,656 74,392 11,381 77,692 151,276 72,709
--------- ------- -------- -------- ------- -------- -------- --------
End of year $ 891,804 $13,176 $287,108 $ 66,845 $10,942 $ 52,945 $194,930 $ 70,390
========= ======= ======== ======== ======= ======== ======== ========
<CAPTION>
----------------------------------------------------------------
----------------------------------------------------------------
-------------------------------------------
Self-
Asset Fixed Small Loan Directed
Growth Allocation Income Cap Fund Fund Total
------ ---------- ------ --- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Participant (Note 1) $ 13,315 $ 3,464 $ 1,207 $ 2,221 $ $ $ 99,196
Employer (Notes 1 and 2) 28,517
-------- ------- ------- ------- ------- -------- ----------
13,315 3,464 1,207 2,221 127,713
-------- ------- ------- ------- ------- -------- ----------
Investment income:-
Interest 95
Dividends 16,859
Net appreciation in fair
value of:
Common stock 160,222
Collective trust fund 686
Registered investment
companies 1,108 1,108
Plan interest in net
investment income of
Master Trust (Note 4) 47,048 7,484 1,287 6,290 1,340 154,079
-------- ------- ------- ------- ------- -------- ----------
Net investment income 47,048 7,484 1,287 6,290 1,340 1,108 333,049
-------- ------- ------- ------- ------- -------- ----------
Withdrawals (5,341) (1,906) (939) (490) (343) (113,405)
Transfers (to)/from other
plans, net 389 52 10 8 82 7 1,685
Interfund transfers, net (7,766) (1,806) (1,484) 14,472 (2) 4,006
-------- ------- ------- ------- ------- -------- ----------
Withdrawals and
transfers, net (12,718) (3,660) (2,413) 13,990 (263) 4,013 (111,720)
-------- ------- ------- ------- ------- -------- ----------
Increase (decrease) in net
assets 47,645 7,288 81 22,501 1,077 5,121 349,042
Net assets:
Beginning of year 161,657 42,112 20,330 14,653 14,477 8,987 1,585,027
-------- ------- ------- ------- ------- -------- ----------
End of year $209,302 $49,400 $20,411 $37,154 $15,554 $14,108 $1,934,069
======== ======= ======= ======= ======= ======== ==========
</TABLE>
(See notes to financial statements)
-5-
<PAGE>
CATERPILLAR INC.
----------------
EMPLOYEES' INVESTMENT PLAN
--------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1 - PLAN DESCRIPTION:
- -------------------------
The following description of the Caterpillar Inc. Employees' Investment Plan
(the Plan) provides only general information. Employees should refer to the Plan
agreement for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan established by Caterpillar Inc. (the
Company) to enable eligible employees of the Company and its subsidiaries (the
employers) which adopt the Plan to accumulate funds.
Participation
Generally, employees of participating employer companies, other than those
employed under collective bargaining agreements, who meet certain age, service
and citizenship or residency requirements are eligible to participate in the
plan. Participation commences upon an eligible employee's filing of an
application with the Investment Plan Committee. Participating eligible employees
(the participants) may acquire ownership interests in the Company through
purchases of its common stock (Part 1). Additionally, the participants may elect
to defer a portion of their compensation until retirement under the Special
Investment Supplement of the Plan (Part 2).
Participant accounts
Accounts are maintained separately for Part 1 and Part 2 for each participant.
The participant's separate account under Part 1 is credited with the
participant's contribution, the employer's contribution and an allocation of
Plan earnings. The participant's account under Part 2 of the Plan is credited
with the participant's contribution as defined below and an allocation of Plan
earnings. Allocations of earnings are based on participant account balances, as
defined. The benefit to which a participant is entitled is the benefit that can
be provided from the participant's accounts.
Loan provisions
The Plan provides for participant loans against eligible participants' Part 2
separate account balances. Eligible employees obtain participant loans by filing
a loan application with the Company and receiving approval thereof. Loan amounts
are generally limited to the lesser of $50,000 or 50% of the individual
participant's account balance, within certain regulatory restrictions. Loan
repayment terms may range from 6 to 117 months depending on the type of loan and
bear interest at the prime interest rate plus 1% rounded to the nearest whole
percent. Repayments, including interest, are made through after-tax payroll
deductions and are credited to the individual participant's account balance.
Loan transactions are treated as a transfer to (from) the applicable investment
fund (from) to the Loan fund.
Contributions
Part 1 -
Participant contributions are made through after-tax payroll deductions based on
a percentage (2%-6%) of total earnings as elected by the employee. Participants
with 25 or more years of service with the employers may contribute an additional
1%-4% of earnings.
-6-
<PAGE>
Employer contributions are 50%, 66-2/3% or 80% of participant contributions (up
to 6% of earnings) based on the participant's years of service.
Part 2 -
Participant contributions are made through a pretax compensation deferral as
elected by the participants and are contributed to the Plan by the employer.
During 1998, the compensation deferral was limited to (a) the greater of $6,000
or 4% of the participant's compensation (limited by the Internal Revenue Code to
$10,000 in 1998) for participants earning in excess of $80,000 or (b) $10,000
for participants earning less than $80,000.
During 1997, the compensation deferral was limited to (a) the greater of $5,000
or 4% of the participant's compensation (limited by the Internal Revenue Code to
$9,500 in 1997) for participants earning in excess of $75,000 or (b) $9,500 for
participants earning less than $75,000.
Investment programs
Part 1 -
Employer contributions are invested entirely in Caterpillar Inc. common stock.
Participants may elect to have their contributions invested as follows: (1) 100%
in Caterpillar Inc. common stock or (2) 50% in Caterpillar Inc. common stock and
50% in a Collective Government Short-Term Investment Fund. The Collective
Government Short-Term Investment Fund is managed by The Northern Trust Company.
Part 2 -
Participants may elect to have their contributions invested in any combination
of the funds shown on the accompanying statements of changes in net assets
available for plan benefits with fund information, including a self-directed
fund option which allows participants to invest in various other mutual funds
outside of the Preferred Group of Mutual Funds. Contributions to and withdrawals
from this self-directed fund occur through transfers to/from other elected
funds. State Street Bank serves as custodian for funds invested through this
self-directed fund option.
Interfund transfers
Transfers of assets between investment funds are recorded on a net basis in the
statement of changes in net assets available for plan benefits with fund
information.
Vesting and distribution provisions
Part 1 -
Participants are fully vested at all times in Caterpillar Inc. common stock or
units of the Collective Government Short-Term Investment Fund purchased with
participant contributions.
Participants begin vesting in shares purchased with employer contributions
generally after the end of the second year of plan participation. Participants
generally vest at the rate of 33% per year, resulting in full vesting by
participants in employer contributions after five years of service with the
Company. Any amounts not vested at withdrawal which are forfeited will be
applied to reduce the amount of future employer contributions to the Plan.
Shares become fully vested upon retirement, permanent disability or death.
-7-
<PAGE>
While an employee, a participant may elect to withdraw all participant purchased
shares of common stock, his share of the government short-term investment fund
and all earnings on participant contributions as provided by the Plan. Employer
contributions may also be withdrawn based on vested status as provided by the
Plan. Upon termination of employment, participants may elect (with spousal
consent, if applicable) to receive their shares by immediate distribution or a
deferred distribution. If termination is due to retirement or disability,
participants may elect (with spousal consent, if applicable) various annuity
payments.
Part 2 -
Participants are fully vested in their participant contributions. Upon
termination of employment for any reason, including death, retirement or total
and permanent disability, or upon Plan termination, the balance or balances in
participants' accounts are distributable.
Administration
The Plan is administered by the Investment Plan Committee, which is responsible
for nonfinancial matters, and the Benefits Funds Committee, which is responsible
for financial aspects of the Plan. Caterpillar Inc. and the Benefit Funds
Committee have entered into trust agreements with The Northern Trust Company to
receive contributions, administer the assets of the Plan and distribute
withdrawals pursuant to the Plan.
Plan termination
In the event the Plan is terminated or partially terminated, each participant in
Part 1 shall also have a fully vested interest in the assets attributable to
employer contributions.
Federal income tax status
The Internal Revenue Service has determined and informed the Company by letter
dated March 8, 1990, that the Plan and related trust are designed in accordance
with applicable sections of the Internal Revenue Code (IRC). The Plan has been
amended subsequent to amendments covered by the determination letter; however,
the Plan administrator and the Plan's legal counsel believe that the Plan is
designed and is currently being operated in compliance with the applicable
requirements of the IRC.
NOTE 2 - SUMMARY OF SIGNIFICANT
- -------------------------------
ACCOUNTING POLICIES:
-------------------
Basis of accounting
The Plan's accounts are maintained on the accrual basis of accounting.
Investments
The Plan's investments are stated at fair value. The Caterpillar Inc. common
stock is valued at quoted market prices. The fair value of the Plan's investment
in the Collective Government Short-Term Investment Fund and the 401(k) Master
Trust (Note 4) is based upon the beginning of the year value of the Plan's
investment plus actual contributions, transfers and allocated investment income
less actual withdrawals. Shares of registered investment companies included in
the self-directed fund option are valued at quoted market prices which represent
the net asset value of shares held by the Plan at year end. Income from
investments is recorded as earned.
-8-
<PAGE>
Contributions
Contributions to the Caterpillar Common Stock Fund under Part 1 of the Plan are
made directly to the trust and shares are immediately purchased by the trust on
the open market.
Administrative expenses
Administrative costs, including trustee fees and certain investment costs, are
paid by the Company.
Use of estimates in the preparation
of financial statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, income and benefit payments.
Actual results could differ from those estimates. The Company believes the
techniques and assumptions used in establishing these amounts are appropriate.
NOTE 3 - UNIT VALUES:
- --------------------
Part 2 of the Plan assigns units to participants directing investments to the
Caterpillar Common Stock Fund. The unit values assigned by the Plan reflect the
current values of the individual fund. Total units held (in thousands) by the
Plan and their respective unit values at each month end are as follows:
<TABLE>
<CAPTION>
Units Unit
----- ----
Value
-----
1997
----
<S> <C> <C>
December 8,595 34.00
1998
----
January 8,566 33.62
February 8,354 38.04
March 8,583 38.36
April 8,690 39.63
May 8,734 38.30
June 9,258 36.92
July 9,562 34.00
August 9,704 29.78
September 9,704 31.33
October 9,674 31.63
November 9,003 34.54
</TABLE>
NOTE 4 - MASTER TRUST:
- ---------------------
Under a Master Trust agreement with The Northern Trust Company (the Trustee),
Part 2 of the Caterpillar Inc. Employees' Investment Plan (EIP 2), the Solar
Turbines Incorporated Savings and Investment Plan and the Caterpillar Inc. Tax
Deferred Savings Plan pool their investments in the Caterpillar Inc. 401(k)
Master Trust (the Master Trust) in exchange for a percentage of participation in
the Trust.
The Master Trust invests in the Preferred Group of Mutual Funds, registered
investment companies which are sponsored by Caterpillar Investment Management
Ltd. (CIML), a wholly-owned subsidiary of the Company. The options available to
the participants through the Preferred Group of Mutual Funds are comprised of
the following:
Preferred Stable Principal Fund
Preferred Short-Term Government Fund Preferred Value Fund
Preferred Growth Fund Preferred Fixed Income Fund
Preferred Money Market Fund Preferred International Fund
Preferred Asset Allocation Fund Preferred Small Cap Fund
-9-
<PAGE>
CIML manages the Preferred Small Cap Fund and the Preferred Short-Term
Government Fund; however, during the period November 1, 1997 through March 31,
1998, the Preferred Short-Term Government Fund was managed by an unrelated third
party. All other funds are managed by unrelated investment managers. Caterpillar
Securities, Inc., a wholly-owned subsidiary of CIML, distributes the shares of
the mutual funds to the Master Trust.
The percentage of the Plan's participation in the Master Trust was determined
based on the November 30, 1998 and 1997 market values of net assets, as
accumulated by the Trustee for the investment funds of each plan. At November
30, 1998 and 1997, the Plan's pro rata interest in the quoted market values of
net assets of each of the funds of the Master Trust was as follows:
<TABLE>
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
Caterpillar Inc. Common Stock Fund 87.30% 86.21%
Preferred Stable Principal Fund 72.69% 70.30%
Preferred Short-Term Government Fund 78.21% 76.72%
Preferred Money Market Fund 84.88% 84.60%
Preferred Value Fund 82.19% 81.69%
Preferred International Fund 85.03% 85.06%
Preferred Growth Fund 81.65% 81.34%
Preferred Asset Allocation Fund 86.94% 86.07%
Preferred Fixed Income Fund 87.21% 87.45%
Preferred Small Cap Fund 86.06% 87.18%
Loan Fund 68.84% 69.30%
</TABLE>
Investment Valuation
The Master Trust's investments are stated at fair value. Common stock and cash
and cash equivalents are valued at quoted market prices. Shares of registered
investment companies are valued at quoted market prices which represent the net
asset value of shares held by the Master Trust at year end. Participant loans
are valued at cost which approximates fair value.
The net investment income or loss of the Master Trust is reflected in the
financial statements of the Plan based on the actual earnings of each investment
fund as allocated to the Plan based on average investment balances throughout
the year. Refer to pages 11 through 14 for analyses of the net assets and
changes in net assets of the Master Trust as of November 30, 1998 and 1997.
-10-
<PAGE>
CATERPILLAR INC. - EMPLOYEES' INVESTMENT PLAN
---------------------------------------------
NOTE 4 - MASTER TRUST - SUMMARY OF NET ASSETS
---------------------------------------------
NOVEMBER 30, 1998
-----------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Preferred Group of Mutual Funds
----------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Asset
Fund Fund Government Market Value International Growth Allocation
------------ --------- ----------- ------- --------- -------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value:
Cash and cash equivalents $ 17,876 $ $ $ $ $ $ $
Common stock 334,345
Registered investment
companies 109,219 18,816 97,380 270,011 86,207 328,201 90,812
Participant loans
-------- -------- ------- ------- -------- ------- -------- -------
Total investments 352,221 109,219 18,816 97,380 270,011 86,207 328,201 90,812
Dividend and interest
receivable 45
Transfers receivable from
EIP 1 3,712 14
Contributions receivable 806 361 77 338 1,223 588 1,572 436
Interfund transfers
receivable/(payable), net (811) 184 (3) 2,081 (659) (66) (440) (29)
Other
receivable/(payable), net 189 119 12 89 159 81 224 37
-------- -------- ------- ------- -------- ------- -------- -------
Net assets $356,162 $109,883 $18,902 $99,902 $270,734 $86,810 $329,557 $91,256
======== ======== ======= ======= ======== ======= ======== =======
<CAPTION>
-----------------
Fixed Small Loan
Income Cap Fund Total
------- -------- -------- ----------
<S> <C> <C> <C> <C>
Investments, at fair value:
Cash and cash equivalents $ $ $ $ 17,876
Common stock 334,345
Registered investment
companies 38,990 40,492 1,080,128
Participant loans 24,784 24,784
------- ------- ------- ----------
Total investments 38,990 40,492 24,784 1,457,133
Dividend and interest
receivable 45
Transfers receivable from
EIP 1 3,726
Contributions receivable 186 375 5,962
Interfund transfers
receivable/(payable), net 75 (332)
Other
receivable/(payable), net 16 39 (773) 192
------- ------- ------- ----------
Net assets $39,267 $40,574 $24,011 $1,467,058
======= ======= ======= ==========
</TABLE>
-11-
<PAGE>
CATERPILLAR INC. - EMPLOYEES' INVESTMENT PLAN
---------------------------------------------
NOTE 4 - MASTER TRUST - SUMMARY OF NET ASSETS
---------------------------------------------
NOVEMBER 30, 1997
-----------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Preferred Group of Mutual Funds
--------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Asset
Fund Fund Government Market Value International Growth Allocation
------------ --------- ---------- -------- -------- -------------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value:
Cash and cash equivalents $ 14,588 $ $ $ $ $ $ $
Common stock 314,360
Registered investment
companies 94,548 14,174 62,201 237,185 82,017 255,414 56,985
Participant loans
-------- ------- ------- ------- -------- ------- -------- -------
Total investments 328,948 94,548 14,174 62,201 237,185 82,017 255,414 56,985
Dividend and interest
receivable 99
Transfers receivable from
EIP 1 2,955 42
Contributions receivable 960 399 76 311 1,261 664 1,610 397
Transfers
receivable/(payable), net (69) 31 (34) 15 (17) 53 (14)
Other
receivable/(payable), net 157 105 11 66 159 90 240 35
-------- ------- ------- ------- -------- ------- -------- -------
Net assets $333,050 $95,083 $14,261 $62,586 $238,620 $82,754 $257,317 $57,403
======== ======= ======= ======= ======== ======= ======== =======
<CAPTION>
------------------
Fixed Small Loan
Income Cap Fund Total
------- ------- -------- ----------
<S> <C> <C> <C> <C>
Investments, at fair value:
Cash and cash equivalents $ $ $ $ 14,588
Common stock 314,360
Registered investment
companies 23,173 42,188 867,885
Participant loans 23,198 23,198
------- ------- ------- ----------
Total investments 23,173 42,188 23,198 1,220,031
Dividend and interest
receivable 99
Transfers receivable from
EIP 1 2,997
Contributions receivable 143 360 6,181
Transfers
receivable/(payable), net 11 24
Other
receivable/(payable), net 13 50 (751) 175
------- ------- ------- ----------
Net assets $23,340 $42,622 $22,447 $1,229,483
======= ======= ======= ==========
</TABLE>
-12-
<PAGE>
CATERPILLAR INC. - EMPLOYEES' INVESTMENT PLAN
---------------------------------------------
NOTE 4 - MASTER TRUST - SUMMARY OF CHANGES IN NET ASSETS
--------------------------------------------------------
FOR THE YEAR ENDED NOVEMBER 30, 1998
------------------------------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Preferred Group of Mutual Funds
-------------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Asset
Fund Fund Government Market Value International Growth Allocation
------------ ---------- ----------- --------- --------- -------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:-
Interest $ 913 $ $ $ $ $ $ $
Dividends 7,772
Net appreciation in fair
value of:
Common stock 10,987
Registered investment
companies 6,287 768 4,091 27,432 5,782 55,238 15,269
-------- ------- -------- -------- --------- -------- --------
Net investment income 19,672 6,287 768 4,091 27,432 5,782 55,238 15,269
-------- -------- ------- -------- -------- --------- -------- --------
Contributions to all plans 12,842 5,433 1,049 4,503 19,893 8,626 24,189 8,166
-------- -------- ------- -------- -------- --------- -------- --------
Withdrawals from all plans (18,329) (8,248) (709) (15,029) (10,858) (3,271) (9,679) (3,132)
-------- -------- ------- -------- -------- --------- -------- --------
Transfers from EIP 1 82,906 1,160
-------- -------- ------- -------- -------- --------- -------- --------
Interfund transfers, net (73,979) 11,328 3,533 42,591 (4,353) (7,081) 2,492 13,550
-------- -------- ------- -------- -------- --------- -------- --------
Increase (decrease) in net
assets 23,112 14,800 4,641 37,316 32,114 4,056 72,240 33,853
Net assets:
Beginning of year 333,050 95,083 14,261 62,586 238,620 82,754 257,317 57,403
-------- -------- ------- -------- -------- --------- -------- --------
End of year $356,162 $109,883 $18,902 $ 99,902 $270,734 $ 86,810 $329,557 $ 91,256
======== ======== ======= ======== ======== ========= ======== ========
<CAPTION>
-------------------
Fixed Small Loan
Income Cap Fund Total
-------- -------- -------- -----------
<S> <C> <C> <C> <C>
Investment income:-
Interest $ $ $ 2,070 $ 2,983
Dividends 7,772
Net appreciation in fair
value of:
Common stock 10,987
Registered investment
companies 2,115 (5,020) 111,962
-------- -------- -------- -----------
Net investment income 2,115 (5,020) 2,070 133,704
-------- -------- -------- -----------
Contributions to all plans 2,921 6,540 94,162
-------- -------- -------- ----------
Withdrawals from all plans (1,687) (1,673) (617) (73,232)
-------- -------- -------- ----------
Transfers from EIP 1 84,066
-------- -------- -------- ----------
Interfund transfers, net 12,578 (1,895) 111 (1,125)
-------- -------- -------- ----------
Increase (decrease) in net
assets 15,927 (2,048) 1,564 237,575
Net assets:
Beginning of year 23,340 42,622 22,447 1,229,483
-------- -------- -------- ----------
End of year $39,267 $40,574 $24,011 $1,467,058
======== ======== ======== ==========
</TABLE>
-13-
<PAGE>
CATERPILLAR INC. - EMPLOYEES' INVESTMENT PLAN
---------------------------------------------
NOTE 4 - MASTER TRUST - SUMMARY OF CHANGES IN NET ASSETS
--------------------------------------------------------
FOR THE YEAR ENDED NOVEMBER 30, 1997
------------------------------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Preferred Group of Mutual Funds
--------------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Asset
Fund Fund Government Market Value International Growth Allocation
------------ ---------- ----------- --------- --------- -------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:-
Interest $ 796 $ $ $ $ $ $ $
Dividends 4,744
Net appreciation in fair
value of:
Common stock 33,272
Registered investment
companies 6,227 774 4,122 51,374 7,320 57,870 8,647
-------- -------- ------- -------- -------- -------- -------- -------
Net investment income 38,812 6,227 774 4,122 51,374 7,320 57,870 8,647
-------- -------- ------- -------- -------- -------- -------- -------
Contributions to all plans 8,777 5,437 892 4,416 14,289 8,290 18,060 4,665
-------- -------- ------- -------- -------- -------- -------- -------
Withdrawals from all plans (11,838) (5,438) (537) (10,417) (6,904) (2,552) (6,939) (2,099)
-------- -------- ------- -------- -------- -------- -------- -------
Transfers from EIP 1 55,793 618
-------- -------- ------- -------- -------- -------- -------- -------
Interfund transfers, net 59,058 (16,001) (1,653) (26,931) (5,826) (15,404) (10,341) (2,306)
-------- -------- ------- -------- -------- -------- -------- -------
Increase (decrease) in net
assets 150,602 (9,775) (524) (28,192) 52,933 (2,346) 58,650 8,907
Net assets:
Beginning of year 182,448 104,858 14,785 90,778 185,687 85,100 198,667 48,496
-------- -------- ------- -------- -------- -------- -------- -------
End of year $333,050 $ 95,083 $14,261 $ 62,586 $238,620 $ 82,754 $257,317 $57,403
======== ======== ======= ======== ======== ======== ======== =======
<CAPTION>
------------------
Fixed Small Loan
Income Cap Fund Total
-------- ------- -------- -----------
<S> <C> <C> <C> <C>
Investment income:-
Interest $ $ $ 1,851 $ 2,647
Dividends 4,744
Net appreciation in fair
value of:
Common stock 33,272
Registered investment
companies 1,481 7,239 145,054
------- ------- ------- ----------
Net investment income 1,481 7,239 1,851 185,717
------- ------- ------- ----------
Contributions to all plans 1,741 2,951 69,518
------- ------- ------- ----------
Withdrawals from all plans (1,036) (560) (530) (48,850)
------- ------- ------- ----------
Transfers from EIP 1 56,411
------- ------- ------- ----------
Interfund transfers, net (1,922) 16,021 999 (4,306)
------- ------- ------- ----------
Increase (decrease) in net
assets 264 25,651 2,320 258,490
Net assets:
Beginning of year 23,076 16,971 20,127 970,993
------- ------- ------- ----------
End of year $23,340 $42,622 $22,447 $1,229,483
======= ======= ======= ==========
</TABLE>
-14-
<PAGE>
ADDITIONAL INFORMATION
-----------------------
<PAGE>
SCHEDULE I
-----------
CATERPILLAR INC.
----------------
EMPLOYEES' INVESTMENT PLAN
--------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
NOVEMBER 30, 1998
-----------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Identity of issue, Description of investment, including
borrower, lessor maturity date, rate of interest, Current
or similar party collateral, par or maturity value Cost Value
---------------- --------------------------------- ---- -----
<S> <C> <C> <C> <C>
* Caterpillar Inc. Common stock; 18,056,623 shares $465,488,389 $ 892,674,300
============ ==============
* Northern Trust Collective Government Short-Term Investment Fund $ 12,805,026 $ 12,805,026
============= ==============
* Caterpillar Inc. 401(k) Master Trust $790,211,972 $1,220,856,000
AIM Global High Income Class B; 970.246 units $ $ 8,296
Accessor FDS Inc. Small to Mid-Cap; 235.412 units 5,144
American Century Benham Target Mat TR 2005; 814.099 units 61,546
Century Benham Target Mat TR 2020; 564.493 units 20,480
Century Global Gold; 17,500.333 units 104,127
Century Income & Growth; 440.341 units 12,624
Century Equity Growth; 142.569 units 3,085
Century 20th Century Ultra; 1,938.295 units 63,925
Heritage Fund; 9,899.069 units 4,356
Ariel Growth Class A; 302.946 units 12,727
Artisan Small Cap; 19.976 units 217
International; 770.381 units 11,725
BT Investment International Equity; 201.288 units 4,680
Babson Value Income; 2,534.072 units 123,060
Baron Asset; 7,972.58 units 368,891
Growth & Inc.; 722.879 units 16,250
Small Cap Fund; 405.515 units 3,869
Berger Small Cap Value Retail; 446.157 units 8,736
Small Company Growth Retail; 731.804 units 2,942
New Generation Retail; 348.158 units 5,017
Balanced Retail; 285.561 units 4,263
Select Retail; 402.545 units 6,445
Brandywine Blue; 3,307.724 units 77,765
Brandywine; 280.717 units 7,720
Bridgeway Microcap Limited; 1,558.442 units 7,122
Bull & Bear Gold; 1,706.223 units 5,033
Montag & Caldwell Growth Fund; 2,157.963 units 61,135
Cohen & Steers Realty Shares Inc; 3,972.974 units 161,620
Colonial Newport Tiger Class A; 31.909 units 253
Dodge & Cox Balance; 880.151 units 60,378
Dreyfus Appreciation Fund; 181.361 units 7,363
Premier Worldwide Growth A; 366.393 units 11,706
Aggressive Value Fund; 180.050 units 4,456
Small Company Value Fund; 352.797 units 6,597
Large Company Value Fund; 282.649 units 6,289
S&P 500 Index Fund; 1,554.420 units 53,985
New Leaders; 410.079 units 16,186
</TABLE>
(Continued)
-15-
<PAGE>
SCHEDULE I
-----------
CATERPILLAR INC.
----------------
EMPLOYEES' INVESTMENT PLAN
--------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
NOVEMBER 30, 1998
-----------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Identity of issue, Description of investment, including
borrower, lessor maturity date, rate of interest, Current
or similar party collateral, par or maturity value Cost Value
---------------- --------------------------------- ---- -----
<S> <C> <C> <C> <C>
Eaton Vance Classic Senior Floating Rate; 166.257 units $ $ 1,658
Excelsior Income Business & Indl Restruc; 155.068 units 3,449
FBR Small Cap Financial Fund; 50.607 units 835
Financial Services Fund; 161.500 units 2,862
Small Cap Growth Value Fund; 160.342 units 2,424
Fidelity Worldwide; 146.851 units 2,405
Diversified International; 1,947.600 units 34,920
Europe Capital Appreciation; 571.433 units 7,695
Emerging Markets; 166.113 units 1,184
Spartan U.S. Equity Index; 807.619 units 33,645
Market Index; 39.499 units 5,133
Fidelity Capital & Income; 1,876.655 units 18,297
Stock Selector; 6,949.820 units 199,321
Asset Manager Growth; 143.779 units 2,963
Contra Fund; 2,316.969 units 126,460
Utilities; 1,354.464 units 29,974
Equity Income; 606.07 units 40,231
Real Estate Investment; 3,113.681 units 50,348
Equity Income II; 1,977.754 units 60,776
Spartan High Income; 3,611.573 units 44,458
Fidelity Government Securities; 11,481.838 units 117,230
Magellan; 77.475 units 8,769
Europe; 470.439 units 16,324
Low Priced Stock; 536.852 units 11,988
Growth & Income; 2,465.583 units 108,239
Dividend Growth; 6,522.289 units 178,580
Select Energy; 572.373 units 10,411
Technology; 130.682 units 8,827
Health Care; 762.949 units 101,045
Precious Metals; 996.226 units 9,305
Utilities Growth; 77.042 units 4,745
Natural Gas; 500.276 units 5,798
Financial Services; 113.687 units 10,945
Regional Banks; 1,743.135 units 74,850
Home Finance; 1,948.362 units 84,617
Retailing; 40.664 units 2,349
Energy Service; 1,141.965 units 16,296
American Gold; 162.251 units 2,108
Money Market; 19,737.510 units 19,738
Software & Computer; 215.230 units 10,398
Telecomm; 460.900 units 24,695
Brokerage & Investment Management; 1,092.642 units 41,870
Electronics; 3,159.223 units 127,633
Computers; 534.939 units 30,823
Fidelity Value; 205.237 units 10,984
</TABLE>
(Continued)
-16-
<PAGE>
SCHEDULE I
-----------
CATERPILLAR INC.
----------------
EMPLOYEES' INVESTMENT PLAN
--------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
NOVEMBER 30, 1998
-----------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Identity of issue, Description of investment, including
borrower, lessor maturity date, rate of interest, Current
or similar party collateral, par or maturity value Cost Value
---------------- --------------------------------- ---- -----
<S> <C> <C> <C> <C>
Flag Investors Telephone, INC CL A; 2,503.457 units $ $ 71,248
Founders Growth; 590.914 units 11,848
Worldwide Growth; 1,868.580 units 41,127
Franklin CA Growth Class 1; 94.697 units 2,197
Global Health Care; 49.950 units 803
Fremont US Micro Capital; 166.389 units 3,080
Gabelli Westwood Realty Retail Class; 5,134.870 units 42,517
Growth Shares Ben Int; 832.284 units 28,023
Global Inter-Active Couch Potato; 277.624 units 4,567
GAM International Class A; 709.901 units 20,367
Global; 263.582 units 4,771
Govett Smaller Companies Class A; 57.615 units 886
Guinness Flight China & Hong Kong; 1,358.917 units 15,138
Flight Asia Small Cap; 1,096.045 units 7,508
Flight Mainland China Fund; 21.386 units 197
John Hancock Special Equity CL B; 571.434 units 11,943
Harbor Bond; 8,426.805 units 99,858
Capital Appreciation; 145.264 units 5,227
International Growth; 509.504 units 9,619
Oakmark Fund; 3,455.029 units 126,593
International; 778.432 units 8,641
Small Cap; 4,118.325 units 59,633
Select; 6,321.634 units 113,094
Heartland Group Value Plus; 3,180.737 units 43,958
Group Midcap Value; 394.633 units 4,578
Hotchkis & Wiley International; 3,440.515 units 81,231
IAI Bond; 1,642.935 units 15,657
Capital Appreciation; 782.571 units 10,213
Invesco Strategic Portfolio Inc. Energy; 7,604.563 units 78,631
Strategic Gold Portfolio; 22,486.708 units 40,701
Strategic Health Sciences; 434.994 units 28,440
Strategic Port Inc. Technology; 1,674.481 units 51,289
Strategic Financial Services; 811.426 units 24,538
Worldwide Communications; 3,462.840 units 64,236
International European; 848.552 units 15,893
Janus Fund; 2,335.738 units 69,698
Inv't Growth & Income; 4,049.006 units 113,129
Inv't Worldwide; 15,799.25 units 697,537
Inv't Twenty; 12,905.554 units 594,688
Flexible Income; 382.324 units 3,835
Special Situations; 3,565.602 units 54,804
Inv't Equity Income; 4,044.804 units 67,265
Olympus; 8,451.157 units 196,996
High Yield Bond; 2,329.539 units 24,833
Enterprise; 617.275 units 21,487
</TABLE>
(Continued)
-17-
<PAGE>
SCHEDULE I
-----------
CATERPILLAR INC.
----------------
EMPLOYEES' INVESTMENT PLAN
--------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
NOVEMBER 30, 1998
-----------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Identity of issue, Description of investment, including
borrower, lessor maturity date, rate of interest, Current
or similar party collateral, par or maturity value Cost Value
---------------- --------------------------------- ---- -----
<S> <C> <C> <C> <C>
Inv't Overseas; 13,734.140 units $ $ 261,773
Inv't Mercury; 407.447 units 9,025
Inv't Balanced; 1,141.129 units 20,632
Japan Fund; 1,594.808 units 12,440
Kaufmann Fund; 11,166.596 units 59,295
Focus Trust Fund; 516.977 units 10,691
Lexington Corporate Leaders Trust CL B; 721.831 units 11,224
Worldwide Emerging Mkts Inc; 617.707 units 4,540
Lindner Bulwark; 893.979 units 5,158
Invts Divid; 976.854 units 23,728
Longleaf Small Cap; 450.418 units 9,679
Loomis Sayles Bond; 6,095.522 units 77,047
Invt Grade Bond Retail; 1,882.859 units 18,942
Lord Abbett Growth & Income Class C; 334.366 units 3,083
MAS Value Portfolio Institutional; 456.433 units 7,905
MFS Emerging Growth Class B; 276.307 units 10,967
Managers FDS Special Equity; 252.524 units 14,379
FDS Int'l Equity; 282.573 units 14,391
Marsico Focus; 10,459.800 units 142,776
Growth and Income; 305.192 units 3,919
Masters Select International; 222.618 units 2,355
Matthews Intl FDS Pac Tiger Fund; 767.754 units 4,860
Midas Fund; 2,783.501 units 4,370
Montgomery Emerging Markets; 86.505 units 731
Latin America; 393.434 units 2,534
Emerging Asia; 924.802 units 9,215
Global Communication; 3,782.166 units 84,115
SML Cap Opportunity; 1,066.098 units 16,557
Growth; 5,111.339 units 112,398
International Growth; 1,063.417 units 19,184
Global Opportunities; 621.396 units 11,198
Mutual Series Shares Class Z; 281.663 units 5,873
Qualified Inc. CL Z; 8,065.223 units 142,996
Beacon Class Z; 1,620.054 units 22,875
Discovery Class Z; 11,217.658 units 201,469
European Class Z; 1,735.606 units 22,198
Neuberger & Berman Guardian Trust; 540.477 units 9,166
Partners Trust Inc; 508.388 units 9,187
Focus Trust Frmly S; 103.141 units 2,252
Nicholas Ltd Edition; 316.706 units 7,430
Northeast Investors Trust CTFS Ben Int; 10,687.687 units 111,900
White Oak Growth Stock; 468.248 units 17,498
Oppenheimer Strategic Inc CL C; 4,131.356 units 19,004
PBHG Growth; 7,956.740 units 177,754
</TABLE>
(Continued)
-18-
<PAGE>
SCHEDULE I
----------
CATERPILLAR INC.
----------------
EMPLOYEES' INVESTMENT PLAN
--------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
NOVEMBER 30, 1998
-----------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Identity of issue, Description of investment, including
borrower, lessor maturity date, rate of interest, Current
or similar party collateral, par or maturity value Cost Value
----------------- --------------------------------- ---- -----
<S> <C> <C> <C> <C>
Emerging Growth; 1,164.478 units $ $ 24,559
Large Cap Growth; 760.100 units 16,745
Select Equity; 4,409.248 units 92,506
Tech & Communication; 639.455 units 12,130
Small Cap Value; 601.410 units 7,872
Mid Cap Value; 174.934 units 2,502
Large Cap 20; 1,730.675 units 31,671
Core Growth; 1,519.384 units 17,108
PIMCO Long Term US Gov't; 5,098.937 units 66,594
Papp Amern Abroad Inc; 2,949.110 units 89,535
Payden & Rygel Growth & Income CL A; 1,432.126 units 21,625
T Rowe Price Health Sciences; 534.759 units 8,246
Putnam OTC & Emerging Growth CL A; 104.312 units 1,595
Robertson Stephens Value Plus & Growth; 1,009.356 units 26,909
Contrarian FD; 2,181.595 units 17,605
Growth & Income FU; 324.149 units 4,382
Microcap Growth FD; 1,690.146 units 23,138
Global Natural RES; 333.730 units 2,737
T Rowe Price Dividend Growth; 3,279.899 units 71,830
Equity Income; 3,965.736 units 109,772
Cap Appreciation; 967.133 units 15,078
Blue Chip Growth Inc; 267.438 units 7,700
Growth & Income; 273.276 units 7,594
Mid Cap Growth; 428.483 units 13,386
New American Growth; 201.005 units 9,343
New Era; 3,063.824 units 72,582
New Horizons FD Inc; 261.893 units 5,872
International Stock; 1,941.701 units 29,281
European Stock; 4,253.497 units 99,106
Int'l New Asia; 2,465.834 units 12,600
Science & Technology; 2,039.363 units 67,340
Spectrum Growth; 212.302 units 3,647
Rydex Nova Fund; 1,583.104 units 48,269
URSA Fund; 3,119.687 units 29,731
OTC Fund; 5,260.559 units 185,645
Juno Fund; 1,359.311 units 10,970
SSGA Small Cap Equity; 3,168.714 units 57,354
Emerging Markets; 711.387 units 5,748
Growth & Income; 751.388 units 14,990
Money Market; 1,975,972.000 units 1,975,972
S&P 500 Index; 12,580.446 units 265,447
Safeco Equity; 3,939.753 units 93,096
Growth; 1,412.587 units 31,402
Salomon Bros. Opportunity Income; 191.168 units 9,396
Scudder Mutual Income Gold; 1,242.440 units 7,803
Greater Europe Growth; 2,461.882 units 61,990
(Continued)
</TABLE>
-19-
<PAGE>
SCHEDULE I
-----------
CATERPILLAR INC.
----------------
EMPLOYEES' INVESTMENT PLAN
--------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
NOVEMBER 30, 1998
-----------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Identity of issue, Description of investment, including
borrower, lessor maturity date, rate of interest, Current
or similar party collateral, par or maturity value Cost Value
---------------- --------------------------------- ---- -----
<S> <C> <C> <C> <C>
Smith Breeden Equity Plus; 240.775 units $ $ 3,686
SoGen International; 1,263.994 units 29,540
Sound Shore FD Inc; 970.603 units 28,274
Stein Roe Income Trust; 1,540.041 units 15,015
Investment Trust Young Invest; 507.513 units 13,028
Investment Trust Cap Oppty; 972.503 units 25,509
Strong Corporate Bond Income; 9,634.490 units 108,099
Income High Yield bond; 7,245.623 units 81,803
Growth; 5,983.995 units 120,937
Growth 20; 450.461 units 5,960
Small Cap Value; 375.548 units 3,759
American Utilities; 326.854 units 5,465
Growth & Income; 1,820.642 units 36,267
Schafer Value; 615.876 units 35,438
Government Securities Income; 909.802 units 10,008
Templeton Developing Markets Trust; 336.150 units 3,600
Developing Markets Class II; 3,205.323 units 33,784
Foreign Class II; 1,988.807 units 16,825
Third Avenue Value FD; 2,181.771 units 68,180
Torray Fund; 2,061.171 units 71,131
Transamerica Premier Small Company; 2,749.530 units 51,416
Oak Value Fund; 586.601 units 15,146
Tweedy Browne Global Value Fund; 13,400.928 units 241,753
Amern Value Fund; 7,419.133 units 166,930
UAM FMA Small Company Portfolio; 253.252 units 3,849
US World Gold; 9,249.128 units 84,352
Gold Shares; 14,348.426 units 53,950
Value Line Aggressive Income; 1,861.042 units 13,772
Convertible; 523.935 units 6,743
Van Wagoner Income Micro-Cap; 212.239 units 2,091
Income Emerging Growth; 3,709.846 units 33,871
Income Mid-Cap; 496.803 units 5,266
Income Post Venture; 77.890 units 777
Vanguard US Growth Portfolio; 564.313 units 20,863
Int'l Growth Portfolio; 1,894.174 units 35,080
Growth & Income; 2,121.775 units 63,568
Equity Income; 509.305 units 12,875
Admiral Sht Term US Treasury; 14,594.426 units 150,031
Prime Cap; 2,316.532 units 105,425
Bond Index Total Market; 3,121.391 units 32,213
Windsor II Portfolio; 5,285.409 units 170,402
Asset Allocation Income; 1,415.555 units 35,814
Fixed Inc Sec L/T Portfolio; 8,090.874 units 76,297
GNMA Fixed Income Securities; 5,769.236 units 60,404
Preferred Stock; 2,901.354 units 30,261
(Continued)
</TABLE>
-20-
<PAGE>
SCHEDULE I
-----------
CATERPILLAR INC.
----------------
EMPLOYEES' INVESTMENT PLAN
--------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
NOVEMBER 30, 1998
-----------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Identity of issue, Description of investment, including
borrower, lessor maturity date, rate of interest, Current
or similar party collateral, par or maturity value Cost Value
---------------- --------------------------------- ---- -----
<S> <C> <C> <C> <C>
Index Trust S&P 500 Port; 6,520.181 units $ $ 707,375
Total Stock Market; 24,642.598 units 640,215
Value Index; 2,296.977 units 51,682
Growth Index; 7,362.286 units 217,850
Warburg Pincus Capital Appreciation; 1,868.979 units 38,856
Emerging Growth; 537.393 units 19,217
International Equity; 2,246.672 units 39,362
Emerging Markets; 214.309 units 1,468
Post Venture Capital; 264.067 units 4,589
Japan Growth; 608.037 units 5,855
Health Sciences; 503.356 units 7,621
Wasatch Growth; 714.527 units 13,304
Weitz Value; 1,138.808 units 33,003
Hickory; 1,039.261 units 30,242
Wright Equifund Hong Kong; 302.479 units 3,046
Equifund Netherlands; 3,100.645 units 35,409
Equifund Mexico; 309.119 units 1,456
Yacktman Fund; 655.703 units 8,911
-----------
$15,618,174
===========
</TABLE>
-21-
<PAGE>
SCHEDULE II
-----------
CATERPILLAR INC.
----------------
EMPLOYEES' INVESTMENT PLAN
--------------------------
ITEM 27d - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS
---------------------------------------------------
FOR THE YEAR ENDED NOVEMBER 30, 1998
------------------------------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Current value
Expense of asset on
Identity of Purchase Selling Lease incurred with Cost transaction Net gain
party involved Description of assets price price rental transaction of asset date or (loss)
- -------------- ----------------------- ------------- -------- ------- ------------- ------------- -------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Caterpillar Inc. Common stock:
Series of 69 purchases $110,430,584 $ $ $103,947 $110,430,584 $110,326,637 $
One sale 14,122 15 6,529 14,137 7,593
</TABLE>
-22-
<PAGE>
EXHIBIT C
---------
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statement on Forms S-8 (No. 33-3718, as amended, and No. 33-39280) of
Caterpillar Inc. of our report dated May 26, 1999 relating to the financial
statements of the Caterpillar Inc. Employees' Investment Plan, which appears in
this Form 11-K.
/s/ PricewaterhouseCoopers LLP
Peoria, Illinois
May 26, 1999
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For the Fiscal Year Ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
For the transition period from _____ to _____
Commission File Number 1-768
TAX DEFERRED SAVINGS PLAN
(Full title of the Plan)
CATERPILLAR INC.
(Name of issuer of the securities held
pursuant to the Plan)
100 NE ADAMS STREET, PEORIA, ILLINOIS 61629
(Address of principal executive offices)
<PAGE>
REQUIRED INFORMATION
Item 1.
The audited statement of net assets available for plan benefits as of the end of
the latest two fiscal years of the Plan is attached hereto as Exhibit A.
Item 2.
The audited statement of changes in net assets available for plan benefits for
each of the latest two fiscal years of the Plan is attached hereto as Exhibit B.
Item 3.
The statements required by Items 1 and 2 have been prepared in accordance with
the applicable financial reporting requirements of ERISA.
Item 4.
The Consent of Independent Accountants is attached hereto as Exhibit C.
<PAGE>
Caterpillar Inc.
Tax Deferred Savings Plan
Financial Statements and Additional Information
December 31, 1998 and 1997
<PAGE>
Report of Independent Accountants
To the Participants and Plan Administrator of the
Caterpillar Inc. Tax Deferred Savings Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statements of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Caterpillar Inc. Tax Deferred Savings Plan (the Plan) at
December 31, 1998 and 1997, and the changes in net assets available for plan
benefits for the years ended December 31, 1998 and 1997, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and of reportable (5%) transactions are presented for
the purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974 (ERISA). The fund
information in the statements of net assets available for plan benefits and the
statements of changes in net assets available for plan benefits is presented for
purposes of additional analysis rather than to present the net assets available
for plan benefits and changes in net assets available for plan benefits of each
fund. These supplemental schedules and fund information are the responsibility
of the Plan's management. The supplemental schedules and fund information have
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
The schedules of assets held for investment purposes and of reportable (5%)
transactions that accompany the Plan's financial statements do not disclose the
historical cost of certain plan assets, and certain related sales transactions,
held by a Plan custodian. Disclosure of this information is required by ERISA.
/s/PricewaterhouseCoopers LLP
Peoria, Illinois
May 26, 1999
<PAGE>
Exhibit A
---------
CATERPILLAR INC.
----------------
TAX DEFERRED SAVINGS PLAN
-------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
-------------------------------------------------------------------------
DECEMBER 31, 1998
-----------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Fund Information
-----------------------------------------------------------------------------------------------------
Preferred Group of Mutual Funds
----------------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Inter- Asset Fixed Small
Fund Fund Government Market Value national Growth Allocation Income Cap
---- ---- ---------- ------ ----- -------- ------ ---------- ------ ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value
(Notes 2 and 4):
Registered investment
companies $ $ $ $ $ $ $ $ $ $
Investments in Master
Trust Net Assets 38,010 27,695 3,713 10,525 45,393 12,424 61,805 11,823 4,906 5,435
----------- --------- ---------- ------- ------- -------- ------- ---------- ------ --------
Total net assets $ 38,010 $ 27,695 $ 3,713 $10,525 $45,393 $ 12,424 $61,805 $ 11,823 $4,906 $ 5,435
=========== ========= ========== ======= ======= ======== ======= ========== ====== ========
<CAPTION>
-----------------
Self-
Loan Directed
Fund Fund Total
---- ---- -----
<S> <C> <C> <C>
Investments, at fair value
(Notes 2 and 4):
Registered investment
companies $ $ 1,311 $ 1,311
Investments in Master
Trust Net Assets 5,411 227,140
-------- -------- --------
Total net assets $ 5,411 $ 1,311 $228,451
======== ======== ========
</TABLE>
(See notes to financial statements)
-2-
<PAGE>
Exhibit A
---------
CATERPILLAR INC.
----------------
TAX DEFERRED SAVINGS PLAN
-------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
-------------------------------------------------------------------------
DECEMBER 31, 1997
-----------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Fund Information
----------------------------------------------------------------------------------------------------
Preferred Group of Mutual Funds
---------------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Inter- Asset Fixed Small
Fund Fund Government Market Value national Growth Allocation Income Cap
---- ---- ---------- ------ ----- -------- ------- ---------- ------ ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value
(Notes 2 and 4):
Registered investment
companies $ $ $ $ $ $ $ $ $ $
Investments in Master
Trust Net Assets 39,455 26,000 2,968 7,824 40,985 11,615 44,652 7,709 2,908 5,149
----------- --------- ---------- ------ ------- -------- ------- ---------- ------ --------
Total net assets $ 39,455 $ 26,000 $ 2,968 $7,824 $40,985 $ 11,615 $44,652 $ 7,709 $2,908 $ 5,149
=========== ========= ========== ====== ======= ======== ======= ========== ====== ========
<CAPTION>
----------------
Self-
Loan Directed
Fund Fund Total
---- ---- -----
<S> <C> <C> <C>
Investments, at fair value
(Notes 2 and 4):
Registered investment
companies $ $ 1,098 $ 1,098
Investments in Master
Trust Net Assets 5,230 194,495
------ -------- --------
Total net assets $5,230 $ 1,098 $195,593
====== ======== ========
</TABLE>
(See notes to financial statements)
-3-
<PAGE>
Exhibit B
---------
CATERPILLAR INC.
----------------
TAX DEFERRED SAVINGS PLAN
-------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
------------------------------------------------------------------------
INFORMATION
-----------
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Fund Information
--------------------------------------------------------------------------------------------------
Preferred Group of Mutual Funds
-------------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Inter- Asset Fixed
Fund Fund Government Market Value national Growth Allocation Income
---- ---- ---------- ------ ----- -------- ------ ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Participant contributions $ 4,072 $ 1,901 $ 260 $ 1,261 $ 3,609 $ 1,549 $ 4,610 $ 1,266 $ 578
----------- ------- -------- ------- ------- ------- ------- ------- ------
Investment income:
Net appreciation in fair
value of registered
investment companies
Plan interest in net
investment income of
Master Trust (Note 4) (676) 1,645 148 503 5,590 1,146 15,789 2,328 240
----------- ------- -------- ------- ------- ------- ------- ------- ------
Net investment income (676) 1,645 148 503 5,590 1,146 15,789 2,328 240
----------- ------- -------- ------- ------- ------- ------- ------- ------
Withdrawals (2,072) (2,099) (127) (1,138) (3,075) (642) (2,686) (442) (226)
Transfers (to)/from
other plans, net (373) (216) (19) (46) (225) (77) (309) (12) (3)
Interfund transfers, net (2,396) 464 483 2,121 (1,491) (1,167) (251) 974 1,409
----------- ------- -------- ------- ------- ------- ------- ------- ------
Withdrawals and
transfers, net (4,841) (1,851) 337 937 (4,791) (1,886) (3,246) 520 1,180
----------- ------- -------- ------- ------- ------- ------- ------- ------
Increase (decrease) in net
assets (1,445) 1,695 745 2,701 4,408 809 17,153 4,114 1,998
Net assets:
Beginning of year 39,455 26,000 2,968 7,824 40,985 11,615 44,652 7,709 2,908
----------- ------- -------- ------- ------- ------- ------- ------- ------
End of year $ 38,010 $27,695 $ 3,713 $10,525 $45,393 $12,424 $61,805 $11,823 $4,906
=========== ======= ======== ======= ======= ======= ======= ======= ======
<CAPTION>
---------------------------
------
Self-
Small Loan Directed
Cap Fund Fund Total
--- ---- ---- -----
<S> <C> <C> <C> <C>
Participant contributions $1,162 $ $ $ 20,268
------ ------ -------- --------
Investment income:
Net appreciation in fair
value of registered
investment companies 140 140
Plan interest in net
investment income of
Master Trust (Note 4) (283) 461 26,891
------ ------ -------- --------
Net investment income (283) 461 140 27,031
------ ------ -------- --------
Withdrawals (116) (243) (12,866)
Transfers (to)/from
other plans, net (146) (38) (111) (1,575)
Interfund transfers, net (331) 1 184
------ ------ -------- --------
Withdrawals and
transfers, net (593) (280) 73 (14,441)
------ ------ -------- --------
Increase (decrease) in net
assets 286 181 213 32,858
Net assets:
Beginning of year 5,149 5,230 1,098 195,593
------ ------ -------- --------
End of year $5,435 $5,411 $ 1,311 $228,451
====== ====== ======== ========
</TABLE>
(See notes to financial statements)
-4-
<PAGE>
Exhibit B
---------
CATERPILLAR INC.
---------------
TAX DEFERRED SAVINGS PLAN
-------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
------------------------------------------------------------------------
INFORMATION
-----------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Fund Information
--------------------------------------------------------------------------------------------------
Preferred Group of Mutual Funds
-------------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Inter- Asset Fixed
Fund Fund Government Market Value national Growth Allocation Income
---- ---- ---------- ------ ----- -------- ------ ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Participant contributions $ 3,107 $ 1,661 $ 280 $ 1,271 $ 3,273 $ 1,727 $ 4,143 $1,120 $ 487
------- ------- ------ ------- ------- ------- ------- ------ ------
Investment income:
Net appreciation in fair
value of registered
investment companies
Plan interest in net
investment income of
Master Trust (Note 4) 5,713 2,145 177 479 8,930 859 10,631 1,290 211
------- ------- ------ ------- ------- ------- ------- ------ ------
Net investment income 5,713 2,145 177 479 8,930 859 10,631 1,290 211
------- ------- ------ ------- ------- ------- ------- ------ ------
Withdrawals (1,041) (1,774) (90) (857) (1,512) (295) (1,341) (156) (55)
Transfers (to)/from other
plans, net (177) (171) (19) (173) (399) (114) (348) (53) (33)
Interfund transfers, net 10,621 (3,519) (345) (3,412) (902) (2,157) (1,820) (310) (238)
------- ------- ------ ------- ------- ------- ------- ------ ------
Withdrawals and
transfers, net 9,403 (5,464) (454) (4,442) (2,813) (2,566) (3,509) (519) (326)
------- ------- ------ ------- ------- ------- ------- ------ ------
Increase (decrease) in net
assets 18,223 (1,658) 3 (2,692) 9,390 20 11,265 1,891 372
Net assets:
Beginning of year 21,232 27,658 2,965 10,516 31,595 11,595 33,387 5,818 2,536
------- ------- ------ ------- ------- ------- ------- ------ ------
End of year $39,455 $26,000 $2,968 $ 7,824 $40,985 $11,615 $44,652 $7,709 $2,908
======= ======= ====== ======= ======= ======= ======= ====== ======
----------------------
<CAPTION>
------
Self-
Small Loan Directed
Cap Fund Fund Total
--- ---- ---- -----
<S> <C> <C> <C> <C>
Participant contributions $ 737 $ $ $ 17,806
------ ------ ------- --------
Investment income:
Net appreciation in fair
value of registered
investment companies 102 102
Plan interest in net
investment income of
Master Trust (Note 4) 814 415 31,664
------ ------ ------- --------
Net investment income 814 415 102 31,766
------ ------ ------- --------
Withdrawals (92) (133) (7,346)
Transfers (to)/from other
plans, net (10) (57) 2 (1,552)
Interfund transfers, net 1,182 594 306
------ ------ ------- --------
Withdrawals and
transfers, net 1,080 404 308 (8,898)
------ ------ ------- --------
Increase (decrease) in net
assets 2,631 819 410 40,674
Net assets:
Beginning of year 2,518 4,411 688 154,919
------ ------ ------- --------
End of year $5,149 $5,230 $ 1,098 $195,593
====== ====== ======= ========
</TABLE>
(See notes to financial statements)
-5-
<PAGE>
CATERPILLAR INC.
----------------
TAX DEFERRED SAVINGS PLAN
-------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1 - PLAN DESCRIPTION:
- -------------------------
The following description of the Caterpillar Inc. Tax Deferred Savings Plan (the
Plan) provides only general information. Employees should refer to the Plan
agreement for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan established by Caterpillar Inc. (the
Company) to enable eligible employees of the Company and its subsidiaries (the
employers) which adopt the Plan to accumulate funds.
Participation
Employees under collective bargaining agreements to which the Plan is extended
who meet certain age, service and citizenship or residency requirements are
eligible to participate in the Plan. Participation commences upon an eligible
employee's filing of an application with the Company. Participating eligible
employees (the participants) elect to defer a portion of their compensation
until retirement.
Participant accounts
Accounts are maintained separately for each participant. The participant's
separate account is credited with the participant's contribution as defined
below and an allocation of Plan earnings. Allocations of earnings are based on
participant account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's account.
Loan provisions
The Plan provides for participant loans against eligible participants' separate
account balances. Eligible employees obtain participant loans by filing a loan
application with the Company and receiving approval thereof. Loan amounts are
generally limited to the lesser of $50,000 or 50% of the individual
participant's account balance, within certain regulatory restrictions. Loan
repayment terms may range from 6 to 117 months depending on the type of loan and
bear interest at the prime interest rate plus 1% rounded to the nearest whole
percent. Repayments, including interest, are made through after-tax payroll
deductions and are credited to the individual participant's account balance.
Loan transactions are treated as a transfer to (from) the investment fund (from)
to the Loan Fund.
Contributions
Participant contributions are made through a pretax compensation deferral as
elected by the participants and are contributed to the Plan by the employer.
During 1998, the compensation deferral was limited to (a) the greater of $6,000
or 4% of the participant's compensation (limited by the Internal Revenue Code to
$10,000 in 1998) for participants earning in excess of $80,000 or (b) $10,000
for participants earning less than $80,000.
During 1997, the compensation deferral was limited to (a) the greater of $5,000
or 4% of the participant's compensation (limited by the Internal Revenue Code to
$9,500 in 1997) for participants earning in excess of $75,000 or (b) $9,500 for
participants earning less than $75,000.
-6-
<PAGE>
Investment programs
Participants may elect to have their contributions invested in any combination
of the funds shown on the accompanying statements of changes in net assets
available for plan benefits with fund information, including a self-directed
fund option which allows participants to invest in various other mutual funds
outside of the Preferred Group of Mutual Funds. Contributions to and
withdrawals from this self-directed fund occur through transfers to/from other
elected funds. State Street Bank serves as custodian for funds invested through
this self-directed fund option.
Interfund transfers
Transfers of assets between investment funds are recorded on a net basis in the
statement of changes in net assets available for plan benefits with fund
information.
Vesting, distribution and plan termination
Participants are fully vested in their participant contributions. Upon
termination of employment for any reason, including death, retirement or total
and permanent disability, or upon Plan termination, the balance or balances in
participants' accounts are distributable.
Administration
The Plan is administered by the Vice President - Human Services Division of
Caterpillar Inc., and the Benefits Funds Committee of Caterpillar Inc. is
responsible for financial aspects of the Plan. Caterpillar Inc. and the Benefit
Funds Committee have entered into a trust agreement with The Northern Trust
Company to receive contributions, administer the assets of the Plan and
distribute withdrawals pursuant to the Plan.
Federal income tax status
The Internal Revenue Service has determined and informed the Company by letter
in February 1988, that the Plan and related trust are designed in accordance
with applicable sections of the Internal Revenue Code (IRC). The Plan has been
amended subsequent to the amendments covered by the determination letter;
however, the Plan administrator and the Plan's legal counsel believe that the
Plan is designed and is currently being operated in compliance with the
applicable requirements of the IRC.
NOTE 2 - SUMMARY OF SIGNIFICANT
- -------------------------------
ACCOUNTING POLICIES:
-------------------
Basis of accounting
The Plan's accounts are maintained on the accrual basis of accounting.
Investments
The fair value of the Plan's investment in the 401(k) Master Trust (Note 4) is
based upon the beginning of the year value of the Plan's investment plus actual
contributions, transfers and allocated investment income less actual
withdrawals. Shares of registered investment companies included in the self-
directed fund option are valued at quoted market prices which represent the net
asset value of shares held by the Plan at year end. Income from investments is
recorded as earned.
Administrative expenses
Administrative costs, including trustee fees and certain investment costs, are
paid by the Company.
-7-
<PAGE>
Use of estimates in the preparation
of financial statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, income and benefit payments.
Actual results could differ from those estimates. The Company believes the
techniques and assumptions used in establishing these amounts are appropriate.
NOTE 3 - UNIT VALUES:
- --------------------
The Plan assigns units to participants directing investments to the Caterpillar
Common Stock Fund. The unit values assigned by the Plan reflect the current
values of the individual fund. Total units held (in thousands) by the Plan and
their respective unit values at each month end are as follows:
<TABLE>
<CAPTION>
Units Unit value Units Unit value
----- ---------- ----- ----------
<S> <C> <C> <C> <C> <C>
January 1,154 33.62 July 1,221 34.00
February 1,145 38.04 August 1,214 29.78
March 1,143 38.36 September 1,198 31.33
April 1,139 39.63 October 1,183 31.63
May 1,136 38.30 November 1,095 34.54
June 1,201 36.92 December 1,177 32.29
</TABLE>
NOTE 4 - MASTER TRUST:
- ---------------------
Under a Master Trust agreement with The Northern Trust Company (the Trustee),
Part 2 of the Caterpillar Inc. Employees' Investment Plan (EIP 2), the Solar
Turbines Incorporated Savings and Investment Plan and the Caterpillar Inc. Tax
Deferred Savings Plan pool their investments in the Caterpillar Inc. 401(k)
Master Trust (the Master Trust) in exchange for a percentage of participation in
the Master Trust.
The Master Trust invests in the Preferred Group of Mutual Funds, registered
investment companies which are sponsored by Caterpillar Investment Management
Ltd. (CIML), a wholly-owned subsidiary of the Company. The options available to
the participants through the Preferred Group of Mutual Funds are comprised of
the following:
Preferred Stable Principal Fund
Preferred Short-term Government Fund Preferred Value Fund
Preferred Growth Fund Preferred Fixed Income Fund
Preferred Money Market Fund Preferred International Fund
Preferred Asset Allocation Fund Preferred Small Cap Fund
CIML manages the Preferred Small Cap Fund and the Preferred Short-Term
Government Fund; however, during the period November 1, 1997 through March 31,
1998, the Preferred Short-Term Government Fund was managed by an unrelated third
party. All other funds are managed by unrelated investment managers. Caterpillar
Securities, Inc., a wholly-owned subsidiary of CIML, distributes the shares of
the mutual funds to the Master Trust.
-8-
<PAGE>
The percentage of the Plan's participation in the Master Trust was determined
based on the December 31, 1998 and 1997 market values of net assets, as
accumulated by the Trustee for the investment funds of each plan. At December
31, 1998 and 1997, the Plan's pro rata interest in the quoted market values of
net assets of each of the funds of the Master Trust was as follows:
<TABLE>
<CAPTION>
1998 1997
----- -----
<S> <C> <C>
Caterpillar Inc. Common Stock Fund 10.64% 11.64%
Preferred Stable Principal Fund 25.88% 27.08%
Preferred Short-Term Government Fund 19.86% 20.63%
Preferred Money Market Fund 11.79% 12.44%
Preferred Value Fund 16.46% 16.98%
Preferred International Fund 13.95% 14.03%
Preferred Growth Fund 16.81% 17.21%
Preferred Asset Allocation Fund 12.41% 13.38%
Preferred Fixed Income Fund 12.38% 12.43%
Preferred Small Cap Fund 13.00% 11.96%
Loan Fund 22.63% 24.94%
</TABLE>
Investment valuation
The Master Trust's investments are stated at fair value. Common stock and cash
and cash equivalents are valued at quoted market prices. Shares of registered
investment companies are valued at quoted market prices which represent the net
asset value of shares held by the Master Trust at year end. Participant loans
are valued at cost which approximates fair value.
The net investment income or loss of the Master Trust is reflected in the
financial statements of the Plan based on the actual earnings of each investment
fund as allocated to the Plan based on average investment balances throughout
the year. Refer to pages 10 through 13 for analyses of the net assets and
changes in net assets of the Master Trust as of December 31, 1998 and 1997.
-9-
<PAGE>
CATERPILLAR INC. - TAX DEFERRED SAVINGS PLAN
--------------------------------------------
NOTE 4 - MASTER TRUST - SUMMARY OF NET ASSETS
---------------------------------------------
DECEMBER 31, 1998
-----------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Preferred Group of Mutual Funds
---------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Asset
Fund Fund Government Market Value International Growth Allocation
---- ---- ---------- ------ ----- ------------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair
value:
Cash and cash equivalents $ 12,191 $ $ $ $ $ $ $
Common stock 343,517
Registered investment
companies 106,280 18,597 86,354 274,488 88,528 366,575 94,532
Participant loans
-------- -------- ------- ------- -------- ------- -------- -------
Total investments 355,708 106,280 18,597 86,354 274,488 88,528 366,575 94,532
Dividend and interest
receivable 93
Transfers receivable
from EIP 1 2,472 53
Contributions receivable 957 427 82 357 1,347 640 1,770 477
Interfund transfers
receivable/(payable), net (2,111) 206 7 2,438 (204) (194) (831) 235
Other
receivable/(payable),
net 279 108 15 50 181 64 233 41
-------- -------- ------- ------- -------- ------- -------- -------
Net assets $357,398 $107,021 $18,701 $89,252 $275,812 $89,038 $367,747 $95,285
======== ======== ======= ======= ======== ======= ======== =======
<CAPTION>
----------------
Fixed Small Loan
Income Cap Fund Total
------- ------- -------- ----------
<S> <C> <C> <C> <C>
Investments, at fair
value:
Cash and cash equivalents $ $ $ $ 12,191
Common stock 343,517
Registered investment
companies 39,316 41,046 1,115,716
Participant loans 24,686 24,686
------- ------- ------- ----------
Total investments 39,316 41,046 24,686 1,496,110
Dividend and interest
receivable 93
Transfers receivable
from EIP 1 2,525
Contributions receivable 188 403 6,648
Interfund transfers
receivable/(payable), net 122 332
Other receivable/(payable),
net 20 36 (768) 259
------- ------- ------- ----------
Net assets $39,646 $41,817 $23,918 $1,505,635
======= ======= ======= ==========
</TABLE>
-10-
<PAGE>
CATERPILLAR INC. - TAX DEFERRED SAVINGS PLAN
--------------------------------------------
NOTE 4 - MASTER TRUST - SUMMARY OF NET ASSETS
---------------------------------------------
DECEMBER 31, 1997
-----------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Preferred Group of Mutual Funds
-------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Asset
Fund Fund Government Market Value International Growth Allocation
----------- ---------- ---------- ------- -------- -------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair
value:
Cash and cash equivalents $ 14,088 $ $ $ $ $ $ $
Common stock 321,300
Registered investment
companies 95,451 14,293 61,952 239,793 82,881 257,136 58,253
Participant loans
-------- ------- ------- ------- -------- ------- -------- -------
Total investments 335,388 95,451 14,293 61,952 239,793 82,881 257,136 58,253
Dividend and interest
receivable 70
Transfers receivable
from EIP 1 2,417 6
Contributions receivable 980 453 80 330 1,271 669 1,637 405
Interfund transfer
receivable/(payable), net 32 (28) 526 124 (894) 382 10
Other
receivable/(payable),
net 164 117 14 95 167 104 253 40
-------- ------- ------- ------- -------- ------- -------- -------
Net assets $339,051 $95,993 $14,387 $62,909 $241,355 $82,760 $259,408 $58,708
======== ======= ======= ======= ======== ======= ======== =======
<CAPTION>
----------------
Fixed Small Loan
Income Cap Fund Total
------ --- ---- -----
<S> <C> <C> <C> <C>
Investments, at fair
value:
Cash and cash equivalents $ $ $ $ 14,088
Common stock 321,300
Registered investment
companies 23,844 42,626 876,229
Participant loans 23,247 23,247
------- ------- ------- ----------
Total investments 23,844 42,626 23,247 1,234,864
Dividend and interest
receivable 70
Transfers receivable
from EIP 1 2,423
Contributions receivable 138 364 6,327
Interfund transfer
receivable/(payable), net (190) 38
Other receivable/(payable),
net 17 33 (836) 168
------- ------- ------- ----------
Net assets $23,809 $43,061 $22,411 $1,243,852
======= ======= ======= ==========
</TABLE>
-11-
<PAGE>
CATERPILLAR INC. - TAX DEFERRED SAVINGS PLAN
--------------------------------------------
NOTE 4 - MASTER TRUST - SUMMARY OF CHANGES IN NET ASSETS
--------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Preferred Group of Mutual Funds
-------------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Asset
Fund Fund Government Market Value International Growth Allocation
---- ---- ---------- ------ ----- ------------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:-
Interest $ 865 $ $ $ $ $ $ $
Dividends 7,756
Net appreciation in fair
value of:
Common stock (15,546)
Registered investment
companies 6,343 738 4,274 33,788 8,120 94,275 18,152
-------- -------- ------- -------- -------- ------- -------- -------
Net investment income (6,925) 6,343 738 4,274 33,788 8,120 94,275 18,152
-------- -------- ------- -------- -------- ------- -------- -------
Contributions to all plans 12,855 5,414 1,057 4,529 20,052 8,626 24,423 8,296
-------- -------- ------- -------- -------- ------- -------- -------
Withdrawals from all plans (18,357) (8,772) (1,053) (15,186) (11,440) (3,439) (10,403) (3,516)
-------- -------- ------- -------- -------- ------- -------- -------
Transfers from EIP 1 82,952 1,191
-------- -------- ------- -------- -------- ------- -------- -------
Interfund transfers, net (52,178) 8,043 3,572 31,535 (7,943) (7,029) 44 13,645
-------- -------- ------- -------- -------- ------- -------- -------
Increase (decrease) in net
assets 18,347 11,028 4,314 26,343 34,457 6,278 108,339 36,577
Net assets:
Beginning of year 339,051 95,993 14,387 62,909 241,355 82,760 259,408 58,708
-------- -------- ------- -------- -------- ------- -------- -------
End of year $357,398 $107,021 $18,701 $ 89,252 $275,812 $89,038 $367,747 $95,285
======== ======== ======= ======== ======== ======= ======== =======
<CAPTION>
-----------------
Fixed Small Loan
Income Cap Fund Total
------ ----- ---- -----
<S> <C> <C> <C> <C>
Investment income:-
Interest $ $ $ 2,081 $ 2,946
Dividends 7,756
Net appreciation in fair
value of:
Common stock (15,546)
Registered investment
companies 2,013 (2,180) 165,523
------- -------- ------- ----------
Net investment income 2,013 (2,180) 2,081 160,679
------- -------- ------- ----------
Contributions to all plans 3,001 6,590 94,843
------- -------- ------- ----------
Withdrawals from all plans (1,911) (1,709) (659) (76,445)
------- -------- ------- ----------
Transfers from EIP 1 84,143
------- -------- ------- ----------
Interfund transfers, net 12,734 (3,945) 85 (1,437)
------- -------- ------- ----------
Increase (decrease) in net
assets 15,837 (1,244) 1,507 261,783
Net assets:
Beginning of year 23,809 43,061 22,411 1,243,852
------- -------- ------- ----------
End of year $39,646 $ 41,817 $23,918 $1,505,635
======= ======== ======= ==========
</TABLE>
-12-
<PAGE>
CATERPILLAR INC. - TAX DEFERRED SAVINGS PLAN
--------------------------------------------
NOTE 4 - MASTER TRUST - SUMMARY OF CHANGES IN NET ASSETS
--------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Preferred Group of Mutual Funds
--------------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Asset
Fund Fund Government Market Value International Growth Allocation
------------ ---------- ----------- --------- --------- -------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:-
Interest $ 813 $ $ $ $ $ $ $
Dividends 4,760
Net appreciation in fair
value of:
Common stock 45,824
Registered investment
companies 6,253 866 4,021 53,130 6,865 62,329 10,267
-------- -------- ------- -------- -------- -------- -------- -------
Net investment income 51,397 6,253 866 4,021 53,130 6,865 62,329 10,267
-------- -------- ------- -------- -------- -------- -------- -------
Contributions to all plans 9,320 5,347 884 4,431 14,573 8,309 18,272 4,716
-------- -------- ------- -------- -------- -------- -------- -------
Withdrawals from all plans (12,273) (5,285) (505) (10,252) (6,680) (2,485) (6,999) (2,125)
-------- -------- ------- -------- -------- -------- -------- -------
Transfers from EIP 1 53,246 589
-------- -------- ------- -------- -------- -------- -------- -------
Interfund transfers, net 49,610 (14,765) (1,477) (21,328) (3,730) (15,748) (9,814) (1,778)
-------- -------- ------- -------- -------- -------- -------- -------
Increase (decrease) in net
assets 151,300 (8,450) (232) (22,539) 57,293 (3,059) 63,788 11,080
Net assets:
Beginning of year 187,751 104,443 14,619 85,448 184,062 85,819 195,620 47,628
-------- -------- ------- -------- -------- -------- -------- -------
End of year $339,051 $ 95,993 $14,387 $ 62,909 $241,355 $ 82,760 $259,408 $58,708
======== ======== ======= ======== ======== ======== ======== =======
<CAPTION>
-------------------
Fixed Small Loan
Income Cap Fund Total
-------- -------- -------- -----------
<S> <C> <C> <C> <C>
Investment income:-
Interest $ $ $ 1,887 $ 2,700
Dividends 4,760
Net appreciation in fair
value of:
Common stock 45,824
Registered investment
companies 1,757 6,494 151,982
------- ------- ------- ----------
Net investment income 1,757 6,494 1,887 205,266
------- ------- ------- ----------
Contributions to all plans 1,726 3,157 70,735
------- ------- ------- ----------
Withdrawals from all plans (1,019) (523) (503) (48,649)
------- ------- ------- ----------
Transfers from EIP 1 53,835
------- ------- ------- ----------
Interfund transfers, net (935) 15,561 968 (3,436)
------- ------- ------- ----------
Increase (decrease) in net
assets 1,529 24,689 2,352 277,751
Net assets:
Beginning of year 22,280 18,372 20,059 966,101
------- ------- ------- ----------
End of year $23,809 $43,061 $22,411 $1,243,852
======= ======= ======= ==========
</TABLE>
-13-
<PAGE>
ADDITIONAL INFORMATION
----------------------
<PAGE>
SCHEDULE I
-----------
CATERPILLAR INC.
----------------
TAX DEFERRED SAVINGS PLAN
-------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
DECEMBER 31, 1998
-----------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Identity of issue, Description of investment, including
borrower, lessor maturity date, rate of interest, Current
or similar party collateral, par or maturity value Cost Value
----------------- --------------------------------- ----- -----
<S> <C> <C> <C> <C>
* Caterpillar Inc. 401(k) Master Trust $ $227,140,000
============ ============
Acorn International; 90.79 units $ $ 1,890
American Century Benham Target Mat TR20 20; 19.99 units 720
Income & Growth; 497.78 units 14,560
Global Natural Resource; 580.59 units 6,143
Utilities; 78.12 units 1,247
20/th/ Century Select; 26.80 units 1,270
20/th/ Century Vista; 423.30 units 4,508
Rushmore American Gas Index; 124.04 units 2,230
Baron Asset; 392.45 units 19,834
Growth & Inc; 189.37 units 4,710
Small Cap FD; 993.05 units 10,467
Brinson US equity; 122.55 units 2,393
Columbia Real Estate Equity; 54.79 units 865
Dreyfus Asset Allocation Fund; 374.97 units 5,058
Small Company Value Fund; 163.99 units 3,239
FBR Small Cap Financial Fund; 113.75 units 1,619
Financial Services Fund; 109.85 units 1,825
Fidelity Worldwide; 249.01 units 4,116
Small Cap Stock; 48.43 units 431
Equity Income II; 276.18 units 8,288
Asset Manager; 304.59 units 5,297
Utilities; 105.07 units 2,435
Fund; 155.36 units 5,700
Government Securities; 1,057.15 units 10,719
Dividend Growth; 236.92 units 6,807
Select Technology; 42.66 units 3,364
Energy Service; 1,289.49 units 18,659
Health Care; 18.26 units 2,497
Utilities Growth; 186.06 units 11,339
Insurance; 49.28 units 2,134
Regional Banks; 34.10 units 1,462
Medical Delivery; 86.58 units 2,022
Retailing; 42.34 units 2,745
Telecomm; 48.56 units 2,931
Electronics; 104.44 units 4,863
Computers; 59.34 units 4,018
Fidelity Value; 156.23 units 7,241
Firsthand Medical Specialists; 481.45 units 4,400
Technology Leaders; 606.70 units 10,848
Technology Innovator; 24.39 units 382
Fremont US Micro Capital; 33.88 units 707
Gabelli Westwood Mighty Mites FD; 25.16 units 273
Guiness Flight China & Hong Kong; 635.80 units 6,848
Wired Index; 17.73 units 249
Oakmark Fund; 390.61 units 13,992
Select; 186.08 units 3,636
Hotchkis & Wiley International; 274.92 units 6,400
The Internet Fund; 41.05 units 645
Invesco Strategic Health Sciences; 92.85 units 5,668
Financial Services; 181.34 units 5,292
</TABLE>
(Continued)
-14-
<PAGE>
SCHEDULE I
----------
CATERPILLAR INC.
----------------
TAX DEFERRED SAVINGS PLAN
-------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
DECEMBER 31, 1998
-----------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Identity of issue, Description of investment, including
borrower, lessor maturity date, rate of interest, Current
or similar party collateral, par or maturity value Cost Value
---------------- --------------------------------- ---- ------
<S> <C> <C> <C> <C>
Janus Fund; 248.59 units $ $ 8,365
Inv't Growth & Income; 169.89 units 4,944
Inv't Worldwide; 2,681.43 units 126,992
Inv't Twenty; 136.41 units 7,271
Special Situations; 87.79 units 1,528
Olympus; 74.86 units 2,065
High Yield Bond; 0.30 units 3
Inv't Overseas; 512.08 units 10,283
Inv't Mercury; 1,137.46 units 27,424
Lexington Troika Dialog Russia Income; 242.25 units 640
Longleaf Partners; 21.34 units 520
Realty; 24.45 units 356
Midas Fund; 4,037.35 units 6,096
Montgomery Asset Allocation; 462.58 units 6,966
Growth; 42.79 units 882
Emerging Asia; 267.06 units 2,118
Mutual Series Beacon Class Z; 1,601.36 units 21,010
Neuberger & Berman Genesis Trust; 898.23 units 18,270
Partners Trust Inc; 449.11 units 8,115
Millennium Trust; 21.70 units 293
PBHG Growth; 246.22 units 6,288
Tech & Communications; 336.76 units 7,223
T Rowe Price Health Sciences; 878.77 units 14,069
Robertson Stephens Value Plus & Growth; 308.27 units 7,990
T Rowe Price Dividend Growth; 486.07 units 10,698
Equity Income; 1,506.38 units 39,648
Mid Cap Growth; 121.99 units 4,158
New Era; 448.37 units 8,869
European Stock; 1,091.92 units 23,771
Int'l New Asia; 3,454.23 units 17,306
Royce Total Return; 182.68 units 1,381
SSGA Small Cap Equity; 47.52 units 922
Money Market; 249,560.00 units 249,560
Safeco Growth; 142.94 units 3,245
State ST Research Aurora Class A; 94.76 units 1,576
Strong Corporate Bond Income; 1,725.99 units 19,417
American Utilities; 220.56 units 3,708
Growth & Income; 159.22 units 3,450
Limited Resources; 327.16 units 2,349
Common stock; 121.12 units 2,551
UAM FMA Small Company Portfolio; 30.00 units 464
US World Gold; 297.13 units 2,787
Vanguard US Growth Portfolio; 285.57 units 10,706
Int'l Growth Portfolio; 518.24 units 9,727
Prime Cap; 118.46 units 5,646
Wellesley Income; 656.15 units 14,514
GNMA Fixed Income Securities; 6,392.65 units 66,803
Short Term Treasury; 1,037.51 units 10,759
Fixed Income Inter Term Co; 1,460.91 units 14,653
Preferred Stock; 465.96 units 4,753
Index Trust S&P 500 Port; 361.48 units 41,191
Total Stock Market; 2,603.08 units 71,376
Growth Index; 3,994.33 units 126,500
Warburg Pincus Global Telecom; 9.86 units 283
----------
$1,311,468
==========
</TABLE>
-15-
<PAGE>
SCHEDULE II
-----------
CATERPILLAR INC.
----------------
TAX DEFERRED SAVINGS PLAN
-------------------------
ITEM 27d - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS
---------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f) (g)
Expense
incurred
Identity of Purchase Selling Lease with Cost
party involved Description of Assets Price Price Rental transaction of asset
-------------- --------------------- ----- ----- ------ ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Janus Inv't Worldwide:
Purchase $ 70,737 $ $ $ $ 70,737
Sale 28,782
Oakmark Select Fund:
Purchase 13,139 13,139
Sale 65,741
SSGA Money Market Fund:
Purchase 759,015 759,015
Sale 688,546
UAM FMA Small Company Portfolio:
Purchase 44,003 44,003
Sale 37,125
Vanguard Growth and Income:
Purchase 59,893 59,893
Sale 61,110
Index Trust - S&P 500 Portfolio:
Purchase 56,070 56,070
Sale 98,822
Vanguard/Windsor II Fund:
Sale 71,534
Growth Index:
Purchase 89,300 89,300
<CAPTION>
(a) (b) (h) (i)
Current
value
Of asset on
Identity of Transaction Net gain
party involved Description of Assets date or (loss)
-------------- --------------------- ---- --------
<S> <C> <C> <C>
Janus Inv't Worldwide:
Purchase $ 70,737 $
Sale 28,782
Oakmark Select Fund:
Purchase 13,139
Sale 65,741
SSGA Money Market Fund:
Purchase 759,015
Sale 688,546
UAM FMA Small Company Portfolio:
Purchase 44,003
Sale 37,125
Vanguard Growth and Income:
Purchase 59,893
Sale 61,110
Index Trust - S&P 500 Portfolio:
Purchase 56,070
Sale 98,822
Vanguard/Windsor II Fund:
Sale 71,534
Growth Index:
Purchase 89,300
</TABLE>
-16-
<PAGE>
EXHIBIT C
---------
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-8003) of Caterpillar Inc. of our report dated May
26, 1999 relating to the financial statements of the Caterpillar Inc. Tax
Deferred Savings Plan, which appears in this Form 11-K.
/s/PricewaterhouseCoopers LLP
Peoria, Illinois
May 26, 1999
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For the Fiscal Year Ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
For the transition period from _____ to _____
Commission File Number 1-768
SAVINGS AND INVESTMENT PLAN
(Full title of the Plan)
CATERPILLAR INC.
(Name of issuer of the securities held
pursuant to the Plan)
100 NE ADAMS STREET, PEORIA, ILLINOIS 61629
(Address of principal executive offices)
<PAGE>
REQUIRED INFORMATION
Item 1.
The audited statement of net assets available for plan benefits as of the end of
the latest two fiscal years of the Plan is attached hereto as Exhibit A.
Item 2.
The audited statement of changes in net assets available for plan benefits for
each of the latest two fiscal years of the Plan is attached hereto as Exhibit B.
Item 3.
The statements required by Items 1 and 2 have been prepared in accordance with
the applicable financial reporting requirements of ERISA.
Item 4.
The Consent of Independent Accountants is attached hereto as Exhibit C.
<PAGE>
Solar Turbines Incorporated
Savings and Investment Plan
Financial Statements and Additional Information
December 31, 1998 and 1997
<PAGE>
Report of Independent Accountants
To the Participants and Plan Administrator of the
Solar Turbines Incorporated Savings and Investment Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statements of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Solar Turbines Incorporated Savings and Investment Plan
(the Plan) at December 31, 1998 and 1997, and the changes in net assets
available for plan benefits for the years ended December 31, 1998 and 1997, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Plan's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and of reportable (5%) transactions are presented
for the purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974 (ERISA). The fund
information in the statements of net assets available for plan benefits and the
statements of changes in net assets available for plan benefits is presented for
purposes of additional analysis rather than to present the net assets available
for plan benefits and changes in net assets available for plan benefits of each
fund. These supplemental schedules and fund information are the responsibility
of the Plan's management. The supplemental schedules and fund information have
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
The schedules of assets held for investment purposes and of reportable (5%)
transactions that accompany the Plan's financial statements do not disclose the
historical cost of certain plan assets, and certain related sales transactions,
held by a Plan custodian. Disclosure of this information is required by ERISA.
/s/PricewaterhouseCoopers LLP
Peoria, Illinois
May 26, 1999
<PAGE>
Exhibit A
---------
SOLAR TURBINES INCORPORATED
---------------------------
SAVINGS AND INVESTMENT PLAN
---------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
-------------------------------------------------------------------------
DECEMBER 31, 1998
-----------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Fund Information
---------------------------------------------------------------------------------------------------
Preferred Group of Mutual Funds
-------------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Inter- Asset Fixed Small
Fund Fund Government Market Value national Growth Allocation Income Cap
---- ---- ---------- ------ ----- -------- ------ ---------- ------ ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value
(Notes 2 and 4):
Registered investment
companies $ $ $ $ $ $ $ $ $ $
Investments in Master
Trust
Net Assets 8,620 2,605 436 1,680 3,656 1,035 5,907 722 242 307
------ ------ ------- ------ ------- ------ ------ ------ ----- -----
Total net assets $8,620 $2,605 $ 436 $1,680 $3,656 $1,035 $5,907 $ 722 $ 242 $ 307
====== ====== ====== ====== ====== ====== ====== ====== ===== =====
<CAPTION>
-------------------
Self-
Loan Directed
Fund Fund Total
------ ---- -----
<S> <C> <C> <C>
Investments, at fair value
(Notes 2 and 4):
Registered investment
companies $ $447 $ 447
Investments in Master
Trust
Net Assets 2,063 27,273
------ ---- -------
Total net assets $2,063 $447 $27,720
====== ==== =======
</TABLE>
(See notes to financial statements)
-2-
<PAGE>
Exhibit A
---------
SOLAR TURBINES INCORPORATED
---------------------------
SAVINGS AND INVESTMENT PLAN
---------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
-------------------------------------------------------------------------
DECEMBER 31, 1997
-----------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Fund Information
-------------------------------------------------------------------------------------------------
Preferred Group of Mutual Funds
----------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Inter- Asset Fixed
Fund Fund Government Market Value national Growth Allocation Income
---- ---- ---------- ------ ------ -------- ------ ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value
(Notes 2 and 4):
Registered investment
companies $ $ $ $ $ $ $ $ $
Investments in Master
Trust
Net Assets 7,378 2,669 399 1,339 3,300 936 4,336 468 159
-------- ------- ------ ------ ------ ------ ----- ------- -----
Total net assets $ 7,378 $ 2,669 $ 399 $1,339 $3,300 $ 936 $4,336 $ 468 $ 159
======== ======= ====== ====== ====== ====== ====== ======= =====
<CAPTION>
------------------------------
--------
Self-
Small Loan Directed
Cap Fund Fund Total
--- ---- ---- -----
<S> <C> <C> <C> <C>
Investments, at fair value
(Notes 2 and 4):
Registered investment
companies $ $ $ 84 $ 84
Investments in Master
Trust
Net Assets 253 1,609 22,846
------ ------ ----- --------
Total net assets $ 253 $1,609 $ 84 $22,930
====== ====== ===== ========
</TABLE>
(See notes to financial statements)
-3-
<PAGE>
Exhibit B
---------
SOLAR TURBINES INCORPORATED
---------------------------
SAVINGS AND INVESTMENT PLAN
---------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
------------------------------------------------------------------------
INFORMATION
-----------
DECEMBER 31, 1998
-----------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Fund Information
--------------------------------------------------------------------------------------------------
Preferred Group of Mutual Funds
------------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Inter- Asset Fixed
Fund Fund Government Market Value national Growth Allocation Income
------------ ---------- ----------- ------- ------- --------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Participant contributions $1,659 $ 257 $ 48 $ 274 $ 492 $ 185 $ 726 $101 $ 30
------ ------ ---- ------ ------ ------ ------ ---- ----
Investment income:
Net appreciation in fair
value of registered
investment companies
Plan interest in net
investment gain of Master
Trust (Note 4) 44 163 18 84 463 89 1,537 138 11
------ ------ ---- ------ ------ ------ ------ ---- ----
Withdrawals (449) (330) (30) (104) (85) (22) (196) (9)
Transfers (to)/from other
plans, net (108) (49) 3 (35) (77) (26) (208) (50) (35)
Interfund transfers, net 96 (105) (2) 122 (437) (127) (288) 74 77
------ ------ ---- ------ ------ ------ ------ ---- ----
Withdrawals and
transfers, net (461) (484) (29) (17) (599) (175) (692) 15 42
------ ------ ---- ------ ------ ------ ------ ---- ----
Increase (decrease) in net
assets 1,242 (64) 37 341 356 99 1,571 254 83
Net assets:
Beginning of year 7,378 2,669 399 1,339 3,300 936 4,336 468 159
------ ------ ---- ------ ------ ------ ------ ---- ----
End of year $8,620 $2,605 $436 $1,680 $3,656 $1,035 $5,907 $722 $242
====== ====== ==== ====== ====== ====== ====== ==== ====
<CAPTION>
-------------------------------
---------
Self-
Small Loan Directed
Cap Fund Fund Total
--------- ------- ---- --------
<S> <C> <C> <C> <C>
Participant contributions $119 $ $ $ 3,891
---- ------ ---- -------
Investment income:
Net appreciation in fair
value of registered
investment companies 19 19
Plan interest in net
investment gain of Master
Trust (Note 4) (22) 168 2,693
---- ------ ---- -------
Withdrawals (9) (15) (1,249)
Transfers (to)/from other
plans, net (8) (55) 84 (564)
Interfund transfers, net (26) 356 260
---- ------ ---- -------
Withdrawals and
transfers, net (43) 286 344 (1,813)
---- ------ ---- -------
Increase (decrease) in net
assets 54 454 363 4,790
Net assets:
Beginning of year 253 1,609 84 22,930
---- ------ ---- -------
End of year $307 $2,063 $447 $27,720
==== ====== ==== =======
</TABLE>
(See notes to financial statements)
-4-
<PAGE>
Exhibit B
---------
SOLAR TURBINES INCORPORATED
---------------------------
SAVINGS AND INVESTMENT PLAN
---------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
------------------------------------------------------------------------
INFORMATION
-----------
DECEMBER 31, 1997
-----------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Fund Information
----------------------------------------------------------------------------------------------
Preferred Group of Mutual Funds
---------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Inter- Asset Fixed
Fund Fund Government Market Value national Growth Allocation Income
----------- ---------- ----------- ------- ------- -------- ------ ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Participant contributions $ 938 $ 297 $ 44 $ 247 $ 425 $ 187 $ 587 $ 90 $ 32
------ ------ ----- ------ ------ ----- ------ ----- -----
Investment income:
Net appreciation in fair
value of registered
investment companies
Plan interest in net
investment gain of
Master Trust (Note 4) 1,105 177 25 80 734 66 1,014 91 16
------ ------ ----- ------ ------ ----- ------ ----- -----
Withdrawals (158) (128) (49) (58) (187) (23) (227) (50) (38)
Transfers (to)/from other
plans, net (131) 16 (4) (52) 94 (1) (19) (4)
Interfund transfers, net 1,628 (631) (60) (595) (280) (189) (220) (79) (68)
------ ------ ----- ------ ------ ----- ------ ----- -----
Withdrawals and
transfers, net 1,339 (743) (113) (705) (373) (213) (466) (133) (106)
------ ------ ----- ------ ------ ----- ------ ----- -----
Increase (decrease) in net
assets 3,382 (269) (44) (378) 786 40 1,135 48 (58)
Net assets:
Beginning of year 3,996 2,938 443 1,717 2,514 896 3,201 420 217
------ ------ ----- ------ ------ ----- ------ ----- -----
End of year $7,378 $2,669 $ 399 $1,339 $3,300 $ 936 $4,336 $ 468 $ 159
====== ====== ===== ====== ====== ===== ====== ===== =====
<CAPTION>
-----------------------------
------
Self-
Small Loan Directed
Cap Fund Fund Total
------ ------ -------- ---------
<S> <C> <C> <C> <C>
Participant contributions $ 51 $ $ $ 2,898
---- ------ ---- -------
Investment income:
Net appreciation in fair
value of registered
investment companies 2 2
Plan interest in net
investment gain of
Master Trust (Note 4) 35 117 3,460
---- ------ ---- -------
Withdrawals (1) (36) (955)
Transfers (to)/from other
plans, net 1 (13) (8) (121)
Interfund transfers, net 37 398 59
---- ------ ---- -------
Withdrawals and
transfers, net 37 349 51 (1,076)
---- ------ ---- -------
Increase (decrease) in net
assets 123 466 53 5,284
Net assets:
Beginning of year 130 1,143 31 17,646
---- ------ ---- -------
End of year $253 $1,609 $84 $22,930
==== ====== ==== =======
</TABLE>
(See notes to financial statements)
-5-
<PAGE>
SOLAR TURBINES INCORPORATED
---------------------------
SAVINGS AND INVESTMENT PLAN
---------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1 - PLAN DESCRIPTION:
- -------------------------
The following description of the Solar Turbines Incorporated Savings and
Investment Plan (the Plan) provides only general information. Employees should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
General
The Plan is a defined contribution plan established by Solar Turbines
Incorporated (the Company), a 100%-owned subsidiary of Caterpillar Inc., to
enable eligible employees of the Company and its subsidiaries (the employers) to
accumulate funds.
Participation
Hourly employees of the Company who meet certain age, service and citizenship or
residency requirements are eligible to participate in the Plan. Participation
commences upon an eligible employee's filing of an application with the Company.
Participating eligible employees (the participants) may elect to defer a portion
of their compensation until retirement.
Participant accounts
Accounts are maintained separately for each participant. The participant's
separate account is credited with the Participant's contribution as defined
below and an allocation of Plan earnings. Allocations of earnings are based on
participant account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's account.
Loan provisions
The Plan provides for participant loans against eligible participants' separate
account balances. Eligible employees obtain participant loans by filing a loan
application with the Company and receiving approval thereof. Loan amounts are
generally limited to the lesser of $50,000 or 50% of the individual
participant's account balance, within certain regulatory restrictions. Loan
repayment terms may range from 6 to 117 months depending on the type of loan and
bear interest at the prime interest rate plus 1% rounded to the nearest whole
percent. Repayments, including interest, are made through after-tax payroll
deductions and are credited to the individual participant's account balance.
Loan transactions are treated as a transfer to (from) the investment fund (from)
to the Loan Fund.
Contributions
Participant contributions are made through a pretax compensation deferral as
elected by the participants and are contributed to the Plan by the employer.
During 1998, the compensation deferral was limited to (a) the greater of $6,000
or 4% of the participant's compensation (limited by the Internal Revenue Code to
$10,000 in 1998) for participants earning in excess of $80,000 or (b) $10,000
for participants earning less than $80,000.
During 1997, the compensation deferral was limited to (a) the greater of $5,000
or 4% of the participant's compensation (limited by the Internal Revenue Code to
$9,500 in 1997) for participants earning in excess of $75,000 or (b) $9,500 for
participants earning less than $75,000.
-6-
<PAGE>
Investment Programs
Participants may elect to have their contributions invested in any combination
of the funds shown on the accompanying statements of changes in net assets
available for plan benefits with fund information, including a self-directed
fund option which allows participants to invest in various other mutual funds
outside of the Preferred Group of Mutual Funds. Contributions to and
withdrawals from this self-directed fund occur through transfers to/from other
elected funds. State Street Bank serves as custodian for funds invested through
this self-directed fund option.
Interfund transfers
Transfers of assets between investment funds are recorded on a net basis in the
statement of changes in net assets available for plan benefits with fund
information.
Vesting, distribution and plan termination
Participants are fully vested in their participant contributions. Upon
termination of employment for any reason, including death, retirement or total
and permanent disability, or upon Plan termination, the balance or balances in
participants' accounts are distributable.
Administration
The Plan is administered by the Vice President - Human Services Division of
Caterpillar Inc., and the Benefits Funds Committee of Caterpillar Inc. is
responsible for financial aspects of the Plan. Caterpillar Inc. and the Benefit
Funds Committee have entered into a trust agreement with The Northern Trust
Company to receive contributions, administer the assets of the Plan and
distribute withdrawals pursuant to the Plan.
Federal income tax status
The Internal Revenue Service has determined and informed the Company by letter
dated May 30, 1986, that the Plan and related trust are designed in accordance
with applicable sections of the Internal Revenue Code (IRC). The Plan has been
amended subsequent to the amendments covered by the determination letter;
however, the Plan administrator and the Plan's legal counsel believe that the
Plan is designed and is currently being operated in compliance with the
applicable requirements of the IRC.
NOTE 2 - SUMMARY OF SIGNIFICANT
- -------------------------------
ACCOUNTING POLICIES:
-------------------
Basis of accounting
The Plan's accounts are maintained on the accrual basis of accounting.
Investments
The fair value of the Plan's investment in the 401(k) Master Trust (Note 4) is
based upon the beginning of the year value of the Plan's investment plus actual
contributions, transfers and allocated investment income less actual
withdrawals. Shares of registered investment companies included in the self-
directed fund option are valued at quoted market prices which represent the net
asset value of shares held by the Plan at year end. Income from investments is
recorded as earned.
Administrative expenses
Administrative costs, including trustee fees and certain investment costs, are
paid by Caterpillar Inc.
-7-
<PAGE>
Use of estimates in the preparation
of financial statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, income and benefit payments.
Actual results could differ from those estimates. The Company believes the
techniques and assumptions used in establishing these amounts are appropriate.
NOTE 3 - UNIT VALUES:
- --------------------
The Plan assigns units to participants directing investments to the Caterpillar
Common Stock Fund. The unit values assigned by the Plan reflect the current
values of the individual funds. Total units held (in thousands) by the Plan and
their respective unit values at each month end are as follows:
<TABLE>
<CAPTION>
Units Unit value Units Unit value
---------- -------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
January 217 33.62 July 233 34.00
February 214 38.04 August 230 29.78
March 215 38.36 September 229 31.33
April 212 39.63 October 238 31.63
May 212 38.30 November 214 34.54
June 216 36.92 December 267 32.29
</TABLE>
NOTE 4 - MASTER TRUST:
- ---------------------
Under a Master Trust agreement with The Northern Trust Company (the Trustee),
Part 2 of the Caterpillar Inc. Employees' Investment Plan (EIP 2), the Solar
Turbines Incorporated Savings and Investment Plan and the Caterpillar Inc. Tax
Deferred Savings Plan pool their investments in the Caterpillar Inc. 401(k)
Master Trust (the Master Trust) in exchange for a percentage of participation in
the Master Trust.
The Master Trust invests in the Preferred Group of Mutual Funds, registered
investment companies which are sponsored by Caterpillar Investment Management
Ltd. (CIML), a wholly-owned subsidiary of Caterpillar Inc. The options
available to the participants through the Preferred Group of Mutual Funds are
comprised of the following:
Preferred Stable Principal Fund
Preferred Short-term Government Fund Preferred Value Fund
Preferred Growth Fund Preferred Fixed Income Fund
Preferred Money Market Fund Preferred International Fund
Preferred Asset Allocation Fund Preferred Small Cap Fund
CIML manages the Preferred Small Cap Fund and the Preferred Short-term
Government Fund; however, during the period November 1, 1997 through March 31,
1998, the Preferred Short-Term Government Fund was managed by an unrelated third
party. All other funds are managed by unrelated investment managers. Caterpillar
Securities, Inc., a wholly-owned subsidiary of CIML, distributes the shares of
the mutual funds to the Master Trust.
-8-
<PAGE>
The percentage of the Plan's participation in the Master Trust was determined
based on the December 31, 1998 and 1997 market values of net assets, as
accumulated by the Trustee for the investment funds of each plan. At December
31, 1998 and 1997, the Plan's pro rata interest in the quoted market values of
net assets of each of the funds of the Master Trust was as follows:
<TABLE>
<CAPTION>
1998 1997
----- -----
<S> <C> <C>
Caterpillar Inc. Common Stock Fund 2.41% 2.18%
Preferred Stable Principal Fund 2.43% 2.78%
Preferred Short-term Government Fund 2.33% 2.78%
Preferred Money Market Fund 1.88% 2.13%
Preferred Value Fund 1.33% 1.37%
Preferred International Fund 1.16% 1.13%
Preferred Growth Fund 1.61% 1.67%
Preferred Asset Allocation Fund .76% .81%
Preferred Fixed Income Fund .61% .68%
Preferred Small Cap Fund .73% .59%
Loan Fund 8.54% .77%
</TABLE>
Investment valuation
The Master Trust's investments are stated at fair value. Common stock and cash
and cash equivalents are valued at quoted market prices. Shares of registered
investment companies are valued at quoted market prices which represent the net
asset value of shares held by the Master Trust at year end. Participant loans
are valued at cost which approximates fair value.
The net investment income or loss of the Master Trust is reflected in the
financial statements of the Plan based on the actual earnings of each investment
fund as allocated to the Plan based on average investment balances throughout
the year. Refer to pages 10 through 13 for analyses of the net assets and
changes in net assets of the Master Trust as of December 31, 1998 and 1997.
-9-
<PAGE>
SOLAR TURBINES INCORPORATED - SAVINGS AND INVESTMENT PLAN
---------------------------------------------------------
NOTE 4 - MASTER TRUST - SUMMARY OF NET ASSETS
---------------------------------------------
DECEMBER 31, 1998
-----------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Preferred Group of Mutual Funds
-----------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money
Fund Fund Government Market Value International Growth
---- ---- ---------- ------ ----- ------------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value:
Cash and cash equivalents $ 12,191 $ $ $ $ $ $
Common stock 343,517
Registered investment companies 106,280 18,597 86,354 274,488 88,528 366,575
Participant loans
-------- -------- ---------- ------- -------- --------- --------
Total investments 355,708 106,280 18,597 86,354 274,488 88,528 366,575
Dividend and interest receivable 93
Transfers receivable from EIP 1 2,472 53
Contributions receivable 957 427 82 357 1,347 640 1,770
Interfund transfers receivable/(payable), net (2,111) 206 7 2,438 (204) (194) (831)
Other receivable/(payable), net 279 108 15 50 181 64 233
-------- -------- ---------- ------- -------- --------- --------
Net assets $357,398 $107,021 $ 18,701 $89,252 $275,812 $ 89,038 $367,747
======== ======== ========== ======= ======== ========= ========
<CAPTION>
-----------------------------
Asset Fixed Small Loan
Allocation Income Cap Fund Total
---------- ------ ----- ---- -----
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Cash and cash equivalents $ $ $ $ $ 12,191
Common stock 343,517
Registered investment companies 94,532 39,316 41,046 1,115,716
Participant loans 24,686 24,686
---------- ------- ------- -------- ---------
Total investments 94,532 39,316 41,046 24,686 1,496,110
Dividend and interest receivable 93
Transfers receivable from EIP 1 2,525
Contributions receivable 477 188 403 6,648
Interfund transfers receivable/(payable), net 235 122 332
Other receivable/(payable), net 41 20 36 (768) 259
---------- ------- ------- --------- ----------
Net assets $ 95,285 $39,646 $41,817 $ 23,918 $1,505,635
========== ======= ======= ========= ==========
</TABLE>
-10-
<PAGE>
SOLAR TURBINES INCORPORATED - SAVINGS AND INVESTMENT PLAN
---------------------------------------------------------
NOTE 4 - MASTER TRUST - SUMMARY OF NET ASSETS
---------------------------------------------
DECEMBER 31, 1997
-----------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Preferred Group of Mutual Funds
-----------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money
Fund Fund Government Market Value International Growth
--------- ----------- ---------- -------- -------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value:
Cash and cash equivalents $ 14,088 $ $ $ $ $ $
Common stock 321,300
Registered investment companies 95,451 14,293 61,952 239,793 82,881 257,136
Participant loans
--------- ---------- ---------- -------- -------- ------------- ---------
Total investments 335,388 95,451 14,293 61,952 239,793 82,881 257,136
Dividend and interest receivable 70
Transfers receivable from EIP 1 2,417 6
Contributions receivable 980 453 80 330 1,271 669 1,637
Interfund transfer receivable/(payable), net 32 (28) 526 124 (894) 382
Other receivable/(payable), net 164 117 14 95 167 104 253
-------- ---------- --------- ------- -------- ------------- ---------
Net assets $339,051 $ 95,993 $ 14,387 $62,909 $241,355 $ 82,760 $ 259,408
======== ========== ========= ======= ======== ============= =========
<CAPTION>
----------------------------
Asset Fixed Small Loan
Allocation Income Cap Fund Total
---------- ------- -------- ------- ----------
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Cash and cash equivalents $ $ $ $ $ 14,088
Common stock 321,300
Registered investment companies 58,253 23,844 42,626 876,229
Participant loans 23,247 23,247
---------- ------- -------- ------- ----------
58,253 23,844 42,626 23,247 1,234,864
Total investments
Dividend and interest receivable 70
Transfers receivable from EIP 1 2,423
Contributions receivable 405 138 364 6,327
Interfund transfer receivable/(payable), net 10 (190) 38
Other receivable/(payable), net 40 17 33 (836) 168
---------- ------- -------- ------- ----------
$ 58,708 $23,809 $ 43,061 $22,411 $1,243,852
Net assets ========== ======= ======== ======= ==========
</TABLE>
-11-
<PAGE>
SOLAR TURBINES INCORPORATED - SAVINGS AND INVESTMENT PLAN
---------------------------------------------------------
NOTE 4 - MASTER TRUST - SUMMARY OF CHANGES IN NET ASSETS
--------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Preferred Group of Mutual Funds
---------------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Asset
Fund Fund Government Market Value International Growth Allocation
---- ---- ---------- ------ ----- ------------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:-
Interest $ 865 $ $ $ $ $ $ $
Dividends 7,756
Net appreciation in fair
value of:
Common stock ( 15,546)
Registered investment
companies 6,343 738 4,274 33,788 8,120 94,275 18,152
-------- -------- ------- -------- -------- ------- -------- -------
Net investment income (6,925) 6,343 738 4,274 33,788 8,120 94,275 18,152
-------- -------- ------- -------- -------- ------- -------- -------
Contributions to all plans 12,855 5,414 1,057 4,529 20,052 8,626 24,423 8,296
-------- -------- ------- -------- -------- ------- -------- -------
Withdrawals from all plans (18,357) (8,772) (1,053) (15,186) (11,440) (3,439) (10,403) (3,516)
-------- -------- ------- -------- -------- ------- -------- -------
Transfers from EIP 1 82,952 1,191
-------- -------- ------- -------- -------- ------- -------- -------
Interfund transfers, net (52,178) 8,043 3,572 31,535 (7,943) (7,029) 44 13,645
-------- -------- ------- -------- -------- ------- -------- -------
Increase (decrease) in net
assets 18,347 11,028 4,314 26,343 34,457 6,278 108,339 36,577
Net assets:
Beginning of year 339,051 95,993 14,387 62,909 241,355 82,760 259,408 58,708
-------- -------- ------- -------- -------- ------- -------- -------
End of year $ 357,398 $107,021 $18,701 $ 89,252 $275,812 $89,038 $367,747 $95,285
======== ======== ======= ======== ======== ======= ======== =======
<CAPTION>
---------------
Fixed Small Loan
Income Cap Fund Total
------ --- ---- -----
<S> <C> <C> <C> <C>
Investment income:-
Interest $ $ $ 2,081 $ 2,946
Dividends 7,756
Net appreciation in fair
value of:
Common stock (15,546)
Registered investment
companies 2,013 (2,180) 165,523
------- ------- ------- ----------
Net investment income 2,013 (2,180) 2,081 160,679
------- ------- ------- ----------
Contributions to all plans 3,001 6,590 94,843
------- ------- ------- ----------
Withdrawals from all plans (1,911) (1,709) (659) (76,445)
------- ------- ------- ----------
Transfers from EIP 1 84,143
------- ------- ------- ----------
Interfund transfers, net 12,734 (3,945) 85 (1,437)
------- ------- ------- ----------
Increase (decrease) in net
assets 15,837 (1,244) 1,507 261,783
Net assets:
Beginning of year 23,809 43,061 22,411 1,243,852
------- ------- ------- ----------
End of year $39,646 $41,817 $23,918 $1,505,635
======= ======= ======= ==========
</TABLE>
-12-
<PAGE>
SOLAR TURBINES INCORPORATED - SAVINGS AND INVESTMENT PLAN
---------------------------------------------------------
NOTE 4 - MASTER TRUST - SUMMARY OF CHANGES IN NET ASSETS
--------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1997
------------------------------------
(Dollars in 000's)
<TABLE>
<CAPTION>
Preferred Group of Mutual Funds
-----------------------------------------------------------------------------------------
Caterpillar
Common Stable
Stock Principal Short-term Money Asset
Fund Fund Government Market Value International Growth Allocation
---- ---- ---------- ------ ----- ------------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:-
Interest $ 813 $ $ $ $ $ $ $
Dividends 4,760
Net appreciation in fair
value of:
Common stock 45,824
Registered investment
companies 6,253 866 4,021 53,130 6,865 62,329 10,267
-------- -------- ------- -------- -------- -------- -------- -------
Net investment income 51,397 6,253 866 4,021 53,130 6,865 62,329 10,267
-------- -------- ------- -------- -------- -------- -------- -------
Contributions to all plans 9,320 5,347 884 4,431 14,573 8,309 18,272 4,716
-------- -------- ------- -------- -------- -------- -------- -------
Withdrawals from all plans (12,273) (5,285) (505) (10,252) (6,680) (2,485) (6,999) (2,125)
-------- -------- ------- -------- -------- -------- -------- -------
Transfers from EIP 1 53,246 589
-------- -------- ------- -------- -------- -------- -------- -------
Interfund transfers, net 49,610 (14,765) (1,477) (21,328) (3,730) (15,748) (9,814) (1,778)
-------- -------- ------- -------- -------- -------- -------- -------
Increase (decrease) in net
assets 151,300 (8,450) (232) (22,539) 57,293 (3,059) 63,788 11,080
Net assets:
Beginning of year 187,751 104,443 14,619 85,448 184,062 85,819 195,620 47,628
-------- -------- ------- -------- -------- -------- -------- -------
End of year $339,051 $ 95,993 $14,387 $ 62,909 $241,355 $ 82,760 $259,408 $ 58,708
======== ======== ======= ======== ======== ======== ======== =======
<CAPTION>
---------------
Fixed Small Loan
Income Cap Fund Total
------ --- ---- -----
<S> <C> <C> <C> <C>
Investment income:-
Interest $ $ $ 1,887 $ 2,700
Dividends 4,760
Net appreciation in fair
value of:
Common stock 45,824
Registered investment
companies 1,757 6,494 151,982
------- ------- ------- ----------
Net investment income 1,757 6,494 1,887 205,266
------- ------- ------- ----------
Contributions to all plans 1,726 3,157 70,735
------- ------- ------- ----------
Withdrawals from all plans (1,019) (523) (503) (48,649)
------- ------- ------- ----------
Transfers from EIP 1 53,835
------- ------- ------- ----------
Interfund transfers, net (935) 15,561 968 (3,436)
------- ------- ------- ----------
Increase (decrease) in net
assets 1,529 24,689 2,352 277,751
Net assets:
Beginning of year 22,280 18,372 20,059 966,101
------- ------- ------- ----------
End of year $23,809 $43,061 $22,411 $1,243,852
======= ======= ======= ==========
</TABLE>
-13-
<PAGE>
ADDITIONAL INFORMATION
----------------------
<PAGE>
SCHEDULE I
----------
SOLAR TURBINES INCORPORATED
---------------------------
SAVINGS AND INVESTMENT PLAN
---------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
DECEMBER 31, 1998
-----------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Identity of issue, Description of investment, including
borrower, lessor maturity date, rate of interest, Current
or similar party collateral, par or maturity value Cost value
---------------- --------------------------------- ---- -------
<S> <C> <C> <C> <C>
Caterpillar Inc. 401(k) Master Trust $ $27,273,000
========= ===========
SSGA Money Market; 166,255.66 units $ $ 166,256
Babson Value Income; 95.84 units 4,397
Baron Asset; 90.13 units 4,555
Cohen and Steers Realty Shares Inc.; 105.77 units 4,017
Fidelity Utilities; 377.05 units 8,740
Europe; 131.25 units 4,394
Growth & Income; 95.44 units 4,375
Founders Growth; 249.53 units 5,093
Janus Special Situations; 292.97 units 5,101
Twenty; 201.94 units 10,764
Inv't Worldwide; 298.06 units 14,116
Kaufmann Fund; 713.54 units 4,053
Oakmark Fund; 135.51 units 4,854
PBHG Growth; 353.73 units 9,034
Rydex OTC Fund; 2,245.31 units 92,866
Stein Roe Investment Trust Cap Oppty; 143.73 units 4,220
Vanguard Fixed Inc Sec L/T Portfolio; 1,739.87 units 16,163
Growth Index; 2,465.92 units 78,096
Warburg Pincus Emerging Growth; 151.08 units 6,039
-----------
$ 447,133
===========
</TABLE>
-14-
<PAGE>
SCHEDULE II
SOLAR TURBINES INCORPORATED
---------------------------
SAVINGS AND INVESTMENT PLAN
---------------------------
ITEM 27d - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS
---------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Current
Expense value
incurred of asset on
Identity of Purchase Selling Lease with Cost transaction Net gain
party involved Description of Assets Price Price rental transaction of asset date or (loss)
- -------------- --------------------- ------ ----- ------ ----------- -------- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fidelity Utilities:
Purchase $ 7,552 $ $ $ $ 7,552 $ 7,552 $
Kaufmann Fund:
Purchase 4,966 4,966 4,966
SSGA Money Market Fund:
Purchase 163,311 163,311 163,311
Sale 28,198 28,198
Strong Government Securities Income:
Purchase 2,587 2,58 2,587
Sale 17,902 17,902
Wasatch
Hoisington Treasury:
Purchase 10,000 10,000 10,000
Sale 10,865 10,865
</TABLE>
-15-
<PAGE>
EXHIBIT C
---------
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statement on Forms S-8 (No. 2-97450, as amended, and No. 33-37353) of
Caterpillar Inc. of our report dated May 26, 1999 relating to the financial
statements of the Solar Turbines Incorporated Savings and Investment Plan, which
appears in this Form 11-K.
/s/PricewaterhouseCoopers LLP
Peoria, Illinois
May 26, 1999
