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SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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FORM
10-K |
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(Mark
One) |
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[X] |
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the
fiscal year ended December 31, 2004
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OR
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[ ] |
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the
transition period from __________ to __________.
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Commission
File No. 1-768
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CATERPILLAR
INC.
(Exact name
of Registrant as specified in its charter)
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Delaware
(State
or other jurisdiction of incorporation)
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37-0602744
(IRS
Employer I.D. No.)
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100
NE Adams Street, Peoria, Illinois
(Address
of principal executive offices)
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61629
(Zip
Code)
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Registrant's
telephone number, including area code: (309)
675-1000 |
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Securities
registered pursuant to Section 12(b) of the Act: |
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Title
of each class |
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Name
of each exchange
on
which registered |
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Common
Stock ($1.00 par value) |
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Chicago
Stock Exchange
New
York Stock Exchange
Pacific
Exchange, Inc. |
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Preferred
Stock Purchase Rights |
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Chicago
Stock Exchange
New
York Stock Exchange
Pacific
Exchange, Inc. |
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9%
Debentures due April 15, 2006 |
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New
York Stock Exchange |
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9
3/8% Debentures due August 15, 2011 |
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New
York Stock Exchange |
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9
3/8% Debentures due March 15, 2021 |
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New
York Stock Exchange |
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8%
Debentures due February 15, 2023 |
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New
York Stock Exchange |
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Securities
registered pursuant to Section 12(g) of the Act: None |
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Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [ ü ]
No [ ]
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate
by check mark whether the Registrant is an accelerated filer (as defined in Rule
12b-2 of the Act).
Yes
[ ü ]
No [ ]
As
of December 31, 2004, there were 342,936,949 shares of common stock of the
Registrant outstanding, and the aggregate market value of the voting stock held
by non-affiliates of the Registrant (assuming only for purposes of this
computation that directors and officers may be affiliates) was $32,772,664,307.
Documents
Incorporated by Reference
Portions
of the documents listed below have been incorporated by reference into the
indicated parts of this Form 10-K, as specified in the responses to the item
numbers involved.
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2005
Annual Meeting Proxy Statement (Proxy Statement) filed with the Securities
and Exchange Commission (SEC) on February 24, 2005. |
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General
and Financial Information for 2004 containing the information required by
SEC Rule 14a-3 for an annual report to security holders filed with the SEC
as an appendix to the 2005 Annual Meeting Proxy Statement (Appendix) on
February 24, 2005, and furnished as Exhibit 13 to this Form
10-K. |
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TABLE
OF CONTENTS
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Part
I |
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Business
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Executive
Officers of the Registrant as of December 31, 2004
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Properties
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Legal
Proceedings
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Part
II |
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Market for
Registrant's Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
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Selected
Financial Data
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Management's
Discussion and Analysis of Financial Condition and Results of
Operations
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Quantitative
and Qualitative Disclosures About Market Risk
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Financial
Statements and Supplementary Data
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Controls and
Procedures
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Part
III |
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Directors and
Executive Officers of the Registrant
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Executive
Compensation
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Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
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Certain
Relationships and Related Transactions
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Principal
Accountant Fees and Services
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Part
IV |
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Exhibits and
Financial Statement Schedules
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Principal
Lines of Business / Nature of Operations
We operate in three
principal lines of business:
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1.
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Machinery - This
principal line of business includes the design, manufacture, marketing and
sales of construction, mining, and forestry machinery - track and wheel
tractors, track and wheel loaders, pipelayers, motor graders, wheel
tractor-scrapers, track and wheel excavators, backhoe loaders, log
skidders, log loaders, off-highway trucks, articulated trucks, paving
products, telescopic handlers, skid steer loaders and related parts. We
also include logistics services for other companies in this line of
business.
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2.
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Engines - This
principal line of business includes the design, manufacture, marketing and
sales of engines for Caterpillar machinery; electric power generation
systems; on-highway vehicles and locomotives; marine, petroleum,
construction, industrial, agricultural and other applications; and related
parts. Reciprocating engines meet power needs ranging from 5 to over
22,000 horsepower (4 to over 16 200 kilowatts). Turbines range from 1,200
to 20,500 horsepower (900 to 15 000 kilowatts).
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3.
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Financial
Products - This
principal line of business consists primarily of Caterpillar Financial
Services Corporation (Cat Financial), Caterpillar Insurance Holdings, Inc.
(Cat Insurance), Caterpillar Power Ventures Corporation (Cat Power
Ventures), and their respective subsidiaries. Cat Financial provides a
wide range of financing alternatives to customers and dealers for
Caterpillar machinery and engines, Solar gas turbines, as well as other
equipment and marine vessels. Cat Financial also extends loans to
customers and dealers. Cat Insurance provides various forms of insurance
to customers and dealers to help support the purchase and lease of our
equipment. Cat Power Ventures is an active investor in independent power
projects using Caterpillar power generation equipment and
services.
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Due
to financial information required by Statement of Financial Accounting Standards
No. 131, Disclosures
about Segments of an Enterprise and Related Information, we
have also divided our business into eight reportable segments for financial
reporting purposes. Information about our reportable segments, including
geographic information, appears in Note 25 on pages A-29 through A-33 of
the Appendix.
Other
information about our operations in 2004 and outlook for 2005, including risks
associated with foreign operations is incorporated by reference from
"Management's Discussion and Analysis" on pages A-36 through A-61 of the
Appendix.
Company
Strengths
Caterpillar
is the leader in construction and mining equipment, diesel and natural gas
engines and industrial gas turbines in our size range. Annual sales and revenues
top $30 billion, making Caterpillar the largest manufacturer in its industry.
Caterpillar is also a leading U.S. exporter, with more than one-half of its
sales outside the United States. Through a global network of independent
dealers, Caterpillar builds long-term relationships with customers around the
world. For over 75 years, the Caterpillar name has been associated with the
highest level of quality products and services.
Competitive
Environment
Caterpillar
products and product support services are sold worldwide into a variety of
highly competitive markets. In all markets, we compete on the basis of product
performance, customer service, quality and price. From time to time, the
intensity of competition results in price discounting in a particular industry
or region. Such price discounting puts pressure on margins and can negatively
impact operating profit.
Outside of the
United States, certain competitors enjoy competitive advantages inherent to
operating in their home countries.
Page 1
The
competitive environment for Caterpillar's machinery business consists of global
competitors, regional competitors, and specialized local competitors. Principal
global competitors include Komatsu, Volvo Construction Equipment (part of the
Volvo Group AB), CNH Global, Hitachi Construction Machinery, John Deere (part of
Deere & Co.), Terex, JCB, and Ingersoll-Rand. Each has particular regional
pockets of strength. John Deere Construction and Forestry Division (part of
Deere & Co.), for example, is a principal competitor in North America. Some
competitors have broad ranges of products which compete with Caterpillar.
Others, like Ingersoll-Rand, only offer a limited range of products
that compete with Caterpillar.
During
2004, the machinery business in general enjoyed an increase in industry demand.
Most of our competitors saw sales and operating profits improve from years of
stagnant sales and difficult profitability. The sharp industry upturn created
supply chain challenges in addition to the material cost challenges of high
commodity prices for all competitors. Several competitors continued to face
distribution channel challenges. Asia-based competitors were impacted the most
by the industry slowdown in China. Europe-based competitors were most impacted
by the strong euro. Most North America-based competitors benefited from the very
strong North American industry upturn. While the competitive environment in the
machinery business continued to be intense, the financial health of the industry
as a whole improved.
Caterpillar
operates in a very competitive engine/turbine manufacturing and packaging
environment. The company manufactures diesel, heavy fuel and natural gas
reciprocating engines for the on- and off-highway mobile markets - as well as
for a wide array of stationary applications - and manufactures industrial
turbines for the oil and gas and power generation markets. In North America,
on-highway heavy-duty and mid-range diesel engine competitors include but are
not limited to Cummins Inc., Volvo Group AB, Mack Trucks, Inc. (part of the
Volvo Group AB), Detroit Diesel Corp. and Mercedes-Benz (both part of
DaimlerChrysler AG), Isuzu Motors, Ltd. and Navistar International Corp.
Overseas on-highway diesel engine competitors include but are not limited to
Mercedes-Benz (part of DaimlerChrysler AG), Volvo Group AB, Mitsubishi Fuso
Truck & Bus Corp. (part of Daimler Chrysler AG), Scania AB, MAN
Aktiengesellschaft, Iveco Motors, Isuzu Motors, Ltd., Hino Motors, Ltd. and MWM
Motores Diesel.
In the North
America off-highway mobile and stationary markets, domestic-based competitors
include but are not limited to Cummins Inc., John Deere Power Systems (part of
Deere & Co.), Detroit Diesel Corp., Ford Power Products (part of Ford Motor
Co.), General Electric Co. and Waukesha (part of Dresser Inc.). Overseas-based
off-highway mobile and stationary application competitors include but are not
limited to Wartsila NSD, MAN B&W Diesel AG, MTU Friedrichshafen GmbH (part
of DaimlerChrysler AG), Volvo Penta (part of the Volvo Group AB), Mitsubishi
Heavy Industries, Ltd., Deutz AG, GE Jenbacher (part of General Electric Co.),
Kubota Corp., Isuzu Motors, Ltd., Kawasaki Heavy Industries Ltd., Yanmar Diesel
Engine Co. Ltd., Bergen (part of Rolls Royce plc), Rolls-Royce plc, Siemens AG
and Alstom.
In the packaging
area, Caterpillar also faces a wide variety of generator set packagers and other
engine and turbine-related packaging competitors. North America-based packagers
include but are not limited to General Electric Co., Cummins Inc., Kohler Co.,
Katolight Corp., Generac Power Systems, Inc., Multiquip Inc., Detroit Diesel
Corp., Stewart & Stevenson Services, Inc., Hanover Compressor Co. and other
regional companies. Overseas-based packagers include but are not limited to
Alstom, Siemens AG, Rolls Royce plc, Wartsila NSD, MAN B&W Diesel AG, GE
Jenbacher, SDMO, Himoinsa s.l., Mitsubishi Heavy Industries, Ltd., Atlas Copco
AB, Kawasaki Heavy Industries, Ltd., AKSA Power Generation (Kazanci Holding) and
many other regional packagers dispersed around the world. These packagers source
emission compliant as well as non-compliant engines and turbines and other
components from domestic and international suppliers, and market their products
regionally and internationally through a variety of company owned, independent,
on-line and multi-brand distribution channels.
Page 2
In the North
America market, heavy-duty and midrange on-highway truck engine competitors
continued to market emission certified engines meeting the January 1, 2004
United States Environmental Protection Agency (EPA) emission limits using cooled
exhaust gas re-circulation technology (EGR). In addition, the industry continued
to invest heavily in new technology to meet future on- and off-highway emission
regulations in North America, Europe, and Asia. Furthermore, competitors formed
or continued joint ventures and partnerships in an effort to share development
costs, strengthen customer relationships, reach new markets and leverage core
competencies. Moreover, key component suppliers such as Delphi Corp., Bosch
GmbH, Denso Corp., Stanadyne Corp. and Fleetguard Inc. (part of Cummins Inc.)
continued to play visible roles as emission technology drivers, partners, and
key suppliers to the reciprocating engine business.
During
2004, Caterpillar completed the introduction of its full line of ACERT® engines
into the North America on-highway truck market, and continued to maintain its
leadership position in this market. In addition, Caterpillar established itself
as a leading provider of truck engines for the specialty, bus and recreational
vehicle (RV) markets. Customer acceptance of Caterpillar ACERT engine
performance, quality and reliability is strong. As a result of strong industry
growth, Caterpillar experienced some heavy-duty ACERT engines capacity
constraints in 2004.
Caterpillar also
focused 2004 investment and resources on leveraging its success with ACERT
engines in on-highway truck markets into off-road markets, as well as the
remainder of its engine platforms. The building blocks for ACERT Technology are
very flexible and scaleable, and are being applied as needed based on engine
platform and application. We have announced that 13 Caterpillar machine models
are being upgraded to ACERT engine technology, and 6 of these 13 models are
already shipping. A full line of seven ACERT industrial engines has been
released, and plans are in place to leverage ACERT Technology throughout
Caterpillar's businesses and engine platforms. We expect this to establish
Caterpillar as the first company to offer a full line of Tier 3/Stage 3a
emission compliant off-highway engines.
We believe ACERT
provides Caterpillar a competitive advantage now and in the future to meet
emission and performance requirements, and we plan to continue investing in
developing and leveraging ACERT Technology systems and components. While
Caterpillar is able to leverage its ACERT Technology directly into its
off-highway businesses, our competitors must pursue alternative technologies or
further develop their existing technologies to meet off-highway market needs and
emission requirements.
Cat Financial,
incorporated in Delaware, is a wholly owned finance subsidiary of Caterpillar.
Cat Financial's primary business is to provide retail-financing alternatives for
Caterpillar products to customers and Caterpillar dealers around the world. Such
retail financing is primarily comprised of financing of Caterpillar equipment,
machinery and engines. In addition, Cat Financial also provides financing for
vehicles, power generation facilities and marine vessels that, in most cases,
incorporate Caterpillar products. In
addition to retail financing, Cat Financial
provides wholesale financing to Caterpillar dealers and purchases short-term
dealer receivables from Caterpillar. The
various financing plans offered by Cat Financial are designed to increase the
opportunity for sales of Caterpillar products and generate financing income for
Cat Financial. Cat Financial's activity is conducted primarily in the United
States, with additional offices and subsidiaries in Asia, Australia, Canada,
Europe and Latin America.
Cat Financial has
over 20 years of experience in providing financing in the various markets in
which it participates, contributing to its knowledge of asset values, industry
trends, product structuring and customer needs. As of December 31, 2004, Cat
Financial had 1,399 full-time employees.
In certain
instances, Cat Financial's operations are subject to supervision and regulation
by state, federal and various foreign government authorities, and may be subject
to various laws and judicial and administrative decisions imposing various
requirements and restrictions, which, among other things, (i) regulate credit
granting activities, (ii) establish maximum interest rates, finance charges and
other charges, (iii) require disclosures to customers, (iv) govern secured
transactions, (v) set collection, foreclosure, repossession and other trade
practices, (vi) prohibit discrimination in the extension of credit and
administration of loans, and (vii) regulate the use and reporting of information
related to a borrower's credit experience.
Page 3
Cat Financial's
retail financing leases and installment sale contracts (total 58 percent*)
include:
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Tax leases
that are classified as either operating or finance leases for financial
accounting purposes, depending on the characteristics of the lease. For
tax purposes, Cat Financial is considered the owner of the equipment (19
percent*). |
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Finance
(non-tax) leases where the lessee is considered the owner of the equipment
during the term of the lease that either require or allow the customer to
purchase the equipment for a fixed price at the end of the term (14
percent*). |
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Installment
sale contracts, which are equipment loans that enable customers to
purchase equipment with a down payment or trade-in and structure payments
over time (24 percent*). |
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Governmental
lease-purchase plans in the United States that offer low interest rates
and flexible terms to qualified non-federal government agencies (1
percent*). |
Retail notes
receivable includes:
| · |
Loans that
allow customers and dealers to use their Caterpillar equipment as
collateral to obtain financing (20
percent*). |
Wholesale notes
receivable, finance leases, and installment sale contracts (total 22 percent*)
include:
| · |
Inventory/rental
programs which provide assistance to dealers by financing their inventory,
rental fleets and rental facilities (6 percent*).
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Short-term
dealer receivables Cat Financial purchases from Caterpillar and
subsidiaries at a discount (16 percent*). |
*Indicates the
percentage of Cat Financial's total portfolio at December 31, 2004. For more
information on the above and Cat Financial's concentration of credit risk,
please refer to Note 21 on pages A-26 and A-27 of the
Appendix.
The retail
financing business is highly competitive, with financing for users of
Caterpillar equipment available through a variety of sources, principally
commercial banks and finance and leasing companies. Cat Financial's competitors
include CIT Group, Citibank, General Electric Capital Corporation and local
banks. In addition, many of our competitor manufacturers use below-market
interest rate programs (subsidized by the manufacturer) to assist machine sales.
Caterpillar and Cat Financial work together to provide a broad array of
financial merchandising programs around the world to meet these competitive
offers.
Cat
Financial's results are largely dependent upon Caterpillar dealers' ability to
sell equipment and customers' willingness to enter into financing or leasing
agreements with it. It is also affected by the availability of funds from its
financing sources and general economic conditions such as inflation and market
interest rates.
Cat
Financial has a "match funding" policy whereby the interest rate profile (fixed
rate or floating rate) of its debt portfolio largely matches the interest rate
profile of its receivable portfolio plus retained interests in securitized
wholesale receivables within established guidelines. In connection with that
policy, Cat Financial uses interest rate derivative instruments to modify the
debt structure to match these assets. This "match funding" reduces the
volatility of margins between interest-bearing assets and interest-bearing
liabilities, regardless of which direction interest rates move. Cat Financial
also uses these instruments to gain an economic and/or competitive advantage
through a lower cost of borrowed funds. This is accomplished by changing the
characteristics of existing debt instruments or entering into new agreements in
combination with the issuance of new debt. For more information regarding match
funding, please see Note 3 on pages A-12 and A-13 of the Appendix.
In managing foreign
currency risk for Cat Financial's operations, the objective is to minimize
earnings volatility resulting from conversion and the remeasurement of net
foreign currency balance sheet positions. This policy allows the use of foreign
currency forward contracts to offset the risk of currency mismatch between the
receivable and debt portfolio. None of these foreign currency forward contracts
are designated as a hedge.
Page 4
Cat Financial
provides financing only when acceptable criteria are met. Credit decisions are
based on, among other things, the customer's credit history, financial strength,
and equipment application. Cat Financial typically maintains a security interest
in retail-financed equipment and requires physical damage insurance coverage on
financed equipment. Cat Financial finances a significant portion of Caterpillar
dealers' sales and inventory of Caterpillar equipment, especially in North
America. Cat Financial's competitive position is improved by marketing programs,
subsidized by Caterpillar and/or Caterpillar dealers, which allow it to offer
below-market interest rates. Under these programs, Caterpillar, or the dealer,
subsidizes an amount at the outset of the transaction, which Cat Financial then
recognizes as revenue over the term of the financing. Transaction processing
time and the supporting technologies continue to drive Cat Financial in its
efforts to respond quickly to customers and improve internal processing
efficiencies. We believe Cat Financial's web-based Cat FinancExpressSM transaction
processing and information tool currently available in the United States,
France, Canada and Australia helps to give Cat Financial a competitive advantage
in those areas. Cat FinancExpress collects
information on-line to provide finance quotes and credit decisions and then
prints the related documents, all in a very short time frame.
Caterpillar
Insurance Company, a wholly owned subsidiary of Cat Insurance (Cat Insurance and
its subsidiaries are referred to herein collectively as Cat Holdings), is a U.S.
insurance company domiciled in Missouri and primarily regulated by the Missouri
Department of Insurance. The insurance company is licensed to conduct Property
and Casualty Insurance business in forty-eight states and the District of
Columbia, and as such, is regulated in those jurisdictions as well. The state of
Missouri acts as the lead regulatory authority and monitors the company's
financial status to ensure that the company is in compliance with minimum
solvency requirements, as well as other financial ratios prescribed by the
National Association of Insurance Commissioners.
Caterpillar
Life Insurance Company, a wholly owned subsidiary of Caterpillar, is a U.S.
insurance company domiciled in Missouri and primarily regulated by the Missouri
Department of Insurance. The insurance company is licensed to conduct Life and
Accident and Health Insurance business in fourteen states and the District of
Columbia, and as such, is regulated in those jurisdictions as well. As the state
of Missouri acts as the lead regulatory authority, it monitors the financial
status to ensure that the company is in compliance with minimum solvency
requirements, as well as other financial ratios prescribed by the National
Association of Insurance Commissioners.
Caterpillar
Insurance Co. Ltd., a wholly owned subsidiary of Cat Insurance is a captive
insurance company domiciled in Bermuda and regulated by the Bermuda Monetary
Authority. The
company is a Class 2 insurer (as defined by the Bermuda Insurance Amendment Act
of 1995), which primarily insures affiliates and, as such, the Bermuda Monetary
Authority requires an Annual Financial Filing for purposes of monitoring
compliance with solvency requirements.
Caterpillar
Product Services Corporation, a wholly owned subsidiary of Caterpillar, is a
warranty company domiciled in Missouri. It is regulated as a special purpose
warranty company in a limited number of jurisdictions and conducts the
Caterpillar engine extended service contract business (parts and labor) in all
states except Virginia, Washington and Wisconsin. It also conducts the machine
extended service contract program in Italy, France and Germany.
Caterpillar
Insurance Services Corporation, a wholly owned subsidiary of Cat Insurance is a
Tennessee insurance brokerage company licensed in all fifty states and the
District of Columbia. It provides brokerage services for all property and
casualty and life and health lines of business.
Cat
Holdings provides protection for claims under the following
programs:
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Contractual
Liability Insurance to Caterpillar dealers and Original Equipment
Manufacturers (OEM) for extended service contracts (parts and labor)
offered by third party dealers and OEMs. |
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Reinsurance
for the worldwide cargo risks of Caterpillar
products. |
| ·
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Contractors'
Equipment physical damage insurance to equipment manufactured by
Caterpillar, which is leased, rented, or sold by third party
dealers. |
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Inventory
Protection Insurance for Caterpillar dealer floor-plan property
risks. |
| ·
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Insurance for
Caterpillar general liability, employer's liability, auto liability,
property, and retiree medical stop loss
insurance. |
| ·
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Brokerage
services for property and casualty and life and health
business. |
Page 5
Cat
Power Ventures, a wholly owned subsidiary of Caterpillar, primarily invests
equity and takes an ownership interest in power generation projects throughout
the world that utilize Caterpillar power generation equipment. In some cases,
these projects also utilize construction and operations and maintenance services
that are provided by other Caterpillar subsidiaries. Currently, Cat Power
Ventures has investments in power projects in Poland, the Dominican Republic,
Tunisia, Cambodia, India and Sri Lanka. Cat Power Ventures has created direct
and indirect subsidiaries and affiliates to hold these investments.
Business
Developments in 2004
2004 was a year of
many milestones, accomplishments and celebrations for Caterpillar. We reached
the $30 billion sales and revenues milestone we set in 1997 ahead of schedule.
We delivered record sales and revenues and profits. We celebrated our
50th year of operations
in Brazil, 20th in Indonesia and
10th in Xuzhou, China.
Cat Financial was one of seven recipients of the Malcolm Baldrige National
Quality Award feted by President George W. Bush at the White House in March.
This award is given to U.S. organizations with exemplary achievements in seven
areas - leadership, strategic planning, customer and market focus, information
and analysis, human resource focus, process management and results. November of
2004 marked the 100-year anniversary of the introduction of our signature
track-type tractor design. In December, our Chairman and CEO James W. Owens rang
the closing bell at the New York Stock Exchange to commemorate the
75th anniversary of our
listing on the Exchange.
We continued to
make progress on our strategy to establish a market leadership position in China
in 2004. In January, Caterpillar shipped the 10,000th Cat hydraulic
excavator from Caterpillar Xuzhou Ltd. This achievement demonstrated the
company's commitment to maintaining a strong presence in China and its excellent
execution by committed people. In April, the Chinese Ministry of Commerce
granted Caterpillar (China) Financial Leasing Co., Ltd. a business license to
provide leasing services in China. By November, Caterpillar (China) Financial
Leasing Co., Ltd. had announced the signing of its first customer lease
contracts. Also in November, Caterpillar announced the signing of a definitive
agreement to acquire an equity interest in Shandong SEM Machinery Co., Ltd.
(SEM), one of China's key wheel loader manufacturers. Caterpillar Logistics
Services Inc., a wholly owned subsidiary of Caterpillar, launched a project to
develop a parts distribution center based in China to serve the company's
dealers and their branches. Each accomplishment in China continued Caterpillar's
rapid implementation of its business model in China, including financing,
logistics, distribution, procurement, rental and used equipment.
2004 also marked
Caterpillar's announcement of the expansion of Caterpillar Remanufacturing
Services' business to provide services for manufacturers and customers in
industries beyond those Caterpillar currently serves. This expansion of
Caterpillar's remanufacturing strategy builds on our successful services
business model, which includes Caterpillar Logistics Services and Financial
Products. In August, we announced the acquisitions of Williams Technologies,
Inc. - a leading remanufacturer of automatic transmissions, torque converters,
and engines for automotive and medium- and heavy-duty truck applications,
located in Summerville, South Carolina - and Wealdstone Engineering Ltd., one of
Europe's leading remanufacturers of gasoline and diesel engines located in the
United Kingdom. These two acquisitions provide Caterpillar the opportunity to
leverage our core remanufacturing strengths to provide remanufacturing services
to original equipment manufacturers in the diesel engine and automotive
industries.
We also continued
to leverage our award-winning ACERT Technology to solidify our position as the
emissions reduction leader in both on- and off-highway applications. In July,
shortly after two Caterpillar employees, Jim Weber and Scott Leman, received the
national Inventors of the Year award from the Intellectual Property Owners
Association, Caterpillar became the first company to offer a full line of EPA
Tier 3 compliant engines in the 175-300 horsepower range. ACERT Technology
enabled us to meet this requirement ahead of the January 2005 and January 2006
planned implementation dates. In November, our new D8T track-type tractor
powered by a Caterpillar engine using ACERT Technology became the first machine
to meet EPA Tier 3 standards, and 6 of an additional 12 machine upgrades to
ACERT Technology have already begun shipping. These milestones continue to
establish the importance of our ACERT Technology, demonstrating the competitive
advantage it provides to Caterpillar and the value it provides to our customers
and the public at large.
Page 6
Acquisitions
Information
about charges related to Turbomach S.A., MG Rover Ltd. and Williams Technology,
Inc. appears in Note 26 on page A-32 of the Appendix.
Order
Backlog
The
dollar amount of backlog believed to be firm was approximately $9.1 billion at
December 31, 2004 and $4.9 billion at December 31, 2003. Of the total backlog,
approximately $613 million at December 31, 2004 and $320 million at December 31,
2003, was not expected to be filled in the following year. Our backlog is
generally highest in the first and second quarters because of seasonal buying
trends in our industry.
Dealers
Our
machines are distributed principally through a worldwide organization of dealers
(dealer network), 53
located in the United States and 145 located outside the United States.
Worldwide, these dealers serve 178 countries and operate
3,324
places of business, including 1,437
dealer
rental outlets. Reciprocating
engines are sold principally through the dealer network and to other
manufacturers for use in their products. Some of the reciprocating engines
manufactured by Perkins are also sold through a worldwide network of 170
distributors located in 150 countries. Most of the electric power generation
systems manufactured by FG Wilson are sold through a worldwide network of 250
dealers located in 170 countries.
These dealers do
not deal exclusively with our products; however, in most cases sales and
servicing of our products are the dealers' principal business. Turbines and
large marine reciprocating engines are sold through sales forces employed by
Solar Turbines and MaK, respectively. Occasionally, these employees are assisted
by independent sales representatives.
The company's
relationship with each independent dealer within the dealer network is
memorialized in a standard sales and service agreement. Pursuant to this
agreement, the company grants the dealer the right to purchase and sell its
products and to service the products in a specified geographic region. Prices to
dealers are established by the company after receiving input from dealers on
transactional pricing in the marketplace. The company also agrees to defend its
intellectual property and to provide warranty and technical support to the
dealer. The agreement further grants the dealer a non-exclusive license to the
company's trademarks, service marks and brand names.
In exchange for
these rights, the agreement obligates the dealer to develop and promote the sale
of the company's products to current and prospective customers in the dealer's
region. Each dealer specifically agrees to employ adequate sales and support
personnel to market, sell and promote the company's products, demonstrate and
exhibit the products, perform the company's product improvement programs, inform
the company concerning any features that might affect the safe operation of any
of the company's products and maintain detailed books and records of the
dealer's financial condition, sales and inventories and make these books and
records available at the company's reasonable request.
These sales and
service agreements are terminable at will by either party upon 90 days written
notice and terminate automatically if the dealer files for bankruptcy protection
or upon the occurrence of comparable action seeking protection from creditors.
Our
products are sold primarily under the brands "Caterpillar," "Cat," design
versions of "Cat" and "Caterpillar," "Solar Turbines," "MaK," "Perkins," "FG
Wilson" and "Olympian." We own a number of patents and trademarks relating to
the products we manufacture, which have been obtained over a period of years.
These patents and trademarks have been of value in the growth of our business
and may continue to be of value in the future. We do not regard any of our
business as being dependent upon any single patent or group of
patents.
Page 7
We have always
placed strong emphasis on product-oriented research and development relating to
the development of new or improved machines, engines and major components. In
2004, 2003, and 2002, we spent $928
million, $669 million, and
$656 million, or 3.1 percent, 2.9 percent, and 3.3 percent of our sales and
revenues, respectively, on our research and development programs.
Employment
As of December 31,
2004, we employed 76,920 persons of whom 38,792 were located
outside the United States. From a global, enterprise perspective, we believe our
relationship with our employees is very good. We build and maintain a
productive, motivated workforce by treating all employees fairly and
equitably.
In
the United States, most of our 38,128 employees are at-will employees and,
therefore, not subject to any type of employment contract or agreement. At
select business units, certain highly specialized employees have been hired
under employment contracts that specify a term of employment and specify pay and
other benefits.
As
of December 31, 2004, there were 11,465 U.S. hourly production employees who
were covered by collective bargaining agreements with various labor unions. The
United Automobile, Aerospace and Agricultural Implement Workers of America (UAW)
represents 9,450 Caterpillar employees under a six-year central labor agreement
that will expire March 1, 2011. The International Association of Machinists
(IAM) represents 1,999 employees under labor agreements expiring on April 30,
2005, and May 29, 2005. Based on our historical experience during periods when
labor unrest or work stoppage by union-represented employees has occurred, we do
not expect that the occurrence of such events, if any, arising in connection
with the expiration of these agreements will have a material impact on our
operations or results.
Outside
the United States, the company enters into employment contracts and agreements
in those countries in which such relationships are mandatory or customary. The
provisions of these agreements correspond in each case with the required or
customary terms in the subject jurisdiction.
Sales
Sales
outside the United States were 54 percent of consolidated sales for
2004, 56
percent for 2003, and 55
percent for 2002.
Environmental
Matters
The
company is regulated by federal, state, and international environmental laws
governing our use of substances and control of emissions in all our operations.
Compliance with these existing laws has not had a material impact on our capital
expenditures, earnings, or competitive position.
We
are cleaning up hazardous waste at a number of locations, often with other
companies, pursuant to federal and state laws. When it is likely we will pay
clean-up costs at a site and those costs can be estimated, the costs are charged
against our earnings. In doing that estimate, we do not consider amounts
expected to be recovered from insurance companies and others.
The
amount recorded for environmental clean-up is not material and is included in
Statement 3 on page A-7 of the Appendix under "Accrued Expenses." If
a range of liability estimates is available on a particular site, we accrue at
the lower end of that range.
We
cannot estimate costs on sites in the very early stages of clean-up. Currently,
we have several sites in the very early stages of clean-up, and there is no more
than a remote chance that a material amount for clean-up at any individual site
or at all sites in the aggregate will be required.
Page 8
Pursuant to a
consent decree Caterpillar entered with the EPA, the company was required to
meet certain emission standards by October 2002. The decree provides that if
engine manufacturers were unable to meet the standards at that time, they would
be required to pay a Non-Conformance Penalty (NCP) on each engine sold that did
not meet the standard. The amount of the NCP would be based on how close to
meeting the standard the engine came - the more out of compliance the higher the
penalty. The company began introduction of fully compliant ACERT engines in 2003
and by the end of 2003 Caterpillar was only producing fully compliant engine
models. As a result, NCPs were not payable for any engines built in 2004. NCPs
of $153 million were paid in 2003.
In addition, the
consent decree required Caterpillar to pay a fine of $25 million, which was
expensed in 1998 and to make investments totaling $35 million in
environmental-related products by July 7, 2007. Total qualifying investments to
date for these projects are $34.9 million, of which $5.9 million was made during
2004. Caterpillar expects to reach the $35 million requirement during the first
quarter of 2005. A future benefit is expected to be realized from these
environmental projects related to Caterpillar's ability to capitalize on the
technologies it developed in complying with its environmental project
obligations. In short, Caterpillar expects to receive a positive net return on
the environmental projects by being able to market the technology it
developed.
Available
Information
The
company files electronically with the SEC required reports on Form 8-K, Form
10-Q and Form 10-K; proxy materials; ownership reports for insiders as required
by Section 16 of the Securities Exchange Act of 1934; and registration
statements on Forms S-3 and S-8, as necessary. The public may read and copy any
materials the company has filed with the SEC at the SEC's Public Reference Room
at 450 Fifth Street, N.W., Washington, DC 20549. The public may obtain
information on the operation of the Public Reference Room by calling the SEC at
(800) SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC. Copies of our annual report on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any
amendments to these reports filed with the SEC are available free of charge
through our Internet site (www.CAT.com/secfilings) as soon as
reasonably practicable after filing with the SEC. Copies of our board committee
charters, our board's Guidelines on Corporate Governance Issues, Worldwide Code
of Business Conduct, and other corporate governance information are available on
our Internet site (www.CAT.com/governance), or upon written
request to the Corporate Secretary at 100 NE Adams Street, Peoria, Illinois
61629.
Additional company
information may be obtained as follows:
Current
information -
| · |
phone
our Information Hotline - (800) 228-7717 (U.S. or Canada) or (858)
244-2080 (outside U.S. or Canada) to request company publications by mail,
listen to a summary of Caterpillar's latest financial results and current
outlook, or to request a copy of results by facsimile or
mail |
| · |
request,
view, or download materials on-line or register for email alerts at
www.CAT.com/materialsrequest |
Historical
information -
| · |
view/download
on-line at www.CAT.com/historical |
Page 9
|
Name
and Age |
Present
Caterpillar Inc. position and date of
initial
election |
Principal
positions held during the
past
five years if other than
Caterpillar
Inc. position currently held |
|
James W. Owens
(58) |
Chairman and
Chief Executive Officer (2004) |
|
|
Stuart L.
Levenick (51) |
Group
President (2004) |
-
General
Manager, Commonwealth of Independent States (1998-2000)
-
Chairman,
Shin Caterpillar Mitsubishi Ltd. (2000-present)
-
Vice
President (2000-2004) |
|
Douglas R.
Oberhelman (51) |
Group
President (2001) |
|
|
Gerald L.
Shaheen (60) |
Group
President (1998) |
|
|
Gérard R.
Vittecoq (56) |
Group
President (2004) |
|
|
Steven H.
Wunning (53) |
Group
President (2004) |
|
|
Kent M. Adams
(50) (1) |
Vice President
(2005) |
-
Vice
President, Caterpillar Financial Services Corporation
(1998-2000)
-
Corporate
Support Vice President, Caterpillar Financial Services Corporation
(2001-2003)
-
Executive
Vice President, Caterpillar Financial Services Corporation
(2004) |
|
Ali M. Bahaj
(51) |
Vice President
(2002) |
-
Director,
Division Services, Engine Products Division (1998-2001)
-
Director,
Business Development & Consulting Services
(2001-2002) |
|
Sidney C.
Banwart (59) |
Vice President
(1998) |
|
|
Michael J.
Baunton (53) |
Vice President
(1998) |
|
|
James S. Beard
(63) (2) |
Vice President
(1990) |
|
|
Rodney C.
Beeler (47) |
Vice President
(2004) |
-
Customer
Segments Manager, Caterpillar Overseas, S.A. (1999-2000)
-
Manager,
Rental and Used Equipment Services Department, North American Commercial
Division (2000-2004) |
|
Mary H. Bell
(44) |
Vice President
(2004) |
-
Service
Support Department Manager, Parts & Service Support Division
(1999-2000)
-
Service
Support Department Manager, Product Support Division (2000)
-
Dealer
Capability Department Manager, Product Support Division
(2000-2002)
-
Cat
Distribution Services General Manager, Logistics Division
(2002-2003) |
|
Richard A.
Benson (61) (3) |
Vice President
(1989) |
|
|
James B. Buda
(57) |
Vice
President, General Counsel and Secretary
(2001) |
|
|
David B.
Burritt (49) |
Vice President
and Chief Financial Officer (2004) |
-
General
Manager, Strategic & Business Services - Europe, Caterpillar
Overseas S.A. (1999-2001)
-
Corporate 6
Sigma Champion (2001-2002)
-
Controller
(2002 - 2004) |
|
Rodney L.
Bussell (58) |
Vice President
(2001) |
|
|
Christopher C.
Curfman (52) |
Vice President
(2004) |
-
Managing
Director, Caterpillar of Australia Ltd. (1999-2001)
-
Managing
Director-Marketing, Caterpillar of Australia Ltd. (2001)
-
Managing
Director-Marketing, Asia-Pacific Division (2001-2004)
-
Alliance
Development Director, Global Mining Division
(2004) |
|
Paolo Fellin
(50) |
Vice President
(2004) |
-
General
Manager, Caterpillar Work Tools & Services (1999-2003)
-
Marketing
Manager, North American Commercial Division
(2003-2004) |
|
Thomas A.
Gales (56) |
Vice President
(2000) |
|
|
Stephen A.
Gosselin (47) |
Vice President
(2002) |
-
North
American Distribution Manager, Engine Products Division
(1999-2000)
-
Regional
Manager, North American Commercial Division
(2000-2002) |
|
Page
10
|
|
Hans A.
Haefeli (46) |
Vice President
(2004) |
-
Managing
Director Product Supply, Perkins Engines Company Limited
(1999-2002)
-
General
Manager, Building Construction Products Division
(2002-2003)
-
President,
Perkins Engine Company Limited (01/2004 to
present) |
|
John S. Heller
(50) |
Vice President
(2004) |
-
Engine
Division Technology Manager, Engine Products Division
(2000-2001)
-
Engine
Division Technology Manager, Systems & Processes Division
(2001-2001)
-
Director,
Corporate Information Services, Systems & Processes Division
(2001-2002)
-
Director,
Global IT Solutions, Systems & Processes Division
(2002-2004)
-
Chief
Information Officer (2004 - Present) |
|
Richard P.
Lavin (52) |
Vice President
(2001) |
|
|
Robert R.
Macier (56) |
Vice President
(1998) |
|
|
F. Lynn
McPheeters (62) (3) |
Vice President
and Chief Financial Officer (1998) |
|
|
Daniel M.
Murphy (57) |
Vice President
(1996) |
|
|
Gerald Palmer
(59) |
Vice President
(1992) |
|
|
James J.
Parker (54) |
Vice President
(2001) |
|
|
Mark R.
Pflederer (48) |
Vice President
(2004) |
-
Electronics
& Electrical Business Unit Manager, Control Systems Products
Division (1999-2001)
-
Electronics
& Electrical Business Unit Manager, Component Products & Control
Systems Division (2001-2003) |
|
Edward J. Rapp
(47) |
Vice President
(2000) |
|
|
William J.
Rohner (52) |
Vice President
(2004) |
|
|
Christiano V.
Schena (55) |
Vice President
(2002) |
-
Managing
Director, Caterpillar Brasil Ltda. (1996-2000)
-
Managing
Director, Caterpillar France S.A. (2000)
-
General
Manager, EAME Product Development Division (2000-2002)
-
Managing
Director, Building Construction Products Europe
(2002) |
|
William F.
Springer (53) |
Vice President
(2002) |
|
|
Gary A. Stroup
(55) |
Vice President
(1992) |
|
|
Donald G.
Western (56) |
Vice President
(1995) |
|
|
Robert T.
Williams (56) |
Vice President
(2004) |
-
General
Manager, Performance Engine Products Division (1998-2002)
-
Director-Manufacturing,
Operations Support & Technology, Technical Services Division
(2002)
-
Director,
Technical Services Division
(2003-2004) |
|
Bradley M.
Halverson (44) |
Controller
(2004) |
-
Business
Resource Manager, Performance Engines Products Division
(1998-2001)
-
Business
Resource Manager, Large Engine Products & Fuel Systems Division
(2001)
-
Business
Resource Manager, Large Power Systems Division (2002)
-
Corporate
Business Development Manager, Corporate Services Division
(2002-2004) |
|
Kevin E.
Colgan (52) |
Treasurer
(2001) |
|
|
(1)
Effective February 1, 2005. |
|
(2)
Will retire effective March 1, 2005. |
|
(3)
Retired effective February 1, 2005. |
Page 11
General
Information
Caterpillar's
operations are highly integrated. Although the majority of our plants are
involved primarily in the production of either machines or engines, several
plants are involved in the manufacturing of both. In addition, several plants
are involved in the manufacturing of components which are used in the assembly
of both machines and engines. Caterpillar's parts distribution centers are
involved in the storage and distribution of parts for machines and engines.
Also, the research and development activities carried on at our Technical Center
(as described below) involve both machines and engines.
Properties
we own are believed to be generally well maintained and adequate for present
use. Through planned capital expenditures, we expect these properties to remain
adequate for future needs. Properties we lease are covered by leases expiring
over terms of generally 1 to 10 years. We anticipate no difficulty in retaining
occupancy of any leased facilities, either by renewing leases prior to
expiration or by replacing them with equivalent leased facilities.
Headquarters
Our
corporate headquarters are in Peoria, Illinois. Additional marketing
headquarters are located both inside and outside the United States. The
Financial Products Division is headquartered in leased offices located in
Nashville, Tennessee.
Distribution
Distribution
of our parts is conducted from parts distribution centers inside and outside the
United States. Caterpillar Logistics Services, Inc., distributes other
companies' products utilizing certain of our distribution facilities as well as
other non-Caterpillar facilities located both inside and outside the United
States. We also own or lease other storage facilities that support distribution
activities.
Changes
in Fixed Assets
During
the five years ended December 31, 2004, changes in our investment in property,
plant and equipment were as follows (stated in millions of
dollars):
| |
|
Expenditures |
|
Acquisitions |
|
|
|
Disposals |
|
Net
Increase |
| |
|
|
|
|
|
Provision
for |
|
and
Other |
|
(Decrease) |
|
Year |
|
U.S. |
|
Outside
U.S. |
|
U.S. |
|
Outside
U.S. |
|
Depreciation |
|
Adjustments |
|
During
Period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2000 |
|
$ |
1,067 |
|
$ |
526 |
|
|
$ |
0 |
|
$ |
9 |
|
|
$ |
(969) |
|
|
$ |
(62) |
|
|
$ |
571 |
|
|
2001 |
|
$ |
1,345 |
|
$ |
623 |
|
|
$ |
2 |
|
$ |
32 |
|
|
$ |
(1,070) |
|
|
$ |
(280) |
|
|
$ |
652 |
|
|
2002 |
|
$ |
1,030 |
|
$ |
743 |
|
|
$ |
15 |
|
$ |
0 |
|
|
$ |
(1,199) |
|
|
$ |
(151) |
|
|
$ |
438 |
|
|
2003 |
|
$ |
1,000 |
|
$ |
765 |
|
|
$ |
0 |
|
$ |
0 |
|
|
$ |
(1,332) |
|
|
$ |
(191) |
|
|
$ |
242 |
|
|
2004 |
|
$ |
1,212 |
|
$ |
902 |
|
|
$ |
10 |
|
$ |
44 |
|
|
$ |
(1,366) |
|
|
$ |
(371) |
|
|
$ |
431 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At
December 31, 2004, the net book value of properties located outside the United
States represented about 42 percent of the net book value of all properties
reflected in our consolidated financial position. Additional information about
our investment in property, plant, and equipment appears in Note 1F on page A-10
and Note 10 on page A-17 of the Appendix.
Technical
Center, Training Centers, Demonstration Areas, and Proving
Grounds
We
own a Technical Center located in Mossville, Illinois, and various other
training centers, demonstration areas, and proving grounds located both inside
and outside the United States.
Manufacturing,
Remanufacturing, and Overhaul
Manufacturing,
remanufacturing, and overhaul of our products are conducted at the following
locations. These facilities are believed to be suitable for their intended
purposes with adequate capacities for current and projected needs for existing
products.
Page 12
|
Manufacturing |
|
|
Inside
the U.S.
|
|
Indiana |
|
Tennessee |
|
France |
|
Mexico |
|
California |
|
|
|
|
|
|
|
|
|
|
|
Kansas |
|
Texas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Florida |
|
Kentucky |
|
Outside
the U.S. |
|
Germany |
|
|
|
|
|
|
|
Australia |
|
|
|
|
|
Georgia |
|
Michigan |
|
|
|
|
|
The
Netherlands |
|
|
|
|
|
|
|
Hungary |
|
|
|
|
|
Minnesota |
|
Belgium |
|
|
|
Northern
Ireland |
|
|
|
|
|
|
|
India |
|
|
|
|
|
|
|
Brazil |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mississippi |
|
|
|
|
|
Peoples
Republic |
|
Illinois |
|
|
|
Canada |
|
Indonesia |
|
of
China |
|
|
|
Missouri |
|
|
|
|
|
|
|
|
|
|
|
England |
|
Italy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
Carolina |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Poland |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Russia |
|
|
|
|
|
|
|
|
|
|
|
|
|
Ohio |
|
|
|
|
|
South
Africa |
|
|
|
|
|
|
|
|
|
|
|
|
|
South
Carolina |
|
|
|
Japan |
|
Switzerland |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Remanufacturing
and Overhaul |
|
|
Inside
the U.S.
|
|
Texas |
|
Canada |
Mexico |
|
Louisiana |
|
|
|
|
|
|
|
|
|
|
England |
|
|
Mississippi |
|
Outside
the U.S. |
|
|
|
|
|
|
Australia |
|
|
Nigeria |
|
|
|
|
|
Indonesia |
|
|
South
Carolina |
|
Belgium |
|
|
Scotland |
|
|
|
|
|
Malaysia |
|
| |
|
|
|
|
|
|
1
Facility of affiliated company (50% or less owned)
2
Facility of partially owned subsidiary (more than 50%, less than
100%) |
| |
We are a party to
litigation matters and claims that are normal in the course of our operations,
and, while the results of such litigation and claims cannot be predicted with
certainty, management believes, based on the advice of counsel, the final
outcome of any single proceeding or all proceedings in the aggregate would not
have a materially adverse effect on our consolidated financial position or
results of operations or cash flows.
On
January 16, 2002, Caterpillar commenced an action in the Circuit Court of the
Tenth Judicial Circuit of Illinois in Peoria, Illinois, against Navistar
International Transportation Corporation and International Truck and Engine
Corporation (collectively Navistar). The lawsuit arises out of a long-term
purchase contract between Caterpillar and Navistar effective May 31, 1988, as
amended from time to time (the Purchase Agreement). The pending complaint
alleges that Navistar breached its contractual obligations by: (i) paying
Caterpillar $8.08 less per fuel injector than the agreed upon price for new unit
injectors delivered by Caterpillar; (ii) refusing to pay contractually agreed
upon surcharges owed as a result of Navistar ordering less than planned volumes
of replacement unit injectors; and (iii) refusing to pay contractually agreed
upon interest stemming from Navistar's late payments. As of December 31, 2004,
the net past due receivable from Navistar regarding the foregoing and included
in "Long-term receivables - trade and other" in Statement 3 on page A-7 of the
Appendix totaled $139 million. The pending complaint also has claims alleging
that Franklin Power Products, Inc., Newstream Enterprises, and Navistar,
collectively and individually, failed to pay the applicable price for shipments
of unit injectors to Franklin and Newstream. As of December 31, 2004, the net
past due receivables for the foregoing, included in "Long-term receivables -
trade and other" in Statement 3 on page A-7 of the Appendix totaled $13 million.
The pending complaint further alleges that Sturman Industries, Inc., and Sturman
Engine Systems, Inc., colluded with Navistar to utilize technology that Sturman
Industries, Inc., misappropriated from Caterpillar to help Navistar develop its
G2 fuel system, and tortiously interfered with the Purchase Agreement and
Caterpillar's prospective economic relationship with Navistar. The pending
complaint further alleges that the two parties' collusion led Navistar to select
Sturman Engine Systems, Inc., and another company, instead of Caterpillar, to
develop and manufacture the G2 fuel system.
On
May 7, 2002, International Truck and Engine Corporation (International)
commenced an action against Caterpillar in the Circuit Court of DuPage County,
Illinois, that alleges Caterpillar breached various aspects of a long-term
agreement term sheet. In its fifth amended complaint, International seeks a
declaration from the court that the term sheet constitutes a legally binding
contract for the sale of heavy-duty engines at specified prices through the end
of 2006, alleges that Caterpillar breached the term sheet by raising certain
prices effective October 1, 2002, and also alleges that Caterpillar breached an
obligation to negotiate a comprehensive long-term agreement referenced in the
term sheet. International has also asserted a claim for "unjust enrichment"
related to certain revenues received by Caterpillar from another customer.
International seeks damages "in an amount to be determined at trial" and
injunctive relief. Caterpillar denies International's claims and has filed a
counterclaim seeking a declaration that the term sheet has been effectively
terminated. Caterpillar also asserts that International has released Caterpillar
from certain of its claims. On September 24, 2003, the Appellate Court of
Illinois, ruling on an interlocutory appeal, issued an order consistent with
Caterpillar's position that, even if the court subsequently determines that the
term sheet is a binding contract, it is indefinite in duration and was therefore
terminable at will by Caterpillar after a reasonable period. Caterpillar
anticipates that a trial currently scheduled to begin in June 2005 will address
all remaining issues in this matter. This matter is not related to the breach of
contract action brought by Caterpillar against Navistar currently pending in the
Circuit Court of Peoria County, Illinois.
In
2004, the European Union (EU) imposed retaliatory tariffs on certain U.S. origin
goods as a result of a WTO decision that found the extraterritorial income
exclusion (ETI) provisions of the FSC Repeal and Extraterritorial Income
Exclusion Act of 2000 constituted a prohibited export subsidy. These tariffs,
which began in March of 2004 at 5 percent, increased 1 percentage point per
month. Given the makeup of the final retaliation list, some Caterpillar parts
and components were subject to these tariffs. However, these tariffs have not
materially impacted our financial results. In addition to the United States, the
company has production facilities in the EU, Russia, Asia, and South America.
Products sold into the EU from these plants were not affected by this
retaliatory tariff. The American Jobs Creation Act of 2004 (Act), enacted on
October
22, 2004, phases-out the ETI provisions. As a result, the EU has lifted the
sanctions effective January 1, 2005 pending the outcome of a WTO review to
determine whether certain provisions of the Act are compliant with the ruling
against the FSC/ETI regime.
Page 14
In a letter dated
November 15, 2004, the EPA proposed a civil penalty of $641,392 to Caterpillar
for the alleged failure to comply with certain requirements of the Federal Clean
Air Act. The EPA alleges that Caterpillar constructed a facility in Emporia,
Kansas, and failed to comply with Section 112(g)(2)(B) of the Clean Air Act.
Caterpillar sold the Emporia facility in December 2002. We are seeking a
settlement of this matter with all concerned parties and the company believes
the outcome will not have a material impact on our financial
statements.
|
Issuer Purchases of
Equity Securities. |
Information
required by Item 5 is incorporated by reference from "Price Ranges" and "Number
of Stockholders" on page
A-62
and from "Dividends paid per common share" on page A-51 of the
Appendix.
Non-U.S.
Employee Stock Purchase Plans
We
have 27 employee stock purchase plans administered outside the United States for
our foreign employees. As of December 31, 2004, those plans had approximately
9,108 participants in the aggregate. During the fourth quarter of 2004, a total
of 121,086 shares of Caterpillar common stock or foreign denominated equivalents
were distributed under the plans. Participants in some foreign plans have the
option of receiving non-U.S. share certificates (foreign-denominated
equivalents) in lieu of U.S. shares of Caterpillar common stock upon withdrawal
from the plan. These equivalent certificates are tradable only on the local
stock market and are included in our determination of shares
outstanding.
Issuer
Purchases of Equity Securities
|
Period |
|
Total
number
of
Shares
Purchased |
|
Average
Price
Paid
per Share |
|
Total
Number
of
Shares Purchased Under the Program |
|
Maximum
Number
of
Shares that May
Yet
Be Purchased
Under
the Program |
|
|
|
|
|
|
|
|
|
|
|
October 1-31,
2004 |
|
1,005,000 |
|
|
$ |
79.53 |
|
|
1,005,000 |
|
|
20,826,904 |
1 |
|
November
1-30, 2004 |
|
- |
|
|
|
|
|
|
- |
|
|
22,909,109 |
1 |
|
December
1-31, 2004 |
|
631,400 |
|
|
|
93.18 |
|
|
631,400 |
|
|
22,936,949 |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
1,636,400 |
|
|
$ |
84.80 |
|
|
1,636,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 On October 8,
2003, the board of directors approved an extension of the share repurchase
program (through October 2008) with the goal of reducing the company's
outstanding shares to 320,000,000. Amount represents the shares
outstanding at the end of the period less 320,000,000. |
|
|
Other
Purchases of Equity Securities
|
Period |
|
Total
number
of
Shares
Purchased1 |
|
Average
Price
Paid
per Share |
|
Total
Number
of
Shares Purchased Under the Program |
|
Maximum
Number
of
Shares that May
Yet
Be Purchased
Under
the Program |
|
|
|
|
|
|
|
|
|
|
October 1-31,
2004 |
|
30 |
|
|
$ |
72.12 |
|
|
N/A |
|
|
N/A |
|
|
November
1-30, 2004 |
|
1,261 |
|
|
|
80.30 |
|
|
N/A |
|
|
N/A |
|
|
December
1-31, 2004 |
|
251
|
|
|
|
85.90 |
|
|
N/A |
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
1,542 |
|
|
$ |
81.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
1 Represents
shares delivered back to issuer for the payment of taxes resulting from
the exercise of stock options. |
|
Page 15
Information
required by Item 6 is incorporated by reference from the "Five-year Financial
Summary" on page A-35, "Contractual obligations" on page A-51, and "Supplemental
consolidating data" on pages A-57 through A-59 of the Appendix.
Information
required by Item 7 is incorporated by reference from pages A-36 through A-61 of
the Appendix.
SAFE
HARBOR STATEMENT UNDER THE SECURITIES LITIGATION REFORM ACT OF
1995
Certain statements
contained in our Management's Discussion and Analysis are forward-looking and
involve uncertainties that could significantly impact results. The words
"believes," "expects," "estimates," "anticipates," "will be", "should" and
similar words or expressions identify forward-looking statements made on behalf
of Caterpillar. Uncertainties include factors that affect international
businesses, as well as matters specific to the company and the markets it
serves.
World
Economic Factors
The world economy
had its best recovery in years in 2004 and we expect that recovery to continue,
but at a somewhat slower pace, in 2005. That outlook assumes central banks will
cautiously raise interest rates so as not to slow growth too much. Low interest
rates, and continued good economic growth, should encourage further growth in
construction and mining. Should central banks raise interest rates aggressively,
both the world economic recovery and our Machinery and Engines sales likely
would be weaker.
The U.S. economy is
growing at more than a three percent rate, which up to now has not created an
inflation problem. While the Federal Reserve has raised interest rates, we
assume the continuation of moderate growth and low inflation will result in
interest rates of no more than 3.5 percent by the end of 2005. Long-term
interest rates are expected to rise less than short-term rates. That environment
should support further growth in construction and manufacturing, helping to keep
commodity prices favorable. Should financial conditions tighten noticeably,
causing economic growth to slow below 3 percent, expected improvements in
Machinery and Engines sales likely would be lower than projected.
Our projection of
increased sales of Machinery and Engines in Europe, Africa, Middle East (EAME)
assumes that low interest rates will allow slightly faster economic growth in
Europe and that favorable commodity prices will extend healthy recoveries in
both Africa and Middle East (AME) and the CIS. Key risks are that the European
Central Bank will raise interest rates sharply to reduce inflation or that
commodity prices collapse. Those developments would negatively impact our
results.
Favorable commodity
prices, increased capital inflows and an improved foreign debt situation are
expected to contribute to another year of economic recovery in Latin America. As
a result, we project that both mining production and construction spending will
increase, supporting an increase in Machinery and Engines sales. This forecast
is vulnerable to a significant weakening in commodity prices, a slowing in world
economic growth or widespread increases in interest rates.
In Asia/Pacific, we
project sales growth in Australia, India and the developing Asian economies will
offset a further decline in China. Critical assumptions are continued growth in
coal demand, low domestic interest rates in most countries, further gains in
exports and continued good economic growth in China. Some developments that
could lower expected results include reduced demand for thermal and coking coal,
significant revaluations of regional currencies, restrictions on regional
exports and sharp interest rate hikes, particularly in China.
Commodity
Prices
Commodities
represent a significant sales opportunity, with prices and production as key
drivers. Prices have improved sharply over the past year and a half and our
outlook assumes continued growth in world industrial production will cause
metals prices to remain high enough in 2005 to encourage further mine
investment. Any unexpected weakening in world industrial production, however,
could cause prices to drop sharply to the detriment of our results.
Page 16
Coal production and
prices improved last year and our sales have benefited. We expect these trends
to continue in 2005. Should coal prices soften, due to a slowing in world
economic growth or otherwise, the ongoing sales recovery would be
vulnerable.
Oil and natural gas
prices increased sharply over the past two years due to strong demand and high
capacity usage. Higher energy prices did not halt economic recoveries last year
since a strong demand boosted prices and world production increased. High prices
are encouraging more exploration and development and we expect increased
production in 2005 will constrain price increases. However, should significant
supply cuts occur, such as from OPEC production cuts or political unrest in a
major producing country, the resulting oil shortages and price spikes could slow
economies, potentially with a depressing impact on our sales.
Monetary
and Fiscal Policies
For most companies
operating in a global economy, monetary and fiscal policies implemented in the
United States and abroad could have a significant impact on economic growth, and
accordingly, demand for a product. In general, higher than expected interest
rates, reductions in government spending, higher taxes, excessive currency
movements, and uncertainty over key policies are some factors likely to lead to
slower economic growth and lower industry demand.
With economic data
looking more favorable, central banks in developed countries have started
raising interest rates from the lowest rates in decades. Our outlook assumes
that central banks will take great care to ensure that economic recoveries
continue and that interest rates will remain low throughout the forecast period.
Should central banks raise interest rates more aggressively than anticipated,
both economic growth and our sales could suffer.
Budget deficits in
many countries have increased, which has limited the ability of governments to
boost economies with tax cuts and more spending. Our outlook assumes that
governments will not aggressively raise taxes and slash spending to deal with
their budget imbalances. Such actions could disrupt growth and negatively affect
our sales.
Political
Factors
Political factors
in the United States and abroad can impact global companies. Our outlook assumes
that no major disruptive changes in economic policies occur in either the United
States or other major economies. Significant changes in either taxing or
spending policies could reduce activities in sectors important to our
businesses, thereby reducing sales.
Our outlook assumes
that there will be no additional significant military conflicts in either North
Korea or the Middle East in the forecast period. Such military conflicts could
severely disrupt sales into countries affected, as well as nearby
countries.
Our outlook also
assumes that there will be no major terrorist attacks. If there is a major
terrorist attack, confidence could be undermined, potentially causing a sharp
drop in economic activities and our sales. Attacks in major developed economies
would be the most disruptive.
Our
outlook assumes that efforts by countries to increase their exports will not
result in retaliatory countermeasures by other countries to block such exports,
particularly in the Asia/Pacific region. Our outlook includes a negative impact
from the phase-out of the Extraterritorial Income Exclusion (ETI) as enacted by
the American Jobs Creation Act of 2004 (the Act). However, our outlook does not
include any impact from the provision of the Act allowing preferential tax
treatment of the repatriation of non-U.S. earnings in 2005. Further, our outlook
assumes any other tax law changes will not negatively impact our provision for
income taxes.
Currency
Fluctuations
The company has
costs and revenues in many currencies and is therefore exposed to risks arising
from currency fluctuations. Our outlook assumes no significant changes in
currency values from current rates. Should currency rates change sharply, our
results could be negatively impacted.
The company's
largest manufacturing presence is in the United States, so any unexpected
strengthening of the dollar tends to raise the foreign currency costs to our end
users and reduce our global competitiveness.
Page 17
The company sells
primarily through an independent dealer network. Dealers carry inventories of
both new and rental equipment and adjust those inventories based on their
assessments of future needs. Such adjustments can impact our results either
positively or negatively. The current outlook assumes dealers will increase
inventories in line with higher deliveries. Should dealers control inventories
more tightly, our sales would be lower.
Financial
Products Division Factors
Inherent in the
operation of Cat Financial is the credit risk associated with its customers. The
creditworthiness of each customer, and the rate of delinquencies, repossessions
and net losses on customer obligations are directly impacted by several factors,
including, but not limited to, relevant industry and economic conditions, the
availability of capital, the experience and expertise of the customer's
management team, commodity prices, political events, and the sustained value of
the underlying collateral. Additionally, interest rate movements create a degree
of risk to our operations by affecting the amount of our interest payments and
the value of our fixed rate debt. Our match funding policy manages interest rate
risk by matching the interest rate profile (fixed rate or floating rate) of our
debt portfolio with the interest rate profile of our receivables portfolio
within certain parameters. To achieve our match funding objectives, we issue
debt with similar interest rate profile to our receivables and also use interest
rate swap agreements to manage our interest rate risk exposure to interest rate
changes and in some cases to lower our cost of borrowed funds. If interest rates
move upward more sharply than anticipated, our financial results could be
negatively impacted. With respect to our insurance and investment management
operations, changes in the equity and bond markets could cause an impairment of
the value of our investment portfolio, thus requiring a negative adjustment to
earnings.
Other
Factors
The rate of
infrastructure spending, housing starts, commercial construction and mining
plays a significant role in the company's results. Our products are an integral
component of these activities and as these activities increase or decrease in
the United States or abroad, demand for our products may be significantly
impacted.
Projected cost
savings or synergies from alliances with new partners could also be negatively
impacted by a variety of factors. These factors could include, among other
things, higher than expected wages, energy and/or material costs, and/or higher
than expected financing costs due to unforeseen changes in tax, trade,
environmental, labor, safety, payroll or pension policies in any of the
jurisdictions in which the alliances conduct their operations.
As
of December 31, 2004, there were 11,465 U.S. hourly production employees who
were covered by collective bargaining agreements with various labor unions. The
United Automobile, Aerospace and Agricultural Implement Workers of America (UAW)
represents 9,450 Caterpillar employees under a six-year central labor agreement
that will expire March 1, 2011. The International Association of Machinists
(IAM) represents 1,999 employees under labor agreements expiring on April 30,
2005, and May 29, 2005. Based on our historical experience during periods when
labor unrest or work stoppage by union-represented employees has occurred, we do
not expect that the occurrence of such events, if any, arising in connection
with the expiration of these agreements will have a material impact on our
operations or results.
Results may be
impacted positively or negatively by changes in the sales mix. Our outlook
assumes a certain geographic mix of sales as well as a product mix of sales. If
actual results vary from this projected geographic and product mix of sales, our
results could be negatively impacted.
The company
operates in a highly competitive environment and our outlook depends on a
forecast of the company's share of industry sales. An unexpected reduction in
that share could result from pricing or product strategies pursued by
competitors, unanticipated product or manufacturing difficulties, a failure to
price the product competitively, or an unexpected buildup in competitors' new
machine or dealer owned rental fleets, leading to severe downward pressure on
machine rental rates and/or used equipment prices.
Page 18
The
environment remains competitive from a pricing standpoint. Our 2005 sales
outlook assumes that the company will be successful in implementing worldwide
machine price increases communicated to dealers with an effective date of
January 3, 2005. While we expect that the environment will absorb these price
actions, delays in the marketplace acceptance would negatively impact our
results. Moreover, additional price discounting to maintain our competitive
position could result in lower than anticipated price realization.
In general, our
results are sensitive to changes in economic growth, particularly those
originating in construction, mining and energy. Developments reducing such
activities also tend to lower our sales. In addition to the factors mentioned
above, our results could be negatively impacted by any of the
following:
| · |
Any sudden
drop in consumer or business confidence; |
| · |
Delays in
legislation needed to fund public construction;
|
| · |
Regulatory or
legislative changes that slow activity in key industries;
and/or |
| · |
Unexpected
collapses in stock markets. |
This discussion of
uncertainties is by no means exhaustive, but is designed to highlight important
factors that may impact our outlook. Obvious factors such as general economic
conditions throughout the world do not warrant further discussion, but are noted
to further emphasize the myriad of contingencies that may cause the company's
actual results to differ from those currently anticipated.
Information
required by Item 7A appears in Note 1 under "Impairment of available-for-sale
securities" on page A-11, Note 3 on pages A-13 and A-14, Note 20 on pages A-25
and A-26 and Note 21 on pages A-26 and A-27 of the Appendix. Other
information required by Item 7A is incorporated by reference from pages A-55 and
A-56 of the Appendix under
"Sensitivity."
Information
required by Item 8 is incorporated by reference from the Report of Independent
Registered Public Accounting Firm on page A-4 and from the Financial Statements
and Notes to Consolidated Financial Statements on pages A-5 through A-34 of the
Appendix. Other information required by Item 8 is included in "Computation of
Ratios of Earnings to Fixed Charges" filed as Exhibit 12 to this Form
10-K.
Under
the supervision and with the participation of our management, including our
chief executive officer and our chief financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined
under Exchange Act Rule 13a-15(e). Based on this evaluation, our chief executive
officer and our chief financial officer concluded that our disclosure controls
and procedures were effective as of the end of the period covered by this annual
report.
The
management of Caterpillar Inc. (company) is responsible for establishing and
maintaining adequate internal control over financial reporting. Our internal
control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of our financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. Our internal control over financial
reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the
company's assets that could have a material effect on the financial
statements.
Page 19
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate. Management assessed the
effectiveness of the company's internal control over financial reporting as of
December 31, 2004. In making this assessment, we used the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal
Control — Integrated Framework.
Based on our assessment we concluded that, as of December 31, 2004, the
company's internal control over financial reporting was effective based on
those criteria.
Our management's
assessment of the effectiveness of the company's internal control over financial
reporting as of December 31, 2004 has been audited by PricewaterhouseCoopers
LLP, an independent registered public accounting firm. Their report appears on
page A-4 of the Appendix.
Identification
of Directors and Business Experience
Information
required by this Item is incorporated by reference from "Directors Up For
Election This Year for Terms Expiring in 2008," "Directors Remaining in Office
Until 2006," and "Directors Remaining in Office Until 2007" on pages 2 through 4
of the Proxy Statement.
Identification
of Executive Officers and Business Experience
Information
required by this Item appears in Item 1A of this Form 10-K.
Family
Relationships
There
are no family relationships between the officers and directors of the company.
All officers serve at the pleasure of the board of directors and are regularly
elected at a meeting of the board in April of each year.
Legal
Proceedings Involving Officers and Directors
Information
required by this SK Item 401(f) is incorporated by reference from "Legal
Proceedings" on page 7 of the Proxy Statement.
Audit
Committee Financial Expert
Information
required by this Item is incorporated by reference from "Board Meetings,
Communications and Committees" on pages 4 through 6 of the Proxy
Statement.
Identification
of Audit Committee
Information
required by this Item is incorporated by reference from "Board Meetings,
Communications and Committees" on pages 4 through 6 of the Proxy
Statement.
Shareholder
Recommendation of Board Nominees
Information
required by this Item is incorporated by reference from "Governance Committee
Report" on pages 10 and 11 of the Proxy Statement.
Compliance
with Section 16(a) of the Exchange Act
Information
required by this Item relating to compliance with Section 16(a) of the
Securities Exchange Act of 1934 is incorporated by reference from "Section 16(a)
Beneficial Ownership Reporting Compliance" on pages 33 and 34 of the Proxy
Statement.
Page 20
Our
Code of Worldwide Business Conduct (Code), first published in 1974 and most
recently amended in 2000, sets a high standard for honesty and ethical behavior
by every employee, including the principal executive officer, principal
financial officer, and principal accounting officer/controller. The Code is
posted on our website at www.CAT.com
under "About CAT" - Company Information and is incorporated by reference as
Exhibit 14 to this Form 10-K. To obtain a copy of the Code at no charge, submit
a written request to the Corporate Secretary at 100 NE Adams Street, Peoria,
Illinois 61629-7310. We will post on our
website any required amendments to or waivers granted under our Code pursuant to
SEC or New York Stock Exchange disclosure rules.
Information
required by this item is incorporated by reference from "Director Compensation"
on page 6, "Performance Graph" on page 13, "Compensation
Committee Report on Executive Officer and Chief Executive Officer
Compensation"
on pages 14 through 21, and "Executive Compensation Tables" on pages 22 through
24 of the Proxy Statement.
On
February 18, 2005, the Compensation Committee authorized the following with
respect to the compensation of the company's named executive officers as defined
in Regulation S-K Item 402(a)(3).
| |
2005
Salary |
|
2004
Bonus1
|
Shares
of
Restricted
Stock |
Shares
Underlying 2005 Option Grant2
|
|
LTCPP
Payouts3
|
|
James W.
Owens |
$ |
1,200,000 |
|
|
$ |
1,649,811 |
|
10,000 |
|
230,000 |
|
|
$ |
1,371,886 |
|
Stuart L.
Levenick |
$ |
588,000 |
|
|
$ |
547,197 |
|
|
|
65,000 |
|
|
$ |
533,814 |
|
Douglas R.
Oberhelman |
$ |
700,000 |
|
|
$ |
764,340 |
|
1,000 |
|
70,000 |
|
|
$ |
708,745 |
|
Gerald L.
Shaheen |
$ |
778,000 |
|
|
$ |
843,739 |
|
|
|
70,000 |
|
|
$ |
788,135 |
|
Gérard L.
Vittecoq |
$ |
819,950 |
4 |
|
$ |
887,295 |
|
|
|
65,000 |
|
|
$ |
771,808 |
|
Steven H.
Wunning |
$ |
612,000 |
|
|
$ |
625,387 |
|
|
|
65,000 |
|
|
$ |
550,432 |
|
1Granted under
the Executive Incentive Compensation Plan (Ex.10.5 hereto) and based on
company performance versus profit per share and 6 Sigma value proposition
metrics set by the Compensation Committee in February 2004 and in
recognition of outstanding individual performance in
2004. |
|
2Granted under
the 1996 Stock Option and Long Term Incentive Plan (Ex. 10.1
hereto). |
|
3Granted under
the 1996 Stock Option and Long Term Incentive Plan (Ex.10.1 hereto) and
based on company performance from 2002 through 2004 against profit per
share and return on equity metrics set by the Compensation Committee in
February 2002. |
|
4Estimated
based on exchange rate for Swiss francs as of February 18,
2005. |
Information
required by this item relating to security ownership of certain beneficial
owners and management is incorporated by reference from "Caterpillar Stock Owned
by Officers and Directors (as of December 31, 2004)" on page 12 and "Persons
Owning More than Five Percent of Caterpillar Stock (as of December 31, 2004)" on
page 13 of the Proxy Statement.
Page 21
Information
required by this item relating to securities authorized for issuance under
equity compensation plans is included in the following table:
|
Equity
Compensation Plan Information
(as
of December 31, 2004) |
|
| |
|
(a) |
|
(b) |
|
(c) |
|
|
Plan category
|
|
Number of
securities to be issued upon exercise of outstanding options, warrants and
rights |
|
Weighted-average
exercise price of outstanding options, warrants and rights |
|
Number of
securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a)) |
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans
approved by
security holders |
|
41,425,377 |
|
|
57.61 |
|
|
19,402,200 |
|
|
|
Equity
compensation plans
not approved
by security holders |
|
n/a
|
|
|
n/a |
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
41,425,377 |
|
|
57.61 |
|
|
19,402,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information
required by this item is incorporated by reference from "Certain Related
Transactions" on page 7 of the Proxy Statement.
Information
required by this Item is incorporated by reference from "Audit Committee Report"
on pages 7 through 9 and "Audit Fees" on page 10 of the Proxy
Statement.
(a)
The
following documents are incorporated by reference from the indicated pages of
the Appendix:
1.
Financial Statements:
| · |
Report
of Independent Registered Public Accounting Firm
(A-4) |
| · |
Statement
1 - Results of Operations (A-5) |
| · |
Statement
2 - Changes in Consolidated Stockholders' Equity
(A-6) |
| · |
Statement
3 - Financial Position (A-7) |
| · |
Statement
4 - Statement of Cash Flow (A-8) |
| · |
Notes
to Consolidated Financial Statements (A-9 through
A-34) |
2. Financial
Statement Schedules:
| · |
All
schedules are omitted because the required information is shown in the
financial statements or the notes thereto incorporated by reference from
the Appendix or considered to be
immaterial. |
| |
3.1
|
|
Restated
Certificate of Incorporation (incorporated by reference from Exhibit 3(i)
to the Form 10-Q filed for the quarter ended March 31, 1998).
|
| |
3.2
|
|
Certificate
of Designation, Preferences and Rights of the Terms of the Series A Junior
Participating Preferred Stock (incorporated by reference from Exhibit 2 to
Form 8-A filed December 11, 1996).
|
| |
3.3
|
|
Bylaws,
amended
and restated as of February 11, 2004 (incorporated by reference from
Exhibit 3.3
to the Form 10-Q filed for the quarter ended March 31, 2004).
|
| |
4
|
|
Third Amended
and Restated Rights Agreement dated as of June 12, 2003, between
Caterpillar Inc. and Mellon Investor Services LLC (incorporated by
reference from Exhibit 4 to Form 10-K/A for 2002 filed July 17,
2003).
|
| |
10.1
|
|
Caterpillar
Inc. 1996 Stock Option and Long-Term Incentive Plan, amended and restated
as of August 18, 2004.**
|
| |
10.2
|
|
Caterpillar
Inc. 1987 Stock Option Plan, as amended and restated and Long Term
Incentive Supplement, amended and restated as of December 31, 2000
(incorporated by reference from Exhibit 10.2 to Form 10-K for 2002 filed
March 31, 2003).**
|
| |
10.3
|
|
Supplemental
Pension Benefit Plan, as amended and restated January 2003.**
|
| |
10.4
|
|
Supplemental
Employees' Investment Plan, as amended and restated through December 1,
2002 (incorporated
by reference from Exhibit 10.4 to the 2002
Form 10-K for 2002).**
|
| |
10.5
|
|
Caterpillar
Inc. Executive Incentive Compensation Plan, effective as of January 1,
2002 (incorporated
by reference from Exhibit 10.5 to the 2002
Form 10-K).**
|
| |
10.6
|
|
Directors'
Deferred Compensation Plan, as amended and restated through April 12, 1999
(incorporated by reference from Exhibit 10.6 to the 1999 Form
10-K).**
|
| |
10.7
|
|
Directors'
Charitable Award Program (incorporated by reference from Exhibit 10(h) to
the 1993 Form 10-K).**
|
| |
10.8
|
|
Deferred
Employees' Investment Plan, as amended and restated through December 1,
2002 (incorporated
by reference from Exhibit 10.8 to the 2002
Form 10-K).**
|
| |
11
|
|
Computations
of Earnings per Share (incorporated by reference from Note 19 on page A-25
of the Appendix).
|
| |
12
|
|
Computation
of Ratios of Earnings to Fixed Charges.
|
| |
13
|
|
Annual Report
to Security Holders attached as an Appendix to the company's 2005 Annual
Meeting Proxy Statement.
|
| |
14
|
|
Caterpillar
Code of Worldwide Business Conduct (incorporated by reference from Exhibit
14 to the 2003 Form 10-K).
|
| |
21
|
|
Subsidiaries
and Affiliates of the Registrant.
|
| |
23
|
|
Consent of
Independent Registered Public Accounting Firm.
|
| |
31.1
|
|
Certification
of James W. Owens, Chairman and Chief Executive Officer of Caterpillar
Inc., as required pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
| |
31.2
|
|
Certification
of David B. Burritt, Chief Financial Officer of Caterpillar Inc., as
required pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
| |
32
|
|
Certification
of James W. Owens, Chairman and Chief Executive Officer of Caterpillar
Inc. and David B. Burritt, Chief Financial Officer of Caterpillar Inc., as
required pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
| |
99.1
|
|
Annual CEO
certification to the New York Stock Exchange.
|
| |
99.2
|
|
Form 11-K for
Caterpillar Foreign Service Employees' Stock Purchase Plan.
|
| |
**
Compensatory plan or arrangement required to be filed as an exhibit
pursuant to Item 15(c) of this Form 10-K.
|
|
Form
10-K
SIGNATURES
|
|
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, the company has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly
authorized.
|
|
|
|
|
CATERPILLAR
INC.
(Registrant)
|
|
February
24, 2005 |
|
By: |
/s/James B.
Buda |
|
|
|
James B.
Buda, Secretary |
| |
|
|
|
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the company
and in the capacities and on the dates
indicated. |
| |
|
|
|
|
February
24, 2005 |
/s/James
W. Owens |
|
Chairman
of the Board, Director
and
Chief Executive Officer |
|
|
|
|
| |
|
|
|
|
February
24, 2005 |
/s/Stuart
L. Levenick |
|
Group
President |
|
|
|
|
| |
|
|
|
|
February
24, 2005 |
/s/Douglas
R. Oberhelman |
|
Group
President |
|
|
|
|
| |
|
|
|
|
February 24, 2005 |
/s/Gerald
L. Shaheen |
|
Group
President |
|
|
|
|
| |
|
|
|
|
February
24, 2005 |
/s/Gerard
R. Vittecoq |
|
Group
President |
|
|
|
|
| |
|
|
|
|
February
24, 2005 |
/s/Steven
H. Wunning |
|
Group
President |
|
|
|
|
| |
|
|
|
|
February 24, 2005 |
/s/David
B. Burritt |
|
Vice
President and
Chief
Financial Officer |
|
|
|
|
| |
|
|
|
|
February 24, 2005 |
/s/Bradley
M. Halverson |
|
Controller
and
Chief
Accounting Officer |
|
|
|
|
| |
|
|
|
|
February
24, 2005 |
/s/W.
Frank Blount |
|
Director |
|
|
|
|
| |
|
|
|
|
February
24, 2005 |
/s/John
R. Brazil |
|
Director |
|
|
|
|
|
| |
|
|
|
|
February
24, 2005 |
/s/John
T. Dillon |
|
Director |
|
|
|
|
| |
|
|
|
|
February 24, 2005 |
/s/Eugene
V. Fife |
|
Director |
|
|
|
|
| |
|
|
|
|
February 24, 2005 |
/s/Gail
D. Fosler |
|
Director |
|
|
|
|
| |
|
|
|
|
February
24, 2005 |
/s/Juan
Gallardo |
|
Director |
|
|
|
|
| |
|
|
|
|
February 24, 2005 |
/s/David
R. Goode |
|
Director |
|
|
|
|
| |
|
|
|
|
February 24, 2005 |
/s/Peter
A. Magowan |
|
Director |
|
|
|
|
| |
|
|
|
|
February
24, 2005 |
/s/William
A. Osborn |
|
Director |
|
|
|
|
| |
|
|
|
|
February
24, 2005 |
/s/Gordon
R. Parker |
|
Director |
|
|
|
|
| |
|
|
|
|
February 24, 2005 |
/s/Charles
D. Powell |
|
Director |
|
|
|
|
| |
|
|
|
|
February 24, 2005 |
/s/Edward
B. Rust, Jr. |
|
Director |
|
|
|
|
| |
|
|
|
|
February
24, 2005 |
/s/Joshua
I. Smith |
|
Director |
|
|
|
|
| |
|
|
|