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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission File No. 1-768
CATERPILLAR INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 37-0602744
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
100 NE ADAMS STREET,
PEORIA, ILLINOIS 61629
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (309) 675-1000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common Stock ($1.00 par value) Midwest Stock Exchange
New York Stock Exchange
Pacific Stock Exchange
Preferred Stock Purchase Rights Midwest Stock Exchange
New York Stock Exchange
Pacific Stock Exchange
8% Three-year Extentable Notes due 1997 New York Stock Exchange
9 1/8% Notes due December 15, 1996 New York Stock Exchange
9 3/8% Notes due July 15, 2000 New York Stock Exchange
9 3/8% Notes due July 15, 2001 New York Stock Exchange
9% Debentures due April 15, 2006 New York Stock Exchange
9 3/8% Debentures due August 15, 2011 New York Stock Exchange
9 3/4% Sinking Fund Debentures due New York Stock Exchange
June 1, 2019
9 3/8% Debentures due March 15, 2021 New York Stock Exchange
8% Debentures due February 15, 2023 New York Stock Exchange
6% Debentures due May 1, 2007 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
==============================================================================
1993
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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 [X] 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. [ ]
As of December 31, 1993, there were 101,861,828 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 $9,020,348,203.
DOCUMENT INCORPORATED BY REFERENCE
Portions of the document listed below have been incorporated by reference
into the indicated parts of this report, as specified in the responses to the
item numbers involved.
1994 Annual Meeting Proxy Statement (Parts I, II, III and IV)
==============================================================================
1993
PART I
ITEM 1. BUSINESS.
Principal Business Segments
Caterpillar Inc. together with its consolidated subsidiaries (the
"Company") operates in three principal business segments:
(1) Machinery--Design, manufacture, and marketing of earthmoving,
construction, and materials handling machinery--track and wheel
tractors, track and wheel loaders, lift trucks, self-guided materials
handling vehicles, pipelayers, motor graders, wheel tractor-scrapers,
track and wheel excavators, backhoe loaders, log skidders, log
loaders, off-highway trucks, articulated trucks, paving products, and
related parts.
(2) Engines--Design, manufacture, and marketing of engines for earthmoving
and construction machines, on-highway trucks, and locomotives; marine,
petroleum, agricultural, industrial, and other applications; electric
power generation systems; and related parts. Caterpillar diesel and
spark-ignited engines meet power needs ranging from 54 to 8,000
horsepower. Turbines range from 1,340 to 15,000 horsepower (1000 to
10 500 kilowatts).
(3) Financial Products--Provides financing alternatives for Caterpillar
and noncompetitive related equipment, and extends loans to Caterpillar
customers and dealers. Also provides various forms of insurance for
Caterpillar dealers and customers to help support their purchase and
financing of Caterpillar equipment.
Note 22 of the Notes to Consolidated Financial Statements on pages A-21
through A-22 of the Appendix to the Company's 1994 Annual Meeting Proxy
Statement contains additional information regarding the Company's business
segments and geographic segments and is incorporated herein by reference.
Company Operations
The Company conducts operations in the Machinery and Engines segments of
its business under highly competitive conditions, including intense price
competition. It places great emphasis upon the high quality and performance of
its products and the service support for such products which is supplied by its
dealers. Although no one competitor is believed to produce all of the same
types of machines and engines produced by the Company, there are numerous
companies, large and small, which compete with the Company in the sale of each
of its products.
Machines are distributed principally through a worldwide organization of
independent full-line dealers, and one company-owned dealership; 65 located in
the United States and 118 located outside the United States. Worldwide, these
dealers have more than 1,250 places of business. Diesel and spark-ignited
engines are sold through the worldwide dealer organization and to other
manufacturers for use in products manufactured by them. Caterpillar dealers do
not deal exclusively in the Company's products, although in most cases sales and
servicing of the Company's products are the dealers' principal business.
Turbines are sold through a sales force employed by Solar Turbines Incorporated,
a wholly owned subsidiary, or its subsidiaries and associated companies. These
employees are from time to time assisted by independent sales representatives.
Financial Products consists primarily of Caterpillar Financial Services
Corporation and its subsidiaries, and Caterpillar Insurance Co. Ltd.
2
Further information concerning the Company's operations in 1993 and its
outlook for 1994 appears under the caption "Management's Discussion and
Analysis" on pages A-26 through A-35 of the Appendix to the Company's 1994
Annual Meeting Proxy Statement, which pages are incorporated herein by
reference.
Patents and Trademarks
The Company's products are sold primarily under the marks "Caterpillar,"
"Cat," "Solar," and "Barber-Greene." The Company owns a number of patents and
trademarks relating to the products manufactured by it, which have been obtained
over a period of years. These patents and trademarks have been of value in the
growth of the Company's business and may continue to be of value in the future.
The Company does not regard any segment of the Company's business as being
dependent upon any single patent or group of patents.
Research and Development
The Company has always placed strong emphasis on product-oriented research
and engineering relating to the development of new or improved machines, engines
and major components thereof, and to the development of new and improved machine
tools and processes for use in manufacturing. In 1993, 1992 and 1991, the
Company expended $455 million, $446 million and $441 million, respectively, on
its research and engineering program. Of these amounts, $319 million in 1993,
$310 million in 1992 and $272 million in 1991 were attributable to new prime
products and major component development and major improvements to existing
products. The remainders were attributable to engineering costs incurred during
the early production phase as well as ongoing efforts to improve existing
products. During 1993 the Company announced several new products, such as the
3406E truck engine, as well as improvements to existing products. The Company
expects to continue the development of new products and improvements to existing
products in the future.
Employment
At December 31, 1993, the Company employed 51,250 persons of whom 13,147
were located outside the United States.
Sales
Sales outside the United States were 49% of consolidated sales in 1993,
compared with 55% in 1992 and 59% in 1991 .
Environmental Matters
The Company's facilities and products are subject to extensive
environmental laws and regulations. Research, engineering, and operating
expenses relating to environmental protection totaled approximately $126 million
in 1993, and are expected to remain relatively constant for 1994. Such expenses
include depreciation expenses of approximately $10 million, but exclude
reserves described hereinafter. Capital expenditures for pollution abatement
and control for 1993 were approximately $11 million, approximately 2.5% of total
capital expenditures. For 1994, the Company estimates that such capital
expenditures will approximate $17 million.
It is expected that these expenditure levels will continue and may increase
over time. However, the ultimate cost of future compliance is uncertain due to
a number of factors such as the evolving nature and interpretation of
environmental laws and regulations, the extent of remediation which may be
required at sites identified by the Environmental Protection Agency (EPA), or
comparable state authorities, and evolving technologies. The 1990 Amendments to
the Clean Air Act provide, among other things, for more stringent air emission
standards which may require significant expenditures to bring the Company's
facilities into compliance and to redesign certain of the Company's products.
The 1990 Amendments are scheduled to be implemented throughout the 1990s and the
first decade of the
3
21st century. However, a large number of the regulations which will be
required to achieve that implementation have not yet been proposed or
promulgated. In 1993, capital and operating expenditures attributed to
compliance with the 1990 Amendments were approximately $15 million. Expenditures
for 1994 are expected to be approximately $19 million.
Based on a preliminary environmental assessment, during 1992 Solar Turbines
Incorporated (Solar), a subsidiary of the Company since 1981, estimated that
assessment, remediation and preventative expenditures for contamination of its
Harbor Drive facility in San Diego, California will be approximately $30 to $50
million expended over the next 25 years, a significant portion of which will be
capital expenditures. The contamination of Harbor Drive, a manufacturing
facility for over 60 years, involves cleaning solvents, petroleum products, and
metal products, which have been found in both soil and groundwater samples.
Solar has been working closely with the state and local agencies on this issue.
While subject to further analysis, Solar believes that a substantial portion of
the expenditures may be recoverable from third parties who previously conducted
manufacturing or other operations on or adjacent to the site. A reserve of $13
million was recorded in the third quarter of 1992 with respect to this matter.
Remediation expenses with respect to Harbor Drive were $3 million in 1993.
Also in 1992, a reserve of $5 million was recorded with respect to
estimated costs of remediation of soil and groundwater contamination at other
facilities. This reserve includes $4 million for estimated costs to remediate
potential groundwater contamination at a former Company facility located in San
Leandro, California. Remediation efforts have been ongoing, and the Company has
been working closely with the California Department of Toxic Substances Control
in its remediation efforts. Remediation expenses with respect to San Leandro
were less than $1 million in 1993.
As of December 31, 1993, the Company, in conjunction with numerous other
parties, has been identified as a potentially responsible party (PRP) at 18
active sites identified by the EPA, or similar state authorities for remediation
under the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980 (CERCLA), or comparable federal or state statutes (CERCLA sites).
Lawsuits and claims involving additional environmental matters are likely to
arise from time to time.
CERCLA and facility sites are in varying stages of investigation and
remediation. As a result, management's assessment of potential liability and
remediation costs have been based on currently available facts, the stage of the
proceedings, the number of PRPs identified, documentation available, currently
anticipated and reasonably identifiable remediation costs, amounts contributed
by the Company on a pro-rata basis toward investigation and remediation costs,
existing technology, presently enacted laws and regulations, and other factors.
While the Company may have rights of contribution or reimbursement from other
parties or coverage under insurance policies, such issues are not factors in
management's estimation of liability.
Based on the foregoing factors, management believes that it is unlikely
that any identified matters, either individually or in the aggregate, will have
a material adverse effect on the Company's consolidated financial position,
results of operations or capital expenditures. Remediation and monitoring
expenses actually incurred in 1993 in respect of CERCLA sites and soil and
groundwater contamination at Company facilities (including Harbor Drive and San
Leandro sites noted above) were approximately $4 million.
4
ITEM 1a. EXECUTIVE OFFICERS OF THE REGISTRANT AS OF DECEMBER 31, 1993.
Present Caterpillar Inc. Principal positions held during the
position and date of past five years other than
Name and Age initial election Caterpillar Inc. position currently held
- --------------------------- ---------------------------- ------------------------------------------------------------------------
- -
Donald V. Fites (59) Chairman of the Board (1990) President; Executive Vice President
James W. Wogsland (62) Vice Chairman (1990) Executive Vice President
Glen A. Barton (54) Group President (1990) Executive Vice President; Vice President; President, Solar Turbines
Incorporated
Gerald S. Flaherty (55) Group President (1990) Executive Vice President; Vice President
R. Rennie Atterbury III (56) Vice President, General Associate General Counsel
Counsel and Secretary (1991)
James W. Baldwin (56) Vice President (1991) General Manager, Parts and Service Support; Manager, Parts
Distribution, General Office
Vito H. Baumgartner (53) Vice President (1990) Chairman, Caterpillar Overseas S.A.; President, Caterpillar Brasil S.A.
James S. Beard (52) Vice President (1990) President, Caterpillar Financial Services Corporation
Richard A. Benson (50) Vice President (1989) President, Caterpillar Industrial Inc.; Manager, Product Source Planning
Ronald P. Bonati (54) Vice President (1990) Manager, Products Control General Office
James E. Despain (56) Vice President (1990) Manager, East Peoria Plant; President, CONEK S.A. de C.V.
Robert C. Dryden (57) Vice President (1981)
Roger E. Fischbach (52) Vice President (1989) Director, Engineering General Office
Donald M. Ings (45) Vice President (1993) President, Solar Turbines Incorporated;
Manager, Precision Barstock Products, York Plant
Keith G. Johnson (62) Vice President (1988) Chairman, Shin Caterpillar Mitsubishi Ltd.
James W. Owens (47) Vice President (1990) President, Solar Turbines Incorporated; Managing Director,
P.T. Natra Raya
Gerald Palmer (48) Vice President (1992) Director of Technical Services, Technical Services Division;
President, CONEK S.A. de C.V.
Robert C. Petterson (55) Vice President (1991) Vice President, Asia-Pacific-Latin America; Regional Manager,
Caterpillar Overseas S.A.
Siegfried R. Ramseyer (56) Vice President (1992) Managing Director, Caterpillar Overseas S.A.; Manager, Construction
Equipment and Dealer Administration, Caterpillar Overseas S.A.
Alan J. Rassi (53) Vice President (1992) General Manager, Aurora Plant; Plant Manager, Aurora Plant
Gary A. Stroup (44) Vice President (1992) Business Unit Manager, Component Products Division; Assistant Director
of Manufacturing, General Office; Planning and Tooling Manager,
East Peoria Plant
Richard L. Thompson (54) Vice President (1989) President, Solar Turbines Incorporated; Vice President, Customer Service,
Solar Turbines Incorporated
Wayne M. Zimmerman (58) Vice President (1989) Director of Logistics, General Office
Robert R. Gallagher (53) Controller (1990) Manager of Tax, General Office
Rudolf W. Wuttke (55) Treasurer (1991) Secretary and Treasurer, Caterpillar Overseas S.A.
Robin D. Beran (42) Assistant Treasurer; Assistant Manager of Tax, General Office
Director of Corporate Tax,
General Office (1990)
5
ITEM 2. PROPERTIES.
The Company's operations are highly integrated. Although the majority of
the Company's plants are involved primarily in the production of either machines
or engines, several of the Company's plants are involved in the manufacture of
both machines and engines. In addition, several plants are involved in the
manufacture of components which are used in the assembly of both machines and
engines. The Company's distribution centers and regional distribution centers
are involved in the storage and distribution of parts for machines and engines.
Also, the research and development activities carried on at the Technical Center
involve both machines and engines.
The corporate headquarters for the Company are located in Peoria, Illinois.
Additional marketing headquarters are located both inside and outside the United
States.
All square footage and acreage provided herein is approximated as of
December 31, 1993.
Total Properties
Total properties owned or leased by the Company consist of 65,330,072
square feet of building area, of which 90.6% is owned in fee and 9.4% is leased.
Owned Properties
Properties owned in fee by the Company consist of 59,221,322 square feet of
building area and 19,288 acres of land. Properties owned by the Company are
believed to be generally well maintained and adequate for the purposes for which
they are presently used. Through planned capital expenditures, the Company
expects these properties to remain adequate for future needs.
Consolidations/Closures/Sales
Over the last five years, in the ordinary course of business, the Company
has consolidated operations and / or closed a number of its facilities. The
Company continues to own closed properties totaling 3,956,839 square feet of
building area and 6,900 acres of land which are no longer utilized in current
operations. These closed properties have been declared surplus and are for
sale.
In December, 1991, the Company announced the probable closure of its
manufacturing facility in York, Pennsylvania and consolidation of its Brazilian
operations (including manufacturing, parts distribution, and office functions)
at the Company's existing Piracicaba facility. The timing of the closure of the
York facility is still pending. The consolidation of Brazilian operations was
completed in 1993 and the manufacturing, distribution and office facilities
located in Sao Paulo, Brazil were closed and sold. Previously closed facilities
located in Brampton, Ontario and Mentor, Ohio were also sold in 1993.
The Company's distribution facility in New Orleans, Louisiana, was closed
in 1993 and its sale is pending for 1994.
Leased Properties
Properties leased by the Company consist of 6,108,750 square feet of
building area. These properties are covered by leases expiring over terms of
generally 1 to 10 years. The Company anticipates no difficulty in retaining
occupancy of any of its leased facilities, either by renewing leases prior to
expiration or by replacing them with equivalent leased facilities.
Manufacturing
Manufacturing activities are conducted at 24 locations inside the United
States and 11 locations outside the United States. Remanufacturing and Overhaul
activities are conducted at 3 locations inside
6
the United States and 3 locations outside the United States. These facilities
have a total building area of 42,422,585 square feet, of which 98.5% is used
for manufacturing and 1.5% is used for remanufacturing and overhaul. These
facilities are believed to be suitable for their intended purposes with adequate
capacities for current and projected needs for existing Company products. A
list of the Company's manufacturing, remanufacturing and overhaul facilities
follows with principal use indicated:
Plant Locations inside the U.S. Principal Use
------------------------------- -------------
Gardena, California ................... Manufacturing
San Diego, California ................. Manufacturing
Jacksonville, Florida ................. Manufacturing
Aurora, Illinois ...................... Manufacturing
Decatur, Illinois ..................... Manufacturing
DeKalb, Illinois ...................... Manufacturing
Dixon, Illinois ....................... Manufacturing
East Peoria, Illinois ................. Manufacturing
Joliet, Illinois ...................... Manufacturing
Mapleton, Illinois .................... Manufacturing
Mossville, Illinois ................... Manufacturing
Peoria, Illinois ...................... Manufacturing
Pontiac, Illinois ..................... Manufacturing
Lafayette, Indiana .................... Manufacturing
Wamego, Kansas ........................ Manufacturing
Menominee, Michigan ................... Manufacturing
Minneapolis, Minnesota ................ Manufacturing
New Ulm, Minnesota .................... Manufacturing
Corinth, Mississippi .................. Remanufacturing
Boonville, Missouri ................... Manufacturing
Clayton, North Carolina ............... Manufacturing
Leland, North Carolina ................ Manufacturing
Dallas, Oregon ........................ Manufacturing
York, Pennsylvania .................... Manufacturing
DeSoto, Texas ......................... Overhaul
Houston, Texas ........................ Manufacturing
Mabank, Texas ......................... Overhaul
Plant Locations outside the U.S. Principal Use
-------------------------------- -------------
Melbourne, Australia .................. Manufacturing
Gosselies, Belgium .................... Manufacturing
Piracicaba, Brazil .................... Manufacturing
Edmonton, Canada ...................... Overhaul
Leicester, England .................... Manufacturing
Grenoble, France ...................... Manufacturing
Rantigny, France ...................... Manufacturing
Vernon, France ........................ Manufacturing
Godollo, Hungary ...................... Manufacturing
Jakarta, Indonesia .................... Manufacturing
Bazzano, Italy ........................ Manufacturing
Monterrey, Mexico ..................... Manufacturing
Nuevo Laredo, Mexico .................. Remanufacturing
Tijuana, Mexico ....................... Overhaul
7
Financial Products
A majority of the activity of the Financial Products Division is conducted
from its leased headquarters located in Nashville, Tennessee. The Financial
Products Division also leases 5 other office locations inside the United States
and 7 office locations outside the United States and shares other office space
with other Company entities.
Distribution
The Company's distribution activities are conducted at 10 Distribution
Center locations (3 inside the United States and 7 outside the United States)
and 13 Regional Distribution Center locations (12 inside the United States and 1
outside the United States). These locations have a total building area of
8,502,793 square feet and are used for the distribution of Company products.
Caterpillar Logistics Services, Inc. distributes other companies' products
utilizing certain of the Company's distribution facilities as well as other non-
Company facilities located both inside and outside the United States. The
Company also owns or leases other storage facilities which support distribution
activities.
Technical Center, Training/Demonstration Areas and Proving Grounds
The Company owns a Technical Center located in Mossville, Illinois and
various other training/demonstration areas and proving grounds located both
inside and outside the United States.
Capital Expenditures
During the five years ended December 31, 1993, changes in investment in
land, buildings, machinery and equipment of the Company were as follows (stated
in millions of dollars):
Expenditures Provisions Disposals Net Increase
------------------ for and Other (Decrease)
Year U.S. Outside U.S. Depreciation Adjustments During Period
---- ---- ------------ ------------ ----------- -------------
1989 $814 $275 $(455) $ (38) $ 596
1990 $708 $331 $(513) $ (45) $ 481
1991 $610 $164 $(593) $(118) $ 63
1992 $502 $138 $(644) $ (91) $ (95)
1993 $508 $124 $(661) $ (98) $(127)
At December 31, 1993, the net book value of properties located outside the
United States represented 25.7% of the net properties on the consolidated
financial position. Further information concerning the Company's investment in
land, buildings, machinery and equipment appears under Notes 1D and 12 of the
"Notes to Consolidated Financial Statements" on pages A-10 and A-16 ,
respectively, of the Appendix to the 1994 Annual Meeting Proxy Statement, which
Notes are incorporated herein by reference.
ITEM 3. LEGAL PROCEEDINGS.
The Company is a party to litigation matters and claims which are normal in
the course of its 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 such matters will not have a materially
adverse effect on the consolidated financial position.
8
As previously reported, on July 18, 1990 and July 20, 1990, two class
action complaints were filed against the Company and certain of its officers and
directors in United States District Court for the Central District of Illinois
("District Court") on behalf of all persons (other than the defendants) who
purchased or otherwise acquired common stock of the Company and certain options
relating to common stock of the Company between January 19, 1990 and June 26,
1990 (the "Class Period"), alleging, among other things, violations of certain
provisions of the federal securities laws. The two cases were consolidated on
April 2, 1991 ("Consolidated Class Actions"). The consolidated complaint
alleged that the defendants fraudulently issued public statements and reports
during the Class Period which were misleading in that they failed to disclose
material adverse information relating to the Company's Brazilian operations, its
factory modernization program and its reorganization plan.
The plaintiffs and the defendants, with the active participation and
approval of the Company's directors and officers liability insurer (the
"Insurer"), have reached an agreement regarding settlement of the Consolidated
Class Actions. The settlement is contingent upon approval by the District Court
and certain other contingencies.
Pursuant to the directors and officers liability policy (the "Policy"), the
Company has requested that the Insurer acknowledge that 100% of the amount to be
paid under the settlement agreement, beyond the Company's self-insured retention
under the Policy, is covered by the Policy. Because the Company is named as a
co-defendant in the Consolidated Class Actions, the insurer has denied coverage
for a portion of the settlement amount, claiming that some liability must be
attributable to the Company and not covered under the Policy. The Company has
been advised that the position of the Insurer is contrary to applicable law and
the Company has brought an action in the District Court against the Insurer for
breach of contract and declaratory relief ("Declaratory Judgment Action"). The
Company believes a successful recovery against the Insurer is likely in this
Declaratory Judgment Action. If that recovery is obtained, the Company believes
that its cost with respect to the settlement of the Consolidated Class Actions
will approximate costs necessary to litigate the Consolidated Class Actions to a
successful conclusion at trial. Regardless of whether the Company is successful
in the Declaratory Judgment Action, the Company does not believe the settlement
of the Consolidated Class Actions will have a materially negative impact on the
Company's financial condition or results of operations.
On May 12, 1993, a Statement of Objections ("Statement") was filed by the
Commission of European Communities against Caterpillar Inc. and certain overseas
subsidiaries ("Company"). The Statement alleges that certain service fees
payable by dealers, certain dealer recordkeeping obligations, a restriction
which prohibits a European Community ("EC") dealer from appointing subdealers,
and certain export pricing practices and parts policies violate EC competition
law under Article 85 of the European Economic Community Treaty. The Statement
seeks injunctive relief and unspecified fines. Based on an opinion of counsel,
the Company believes it has strong defenses to each allegation set forth in the
Statement.
On November 19, 1993, the Commission of European Communities informed the
Company that a new complaint has been received by it alleging that certain
export parts policies violate Article 85 and Article 86 of the European Economic
Community Treaty. The Commission advised the Company that it intends to deal
with the new complaint within the framework of the proceedings initiated on May
12, 1993. Based on an opinion of counsel, the Company believes it has strong
defenses to the allegations set forth in the new complaint.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
9
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The information required by Item 5 is incorporated by reference from under
the caption "Common Stock Price Range" and the first paragraph under the caption
"Number of Stockholders" appearing on page A-36 and under the caption
"Dividends" on page A-31 of the Appendix to the Company's 1994 Annual Meeting
Proxy Statement.
ITEM 6. SELECTED FINANCIAL DATA.
The information required by Item 6 is incorporated by reference from pages
A-24 and A-25 of the Appendix to the Company's 1994 Annual Meeting Proxy
Statement under the caption "Eleven-year Financial Summary" but only for the
years 1989-1993, inclusive, and then only with respect to the information set
forth for each of such years under the following captions: "Sales and
revenues," "Profit (loss) before effects of accounting changes(1)" (including
the footnote indicated), "Effects of accounting changes (note 2)" (including the
note indicated), "Profit (loss)," "Profit (loss) per share of common stock: (1)
(2) Profit (loss) before effects of accounting changes(1)" (including the
footnotes indicated), "Profit (loss) per share of common stock:(1) (2) Effects
of accounting changes (note 2)" (including the footnotes and note indicated),
"Profit (loss) per share of common stock:(1) (2) Profit (loss)" (including the
footnotes indicated), "Dividends declared per share of common stock," "Total
assets: Machinery and Engines," "Total assets: Financial Products," "Long-term
debt due after one year: Machinery and Engines," and "Long-term debt due after
one year: Financial Products."
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information required by Item 7 is incorporated by reference from under
the caption "Management's Discussion and Analysis" on pages A-26 through A-35 of
the Appendix to the Company's 1994 Annual Meeting Proxy Statement.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by Item 8 is incorporated by reference from the
Report of Independent Accountants appearing on page A-3, and the Financial
Statements and Notes to Consolidated Financial Statements appearing on pages A-4
through A-23 of the Appendix to the Company's 1994 Annual Meeting Proxy
Statement.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required by Item 10 relating to identification of directors
is incorporated by reference from pages 3 through 7 of the Company's 1994 Annual
Meeting Proxy Statement under the captions "Nominees for Election as Directors
for Terms Expiring in 1997," "Directors Continuing in Office in the Class of
1995," and "Directors Continuing in Office in the Class of 1996." Identification
of executive officers appears herein under Item 1a. There are no family
relationships between the officers
10
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 of Directors in
April of each year. Information required under Item 405 of Regulation S-K is
incorporated by reference from under the caption "Filings Pursuant to Section 16
of the Securities Exchange Act of 1934" appearing on page 25 of the Company's
1994 Annual Meeting Proxy Statement.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by Item 11 is incorporated by reference from under
the caption "Compensation of Directors" which appears on page 9, from under the
caption "Report of the Compensation Committee" on pages 11 through 15, from
under the caption "Performance Graph" on page 16, from under the caption
"Executive Compensation" and the tables thereunder which appear on pages 17
through 19, from under the caption "Pension Program" (including footnote) and
the table thereunder which appear on pages 19 and 20, and from under the caption
"Compensation Committee Interlocks and Insider Participation" which appears on
page 16 of the Company's 1994 Annual Meeting Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by Item 12 is incorporated by reference from pages
10 and 11 of the Company's 1994 Annual Meeting Proxy Statement under the
caption "Equity Security Ownership of Management and Certain Other Beneficial
Owners (as of December 31, 1993)."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by Item 13 is incorporated by reference from the
Company's 1994 Annual Meeting Proxy Statement from under the caption "Certain
Relationships and Related Transactions" appearing on page 20 and from under the
caption "Compensation Committee Interlocks and Insider Participation" on
page 16.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as part of this report:
1. Financial Statements:
Report of Independent Accountants (p. A-3)*
Statement 1 Consolidated Results of Operations for the Years
Ended December 31 (p. A-4)*
Statement 2 Changes in Consolidated Stockholders' Equity for
the Years Ended December 31 (p. A-5)*
Statement 3 Financial Position at December 31 (p. A-6 and
p. A-7)*
Statement 4 Statement of Cash Flows for the Years Ended
December 31 (p. A-8 and p. A-9)*
Notes to Consolidated Financial Statements (pp. A-10 through
A-23)*
2. Financial Statement Schedules:
Report of Independent Accountants on Financial Statement
Schedules
Schedule V Property, Plant and Equipment
Schedule VI Accumulated Depreciation of Property, Plant and
Equipment
Schedule VIII Valuation and Qualifying Accounts
11
Schedule IX Short-term Borrowings
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or the notes thereto
incorporated by reference.
(b) No reports on Form 8-K were filed during the last quarter of 1993.
(c) Exhibits:
3 (a) Restated Certificate of Incorporation, Certificate of Amendment
of Certificate of Incorporation, and Certificate of
Designation, Preferences and Rights of the Terms of the Series
A Junior Participating Preferred Stock (incorporated by
reference from Exhibit 3(a) to Form 10-K for the year ended
December 31, 1991, Commission File No. 1-768).
(b) Bylaws (incorporated by reference from Exhibit 3(b) to Form
10-K for the year ended December 31, 1990, Commission File No.
1-768).
4 (a) Rights Agreement dated as of November 12, 1986, between
Caterpillar Inc., the Registrant hereunder, and First Chicago
Trust Company of New York (formerly Morgan Shareholder Services
Trust Company) (incorporated by reference from Exhibit 10(a) to
Form 10-K for the year ended December 31, 1990, Commission File
No. 1-768) and First Amendment to Rights Agreement dated
December 9, 1992 (incorporated by reference from Exhibit 10(a)
to Form 10-K for the year ended December 31, 1992, Commission
File No. 1-768).
10 (a) 1977 Stock Option Plan as amended (incorporated by reference
from Exhibit 10(b) to Form 10-K for the year ended December 31,
1984, Commission File No. 1-768).**
(b) 1987 Stock Option Plan as amended and Long Term Incentive
Supplement.**
(c) Supplemental Pension Benefit Plan, as amended and restated.**
(d) Supplemental Employees' Investment Plan (incorporated by
reference from Exhibit 10(e) to Form 10-K for the year ended
December 31, 1987, Commission File No. 1-768).**
(e) Caterpillar Inc. 1993 Corporate Incentive Compensation Plan
Management and Salaried Employees, as amended and restated.**
(f) Directors' Deferred Compensation Plan, as amended and
restated.**
(g) Directors' Retirement Plan (incorporated by reference from
Exhibit 10(i) to Form 10-K for the year ended December 31,
1991, Commission File No. 1-768).**
(h) Directors' Charitable Award Program.**
11 Computations of Earnings Per Share
12 Statement Setting Forth Computation of Ratios of Profit to
Fixed Charges (The ratio of profit to fixed charges for the
year ended December 31, 1993 was 2.4. Because of pretax losses
for the years ended December 31, 1992 and 1991, profit was not
sufficient to cover fixed charges. The coverage deficiencies
were approximately $341 million and $529 million,
respectively.)
21 Subsidiaries and Affiliates of the Registrant
23 Consent of Independent Accountants
99 (a) Form 11-K for Employees' Investment Plan.
(b) Form 11-K for Caterpillar Foreign Service
Employees' Stock Purchase Plan.
(c) Form 11-K for the Savings and Investment Plan for eligible
employees of Solar Turbines Incorporated.
(d) Form 11-K for the Tax Deferred Savings Plan for eligible
employees of Caterpillar Inc.
12
(e) Appendix to the Company's 1994 Annual Meeting Proxy Statement
(furnished for the information of the Commission and not deemed
to be filed except for those portions expressly incorporated
by reference herein).
- --------
*Incorporated by reference from the indicated pages of the Appendix to the 1994
Annual Meeting Proxy Statement.
**Compensatory plan or arrangement required to be filed as an exhibit pursuant
to Item 14(c) of this Form 10-K.
13
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)
By: R. R. Atterbury III
-------------------------------
Date: March 2, 1994 R. R. Atterbury III, 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.
March 2, 1994 DONALD V. FITES Chairman of the Board, Director
-------------------------- and Chief Executive Officer
(Donald V. Fites)
March 2, 1994 JAMES W. WOGSLAND Vice Chairman and Director
--------------------------
(James W. Wogsland)
March 2, 1994 GLEN A. BARTON Group President
--------------------------
(Glen A. Barton)
March 2, 1994 GERALD S. FLAHERTY Group President
--------------------------
(Gerald S. Flaherty)
March 2, 1994 JAMES W. OWENS Vice President and
-------------------------- Chief Financial Officer
(James W. Owens)
March 2, 1994 ROBERT R. GALLAGHER Controller and
-------------------------- Chief Accounting Officer
(Robert R. Gallagher)
_______, 1994 Director
--------------------------
(Lilyan H. Affinito)
March 2, 1994 JOHN W. FONDAHL Director
--------------------------
(John W. Fondahl)
14
March 2, 1994 DAVID R. GOODE Director
--------------------------
(David R. Goode)
March 2, 1994 JAMES P. GORTER Director
--------------------------
(James P. Gorter)
March 2, 1994 WALTER H. HELMERICH, III Director
--------------------------
(Walter H. Helmerich, III)
March 2, 1994 JERRY R. JUNKINS Director
--------------------------
(Jerry R. Junkins)
_______, 1994 Director
--------------------------
(Charles F. Knight)
March 2, 1994 PETER A. MAGOWAN Director
--------------------------
(Peter A. Magowan)
March 2, 1994 GEORGE A. SCHAEFER Director
--------------------------
(George A. Schaefer)
March 2, 1994 JOSHUA I. SMITH Director
--------------------------
(Joshua I. Smith)
March 2, 1994 CLAYTON K. YEUTTER Director
--------------------------
(Clayton K. Yeutter)
15
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors of Caterpillar Inc.:
Our audits of the consolidated financial statements of Caterpillar Inc. referred
to in our report dated January 21, 1994 appearing on page A-3 of the Appendix to
the 1994 Annual Meeting Proxy Statement (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the Financial Statement Schedules listed in Item 14(a)
of this Form 10-K. In our opinion, these Financial Statement Schedules present
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
PRICE WATERHOUSE
Peoria, Illinois
January 21, 1994
CATERPILLAR INC.
AND CONSOLIDATED SUBSIDIARY COMPANIES
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
(Millions of dollars)
YEARS ENDED DECEMBER 31,
Other Changes --
Add (Deduct)
Balance at ---------------------- Balance
Beginning Additions Items Fully at Close
Classification(1) of Year at Cost Retirements Depreciated Other(2) of Year
----------------- ---------- --------- ----------- ----------- -------- --------
1993
- ----
Buildings.................. $2,479 $ 73 $ (62) $ (7) $ 2 $2,485
Machinery and equipment.... 3,458 381 (67) (176) (2) 3,594
Patterns, dies, jigs, etc.. 405 52 (20) (16) 7 428
Furniture and fixtures..... 589 64 (27) (12) (1) 613
Transportation equipment... 27 4 (2) (1) -- 28
Equipment leased to others. 429 215 (92) -- (16) 536
Construction-in-process.... 346 (159) (1) -- (10) 176
------ ----- ----- ----- ---- ------
Total.................. $7,733 $ 630 $(271) $(212) $(20) $7,860
------ ----- ----- ----- ---- ------
Land....................... $ 109 $ 2 $ (6) $ -- $ -- $ 105
------ ----- ----- ----- ---- ------
1992
- ----
Buildings.................. $2,433 $ 58 $ (15) $ (1) $ 4 $2,479
Machinery and equipment.... 3,428 372 (92) (260) 10 3,458
Patterns, dies, jigs, etc.. 411 57 (29) (37) 3 405
Furniture and fixtures..... 572 69 (31) (22) 1 589
Transportation equipment... 37 2 (2) -- (10) 27
Equipment leased to others. 430 125 (123) -- (3) 429
Construction-in-process.... 369 (43) (10) -- 30 346
------ ----- ----- ----- ---- ------
Total.................. $7,680 $ 640 $(302) $(320) $ 35 $7,733
------ ----- ----- ----- ---- ------
Land....................... $ 110 $ 0 $ (1) $ -- $ -- $ 109
------ ----- ----- ----- ----- ------
1991
- ----
Buildings.................. $2,369 $ 170 $ (29) $ (55) $(22) $2,433
Machinery and equipment.... 3,057 674 (58) (252) 7 3,428
Patterns, dies, jigs, etc.. 430 33 (7) (45) -- 411
Furniture and fixtures..... 524 84 (24) (16) 4 572
Transportation equipment... 24 13 -- -- -- 37
Equipment leased to others. 360 121 (48) -- (3) 430
Construction-in-process.... 710 (322) (7) -- (12) 369
------ ----- ----- ----- ---- ------
Total.................. $7,474 $ 773 $(173) $(368) $(26) $7,680
------ ----- ----- ----- ---- ------
Land....................... $ 111 $ 1 $ (3) $ -- $ 1 $ 110
------ ----- ----- ----- ---- ------
- ----------------
(1) The principal lives and depreciation methods used for the above asset
classifications are:
Classification Lives Depreciation Methods
-------------- ----- --------------------
Buildings 33 1/3 years 150% Declining balance;
Sum-of-the-years-digits; Straight-line
Machinery and equipment 10 years Sum-of-the-years-digits
Patterns, dies, jigs, etc. 10 years Sum-of-the-years-digits
Furniture and fixtures 10 years Sum-of-the-years-digits
Transportation equipment 6 years Sum-of-the-years-digits
Equipment leased to others 5-15 years Straight-line
(2) Includes effects of changes to the Provision for plant closing and
consolidation costs. See Schedule VIII.
CATERPILLAR INC.
AND CONSOLIDATED SUBSIDIARY COMPANIES
SCHEDULE VI - ACCUMULATED DEPRECIATION OF
PROPERTY, PLANT AND EQUIPMENT
(Millions of dollars)
YEARS ENDED DECEMBER 31,
Other Changes -
Add (Deduct)
Balance at -------------------------- Balance
Beginning Additions Items Fully at Close
Classification of Year at Cost Retirements Depreciated Other(1) of Year
-------------- -------------------- -------------------- ---------------------- ---------------- -------- -------
1993
- ----
Buildings.................. $1,234 $ 78 $ (42) $ (7) $ (3) $1,260
Machinery and equipment.... 1,917 401 (53) (176) (9) 2,080
Patterns, dies, jigs, etc.. 275 31 (17) (16) 6 279
Furniture and fixtures..... 311 76 (23) (12) (1) 351
Transportation equipment... 17 3 (1) (1) - 18
Equipment leased to others. 134 72 (55) - (1) 150
------ ---- ----- ----- ---- ------
Total................... $3,888 $661 $(191) $(212) $ (8) $4,138
====== ==== ===== ===== ==== ======
1992
- ----
Buildings.................. $1,165 $ 74 $ (9) $ (1) $ 5 $1,234
Machinery and equipment.... 1,866 379 (75) (260) 7 1,917
Patterns, dies, jigs, etc.. 288 46 (22) (37) - 275
Furniture and fixtures..... 277 77 (22) (21) - 311
Transportation equipment... 16 3 (1) (1) - 17
Equipment leased to others. 129 65 (59) - (1) 134
------ ---- ----- ----- ---- ------
Total................... $3,741 $644 $(188) $(320) $ 11 $3,888
====== ==== ===== ===== ==== ======
1991
- ----
Buildings.................. $1,142 $ 71 $ (6) $ (55) $ 13 $1,165
Machinery and equipment.... 1,808 345 (47) (252) 12 1,866
Patterns, dies, jigs, etc.. 302 38 (6) (45) (1) 288
Furniture and fixtures..... 229 79 (16) (16) 1 277
Transportation equipment... 13 3 - - - 16
Equipment leased to others. 105 57 (32) - (1) 129
------ ---- ----- ----- ---- ------
Total................... $3,599 $593 $(107) $(368) $ 24 $3,741
====== ==== ===== ===== ==== ======
- -------------
(1) Includes effects of changes to the Provision for plant closing and consolidation costs. See Schedule VIII.
CATERPILLAR INC.
AND CONSOLIDATED SUBSIDIARY COMPANIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(Millions of dollars)
YEARS ENDED DECEMBER 31,
Balance at Balance at
Beginning Close of
Description of Year Additions Deductions Year
---------------- ---------------------- ----------------------------- ------------------------------ ----------------
1993
- ----
Reserves for plant closing
and consolidation costs:
Included in current
liabilities:
Accounts payable and
accrued expenses....... $ 80 $ - $22(3) $ 58
Accrued wages,
salaries, and employee
benefits............... 150 - 12(3) 138
Deducted from assets:
Land, buildings,
machinery, and
equipment - net........ 164 - 14(4) 150
1992
- ----
Reserves for plant closing
and consolidation costs:
Included in current
liabilities:
Accounts payable and
accrued expenses....... $ 87 $ 4(1) $11(3) $ 80
Accrued wages,
salaries, and employee
benefits............... 170 15(1) 35(3) 150
Deducted from assets:
Land, buildings,
machinery, and
equipment - net........ 161 7(1) 4(4) 164
1991
- ----
Reserves for plant closing
and consolidation costs:
Included in current
liabilities:
Accounts payable and
accrued expenses....... $ 14 $ 75(2) $ 2(3) $ 87
Accrued wages,
salaries, and employee
benefits............... 44 135(2) 9(3) 170
Deducted from assets:
Land, buildings,
machinery, and
equipment - net........ 113 52(2) 4(4) 161
- ------------------
(1) Additions related to the sale of assets to the lift truck joint venture that were included in the net gain on the sale and
not charged to Provision for plant closing and consolidation costs.
(2) Charged to Provision for plant closing and consolidation costs.
(3) Expenditures made.
(4) Related to assets disposed of.
CATERPILLAR INC.
AND CONSOLIDATED SUBSIDIARY COMPANIES
SCHEDULE IX - SHORT-TERM BORROWINGS
(Millions of dollars)
YEARS ENDED DECEMBER 31,
At December 31 Average for Year
------------------------- Maximum ---------------------------
Weighted Amount
Average Outstanding Weighted
Interest At Any Amount Interest
Category Balance Rate/(1)/ Month-end Outstanding Rate/(1)/
-------- ------- --------- ------------- ------------- ---------
1993
- ----
High inflation countries/(2)/:
Notes payable to banks...................... $ 27 - $ 58 $ 40 -
Other countries:
Notes payable to banks...................... 413 6.6% 434 368 6.9%
Notes payable to others..................... 5 3.6% 5 4 3.6%
Commercial paper/(3)/......................... 832 3.6% 1,300 1,091 3.6%
------ ------
Total..................................... $1,277 $1,503
====== ======
1992
- ----
High inflation countries/(2)/:
Notes payable to banks...................... $ 84 $ 117 $ 91
Other countries:
Notes payable to banks...................... 295 7.1% 330 210 7.0%
Notes payable to others..................... 4 3.8% 4 3 4.2%
Commercial paper/(3)/....................... 1,353 4.3% 1,353 1,031 4.4%
------ ------
Total..................................... $1,736 $1,335
====== ======
1991
- ----
High inflation countries/(2)/:
Notes payable to banks...................... $ 95 $ 95 $ 79
Other countries:
Notes payable to banks...................... 78 8.4% 98 85 11.7%
Notes payable to others..................... 2 5.6% 2 - -
Commercial paper/(3)/....................... 1,089 6.0% 1,891 1,505 6.9%
------ ------
Total..................................... $1,264 $1,669
====== ======
- ---------------
/(1)/ The weighted average interest rates were computed by relating interest
expense for the year to average daily or monthly borrowings.
/(2)/ High inflation countries include borrowings in Brazil.
The Weighted Average Interest Rate is not considered
meaningful because rate reflects effect of significant inflation.
/(3)/ Commercial paper supported by revolving credit agreements of $455 million,
$795 million, and $790 million at December 31, 1993, 1992, and 1991,
respectively, was classified as noncurrent in the consolidated financial
position. In this Schedule, the commercial paper balances include the
noncurrent portion.