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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, 1995
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) Chicago Stock Exchange
New York Stock Exchange
Pacific Stock Exchange
Preferred Stock Purchase Rights Chicago Stock Exchange
New York Stock Exchange
Pacific 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
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, 1995, there were 194,015,118 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 $11,332,764,139.
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.
1996 Annual Meeting Proxy Statement (Parts I, II, III and IV)
==============================================================================
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 construction,
mining, and agricultural 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, 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
reciprocating diesel and spark-ignited engines meet power needs
ranging from 40 to 8,050 horsepower. Turbines range from 1,340 to
15,000 horsepower (1000 to 11 200 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 23 of the Notes to Consolidated Financial Statements on pages A-23
through A-25 of the Appendix to the Company's 1996 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 121 located outside the United States. Worldwide, these
dealers have more than 1,300 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 Services
Corporation.
Page 1
Further information concerning the Company's operations in 1995 and its
outlook for 1996 appears under the caption "Management's Discussion and
Analysis" on pages A-28 through A-36 of the Appendix to the Company's 1996
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. In 1995, 1994 and 1993, the Company expended $532 million,
$435 million and $455 million, respectively, on its research and engineering
program. Of these amounts, $375 million in 1995, $311 million in 1994 and $319
million in 1993 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 1995 the Company
announced several new products 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, 1995, the Company employed 54,352 persons of whom 14,374
were located outside the United States.
Sales
- -----
Sales outside the United States were 52% of consolidated sales in 1995,
compared with 49% in 1994 and 1993.
Environmental Matters
- ---------------------
Environmental considerations are a very important factor in the Company's
product development and operations planning. This past year, two Company
manufacturing facilities were recognized by the state of Illinois for their
pollution prevention efforts and the Company's Engine Division announced
participation in a joint government-industry effort to reduce on-highway engine
emissions.
In 1995, the Company had capital expenditures of about $11 million for
projects related to the environment (including $3 million in costs related to
compliance with the Clean Air Act), approximately equal to amounts for 1994. In
1996 and 1997, these expenditures are expected to increase moderately.
In addition to these expenditures, the Company had depreciation, research
and engineering, administrative, and operating expenses related to environmental
regulation of about $131 million in 1995 (including $28 million for compliance
with the Clean Air Act), slightly more than comparable expenses in 1994. These
expenses are expected to remain at similar levels for 1996 and 1997.
The Company also is involved in a number of remediation actions to clean up
hazardous wastes as required by federal and state laws. These laws often require
responsible parties to fund remediation actions regardless of fault, legality of
original disposal or ownership of a disposal site. Under accounting
Page 2
guidelines, the Company is required to accrue and charge to income management's
best estimate of future costs associated with these sites. When there appears to
be a range of possible costs with equal likelihood, liabilities are based on the
lower end of that range. For 1995, the amount accrued for potential clean up
costs is contained in the line item, "Accounts payable and accrued expenses" on
Statement 3 of the Appendix to the 1996 Annual Meeting Proxy Statement, and
represents an immaterial portion of that line item. While the Company may have
rights of contribution or reimbursement under insurance policies, amounts that
may be recoverable from other entities are not considered in establishing the
accrual.
In deciding upon amounts to be reserved for potential environmental
liability at a particular site, the Company looks at several factors including:
. prior experience regarding environmental remediation at a similar site;
. experience of other companies and industries with respect to a similar
site;
. technology available for remediation at the time;
. the stage of remediation for the particular site (i.e., whether the site
is at the identification stage or whether a remedial investigation or
feasibility study has been conducted);
. documentation, if any, linking the Company to a particular site;
. the amount the Company has been asked to contribute to a particular site;
and
. aspects of the law under which the Company is alleged to be liable for
clean up.
The Company also looks at these factors in deciding whether it could incur
liabilities beyond that which it has accrued for future remediation. Although it
is difficult to estimate with any meaning potential liability at sites in very
early stages of remediation (of which the Company has seven currently) or sites
yet to be identified because of the many uncertainties involved, including
uncertainties about the status of the law, regulation, technology and
information related to individual sites, at this time the Company believes the
likelihood of incurring any material environmental liability beyond that accrued
is remote.
ITEM 1A. EXECUTIVE OFFICERS OF THE REGISTRANT AS OF DECEMBER 31, 1995.
PRESENT CATERPILLAR PRINCIPAL POSITIONS HELD
NAME AND AGE INC. POSITION AND DURING THE
DATE OF PAST FIVE YEARS OTHER THAN
INITIAL ELECTION CATERPILLAR INC. POSITION
CURRENTLY HELD
- --------------------------------------------------------------------------------
Donald V. Fites (61) Chairman of the Board
(1990)
- --------------------------------------------------------------------------------
Glen A. Barton (56) Group President (1990)
- --------------------------------------------------------------------------------
Gerald S. Flaherty (57) Group President (1990)
- --------------------------------------------------------------------------------
James W. Owens (49) Group President (1995) Vice President; Chief
Financial Officer;
President, Solar Turbines
Incorporated
- --------------------------------------------------------------------------------
Richard L. Thompson (56) Group President (1995) Vice President
- --------------------------------------------------------------------------------
R. Rennie Atterbury III Vice President, Associate General Counsel
(58) General Counsel and
Secretary (1991)
- --------------------------------------------------------------------------------
James W. Baldwin (58) Vice President (1991) General Manager, Parts
and Service Support
- --------------------------------------------------------------------------------
Vito H. Baumgartner (55) Vice President (1990)
- --------------------------------------------------------------------------------
James S. Beard (54) Vice President (1990)
- --------------------------------------------------------------------------------
Richard A. Benson (52) Vice President (1989) President, Caterpillar
Industrial Inc.
- --------------------------------------------------------------------------------
Ronald P. Bonati (56) Vice President (1990)
- --------------------------------------------------------------------------------
Page 3
- --------------------------------------------------------------------------------
James E. Despain (58) Vice President (1990)
- --------------------------------------------------------------------------------
Roger E. Fischbach (54) Vice President (1989)
- --------------------------------------------------------------------------------
Michael A. Flexsenhar (56) Vice President (1995) General Manager, Large
Engines, Lafayette Plant;
Plant Manager, Lafayette
- --------------------------------------------------------------------------------
Donald M. Ings (47) Vice President (1993) President, Solar Turbines
Incorporated; Business
Unit Manager, York;
Plant Manager, York
- --------------------------------------------------------------------------------
Duane H. Livingston (54) Vice President (1995) Director of Corporate
Auditing, Corporate
Services Division;
Controller, Parts
Distribution Accounting,
Morton Distribution Center
- --------------------------------------------------------------------------------
Douglas R. Oberhelman (42) Vice President (1995) Managing Director and
Vice General Manager,
Strategic Planning, Shin
Caterpillar Mitsubishi
Ltd. (Tokyo); District
Manager, Peoria District,
Central Region, N.A.
Commercial Division
- --------------------------------------------------------------------------------
Gerald Palmer (50) Vice President (1992) Director of Technical
Services, Technical
Services Division;
President, CONEK S.A. de
C.V.
- --------------------------------------------------------------------------------
Robert C. Petterson (57) Vice President (1991) President, Caterpillar
Brasil S.A.; Regional
Manager, Caterpillar
Overseas S.A.
- --------------------------------------------------------------------------------
John E. Pfeffer (53) Vice President (1995) Business Unit Manager,
York Plant; President,
CONEK S.A. de C.V.;
Regional Manager, Central
Region, N.A. Commercial
Division
- --------------------------------------------------------------------------------
Siegfried R. Ramseyer (58) Vice President (1992) Managing Director,
Caterpillar Overseas
S.A.; Manager,
Construction Equipment
and Dealer
Administration,
Caterpillar Overseas S.A.
- --------------------------------------------------------------------------------
Alan J. Rassi (55) Vice President (1992) General Manager, Aurora
Plant
- --------------------------------------------------------------------------------
Gerald L. Shaheen (51) Vice President (1995) Managing Director,
Caterpillar Overseas
S.A.; Regional Manager,
Eastern Region, N.A.
Commercial Division
- --------------------------------------------------------------------------------
Gary A. Stroup (46) Vice President (1992) Business Unit Manager,
Component Products
Division
- --------------------------------------------------------------------------------
Sherril K. West (48) Vice President (1995) Marketing Support
Services Manager,
Corporate Services
Division; General
Manager, Caterpillar
Service Technology,
Caterpillar Internal
Ventures
- --------------------------------------------------------------------------------
Donald G. Western (47) Vice President (1995) Managing Director,
Caterpillar Belgium S.A.
- --------------------------------------------------------------------------------
Wayne M. Zimmerman (60) Vice President (1989)
- --------------------------------------------------------------------------------
Robert R. Gallagher (55) Controller (1990)
- --------------------------------------------------------------------------------
Rudolf W. Wuttke (57) Treasurer (1991) Secretary and Treasurer,
Caterpillar Overseas S.A.
- --------------------------------------------------------------------------------
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.
Page 4
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, 1995.
Total Properties
- ----------------
Total properties owned or leased by the Company consist of 61,706,142
square feet of building area, of which 87.9% is owned in fee and 12.1% is
leased.
Owned Properties
- ----------------
Properties owned in fee by the Company consist of 54,225,183 square feet of
building area and 18,639 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 35,694 square feet of
building area and 5,742 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. The Company determined that unless
significant cost reductions were made, the unit would be closed. The Company has
notified the United Auto Workers union ("UAW"), which represents approximately
1,100 of the 1,400 active employees at the York facility, of its willingness to
negotiate a labor agreement that would allow the unit to remain open. Unless a
satisfactory contract is reached, the Company plans to close the plant beginning
in the 1996 time frame.
Leased Properties
- -----------------
Properties leased by the Company consist of 7,480,959 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 30 locations inside the United
States and 13 locations outside the United States. Remanufacturing and Overhaul
activities are conducted at 3 locations inside the United States and 3 locations
outside the United States. These facilities have a total building area of
39,835,217 square feet, of which 98.4% is used for manufacturing and 1.6% 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
Jefferson, Georgia............................ Manufacturing
Aurora, Illinois.............................. Manufacturing
Decatur, Illinois............................. Manufacturing
DeKalb, Illinois.............................. Manufacturing
Page 5
Dixon, Illinois............................... Manufacturing
East Peoria, Illinois......................... Manufacturing
Joliet, Illinois.............................. Manufacturing
Mapleton, Illinois............................ Manufacturing
Mossville, Illinois........................... Manufacturing
Peoria, Illinois.............................. Manufacturing
Pontiac, Illinois............................. Manufacturing
Sterling, 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
Franklin, North Carolina...................... Manufacturing
Leland, North Carolina........................ Manufacturing
Dallas, Oregon................................ Manufacturing
York, Pennsylvania............................ Manufacturing
Greenville, South Carolina.................... Manufacturing
Dyersburg, Tennessee.......................... Manufacturing
Rockwood, Tennessee........................... 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
Shanghai, China............................... Manufacturing
Xuzhou, China................................. Manufacturing
Leicester, England............................ Manufacturing
Grenoble, France.............................. Manufacturing
Rantigny, France.............................. Manufacturing
Godollo, Hungary.............................. Manufacturing
Jakarta, Indonesia............................ Manufacturing
Bazzano, Italy................................ Manufacturing
Monterrey, Mexico............................. Manufacturing
Nuevo Laredo, Mexico.......................... Remanufacturing
Tijuana, Mexico............................... Overhaul
St. Petersburg, Russia........................ Manufacturing
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 6 other office locations inside the United States
and 9 office locations outside the United States and shares other office space
with other Company entities.
Page 6
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
9,406,738 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, 1995, changes in investment in
land, buildings, machinery and equipment of the Company were as follows (stated
in millions of dollars):
- --------------------------------------------------------------------------------------------------------------
EXPENDITURES DISPOSALS AND NET INCREASE
----------------------------- PROVISIONS FOR OTHER (DECREASE)
YEAR U.S. OUTSIDE U.S. DEPRECIATION ADJUSTMENTS DURING PERIOD
- --------------------------------------------------------------------------------------------------------------
1991 $610 $164 $(593) $(118) $ 63
- --------------------------------------------------------------------------------------------------------------
1992 $502 $138 $(644) $ (91) $ (95)
- --------------------------------------------------------------------------------------------------------------
1993 $508 $124 $(661) $ (98) $(127)
- --------------------------------------------------------------------------------------------------------------
1994 $508 $186 $(680) $ (65) $ (51)
- --------------------------------------------------------------------------------------------------------------
1995 $506 $173 $(679) $(132) $(132)
- --------------------------------------------------------------------------------------------------------------
At December 31, 1995, the net book value of properties located outside the
United States represented 25.2% 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 10 of the
"Notes to Consolidated Financial Statements" on pages A-10 and A-16,
respectively, of the Appendix to the 1996 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.
On September 6, 1994, the International Union, United Automobile, Aerospace
and Agricultural Implement Workers of America ("UAW"), UAW Local 974, and
Citizens for a Better Environment filed a complaint against the Company with the
Illinois Pollution Control Board ("Board"). The complaint generally alleges, in
seven counts, that the Company has violated certain provisions of the Illinois
Environmental Protection Act and Board regulations with respect to a particular
property in East Peoria, Illinois. The Company believes the claims are without
merit and will vigorously contest them. The Company further believes final
resolution of this matter will not have a material impact on the Company's
liquidity, capital resources, or results of operations.
Page 7
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.
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-37 and under the caption
"Dividends" appearing on page A-33 of the Appendix to the Company's 1996 Annual
Meeting Proxy Statement.
ITEM 6. SELECTED FINANCIAL DATA.
The information required by Item 6 is incorporated by reference from pages
A-26 and A-27 of the Appendix to the Company's 1996 Annual Meeting Proxy
Statement under the caption "Eleven-year Financial Summary" but only for the
years 1991-1995, 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/(2)/" (including the
footnote indicated), "Profit (loss)/(1)/," (including the footnote indicated),
"Profit (loss) per share of common stock: /(1)//(3)/ Profit (loss) before
effects of accounting changes/(1)/" (including the footnotes indicated), "Profit
(loss) per share of common stock:/(1)//(3)/ Effects of accounting
changes/(2)/" (including the footnotes indicated), "Profit (loss) per share of
common stock:/(1)//(3)/ 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-28 through A-36 of
the Appendix to the Company's 1996 Annual Meeting Proxy Statement ("Appendix").
Page 8
Contingencies discussed on page A-36 of the Appendix under the caption,
"1996 Economic and Industry Outlook" are the principal factors which may
influence the Company's 1996 Outlook. Other significant factors include:
. strategies pursued by domestic and foreign competitors, potentially
having an impact on market share;
. changes in dealer inventory levels for both new and rental equipment;
. currency fluctuations, particularly in Europe and Japan;
. ability to realize price increases, particularly as a result of changes
in industry demand, product mix, competitive environment, and inflation
levels;
. rates of inflation, particularly in the U.S., Europe, and Japan;
. commodity prices throughout the world;
. infrastructure spending, particularly in Europe, Latin America, and Asia;
. growth in housing starts, commercial construction, and mining,
particularly in the U.S.;
. political uncertainty in China and CIS; and
. production cost levels at key plants located in the U.S., U.K., France,
Belgium, Brazil, Mexico, and Japan.
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-25 of the Appendix to the Company's 1996 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 2 through 6 of the Company's 1996 Annual
Meeting Proxy Statement under the captions "Nominees for Election as Directors
for Terms Expiring in 1999," "Directors Continuing in Office in the Class of
1997," and "Directors Continuing in Office in the Class of 1998." Identification
of executive officers appears herein under Item 1a. 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 of Directors in April of each year. Information required
Page 9
under Item 405 of Regulation S-K is incorporated by reference from under the
caption "Filings Pursuant to Section 16 of the Securities and Exchange Act of
1934" appearing on page 25 of the Company's 1996 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 8, from under the
caption "Report of the Compensation Committee on Executive Compensation" on
pages 10 through 14, from under the caption "Performance Graph" on page 15, from
under the caption "Executive Compensation" and the tables thereunder which
appear on pages 16 through 18, from under the caption "Pension Program"
(including footnote) and the table thereunder which appear on pages 18 and 19,
and from under the caption "Compensation Committee Interlocks and Insider
Participation" which appears on page 15 of the Company's 1996 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
9 and 10 of the Company's 1996 Annual Meeting Proxy Statement under the caption
"Equity Security Ownership of Management and Certain Other Beneficial Owners (as
of December 31, 1995)."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by Item 13 is incorporated by reference from the
Company's 1996 Annual Meeting Proxy Statement from under the caption "Certain
Relationships and Related Transactions" appearing on page 19 and from under the
caption "Compensation Committee Interlocks and Insider Participation" on page
15.
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-25)*
2. Financial Statement Schedule:
Report of Independent Accountants on Financial Statement Schedule
Schedule VIII Valuation and Qualifying Accounts
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) There were no reports on Form 8-K filed during the last quarter of
1995.
Page 10
(c) Exhibits:
3 (i) (a) Restated Certificate of Incorporation (incorporated by
reference from Exhibit 3(a)(i) to Form 10-K for the year
ended December 31, 1994, Commission File No. 1-768).
3 (i) (b) 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).
3 (ii) Bylaws (incorporated by reference from Exhibit 3(ii) to
Form 10-Q for the quarter ended September 30, 1995,
Commission File No. 1-768).
4 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).**
10 (b) 1987 Stock Option Plan, as amended and Long Term
Incentive Supplement.**
10 (c) Supplemental Pension Benefit Plan, as amended and
restated (incorporated by reference from Exhibit 10(c) to
Form 10-K for the year ended December 31, 1993,
Commission File No. 1-768).**
10 (d) Supplemental Employees' Investment Plan, as amended and
restated.**
10 (e) Caterpillar Inc. 1993 Corporate Incentive Compensation
Plan Management and Salaried Employees, as amended and
restated (incorporated by reference from Exhibit 10(e) to
Form 10-K for the year ended December 31, 1993,
Commission File No. 1-768).**
10 (f) Directors' Deferred Compensation Plan, as amended and
restated (incorporated by reference from Exhibit 10(f) to
Form 10-K for the year ended December 31, 1993,
Commission File No. 1-768).**
10 (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).**
10 (h) Directors' Charitable Award Program (incorporated by
reference from Exhibit 10(h) to Form 10-K for the year
ended December 31, 1993, Commission File No. 1-768).**
10 (i) Deferred Employees' Investment Plan.**
11 Computations of Earnings Per Share
12 Statement Setting Forth Computation of Ratios of Profit
to Fixed Charges
21 Subsidiaries and Affiliates of the Registrant
23 Consent of Independent Accountants
27 Financial Data Schedule
99 (a) Form 11-K for Caterpillar Foreign Service Employees'
Stock Purchase Plan.
99 (b) Appendix to the Company's 1996 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
1996 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.
Page 11
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: /s/R. R. ATTERBURY III
-------------------------------------
Date: March 4, 1996 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.
Chairman of the Board,
Director and Chief
March 4, 1996 /s/DONALD V. FITES Executive Officer
--------------------------
(Donald V. Fites)
March 4, 1996 /s/GLEN A. BARTON Group President
--------------------------
(Glen A. Barton)
March 4, 1996 /s/GERALD S. FLAHERTY Group President
--------------------------
(Gerald S. Flaherty)
March 4, 1996 /s/JAMES W. OWENS Group President
--------------------------
(James W. Owens)
March 4, 1996 /s/RICHARD L. THOMPSON Group President
--------------------------
(Richard L. Thompson)
Vice President and
March 4, 1996 /s/DOUGLAS R. OBERHELMAN Chief Financial Officer
--------------------------
(Douglas R. Oberhelman)
/s/ROBERT R. GALLAGHER Controller and
March 4, 1996 -------------------------- Chief Accounting Officer
(Robert R. Gallagher)
March 4, 1996 /s/LILYAN H. AFFINITO Director
--------------------------
(Lilyan H. Affinito)
Director
--------------------------
(W. Frank Blount)
Page 12
March 4, 1996 /s/JOHN W. FONDAHL Director
--------------------------
(John W. Fondahl)
March 4, 1996 /s/DAVID R. GOODE Director
--------------------------
(David R. Goode)
March 4, 1996 /s/JAMES P. GORTER Director
--------------------------
(James P. Gorter)
March 4, 1996 /s/JERRY R. JUNKINS Director
--------------------------
(Jerry R. Junkins)
March 4, 1996 /s/PETER A. MAGOWAN Director
--------------------------
(Peter A. Magowan)
March 4, 1996 /s/GORDON R. PARKER Director
--------------------------
(Gordon R. Parker)
March 4, 1996 /s/GEORGE A. SCHAEFER Director
--------------------------
(George A. Schaefer)
March 4, 1996 /s/JOSHUA I. SMITH Director
--------------------------
(Joshua I. Smith)
March 4, 1996 /s/CLAYTON K. YEUTTER Director
--------------------------
(Clayton K. Yeutter)
Page 13
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
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 18, 1996 appearing on page A-3 of the Appendix to
the 1996 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 Schedule listed in Item 14(a)
of this Form 10-K. In our opinion, this Financial Statement Schedule presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
/s/Price Waterhouse LLP
PRICE WATERHOUSE LLP
Peoria, Illinois
January 18, 1996
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
------------- ------------ ----------- ------------ ------------
1995
- ----
Reserves for plant closing and consolidation costs:
Included in current liabilities:
Accounts payable and accrued expenses............... $ 56 $ - $ 1(1) $ 55
Accrued wages, salaries, and employee benefits...... 122 - 7(1) 115
Deducted from assets:
Land, buildings, machinery, and equipment - net..... 149 - 50(2) 99
1994
- ----
Reserves for plant closing and consolidation costs:
Included in current liabilities:
Accounts payable and accrued expenses............... $ 58 $ - $ 2(1) $ 56
Accrued wages, salaries, and employee benefits...... 138 - 16(1) 122
Deducted from assets:
Land, buildings, machinery, and equipment - net..... 150 - 1 149
1993
- ----
Reserves for plant closing and consolidation costs:
Included in current liabilities:
Accounts payable and accrued expenses............... $ 80 $ - $22(1) $ 58
Accrued wages, salaries, and employee benefits...... 150 - $12(1) 138
Deducted from assets:
Land, buildings, machinery, and equipment - net..... 164 - 14(2) 150
- ----------------
(1) Expenditures made.
(2) Related to assets disposed of.