Item 2.06. Material Impairments.
On January 16, 2013, the Audit Committee of the Board of Directors of
Caterpillar Inc. ("Caterpillar") met and the Company concluded that goodwill
recorded in connection with the acquisition of ERA Mining Machinery Limited,
including its wholly-owned subsidiary Zhengzhou Siwei Mechanical & Electrical
Manufacturing Co., Ltd., commonly known as "Siwei", was impaired. As a result,
Caterpillar will record a noncash goodwill impairment charge of approximately
$580 million ($0.87 per share) in the quarter ending December 31, 2012. No
portion of the impairment charge relates to future cash expenditures.
This impairment charge arises from a determination by Caterpillar that Siwei
senior managers engaged in accounting misconduct for several years prior to
Caterpillar's acquisition of Siwei in mid-2012 and the impact of such
misconduct. Caterpillar's investigation of this matter is ongoing.
Item 7.01. Regulation FD Disclosure.
On January 18, 2013, Caterpillar issued a press release regarding the matters
described under Item 2.06 above. The press release is attached as Exhibit 99.1
hereto.
* * * * * * *
Forward-Looking Statements
Certain statements in this filing relate to future events and expectations and
are forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Words such as "believe," "estimate," "will be,"
"will," "would," "expect," "anticipate," "plan," "project," "intend," "could,"
"should" or other similar words or expressions often identify forward-looking
statements. All statements other than statements of historical fact are
forward-looking statements, including, without limitation, statements regarding
our outlook, projections, forecasts or trend descriptions. These statements do
not guarantee future performance, and we do not undertake to update our
forward-looking statements.
Caterpillar's actual results may differ materially from those described or
implied in our forward-looking statements based on a number of factors,
including, but not limited to: (i) global economic conditions and economic
conditions in the industries and markets we serve; (ii) government monetary or
fiscal policies and infrastructure spending; (iii) commodity or component price
increases and/or limited availability of raw materials and component products,
including steel; (iv) our and our customers', dealers' and suppliers' ability to
access and manage liquidity; (v) political and economic risks and instability,
including national or international conflicts and civil unrest; (vi) our and Cat
Financial's ability to: maintain credit ratings, avoid material increases in
borrowing costs, and access capital markets; (vii) the financial condition and
credit worthiness of Cat Financial's customers; (viii) inability to realize
expected benefits from acquisitions and divestitures, including the acquisitions
of Bucyrus International, Inc. and ERA Mining Machinery Limited; (ix)
international trade and investment policies; (x) challenges related to Tier 4
emissions compliance; (xi) market acceptance of our products and services; (xii)
changes in the competitive environment, including market share, pricing and
geographic and product mix of sales; (xiii) successful implementation of
capacity expansion projects, cost reduction initiatives and efficiency or
productivity initiatives, including the Caterpillar Production System; (xiv)
sourcing practices of our dealers or original equipment manufacturers; (xv)
compliance with environmental laws and regulations; (xvi) alleged or actual
violations of trade or anti-corruption laws and regulations; (xvii) additional
tax expense or exposure; (xviii) currency fluctuations; (xix) our or Cat
Financial's compliance with financial covenants; (xx) increased pension plan
funding obligations; (xxi) union disputes or other employee relations issues;
(xxii) significant legal proceedings, claims, lawsuits or investigations;
(xxiii) compliance requirements imposed if carbon emissions legislation and/or
regulations are adopted; (xxiv) changes in accounting standards; (xxv) failure
or breach of IT security; (xxvi) adverse effects of natural disasters; and
(xxvii) other factors described in more detail under "Item 1A. Risk Factors" in
our Form 10-K filed with the SEC on February 21, 2012 for the year ended
December 31, 2011. This filing is available on our website at
www.caterpillar.com/secfilings.
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