Caterpillar Executive to Testify Before U.S. Senate Subcommittee About Company's Business Structure Company acts ethically, complies with tax law and pays its taxes
WASHINGTON, March 31, 2014 /PRNewswire/ -- In testimony tomorrow before the U.S. Senate Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations (PSI), Caterpillar Inc. (NYSE: CAT) Vice President with responsibility for the Finance Services Division Julie Lagacy will discuss Caterpillar's prudent and lawful business planning that is common among responsible U.S. multinational corporations.
"Caterpillar takes very seriously its obligation to follow tax law and pay what it owes," said Lagacy. "In fact, Caterpillar's effective income tax rate averages about 29 percent, which is one of the highest for a U.S. multinational manufacturing company. Caterpillar's philosophy is that our business structure drives our tax structure. We comply with the tax laws enacted by Congress, by the states and by all of the many jurisdictions in which we conduct business."
After an extensive review of Caterpillar's international tax compliance, the PSI chairman's staff report focuses on one aspect of our overall business: parts sales outside of the United States by Caterpillar subsidiary, Caterpillar SARL (CSARL).
"CSARL is a major operating company with thousands of people around the world who perform strategically critical work to support our customers in non-U.S. markets," said Lagacy. "We grow and build near our customers worldwide, not only because it's what they demand, but because remaining globally competitive helps create jobs in the United States."
In the past 15 years, Caterpillar's U.S. employment has increased by 13,000 jobs, growing from 38,000 in 1999 to nearly 52,000 in 2013. Many of these jobs support Caterpillar's U.S. exports, which last year alone totaled $16 billion. While the company has more than 118,000 employees in 21 countries worldwide, it continues to invest in the U.S. with 69 manufacturing and logistics facilities in 23 states, as well as Cat dealers from coast to coast.
Lagacy's testimony will be delivered at a hearing titled "Caterpillar's Offshore Tax Strategy."
For nearly 90 years, Caterpillar Inc. has been making sustainable progress possible and driving positive change on every continent. Customers turn to Caterpillar to help them develop infrastructure, energy and natural resource assets. With 2013 sales and revenues of $55.656 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company principally operates through its three product segments - Resource Industries, Construction Industries and Power Systems - and also provides financing and related services through its Financial Products segment. For more information, visit caterpillar.com. To connect with us on social media, visit caterpillar.com/social-media.
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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 we serve; (ii) government monetary or fiscal policies and infrastructure spending; (iii) commodity price changes, component price increases, fluctuations in demand for our products or significant shortages of component products; (iv) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers; (v) political and economic risks, commercial instability and events beyond our control in the countries in which we operate; (vi) failure to maintain our credit ratings could increase our cost of borrowing and adversely affect our cost of funds, liquidity, competitive position and access to capital markets; (vii) our Financial Products segment's risks associated with the financial services industry; (viii) changes in interest rates or market liquidity conditions could adversely affect Cat Financial's and our earnings and /or cash flow; (ix) an increase in delinquencies, repossessions or net losses of Cat Financials customers could adversely affect its results; (x) new regulations or changes in financial services regulations; (xi) we may not realize all of the anticipated benefits of our acquisitions, joint ventures or divestitures, or these benefits may take longer to realize than expected; (xii) international trade policies may impact demand for our products and our competitive position; (xiii) our ability to develop, produce and market quality products that meet our customers' needs; (xiv) the highly competitive environment in which we operate could adversely affect our sales and pricing; (xv) we may not realize all of the anticipated benefits from a number of initiatives to increase our productivity, efficiency and cash flow and to reduce costs; (xvi) we could incur additional restructuring charges and may not realize anticipated savings or benefits from past or future cost reduction actions; (xvii) inventory management decisions and sourcing practices of our dealers and our OEM customers; (xviii) compliance with environmental laws and regulation; (xix) alleged or actual violations of trade or anti-corruption laws and regulations; (xx) additional tax expense or exposure; (xxi) currency fluctuations; (xxii) our or Cat Financial's compliance with financial covenants; (xxiii) increased pension plan funding obligations; (xxiv) union disputes or other employee relations issues; (xxv) significant legal proceedings, claims, lawsuits or investigations; (xxvi) compliance requirements imposed if additional carbon emissions legislation and/or regulations are adopted; (xxvii) changes in accounting standards; (xxviii) failure or breach of IT security; (xxix) adverse effects of unexpected events including natural disasters; and (xxx) other factors described in more detail under "Item 1A. Risk Factors" in our Form 10-K filed with the SEC on February 18, 2014 for the year ended December 31, 2013.
SOURCE Caterpillar Inc.