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SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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FORM
11-K
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(Mark
One)
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[X]
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ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT
OF 1934
For
the
fiscal year ended December 31, 2005
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OR
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[ ]
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TRANSITION
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT
OF 1934
For
the
transition period from __________ to __________.
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Commission
File No. 1-768
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CATERPILLAR
INC.
TAX
DEFERRED SAVINGS PLAN
(Full
title
of the Plan)
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CATERPILLAR
INC.
(Name
of
issuer of the securities held pursuant to the Plan)
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100
NE Adams
Street, Peoria, Illinois 61629
(Address
of
principal executive offices)
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SIGNATURES
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Pursuant
to
the requirements of Section 13 or 15(d) of the Securities Exchange
Act of
1934, the Company has duly caused this annual report to be signed
on its
behalf by the undersigned, hereunto duly authorized.
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CATERPILLAR
INC.
TAX
DEFERRED SAVINGS PLAN
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CATERPILLAR
INC. (Issuer)
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June
28,
2006
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By:
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/s/
David B.
Burritt
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Name:
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David
B.
Burritt
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Title:
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Vice
President and Chief Financial
Officer
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EXHIBIT
A
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Caterpillar
Inc.
Tax
Deferred Savings Plan
Statement
of Net Assets Available for Benefits
December
31, 2005 and 2004
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(in
thousands of dollars)
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2005
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2004
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Investments
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Interest
in
the Caterpillar Investment Trust
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$
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336,602
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$
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309,486
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Participant
loans receivable
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6,544
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5,726
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Other
investments - participant directed brokerage accounts
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4,970
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3,108
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Total
investments
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348,116
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318,320
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Receivables
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Participant
contributions receivable
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469
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216
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Net
assets
available for benefits
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$
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348,585
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$
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318,536
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The
accompanying notes are an integral part of these financial
statements.
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EXHIBIT
B
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Caterpillar
Inc.
Tax
Deferred Savings Plan
Statement
of Changes in Net Assets Available for Benefits
Years
Ended December 31, 2005 and 2004
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(in
thousands of dollars)
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2005
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2004
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Investment
income
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Plan
interest
in net investment income of Master Trust
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$
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31,712
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$
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29,543
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Interest
on
participant loans receivable
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325
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302
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Net
investment income from participant directed brokerage
accounts
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507
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222
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Net
investment income
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32,544
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30,067
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Contributions
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Participant
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18,587
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16,786
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Employer
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5
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40
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Total
contributions
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18,592
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16,826
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Deductions
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Withdrawals
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(24,148
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)
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(17,852
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)
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Increase
in
net assets available for benefits
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26,988
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29,041
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Transfers
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Transfers
from (to) other plans, net
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3,061
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(2,283
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)
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Net
increase
in net assets available for benefits
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30,049
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26,758
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Net
assets available for benefits
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Beginning
of
year
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318,536
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291,778
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End
of
year
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$
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348,585
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$
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318,536
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The
accompanying notes are an integral part of these financial
statements.
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1.
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Plan
Description
The
following
description of the Caterpillar Inc. Tax Deferred Savings Plan (the
"Plan")
provides only general information. Participants should refer to the
Plan
agreement for a more complete description of the Plan's provisions.
General
The
Plan is a
contributory defined contribution plan established by Caterpillar
Inc.
(the "Company") to enable eligible employees of the Company and its
subsidiaries (the "participating employers"), which adopt the Plan
to
accumulate funds for retirement. The Plan is subject to the provisions
of
the Employee Retirement Income Security Act, as amended
("ERISA").
Participation
Employees
of
the participating employers who are covered under collective bargaining
agreements to which the Plan is extended who meet certain age, service
and
citizenship or residency requirements are eligible to participate
in the
Plan. Participation commences upon an eligible employee filing an
application with the Plan’s record keeper. Participating eligible
employees (the "participants") elect to defer a portion of their
compensation until retirement.
Participant
Accounts
Accounts
are
separately maintained for each participant. The participant's account
is
credited with the participant's contribution as defined below, employer
contributions and an allocation of Plan earnings. Allocations of
earnings
are based on participant account balances, as defined. The benefit
to
which a participant is entitled is the benefit that can be provided
from
the participant's vested account.
Participant
Loans
The
Plan
provides for participant loans against eligible participants' account
balances. Eligible participants obtain participant loans by filing
a loan
application with the Plan’s record keeper and receiving approval thereof.
Loan amounts are generally limited to the lesser of $50,000 or 50
percent
of the individual participant's vested account balance, with certain
regulatory restrictions. Each loan shall specify a repayment period
that
shall not extend beyond five years. However, the five-year limit
shall not
apply to any loan used to acquire any dwelling unit, which within
a
reasonable time is to be used (determined at the time the loan is
made) as
the principal residence of the participant. Loans bear interest at
the
prime interest rate plus 1 percent, as determined at the time of
loan
origination. Repayments, including interest, are made through after-tax
payroll deductions and are credited to the individual participant's
account balance. At December 31, 2005, participant loans have various
maturity dates through July 31, 2015, with varying interest rates
ranging
from 4.75 to 11 percent.
Contributions
Participant
contributions are made through a pretax compensation deferral as
elected
by the participants and are contributed to the Plan by the participating
employers. Participants who are at least 50 years old by the end
of the
calendar year are allowed by the Plan to make a catch-up contribution
for
that year. Contributions are subject to certain limitations set by
the
Internal Revenue Code.
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All
eligible
associates of the International Association of Machinists and Aerospace
Workers, AFL-CIO, District Lodge No. 77 also receive a Company matching
contribution equal to 20 cents per hour worked while the Agreement
and
Plan are in effect. No other participants receive a company matching
contribution.
Participants
direct the investment of their contributions and employer match
contributions into various investment options offered by the Plan
as
discussed in Note 3, including a self directed fund option. Participants
may change their contribution elections and prospective investment
elections on a daily basis and reallocate the investment of their
existing
account balance every seven business days.
Vesting
and Distribution Provisions
Participants
are immediately fully vested in their participant contributions and
earnings thereon. Participants also vest immediately in Company matching
contributions and the earnings thereon. Upon termination of employment
for
any reason, including death, retirement or total and permanent disability,
or upon Plan termination, the balance in participants' accounts is
distributable in cash unless the participant (or beneficiary) elects
to
receive Company shares in kind. The value of any full or fractional
shares
paid in cash will be based upon the average price per share the Trustee
receives from sales of Company shares for the purpose of making the
distribution. Participants also have the option to leave their vested
account balance in the Plan, subject to certain limitations.
Administration
The
Plan is
administered by Caterpillar Inc., who is responsible for non-financial
matters, and the Benefit Funds Committee of Caterpillar Inc., which
is
responsible for financial aspects of the Plan. Caterpillar Inc. and
the
Benefit Funds Committee have entered into a trust agreement with
The
Northern Trust Company (the "Trustee") to receive contributions,
administer the assets of the Plan and distribute withdrawals pursuant
to
the Plan.
Plan
Termination
Although
it
has not expressed any intent to do so, the Company has the right
under the
Plan at any time to terminate the Plan subject to provisions of ERISA
and
the provisions of the collective bargaining agreements. In the event
of
Plan termination, Plan assets will be distributed in accordance with
the
provisions of the Plan.
Plan
Qualification
The
Plan
obtained its latest determination letter on March 6, 2000, in which
the
Internal Revenue Service stated that the Plan, as then designed,
was in
compliance with the applicable requirements of the Internal Revenue
Code.
Although the Plan has been amended since receiving the determination
letter, the Plan Administrator and the Plan's tax counsel believe
that the
Plan is designed and is currently being operated in compliance with
the
applicable requirements of the Internal Revenue Code. Therefore,
no
provision for income taxes has been included in the Plan's financial
statements.
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2.
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Summary
of Significant Accounting Policies
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Basis
of Accounting
The
Plan's
accounts are maintained on the accrual basis of accounting.
Investments
The
Plan’s
interest in the Caterpillar Investment Trust is valued as described
in
Note 4. Investments included in the self-directed fund option are
valued
at quoted market prices which, for registered investment companies,
represent the net asset value of shares held by the Plan at year-end.
Participant loans are valued at estimated fair value consisting of
principal and any accrued interest. Interest on investments is recorded
as
earned. Dividends are recorded on the ex-dividend date. Purchases
and
sales of securities are recorded on a trade-date basis.
Administrative
Expenses
Administrative
costs, including trustee fees and certain investment costs, are paid
by
the Company.
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Withdrawals
Withdrawals
are recorded when paid.
Transfers
Transfers
to/from other plans generally represent account balance transfers
for
participants who transfer from one plan to another plan primarily
due to
employment status changes.
Use
of Estimates in the Preparation of Financial
Statements
The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, and changes therein. Actual results
could
differ from those estimates. The Company believes the techniques
and
assumptions used in establishing these amounts are
appropriate.
Reclassification
Certain
amounts from prior years have been reclassified to conform to the
current-year financial statement presentation.
Risks
and Uncertainties
The
Plan
provides for various investment options in any combination of stocks,
bonds, fixed income securities, mutual funds and other investment
securities. Investment securities are exposed to various risks, such
as
interest rate, market and credit risks. Due to the level of risk
associated with certain investment securities, it is at least reasonably
possible that changes in the values of investment securities could
occur
in the near term and that such changes could materially affect
participants' account balances and the amounts reported in the statement
of net assets available for benefits. Approximately 32 percent of
the
Plan’s investments are invested in Caterpillar Inc. Common Stock.
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3.
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Investment
Programs
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The
majority
of the Plan’s assets are invested in the Caterpillar Investment Trust as
discussed in Note 4, except for the self-directed fund option and
participant loans receivable.
Participants
can elect to have their contributions invested in any combination
of the
following investment fund options:
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*
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Caterpillar
Stock Fund
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*
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Preferred
Small Cap Growth Fund
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*
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Preferred
Stable Principal Fund
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*
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US
Equity
Broad Index Fund
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*
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Preferred
Short-Term Government Securities Fund
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*
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Preferred
Mid
Cap Growth Fund
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*
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Preferred
Money Market Fund
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*
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Preferred
International Growth Fund
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*
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Preferred
Value Fund
|
*
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Model
Portfolio - Income
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*
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Preferred
International Value Fund
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*
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Model
Portfolio - Conservative Growth
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*
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Preferred
Large Cap Growth Fund
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*
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Model
Portfolio - Moderate Growth
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*
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Preferred
Asset Allocation Fund
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*
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Model
Portfolio - Growth
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*
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Preferred
Fixed Income Fund
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Each
Model
Portfolio contains a specific mix of the Plan’s core investments. Each
portfolio’s mix of stocks and bonds is automatically rebalanced on the
last business day of each calendar quarter. The targeted percentage
of
stocks and bonds in each of the Model Portfolios is as
follows:
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*
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Income
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20%
stocks
and 80% bonds
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*
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Conservative
Growth
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40%
stocks
and 60% bonds
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*
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Moderate
Growth
|
60%
stocks
and 40% bonds
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*
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Growth
|
80%
stocks
and 20% bonds
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The
Caterpillar Stock Fund consists of Caterpillar Inc. common stock
and a
small amount of cash equivalents.
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In
addition,
a self-directed fund option allows participants to invest in various
other
investments outside of the standard Plan options. Harris Direct began
serving as custodian for funds invested through this self-directed
fund
option effective February 1, 2003. Net investment income for the
participant directed brokerage account consists of primarily net
appreciation (depreciation) in the fair value of investments in registered
investment companies.
Details
of
the participant directed brokerage accounts net assets are as
follows:
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(in
thousands of dollars)
|
2005
|
2004
|
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Investments,
at fair value
|
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|
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Registered
investment companies
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$
|
4,970
|
$
|
3,105
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Other
|
-
|
3
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Net
assets of
the participant directed brokerage accounts
|
$
|
4,970
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$
|
3,108
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4.
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Master
Trust
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A
portion of
the Plan’s investments are in the Caterpillar Investment Trust (the
"Master Trust"), which was established for the investment of the
Plan and
other Company sponsored retirement plans. These plans pool their
investments in the Master Trust in exchange for a percentage of
participation in the Trust. The assets of the Master Trust are held
by The
Northern Trust Company (the "Trustee").
The
percentage of the Plan's participation in the Master Trust was determined
based on the December 31, 2005 and 2004 fair values of net assets,
as
accumulated by the Trustee for the investment fund options chosen
by
participants of each plan. At December 31, 2005 and 2004, the Plan's
interest in the net assets of the Master Trust was 7.71 percent and
8.06
percent, respectively.
The
Master
Trust's investments are stated at fair value. Common stock is valued
at
quoted market prices. Shares of registered investment companies are
valued
at quoted market prices that represent the net asset value of shares
held
by the Master Trust at year-end. Common and collective trust investments
are stated at unit value, which represents the fair value of the
underlying investments.
The
net
investment income or loss of the Master Trust is reflected in the
financial statements of the Plan based on the actual earnings of
each
investment fund as allocated to the Plan based on average investment
balances throughout the year.
Details
of
the Master Trust net assets and significant components of the net
investment income of the Master Trust are as
follows:
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(in
thousands of dollars)
|
2005
|
2004
|
||||||||||
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|
|||||||||||
|
Investments,
at fair value
|
||||||||||||
|
Caterpillar
Inc. common stock, 39,883,224
and 39,964,424
shares, respectively
|
$
|
2,304,054
|
$
|
1,948,465
|
||||||||
|
Registered
investment companies
|
1,626,639
|
1,495,349
|
||||||||||
|
Common
and
collective trusts
|
424,008
|
394,436
|
||||||||||
|
|
|
|
|
|
|
|||||||
|
4,354,701
|
3,838,250
|
|||||||||||
|
Dividend
and
interest receivable
|
80
|
36
|
||||||||||
|
Other,
net -
pending trade sales (purchases)
|
8,443
|
(16
|
)
|
|||||||||
|
|
|
|
|
|
|
|||||||
|
Net
assets of
the Master Trust
|
$
|
4,363,224
|
$
|
3,838,270
|
||||||||
|
|
|
|
|
|
|
|||||||
|
Plan’s
interest in the Master Trust
|
$
|
336,602
|
$
|
309,486
|
||||||||
|
|
|
|
|
|
|
|||||||
|
(in
thousands of dollars)
|
2005
|
2004
|
||||||||
|
|
|
|||||||||
|
Investment
income
|
||||||||||
|
Dividends
|
16,575
|
32,832
|
||||||||
|
Net
appreciation in fair value of investments:
|
||||||||||
|
Common
stock
|
380,583
|
298,996
|
||||||||
|
Registered
investment companies
|
101,749
|
111,831
|
||||||||
|
Common
and
collective trusts
|
14,817
|
15,407
|
||||||||
|
|
|
|
|
|
|
|||||
|
Net
Master
Trust investment income
|
$
|
513,724
|
$
|
459,066
|
||||||
|
|
|
|
|
|
|
|||||
|
Plan’s
interest in net Master Trust investment income
|
$
|
31,712
|
$
|
29,543
|
||||||
|
|
|
|
|
|
|
|||||
|
|
On
June 8,
2005, the Company’s board of directors approved a 2-for-1 stock split in
the form of a 100 percent stock dividend. The stock split shares
were
distributed on July 13, 2005 to stockholders of record at the close
of
business on June 22, 2005. The share data and price per share data
in the
table above reflect the stock split, applied retroactively, to all
periods
presented.
|
|
|
|
|
5.
|
Related
Parties
|
|
The
Trustee
is authorized, under contract provisions and by exemption under 29
CFR
408(b) of ERISA regulations, to invest in securities under its control
and
in securities of the Company.
The
Master
Trust invests mainly in the Preferred Group of Mutual Funds, registered
investment companies that are sponsored by Caterpillar Investment
Management Ltd. (CIML), a wholly-owned subsidiary of Caterpillar
Inc. The
investment options available to the participants are summarized in
Note 3
and include the Caterpillar Stock Fund. The Master Trust also invests
in
the US Equity Broad Index Fund, which is sponsored and managed by
The
Northern Trust Company, the Trustee for the Master Trust.
CIML
manages
the Preferred Short-Term Government Securities Fund while all other
funds
are managed by unrelated investment managers. Caterpillar Securities,
Inc., a wholly-owned subsidiary of CIML, distributes the shares of
the
registered investment companies to the Master Trust.
|
|
6.
|
Subsequent
Event
|
|
In
October
2005, Caterpillar made the strategic decision to exit the investment
management business. As a result, the Benefit Funds Committee, which
oversees the financial aspects of the Company’s savings and investment
plans, has selected new investment options for the Plans to replace
the
Preferred Group of Mutual Funds. The transition of the investment
of
participant account balances to the new investment options
was implemented after the close of the market effective May 26, 2006.
The new investment options are similar in nature to those listed
in Note
3. Participant accounts and future deferral elections were
automatically transferred to the most similar new investment option.
|
|
7.
|
Reconciliation
of Financial Statements to Form 5500
|
|
The
following
table reconciles the net assets available for benefits per the
audited
financial statements to the Form 5500 Annual
Report:
|
|
(in
thousands of dollars)
|
2005
|
2004
|
|||||||
|
|
|
||||||||
|
|
|
|
|
||||||
|
Net
assets
available for benefits per financial statements
|
$
|
348,585
|
$
|
318,536
|
|||||
|
Certain
deemed distributions of participant loans
|
(457
|
)
|
(3
|
)
|
|||||
|
|
|
|
|
|
|
||||
|
Net
assets
per Form 5500
|
$
|
348,129
|
|
$
|
318,533
|
|
|||
|
|
|
|
|
|
|
||||
|
SCHEDULE
I
|
||||||||||
|
Caterpillar
Inc.
Tax
Deferred Savings Plan
EIN
37-0602744
Schedule
H, Line 4i - Schedule of Assets Held at End of Year
December
31, 2005
|
||||||||||
|
|
||||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
||||||
|
Identity
of
issuer,
borrower,
lessor
or
similar
party
|
Description
of investment, including
maturity
date, rate of interest,
collateral,
par or maturity value
|
Cost
|
Current
value
|
|||||||
|
|
|
|
|
|
||||||
|
*
|
Caterpillar
Inc.
|
Caterpillar
Investment Trust
|
**
|
$
|
336,602,079
|
|||||
|
Harris
Direct
|
Participant-directed
brokerage account
|
**
|
4,970,041
|
|||||||
|
*
|
Participant
loans receivable
|
Participant
loans (various maturity dates through July 31, 2015, various interest
rates ranging from 4.75% to 11%)
|
-
|
6,544,359
|
||||||
|
|
|
|||||||||
|
Total
Investments
|
$
|
348,116,479
|
||||||||
|
|
|
|||||||||
|
* Denotes
party in interest.
|
||||||||||
|
** Cost
information is not applicable for participant directed
investments.
|
||||||||||