Caterpillar Inc.'s Ratings Affirmed By Fitch.

Business Editors

CHICAGO--(BUSINESS WIRE)--May 10, 2001

Fitch affirms Caterpillar Inc.'s (NYSE: CAT) senior unsecured notes at `A+', including the recent issuance of $250 million of 6.55% due May 2011 and $350 million of 7.30% due November 2031. Fitch also affirmed is the commercial paper rating at `F1'. The Rating Outlook remains Stable.

The ratings reflect CAT's well-established global market position with leading product lines and brand equity and a solid global dealer network. This dealer network affords CAT a distinctive competitive advantage in delivering its full line-up of products to end customers through both sales and rental and the attendant support services. Moreover, the diversity of the many end markets served by CAT helps to mitigate the significant cyclical volatility of individual product and market segments, leading to relatively consistent cash flows in sum. For instance, while its engine business has significant exposure to the sharp falloff in North American truck market, CAT has largely buffered itself from this exposure through its exposure to the growing generated power business. CAT's generated power business will continue to be a significant growth platform for its overall engine business, even as engine sales to the truck markets rebounds with the eventual recovery of the North American truck market.

For the 12 months ended March 31, 2001, net free cash flow generation from machinery and engine operation remained strong at $1.1 billion. CAT has consistently generated strong cash flows through cycles in individual product and market segments. Total balance sheet debt of $3.7 billion at March 31, 2001, was up moderately from year-end levels, with debt-to-EBITDA for the trailing 12 months at 1.6 times (x). Fitch expects credit measures to remain within its current range for the balance of the year before improving with the full recovery of the larger end markets CAT serves.

CAT is the world's largest manufacturer of heavy machinery, producing an array of construction, agricultural, mining, and forestry equipment. CAT also makes a variety of diesel engines for both third-party customers and for CAT equipment and gas turbine engines for numerous energy generation and industrial markets. Subsidiaries, Caterpillar Financial Services and Caterpillar Insurance Services provide financing and insurance to dealers and customers.