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CATERPILLAR ISSUES STATEMENT

 CHICAGO, Nov. 19 ~PRNewswire ~ -- Caterpillar (NYSE: CAT) issued the following statement today:
 On November 19, Caterpillar advised employees on all payrolls -- management, salaried and hourly -- that the company will limit its liability for retirees' medical costs.
 Caterpillar will pay the increased costs of health care for retirees through 1999. After January 1, 2000, Caterpillar will continue to pay the same per capita amount it paid in 1999. However, if costs rise above that level, retirees will have to pay a monthly premium.
 This provision applies to management and salaried employees who retire after Feb. 1, 1993, and hourly employees who retire after Jan. 1, 1992.
 Rising health costs are a major problem throughout the United States. Caterpillar has taken a number of steps to limit the increase in costs, but recognizes that it must do more to remain competitive and build a secure future.
 A new accounting rule has also increased the focus on rising health care costs. As previously announced, Caterpillar is adopting, as of Jan. 1, 1992, the Statement of Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other than Pensions."
 The rule will require companies to record future retiree medical costs over the employees' service period. In the past, Caterpillar and many other companies accounted for these expenses as they occurred.
 The company's estimated liability for past service as of Jan. 1, 1992 will be taken as a one-time charge -- which could be up to $2.4 billion after tax -- against 1992 earnings.
 A number of other companies have placed limits on their retiree health care costs. In contrast, companies that have provided little or no health care coverage to their retirees don't face these significant liabilities.
 Faced with continuing increases in health care costs, Caterpillar has looked at many ways to ease the burden on employees and the company. The company believes the liability limitation on retirees' costs is the most reasonable solution it has at this point.
 -0- 11~19~92
 ~CONTACT: Dick Stober, Public Information, 309-675-5548, for Caterpiller~
 (CAT)


CO: Caterpillar Inc. ST: Illinois IN: MAC SU:

TM -- NY121 -- 3184 11~19~92 19:25 EST
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Publication:PR Newswire
Date:Nov 19, 1992
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