Since GA, Caterpillar stock has increased PCUSA’s assets
By John H. Adams, The Layman Online, October 28, 2004
When the 216th General Assembly commissioners voted on July 2 to call for ending the denomination’s investments in corporations doing business with Israel, the one corporation specifically cited as a target was Caterpillar.
Meanwhile, the not-yet-divested Presbyterian Church (USA) funds in Caterpillar have produced a windfall of roughly $119,833 in asset growth for the Presbyterian Foundation and the denomination’s Board of Pensions in the four months since the General Assembly action.
Nonetheless, the PCUSA has begun steps to use its $3-million in Caterpillar stock as leverage in trying to convince Caterpillar to cease selling equipment to Israel. The denomination has joined a shareholders’ protest against Caterpillar.
“This is within the normal operations of our committee,” Bill Somplatsky-Jarman, the primary staff to the PCUSA’s Mission Responsibility Through Investment Committee (MRTI), told the Presbyterian News Service. “We supported this resolution last year and there is no reason why we couldn’t do so this year.”
MRTI will meet in New York City Nov. 4-6 to set criteria for the General Assembly resolution.
An overwhelming majority of the commissioners (87.4 percent in a 431-62 vote) approved the resolution that condemned Israel’s treatment of Palestinians. Another resolution approved by the GA condemned the construction of a wall to prevent insurgent suicide-bombers from murdering men, women and children.
The resolution ignited the international firestorm that flared even higher on Oct. 12 when members of a Presbyterian delegation to the Mideast met with Hezbollah, a Lebanese group that the U.S. State Department blames for the deaths of 270 Americans in two bombings.
In the nearly four months since that the vote on divestment, the PCUSA’s investment portfolios have experienced a 4.14 percent gain – roughly $119,833 – on the denomination’s 37,100 shares of Caterpillar stock.
Most of that money accrues to the benefit of the Presbyterian Foundation, whose investment returns underwrite a substantial share of the denomination’s mission program. The foundation owns 36,900 shares of Caterpillar. The Board of Pensions owns 200 shares.
On Wednesday, Caterpillar stock rose to $80.80 per share. Bloomberg News, a financial reporting service, said the company reported that sales of machinery in the third quarter rose 46 percent compared with the same period last year and engine sales rose 33 percent.
“It stuck with a previous forecast that sales for the year will rise as much as 30 percent,” Bloomberg reported.
On July 2, the day that the commissioners called for divestment, the closing high for Caterpillar stock was $77.98 per share. Through Wednesday, the gain in assets for the denomination from the increased value of Caterpillar stock since July 2 was $104,622. In addition, Caterpillar paid a 41-cent per share dividend on Oct. 21, which added $15,211 – bringing the total to $119,833.
Caterpillar’s stock has had its ups and downs – not unlike other corporate stocks during the past two years. But if the corporation continues its sales and earnings performance, and its stock value rises accordingly, the return to the PCUSA without divestment would be $360,000 over a 12-month period since the July 2 vote, with 99.5 percent of that money going to the foundation to support PCUSA mission. That would produce an annualized rate of return for the denomination of 12.4 percent from Caterpillar holdings.
On Tuesday, Caterpillar posted on its Web site its third-quarter report: record sales and revenues of $7.65 billion and record third-quarter profit of $498 million, or $1.41 per share. “Results for the nine months ended Sept. 30 are the best in company history with sales and revenues of $21.68 billion and profit of $1.48 billion, or $4.19 per share,” the company said.
Caterpillar was cited as an example of the kind of company that the PCUSA should target for divestment because Israel has purchased its equipment to help build its defensive wall to prevent terrorist strikes.