Caterpillar 2012 Annual Report Download

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2012 YEAR IN REVIEW
ROCK SOLID
Potential | Position | Plan | People | Performance
In a global marketplace filled with shifting dynamics, our customers count on Caterpillar as
a dependable source of products, services and solutions to meet their needs. This strategy is
the stabilizing force behind our business. Today, we’re as confident of our rock solid strength
as at any time in our history.

Table of contents

  • Page 1
    2012 YEAR IN REVIEW ROCK SOLID Potential | Position | Plan | People | Performance In a global marketplace filled with shifting dynamics, our customers count on Caterpillar as a dependable source of products, services and solutions to meet their needs. This strategy is the stabilizing force behind...

  • Page 2
    ...of sales; (xiv) successful implementation of capacity expansion projects, cost reduction initiatives and efficiency or productivity initiatives, including the Caterpillar Production System; (xv) inventory management decisions and sourcing practices of our dealers or original equipment manufacturers...

  • Page 3
    .... ROCK SOLID PEOPLE Caterpillar's extended value chain is comprised of employees, dealers and suppliers around the world who are focused on the same customer-driven goals. The talent and commitment of this team is critical to our success. That's why we're investing in our people and working together...

  • Page 4
    ...- trade, energy, infrastructure and tax - that ensure growth and global competitiveness in the world's economy. In 2012, we led the way in support of a new U.S. highway bill - sending over 40,000 letters from employees, dealers, suppliers and customers for legislation that will provide investment in...

  • Page 5
    ... Review. Our customers, our employees and our communities are doing amazing work, and I'm proud to share their stories with you! Here are just a few highlights of some of the rock solid accomplishments we had in 2012. • Achieved record sales, revenues and profit in 2012 • Opened the Caterpillar...

  • Page 6
    ... company that touches as many industries with as attractive long-term demand fundamentals as Caterpillar. A growing global population needs more energy, water, roads, schools, power systems and housing, to name a few - all needs that our customers will help meet for decades to come. ROCK SOLID...

  • Page 7
    ...railway system. "We consider Cat® products to be the best brand with the best value and quality worldwide," said Majed Al Mobty of the Mobty Company, who is using Cat® equipment exclusively for this job. "The machines offer the best productivity and best product support with the least running cost...

  • Page 8
    ... SOLID 2012 Year in Review Rock Solid Potential A NATURAL FIT New technologies to capitalize on a new era of natural gas growth. Energy consumption is rising rapidly, driven by worldwide population growth, developing economies, improving global living standards and the use of ever more energy...

  • Page 9
    ... trucking for long hauls. Since acquiring EMD in 2010, Caterpillar and Progress Rail have made significant investments in new equipment and plant improvements to enable the creation of new products and services to meet the growing demands of the international railway industry. With new locations...

  • Page 10
    ROCK SOLID 2012 Year in Review Rock Solid Potential DEEP INTO THE FOREST A customer-first focus drives forestry machine development. Caterpillar's forestry roots date back to the 1890s, when the Best Manufacturing Company and The Holt Manufacturing Company used steam traction engine tractors in...

  • Page 11
    ROCK SOLID 2012 Year in Review POSITION ROCK SOLID Today, our global reach is unmatched in the industry. The breadth and depth of our product portfolio, combined with our global dealer network sets us apart from competitors. An unprecedented level of additional capacity and product development ...

  • Page 12
    ...Beyond product and manufacturing expansions, SEM also has expanded its sales and service support. SEMâ„¢ dealers are now in 33 countries to provide sales, parts and basic service support capabilities. In 2013, SEM is adding dedicated parts distribution centers outside China. "Our SEMâ„¢ product line...

  • Page 13
    ... the best suppliers and development partners to ensure all customer work streams are enabled by technology solutions. From grade control, to global positioning, to industry-specific services, Caterpillar is committed to improving customer productivity with lower operating costs through technology...

  • Page 14
    ... two dozen products and technologies, including an off-highway mining truck, hydraulic shovel, next-generation Cat® D11T Track-type Tractor and a variety of underground mining machines such as continuous miners, a longwall shearer and plow, as well as other support equipment. Among the new products...

  • Page 15
    ROCK SOLID 2012 Year in Review Rock Solid Position RIGHT PART, RIGHT PLACE, RIGHT TIME When it comes to parts, minutes matter. Cat® machines are at work around the clock in every corner of the globe. When customers buy yellow iron, they expect the legendary Caterpillar product support that ...

  • Page 16
    ... SOLID 2012 Year in Review PLAN ROCK SOLID Caterpillar's strength depends on providing customers with the best products, the best service and the best value proposition in the marketplace. Our updated Vision 2020 strategy is squarely focused on these goals. Two years into executing this strategy...

  • Page 17
    ... and energy security. Caterpillar continues to commit research and development resources to supporting renewable fuels as part of a winning solution for clean energy and a sustainable future. ROCK SOLID HISTORY In 1946, Solar capitalized on the opportunity to design a gas turbine - a product that...

  • Page 18
    ... 2012 Year in Review Rock Solid Plan DEALERS GET IN THE MINING GAME Aligning distribution in our mining business. When Caterpillar acquired mining equipment company Bucyrus in 2011, there was a need to align their distribution capabilities within Caterpillar's dealer-oriented distribution model...

  • Page 19
    ... cost advantage to many customers' bottom line. We are introducing a complete lineup of gas-capable power systems across the market segments - electric power, petroleum, mining, rail and marine - to provide this value," said Joel Feucht, general manager for Gas/Medium Speed Engines in Caterpillar...

  • Page 20
    ROCK SOLID 2012 Year in Review Rock Solid Plan REDUCING CLAIMS, INCREASING PROFITS Big improvements in parts quality benefit customers. Machine downtime means lost profit. That's why parts availability can be the lifeblood of a Caterpillar customer's business. It's also the single biggest ...

  • Page 21
    ROCK SOLID 2012 Year in Review PEOPLE ROCK SOLID Caterpillar's extended value chain comprises employees, dealers and suppliers around the world who are focused on the same customer-driven goals. The talent and commitment of this team is critical to our success. That's why we're investing in our ...

  • Page 22
    ... relationships. They are an integral part of the enterprise strategy and play a key role in the Caterpillar business model. They are at the front lines of serving our customers. They are a competitive advantage that competitors simply cannot match. That's why Cat dealers were a key player in the...

  • Page 23
    ... to develop Caterpillar leaders for senior roles in the enterprise, it quickly became evident that leaders from the entire value chain would benefit from participation and bring another dimension to the program. Now, critical suppliers, dealer leadership teams and selected Caterpillar customers...

  • Page 24
    ... to support the construction and mining businesses. To celebrate the first 50 years, a grand ceremony was held during September 2012. With the assistance of several managers, business partners and special guests, employees were thanked for their hard work that has helped pave Caterpillar's road to...

  • Page 25
    ... in the world, the Building HH Showroom in East Peoria, Ill., was 308 feet long, 108 feet wide and featured at least one sample of every machine Caterpillar built at any given time. Opened in 1929, thousands of people visited the showroom each year, including dealers, customers and the public. In...

  • Page 26
    ... facility locations globally and diverse career paths, allowing employees to gather deep expertise in their fields and move between product lines and business areas. • Opportunities to work with a team committed to customer success and living by Our Values in Action - Caterpillar's Worldwide Code...

  • Page 27
    ROCK SOLID 2012 Year in Review PERFORMANCE Our renewed focus on customers is delivering results. When Caterpillar products and services deliver world-class performance for our customers, then we are positioned to deliver world-class financial performance for our stockholders. We accomplished this...

  • Page 28
    ... bottom line." Long-time Foley sales representative Dustin Daniels and Scott Bailey of Caterpillar's Job Site Solutions team conducted an exhaustive, topto-bottom analysis of the entire operation, including capital and cash ï¬,ow; machine requirements and their fit to operational tasks; work ï¬,ows...

  • Page 29
    ...," said Bobby Aiken, road department Superintendent for Seminole County, Georgia, "It's a lot less downtime for us." Since the release of the Cat M2, multiple products have gone into production with Tier 4i - medium wheel loaders, articulated trucks, track-type tractors and more. The next round...

  • Page 30
    ... and maintain engines with the newer technology. Caterpillar has a long history of innovating on behalf of its customers. Energy & Power Systems customers are choosing to address these challenges by leveraging Caterpillar equipment monitoring solutions to assist in the proactive management of their...

  • Page 31
    ... of the Caterpillar Production System (CPS) to identify areas of opportunity and define sustainable solutions. The overall goals were to best match the labor force to tasks, reduce cycle time, reduce total labor hours, deliver the standard work in a sustainable way and improve safety by identifying...

  • Page 32
    ... manufacturing footprint that helps balance the shifting world economies. • A dealer network that is unmatched and a supply chain that facilitated the ramp-up to record levels. • A Caterpillar business model that puts the largest population of machines in the field at the lowest life-cycle cost...

  • Page 33
    ...multi-terrain loaders, mini excavators, compact wheel loaders, select work tools, small, medium and large track excavators, wheel excavators, medium wheel loaders, medium track-type tractors, track-type loaders, motor graders, telehandlers, pipelayers and related parts. ENERGY & POWER SYSTEMS Energy...

  • Page 34
    ... and build on the tremendous foundation that has already been established. I leave Caterpillar very optimistic about its long-term future and the success it will bring in the years ahead. $ in millions Segment Profit 2011 2012 $2,056 $1,789 $ in millions 2012 Sales by Geography North America...

  • Page 35
    ... to global oil and gas customers and an agreement with Westport to develop natural gas technology for off-road equipment. We also added to our growing list of agreements with International Power Project (IPP) providers to develop temporary power solutions to meet the needs of the growing IPP segment...

  • Page 36
    ... for more than 85 years. We continue to successfully invest and deploy the Caterpillar Production System (CPS) with all of our newly acquired plants from South Milwaukee, Wisconsin, to Thiruvallur, India, which is leading the pack in manufacturing excellence. The component business has been equally...

  • Page 37
    ..., innovation, supplying power to the world or building more infrastructure, you will quickly learn why I am proud to be part of the remarkable accomplishments at Caterpillar and get the opportunity to lead a great team of employees. in thousands Global Cat® Dealers 2008 2009 2010 2011 2012 180...

  • Page 38
    .... We are using those capabilities to solve real business problems and to chase that value add to the bottom line. I'm proud to say I've been a part of Corporate Services as I move to leadership of Construction Industries in 2013. $763 $587 $ in millions 2012 Revenues by Geography North America...

  • Page 39
    ROCK SOLID 2012 Year in Review Performance Summary Financial Performance Market Performance Business Performance 2012 Regional Performance 5-Year Financial Summary Performance Summary 39

  • Page 40
    ... Resource Industries n $21,158 Total Power Systems n $21,122 Financial Products $65,875 $ in millions n $3,090 All Other n $1,171 $ in millions Investment in research and development reached record levels in 2012. Sales and revenues were $65.88 billion compared with $60.14 billion in 2011...

  • Page 41
    ...,875 $ in millions Caterpillar invested more than $3.35 billion in capital expenditures during 2012, reï¬,ecting capacity expansion around the world to support customer demand. $ in millions Sales and revenues increased 10 percent to $65.88 billion in 2012, an all-time record. 2012 Exports From...

  • Page 42
    ... has consistently outperformed the S&P 500 over the past five years. 5-Year Closing Stock Price 2008 2009 2010 2011 2012 $93.66 $90.60 $89.61 $56.99 $44.67 $ in billions Caterpillar shares have enjoyed a significant level of appreciation since the downturn of 2008. Performance Summary 42

  • Page 43
    ROCK SOLID 2012 Year in Review Business Performance Global Employees (at year end) 2012 Sales & Revenues Per Employee 2008 2009 2010 2011 2012 125,341 $482 125,099 104,490 93,813 112,887 $ in thousands $529 $432 $326 $516 2011 2010 2009 2008 Worldwide full-time employment was 125,341 at ...

  • Page 44
    ROCK SOLID 2012 Year in Review Dealer Statistics Global Cat® Dealers 2008 2009 2010 2011 2012 2012 Dealer Employees 152.5 141.3 126.7 135.7 131.8 180 178 188 191 189 2011 2010 2009 in thousands $ in billions 2008 Our vast dealer network offers comprehensive solutions for customers ...

  • Page 45
    ROCK SOLID 2012 Year in Review Regional Performance North America Sales & Revenues by Segment $ in millions Construction Industries Resource Industries Power Systems Financial Products All Other Latin America Sales & Revenues by Segment $ in millions Construction Industries Resource Industries ...

  • Page 46
    ... Equipment leased to others Depreciation and amortization Research and development expenses As a percent of sales and revenues Wages, salaries and employee benefits Average number of employees December 31, Total assets Long-term debt due after one year: Consolidated Machinery and Power Systems...

  • Page 47
    ROCK SOLID 2012 Year in Review About Caterpillar Business Overview We are the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. Global Snapshot With offices and facilities that span six ...

  • Page 48
    ...Engine Forestry Machines Generator Set Hydraulic Excavator Locomotive Material Handler Motor Grader Off-Highway Truck On-Highway Truck Paving Equipment Pipelayer Scraper Skid Steer Loader Surface Mining Telehandler Track Loader Track-Type Tractor Turbine Underground Mining Vehicles Wheel Dozer Wheel...

  • Page 49
    ROCK SOLID 2012 Year in Review Global Snapshot Offices Facilities* *Facilities include principal locations where manufacturing, parts distribution, rail, and remanufacturing work takes place. In certain geographic areas, the facility symbol may represent multiple facilities. About Caterpillar ...

  • Page 50
    ..., Resource Industries; Gerard Vittecoq, Energy & Power Systems; Doug Oberhelman, Chairman and CEO; Rich Lavin, Construction Industries; Stu Levenick, Customer & Dealer Support Executive Officers (Data based on 2012 year-end) Doug Oberhelman, Chairman and CEO Doug Oberhelman joined Caterpillar in...

  • Page 51
    ROCK SOLID 2012 Year in Review Officers (Data based on 2012 year-end) Chairman and Chief Executive Officer Douglas R. Oberhelman Group Presidents Richard P. Lavin Stuart L. Levenick Edward J. Rapp Gerard R. Vittecoq Steven H. Wunning Executive Vice President, Law and Public... Spears Controller and...

  • Page 52
    ... at the graduate and executive education levels. He was formerly vice president of financial management and chief financial risk officer of International Business Machines Corporation (computer and office equipment). Mr. Greene has been a director of the Company since 2011. Jon M. Huntsman, Jr...

  • Page 53
    ... Global Services & Support (2008-2009) and vice president and general manager of the Boeing Combat Systems division (2006-2008). Mr. Muilenburg has been a director of the Company since 2011. Douglas R. Oberhelman, 59 Chairman and chief executive officer of Caterpillar Inc. (machinery, power systems...

  • Page 54
    ... possible around the world by providing program support in the areas of environmental sustainability, access to education and basic human needs. To learn more about the Foundation's investments, please visit caterpillar.com/Foundation. 52% International $60 million INVESTED IN 2012 48% U.S. $12...

  • Page 55
    ROCK SOLID 2012 Year in Review (continued) Shelter The Caterpillar Foundation works with a number of organizations specializing in providing those in need with temporary, transitional and permanent housing. HABITAT FOR HUMANITY REBUILDING TOGETHER AMERICAN RED CROSS 60,000+ AFFORDABLE HOMES ...

  • Page 56
    Caterpillar Inc. 100 NE Adams Street Peoria, Illinois 61629 USA 1 (309) 675-1000