Caterpillar 2013 Annual Report Download

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ground
STRENGTHS WE SHARE AROUND THE WORLD
COMMON
2013 YEAR IN REVIEW

Table of contents

  • Page 1
    ground COMMON STRENGTHS WE SHARE AROUND THE WORLD 2013 YEAR IN REVIEW

  • Page 2
    .... Around the world, Caterpillar and our people give back to the communities where we live and work. Our legal team is a great example. Read more on page 40. Long-Term Fundamentals that Go the Distance Our brands stand for it, our products are built for it and our business is managed for it. We...

  • Page 3
    ...Oberhelman shares his thoughts on our performance in 2013 and where we're headed in the future. 4 Leadership A look at the executive management team and Board of Directors who lead our company. 8 Segments An overview of our business segments, thoughts from our leadership on current business topics...

  • Page 4
    ...fidence in the long-term future of Caterpillar. Our increased market share around the world results in thousands more machines in the field, affording our dealer network the opportunity to sell more parts and service. That's a tremendous accomplishment. CATERPIL L AR INC. 2013 YEAR IN REVIEW 2

  • Page 5
    ... our brand promise. Our products are built to last, and through our disciplined execution of Lean and leveraging our Caterpillar Production System (CPS), we are holding ourselves accountable to that standard. It's working. Nearly every day, I hear from dealers and customers who say we have the best...

  • Page 6
    ... Caterpillar Enterprise System Group. The new order-to-delivery organization was formed in 2013 and brings together critical processes and support groups to further improve our manufacturing and supply chain capabilities worldwide. Bozeman joined Caterpillar in 2008. CATERPIL L AR INC. 2013 YEAR...

  • Page 7
    ... is a group president with responsibility for Resource Industries at Caterpillar Inc., which includes the Advanced Components & Systems, Diversified Products, Integrated Manufacturing Operations, Mining Sales & Support, Mining Products and Product Development & Global Technology Divisions. Wunning...

  • Page 8
    ... Company B.V (marketing and media information) since January 2014. Prior to his position at Blackstone, Mr. Calhoun served as Chief Executive Officer of Nielsen Holdings N.V. (2010-2013) and Vice Chairman of General Electric Company and President and Chief Executive Officer of GE Infrastructure...

  • Page 9
    .../ defense products and services) since December 2013. Prior to his current position, Mr. Muilenburg was Executive Vice President of The Boeing Company and President and Chief Executive Officer of Boeing Defense, Space & Security (2009-2013); President of Boeing Global Services & Support (2008...

  • Page 10
    ... building construction applications. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes backhoe loaders; compact, small and medium wheel loaders; small and medium track...

  • Page 11
    ... quality, what factors are driving success for Caterpillar? The primary factor is the strength of the Cat product portfolio. The depth and breadth of that line is a key part of our strength - from the smallest machines to the largest mining equipment, from generators to engines that power ocean...

  • Page 12
    ...our desire to drive a deeper understanding of our customers and also enhance the development of our key leaders," says Bluth. Tim Graham, who is now Caterpillar's chief engineer for mid-sized wheel loaders, was the first to experience this opportunity. He spent one year with Kiewit rotating through...

  • Page 13
    ...parts of the business and multiple locations across the world. Today, Chen is responsible for leading Caterpillar's "Win in China" strategy by providing overall leadership to the company's growth in China, which includes 26 facilities, four research and development centers, three logistics and parts...

  • Page 14
    ... of the families who live here because they can generate food for their own consumption, as well as generate an income." "As is typical of our culture, employees in all functions within Caterpillar rallied to rapidly increase production and ensure delivery," adds Worldwide Product Manager Pat...

  • Page 15
    ...Management helps customers increase uptime and reduce operating costs by monitoring fuel burn, location and utilization of machines, as well as health and maintenance issues like hours and ï¬,uid contamination. • Productivity monitors production and manages job site efficiency by using technology...

  • Page 16
    ... using our products and services than they can with our competitors - and we're doing just that with Cat Connect," says Carpenter. "Once customers experience what we have to offer, they want to immediately leverage these technologies on their own job sites." CATERPIL L AR INC. 2013 YEAR IN REVIEW...

  • Page 17
    ... customer service and delivering outstanding dealer development. This group supports customers and dealers in a variety of ways, such as providing employee equipment training on job sites, supplying aftermarket parts and service support and offering e-business and equipment management solutions. Key...

  • Page 18
    ...Caterpillar really is. We're much more than just products. We're much more than just solutions. We're a global organization, along with our dealers, with products, services and solutions and people on the ground who are dedicated to building customer value. Can you provide an example of how we help...

  • Page 19
    ... our products and services. It showcases our ability to leverage the strengths and expertise of our global manufacturing and distribution network that is positioned to deliver a wide range of solutions. By executing a consistent, well-coordinated marketing message between Caterpillar and Cat dealers...

  • Page 20
    ... as e-business, technology-enabled solutions, service strategy, rental and used equipment strategy and parts logistics. A global team focused on one ideal - ensuring that our distribution network is built for our next century of progress. STRENGTHEN The Cat Dealer Model ENHANCE Customer Focus...

  • Page 21
    ... says Reman General Manager Frank Li. This change enables Caterpillar to sell more machines by providing our customers in China the complete Cat ® value package and a broader range of options. Our dealers see value in RFG imports too, as they create more business opportunities and choices to serve...

  • Page 22
    ...& DEALER SUPPORT Customers Succeed with Equipment Management Solutions Caterpillar is in business to help customers succeed, and nothing is more critical to customer success than having machines ready to do the job wherever and whenever they are needed. Cat ® dealer NMC understands this and works...

  • Page 23
    ... is built to support customers using reciprocating engines, turbines, locomotives and related systems and solutions in oil & gas, power generation, marine, rail and industrial applications, including Caterpillar machines. Responsibilities include business strategy, product design, product management...

  • Page 24
    ... part of your work with natural gas technology do you take the most pride in? Caterpillar employees and our dealers are proud to provide the products and services that improve living standards around the world. Many in the developing world still do not have access to reliable power in homes, schools...

  • Page 25
    ... the next 25 years. Caterpillar's natural gas solutions range across the entire value chain, and our product offering continues to grow. Caterpillar is the market leader for supplying power for land drilling and for providing both engines and transmissions for use on hydraulic well stimulation rigs...

  • Page 26
    ... as well as in Cat ® machines • Turbines and turbine-related services • Diesel-electric locomotives and components and other rail-related products and services As part of our 2010 strategic imperatives, Caterpillar committed to aggressively grow the Energy & Power Systems businesses, which...

  • Page 27
    ... Rail Services Corporation, a wholly-owned subsidiary of Caterpillar Inc., is a leading supplier of remanufactured locomotive and railcar products and services to the railroad industry. Through the acquisition of Electro-Motive Diesel, Inc., Progress Rail has expanded its network of global locations...

  • Page 28
    ... even more Cat ® products for ship owners around the world, and the Caterpillar Marine team and our unmatched dealer network will provide greater services with these complete Caterpillar Propulsion solutions. "Our team will now be able to provide worldwide Caterpillar support to marine operators...

  • Page 29
    ...other generation sources that offer ï¬,exibility and control to effectively manage sudden changes in supply and demand of power. Caterpillar has the right solutions and capabilities to meet that need. Mid-Kansas Electric Company, LLC is a coalition of five rural electric cooperatives and one wholly...

  • Page 30
    CATERPILLAR ENTERPRISE SYSTEM GROUP Caterpillar Enterprise System Group brings together critical processes and is built to support Caterpillar to further improve our manufacturing and supply chain capabilities worldwide. It builds upon the strong foundation of our Caterpillar Production System and 6...

  • Page 31
    ...product or service to the time that product or service is delivered. We expect our group, together with the businesses, will drive that greater experience. In terms of Caterpillar's 2020 strategy, why did it make sense to form the group in 2013? I think Caterpillar has been heading in this direction...

  • Page 32
    ...serve customers from the moment they place an order to the day it is delivered in the field, we are engineering an innovative, end-to-end Lean value chain. The new structure and processes are designed to deliver a competitively advantaged company. The Caterpillar Enterprise System Group encompasses...

  • Page 33
    CATERPILLAR ENTERPRISE SYSTEM GROUP CONSTRUCTION INDUSTRIES Feature Story Headline Lean: A Journey that Delivers Significant Results A commitment to Lean is driving significant process and quality improvements at Caterpillar. Lean challenges all employees to get closer to the customer so they can...

  • Page 34
    ... to the customer; however each repair added extra time associated with rework to our internal processes and additional inventory. By leveraging the tools and processes of 6 Sigma and the Caterpillar Production System (CPS), Lean empowered Aurora employees to eliminate internal defects throughout...

  • Page 35
    ... of product being delivered with processes that shorten transit time and increase transport utilization, everyone through the outbound value chain wins - Caterpillar, dealers and customers," says Ed O'Neil, director of Integrated Logistics Services. "Driving future success is about designing and...

  • Page 36
    ... customers and dealers to help support the purchase and lease of our equipment. Corporate Services is built to provide business and human resources, information technology, accounting and finance services to Caterpillar, serving as the enterprise resource for business-related activities. Revenues...

  • Page 37
    ... - ones that support global growth, infrastructure development and growth of the middle class - and we're well-positioned to help meet those needs going forward. We've got the right business model, the best products and a dealer network that's focused on lowering our customers' operating costs...

  • Page 38
    ...who deal with the machines daily on the job site. Work is getting done more quickly and efficiently. At the end of 2013, Borg owned six Cat machines with plans to add more Cat ® products to his ï¬,eet. "For us, Caterpillar, Cat Financial and Pon Equipment BV are able to offer us trust, service and...

  • Page 39
    ...has been proven that companies with diverse teams outperform their competitors. Our global customers expect employees to understand their diverse cultures and business needs," Gillespie adds. Attracting and developing the best talent is a critical component of Caterpillar's strategy. To achieve that...

  • Page 40
    ... on a truck, the time required to retrieve information added up quickly. The shop ï¬,oor mobility initiative makes standard work accessible on the machine that an assembler is building, through a tablet with a specially designed magnetic case. It requires only a click to rotate a picture, zoom into...

  • Page 41
    ..., media relations, internal communications, government affairs advocacy, sustainability consulting and global environmental, health and safety services. Support for the Caterpillar Foundation is also provided by our group, making sustainable progress possible around the world. We are a global team...

  • Page 42
    ... Caterpillar Foundation is supported by our group, and that drives home the need to help others. From cleaning up a park to building homes, or volunteering with Junior Achievement or the United Way, our team is always ready to reach out and get the job done. CATERPIL L AR INC. 2013 YEAR IN REVIEW...

  • Page 43
    ... 4 emissions management technologies and hydraulic hybrid technologies. Today, Caterpillar invests around four percent of annual sales in research and development, producing breakthroughs that expand our offering and improve existing products. It is only through a world-class Intellectual Property...

  • Page 44
    ... INSIDER IMAGES/Stuart Ramson for the UN Foundation. Caterpillar enables the growth of our world through infrastructure and energy development. Our solutions support communities and protect the planet, and the Caterpillar Foundation shares these values in the communities where we live and work. The...

  • Page 45
    ..., investors and Caterpillar's Board of Directors have never been higher. We embrace those high expectations and are committed to continuous improvement as we work to strengthen a world-class ethics and compliance culture. Our global footprint, key markets, growth strategy and business model put the...

  • Page 46
    ... fundamental environmental and safety issues that all Caterpillar facilities must address. Feature Story Headline "While Global EHS sets the policies for the enterprise, our improvement is due to our employees and leaders who put safety first. An RIF number of .78 illustrates that the safety of...

  • Page 47
    ... customers using machinery in mining and quarrying applications. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes large track-type tractors, large mining trucks...

  • Page 48
    ... the long-term outlook for mining? The long-term fundamentals are very positive. The world's population is growing at a rate of about 6.5 million people every month, and that's going to continue month in, month out for the foreseeable future. The standard of living for people in developing countries...

  • Page 49
    ... Our global product development community is working now to bring innovation to bear on those future challenges, and turn them into opportunities for long-term success. In recent years, Caterpillar's product development has largely focused on one of the most significant opportunities in our history...

  • Page 50
    ... Unit RigTM MT4400. The initial truck has now clocked more than 6,000 hours in the field without any major issues, giving dealers confidence in the quality of the design and manufacturing of the project. Following this success, we undertook the next step by adding proven Cat electric drive system...

  • Page 51
    ...Caterpillar. Developing a world-class product like the high-tech Cat 988K Wheel Loader takes a tremendous team effort. At the core of this development were technologies that Caterpillar invested in to improve the way we work as a team. Utilizing new Voice of the Customer software, the marketing team...

  • Page 52
    ... per day. The Akashi facility has become an enterprise benchmark for implementation of the Caterpillar Production System and highly efficient supply chain. The Hydraulic Excavator Design Center (HEDC) in Akashi is a key Caterpillar product development center. HEDC has developed products such as the...

  • Page 53
    ... driven by a sharp drop in sales of new machines for mining. „ Energy & Power Systems $20,155 „ Construction Industries $18,445 „ Resource Industries $13,270 „ Financial Products $3,224 „ All Other $562 $55.7 and Billion Total Sales Revenues Caterpillar is a diverse company that serves a wide...

  • Page 54
    ... actions helped mitigate the negative profit impact from lower sales. 15% Increase Strong cash ï¬,ow enabled us to increase our dividend in 2013, the 20th consecutive year we have done so. 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 CATERPIL L AR INC. 2013 YEAR IN REVIEW 52

  • Page 55
    ... 2013 2009 2010 2011 2012 2013 Cumulative stockholder return assuming an investment of $100 on December 31, 2008, and reinvestment of dividends issued thereafter. Caterpillar common stock is traded on the New York Stock Exchange under the symbol CAT. CATERPIL L AR INC. 2013 YEAR IN REVIEW...

  • Page 56
    ... per employee decreased due to lower sales volume. 2011 2010 2009 2009 2010 2011 2012 2013 GLOBAL CAT® DEALERS 178 188 191 189 178 DEALER NET WORTH ($ IN BILLIONS)* $15.7 $17.7 $18.9 $21.3 $21.8 178 Global Dealers Our dealer network is a key part of our Business Model and a competitive...

  • Page 57
    ...principal locations where manufacturing, parts distribution, rail and remanufacturing work takes place. In certain geographic areas, the facility symbol may represent multiple facilities. 53 Dealers EAME 2013 Sales and Revenues by Segment ($ in millions) Total $13,613 „ Energy & Power Systems...

  • Page 58
    ...* „ Construction Industries $2,728 „ Resource Industries $2,481 „ Energy & Power Systems $2,168 „ Financial Products $430 „ All Other $4 15,385 Employees 33 Dealers *Facilities include principal locations where manufacturing, parts distribution, rail and remanufacturing work takes place. In...

  • Page 59
    ... 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 Financial Products Total debt: Consolidated...

  • Page 60
    ... Multi Terrain Loader • Dragline • Drill • Electric Rope Shovel • Engine • Generator Set • Highwall Miner • Hydraulic Excavator • Hydraulic Shovel • Locomotive • Marine Propulsion Systems • Motor Grader • Off-Highway Truck On-Highway Truck Pipelayer Skid Steer Loader Track...

  • Page 61
    BUSINESS Overview Global Footprint 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. CATERPIL L AR INC. 2013 YEAR IN ...

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    ... used without permission. © 2014 CATERPILLAR PUBLIC RELEASE All Rights Reserved. Printed in the U.S.A. Forward-Looking Statements Certain statements in this 2013 Year in Review relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities...