Caterpillar 2010 Annual Report Download

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1
2010 YEAR IN REVIEW
Put on a hard hat. Walk the job site. Check the engine readings. Examine the project
schedule. Evaluate the bottom line.
These are just a few of the tasks that thousands of Caterpillar customers around the
world perform every day. The more closely we can see the job from our customers’ point
of view, the more likely we are to meet their needs. And when that happens, we all win.
THINK LIKE
YOUR CUSTOMER

Table of contents

  • Page 1
    2010 YEAR IN REVIEW THINK LIKE YOUR CUSTOMER Put on a hard hat. Walk the job site. Check the engine readings. Examine the project schedule. Evaluate the bottom line. These are just a few of the tasks that thousands of Caterpillar customers around the world perform every day. The more closely we can...

  • Page 2
    ... and teach our new strategy to employees, dealers and suppliers. It couldn't have worked out better! Doug Oberhelman Chairman and CEO Team Caterpillar Delivers 2010 proved to be exciting. While we faced challenges, including continued uncertainty in the global economy, our team rolled up their...

  • Page 3
    ... of Caterpillar, we've also faced uncertainty - certainly in terms of the global economy, but also in terms of policy decisions that will either help or hurt the long-term competitiveness of companies operating from a U.S. base. The United States used to lead the world on trade, but today the story...

  • Page 4
    ...Class with a Higher Standard of Living Higher Demand for Goods & Services Increased Urbanization Rising Energy Consumption Higher Demand for Commodities Increased Need for Infrastructure Finite Energy Resources More Mining of Commodities Increased Construction Equipment New Energy Solutions...

  • Page 5
    ... - be proud of our history and past successes and build on them. But at the same time we have to actively shape our future, and that requires looking outside of Caterpillar. Customers Drive Caterpillar This past summer we introduced our updated Enterprise Strategy. It's simple. It's straightforward...

  • Page 6
    ... in Europe, the Middle East and Africa. In Brazil, a new backhoe loader and small wheel loader manufacturing plant will meet growing customer demand across Latin America. And, in South Dakota, a new engineering design center is part of Caterpillar's Product Development and Global Technology Division...

  • Page 7
    ... IN REVIEW THINK LIKE YOUR CUSTOMER Think Fast "Our management team received direction to start mobilization for millions of dollars worth of equipment to be loaded on a ship in two weeks." Neal R. Winberg, Director Equipment Purchasing and Sales Kiewit Corporation The closer you get to the North...

  • Page 8
    ... Thinking and ecologically." We provide customers with Valued Products and Services, a Caterpillar operating principle, when we can offer the lowest total owning and operating life cycle costs. The re-built D7F costs Bouchamaoui 60 percent less than a new machine. During 2010 and after the success...

  • Page 9
    ..., Operations and Maintenance Manager Oyu Tolgoi Project Construction Team Where there are minerals, there are mining customers. Where there are customers, there is Caterpillar. This philosophy was behind Cat® dealer Wagner Asia's decision to open a Cat® Rental Store in the middle of the remote...

  • Page 10
    2010 YEAR IN REVIEW THINK LIKE YOUR CUSTOMER Think Quality " We expect a lot from Caterpillar. We expect world-class products with great reliability, long life, great parts availability, great field service and great value." Steve McCandless, Senior Vice President Garney Construction For Garney ...

  • Page 11
    ... efficient." Naguib Bestavros, Parts and Service Operations Manager Mantrac Group, Egypt For the staff at the Caterpillar's parts distribution center in Grimbergen, Belgium, thinking "right now" is the only way to think. Grimbergen By-the-Numbers "When a customer needs a part, they need it fast...

  • Page 12
    ... near-zero emissions of particulate matter and oxides of nitrogen, Caterpillar went to work to develop solutions for its customers. For Caterpillar, this meant re-engineering hundreds of complex products in order to meet these standards. The undertaking - resulting in the largest research and...

  • Page 13
    ... their operations. The first production models of the 795F AC were delivered to Boliden's Aitik mine in Sweden in late 2010. Adding electric drive trucks to its ï¬,eet enables Caterpillar to provide a solution to match customer preferences. "Every machine is designed, built, serviced and supported...

  • Page 14
    ... YEAR IN REVIEW THINK LIKE YOUR CUSTOMER Think Efficiency "Cat generator sets have delivered power and heat to our main lodge around the clock for nearly 25 years. They help us get the most out of the limited energy supply available to our remote location." Bill McEwen, Co-Generation Supervisor...

  • Page 15
    ... & Growth Markets, which includes the Earthmoving, Excavation and Building Construction Products Divisions, Caterpillar Japan Ltd. (CJL), Europe / South America Integrated Manufacturing Operations, Caterpillar China Division, large contractor industry and India/ASEAN. STU LEVENICK Customer & Dealer...

  • Page 16
    ... Components & Systems Division, Diversified Products Division, Integrated Manufacturing Operations Division, Global Mining Division, and Product Development & Global Technology Division. He is also responsible for leading manufacturing excellence through the Caterpillar Production System. 16

  • Page 17
    ... of our Business Model that include product support, logistics, rental and used equipment, remanufacturing and financing. The total Caterpillar model is what separates us from every competitor. We have thousands of new customers to develop. And these aren't just new customers to Caterpillar; they...

  • Page 18
    ...GROW the business by building the largest global field population of products. This large field population helps us sell parts and services, which leads to increased customer loyalty. To get there, we take advantage of rental and used equipment sales opportunities, as well as new machine sales. By...

  • Page 19
    ...the department manager in Building Construction Products, and Europe Region Manager. In 2000, Rapp became vice president of the Europe-AfricaMiddle East (EAME) Marketing Division. Prior to becoming group president in 2007, Rapp served as vice president of Caterpillar's Building Construction Products...

  • Page 20
    ... engine manufacturer to a full-line power systems provider. Our new group brings together all of our Power Systems teams under one umbrella with a sharp focus on providing solutions to marine, oil & gas, alternative fuels, electric power, industrial and rail end-markets. While developed markets...

  • Page 21
    ...and technologies on a global level. Big 8 Imperatives Expand leadership in Mining and Quarry & Aggregates...new products and solutions. Excel at Product Development...quality, emissions, growth markets and next-generation products. 2010 showcased how successful we can be in the mining business. We...

  • Page 22
    ... JAMES UMPLEBY TANA L. UTLEY CHIEF FINANCIAL OFFICER EDWARD J. RAPP CHIEF INFORMATION OFFICER JOHN S. HELLER CHIEF TECHNOLOGY OFFICER TANA L. UTLEY CONTROLLER AND CHIEF ACCOUNTING OFFICER JANANNE A. COPELAND TREASURER EDWARD J. SCOTT CHIEF AUDIT OFFICER MATTHEW R. JONES CHIEF ETHICS AND COMPLIANCE...

  • Page 23
    ...Dickinson has been a director of the Company since 2006. JOHN T. DILLON, 72, Senior Managing Director of Evercore Capital Partners' (advisory and investment firm) investment activities and private equity business and former Vice Chairman of the firm. Current directorships: E. I. du Pont de Nemours...

  • Page 24
    ...Chief Financial Risk Officer, International Business Machines Corporation (computer and office equipment). Mr. Greene became a director of the Company effective January 1, 2011. MILES D. WHITE, 55, Chairman and Chief Executive Officer of Abbott (pharmaceutical and medical products). Other current...

  • Page 25
    ... Caterpillar's workforce increased by approximately 7,500 U.S. jobs during the year to meet growing customer demand. Consolidated operating profit was $3.963 billion in 2010 compared with $577 million in 2009. Higher sales volume, improved price realization and lower manufacturing costs contributed...

  • Page 26
    ...production substantially, improving factory efficiency and driving Machinery and Engines operating cash ï¬,ow to an all-time record. Long-term investment continued to be a priority with significant funding directed toward product development, additional capacity and strategic acquisitions. Capital...

  • Page 27
    .... S&P $100.00 $107.89 $129.99 $109.36 $184.47 $82.16 The market acknowledged Caterpillar's improved performance in 2010 with a 64.3 percent increase in share price during the year. Caterpillar also was the best performing stock among the companies comprising the Dow Jones Industrial Average in 2010...

  • Page 28
    ...' equity 3, 5, 6 Capital expenditures: Property, plant and equipment 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 6 Long-term...

  • Page 29
    ... aftermarket support. Announced plans for the expansion of excavator production in China that, when complete, will increase China-based excavator capacity by 400 percent. Announced plans to expand manufacturing in Brazil through a new facility to produce backhoe loaders and small wheel loaders...

  • Page 30
    ... PERFORMANCE • HIGHLIGHTS ENGINES Expanded capabilities of Caterpillar Emissions Solutions through acquisition of CleanAIR Systems, Inc., a leader in designing and manufacturing customized stationary aftertreatment solutions for internal combustion engines. Opened new logistics center for MaK...

  • Page 31
    ...and Non-Banking Financial Companies (NBFCs) to give customers in India greater access to new finance options to purchase Cat® equipment. As a result of teamwork, Cat Financial funded 92 percent of the over 200 Cat machines being used for the Panama Canal expansion project. In support of the launch...

  • Page 32
    .... (Cat Logistics) and Progress Rail Services Corporation (Progress 2006-2010 SALES & REVENUES PER EMPLOYEE (dollars in thousands) Rail). Caterpillar is also a leading U.S. exporter. Through a global network of independent dealers and direct sales of certain products, Caterpillar builds long-term...

  • Page 33
    ..., as these markets represent significant growth opportunities in the industries we serve. Cat dealers and their employees share our passion, enhance our competitive edge and ensure that our customers receive maximum business value from our products and services. Most Cat dealers are independently...

  • Page 34
    ... Oil & Gas Paving Pipeline Power Generation Quarry & Aggregate Railroad Road Construction Underground Utilities Waste Services Major Service Areas Financing Insurance Locomotive & Railcar Maintenance and Repair Logistics OEM Solutions Remanufacturing Rental Solar Turbine Customer Services Training...

  • Page 35
    ... AT-A-GLANCE • WORLDWIDE LOCATIONS Dealer Main FG Wilson - MaK - Perkins - Solar Manufacturing Office Facilities Parts Progress Rail 2010 2010 2010 2010 North America Sales & Revenues (in millions) Machinery $10,419 Engines(1) 4,103 Financial Products 1,571 Employees Cat Dealers 48,540 55...

  • Page 36
    ...; (x) international trade and investment policies, such as import quotas, capital controls or tariffs; (xi) the possibility that Caterpillar's introduction of Tier 4 emissions compliant machines and engines is not successful; (xii) market acceptance of Caterpillar's products and services; (xiii...

  • Page 37
    2010 YEAR IN REVIEW AT-A-GLANCE • TRADEMARKS TRADEMARK INFORMATION CAT, CATERPILLAR, their respective logos, "Caterpillar Yellow," and the POWER EDGE trade dress as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission. Cat and ...