Caterpillar 2010 Annual Report Download - page 19

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GROWING WITH DISCIPLINE AND FOCUS
The new enterprise strategy contains many references to the need to drive a competitive
cost structure and deliver profit and cash pull through; delivering incremental profit and
cash flow on incremental sales.
With great engagement from our employees, suppliers and dealers during 2009 and
early 2010, Caterpillar successfully navigated through the most significant downturn
since the Great Depression. In 2009, we maintained profitability with strong cash flow,
held our “mid-A” credit rating and increased the dividend, setting the foundation for a strong recovery in 2010. We ramped
up schedules with great support from our suppliers and closely managed costs, which resulted in a significant improvement
in profitability and operating cash flow.
We have deployed the additional cash flow in 2010 to fund investments that benefit all of our stakeholders – customers,
employees and stockholders. We executed strategic acquisitions and invested in new markets, products and technology
to better serve our customers. This will lead to growth and opportunity for our employees. To the benefit of stockholders,
we increased the dividend. In addition, Caterpillar was the number-one performer for the year on the Dow Jones Industrial
Average in terms of total stockholder return.
As the global economy further improves, we must remain diligent and focused on the strategy moving into 2011. We must
be externally focused to win in today’s competitive marketplace. We need to recognize that we still have opportunities to
improve the competitiveness of our cost structure. And finally, we must deliver the profit and cash pull through following
the recipe of our Caterpillar Production System to improve velocity and working capital efficiency in order to support the
great growth opportunities that lie ahead.
One of the most pleasing parts of 2010 was our ability to deliver for our customers, stockholders and employees. We
significantly increased our sales volume to meet customer demand around the world. We delivered outstanding growth
in shareholder value. And eligible employees were recognized for the great results through their participation in our
incentive/gainsharing compensation plans. But the best part is that we laid a strong foundation for the years ahead. While
we still have work to do, I remain convinced the best is yet to come.
LEADERSHIP • EXECUTIVE OFFICERS
Ed Rapp
Rapp joined Caterpillar in 1979 as a pricing analyst and has held positions related to pricing, production
scheduling, marketing, dealer development, manufacturing and product development. In 1987, he transferred
to the North American Commercial Division where he held positions in Planning Support and as district
manager of the San Francisco district. He later transferred to Johannesburg, South Africa, as area manager
and then on to Geneva, Switzerland, where he was the department manager in Building Construction
Products, and Europe Region Manager. In 2000, Rapp became vice president of the Europe-Africa-
Middle East (EAME) Marketing Division. Prior to becoming group president in 2007, Rapp served as
vice president of Caterpillar’s Building Construction Products (BCP) Division, based in Cary, N.C.
Big 8 Imperatives
Simplify and attack cost
structure.
Achieve profit and cash pull
through.
2010 YEAR IN REVIEW