Caterpillar 2010 Annual Report Download - page 3

3
We were able to make these moves because of our cash flow in 2010. And all of these investments align perfectly with our
strategy and will set us up for profitable growth in the future. Timing is important. We made these investments at the right
time. We’ve seen positive signs in terms of the economy and demand, so we want to be positioned and ready to take
advantage of the upturn.
Policies Critical To Competitiveness
Outside 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 is becoming alarming. Progress has been painfully slow with
the pending trade agreements with South Korea, Colombia and Panama. The WTO Doha Development Round has yet to
be completed. And we lack free trade agreements with some of our largest trading partners and key growth markets
such as Brazil, China and India. Meanwhile, other countries have aggressively pursued trade agreements that leave U.S.
exporters at a competitive disadvantage. We have to step up our game on trade and make sure our people understand
that when markets are truly open, businesses do exceedingly well, which translates into economic growth and more jobs.
We also have a problem with the mounting deficit levels at the federal and state levels. We need to restore a sense of
fiscal discipline, and as unpleasant as it may be, it has to start with cutbacks, streamlining and some good old-fashioned
belt tightening.
But we also need a renewed focus on prioritizing investments that yield the best return. And nowhere is this more evident
than in our nation’s infrastructure. Once the pride of the world, our infrastructure is aging and in need of updates to
enhance our country’s competitiveness, grow jobs and increase exports.
The U.S. tax code is another source of uncertainty. At the end of 2010, Congress extended a number of important business
provisions like the Research & Development tax credit, but these provisions are still temporary and will expire again without
congressional action. To keep pace with the rest of the world, the U.S. must reform the tax code and enact permanent reforms
that will provide certainty and a level playing field for businesses competing at home and abroad.
CHAIRMAN’S MESSAGE
2010 YEAR IN REVIEW
A newly updated strategy will guide our business over the next five years as we work toward our 2020 vision.