We Provide What Our Customers Need So They Can Provide

What the World Needs
2011 YEAR IN REVIEWWHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW

3 Chairman’s Message
8	More Construction

From highways to housing, our customers are helping to build theinfrastructure necessary to support the world’s growing population.

16 Natural Resources

We’re helping our customers reach and extract minerals and otherresources that are critical to the Earth’s 7 billion plus inhabitants.

26 Energy & Power

Our power solutions are helping meet the world’s energy needs.

33 Global Reach

Our worldwide dealer network makes it possible for us to be wherever
our customers are in the world and is the foundation of our intense
focus on meeting customer needs.

39 Financial Strength

Strong financial viability and expert corporate resources are essential
to ensuring that we have what it takes to meet customers’ needs sothat they can meet the world’s needs.

45	Changing Lives

The Caterpillar Foundation invests in programs worldwide to makesustainable progress possible around the world.

51 Executive Officers
53 Officers
54 Board of Directors
57 PErformance Metrics
66 Forward-Looking Statements & Trademark Information

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems“…we know what we need to do.
Our strategy is working. All we haveto do is execute and maintain an
absolute focus on our customers.
We are here to help them succeed.
It’s as simple as that.”

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Message From Our Chairman
Doug Oberhelman, Chairman and CEO

There are many who will look back at 2011 as a record year. It wascertainly a great year, and I’m proud of the entire Caterpillar teamfrom employees to dealers to suppliers. We’ve renewed our focus
on customers and delivered some impressive results. But it’s nota record I want to celebrate – it’s a record I want to break. I lookat 2011 as a foundational year. It’s a stake in the ground, a line in
the sand, a milestone on our way to achieve our Vision 2020.
Throughout the recession that began in 2008 and lingered until 2010, we kept
investing and said we wanted to hit the ground running as soon as possible
when the economy and demand stabilized. We certainly did that! We’ve beenacquiring, investing, expanding, growing, developing – those are the kind ofwords you want to hear in business. But those words indicate starting points,
not end points. That means Caterpillar has a lot of work to do!
Fortunately, we know what we need to do. Our strategy is working. All we haveto do is execute and maintain an absolute focus on our customers. We arehere to help them succeed. It’s as simple as that.
But, our customers are anything but simple. They are literally powering andbuilding the world. Our customers operate in every corner of the globe. They
range in size from a small residential contractor with one Caterpillar machine
to large multinational global mining customers with hundreds of machines
working 24 hours a day seven days a week. Our power systems are used to
power huge ships and oil rigs, and they provide back-up power to hospitals,
just to name a few applications.
Our customers are diverse, but all have something in common – they all expect
the best from Caterpillar. They expect the best quality, the best performance, thebest productivity and more than anything, they expect the best value for the pricethey pay. We’ve got our work cut out for us to deliver on these expectations.
That’s why we have to set the bar high.
As good as 2011 was, it’s not the new normal. We can do even better.
(continued)

Chairman’s Message 3

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Message From Our Chairman (continued)
When we introduced our 2011–2015 strategy, we talked to our teams about the need to look outside of Caterpillar. We often compare
our performance to ourselves – not our competitors – from year to year. We compare our new products to older models. We compare
results from Division to Division. There’s nothing wrong with that – it’s an effective way to show improvement. But it doesn’t help us
figure out what our customers need, and it certainly doesn’t show us what the world needs.
Business has changed. The industries we serve have changed. Competition is tough, customer requirements are demanding, andthe industries we serve are booming, and they are complicated. Outperforming ourselves simply isn’t good enough anymore.
That’s why asking the question – what does the world need? – is so important.
By 2020 the world population is expected to be 7.6 billion people. What are all those people going to need? They are going to needfood, water, energy, housing, roads, schools – everything you and I have today and probably some new things we haven’t eventhought of yet. That means infrastructure, construction, mining and power systems are growing industries. Demand for our
products is strong, and we think the big macroeconomic trends will mean good global growth for our industries for the next 25-30
years. 2011 was about getting us ready to capitalize on all of that growth.
In 2011, we announced new distribution centers to keep up with growing parts demand. We completed the acquisitions of Bucyrus
and MWM, which expands our mining and power systems portfolios. We introduced over 50 new Tier 4 products that not only
meet emissions requirements, but deliver added value in terms of power, efficiency, safety and more. These new products run
with the cleanest diesel engines ever made. We built new factories around the world and significantly expanded capacity inexisting factories. In fact, in some cases we doubled capacity. Comparing ourselves from year to year, we did an amazing job.
But the world wants more.
Despite the increases in capacity and expected additions in 2012, we are still very tight on many products and are currently quoting
extended delivery times for some products. For example, we are now quoting delivery times into 2014 for some large trucks andtrack-type tractors.
That’s why we are setting the bar even higher for 2012.
While we have much to do in 2012, we’ll be particularly focused on four things – continuing to improve quality, our investment inproduct development, integrating our acquisitions and adding production capacity. In 2011 our investment in capital expenditures
was $2.6 billion. In 2012, we expect capital expenditures of about $4 billion. We are transforming Caterpillar with an intense focus
on customers, driving a reinvigorated sense of urgency as we invest and grow the company like never before.
We are also taking a close look at some areas that need improvement. When we developed our new Enterprise Strategy in 2010,
we started by taking an honest look at ourselves. We asked: what are we doing well, and what do we need to work on? That’s nota one-time exercise, but something we need to do all the time.
(continued)

Chairman’s Message 4

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Message From Our Chairman (continued)
When we compare ourselves to the best in the auto industry, we just don’t stack up well when it comes to managing our inventory turns.
Inventories have grown in our own factories, with our dealers and in our product distribution centers too. We came out of the recession
with growth much stronger and faster than expected. I’m not one for passing up sales, so we really had to ramp up production quickly.
I’m pleased that we are doing better at meeting demand, but I feel we can improve inventory turns and use less cash.
Again, we know what we need to do – we need to collaborate better with our suppliers. Sounds easy enough, but it requires a change
in our culture. Caterpillar has been known to be arrogant in the past. Our customers have said it. Our dealers have said it. And our
suppliers have probably felt it more than anyone. We’re changing that. Our suppliers are the best in the business, and we aregoing to leverage their expertise, communicate better and ensure we have the capacity and quality we need from our supply base.
This is something I’m really going to push in 2012. I’m going to personally visit more suppliers, and I’m encouraging the rest of theCaterpillar team to do the same.
As I said, we are prepared to take a good, hard look at our company. It’s something we have to do in order to be successful.
We encourage our dealers and suppliers to do the same – we can all work together better that way.
Governments also need to review their policies to ensure growth. “Business as usual won’t allow us to retain our leadership position.
But extraordinary commitment – when backed by an external environment that fosters enterprise – will help Caterpillar and other
U.S. firms compete successfully in the decade ahead.“ That’s a quote from Caterpillar’s Chairman Lee Morgan and President Bob
Gilmore in our 1981 Annual Report. It’s amazing that those very words still apply today. But I imagine they will also be valid 30 years
from now. The world is constantly changing, and businesses, individuals and governments need to change with it.
The world is recovering from a global recession. Some economies have come back pretty strong, like Asia. Things are looking up
in South America, but we’ve still got an uphill climb. And Europe is really struggling.
We are all watching to see what happens around the world. But at Caterpillar, we don’t like to just watch, we feel an obligation to
get involved. That’s why wherever we do business around the world, we actively promote many pro-growth policies. In terms ofpolicy and governance there’s a lot we can do to be competitive. And many of the issues we are facing in the United States apply
anywhere in the world that wants to compete in the global economy. Here are some things we feel strongly about:
1.	Freer trade. Time and again, free trade is a proven winner for both sides. At Caterpillar, we promote freer trade wherever we canget it, but we also recognize that expanding global free trade agreements through the World Trade Organization is a once in a
generation opportunity to open markets and increase worldwide economic growth.
2.	Better infrastructure. Being able to participate in the global economy means being able to get your products out and get supplies
and products in. That requires a robust, modern infrastructure. Many developing nations are investing heavily in infrastructure andit’s paying dividends. And many developed countries are in need of updated infrastructure to accommodate a growing populationand changing needs. Yes, infrastructure is expensive and it’s hard to justify any spending when a country is struggling or in debt,
but sound infrastructure is an investment that – when done right – will eventually pay for itself.
(continued)

Chairman’s Message 5

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Message From Our Chairman (continued)
3.	More energy. The world population is expanding and so is the middle class. Growing, modern economies need energy. This
is why we promote a broad energy portfolio. Alternative fuels and advanced technology offer some exciting possibilities, but
we also need to invest in tried and true resources like coal and natural gas. These fossil fuels can be very efficient, clean andsustainable, and companies like Caterpillar are hard at work to deliver sustainable solutions in terms of traditional resources
and alternatives – we need both.
4.	Lower corporate tax rates. The United States currently has one of the highest corporate tax rates, and it’s affecting investments.
When you look around the world, those countries with lower corporate tax structures have a distinct advantage when attracting
investment.
5.	Improved education system. We talked about how policies and governments need to change with the times, and the same istrue for our education system. Today’s jobs are high-tech. We need scientists, engineers, mathematicians, but we also needmore people going into the skilled trades. These aren’t the jobs they were before. They are high-tech, skilled, safe jobs that can
provide a good living. It’s true all over the world.
Quite a list, right? We’ve got work to do here in the United States, and around the world. These aren’t easy issues and there are
no quick fixes, but there is a proven path for success – partnerships between the public and private sectors and individuals. At
Caterpillar, we make our positions known. We educate our employees, our communities and government officials. If we don’t tellour side of the story, who will? If we don’t look out for the best interests of our company, our employees, our communities andour customers, who will? It’s up to all of us to become educated, to get involved and to work together – that includes theprivate sector, the public sector and individuals.
Will 2012 be the new normal? Probably not. We will be focused on growth and investment in our products, our processes and ourpeople. These are all investments that pay dividends well into the future.
So what is the new normal? The new standard will be a flexible, agile Caterpillar that is squarely focused on our customers and on
what the world needs. Our opportunities are limitless – we just have to go after them.

Douglas R. Oberhelman
Chairman and CEO
Caterpillar Inc.

Chairman’s Message 6

Chairman’s Message 7

Campo Largo,
Paraná State, Brazil
New small wheel and backhoe
loader factory and expansionof core product capacity

Stanford, NC
Expansion of compact
construction products facility

Piracicaba,São Paulo, Brazil
Expansion 3500 seriesengines operations

Sete Lagoas, Brazil
New Progress Rail locomotive
manufacturing facility

Winston-Salem, NC
New axle-assembly facility

Decatur, IL
Expansion of mining
truck capacity
Dubai, United
Arab Emirates
New parts distribution center

Mannheim, Germany
MWM acquisition

Source: United Nations

CITIES
Urbanization

54%

INCOMEGDP Per Capita

The Caterpillar
Foundation

PEOPLE
Population Trends

51%$9,3882020$7,3292010

Rayong Province,
ThailandExpansion ofunderground mining
product manufacturing

Hemaraj Rayong,ThailandNew medium track-type
tractor facility

Tongzhou, China
New large wheel loader
manufacturing facility

Xuzhou, China
New large excavator
manufacturing facility

Financial Products &Corporate Services

6.9 B 7.7 B

WHAT’S DRIVING DEMAND?

Jurong Township,
Singapore
New remanufacturing facility

Chennai, India
New Perkins engine facility

Chennai, India
Expansion of mining
truck capacity

Wujiang, China
New mini-excavatorfactory

Shaanxi, China
New joint venture to produce
machine components andon-highway transmissions

Tianjin, China
New 3500 seriesengine factory

Customer &Dealer Support

Wamego, KS
Expansion of work
tools business

Victoria, TX
New excavator factory

Clayton, OH
New parts
distribution center

La Grange, IL
Acquisition ofElectro-Motive Diesel

Oak Creek, WI
Acquisition of Bucyrus

Xuzhou, China
New undercarriage
components andtrack assemblies
facility andexpansion of
excavator facility

Energy &Power Systems

Tejon Ranch, CA
New parts
distribution center

Muncie, IN
New locomotive
manufacturing facility

Aurora, IL
Expansion of mining
product manufacturing

Rapid City, SD
New engineering
design center

Resource
Industries

Spokane, WA
New parts
distribution center

East Peoria, IL
Modernization of undercarriage
component facility and large
tractor capacity expansion

Construction
Industries

West Fargo, ND
Expansion ofremanufacturing facility

INVESTING TO MEETGLOBAL DEMAND.

Chairman’s
Message

Caterpillar makes sustainable progress possible around the world by
providing what our customers need, so they can provide what theworld needs. To do so, we have made significant investments during
2010 and 2011 to ensure that our customers have the right products,
services and solutions when and where needed in the years ahead.

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Leadership
PerformanceWHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Construction
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Our Construction Industries segment is focused on helping our customers build what
the world needs – new highways, railroads, airports, water systems, housing, hospitals
and schools, to name a few. The need for new infrastructure is especially acute in
the world’s fastest-growing economies. This segment, led by Group President Rich
Lavin, designs, manufactures and markets construction machines, including backhoe
loaders, small and medium wheel loaders, small and medium track-type tractors,
track-type loaders, skid steer loaders, multiterrain loaders, mini excavators, compact
wheel loaders, select work tools, small, medium and large track excavators, wheel
excavators, motor graders and pipelayers.

Construction Industries 8

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Pavingthe Way
Caterpillar is scoring big wins in theworld’s largest cement market.

China has a staggering list of infrastructure needs to fulfill by
2025, when its urban population is expected to reach 350 million
people. An estimated 600,000 miles of new roads, 170 masstransit systems and 97 new airports are on the list, for starters.
These types of projects, along with new housing and power
projects, continue to present Caterpillar and Cat® dealers withenormous opportunities in the Chinese market. So much so that
one of eight strategic imperatives for Caterpillar to achieve
between 2011 and 2015 is to, quite simply, “Win in China.”
A key to realizing this goal is to focus on specific industries
playing central roles in China’s growth. This focus, along withthe strong support of local Cat® dealers, is enabling Caterpillar
to make significant strides in our participation in the growing
Chinese Quarry & Aggregate industry, which accounted for
50 percent of global cement production in 2011.
During 2011, China Engineers Ltd., the Cat® dealer in southern
China, won a critical fleet deal with China Resource Cement(CRC), a major Chinese cement producer, closing equipment
sales of 27 units of quarry trucks, wheel loaders and excavators.
This transaction led to breakthroughs with two other Chinese
cement producers for a combined 23-unit sale of similarequipment. In addition, Conch Cement, the largest cement
producer in China, entered into a field trial arrangement of
772 off-highway trucks. Conch is already one of the largest
customers of Cat large wheel loaders in China and owns morethan 120 Cat engine products.

The 2011 successes represent a growing shift in priorities by
Chinese machine purchasers, who traditionally have valued
initial purchase price over total operating costs. The passage oftime is helping to underscore Caterpillar’s value proposition ofproviding the lowest operating costs over the life of the product.

The growing Chinese Quarry &Aggregate industry accounts
for 50 percent of global
cement production.
Conch bought its first 988 unit in 1997 and, as Chairman Guo
Wensan noted, “It is still working well.” He added, “Over theyears, Cat® products have helped us to improve productivity
and efficiency, and to keep operation costs down.”
As more customers in China develop similar appreciation for
Cat products, Caterpillar’s mandate to “Win in China” moves
closer to becoming reality.

Construction Industries 9

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Big Project,
Big Win“Yellow iron” is the only equipmenton the job at one of the largest
hydroelectric projects in history.

With one of the world’s fastest-growing economies, Brazil is
expected to add approximately $150 billion to its economy within
the next five years and attract millions of visitors as it hosts theWorld Cup in 2014 and the Summer Olympics in 2016. To help meet
future energy needs, Brazil has begun construction of the world’s
third-largest hydroelectric dam – Belo Monte – a massive
project that will depend 100 percent upon Cat equipment
for its construction and infrastructure support.
The sheer scale of the project represents a major win forCaterpillar. To date, Brazil-based Cat® dealer Sotreq has sold
685 Cat machines and 77 generator sets for the project. Thereis potential for an additional 300 machines to be sold over the
project’s duration, as well as a significant aftermarket parts
sales opportunity.
Bernadette Manso, region industry manager for the Global
Construction & Infrastructure group, credits teamwork andcommitment for giving Caterpillar the edge to win 100 percent of
the project. “Our product groups, distribution services teamand Cat Financial worked as one to present a comprehensive
solution, and Sotreq put together an amazing product support
proposal,” explains Bernadette Manso, who worked closelywith Sales Supervisor Dennis Ventura, Corporate ProductSupport Manager Edgard Reis and Corporate AccountManager Augusto Azevedo to pull together the Caterpillar bid.

Located on the Xingu River deep in a remote area of the Amazon,
a single dirt road is the only connection between the area andthe port 40 kilometers away. Even before winning the business,
Sotreq was purchasing land to establish an onsite branch.
Another major component of the project for Caterpillar andSotreq is operator and safety training for up to 26,000 eventual
onsite employees. Already six simulators are in place to assist
with operator training, service practice, maintenance and undercarriage management. In addition, Sotreq has 200 employees
supporting the project and even a project manager living onsite to anticipate project needs.
Belo Monte is the type of project that supports Caterpillar’s
Vision 2020 strategy perfectly, contributing to profitable global
machine leadership and executing the business model fully.
As Manso notes, “When you look at this project, it represents
everything that Vision 2020 shows us we must accomplish.”

Not only is Belo Monte dam one of the largest construction
projects in all of Latin America, but it’s also a challenging one.
Construction Industries 10

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

MovingMountains
That’s what it takes to build amission-critical railroad through thechallenging terrain of Sierra Leone.

Iron ore is used to make everything from steel products forconstruction to utensils for eating. It is so commonplace thatmany believe iron ore to be the most important global commodity
after oil. To keep up with global demand for this essential material,
companies often have to establish worksites in remote areas
with no developed infrastructure.
The mountainous jungle of Sierra Leone is a place not many
companies have ventured. When African Minerals Limited (AML)
decided to develop an iron ore mine in Tonkolili, a district in the
Northern Province of Sierra Leone, it quickly became apparent
that a 125-mile railroad would be needed to connect the mine to
the nearest port. AML commissioned WBHO, a civil contractor
based in South Africa, to build the railroad, and Caterpillar became
the sole equipment provider for this formidable project.
Challenges were plenty. The Tonkolili project was slated to begin
active mining in just 12 months, and of those, four months wereduring Sierra Leone’s rainy season. The dense jungle andmountainous region created topographical issues since railroads
cannot be built with more than a 4 percent ascending grade. The
aggressive timeline and challenging terrain meant jobsite efficiency
and machine performance were of the utmost importance.
Caterpillar developed a plan for WBHO to purchase and rent
equipment through Mantrac, the Cat® dealer in West Africa.
Of a total fleet of 1,608 mobile plant items, Caterpillar supplied
412 machines and 20 power generation units. In addition, aCaterpillar applications specialist worked closely with WBHO toensure machines were working efficiently to keep productivity
at the highest level. Articulated truck drivers, for example, were
given special training in order to operate fully loaded trucks
on steep grades so as not to damage the brakes. Caterpillar’scomplete presence at Tonkolili paid off. WBHO moved a staggering six million cubic meters of earth and constructed therailroad successfully within the 12-month timetable.

6 Million M

3

WBHO moved a staggering six million
cubic meters of earth and constructed
the railroad successfully within the
12-month timetable.
Caterpillar’s support also reached the local population, who werein need of jobs after years of war and hardship. The trainingthat local residents received from Caterpillar specialists has
provided life skills that can be used long after the railroad has
been commissioned. The now accessible mine provides thousandsof jobs, not only helping satisfy the world’s need for iron ore, butalso Sierra Leone’s citizens’ need for a better livelihood.

Construction Industries 11

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

2011
Highlights

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Recently Announced Facilities• A new manufacturing facility in North America for small track-type tractors and mini
hydraulic excavators that shifts production from Japan to be closer to Caterpillar’s
large base of customers in North America and Europe.

Construction Industries
New Facilities Under Construction for Production in 2012 or 2013
• New facility in Xuzhou, China, for large hydraulic excavators.
• New facility in Victoria, Texas, for small, medium and large hydraulic excavators.
• New facility in Rayong, Thailand, for medium track-type tractors.
• New facility in Wujiang, China, for mini hydraulic excavators.
• New capacity being installed in Chennai, India, for medium hydraulic excavators.
(continued)

Construction Industries 12

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

2011
Highlights
Construction Industries(continued)

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Major Capacity Expansions in 2011 versus 2010 include:• New facility opened in Campo Largo, Brazil, for production of backhoe loaders andsmall wheel loaders.
• New facility opened in Thiruvallur, India, dedicated to the production of backhoe loaders.
• Increase in small wheel loader unit capacity at Clayton, N.C.
• Increase in medium excavator unit capacity at Jakarta, Indonesia.
• Increase in motor grader unit capacity at North Little Rock, Ark., as the facility ramps
up to full production, including the transfer of the majority of existing motor grader
capacity from Decatur, Ill.
• Increase in SEM brand wheel loader unit capacity at Qingzhou, China.
• Increase in motor grader and medium wheel loader unit capacity at Suzhou, China,
as the facility ramps up to full production.
• Increase in small, medium and large excavator unit capacity at Xuzhou, China.
• The expansion opening of the Sanford, N.C., facility that provides increased logistics
and fabrications capacity to meet global demand.
(continued)

Construction Industries 13

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

2011
Highlights
Construction Industries(continued)

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Product Model Introductions and Enhancements• New models of the PL83 and PL87 Cat® Pipelayers.
• Four E Series Hammer models – H110Es, H115Es, H120Es and H130Es – for use on
small and medium excavators and the Cat® 450E Backhoe Loader.
• T he addition of mini-excavator models with operating weights of 2,061 lbs (935kg),
3,340 lbs (1515kg) and 5,886 lbs (2,670kg).
• The enhancement of the K-Series Tier 4i medium wheel loaders with productimprovements that help with customer productivity and fuel efficiency. Early
customer and dealer feedback has been positive.
• T ier 4/Stage IIIB E Series hydraulic excavators were also well received by dealers
and customers.
• I ntroduced new Tier IVi track-type tractor models (D7E, D6T and D8T) and Tier IVi
motor grader models (140M2 and 160M2).

Other Key Highlights• The Excavation Division Supply Chain Optimization (SCR) process won the 2011
Chairman’s award.
• 2011 safety performance was nearly 40 percent better than best-in-class standards(Bureau of Labor Statistics top quartile for Recordable Injury Frequency for the
Manufacturing Industry is 1.0 or better).
• Construction Industries received four 2011 Chairman’s Product Quality Awards:
226 Skid Steer Loader – Small Cat Machine winner.
320 Hydraulic Excavator – Medium Cat Machine winner.
D8R/T Track-Type Tractor – Large Cat Machine winner.
SEM 650 Wheel Loader – Complementary Product category winner.

Construction Industries 14

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Key Metrics

Construction Industries

SALES(in millions of dollars)

SEGMENT PROFIT(in millions of dollars)

2011 SALESBY GEOGRAPHY(in millions of dollars)$5,985$5,869North America
Latin America$4,768$13,572$19,667$783$2,056

2010

2011

2010

2011

Sales increased 45 percent
from 2010 to 2011 as a result ofsignificantly higher sales volume
in all geographic regions andacross all major products.

Higher sales volume and improved
price realization enabled segment
profit to more than double.

Construction Industries 15$3,045

EAME
Asia/Pacific

New machine sales were above or nearrecord levels across much of the developing world.

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

The world needs resources such as coal, iron ore and lumber in order to grow andthrive. The Resource Industries segment, led by Group President Steve Wunning,
makes it possible for our customers to mine and harvest these resources in a
profitable and sustainable way. The business units within Resource Industries
design, manufacture and market products from large track-type tractors and large
mining trucks, to underground mining loaders, to paving and forestry equipment,
to machinery components and electronics and control systems.
The acquisition of Bucyrus International, Inc. (Bucyrus), in 2011 expanded the mining
product portfolio into the broadest product line in the industry. Caterpillar’s ProductDevelopment & Global Technology and Advanced Component & Systems Divisions
are also a part of Resource Industries. These two divisions include a global
workforce of over 10,000 people working in multiple technical centers and facilities
in the U.S., Mexico, Europe, China and India and product proving grounds in the
U.S. and China. Resource Industries is also home to the Caterpillar Production
System group, which is responsible for driving manufacturing excellence throughout
the company.

Resource Industries 16

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

From
Day OneCaterpillar Global Mining unveils
broadest product line in industry

When regulatory clearance for Caterpillar’s acquisition of
Bucyrus came through on July 8, 2011, months of planning fell
swiftly into place. The transaction closed later the same day andby “Day One,” July 11, these two leading suppliers to the global
mining industry became one company.
The idea of one customer face, one team, one distribution modeland one brand was the guiding philosophy driving the integration.
On Day One, approximately 10,000 Bucyrus employees became
part of Caterpillar Global Mining, led by a team that includes
both Caterpillar and former Bucyrus management.
“This acquisition brought together the two best teams in themining industry,” said Luis de Leon, corporate vice president
and president of Caterpillar Global Mining Products. “Theresults are already showing through the successes we areachieving in product design and implementation.”

The breadth and depth of mining products today reflects how
highly complementary the Caterpillar and Bucyrus product lines
were to each other, with only very limited overlap. A number ofsynergies are being implemented, such as Cat components
being added to legacy Bucyrus machines. For example, just six
months after Bucyrus was acquired, a Bucyrus AC truck with a
Cat engine was delivered to a work site.
“The teams have definitely exceeded our expectations with the
speed at which we got this done, which has also enabled us
to increase our production,” explains David Rea, manager ofCaterpillar Mining Truck & Business Integration. “It reallyreflects how well we were able to combine the experience ofboth teams and their product strengths.”
The same could be said of the entire Bucyrus product integration,and bodes well for the future of Caterpillar Global Mining.

With the acquisition of Bucyrus, Caterpillar Global Mining now
offers an unparalleled range of equipment and services to themining industry. In addition to providing customers with a “onestop-shopping” option, working with Caterpillar as a strategic
supplier with a comprehensive product line enables customers
to reduce supply chain complexity. It also improves jobsite
safety, a major issue for miners, by reducing the number of
support people and vehicles on site.

Resource Industries 17

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Mining ProductBreadthCaterpillar’s next steps in mining

Today, mining is key to providing what the world needs. Countries
must build infrastructure to serve the growing demand for reliable
power, transportation, housing, clean water and sanitation. Andat every step along the development journey, Caterpillar isthere with solutions that fuel sustainable growth.
As the demand for mined minerals grows, so does the need fora broad range of equipment and solutions to support the mining
industry. With the broadest product offering in the industry,
Caterpillar is proud to offer customers a one-stop shop for
surface and underground mining equipment.
Caterpillar is taking a multipronged approach to building andmaintaining a top spot in the mining industry: expand capacityand production to meet demand, build product depth, develop
mining solutions and leverage the Caterpillar dealer network toprovide the broadest range of products and customer support.
Caterpillar has recently announced billions of dollars in investments to expand, build and update mining facilities and products
around the world. And by embracing the Caterpillar Production
System, Caterpillar is driving manufacturing excellence andoptimizing efficiencies in each of these facilities to effectively
meet customer demands.

In terms of product depth, Caterpillar is closely reviewing its
full product portfolio to identify potential gaps at the model level.
As an example, the Large Mining Truck and Hydraulic Mining
Shovel product lines are being reviewed to optimize the loadinghauling match for all models. In addition, with Caterpillar’sannounced intent to acquire a leading Chinese manufacturerof underground mining roof support systems, the company
expects to have a Longwall Mining platform to begin building
a portfolio to better meet the needs of customers in the China
coal industry.
As for developing solutions, Caterpillar is identifying ways
to leverage machine and mine level data in new and innovative
ways. The Cat® MineStar™ System, introduced in 2011, is theindustry’s broadest, most comprehensively integrated mine
operations and mobile equipment management system.
Configurable to suit any mine operation, the system helps
customers manage everything from material tracking tosophisticated real-time fleet management, machine health systems,
autonomous equipment systems and more. Autonomous mining
solutions eliminate the need for human machine operators,
which can improve safety, equipment availability and overall
productivity on a mine site. And that’s particularly important for
remote operations where attracting and retaining skilled humanlabor is a challenge.

Resource Industries 18

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Mining ProductBreadthContinued

And finally, Caterpillar believes that its dealers, together with
Caterpillar and Bucyrus expertise, are an unstoppable combination.
Cat dealers are world-class organizations that deliver unmatched
service, integrated solutions, after-sales support, fast and efficientparts fulfillment, world-class remanufacturing capabilities andmore. As Caterpillar combines the proven strengths of eachorganization, it’s creating a unified team unlike any other in themining industry.

“We’re poised like never before to deliver comprehensive
solutions to our customers around the world,” said Chris
Curfman, corporate vice president and president of Caterpillar
Global Mining Sales and Support. “The power of our people, ourproducts, our culture and our dealers is unmatched by anyone.
We are leveraging our strengths to better support our customers
and define how we can help drive profitable and sustainable
mining worldwide.”

Resource Industries 19

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Virtual Reality,
Virtual Iron
Advanced technologies are saving
time, cutting costs and resulting in
better-designed products and facilities.

The Caterpillar Technical Center in Mossville, Ill., is home toCaterpillar’s Immersive Visualization Center. The Center houses
a four-screen, three-dimensional, walk-in virtual reality systemcomprised of three walls, a floor and 12 high-definition digital 3D
projectors. With a useable work area over 20’ wide and 10’ highand deep, it is one of the largest such systems in North America.
Immersive visualization allows product development teams toidentify any human-machine interaction issues in the earlystages of design, well before prototypes are built. For example,
a service technician can use this technology to “work” on a
virtual machine and perform a service procedure while evaluating
ergonomics. Immersive visualization is also used by manufacturing
engineers to “walk through” virtual factories to assess line
layout and material flow in the facility. This early exploration
enables multiple design alternatives to be evaluated, allowing
the engineers to identify an optimal design.

Immersive Visualization is key to the continuing effort tobroaden the impact and expand the applicability of virtual
product development (VPD) at Caterpillar. ”We want to be able to
make decisions before a design is committed to iron,” explains
Dr. Valerie Wiest, division manager in the Product Development& Global Technology Division at the Tech Center. “The goal ofvirtual product development is to fully validate designs using
computer models as prototypes. Caterpillar saves on development
time and cost, and the customer gets a better machine, faster.”Dr. Wiest and her VPD deployment team envision a day whenvirtual reality technology will be used at all Caterpillar design
facilities as a standard tool for product and process development.
Immersive visualization engineers Galen Faidley and Abhishek
Seth are making that vision a reality. “We have launched thiscapability in several facilities in the U.S., Europe and Asia,” Faidley
noted. ”It’s a great time to be a VPD engineer at Caterpillar.”

Resource Industries 20

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Diversified
Products
Unique, purpose-built products andservices that offer the enterprise accessto important markets and customers

Nowhere within Caterpillar is its broad range of products andsolutions more apparent than in the Diversified Products group.
This group manages a portfolio of strategic businesses andserves the market and product needs of customers in a variety
of distinct industries.
The division has six businesses: Paving Products, Forest Products,
Work Tools, Tunneling, OEM Solutions and Defense & Federal
Products. In late 2011, Caterpillar signed an alliance agreementwith Exodus Machines Inc., a purpose-built manufacturer ofscrap/industrial material handlers. This alliance led to thecreation of a new diversified products business called Caterpillar
Industrial & Waste.
Highlights from 2011 include:• Paving Products is dedicated to supporting the asphalt andpaving industry all over the world. This industry is a criticallyimportant part of building and maintaining the world’s infrastructure. The paving group opened a new customer support
and learning center at its headquarters in Minneapolis, Minn.
• Forest Products also serves a dedicated group of customers.
It’s focused not only on designing and manufacturing purposebuilt forestry machines, but also on enabling Caterpillar tooffer a full line of traditional machines configured for forestry
applications. In 2011 the division introduced a new productline of Tier 4i Wheeled Feller Bunchers. These machines weredeveloped with an innovative rear-mounted transverse engine

design that delivers the best stability in the woods, withimproved fuel consumption.
• Caterpillar Work Tools are designed to improve the productivityof Cat machines. Growth in the work tool business led toplant expansions at facilities in Waco, Texas, and Wamego,Kan. The Waco facility is home to a new line of Caterpillar
engineered and designed hydraulic hammers for use in the
demolition industry.
• OEM Solutions and Defense & Federal Products are businesses
that leverage Cat machine and power system products,
designs and technologies to achieve incremental growth byserving other unique and discrete customers and industries.
As an example, OEM Solutions sells components and partiallybuilt machines to other OEMs in foundation drill, material
handling, mining, industrial and demolition markets. The mobile
hydraulic power unit, configured from the hydraulic excavator
platform, now has an active population of over 2,000 units inthe field today.
“We’ve been given a great opportunity to bring people together
to serve a wide array of diverse customers and businesses,”said Bill Springer, vice president with responsibility for Diversified
Products. “We manage our businesses independently and allow
our leaders to lead and our experts who know their businesses
to thrive and grow. We place a priority on learning, and weleverage our diversity to teach one another how to solve
problems and to accelerate our mutual business success.”Resource Industries 21

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance2011
Highlights

Business Expansion Announcements

Resource Industries• Caterpillar invested $426 million in the Axle Manufacturing facility in Winston-Salem,
N. C., and celebrated its grand opening November 2011. The 850,000-square-foot,state-of-the-art facility supports the company’s growing global mining operations andemploys over 400 people.

• The acquisition of Bucyrus International, Inc., which combined two leading suppliersof mining equipment. The acquisition positions Caterpillar to offer the industry’s
broadest range of surface and underground mining products and solutions to customers.

•A $300 million dollar investment in Decatur, Ill. facilities and a $340 million dollar
investment in East Peoria, Ill. facilities to increase capacity for large mining trucks
and production of large track-type tractors for use in mining applications around theworld. When completed, capacity expansion projects in Decatur and supporting plants
will increase Large Mining Truck production by over 100 percent of our 2010 capacity.
• A new 645,000-square-foot manufacturing facility in the Rayong Province of Thailand
to produce a full range of mining articulated trucks and loaders for use in hard-rockunderground mining applications. The facility is expected to employ about 800 people
when at full capacity.
• A new customer support and learning center for Paving Products near
Minneapolis, Minn.
• A Work Tools plant expansion in the Waco, Texas, facility, which is now home to a
new line of Caterpillar engineered and designed hydraulic hammers for use in the
demolition industry.
• An additional $62 million dollar investment in an existing off-highway truck
manufacturing facility in Chennai, India, to expand truck capacity and efficiency.
This is in addition to the $108 million investment announced in 2010.
•A $150 million dollar investment for a new manufacturing facility in Indonesia tobuild a range of mining truck chassis and bodies for shipment to customers in the
Asia/Pacific region.

Resource Industries 22

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

2011
Highlights
Continued

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance• The expansion of operations at the Tosno, Russia, manufacturing facility toaccommodate the 773E off-highway trucks now being produced.
•C aterpillar and Shaanxi Fast Gear established a joint venture in April 2011 to produce
components and on-highway automatic transmissions in China.
• T he Wuxi, China components campus, producing hydraulic components andoperator stations, increased volume by four times and increased employment by
100 percent in 2011. The campus is set to double both volume and employees again
in 2012 as drivetrain and additional hydraulic components are added. By 2015, Wuxi
will be Caterpillar’s largest components campus.
• The China-based hydraulics joint venture with Liyuan commenced operations in 2011.
• The announcement in November 2011 that Caterpillar will make an offer to acquire
ERA Mining Machinery Limited, which primarily designs, manufactures, sells andsupports underground coal mining equipment in mainland China through its
wholly-owned subsidiary Zhengzhou Siwei Mechanical & Electrical Equipment
Manufacturing Co., Ltd.
• Announced expansion plans for the company’s multifunctional research anddevelopment (R&D) center and proving grounds in Wuxi, China. The expansion will
enable full product development and validation capabilities.

Product Model Introductions and Enhancements
With Tier 4 initiatives, Caterpillar successfully implemented 50 on-time programs,
which equates to more than 3,500 machines and over 1.25 million running hours in
2011. We are on track with our reliability initiatives, and have more opportunities
ahead with 65 scheduled machine introductions for 2012.
Additional products and solutions introduced in 2011:• Ten new product lines of surface and underground mining equipment with theacquisition of Bucyrus• New model of the 789D Cat Mining Truck• New H series Wheel Tractor-Scrapers for mining• New Cat 390DL Hydraulic Excavator for mining applications• Introduction of the 795F AC, Caterpillar’s first AC electric drive truck• The 994H Large Wheel Loader updated for fuel efficiencies and technology
enhancements• 568 FM Forest Machine, a Tier 4 Interim machine used for logging• New Tier 4 Interim C series Wheeled Feller Buncher

Resource Industries 23

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

2011
Highlights
Continued

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance• New AP1055E Asphalt Paver• E Series Hammers to be used in the demolition industry• CL15 Compact Loader used in underground mining Room and Pillar applications• Command for hauling, autonomous mining technology that provides customers with avertically integrated system, including the base truck, onboard components and systems technology, off-board site infrastructure and communications systems, anddealer distribution and support

Resource Industries 24

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Key Metrics
Resource Industries

SALES(in millions of dollars)

SEGMENT PROFIT(in millions of dollars)

2011 SALESBY GEOGRAPHY(in millions of dollars)$4,963$4,607

North America
Latin America$3,228$8,667$15,629$1,789$3,334

2010

2011

2010

2011

Sales increased 80 percent
from 2010 to 2011 as a result ofhigher sales volume and theacquisition of Bucyrus during
the third quarter of 2011.

Segment profit increased primarily
due to higher sales volume, theacquisition of Bucyrus and pricerealization.

Resource Industries 25$2,831

EAME
Asia/Pacific

Growth in the global economy increased
demand for commodities and kept
commodity prices at levels thatencouraged investment, supporting
higher sales of equipment for mining.

PerformanceWHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

The world’s energy needs are expected to grow significantly over the coming
decade. Our Power Systems segment, under the leadership of Group President
Gerard Vittecoq, is focused on helping to meet these needs through a variety
of solutions and applications across multiple industries. This segment designs,
manufactures and markets products including generator sets, integrated systems
and solutions for marine and petroleum industries and reciprocating engines
supplied to global Original Equipment Manufacturers (OEMs) for a variety ofdiverse applications as well as Cat® machinery. Power Systems also includes theoperations of Progress Rail and Solar Turbines, both subsidiaries of Caterpillar.

Energy & Power Systems 26

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

NaturalStrength
Caterpillar is poised to become aleader in supplying diesel andnatural gas energy solutions.

The world needs energy, but it does not need the potentiallynegative impacts that may accompany energy production andconsumption activities. As a primary energy source, natural gas
offers an increasingly attractive solution to these challenges.
Comprised primarily of methane, natural gas is one of the purest
forms of energy available. Moreover, vast reserves of natural gas
around the world, including those in the U.S., provide energy
security and cost benefits.
Caterpillar has recently enhanced its position in the natural gas
segment of the energy market by acquiring MWM Holding GmbH,a leader in natural gas and alternative-fuel engine development.
MWM is a global provider of sustainable diesel, natural gas, lowenergy gas and biogas generator sets, as well as integrated
power systems involved in the generation, control and supplyof electricity. MWM generator sets are designed for maximum
electrical and thermal efficiency, low operating and service costs
and high reliability and availability. This translates into cleaner
and more efficient power options for Caterpillar customers.

The acquisition of MWM pairs two strong companies, both ofwhich have significant potential for innovation within the energy
sector. Through continuous research and development, MWM
has almost tripled the power density of its engines over the past
20 years. At the same time, efficiency has been increased by
30 percent, along with very low emission levels. In this way, MWM
makes a valuable contribution to the conservation of resourcesand guarantees high efficiency of its products. Always focusedon the customer, MWM provides customers with comprehensive
advice on the best economic and ecological handling of products,
to fulfill or surpass customer requirements.

Energy & Power Systems 27

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

FertileGroundOur engines and generators help
to transform barren desert intobountiful farmland.

Agriculture is big business in Tabuk, Saudi Arabia. Since 1983,
the Tabuk Agricultural Development Company (TADCO) has growna wide variety of crops, including wheat, alfalfa, dates, potatoes,
stone fruits, grapes and olives. TADCO’s more than 86,000 acres
provide the farm with the distinction of being the largest supplierof potatoes for french fries in Saudi Arabia and the home of oneof the world’s purest olive oils.

Caterpillar supports TADCO as a successful farm as well as acommunity. TADCO’s farmers and their families live on site. “Ourengines are really powering their livelihood,” explains Mitch
Colgan of Caterpillar Power Systems. By providing solutions
for TADCO, including supplying vehicles, power and engines,
as well as maintenance, Caterpillar keeps a loyal customer inbusiness, while also supporting the development of muchneeded resources for the world.

Producing bountiful harvests in the middle of the Arabian Desert,
however, requires overcoming numerous challenges, including
irrigating crops properly. To do so, TADCO has been relying onCat® generators to power its irrigation systems for over 20 years.
TADCO also uses Cat® industrial engines to pump water fromunderwater reservoirs to reach reservoirs in the area.
In order to supply food year round, TADCO grows crops througha process known as center pivot, or circle, irrigation. This process
hangs an irrigation system above the field, which takes on acircular shape due to the water placement. Although Tabuk has
mild winters, temperatures can reach 140F degrees in the summer.
During this time, crops must be watered continuously for up to
12 hours daily to prevent plants from drying out. TADCO’s loyalty
to Cat® equipment reflects the superior durability and reliabilityof our engines that keep the irrigation system running well, evenin a harsh climate. TADCO also appreciates the service andsupport provided by local Cat® dealer Zahid.

Energy & Power Systems 28

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

On Track
The combination of Caterpillar,
Progress Rail and EMD is goingto take us far via rail.

For nearly two centuries, trains have been moving freight andpeople. Today’s modern rail industry continues to do so in an
increasingly efficient and sustainable manner. Since 2006,
Caterpillar has invested approximately $2 billion to grow its
presence in the global rail and transit business. Progress Rail’s
2010 acquisition of Electro-Motive Diesel (EMD) is the latest
step in Caterpillar’s expansion into the rail market.
Caterpillar’s 2006 acquisition of Progress Rail provided an extensive
range of cost-effective solutions for a broad spectrum of railway
customers. Progress Rail is one of the largest providers of rail
and transit products and services in North America, including
locomotive upgrade and repair, railcar remanufacturing, trackwork, rail repair and replacement, signal design and installation,
parts reclamation and recycling.
EMD was a natural choice when Caterpillar and Progress Raillooked to expand further in the rail market. EMD offers a diversified
product portfolio that complements the Progress Rail portfolio.
EMD designs, builds, maintains and services a full range oflocomotives, including passenger, freight, mining and switching
locomotives, and has the largest installed base of diesel-electric
locomotives in the world.

EMD locomotives are often specifically tailored for the markets
they serve. The GT38AC locomotive, for example, was designed
for mining customers such as PT Kereta Api Indonesia. Haulingheavy coal trains, it packs a powerful EMD engine into a small
package suited to the track and tunnels found in Sumatra. Anotherexample is the SD70ACe/lci locomotive in use by BHP Billiton Iron
Ore. This massive mining locomotive hauls iron ore in the harshheat and sand environment of Australia’s Pilbara region.
Caterpillar, Progress Rail and EMD each bring their own strengths
in advanced technologies to offer leading products to the industries
they serve. Progress Rail has state-of-the-art facilities in the
United States, Canada, Mexico and the United Kingdom, as wellas innovative recycling and salvage processes to provide totallife cycle solutions to our customers. EMD has upgraded factories
with the latest equipment and significantly increased investment
in research and development as it has expanded its global productportfolio. Finally, Caterpillar’s engine expertise and advanced
technologies research provide a platform upon which Progress
Rail and EMD can further enhance locomotive performance.

Energy & Power Systems 29

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

2011
Highlights
Energy & Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Business Expansion Announcements• The acquisition of MWM, which enables Caterpillar to significantly expand customer
options for sustainable power generation solutions.
• A new Progress Rail locomotive manufacturing and assembling facility in Minas
Gerais, Brazil, to better serve Brazilian and South American customers.
• A new Progress Rail locomotive assembly plant in Muncie, Ind.
• A joint venture with Anqing CSSC Diesel Engine Company, Ltd., to manufacture MaK
brand medium-speed marine engines for China and the Asia Pacific region, to better
compete and support its growing customer base across Asia.
• New operations at the Caterpillar facility in Piracicaba, Brazil, to package 3500C seriesengines, generator sets and diesel electric propulsion systems in support of marine
and petroleum customers in Brazil.
• Agreements with five large International Power Project (IPP) providers that leverage
our newly established Global Distribution Program to compete in the rapidly expanding
IPP marketplace.
• The acquisition of the Pyroban Group Ltd, a leading provider of hazardous area safety
solutions to the oil and gas, industrial material handling, mining and marine markets.
• Progress Rail Services purchased the trackwork manufacturing business of Balfour
Beatty Group Ltd., which will complement and globalize existing Engineering & Track
Services, allowing even broader service coverage for its customers.
• A new $150 million engine manufacturing facility in India that will produce Perkinsbranded 4000 Series engines.
• Introduction of innovative joystick and pod solutions for marine propulsion andmaneuvering solutions for pleasure craft.
(continued)

Energy & Power Systems 30

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

2011
Highlights
Energy & Power Systems(continued)

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Product Model Introductions and Enhancements• Availability of Cat® C15 ACERT™ water-cooled manifold engines certified for hazardous
location use.
•N
 ew Cat® C175-16 marine propulsion engine to drive new, more profitable vessel
designs for all segments of the marine industry.
• Availability of Cat® C27 ACERT™ and C32 ACERT™ petroleum engines that meet U.S.
EPA Tier 4 Final emissions standards four years ahead of regulatory mandate.
• New Cat® three- and four-cylinder diesel engines, the C1.5 and the C2.2, allow OriginalEquipment Manufacturers (OEMs) to equip their products with engines that meet strict
emissions requirements.
• Launched new versions of Cat® and Perkins 4.4-, 6.6- and 7.1-liter diesel engines
meeting strict emissions requirements, and enabling machine OEMs to equip theirproducts with more powerful and fuel-efficient engines/powertrains.
• Introduced new versions of Cat® and Perkins 1.5- and 2.2-liter diesel engines that allow
OEMs to equip their products with engines that meet strict emissions requirements, andwill go into mass production at the end of 2012.

Energy & Power Systems 31

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Key Metrics
Power Systems

SALES(in millions of dollars)

SEGMENT PROFIT(in millions of dollars)

2011 SALESBY GEOGRAPHY(in millions of dollars)$3,668$8,331

North America$2,363$5,752$15,537$20,114$2,288$3,053

2010

2011

2010

2011

Sales increased 29 percent from2010 to 2011 as a result of higher
sales volume and the acquisitionof EMD. Sales were up in all
geographic regions.

Segment profit improved 33 percent,primarily due to higher sales volume
and improved price realization.

Energy & Power Systems 32

Latin America
EAME
Asia/PacificWorldwide demand for energy at price levels
that encourage continued investment resulted
in higher demand for engines and turbines
for petroleum applications. Electric power
continued to improve as a result of worldwide
economic growth.

PerformanceWHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

When our customers need to build out, dig down or power up, Caterpillar is there to support
their needs. Our Seed-Grow-Harvest Business Model is built upon a foundation of deliveringvalued quality products, services and solutions to our customers, which in turn provides themwith the lowest owning and operating lifecycle costs. This begins with building sophisticated,
quality machines and then supporting the customer in a variety of ways: employee equipmenttraining on job sites, supplying aftermarket parts and service support, and offering eBusiness and Equipment Management solutions. Caterpillar’s global network of Cat® dealers
ensure that customers get what they need, when they need it and where they need it.
Customer & Dealer Support (C&DS), led by Group President Stu Levenick, strengthens
Caterpillar’s product support excellence. Through our Customer Services Support andDistribution Services Divisions, C&DS builds competitive advantage and brings strong focus toCaterpillar-branded parts and customer services and delivers outstanding dealer development.
A key foundational element of C&DS is our ability to manufacture parts and components,
provide remanufacturing solutions and deliver unmatched parts availability to dealers
and customers anywhere in the world.
Parts Distribution & Logistics provides integrated supply chain services, transportation
and unmatched service parts logistics to Cat dealers and customers worldwide. Parts
Distribution & Logistics is responsible for the quality and span of the global parts distribution network for Caterpillar and manages the integrated logistics and transportation for
the enterprise.
The Remanufacturing & Components Division leads the enterprise in technology andsustainable solutions and serves our customers through quality products in remanufacturing, undercarriage, ground engaging tools and specialty products.
Customer & Dealer Support 33

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Best Gets
Even Better
Global expansion is helping Cat
Logistics help us to increase
aftermarket parts sales and service.

Caterpillar machines and engines put in long hours in toughconditions in service to customers. When a part wears out orneeds replacement, ensuring that the right parts are in theright place at the right time is the brand promise our customers
have learned to expect from Caterpillar. Delivering on thispromise requires a world-class global logistics network. Widely
considered to have the industry’s best distribution system,
Cat Logistics is investing to set an even higher standard as thegrowth of the company’s machine population accelerates. In
2011, parts availability climbed to historic highs, and inventory
turns and fill rates exceeded efficiency targets.
The improvements are the result of better forecasting of dealer
and customer needs and improved visibility into both internal andexternal supply chains. A new planning system fully implemented
during 2011, for example, uses machine population data to plan
distribution center inventory levels. An SAP-based Service Parts
Management (SPM) system is also key, supporting facilities aroundthe globe on a single platform with significant efficiency gains.
Equally important is an ongoing expansion of Caterpillar’s parts
distribution network. The latest phase of this expansion is adding
millions of square feet of distribution center space by growing
some facilities and constructing new distribution centers.
During 2011, a new, one-million-square-foot distribution center
opened in Clayton, Ohio. In 2012, the current Spokane, Wash.,distribution center will be replaced with a new 500,000-square-

foot-facility, which will be four times the size of the existing facility.
In addition, two other new distribution centers were announced,
located in Dubai and California, that will add a combined 850,000
square feet during 2012.
These investments have one simple purpose: to get parts todealers and customers faster. “One of the key reasons customers
buy Caterpillar products is the superior product support capability
our dealers provide,” notes Steve Larson, vice president withresponsibility for the Parts Distribution & Logistics Division.
These expansions will not only support anticipated growth in

2.5

Million More Square
Feet of Distribution
Center Space

parts demand, but also help to optimize the parts supply chain.
These facilities are the latest in an ongoing parts distribution
expansion that has included the new distribution centers inShanghai in 2006, Russia in 2007 and Waco, Texas, in 2009.
These physical investments, combined with new systems andprocesses, are not only transforming Cat Logistics, but also are
helping to realize one of Caterpillar’s strategic “Big 8” imperatives,
Execute the Business Model…accelerate aftermarket parts andservices growth.

Customer & Dealer Support 34

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

ForwardThinking
at Work
Cat Reman takes the initiative in
helping dealers deal with growing
demand for parts and service.

Proactive planning on the part of Caterpillar Remanufacturing &Components Division is playing a critical role in helping Cat® dealers
meet record levels of demand for mining equipment and service.
Continuing growth in world commodity markets means many ofour mining customers are running their existing fleets at full
utilization. More operating hours translates to more demand
for replacement or reconditioning of major components suchas engines, transmissions and drive trains.
When demand grows, dealers naturally turn to Cat Reman, which
specializes in returning Cat® powertrain and hydraulic components
at the end of their life to a “same as new” condition. The advantagesof working with Cat Reman are two fold: it lessens the demand
for repairs by certified dealer technicians, who are in short supply,and it helps satisfy customer needs in a more timely manner.
To optimize the relationship between Cat Reman and Cat® dealers,
however, requires planning, and this is where a new initiative,
Reman Active Partnership, is making a big difference. This initiative
takes a proactive approach to machine maintenance and repair
by working with dealers to forecast demand for service. This
planning can result in improved dealer efficiencies and component
availability plans. Frequently, the plans include guaranteed 90-day
order delivery.

“Essentially we are helping dealers with major mining customers
help us to help them,” explains Greg Folley, Caterpillar vice president
with responsibility for the Remanufacturing & Components Division.
“One of the primary ways we facilitate this planning effort is toregularly meet with key dealers and jointly develop strategies
to help customers keep their equipment running at the lowest
possible cost.”
Supporting a major mining or construction project with timeand budget constraints allows little room for error. By focusing
on keeping equipment up and running for years, Caterpillar andits dealers help customers save on operating costs and meettheir commitments. To date, Cat Reman, working with Caterpillar
Global Mining and district offices, has established ActivePartnership relationships with nearly half of all Cat® dealerswith mining customers. Over the next year, the goal is to extend
active partnerships to the remainder of dealers with major
mining customers.

Customer & Dealer Support 35

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

The Truck That
Customers Built
The Cat® CT660 vocational truck blends
customer insight and extensive research
to become an instant hit.

The Cat® CT660, the first in a full line of Class 8 vocational trucks,
was developed by Caterpillar, but designed with feedback from
Caterpillar customers. The result has been a resounding success.
“This may be Caterpillar’s most intensely researched productever,” said George Taylor, director of the Global On-Highway
Truck Group. “We spent many hours speaking with Cat® ‘yellow
iron’ customers.”
Extensive research and attention to the voice of our customers
allowed the CT660 design to be seamlessly integrated into theentire Caterpillar fleet. Indeed, Caterpillar customers havereceived the CT660 with open arms, calling it the most innovative
truck on the market due to its unique ergonomic design, attention
to detail, and inclusion of Caterpillar’s proprietary comprehensive
asset and fleet management tool, Product Link.
“Really, the development of this truck was about a company
focusing for the first time not just on the truck itself, but theapplication of that truck in a business,” explains Taylor. “Thetrucks complement other Cat® equipment, and dealers recognize how important the trucks will be to customers in handlingthe demands of the work they do.”

The CT660 offers a wealth of configuration options to contractors
and construction crews, so each customer’s truck can be built
specifically for their demanding application. Additionally, Cat®
dealers and technicians have been diligently learning the ins andouts of the CT660 to service the truck both in the field and at local
service centers. Cat dealers® offer bumper-to-bumper service andsales support for the truck in all 54 U.S. and Canadian dealerships,with more than 400 service locations and 2,300 truck service bays.

“This may be Caterpillar’s mostintensely researched productever,” said George Taylor, directorof the On-Highway Truck Group.
“We spent many hours speaking
with Cat® ‘yellow iron’ customers.”

Customer & Dealer Support 36

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

2011
Highlights
Customer & Dealer Support

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Business Expansion Announcements• Cat Logistics announced construction of a new parts distribution center in California
and a new facility in Spokane, Wash., that will be four times the size of an existing facility.
• Cat Reman expanded its remanufacturing facility in West Fargo, N.D., to help meetthe strong demand for remanufactured drivetrain components for large off-highway
trucks and other mining equipment. Cat Reman also opened its new remanufacturing
facility in Singapore, which will serve as the regional source for remanufactured major
components for large off-highway trucks and other mining equipment.
• Caterpillar and Vestas Wind Systems, the world’s leading wind turbine manufacturer,
reached a 10-year, global agreement to remanufacture wind turbine components.
• Caterpillar launched CaterpillarUniversity.com, a new online learning platform for allCat® machine and engine customers, to provide online instruction in the areas ofsafety, operator training and service.
• Caterpillar Safety Services acquired CoreMedia, a safety management consulting
company that specializes in helping businesses attain zero-incident safety performancefor customers across a variety of industries.
• The Cat Rental Store™ launched CatRentalStore.com to help support customers’
rental needs, including store locator, equipment rental requests and pricing.
• New smartphone apps were launched to provide customers with easy and quick
access to Cat® product information such as rental equipment details, used equipment
inventory and new machine specifications.

Customer & Dealer Support 37

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Key Metrics
Customer & Dealer Support

GLOBAL CAT® DEALERS

CAT® DEALER EMPLOYEESCAT® DEALER NET WORTH(in thousands)(in billions of dollars)

181

180

178

188

191

121.4

131.8

135.7

126.7

141.3

$14.2

$16.5

$15.7

$17.7

$18.9

2007

2008

2009

2010

2011

2007

2008

2009

2010

2011

2007

2008

2009

2010

2011

Our vast dealer network offers comprehensive
solutions for customers worldwide.

Cat® dealer employees share our commitment
to customers and ensure maximum businessvalue from our products and services.

Customer & Dealer Support 38

Most Cat ® dealers are independently
owned, locally operated businesses
and benefit from strong, long-standing
customer relationships.

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Financial
Products &Corporate
Services

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

When the world needs Caterpillar, the company finds a way to sustain financiallysound relationships with its dealers, customers and suppliers. Caterpillar understands that customers need flexible payment options for machines and engines
to keep a project on track. Cat Financial helps do so by providing customized
financing solutions to Caterpillar customers through offices in 46 countries andassuring customers’ peace of mind when buying or leasing Cat® equipment.
Financial products include a variety of equipment financing alternatives, leasing
options and insurance coverage plans. Our Financial Products segment businesses
report to Caterpillar Group President and CFO Ed Rapp, whose responsibilities
also include Corporate Services, encompassing the administrative functions to
support the enterprise, including Finance Services, Human Services, Global
Information Services, Global Purchasing, Investor Relations, Strategy & Business
Development and Corporate Auditing.

Financial Products & Corporate Services 39

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

L.E.A.D.
Prepares the
Next Generation
We’re more committed than ever toensuring that our future leaders havewhat they need to lead.

Investments in innovative technologies, expanded manufacturing
capabilities and new products and services will help Caterpillar
meet a new era of demand. The most important investments,
however, will be made in the people who ultimately drive thebusiness to realize its potential. Accordingly, leadership development is a key focus of Caterpillar’s Vision 2020 strategy, and thecompany is investing more time and money in the effort thanever before.
Ironically, it took the downturn of 2008-2009 to underscore theneed for increased leadership development. “It was the deepest
recession employees had ever experienced,” says Bonnie Fetch,
Caterpillar director of People and Organizational Development.
“It awakened us to the need for superior leadership throughout
the company and the development of a high-performance culturethat can perform through the business cycle.”
To this end, Caterpillar has created the Leadership Excellence inAccountability and Development program, or L.E.A.D., a global
initiative introduced in 2011. L.E.A.D. focuses on four levels of
leadership – first-line supervisors, managers, department heads
and executive officers – in all countries where Caterpillar operates.

For leaders with the potential to grow to senior executive level,
L.E.A.D. offers Digging Deep – our flagship program developedin partnership with Stanford University Graduate School ofBusiness. In addition to classroom instruction from Stanford
faculty, participants also spend a week on job sites in growthmarkets like China and Brazil and participate in Corporate Social
Responsibility activities. These trips offer a firsthand look at
sustainability efforts and interaction with clients in different
parts of the world.
“We’re merely stewards of the business,” notes Caterpillar Group
President and CFO Ed Rapp. “As I see it, the most critical role I
have is to make sure that I leave the business better than I foundit and to turn it over to more capable hands when I leave.”
Development from the ground up will ensure Caterpillar’s futureremains in the hands of people with the best interests of Caterpillar
in mind. “We recognize that Caterpillar is important in the world
marketplace,” adds Fetch. “We’re taking ownership of ensuring
we have leaders ready to lead.” The goal is to develop leaders
who can thrive in a continually changing marketplace, engage
their workforce, focus on their customers’ needs and shape aculture of accountability and performance.

L.E.A.D. offers innovative coursework combined with learning in
the field. Each level of leadership engages in learning programs
tailored to their needs and focused on the strategic needs ofthe company.

Financial Products & Corporate Services 40

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

PerformanceStrength
Building
Strength
Financial discipline is not only about
surviving the downturn, but also
winning on the rebound.

Just two years after weathering the most difficult economic
environment in a generation, Caterpillar is posting record profits,
cash flow and a strong balance sheet. Strong demand in rebounding markets only accounts for part of this robust performance.
Learning from past business cycles, Caterpillar’s trough planin 2008–2009 was designed to weather the downturn and to
emerge in a position of financial strength. Caterpillar did so with
its profitability, dividend and credit rating intact. Since then, thecompany has used this strength purposefully to position thebusiness for opportunities over the next decade.
Caterpillar began making investments in capacity expansion
early in 2010, paying careful attention to resource allocation.
The company invested selectively in industries with the most
attractive growth potential and the best strategic fit. In addition,
the ramp-up in production has been effectively managed
through the Caterpillar Production System and an unwavering
focus on cost management. As a result, Caterpillar has beenable to translate additional volume into profit and cash
pull-through to the bottom line.

through available cash generated from hitting profit targets,diligent focus on working capital management, and a public
debt issuance. This avoided the need for new equity and theaccompanying earnings dilution. In addition to Bucyrus, in2010 and 2011 Caterpillar completed two other acquisitions,
MWM, a supplier of diesel and natural gas generator sets
and integrated power systems, and Electro-Motive Diesel, apremier provider of locomotive technology, for a combined$1.6 billion.
Suppliers have been another key factor in a successful ramp-up.
Recognizing that a manufacturer is only as strong as its supply
chain, Caterpillar facilitated a new Supply Chain Financeprogram in 2010 and expanded the program in 2011. As aresult, suppliers, through a financial institution, can acceleratecash flow to help their own businesses ramp up. This programis yet another example of how Caterpillar is using its strengths
to build strength.

The ramp-up in production has
been effectively managed throughThis pull-through, in turn, has been instrumental in Caterpillar’sability to complete three acquisitions during the past 18 months, the Caterpillar Production System
including global mining equipment manufacturer Bucyrus, its
and an unwavering focus onlargest purchase ever. This $8.8 billion transaction was financed
cost management.

Financial Products & Corporate Services 41

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Financing
Progress
From humble beginnings, Caterpillar
Financial Services Corporation iscelebrating 30 years of helping projects –both big and small – become realities.

When Cat Leasing began in 1981, it had 12 employees specialized
in financing lift trucks in Peoria. Fast-forward 30 years toCaterpillar Financial Services Corporation headquartered in
Nashville, Tenn., to see how this vital part of Caterpillar has grown.
During the past three decades, Cat Financial has expanded tomore than 2,000 employees in 46 offices worldwide who supportCat® dealers and their customers around the world as they makeprogress possible.
Securing equipment financing is often a vital step for customers
to begin projects. The goal of Cat Financial is to successfully
finance product purchases in order to get equipment to thejob site quickly. Cat Financial offers global product-financing
solutions to customers for projects of every size and provides
quotes and customized financing plans to keep the order-toproduction process as smooth as possible.
Today, Cat Financial is an integral part of many of the mostvisible and strategic construction projects in the world, such as
the expansion of the Panama Canal. Cat Financial has worked
with Caterpillar customers in Panama since 2009 to financetractors and trucks to expand and update the 98-year-old
engineering marvel. Most recently, Cat Financial provided an

additional $35 million financing package for the Panama PAC4
contract that included 75 units of equipment. This is an increaseover the 243 units already financed for the Canal’s expansion.
In all, Cat Financial is financing 92 percent of the machine sales
for this vital link in the global commerce chain.
Cat Financial is also instrumental in helping open new market
opportunities. During 2011, Indonesia’s second-largest coalmining company, BUMA, committed to purchasing Cat® mining
trucks, their first Cat® equipment purchase since 2004. With thehelp of Cat Financial, BUMA placed an order for 178 machinesfrom Indonesian Cat® dealer, PT Trakindo Utama (Trakindo).
BUMA has also signed maintenance and repair agreementswith Trakindo to secure product support for their machines
over the next eight years. Without the help of Cat Financial,a steady delivery of machines for BUMA’s mining projects
would not be possible.
As global demand increases for the goods and services that
Caterpillar customers provide, the demand for Cat Financial’s
support will increase as well, and the division will be there tohelp customers get the most out of their equipment investment.

Financial Products & Corporate Services 42

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

2011
Highlights

Energy &Power Systems

Financial Products &Corporate Services

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Business Expansion Announcements• New retail financing for Caterpillar Financial Services Corporation was $11.32 billion,
an increase of $1.9 billion, or 20 percent, from 2010.
• Cat Financial portfolio performance improved, with past dues and full-year write-offs
at their lowest levels since 2008.
• Cat Financial launched an e-Signature tool for paperless loan documents to provide
customers with a quick, secure, convenient and sustainable way to process documents.
• Collaboration efforts from many areas of Caterpillar to innovatively improve working
capital and cash flow were recognized as best practices. Caterpillar was recognized byTreasury & Risk magazine and the Association for Financial Professionals for excellence
and innovation in treasury management and finance, its sustainable focus on working
capital improvement, and the funding of the Bucyrus acquisition with no equity.
• During our rapid growth in 2011 with new facility start-ups worldwide, production
increases and the addition of thousands of new employees, Caterpillar wasable to achieve a 13 percent improvement in our safety results.
• More than 7,000 Caterpillar leaders participated in leadership development programs
that provide leaders the tools to build high-performing teams and execute the strategy.
• Caterpillar continued deployment of common global systems to support growth inmanufacturing and achieve improved inventory turns, improved labor utilization, andbetter supply chain visibility and management. By the end of 2012, approximately
25 percent of enterprise sales and revenues will be on the strategic platform.
• As machine volumes have grown dramatically from 2009 on, Caterpillar suppliers have
responded. Global Purchasing orchestrated the ramp-up of a supply base that in somecases saw demand grow by 300 percent or more.
• Global Purchasing led supplier recovery efforts after a devastating tsunami hit
Japan. The team worked with the supply base to install back-up generators andidentified alternate sources for critical parts, ensuring severe business disruption
was avoided.

Financial Products & Corporate Services 43

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Key Metrics
Financial Products

REVENUES(in millions of dollars)

SEGMENT PROFIT(in millions of dollars)

2011 REVENUESBY GEOGRAPHY(in millions of dollars)$517$1,687$361$438$2,946$3,003

$429

$587

2010

2011

2010

2011

Revenue grew slightly from 2010
to 2011 primarily due to a favorable
impact from higher average earning
assets, a favorable change fromreturned or repossessed equipment and higher miscellaneous
net revenues.

Segment profit increased 37 percent
primarily due to a favorable impact
from higher average earning assets,a higher net yield on average earning
assets, a favorable change fromreturned or repossessed equipment
and a decrease in provision expense.

North America
Latin America
EAME
Asia/Pacific

Caterpillar Financial Services Corporation
helps finance customer projects aroundthe world.

Financial Products & Corporate Services 44

PerformanceWHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Photo: Paulette Waltz/Room to Read

The
Caterpillar
Foundation

Founded in 1952 as a philanthropic effort of Caterpillar, the Caterpillar Foundation
has contributed more than $500 million to help make sustainable progress possiblearound the world. The Caterpillar Foundation provides program support in theareas of environmental sustainability, education and basic human needs, including
disaster relief. “Commitment” defines the Caterpillar Foundation’s work at home
and around the world. As individuals and as a company, we contribute significant
time and resources to promoting the health, welfare and economic stability of ourcommunities. We believe that our success should also contribute to the prosperity,
sustainability and quality of life in the communities where we work and live, which
is why we support the Caterpillar Foundation’s activities. Learn more about theCaterpillar Foundation’s global impact at caterpillar.com/foundation.

Caterpillar Foundation 45

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Progress &Sustainability
A $3 million grant will bring cleanwater and sanitation to hundreds ofthousands over the next three years.

Photo: Water.org

On November 29, 2011, the Caterpillar Foundation and Water.org
announced a $3 million partnership to reach more than 218,000
people with clean water and sanitation over a three-year period.
The program will support a significant expansion of Water.org’s
WaterCredit activities in India, and it will fund a market assessment
to explore the launch of WaterCredit in Indonesia. WaterCredit
facilitates small loans for water and sanitation access for people
living in poverty who do not have access to basic necessities.
“We are honored to be working with the Caterpillar Foundationon this high-impact program,” said Water.org Chief Executive
Officer and Co-Founder Gary White. “Because of the Caterpillar
Foundation’s generous support, we will reach more people withclean water and sanitation, at a faster rate, and at a decreasing
philanthropic cost per person.”“The Caterpillar Foundation supports a number of basic humanneeds programs in areas where Caterpillar has a presence,” said
Caterpillar Corporate Public Affairs Director Jim Baumgartner.
“The sustainability of Water.org’s model is really what drew us to
WaterCredit. This program will provide clean water and sanitation
facilities to thousands of families in India, but the cycle ofprogress will continue as the loans are repaid and thesefunds are provided to others in need.”
The Caterpillar Foundation grant also supports Water.org’s workwith existing microfinance partners in Bangalore and Tamil Nadu,
India. The funds will help facilitate WaterCredit loans for sanitation
purposes, enabling more than 180,000 residents to gain accessto hygienic sanitation facilities. In addition, the grant will fundan initial market assessment and lay the groundwork for thelaunch of WaterCredit in Indonesia.

The Caterpillar Foundation grant will support two WaterCredit
programs in India. This initiative includes the expansion of arevolving loan fund managed by one of Water.org’s partners in
Bangalore to provide an additional 38,000 people with accessto microloans for clean water and sanitation. Through thisfinancial model, once a loan is repaid, it is then re-lent to anotherperson in need.

Caterpillar Foundation 46

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

A Better
Bolivia
The Caterpillar Foundation’s
partnership with Mano a Manois building a brighter future inrural Bolivia.

Photo: Marc Esser

The Caterpillar Foundation invests in Mano a Mano International,
an organization dedicated to serving Bolivian communities byimproving healthcare, transportation and economic conditions.
Mano a Mano collaborates with partner organizations to build
sustainable solutions that improve the quality of life in thisdeveloping country.
For many Bolivians, access to medical care is extremely limited.
In some regions, the nearest medical clinic is a four-hour walk.
The sick and injured are often carried on the backs of others.
In addition, Bolivia has one of the highest infant mortality rates
in the world.

With the Caterpillar Foundation’s assistance, Mano a Mano
has built and continues to build new roads that improve accessto medical facilities, schools and markets. As a result, Bolivian
businesses and farms are expanding, which benefits the entire region. Many medical clinics are now treating 10 times
more patients than they did just 10 years ago. Thousands of
new mothers and their children are being cared for each year.
The Caterpillar Foundation’s ongoing partnership with Manoa Mano is building a brighter future full of health and hope forthe people of Bolivia.

Caterpillar Foundation 47

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Great Rivers,
Great Partners
An innovative partnership is conserving
and restoring the world’s mightiest rivers.

Photo: Ami Vitale

In 2005, the Caterpillar Foundation invested in the Nature
Conservancy to establish the Great Rivers Partnership. The
program conserves and restores the world’s great river systems
for the benefit of those who depend upon them for life.
The partnership has helped restore thousands of miles of theMississippi River, which is home to more than 30 million people.
Great Rivers is also working with American farmers to develop
more sustainable agricultural practices.
In China, more than 400 million people live in the Yangtze Riverregion. Part of the Great Rivers program provides geographic
analysis to pinpoint specific areas of the Yangtze River in needof protection and repair.

South America’s Paraguay-Paraná River system covers almost
one million square miles. Pollution and major alterations to therivers’ flow pose serious threats to these waters, which impact
the lives of more than 100 million people. The partnership is
helping to preserve hundreds of fish species and fresh drinking
water for many communities in need.
The Caterpillar Foundation’s leadership investment is helping theGreat Rivers Partnership set new standards that will influenceworldwide conservation of fresh water. The program isn’t justabout wildlife or development, but rather how the two can cometogether to preserve one of life’s most essential elements.

Caterpillar Foundation 48

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Photo: Patrick Fuller/IFRC

Responding
as a Team

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Photo: CHF International

Performance

Photo: WFP/Thierry Gouegon

In 2011, Caterpillar responded as a team to support disaster
relief, repair and rebuilding efforts following some of theyear’s worst disasters. Our response included:• $3.5 million contributed in 2011 by the Caterpillar Foundation• $450,000 contributed by employees, dealer employees and retirees• $250,000 invested in American Red Cross Annual Disaster Giving Program

Missouri Tornado
Southeast Storms
Texas Wildfire
Haiti Rebuilding

BrazilFloodsTurkey Earthquake
Japan
Earthquake

Horn of Africa
FamineThailandFloodsAustralia
FloodsNew Zealand
Earthquake

Caterpillar Foundation 49

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

Key Metrics

The Caterpillar
Foundation

Leadership

Performance

Photo: Ana Garcia/TNC

The Caterpillar
Foundation$50

Million2011 Philanthropic
Investment Worldwide

Amount Invested in the
U.S. and internationally50%
50%

Caterpillar Foundation 50$10.6
MillionTotal global supportof United Way

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance(Left to right): Gerard Vittecoq, Doug Oberhelman, Stu Levenick, Rich Lavin, Steve Wunning, Ed Rapp.

Executive Officers
Doug Oberhelman
Chairman and CEO

Rich Lavin
Construction Industries& Growth Markets

Stu Levenick
Customer & Dealer Support

Doug Oberhelman joined Caterpillar in 1975 and was elected a vice president in 1995. In 2002, hewas elected a group president and member of Caterpillar’s executive office. In October 2009, theCaterpillar Board of Directors named Oberhelman vice chairman and CEO-elect. During this time,
he led a team that developed the future strategic plan for the company. Oberhelman was elected
chief executive officer and a member of the board of directors effective July 1, 2010, and becamechairman effective November 1, 2010.
Rich Lavin is a group president of Caterpillar Inc. He has dual locations in Hong Kong and Peoria,
Ill., and is responsible for the Construction Industries & Growth Markets Strategic Business Unit,
which includes the Earthmoving Division, Excavation Division, Building Construction Products
Division, Caterpillar Japan Ltd. (CJL) Division, Europe/South Americas Operations Division,
Global Construction & Infrastructure and country manager strategic responsibility for China,
India, ASEAN and Brazil.
Stu Levenick is group president of Caterpillar with responsibility for Customer & Dealer Support,
which includes Europe-Africa-Middle East (EAME), Americas and Asia Pacific Distribution Divisions,Remanufacturing & Components, Customer Services Support and Parts Distribution & Logistics.
(continued)

Leadership 51

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Executive Officers (Continued)
Ed Rapp
CFO & Corporate Services

Gerard Vittecoq
Energy & Power Systems

Steve Wunning
Resource Industries

Ed Rapp is group president and CFO of Caterpillar with responsibility for the Finance Services,
Human Services, Global Information Services, Global Purchasing and Financial Products Divisions.
He is also responsible for Strategy & Business Development, Corporate Auditing, Shared Services
and Investor Relations.
Gerard Vittecoq is group president of Caterpillar with responsibility for Caterpillar’s Energy &Power Systems Group, which includes the Industrial Power Systems & Growth Markets, Large
Power Systems & Growth Markets, Marine & Petroleum Power, Electric Power, Progress Railand Solar Divisions.
Steve Wunning is group president of Caterpillar with responsibility for the Resource Industries
Group, which includes the Advanced Components & Systems, Diversified Products, Integrated
Manufacturing Operations, Mining Products, and Product Development & Global Technology
Divisions. He is also responsible for leading manufacturing excellence through the Caterpillar
Production System.

Leadership 52

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Officers
Chairman andChief Executive Officer
Douglas R. Oberhelman

Group Presidents
Richard P. Lavin
Stuart L. Levenick
Edward J. Rapp
Gerard R. Vittecoq
Steven H. Wunning

Senior Vice President andChief Legal Officer
James B. Buda

will resign effective 5/1/2012
effective 4/1/2012
3
will retire effective 7/1/2012
1
2

Energy &Power Systems

Customer &Dealer Support

Vice Presidents

Kent M. Adams
William P. Ainsworth
Ali M. Bahaj
Mary H. BellThomas J. BluthDavid P. Bozeman
Richard J. Case 1
Robert B. Charter
Frank J. Crespo
Christopher C. Curfman
Paolo Fellin
William E. Finerty
Steven L. Fisher
Gregory S. Folley
Thomas G. Frake 2
Stephen A. Gosselin
Hans A. Haefeli
Bradley M. Halverson
Kimberly S. Hauer
Gwenne A. Henricks
Randy M. Krotowski
Luis de Leon
Stephen P. Larson
William J. Rohner
Christiano V. Schena 3
William F. Springer
Gary A. Stampanato
Mark E. Sweeney
Donald J. Umpleby III
Tana L. Utley
Leadership 53

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Chief Financial Officer
Edward J. Rapp

Treasurer

Edward J. Scott

Chief Audit Officer
Matthew R. Jones

Chief Ethics andCompliance Officer

Christopher C. Spears

Controller andChief Accounting Officer
Jananne A. Copeland

Corporate Secretary
Christopher M. Reitz

Assistant Treasurer
Robin D. Beran

Assistant Secretary
Laurie J. Huxtable

PerformanceWHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance(Front row, left to right): David R. Goode, Susan C. Schwab, Charles D. Powell, Douglas R. Oberhelman, Peter A. Magowan, David L. Calhoun,Jesse J. Greene, Jr. (Back row, left to right): Edward B. Rust, Jr., Daniel M. Dickinson, Dennis A. Muilenburg, Juan Gallardo, William A. Osborn,
Miles D. White, Eugene V. Fife and Joshua I. Smith.

Board of Directors
David L. Calhoun, 54

Chief executive officer (since May 2010) and executive director (since January 2011) of Nielsen
Holdings N.V. (marketing and media information) and chairman of the executive board and chief
executive officer of The Nielsen Company B.V. (since September 2006). Prior to his positions at
Nielsen, Mr. Calhoun served as vice chairman of General Electric Company and president andchief executive officer of GE Infrastructure. Other current directorships: Medtronic, Inc. and
The Boeing Company. Other directorships within the last five years: none. Mr. Calhoun has beena director of the Company since 2011.

Daniel M. Dickinson, 50

Managing partner of HCI Equity Partners (private equity investment). Other current directorships:
Progressive Waste Solutions Ltd., Mistras Group, Inc. and HCI Equity Partners. Other directorships
within the last five years: none. Mr. Dickinson has been a director of the Company since 2006.

Eugene V. Fife, 71Managing principal of Vawter Capital LLC (private investment). Mr. Fife served as the interim CEO
and president of Eclipsys Corporation (healthcare information services) from April to Novemberof 2005 and the nonexecutive chairman from 2001 until 2010, when Eclipsys merged with Allscripts
Healthcare Solutions, Inc. Mr. Fife was formerly a partner of Goldman Sachs & Co., retiring in 1995.
Other current directorships: Allscripts Healthcare Solutions, Inc. Other directorships within thelast five years: Eclipsys Corporation. Mr. Fife has been a director of the Company since 2002.

Juan Gallardo, 64

Chairman and former CEO of Grupo Embotelladoras Unidas S.A.B. de C.V. (beverages and bottling).
Other current directorships: Lafarge SA. Other directorships within the last five years: Grupo
Mexico, S.A. de C.V. Mr. Gallardo has been a director of the Company since 1998.
(continued)

Leadership 54

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Board of Directors (Continued)
David R. Goode, 71

Former chairman, president and CEO of Norfolk Southern Corporation (holding company engaged
principally in surface transportation). Other current directorships: Delta Air Lines, Inc. and Texas
Instruments Incorporated. Other directorships within the last five years: none. Mr. Goode has beena director of the Company since 1993.

Jesse J. Greene, Jr., 66

Former vice president of Financial Management and chief financial risk officer of International
Business Machines Corporation (computer and office equipment). Other current directorships:
none. Other directorships within the last five years: none. Mr. Greene has been a director of theCompany since 2011.

Peter A. Magowan, 69

Former president and managing general partner (1993-2008) of the San Francisco Giants (major
league baseball team) and chairman (1980-1998) and chief executive officer (1980-1993) ofSafeway Inc. (food retailer). Other current directorships: none. Directorships within the last
five years: DaimlerChrysler AG. Mr. Magowan has been a director of the Company since 1993.

Dennis A. Muilenburg, 48

Executive vice president of The Boeing Company (aerospace/defense products and services) andpresident and chief executive officer of Boeing Defense, Space & Security since September 2009.
Prior to his current position, Mr. Muilenburg was president of Boeing Global Services & Support(2008-2009), vice president and general manager of the Boeing Combat Systems division (2006-2008)and vice president and program manager for Boeing Future Combat Systems (2003-2006). Other
current directorships: none. Other directorships within the last five years: none. 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 and financial
products). Prior to his current position, Mr. Oberhelman served as vice chairman and chief
executive officer-elect and as a group president of Caterpillar Inc. Other current directorships:
Eli Lilly and Company. Other directorships within the last five years: Ameren Corporation.
Mr. Oberhelman has been a director of the Company since 2010.

William A. Osborn, 64

Former chairman and CEO of Northern Trust Corporation (multibank holding company) and theNorthern Trust Company (bank). Other current directorships: Abbott Laboratories and General
Dynamics Corporation. Other directorships within the last five years: Nicor Inc., Tribune Company
and Northern Trust Corporation. Mr. Osborn has been a director of the Company since 2000.

Charles D. Powell, 70

Chairman of Capital Generation Partners (asset and investment management), LVMH Services
Limited (luxury goods) and Magna Holdings (real estate investment). Prior to his current positions,
Lord Powell was chairman of Sagitta Asset Management Limited (asset management). Other
current directorships: LVMH Moët-Hennessy Louis Vuitton and Textron Inc. Other directorships
within the last five years: none. Lord Powell has been a director of the Company since 2001.
(continued)

Leadership 55

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Board of Directors (Continued)
Edward B. Rust, Jr., 61

Chairman, CEO and president of State Farm Mutual Automobile Insurance Company (insurance).
He is also president and CEO of State Farm Fire and Casualty Company, State Farm Life Insurance
Company and other Principal State Farm Affiliates as well as trustee and president of State Farm
Mutual Fund Trust and State Farm Variable Product Trust. Other current directorships: Helmerich &Payne, Inc. and The McGraw-Hill Companies, Inc. Mr. Rust has been a director of the Company
since 2003.

Susan C. Schwab, 56

Professor at the University of Maryland School of Public Policy and a strategic advisor for Mayer
Brown LLP. Prior to her current positions, Ambassador Schwab held various positions, including
United States trade representative (member of the U.S. President’s cabinet) and deputy UnitedStates trade representative. Other current directorships: FedEx Corporation and The Boeing
Company. Other directorships within the last five years: none. Ambassador Schwab has been a
director of the Company since 2009.

Joshua I. Smith, 70

Chairman and managing partner of the Coaching Group, LLC (management consulting). Other
current directorships: Comprehensive Care Corporation, FedEx Corporation and The Allstate
Corporation. Other directorships within the last five years: CardioComm Solutions Inc. Mr. Smith
has been a director of the Company since 1993.

Miles D. White, 56

Chairman and chief executive officer of Abbott Laboratories (pharmaceutical and medical products).
Other current directorships: McDonald’s Corporation. Other directorships within the last five years:
Motorola, Inc. and Tribune Company. Mr. White has been a director of the Company since 2011.

Leadership 56

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Performance

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Caterpillar powers world progress. Cat® equipment – more than three million pieces
around the world – is at work for our customers on highways, rail lines, oceans andrivers, in forests, quarries and oil fields. We supply the machines, solutions andsupport so our customers can excel in varying terrain, soil and climate conditions.
Our engines and gas turbines provide the horsepower for customers to move goods
and commodities across the globe, while generators deliver power wherever it isneeded. Caterpillar manufacturing excellence is supplemented by world-class service
businesses providing logistics, financial products and remanufacturing. Moreinformation about Cat® products, services and solutions can be found at cat.com.

At-A-Glance 57

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Business Overview
Major Product Groups
Articulated Trucks
Backhoe LoadersCompactors
Engines
Forestry Machines
Generator Sets

Hydraulic Excavators
Locomotives
Material Handlers
Motor Graders
Off-Highway Trucks
On-Highway Trucks

Paving Equipment
Pipelayers
Scrapers
Skid Steer Loaders
Surface Mining
Track Loaders

Track-Type Tractors
Turbines
Underground Mining Vehicles
Wheel Dozers
Wheel Excavators
Wheel Loaders

Industrial/OEM
Landscaping
MarineMiningOil & Gas

PavingPipeline
Power Generation
Quarry & Aggregate
RailroadRoad Construction
Underground Utilities
Waste Services

Logistics
OEM Solutions
Remanufacturing
RentalSafetySolar Turbine
Customer Services
Training

Major Industries Served
Demolition and Scrap
Forestry
General Construction
Governmental
Heavy Construction

Major Service Areas
Financing
Insurance
Locomotive & Railcar
Maintenance and Repair

BrandsCaterpillar Inc. owns a complex portfolio of brands whose roles and relationships support the growth to achieve our enterprisegoals. The Caterpillar brand represents our corporation with the investment community, employees, public policymakers and otherkey stakeholders. Built on decades of performance, our portfolio of brands – including our primary public-facing brand name,Cat® – speaks quality, reliability and an assurance of the finest in design, engineering and customer service. For an overview of
the Caterpillar brand portfolio, visit caterpillar.com/brands.

At-A-Glance 58

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Performance Metrics
Consolidated Sales & Revenues

2011 Consolidated Sales & Revenues by Segment(in billions of dollars)(in millions of dollars)$3,003$1,725
Power Systems$20,114

Construction Industries$15,629

2008

2009

2010

Financial Products$19,667$44.96 $51.32 $32.40 $42.59 $60.14
2007

Resource Industries

All Other

2011

Sales and revenues increased in nearly all
segments in 2011. Improvements in sales
are a result of significantly higher sales
volume and improved price realization.

Consolidated sales and revenues increased
41 percent to $60.14 billion in 2011, an all-time
record. Improvements were largely a resultof higher sales volume, including a significant
increase in new equipment sales andimprovements in aftermarket parts.

2011 Exports From U.S. by Region

Operating Profit(in millions of dollars)(in millions of dollars)$2,614$5,795

Canada$4,848$6,485Latin America
EAME
Asia-Pacific$4,921 $4,448$577$3,963 $7,153

2007

2009

2010

2008

2011

Consolidated operating profit was $7.15 billion
compared with $3.96 billion in 2010. Higher sales
volume and improved price realization contributed
to the increase in operating profit, which waspartially offset by higher manufacturing costs,
higher selling, general and administrative, andresearch and development expenses as wellas unfavorable impacts of currency.

U.S. exports of $19.7 billion increased
47 percent from 2010 to 2011.

At-A-Glance 59

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance Metrics (Continued)
Capital Expenditures (excludes equipment leased)(in millions of dollars)

Research & Development(in millions of dollars)$1,404 $1,728 $1,421 $1,905 $2,297$1,682 $2,320 $1,504 $1,575 $2,515
2007

2008

2009

2010

2007

2011

2009

2010

2011

Investment in research and development reachedrecord levels in 2011.

Caterpillar invested more than $2.5 billion incapital expenditures during 2011, reflecting
capacity expansion around the world to support
customer demand.

Profit Per Share (Diluted)

2008

Dividends Declared Per Share(in dollars)(in dollars)

$5.37

$5.66

$1.43

$4.15

$7.40

$1.38

$1.62

$1.68

$1.74

$1.82

2007

2008

2009

2010

2011

2007

2008

2009

2010

2011

A significant increase in profit per share in 2011reflected effective profit pull-through, one of our“Big 8” strategic imperatives.

2011 marked the 18th consecutive year Caterpillar
has paid an increased dividend to stockholders.

At-A-Glance 60

PerformanceWHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance Metrics (Continued)
5-Year Total Return CAT vs. S&P 500 vs. S&P Machinery Index(in dollars)$100.00$120.48$76.16$101.36$170.98$168.36

2006

2007

2008

2009

2010

2011

Caterpillar Inc.
S&P 500 Index
S&P 500 Machinery Index (S5MACH)

Cumulative stockholder return assuming an investment of $100 on December 31, 2006, and reinvestment of dividends issued thereafter.

Caterpillar has consistently outperformed the S&P 500 over the past five years.

5-Year Closing Stock Price(in dollars)$72.56 $44.67 $56.99 $93.66 $90.60
2007

2008

2009

2010

2011

Caterpillar shares have enjoyed a significant
level of appreciation since the downturn of 2008.

At-A-Glance 61

PerformanceWHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Business Metrics
Sales & Revenues Per Employee

Global Employees(in thousands of dollars)

101,333 112,887 93,813 104,490 125,099

$461

$482

$326

$432

$529

2007

2007

2008

2009

2010

2011

2008

2009

2010

2011

Increased sales and revenues per employee in2011 reflected strong top-line growth.

Worldwide full-time employment was 125,099 at
the end of 2011 compared with 104,490 at the endof 2010, an increase of 20,609 full-time employees.
We increased our workforce to support higher
sales volume across all geographic regions.

Dealers

Dealer Employees(in thousands)

181

180

178

188

191

121.4

131.8

135.7

126.7

141.3

2007

2008

2009

2010

2011

2007

2008

2009

2010

2011

Our vast dealer network offers comprehensive
solutions for customers worldwide.

Cat dealer employees share our commitment tocustomers and ensure maximum business value
from our products and services.
®

At-A-Glance 62

PerformanceWHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

Business Metrics (Continued)
Dealer Net Worth(in billions of dollars)

$14.2
2007

$16.5

$15.7

$17.7

$18.9

2008

2009

2010

2011

Most Cat dealers are independently owned,
locally operated businesses and benefit fromstrong, long-standing customer relationships.
®

At-A-Glance 63

The Caterpillar
Foundation

Leadership

PerformanceWHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance2011 Global Snapshot
Caterpillar’s global reach and presence is unmatched in theindustry. We serve customers in more than 180 countries aroundthe globe with more than 300 products. More than half of our sales
are outside the United States. Our manufacturing, marketing,logistics, service, R&D and related facilities along with our dealer
locations total more than 500 locations worldwide, ensuring that
we remain geographically closer to our global customer base.

North America

Latin America

Sales & Revenues (in millions)

Sales & Revenues (in millions)

Construction Industries $5,985
Resource Industries
4,963
Power Systems
8,331
Financial Products
1,687
All Other767
EmployeesCat® Dealers

54,88055

EAME

Construction Industries $3,045
Resource Industries
2,831Power Systems
2,363
Financial Products
361
All Other73
EmployeesCat® Dealers

Asia/Pacific

Sales & Revenues (in millions)

Sales & Revenues (in millions)

Construction Industries $4,768
Resource Industries
3,228
Power Systems
5,752
Financial Products
438
All Other
553
EmployeesCat® Dealers

19,111
31

28,77849

Construction Industries $5,869
Resource Industries
4,607Power Systems
3,668
Financial Products
517
All Other
332
EmployeesCat® Dealers

At-A-Glance 64

22,33056

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

FIVE-YEAR FINANCIAL SUMMARY(dollars in millions except per share data)
Years ended December 31,
Sales and revenues
Sales
		 Percent inside the United States
		 Percent outside the United States
Revenues
Profit4		
Profit per common share 1
Profit per common share – diluted 2
Dividends declared per share of common stock
Return on average common stockholders’ equity 3, 5
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
Long-term debt due after one year:
Consolidated
Machinery and Power Systems
Financial Products
Total debt:
Consolidated
Machinery and Power Systems
Financial Products

2011$ 60,138$ 57,392
30%
70%$  2,746$  4,928$   7.64$   7.40$  1.820
41.4%

2010
$42,588$39,867
32%
68%$ 2,721$ 2,700$  4.28$  4.15$ 1.740
27.4%

2009$32,396$29,540
31%
69%$ 2,856$   895$  1.45$  1.43$ 1.680
11.9%

2008$ 51,324$ 48,044
33%
67%$ 3,280$ 3,557$ 5.83$ 5.66$ 1.62046.8%

2007$44,958$41,96237%
63%$ 2,996$ 3,541$  5.55$  5.37$ 1.38044.4%$  2,515$  1,409$  2,527$  2,297
3.8%$ 10,994
113,620$ 1,575$ 1,011$ 2,296$ 1,905
4.5%$ 9,187
98,554$ 1,504$   968$ 2,336$ 1,4214.4%$ 7,416
99,359

$
$
$
$

2,320
1,566
1,980
1,728
3.4%
$ 9,076
106,518$ 1,682$ 1,340$ 1,797$ 1,404
3.1%$ 8,331
97,444$ 81,446$64,020$60,038$ 67,782$56,132$ 24,944$  8,415$ 16,529$20,437$ 4,505$15,932$21,847$ 5,652$16,195$ 22,834$ 5,736$ 17,098$17,829$ 3,639$14,190$ 34,592$  9,066$ 25,526$28,418$ 5,204$23,214$31,631$ 6,387$25,244$ 35,535$ 7,824$ 27,711$28,429$ 4,006$24,423

1. Computed on weighted-average number of shares outstanding.
2. Computed on weighted-average number of shares outstanding diluted by assumed exercise of stock-based compensation awards, using the treasury
stock method.
3. Represents profit divided by average stockholders’ equity (beginning of year stockholders’ equity plus end of year stockholders’ equity divided by two).
4. Profit attributable to common stockholders.
5. Effective January 1, 2009, we changed the manner in which we accounted for noncontrolling interests. Prior periods have been revised, as applicable.

At-A-Glance 65

WHAT THE WORLD NEEDS | 2011 YEAR IN REVIEW
Chairman’s
Message

Construction
Industries

Resource
Industries

Energy &Power Systems

Customer &Dealer Support

Financial Products &Corporate Services

The Caterpillar
Foundation

Leadership

Performance

Forward-Looking Statements
Certain statements in this 2011 Year in Review relate to future events and expectations and are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,”“project,” “intend,” “could,” “should” or other similar words or expressions often identify forward-looking statements. All statements other thanstatements of historical fact are forward-looking statements, including, without limitation, statements regarding our outlook, projections, forecasts
or trend descriptions. These statements do not guarantee future performance, and we do not undertake to update our forward-looking statements.
Caterpillar’s actual results may differ materially from those described or implied in our forward-looking statements based on a number of factors,
including, but not limited to: (i) global economic conditions and economic conditions in the industries and markets we serve; (ii) government
monetary or fiscal policies and infrastructure spending ; (iii) commodity or component price increases and/or limited availability of raw materials
and component products, including steel; (iv) our and our customers’, dealers’ and suppliers’ ability to access and manage liquidity; (v) politicaland economic risks and instability, including national or international conflicts and civil unrest; (vi) our and Cat Financial’s ability to: maintain credit
ratings, avoid material increases in borrowing costs, and access capital markets; (vii) the financial condition and creditworthiness of Cat Financial’s
customers; (viii) inability to realize expected benefits from acquisitions and divestitures, including the acquisition of Bucyrus International, Inc.;(ix) international trade and investment policies; (x) challenges related to Tier 4 emissions compliance; (xi) market acceptance of our products andservices; (xii) changes in the competitive environment, including market share, pricing and geographic and product mix of sales; (xiii) successful
implementation of capacity expansion projects, cost reduction initiatives and efficiency or productivity initiatives, including the Caterpillar Production
System; (xiv) sourcing practices of our dealers or original equipment manufacturers; (xv) compliance with environmental laws and regulations;(xvi) alleged or actual violations of trade or anticorruption laws and regulations; (xvii) additional tax expense or exposure; (xviii) currency fluctuations;(xix) our or Cat Financial’s compliance with financial covenants; (xx) increased pension plan funding obligations; (xxi) union disputes or other
employee relations issues; (xxii) significant legal proceedings, claims, lawsuits or investigations; (xxiii) compliance requirements imposed if carbon
emissions legislation and/or regulations are adopted; (xxiv) changes in accounting standards; (xxv) failure or breach of IT security; (xxvi) adverse
effects of natural disasters; and (xxvii) other factors described in more detail under “Item 1A. Risk Factors” in our Form 10-K filed with the SEC on
February 21, 2012 for the year ended December 31, 2011. This filing is available on our website at www.caterpillar.com/secfilings.

Trademark Information
CAT, CATERPILLAR, their respective logos, “Caterpillar Yellow,” the “PowerEdge” trade dress as well as corporate and product identity usedherein, are trademarks of Caterpillar and may not be used without permission. Cat and Caterpillar are registered trademarks of Caterpillar Inc.,
100 N.E. Adams, Peoria IL 61629.
© CATERPILLAR PUBLIC RELEASE All rights reserved. Printed in the USA.

At-A-Glance 66