How We Win2009 Year In Review

Chairman’s message

Dedicated TEamfinancial Strength

Significant Opportunity

Sustainable Development

Invaluable Partners

Quality Products

Customer Focus

How We WinHow We Win2009 Year In Review

From Our Chairman
Over the course of many years, Caterpillar has forged a strong
reputation for performance and financial strength in both goodand challenging times. Despite a 37-percent decrease in sales
and revenues, we delivered a profit, improved our balance sheet,upheld our mid-A credit rating, maintained the dividend andcontributed to employee pension plans.

James W. Owens
Chairman & CEO, Caterpillar Inc.

This Year atCaterpillar

Performance under pressure. That’s what Team Caterpillar delivered in 2009.
In my 37 years at Caterpillar, this was the most difficult economic environment I’ve seen. The industries we serve
were among the hardest hit. And our sales and revenues plummeted. Despite the difficulties, we delivered admirable
results, invested for the future and continued to strengthen our foundation for growth.
It seems almost miraculous. But the truth is, our spectacular performance is simply the result of executing some ofour basic business principles. First we have a solid business model. Our global footprint, diverse line of products andservices and comprehensive and well-understood strategy all contributed to our admirable performance. Notably, ourintegrated services businesses helped buffer the impact of recession, and climbed to 46 percent of the company’s
2009 sales and revenues.
Second, we planned. Because we serve many cyclical industries, it’s important to plan for the trough. When we
introduced our new strategy in 2005, trough planning was a big part of it. Each of our operations was required to havespecific plans that were ready to execute in the event of a business downturn. And I’m glad we did. When the global
economic crisis hit, we were able to act quickly and deploy our trough plans. The actions we took were aggressive,decisive and allowed us to quickly lower production levels and bring our costs down in line with the much lower volume.
Finally, we had the right team in place to deliver results. Our employees, dealers and suppliers in every region of theworld pulled together. Not only do we have a talented group of people, we also have a team committed to long-term
success. In the face of difficult and uncertain times, members of Team Caterpillar around the world rolled up theirsleeves, asked what they could do to help and got to work.
How We Win2009 Year In Review

From Our Chairman
Delivering results
Over the course of many years, Caterpillar has forged a strong reputation for performance and financial strength inboth good and challenging times. Despite a 37-percent decrease in sales and revenues, we delivered a profit, improved
our balance sheet, upheld our mid-A credit rating, maintained the dividend and contributed to employee pension plans.
Delivering these results and maintaining our financial strength was important to the long-term success of Caterpillar
and, of course, our employees, dealers, suppliers, customers and stockholders.
Our efforts focused not only internally, but also on our extended value chain. In late 2008 and early 2009, we allowed
dealers to cancel orders – something we’d not done before. That helped dealers manage their inventories down andpreserve their balance sheet strength. Late in 2009, as we began preparation for the upturn, we met directly with key
suppliers to assess their ability to ramp up production in 2010. We were able to provide financing to our customers
through Cat Financial when other sources of financing were simply unavailable. And for stockholders, we declared our
306th consecutive quarterly dividend.
Beyond achieving solid financial results, we maintained focus on other goals critical to our company’s long-term
future. We used the period of reduced production levels to focus on improving and innovating. We continued to
implement and gain traction on the Cat Production System (CPS). Along with 6 Sigma, this process discipline iscritical to our future success, and I am pleased that we’ve been able to maintain forward momentum and deliver
results during this tumultuous year.

Investing in our future
Our future is built on the work we do today. Losing our focus on technology and innovation is not an option. We caneither lead in this area, or watch as others pass us by. We choose to lead.
Although we’ve had to be strategic with our investments, 2009 was our second highest year of research and development
spending. We also strategically invested in facilities and capacity around the world including our new Large Payload
Structural Dynamics Laboratory, located in Mossville, Illinois. On the other side of the world we’ve invested in additional
products, added capacity and opened a new multi-functional research and development center in China. China represents
our single largest opportunity for growth, and our investment there is a clear indication of our commitment to our
growing Chinese customer base.
We’ve maintained our focus on sustainability. This isn’t a passing fad that we worry about only during prosperous
times. It’s a real business opportunity, now and in the future. Customers are looking for ways to increase productivity
and energy efficiency, lower emissions and improve job site safety. And we are providing the solutions they need.
At the same time, in our own operations, we are saving money by using materials, energy and water more efficiently.

Strengthening our foundation
I would never say the recession was a good thing. It was tough on our customers, and difficult for our entire team –employees, dealers and suppliers. But we learned. And we became a leaner company in ways that will make us betterand more competitive going forward.
We learned to do more with less. We became more disciplined and committed to execution. And we developed an
intense focus on cost. This will become the new norm and help us grow the right way without adding unnecessary
costs. It’s critical that we manage costs on the way up as well as we did in the face of declining volume.
How We Win2009 Year In Review

From Our Chairman
We are ready to grow again. We see signs of economic improvement around the world, particularly in developing
countries. The world’s need for infrastructure remains strong. Demand for mining equipment is increasing – a resultof continued strong commodity prices and growing confidence in the global economic recovery. We have also seen
improvement in sales of aftermarket service parts, which is an early indicator of machine utilization picking up –a precursor of demand recovery.
Caterpillar is in an excellent position to benefit from growth in the world economy. And 2010 already looks like it will
be a better year with sales and revenues expected to be up 10 to 25 percent from 2009. But we are cautious as therecovery is still in its early stage. It’s fragile and it’s pacing differently around the world. North America, Europe andJapan are still weak. But our strong global footprint and ability to export will help us take advantage of the recovery
as it unfolds and gains strength.
2009 was a tough year, but it helped prove who we are as a company. It’s the things we do in difficult times thatdefine us. In tough times, character is more important than ever. Integrity, excellence, teamwork and commitment are
the foundation of all our actions at Caterpillar in good times and in bad. And I’m proud to say those characteristics
were present more than ever during this difficult year.
We had fewer people and fewer resources so divisions, teams and individuals had to work together more than ever.
Despite bad news and uncertainty, our people stayed focused on their jobs and safety. We continued our implementationof CPS and our efforts to improve product quality. And we further developed our close relationships with our dealersand suppliers who are such a critical part of our business. That’s who we are. And that’s how we win.
2009 was my last full year to serve as this company’s Chairman and CEO. It’s been an honor and privilege to lead sucha distinguished company. It’s been a fast and exciting run, and I’m proud to say that during this time we built on alegacy and left the foundation stronger.
To our employees, I sincerely appreciate your commitment and dedication. To our dealers and suppliers, thank you foryour leadership and responsive actions. And, to our valued customers and shareholders, thank you for your confidencein Caterpillar. We will always strive to exceed your expectations – today and tomorrow.
While uncertainty remains in 2010, one thing is certain – leadership at Caterpillar will not waver. We have a strong
management team built on a legacy of integrity, excellence, teamwork and commitment. As I leave, the leadershipbaton will be passed to a long-serving executive who knows Caterpillar. I retire in 2010 knowing the company is ingood hands. And I look forward to watching Doug take this very good company to the next level in our ongoing journeyfrom “Good to Great.”How We Win2009 Year In Review

Dedicated TeamHow We Win

Winning STAT:

93,000+dedicated employeesHow We Win2009 Year In Review

Dedicated TeamHow We Win”Innovation is always recognized andrewarded – that’s why Caterpillar will
always win.””I’m a second-generation Caterpillar
employee. My dad, who was a welder, diedin 2005. He would be amazed and proud of
how Team Caterpillar has pulled together
over the past year. The compassion andempathy that was demonstrated as wewatched our friends and co-workers leave
due to the drop in demand was truly amazing. We have to keep the ship afloat out ofthe pride and respect for those who are nolonger with us.”– Howard Gibson, Moscow– Kris Paquin, Joliet, Ill.
”For us, I think we win even in difficult
times because we have a long historyof being part of a winning team and areunwilling to accept less.”– David Ferron, Minneapolis, Minn.

”With fewer people to manage and run
this business, we have really had to think
hard about what we do that delivers value
to our customers and then concentrateon those areas that deliver a directbusiness impact.”– Cameron Balzat, Australia”We work together! We understand eachand everyone’s interests, goals andopinions as we move forward throughchallenging times. Our CPS strategy led
us in 2009 and it will continue to provethat Caterpillar can sustain being number
one in earth moving equipment!”– Tim Meyers, Aurora, Ill.
How We Win2009 Year In Review

Dedicated TeamHow We Win”During the hard time we had in 2009,
we took the time to discover eachcustomer’s unique circumstances andfound the right customized solutions.
Customers felt that once again they
were supported by Caterpillar.””Even in a downturn we can still deliverconsiderable value to our customers andcontinue to develop relationships. The
effort now will be rewarded in the years
to come.”– Simon Uebergang, Singapore– Elaine Cristina Bagio, Brazil“The vision of the leaders needs to beappreciated. Planning for the worst andhaving a well-laid plan in place in caseof a disastrous situation is important.”– Venkatachalam Swaminathan,
Chennai, India“With innovation like the ‘E’ line [D7E]
there is no limit to what this company
can do. The D7E is our future. With theTier 4 emissions regulations coming
up, this tractor will be huge.”– Connie Baugh, East Peoria, Ill.

“The results would not have beenpossible without clear direction andobjectives from the leadership team,and everyone striving together toachieve those targets.”– Niall Durdin, U.K.
How We Win2009 Year In Review

Financial Strength

How We Win

Winning STAT:

A

MID-

Caterpillar is committed
to maintaining a mid-A
credit rating

Planning
Pays Off

From the best of times to the toughest of times, Caterpillar’s strong financial foundation has been fundamental tocapitalizing on opportunities and overcoming challenges. This continued to hold true as Caterpillar recognized thesigns of an economic downturn and proactively began to address the situation.
“Although Caterpillar entered the downturn from a record period of growth and with a solid balance sheet, we knew
we needed to act swiftly in order to weather the storm,” said Dave Burritt, Caterpillar’s chief financial officer.
One of the first steps was to deploy trough actions that were a key part of the Vision 2020 strategy rolled out in 2005.
The trough plans enabled the enterprise to react more quickly and monitor the situation more intensely.
Next, a cross-functional team of Caterpillar employees utilized 6 Sigma principles to launch an initiative focused on
key business factors that promoted Caterpillar’s financial strength. The team worked toward three primary goals:
maintaining profitability with strong cash flow, holding a mid-A credit rating and maintaining the dividend.
The project focused not only internally, but also on the extended Caterpillar value chain, including dealers and suppliers.

How We Win2009 Year In Review

Financial Strength

How We Win
In the end, Caterpillar achieved the three goals. The company maintained
profitability with strong cash flow by focusing on working capital management and minimizing cash spent. Even though some analysts had doubts,
Caterpillar maintained its dividend – an important priority for stockholders,the ultimate owners of the business. Finally, Caterpillar held a mid-A credit
rating and preserved access to capital markets.
These results were a remarkable accomplishment given that sales andrevenues experienced the largest annual decrease since the 1940s. These
accomplishments demonstrate Caterpillar’s underlying financial strength,
which will enable the company to move forward with strong momentum
and prepare for the upturn.

Cat Financial – Creating Customers for LifeFor Cat Financial, investing in customer loyalty is a basic business tenet. That’s why, during the economic downturn,the company reached out to help customers during challenging market conditions.
For customers both small and large, access to financing is vital to the longevity of a business. During 2009 – a time
when many banking and lending institutions were challenged to meet customers’ business needs – these customers
turned to Cat Financial for assistance.
Throughout the course of the year, Cat Financial responded by making equipment financing and working capital loans
available to Caterpillar customers. By consistently providing this finance support, Cat Financial was able to help
many customers successfully operate their businesses, despite the significant downturn in the economy and, in
doing so, held true to the motto of “Creating Customers for Life.”How We Win2009 Year In Review

Significant Opportunity

How We Win

Winning STAT:

24.5%

average annual growth rate
of Chinese infrastructure
investment since 2003

Emerging
Pipelines ofOpportunity

In emerging markets, large populations and rising incomes are creating demand for new infrastructure and, accordingly,
the equipment necessary to tackle major projects. Through a combination of Caterpillar technology, an extensive
operational footprint and proven dealer support, Caterpillar is well positioned to facilitate progress in these developing
areas of the world.
A significant opportunity lies in China, an economic powerhouse that generates a significant portion of the emerging
world’s Gross Domestic Product (GDP). Even with the economic turmoil of the past year, China’s GDP still grew 8.7 percent
in 2009. According to China’s National Statistics Bureau, since 2003, China’s total infrastructure investment has seen
an average annual growth rate of 24.5 percent as roads, rail lines, airports, hydroelectric projects and other facilities
have been built to meet the needs of its 1.3 billion citizens.
A focused approach in the pipeline construction market is one example of Caterpillar’s success in leveraging China’s
immense market opportunities. China plans to invest more than $10 billion over the next five years to expand its
pipeline infrastructure. Cat ® dealer PipeLine Machinery International (PLM) is playing a major role in supporting thisconstruction surge. Caterpillar and PLM offer a full suite of products and services for pipeline construction – including
specially configured hydraulic excavators, track-type tractors, motor graders and pipelayers – to meet the diverse
needs of customers.

10How We Win2009 Year In Review

Significant Opportunity

How We Win
China Petroleum Pipeline Bureau, (CPP), the largest contractor in China withthousands of project miles underway, already has purchased more than 70
new pipelayers from PLM. Caterpillar and PLM are working to supplement
product offerings with differentiated services such as service and operator
training, safety consulting, parts operations, introduction of new technologies and pipeline construction methods.
Caterpillar has a strong commitment to China. Today, eight manufacturing
facilities are in place, a number we expect to increase as our in-country
business grows in coming years. We also expect to grow our logistics andparts facilities and research and development centers.
It’s an investment well worth making. Such growth demonstrates that when
we win in China, we win big.

Opportunity in the Developed WorldInfrastructure demand is centered on expanding, reconditioning or replacing existing roads, bridges, rail lines andsewer systems to name a few. In response to the recent global economic crisis, governments on every continent
have committed major financial resources to new infrastructure investments as part of stimulus programs. The
bottom line? The world has a need for infrastructure, which translates into a better quality of life for individuals
and business opportunity for Caterpillar and its customers.

11How We Win2009 Year In Review

Sustainable Development

How We Win

Winning STAT:

9

the number of consecutive years
Caterpillar has been a memberof the Dow Jones Sustainability
World Index (DJSI World)

Sustainable
Solutions for
an Energetic
World

With global energy demand expected to increase as much as 40 percent by 2030, innovative solutions to develop
energy potential from non-traditional sources are essential. Caterpillar’s ability to provide customers with sustainable,highly efficient energy solutions that convert biogas into useful energy is a compelling competitive advantage and onethat ensures a winning scenario for our business, our customers and our world.
In Atlanta, Georgia two Cat ® landfill gas low emission generator sets operate around the clock at the second-largest
landfill in the state, extracting waste gases to generate enough electricity to serve 2,500 homes. The generators run
on methane, a natural product of the decomposition of organic material at the site and considered by regulators to bea significant greenhouse gas. Not only is the facility reducing the need to burn waste gas into the atmosphere, butalso it is earning the county $100,000 a month from sales of alternative power.
On the other side of the world, hog manure is another fuel of choice for Cat generators. Nong Rai Farm, one of Thailand’s
largest food suppliers, operates a 30,000 hog feeder operation. The farm uses Cat generator sets fueled by biogas tosupply its entire energy needs by diverting manure into a digester pond. From the pond, enough fuel is generated to
produce approximately 200kW of power for the facility’s blowers, drying systems and other power needs.
The world has only just begun to tap the energy potential generated by natural organic processes. Caterpillar has theopportunity to drive meaningful change by supplying our customers with power systems that support alternative energy
sources – one of the many ways that we are making sustainable progress possible.

12How We Win2009 Year In Review

Invaluable Partners

How We Win

Winning STAT:$1.421$15,717BILLIONMILLION

Working
As OneExtraordinary challenge requires extraordinary collaboration.
This is the common lesson we take away from two very different
projects – one long-term and highly technical, the other short-termand highly tactical.
While it’s not unusual to find Caterpillar engineers working closelywith suppliers, the level of transparency between Caterpillar andsuppliers has been taken to a new level in the challenge to develop
Tier 4 Aftertreatment systems. At the outset of the program, project
leaders identified supplier collaboration as critical to the successful
launch of a world-class product on schedule and within budget.
Soon thereafter, strategic suppliers helped to establish a prototype
facility in Mossville, Illinois. The idea was that shoulder-to-shoulderinteraction would enable the team to identify hurdles earlier, evaluate
solutions more fully and make decisions on a more timely basis.
Today, one can walk into the Mossville facility to find suppliers
actively participating in design reviews, analyzing value-added
engineering or conducting product tests.

2009 investment
in research &development
Cat® Dealer net
worth in 2009“A s a strategic partner, we gain an
early understanding of Caterpillar’semissions control needs and systemobjectives. This helps us to deliverproducts that differentiate Caterpillar
in the marketplace based on
performance. It also helps drive ourown R&D efforts to innovate newtechnology solutions and improveexisting products – all while taking
advantage of synergies between ourcompanies in the design phase tohelp reduce cost.”– Caterpillar SupplierThough daily interaction on this project will end in 2010 as the next phase of the process transfers to the suppliers’
own production facilities around the world, the achievements of truly working as one will endure in the successful
launch of Tier 4 technology and the world-class supplier best practices that will be applied to future NPI projects.
13How We Win2009 Year In Review

Invaluable Partners
The challenge to re-invigorate dealer-customer interaction spurred
the Rental and Used Center of Excellence in the EAME region toutilize shoulder-to-shoulder interaction in a much faster, but equally
successful manner. The “Sales Blitz” concept paired Caterpillar
representatives with dealers’ sales forces in a defined geographic
region over a short period of time to make every sales contact
possible – no matter its potential.

How We Win“The Sales Blitz proved to be highly
customer centric, a great way tointegrate our equipment solution
offering and motivate our sales force.”– Inge Stensland PON Norway
Country Manager and Rental VP

In the Scandinavian territories, Cat ® dealer PON teamed with
Caterpillar representatives to conduct events in Norway, Sweden,
the Netherlands and Denmark. Each event consisted of two days of worksite and office visits with integrated rental
and new machines sales teams. In total, the effort introduced total equipment solutions to over 1,400 customers –nearly 30 percent were first time customers to PON. Identifying over 350 priority leads, PON immediately closed salesof 16 rental contracts, nine used, three new, and nine service contracts with more opportunity to follow up. Thesesales accounted for revenues of nearly $750,000.
By working together, Caterpillar and its dealers proved that strength in numbers works. The “Sales Blitz” program
counted more than 6,500 customer visits in 20 countries that generated more than $2 million of rental, used and new
equipment revenues during 2009.
Whether concentrated in one location for several years or fanning across a region for several months, Caterpillar’snearly seamless collaboration with its strategic suppliers and its global dealer network demonstrates that when we
work together, we win together.

14

How We Win2009 Year In Review

Quality Products

How We Win

Winning STAT:

13.01
2,973
CPS and
Quality Cometo Lifeideas generated per
employee in 2009active CPS
6 Sigma projects

Quality products are essential to progress. Reliable machines and engines that consistently get the job done not only
save time and resources for our customers, but also ensure that the work itself is well done. Today, the Cat Production
System (CPS) is actively fortifying our already strong reputation for product quality.
Through the discipline of 6 Sigma, CPS provides the architecture to greatly increase quality, velocity and safety, while
also reducing waste. Yet, CPS produces its highest-impact results when team members truly “live” the CPS Guiding
Principles and incorporate them into their daily work lives.
Meet Carlos Campioni, an industrial support analyst at our manufacturing facility in Piracicaba, Brazil, who lives CPS.
Carlos has been a catalyst for dramatic process improvements through his personal investment in CPS since it was
implemented in his plant in 2006. To date, he has seen 311 of his ideas become reality.
A 23-year veteran of the company, Carlos is responsible for the production of cabs for wheel loaders. “I believe it isessential to have the vision of an entrepreneur, to see the company through the eyes of the owner,” said Carlos.
“We need to find the gold, and it just depends on the people.”
Carlos’ suggestions have led to programs that monitor safety and productivity – such as a shortage of parts or
noncompliance with established processes. His initiative to install protectors on parts bins now limits the risk ofcontamination that, in turn, enhances product quality, and helps reduce waste and cost.
According to CPS Section Leader David Ercolin, every idea is worth considering. “The important thing is not to let goof any idea. It is in simplicity that we find perfection.”
15

How We Win2009 Year In Review

Quality Products

How We Win

Carlos’ investment in CPS to drive efficiency and quality can also be found among tens of thousands of employees inCaterpillar facilities across the globe. By “living” CPS, they are ensuring the best quality products possible are readyto make progress possible.

Our Winning Advantage
The breadth and depth of Caterpillar’s portfolio provides us with a winning advantage as we compete around theworld. With hundreds of products that span a wide range of industries, Caterpillar more than likely has product to
fit the specs for any given job. In 2009, a Cat® paver finisher, asphalt compactor and compact wheel loader were atwork in front of the Eiffel Tower to help reconstruct a busy intersection where time and space were at a premium.
Time constraints also were in play for the repaving of an airport runway in Bologna, Italy, where two Cat® PM200
cold planers completed the project in just two nights. And, a variety of Cat® equipment was key to the completionof Phase I of the Panama Canal Expansion project. The completion of jobs on time and on budget is a universal
need. Thanks to our commitment to quality, Caterpillar is on the job, helping customers around the world meettheir commitments.

16

How We Win2009 Year In Review

Customer Focus

How We Win

Winning STAT:

32 DAYS

time needed to move Customer
Stimulus Program from concept toenterprise-wide implementation, thanks
to the team’s sense of urgency andCaterpillar’s new enterprise alignment

Stimulating
Success for
Customers

A challenging economy causes many customers to delay investments in new equipment, yet their need for dependable
machines that get the job done – and keep them in business – remains. With this in mind, a committed team from theMarketing and Product Support Center of Excellence (M&PS COE) and distribution services divisions quickly recognized that Caterpillar customers could use some help to weather the latest recession.
This team utilized the slow down in new equipment sales to craft an inventive approach that could help strengthen
customers’ capabilities during the downturn, as well as Cat dealer-customer relationships. The team’s solution
resulted in a plan that focused on critical customer needs.
“We all know how important our customers are to our own success, so it only makes sense to help our customers
be more successful in these tough economic times,” said Denny Vosberg, manager, Product Support Operations,
M&PS COE.
The team focused on key areas that help the customer maximize machine performance, such as inspection, repair,rebuild and refurbish, used equipment upgrade and do-it-myself customers. When problems were identified, multiple
solutions could be investigated, including repairs or a full machine rebuild.

17

How We Win2009 Year In Review

Customer Focus

How We Win
The effectiveness of the initiative could be seen in the relationship between Cat ® dealer Cleveland Brothers and its customer, PBS Coals. Cleveland Brothers’ inspection of the customer’s fleet, subsequent reportand recommendations led to plans for upgrades to their dozer fleet with additional rented and purchased
units.
“The Caterpillar Customer Stimulus initiative was very creative and instrumental in helping us support PBS
Coals,” said Jay W. Cleveland, Jr., President and CEO of Cleveland Brothers. “The plan we designed withPBS Coals brought them maximum value so they could leverage both Caterpillar’s expertise and Cleveland
Brothers’ capabilities.”

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How We Win2009 Year In Review

Forward-Looking Statements
Certain statements in this 2009 Year in Review relate to future events and expectations and, as such, constituteforward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Thesestatements are subject to known and unknown factors that may cause actual results of Caterpillar Inc. to be different
from those expressed or implied in the forward-looking statements. 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 than statements 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 Caterpillar does not undertake to update its forwardlooking statements.
It is important to note that actual results of the company may differ materially from those described or implied in suchforward-looking statements based on a number of factors, including, but not limited to: (i) economic volatility in the
global economy generally and in capital and credit markets; (ii) Caterpillar’s ability to generate cash from operations,secure external funding for operations and manage liquidity needs; (iii) adverse changes in the economic conditions of
the industries or markets Caterpillar serves; (iv) government regulations or policies, including those affecting interest
rates, liquidity, access to capital and government spending on infrastructure development; (v) commodity priceincreases and/or limited availability of raw materials and component products, including steel; (vi) compliance costs
associated with environmental laws and regulations; (vii) Caterpillar’s and Cat Financial’s ability to maintain theirrespective credit ratings, material increases in either company’s cost of borrowing or an inability of either company
to access capital markets; (viii) financial condition and credit worthiness of Cat Financial’s customers; (ix) material
adverse changes in our customers’ access to liquidity and capital; (x) market acceptance of Caterpillar’s products andservices; (xi) effects of changes in the competitive environment, which may include decreased market share, lack ofacceptance of price increases, and/or negative changes to our geographic and product mix of sales; (xii) Caterpillar’sability to successfully implement Caterpillar Production System or other productivity initiatives; (xiii) international tradeand investment policies, such as import quotas, capital controls or tariffs; (xiv) failure of Caterpillar or Cat Financial tocomply with financial covenants in their respective credit facilities; (xv) adverse changes in sourcing practices for our
dealers or original equipment manufacturers; (xvi) additional tax expense or exposure; (xvii) political and economic
risks associated with our global operations, including changes in laws, regulations or government policies, currency
restrictions, restrictions on repatriation of earnings, burdensome tariffs or quotas, national and international conflict,including terrorist acts and political and economic instability or civil unrest in the countries in which Caterpillar operates;(xviii) currency fluctuations, particularly increases and decreases in the U.S. dollar against other currencies; (xix) increased
payment obligations under our pension plans; (xx) inability to successfully integrate and realize expected benefits fromacquisitions; (xxi) significant legal proceedings, claims, lawsuits or investigations; (xxii) potential imposition of significant
costs due to the enactment of healthcare reform legislation; (xxiii) changes in accounting standards or adoption of new
accounting standards; (xxiv) adverse effects of natural disasters; and (xxv) other factors described in more detailin “Item 1A – Risk Factors” in Part I of our Form 10-K filed with the SEC on February 19, 2010 for the year ended
December 31, 2009. This filing is available on our website at www.cat.com/sec_filings.

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How We Win2009 Year In Review

Who We Are

Who We Are: Global, Innovative, Sustainableover

3 million
machines and engines in
use today

Caterpillar’s global presence, product breadth and financial strength enable us to win in today’s competitivemarketplaces. With 2009 sales and revenues of $32.4 billion, we are one of the world’s largest manufacturersof construction and mining equipment, diesel and natural gas engines and industrial gas turbines. Our businessportfolio also includes Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics
Services and Progress Rail Services.
Cat products, services and technical expertise deliver value across many diverse industries, and our technologicalleadership, commitment to quality and passion for exceeding customer expectations has earned us leading market
positions in the industries we serve. For more than 80 years, our solutions have built the infrastructure that enables
people around the world to enjoy a better quality of life and higher standard of living. In partnership with ourdealer network and other distribution partners and our global supplier base we drive positive and sustainablechange worldwide.

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How We Win2009 Year In Review

Employees

WHO We ARE
Caterpillar’s success is built on the talent and commitment of more than 93,000 employees in countries spanning theglobe. Guided by our Values in Action and leveraging the Cat Production System and 6 Sigma principles, Caterpillar
people demonstrate a passion for innovation and customer service. Our diverse workforce speaks over 100 languages
and is bound by a common goal: making the world better tomorrow because of the work we are doing today.

Sales and
Revenues by
Employee

2009

$326

2008

$482

2007

$461

2006

$460

2005

$445
*dollars in thousands

21How We Win2009 Year In Review

Employees

WHO We ARE

North
America

2007

2008

2009

50,901 54,284 43,999

Latin
America

2007

2008

2009

13,930 14,403 10,776

EAME

2007

2008

2009

26,168 26,983 22,790

Asia
Pacific

2007

2008

2009

10,334 17,217 16,248

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How We Win2009 Year In Review

Employees

WHO We ARE

Full-Time Employees at Year-End

Outside U.S.

50,78850.1%

Inside U.S.

Outside U.S.

49.9%

52.6%

50,54559,378Inside U.S.

Outside U.S.

47.4%

53.9%

53,50950,562

2007

2008

2009

Total

Total

Total

101,333

112,887

Inside U.S.

43,25146.1%

93,813

Employees by Region
2005

2006

2007

2008

2009

North America

43,93349,01850,90154,28443,999EAME	

23,137

24,845

26,16826,983

22,790Latin America

11,68813,231

13,93014,403

10,776

Asia Pacific

6,358

7,499

10,334

17,217

16,248

Total

85,116

94,593

101,333

112,887

93,81323

How We Win2009 Year In Review

Cat Dealers

WHO We ARE
Our vast dealer network helps Caterpillar and our customers win around the world. Cat ® dealers share our passion,
enhance our competitive edge and ensure that our customers receive maximum business value from our products
and services.
Most Cat dealers are independently owned, locally operated businesses and benefit from strong, longstanding
customer relationships. Caterpillar and its dealers are expanding their coverage and making significant investments
in countries such as China, India and the countries that comprise the Commonwealth of Independent States, asthese markets represent significant growth opportunities in the industries we serve.

24How We Win2009 Year In Review

Cat Dealers
Cat Dealers In
North America
Latin America
EAME
Asia Pacific

WHO We ARE

North
America
Cat Dealer Employees
Cat Dealers
Cat Dealer Net Worth**dollars in millions

Latin
America
Cat Dealer Employees
Cat Dealers
Cat Dealer Net Worth**dollars in millions

EAME
Cat Dealer Employees
Cat Dealers
Cat Dealer Net Worth**dollars in millions

Asia
Pacific
Cat Dealer Employees
Cat Dealers
Cat Dealer Net Worth**dollars in millions

25

How We Win2009 Year In Review

2009 Board of Directors

WHO We ARE(left to right): W. Frank Blount, John R. Brazil, Daniel M. Dickinson, John T. Dillon, Eugene V. Fife, Gail D. Fosler, Juan Gallardo, David R. Goode, Peter A. Magowan,
William A. Osborn, James W. Owens, Charles D. Powell, Edward B. Rust, Jr., Susan C. Schwab, Joshua I. Smith

2009 Board
Of Directors

W. FRANK BLOUNT, 71, Chairman and CEO of JI Ventures, Inc. (venture capital) and former Chairman and CEO of
TTS, Inc. (private equity firm). Other current directorships: Alcatel-Lucent S.A.; Entergy Corporation; and KBR, Inc.
Other directorships within the last five years: Adtran Inc. and Hanson PLC. Mr. Blount has been a director of thecompany since 1995.

W. Frank Blount
John R. Brazil
Daniel M. Dickinson
John T. Dillon
Eugene V. Fife
Gail D. Fosler
Juan GallardoDavid R. Goode
Peter A. Magowan
William A. Osborn
James W. Owens
Charles D. Powell
Edward B. Rust, Jr.
Susan C. Schwab
Joshua I. Smith

JOHN R. BRAZIL, 64, former President of Trinity University (San Antonio, Texas). Dr. Brazil has been a director of
the company since 1998.
DANIEL M. DICKINSON, 48, Managing Partner of Thayer | Hidden Creek (private equity investment). Other current
directorships: IESI-BFC Ltd. and Mistras Group, Inc. Mr. Dickinson has been a director of the company since 2006.
JOHN T. DILLON, 71, Senior Managing Director of Evercore Capital Partners’ (advisory and investment firm)
investment activities and private equity business and former Vice Chairman of the firm. Other current directorships:
E. I. du Pont de Nemours and Company and Kellogg Co. Other directorships within the last five years: Vertis Inc.
Mr. Dillon has been a director of the company since 1997.
EUGENE V. FIFE, 69, Managing 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 November of 2005 andcurrently serves as the non-executive Chairman. Other current directorships: Eclipsys Corporation. Mr. Fife has beena director of the company since 2002.

26

How We Win2009 Year In Review

2009 Board of Directors

WHO We ARE

GAIL D. FOSLER, 62, Senior Advisor of The Conference Board (research and business membership). Prior to hercurrent position, Ms. Fosler has served as President, Trustee, Executive Vice President, Senior Vice President andChief Economist of The Conference Board. Other current directorships: Baxter International Inc. Other directorships
within the last five years: DBS Group Holdings Ltd. and Unisys Corporation. Ms. Fosler has been a director of thecompany since 2003.
JUAN GALLARDO, 62, Chairman and former CEO of Grupo Embotelladoras Unidas S.A. de C.V. (bottling). Former
Vice Chairman of Home Mart de Mexico, S.A. de C.V. (retail trade), former Chairman of Grupo Azucarero Mexico,
S.A. de C.V. (sugar mills) and former Chairman of Mexico Fund Inc. (mutual fund). Other current directorships:
Grupo Mexico, S.A. de C.V. and Lafarge S.A. Mr. Gallardo has been a director of the company since 1998.
DAVID R. GOODE, 69, 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: Norfolk Southern Corporation and Georgia-Pacific Corporation.
Mr. Goode has been a director of the company since 1993.
PETER A. MAGOWAN, 68, former President and Managing General Partner of the San Francisco Giants (major
league baseball team). Other directorships within the last five years: DaimlerChrysler AG, Safeway Inc. and Spring
Group plc. Mr. Magowan has been a director of the company since 1993.
WILLIAM A. OSBORN, 62, retired Chairman and CEO of Northern Trust Corporation (multibank holding company)
and The Northern Trust Company (bank). Other current directorships: Abbott Laboratories and General Dynamics.
Other directorships within the last five years: Nicor Inc. and Northern Trust Corporation. Mr. Osborn has been a
director of the company since 2000.
JAMES W. OWENS, 64, Chairman and CEO of Caterpillar Inc. (machinery, engines and financial products). Prior tohis current position, Mr. Owens served as Vice Chairman of Caterpillar. Other current directorships: Alcoa Inc. andInternational Business Machines Corporation. Mr. Owens has been a director of the company since 2004.
CHARLES D. POWELL, 68, 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:
Hongkong Land Holdings Limited; LVMH Moet-Hennessy Louis Vuitton; Mandarin Oriental International Ltd.; Textron
Corporation; and Schindler Holding Ltd. Other directorships within the last five years: Yell Group plc. Lord Powell has
been a director of the company since 2001.
EDWARD B. RUST, JR., 59, 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 Trustand 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.

27

How We Win2009 Year In Review

2009 Board of Directors

WHO We ARE

SUSAN C. SCHWAB, 55, Professor, University of Maryland School of Public Policy. Prior to her current position,
Ambassador Schwab held various positions including United States Trade Representative (member of the President’s
cabinet), Deputy United States Trade Representative and President and CEO of the University System of Maryland
Foundation. Other current directorships: FedEx Corporation and The Boeing Company. Other directorships within thelast five years: Adams Express Company, Calpine Corporation and Petroleum & Resources Corporation. Ambassador
Schwab has been a director of the company since 2009.
JOSHUA I. SMITH, 69, 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 thecompany since 1993.

28

How We Win2009 Year In Review

Officers

WHO We ARE(left to right): James W. Owens, Richard P. Lavin, Stuart L. Levenick, Douglas R. Oberhelman*, Edward J. Rapp, Gerard R. Vittecoq, Steven H. Wunning

Officers
Chairman and Chief Executive Officer
JAMES W. OWENSJim Owens is chairman and chief executive officer of Caterpillar Inc. After joining the company in 1972 as a corporate
economist, he has held numerous management positions.

Group Presidents
RICHARD P. LAVIN
Rich Lavin has responsibility for the company’s Earthmoving and Excavation Divisions, Caterpillar Japan Ltd. (CJL),
Asia Pacific Distribution Division, and Caterpillar China Division.
STUART L. LEVENICK
Stu Levenick has responsibility for the Americas Distribution Services Division, Americas Operations Division,
Mining Division, Quarry & Specialty Industries Division and the Marketing & Product Support Center of Excellence.
DOUGLAS R. OBERHELMAN*
Doug Oberhelman has responsibility for the company’s human services and sustainable development functions as well
as Caterpillar’s growing remanufacturing business.
29How We Win2009 Year In Review

Officers

WHO We ARE
EDWARD J. RAPP
Ed Rapp has responsibility for the Financial Products Division, Building Construction Products Division, Legal Services
Division, Global Finance & Strategic Services Division and Global Information Services Division.
GERARD R. VITTECOQ
Gerard Vittecoq has responsibility for the company’s Europe-Africa-Middle East and CIS (EAME) Distribution Services
Division, EAME Operations Division, Marine & Petroleum Power Division, Electric Power Division and Production Centerof Excellence Division.
STEVEN H. WUNNING
Steve Wunning has responsibility for the Advanced Systems Division, Core Components Division, Electronics & Machine
Systems Division, Logistics Division, Product Development Center of Excellence, and Global Purchasing Division.
*The Caterpillar Board of Directors named Doug Oberhelman vice chairman and CEO-elect effective January 1, 2010.
Oberhelman will succeed Jim Owens as CEO upon Owens’ retirement on July 1, 2010. Owens will remain Chairman of
the Board until October 31, 2010 at which time Oberhelman will be named Chairman of the Board.

Vice Presidents
KENT M. ADAMSWILLIAM P. AINSWORTH
ALI M. BAHAJRODNEY C. BEELER
MARY H. BELL
THOMAS J. BLUTH
DAVID P. BOZEMANJAMES B. BUDADAVID B. BURRITTRICHARD J. CASEROBERT B. CHARTERCHRISTOPHER C. CURFMANPAOLO FELLINSTEVEN L. FISHERGREGORY S. FOLLEYSTEPHEN A. GOSSELIN
HANS A. HAEFELIJOHN S. HELLER
GWENNE A. HENRICKSSTEPHEN P. LARSONDANIEL M. MURPHYJAMES J. PARKER
MARK R. PFLEDERER
WILLIAM J. ROHNER
CRISTIANO V. SCHENAWILLIAM F. SPRINGERGARY A. STAMPANATOGARY A. STROUP
TANA L. UTLEYJAMES D. WATERS, JR.
ROBERT T. WILLIAMSJIMING ZHUWe also acknowledge the contributions offormer Vice Presidents Sidney C. Banwart,
who retired in October 2009 after more than
41 years of service, and Thomas A. Gales,
who retired in November 2009 after nearly
40 years of service.

30

How We Win2009 Year In Review

Officers

WHO We ARE
Other Officers
JAMES B. BUDA
General Counsel & Secretary
DAVID B. BURRITT
Chief Financial Officer
JOHN S. HELLER
Chief Information Officer
BRADLEY M. HALVERSON
Controller
KEVIN E. COLGAN
Treasurer
EDWARD J. SCOTT
Chief Audit Officer
CHRISTOPHER C. SPEARS
Chief Ethics and Compliance Officer
JANANNE A. COPELAND
Chief Accounting Officer
ROBIN D. BERAN
Assistant Treasurer
LAURIE J. HUXTABLE
Assistant Secretary31How We Win2009 Year In Review

What We Do – Businesses

What We Do:
Machinery, Engines, Financial Products
Caterpillar powers world progress. We are a technology leader serving a wide range of industries, including generaland heavy construction, mining, forestry, energy and electrical power generation. In more than 180 countries aroundthe world, Cat ® equipment is at work on highways, rail lines, oceans and rivers, in forests, quarries and oil fields.
Cat equipment delivers unmatched power and dependability. We supply the machines, solutions and support so ourcustomers can excel in varying terrain, soil and climate conditions. Cat ® engines and gas turbines provide the horsepower to move goods and commodities across the globe, while Cat ® generators deliver power wherever it’s needed.
Our manufacturing excellence is supplemented by world-class service businesses providing logistics, financial products
and remanufacturing. It is a combination that wins for our dealers and customers, as well as our shareholders.

32How We Win2009 Year In Review
Businesses:

Machinery

WHAT We DO
The Cat product line, comprised of more than 300 machines with an unmatched reputation for quality, sets thestandard for our industry. Our products serving the construction, mining and forestry sectors include track and wheel
tractors, track and wheel loaders, pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators,
backhoe loaders, log skidders, off-highway trucks, articulated trucks, paving products and skid steer loaders. We arealso a leader in logistics services and in the design, manufacture and remanufacture of rail-related products.

Highlights
Produced the 50,000th rigid frame Cat ® off-highway
truck – these trucks move more than 50 percent of therock in the quarry and aggregates industry.

Launched and delivered the first Cat ® D7E track-type
tractor, which features innovative electric drive technology
to achieve major gains in performance, value andsustainability. The revolutionary design delivers 10 to30 percent greater fuel economy, greater productivity andlower lifetime service costs, compared with conventional
tractors of equal weight and horsepower.

Introduced the new Cat ® 793F mining truck, the fifth
generation in the series, which offers significant
improvements in fuel efficiency, emissions control,
operating ease and durability.

33

How We Win2009 Year In Review
Businesses:

Machinery

WHAT We DO
Highlights (continued)
Launched the new B Series knuckleboom log loader thatfeatures an enhanced engine and hydraulic power system,
which improves fuel economy and gives the operator
more control to match the loader’s power output to job
requirements.

Announced the next generation of the undergroundautomation system, MINEGEM™, designed to enhancesafety and boost operator efficiency in undergroundmining operations. MINEGEM™ is Caterpillar’s firstcommercially available semi-autonomous mining system.

Launched a new forwarder line from Cat Forest Productsthat introduced two models with 18-metric-ton and
20-metric-ton capacities. The new Cat ® 584 and Cat 584HD
are designed to withstand the demanding requirementsof transporting large payloads long distances overdifficult terrain, while providing outstanding operator
comfort, controllability and serviceability.

34

How We Win2009 Year In Review
Businesses:

Engines

WHAT We DO
Cat ® engines are recognized for quality, reliability and technological innovation. We design and manufacture engines,
ranging from 10 to over 21,000 horsepower, which provide power to ships and boats, oil & gas applications and industrial
applications, as well as our own construction and mining machines. Electrical power systems supply both primary andstandby power for a variety of uses – offshore oil rigs, hospitals, schools, factories, airports and office buildings. Our
remanufacturing services permit customers to make their operations more efficient and sustainable. Caterpillar is alsoa world leader in designing, manufacturing and servicing industrial gas turbine power system solutions, which range
from 1,600 to 30,000 horsepower, for the oil & gas and power generation industries.

Highlights
Introduced a new diesel-drilling module, the C175-16,
designed for offshore applications. The generator sets,
which offer higher power density, lower emissions,longer service intervals and reduced installation costs,
are optimized for the stringent demands of power
generation for offshore drilling and set a new standard
for offshore shallow water and jack-up rigs.

Announced several additions to the Cat Tier 4 Interim/
Stage IIIB industrial lineup, bringing to 15 the total count ofengines in this category. The engine platform optimizes fuelconsumption to the actual operating cycles of off-highway
machines. The engines also use ACERT™ technologies toachieve a 90 percent reduction in particulate matter anda 45 percent reduction in nitrogen oxides (NO x ).

35

How We Win2009 Year In Review
Businesses:

Engines

WHAT We DO
Highlights (continued)
Introduced a series of Ultra Lean Burn (ULB) technology
engines that meet the most stringent current and upcoming
emission requirements. The units, used for gas compression
applications, utilize an in-engine solution to consistently meetrequirements limiting NOx emissions to ultra-low levels.

Shipped the 5,000th marine engine from the Caterpillar
Marine Center of Excellence (MCOE). The Center, locatednear Greenville, South Carolina, is a focused facility forthe design, development, assembly and testing of Cat ®
C7 through C32 marine propulsion engines.

Introduced new Diesel Electric Propulsion (DEP) enginesfrom Caterpillar Marine Power Systems. The units aredesigned for a variety of commercial applications andmega-yachts and meet the newest environmental regulations
by balancing power supply, fuel consumption and exhaustemissions at any given load.

36

How We Win2009 Year In Review
Businesses:

Financial Products

WHAT We DO

Caterpillar’s financial products are the source of a significant competitive advantage, especially in today’s
credit-constrained world. Our financial businesses consist primarily of Caterpillar Financial Services Corporation(Cat Financial) and its subsidiaries.
Cat Financial provides a wide range of financing alternatives to customers and dealers, all managed to sensible
underwriting standards and backed by assets we know – Cat ® equipment. Cat Financial has more than 40 offices
and subsidiaries located throughout the Americas, Asia, Australia and Europe.

Highlights
Remained solidly profitable in every quarter of 2009,
despite the global economic recession.

Provided new retail financing of over $7.6 billion.

37

How We Win2009 Year In Review
Businesses:

Financial Products

WHAT We DO
Highlights (continued)
Maintained access to the term debt and commercial
paper markets, and renewed or increased revolving
credit agreements with key banks.

Earned the Leadership in Energy and Environmental
Design for Existing Buildings (LEED-EB ® ) 2.0 Goldcertification for the Caterpillar Financial Center in
Nashville, Tenn. It is the first privately owned commercial
building in Tennessee to become LEED-EB ® certified.

38

How We Win2009 Year In Review

Worldwide Locations

WHAT We DO

All
Dealer Main
FG Wilson – MaK –Perkins – Solar
Manufacturing
Office Facilities
Parts
Progress Rail

Locations In
North America
Latin America
EAME
Asia Pacific

Caterpillar’s global reach and presence is unmatched in the industry. 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 close to our global customer base.

North
America2009

All
Dealer Main
FG Wilson – MaK –Perkins – Solar
Manufacturing
Office Facilities
Parts
Progress Rail

Sales & Revenues (in millions)
Machinery$6,993Engines$3,652Financial Products$1,714
Employees
Cat Dealers

43,99956

39

How We Win2009 Year In Review

Worldwide Locations

WHAT We DO

Latin
America

2009

Sales & Revenues (in millions)
Machinery$2,555Engines$1,080Financial Products$   268

All
Dealer Main
FG Wilson – MaK –Perkins – Solar
Manufacturing
Office Facilities
Parts
Progress Rail

Employees
Cat Dealers

10,776
31

EAME

2009

Sales & Revenues (in millions)
Machinery$4,112Engines$4,295
Financial Products$   495
Employees
Cat Dealers

22,79051

All
Dealer Main
FG Wilson – MaK –Perkins – Solar
Manufacturing
Office Facilities
Parts
Progress Rail

Asia
Pacific

2009

Sales & Revenues (in millions)
Machinery$4,488Engines$2,365
Financial Products$   379
Employees
Cat Dealers

16,24840All
Dealer Main
FG Wilson – MaK –Perkins – Solar
Manufacturing
Office Facilities
Parts
Progress Rail40

How We Win2009 Year In Review

Products

WHAT We DO

As a technology leader, we win through a commitment to product research and development. Today, more than 3 million
Cat ® machines and engines are in active use around the world. Caterpillar continually introduces technologicalinnovations and capability enhancements to our products that meet customers’ needs for higher productivity, lower
emissions and greater power.
Our products include:
Articulated Trucks
Backhoe LoadersCompactors
Engines
Forest Machines	Generator Sets
Hydraulic Excavators
Material Handlers
Motor Graders
Off-Highway Trucks
Paving Equipment

Pipelayers
Scrapers
Skid Steer Loaders
Track Loaders
Track-Type Tractors
Turbines
Underground Mining Vehicles
Wheel Dozers
Wheel Excavators
Wheel Loaders

Articulated Trucks
A type of tractor-trailer unit most commonly used to haul heavy loads,
often over difficult terrain, in construction and mining work.

Backhoe Loaders
Combines the features of two separate machines: a backhoe and a loader
and is frequently used for road work and major construction projects.

Compactors
Maximizes soil density and compacts other materials in construction,paving, landfills and other applications.

41

How We Win2009 Year In Review

Products

WHAT We DO
EnginesWith more than 500 types of engines, we are one of the world’s
largest engine makers for road, off-road, underground andmarine vessels and machinery.

Forest Machines
Serves the forestry industry with machines used to harvest
trees, load and process logs.

Generator Sets
Diesel, natural gas and integrated power systems for emergency,
standby, prime and continuous power generation needs.

Hydraulic Excavators
Excavate and load material in a variety of applications, including
mining, road and pipeline construction.

Material Handlers
Designed to move and process heavy materials using a grapple,
clamshell bucket or magnet.

Motor Graders
Three-axle machines that feature a long blade used to create aflat surface in mining, road and heavy construction applications.

Off-Highway Trucks
Designed to keep material, which ranges from a 40- to 380-ton
capacity, moving at high volumes in heavy construction, minesand quarries.
42

How We Win2009 Year In Review

Products

WHAT We DO
Paving Equipment
Lays asphalt for roads and highways with paving widths of up to
10 feet.

Pipelayers
Uses a winch and boom to put heavy pipe where it is needed –a pipeline industry standard for decades.

Scrapers
Large earthmovers that collect and deposit material, and areuseful for cut and fill applications in heavy construction, site
development and mining.

Skid Steer Loaders
Highly maneuverable smaller machines used in construction
and landscaping to push, carry and load material, and can be
configured with a variety of labor and time saving attachments.

Track Loaders
Larger, higher capacity loaders that operate in softer underfootconditions with tracks rather than wheels and can move and loadmaterials in excess of 4,000 pounds.

Track-Type Tractors
Versatile machines used to clear space, move material,
grade, rip, backfill in a variety of construction and job sites.

Turbines
Mid-range, industrial gas turbines for use in power generation,
natural gas compression and pumping systems.
43

How We Win2009 Year In Review

Products

WHAT We DO
Underground Mining Vehicles
Articulated trucks and load-haul-dump loaders that areengineered to meet the specialized demands of undergroundmining applications and enable high production volumes andlower costs per ton.

Wheel Dozers
Combines the dozing capabilities of track-type tractors with themobility and versatility of wheel loaders. They are widely usedin power generation, road maintenance, surface mining andreclamation applications.

Wheel Excavators
Meet excavation needs that range from ditch cleaning and roadmaintenance, to large earth moving and demolition applications
where mobility is a key requirement.

Wheel Loaders
Designed to load and carry material quickly and efficiently withbucket capacities that range from 2 cubic yards up to 41 cubic
yards for the highest-volume mining, quarry, aggregates, waste
and earth moving applications.

44How We Win2009 Year In Review

Industries

WHAT We DO

Our products are used in a large and diverse collection of industries. Despite short-term challenges associated withthe global economic crisis of 2009, long-term prospects in most end markets are strong because of the world’s
ongoing need to expand and rebuild infrastructure.
Our industries include:
Demolition and Scrap
Forestry
	General Construction
	Governmental
Heavy Construction
	Industrial/OEM
Landscaping
MarineMiningOil & Gas
PavingPipeline
Power Generation
Quarry & Aggregate
RailroadRoad Construction
Underground Utilities
Waste Services

Demolition and Scrap
From demolition and site preparation to scrap recycling and material handling, Cat ® machines and work tool solutions
are designed for high productivity and durability for every stage of the process – even under the most demandingsite conditions.

Forestry
The capabilities of Cat ® forestry equipment extend from the beginning to the end of the wood flow process: roadbuilding, harvesting, wood extraction, processing, loading, mill yard and reforestation. Cat equipment is designed tomake forestry operations more productive, profitable and sustainable.

General Construction
Caterpillar offers a full line of construction equipment including backhoe loaders, track and wheel excavators,
track-type tractors and track loaders, wheel loaders, skid steer loaders and integrated tool carriers. Our construction
solutions are designed to offer better value through increased performance, reliability and quality.

45

How We Win2009 Year In Review

Industries

WHAT We DO
Governmental
Caterpillar offers a full array of standard, modified and built-to-spec equipment that meets the needs of state andlocal, federal and military customers. Durability, reliability and industry-leading service and support help ensure
maximum value for government customers.

Heavy Construction
Caterpillar is the performance leader of general and road construction equipment. Each machine in the lineup is aclass leader, enhanced with best-in-the-industry features. Whether it is new construction or maintenance – grading,soil stabilizing, cold planing, soil or asphalt compaction – Caterpillar has the machines to get the job done.

Industrial/OEM
More than 100,000 Cat ® engines are at work worldwide in wood chippers, air compressors, trenchers, irrigators,
fire pumps, locomotives, mining machines and much more. Gas and diesel engines are available in the industry’s
widest power range from 10 to over 6,000 horsepower – each built to the same exacting standards to deliver highproductivity, long life and low operating cost.

Landscaping
Caterpillar offers a full line of compact construction equipment, including skid steer loaders, compact track loaders,mini hydraulic excavators and compact wheel loaders. Our wide range of versatile machines and Cat work tool
attachments meets the needs of a variety of landscaping applications.

MarineCaterpillar is the marine industry’s leading provider of medium- and high-speed marine diesel engines, generator sets
and auxiliary engines. Manufacturing both the Cat ® and MaK® brands for marine engines, Caterpillar Marine Power
Systems is committed to meeting customer requirements.

46

How We Win2009 Year In Review

Industries

WHAT We DO
MiningWith the broadest line of mining equipment in the industry, Caterpillar provides comprehensive solutions for surface,underground and mining technology applications. Our technologies enable fleet management, drilling and blasting,loading, hauling, dozing, truck assignment and material tracking. Cat mining equipment helps customers increase
productivity, efficiency and safety.

Oil & Gas
Caterpillar provides high-technology products for drilling, well servicing, pumping and production. With a global
customer focus and market leadership in gas compression, drilling, and well servicing products and systems,
Caterpillar is the first choice for petroleum industry power solutions.

PavingCaterpillar Paving Products offers a complete solution for the paving industry, including equipment, training, consulting,
service and support. Cat high-production paving machines are reliable and durable, with low overall cost of ownershipand the industry’s highest resale values.

Pipeline
The wide range of Cat pipeline products and attachments gives pipeline contractors the power to match equipment totheir production needs, site conditions and environmental requirements. Caterpillar provides comprehensive solutions
for clearing and grading, ditching, pipe bending, welding, lowering in, backfilling and other pipelining needs.

Power Generation
Cat Power Generation Systems provides a full suite of solutions to provide major power generation equipment, project
design, construction, operation and maintenance. Capability, experience and trust are why developers of major power
projects around the world choose Caterpillar.

47

How We Win2009 Year In Review

Industries

WHAT We DO
Quarry & Aggregate
From wheel loaders to excavators, Caterpillar has a machine to meet all the challenges of the quarry and aggregates
industry. Our aggregates product line includes large wheel loaders, front shovels, mass excavators, trucks, excavators,
articulated trucks, mid-sized wheel loaders and engines-generator sets.

RailroadCat ® engines deliver some of the lowest owning and operating costs of any engines available, proven in railway
applications throughout the world. Cat engines power hundreds of mainline and switcher locomotives worldwide
and provide head end power (HEP) in passenger locomotives. A full range of Cat engines can also be found inmaintenance-of-way equipment.

Road Construction
Caterpillar has the breadth of product line, the machine application knowledge and the experienced dealer organization
to make road construction more productive, efficient and profitable. Whether it’s breaking up and reclaiming existingroads, creating new roads, building base courses, or paving and finishing, Caterpillar has the right technology to get
the job done safely and on time.

Underground Utilities
To the highly competitive underground utilities business, Caterpillar offers a full range of excavators, tractors andloaders that provide efficient, cost-effective solutions.

Waste Services
Caterpillar makes a complete and purpose-built line of equipment for the solid waste industry. Our waste handlingmachines perform in virtually any system, whether loading at a transfer station or recycling center, working the faceof a landfill or maintaining sites.

48

How We Win2009 Year In Review

Services

WHAT We DO

Industry-leading products are joined with world-class services that provide customers with flexible solutions to meettheir financial, logistics, maintenance, remanufacturing and other business-critical needs. Caterpillar’s services help
customers in more than 180 countries become more sustainable, efficient and profitable.
Our services include:
Financing	Insurance
Locomotive & Railcar Maintenance and Repair
Logistics
OEM Solutions

Remanufacturing
RentalSolar Turbine Customer Services
Training

Financing
Cat Financial has been providing a wide range of financing alternatives for Cat and related equipment for over
25 years to customers and Cat ® dealers. Cat Financial has more than 40 offices and subsidiaries located throughout
the Americas, Asia, Australia and Europe.

Insurance
Caterpillar provides insurance to Cat dealers and customers around the world with the products and services theyneed to protect their new and used equipment. Our staff of risk management and insurance experts develops andmanages programs that support the Cat brand’s reputation for quality equipment, parts and service.

Locomotive & Railcar Maintenance and Repair
Caterpillar’s wholly-owned subsidiary, Progress Rail Services, is one of the largest providers of outsourced
maintenance and repair services to the railroad industry in North America. Headquartered in Albertville, Ala., itcurrently has more than 100 facilities throughout the United States, Canada and Mexico. Its customers include allof the major North American, or “Class 1” railroads, as well as regional railroads and public transit authorities.

49

How We Win2009 Year In Review

Services

WHAT We DO
Logistics
Caterpillar Logistics Services provides integrated world-class supply chain solutions that deliver a competitive
advantage and impact corporate performance. With more than 105 offices worldwide, Cat Logistics serves Caterpillar
and more than 65 other leading corporations in market sectors including automotive, industrial, consumer durables,
technology and electronics.

OEM Solutions
Caterpillar provides Original Equipment Manufacturers (OEMs) with integrated systems that are performance-matched
to meet specific application requirements in order to achieve product differentiation and enhance competitiveness.

Remanufacturing
Cat Reman is a technology-enabled, global organization focused on salvage capabilities that refurbish and restore
used machinery and technologies to like-new condition and specifications.

RentalThe Cat Rental Stores are equipped to meet a wide variety of customers’ heavy equipment needs. From concretesaws to heavy construction equipment, over 1,500 locations around the world offer products from Cat and otherleading brands.

50How We Win2009 Year In Review

Services

WHAT We DO
Solar Turbine Customer Services
Solar Turbine Customer Services helps get the most from their turbine-driven equipment through expert field
services, certified parts service, training programs, machinery management services and equipment refurbishment
and restoration.

Training
Caterpillar helps a wide variety of customers improve efficiencies, enhance jobsite safety and cut costs with
Caterpillar training programs. With our operator training programs and safety eLearning, operators achieve higher
levels of proficiency to derive maximum value from Cat ® equipment.

51

How We Win2009 Year In Review

Brands

WHAT We DO

Built on decades of performance, our portfolio of brands speaks quality, reliability and an assurance of the finest in
design, engineering and customer service.
Our brands include:Cat
Cat Financial
Cat Logistics
Cat Reman
Cat Rental Store
FG Wilson

FG Wilson
MaK
Perkins
Progress Rail Services
Solar TurbinesCat
The Cat ® brand represents the industry-leading products and services made by Caterpillar. The Cat brand isCaterpillar’s flagship products and services brand, representing the company’s equipment, related services and thedealer network that supports customers all over the world.

Cat Financial
For over 25 years, Cat Financial has been providing a wide range of financing alternatives for Cat and related
equipment to customers and Cat dealers. Cat Financial has more than 40 offices and subsidiaries located throughout
the Americas, Asia, Australia and Europe.

Cat Logistics
The Cat Logistics brand provides integrated world-class supply chain solutions and services to Caterpillar and morethan 65 other leading corporations in market sectors including automotive, industrial, consumer durables, technology,
electronics, manufacturing logistics and others.

Cat Reman
Cat Reman is a technology-enabled, global organization focused on salvage capabilities that refurbish and restore
used machinery and technologies to like-new condition and specifications. As one of the world’s largest remanufacturers,
Cat Reman operates facilities in the United States, United Kingdom, Europe, Mexico and China.

The Cat Rental StoreThe Cat Rental Stores serve as a convenient source for Cat products. Numbering over 1,500 locations around theglobe, The Cat Rental Stores offer short- and long-term rentals for the general construction industry.

52How We Win2009 Year In Review

Brands
FG Wilson
Founded in 1966, FG Wilson produces generator sets ranging from small standby sets suitable for domestic use tolarge units capable of feeding power back into the national grid.

MaK
MaK branded marine diesel engines are marketed and serviced through Caterpillar Marine Power Systems (CMPS),
headquartered in Hamburg, Germany. Its customers include operators of large oceangoing vessels such as container
feeders, chemical tankers, bulk carriers, offshore supply vessels, general cargo vessels, ferries and cruise ships.

Perkins
Based in Peterborough, United Kingdom, Perkins manufactures more than 400,000 engines a year to support
customers with thousands of different specifications. Prior to becoming part of the Caterpillar family, Perkins
functioned as a supplier to Caterpillar.

Progress Rail Services
With more than 100 facilities in the United States, Canada and Mexico, Progress Rail Services is one of the largest
providers of outsourced maintenance and repair services to the railroad industry in North America. Its customers
include all of the major North American, or “Class 1” railroads, as well as regional railroads and public transit authorities.

Solar Turbines
Solar Turbines is a world leader in the design, manufacture and service of industrial gas turbine engines. Its products
are used on land and offshore for the production and transmission of oil and natural gas, and are also used forgenerating electricity and thermal energy in a wide variety of industrial applications.

Trademark Information
CAT, CATERPILLAR, their respective logos, TODAY’S WORK., TOMORROW’S WORLD.,“Caterpillar Yellow” and the
POWER EDGE trade dress, as well as corporate and product identity used herein, are trademarks of Caterpillar andmay not be used without permission. MaK is a trademark of Caterpillar Motoren GmbH & Co. KG and may not be usedwithout permission. PROGRESS RAIL SERVICES and design is a trademark of Progress Rail Services Corporation andmay not be used without permission. SOLAR, as well as corporate and product identity used herein, are trademarksof Solar Turbines Incorporated and may not be used without permission. PERKINS, the “square and circles” designand “Perkins Blue” are trademarks of Perkins Holdings Limited and may not be used without permission. FG WILSON
and the “globe” design are trademarks of FG WILSON (Engineering) Limited and may not be used without permission.

53

How We Win2009 Year In Review

How We Performed

How WePerformed:
Stable,Disciplined,
Profitable

The worst recession since the 1930s severely pressured Caterpillar’s financial performance in 2009. Yet, in many
respects, one of the toughest years in our history also brought about one of the best performance efforts in our history.
Caterpillar’s 37 percent decrease in sales and revenues in 2009 was the largest single-year percentage decline insales and revenues since the 1940s. Yet, we achieved our three foremost objectives: to maintain profitability, to holdour credit rating in the face of tightening financial markets and to maintain the dividend.

over $ 2.4 billion in inventory reductions
Our trough management strategy was critical to achieving these objectives. This strategy was formulated to prepare
for an economic downturn and provided a blueprint for our actions during the year. We lowered production as dealers
reduced their inventories. We decreased operating costs, maintained positive price realization and leveraged 6 Sigma
and the Cat Production System. By year-end, we reduced our inventory by more than $2.4 billion.
Although many of these actions were difficult, they were necessary to secure Caterpillar’s future. In the long run,companies that survive are those that make the hard decisions in the toughest of times in order to protect thelong-term viability of the enterprise.
2009 was a challenging year for our dealers and customers, for our employees and for our suppliers. As 2010 begins to
unfold, we are encouraged by signs of improving demand and we are working closely with each of these stakeholders
to help ensure that we all “power up” for a recovery in a smart and disciplined manner.
The world’s need for infrastructure has not gone away and, in fact, shows signs of improvement. Caterpillar is poised
to seize these opportunities and looks forward to new successes in the future.
54

How We Win2009 Year In Review$120.72$130.24$156.92$ 99.19$132.02

Total Return –Caterpillar vs. S&P$100.00

HOW We PERFORMED

2004

2005

2006

2007

2008

2009

Caterpillar Inc.
S&P 500
S&P 500 Machinery*Cumulative stockholder return assuming an investment of $100 on December 31, 2004, and reinvestment of dividends issued thereafter.

55

How We Win2009 Year In Review
HOW We PERFORMED

Five-Year Financial Summary(dollars in millions except per share data)
Years ended December 31,
2009
2008	
2007	
2006	
2005
Sales and revenues$32,396$ 51,324$44,958$41,517$36,339Sales$29,540$ 48,044$41,962$38,869$34,006
		 Percent inside the U.S. 	31% 	33% 	37% 	46% 	47%		 Percent outside the U.S. 	69% 	67% 	63% 	54% 	53%Revenues$ 2,856$  3,280$ 2,996$ 2,648$ 2,333
5, 6, 7$   895$  3,557$ 3,541$ 3,537$ 2,854
ProfitProfit per common share1, 5, 6$  1.45$   5.83$  5.55$  5.37$  4.21
Profit per common share – diluted 2, 5, 6$  1.43$   5.66$  5.37$  5.17$  4.04
Dividends declared per share of common stock$  1.68$   1.62$  1.38$  1.15$ 0.955
3, 4, 6, 8
Return on average common stockholders’ equity
	11.9% 	46.8% 	44.4% 	45.9% 	35.7%
Capital expenditures
Property, plant and equipment$ 1,348$   2,445$ 1,700$ 1,593$ 1,201
	Equipment leased to others$   968$  1,566$ 1,340$ 1,082$ 1,214
Depreciation and amortization$ 2,336$  1,980$ 1,797$ 1,602$ 1,477
Research and development expenses$ 1,421$  1,728$ 1,404$ 1,347$ 1,084
As a percent of sales and revenues 	4.4% 	3.4% 	3.1% 	3.2% 	3.0%
Wages, salaries and employee benefits$ 7,416$   9,076$ 8,331$ 7,512$ 6,928
Average number of employees
99,359 	106,518
97,444
90,160 	81,673
December 31,
Total assets: 4, 6
Long-term debt due after one year:
Consolidated
Machinery and Engines
Financial Products
Total debt:
Consolidated
Machinery and Engines
Financial Products$60,038$ 67,782$56,132$51,449$47,553$21,847$ 5,652$16,195$ 22,834$  5,736$ 17,098$17,829$ 3,639$14,190$17,680$ 3,694$13,986$15,677$ 2,717$12,960$31,631$ 6,387$25,244$ 35,535$  7,824$ 27,711$28,429$ 4,006$24,423$27,296$ 4,277$23,019$25,745$ 3,928$21,817

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. Effective December 31, 2006 we changed the manner in which we accounted for postemployment benefits.
5. In 2006 we changed the manner in which we accounted for stock-based compensation.
6. In 2007 we changed the manner in which we accounted for uncertain tax positions.
7. Profit attributable to common stockholders.
8. Effective January 1, 2009, we changed the manner in which we accounted for noncontrolling interests.

56

How We Win2009 Year In Review
HOW We PERFORMED

Sales and Revenues –Machinery

Machinery$2,8562009

Financial
Products$18,1482008$11,392
Engines$31,8042007$28,359

2006$26,062$18,148

Machinery

2005

2009 Total$32,396$22,931(dollars in millions)

Sales and Revenues –EnginesEngines$2,8562009

Financial
Products$11,3922008$11,392
Engines$16,240

2007$13,6032006$12,807$18,148

Machinery

2005

2009 Total$32,396$11,075(dollars in millions)

Sales and Revenues –Financial Products

Financial Products$2,8562009

Financial
Products$2,8562008$11,392
Engines

2007$32,396$2,996$18,148

Machinery

2009 Total$3,2802006$2,6482005$2,333(dollars in millions)57

How We Win2009 Year In Review
HOW We PERFORMED

Operating Profit –Machinery

Machinery(1)$1,4642009($1,007)

2008

$381
Machinery(1)Engines(1)Financial
Products
2009 Total*$577($1,007)

Operating Profit –Engines$1,8032007$2,7582006$3,0272005$2,431(dollars in millions)(1) Caterpillar operations are highly integrated; therefore, the company uses a number of allocations to determine lines of business operating
profit for Machinery and Engines.
(1)*Eliminations of ($249), ($406), ($353), ($253) and ($261) (dollars in millions) for 2005, 2006, 2007, 2008 and 2009, respectively, are required toarrive at consolidated operating profit.
$1,4642009$1,464

Engines

2008$381
Machinery(1)Engines(1)Financial
Products
2009 Total*$577($1,007)

Operating Profit –Financial Products$2,3192007$1,8262006$1,6302005$1,071(dollars in millions)(1) Caterpillar operations are highly integrated; therefore, the company uses a number of allocations to determine lines of business operating profit
for Machinery and Engines.
*Eliminations of ($249), ($406), ($353), ($253) and ($261) (dollars in millions) for 2005, 2006, 2007, 2008 and 2009, respectively, are required toarrive at consolidated operating profit.

Financial Products$1,464

2009

$381

2008

$381
Machinery(1)Engines(1)Financial
Products
2009 Total*($1,007)

$577

$579

2007

$690

2006

$670

2005

$531
(dollars in millions)

Caterpillar
operations
highlyintegrated;
therefore,
company
uses
a numberallocationstotodetermine
determinelines
linesofofbusinessbusinessoperating
operatingprofit
profit(1)	C(1)aterpillar
operations
arearehighlyintegrated;
therefore,
thethecompany
uses
a numberofof
allocationsfor Machinery and Engines.
Engines.
*Eliminationsofof($249),($249),($406),($406), ($353),($353), ($253)
respectively,
arearerequiredto to*	Eliminations($253)andand($261)($261)(dollars(dollarsininmillions)millions)forfor2005,
2005,2006,
2006,2007,
2007,20082008andand2009,2009,
respectively,
requiredarrivearriveatatconsolidated
consolidatedoperating
operating profit.
profit.

58

How We Win2009 Year In Review
HOW We PERFORMED

Profit Per Share
2009

$1.43

2008

$5.66

2007

$5.37

2006
2005

Annual Dividends
Declared Per Share

$5.17
$4.04

2009

$1.68

2008

$1.62

2007

$1.38

2006
2005

Closing
Stock Price(on the final trading datefor each year)

$1.15
$0.96

2009
2008

$56.99$44.67

2007
2006
2005

$72.56$61.33$57.7759

How We Win2009 Year In Review
HOW We PERFORMED

CapitalExpenditures2009$1,3482008$2,4452007$1,7002006$1,5932005$1,201(dollars in millions) (excluding equipment leased to others)

2009 Patents /Research &Development

Patents Awarded

450

In 2009, about 450 patents wereawarded to over 600 inventors,
including employees from Caterpillar
Japan Limited, which became amajority owned subsidiary during
the prior year.

Research & Development
2009$1,4212008$1,7282007$1,4042006$1,3472005$1,084(dollars in millions)2009 New Machinery
Distribution to End
Users (Dealer Sales)(2009 dealer reported worldwide distribution of Cat machinery by major end use)
Waste 3%Quarry & Aggregates 7%
Paving & Compaction 4%

3% Forestry

18% General Construction

Mining 28%

Industrial 4%

33% Heavy Construction

60

How We Win2009 Year In Review
HOW We PERFORMED2009 New Engine
Distribution to
End Users(Dealer Sales)(2009 dealer reported and internally estimated worldwide distribution of Cat engines)
Truck 4%
32% Electric Power Generation

Petroleum 39%

Marine 14%

2009 Corporate
Philanthropy

The mission of the Caterpillar Foundation is“Making Sustainable Progress Possible in
our Communities” by:• Promoting access to basic human needs(sustainable humanity)• Advancing knowledge and education(sustainable education)• Protecting the environment and conservationof resources (sustainable development).

2009 Exports fromthe U.S. (by region)

Asia Pacific $2,538

10% Industrial$32

MillionInvested inCommunities
Worldwide$1,352 Canada

2009 Total$10,385

Latin America $2,356$4,139 EAME

(dollars in millions)61