2012 YEAR IN REVIEWROCK SOLID
Potential | Position | Plan | People | Performance

In a global marketplace filled with shifting dynamics, our customers count on Caterpillar as
a dependable source of products, services and solutions to meet their needs. This strategy is
the stabilizing force behind our business. Today, we’re as confident of our rock solid strength
as at any time in our history.

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2012 Year in Review

Forward-Looking Statements
Certain statements in this 2012 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 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 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 andinfrastructure spending; (iii) commodity or component price increases, fluctuations in demand for our products, or limited availability of raw materials andcomponent products, including steel; (iv) our and our customers’, dealers’ and suppliers’ ability to access and manage liquidity; (v) political and 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 credit worthiness of Cat Financial’s customers; (viii) changes in interest rates ormarket liquidity; (ix) changes in financial services regulation; (x) inability to realize expected benefits from acquisitions, including ERA Mining Machinery Limited,and divestitures, including the divestiture of the Bucyrus International, Inc. distribution business to our independent dealers; (xi) international trade and investment
policies; (xii) market acceptance of our products and services; (xiii) changes in the competitive environment, including market share, pricing and geographic andproduct mix of sales; (xiv) successful implementation of capacity expansion projects, cost reduction initiatives and efficiency or productivity initiatives, including
the Caterpillar Production System; (xv) inventory management decisions and sourcing practices of our dealers or original equipment manufacturers; (xvi) compliancewith environmental laws and regulations; (xvii) alleged or actual violations of trade or anti-corruption laws and regulations; (xviii) additional tax expense or
exposure; (xix) currency fluctuations; (xx) our or Cat Financial’s compliance with financial covenants; (xxi) increased pension plan funding obligations; (xxii) union
disputes or other labor matters; (xxiii) significant legal proceedings, claims, lawsuits or investigations; (xxiv) compliance requirements imposed if carbon emissions
legislation and/or regulations are adopted; (xxv) changes in accounting standards; (xxvi) failure or breach of information technology security; (xxvii) adverse effects
of natural disasters; and (xxviii) other factors described in more detail under “Item 1A. Risk Factors” in our Form 10-K filed with the SEC on February 19, 2013 forthe year ended December 31, 2012. This filing is available on our website at www.caterpillar.com/secfilings.

Trademark Information
CAT, CATERPILLAR, their respective logos, “Caterpillar Yellow” and the POWER EDGE 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.
© 2013 CATERPILLAR PUBLIC RELEASE All Rights Reserved. Printed in the U.S.A.

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2 Forward-Looking Statements & Trademark Information
4 Chairman’s Message
6	Rock Solid Potential

It’s hard to think of another company that touches as many industries
with as attractive long-term demand fundamentals as Caterpillar.

11 Rock Solid Position

Today, our global reach is unmatched in the industry. The breadthand depth of our product portfolio, combined with our global dealer
network sets us apart from competitors. An unprecedented level ofadditional capacity and product development is ensuring that we not
only maintain, but also fortify and expand this unique position.

16 Rock Solid Plan

Caterpillar’s strength depends on providing our customers with thebest products, the best service and the best value proposition in
the marketplace.

21 Rock Solid People

Caterpillar’s extended value chain is comprised of employees,
dealers and suppliers around the world who are focused on thesame customer-driven goals. The talent and commitment of thisteam is critical to our success. That’s why we’re investing in ourpeople and working together more cohesively than ever before.

27	ROCK SOLID PERFORMANCE

Our renewed focus on customers is delivering results. When Caterpillar
products and services deliver world-class performance for our customers,
we are positioned to deliver world-class financial performance for ourstockholders. We accomplished this in 2012 by translating record sales
and revenues into solid profitability.

33	Business Segments
39	Performance Summary
47 about caterpillar
50 Executive Officers
51 Officers
52 Board of Directors
54 The Caterpillar Foundation

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Chairman’s
Message2012 Year in Review

When faced with challenges, it’s how we respond that defines us.
2012 was full of challenges for the Caterpillar team, but our responseto everything that was thrown at us was rock solid.

Doug Oberhelman,
Chairman and CEO

FURTHER POSITIONING OURSELVESFOR SUCCESS: GLOBAL GOVERNMENT& CORPORATE AFFAIRSWe believe that Caterpillar and ourdealers deliver the best products andservices in the world. However, theactions that governments take aroundthe world can have significant impact on
our business, our employees, customers
and stockholders. The world is a big
place, and we have big issues to face.
But at Caterpillar, we don’t just watch
the world go by — we get involved.
We have a strong voice on the key
issues — trade, energy, infrastructure
and tax — that ensure growth and global
competitiveness in the world’s economy.
In 2012, we led the way in support of a
new U.S. highway bill — sending over
40,000 letters from employees, dealers,
suppliers and customers for legislationthat will provide investment in robust,modern infrastructure that can handle
the rising exports to our customers
around the world.
(continued)

Nowadays it seems there aren’t many things that are rock solid. The global marketplace is constantly
shifting and economies around the world face uncertainty on a variety of fronts — fiscally, politicallyand socially. The world struggles to address concerns like energy, infrastructure, workforce
readiness and how to compete in the global economy. And our customers also face challenges
like never before.
It’s hard to grasp anything solid, steady and reliable anymore. But that’s exactly what we try to be
for our customers, stockholders, employees, dealers and suppliers. We live by our core values ofIntegrity, Excellence, Teamwork and Commitment. And as we do business in every corner of the
globe, our values guide us to be fair and consistent. You know what to expect when you deal
with Caterpillar.
Our products have always been made to be tough, durable and reliable. And we keep a constantfocus on quality. In 2012 product quality was at a historically high level. Great news! But it’s evenbetter when you note that we also had historically high volumes and were introducing Tier 4 Interim
products to the market.
The team has really delivered. I’m happy with quality, but even more importantly, our customers
are happy. We are receiving very positive input from the field — rock solid!
But our job doesn’t end there. Today our customers count on us for much more.
That’s why we innovate. In 2012 we spent $2.5 billion on research and development. Our engineers
and technologists are working on products and services for our customers both today and wellinto the future.
That’s why we lead. Caterpillar has been an outspoken voice on the issues that affect our customers.
It’s up to us to educate our employees, communities and government officials on our position
regarding topics like trade, tax, infrastructure and energy.
(continued)
Chairman’s Message 4

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2012 Year in Review

Chairman’s Message (continued)
Sales & Revenues
2008

2009

Operating Profit
2010

2011

$60,138

2012

2008

2009

Research & Development
2010

2011

2012

2008

$7,153$2,466$1,421$4,448$3,963$577$ in millions$ in millions$ in millions

While these are important victories,
we still have a lot of work to do. We’ve
repositioned our global engagement
strategy and created a new division,
Global Government & Corporate Affairs,
to ensure we are even better positioned
to make a positive difference around theworld. Under the leadership of our new
Vice President Kathryn Karol, we have aneven stronger business focus that willfurther align global government teams
across the enterprise. It’s a commitment
to our customers, dealers, employees andall of our stockholders. We’ll continue toensure we have the right team in place totell our story and share the challenges
we face as a global corporation. To learn
more about our involvement, visit
caterpillar.com/company/global-issues.

2012$1,905$1,728$32,3962011$2,297$42,588

We were also a leading voice in urging
Congress to establish Permanent Normal
Trade Relations (PNTR) with Russia —another step toward job creation andinvestment that will open markets andincrease economic growth.

2010$8,573$65,875$51,324(continued)

2009

And that’s why we maintain internal strength. At Caterpillar, we talk about controlling what we canwithin our four walls. The world around us is going to keep changing, and we have to be readyfor anything. We do that with rock solid operations. We focus on maintaining a strong balance
sheet, having efficient processes in our factories and offices and developing the best team.
That’s how we stay strong.
Rock solid doesn’t imply perfection. We make mistakes — everyone does. But we learn from them,and the lessons we learn make us stronger.
And you’ll see that strength throughout our Year in Review. Our customers, our employees andour communities are doing amazing work, and I’m proud to share their stories with you!
Here are just a few highlights of some of the rock solid accomplishments we had in 2012.
• Achieved record sales, revenues and profit in 2012
• Opened the Caterpillar Visitors Center• Displayed our largest exhibits ever at Bauma China and MineExpo• Invested $60 million in our communities through the Caterpillar Foundation• Announced eight new facilities and expansions• Registered the 100,000th machine using VisionLink™
• Manufactured the first ever machine in Thailand
It’s been a big year for our team! I’m proud of all that we have accomplished, and I look forward tomuch of the same in 2013. I can’t predict the future, and 2013 could be a tough year. But our teamis prepared to execute and deliver no matter what the circumstances.
We have big plans for our people, our customers and our stockholders, and we will deliver therock solid performance they have all come to expect! That’s what makes our company rock solid.
No matter what is happening in the world around us, we will always be prepared and ready to act.

Doug Oberhelman
Caterpillar Inc. Chairman and CEO

Chairman’s Message 5

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ROCK SOLID

POtential
Energy. Commodities. Infrastructure.
It’s hard to think of another company that touches
as many industries with as attractive long-term
demand fundamentals as Caterpillar. A growing
global population needs more energy, water, roads,
schools, power systems and housing, to name afew — all needs that our customers will help meetfor decades to come.

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Rock Solid Potential

DEVELOPMENT
IN THE DESERT
Saudi Arabia invests millions ininfrastructure improvement.

Saudi Arabia’s typical harsh desert conditions are occasionallyinterrupted by sudden, torrential rainfall that usually results inserious flooding. For the town of Jeddah, Saudi Arabia’s secondlargest city, the problem is an outdated sewer and drainage
system that cannot handle large water volumes in downpours,
according to Caterpillar Industry Sales Manager Maarten
de Haas. In 2009 and 2011, the city experienced devastating
floods that destroyed businesses, left roads submerged andkilled nearly 500 people.
This recurring devastation prompted the Saudi government to develop
a permanent solution for the water drainage problem — a $171 million
citywide stormwater, flood-control and wastewater infrastructure
improvement program. The program calls for the construction of five dams,
the expansion of existing stormwater canals in northern, southern andeastern Jeddah, and the construction of a new canal adjacent to a major,
international airport. The new system will allow water to be collectedin dams and then channeled underneath and around the city to thesea to prevent future flooding in the city.
At the heart of this long-awaited resolution are Cat® machines. Morethan 100 Cat machines will support this much-needed project, working
around the clock to complete it in less than eight months.
“We are using Cat machines because they have the best up time andbest productivity,” said Caterpillar customer and Chairman of the Boardof Directors of the Saudi Pan Kingdom Company (SAPAC) Shaikh Sulaiman
Al-Harbi, one of the major contractors on the project. “Our main challenge
for this project is its short time frame, so we wanted to ensure we were
dealing with reliable machines, as well as working with a dealer witha good reputation that could support our project needs.”

Al-Harbi said the aftersales support provided by Cat® dealer Zahid Tractor
was a major factor in their decision to use Cat machines. Throughout
the project, Zahid has provided unmatched support, parts and service
support, as well as weekly operator training and demonstrator visits.
The Jeddah stormwater and drainage program is just one of many
projects improving the infrastructure in Saudi Arabia. The country has
infrastructure development and improvement projects under way
at all levels. In 2012 alone, nearly $25 billion was budgeted forinfrastructure development.
For instance, the Saudi Railway Organization awarded Caterpillar
customer Saad Al Mobty & Partners a $1.7 billion-plus contract forthe construction of a bypass to move its existing railway from the city
center of Al-Hofuf. The new railway will reduce the amount of traffic
in the city significantly, while improving its current railway system.
“We consider Cat® products to be the best brand with the best value andquality worldwide,” said Majed Al Mobty of the Mobty Company, who
is using Cat® equipment exclusively for this job. “The machines offer thebest productivity and best product support with the least running cost.”
Mobty has more than 100 Cat machines on the job site, in addition to
three Cat® generators. The machines are working in harsh conditions,
cutting nearly 10 million cubic meters of limestone and filling 8 million
cubic meters of desert sand, while constructing nine bridges and 3,000
meters of pipeline protection. Zahid Tractor has provided two qualified
technicians to remain on site to perform warranty repairs and preventive
maintenance throughout the duration of the project, as well as a certified
demonstrator to train operators on site.
The nearly $200 million USD (SR 750M) project began in April 2011 and isestimated to take three years to complete. To date, more than 35 percentof the project is already complete.

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Rock Solid Potential

A NATURAL FIT
New technologies to capitalize on a new eraof natural gas growth.

Energy consumption is rising rapidly, driven by worldwide
population growth, developing economies, improving global
living standards and the use of ever more energy-dependent
technologies. Access to affordable and dependable energy isalso critical to energy security and economic prosperity.
At Caterpillar, there is support for the development and utilization of
all energy resources — both traditional and alternative. The world
needs more of everything — and when Caterpillar thinks power, it’s
not considered in terms of diesel or gas, but diesel and gas.
Natural gas presents important opportunities as its availability increases,
along with the development of technologies to use natural gas inmore products. Caterpillar has announced its intent for developing thetechnologies our customers need to accompany the growth in naturalgas. To this end, Caterpillar acquired MWM Holding GmbH (MWM) in

2011, enabling the company to significantly expand customer options
for sustainable, natural gas-powered solutions. Caterpillar announced
that mining trucks and locomotives will be among the first Cat® machines
to incorporate high pressure direct injection (HPDI) technology, extending
the commitment to natural gas across its high-horsepower product lines.
Additionally, the Dynamic Gas Blending line of retrofit kits for energy
exploration and production engines was introduced.
Caterpillar is one of the world’s leading technology suppliers to thediverse energy market, and leverages its technology and innovation tomeet the world’s growing energy needs. Gas continues to be a significant
opportunity for the company and its customers. Natural gas could be agame-changer, and, at Caterpillar, there is a clear strategy to enablesuccess in this exciting market.
To learn more more, visit caterpillar.com/naturalgas.

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Rock Solid Potential

TRACKING ON
THREE CONTINENTS
Investments to meet the growing demands ofthe railway industry.

Progress Rail Services and Electro-Motive Diesel (EMD) arecommitted to increasing capacity to produce locomotives
globally. Rising oil costs in recent years have made railroads
a more efficient transportation alternative than trucking forlong hauls.
Since acquiring EMD in 2010, Caterpillar and Progress Rail have madesignificant investments in new equipment and plant improvements toenable the creation of new products and services to meet the growing
demands of the international railway industry. With new locations
located strategically around the world, Caterpillar is well-positioned
to meet the challenging competitive realities of the global rail industry
and to provide quality products to customers around the world.
The Muncie, Ind., facility is the first locomotive assembly plant to open
in the U.S. in many years and marks Progress Rail’s strategic approach tocompete and win in the global railway industry. In less than two years,
this facility has completed 100 diesel-electric locomotives for customers.

In South America, Progress Rail, through its subsidiary, MGE Equipamentos
e Servicos Ferroviarios Ltda. (MGE), has located a locomotive manufacturing facility in Sete Lagoas, in the state of Minas Gerais, Brazil, tobetter serve the diesel-electric locomotive market in this region. The
company made an investment to open and modernize the existing
manufacturing plant to produce world-class locomotives. This state-ofthe-art facility, which has the potential to create jobs, assembles andmanufactures EMD-branded locomotives in a 12,000-square-meter
space on a 100,000-square-meter site.
Since 2006, Caterpillar has demonstrated its rail commitment byinvesting more than $2 billion to meet customers’ growing needs.
Through these collective investments, Progress Rail and EMD are
positioned to produce the most durable, reliable and sustainable
locomotives in the world.

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Rock Solid Potential

DEEP INTO THE FOREST
A customer-first focus drives forestry
machine development.

Caterpillar’s forestry roots date back to the 1890s, when the Best
Manufacturing Company and The Holt Manufacturing Company
used steam traction engine tractors in logging applications.
Today, forestry is a strategic business for Caterpillar and its
dealers. The “skidder,” a machine used to pull harvested trees
out of the forest, was not expected to replace Cat® track-type
tractors for logging — even with its advantages of speed, power
to pull big loads and maneuverability around stumps. But loggers
saw production improve with a machine designed to meet theirunique needs, and the skidder became the first in a full line ofCaterpillar timber harvesting machines marketed worldwide.
“In 2012, Caterpillar Forest Products improved product quality, introduced
new machines and work tools and expanded our presence in international
markets,” explained John T. Carpenter, who led Caterpillar Forest
Products through 2012.
New Products
During 2012, Forest Products added a third model to the Cat® C Series
wheel feller buncher. Through a new design, this machine meets more
stringent EPA emissions regulations while delivering more horsepowerand burning less fuel than competitive machines. For loggers working
in rough terrain, a new track feller buncher went into production in
preparation for an early 2013 launch. And in Brazil, where eucalyptus
is the primary timber crop, a specialized work tool to delimb and strip
the bark was introduced.

Collaborations blended the best of Caterpillar with other companies
to produce additional new forestry products. The Prentice/Epsilon
self-loader, which is mounted on a log truck, brings exceptional speed
and precision to loading and unloading logs, and the Demlone high-lift
log handler stacks logs up to 6.1 meters for more efficient use ofground space in a wood yard.
Education
Increasingly, logging contractors are having a difficult time finding
qualified equipment operators. To answer that need, a community
college in North Carolina launched a course in 2012 to train operators.
Caterpillar Forest Products is an important partner in this program byproviding guest instructors on maintenance and safety and loaning themachines needed to teach students how to harvest trees, transportthem out of the forest and load them onto trucks.
Customer Focus
The foundation for Caterpillar’s growth in the forestry market and theorigin of all accomplishments in the last year is the business unit’s
focus on the “Voice of the Customer.” Product councils consisting ofloggers and dealer representatives are involved in new product design.
Customer plant tours include give-and-take discussions with productengineers. And product specialists and engineers visit customer jobsites to see firsthand what loggers need to do their jobs.
“We design products that originate from a deep understanding ofcustomers’ needs. Our daily focus in all we do is on our customers.
This customer-first focus is ingrained in the business’ culture and iswhat will propel Caterpillar Forest Products to even greater success,”notes Carpenter.

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ROCK SOLIDPOSITION

Today, our global reach is unmatched in the industry. The breadth and depth of our productportfolio, combined with our global dealer network sets us apart from competitors.
An unprecedented level of additional capacity and product development is ensuring that
we not only maintain, but also fortify and expand this unique position.

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Rock Solid Position

EMERGING MARKETS,
EMERGING NEEDS
A new brand targets a new kind of customer in China.

Caterpillar’s 85-year leadership position has been largely built
on the ability to listen and respond to customers. In recent
years, emerging markets have produced a new type of customer
with new needs.
“Over the past two decades, new customers in developing economies
have increasingly comprised a larger portion of the global industry,
especially in countries like China where a lot of newer contractors areentering the business,” explained retired Construction Industries Group
President Rich Lavin. “These newer contractors value an entry-levelproduct as they come into the industry. They’re looking for a machinethat performs well, but with different features and service support.”
Emerging economies are not only producing a new type of customer,
but also developing a new type of competitor.
“These new competitors are entering the market aggressively, and clearlytargeting these new customers by providing products and services aimed
at their unique requirements,” said Lavin. “If we’re going to compete
effectively against the growing number of emerging competitors —especially our Chinese competitors — we must have a utility productline that meets the needs of our customers.”
Caterpillar’s utility brand, Shandong SEM Machinery Co., Ltd. (SEM),
targets this fast-growing customer base in China, as well as other partsof the world. Although the value proposition of SEM is fundamentallydifferent than that of the Cat brand, SEM offers sturdy machines withgreater parts availability and support than other utility competitors.

Since purchasing SEM in 2005, Caterpillar has invested significant
resources to develop new utility models with improved product quality
and reliability. SEM has expanded its historical product line of wheel
loaders to cover a range of utility requirements from two to six tons.
It has also added three motor graders and three soil compactors to its
product line. In 2013, SEM is introducing SEM-branded track-type
tractors to further expand its product portfolio.
In addition to expanding the product line, SEM has also added capacity.
When complete in 2014, SEM™ wheel loader capacity will have nearly
tripled since becoming part of Caterpillar. SEM has expanded manufacturing to begin production of SEM-branded track-type tractors for China
and other growth countries, ramping up through 2013 and 2014. Beyond
product and manufacturing expansions, SEM also has expanded its sales
and service support. SEM™ dealers are now in 33 countries to provide
sales, parts and basic service support capabilities. In 2013, SEM isadding dedicated parts distribution centers outside China.
“Our SEM™ product line serves us very well,” explained Caterpillar
Vice President Tom Bluth, who had responsibility for earthmoving in
2012. “It gives us the opportunity to position ourselves in China andother growth markets, but more importantly, it enables us to serve
customers early in their industry experience and move them over time
toward the Cat brand value proposition, establishing a relationshipthat will keep them with Caterpillar for the long term.”

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Rock Solid Position

CUSTOMER-DRIVENTECHNOLOGY
Real-time information helps customers
optimize productivity.

In today’s world of instant information and smart devices,
job sites are becoming increasingly connected. Customers
are demanding real-time information to assist in effectively
and efficiently managing their business.

Caterpillar is partnering with the best suppliers and development
partners to ensure all customer work streams are enabled by technology
solutions. From grade control, to global positioning, to industry-specificservices, Caterpillar is committed to improving customer productivity
with lower operating costs through technology.

Caterpillar recognizes that technology-enabled business solutions
differentiate themselves from the competition. To achieve success inthis rapidly changing technology space, Caterpillar has developed
an enterprise-wide Technology Enabled Solutions (TES) Strategy. Our
solutions will include such capabilities as equipment management,
asset management, condition and remote monitoring, as well as
prognostic and diagnostic tools.
Our technology solutions are tailored to meet customer requirements
and will be fully integrated into our machines and engines at first fit, or
through aftermarket retrofit options. The goal is for Caterpillar’s fleet
management approach to become the industry standard, by leveraging
proven cross industry applications, and modules, which will givecustomers a competitive advantage.

“Technology is going to be the deciding factor in the industry moving
forward. Caterpillar technology touches every piece of our equipment,
and with that information we can continue to drive our efficiency andeffectiveness,” said Chad Jessen, a Caterpillar customer and development
and innovation partner, Kiewit. “It’s no secret that the Cat® dealer
network and parts availability are best in class. As customers, we know
Caterpillar’s technology platform is the next area where Caterpillar
will serve customers as best in class. Working together we will set
ourselves apart from everyone else.”
The rapid implementation of the Technology Enabled Solutions (TES)
strategy will ensure success jointly for Caterpillar, Cat dealers andcustomers far into the future.

Customers receive support for technology solutions through our
unrivalled dealer network. Dealers provide technical expertise in the
deployment of these technologies, and product support of machines
and engines, to help customers be more successful.
“Operationally, telematics will give us access to a database of informationthat will allow us to hone that information to unprecedented levels,” said
Brett Lehmann, national survey manager at Abigroup Ltd. “We have amature relationship with Caterpillar and our dealer which allows theuse of telematics to be mutually beneficial. We have real-time, fleetefficiency data sent directly to our supervisors in the field … the powerof that is phenomenal.”

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Rock Solid Position

A BIG SHOW OFMINING STRENGTH
A showcase of the broadest line of mining
equipment ever at MINExpo.

No matter what their interests — surface or underground, hardrock or soft rock — MINExpo International visitors experienced
machines and technology at the Caterpillar exhibit to help themmine and move minerals safely and productively. MINExpo
International, the world’s largest and most comprehensive trade
show dedicated to mining, truly brought the theme “Wherever
There’s Mining, We’re There” to life. With more than 52,000
square feet at the Las Vegas Convention Center, Caterpillar
showcased the broadest line of mining and materials-handlingequipment available — backed by the most extensive andcapable product support team in the worldwide mining industry.
“There is no bigger stage to give us this remarkable opportunity totell the Caterpillar mining story. We recognize that mining is at thecore of an unprecedented drive for urbanization and modernization,”
explained Caterpillar Chairman and Chief Executive Officer Doug
Oberhelman. “We believe the long-term outlook is positive for thisindustry, and we’re uniquely positioned to capitalize on that growth.
That’s why the company has made major investments in mining acrossthe Caterpillar organization, plus expanding and modernizing ourfactories and developing even better mining products and solutions.”
Since July 2011, Caterpillar has added more than 100 products to its
mining portfolio, many of which were showcased at the MINExpo exhibit.
Divided into two areas, surface and underground, the Caterpillar exhibitfeatured more than two dozen products and technologies, including
an off-highway mining truck, hydraulic shovel, next-generation Cat®
D11T Track-type Tractor and a variety of underground mining machines
such as continuous miners, a longwall shearer and plow, as well as othersupport equipment. Among the new products introduced at MINExpo
was the Cat® 6120B H FS Hydraulic Shovel. The Cat 6120B is the first
diesel-electric hybrid ultra-class shovel available in the industry —promising to lower cost per ton in world-class mining operations.
“Like our customers, Caterpillar is committed to building a betterworld. That’s why when customers asked us to provide more products
and solutions for the mining industry, the company responded in a bigway,” said Steve Wunning, Caterpillar group president with responsibility
for Resource Industries. “Beyond just the iron, we understand the issues
our customers face, such as safety, environmental stewardship, emissions
standards and skills shortages and training, and we work together toaddress them. This will continue to be our focus.”
Unique among all machines within the Caterpillar exhibit and throughout
the hundreds of MINExpo displays, the Electro-Motive Diesel (EMD)
SD70ACe locomotive — painted in Caterpillar yellow — gave themining world an opportunity to explore the railroad technology thattransports minerals to market. EMD™ SD70ACe locomotives run
in mining operations across the globe.

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RIGHT PART, RIGHTPLACE, RIGHT TIME
When it comes to parts, minutes matter.

Cat® machines are at work around the clock in every corner ofthe globe. When customers buy yellow iron, they expect thelegendary Caterpillar product support that helps them to be
more productive and profitable than anyone else in theindustry. Making sure customers have the right part, at theright place, at the right time is what Caterpillar does.

These facilities will join new distribution facilities in Waco, Texas; Clayton,
Ohio; Spokane, Washington; Arvine, California; and Dubai, United
Arab Emirates (UAE). These new facilities represent an increase ofnearly 4.5 million square feet to the overall distribution network andsupport the commitment to providing unmatched parts availability tocustomers and dealers around the world.

Parts support to dealers and customers is a 24 hours per day, seven days
per week, 365 days per year business. Minutes matter to customers —and they matter to Caterpillar, which ships more than 158 million
parts orders a year. That translates into 400,000-plus orders per day,
18,000-plus orders per hour, 300-plus orders per minute of every dayof every year. That kind of around-the-clock global support doesn’t
happen without a world-class distribution network.

In addition to creating new distribution centers, Caterpillar invested
in the expansion of existing parts distribution facilities in Grimbergen,
Belgium; Melbourne, Australia; and Shanghai, China. All of these facilities
are leveraging common systems and processes in addition to deploymentof SAP’s Service Parts Management (SPM), a global solution that
replaces multiple legacy software systems supporting the Caterpillar
parts network.

The Caterpillar distribution network is second to none, yet improvement
and expansions are always occurring to ensure customers have support
when and where they need it. In fact, in 2012, Caterpillar invested in
product support capabilities in every region of the world and announced
new distribution facilities in Yatala, Australia, and San Luis Potosí,
Mexico, as part of a multiyear modernization plan to enhance the global
Caterpillar parts distribution network and to get parts to dealers andcustomers faster.

“We are focused on ensuring our customers’ success through a global,
high-velocity network that delivers the industry’s best parts availability,”
said Steve Larson, president of Caterpillar Logistics Inc. “All of theseinvestments have the singular purpose of ensuring that Caterpillar andCat® dealers support our customers’ success better than anyone else.”

ROCK SOLID HISTORY

In August 1928, a customer called a Cat® dealership at 6 a.m.
during harvest time. This customer had a machine broken
down in the field and lived 40 miles from the dealership. The
Cousins Tractor Co. made arrangements for airplane service
and delivered the parts the customer needed, just one hour
after the call came in.

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rock solidROCK SOLID

PLAN

Caterpillar’s strength depends on providing customers with the best products, thebest service and the best value proposition in the marketplace. Our updated Vision2020 strategy is squarely focused on these goals. Two years into executing thisstrategy, we are more confident than ever that we have the right plan to pursue.

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A RENEWABLE
COMBINATION
Solar Turbines lead to increased efficiency.

Rising demand for sustainable power is driving the use ofrenewable fuels in power generation applications. The prospectof meeting global energy needs while minimizing the impact on
the environment is presenting real opportunities. Solar Turbines,
a Caterpillar company, is seizing this opportunity by developing
new Combined Heat and Power (CHP) technology.
CHP, also known as cogeneration, is an efficient, clean and reliableapproach to generating power and thermal energy from a single fuelsource. Installation of a CHP system can greatly increase operational
efficiency, while at the same time decrease energy costs.

Customers such as Veolia Environmental Services, located outsideof Paris, France, have installed a 15-megawatt landfill gas-fueled
combined-cycle plant. The plant uses a Mars 100 Solar™ Gas Turbine
Generator Set, packaged by Turbomach at its European facility
in Switzerland.
Renewable fuels in CHP applications make sense for efficiency,
sustainability and energy security. Caterpillar continues to commit
research and development resources to supporting renewable fuels as
part of a winning solution for clean energy and a sustainable future.

ROCK SOLID HISTORYIn 1946, Solar capitalized on the opportunity to design a gas
turbine — a product that would go on to become Solar’ssignature product, and remains a focus today … 85 years after
Solar started as an airplane manufacturing company in 1928.

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DEALERS GET IN
THE MINING GAME
Aligning distribution in our mining business.

When Caterpillar acquired mining equipment company Bucyrus
in 2011, there was a need to align their distribution capabilities
within Caterpillar’s dealer-oriented distribution model. Througha series of divestitures, Caterpillar is engaging dealers in the
product distribution and product support aspects of the business.
“The primary focus of the divestitures is to improve service to end-users
by leveraging the proven distribution capabilities we have with ourdealers,” explained Dave Hoffman, chief financial officer for Resource
Industries with responsibility for leading the divestiture team. By theend of 2012, Caterpillar had successfully completed 13 sale transactions
to dealerships accounting for a significant portion of the Bucyrus
distribution business. This is in line with Caterpillar’s plan to engage
dealers in Bucyrus opportunities as quickly as possible.
“Our dealers have a long history of exceptional service to mining
customers around the world, and they know what is needed in local
markets and individual mines. As service to our customers improves,
our dealers will be rewarded and ultimately Caterpillar will be rewarded
with higher customer satisfaction and sales,” said Hoffman.

Each transition is unique and requires professional handling with a sharp
focus on quality. In addition, the territories do not directly overlap withCat® dealers, so the divestiture process ensures a smooth transition
and uninterrupted service to customers.
“From a 20,000-foot perspective, it looks pretty simple to insert
the dealers into the value chain, but it’s all the details that makeit challenging,” said Hoffman. “We are focused on doing it rightthe first time and have a dedicated team in place to ensure asmooth transition.”
To date, the transitions have been successful with limited disruption
to Caterpillar customers. Clive Thomson, chief executive officer ofBarloworld, Cat dealer in South Africa and Botswana, said, “Thisacquisition is perfectly aligned with the group’s growth strategy. It
builds on our existing strengths and will enhance our leading positionin the mining industry by significantly expanding the range of equipment
solutions we are able to provide to customers operating acrosssouthern Africa.”

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HIgh-TECH VISION
A technology roadmap is created tokeep customers competitive.

What does the future look like for Caterpillar and its customers?
How and where will Cat® products work in 2030? What technologies will customers need to be successful? The Caterpillar
product development community is thinking about these questions
today in order to meet customer needs well into the future.
The enterprise product and technology strategy is the foundation ofCaterpillar’s future vision. The strategy, conceived in 2011 and introduced
in 2012, defines the key technologies and areas of research anddevelopment investment necessary to meet customer needs andsustain Caterpillar’s competitive advantage for the long term.
It is focused on three themes — Energy & Power Systems, Machines& Machine Systems and Automation & Enterprise Solutions. Each theme
has bold goals serving as targets against which development progress
can be measured. Research and advanced engineering activities
currently under way within these areas include opportunities toreduce customer owning and operating costs; improve productivity
and safety; and improve the environment.
In 2012 the technology strategy came to life in the form of several
innovative technologies and products with customer value outcomes.
Energy & Power Systems: For some customer applications, natural
gas can represent a breakthrough opportunity for fuel-cost savings whencompared to diesel power alone. Efforts to expand natural gas-fueled
power system products are well under way with the acquisition of MWM
and an agreement with Westport Innovations to develop dual-fuel(diesel and gas) injectors for large mining trucks and EMD locomotives.
“Dual-fuel and natural-gas engines can bring a significant cost advantage
to many customers’ bottom line. We are introducing a complete lineup
of gas-capable power systems across the market segments — electric
power, petroleum, mining, rail and marine — to provide this value,”
said Joel Feucht, general manager for Gas/Medium Speed Engines inCaterpillar’s Large Power Systems and Growth Markets Division.

Machines & Machine Systems: A suite of advanced machine systemtechnologies brings innovations in hydraulics and transmissions
together to enable unprecedented efficiency and productivity. The
Cat® 336E H, Caterpillar’s first hydraulic hybrid excavator, uses up to
25 percent less fuel than the standard Cat® 336E excavator, while
delivering equal or better performance. “We are applying technologies
which reduce our customers’ owning and operating costs to ensure
they make more money when they choose Cat products and the Cat®
dealer network than they can with any competitive alternative. This
new generation of machines uses far less fuel, which translates tolower cost for customers and lower emissions for the environment,”
said Ken Gray, global product manager for Large Hydraulic Excavators
in Caterpillar’s Excavation Division.
Automation & Enterprise Solutions: The autonomous mine site of
the future is becoming a reality with the development of Cat Command for
Hauling. Since March of 2011, Caterpillar, in alliance with BHP Billiton,
has commissioned Billiton’s Navajo mine site in New Mexico to trial asmall fleet of autonomous Cat® 793 Mining Trucks, 24 hours per day,seven days per week.
“The technology that we use in these unmanned machines will
revolutionize the way we approach mining in the future. These trucks
are able to operate in hazardous conditions, on continual shifts without
putting our operators in harm’s way,” explained Jim Humphrey, theprogram’s first project manager and member of the mining solutions
team. “It’s been a very successful trial program to date.”
The world of the future holds many challenges for Caterpillar customers.
Caterpillar’s product development community is working now to bringinnovation to bear on those future challenges and turn them into
opportunities for long-term success.

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REDUCING CLAIMS,
INCREASING PROFITSBig improvements in parts quality benefit customers.

Machine downtime means lost profit. That’s why parts
availability can be the lifeblood of a Caterpillar customer’sbusiness. It’s also the single biggest driver of customer loyalty
and integral to the Cat brand … a key part of the Caterpillar
Business Model.

In 2008, Caterpillar launched a sweeping new plan to address parts
quality issues and turn a laser-like focus on customers’ needs. This
plan has led to a dramatic reduction in errors, defects and waste,even with today’s higher volume. Learn more about this initiative
to reduce claims and better position customers for success at
http://youtu.be/6i49wZWHwOM.

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ROCK SOLIDPEOPLE

Caterpillar’s extended value chain comprises employees, dealers and suppliers around theworld who are focused on the same customer-driven goals. The talent and commitment of
this team is critical to our success. That’s why we’re investing in our people and working
together more cohesively than ever before.

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BETTER TOGETHERGreat examples of collaboration acrossthe value chain.

Efforts to drive an enterprise point of view across the value chain
with suppliers, dealers and ultimately customers are under way
at Caterpillar. Multiple internal initiatives are now extending toincrease collaboration across the entire value chain.
Suppliers in China, for example, are deploying the Caterpillar Production
System (CPS) in order to experience the same transformation that thesystem has delivered in our own manufacturing operations. The Catbrand and a focus on brand advocacy was a key initiative with dealers,and Caterpillar’s flagship leadership development program is now
inviting leaders from critical suppliers, dealer principals and selectcustomers ... all in an effort to develop rock solid people.
CPS for Suppliers
In 2006, Caterpillar rolled out CPS, focusing first on internal operations.
Three years later, CPS was extended to its supply base through the
CPS for Suppliers program in an effort to drive collaboration across its
entire value chain. Today, that program is driving significant resultsaround the world, creating long-term relationships with key suppliers
sharing a common goal to produce the highest-quality products asefficiently and safely as possible.
“The introduction of CPS has brought significant changes in the ideas
of Chinese suppliers,” explained Gao Erging, general manager of BUT
Construction Machinery Manufacturing in Xuzhou, China. “We are more
confident about the elimination of waste and cost reduction, and aboutmaintaining our competitiveness for Cat® products.”

According to Erging, who has been a Caterpillar supplier for nearly
17 years, they reduced the amount of space in their production areaby nearly 40 percent by following the CPS Principles.” We use only
three-fifths of the production area originally planned to achieve thesame production capacity in layout,” said Erging. “CPS has helped us
greatly reduce our investment in the plant and improve our efficiency,
so it is of great significance to us.”Dealers Advocating the Cat Brand
For more than 85 years, Caterpillar has had a unique relationship withits dealers. This simple yet powerful partnership has combined thecapabilities of a global technology and manufacturing leader withdealers who enjoy close relationships with their customers in theirown language and culture.
The dealer network helps Caterpillar and customers win around theworld. Cat® dealers share the Caterpillar passion, enhance the competitive edge and ensure customers receive maximum business value fromCat products and services. Most Cat dealers are independently owned,
locally operated businesses and benefit from strong, longstanding
customer relationships.
They are an integral part of the enterprise strategy and play a key rolein the Caterpillar business model. They are at the front lines of serving
our customers. They are a competitive advantage that competitors
simply cannot match. That’s why Cat dealers were a key player in therollout of Caterpillar’s revitalized brand strategy in 2012, which focusedon energizing and developing a culture that has an intense, acute focus
on the customer.

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2012 Year in Review(continued)“We are rededicating ourselves to living up to our brand promise.
To ensure that the way we present ourselves, both internally andexternally, reflects our unwavering dedication to ensuring our customers’
success,” stated Caterpillar Group President Stu Levenick. In addition
to the more than 9,000 Caterpillar employees worldwide who completed
the brand experience training, more than 600 dealer marketing managers
from 114 dealerships in 13 regions of the world and 22 of their agencies
also learned about the Cat brand promise and updated global advertisingframework. Working together with a common understanding ofwhat the Cat brand stands for, we are champions for our customers’
enduring success.
Suppliers/Dealers/Customers Learning to L.E.A.D.
Leadership Excellence in Accountability and Development (L.E.A.D.),
Caterpillar’s leadership development program, has a flagship program
designed specifically to prepare future Caterpillar leaders for executivelevel positions. Developed in partnership with Stanford University’s
Graduate School of Business, this program includes intense week-longsessions spread over 12 months in different locations around the world,allowing participants to experience Caterpillar’s global footprint with
an emphasis on growth markets.
While the program was initially designed to develop Caterpillar leaders
for senior roles in the enterprise, it quickly became evident that leadersfrom the entire value chain would benefit from participation and bringanother dimension to the program. Now, critical suppliers, dealer
leadership teams and selected Caterpillar customers comprise about
one-third of program participants.
“The intent is to have the entire value chain represented to truly
provide the enterprise point of view,” said Group President Ed Rapp.
“Participants see the value in having open, honest dialogue with one
another and see the power of the entire value chain, including customer
leaders, there in the same room to work on project teams to solve realbusiness challenges we’re facing.”

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CELEBRACIÓN
DE MEXICO
Celebrating 50 years of Caterpillar
success in Mexico.

It was February 1963 when Caterpillar broke ground on its first
operations in Mexico. The facility opened its doors with
130 employees, and the production and distribution facility
proudly called Monterrey its home.

Maria Carvajal Fernandez, a service technician, said the open house
was very well organized, and she was proud to bring her family.

Fifty years later, Caterpillar’s Mexico operations now include several
facilities, with four of them directly supporting the Integrated
Manufacturing Operations Division (IMOD). Today, more than 5,000
IMOD employees specialize in large fabrications to support theconstruction and mining businesses.

“Caterpillar is the only company that I have worked for, and I have seen
many changes over the past 24 years since I began working,” Fernandezsaid. “I think that the open house was a great opportunity for our families
to see and understand what we do and where we work. I was very
proud because I came with my mom, who had the opportunity to cometo the open house more than 10 years ago, and now she could compare
and see many positive changes have been made.”

To celebrate the first 50 years, a grand ceremony was held during
September 2012. With the assistance of several managers, business
partners and special guests, employees were thanked for their hard workthat has helped pave Caterpillar’s road to success through the years.

Families who explored the Monterrey facility not only enjoyed Cat®
products, but also a playground for children, a presentation from a
local TV children’s show and a museum that focuses on Caterpillar’spresence and contributions in Mexico.

“We celebrated in Monterrey because this is where we began,” said
Ron Riekena, managing director and Mexico country manager. “And
we continued the celebrations all through our Mexico facilities.”

For many who participated, the main attraction was an interactive showthat involved Cat® machines, dancers, musicians and acrobats. Amongthe many performers was a Cat® 416E Backhoe Loader, a Cat® 966E
Wheel Loader and a Cat® 770 Off-highway Truck.

Two days after the celebration, an open house was held at the Monterrey,
Mexico, facility for all employees and their families. This was the first timein more than 10 years that the facility was open to employees to share with
their families. As a result, there was a lot of anticipation leading up to theevent. Approximately 10,000 attendees visited the facility for tours of the
production building, where they were able to learn how one of the main
products, the small truck body, is built.

Employees were thankful for this great opportunity to share their
Caterpillar pride with their families.
“I’m very proud of the team who has pulled together over the years,
whether it was for the business or for our communities,” Riekena said.

“The open house was great for some of our newest employees,” said
Logistics Manager Roberto Tellez Gonzalez, who has been with Caterpillar
for 14 years. “They had the opportunity to show their families everythingthat the Monterrey facility does. We all had the opportunity to go on afacility tour, and it was amazing.”

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THE STORY OF
YELLOW IRON
A new showcase for the history, technology
and people behind Caterpillar.

People know the yellow iron. Now they can understand the history,
technology and global team behind it. A once-empty block on the
Peoria, Ill., riverfront is now occupied by the Caterpillar Visitors Center,
which offers a wide range of interactive exhibits to thousands of visitors
every week. Just six weeks after opening on October 20, 2012, theCaterpillar Visitors Center had already counted more than 20,000 visitors.
To commemorate the opening, a time capsule was placed in the globe
of the Visitors Center lobby. The capsule includes 78 different items,
such as a Cat® D73 machine blueprint, diesel exhaust fluid tank cap
and a pair of Cat® work boots, to be revealed in 38 years on the 125th
anniversary of Caterpillar.

The Center itself is a state-of-the-art, LEED-certified building andprovides a fascinating look at the company, the iron and the rock solid
people making sustainable progress possible around the world. With
nearly 50,000 square feet to explore, employees, retirees, dealers,customers, suppliers and the general public learn the story of Caterpillar
through 28 exhibits, 53 videos, and approximately 775 photographs
throughout the experience.
Possibly the most notable feature is the massive, life-size Cat® 797
Mining Truck at the heart of the building. Each visitor’s journey begins
in the bed of the Cat 797, which is home to a 62-person, rumble-seat
theater. The featured video begins with stories from Caterpillar customers
who talk about the work they do and how it impacts the world aroundthem — every day, across the globe. These customers are the heartof Caterpillar’s business — and the spotlight of the Visitors Center.

ROCK SOLID HISTORY

Recognized at the time as the largest showroom of its kind
anywhere in the world, the Building HH Showroom in East
Peoria, Ill., was 308 feet long, 108 feet wide and featured atleast one sample of every machine Caterpillar built at any
given time. Opened in 1929, thousands of people visited theshowroom each year, including dealers, customers and the
public. In 1938 alone, the showroom saw 14,566 visitors.

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DEFINING THE
DIFFERENCE

my roadtoprogress

Differentiating a Caterpillar careerfor prospective employees.

What is it like to work at Caterpillar?

As a global leader with global resources, Caterpillar offers:“At Caterpillar, you work for a global leader with global resources
to support your career. You work with a talented team groundedin timeless values. And as all of us work together, Caterpillar
provides the opportunity to make a transformational, tangible
impact on your community and the world.”
These statements are the pillars of Caterpillar’s employment brandmessage, developed in 2012 to describe what differentiates theCaterpillar career experience from other employers’ — it’s why
employees choose to work here and why job candidates should
consider a career at Caterpillar.
Extensive research was conducted with current employees, recent
new hires, executive leaders and potential candidates to define theemployment brand and to be certain it matched the real work experiencethat makes Caterpillar unique among other companies. The employment
brand message is now being used to describe the Caterpillar work
experience to potential candidates, while improving the career
experience for current employees.
“As we have added more than 30,000 new employees globally in thelast two years through direct hires and acquisitions, we believed it
was important strategically to develop a consistent message of what
it is like to work at Caterpillar,” explained Vice President and Chief
Human Resources Officer Kim Hauer. “As we grow globally we want
to reinforce and perpetuate the Caterpillar culture and brand that wehave inherited from previous generations.”• More than 85 years of industry leadership through its broad productline, a respected and admired corporate leader as a Fortune 50
company listed in the Dow Jones Industrial Average.
•D ynamic and flexible careers with boundless growth throughout
hundreds of facility locations globally and diverse career paths,
allowing employees to gather deep expertise in their fields andmove between product lines and business areas.
• Opportunities to work with a team committed to customer successand living by Our Values in Action — Caterpillar’s Worldwide
Code of Conduct.
• Innovation that is purposeful and tangible. Currently, Caterpillar
has more than 10,000 engineers. Historically, more than 7,000
patents have been granted.
• T he opportunity to make a difference. Caterpillar equipment plays
an unmistakable role in developing countries and creating economic
growth. Employment with Caterpillar is truly an opportunity tochange the world.
It’s been said around Caterpillar for decades that the road to progress
begins with a road, period. So, as Caterpillar makes progress possiblearound the world through its powerful machine and engine products
and solutions, Caterpillar employs “rock solid people” who can say,
“My road to progress begins with a career at Caterpillar.”
The employment brand message on “Why Caterpillar” can be foundon the caterpillar.com/careers website.

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ROCK SOLIDPERFORMANCE
Our renewed focus on customers is deliveringresults. When Caterpillar products and services
deliver world-class performance for our customers,then we are positioned to deliver world-classfinancial performance for our stockholders. We
accomplished this in 2012 by translating record
sales and revenues into solid profitability.

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GETTING A FIX ON
VARIABLE EXPENSE
Job Site Solutions helps a dairy better manage
the bottom line.

Spend any time with the McCarty family at their dairy operationand you’re likely to hear the words family, relationship, trust andintegrity, along with analysis and innovation. All of this playeda part in a recent deal from Foley Equipment for 17 new Cat®
machines to handle feed and manure for McCarty Family Farms.
The McCarty family transplanted their entire operation to Kansas from
Pennsylvania, where rising costs made it difficult to acquire acreage
needed to grow the business. With this expansion came the need formore machines to run the operation. The McCartys turned to theirequipment partner, Foley Equipment, and Caterpillar for an analysis of
their purchase and operating options.
As with most businesses, the dairy business is considerably morecompetitive today than in the past, so watching costs is critical. “In
any given month, we might find a $30,000 or $40,000 ‘surpriseexpense’ for machine or equipment repairs,” said Ken McCarty, who
operates the Rexford dairy with his brother Clay.
“Our goal is to minimize the up-and-down fluctuations in operating costs.
We’re really tuned in to finding partners and ways of doing businesswhere the unknowns become known,” said Clay. “Foley made it so weknow how much machine operating expenses will be for the long term,”
Ken continued. “This brings incredible stability to our operating cost,which ultimately flows to the bottom line.”
Long-time Foley sales representative Dustin Daniels and Scott Bailey
of Caterpillar’s Job Site Solutions team conducted an exhaustive, topto-bottom analysis of the entire operation, including capital and cash
flow; machine requirements and their fit to operational tasks; workflows and productivity; and safety and maintenance.
The outcome of the analysis is a solution that optimizes machine utilization,
component life, operator performance, fuel consumption and total fleet

availability at a fixed cost. The end result is a fleet fully integrated withdairy operations to significantly improve the bottom line.
Monitoring and managing each machine wouldn’t be possible without
technology. Each machine is outfitted with Cat® Product Link™ andmonitored by Foley through VisionLink™ desktop and mobile monitoring
applications. Machines are set up with limits on certain operating
parameters, based on the site and the work required and monitored
on a number of productivity measures, as well.
Issues such as engine overspeeds, improper shift points or excessive
idling that could create a safety issue, an unplanned repair or higher
operating costs are now visible. In doing so, Foley will be able to identify
issues and develop remedies before they turn into costly downtime.
Productivity of the machines will also be tracked in an effort to optimize
efficiency. Load volumes and cycle times will provide insight into
inefficiencies or bottlenecks in the day-to-day operations, with thegoal of eliminating them.
Delton Taylor, equipment solutions manager for Foley Equipment, willbe the primary point of contact for much of this information called
Condition Monitoring. “What’s neat about this is that it’s going to betransparent to the customer. In most instances we’re going to know a
problem exists before the customer has a chance to pick up the phone.
In fact, we’ll likely be reporting the problem to them,” explained Taylor.
“The more we looked at this, the more it appeared to be a no-brainer on
so many levels,” said Mike McCarty. “Think about it this way; we’vetaken a variable expense and made it fixed. That’s huge. We’ve taken themachine maintenance and off-loaded it to the people who really know
the machines. As the technology advances it’s tougher to train workers
and keep them up-to-date. Plus, with an operation this large, we’re
increasingly looking for a better quality of life, and that doesn’t include
spending our free time wrenching on a machine,” McCarty concluded.

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PRAISE FOR A
NEW PROCESSAND PRODUCTA new development approach leads to accolades
for Tier 4i motor graders.

Just one year after its release, Caterpillar’s new Cat® M2-Series
motor grader continues to gain accolades for its superior
performance, reliability and productivity. Although customer
satisfaction is what really counts, the process leading up to
its release gained praise itself — raising the bar and setting
higher standards for new product introduction at Caterpillar.
The Cat M2 was Caterpillar’s first machine introduced to meet a newround of emission standards in North America and Europe — Tier 4Interim (Tier 4i) standards for the United States and Stage IIIB standards
in the European Union (EU).
According to Caterpillar Motor Grader New Product Introduction (NPI)Manager Jeff Castleman, the sheer magnitude of teamwork andcollaboration involved was extremely well orchestrated — spanning
four continents and representing Caterpillar’s product development
team, manufacturing facilities and supply base.
“This truly is a great example of Caterpillar at its best, in terms of global
collaboration, to make sure we excel at product development,” explained
Castleman. “The team went in with a very aggressive plan to executeand deliver a new product introduction that not only met emission
requirements, but also offers superior value to our customers.”
One year post-introduction, Castleman said, “The dealer’s feedbackon the Cat M2-Series has been very positive. They specifically saw
improvements in machine performance, as well as feature improvements that not only provide value to the customer, but also make theirjobs easier.”

Cat M2 motor graders have been outstanding,” he explained. “We’ve
had several customers tell us the initial difference in performance is
excellent, and over time they have seen considerable fuel savings,
excellent reliability and improved uptime. Based on positive customer
feedback, strong initial quality metrics and the high confidence of our
account managers, the Cat M2 has more than delivered in performanceand reliability.”
Built on the strengths of the M-Series predecessors, the Cat 120M2,
Cat 12M2, Cat 140M2 and Cat 160M2 feature new engines, revolutionary
joystick controls and integrated technologies that help the customer
do more work in less time at a lower total cost. Other added features
include a new ripper design, swing open cooling package, anti-icing
glass and Cat® Grade Control.
“The new swing out radiator on the M2-Series makes our routine
maintenance a lot easier,” said Bobby Aiken, road department
Superintendent for Seminole County, Georgia, “It’s a lot lessdowntime for us.”
Since the release of the Cat M2, multiple products have gone into
production with Tier 4i — medium wheel loaders, articulated trucks,
track-type tractors and more. The next round of emissions regulations,Tier 4 Final, takes effect January 1, 2014.
“Throughout the introduction of the Cat M2, the commitment tocontinuously improve the overall development and execution process
was unprecedented,” said Global Motor Grader Product Manager
Pat O’Connell. “We’re building and improving on this foundation as
we prepare for Tier 4 Final.”Cat® dealer Empire Machinery Sales Manager Kevin Shanley said theintroduction of Tier 4i emissions technology to the Cat M2 has been aseamless transition for Empire and its clients. “From our perspective,

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MANAGING AND
MONITORING THE
SMART WAY
Smart electronics yield better engine performance.

Caterpillar is constantly developing and refining advanced
technologies to help make customers’ equipment moreproductive and efficient, and to help them more effectively
manage fleets and operations.

As a result of implementing the monitoring system, the customer has
achieved 99 percent runtime, and the interaction between the operator
and Caterpillar experts has proved very helpful by increasing operator
knowledge of this equipment.

Smart electronics, for example, help to monitor and control Caterpillarpowered gas compression stations around the world. These innovative
solutions also help Energy & Power Systems customers utilize
equipment data for proactive asset management, ranging frombasic location tracking to advanced condition monitoring.

Business pressures to improve reliability and reduce costs have increased
the challenge faced by operations and maintenance organizations as theyacquire and maintain engines with the newer technology. Caterpillar
has a long history of innovating on behalf of its customers. Energy &Power Systems customers are choosing to address these challenges
by leveraging Caterpillar equipment monitoring solutions to assist in
the proactive management of their equipment.

The value of these smart electronics is evident at the Atmos Energy
Corporation Ponder Compressor Station, located northwest of Fort Worth,
Texas. Here, Atmos operates two Cat® G3612 Engines. Both units are
required to run 24 hours per day, seven days per week, but the stationis unmanned at night and on the weekends. By filling this gap in operational surveillance, the Caterpillar monitoring system provides valueand helps to enable customer success.

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READY, SET…
ASSEMBLE!
Collaboration improves truck assembly.

Few organizations in the world can boast such well-established,successful relationships as those that exist between Caterpillar
and its dealers, who continually look for ways to work together
more efficiently and effectively to benefit customers. A 2012 initiative between Caterpillar and Cat® dealers to improve the assembly timeof the Cat® 793F Large Mining Truck is a great example of how thiscollaboration benefits customers.
The massive truck is more than 18 feet tall, 44 feet long, weighs upwardsof 270,000 pounds and has a payload of 250 tons. The assembly of thisworkhorse is a massive undertaking. Historically, assembly took manyweeks with multiple technicians, depending upon the truck’s configuration. This process tied up the skilled technicians at the dealership andkept them from addressing other customer needs.
A global core team of 15 individuals, with an additional 60 people
representing 13 different dealerships and seven different Caterpillar
business units, collaborated to improve the process.
“As the team started to get into the real details of the problem, it became
apparent very quickly that the challenge had many dimensions, thesolution had to be global and sustainable, and the project would require
an extraordinary degree of communication and collaboration amongst
multiple divisions and dealers,” explained Cameron Ferguson, dealer
capability manager. “With an issue as complex as assembling large
product consistently around the world, involving hundreds of people,
thousands of parts, several languages and local customization, thisproject showed that with the right tools and commitment, a flexible but
consistent solution can be achieved and exceed customer expectations.”

The team used the rigor of 6 Sigma methodology and the discipline of
the Caterpillar Production System (CPS) to identify areas of opportunityand define sustainable solutions. The overall goals were to best matchthe labor force to tasks, reduce cycle time, reduce total labor hours,deliver the standard work in a sustainable way and improve safety byidentifying the right specialty and shop tools for the tasks.
The results have been remarkable. Using the new processes and tools,
the base assembly time has been reduced by an average of 40 percent.
In addition to the faster assembly, the quality levels of the machines havebeen significantly improved, due to the focus on standard processes andtools, which are being replicated for other large mining trucks. This
global collaboration leads to a better product delivered faster andmore cost effectively to customers.
Darren Tasker, chief operating officer of WesTrac, one of the pilot
dealers heavily involved in the project noted, “WesTrac has been
focused on driving continuous improvement throughout its entire
organization, including the large mining truck ‘order to delivery’ cycle.
Through the collaboration of both Caterpillar and WesTrac, the project
quickly gathered momentum with immediate benefits.”
These benefits included elimination of waste, reduced defects/rework
and predictable cycle times and man hours required to perform theassembly of the machines.
“There is no doubt that without the expertise provided by Caterpillar,
WesTrac would not have realized this level of benefits, which also will
benefit other Cat dealers,” added Tasker.

Features 31

rock solid

2012 Year in Review

Rock Solid Performance

WHY CATerpillar?
Good reasons why Caterpillar is agood choice for all stakeholders.

With more than seven billion people in the world who needinfrastructure, energy and power, and the world’s commodities,
Caterpillar is in a great position to win in the global marketplace.
Group President Ed Rapp describes a number of factors that
put Caterpillar ahead of the competition:• The broadest line of products and services in the industry, andvertical integration of products, components and systems thatprovide unique advantages over the competition.
• A global manufacturing footprint that helps balance the shifting
world economies.
• A dealer network that is unmatched and a supply chain thatfacilitated the ramp-up to record levels.
• A Caterpillar business model that puts the largest population ofmachines in the field at the lowest life-cycle cost for the customer.
• A diverse and talented team of great people.
• A strong balance sheet that provides financial strength asCaterpillar delivered another year of record sales and revenues
and profits in 2012.
To learn more, visit http://youtu.be/GETaxNQN9mw.

Features 32

rock solid

2012 Year in Review

Business Segments
Construction industries
Construction Industries 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. Primarily responsible forsupporting customers using machinery in infrastructure and building
construction applications. Responsibilities include business strategy,
product design, product management and development, manufacturing,marketing, and sales and product support. The product portfolio includes
backhoe loaders, small wheel loaders, small track-type tractors, skid
steer loaders, multi-terrain loaders, mini excavators, compact wheel
loaders, select work tools, small, medium and large track excavators,
wheel excavators, medium wheel loaders, medium track-type tractors,
track-type loaders, motor graders, telehandlers, pipelayers andrelated parts.
energy & power systems
Energy & Power Systems is focused on supporting customers tomeet increasing demand for energy through a variety of solutions
and applications. This segment is primarily responsible for supporting
customers using reciprocating engines, turbines and related parts acrossindustries serving electric power, industrial, petroleum and marine
applications as well as rail-related businesses. Responsibilities
include business strategy, product design, product management,
development, manufacturing, marketing, sales and product supportof reciprocating engine powered generator sets, integrated systems
used in the electric power generation industry, reciprocating engines
and integrated systems and solutions for the marine and petroleum
industries; reciprocating engines supplied to the industrial industry as
well as Caterpillar machinery; the business strategy, product design,
product management, development, manufacturing, marketing, sales
and product support of turbines and turbine-related services; thedevelopment, manufacturing, remanufacturing, maintenance, leasing
and service of diesel-electric locomotives and components and otherrail-related products and services.

resource industries
Resource Industries helps customers mine and harvest resources likecoal, iron ore and lumber. Responsibilities include business strategy,
product design, product management and development, manufacturing,marketing and sales and product support. The product portfolio includes
large track-type tractors, large mining trucks, underground mining
equipment, tunnel boring equipment, large wheel loaders, off-highway
trucks, articulated trucks, wheel tractor scrapers, wheel dozers,
compactors, select work tools, forestry products, paving products,
machinery components and electronics and control systems. In addition,
Resource Industries manages areas that provide services to other partsof the company, including integrated manufacturing, research anddevelopment and coordination of the Caterpillar Production System.
Since the acquisition of Bucyrus in 2011, additional responsibilities
were added and include business strategy, product design, productmanagement and development, manufacturing, marketing and sales
and product support for electric rope shovels, draglines, hydraulicshovels, drills, highwall miners and electric drive off-highway trucks.
customer & Dealer support
Customer & Dealer Support strengthens Caterpillar’s product support
excellence by bringing a strong focus to Cat branded parts andcustomer service and delivering outstanding dealer development. This
segment supports customers and dealers in a variety of ways, suchas providing employee equipment training on job sites, supplying
aftermarket parts and service support, and offering eBusiness andEquipment Management solutions. A key strength is the ability to
manufacture parts and components, provide remanufacturing solutions
and deliver unmatched parts availability to dealers and customers
anywhere in the world.
financial products
Caterpillar sustains sound relationships with its dealers, customers
and suppliers by providing customized financing solutions throughoffices in more than 35 countries. Financing plans include operating
and finance leases, installment sale contracts, working capital loans
and wholesale financing plans. The segment also provides various
forms of insurance to customers and dealers to help support thepurchase and lease of Cat® equipment.

Business Segments 33

rock solid

2012 Year in Review

Construction Industries
Rich Lavin
Caterpillar Group President

Despite a difficult and challenging year, Construction Industries (CI)
contributed to yet another record year for the enterprise and had someincredible accomplishments.

Sales
2012

$19,667$19,334• We achieved historical bests in both quality and safety.
• We improved our overall industry leadership position.
• We made progress in China — bauma China 2012 was an excellent example that
displayed the strength of our product offerings in China.
• We improved the diversity of our leadership in Asia-Pacific.
• We made considerable strides in becoming the lowest cost producer (LCP).
• We deployed Tier 4i, while improving overall customer value and maintaining
excellent quality.
• We saw positive expansion of global facilities and continue to have success on
those in progress.

$ in millions

2011

Segment Profit
2011

2012

At the end of last year, I entered a new chapter in my life to begin my retirement, withGroup President Ed Rapp taking leadership of Construction Industries. I’m confident that
Ed will take the performance of our business to the next level and build on the tremendous
foundation that has already been established. I leave Caterpillar very optimistic about
its long-term future and the success it will bring in the years ahead.

$2,056$ in millions$1,7892012 Sales by Geography
North America

n $7,101

Latin America

n $2,650$ in millions

EAME

n $4,633
Asia-Pacific

n $4,950

Business Segments 34

rock solid

2012 Year in Review

Energy & Power Systems
Gerard Vittecoq
Caterpillar Group President

In 2012, the Energy & Power Systems team delivered record results, making
significant progress toward our 2015 goals.

Sales
2011

$21,122We expanded capacity with the opening of a new Rail facility in Sete Lagoas, Brazil,
and a new Solar Turbines facility in Zatec, Czech Republic. We continued to make great
strides in integrating MWM into Caterpillar following our acquisition in 2011, ultimately
enabling us to significantly expand customer options for sustainable power generation
solutions. We made a number of exciting announcements as well, including a joint
venture with Ariel Corporation to provide complete pressure-pumping solutions to
global oil and gas customers and an agreement with Westport to develop natural gas
technology for off-road equipment. We also added to our growing list of agreementswith International Power Project (IPP) providers to develop temporary power solutions
to meet the needs of the growing IPP segment.

$ in millions$20,1142012

Segment Profit
2011$3,434$ in millions$3,053

I also marked a personal milestone with an announcement at the end of the year of myretirement after more than 37 years with the company. Earlier this year, Jim Umpleby
assumed responsibility as group president with responsibility for Energy & Power Systems.
I have tremendous confidence in Jim’s ability to lead this business and continue to buildon the successes we’ve achieved thus far. When it comes to our Energy & Power Systems
businesses, we are in the right businesses at the right time, for a long time. Our potential
is rock solid, and I look forward to the many great things to come from this group in
the future.

2012

2012 Sales by Geography
North America

n $8,720

Latin America

n $2,191$ in millions

EAME

n $6,043
Asia-Pacific

n $4,168

Business Segments 35

rock solid

2012 Year in Review

Resource Industries
STEVE WUNNING
Caterpillar Group President

As we enter into a new year that looks to be as challenging as 2012, it’s important thatSales

we not forget just how far we’ve come in Resource Industries. We have had many remarkable2011

accomplishments, and I would like to take the opportunity to mention a few. The integration of Bucyrus

2012$21,158

is going very well and is delivering our commitments made to our customers and stakeholders.
On-time shipping performance from our plants is more than 85 percent compared to less than

$15,62940 percent five years ago. We’ve expanded and modernized our machine and component manufacturing
plants all around the world, making our manufacturing facilities world class.

most modern and global manufacturing presence in the mining industry. The showcase of all our
new products, technologies and solutions at MINExpo was a powerful example to our customers$ in millions

New startup facilities in Asia separate Caterpillar even more from competition with the largest,that we take our leadership in the mining industry very seriously.

Segment Profit
Our diversified businesses continue to respond to a difficult and uncertain business climate, particularly

2011

2012

in our Forest Products, Tunneling Products and Paving Products businesses. Our new Industrial & Waste
strategic business is providing the necessary focus to this important segment. And, our Defense &$4,318Federal Products, OEM Solutions and Work Tool businesses are performing exceptionally well,$3,334making important contributions to the enterprise.
Product quality has improved tremendously, continuing the legacy that’s been our foundation for more
(CPS) with all of our newly acquired plants from South Milwaukee, Wisconsin, to Thiruvallur,
India, which is leading the pack in manufacturing excellence. The component business has been

$ in millions

than 85 years. We continue to successfully invest and deploy the Caterpillar Production System

equally successful with improved delivery performance, and the investments in our producttechnology strategy and Tier 4 deployment continue to differentiate us, providing greater value to2012 Sales by Geography

our customers today and into the future. Most importantly, we’ve seen outstanding improvement
North America

in employee safety over a 10-year journey. We are pleased with our progress, but recognize we

n $6,037

still have a long way to go to reach Vision Zero.

Latin America

n $3,662
EAME

is this … our team of dedicated employees always delivers, no matter the challenge.

Business Segments 36$ in millions

Throughout 2013, Resource Industries will have to be flexible, but there is one constant and thatn $4,374
Asia-Pacific

n $7,085

rock solid

2012 Year in Review

Customer & Dealer Support
STU LEVENICK
Caterpillar Group President

The Customer & Dealer Support (C&DS) organization faced a number ofchallenges in 2012, but we continued to focus on our customers and executethe key role we play in the Caterpillar Business Model. We have a rock solid
strategy and a well-aligned organization that is executing very well.

180

178

2010

188

2011

2012

191

189

Dealer Employees
152.5

2012

These are just a few of the 2012 Customer & Dealer Support organization’s
accomplishments. I encourage you to read about the many things Caterpillar deliveredin 2012. Whether it was dealer collaboration, innovation, supplying power to theworld or building more infrastructure, you will quickly learn why I am proud to bepart of the remarkable accomplishments at Caterpillar and get the opportunity tolead a great team of employees.

141.3

2011

126.7

2010

in thousands

What we do makes a difference — not only for Caterpillar, but more importantly for our
dealers and customers.

2009$ in billions

I am proud of my organization’s accomplishments as progress continues to be madetoward our very aggressive 2015 goals and our safety targets have again been exceeded.
We invested heavily in our parts distribution network in every region of the world and in
our Reman and Components global capacity. Despite the economic headwinds during theyear, we continued to improve quality. We made great strides in our efforts to provide
world-class support to the greatest dealer network in the world. Our eBusiness capabilities
continued to expand, we accelerated our penetration into telematics and Equipment
Management, and we launched our revitalized Global Brand strategy that uniquely
positions and strengthens our Cat brand in the global marketplace.

Global Cat® Dealers
2008

2009

135.7

2008

131.8

Dealer Net Worth
2008

2009

2010

2011

2012

$21.3

$ in billions$16.5

Business Segments 37

$15.7

$17.7

$18.9

rock solid

2012 Year in Review

Financial Products &Corporate Services
ED RAPP
Caterpillar Group President & Chief Financial Officer

As I reflect on 2012 as Group President of Financial Products & Corporate
Services, I realize our employees of the services groups and Financial
Products have accomplished much as you consider:

Revenues
2011$3,0032012$3,090• Our recovery since the “Great Recession” has been the fastest ramp-up in company
history, stretching all of us and our supply chain. I think we have made good progressin building these supplier relationships.

$ in millions• C at Financial came out of this challenging period even stronger and we have
improved alignment.
• Add to that, we’re integrating four major strategic acquisitions, including thelargest in company history, the largest capital expansion program ever, and ourlargest divestiture. All of those activities involved our entire suite of support
services. Now, as a company we need to stay focused on execution.

Segment Profit
2011

2012

•A
 ll of our groups have had major transformations underway that are truly making
us more effective and efficient at delivering services to the business, supply chain
and customers: People initiatives to help us develop the Best Team, Purchasing transformation, Order to Delivery/Finance Transformation (Mach 1) and our strategy todeliver as a captive finance company.

$763
$587

$ in millions• That doesn’t even begin to touch all of the aspects of deep expertise andfundamentals that are executed without a hitch day in and day out in Cat Financial,information technology, human resources, procurement and finance.

2012 Revenues by Geography

There is considerable capability across Corporate Services and Cat Financial to bringvalue to the business. We are using those capabilities to solve real business problems
and to chase that value add to the bottom line. I’m proud to say I’ve been a part ofCorporate Services as I move to leadership of Construction Industries in 2013.

North America

n $1,675

Latin America

n $397$ in millions

EAME

n $408Asia-Pacific

n $610Business Segments 38

rock solid

Performance Summary
Financial PerformanceMarket Performance2012 Regional Performance

Business Performance

5-Year Financial Summary

Performance Summary 39

2012 Year in Review

rock solid

2012 Year in Review

Financial Performance
Dividends Declared Per Share
2008

$1.62

2009

$1.68

2010

$1.74

Profit Per Share (diluted)
2011

$1.82

2012

2008

2009

2010

2011

2012

$2.02

$8.48
$7.40
$5.66
$4.15

in dollars

in dollars$1.432012 marked the 19th consecutive year Caterpillar has paid anincreased dividend to stockholders.

A significant increase in profit per share in 2012 reflected effective
profit pull-through, one of our “Big 8” strategic imperatives.

Research & Development
2008

2009

2010

2012 Sales & Revenues By Segment
2011$2,2972012$2,466

Construction Industries

n $19,334

Resource Industries

n $21,158$1,905$1,728

Total$65,875

Financial Products

n $3,090
All Othern $1,171$ in millions$ in millions$1,421

Power Systems

n $21,122

Investment in research and development reached record levels
in 2012.

Sales and revenues were $65.88 billion compared with $60.14 billion
in 2011. The increase in sales and revenues is a result of the net
impact of acquisitions and divestitures, higher sales volume andimproved price realization.

Performance Summary 40

rock solid

2012 Year in Review

Financial Performance
Capital Expenditures (excludes equipment leased)

Sales & Revenues

2008

2008

2009

2010

2011

2012

2009

2010

2011

$3,350$60,138$65,875$51,324$2,515$2,3202012$42,588$1,575$32,396$ in millions$ in millions$1,504

Caterpillar invested more than $3.35 billion in capital expendituresduring 2012, reflecting capacity expansion around the world to
support customer demand.

Sales and revenues increased 10 percent to $65.88 billion in 2012,
an all-time record.

2012 Exports From U.S. By Region

Operating Profit
2008

2009

2010

2011

Canada$8,573

n $2,630
Latin America

n $5,247
n $7,140
Asia-Pacific

n $7,794$ in millions$22,811$7,153

EAME

U.S. exports of $22.81 billion increased 16 percent from2011 to 2012.

$4,448$ in millions

Total

2012

$3,963$577
Operating profit was $8.57 billion compared with $7.15 billion
in 2011.

Performance Summary 41

rock solid

2012 Year in Review

Market Performance
5-Year Total Return CAT vs. S&P 500 vs. S&P Machinery Index
2007

2008

2009

2010

2011

2012

$100.00$63.21$84.13$141.91$139.75$141.96n Caterpillar Inc.
n S&P 500 Index
n S&P 500 Machinery Index (S5MACH)

Cumulative stockholder return assuming an investment of $100 on December 31, 2007, and reinvestment of dividends issued thereafter.
Caterpillar has consistently outperformed the S&P 500 over the past five years.

5-Year Closing Stock Price
2008

2009

2010

2011

2012

$93.66$90.60$89.61$56.99$ in billions$44.67

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

Performance Summary 42

rock solid

2012 Year in Review

Business Performance
Global Employees (at year end)

Sales & Revenues Per Employee
2008

2008

2011

2012

$432
$326

104,490
93,813$ in thousands

2009

2010

$529

$482

125,099

2011

2010

2009

125,3412012

112,887

Worldwide full-time employment was 125,341 at the end of 2012
compared with 125,099 at the end of 2011.

Sales and revenues per employee in 2012 were $516,000.

Performance Summary 43$516

rock solid

2012 Year in Review

Dealer Statistics
Global Cat® Dealers
2008

180

2009

178

Dealer Employees
2010

188

2011

191

2012

189
2011

$ in billions

in thousands

2010

Our vast dealer network offers comprehensive solutions forcustomers worldwide.

2009

2010

2011

2008

131.8

Cat® dealer employees share our commitment to customers andensure maximum business value from our products and services.

2012

$15.7

$18.9

$ in billions

$16.5

126.7
135.7

$21.3
$17.7

141.3

2009

Dealer Net Worth
2008

152.5

2012

Most Cat® dealers are independently owned, locallyoperated businesses and benefit from strong,longstanding customer relationships.

Performance Summary 44

ROCK SOLID

2012 Year in Review

Regional Performance
North America

Latin America
Sales & Revenues by Segment

Sales & Revenues by Segment$ in millions$ in millions
Construction Industries

Total$24,079

Construction Industries

n $7,101

Total

Resource Industries

n $6,037$8,936

Power Systems

n $8,720

Financial Products

Power Systems

n $2,191
n $397All Other

All Othern $546

n $36

55,372

16,441

Offices

Employees

Facilities*

Resource Industries

n $3,662

Financial Products

n $1,675

Offices

n $2,650

Employees

Facilities*

53

31

Dealers

EAME

DealersAsia-Pacific
Sales & Revenues by Segment

Sales & Revenues by Segment$ in millions$ in millions
Construction Industries

Total$15,827

Construction Industries

n $4,633

Total

Resource Industries

n $4,374$17,033

Power Systems

n $6,043

Financial Products

n $4,950

Resource Industries

n $7,085

Power Systems

n $4,168

Financial Products

n $408n $610All Other

All Othern $369n $220
Offices

25,611

Offices

Employees

Facilities*

27,917

Employees

Facilities*

49

Dealers*Facilities include principal locations where manufacturing, parts distribution, rail, and remanufacturing
work takes place. In certain geographic areas, the facility symbol may represent multiple facilities.

Performance Summary 45

56

Dealers

rock solid

2012 Year in Review

5-YEAR FINANCIAL SUMMARY(dollars in millions except per share data)
Years ended December 31,
Sales and revenues
		 Percent inside the United States
		 Percent outside the United States
Sales
Revenues
Profit 4
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

2012$ 65,875
31%
69%$ 63,068$  2,807$  5,681$   8.71$   8.48$  2.020
37.2%

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

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

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

2008
$ 51,324
33%
67%$ 48,044$  3,280$  3,557$   5.83$   5.66$  1.620
46.8%$  3,350$  1,726$  2,813$  2,466
3.7%$ 11,756
127,758$  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$  1,421
4.4%$  7,416
99,359$  2,320$  1,566$  1,980$  1,728
3.4%$  9,076
106,518$ 89,356$ 81,446$ 64,020$ 60,038$ 67,782$ 27,752$  8,666$ 19,086$ 24,944$  8,415$ 16,529$ 20,437$  4,505$ 15,932$ 21,847$  5,652$ 16,195$ 22,834$  5,736$ 17,098$ 40,143$ 10,415$ 29,728$ 34,592$  9,066$ 25,526$ 28,418$  5,204$ 23,214$ 31,631$  6,387$ 25,244$ 35,535$  7,824$ 27,711

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.

Performance Summary 46

rock solid

2012 Year in Review

About Caterpillar

Business Overview

Global Snapshot

We are the world's leading manufacturer of construction
and mining equipment, diesel and natural gas engines,
industrial gas turbines and diesel-electric locomotives.

With offices and facilities that span six continents, ourglobal reach is unmatched in the industry.

Leadership TeamThe Caterpillar Foundation

Our officers and directors lead more than 125,000 employees
around the world in executing our strategy.

Founded in 1952, the Caterpillar Foundation helps makesustainable progress possible around the world.

About Caterpillar 47

rock solid

2012 Year in Review

Business Overview
Caterpillar powers world progress. Cat® equipment — more than three million units around the world — is at work for our customers on highways,
rail lines, oceans and rivers, in forests, quarries and oil fields. We supply the machines, solutions and support so our customers can excel undervarying 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 is needed. Caterpillar manufacturing excellence is supplemented by world-classservice businesses, supported by logistics, financial products and remanufacturing. More information about Caterpillar products, services andsolutions can be found at www.cat.com.

Major Product Groups
Articulated Truck
Backhoe Loader
Compactor
EngineForestry Machines
Generator Set
Hydraulic Excavator

Locomotive
Material Handler
Motor Grader
Off-Highway Truck
On-Highway Truck
Paving Equipment

Pipelayer
Scraper
Skid Steer Loader
Surface Mining
Telehandler
Track Loader

Track-Type Tractor
TurbineUnderground Mining Vehicles
Wheel Dozer
Wheel Excavator
Wheel Loader

Industrial/OEM
Landscaping
Logistics
MarineMiningOil & Gas
PavingPipeline
Power Generation
Quarry & Aggregate

RailroadRoad Construction
Underground Utilities
Waste Services

Locomotive & Railcar
Maintenance and Repair
OEM Solutions

Remanufacturing
RentalSafetyTurbines
Training

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

Major Service Areas
Customer Services
Financing
Insurance

BrandsCaterpillar Inc. owns a portfolio of brands. These brands help support our growth strategy and achieve our enterprise goals.
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.

About Caterpillar 48

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Global Snapshot

Offices
Facilities**Facilities include principal locations where manufacturing, parts distribution, rail, and remanufacturing work takes place.
In certain geographic areas, the facility symbol may represent multiple facilities.

About Caterpillar 49

2012 Year in Review

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2012 Year in Review

From Left to Right: Ed Rapp, CFO, Financial Products & Corporate Services; Steve Wunning, Resource Industries; Gerard Vittecoq, Energy & Power Systems;
Doug Oberhelman, Chairman and CEO; Rich Lavin, Construction Industries; Stu Levenick, Customer & Dealer Support

Executive Officers (Data based on 2012 year-end)
Doug Oberhelman, Chairman and CEO
Doug Oberhelman joined Caterpillar in 1975 and was elected a vicepresident in 1995. In 2002, he was elected a group president andbecame a member of Caterpillar’s executive office. In October 2009, theCaterpillar Board of Directors named Mr. Oberhelman vice chairman
and CEO-elect. During this time, he led a team that developed the future
strategic plan for the company. Mr. Oberhelman was elected chief
executive officer and a member of the board of directors effective
July 1, 2010, and became chairman effective November 1, 2010.

Ed Rapp, CFO, Financial Products & Corporate Services
During 2012, Ed Rapp served as 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. Effective January 1,
2013, Mr. Rapp became group president, Construction Industries, andBradley Halverson was named CFO and group president.

Rich Lavin, Construction Industries
During 2012, Rich Lavin served as group president and executive officemember of Caterpillar with responsibility for Construction Industries,
which included the Earthmoving, Excavation, Building Construction
Products, Europe/South America Operations and Caterpillar Japan Ltd.
(CJL) divisions, as well as Global Construction & Infrastructure andChina/India/ASEAN. Mr. Lavin retired at the end of 2012. His areasof responsibility have been assumed by Ed Rapp.

Gerard Vittecoq, Energy & Power Systems
During 2012, Gerard Vittecoq served as 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, ElectricPower, Progress Rail and Solar Turbines divisions. At the end of 2012,
Mr. Vittecoq announced his upcoming retirement effective May 31,
2013. James Umpleby became group president responsible forEnergy & Power Systems effective January 1, 2013.

Stuart L. Levenick, Customer & Dealer Support
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 andParts Distribution & Logistics.

Steve H. Wunning, Resource Industries
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 Sales & Support, Mining Products, and ProductDevelopment & Global Technology divisions.

Executive Officers 50

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2012 Year in Review

Officers (Data based on 2012 year-end)
Chairman and Chief Executive Officer
Douglas R. Oberhelman
Group Presidents
Richard P. Lavin
Stuart L. Levenick
Edward J. Rapp
Gerard R. Vittecoq
Steven H. Wunning
Executive Vice President,
Law and Public Policy
James B. Buda

Vice Presidents
Kent M. Adams
William P. Ainsworth
Mary H. BellThomas J. BluthDavid P. Bozeman
Robert B. Charter
Frank J. Crespo
Christopher C. Curfman
Paolo Fellin
William E. Finerty
Steven L. Fisher
Gregory S. Folley
Thomas G. Frake
Stephen A. Gosselin
Hans A. Haefeli
Bradley M. Halverson
Kimberly S. Hauer
Gwenne A. Henricks
Kathryn Dickey Karol
Randy Krotowski
Stephen P. Larson
William J. Rohner
Mark E. Sweeney
D. James Umpleby, III
Tana L. Utley
Officers 51

Chief Financial Officer
Edward J. Rapp
Treasurer
Edward J. Scott
Chief Audit Officer
Matthew R. Jones
Chief Ethics and Compliance Officer
Christopher C. Spears
Controller and Chief Accounting Officer
Jananne A. Copeland
Corporate Secretary
Christopher M. Reitz
Assistant Treasurer
Robin D. Beran
Assistant Secretary
Patrick G. Holcombe
Joni J. Funkrock solid

2012 Year in Review

From Left to Right: Susan C. Schwab, Edward B. Rust, Jr., Joshua I. Smith, Jesse J. Greene, Jr., Douglas R. Oberhelman, David L. Calhoun, Juan Gallardo, Dennis A.
Muilenburg, Jon M. Huntsman, Jr., Miles D. White, Charles D. Powell, Eugene V. Fife, Daniel M. Dickinson, Peter A. Magowan, William A. Osborn, David R. Goode.

Board of Directors
David L. Calhoun, 55
Chief executive officer (since May 2010) and a director (since January2011) of Nielsen Holdings N.V. (marketing and media information) andchairman 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 ElectricCompany and president and chief executive officer of GE Infrastructure.
Other current directorships: The Boeing Company. Other directorships
within the last five years: Medtronic, Inc. Mr. Calhoun has been a
director of the Company since 2011.
Daniel M. Dickinson, 51
Managing partner of HCI Equity Partners (private equity investment).
Other current directorships: MISTRAS Group, Inc. and HCI Equity
Partners. Other directorships within the last five years: Progressive
Waste Solutions Ltd. Mr. Dickinson has been a director of theCompany since 2006.
Eugene V. Fife, 72
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 andthe nonexecutive chairman from 2001 until 2010, when Eclipsys mergedwith Allscripts Healthcare Solutions, Inc. Mr. Fife was formerly a partnerof The Goldman Sachs Group, Inc., retiring in 1995. Other directorships
within the last five years: Allscripts Healthcare Solutions, Inc. andEclipsys Corporation. Mr. Fife has been a director of the Company
since 2002 and retired from the board at the end of 2012.

Juan Gallardo, 65
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.
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. Mr. Goode has been a director of the Company
since 1993.
Jesse J. Greene, Jr., 67
Instructor at Columbia Business School in New York City, where heteaches corporate governance, risk management and other businesstopics at the graduate and executive education levels. He was formerly
vice president of financial management and chief financial risk officerof International Business Machines Corporation (computer and officeequipment). Mr. Greene has been a director of the Company since 2011.
Jon M. Huntsman, Jr., 52
Former United States Ambassador to China (2009-2011) and former
governor of Utah (2005-2009). Other current directorships: Ford Motor
Company and Huntsman Corporation. Mr. Huntsman has been a directorof the Company since April 2012.

(continued)
Board of Directors 52

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2012 Year in Review

Board of Directors (continued)
Peter A. Magowan, 70
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) of Safeway Inc. (food retailer).
Other 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) and president 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) and vice president and general manager of the
Boeing Combat Systems division (2006-2008). Mr. Muilenburg has beena 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-electand 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 theCompany since 2010.
William A. Osborn, 65
Former chairman and CEO of Northern Trust Corporation (multibank
holding company) and the Northern 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 theCompany since 2000.

Edward B. Rust, Jr., 62
Chairman, CEO and president of State Farm Mutual Automobile Insurance
Company (insurance). He is also president and CEO of State Farm Fireand Casualty Company, State Farm Life Insurance Company and otherprincipal 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, 57
Professor at the University of Maryland School of Public Policy and astrategic 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) anddeputy United States trade representative. Other current directorships:
FedEx Corporation and The Boeing Company. Ambassador Schwab has
been a director of the Company since 2009.
Joshua I. Smith, 71
Chairman and managing partner of 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, 57
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 directorof the Company since 2011.

Charles D. Powell, 71
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. Lord Powell has been a director of theCompany since 2001.

Board of Directors 53

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2012 Year in Review

The Caterpillar Foundation reflects the philanthropic efforts of Caterpillar Inc. Founded in 1952 by Caterpillar, theCaterpillar Foundation has contributed more than $550 million to help make sustainable progress possible aroundthe world by providing program support in the areas of environmental sustainability, access to education and basic
human needs. To learn more about the Foundation's investments, please visit caterpillar.com/Foundation.

52% International$12.6 million$60
million

UNITED WAY CAMPAIGN TOTALINVESTED IN 2012$6.3 million

48% U.S.

PLEDGED BY CATERPILLAR
EMPLOYEES/RETIREES

Food

MATCHED BY THE CATERPILLAR
FOUNDATION

Water

In the U.S. and around the world, the Caterpillar Foundation invests in many
programs focused on ensuring disadvantaged populations have enough to eat.

1 in 6 Americans$6.3 million

870 million
CHRONICALLY HUNGRY WORLDWIDEIS FOOD INSECURE

For many, fresh, clean water is not as simple asturning on the tap. The Caterpillar Foundation
supports organizations that are striving to bringpotable water to those in need.
CHARITY: WATER
Since 2010, charity: water has funded 6,994 waterprojects in 20 countries. These well and filtration
system projects in Southeast Asia and Africa will serve
more than 2.5 million people. In 2012, the Caterpillar
Foundation provided support for their work in Tanzania,
Liberia and Malawi.

66 million

CHILDREN ACROSS THE DEVELOPINGWORLD ATTEND CLASSES HUNGRYHUNGER STRIKES

1 in 5 U.S. Children

World food PROGRAMMEThe World Food Programme (WFP) operates school meal programs in 60 countries. In thepoorest nations, this program has shown to as much as double primary school enrollment
and greatly equalizes gender disparities. With support from the Caterpillar Foundation,
WFP reaches about 22 million children annually.
FEEDING AMERICA
Feeding America’s network of over 200 food banks across the United States will serve
8 million meals because of the Caterpillar Foundation’s investment.

The Caterpillar Foundation 54

water.org
Water.org works to provide microloans for cleanwater access and the construction of household
sanitation facilities. The Caterpillar Foundation’s
investment in Water.org has helped thousands ofpeople in India gain access to fresh water and the
dignity of sanitation facilities.

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2012 Year in Review(continued)

Shelter
The Caterpillar Foundation works with a number of organizations specializing in providing thosein need with temporary, transitional and permanent housing.

HABITAT FOR HUMANITYREBUILDING TOGETHER

60,000+$25,000

AFFORDABLE HOMES BUILTSINCE 1976.

INVESTED IN PEORIA AND AURORA, ILL.,REBUILDING TOGETHER PROGRAMS.

AMERICAN RED CROSSWE HELP THOSE AFFECTED BYDISASTERS WITH SERVICES SUCH
AS EMERGENCY SHELTER.

ofPROVIDES TRANSITIONAL
HOUSING IN SLUM AREAS

19

Latin American
Countries

MANY CATERPILLAR AND DEALER EMPLOYEESVOLUNTEER WITH TECHO TO CONSTRUCT HOUSESFOR DISADVANTAGED FAMILIES IN THESE AREAS.

SINCE 1997

TECHO

245,000

volunteers

HAVE CONSTRUCTED

65,000transitional
homes

FOR

260,000

people inneed

WE INVEST IN THE ANNUAL DISASTERRELIEF PROGRAM OF THE AMERICAN
RED CROSS, WHICH HELPS THOSE
AFFECTED BY NATURAL DISASTER WITHSERVICES SUCH AS EMERGENCY SHELTER.

The Caterpillar Foundation 55

Caterpillar Inc.
100 NE Adams Street
Peoria, Illinois 61629 USA
1 (309) 675-1000