1. JPMorgan Basics and
Caterpillar Industrials Conference
Dave Burritt
Chief Financial Officer &
Vice President of Global Finance & Strategic Support
MAKING PROGRESS POSSIBLE
2. 2
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
Certain statements contained in this presentation are forward-looking and involve
risks, assumptions and uncertainties that cause actual results of Caterpillar to be
materially different from those projected or implied in the forward looking
statements. In this context, words such as quot;willquot;, “believes,” “expects,” “estimates,”
“anticipates,” “will be,” “should” and similar words or expressions identify forward-
looking statements made on behalf of Caterpillar. It is important to note that actual
results of Caterpillar may differ materially from those described or implied in such
forward-looking statements based on a number of factors and uncertainties,
including, but not limited to, changes in economic conditions; currency exchange or
interest rates; political stability; market acceptance of Caterpillar's products and
services; significant changes in the competitive environment; changes in law,
regulations and tax rates; and other general economic, business and financing
conditions and factors.
A more complete summary of risks and uncertainties is described in more detail in
Caterpillar's Form 10Q filed with the Securities and Exchange Commission on May
2, 2008. Caterpillar undertakes no obligation to update these forward-looking
statements.
3. 3
Strategy Unchanged
Vision 2020
But, there’s big opportunity for
Economic uncertainty, particularly in
Caterpillar over the next decade,
the US, is making the short-term
particularly related to mining,
environment a challenge VISION
energy, and infrastructure
2020
STRATEGIC PROFILE
STRATEGIC GOALS
Performance Profitable
People Product &
Growth
Process
CRITICAL SUCCESS FACTORS
EMERGING
PEOPLE QUALITY PRODUCT VELOCITY DISTRIBUTION MARKETS Trough
New Product Introduction
ENTERPRISE
Order-to-Delivery
STRATEGIC
AREAS Encoding 6 Sigma
OF Sustainable Development
IMPROVEMENT
Growth Beyond Core
Our Values in Action – INTEGRITY, EXCELLENCE, TEAMWORK, COMMITMENT
WORLDWIDE CODE OF CONDUCT
4. 4
What I’ll Cover Today
Overview of Caterpillar and recent history
Brief review of 2008
A broader look forward
5. 5
36% EPS CAGR 2002 to 2007
5 Years of Growth
Sales and Revenues Earnings Per Share
$5.37
$5.17
$41.5 $45.0
$43
$41
$36.3
$36
$4.04
$30.3
$30
$2.88
$22.8
$23
$20.2
$20
$1.56
$1.15
2007
2005
2004 2006
2003
2002
2007
2005
2004 2006
2003
2002
6. 6
Product Range Machines
About 300 Models in a broad range of product categories …
Backhoe Loaders Skid Steer Loaders Multi Terrain Loaders Integrated Tool Carriers
Wheel Loaders Excavators Wheel Excavators Track-Type Tractors
Track Loaders Pipelayers Landfill Compactors Soil Compactors
Wheel Dozers Motor Graders Wheel Tractor Scrapers Articulated Trucks
Off Highway Trucks Underground Trucks Underground Loaders Track Skidders
Wheel Skidders Feller Bunchers Vibratory Compactors Asphalt Compactors
Asphalt Pavers Pneumatic Compactors Cold Planers Rotary Mixers
7. 7
From a mini-excavator that fits in
Machines the back of a pick-up to … big iron
Operator
8. 8
New D7E at CONEXPO … Innovative From the Inside Out
35% more visibility 50% better
steering performance
50% less Up to 20% less
operator noise fuel consumed per
hour
35-70% lower
undercarriage
operating cost
Less fluids
60% fewer moving parts used
in the electric drive train
9. 9
End markets Machines
Infrastructure
Nonresidential Industrial
Residential
Waste Forestry
Energy
Mining & Quarrying
10. 10
Product Range Broadest Range of
Engines in Our
Industry
From 100 KW
to 22,000 KW
11. 11
Engines … and everything
in between
Model 3616
Model 3003
12. 12
End markets Engines
Petroleum
Cat Machines
Electric Power
Industrial
On-Highway Marine
Truck
13. 13
Geographic Diversity The Global Leader
Geographic Mix - Sales and Revenues
Caterpillar
• Broadest footprint in the industry
Outside Outside
• About 101,000 Employees North
North North
North
America
America America America
• About 300 Facilities 44%
43% 56%
57%
• In about 50 countries
1997 2007
Caterpillar Dealers
• 181 Cat dealers
• 3,000+ branches & rental stores
• Over 120,000 employees
14. 14
Sales and Costs
Caterpillar Overview
Machinery & Engines
Sales & Revenues
Operating Costs $37B in 2007
$45B in 2007 up 8% from 2006
Factory
Machines
Labor &
Material
Up 9%
Overhead
Costs
63%
56% 31%
30%
7%
Engines 9%
4%
Up 6%
SG & A
R&D
Financial Products
Up 13%
15. 15
Increase Capacity and
Investing in the future Product Development
Capital Expenditures Research & Development
Up
$2.3B 15-20%
$1.3B $1.4B
$1.7B
$1.6B
$1.1B
$928M
$1.2B
$926M $669M
$682M
08*
03 04 05 06 07 08*
03 04 05 06 07
3.2% 3.3% 3.5% 4.1% 4.1% 4.7% 3.2% 3.3% 3.3% 3.4%
3.2% 3.3%
% of Sales % of Sales
* Outlook
16. 16
Synergistic growth &
Sales and Revenues improved earnings stability
2007 Sales and Revenues
Genuine Cat
$45 Billion
Replacement Parts
Products 64%
$29 Billion
Integrated
Services 36%
Solar Customer Services
$16 Billion
17. 17
Sales & Revenues and
1st Quarter 2008 Results EPS up 18% despite a very
weak US economy
1st Q 1st Q
2007 2008 Change
Sales and Revenues $10.0B $11.8B $1.8B 18%
Earnings Per Share $1.26 $1.45 $0.22 18%
18. 18
Growth is largely
1st Qtr Sales & Revenue outside North America
Sales and Revenues were up $1.8 Billion …. or 18% vs. the 1st Quarter of 2007
Increase by – Price, Volume,
Percentage Increase by Region Currency, Financial Products
37%
40%
Financial
35%
Products
30%
Price $.1B
30% Realization
24%
$.3B
25%
20%
Currency Volume
15%
Translation $1.1B
$.3B
10%
4%
5%
0%
Asia EAME Latin North
Pacific America America
19. 19
Priorities for Use of Cash
Well Established
Priorities
Cash From Fund Growth
Operations
Pension/Benefit Plans
Maintain Financial Strength
Dividend Growth
“A” Credit Rating
Stock Repurchase
21. 21
What I’ll Cover Today
Overview of Caterpillar and recent history
Brief review of 2008
A broader look forward
22. 22
Sales patterns
Sales patterns
Worldwide Machine Industry diverging
diverging
350
Machine Industry Unit Index
18%
2002 = 100
300
Outside 28%
North America
250
200
-11%
150
-10% to -15%
North
America
100
50
2002 2003 2004 2005 2006 2007 2008
Caterpillar Estimate
23. 23
By Geographic
2008 Sales and Revenues Region
Worldwide up 5 to 10%
North America
+/- 2%
EAME
Up 7 to 12%
Asia Pacific
Up 15 to 20%
Latin America
Up 15 to 20%
24. 24
We expect another
2008 Outlook record year despite U.S.
weakness
2007 2008
Actual Outlook
Sales and Revenues $45 B Up 5 - 10%
Earnings Per Share $5.37 Up 5 - 15%
25. 25
What I’ll Cover Today
Overview of Caterpillar and recent history
Brief review of 2008
A broader look forward
26. 26
Strong World
World Economic Growth Economic Growth
Continues
6.6
6.4
6.1
3.6
3.4
3.2 3.2
3.1
3.0 2.9 2.8 2.8
2.6 2.6 2.5
1.6
1.5
1.3
World North America EAME Latin America Asia Pacific Japan
1990 - 1999 2000 - 2008 2009 - 2017
27. 27
Long-term Positive
Key Longer-term Trends for Caterpillar
We expect continued strong
growth in worldwide infrastructure
spending over the next decade
Significant growth in the developing world … and
they have the money!
Significant need to improve and rebuild
infrastructure in the developed world … after years
of under investment
28. 28
Years of
Factors Driving Construction construction
underinvestment
Developed Economies Developing Economies
• Old, outdated buildings • Large, rapidly growing populations
• Insufficient infrastructure • Inadequate infrastructure
• Modest economic growth • Rapid economic growth
We expect continued good growth in construction
29. 29
Mining & Energy A Very Positive Future
• Growing world demand
• Prolonged underinvestment
• Tight inventories & spare capacity
30. 30
Generally positive
Commodity Prices Are Favorable for investment
2006 Average Price
Dollars per Market Unit 2007 Average Price
2008 Forecast Average Price
Estimated Threshold for investment
9.60
117
6.98
6.74
92 6.50
72
66
3.80
50 50 47 3.23
3.05
41
1.30
Natural Gas Copper
Oil Coal
Source: Haver Analytics, Business Economics
31. 31
31
Replacement
Worldwide Mining Fleets opportunity
% of Machines More Than 10 Years Old (2007)
657
Units
1,160
1,075
10,254
907
7,838
69%
65%
57%
56%
54%
50%
Coal Mines Metals Mines
Source: Parker Bay.
Crawlers Trucks Wheel Loaders
32. 32
Our goals for 2010 Sales and Profit
Last Year Today
2010 Sales & Revenues Approaching
$50 billion “plus”
$60 billion
In a plausible range of
$45 to $60 billion
EPS Growth No Change
EPS CAGR of 15% to
20% from a 2005 base
That means EPS in a
range of about $8 to
$10 per share
33. 6.6
6.4
6.1
33
3.6
3.4
3.2 3.2
3.1
3.0
2.9
2.8 2.8
2.6 2.6
2.5
1.6
1.5
1.3
World North America EAME Latin America Asia Pacific Japan
1990 - 1999 2000 - 2008 2009 - 2017
World Economic Growth
Global infrastructure needs
Our customers
“Make Progress Possible”
No company is
better positioned
than Caterpillar
Broadest product line
On a foundation of a large
population of machines & engines
Unparalleled global dealer network Global manufacturing footprint
