Caterpillar. Mike DeWalt Director of Investor Relations MAKING PROGRESS POSSIBLE

Transcription

1 Caterpillar Mike DeWalt Director of Investor Relations MAKING PROGRESS POSSIBLE

2 SAFE HARBOR STATEMENT UNDER THE SECURITIES LITIGATION REFORM ACT OF Certain statements contained in this presentation are forward-looking and involve uncertainties that could significantly impact results. Therefore, actual results could differ materially from those projected in the forward looking statements. The words believes, expects, estimates, anticipates, will be, should and similar words or expressions identify forward-looking statements made on behalf of Caterpillar. Uncertainties include factors that affect international businesses, as well as matters specific to the company and the markets it serves. A more complete summary of risks and uncertainties is described in more detail in our 10K filed with the Securities and Exchange Commission on February 23, We do not undertake to update our forward-looking statements.

3 The Story Today is Positive 3 In October, we reported our best ever 3rd quarter. Our Outlook for the full year 2007 is for record sales and profit. Our preliminary outlook for 2008 is for another record year. These results are despite a severe downturn in key US end-markets including a very depressed US housing industry.

4 What I ll Cover Today Caterpillar a little background on our product, end market, and geographic breadth How we re doing financially, and expectations for 2007 & 2008 Our focus on 2010

5 Breadth and diversity What we mean 5 Products End markets Geographic footprint Growth in service related businesses

6 Product depth Machines 6 Over 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 End markets Residential Building Site Prep Lawn Care Sewer & Water Tie-in Nonresidential Building Site Prep Landscaping Underground Utilities Energy Coal Oil Sands Petroleum Mining & Quarrying Metals Non-metals Quarrying Infrastructure Road Construction Paving Military Civil Aggregate Recycling Machines Industrial Industrial Processing Demolition Scrap Ports Forestry Logging Mill Yard Waste Landfill Operations Waste Handling Specialized Waste 7

8 Product depth Engines 8 Turbines Medium Speed C175 Saturn, Centaur, Mercury, Taurus, Mars, Titan M20/25, M32, M C Vees Heavy Duty C11, C13, C15, C18 C27/32, C , 2300, 2500, 2800 Mid-Range 1100 Small C7,C , 800 Solar MaK Cat Perkins KW

9 End markets Engines 9 Electric Power Cat Machines Petroleum On-Highway Truck Marine Industrial

10 Geographic Diversity The Global Leader 10 Caterpillar Broadest footprint in the industry About 100,000 Employees 278 Facilities In 40 countries / 6 continents In the 3rd Quarter, 56% of Sales & Revenues were outside North America Caterpillar Dealers 182 Cat dealers 3,000+ branches & rental stores Over 100,000 employees

11 Integrated Services More stable than traditional capital goods businesses 11 Cat Aftermarket Parts* Solar Customer Services Synergistic growth & improved earnings stability * Aftermarket parts included in our machinery and engines businesses

12 Integrated Services Growth as a percent of total sales and revenues 12 $30 Sales and Revenues in Billions Goal $ $14 $16 >$20 % of total company sales and revenues % 37% 37% to 40%

13 Our Financial Picture Strong Results 13 Growth in sales and profit 3rd Quarter 2007 best 3rd quarter profit, and highest sales of any quarter ever. Full Year outlook for 2007 record year despite very weak US end markets Preliminary 2008 Outlook another record year Strong cash flow

14 Most Recent Quarter Growth, despite headwinds 14 3rd Quarter 3rd Quarter Change Sales and Revenues $ 10,517 $ 11,442 9% Profit Per Share % A strong quarter despite significant declines in key North American end markets

15 Geographic Diversity 15 Change in Sales and Revenues Q vs Q North America -11% EAME 36% Latin American 20% Asia/Pacific 30% Total 9%

16 Geographic Diversity 16 Change in Sales and Revenues Q vs Q North America -11% EAME 36% Latin American 20% Asia/Pacific 30% Total 9%

17 Looking Forward 17 Economic & Industry Outlook 2007/2008 GDP in the USA is slowing we re expecting 1.5% growth in the Most of the rest of the world continues to enjoy better growth and the developing world is doing very well. As a result, world growth is solid, and is driving a need for our products. Many of the industries we serve continue to be very strong. Commodity related industries are doing particularly well.

18 Full Year Outlook A Record Year Actual Outlook Sales and Revenues $41.5 B About $44 B Earnings Per Share $5.17 $ $5.60 Overall for 2007, the outlook remains positive The US looks a little weaker than we d expected, but Sales and revenues outside the U.S. look better

19 2008 Full Year Outlook Another Record Year 19 Sales and Revenues Up 5-10% Earnings Per Share Up 5-15% Continued growth overall, despite a weaker U.S. economy Sales and revenues outside the U.S. look positive Less negative impact from declining dealer inventories

20 Two Key Financial Targets for Sales and Revenues of over $50 Billion % EPS growth from a 2005 base People VISION 2020 STRATEGIC PROFILE STRATEGIC GOALS Performance Product & Process Profitable Growth CRITICAL SUCCESS FACTORS PEOPLE QUALITY PRODUCT VELOCITY DISTRIBUTION CHINA Trough ENTERPRISE STRATEGIC AREAS OF IMPROVEMENT New Product Introduction Order-to-Delivery Encoding 6 Sigma Sustainable Development Growth Beyond Core Our Values in Action INTEGRITY, EXCELLENCE, TEAMWORK, COMMITMENT WORLDWIDE CODE OF CONDUCT

21 2010 Growth Goal Sales and Revenues $50B Plus Plausible 2010 Range $45-$60B 21 $50 $40 $30 $20 Annual growth needed 2009/2010 Original $50B target 3% To reach $55B 8% To reach $60B 13% $10 $ Actual Actual Actual Outlook Outlook 2007/8 is the midpoint of the 3Q outlook

22 2010 Growth Goal Earnings Per Share 15 to 20% CAGR $10 $8 $6 $4 $2 Solid profit growth off a 2005 Base 20% - $ % - $8.12 Mid-point of the 2008 outlook represents a 14% CAGR from 2005 and 20% CAGR from $ EPS $2.88 $4.04 $5.17 $ and 2008 are midpoint of the outlok

23 Priorities for Use of Cash 23 Well Established Priorities Cash From Operations Maintain Financial Strength A Credit Rating Fund Growth Pension/Benefit Plans Dividend Growth Stock Repurchase

24 Takeaways from Today 24 We expect continued growth in the world economy, despite a weak US Most of the industries we serve are strong Our 2010 goals are challenging but achievable Focused on execution in the areas of Safety, Quality, and Velocity Delivering the strategy will be rewarding

25 Q & A