Caterpillar CEO outlines aggressive plans for growth and returns

Building on the company's strengths, Caterpillar Inc. CEO Doug Oberhelman reviewed the company's updated five-year strategy and goals with analysts and investors this afternoon. During a presentation followed by a question-and-answer session held August 19 at the historic New York Stock Exchange, Oberhelman expressed confidence about Caterpillar's growth opportunities throughout the world and the company's strategic focus on operational execution, which will drive financial performance over the next five years.

Oberhelman also discussed growth opportunities and highlighted a series of recent investments totaling more than $2.5 billion that will increase capacity in nearly all geographic regions around the world and will position Caterpillar to expand rapidly.

"We have streamlined our organization from the top down, and our leadership team is driving an intense focus on helping our customers succeed," Oberhelman said. "From our factory floors to our research and development laboratories and everywhere across the company, we have the talent in place to win, and as we execute this strategy, we will deliver greater value to our customers, our stockholders and employees."

The primary goals for the next five years are focused in three areas:

• Delivering superior results – earnings per share growth, operating profit after capital charge (an internal metric for measuring business performance) and cash flow
• Developing the best team of people – world-class safety and inclusion
• Becoming the global leader everywhere we do business – from the quality of our products, to PINS (percent of industry sales) and including aftermarket parts growth

The Caterpillar Production System (CPS) is the primary enabler of the company's plan to execute the updated strategy. Since its implementation, CPS has already resulted in gains in product quality, cost savings and employee safety. CPS is also the key reason Caterpillar's manufacturing efficiency has improved in every quarter since the end of 2008.

"Our primary goal for stockholders is delivering total shareholder returns over the business cycle in the top 25 percent of the S&P 500," Oberhelman said. "To do that, we believe that we need to deliver compound annual earnings per share growth of 15 to 20 percent over the business cycle," said Oberhelman. "We performed well during the downturn in 2009, and so far this year we're doing better than we expected as we came into 2010. Last year, we discussed our 2012 profit goal of sales and revenues in a range of $55 to $60 billion, and earnings per share of $8 to $10 – and that's still our goal for 2012. We are on the path to 15 to 20 percent growth over the cycle," Oberhelman added.

In just the last two months, Caterpillar has announced a series of investments to open new facilities, expand existing operations, develop a new mining shovel product line and expand into the locomotive business with the acquisition of Electro-Motive Diesel. The company's improved financial performance positions Caterpillar to continue making these strategic long-term investments in order to maintain its global industry leadership.

"These recent investments total more than $2.5 billion that Caterpillar is putting to work over the next several years in the United States, Brazil, China and India," Oberhelman said. "Our leadership team will be held accountable to deliver on these goals so that we can help our customers become more profitable. When that happens, everyone wins."

About Caterpillar
For more than 85 years, Caterpillar Inc. has been making progress possible and driving positive and sustainable change on every continent. With 2009 sales and revenues of $32.396 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines.