Drew Osika Jack Hainline Dan Glotzbach Greg Bruno December 7, 2010.

Drew OsikaJack Hainline

Dan GlotzbachGreg BrunoDecember 7, 2010

Agenda Company Overview Sources of Revenue Recent Financial Results SWOT Management Assessment Competitors Valuation

Company Overview The company traces its origins back to the 1925, merger between

C.L. Best and Holt Caterpillar which formed Caterpillar Tractor Co. The name was changed to Caterpillar Inc. in 1986.

Began trading on the NYSE exchange January 2, 1962, under the ticker symbol CAT.

Headquartered in Peoria, IL, and has 102,336 employees worldwide.

Chairman and CEO – Douglas Oberhelman CAT manufactures and sells construction and mining equipment,

diesel and natural gas engines, and industrial gas turbines worldwide.

CAT is an industry leader and the company’s products are recognized worldwide.

Sources of Revenue

MachineryManufactures and sells construction,

mining, and forestry machines. Has over 300 different types of machines ranging from skid loaders and backhoe loaders to underground mining equipment and articulated trucks.

This sector represented 65% of 3Q 2010 revenue.

Quarterly Results for 3Q 2010 Page 7http://www.caterpillar.com/cda/files/2506920/7/3Q+2010+Cat+Inc+Release+Final+814pm.pdf

Sources of Revenue

EnginesWorld’s largest manufacturer of

medium speed engines and also the world’s largest manufacturer of high speed diesel engines.

Caterpillar engines provide power to trucks, ships and boats, and their own construction and mining equipment.



Sources of Revenue

Financial ProductsProvides financing alternatives and loans to

customers and dealers for Caterpillar’s machinery, engines, and other equipment and marine vessels.

They also offer different types of insurance to customers and dealers to support the purchase of their equipment.



Recent Financial Results 3Q 2010 Earnings Reported October 21, 2010

CAT realized a profit of $796 M for the quarter, 96% higher than the 3Q 2009 number of $404 M

Profit/Share was $1.22 an increase from $0.64 for 3Q 2009 and an increase from the 2Q 2010 number of $1.09

Sales and Revenue were $11.134 B for the quarter, 53% higher than the 3Q 2009 number of $7.298 B

2010 is shaping up to be one of the most significant YOY increases in sales and revenue in the company’s history

2010 Profit/Share revised to $3.80 to $4.00 from the 2Q 2010 range of $3.15 to $3.85

Preliminary 2011 sales and revenue expected to reach $50 B with continued growth in developing countries and weak, but continued, growth in the developed countries.

Quarterly Results for 3Q 2010 Pages 1 and 5http://www.caterpillar.com/cda/files/2506920/7/3Q+2010+Cat+Inc+Release+Final+814pm.pdf

Recent Financial Results

(Revenue in Billions of $)

http://www.caterpillar.com/investors/financial-reporting/quarterly-results/cat-incQuarterly Results for 4Q 2009 – 3Q 2010 Page 5 in all reports

Revenue Breakdown Geographically for 3Q 2010

23%

23%


SWOT Analysis

Strengths:Global Market Leader / Brand StrengthDiversified Revenue StreamsInnovation

Weaknesses:Highly Debt Leveraged (Slow Improvement)Reliance on Credit Sales to Customers

SWOT Analysis Opportunities:

Investment in Emerging MarketsExpect large increase in excavator production

capacity in ChinaContinued Expansion into Mining Industry

(November Acquisition of Bucyrus International Inc.)

Threats:Manufacturing Capacity to Meet Growing Sales

DemandChanging prices in raw material inputs

(Hedge only for foreign exchange/interest rates)

Management Assessment “How We Win” Strategic Initiatives Focus: Rising demand in energy and

the ability of CAT to provide an efficient product

Continued Global Leadership and GrowthM&A and Direct Investment

Dividends per share continue to rise

Competitors Deere & Company

Leading producer of agricultural and forestry equipment

Komatsu Ltd. World’s 2nd largest manufacturer of construction and mining equipment Larger presence than CAT in China and Japan

CNH Global Created in 1999 after New Holland N.V. and Case Corporation merged Fiat S.p.A. owns the majority of CNH’s common shares

Volvo AB Diverse business that competes with CAT on construction equipment,

heavy-duty trucks and engines.

5-Year Stock Performance

http://finance.yahoo.com/q/bc?t=1y&s=CAT&l=on&z=l&q=l&c=&c=^GSPC&c=CNH&c=DE

Comparable Analysis Multiples are in line with industry Heavy debt but large future earnings growth

expected

Comparable Analysis

Recommendation

Do not recommend a buy at this time. Put on Watch List.

Drew Osika Jack Hainline Dan Glotzbach Greg Bruno December 7, 2010.

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