• The Caterpillar Production System (CPS) is the way of life at Caterpillar and has been a principal driver in improvements in safety, quality, velocity and efficiency. We continued to improve in each of these areas in 2011 and achieved new records in many areas.
• The safety of our workforce, contractors, and visitors is a fundamental value for Caterpillar, and we are pleased that our enterprise safety metrics improved again in 2011 – an 83-percent improvement in safety performance since 2003.
• Product quality is important to customers, and in 2011 we continued to see meaningful improvements in product reliability.
• Given the sizable increase in demand in 2011, we stretched our factories and our suppliers to produce more. The results were outstanding, and we were able to significantly increase production and improve our on-time delivery performance. We thank our suppliers for a remarkable year in support of our business.
• For many of our products, demand in 2011 was very strong and above capacity. Throughout the year at our factories around the world, we, along with many of our suppliers, invested in production capacity to support customers. Despite the increases in capacity and expected additions in 2012, we are still very tight on many products and are currently quoting extended delivery times for some products. For example, we are now quoting delivery times into 2014 for many models of large trucks.
• 2011 saw significant new product introductions related to new emissions requirements in the United States and Europe and continued the most extensive new product development program in Caterpillar history. The introduction of these new products has gone well, and feedback from dealers and customers has been very positive.
• Another important consideration for customers is aftermarket parts availability, and we made notable improvements in delivery performance in 2011.
• While it was a good year for the industries we serve, it was an even better year for Caterpillar. In the aggregate, and for most of our products, our sales increased at a faster rate than the overall industry. Better quality, good delivery performance, our investment in capacity, the performance of our suppliers, and modest price increases all helped drive better value for our customers and better performance for Caterpillar.
• Over the past year and a half we have made three large acquisitions – Bucyrus, Electro-Motive Diesel (EMD), and MWM. Integrating them into Caterpillar is a high priority and a major focus, and we are pleased with the progress.
• Our working capital metrics in 2011 notably improved for payables and receivables, and the improvements were important to the generation of record M&PS operating cash flow.
• Leadership development is critical for our long-term success. In 2011, we invested in our new leadership development program, which is designed to build high-performing teams and prepare leaders for the future. More than 7,000 people were involved in the program in 2011.

2012 Outlook

The outlook for 2012 sales and revenues has increased and is expected to be in a range of $68 to $72 billion. Profit per share is expected to be about $9.25 at the middle of the sales and revenues range. The outlook includes full-year results for the two large acquisitions that we completed in 2011 – Bucyrus and MWM.

“We’re expecting 2012 to be another year of good growth and continued focus on executing our strategy. While we have much to do in 2012, we’ll be particularly focused on four things – continuing to improve quality, our investment in product development, integrating our acquisitions and adding production capacity. We’re very tight on production capacity for many of our products and are continuing to invest in new and existing factories. Our investments in capital expenditures and R&D will certainly add cost in 2012, but it’s the right thing to do. We expect 2012 to be a new sales record at a time when construction activity in the United States and Europe – two large markets for us – are still depressed. Our employees and suppliers have done a great job taking care of our customers, but we have to be prepared for recovery in the developed world beyond 2012 and continuing growth in emerging markets,” Oberhelman said.

“In 2011 our investment in M&PS capital expenditures was $2.6 billion, with nearly 60 percent of that investment in the United States. For 2012, we expect capital expenditures of about $4 billion. We are transforming Caterpillar with an intense focus on customers driving a reinvigorated sense of urgency as we invest and grow the company like never before. As I look forward to the goals we set for 2015, I am more confident than ever that we will deliver, and we’re in a hurry to do it,” Oberhelman said