caterpillar jpmorgan basics & industrials conference

MAKING PROGRESS POSSIBLE

Caterpillar

Dave Burritt Chief Financial Officer &Vice President of Global Finance & Strategic Support

JPMorgan Basics and Industrials Conference

2SAFE 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 "will", “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

VISION 2020

STRATEGIC GOALSPeople

CRITICAL SUCCESS FACTORSEMERGING

PEOPLE QUALITY PRODUCT VELOCITY DISTRIBUTION MARKETS Trough

Our Values in Action – INTEGRITY, EXCELLENCE, TEAMWORK, COMMITMENTWORLDWIDE CODE OF CONDUCT

ENTERPRISE STRATEGIC AREAS OF IMPROVEMENT

STRATEGIC PROFILE

Performance Product & Process

New Product Introduction

Order-to-Delivery

Encoding 6 Sigma

Sustainable Development

Growth Beyond Core

Profitable Growth

Economic uncertainty, particularly in the US, is making the short-term

environment a challenge

Strategy UnchangedVision 2020

But, there’s big opportunity for Caterpillar over the next decade,

particularly related to mining, energy, and infrastructure

4

What I’ll Cover Today

Overview of Caterpillar and recent history

Brief review of 2008

A broader look forward

5

5 Years of Growth

$20

$23

$30

$36

$41$43

$1.15

$1.56

$2.88

$4.04

$5.17$5.37

2002 2003 2004 2005 2006 2007 2002 2003 2004 2005 2006 2007

Sales and Revenues Earnings Per Share$45.0$41.5

$36.3

$30.3

36% EPS CAGR 2002 to 2007

$22.8$20.2

6

Backhoe Loaders Skid Steer Loaders Multi Terrain Loaders Integrated Tool Carriers Wheel Loaders Excavators Wheel Excavators Track-Type TractorsTrack Loaders Pipelayers Landfill Compactors Soil CompactorsWheel Dozers Motor Graders Wheel Tractor Scrapers Articulated TrucksOff Highway Trucks Underground Trucks Underground Loaders Track SkiddersWheel Skidders Feller Bunchers Vibratory Compactors Asphalt CompactorsAsphalt Pavers Pneumatic Compactors Cold Planers Rotary Mixers

Product Range

About 300 Models in a broad range of product categories …

Machines

7From a mini-excavator that fits in

the back of a pick-up to … big ironMachines

Operator

8

35-70% lower undercarriage operating cost

50% better steering performance

Up to 20% lessfuel consumed per hour

60% fewer moving partsin the electric drive train

35% more visibility

50% lessoperator noise

Less fluids used

New D7E at CONEXPO … Innovative From the Inside Out

9

Nonresidential

EnergyMining & Quarrying

Infrastructure Residential Industrial

ForestryWaste

End markets Machines

10

Product Range Broadest Range of Engines in Our

Industry

From 100 KW to 22,000 KW

11

… and everything in between

Model 3003

Model 3616

Engines

12

On-HighwayTruck

Marine Industrial

Cat Machines PetroleumElectric Power

End markets Engines

13

Geographic Diversity

Caterpillar Dealers• 181 Cat dealers• 3,000+ branches & rental stores• Over 120,000 employees

The Global Leader

2007 1997

Geographic Mix - Sales and RevenuesCaterpillar• Broadest footprint in the industry• About 101,000 Employees• About 300 Facilities • In about 50 countries

OutsideNorth

America43%

NorthAmerica

57%

OutsideNorth

America56%

NorthAmerica

44%

14

Caterpillar Overview

Sales & Revenues$45B in 2007 up 8% from 2006

Sales and Costs

7%

30%

63%

MachinesUp 9%

EnginesUp 6%

Financial ProductsUp 13%

4% 9%

31%56%

Material Costs

Factory Labor &

Overhead

SG & AR&D

Machinery & EnginesOperating Costs $37B in 2007

15

Capital Expenditures Research & Development

03 04 05 06 07

$682M$926M

$1.2B

$1.6B $1.7B

08* 03 04 05 06 07

$669M$928M

$1.1B$1.3B $1.4B

08*

Up 15-20%

* Outlook

Investing in the future Increase Capacity and Product Development

$2.3B

3.2% 3.3% 3.5% 4.1% 4.1% 3.2% 3.2%3.3% 3.3%3.3%

% of Sales % of Sales

4.7% 3.4%

16

Sales and Revenues Synergistic growth & improved earnings stability

Products 64%

Integrated Services 36%

$29 Billion

$16 BillionSolar Customer Services

Genuine Cat Replacement Parts

2007 Sales and Revenues$45 Billion

17

1st Quarter 2008 Results

1st Q 1st Q2007 2008

Sales and Revenues $10.0B $11.8B $1.8B 18%

Earnings Per Share $1.26 $1.45 $0.22 18%

Change

Sales & Revenues and EPS up 18% despite a very

weak US economy

18

1st Qtr Sales & Revenue

Percentage Increase by Region

Growth is largely outside North America

Sales and Revenues were up $1.8 Billion …. or 18% vs. the 1st Quarter of 2007

Increase by – Price, Volume, Currency, Financial Products

Volume$1.1B

Currency Translation

$.3B

Price Realization

$.3B

Financial Products

$.1B

37%

30%

24%

4%

0%

5%

10%

15%

20%

25%

30%

35%

40%

AsiaPacific

EAME LatinAmerica

NorthAmerica

19

Maintain Financial Strength

“A” Credit Rating

Priorities for Use of Cash

Cash From OperationsCash From Operations

Fund GrowthFund Growth

Pension/Benefit PlansPension/Benefit Plans

Dividend GrowthDividend Growth

Stock RepurchaseStock Repurchase

Well Established Priorities

20

Cash FlowMachinery & Engines Operating Cash Flow

How we’ve spent increasing cash flow

2005 2006 2007Actual Actual Actual

Operating Cash Flow $ 2.8 $ 4.6 $ 5.4

Key Uses of Cash- Growth (CAPEX & Acquisitions) $ 1.2 $ 2.1 $ 1.9- Dividends $ 0.6 $ 0.7 $ 0.8- Stock Repurchase $ 1.7 $ 3.2 $ 2.4

Billions of Dollars

21

What I’ll Cover Today

Overview of Caterpillar and recent history

Brief review of 2008

A broader look forward

22

50

100

150

200

250

300

350

2002 2003 2004 2005 2006 2007 2008

Machine Industry Unit Index 2002 = 100

North America

Outside North America

Caterpillar Estimate

Worldwide Machine Industry Sales patterns diverging

Sales patterns diverging

-11%

-10% to -15%

28%

18%

23

North America+/- 2% EAME

Up 7 to 12%

Worldwide up 5 to 10%

Latin AmericaUp 15 to 20%

Asia PacificUp 15 to 20%

By Geographic Region2008 Sales and Revenues

24We expect another

record year despite U.S. weakness

2008 Outlook

2007 2008Actual Outlook

Sales and Revenues $45 B Up 5 - 10%

Earnings Per Share $5.37 Up 5 - 15%

25

What I’ll Cover Today

Overview of Caterpillar and recent history

Brief review of 2008

A broader look forward

26

World Economic Growth

2.6

3.1

1.5

3.2

6.6

1.3

3.0 2.92.6

2.8

6.4

1.6

3.43.2

2.8

3.6

6.1

2.5

World North America EAME Latin America Asia Pacific Japan

1990 - 1999 2000 - 2008 2009 - 2017

Strong World Economic Growth

Continues

27

Key Longer-term Trends Long-term Positive 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

2828

Factors Driving Construction

Developed Economies• Old, outdated buildings• Insufficient infrastructure• Modest economic growth

Developing Economies• Large, rapidly growing populations• Inadequate infrastructure• Rapid economic growth

We expect continued good growth in construction

Years of construction

underinvestment

2929

Mining & Energy

• Growing world demand• Prolonged underinvestment• Tight inventories & spare capacity

A Very Positive Future

3030

Commodity Prices Are Favorable Generally positive for investment

Dollars per Market Unit

66

50

72

47

117

92

5041

Oil Coal

6.74

3.05

6.98

3.23

6.50

1.30

3.80

9.60

Natural Gas Copper

Source: Haver Analytics, Business Economics

Estimated Threshold for investment

2006 Average Price2007 Average Price2008 Forecast Average Price

3131

Worldwide Mining Fleets

Source: Parker Bay.

65% 69%

50%56%54% 57%

Coal Mines Metals Mines

Crawlers Trucks Wheel Loaders

1,160

7,838907

657

10,254 1,075

% of Machines More Than 10 Years Old (2007)

Replacement opportunity

Units

32

Our goals for 2010 Sales and Profit

2010 Sales & Revenues

EPS Growth

$50 billion “plus”

In a plausible range of $45 to $60 billion

EPS CAGR of 15% to 20% from a 2005 base

That means EPS in a range of about $8 to $10 per share

Last Year Today

Approaching$60 billion

No Change

33

2.6

3.1

1.5

3.2

6.6

1.3

3.0 2.92.6

2.8

6.4

1.6

3.43.2

2.8

3.6

6.1

2.5

World North America EAME Latin America Asia Pacific Japan

1990 - 1999 2000 - 2008 2009 - 2017

World Economic Growth

Global infrastructure needs

Broadest product line

Global manufacturing footprintUnparalleled global dealer network

On a foundation of a large population of machines & engines

Our customers “Make Progress Possible”

No company is better positioned than Caterpillar

Questions?