To our
Stakeholders:

Caterpillar’s efforts to drive sustainability across the company in 2018 led to outstanding business performance, which allowed us to invest in sustainable solutions that enhance communities and protect the planet.

We achieved record financial results and profitable growth, while introducing innovative products and services. In 2018, our new enterprise strategy took firm hold, and each component — services, expanded offerings, and operational excellence — played a significant role in our sustainability strategy.

Services Means Transforming Traditional Product Support in Ways That Reduce Environmental Impact
Caterpillar and our dealers provide services that support customers with digital solutions, e-commerce offerings, financing and more. The newly refreshed Cat® digital model guides investment in advanced technology to create connected fleet solutions, autonomous machines and apps for monitoring equipment. In the process, we help customers reduce fuel consumption, lower emissions, improve productivity and enhance worker safety. Today, Caterpillar has one of the world’s largest industrial connected fleets at 850,000 assets — and it’s growing every day.

Caterpillar’s remanufacturing and rebuilding businesses increase the lifespan of equipment, reusing instead of discarding components, reducing waste and keeping nonrenewable resources in circulation for multiple lifetimes. In 2018, Caterpillar received more than 150 million pounds of end-of-life material for remanufacturing.

Expanded Offerings Means the Right Solutions for Customers and the Environment
Our team continues to expand offerings across all business lines in innovative and sustainable ways. Innovations to make our products and our customers’ operations more sustainable have included the introduction of the Cat D6 XE. This model uses up to 35 percent less fuel, lowers service and maintenance costs, and boosts customer profitability compared to prior models. And, our Energy & Transportation team is helping the cruise industry find ways to reduce the emissions footprint of marine transport. We have developed dual-fuel engines for cruise ships that can be operated with either diesel fuel or natural gas, with the potential for the latter to realize significant exhaust emissions reduction.

Operational Excellence Means Building a Sustainable Advantage in our Business and our Communities
Operational excellence speaks to the core of social responsibility — safety, quality, continuous improvement and waste reduction.

We want every person at Caterpillar to go home safely every day. As we make our facilities safer with automation — for example, implementing robotic solutions that have the potential to reduce employees’ ergonomic injuries — we also improve efficiency. In 2018, we continued to reduce lost time injuries with a 6 percent improvement over 2017 and a 95 percent improvement against our 2003 baseline.

People are Both the Reason and the Instrument for Building a Better, More Sustainable World
When we have the best talent assembled on a globally diverse team, we’re best prepared to meet customer needs and make a difference in the communities where we live and work. We champion diversity, treat people fairly, prohibit discrimination and foster an inclusive environment. Full inclusion drives business results.

Through the Caterpillar Foundation, we set a goal in 2013 and are on track to help 50 million people rise out of poverty by 2020. Since 1952, the Foundation has contributed more than $740 million to help make sustainable progress possible around the world. Our team members amplify this impact by giving money and time. The Caterpillar Foundation also launched the Value of Water campaign to raise awareness of global water issues.

I’m proud of all that our global team has accomplished this past year — creating strong company performance and reaching key sustainability milestones. We are proud to make Fortune’s World’s Most Admired Companies for 2018. And, for the 19th time, our company was named to the Dow Jones Sustainability Indices, including both the World and North America indices in 2018. I’m excited about the opportunities that lie ahead. Our team is empowered and ready to make great things happen for our customers, for our communities and for our world.

Jim Umpleby

Chairman & CEO