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2019 | Annual Report

Strategy Highlights

Caterpillar continues to execute our strategy for profitable growth, which has three pillars: operational excellence, expanded offerings and services. Operational excellence includes the core competencies of safety, quality, Lean and a competitive and flexible cost structure. Expanded offerings includes our growing equipment portfolio that meets a broad range of customer needs. Services refers to the many ways that we help customers succeed after purchasing a product, including growing digital offerings. Successfully executing this strategy allows us to improve operating profit and free cash flow — while providing better solutions to customers and creating more opportunities for our people, partners and shareholders.

Operational Excellence

  • Delivered an operating margin of 15.4% on $53.8 billion of sales and revenues in line with our 2019 Investor Day range.
  • Continued our Lean manufacturing journey through synchronization of value chains to reduce lead times, optimize working capital and increase availability.
  • Continued focus on improving the competitiveness and flexibility of our cost structure, such as reducing production levels to reflect dealer order patterns and targeting lead times.
  • Removed about $2 billion in structural costs since 2014 by taking an enterprise view to cost management and streamlining our manufacturing approach.
  • Continued focus on implementing defect-free initiatives across the company has continued to result in high-quality machines and power systems.

Achieved our best safety performance on record.

Expanded Offerings

  • Invested approximately $3.5 billion in research and development (R&D) during the past two years, resulting in a wide variety of new products across all our segments.
  • Launched 11 GC models to date, including six new models in 2019, which target customers who prioritize lifecycle value.
  • Expanded our portfolio to include a broader range of underground mining products. Introduced new products with fuel-efficiency benefits, including the D6 XE, the world’s first high-drive electric drive dozer.
  • Responded to customers’ needs for reliable engines that are lighter, more efficient and powerful with two new engine platforms, the Cat C3.6 and C13B.
  • Introduced the well service 3512E Tier 4 Final Dynamic Gas Blending™ dual fuel engine — the first and only Tier 4 Final well service dual-fuel engine in the industry.
  • Started production of a new single trailer 5MW Solar turbine mobile generator.
  • Launched the XQP30, XQP60, XQP100, XQ230, XQP1100 and XGC1900 family of switchable electric power rental packages.


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Increased Machinery, Energy & Transportation (ME&T) services revenue 2% in 2019 to approximately $18 billion, working toward our goal to double ME&T services revenue between 2016 and 2026.

Achieved target to connect 1 million assets, resulting in one of the largest fleets of connected assets in the industries we serve.

Continued to expand digital capabilities, providing actionable insights for our customers. For example, the Cat Inspect app is now being used to provide close to 100,000 inspections per month.

Helped dealers better forecast customer demand through advanced analytics, enabling them to improve parts availability.

Leveraged new capabilities to be more customer-focused than ever before, thanks to a renewed focus on customer value agreements.

Expanded the number of mining trucks running Caterpillar’s autonomous solutions to 275 trucks, an increase of 48% over 2018. Caterpillar continues to have the single largest autonomous fleet in the world, with customers reporting benefits in the areas of safety, productivity and performance.

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