PAPER PRESENTATION ON CATERPILLAR COMPANY

SUBMITTED TO

PROF AMITA NAYAR

SUBMITTED BY:

FINANCE - 02

Abdul Gani (02) Ajay (03) V.Arun Kumar (05) Arvind Rawal (06)

Dinesh (14) Suyambuvel (41) Abirama Sundari(51)

ACKNOWLEDGEMENT

This project and presentation required some tiresome and valuable effort. We are obliged to everyone who has helped us tread the right path and making the presentation a notable success.

We would like to thank Prof. AMITA NAYAR and our Dean R. KRISHNAN who have helped us in showcasing our talent and hone our skills required for the big event.

Finally we would like to thank all our classmates for supporting us and we owe a lot to the aforementioned people than they would be willing to accept.

PREFACEThis is a unique study to provide a comprehensive view on the Caterpillar Company. As one of the Fortune 500, Caterpillar Inc. is the world's largest manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company is a technology leader in construction, transportation, mining, forestry, energy, logistics, electronics, financing and electric power generation. For over 80 years, the Caterpillar name has been associated with the highest level of quality products and services.This project also gave a chance to know well about an enterprise which is leader in their industry and is benchmarked by other companies worldwide. The practices and the methods which have helped them to achieve this status. The main theme of company is to help the various infrastructure projects worldwide whether it is mining, construction, energy or the electric power generation. This goes well with the Today`s work Tomorrow`s world which is being followed by Caterpillar. Table of Contents5EXECUTIVE SUMMARY

6Quick facts about Caterpillar

7COMPANY OVERVIEW

8HISTORY

9WORLDWIDE PRESENCE:

11CATERPILLAR INDIA PRIVATE LIMITED

12BUSINESS LINES

13BUSINESS AND BRANDS

17PRODUCTS

20FINANCIAL DETAILS

24SWOT ANALYSIS

25People life cycle

27GROWTH AND TRADE

28CSR BY CATERPILLAR

29SUSTAINABLE DEVELOPMENT

31VISION 2020

32CONCLUSION

33BIBLIOGRAPHY

EXECUTIVE SUMMARYCaterpillar products and product support services are sold worldwide into a variety of highly competitive markets. Headquartered in Peoria, Illinois, Caterpillar is also a leading US exporter, with more than half of its sales outside the United States. The present Analysis of Caterpillar Inc. a complete and comprehensive analysis of Caterpillar Inc, one of the leading industrial machinery and equipment manufacturing machinery company in the world, includes an overview of the industry in the United States, a PEST Framework Analysis of the US Equipment Manufacturing Industry, and then moves on to analyzing the company itself.

Company analysis includes a history of Caterpillar Inc, a business segment analysis of the segments Caterpillar Inc operates through, a look at the organization structure of the company, a geographical operating segments analysis, an analysis of the company's major competitors namely Deere & Company, CNH Global NV, Cummins Inc, and Volvo AB.A financial analysis of Caterpillar Inc is presented in the report which includes a ratio analysis, basic profit and loss analysis, presentation of the company balance sheet, and much more. A SWOT Framework Analysis of Caterpillar Inc completes this in-depth company analysis.

Later in report you will find the responsible role being played by Caterpillar Inc. towards the environment and the societies worldwide. Vision 2020 set up in the year 2007 are the guidelines which company will follow in the future and lay the path to be followed towards retaining the leadership in industry. Quick facts about Caterpillar

TypePublic(NYSE:CAT)

Founded1925

HeadquartersPeoria, Illinois,USA

Key peopleJames W. Owens, CEO & Chairman

IndustryHeavy equipment

ProductsConstruction&Agriculture Machinery

Revenue$44.958 billionUSD(2007)

Net income$3.541 billionUSD(2007)

Employees101,333 (2007)

Websitehttp://www.cat.com

Rankings #50 in FORTUNE 500

S&P 500

Dow Jones Industrials

#162 in FT Global 500

Manufacturing facilities 45 plants in the United States

60 plants located in 20 countries

COMPANY OVERVIEWCaterpillar Inc.(NYSE:CAT) is aUnited States-basedcorporationheadquartered inPeoria, Illinois. Caterpillar (commonly referred to simply asCAT) is "the world's largest manufacturer ofconstructionandminingequipment,dieselandnatural gasengines, and industrialgas turbines."Famous for their products featuringcaterpillar tracksand a distinctive yellow paint scheme, Caterpillar produces a wide range ofengineering vehicles, including the range of Caterpillarbulldozers.

Caterpillar is one of the thirty companies whosestockis tracked in theDow Jones Industrial Average. It is aFortune 500company, ranked number 50 in 2008,and first in its industry, with more than $30 billion inassets.

HISTORY

The story of Caterpillar Inc. originates in the late 19thcentury, whenDaniel BestandBenjamin Holtexperimented with ways to fulfill the promise thatsteam tractorsheld for farming. By 1904, these large steam-powered tractors had been plowingCaliforniafields for 14 years, and occasionally got bogged down in the soft soil, especially after heavy rains. Once stuck in the mire, they were difficult to pull free, even with teams of horses. Their great weight typically rested on four metal wheels.

Holt came up with the idea to carry the road with the vehicle. OnNovember 24,1904he added wooden block-linked treads around theidlerson Holt No.77, his test tractor. The results were impressive, and the modern tractor was born. Caterpillar became famous for its Caterpillar 30and itsCaterpillar 60tractors.

In 1909, Benjamin Holt bought the abandoned but relatively new manufacturing plant of a tractor company that had failed inEast Peoria, Illinois. The location offered Holt everything he needed in a manufacturing center, and despite the hefty amount ofcapitalneeded for retooling the plant, the venture proved so profitable that by 1911 the factory employed 625 people. Around that time, Holt Manufacturing began exporting its tractors toArgentina, Mexico, andCanada, in addition to their domestic sales.The Holt Manufacturing Company later pioneered the use of thecontinuous trackduringWorld War I. Their crawler tractors inspired the first militarytanks, which helped endWorld War I.

Caterpillar formed onApril 15,1925with the merger ofHolt Manufacturing CompanyofStockton,Californiaand theC. L. Best Gas Traction CompanyofSan Leandro,California, forming the Caterpillar Tractor Co.Sales the first year were$13 million. By 1929, sales climbed to $52.8 million, and CAT continued to grow throughout theGreat Depressionof the 1930s.

After the companies merged, Caterpillar went through many changes, including the adoption of thediesel engine. DuringWorld War II, Caterpillar products found fame with theSeabees, Construction Battalions of theUnited States Navy, who builtairfieldsand other facilities in thePacific Theater of Operations. During the post-war construction boom, the company grew at a rapid pace and launched its first venture outside the US in 1950, marking the beginning of Caterpillar's development into amultinational corporation.After 1950 company has grown enormously and few of important milestones are following.1953. In 1931, the company created a separate engine sales group to market diesel engines to other equipment manufacturers. This group was replaced in 1953 with a separate sales and marketing division to better serve the needs of a broad range of engine customers. Engine sales now account for approximately one-third of the company's total sales and revenues.

1983. Caterpillar Leasing Company is expanded to offer equipment financing options to its customers worldwide and is renamed Caterpillar Financial Services Corporation.1986. The Caterpillar Tractor Co. changes its name to Caterpillar Inc. - a more accurate reflection of the enterprise's growing diversity. 1990. The company decentralized its structure, reorganizing into business units responsible for return on assets and customer satisfaction.

2000. Caterpillar celebrates its 75th anniversary. 2001. Caterpillar is the first company to globally launch 6 Sigma and deliver first-year benefits in excess of implementation costs.

2003. Caterpillar becomes the first engine manufacturer to offer a complete line of 2004 model year clean diesel engines fully compliant and certified by the U.S. Environmental Protection Agency (EPA). WORLDWIDE PRESENCE:Caterpillar is not confined to a particular country or continent. They have made an excellent network of the manufacturing units and dealers worldwide across all the continents. Caterpillar products are manufactured in 50 U.S. facilities and in 65 other locations worldwide. More than 300 products sold in 200 countries. Marketing offices in 15 cities in 11 countries. Cat Financial's global locations include Belgium, Canada, China, Indonesia, Japan, Korea, Malaysia, Singapore, Thailand, the Philippines, Australia, New Zealand, the Czech Republic, Denmark, France, Germany (including Austria and Switzerland), Ireland, Italy, the Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovenia, Spain, Sweden, the United Kingdom, Ukraine, Brazil, Chile, Mexico, Peru, four regional offices and one subsidiary FCC Equipment Financing in the United States. Parts distribution facilities are present worldwide. Caterpillar has made such huge facilities over a period of time by mergers and acquisitions. List of various acquisitions done by CaterpillarCompanyLocationDateProductsNotes

Tow motorMentor, OH1965ForkliftsLater became Caterpillar Mitsubishi Forklifts, 99% owned by Mitsubishi

Solar TurbinesSan Diego, CA1981Natural gas turbines

Barber GreenMinneapolis, MN1991paving productsRenamed Caterpillar Paving Products

Krupp MaK EnginesKiel, Germany1997Marine diesel engines

Perkins EnginesPeterborough, UK1998Small diesel enginesProduces both Cat and Perkins branded engines

F.G. WilsonLarne, Northern Ireland1999GeneratorsProduces both Cat and Olympian branded gen-sets

Hindustan Motors Earthmoving Equipment DivisionChennai, India2001Construction equipmentRenamed Caterpillar India

ElphinstoneBurnie, Australia2000Underground mining equipmentRenamed Caterpillar Underground Mining

Shandong Engineering Machinery (SEM)China2008Construction equipment

LOVATCanada2008Tunnel boring machines

Shin Caterpillar MitsubishiSagami & Akashi, Japan2008Construction equipmentJoint venture since 1963, with purchase of majority became Caterpillar Japan Ltd.

CATERPILLAR INDIA PRIVATE LIMITEDA wholly owned subsidiary of Caterpillar Inc., viz., Caterpillar India Private Limited (CIPL), has been incorporated as an Indian Company for the manufacture of construction and mining equipment. Caterpillar Inc formed this Company subsequent to the acquisition of the Earthmoving Equipment Division of Hindustan Motors, Thiruvallur, TamilNadu in February 2001.

BUSINESS LINESCaterpillar Inc. products, services and technologies fall into three principal lines of business.

MACHINERYCaterpillar machines do the worlds work. From earthmoving, mining and construction projects to forestry, waste, paving and any number of other applications, we have the right equipment large and small to help our customers get the job done right. We also lead the industry in the distribution of equipment and parts and offer that expertise to others through Caterpillar Logistics Services, Inc., one of the worlds largest integrated logistics organizations with more than 60 third-party clients.

ENGINES

Caterpillar reciprocating engines and engine systems provide power to the world. Our engines power our own construction and mining machines plus trucks, ships and boats and much more. Electrical power systems supply both primary and standby power for a wide variety of uses. Solar industrial gas turbines power the production, processing and transporting of crude oil and natural gas and provide electrical power to many industries.

FINANCIAL PRODUCTS

We help customers around the globe purchase Cat and related equipment (new and used) through Caterpillar Financial Services Corporation and its subsidiaries. Customers can protect their Cat equipment by using various types of insurance offered by Caterpillar Insurance Holdings, Inc.

BUSINESS AND BRANDSAs a global leader with a broad portfolio of leading products, technologies and brands, Caterpillar is forever setting higher standards by maintaining a watchful eye on the ever-changing shift in regional dynamics and responding with new product innovations and manufacturing flexibility.

CAT:

Cat brand represents the industry-leading products and services made by Caterpillar. The Cat trademark was first used in 1949 and later registered in 1952, when it began appearing as part of machine trade dress. Today, the Cat brand is Caterpillar's primary public-facing brand name, representing the company's equipment, related services and the incredible dealer network that supports customers all over the-world.CAT LOGISTICS:Caterpillar Logistics Services, Inc. is a wholly owned subsidiary of Caterpillar Inc., formed in 1987 to build on the global distribution experience of its parents company. The Cat Logistics brand provides integrated world-class supply chain solutions and services to Caterpillar and more than 65 other leading corporations in market sectors including automotive, industrial, consumer durables, technology, electronics, manufacturing logistics and others. 105 offices and facilities in 25 countries around the world.CAT FINANCIAL:Cat Financial is a wholly owned subsidiary of Caterpillar Inc. and has been providing a wide range of financing alternatives for Cat and related equipment for over 25 years to customers and Cat dealers. Headquartered in Nashville, TN, Cat Financial has more than 40 offices and subsidiaries located throughout 80 countries in the Americas, Asia, Australia and Europe. CAT REMAN:

Caterpillar has been in the remanufacturing business for over 30 years, however only began marketing its expertise to other OEMs under the Cat Remanufacturing Services (Cat Reman) name in 2004. Cat Reman is a high-technology, low cost, global organization focused on salvage capabilities that refurbish and restore used machinery and technologies to their original condition and specifications.

CAT RENTAL:

Cat Rental Stores serve as a convenient source for Cat products. Numbering over 1600 locations around the globe, Cat Rental Stores offer short- and long-term rentals for the general construction industry. The business model differs slightly in each region, with stores typically renting Cat machines and also allied products complementary to the Cat offering, such as specialized tools for jobsite needs.

FG WILSON:Founded in 1966, FG Wilson produces generator sets ranging from small standby sets suitable for domestic use to large units capable of feeding back into the national grid. The company was introduced into the Cat family in 1999, when it was acquiredfrom Emerson Electric. Today, the FG Wilson brand is sold into the electric power market outside North America through its own distinct distribution channel.

MAK:MaK branded marine diesel engines are marketed and serviced through Caterpillar Marine Power Systems (CMPS), headquartered in Hamburg, Germany. Its customers include well-known operators of ocean-going vessels such as container feeders, chemical tankers, bulk carriers, offshore supply vessels, general cargo vessels, ferries and cruise ships. In the commercial marine segment, MaK engines are sold into tugboats, workboats and inland waterway vessels. CMPS' regional sales offices are located in Hamburg, Shanghai, P.R. China, Singapore and Miramar, Florida, while technical application support is located in Kiel, Germany.

PERKINS:Formed in 1932 and based in Peterborough, England, Perkins manufactures more than 400,000 engines every year to support customers with thousands of different specifications. Since the 1970s, Perkins has functioned as a supplier to Caterpillarits largest single customer with about 35% of sales volume. In 1997, Perkins was acquired by Caterpillar and today has manufacturing facilities in Brazil, the United Kingdom and the United States.

PROGRESS RAIL:Progress Rail is one of the largest providers of outsourced maintenance and repair services to the railroad industry in North America. It is headquartered in Albertville, Alabama and currently has more than 100 facilities throughout the United States, Canada and Mexico.

SOLAR TURBINES:Solar Turbines is a world leader in the design, manufacture and service of industrial gas turbine engines in its size range. Its products are used on land and offshore in 93 nations for the production and transmission of oil and natural gas, and are also used for generating electricity and thermal energy in a wide variety of industrial applications. Solar Turbines is a wholly owned subsidiary of Caterpillar Inc.

Diversification of Caterpillar Inc.PRODUCTS

ENGINES:

Caterpillar is the world's largest manufacturer of medium speed engines, as well as one of the world's largest manufacturers of high speed diesel engines, with ratings available from 54 to 13,600HP

Caterpillar engines and engine systems provide power to the world. These engines provide power to trucks, ships and boats, our own construction and mining machines, and much more. Electrical power systems supply both primary and standby power for a variety of uses -- like off-shore oil rigs, huge mines in remote deserts or mountain ranges, entire communities in areas not close to a utility power grid, hospitals, schools, factories, airports and office buildings. The engines are broadly classified in the following segments: Marine

Industrial / OEM (Original Equipment Manufacturers) Oil & Gas

Power Generation On-Highway EnginesMachines:

The Caterpillar equipment product line, consisting of more than 300 machines, sets the standard for our industry - one that is increasingly customer--focused. The plan is to remain the leader and continue to help customer to meet his needs with our equipment, with the best distribution and product support system in any capital goods industry and the continual introduction and updating of products.Caterpillar's line of vehicles range from tracked tractors tohydraulic excavators,backhoe loaders,motor graders, off-highwaytrucks,wheel loaders, and agriculturaltractors. They are used inconstruction,building, mining,forestry,energy,transportationand material-handling industries.Caterpillar is the world's largest manufacturer of wheel loaders. The medium size (MWL) and large size (LWL) are designed at theirAurora, Illinoisfacility. Medium wheel loaders are manufactured at

Aurora, Illinois (USA) Sagamihara, Kanagawa,(Japan) Gosselies,Charleroi,(Belgium) Piracicaba,So Paulo,(Brazil) India The People's Republic of ChinaLarge wheel loaders are manufactured exclusively on three assembly lines atAurora, Illinois.

FINANCE:For 26 years, Cat Financial, a wholly-owned subsidiary of Caterpillar Inc., has been providing a wide range of financing alternatives for the complete line of Caterpillar machinery and engines, Solar gas turbines, other related equipment and marine vessels. The company also extends loans to customers and dealers. Cat Financial has offices and subsidiaries located throughout the Americas, Asia, Australia, and Europe. Cat Insurance provides Cat Dealers and customers around the world with the products and services they need to protect their new and used equipment. Our staff of risk management and insurance experts develops and manages programs that support Caterpillar's reputation for quality equipment, parts and service. From Physical Damage insurance to Extended Coverage beyond the standard warranty period, you can count on Cat Insurance to help you manage your business risk.

Physical Damage

Machine Extended Coverage

Power Systems Extended Service Coverage

CATERPILLAR DEFENCE PRODUCTS:

The Caterpillar Defence Products subsidiary is situated inShrewsbury,Shropshire. The products being produced are used worldwide by the countries such as Sweden, Norway, Finland, Switzerland, the Netherlands, Denmark, US and UK. This division also provides both propulsion engines and power generation systems to the navalshipbuilding industry. FINANCIAL DETAILSAs we already know the Caterpillar is generating revenue from the three principal business lines namely machinery, engines and financial products. In year 2007 North American sales and revenues dropped significantly (down 11 percent) due to severe weakness in two key markets: on-highway truck engines and U.S. residential construction. But customer demand for Caterpillar products in the rest of the world particularly the emerging markets was explosive. Sales and revenues were up 28 percent in Asia-Pacific, 34 percent in Europe, Africa, the Middle East and The Commonwealth of Independent States (CIS) and 18 percent in Latin America. Our integrated services businesses also grew 16 percent, representing 36 percent of total sales and revenues and providing earnings stability. As a result, 2007 marks fifth straight year of record sales and revenues, and our fourth consecutive year of record profit and despite continued weakness in the United States in 2008, company is predicting another record year. Total sales and revenues for the year 2007 stands at $ 44,958 millions. There has been growth of 7.7% compared to year 2006.

Chart 1: Sales & Revenues ( Dollars in millions)

Also machinery sales makes the bulk portion of the sales & revenues almost the 2/3 rd part comes from machinery.

Figure 1: Breakdown of sales & revenues according to the business linesTotal operating profit in the year 2007 was $ 4,921 million dollars. Out of which $ 2,758 million comes from machinery and $ 1,826 millions from engines. Contribution of financial products to the profit was $ 690 millions.

Figure 2: Breakdown of operating profits accoding to business lines

As we know Caterpillar is a global organization maing products and services available all over world. But still North America is their biggest market followed by EAME (Europe, Africa, Middle East and the Commonwealth of Independent states), Asia Pcific and Latin America.

Chart 2: Revenue generated from different marketsTo maintain the leader position on the market and also to provide the vast range of products the company spends lot of money for research and development. It helps the company to come out with the new products more suitable to the customer needs.

Chart 3: Investment in Research & Development (Dollars in millions)In the current scenario of global slow down and symptoms of recession in America is a problem for the company and also the effect can be seen in the results of company so far in year 2008.

THIRD QUARTER 2008 VS. THIRD QUARTER 2007

(ENDING SEPTEMBER 30)

(Millions of dollars)20082007CHANGE

Revenues $ 774$7582%

Profit Before Tax $156$187(17%)

Profit After Tax $118$133(11%)

New Retail Financing $4,380$3,57722%

Total Assets $32,735$28,15016%

SWOT ANALYSIS

STRENGTH

Hold larger portion of market share

Growth through production not acquisition

Distribution system

High brand recognition

6 sigma

Investment in the research & development

WEAKNESS

Recent employee reduction

Miscommunication between foreign and domestic managers

OPPURTUNITY

Expansion in third world countries

Market sales overseas offer potential

Tax breaks for better emission

Hydrogen fuel and solar turbineTHREAT

Economic recession

Tougher emission laws

Local players in the various markets

People life cycle is the key part of the Caterpillar Inc. corporate strategy. Caterpillar actively engages their employees in the learning and development of the human resource. At the same time they have the overlook on the efficiency of the organization and effectiveness of the various practices being employed.

People life cycleRelationships between Learning and Development, Engagement, and Business Performance can be effectively shown by the following diagram.

Career Advancement

We offer Dealer Technicians ongoing training on the latest high-tech machines and diagnostic tools to build their skills and advance their career development. Whether you choose to follow a career path as a Cat Dealer Shop Technician, Field Technician or Supervisor, advancement opportunities are within your reach. Below is an example of an advancement path many technicians take to get where they want to be.

GROWTH AND TRADEFree and open markets promote development, contribute to a healthy and prosperous global society, and present a significant business opportunity for Caterpillar as company leverage technologies and make them accessible to the developing world. As growing markets look for new solutions to address their challenges, company is poised to deliver the products, services and technologies to meet their needs. Caterpillar contribute to economic growth around the world including the rapidly developing economies of Brazil, Russia, India and China by enabling infrastructure development that provides improved access to energy, materials and mobility. Also Caterpillar works with policy makers to bring balance to debates over international trade and sustainable development, and seek opportunities to partner with others to build viable frameworks that encourage responsible growth, help our customers grow local economies and enable societies to meet their own goals.Four main principles followed by Caterpillar for growth are:

i. Energy: Open markets enable Caterpillar and other companies to fund, develop and deploy new technologies that address worldwide energy and climate challenges.

ii. Materials: Growing economies rely on goods and resources from around the world. Our operations and customer solutions are designed to support more sustainable forms of production and consumption.

iii. Mobility: Mobility of people and goods is key to improved living standards. We seek to enable sustainable mobility improving accessibility and efficiency while minimizing congestion and pollution.iv. Development: Quality infrastructure improves access to markets, education and healthcare, enabling people to enhance their quality of life. We encourage development that occurs in an increasingly balanced, planned and thoughtful manner.

CSR BY CATERPILLAR

EDUCATION

One of the major initiatives taken by the Company is in the field of education. Recognizing the need for grooming todays children as tomorrows responsible corporate citizens, the company established a school in 1990 near the factory premises. This English Medium Higher Secondary School, Chellammal Vidyalaya, imparts quality education, not only for the benefit of employees children, but also for children from nearby villages. This school has facilities for education up to 12th Std and currently has on the rolls 1000 students. The Company has provided the entire infrastructure, facilities and subsidized transport facility. The school is constantly on the upgrade and over the years has become a landmark in Thiruvallur District.WELFARE

Alcoholism and Drug Abuse is a constant threat to society. Recognizing the need to eradicate this evil, the company is in tie up with TTK Hospital for de-addiction treatment and employee counseling on a continuous basis. Appreciating the efforts taken by the management in this regard, the International Labour Organization (ILO) has identified CIPL for a yearlong training programme for employees on Alcoholism and Drug Abuse. This programme has been extended to neighbouring villages also. ILO has commended CIPL as one of the best companies taking initiatives and achieving excellent results in this important and much needed welfare measure.HEALTH CARE

Regular eye check up camps, family planning awareness programmes etc., are being arranged with the help of CIPLs Occupational Health Services (OHS) in association with local hospitals. More than 2500 persons from neighbouring villages have been benefited by the Medical Health Camps organized by the Company.

SUSTAINABLE DEVELOPMENT

Caterpillar is committed towards making the world a better place than what it is now so they have proper commitment towards the restoring of our ecological environment. Caterpillar has been criticized by many environmental groups. Products produced by the company include forestry equipment, mining equipment, and diesel engines. While providing higher fuel efficiency than gasoline engines, diesel engines usually produce higher levels ofNOxand particulates.In October, 2002, Caterpillarfails to meet the emissions standards deadline fixed by Justice Departmentand theState of California and was forced to pay $128 million in per-engine non-conformance penalties. In 2004, the company came out with ACERT diesel engines that exceed federal guidelines for emission standards.In 2007, Caterpillar released a second generation of ACERT to meet even stricter standards. Caterpillar activelyparticipates in initiatives such as theUnited States Environmental Protection Agency's National Clean Diesel Campaign program, which encourages retrofitting fleets of older buses and trucks with newer diesel engines that meet higher emissions standards.

In 2005, Caterpillar donated $12 million dollars toThe Nature Conservancyin a joint effort to protect and preserve river systems in Brazil, USA, and China.By creating distributed energy solutions is one way Caterpillar is enabling development while preserving the environment in the Philippines and other countries. In 2007 Remanufacturing (Reman) Division launched a project that will take end-of-life diesel engines from around the world and remanufacture them into methane-fueled generator sets. These Reman gen sets will convert methane from animal waste into usable energy. The first units will be installed in pig farms in the Philippines beginning in 2008, where they will burn methane, provide electricity and reduce greenhouse gas emissions. A number of similar projects are planned over the next several years.

Caterpillar has, for many years, been a member of theWorld Business Council for Sustainable Developmentbased inGeneva, Switzerland. Caterpillar has been listed on the Dow Jones Sustainability World Index each year since 2001. Caterpillar divisions have won Illinois Governor's Pollution Prevention Awards every year since 1998. Caterpillar was awarded the 2007 Illinois Governor's Pollution Prevention Award for three projects:

The Hydraulics and Hydraulic Systems business unit in Joliet implemented a flame sprayed coating for its truck suspension system, replacing a chroming process, reducing hazardous waste by 700,000 pounds annually and saving 14 million gallons of water.

Caterpillar's Cast Metals Organization in Mapleton worked with the American Foundry Society to help produce a rule to reduce hazardous waste in scrap metal that would not only meet strict quality requirements, but would allow foundries to continue to recycle certain types of scrap and maintain a competitive cost structure.

Caterpillar's Mossville Engine Center formed a team to look at used oil re-use and recycle processes that forced MEC to send large amounts of used oil off-site for recycling, and developed an updated system for reclaiming it for re-use on-site. The resulting benefits included a usage reduction of about 208,000 gallons of oil per year.

In early 2007, Caterpillar joined 26 of the world's largest corporationssuch as DuPont, BP America, General Electric, Deere and Company, General Motors and Rio Tintoto form the U.S. Climate Action Partnership (USCAP).

Caterpillar India`s commitment to environment has been reinforced with being awarded the ISO 14001 Certification in July 2000. The Company adopts eco friendly production activities; maintain ecological balance both inside and outside the organisation. The major initiatives include: Planting 20,000 trees of various varieties in the Company premises covering 30 acres of land

Zero Discharge of effluents

Conducting Awareness Programmes on ban of use of plastics

Emphasing the need for use of materials that can be recycled. Spreading this concept to nearby villages.VISION 2020In year 2007 Caterpillar has set few goals to be achieved for the better operations and efficiency. Company is highly committed to its policies of sustainable growth thats the reason environment is given importance in these goals too. Company wants to grow further but in the way that sustains the environment.

Caterpillar vision is to contribute, through its diverse businesses, to a society in which peoples basic needs are not only met but fulfilled in a way that sustains the environment.2020 GOALS FOR PRODUCTS, SERVICES AND SOLUTIONS Provide leadership in the safety of people in, on and around our products.

Reduce customer greenhouse gas emissions by 20%. Increase customer energy efficiency by 20%. Increase customer material efficiency by 20%.

2020 GOALS FOR OPERATIONS Reduce recordable workplace injury rate to 0.6 and lost-time case rate due to injury to 0.15. Increase energy efficiency by 25%. Design all new construction to meet Leadership in Energy and Environmental Design (LEED) or comparable green building criteria. Use alternative / renewable sources to meet 20% of our energy needs. Send zero waste to landfills by reducing, reusing and recycling waste. Hold water consumption flat. Reduce absolute greenhouse gas emissions from existing facilities by 25%.CONCLUSIONCaterpillar Inc. is truly leader in its industry and also in the way to make the world a better place to live. Started in 1925 company has came a long way ahead and have diversified its business and spread across the world. These working conditions present few peculiar problems as working with the people of various cultures simultaneously which requires the cultural synergy.

Near 1980 company was on the verge of bankruptcy due to the rigid organizational structure but it was a wake up call for Caterpillar and they came back strongly. Decentralization of organization took place and they made the strong foundation of the values which helped them to achieve what they are today. More over Caterpillar`s worldwide code of conduct is also the same Our Values in Action. Finally the sustainable development approach being followed by company is admirable and gives the sense of companys long term thinking. Prime goal of company behind providing products and services is to improve the living standard of societies worldwide by giving them better infrastructure and energy supply its is also the first step in sustainable development. Vision 2020 is another remarkable benchmark to be achieved and set an example for the corporation houses worldwide to be followed.BIBLIOGRAPHY

www.finance.cat.com www.cat.com/rental www.fgwilson.com www.mak-global.com www.perkins.com www.progressrail.com www. mysolar.cat.comwww.wikipedia.com

1

CATERPILLAR Inc.