Profile: Caterpillar Inc (CAT)
21 May 2013
Caterpillar Inc. (Caterpillar) is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The Company is also a services provider through Caterpillar Financial Services Corporation (Cat Financial), Caterpillar Remanufacturing Services, Caterpillar Logistics Inc. (Cat Logistics) and Progress Rail Services Corporation (Progress Rail). Caterpillar is also a United States exporter. The Company operates in two segments: Machinery and Power Systems, and Financial Products. Machinery and Power Systems represents a total of Construction Industries, Resource Industries, Power Systems and All Other segments and related corporate items and eliminations. Financial Products includes the Company’s Financial Products Segment. This category includes Cat Financial, Caterpillar Insurance Holdings Inc. (Cat Insurance) and their respective subsidiaries. In October 2011, the Company acquired MWM Holding GmbH (MWM). On July 8, 2011, the Company acquired Bucyrus International, Inc. (Bucyrus). Effective March 1, 2012, the Company announced that Caterpillar Japan Ltd. (Caterpillar Japan) acquired Caterpillar Tohoku Ltd. (Cat Tohoku). In May 2012, Finning International Inc. completed the acquisition from Caterpillar of the former Bucyrus distribution and support business in portions of South America and in the United Kingdom. In August 2012, Platinum Equity, LLC. acquired a majority interest in Caterpillar Logistics Services. Caterpillar will retain a 35% equity stake in the business. In October 2012, Finning International Inc acquired from Caterpillar of the former Bucyrus distribution and support business in its dealership territory across Western Canada.
The Company’s Construction Industries segment is responsible for supporting customers using machinery in infrastructure and building construction applications. The machine sales in this segment are made in the heavy construction, general construction, mining and quarry and aggregates markets. The Construction Industries product portfolio includes backhoe loaders; small wheel loaders; small track-type tractors; skid steer loaders; multi-terrain loaders; mini excavators; compact wheel loaders; select work tools; small, medium and track excavators; wheel excavators; medium wheel loaders; medium track-type tractors; track-type loaders, motor graders and pipelayers.
The Company competes with Komatsu Ltd., Volvo Group AB, CNH Global N.V., Deere & Co., Hitachi Construction Machinery Co., J.C. Bamford Ltd., Doosan Infracore Co., Ltd., Hyundai, LiuGong Machinery Co., Ltd., Longking Group, Sany Heavy Industry Co., Ltd, XiaGong Machinery Co. Ltd., and XCMG Group.
The Resource Industries segment is responsible for supporting customers using machinery in mine and quarry applications. It also serves forestry, paving and tunneling customers. The Resource Industries product portfolio includes the machines and related parts, electric rope shovels, draglines, hydraulic shovels, drills, highwall miners, underground mining equipment, track-type tractors, mining trucks, electric drive mining trucks, tunnel boring equipment, wheel loaders, off-highway trucks, articulated trucks, wheel tractor scrapers, wheel dozers, compactors, select work tools, forestry products, paving products, machinery components, and electronics and control systems.
The Company competes with Komatsu Ltd., Joy Global Inc., Hitachi Construction Machinery Co., Ltd., Volvo Group AB, Atlas Copco, Wirtgen and Deere & Co.
The Company’s Power Systems segment is responsible for supporting customers using reciprocating engines, turbines and related parts across industries serving electric power, industrial, petroleum and marine applications, as well as rail-related businesses. The Power Systems portfolio includes reciprocating engine powered generator sets; integrated systems used in the electric power generation industry; reciprocating engines and integrated systems and solutions for the marine and petroleum industries; reciprocating engines supplied to the industrial industry, as well as Caterpillar machinery; turbines and turbine-related services, and diesel-electric locomotives and components and other rail-related products and services.
The Company competes with Cummins Inc., Tognum AG, GE Energy Infrastructure, Siemens Energy, Wartsila Corp., John Deere Power Systems, MAN Diesel & Turbo SE, Mitsubishi Heavy Industries Ltd., Volvo Group AB, Kawasaki Heavy Industries, Rolls Royce Group plc, Generac Power Systems, Inc., Kohler Co., GE Transportation, Vossloh AG, Siemens AG and Alstom Transport.
Financial Products Segment
The business of the Company’s Financial Products segment is conducted by Cat Financial, a wholly owned finance subsidiary of Caterpillar. Cat Financial’s business is to provide retail and wholesale financing alternatives for Caterpillar products to customers and dealers globally. Retail financing is consisted of the financing of Caterpillar equipment, machinery and engines. Cat Financial also provides financing for vehicles, power generation facilities and marine vessels, which incorporate Caterpillar products. In addition to retail financing, Cat Financial provides wholesale financing to Caterpillar dealers and purchases short-term receivables from Caterpillar and its subsidiaries.
Cat Financial’s retail leases and installment sale contracts include tax leases, which are classified as either operating or finance leases for financial accounting purposes, depending on the characteristics of the lease. For tax purposes, Cat Financial is considered the owner of the equipment ; finance (non-tax) leases, where the lessee for tax purposes is considered to be the owner of the equipment during the term of the lease, which either require or allow the customer to purchase the equipment for a fixed price at the end of the term; installment sale contracts, which are equipment loans, which enable customers to purchase equipment with a down payment or trade-in and structure payments over time, and Governmental lease-purchase plans in the United States.
Cat Financial’s wholesale notes receivable, finance leases and installment sale contracts include Inventory/rental programs, which provide assistance to dealers by financing their new Caterpillar inventory and rental fleets, and short-term receivables it purchases from Caterpillar at a discount. Cat Financial’s retail notes receivables include loans, which allows customers and dealers to use their Caterpillar equipment or other assets as collateral to obtain financing. Caterpillar Insurance Company, a wholly owned subsidiary of Caterpillar Insurance Holdings Inc., is an insurance company. Caterpillar Insurance Co. Ltd., a wholly owned subsidiary of Caterpillar Insurance Holdings Inc., is a captive insurance company. Caterpillar Product Services Corporation, a wholly owned subsidiary of Caterpillar, is a warranty company. It conducts a machine extended service contract program in Germany and France by providing machine extended warranty reimbursement protection to dealers in Germany and France. Caterpillar Insurance Services Corporation, a wholly owned subsidiary of Caterpillar Insurance Holdings Inc., is a Tennessee insurance brokerage company licensed in all 50 states and the District of Columbia. It provides brokerage services for all property and casualty and life and health lines of business.
Caterpillar’s insurance group provides protection for claims for the programs, which include contractual liability insurance to Caterpillar and its affiliates, Caterpillar dealers and original equipment manufacturers (OEMs) for extended service contracts (parts and labor) offered by Caterpillar, third party dealers and OEMs; cargo insurance for the global cargo risks of Caterpillar products; contractors’ equipment physical damage insurance for equipment manufactured by Caterpillar or OEMs, which is leased, rented or sold by third party dealers to customers; general liability, employer’s liability, auto liability and property insurance for Caterpillar; retiree medical stop loss insurance for medical claims under the Voluntary Employees’ Beneficiary Association (VEBA), and brokerage services for property and casualty and life and health business.
The Company competes with Wells Fargo Equipment Finance Inc., General Electric Capital Corporation, Volvo Financial Services, Komatsu Financial L.P. and John Deere Capital Corporation.
100 North East Adams Street
PEORIA IL 61629
Company Web Links
- Caterpillar, Milwaukee workers union to resume contract talks
- Caterpillar machinery sales down 9 pct in April, led by Asia
- China deal ends distraction, but not questions, for Caterpillar
- Caterpillar says settles Siwei deal with cut in purchase price
- UPDATE 1-Caterpillar settles soured China deal with cut in purchase price