Cat annual report released

PEORIA, Apr 28, 2009 (Journal Star - McClatchy-Tribune Information Services via COMTEX) -- CAT | Quote | Chart | News | PowerRating -- Caterpillar Inc. recorded $482,000 in sales and revenues for each of its 112,887 employees that it had at year's end in 2008.

That was a per-capita record in a record-setting year, according to the company's 2008 annual report to shareholders, which is now available on-line as is its 2008 sustainability report, at www.cat.com.

However, Chairman Jim Owens said in a letter to shareholders contained within the annual report, the economic woes that entrenched themselves worldwide in the fourth quarter last year caused 2008 to be "a tale of two years." In the annual report, titled appropriately "Big Challenge," Owens describes how the "boom that began in 2004 rolled on" through the first nine months of 2008 and how Caterpillar seemed to be weathering recessionary conditions in the United States and other regions of the world.

"But toward the end of the fourth quarter, we realized a seismic shift in the global industries we serve," Owens said, describing the multiple reasons for the shift.

They included:

--The global credit market crisis;

--The dramatic drop in commodity prices, which adversely affected mining and energy exploration industries;

--Swings in global currencies, which affected manufacturing costs;

--Heavy losses in worldwide equity markets.

"Frankly, there hasn't been a time during my 35 years at Caterpillar when so many factors that affect our business changes so quickly and dramatically," Owens said.

He then described the actions that company has taken the last six months to cut costs and minimize the effects of the recession, including the layoffs of about 25,000 employees worldwide.

But, he added, "I am confident in our prospects for the future." Owens noted the recession will not stop the world's need for improved infrastructure and more energy and that "when recovery comes we will be ready to hit the ground running." The 48-page, full-color report uses unique graphics to show shareholders what occurred in 2008 as well as comparisons with the four previous years.

It details the steady growth from 2004, when sales and revenues hits $30 billion for the first time, through 2008, when sales and revenues reached $51.3 billion, and showed the steady climb in profits over the same period, from just over $2 billion to $3.6 billion.

The report also shows the growth in the average number of employees -- from 73,033 to nearly 107,000 -- and how the company's expenses also grew, including by 50 percent in wages and benefits.

In the annual sustainability report, titled "Big Picture," the company said it continued to make progress in 2008 toward its goals of meeting the needs of the present without compromising the future.

That includes, the report said, Caterpillar's goal of being one of the world's leading environmentally sound manufacturing companies. Also, in taking care its own, as the company continued to improve its in-plant safety record.

In a letter to shareholders in the sustainability report, Owens said, "The depth and duration of the current economic crisis is still unknown. Our first priority during these trying times is ensuring the long-term viability of our company. Fortunately for Team Caterpillar and all our stakeholders, the sustainability of our business and the sustainability of the world economy are deeply intertwined. That's why both can emerge even stronger from the current recession."

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