Trademark Trial and Appeal Board Electronic Filing System. https://estta.uspto.gov
`ESTTA1235692
`09/14/2022
`
`ESTTA Tracking number:
`
`Filing date:
`
`Proceeding no.
`
`Party
`
`Correspondence
`address
`
`Submission
`
`Filer's name
`
`Filer's email
`
`Signature
`
`Date
`
`Attachments
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`91213597
`
`Plaintiff
`Caterpillar, Inc.
`
`NARESH KILARU
`FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER LLP
`901 NEW YORK AVENUE NW
`WASHINGTON, DC 20001
`UNITED STATES
`Primary email: docketing@finnegan.com
`Secondary email(s): laura.johnson@finnegan.com, ttab-leg-
`al-assistants@finnegan.com, naresh.kilaru@finnegan.com
`202-408-4000
`Testimony For Plaintiff
`
`Naresh Kilaru
`
`docketing@finnegan.com, naresh.kilaru@finnegan.com,
`laura.johnson@finnegan.com, TTAB-Legal-Assistants@finnegan.com
`
`/Naresh Kilaru/
`
`09/14/2022
`
`Ex G part 1.pdf(6132544 bytes )
`Ex G part 2.pdf(5207430 bytes )
`Ex G part 3.pdf(5858367 bytes )
`Ex G part 4.pdf(2683221 bytes )
`Ex H cat-en-US-products-new-equipment-html.pdf(942022 bytes )
`
`

`

`EXHIBIT (cid:42)
`EXHIBIT G
`
`

`

`2019
`Annual Report
`Executing Our Strategy
`
`

`

`Whether paving roads, mining essential commodities or extracting the fuels to Whether paving roads, mining essential commodities or extracting the fuels to
`
`
`satisfy global energy demand, Caterpillar products are helping to build a better satisfy global energy demand, Caterpillar products are helping to build a better
`
`world. Since 1925, Caterpillar has been making sustainable progress possible world. Since 1925, Caterpillar has been making sustainable progress possible
`
`and driving positive change on every continent.and driving positive change on every continent.
`
`Services offered throughout the product life cycle, cutting-edge technology Services offered throughout the product life cycle, cutting-edge technology
`
`
`and decades of product expertise set Caterpillar apart, providing exceptional and decades of product expertise set Caterpillar apart, providing exceptional
`
`value to help our customers succeed.value to help our customers succeed.
`
`~$30M
`
`Foundation
`Investment
`
`102,300
`
`Employees
`
`165
`
`Cat® Dealers
`
`21
`
`Brands
`
`190+
`
`Countries Where
`We Do Business
`
`~150
`
`Primary
`Locations
`
`In~25 Countries
`
`Sales Outside
`the U.S.
`
`CORPORATE
`PROFILE
`$1.7B
`
`R&D
`Funding
`
`$53.8B
`
`Sales
`& Revenues
`
`4 Million+
`
`Cat® Products at Work
`Around the World*
`*Includes discontinued products
`
`1M
`
`Connected
`Assets
`
`All numbers represent 2019 data
`
`THE WORLD’S LEADING THE WORLD’S LEADING
`
`
`MANUFACTURERMANUFACTURER
`
`PRIMARY BUSINESS PRIMARY BUSINESS
`
`
`SEGMENTSSEGMENTS
`
`CORPORATE CORPORATE
`
`
`HEADQUARTERSHEADQUARTERS
`
`Construction and Mining Construction and Mining
`
`
`EquipmentEquipment
`
`Diesel and Natural Diesel and Natural
`
`
`Gas EnginesGas Engines
`
`
`
`Industrial Gas TurbinesIndustrial Gas Turbines
`
`
`
`Diesel-Electric LocomotivesDiesel-Electric Locomotives
`
`
`
`Construction IndustriesConstruction Industries
`
`
`
`Deerfield, IllinoisDeerfield, Illinois
`
`
`
`Resource Industries Resource Industries
`
`
`
`STOCK SYMBOLSTOCK SYMBOL
`
`
`
`Energy & TransportationEnergy & Transportation
`
`CATCAT
`
`
`
`Financial ProductsFinancial Products
`
`20 YEARS 20 YEARS
`
`
`ON THE DOW JONES ON THE DOW JONES
`
`SUSTAINABILITY INDEXSUSTAINABILITY INDEX
`
`

`

`DEAR FELLOW
`SHAREHOLDERS
`
`I would like to thank Caterpillar employees
`around the world for enabling our customers
`to continue providing the critical infrastructure
`essential to ight the global pandemic.
`
`As we prepared this year’s Annual Report, COVID-19 became a global pandemic,
`presenting new challenges around the world. Governments responded with
`guidance to manage the crisis and, in many instances, classified operations
`such as Caterpillar’s as essential activity for support of critical infrastructure.
`
`Customers use our products to provide primary and stand-by power for hospitals,
`grocery stores and data centers; transport food and critical supplies in trucks, ships
`and locomotives; maintain clean water and sewer systems; mine commodities
`
`/ 1 /
`
`

`

`Along with our dealers and suppliers, Caterpillar is
`working to help ensure uninterrupted access to the
`products and services that our customers rely upon
`to support society during these difficult times.
`
`and extract the fuels essential to satisfy global
`energy demand. Along with our dealers and
`suppliers, Caterpillar is working to help ensure
`uninterrupted access to the products and services
`that our customers rely upon to support society
`during these difficult times.
`
`While we are serving this important need, Caterpillar
`remains dedicated to the safety, health and well-being
`of our employees. The Caterpillar team achieved our
`best safety performance on record in 2019, and we
`are leveraging our strong safety culture to manage
`through this pandemic.
`
`Employees who can work from home are doing so. In our facilities that remain
`open, Caterpillar is taking appropriate precautions and implementing safeguards
`to protect our team members. We have increased the frequency of cleaning and
`disinfecting facilities with special attention to common areas. We are following
`social distancing practices and are implementing other measures consistent with
`specific regulatory requirements and guidance from health authorities.
`
`We have introduced a number of enhanced benefits to our employees to help them
`deal with the pandemic. These benefits vary by country based on local medical
`care systems and various regulatory
`requirements. The Caterpillar
`Foundation has also committed
`$10 million (USD) to directly support
`global COVID-19 response activities
`and help organizations that have
`been impacted.
`
`In response to the pandemic, we
`have taken other decisive actions
`to keep our company strong, including
`reducing discretionary expenses and
`suspending 2020 salary increases and
`short-term incentives for many
`employees and all senior executives.
`
`/ 2 /
`
` 2019 ANNUAL REPORT
`
`

`

`Photo credit: NYSE
`
`Celebrating 90 Years of Corporate Strength
`
`Of the approximately 2,200 companies listed on the New York Stock Exchange (NYSE), Caterpillar
`is among only 3% that have been listed for 90 consecutive years or more. We celebrated the 90th
`anniversary of Caterpillar’s listing on the NYSE in December, when Caterpillar Chairman and CEO
`Jim Umpleby rang the opening bell.
`
`To mark the occasion, we put a variety of Cat® machines on display in front of the NYSE, including
`a wheel loader, wheeled excavator, industrial loader and compact loader, all of which have played
`a part in Caterpillar’s historical success.
`
`We continue to execute the strategy for profitable
`growth we introduced in 2017 by focusing on operational
`excellence, expanded offerings and services.
`
`Caterpillar has faced and overcome many challenges in
`our 95-year history. As in the past, our employees continue
`to rise to the occasion. I would like to thank Caterpillar
`employees around the world for enabling our customers
`to continue providing the critical infrastructure essential
`to fight the global pandemic.
`
`Thank you for your continued support.
`
`Jim Umpleby
`Chairman & CEO
`
`/ 3 /
`
`

`

`2019 PERFORMANCE AT-A-GLANCE
`
`Caterpillar delivered strong operational performance despite a 2% decline in sales and revenues for
`the year. We remained disciplined and focused on maintaining control of our structural costs, which
`helped us achieve an operating profit margin of 15.4%. We generated strong operating cash flow and,
`as a result, were able to return $6.2 billion to shareholders, including $4.0 billion in share repurchases.
`We also raised the dividend by 20% in 2019 and paid dividends of $2.1 billion, maintaining our status
`as a Dividend Aristocrat. We achieved our 2019 Investor Day targets for operating margin and returned
`substantially all Machinery, Energy & Transportation (ME&T) free cash flow to shareholders.
`
`Sales and Revenues
`(in billions)
`
`$54.7
`
`$53.8
`
`$45.5
`
`Sales by Region
`(in billions)
`
`‘17
`
`‘18
`
`‘19
`
`Proit Per Share
`(in dollars)
`
`$10.26
`
`$10.74
`
`$1.26
`
`North America – $25.8
`Asia/Pacific – $12.1
`Europe, Africa, Middle East – $11.2
`Latin America – $4.7
`
`Adjusted Proit
`Per Share
`(in dollars)
`$11.22
`
`$11.06
`
`$6.88
`
`Operating Proit
`(in billions)
`
`$8.3
`
`$8.3
`
`$4.5
`
`‘17
`
`‘18
`
`‘19
`
`Dividends Paid
`(per share in dollars)
`
`$3.78
`
`$3.10
`
`$3.28
`
`‘17
`
`‘18
`
`‘19
`
`‘17
`
`‘18
`
`‘19
`
`‘17
`
`‘18
`
`‘19
`
`Amounts in U.S. Dollars
`
`/ 4 /
`
` 2019 ANNUAL REPORT
`
`A reconciliation of adjusted profit per
`share to U.S. GAAP can be found in our
`2019 10-K filing, which is available on our
`website at www.caterpillar.com/investors.
`
`

`

`2019 END-MARKET HIGHLIGHTS
`
`Construction Industries
`
`Modest economic expansion and continued growth in
`construction activity in North America, in particular for road
`infrastructure, was offset by weaker demand in Asia/Pacific
`due to continued competitive pressures. Lower sales in 2019
`were driven by changes in dealer inventories, partially offset
`by higher end-user demand.
`
`$22.6B*
`
`$3.9B
`
`Revenue
`
`Proit
`
`Resource Industries
`
`Mining customers increased capital expenditures as
`commodity prices were generally supportive of investments.
`Positive global economic growth drove increased sales for
`equipment supporting nonresidential construction activities,
`as well as quarry and aggregates activities.
`
`$10.3B*
`
`$1.6B
`
`Revenue
`
`Proit
`
`Energy & Transportation
`
`Declines in North American oil and gas resulted in weaker
`new equipment demand for well servicing and slowed timing
`of turbine project delivery of gas compression projects. Both
`industrial and power generation applications experienced
`moderate growth from higher end-user demand, while
`transportation sales were about flat.
`
`$22.1B*
`
`$3.9B
`
`Revenue
`
`Proit
`
`* Includes inter-segment sales
`
`/ 5 /
`
`

`

`EXECUTING OUR STRATEGY
`
`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
`
`OPERATIONAL
`EXCELLENCE
`
`EXPANDED
`OFFERINGS
`
`SERVICES
`
`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 lexibility
`of our cost structure, such as
`reducing production levels to
`relect 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.
`
`/ 6 /
`
` 2019 ANNUAL REPORT
`
`

`

`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-eficiency beneits,
`including the D6 XE, the world’s
`irst 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 irst 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.
`
`SERVICES
`
`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 leets 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
`leet in the world, with customers
`reporting beneits in the areas of
`safety, productivity and performance.
`
`/ 7 /
`
`

`

`CORPORATE GOVERNANCE
`
`Caterpillar’s governance structure provides leadership, accountability and transparency to the
`management of the company and its businesses. Our corporate governance framework serves the
`interests of shareholders with the highest standards of responsibility, integrity and commitment
`to enhance shareholder value over the long term. These standards are developed and implemented
`by our Board of Directors and the Executive Office. Learn more at www.caterpillar.com/governance.
`
`Oficers
`
`Chairman and CEO
`D. James Umpleby III
`
`Group Presidents
`William P. Ainsworth
`Bob De Lange
`Denise C. Johnson
`Ramin Younessi
`
`Chief Financial Oficer
`Andrew R.J. Bonield
`
`Chief Legal Oficer, General Counsel
`and Corporate Secretary
`Suzette M. Long
`
`Chief Human Resources Oficer
`Cheryl H. Johnson
`
`Board of Directors
`
`Kelly A. Ayotte
`Former U.S. Senator
`Representing New Hampshire
`
`David L. Calhoun
`President and CEO
`The Boeing Company
`
`Daniel M. Dickinson
`Managing Partner
`HCI Equity Partners
`
`Juan Gallardo
`Chairman and Former CEO
`Organización CULTIBA, S.A.B de C.V.
`
`William A. Osborn
`Former Chairman and CEO
`Northern Trust Corporation and
`The Northern Trust Company
`
`Debra L. Reed-Klages
`Former Chairman and CEO
`Sempra Energy
`
`As of April 1, 2020
`
`Edward B. Rust, Jr.
`Former Chairman and CEO
`State Farm Mutual Automobile
`Insurance Company
`
`Susan C. Schwab
`Professor
`University of Maryland School
`of Public Policy and Former
`U.S. Trade Representative
`
`D. James Umpleby III
`Chairman and CEO
`Caterpillar Inc.
`
`Miles D. White
`Executive Chairman of the Board
`Abbott Laboratories
`
`Rayford Wilkins, Jr.
`Former CEO
`Diversiied Businesses AT&T Inc.
`
`LEARN MORE about our corporate governance framework and voting on matters for the annual meeting
`
`in Caterpillar’s Proxy Statement: https://www.caterpillar.com/en/investors/inancial-information/proxy-statement.
`
`/ 8 /
`
` 2019 ANNUAL REPORT
`
`

`

`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`
`FORM 10-K
` ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the iscal year ended December 31, 2019
`OR
` TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the transition period from ______________ to ______________.
`
`Commission File No. 1-768
`
`CATERPILLAR INC.
`
`(Exact name of Registrant as specified in its charter)
`
`DELAWARE
`(State or other jurisdiction of incorporation)
`510 Lake Cook Road, Suite 100, Deerield, Illinois
`(Address of principal executive offices)
`
`37-0602744
`(IRS Employer I.D. No.)
`60015
`(Zip Code)
`
`(224) 551-4000
`
`(Registrant’s telephone number, including area code)
`
`SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
`Title of each class
`Trading Symbol (s)
`Name of each exchange on which registered
`New York Stock Exchange(1)
`Common Stock ($1.00 par value)
`CAT
`9 3/8% Debentures due March 15, 2021
`CAT21
`New York Stock Exchange
`8% Debentures due February 15, 2023
`CAT23
`New York Stock Exchange
`5.3% Debentures due September 15, 2035
`CAT35
`New York Stock Exchange
`
`(1) In addition to the New York Stock Exchange, Caterpillar common stock is also listed on stock exchanges in France and Switzerland.
`
`SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
`NONE
`
`Indicate by check mark
`
`YES
`
`NO
`
` • if the Registrant is a well-known seasoned issuer, as deined in Rule 405 of the Securities Act.
`
` • if the Registrant is not required to ile reports pursuant to Section 13 or Section 15(d) of the Act.
` • whether the Registrant (1) has iled all reports required to be iled by Section 13 or 15(d) of the Securities
`Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was
`required to ile such reports), and (2) has been subject to such iling requirements for the past 90 days.
` • whether the Registrant has submitted electronically every Interactive Data File required to be submitted
`pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
`such shorter period that the registrant was required to submit such iles).
` • whether the Registrant is a large accelerated iler, an accelerated iler, a non-accelerated iler, a smaller reporting company or emerging growth
`company. See the deinitions of “large accelerated iler,” “accelerated iler”, “smaller reporting company” and “emerging growth company” in
`Rule 12b-2 of the Exchange Act. (Check one):
`
`Smaller reporting company 
`Non-accelerated iler 
`Accelerated iler 
`Large accelerated iler 
` • If an emerging growth company, indicate by check mark if the registrant has elected not to use the
`extended transition period for complying with any new or revised inancial accounting standards provided
`pursuant to Section 13(a) of the Exchange Act.
`
`Emerging growth company 
`
` • whether the Registrant is a shell company (as deined in Rule 12b-2 of the Exchange Act).
`
`As of June 28, 2019, there were 562,589,191 shares of common stock of the Registrant outstanding, and the aggregate market value
`of the voting stock held by non-afiliates of the Registrant (assuming only for purposes of this computation that directors and executive
`oficers may be afiliates) was approximately $76.8 billion.
`As of December 31, 2019, there were 550,082,610 shares of common stock of the Registrant outstanding.
`
`DOCUMENTS INCORPORATED BY REFERENCE
`Portions of the documents listed below have been incorporated by reference into the indicated parts of this Form 10-K, as speciied in
`the responses to the item numbers involved.
`Part III
`2020 Annual Meeting Proxy Statement (Proxy Statement) to be iled with the Securities and Exchange Commission (SEC)
`within 120 days after the end of the iscal year.
`
`

`

`TABLE OF CONTENTS
`
`PART I
`
`Item 1.
`
`Business
`
`
`
`
`
`
`
`
`
`
`
`
`
`Item 1A. Risk Factors
`
`Item 1B. Unresolved Staff Comments
`
`Item 1C. Executive Oficers of the Registrant
`
`Item 2.
`
`Properties
`
`Item 3.
`
`Legal Proceedings
`
`Item 4. Mine Safety Disclosures
`
`PART II
`
`Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Item 6.
`
`Selected Financial Data
`
`Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
`
`Item 7A.
`
` Quantitative and Qualitative Disclosures About Market Risk
`
`Item 8.
`
`Financial Statements and Supplementary Data
`
`Item 9.
`
`Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
`
`Item 9A. Controls and Procedures
`
`Item 9B. Other Information
`
`PART III
`
`Item 10. Directors, Executive Oficers and Corporate Governance
`
`
`
`
`
`
`
`
`
`Item 11. Executive Compensation
`
`Item 12. Security Ownership of Certain Beneicial Owners and Management and Related Stockholder Matters
`
`Item 13. Certain Relationships and Related Transactions, and Director Independence
`
`Item 14. Principal Accountant Fees and Services
`
`1
`
`6
`
`12
`
`12
`
`13
`
`14
`
`14
`
`15
`
`17
`
`18
`
`48
`
`49
`
`107
`
`107
`
`107
`
`108
`
`108
`
`108
`
`109
`
`109
`
`

`

`PART I
`
`ITEM 1.
`
`Business.
`
`General
`
`Construction Industries
`
`Originally organized as Caterpillar Tractor Co. in 1925 in the State of
`California, our company was reorganized as Caterpillar Inc. in 1986
`in the State of Delaware. As used herein, the term “Caterpillar,”
`“we,” “us,” “our” or “the company” refers to Caterpillar Inc. and its
`subsidiaries unless designated or identiied otherwise.
`
`Overview
`
`With 2019 sales and revenues of $53.800 billion, Caterpillar is the
`world’s leading manufacturer of construction and mining equipment,
`diesel and natural gas engines, industrial gas turbines and diesel-
`electric locomotives. The company principally operates through
`its three primary segments - Construction Industries, Resource
`Industries and Energy & Transportation - and also provides inancing
`and related services through its Financial Products segment.
`Caterpillar is also a leading U.S. exporter. Through a global network of
`independent dealers and direct sales of certain products, Caterpillar
`builds long-term relationships with customers around the world.
`
`Currently, we have five operating segments, of which four are
`reportable segments and are described below.
`
`Categories of Business Organization
`
`1. Machinery, Energy & Transportation – Represents the
`aggregate total of Construction Industries, Resource Industries,
`Energy & Transportation and All Other operating segment and
`related corporate items and eliminations.
`
`2. Financial Products – Primarily includes the company’s Financial
`Products Segment. This category includes Caterpillar Financial
`Services Corporation (Cat Financial), Caterpillar Insurance Holdings
`Inc. (Insurance Services) and their respective subsidiaries.
`
`Other information about our operations in 2019, including certain
`risks associated with our operations, is included in Part II, Item 7
`“Management’s Discussion and Analysis of Financial Condition and
`Results of Operations.”
`
`Our Construction Industries segment is primarily responsible for
`supporting customers using machinery in infrastructure, forestry
`and building construction. The majority of machine sales in this
`segment are made in the heavy and general construction, rental,
`quarry and aggregates markets and mining.
`
`The nature of customer demand for construction machinery varies
`around the world. Customers in developing economies often
`prioritize purchase price in making their investment decisions, while
`customers in developed economies generally weigh productivity
`and other performance criteria that contribute to lower owning and
`operating costs over the lifetime of the machine. To meet customer
`expectations in developing economies, Caterpillar developed
`differentiated product offerings that target customers in those
`markets, including our SEM brand machines. We believe that these
`customer-driven product innovations enable us to compete more
`effectively in developing economies. The majority of Construction
`Industries’ research and development spending in 2019 focused on
`the next generation of construction machines.
`
`The competitive environment for construction machinery is
`characterized by some global competitors and many regional and
`specialized local competitors. Examples of global competitors
`include CASE (part of CNH Industrial N.V.), Deere Construction &
`Forestry (part of Deere & Company), Doosan Infracore Co., Ltd.,
`Hitachi Construction Machinery Co., Ltd., Hyundai Construction
`Equipment Co., Ltd., J.C. Bamford Excavators Ltd., Kobelco
`Construction Machinery (part of Kobe Steel, Ltd), Komatsu Ltd.,
`Kubota Farm & Industrial Machinery (part of Kubota Corporation),
`and Volvo Construction Equipment (part of the Volvo Group). As
`an example of regional and local competitors, our competitors in
`China also include Guangxi LiuGong Machinery Co., Ltd., Longking
`Holdings Ltd., Sany Heavy Industry Co., Ltd., XCMG Group,
`Shandong Lingong Construction Machinery Co., Ltd. (SDLG, part
`of the Volvo Group) and Shantui Construction Machinery Co.,
`Ltd., (part of Shandong Heavy Industry Group Co.). Each of these
`companies has varying product lines that compete with Caterpillar
`products, and each has varying degrees of regional focus.
`
`The Construction Industries product portfolio includes the following machines and related parts and work tools:
`
` z asphalt pavers
`
` z backhoe loaders
`
` z compactors
`
` z cold planers
`
` z harvesters
`
` z telehandlers
`
` z knuckleboom loaders
`
` z small and medium track-type tractors
`
` z motorgraders
`
` z pipelayers
`
` z track-type loaders
`
` z wheel excavators
`
` z compact track and multi-terrain loaders
`
` z road reclaimers
`
` z compact, small and medium wheel loaders
`
` z mini, small, medium and large excavators
`
` z site prep tractors
`
` z utility vehicles
`
` z forestry excavators
`
` z feller bunchers
`
`Resource Industries
`
` z skidders
`
` z skid steer loaders
`
`The Resource Industries segment is primarily responsible
`for supporting customers using machinery in mining, heavy
`construction, quarry and aggregates, waste and material handling
`applications. Caterpillar offers a broad product range and services
`to deliver comprehensive solutions for our mining customers.
`We manufacture high productivity equipment for both surface
`
`and underground mining operations around the world. Our
`equipment is used to extract and haul copper, iron ore, coal, oil
`sands, aggregates, gold and other minerals and ores. In addition to
`equipment, Resource Industries also develops and sells technology
`products and services to provide customers leet management
`systems, equipment management analytics and autonomous
`machine capabilities.
`
`2019 FORM 10-K
`
`1
`
`

`

`Customers in most markets place an emphasis on equipment that
`is highly productive, reliable and provides the lowest total cost
`of ownership over the life of the equipment. In some developing
`markets, customers often prioritize purchase price in making
`their investment decisions. We believe our ability to control the
`integration and design of key machine components represents
`a competitive advantage. Our research and development efforts
`remain focused on providing customers the lowest total cost of
`ownership enabled through the highest quality, most productive
`products and services in the industry.
`
`The competitive environment for Resource Industries consists of a
`few larger global competitors that compete in several of the markets
`that we serve and a substantial number of smaller companies that
`compete in a more limited range of products, applications, and
`regional markets. Our global surface competitors include Deere
`Construction & Forestry (part of Deere & Company), Epiroc AB,
`Hitachi Construction Machinery Co., Ltd., Komatsu Ltd., Liebherr-
`International AG, Sandvik AB, and Volvo Construction Equipment. Our
`global underground competitors include Epiroc AB, Komatsu Ltd.,
`Sandvik AB and Zhengzhou Coal Mining Machinery Group Co., Ltd.
`
`The Resource Industries product portfolio includes the following machines and related parts:
`
` z electric rope shovels
`
` z draglines
`
` z hydraulic shovels
`
` z rotary drills
`
` z hard rock vehicles
`
` z large track-type tractors
`
` z large mining trucks
`
`Energy & Transportation
`
` z longwall miners
`
` z large wheel loaders
`
` z off-highway trucks
`
` z articulated trucks
`
` z soil compactors
`
` z machinery components
`
` z autonomous ready vehicles and solutions
`
` z select work tools
`
` z wheel tractor scrapers
`
` z hard rock continuous mining systems
`
` z wheel dozers
`
` z landill compactors
`
`Our Energy & Transportation segment supports customers in oil
`and gas, power generation, marine, rail and industrial applications,
`including Cat® machines. The product and services portfolio includes
`reciprocating engines, generator sets, marine propulsion systems,
`gas turbines and turbine-related services, the remanufacturing of
`Caterpillar engines and components and remanufacturing services
`for other companies, diesel-electric locomotives and other rail-
`related products and services and product support of on-highway
`vocational trucks for North America.
`
`Regulatory emissions standards require us to continue to make
`investments as new products and new regulations are introduced.
`On-going compliance with these regulations remains a focus.
`Emissions compliance in developing markets is complex due to
`rapidly evolving and unique requirements where enforcement
`processes can often vary. We employ robust product development
`and manufacturing processes to help us comply with these
`regulations.
`
`The competitive environment for reciprocating engines in marine,
`oil and gas, industrial and electric power generation systems along
`with turbines in oil and gas and electric power generation consists
`of a few larger global competitors that compete in a variety of
`markets that Caterpillar serves, and a substantial number of
`smaller companies that compete in a limited-size product range,
`geographic region and/or application. Principal global competitors
`include Cummins Inc., Deutz AG, INNIO, Rolls-Royce Power
`Systems and Wärtsilä Corp. Other competitors, such as Fiat
`Industrial SpA (CNHI), GE Power, Kawasaki Heavy Industries
`Energy System & Plant Engineering, MAN Energy Solutions (VW),
`Mitsubishi Heavy Industries Ltd., Siemens Power and Gas,Volvo
`Penta AB, Weichai Power Co., Ltd., and other emerging market
`competitors compete in certain markets in which Caterpillar
`competes. An additional set of competitors, including Aggreko
`plc, Baker Hughes Co., Generac Holdings, Kohler Power Systems,
`and others, are primarily packagers who source engines and/or
`other components from domestic and international suppliers and
`market products regionally and internationally through a variety
`of distribution channels. In rail-related businesses, our global
`competitors include Alstom SA, Bombardier Transportation,
`CRRC Corp., LTD., The Greenbrier Companies, Siemens Mobility,
`Voestalpine AG, Vossloh AG and Wabtec Freight. We also compete
`with other companies on a more limited range of products,
`services and/or geographic regions.
`
`2
`
`2019 FORM 10-K
`
`The Energy & Transportation portfolio includes the following
`products and related parts:
`
` z reciprocating engine powered generator sets
`
` z reciprocating engines supplied to the industrial industry as well
`as Caterpillar machinery
`
` z integrated systems used in the electric power generation industry
`
` z turbines, centrifugal gas compressors and related services
`
` z reciprocating engines and integrated systems and solutions for
`the marine and oil and gas industries
`
` z remanufactured reciprocating engines and components
`
` z diesel-electric locomotives and components and other rail-related
`products and services
`
`Financial Products Segment
`
`The business of our Financial Products Segment is primarily conducted
`by Cat Financial, Insurance Services and their respective subsidiaries.
`Cat Financial is a wholly owned inance subsidiary of Caterpillar Inc.
`and its primary business is to provide retail and wholesale inancing
`alternatives for Caterpillar products to customers and dealers around
`the world. Retail inancing is primarily comprised of the inancing
`of Caterpillar equipment, machinery and engines. Cat Financial
`also provides inancing for vehicles, power generation facilities and
`marine vessels that, in most cases, incorporate Caterpillar products. In
`addition to retail inancing, Cat Financial provides wholesale inancing
`to Caterpillar dealers and purchases short-term trade receivables from
`Caterpillar. The various inancing plans offered by Cat Financial are
`primarily designed to increase the opportunity for sales of Caterpillar
`products and generate inancing income for Cat Financial. A signiicant
`portion of Cat Financial’s activity is conducted in North America, with
`additional offices and subsidiaries in Latin America, Asia/Pacific,
`Europe, Africa and the Middle East.
`
`For over 35 years, Cat Financial has been providing inancing in
`the various mar