Caterpillar, Inc. · NYSE:CAT
Caterpillar — Merger or Acquisition (July 2011)
20 slides from Caterpillar's merger presentation, Jul 22, 2011
Slide 1: Bucyrus Acquisition
EXHIBIT 99.2 Page 1 Bucyrus Acquisition This presentation should be read in conjunction with Caterpillar’s Earnings Release filed on July 22, 2011 with the Securities and Exchange Commission on Form 8-K
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to known and unknown factors that may cause Caterpil
Slide 3: 2011-2015 Enterprise Strategy & Our Values in Action
2011-2015 ENTERPRISE STRATEGY & ‘OUR VALUES IN ACTION CUSTOMERS. PEOPLE. STOCKHOLDERS. CATERPILLAR’
Slide 4: Today's Discussion
Today’s Discussion Fundamental Reasons to Acquire Bucyrus Remain Mining is a great industry that fits our strategy We expect robust long-term growth in mining Bucyrus products are highly complementary We’ve Made Key Decisions Organization Branding Dealer participation Funding We are Ready for Integr
Slide 5: The Cat Business Model
The Cat Business Model Executed in close partnership with Dealers Page 5
Slide 6: Growth in Mining is a Strategic Imperative
Growth in Mining is a Strategic Imperative Page 6
Slide 7: Complementary Bucyrus Products
Page 7 Electric rope shovels Draglines Hydraulic shovels Drills Underground mining equipment Trucks Highwall miners Complementary Bucyrus Products
Slide 8: Caterpillar Before Bucyrus
Caterpillar Before Bucyrus Important in mining, but narrow product line Surface Mining Equipment Underground Mining Equipment Dozers & Graders Wheel Loaders Mining Trucks Hydraulic Shovels Highwall Miners Surface Drills Rope Shovels Draglines Surface Belt Systems Belt Systems Roof Supports Armored F
Slide 9: Caterpillar & Bucyrus Combined
Surface Mining Equipment Underground Mining Equipment Dozers & Graders Wheel Loaders Mining Trucks Hydraulic Shovels Highwall Miners Surface Drills Rope Shovels Draglines Surface Belt Systems Komatsu Hitachi Joy Global Liebherr Caterpillar Page 9 Belt Systems Roof Supports Armored Face Conveyors She
Slide 10: Key Decisions
Key Decisions Organization Branding Dealer participation Funding
Slide 11: Organization
Page 11 Bucyrus will become a part of Caterpillar’s mining group within the Resource Industries Segment lead by Steve Wunning Cat Global Mining headquarters will be in Oak Creek, Wisconsin Three Caterpillar Vice Presidents will report to Steve Wunning and lead the mining business: Dave Bozeman will
Slide 12: Products will be Branded Caterpillar
Page 12 Since announcing the acquisition last November we’ve studied the best branding approach We worked with dealers, customers, the Bucyrus leadership, and outside industry and branding experts The conclusion was a single brand Caterpillar The decision was endorsed by the Bucyrus board of directo
Slide 13: Dealer Participation
Page 13 Bucyrus employed a predominantly direct distribution model. We expect to migrate sales and support to Caterpillar dealers Dealers and customers have asked us for years to expand our offering in mining The sale of Bucyrus distribution businesses and the migration of distribution and support t
Slide 14: Transaction Funding
Funding Transaction Funding Page 14 Caterpillar acquired 100% of Bucyrus outstanding common stock at $92 per share Total purchase price of ... approximately $8.8 billion including assumption of Bucyrus’ net debt Positive cash flow since November 2010 has resulted in funding that is more favorable to
Slide 15: We're Ready for Integration
We’re Ready for Integration We formed a dedicated team in late 2010 to plan for the integration and synergy capture. Good planning and we’re off and running Much to do branding, dealers, product support, employees, IT, purchasing, remanufacturing, finance, engineering, Cat components and much more.
Slide 16: Synergy Capture
Synergy Capture Page 16 We expect synergy benefits across a wide range of areas Sales and support capability of Cat Dealers higher sales, more aftermarket Use of Cat engines and components in Bucyrus products Costs such as purchasing and engineering Cat Remanufacturing Expected Synergy Benefits & Co
Slide 17: Expected Financial Impact
Expected Financial Impact * Page 17 * This does not include impacts related to migrating Bucyrus sales and support businesses to dealers. Profit impact will change as dealers acquire and pay for distribution businesses. About -$300M About -$300M Inventory Step-up About -$250M Interest Rate Swap Loss
Slide 18: What's Changed
What’s ......... Changed Page 18 Negative Higher up-front costs – primarily interest rate swap losses and a higher inventory step-up. We’re expecting about $700M in up-front costs in 2011 including the loss on interest rate swaps $150M, inventory step-up $250M, and other integration and deal-related
Slide 19: Summary
Summary ......... Great acquisition with a complementary product fit Still much work to do we have a great integration plan that we are executing Increasingly positive on the synergy potential, but it does require investment to implement. Will take time to integrate including the dealer transition M
Slide 20: The Right Move for Caterpillar
The Right Move for Caterpillar Page 20