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CATERPILLAR FINANCIALCATERPILLAR FINANCIAL
SERVICESSERVICES
Team CAN-IStacey Kemner, Russ Poush, Anthony Spencer
September 12, 2006
BackgroundBackground
CAT Financial offers financial
services to Dealers, Users,
and CATBUs and is a wholly
owned subsidiary of
Caterpillar Incorporated.
Caterpillar Incorporated
markets include: general,
heavy and compact
equipment construction,
engines, power generation, lift
trucks, asphalt paving, marine,
and forestry.
Mission & Vision
Statements
Malcolm Baldrige
National Quality Award
Profits
6 Sigma Results
Critical Success Factors
(CSFs)
Customer Service
Mission & Vision StatementMission & Vision Statement
Vision
Mission
Critical Success Factors
6 Sigma
Shared Values
Vision
We will be a significant reason
customers select Caterpillar worldwide.
We will leverage our intellectual
capital to deliver customer-driven
solutions and enhance shareholder
value.
We will grow on our strong foundation
as a caring and learning organization.
Mission
Helping Caterpillar and our customers
succeed through financial service
excellence.
Critical Success Factors
•Customer Satisfaction
• Growth
• Reliable Returns
• Employee Satisfaction
• Leadership
• World-Class Core Processes
Shared Values
We are a people of integrity who
respect and care for others in
our workplace and our world.
We are driven by the freedom
and responsibility to exceed
expectations of those we work
with and serve.
Caterpillar Financial Service Corporation, Summary, 2
Figure P-4 Business Excellence
Malcolm Baldrige National Quality AwardMalcolm Baldrige National Quality Award
• 1993 - Began using theBaldrige program as part ofthe Tennessee QualityAward process.
• 1999 - Won TennesseeQuality Excellence Awardwith Global ExcellenceCommendation
• 2003 - Won MalcolmBaldrige National QualityAward
6 Sigma Results6 Sigma Results
'00 '01 '02 '03 YTD '04 EST
$
Good
Figure 7.3-7, Caterpillar Financial Services Corporation Summary, 46
CFSC was able to fully recoup all 6 Sigma start-up costs in 2001, the first
year of deployment, and is yielding significant benefits, with 2002 after-tax
savings exceeding $9 million.
ProfitsProfits
Figure 7.3-3 Reliable Returns to
Caterpillar, Inc.
CF
SC
%
T
ota
l C
ate
rp
illa
r
Ea
rn
in
gs
• Since 1998, CFSC has
increased assets 34% and
profit 54% (industry
performance has declined
21% & 35%, respectively)
• CFSC’s contribution to
Caterpillar’s total earnings
increased from 5.6%
(1998) to over 17% (2002)
Good
Caterpillar Financial Service Corporation, Summary, 44-45
CSF IndicatorsCSF Indicators
• Reliable Returns - Portfolio
Health
– Product/Services Expansions
– Top 20 Users (na)
– Past Due Results
– Inactive Accounts
– Restructures (na)
– Repossessions
– Potential Losses >500k (na)
– Defaults
– Allowance for Credit Losses% Past Dues % Inactives Repo Units % Allowance
7.5-13 Portfolio Factors
2000 2001
2002 2003 YTD
Industry Benchmark
Good
Caterpillar Financial Services Corporation Summary,53
CSF IndicatorsCSF Indicators
• Employee
Satisfaction/Health
– Retention
– Compensation
Competitiveness
– Succession Planning
– Diversity
– Development
7.4-6 Employee Retention
1999 2000 2001 2002 2003 YTD
%
CSFC CFSC with Regional Offices
% Non Voluntary/Voluntary Industry/Top Quartile
7.4-4 Investment in Employee Recognition
1999 2000 2001 2002 2003 YTD
$
Eye On quality Cat Bucks 6 Sigma Rewards
Caterpillar Financial Services Corporation Summary, 48
CSF IndicatorsCSF Indicators
• Leadership Health
– Strategic Retreat
– ALC
– Shared Values
– Community Support
7.6-9 Community Support
2001 2002 National
Norm
Baldrige
Winner
%
Fa
vo
ra
ble
Caterpillar Financial Services Corporation Summary, 55
Good
Customer ServiceCustomer Service
• CAT Financial meets orexceeds customer’sexpectations
• Flexible financial lendingrequirements allow all but asmall percentage of loans to beapproved
• User/Dealer Focus Groups &Surveys re: staff performance,overall satisfaction, futureintentions, loyalty, competitivecompetition
• Email, Internet, Intranet,Extranet - Allow for quickresponse to customer needs
Caterpillar Financial Services Corporation Summary,53
QUESTIONS??QUESTIONS??
CATERPILLAR FINANCIALCATERPILLAR FINANCIAL
SERVICESSERVICES
THANKS FOR THANKS FOR
LISTENING!!!LISTENING!!!
CATERPILLAR FINANCIALCATERPILLAR FINANCIAL
SERVICESSERVICES
CATERPILLAR FINANCIALCATERPILLAR FINANCIAL
SERVICESSERVICES