The rating on Peoria, Ill.-based Caterpillar Inc. reflects the company's excellent competitive business position in the cyclical global construction equipment market, its solid cash flow protection, and the expectation that the company will generate acceptable earnings measures, even at the bottom of an economic cycle. Caterpillar is by far the world's largest producer of construction equipment, with more in sales than the next three largest competitors combined. It's also the world's leading diesel engine manufacturer. The company continues to strengthen its business position by introducing new products targeting the small equipment segment (in which it has lower penetration) and by expanding rapidly in China. North American and Western European markets are mature. However, large infrastructure needs in emerging countries should
