Mike DeWalt – Director of Investor Relations Douglas R. Oberhelman – Chairman and Chief Executive Officer Edward J. Rapp – Chief Financial Officer

Stephen Volkmann – Jefferies & Company, Inc. Robert Wertheimer – Vertical Research Partners, LLC. Andrew Kaplowitz – Barclays Capital Ted Grace – Susquehanna Financial Group Robert F. McCarthy – Robert W. Baird & Co Jerry Revich – Goldman Sachs Group Inc. Henry Kirn – UBS Investment Bank David Raso – ISI Group Seth Weber – RBC Capital Markets, LLC Eli Lustgarten – Longbow Securities Jamie Cook – Credit Suisse Securities

Good morning, ladies and gentlemen and welcome to the Third Quarter 2011 Earnings Results Conference Call. At this time, all participants have been placed on a listen-only mode and we will open up the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Mike DeWalt. Sir, the floor is yours.

Thank you, very much and good morning and welcome everyone to Caterpillar's third quarter earnings call. I am Mike DeWalt, the Director of Investor Relations. I am pleased to have our Chairman and CEO, Doug Oberhelman; and our Group President and CFO, Ed Rapp, with me on the call today. This call is copyrighted by Caterpillar Inc., and any use, recording or transmission of any portion of this call without the expressed written consent of Caterpillar is strictly prohibited. If you would like a copy of today's call transcript, we will be posting it in the Investor section of our caterpillar.com website. It will be in the section labeled Results Webcast. This morning, we will be discussing forward-looking information that involves risks, uncertainties and assumptions that could cause our actual results to differ materially from the forward-looking information. A discussion of some of those factors that either individually or in the aggregate, we believe could make actual results differ materially from our projections, can be found in our cautionary statements under Item 1A, Risk Factors, of our Form 10-K filed with the SEC on February 22 of this year. And also on our forward-looking statements language contained in today's release. Okay this morning I will start by summarizing our third quarter financial results, the increase in our outlook for 2011 and our preliminary outlook for 2012 sales and revenues. Earlier today, we were happy to report a record breaking third quarter. Sales and revenues were $15.7 billion and that was an all time record the best quarter ever in our history. Now the quarter did include $1.1 billion in sales and revenues from our recent acquisition of Bucyrus. Excluding Bucyrus sales and revenues were $14.6 billion and that was also an all time record. Profit was a $1.71 per share in the quarter and that did include a negative impact of $0.22 a share related to Bucyrus. Excluding Bucyrus profit was an all time record at a $1.93 per share. The $0.22 impact from Bucyrus included acquisition related expenses of a $160 million for the inventory step up and a $122 million of deal-related and integration costs. Now the inventory step up will continue in the fourth quarter and there will be more deal-related costs, but much less in total than the third quarter. There is a good summary of Bucyrus related impacts in our financial release and its on page 15; it’s in the table in the Q&A. Now one other point on Bucyrus when you review our financial results by segment remember that Bucyrus is in resource industries. And when you review our sales by geographic region remember that Bucyrus impacts every region. Now to help you understand that impact, we broken up Bucyrus sales by region in our discussion of resource industries on page 10 of the release. Because of the size of Bucyrus to keep the discussion apples-to-apples will compare our third quarter 2011 results excluding Bucyrus with our total third quarter 2010 results. And again at 14.6 with out Bucyrus it was a record quarter up 31% from a $11.1 billion a year ago. Sales and revenues were up in every geographic region with North America up 25%, Latin America 20%, Europe Africa Middle East up 41% and Asia Pacific up 38% and again those exclude Bucyrus. Now in terms of the timing of the sales increase and the backlog growth it was reasonably consistent as we went through out the quarter. Now speaking of the order backlog for all products other than Bucyrus it rose a 11% from the end of the second quarter in June from about $21.9 billion to $24.4 billion at the end of the third quarter. And it’s about 40% higher than it was at the end of the third quarter a year ago. Now Bucyrus backlog grew from about $3.5 billion at the time of our acquisition in July to $4.2 billion at the end of September. Now moving on to the results price realization was $129 million and that is up close to 1% and above as we expected. Manufacturing costs were up $330 million and of that period or fixed manufacturing costs were the most significant driver and the primary reasons for that increase were our volume increase, the investments that we’re making in capacity and the increases in our short-term incentive compensation. In addition to the period costs material and freight were also somewhat higher. Now SG&A and R&D costs were up $82 million in the quarter, that’s about a 6% increase in costs on our 31% increase in sales. We think that’s pretty good cost control and as a percent of sales SG&A and R&D declined. Currency impacts overall were negative a $160 million of operating profit, it’s a positive impact on sales of $356 million, but a negative impact on operating costs of $516 million. The most significant net negatives were from the yen and the British pound. The US dollar was weaker versus both the yen and the pound and we are sizable net exporters from both Japan and the UK. As you do your analysis of our third quarter results, I’m sure many of you will do the math and calculate incremental operating margin. To help you out with that we’ve included a Q&A. So on page 12, as number 12, on page 18 of our financial release. Now, when you calculate incremental margin your purpose is likely to be to get a data point on our operating performance. We think to make it a reasonable analysis you need to pull out the impact of acquisitions to make it apples-to-apples. And that’s how we’ve stated our goal for the year and that’s excluding the acquisitions of EMD and Bucyrus. Excluding the acquisitions, our consolidated incremental operating profit pull through was 22% in the quarter and 24% year-to-date through September. That 24% year-to-date number is a little lower than our goal, which was 25% for the year, and the primary reason for that is negative currency impact. Excluding currency impacts, incremental operating profit was 30% in the third quarter and was 20% year-to-date. Bottom line; we have 24% year-to-date versus our goal of 25%, that’s pretty close. And operationally excluding currency, we’re doing even better than our goal. All in all, it was a good quarter for sales and profit. Costs were in good shape, margins improved. In fact, excluding Bucyrus our year-to-date operating profit as a percent of sales is better than any full year in more than three decades. Cash flow was also a great story; our machinery and engines operating cash flow was over $6.1 billion through the first nine months of the year. That means, if we stop the year at the end of September, it would be an all-time record. The first nine months have been better than any full year in our history. Our debt to capital ratio continues to improve and it dropped to 41.1% at the end of the third quarter, that’s down from 42.6% at the end of the second quarter. As a reminder, we bought Bucyrus for almost $9 billion, and we did not issue equity to do it and even with the acquisition our debt to cap ratio is 41.1%, and we had more than $3 billion in cash on the balance sheet at the end of the quarter. Okay, that’s enough about the quarter. This morning, we also increased our outlook for 2011. all in with Bucyrus, our new 2011 outlook with sales and revenues of about $58 billion and profit of $6.75 a share. Our previous outlook was a range of $56 billion to $58 billion, with profit of $6.25 to $6.75 a share. Excluding Bucyrus, our new outlook is for sales and revenues of about $56 billion and profit of $7.25. Previous outlook was a range of $54 billion to $56 billion and $6.75 to $7.25 a share. Now, that’s a lot of numbers but I think the easiest way to think about the change in the outlook is this; from the mid point of our previous guidance we raised sales and revenues by about a $1 billion in the bottom line by $0.25 a share, both with and with out Bucyrus. Now as we usually do with this time of the year, we provided a preliminary sales and revenue outlook for next year 2012. For 2012, we expect our total sales and revenues to be up 10% to 20% from the outlook for 2011 of $58 billion. Now, that’s based on our view that the developed countries of the world will continue to grow in 2012 a little bit better than 2011 but at a slow rate and below their potential. In the developing world, we expect overall economic growth at about the same pace as 2011. In the US, we still expect continuing poor housing, a little better than this year but still very weak. We are also not factoring in any new highway build, but we are encouraged that it seems to be gaining some traction in Washington. In summary; we are still predicting, improving but slow economic growth. In some of our businesses that’s actually good. Well, many of our products were producing full out, we need time to get more capacity in place. Despite the relatively weak economic growth so far this year in 2011, our order backlog has steadily increased throughout the year, it’s in a record level and that will help support next year sales. Commodity prices; well off earlier highs are still levels that should continue to be favorable for mining investment. We expect the dealers will continue to add to rental fleets to reduce their average machine ages and increase fleet sizes. Users in developed countries still need to catch up on deferred replacements and we expect construction activity to continue to improve in developing countries, requiring some further fleet expansion. We expect the dealers throughout the world will modestly increase machine inventories in 2012 to support the higher sales. And we also expect that sales of engines, turbines and rail will improve next year. Now we understand we don’t have a crystal ball and as Doug said in this morning release, we realize the world faces economic uncertainty and risk and a key part of our planning process is to make sure we are prepared if this situation turns negative. Each of our businesses prepares trough plans and that’s a standard practice here; Cat would do it every year, and actually help us act faster should the need to take action arises. Bottom line; our business is improving. The signs that we see need us to believe that will continue, but we’re keeping a close eye in the world economy and will act if we need to. Just a couple of more points and then we’ll take your questions. The first is rightful we talk a lot about economics, and sales, and cost, and profit, but there are few other aspects of our business that are also going very well. Quality levels continue to improve for almost all of our product groups. We’re well into our US Tier 4 in European Stage IIIB product introductions. We are going very well so far and feedback from the field has been very good. Another area improvement has been tens and while we don’t disclose absolute numbers, I will tell you we’re gaining; it’s been a steady year-over-year improvement each month since early 2010. And my final point; employment. Our global workforce has continued to increase in the third quarter, and since the beginning of 2010 we’ve added more than 30,000 people at Caterpillar and that does not include the acquisitions that we made. Okay that’s enough about the quarter. We are ready to take your questions.

Thank you. (Operator Instructions) The first question is coming from Stephen Volkmann. Please announce your affiliation, then pose your question. Stephen Volkmann – Jefferies & Company, Inc.: Hi good morning, it’s Jefferies & Company.

Good morning, Steve. Steve Volkmann – Jefferies & Company, Inc.: I’m wondering Mike if you might be willing to sort of directionally help us think about how incremental margins might kind of proceed into 2012, and really get a number of things that were sort of headwinds this year, I think by currency and price cost, and some of these comp accruals, and so forth. And it seems like most of those should be a little better next year, but then again we are later in the cycle with little bit higher production levels, I just kind of conceptually how do you think about the progression of incremental margins?

Well, I’ll talk around it little bit, Steve, we don’t have profit guidance for next year. But as you said there will be plenty of puts and takes. On the positive side, this year we’ve far exceeded our plan for the year and the results of that is incentive comp, is quite a bit higher than a regular target number, well higher than our outlook. So that would actually be a fairly sizable tailwind going into next year. Currency as you said has been a big negative so far this year and I guess that’s, we’ll see how the currency plays out. Hopefully it won’t be a headwind next year, but we’ll just have to wait and see what happens on the currency next year. There are a couple of headwinds; were we’re increasing capacity. For lot of our product we’re producing full out right now. As you’ve seen us announce over the last 18 months, we have a lot of projects in place and that does drive some increase in expense. I guess I would wrap all that up and say, so far this year year-to-date even including the negative from currency, we’ve done about 24% excluding acquisitions. Our goal leading up to 2012 through 2012 our long-term goal has been around 25%, so certainly that’s what we will, that’s our goal. But again we don’t have profit guidance for next year, so it’s a little tough to be more explicit than that. Stephen Volkmann – Jefferies & Company, Inc.: Yeah, understood that’s exactly what I was looking for. And then sorry to get into the weeds here, but was there an interest rate swap loss, I think you are guiding to something 150 million-ish and I’m just trying to make sure I’m thinking about interest expense right may be at somewhere else?

No, we did have about a 150 million of swap losses, but that was in the second quarter, that’s behind us. Stephen Volkmann – Jefferies & Company, Inc.: Okay. So nothing else going forward. Thanks very much.

Thanks.

Thank you. The next question is coming from Rob Wertheimer. Please announce your affiliation, then pose your question. Robert Wertheimer – Vertical Research Partners, LLC.: :

Yeah, that’s a good question and I don’t normally talk about, how things progressed through the quarter, but with all the uncertainty we were trying to send a settle signal there that there we had good consistent growth as we went through the quarter. Robert Wertheimer – Vertical Research Partners, LLC.: Okay. Helpful.

That was on purpose. Robert Wertheimer – Vertical Research Partners, LLC.: Good. Somewhat unrelated follow-up; in China, I think you mentioned how you have the finally you have capacity to build a little bit inventory ahead of the selling season. Can you talk about obviously China there is a lot of negativity around equipment sales in the market. Is there a point where you start to worry that you need to back off or is there enough share gain ahead of you that, that you can ramp into your full capacity that you planned?

Yeah. You know, I think if you look at China, and again, we don’t disclose market share data, but there is plenty of information that people can pick up. There is no big leaders in China; it’s a very big market, a very fragmented market. We’re executing our strategy there. There is room for quite a bit of growth. We’ve actually done over the last, I don’t know, few months. We’ve done better than the market overall. Earlier we kept saying, time and time again our sales were limited by production, and I think, what’s happened to us relative to the market over the last few months has proved that out. It’s hard to speculate too much about the future, it’s a big market, it’s a growing market, it’s going to need more capacity not just from us, but from competitors going forward, but you know there is always ups and downs in the timing. So, you know I think we are doing okay. We are proceeding with the capacity that we’ve already announced there and that fits nicely within our plans. Robert Wertheimer – Vertical Research Partners, LLC.: (Inaudible). Douglas R. Oberhelman: Yeah, it’s Doug Oberhelman, here, just kind of another view on China from a couple of different angles. First, our sales to users in the third quarter of ‘011 were higher than they were in ’10. Secondly, the slowdown we have seen in the economy as the Chinese authorities have tried to get a hold of inflation, in my view is the best thing it could have happened to the construction equipment industry. The levels of investment, the levels of growth that were occurring there before they did that were unsustainable for Caterpillar, for our competitors, for our industry, and it would have lead to a bubble really significant proportions, which I think would have been felt around the world. The fact they got a hold of that early which is no surprise given Chinese history, they have proven they can’t run that economy ground is getting bigger, but the fact they got a hold of that in our industry has slowed down is extremely healthy for us in the long term. The good news is our excavator business, the [Xuzhou] made products there is a world-class product that we can use just about anywhere in the world. So we have the ability to divert some of that reduction elsewhere in the world where we can keep up until we get our other investments up like in Texas, which we have started our new plant there over 20 to 30 ton product and it is underway. So right now, it’s kind of a sweet spot in my opinion, because we’ve saved the future to a great degree by not having that thing boiling out of control and spilling all over. And in fact, I think we’ll see the Chinese authorities get a hold of inflation, reflate believe or not, we’ll see 9% I don’t know late 10%, 11% growth, which is wonderful for us. In long-term it really plays to what our strategy is. So, I am in the camp loud and clear supporting the slowdown in China and in our, industry because long-term it helps and it adds then as Mike said, we refer to an inventory level in China, we wouldn’t been able to produce to until probably 13 or 14. So we are at that level a day our dealers are ready, our distribution are ready and we are seeing market share gains, which we like. But as he said, there is no clear leader yet because it’s such a disparate excavator business, and wheel loader business, but right now, I’m pretty optimistic what – with where that market has involved to and what I think will be a reasonable growth certainly at a lower level than 15% to 20% that we were seeing, but 8%, 9% and 10% is great going forward in my opinion. Robert Wertheimer – Vertical Research Partners, LLC.: Thanks, Doug. Thanks Mike.

The next question is coming from Andrew Kaplowitz. Please announce your affiliation then pose your question. Andrew Kaplowitz – Barclays Capital: Barclays Capital. Good morning, guys. Douglas R. Oberhelman: Good morning, Andy.

Hi, Andy. Andrew Kaplowitz – Barclays Capital: So, if I could just ask you about your guidance for 2012, and maybe in a different way, can you talk about the visibility that you have in this guidance given Caterpillar is getting more aftermarket focus. It’s getting more backlog focus and so you know I know there is a lot of macroeconomic uncertainty out there, but it seems like those two things would help you and give you better visibility as we go forward?

Well, Andy this is, Mike. I think you’re right. I mean, particularly with the acquisition of Bucyrus with the relative strength of mining, which is a more sort of backlog-oriented business then, let’s say construction equipment. You know kind of just going back to the earlier comments from today, from the end of June to the end of September our backlog even without Bucyrus went up 11%. Bucyrus went up a little bit more than that we were up about 40% versus a year ago on backlog, so that does help. You mentioned aftermarket, again, we don’t break that out separately, but you know we’ve had continuing consistent increases in the aftermarket business, which basically tells you a couple of things you know, on one hand it tells you that activity levels are holding up, because now aftermarket is related to activity levels and that gives you some confidence and then, I think there is also an impact particularly in the developed world where we just have a little bit of an aging fleet and I think that gives you a little confidence in terms of the need for at least some minimal replacement. Douglas R. Oberhelman: Yeah, I – it’s never a sure thing. I mean, you know as you look forward to next year there are (many) things that could happen, but I think as we sit here right now today, when you look at aftermarket which is an indicator of activity, if you look at the backlog, which is an indicator sort of customer confidence I guess, it looks pretty good. Edward J. Rapp: : Andrew Kaplowitz – Barclays Capital: That’s great, and Mike, if I could you considerably read about this status for one second, 4.2 if I’m not mistaken is a recon for the company by a wide range and I know its part of Caterpillar now. But as we look at that business, just they are in few months have been part of Caterpillar, the backlog extended quite dramatically, is that the impact of Caterpillar you had, is that just the strong markets and maybe you could just update us on integration so far?

Yeah, well I would say in general, mining is just continuing to be very strong, and I would certainly hope that customers are happier than it’s with us right now, but it would be hard to look at that and say this one is, and this one is not. It probably has something to do with being part of CAT, but probably more to do with being just a really good market. In terms of the integration… Douglas R. Oberhelman: : I’m sure somebody will ask down the road, so I’ll just this right here, right now. In terms of how are we doing in talking with the dealers about selling them distribution businesses. And I guess, I would say, I think that’s going pretty well. We never thought it would be all done you know in one quarter or even this year. We are focused in the places where you know the bang is the biggest; it’s with the dealers that have the most opportunity. We’re very excited about you know taking on this business. But at this point, we don’t really have any deals to announce and until we do we’ll probably be a little more silent on the specifics surrounded. So, you know I think all in all so far, so good on Bucyrus. We did not change our estimates for this year in terms of the overall impact and so you know, I would say that’s a good thing. Andrew Kaplowitz – Barclays Capital: Thanks, guys.

Thank you. The next question is coming from Ted Grace. Please announce your affiliation then pose your question. Ted Grace – Susquehanna Financial Group: Susquehanna. Hey, congratulations on a great quarter guys. The question I was hoping to ask is in regard to the top line guidance for 2012 and I was just wondering if you might be able to walk through some of the assumptions that are little more granular level. I know you walk through some of the GDP expectations for the US being up 2.5% next year, Europe being no more than 1.5%, and you talked about US public infrastructure markets being constrained and private non-res improving. But I was just wondering if you could talk about magnitude and timing of public and private non-res in US and Europe, and how you’re thinking about various scenarios of austerity in both regions?

Yeah, I think in terms of granularity, it will be little bit difficult. We didn’t provide a lot of specific guidance by region or by country, or by product. But what I would tell you is if you look at US and Europe increased spending, construction spending is not the main driver. The main driver for increases in the developed world today that would be both the US and Europe is essentially customers just having to replace some machines kind of post in the US 2006, 2007 highs and in Europe late 2008 and early 2007 highs. They have really just cut back replacement spending dramatically. And so I think most of the increase that we’re going to see in both the US and Europe. And in fact that we are seeing today even amid what is terrible construction spending. I mean look at the housing market, it’s terrible. The sales increases, which are quite healthy, are mostly related to replacements. Ted Grace – Susquehanna Financial Group: Okay. So the 10% to 20% embeds minimals any real underlying growth in the developed markets?

Yeah, in the developing world there is enough economic growth that fleet sizes are going up, construction spending is going up. So I think outside – in the developing world, real construction spending should be a positive. In the developed world, it’s mostly replacements. Ted Grace – Susquehanna Financial Group: Okay, that’s helpful. Douglas R. Oberhelman: Think to give you a feel for, we used dealer rental fleets in the US as kind of a proxy of where customer fleets are. And if you look at dealer rental fleets today, there is still levels down in the area of the last trough the’02, ’03 timeframe. And on average that equipment is 30% over. And so there is a really good pent up replacement demand that is yet to play out. And then it’s one of the reasons we’re continuing to make some of the investments in capital that we’re making. Ted Grace – Susquehanna Financial Group: Great. And then a real quick follow-up. Cap financial in the quarter you had a $145 million of profits on revenue of $693 million, 21% margin, in the second quarter it was like $172 million and $695 million, 25% margin. Another earning assets were down about 1.5% sequentially, but could you just walk us through the other dynamics on the sequential basis would have reduced operating profits.

Yeah. I mean, I think this is Mike. If you look at Cat Financial, I think their results have been quite consistent I think in the second quarter, I think they lowered their allowance reserve and there was a little benefit in there from that. I don’t think that was as much as in the third quarter, but I think relatively speaking their, kind of underlying operating performance pretty similar. It’s been actually good, I mean past dues are improving, kind of down just over 3.5% now Cat Finanicals have been doing a pretty good job. Ted Grace – Susquehanna Financial Group: Got it. Best of luck this quarter guys. Thanks a lot.

Thank you. The next question is coming from Robert McCarthy. Please announce your affiliation then pose your question. Robert F. McCarthy – Robert W. Baird & Co: Hi, it’s Robert W. Baird. Good morning guys.

Hey Rob. Robert F. McCarthy – Robert W. Baird & Co: I wanted to ask about the growth in dealer inventory 1.1 billion at six months, now 1.8 billion doesn’t really look like it’s on a track to slow down in terms of its growth in the second half of the year relative to the first which had been – what’s you have been talking about a quarter ago. I mean, maybe I’m splitting hairs but it seems to me that there is some benefit being recognized, through the development of, through development of the lean strategy, so my question, although a little bit difficult to define, it goes to the flavor of are you seeing the impact really in terms of control of dealer inventory that you expect to see at this point, and can we look for a much slower rate, and I mean relative to your own revenue growth, can we look for a much slower rate of inventory increases in 2012? Edward J. Rapp: Hey Rob, this is Ed, in months of sales perspective, you really see dealer inventory get back closer to what we would consider kind of a normal months of sales. If you look at the growth in terms of the quarterly move in terms of dealer inventory I think about 40% of that was related to mining and that’s not inventory, that’s just up, it’s in transit being getting ready if you would for the delivery to an end-user. If you look at the fourth quarter, you know our view of fourth quarter would be dealer inventory would be in kind of the flat-to-down slightly type range, get towards the end of the year you usually have it, you got some benefits of things like accelerated depreciation, so I think you’ll see a trend flat-to-down slightly for the balance of the year. And then with a normalizing from the months of sales perspective I think little bit going forward would be inline with the revenue growth. Robert F. McCarthy – Robert W. Baird & Co: Okay and my other question goes to EMDs performance, I realize you know relative to the entire company is quite small, but I think you know we are very excited about the longer term opportunity there and I was struck by the fact that you had some nice revenue growth, but a decline in earnings in terms of year-on-year comparison, I wonder if we’re seeing some ongoing call it restructuring and integration expenses that are constraining profit improvement there or if that’s not the case, when should we expect to see a more healthy rate of profit improvement?

Yeah this is Mike, I think one of things that’s going on with EMD right now is they are kind of caught between two worlds, what they are shipping and selling right now, is still at a pretty depressed level, their expectations for ‘012, ‘013 and ‘014 are much better, they are worried about capacity. The result of that is they’ve added a fairly sizable new facility in Monsey, Indiana. They’ve actually been getting that ready, so it’s been quite a bit a cost I think related primarily to Monsey to a lesser degree, some capacity expansion done in Brazil. So, I think it’s a case where they’re seeing a strengthening order backlog and they are trying to get capacity in place to do that. And that’s causing something right now. Robert F. McCarthy – Robert W. Baird & Co: Solid investments, spending in everywhere.

Yeah. Robert F. McCarthy – Robert W. Baird & Co: And when you were talking about the Bucyrus service centre transactions and when we might see that, we’re even tending for us to come away not expecting any of those transactions to be announced before the end of the year.

No, I think we’d love to get, we’d love to get some of them done this year, all I was trying to leave you with this. We never – we never intended that they would all be done this year. Then we are focusing on the really big ones first. But yeah we’d love to get a couple done this year. Robert F. McCarthy – Robert W. Baird & Co: Okay, all right. Thank you.

Thank you. The next question is coming from Jerry Revich. Please announce your affiliation, then pose your question. Jerry Revich – Goldman Sachs Group Inc.: Good morning. It’s Goldman Sachs. On your money equipment business, Mike can you say more about incremental manufacturing capacity expansion you’re considering and also can you give us an update on your progress on purchasing an aftermarket penetration on the Bucyrus business?

Remember the second part of that question because after I’m done with the first one, I might forget it. So hang on to that. What was the first part again? Jerry Revich – Goldman Sachs Group Inc.: Sure, any updated thoughts on incremental manufacturing capacity and mining broadly?

Oh, yeah, yeah, yeah, sorry. My memory is short this morning. Yeah, I mean we’ve been, I use mining trucks a lot as a proxy because mining trucks, larger mining trucks are the biggest opportunity in mining historically for us, for the CAT brand. We've fairly dramatically increased production as we've gone throughout the year. Early in this year we were, I think, I don't remember the month but some point in the first quarter we kind of got back to the '08 peak levels. And we're going to probably end the year something in the range of, at least for larger mining trucks half again as much. And the idea with the mining truck expansion was that, by the time we got to early '13, it would have been doubled from that prior level. So, for mining trucks there is more to come. There are other parts of mining, which we're also trying to increase. Underground mining, there's a new factory going into Taiwan. So, there is quite a long backlog right now in underground mining, hard rock mining equipment, so that'll good. We’re trying to get more production out on large bulldozers as well. So, I guess what I would tell you is the plans that we have in place, we're executing but particularly on large mining trucks it's going to be in bulldozers. It will be tight as we go throughout next year, better than this year, but probably still tight. Jerry Revich – Goldman Sachs Group Inc.: And Mike, can you relieve the same discussion on the Bucyrus assets particularly the hydraulic excavators there?

Yeah, hydraulic excavators, it would be very much the same as we look at that manufacturing footprint, Jerry, this is it. The other one on your question about the product support side and what we’re seeing on Bucyrus; I’d say as we got into it, we continue to see a lot of upside opportunity. A big part of capturing that upside opportunity is going to be getting the dealers and sort it into this process, because a lot of that replacement part demand, they can, they are already setup on the mining sites to be able to execute that, and so it’s just a question of getting the flow of the parts through it. If you look at another part of capturing the parts side of the business on Bucyrus longer term, it’s the integration of our components into that product and we’re working that hard but it’s got a little bit longer shelf life in terms of getting that done. And then the last thing, we think we can add some good value with our logistics capability in terms of moving those parts around the world. So going in, we felt one of the real upside opportunities was capturing more of the aftermarket on Bucyrus. I’d say our early view is that view was correct. Jerry Revich – Goldman Sachs Group Inc.: Okay, and as you have discussions with your mining customers and their CapEx plans; can you talk about the range of budget increases you expect to see out of them? And can you touch on which regions and commodities you expect to drive orders for your business over that time period?

: Jerry Revich – Goldman Sachs Group Inc.: Thank you.

Thanks Jerry

Thank you. The next question is coming from Henry Kirn. Please announce your affiliation, then pose your question. Henry Kirn – UBS Investment Bank: Good morning guys, its UBS.

Hey, Henry.

Hey, Henry. Henry Kirn – UBS Investment Bank: I’m wondering if you could talk about, where the remaining supply chain pinch points are most pressing and have you seen any discernible margin drags coming out of the supply chain?

You know I guess I would describe the supply chains issues right now was in some areas as tight but manageable, you know tires somewhat tight but manageable, steel castings kind of the same thing. I mentioned before one of the places where we use a lot of large steel castings is in frames for mining trucks. We’ve done a good job, our suppliers have done a good job in ramping up, but it’s still pretty tight. Outside of that, I don’t, I’m not aware of any some specialty steels here and there, but in general, I think it’s I’d describe it as in some areas tight but manageable and not many sort of system-wide problems that I’ve heard off. Henry Kirn – UBS Investment Bank: And with all of the headlines on Europe over the last few months, could you talk about how that market trended during the third quarter and may be some of the demand thoughts that are baked into your guidance for 2012?

Yeah, well in a lot of ways Europe is similar to US, you know the economic indicators has not been most robust, but much of our business in the developed world, again it’s replacement oriented, most of what we sell in the US and Europe in any given year was largely forward replacements, and so that’s driving that business. There are sales; we don’t break it out separately, but we show Europe, Africa, and Middle East; and I think excluding Bucyrus region was up 41%. Of course the AME part of it, the Africa and Middle East part was up more than Europe, but Europe is behaving in a lot of ways similar to the US, up on replacements and at some point down the road, it’s certainly not in our expectations for ‘12 but maybe beyond that these economies will grow more, or will get some housing start, some commercial construction and then we will have real growth, it will drive the next way. Henry Kirn – UBS Investment Bank: Thanks a lot. Good quarter.

The next question is coming from David Raso. Please announce your affiliation, then pose your question. David Raso – ISI Group Inc.: Regarding the profitability for the company, just trying to think through ‘12 a little bit. The last couple quarters even if you pull out Bucyrus, the gross margins have been down year-over-year. And that looks like one of the key reasons is price versus manufacturing cost, the last couple quarters the price realizations has been a lot lower than the Dragon Manufacturing. So keep things to a little bit the pricing dynamic and how you are thinking about that relationship? And then I have a follow up kind of related to those manufacturing cost?

Yeah, this is Mike and this is certainly no change in direction. We would expect that this year would be somewhere in the ballpark of 1% and in fact that’s roughly what we had in this quarter. We’re driving the company to get margin improvement and incremental margins, like we have this year, without doing it on the back of high price. We’re trying to drive the CAT business model, modest price increases, let’s say kind of inline with our cost inflation and then drive incrementals through efficiency. We’ve done a pretty good of doing that so far this year. I think if you look forward, I don’t see us, again, we don’t have any profit guidance for next year, but what I just described was kind of an essence what Doug strategy is, and so I don’t see that dramatically changing. The price increases that we announced for machines for next year, the vast majority were between zero and three, which it’s fairly consistent with this year. So, I would say, at least in terms of price we didn’t give you an average total all in weighted average expectation for next year, but our strategy is modest increases, drive efficiency and get margin through that. And I’d probably wouldn’t see that changing. David Raso – ISI Group Inc.: :

Yeah, Dave, when you are talking gross margin drag you have to be a little bit careful because we do our analysis on a period and variable basis. So when you are looking at gross margin, that does include period costs, and so I think, when you’re looking at our gross margin performance, I think if you were to take out the acquisitions and the impact of currency, you would see our gross margin not being negative, but being actually better year-over-year. So, I think as you look forward, again our goal on period manufacturing cost is to keep the growth rate in period manufacturing costs, which is the biggest contributor to the 340 to keep it at less than half a rate of sales growth, and if we do that, that helps increase gross margin. David Raso – ISI Group Inc.: Okay, I will follow up with you. I appreciate it. Thank you. Douglas R. Oberhelman: It’s Doug here. On a broader view of this, I think that quarterly and certainly the year-to-date ’11 over ’10 and now the outlook that we’ve put out for ’11 over ’10 or right where we wanted to be in terms of our strategic alignment in 2012 and 2015. And we have always said you know that our goal here is a 25% pull through overtime and we’ve hit that in some quarters and some quarters we haven’t but we’re pretty done close year-to-date 2011 over ’10. And that’s exactly what we expect going forward in terms of the strategic gearing of the company we’re still going through that. Market share is the driver balanced with profits at a 25% pull through with our goals out in 2015 and I absolutely believe if we dissect the numbers or not, the third quarter and year-to-date put us right on track where we want to be and I – we’re off, as a management team pretty happy with the progress on that. Long ways to go, we’ve got lots of the capital investments to make, but there are seven million people on the planet that want to live like that most developed countries do and that’s driving the needs for a lot of infrastructure, our natural resources and so on and we are going to be in a position to take advantage of that and that’s part of the balance we make in terms of market share versus profit overtime. Douglas R. Oberhelman: Good. Next question

The next question is coming from Seth Weber. Please announce your affiliation then pose your question. Seth Weber – RBC Capital Markets, LLC: Hey, thanks good morning. It’s, RBC.

Hey, Seth. Seth Weber – RBC Capital Markets, LLC: Hey. I just wanted to drill down a little bit. There is a comment in the release about some unfavorable pricing or unfavorable mix in the construction equipment business. I guess, two parts, is that a regional issue, I mean does that reflect some aggressive pricing in China and I guess should that get better next year if the US and the developed markets start to improve.

Well in terms of construction, overall, I would say, both in from a product standpoint and geographic sort of country standpoint. Country mix has been through (inaudible) much of the year slightly negative and you would see that in terms of price. I mean we don’t for the same product, in different areas of the world it sells for different price levels and we have commented on that, I think through out the year that that, that’s been slightly negative. From a product standpoint, we’ve had some pretty healthy increases in the small and to the product line. Other products like excavators and some of the larger product we’ve been fairly supply constraint. So product mix has been slightly negative. It’s not a huge deal either show the geographic mix impact on price or the product impact on margin. It’s been a slight negative but nothing overall too significant. Seth Weber – RBC Capital Markets, LLC: Okay, thanks. And then, I guess just a clarification, is the mining business fully booked for 2012 at this point?

When you say fully booked in mining business, I would say, for the most part we’re—based on what we see right now will be capacity constrained on most products during the year, but it’s hard to say everything all year long. I mean, if you are a mining customer, you might need a 320 excavator to do some clean up around a pile, so that would be mining, but it's not a mining product per se. So, for the most part, I think the answer is, we’re pretty well sold out, but it’s probably not a 100% on everything. Seth Weber – RBC Capital Markets, LLC: Okay. But fair to say you are not getting any request for delivery push outs or cancellations or anything like that.

No, it continues to be a very strong business. The customers seem to have quite a bit of conviction. Seth Weber – RBC Capital Markets, LLC: Okay. Great, thanks very much guys.

: Eli Lustgarten – Longbow Securities: Longbow Securities. Good morning, everyone.

Good morning, Eli. Eli Lustgarten – Longbow Securities: Just one quick clarification, you talked about inventory levels that dealers are being sort of back up to normal months is that true around the world or can you talk to me to believe that inventory levels are backward dealers with license to see at this point in time.

Well, we didn’t exactly say it's what dealers would like to see them what we said was, they’re kind of back to a historical average. So yeah, and it’s actually I looked at the numbers kind of by region and it’s some of them maybe are little over and some that are still maybe a little under, but surprisingly, all four major regions of the world are fairly close to historical averages right now. During the quarter, if you look at dealer inventory, we had more of a gain in inventory in Asia, but in a lot of ways that’s not surprising. Once we had kind of enough supply to more closely match demand, it had been the region that it had been further under. So yeah, it doesn’t like there are any out wires if you will. I mean you don’t have one region that’s 40% higher and one region that’s 40% lower there is some reasonable consistency. Eli Lustgarten – Longbow Securities: And as far as you’re pricing for 2012, you talked about 0% to 3%, but you had a second component for IT poor pricing for most machines. And I got to believe that you had a lot across in 2011 that weren’t recovered as you converted over. So I mean, are we looking at 2012 you know pricing out of (inaudible) T4 being more of a lesser impact from the cost of conversion than we had in 2012?

Well, two things Eli, bring up a good point, you know what a customer sees in terms of price is a lot higher than what we’re reporting as price realization, because you have things like Tier 4, where there is actually added content and when we look at like the Tier 4 or Stage IIIB, where the actual content of product changes we’re netting off the cost, but there was no big windfall, no big drag in 2011. I mean, the price increases on average I’m sure it vary by model, but overall you know Tier 4 has more than recovered its cost this year. Eli Lustgarten – Longbow Securities: All right. Thank you.

The next question is coming from Jamie Cook. Please announce your affiliation then pose your question. Jamie Cook – Credit Suisse Securities: Hi, good morning. Most of my questions have been answered. Just Mike quickly, anything I think, people are trying to get at this, but unusual as you think about your top line forecast with regards to mix that we should consider, which could have implications for incremental margins. And then last well, have you done any last time when you were going to downtown you guys were proactive in going out to the dealers and saying you can cancel orders. I mean, have we done anything in terms of, I guess scrubbing, scrubbing the backlog just given the macro uncertainty?

I'll start with the first one on mix. I can’t think of anything that’s on top of my head here that's, that's way out of line. I think our view as we look into next year is that mining will continue to improve, construction will continue to improve its fairly broad-based. I'm sure when it's all settled down there’ll be some mix impact, but kind of given the level of sales change that we're talking about and the idea that is actually fairly broad-based – it'll be hard to see huge mix shifts in that. And in terms of the backlog, when you go back at this point in time in 2008, there was a situation and actually from here on in 2000, there was a situation where dealers kind of stopped ordering and it made you question the backlog and I think we did the right thing by opening up the order book back then to let it be cleared out. We don't have that situation now. Dealers are ordering more. I mean, as you’d go throughout the third quarter, dealers ordered more from us than we sold to them in the third quarter and consistently in the third quarter. So, you never know what's going to happen down the road. We don't have a crystal ball, but it's been pretty good solid consistent growth. Douglas R. Oberhelman: I just want to add in here. We get questions almost daily our own employee’s, outsiders you name it, the situation seems like 2008 all over again. And, while it does in some cases on a macro level specific to the European banking situation it bares a little resemblance internally at Caterpillar II this time or even going back to mid 2008. You recall that when late ’08 hit DCP, our building construction products group around home building had been in a (inaudible) for over two years of that point in time. And as Mike said, dealer order rates were coming down all through 2008 and that’s one of the reasons we said, what we said in the fall of 2008 about a recession coming. We are not saying that today. I would love to say we see a boom coming, but we don’t see that. We see a slow growth recovery here that it should be a lot better than it is has been confounded by some policy missteps around the world in the last few months. Having said that, we do not hear anecdotally from customers or dealers that there is less work at this moment than there was a year ago. We heard that all through 2008 as their backlog shriveled and withered away, we do not hear that today and that’s one of the reasons we’ve talked about that in our outlook statement for the rest of 2011. We may hear it tomorrow, we may hear it next month, but right now, it’s very dissimilar to this period in 2008 and we’re looking for a slow growth recovery and this is exactly as we said in the outlook going on into 2012, which at this moment looks pretty good for our business. Jamie Cook – Credit Suisse Securities: All right. Thanks, and I’ll get back in queue.

I think we are at the top of the hour now, so we’ll stop here. Thank you all for joining us on the call today, and we’ll talk to you again in three months.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.