/FIRST AND FINAL ADD -- AQF008 -- CATERPILLAR EARNINGS/

    GLOSSARY OF TERMS

    1.   Cat Production System (CPS) - The Caterpillar Production System is
         the common Order-to-Delivery process being implemented
         enterprise-wide to achieve our safety, quality, velocity, earnings
         and growth goals for 2010 and beyond.
    2.   Consolidating Adjustments - Eliminations of transactions between
         Machinery and Engines and Financial Products.
    3.   Core Operating Costs - Machinery and Engines variable manufacturing
         cost change [adjusted for volume] and changes in period
         manufacturing costs, SG&A expenses and R&D expenses.  Excludes the
         impact of currency.
    4.   Currency - With respect to sales and revenues, currency represents
         the translation impact on sales resulting from changes in foreign
         currency exchange rates versus the U.S. dollar.  With respect to
         operating profit, currency represents the net translation impact on
         sales and operating costs resulting from changes in foreign currency
         exchange rates versus the U.S. dollar.  Currency includes the
         impacts on sales and operating profit for the Machinery and Engines
         lines of business only; currency impacts on Financial Products
         revenues and operating profit are included in the Financial Products
         portions of the respective analyses.  With respect to other
         income/expense, currency represents the effects of forward and
         option contracts entered into by the company to reduce the risk of
         fluctuations in exchange rates and the net effect of changes in
         foreign currency exchange rates on our foreign currency assets and
         liabilities for consolidated results.
    5.   EAME - Geographic region including Europe, Africa, the Middle East
         and the Commonwealth of Independent States (CIS).
    6.   Earning Assets - Assets consisting primarily of total finance
         receivables net of unearned income, plus equipment on operating
         leases, less accumulated depreciation at Cat Financial.
    7.   Engines - A principal line of business including the design,
         manufacture, marketing and sales of engines for Caterpillar
         machinery; electric power generation systems; on-highway vehicles
         and locomotives; marine, petroleum, construction, industrial,
         agricultural and other applications; and related parts.  Also
         includes remanufacturing of Caterpillar engines and a variety of
         Caterpillar machinery and engine components and remanufacturing
         services for other companies.  Reciprocating engines meet power
         needs ranging from 5 to 21,500 horsepower (4 to more than 16 000
         kilowatts).  Turbines range from 1,600 to 20,500 horsepower (1 200
         to 15 000 kilowatts).
    8.   Financial Products - A principal line of business consisting
         primarily of Caterpillar Financial Services Corporation (Cat
         Financial), Caterpillar Insurance Holdings, Inc. (Cat Insurance),
         Caterpillar Power Ventures Corporation (Cat Power Ventures) and
         their respective subsidiaries.  Cat Financial provides a wide range
         of financing alternatives to customers and dealers for Caterpillar
         machinery and engines, Solar gas turbines as well as other equipment
         and marine vessels.  Cat Financial also extends loans to customers
         and dealers.  Cat Insurance provides various forms of insurance to
         customers and dealers to help support the purchase and lease of our
         equipment.  Cat Power Ventures is an investor in independent power
         projects using Caterpillar power generation equipment and services.
    9.   Integrated Service Businesses - Previously termed "Diversified
         Service Businesses."  A service business or a business containing an
         important service component.  These businesses include, but are not
         limited to, aftermarket parts, Cat Financial, Cat Insurance, Cat
         Logistics, Cat Reman, Progress Rail, OEM Solutions and Solar Turbine
         Customer Services.
    10.  Latin America - Geographic region including Central and South
         American countries and Mexico.
    11.  Machinery - A principal line of business which includes the design,
         manufacture, marketing and sales of construction, mining and
         forestry machinery-track and wheel tractors, track and wheel
         loaders, pipelayers, motor graders, wheel tractor-scrapers, track
         and wheel excavators, backhoe loaders, log skidders, log loaders,
         off-highway trucks, articulated trucks, paving products, skid steer
         loaders and related parts. Also includes logistics services for
         other companies and the design, manufacture, remanufacture,
         maintenance and services of rail-related products.
    12.  Machinery and Engines (M&E) - Due to the highly integrated nature of
         operations, it represents the aggregate total of the Machinery and
         Engines lines of business and includes primarily our manufacturing,
         marketing and parts distribution operations.
    13.  Manufacturing Costs - Manufacturing costs represent the
         volume-adjusted change for variable costs and the absolute dollar
         change for period manufacturing costs.  Variable manufacturing costs
         are defined as having a direct relationship with the volume of
         production.  This includes material costs, direct labor and other
         costs that vary directly with production volume such as freight,
         power to operate machines and supplies that are consumed in the
         manufacturing process.  Period manufacturing costs support production
         but are defined as generally not having a direct relationship to
         short-term changes in volume.  Examples include machine and equipment
         repair, depreciation on manufacturing assets, facility support,
         procurement, factory scheduling, manufacturing planning and
         operations management.
    14.  M&E Other Operating Expenses - Comprised primarily of gains (losses)
         on disposal of long-lived assets, long-lived asset impairment
         charges and impairment of goodwill.
    15.  Operating Profit - Sales and revenues minus operating costs.
    16.  Price Realization - The impact of net price changes excluding
         currency and new product introductions.  Consolidated price
         realization includes the impact of changes in the relative weighting
         of sales between geographic regions.
    17.  Profit - Consolidated profit before taxes less provision for income
         taxes plus equity in profit (loss) of unconsolidated affiliated
         companies.
    18.  Sales Volume - With respect to sales and revenues, sales volume
         represents the impact of changes in the quantities sold for
         machinery and engines as well as the incremental revenue impact of
         new product introductions.  With respect to operating profit, sales
         volume represents the impact of changes in the quantities sold for
         machinery and engines combined with product mix -- the net operating
         profit impact of changes in the relative weighting of machinery and
         engines sales with respect to total sales.
    19.  6 Sigma - On a technical level, 6 Sigma represents a measure of
         variation that achieves 3.4 defects per million opportunities.  At
         Caterpillar, 6 Sigma represents a much broader cultural philosophy
         to drive continuous improvement throughout the value chain.  It is a
         fact-based, data-driven methodology that we are using to improve
         processes, enhance quality, cut costs, grow our business and deliver
         greater value to our customers through Black Belt-led project teams.
         At Caterpillar, 6 Sigma goes beyond mere process improvement -- it
         has become the way we work as teams to process business information,
         solve problems and manage our business successfully.

NON-GAAP FINANCIAL MEASURES

The following definition is provided for "non-GAAP financial measures" in connection with Regulation G issued by the Securities and Exchange Commission. This non-GAAP financial measure has no standardized meaning prescribed by U.S. GAAP and therefore is unlikely to be comparable to the calculation of similar measures for other companies. Management does not intend this item to be considered in isolation or as a substitute for the related GAAP measure.

MACHINERY AND ENGINES

Caterpillar defines Machinery and Engines as it is presented in the supplemental data as Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis. Machinery and Engines information relates to the design, manufacture and marketing of our products. Financial Products information relates to the financing to customers and dealers for the purchase and lease of Caterpillar and other equipment. The nature of these businesses is different, especially with regard to the financial position and cash flow items. Caterpillar management utilizes this presentation internally to highlight these differences. We also believe this presentation will assist readers in understanding our business. Pages 27-32 reconcile Machinery and Engines with Financial Products on the equity basis to Caterpillar Inc. Consolidated financial information.

Caterpillar's latest financial results and current outlook are also available via:

    Telephone:
    (800) 228-7717 (Inside the United States and Canada)
    (858) 244-2080 (Outside the United States and Canada)

    Internet:
    http://www.cat.com/investorhttp://www.cat.com/irwebcast (live broadcast/replays of quarterly
    conference call)



                                Caterpillar Inc.
            Condensed Consolidated Statement of Results of Operations
                                   (Unaudited)
                   (Dollars in millions except per share data)

                                Three Months Ended      Nine Months Ended
                                  September 30,           September 30,
                                 2007       2006        2007          2006

    Sales and revenues:
      Sales of Machinery and
      Engines                   $10,668    $9,842     $30,602       $28,541
      Revenues of Financial
      Products                      774       675       2,212         1,973
      Total sales and
       revenues                  11,442    10,517      32,814        30,514

    Operating costs:
      Cost of goods sold          8,270     7,610      23,706        21,578
      Selling, general and
       administrative expenses      938       988       2,796         2,690
      Research and development
       expenses                     357       329       1,047           979
      Interest expense of
        Financial Products          289       266         839           754
      Other operating
       expenses                     275       246         760           738
      Total operating costs      10,129     9,439      29,148        26,739

    Operating profit              1,313     1,078       3,666         3,775

      Interest expense
       excluding Financial
       Products                      69        72         228           206
      Other income (expense)         51        72         232           165

    Consolidated profit before
     taxes                        1,295     1,078       3,670         3,734

      Provision for income
       taxes                        395       334       1,155         1,153
      Profit of consolidated
       companies                    900       744       2,515         2,581

      Equity in profit (loss)
       of unconsolidated
       affiliated companies          27        25          51            74

    Profit                         $927      $769      $2,566        $2,655


    Profit per common share       $1.45     $1.18       $4.00         $4.01

    Profit per common share -
     diluted (1)                  $1.40     $1.14       $3.87         $3.86

    Weighted average common
     shares outstanding
     (millions)
      - Basic                     638.3     653.2       641.0         662.4
      - Diluted (1)               660.0     677.2       662.7         688.5

    Cash dividends declared
     per common share                $-        $-        $.66          $.55

    (1) Diluted by assumed exercise of stock-based compensation awards using
        the treasury stock method.



                                 Caterpillar Inc.
              Condensed Consolidated Statement of Financial Position
                                   (Unaudited)
                              (Millions of dollars)

    Assets                                         September 30,  December 31,
      Current assets:                                 2007            2006
        Cash and short-term investments               $910            $530
        Receivables - trade and other                8,089           8,607
        Receivables - finance                        6,991           6,804
        Deferred and refundable income taxes           892             733
        Prepaid expenses and other current assets      853             638
        Inventories                                  7,187           6,351
      Total current assets                          24,922          23,663

      Property, plant and equipment - net            9,436           8,851
      Long-term receivables - trade and other          784             860
      Long-term receivables - finance               12,917          11,531
      Investments in unconsolidated affiliated
       companies                                       551             562
      Noncurrent deferred and refundable
       income taxes                                  1,954           1,949
      Intangible assets                                456             387
      Goodwill                                       1,937           1,904
      Other assets                                   1,842           1,742
    Total assets                                   $54,799         $51,449

    Liabilities
      Current liabilities:
        S

Source: Caterpillar Inc.

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