We're very excited to have Caterpillar with us. It's our last presentation, machinery presentation of the day but obviously Caterpillar needs no introduction, World Class Company.

Lot of things going on with the company right now, some good highlights like North America construction was on top of that but some other things that are bit of pressure for the company; we've sort of had very strong free cash flow and then free cash flow yield which we still very much believe in.

But with us today we have Rich Moore who is the Director of Investor Relations and Matt Hohulin who is the Manager of Investor Relations. So Rich maybe I'll just start out with the dealer stats that you released, that came up this morning.

Maybe you could sort of give us some highlights and then I'll ask you a couple of questions and then we can move to other stuff..

Yes, sure thanks Andy. We released our retail stats for January today and really nothing in there that surprised us. I think starting with energy and transportation was up similar to -- actually up 22% similar to what it was at the end of -- for December.

If you go through the components of that power gen was again up nicely, that's still -- a lot of that is still the benefit from the large power project we announced in December, that's still in that three months rolling period, so that's carrying through.

Industrial was down 15 from down 12 last time, again nothing surprised us there that's really again the tough comp period that continues from 2014 and that will probably continue to be a bit of a headwind in declining comps as we go through the year.

Transportation was up quite a bit and again that might look a little bit surprising but really that's just a continuation of the high amount of locomotive deliveries for North America through the tier-4 change over lot of that production that was scheduled in December that didn't get out the door, continued on in January.

So again nothing surprises really there. Oil and gas remains pretty healthy, again that's a continuation of what we saw in the last part of '14, we expect we have a good order backlog there, we expect that to continue for a while, at pretty healthy levels.

So we would expect that, if you remember last year the comps were starting to build up and getting tougher as the year goes on. So we'd expect that to kind of come off as the year plays out..

Let me ask you about the North American construction business was flat in the [indiscernible] obviously the comps have been hard. So is it just a question of comps or is it a question of do you see any slowing in that business, because people are going to watch that business very, very closely given potential oil and gas volatility within it..

In North America I don't think much of it was the impact of what we kind of quantify as the indirect exposure to oil and gas, that's probably too soon to see that play out yet. So largely its tough comps from a year ago period. The other thing to highlight in our construction is Latin America is continuing to be a negative on the retail stats.

That's again the tough comps from Brazil, if you remember that MDA transaction, large government order continued to deliver machines about through mid year last year. So it will be tough comps until we get to about mid year..

And let me ask you about mining, obviously you have given a more conservative guidance for the year but looks like in the data it's taking more legs down. We know your comps are getting easier and it looks like the number has gotten worse..

Yes, one thing we changed in our January retail stats for recourse industries was we added what we call expanded mining products which is the form of the machines, we added that to our numbers now for the month of January.

So January '14 and January '15, had we not had -- not again with the commitment we made that once we got the dealer distribution behind us which is largely the case now as well as the data integration and the cleanup of some of that, the retail stat numbers we would shout including that in our numbers and that happened in January we typically start these changes at the beginning of the year.

So we have now added that and that was primarily the reason for the change, had we not added that in January it would have been flat..

Got it.

So sequentially flat you're talking about?.

Yes..

Got it. And then let me ask you about the industrial business, I mean again you would mention pre-buy [indiscernible] a year ago and you are comping against that when it goes down to industrial engines as well.

So pretty leverage Europe it looks pretty weak, and the number has there been any sort of further commentary on the industrial items in the business as you see it..

Well it's primarily bad Andy, its tough comps and if you look at the end markets of these products go into Ag, old story there heavily weighted in Europe, meets construction and some power gens. A lot of end markets that quite frankly are not robust right now.

But having said that I do want to I guess make a plug for our folks in that business unit, kind of the industrial engine group that they have done a fabulous job of considering to work on cost and competitiveness for those smaller, historically the purchased brand of engines.

And so that has been quite a turnaround from our overall business perspective, but they had a pretty strong really '13 and then '14. So I think that the year-over-year change is above just comps and weaken markets of those engines going to..

Got it and then maybe just one or two more questions on this leg.

So, in EME and machines like it didn’t hanging on to positive I guess and the last few months people are asking me any signs of life in Europe, can we separate the European and the Middle East for us, any sort of incremental issues in the Middle East because I think there is a huge debate out there whether Middle East is going to slow down or not, there is a lot of infrastructure growth there but obviously big in oil and gas?.

That’s a great question and I think we’ve looked at just Europe, I mean there is quite a big difference between some countries in Europe and others.

But overall I think we feel pretty good about stability, I’d say in the construction industry in Europe certainly not ramping up aggressively but it's holding in, last year we had an increase and we had better performance in Europe year-over-year. So, I’d say stability is probably a better way to characterize Europe for construction.

As we get outside of Europe we all know about CIS, Eastern Europe in CIS is going to be challenged with things going on there. The Middle East is kind of mix story, I think when you look at the oil producing countries certainly in general they are going to have less revenue.

Their budgets are going to be a bit under pressure that could impact construction activity, infrastructure activity, but the wealth here oil producing nations in the Gulf states, Saudi and others, we think that they will continue to go forward with a lot of their infrastructure projects, it's been a pretty strong area I would say generally speaking over the past couple of years we would expect a lot of that to continue, but net net oil producing countries we believe -- that’s part of what we try to frame as our indirect oil and gas exposure and construction part of its obviously North America but another part of it is just less money for these countries to spend on infrastructure..

So let's do the first couple automatic response questions and then we’ll go into more stuff.

You are currently on the stock one yes overly; or two, yes eagerly; three yes underway, and four no?.

I think you did this last year, it was very interesting..

So 75% say no, 17% say yes, let's pull up the historical data. Question number two please. What is your general bias towards the stock right now, one positive, two negative, three neutral? Okay, so 44% negative, 37% neutral, let's see the historical data there. So pretty similar to last year slightly more positive.

So let me ask you about your guidance then in the context of -- obviously a lot of people are either neutral or negative right now and I think that goes from most machinery names not just Caterpillar, but we’re all trying to figure out how conservative people's guidance are and what ultimately they did with oil and gas and the outlook.

And so, Mike DeWalt did a good job of sort of talking about the businesses that are exposed to oil and gas.

But if I run through some quick math and I look at the $50 billion guidance, the 10% decline what I come out with is that it seems like you're down to about 20% to 25% decline in oil and gas when it comes down to it and I get that by looking at couple of percent in tax in North America locomotives like you guys talked about for the whole company and then a flattish E&T business outside of oil and gas and locomotives.

Am I in the right ballpark or….

Maybe some adjustments are there. Of the 5 billion top-line decline we said about half of that's related to oil and gas indirect or direct. The biggest piece of that is in our oil and gas end market of energy and transportation, primarily almost exclusively related though to the recip engines in the well servicing and drilling area.

So that’s single biggest element of the 2.5 billion. But you made a couple of other comments about the rest of energy and transportation, the rail piece of the decline for ’15, we I think in the third quarter now so it was going to be about 2% of energy and transportation, so that’s 400 million to 500 million.

So if you go around the pie chart for energy and transportation, we already talked about industrial that’s going how we expect that to be down, it could be sizable for that end market because of the tough comps and weakened markets.

And then power gen we expect also to be down, primarily because of the large power project we delivered in the fourth quarter of last year, the absence of that -- the size project competing will be year-over-year decline.

So all-in-all if you look at energy and transportation being down say at the midpoint of our guidance so -- just under $3 billion again the single biggest piece of that is in the oil and gas direct exposure in recip engines.

Outside of the -- so the other 2.5 billion that's not related to oil and gas, we have in construction if you frame that kind of at the midpoint of guidance it's gotten about 1.5 billion again that's a bit of emerging market weakness primarily China that industry we expect to be down again, we expect to be able to continue to perform well in that space to probably gain some more share there but the overall industry is down we expect our business to probably be softer there as well.

Currency headwinds we talked about the top line, that will primarily impact construction industries.

And then we also have some indirect exposure to oil and gas in construction as I already mentioned certainly in some of the growth over the past few years in North America construction was driven by the build out of the construction related to whether its frac pads or roads to the drilling sites or pipelines that will probably be impacted, it's hard to quantify but we know that it's going to probably have an impact on our North American construction business as well as outside of North America in some of the oil producing countries that probably will spend less in infrastructure.

So that kind of frames -- and then mining was the other piece of that was down 10% that's about 900 million that rounds out the rest of that 5 billion decline..

Got it. So let's step back for a second. I was to ask you about your footprint today. In the sense that I'll go back [indiscernible] few years ago you talked about 80 to 100 billion in potential sales by '15, and so $12 to $18 an EPS. Here is what I am getting at though.

If I think about 50 billion it seems like you're basically half utilized if I thought that you had the foot print for 100 billion. Is that not far from the truth when it comes down to it? And I know you guys have talked about like minor, relatively minor to moderate restructuring.

But when does it become more apparent that you need to do a little bit more when it comes down to it?.

Well again I think there is -- we need to define or separate restructuring from other costs take out, because again restructuring is very defined accounting terms when you close a facility you got some asset impairment, you got people separation cost.

So that's what's gets categorized as restructuring but there is a lot of other activities going around the company that focuses on cost, lean initiatives are one, just we had adjusting our footprint, maybe move some products from Japan to the U.S. that will lower cost of delivery of those machines that are primarily delivered in U.S.

So there is a lot of things that we've done over the past couple of years outside of restructuring but even if you look at restructuring now we're getting close to [indiscernible] even going back at 2012, '13, '14 and now for '15, we're close to $1 billion of restructuring cost that will start to play a role in our cost structure going forward, already is to a certain degree but will ramp up.

The biggest piece of that obviously we talked about is the Belgium facility that will probably have more of a benefit to realization starting kind of next year.

So I would say we have done quite a bit that kind of maybe goes under the radar screen so it doesn't get called out specifically as restructuring but certainly cost take out, and it's all based on our detrimental commitments as volumes have come down we have made a commitment to have 25% to 30% detrimental margins and I think largely we've been able to deliver that.

You want to add anything else?.

No, I think it's true, I mean I guess I kind of look at it as a positive in a sense that you're so underutilized right now. But if you actually experience any growth, when it comes down to it you would have very strong incremental margins when it comes down..

Yes and that's what we would expect. Again the commitment on incremental and detrimental margins is a very, very clear focus within our business units. They have to stay under [indiscernible] and this is really driven by the commitment on incremental detrimental margins.

And we saw an example of that, we saw in the first quarter of last year with some volume coming back in our construction business, margins, incremental margins were north of 40%. So it does play out and we have some examples of how that has played out when volume does come back.

A lot of the cost that we've taken out are not going to come back in proportion to the sale. So that will generate some nice incremental margins when volume does come back. So that's what we would expect..

And right now it’s fair to say that the company is satisfied with the footprint and we'll just see kind of what happens here..

Yes, I don't know if I would ever say that we're satisfied with their footprint, we're constantly looking at what we can do differently; we had some announcements last month with some component facilities.

So I think we're constantly looking at what we can do to better position us and to lower our cost structure, and if that means reallocation of the footprint of some facilities then that's what we'll do. So I don't know if you’ve ever done with that always looking at what you can do incrementally to improve that structure..

So again shifting gears, one of the big topics for investors is inventory fluctuations at Caterpillar. And it seems like you really had a lot of effort to sort of minimize the amount of fluctuations yet. When we think it gets better, it kind of comes up again right in the fourth quarter, it came up again, you talked about more destocking here in 2015.

And we know you have a new whole enterprise system. We know you have a new [indiscernible] you have a new product, the enterprise system. So the point is that it's hard to see the evidence that is helping right now and is it more because of market fluctuations or is working to early still or.

I think it isn’t clear as far as looking at our numbers and keeping out exactly how to correlate our efforts of our new transformation or enterprise systems group efforts.

But it is real, we do know that it's flowing through lot of different internal metrics, quality is up we know that’s a direct impact to the lean transformation, the focus on built-in quality and factory safety metrics are improved that also helps material cost and manufacturing efficiency is improved.

So there is elements of their progress and it is fairly early on I would say maybe not even in the [indiscernible] of the transformation.

So it's gaining momentum, there is quite a few more pilot waves underway right now, there is a lot of pull coming from the business units because they have seen the benefits of some of the improvements from some of the other business units.

Now again it's hard to quantify but for surely a portion of the construction margin improvement has been related to the lean transformation, so it's hard to say whether it's 50 basis points or whatever, but it's real it's happening..

And you talked about $1 billion or more of dealer takeout in 2015, as you said the same in 2014 or more and I think -- I am not quantify that but seems to me like it's in the 600 million, 700 million, 800 million of takeout of Caterpillar of destocking when it comes down to it something in that range.

But the point is obviously as you guys know it's a pretty big margin drag when it comes down to it. But if I think about it where are we in the channel if we do that, are we so low then we should, when do we think we clear that out again. So again restocking tends to be when people look at cash stock when it comes down to it..

I think on our overall goals for this lean initiative is to improve our current by one, so I’d say over the course of the next several years you’ll continue to see us taking inventory out of our channel, I think the dealers has to get more comfortable with our ability to deliver as we committed to again through this lean initiatives that they will continue to work there months of supply down as well.

And so although a portion of the reduction in inventory for ’15 is due to the fact buying are both for us and for dealers. I think portion on this is related to the work that we’re doing on lean too..

And how much of it -- could you tell us how much is construction versus mining in terms of the destocking both at the dealer level and the CAT level?.

Well for ’15 it's probably going to be -- I don’t know if it's exactly going to be evenly split. But there will be some involved.

We still have probably close to half of that in mining dealer inventory to come out and the balance will be in construction probably not a whole lot of inventory adjustment from the dealer side on engines, in our energy and transportation business.

And the CAT inventory side, it is probably some because of volumes are coming down in OE type predominantly in resource industries and there might be some inventory decline at CAT level, but I think the majority of that will be if you think about our PDCs is predominantly construction equipment and as -- again as Matt mentioned as we take down short number of lead times and work harder to the overall lean transformation we’ll be able to maintain less inventory channel for given level of sales and certainly with sales declining that’s -- we expect that to come down again in ’15..

And you intent to restock in the first-half of the year usually, so this is just going to be less of a restocking construction that’s the way we need to think about?.

Yes, I think when you think about construction in industries as the seasonal pattern were the dealers would build up inventory in the first quarter and then look at down the rest of the year, I think you're exactly right at the end of the year let`s say roughly 0.5 billion lower on construction industries dealer inventory and the peak will be probably less as well, we’ll see how that plays out..

And I want to ask you one follow-up on the lean transformation, where you talk about OPEC from the 2 million to 4 million overtime, what should we think of that in 2015, could we see a contribution from it to help? What will that contribution look like?.

There is contribution for sure that's going through business right now, again if it's something isn’t apparent it's not something that we’re going to be report on, on exactly where we are in that, what the number is. But certainly we kind of frame that 2 billion to 4 billion as expected OPEC improvement by 2018.

So again that process is a journey and we’re continuing to gain momentum there so there are some benefits being realized, probably the best way to think about it though, I think in the near-term '15 and is that certainly the efforts that we made, the progress we made with this lean transformation is just one other element that’s going to help us deliver our detrimental margin commitment, it gives us more flexibility on the cost structure, it gives us more flexibility on inventory so that should help us make sure that we hit those OPEC curve targets based on whatever given volume our business units face..

Let me ask you one more question on inventories and then we'll move and we'll get ready to ask the audience some questions. So again a lot of investors asked me why wouldn’t CAT have excess inventory in the oil and gas side.

And you guys really have not highlighted that as an issue, it could become an issue and why wouldn't it become an issue?.

It's very different than mining. If you think back to 2014 while we're having very robust orders in growth sales in this area our lead times and our availability for those engines that go into that business remained I would say at normal levels.

So as opposed to mining trucks as an example where we got out to 1.5 years and two years of backlog, and so there was a lot of orders that were placed to get positions for the future that obviously kind of led to an overhang of inventory that we had to work through, with the engine business it's sort of applications, we don't have that, it's not broad based as far as -- there is probably maybe dealers on one hand that really have -- in North America has a big impact in this area, Texas, Dakota, Pennsylvania, Ohio, shale formations are.

So it's not as broad based as what we saw in mining. It's more focused challenge right now.

You want to add anything else?.

I think the only thing I'd add to that would be recall back in late 2012 and into '13 there was a work down of a bunch of I'll say track trailers, memory are still pretty sharp that wasn't that long ago. So the buildup of that activity wasn't as quite as strong as what might had happened if that work out hadn’t happened..

It reminded me actually one question about mining which is like how much pain did you guys anticipate in your guidance in the sense that we continue to see cuts in CapEx from some of the major deals since you guys announced just a few weeks ago.

So we're also going to figure out again especially in mining how conservative are you, because we can see the real time impact, oil and gas seems it might take longer to really find out what's going on, but it might be as bad as you know, but for years still seems like it's got a way to go..

Yes I think that what changed from our outlook at the end of third quarter to the end of January in mining resource industry was predominantly two things. One is the continuation of very low order intake rates.

And if you do the math on what we're delivering to dealers, customers from our backlog compared to the order intake rates, you can kind of see the impact that might have on your business. If you don't forecast kind of a backend as the year ramp up which we're not.

The other thing is I think primarily in December commodity prices took another leg down and that again didn't help the situation and probably put more doubts in the minds of customers and ourselves and dealers on whether there is going to be a recovery sooner rather than later.

So I think those two factors played into why we viewed 2015 to be another down year. And even having said that predominantly that decline is going to be an OE not aftermarket, it's our expectation..

And I'll just try and then I'll open it to audience, everybody wants to know how much aftermarket mix is in mining now, besides 35% to 40%, you guys were smaller in mining trucks but that's also when it was 85% higher.

So is it fair to say that aftermarket is now a sizeable portion of that mining business that's left?.

Well to answer your yes, I mean we’re not going to frame any specifics but good try there though Andy. But I think if you go back to 2012 and you have some assumption about what our aftermarket percentage was, at kind of the peak.

If you look at what happened since then and the 11ish billion of the top line which wasn't all NOE but that's majority of that was NOE. You can kind of get to a percentage that's quite sizeable relative to the overall business.

So yes it’s a very, very sizeable piece of the business right now and quite frankly that's what is sustaining the returns that we do have on that, the profitability we do have on that which is very, very low, pretty much going to be non-existing in '15.

But that is what has kept that business profitable as well as sustains our mining dealers quite a bit in the aftermarket side of that business. So that field population plus the high aftermarket is kind of where that comes home..

So I want to ask you but if the audience has questions please chime in. Question over there..

There is always not a lot to talk about energy here in the US but when you look at your customer across the Mideast you have the oil issue and you have the turmoil issue. So I am just wondering what you're seeing what the outlook is in 2015 in that region. Thanks..

Well again there is -- over the past couple of years infrastructure spend, construction infrastructure has been pretty good in that region.

If you look at certainly they're going to have top our budgets, lower revenues in those countries but the wealthier oil producing nations we expect that for the most part, not a lot of those infrastructure projects are going to continue to go forward, they are not going to -- have some impact but we don’t expect I would say a dramatic impact on some of the wealthier nations Saudi and familiar Gulf countries.

But lot of the other oil producing countries are going to be pretty challenged in there, I mean some of them will be prudent, anecdotes that they need something close to $100 a barrel for them to kind of have a positive impact on their budget.

So they are going to be on there some pretty significant pressure and I think we do expect that that will carry over to the construction business and infrastructure spend in some of those countries..

In our outlook for 2015, we did in fact include some amount of reduction because of that, good question..

I think in 2009 or ’10 you guys suggested a plan that Europe is a construction part of the -- the U.S. construction part of the equation was already down something like 80% for new equipment.

Have we seen much of a tick up from there, can you just talk about that?.

In North America construction?.

Yes, I think your predecessor has talked about how it was already down something like 80% or 85% in North America construction, so there wasn’t that much to really go down anymore..

Yes, I don’t remember that specific comment, but what we have talked about with North American construction we have generally talked about this in various regions of the world is how much off the prior peak that industry is and so for North America prior peak was 2006.

We’re still off of that prior peak by maybe 10% or 15%, so we’re not even back to the prior peak after several years into this, so we still believe that certainly North America is probably the best case, Europe is still probably close to 40% of the prior peak and Asia primarily China is closer to probably 60% of the prior peak.

So we believe in certainly a construction, there is plenty of runway left for the industry to continue to grow as we go forward.

Certainly in North America there will be a bit of a headwind with the some impact of the oil and gas declines, so that will have an impact on the overall industry, but overall we believe North America will be up in construction in ’15 both the industry and our business so despite the headwinds that we see in the oil and gas related area..

What will price assumption be you think?.

Yes, we didn’t specifically disclose that but I can say we don’t have much of a change when we first announced our outlook which was in the high 40s, maybe low 50s, something like that, so we don’t have a back half hockey stick pick up in oil prices, we're basically expecting oil prices to stay relatively low throughout the whole year, obviously some fluctuations during the year probably will end the year higher than we are today, but overall average probably not much of a difference from where we start at the year-end..

Do you have a view on 2016 for internal guiding purposes?.

Yes, we’re not providing, I think it's hard to figure out ’15 right now, to think about ’16, but we don’t really have any comments on ’16 yet..

And last question is do any of your customers have the rights to put equipment back to use in oil and gas?.

That just provide equipment back to us, they can cancel orders, they have dealers and dealers can cancel orders that they have with us and that has happened -- that was really part of I think our business plan outlook changed a few times from the holidays through when we announced.

So a lot of that was starting through some of the order cancellations that we had and again in recip engines that go into the well servicing and drilling applications.

We had quite a few motor cancellations that impacted our backlog, but after we got through that kind of wave of cancellations we embedded the rest of the order board and we feel it's pretty good, pretty solid right now, so that was an adjustment that we kind of had to take into consideration as we fine-tuned our outlook going into the first part of the year.

So that happens -- again right now we think that it's stabilized and a lot of that is now behind us so we have -- we think a pretty good visibility on our order board right now in those particular products..

Cancellations have died down during more….

Yes, I think they came pretty fast and furious over a four to six week period I would say and since then it seems like it's has stabilize, so again that’s another difference then comparing this to the mining decline in that the adjustment so we’ve had not a lot of overall inventory in the channel that has to be work through orders have been now probably pretty well reset.

And so now it's I think is delivering out of that backlog kind of seeing where the order intake rates go..

Could you just reconcile for us the couple of comments that was made that you're going to continue to destock inventory to the tune of $1 billion, you think equipment related to oil and gas will be down but yet in North America you're actually going to grow your U.S. construction business.

So I mean can you just help us understand those puts and takes and maybe we can talk about revenue bucket associated with some of those end markets, it just doesn't seem to make sense..

Well again I think if you look at the overall construction business, it's much beyond the oil and gas --.

Well I think the question was what do you expect to grow in North America in 2015?.

Well I think residential construction is expected to continue to improve, it's not at a very good level yet but we expect that to continue to grow on non-res infrastructure which is where the oil and gas piece of the industry is recorded we still also excluding the oil and gas spend we still expect that to continue to grow as well.

So I think it's just overall activity in the construction industry, is looking, continue to look better.

I mean it hasn't been great by any stretch but it has gradually improved over the past couple of years and we would expect that to continue, a lot of that is perspectives from our dealers and their perspectives that they get from their customers activity they see in rental, used equipment prices, all of that factors into our view of where we think the industry and certainly our piece of that industry is expected to go..

I think to add that too when you think about oil and gas in construction, you can always go down to the county where it's going to be a major impact but in a state like Texas that will have some impacts in construction due to oil and gas there are other areas where infrastructure and non-res spend will actually be quite good..

The other thing maybe to add too is that we know there is a lag but there is also a positive stimulus to economies with lower oil prices.

And so that probably -- it won't factor into the equation for a while yet but that will -- it will be a stimulus there is no doubt about that, how much and when does it show up, I think is still kind of yet to be determined but that's also a benefit that some parts of -- there is winners and losers in all of this and some of the winners will be, some other parts of economy that will benefit from lower price, certainly our contractors, our customers I should say are seeing a nice tailwind to their business with lower fuel prices which is one of top operating expense items that they have.

So how much does that translate into increased profitability by these customers and then gain more equipment acquisitions, it's kind of hard to put a finger on it but we know it's going to be to some degree a tailwind to the overall economy..

Before you ask your question, let me roll through a couple of you these questions and then you can ask your questions.

[In your opinion] EPS growth for CAT will be above peer, moderate peers, below peers?.

The follow on question is who are the peers?.

Okay, so 46% say below peers, 38% say in line, can we see that historical data?.

No change..

No change. Question four. In your opinion what should CAT do with excess cash one, bolt-on M&A, two large M&A, three shares which is support dividend, five [indiscernible] six, internal investment.

Share (inaudible) is at 46%, okay, we'll just keep going with questions five, in your opinion what multiple of 2015 earnings CAT trades, one less than 10 times, two 10 and 12, three 13 and 15 or four 16 and 18, five 19 and 21, six higher than 21.

So three 13 and '15 with 45% of course does trade higher than that and people are thinking it might be tough earnings. What's the history on that? So it's a pretty similar to history. Question six.

What do you think is the (inaudible) investment issue for CAT one core growth, two, margin performance; 3, capital deployment; 4, execution strategy? Core growth win, but execution strategy is up there which is interesting, can we see the history. Okay, so actually more at season strategy, more (inaudible) go ahead and ask your question..

Question on -- going back to U.S. North American construction business.

Can you talk about the rental appetite within your dealers that had been a nice tailwind from a demand perspective? Is that continuing or are you seeing more of the contractors?.

Yes I think in general we expect that to continue, it's been growing peace of the construction industry now for quite a while and if you think about the factors that plan to the growth of rental it's really broad based terms is two things.

It’s better visibility into the economics of a fleet of equipment that a contractor would have, that would keep utilization high it probably justifies having slightly higher percentage of the fleet being rentals than owned.

And then the second piece of that that factors into that is the just a visibility to the outlook on the runway of projects that a contractor might have as that is remains cloudy or is not as long as they would like, they probably will tend to rent a higher percentage of their fleet and then by.

So as clarity, as backlog work for contractors grows and clarity gets better some of that rental will probably get converted to purchase.

But we think there is a structural fundamental piece of that that’s probably here to stay and that is the -- with the data that you get off the machines to really analyze your uptime, your fleet utilization, your economics of your job site that probably argue that they should have a higher percentage of rental in general over purchase.

So well that’s kind of how we look at and our viewers are participating in a big way in rental and they kind of see those same trends progressing, it's becoming a bigger piece of the equation..

I just want to add couple of quick follow-ups, we do not have much time on the parts of the barricades that you guys actually is that the still alarm business will fall up in 2016 in oil and gas; you guys talked about you need some oil price improvement.

Can you give us a better handle to quantify how large that OEE offshore turbine businesses, because I think there is some confusion with a bunch of aftermarket in that business, so how much is the OEE business that we’re talking about here?.

Yes, can’t give you lot of specifics, I know you're surprised to hear that Andy, but I can kind of frame for you little bit, we talk about that the oil and gas piece of our energy and transportation pie being about 30% or third, so roughly call it 7 billion.

We’ve also said that roughly half of that is solar, half is recip engine of that solar piece you’ve got prime power for offshore production platforms, you’ve got gas compression and in both of those cases you got a fairly healthy size of aftermarket.

And that doesn’t also include the piece that is in our power gen end market for prime power and larger scale power projects which also is turbine plus water related gear, plus customer service is in aftermarket.

So if you're talking about potential impacts, initial impacts let's say on ’16, really you have to frame that the right way to think about really talking about not much impact on gas compression maybe some but not a whole lot.

Primarily on offshore prime power -- offshore production platforms but it's the first turbine that would go into that not so much reoccurring revenue from the customer service just to maintain the big fuel population of turbines that are already out there..

That doesn’t give you any specific number?.

Just less than a 1 billion, that’s my number..

We heard it was Andy’s number. I think we need to stop that and so thank you very much. Appreciate it. Thanks for coming..