Carl Levin

Of course, but that is Caterpillar's offshore employees.

To migrate the profits from CAT Inc. to a low-cost marketing company. Is that what it says?

You were worried about ``move'' to the United States. Is that right?

That tax strategy related to parts, did it not?

They were transferred to CSARL, the economic rights to those? Is that not true?

OK. Now, take a look at Exhibit 18.

Cat Inc. has the largest role with regard to market and dealer development.

And how much, if you repatriated, would be subject to tax here?

Is that correct, you are not aware of that by Mr. Larson?

But both were listed as intangibles. Is that correct?

Based on our analysis of the Intangible Assets Transferred, we conclude that they are routine and common to most distribution and marketing companies.

Did you believe it was true when you wrote it?

You know what the deal was here: 85 percent of the profits were shifted to a related company in Switzerland.

I am asking you just a very simple question based on your experience.

We cannot tolerate the loss of our taxable revenue the way it is currently lost to Uncle Sam.

Prior to the 1999 transaction, the accountable profits on parts sales matched the results for tax purposes.

Caterpillar dealers are--they are an independent dealer network, yes.

Well, then let me tell you that it does, and if it is not true, you can correct for the record what I am saying.

What does this mean, 'tax-efficient repatriation strategies,' and why can't you just--it says $3 billion.

So the advantage to Caterpillar Inc. would be that it would pay less Federal income tax?

Did the tax strategy relate to parts? That is my question.

Caterpillar has created this very strong company, 90 years to buildup.

The allocation of profits shifted from 15 percent to approximately 85 percent.

First of all, without doubt we have to reform our tax code. It is long overdue.

Now, prior to the tax consulting engagement, Caterpillar had been reporting most of the income from the sale of its replacement parts outside of the United States on its U.S. tax return. Is that correct?