Welcome to the third quarter 2025 Caterpillar earnings conference call. Please be advised that today's conference is being recorded. I will now hand the conference over to your speaker today, Alex Kapper. Thank you. Please go ahead. Thank you, Audra. Good morning everyone and welcome to Caterpillar third quarter 2025 earnings call. I'm Alex Kapper, Vice President of Investor Relations. Joining me today are Joe Creed, Chief Executive Officer, Andrew Bonfield, Chief Financial Officer, Kyle Epley, Senior Vice President of the Global Finance Services Division, and Rob Rengel, Senior Director of Investor Relations. During our call, we'll be discussing the third quarter earnings release we issued earlier today. You can find our slides, the news release, and a webcast replay at investors.caterpillar.com under Events and Presentations. The content of this call is protected by U.S. and international copyright law. Any rebroadcast, retransmission, reproduction, or distribution of all or part of this content without Caterpillar prior written permission is prohibited. Moving to slide two, during our call today, we'll make forward-looking statements which are subject to risks and uncertainties. We'll also make assumptions that could cause our actual results to be different from the information we're sharing with you on this call. Please refer to our recent SEC filings and the forward-looking statements reminder in the news release for details on factors that individually or in aggregate could cause our actual results to vary materially from our forecast. A detailed discussion of the many factors that we believe may have a material effect on our business on an ongoing basis is contained in our SEC filings. On today's call, we'll also refer to non-GAAP numbers. For a reconciliation of any non-GAAP numbers to the appropriate U.S. GAAP numbers, please see the appendix of the earnings call slides. Now let's advance to slide three and turn the call over to our CEO, Joe Creed. Thank you, Alex, and good morning, everyone. Thanks for joining us today. Solid performance from our team generated strong results this quarter, driven by resilient demand and focused execution across our three primary segments. As a result, sales growth and adjusted operating profit margin were both slightly above our expectations. Sales and revenues increased 10% to $17.6 billion, an all-time record for a single quarter. Backlog grew by about $2.4 billion, driven by strong orders in Energy and Transportation. The backlog is now $39.8 billion, which is also an all-time record and positions us for sustained momentum and long-term profitable growth. We also generated $3.2 billion of ME&T free cash flow, and we deployed about $1.1 billion to shareholders through dividends and share repurchases during the quarter. I'll start with my perspectives about this quarter's performance. Then I'll discuss our outlook along with insights about our end markets. Finally, Andrew will provide a detailed overview of results and key assumptions. Turning to slide four, sales and revenues were up 10% versus last year. The increase was primarily due to higher sales volume, partially offset by unfavorable price realization for machines. Higher sales volume was driven by higher sales of equipment to end users across our three primary segments. Third quarter adjusted operating profit margin was 17.5% for the quarter. The net impact of incremental tariffs was near the top end of our estimated range of $500 million- $600 million. Despite the tariff headwind, adjusted operating profit margin was slightly above our expectation, primarily due to better than expected sales volume. In Energy and Transportation, we achieved quarterly adjusted profit per share of $4.95 compared to the third quarter of 2024. Sales to users increased 12%, led by 25% growth in Energy and Transportation, while machine sales to users increased 6%. For Construction Industries, sales to users were up 7% year- over- year, broadly in line with our expectations. Let me take a minute to walk through the sales to users by region. North America increased 11% over the prior year and was better than we anticipated due to growth in both residential and non-residential construction, while rental fleet loading was down slightly. Dealers' rental revenue continued to grow in the quarter. An increase in EAME was primarily due to growth in Africa and the Middle East. We saw a decline in Asia Pacific, which was below our expectations, resulting from softness in a few key sub-regions. Latin America increased but was slightly lower than we anticipated. In Resource Industries, sales to users increased 6% year-over-year, which was slightly above our expectations. Mining was better than expected due to the timing of deliveries to end customers. For large mining trucks and off-highway trucks, heavy construction, and quarry and aggregates were in line with our expectations. In Energy and Transportation, sales to users increased by 25% year-over-year with double-digit growth across all applications. The largest growth came from power generation with a 33% increase, primarily due to demand for reciprocating engines for data center applications. Turbines and turbine-related services also contributed to power generation growth. Sales to users in oil and gas, industrial, and transportation all increased about 20%. The increase in oil and gas was primarily driven by higher demand for turbines and turbine-related services. Industrial grew from a relatively low level and was driven by sales into electric power applications. Transportation increased due to international locomotive deliveries, moving to dealer inventory, and our backlog. In total, dealer inventory increased by approximately $600 million versus the second quarter of 2025. Machine dealer inventory increased approximately $300 million, about in line with our expectations. As I mentioned, backlog increased sequentially by $2.4 billion, driven by robust order activity in power generation and oil and gas. Since the third quarter of 2024, our backlog has increased 39% with growth across all three primary segments. Moving to slide five, I'll now discuss our outlook. I'm pleased with the continued positive momentum in our business. With a record backlog, strong order rates, and continued growth in sales to users, our outlook has improved since last quarter. For the fourth quarter, we anticipate strong sales growth versus the prior year. Sales growth is expected to be driven by higher volumes in all three segments. We also expect the year-over-year impact of price realization to be about flat in the fourth quarter, excluding the net impact of incremental tariffs. Fourth quarter adjusted operating profit margin is expected to be higher versus the prior year. When taking into account the net impact from incremental tariffs, we expect fourth quarter enterprise adjusted operating profit margin to be lower versus the prior year. Given the strength across our three primary segments, we now expect full year 2025 sales and revenues to be higher than we previously anticipated, resulting in modest growth versus 2024. We continue to expect full year services revenues to be about flat versus 2024. Based on the incremental tariffs announced in 2025 and expected to be in place by November 1st, we expect the full year net impact from tariffs to be between $1.6 billion and $1.75 billion. Tariff and trade negotiations remain fluid. Our team is continuously evaluating options to further reduce the impact of tariffs going forward, and we fully intend to implement longer term actions once there is sufficient certainty. I remain confident that we'll manage the impact of tariffs over time. Excluding the net impact of incremental tariffs, full year adjusted operating profit margin is expected to be in the top half of our target margin range. Including the net impact from incremental tariffs, we expect full year adjusted operating profit margin to be near the bottom of the target range, corresponding to our current expectation for full year sales and revenues. This margin estimate includes the initial mitigating actions already implemented and currently planned throughout the rest of the year. We also expect ME&T free cash flow to be above the midpoint of the $5 billion- $10 billion target range. Andrew will provide more details on key assumptions for the fourth quarter and full year. To further support our sales outlook, I'll now share the latest view of our end markets starting with construction industries. As I mentioned earlier, we're encouraged by another quarter of growth in sales to users and strong order rates across many of our regions. Customers continue to be responsive to the attractive rates we're offering. Through Cat Financial, we continue to anticipate full year growth in construction industry sales to users despite softness in the global industry. In North America, overall construction spending remains at healthy levels and infrastructure projects funded by the IIJA continue to be awarded. We continue to expect full year growth for sales to users. Full year dealer rental revenues are also expected to grow, and we anticipate dealer rental fleet loading will increase in the fourth quarter compared to the prior year. In Asia Pacific, we anticipate full year sales to users to be about flat. China has shown positive momentum to start the year, and we expect full year growth in the above 10 ton excavator industry, but from a very low level of activity. In Asia Pacific outside of China, we expect economic conditions to be soft. In EAME, we expect growth for the year driven by healthy construction activity in Africa and the Middle East and improving economic conditions in Europe. With ongoing weaker construction activity in Latin America, we now expect to be about flat for the full year. Moving to Resource Industries, we anticipate lower sales to users in 2025 compared to last year as customers continue to display capital discipline. However, we see positive momentum with healthy orders for large mining trucks, articulated trucks, and large track-type tractors. Although most key commodities remain above investment thresholds, declining coal prices have caused an increase in the number of parked trucks. As a result, we continue to expect slightly lower rebuild activity compared to last year. Overall customer product utilization remains high, and the age of the fleet remains elevated. We also continue to see growing demand and customer acceptance of our autonomous solutions. Finally, in Energy and Transportation, we expect strong growth in full year sales for power generation compared to last year. Demand remains robust, driven by data center growth related to cloud computing and generative AI. We're also pleased by healthy orders for the prime power applications as evidenced by recent announcements with Joule Capital Partners and Hunt Energy Company. We continue to stay close to our largest data center customers and receive regular feedback on their long-term demand expectations. In oil and gas, we expect moderate growth in 2025 for reciprocating engines and services. We continue to expect softness in well servicing due to ongoing capital discipline, industry consolidation, and efficiency improvements in our customers' operations. We do see positive momentum in demand for reciprocating engines used in gas compression applications. Solar Turbines' oil and gas backlog remains strong, and we see healthy order and inquiry activity with our ongoing investment to increase large reciprocating engine capacity. We're continually improving manufacturing throughput to meet customer needs across a broad range of applications. Demand for products and industrial applications is improving from previous lows, with order growth being driven by engines sold into electric power applications. Transportation is expected to remain stable. The strong momentum we achieved in the third quarter, combined with the anticipated growth through year end, sets the stage for exciting opportunities ahead. As a result, I look forward to sharing more about our long term outlook at our 2025 Investor Day on November 4. I will now turn over to Andrew for a detailed overview of results and key assumptions l ooking forward. Thank you Joe and good morning everyone. As usual, I will start with a brief overview of our third quarter results followed by our segment performance. Then I'll discuss the balance sheet and free cash flow before concluding with our current assumptions for the full year and the fourth quarter. Beginning on slide six, sales and revenues were $17.6 billion, a 10% increase versus the prior year. This was slightly better than we had expected on stronger volume. Adjusted operating profit was $3.1 billion and our adjusted operating profit margin was 17.5%. Both were slightly better than we had expected. Profit per share was $4.88 in the third quarter compared to $5.06 in the third quarter of last year. Adjusted profit per share was $4.95 in the quarter compared to $5.17 last year. Adjusted profit per share excluded restructuring costs of $0.07 in the quarter compared to $0.11 in the third quarter 2024. Other income and expense was favorable by $132 million, primarily due to the absence of an unfavorable net balance sheet translation impact which occurred in the prior year. Excluding discrete items, the global annual effective tax rate was 24%, an increase versus our prior expectation of 23%. The higher rate had an unfavorable impact on our performance in the quarter by about $0.18. This is due to changes in recently enacted U.S. tax legislation. While the changes have a negative impact on the tax rate in 2025, they benefit 2025 cash flow in 2026 and beyond. We would expect a positive benefit to the tax rate versus the previous estimated tax rate for 2025, subject to a consistent mix of profits. The year-over-year impact from the reduction in the average number of shares outstanding, primarily due to share repurchases, resulted in a favorable impact on adjusted profit per share of approximately $0.17. Moving to slide seven, I'll discuss our top line results for the third quarter. Sales and revenues increased by 10% compared to the prior year, driven by higher volume which was primarily due to stronger sales of equipment to end users. Changes in dealer inventory acted as a slight tailwind to sales, while price realization was a slight headwind. As I mentioned, sales were slightly better than we had expected in August. Moving to operating profit on slide eight, operating profit in the third quarter increased by 3% to $3.1 billion compared to the prior year. Adjusted operating profit increased by 4% versus the prior year to $3.1 billion. Stronger volumes, stronger sales volume and favorability in other operating income and expenses was more than offset by unfavorable manufacturing costs, unfavorable price realization and higher SG&A and R&D expenses. The unfavorable manufacturing costs largely reflected the impact of tariffs. You'll note that there was a headwind of $127 million in corporate items and eliminations this quarter compared to the prior year. The unfavorable impact was driven by higher short-term incentive compensation expenses and an accrual for incremental tariffs and corporate items, which I will discuss in a moment. This is partially offset by the proceeds from an insurance claim. The adjusted operating profit margin was 17.5%, a decrease of 250 basis points compared to the prior year. The margin was slightly higher than we had anticipated, mainly due to better than expected sales volume in Energy and Transportation. As Joe mentioned, the net impact from incremental tariffs was near the top end of our estimated $500 - $600 million range for the third quarter. Excluding tariffs, adjusted operating profit margin was slightly higher versus the prior year. This compares favorably to our expectations of a similar margin to the prior year excluding tariffs. Tariffs impacted all three primary segments and as I mentioned, part of the charge was recorded in corporate items similar to what we saw in the second quarter. This timing impact reflects the additional tariffs that were announced within the quarter, which we noted in the 8-K filing on August 28th. Moving to slide nine, I'll review the performance of the segments starting with Construction Industries. Sales increased by 7% in the third quarter to $6.8 billion. The sales increase was about in line with our expectations. The 7% sales increase was primarily due to higher sales volume and favorable currency impacts, partially offset by unfavorable price realization by region. Construction Industries sales in North America increased by 8% versus the prior year. Sales in the EAME region increased by 6%, in Asia Pacific sales increased by 3%, and in Latin America sales decreased by 1%. Third quarter profit for Construction Industries was $1.4 billion, a 7% decrease versus the prior year. The segment's margin of 20.4% was a decrease of 300 basis points versus the prior year. The decrease was mainly due to unfavorable price realization and increased manufacturing costs, largely due to tariffs. While the profit impact of higher sales volume provided a partial offset, the net impact of incremental tariffs in Construction Industries had a negative impact on the segment's margin of around 340 basis points. Excluding this impact from tariffs, the margin was slightly higher than the prior year and about in line with our expectations. Turning to slide 10, Resource Industries sales increased by 2% in the third quarter to $3.1 billion. Sales were about in line with our expectations. Note that sales to users were slightly stronger than we had expected due to timing, as shipments originally expected to occur in the fourth quarter were delivered to customers early. This resulted in a decrease in dealer inventory compared to the prior year. The 2% sales increase was primarily due to higher sales volume, partially offset by unfavorable price realization. Third quarter profit for Resource Industries decreased by 19% versus the prior year to $499 million. The segment's margin of 16% was a decrease of 430 basis points versus the prior year. The decrease was primarily due to unfavorable manufacturing costs from tariffs and unfavorable price realization. This was partially offset by the profit impact of higher sales volume. The net impact of incremental tariffs on Resource Industries margin was approximately 260 basis points. Excluding the impact from tariffs, the margin was lower versus the prior year and about in line with their expectations. Now on slide 11, Energy and Transportation sales of $8.4 billion increased by 17% versus the prior year. Sales were stronger than we had expected due to higher sales volume. The 17% sales increase versus the prior year was mainly due to higher sales volume including higher intersegment sales. Also, price realization was favorable by application. Power generation sales increased by 31%. Oil and gas sales increased by 20%. Sales in industrial and transportation each increased by 5%. Third quarter profit for Energy and Transportation increased by 17% versus the prior year to $1.7 billion. The increase was primarily due to the profit impact of higher sales volume and favorable price realization, partially offset by higher manufacturing costs, primarily due to tariffs. The segment's margin of 20% was an increase of 10 basis points versus the prior year. The net impact of incremental tariffs on Energy and Transportation's margin was approximately 140 basis points. Excluding this impact from tariffs, the margin was higher versus the prior year and slightly stronger than we had expected. Moving to slide 12, Financial Products revenues were approximately $1.1 billion in the quarter, a 4% increase versus the prior year due to a favorable impact from higher average earning assets in North America. This was partially offset by an unfavorable impact from lower average financing rates across all regions except Latin America. Segment profit decreased by 2% to $241 million. The decrease was mainly due to a higher provision for credit losses at Cat Financial, higher SG&A expenses, and an unfavorable impact from equity securities at Insurance Services. This was partially offset by a favorable impact from higher average earning assets. Our customers' financial health remains strong. Past dues were 1.47% in the quarter, down 27 basis points versus the prior year, the lowest third quarter in over 25 years. The allowance rate was 0.89%, remaining near historic lows. Business activity at Cat Financial remains healthy. Retail credit applications increased by 16% and retail new business volume grew by 7% versus the prior year. In addition, used equipment levels remain low and conversion rates remain above historical averages as customers choose to buy equipment at the end of their lease term. Moving to slide 13, ME&T free cash flow was about $3.2 billion in the third quarter, approximately $500 million higher than the prior year. A stronger operating cash flow more than offset higher CapEx spend. We continue to anticipate CapEx spend of around $2.5 billion this year. Moving to capital deployment, we deployed about $1.1 billion to shareholders in the third quarter. Our quarterly dividend payment was about $700 million, with the remainder reflecting share repurchases in the quarter. Average balance sheet and liquidity positions remained strong. We ended the third quarter with an enterprise cash balance of $7.5 billion. In addition, we held $1.2 billion in slightly longer-dated liquid marketable securities to improve yields on that cash. Now on slide 14, let me start with a few comments for the full year based on what we see today. We are optimistic about our top line momentum supported by healthy demand signals including a robust backlog and growth in sales to users. Against this supported backdrop, we now expect full year 2025 sales and revenues to increase modestly versus 2024, a slight improvement compared to our expectations last quarter. Now moving on to margins, excluding the net impact from incremental tariffs, the full year adjusted operating profit margin is expected to be in the top half of our margin target range. Including the net impact from incremental tariffs, we expect full year adjusted operating profit margin to remain near the bottom of the target range. Given our improved sales and revenue expectations, adjusted operating profit margin should be slightly higher than we anticipated when we filed the 8-K on August 28. Based on the tariffs announced in 2025 and expected to be in place on November 1st, we expect the impact from incremental tariffs for 2025 to be around $1.6 billion- $1.75 billion net of some mitigating actions and cost controls. This assumes that the net incremental impact of tariffs will be greater in the fourth quarter than in the third, primarily due to the timing of tariff rate changes. As Joe mentioned, we expect ME&T free cash flow will be above the midpoint of the $5 billion- $10 billion target range. We continue to expect restructuring costs of approximately $300 million - $350 million this year. On taxes, as I mentioned, we now anticipate our 2025 global annual effective tax rate to be 24% excluding discrete items. Turning to slide 15, to assist you with your modeling, I'll provide our fourth quarter assumptions based on what we see today. We anticipate strong sales growth versus the prior year with higher sales volume across all three primary segments. We expect machine dealer inventory to decline slightly in the quarter compared to a $1.6 billion decrease in the prior year, which should result in a sales tailwind for the fourth quarter. We expect price to be roughly flat for the enterprise by segment. In Construction Industries, we expect a strong sales increase in the fourth quarter versus the prior year on volume growth driven mainly by the dealer inventory tailwind previously mentioned. Higher sales to users should benefit volume as well. While we anticipate the year-over-year price impact to be about neutral, in Resource Industries in the fourth quarter we expect stronger sales versus the prior year primarily due to higher volume driven by changes in dealer inventory. Note that we anticipate unfavorable sales to users in the fourth quarter in Resource Industries due to the timing impact that I mentioned a moment ago. The impact of price in resource industries is expected to remain unfavourable but to a slightly lesser extent compared to what we saw in the third quarter versus the prior year. In energy and transportation in the fourth quarter, we anticipate strong sales growth versus the prior year driven by continued strength in power generation. We also expect higher sales in oil and gas driven by Solar Turbines and turbine related services. Price realization should remain favorable as well. Let me provide some perspective on our expectations for energy and transportation. While we expect sales to increase sequentially in the fourth quarter, the increase will likely be different than the typical seasonal pattern. This reflects the impact from robust third quarter sales, which have tempered the usual fourth quarter uplift. As a result, the sequential sales growth rate between the third and fourth quarters is projected to be slightly lower than last year's level. Now I'll provide some color on our fourth quarter margin expectations. Excluding the net impact from incremental tariffs, we expect the fourth quarter enterprise adjusted operating profit margin will be higher versus the prior year. We anticipate stronger sales volume will be partially offset by higher manufacturing costs. As I mentioned, price realization for the enterprise should be roughly flat in the fourth quarter. Including the net impact from incremental tariffs, we anticipate a lower enterprise adjusted operating profit margin in the fourth quarter versus the prior year. As I mentioned, the tariff headwind should be larger than it was in the third quarter. We anticipate a net cost headwind of about $650 million - $800 million in the fourth quarter. At this point, we expect tariffs to have a minimal impact to corporate items in the fourth quarter as our current assumptions are based on tariffs announced and expected to be in place on November 1st. Now I'll make a few comments regarding our segment margin expectations for the fourth quarter. In construction industries, excluding the net impact from incremental tariffs, we expect a higher margin compared to the prior year. This is driven primarily by the profit impact from higher sales volume, though the benefit within volume is lessened by unfavorable product mix compared to the prior year. Now, including the net impact from incremental tariffs, we anticipate a lower margin. In Construction Industries versus the prior year, we expect about 55% of the fourth quarter net incremental tariff impact will be incurred in Construction Industries. In Resource Industries, excluding the net impact from incremental tariffs, we anticipate a higher margin versus the prior year mainly due to higher sales volume, partially offset by unfavorable price realization. Including the net impact from incremental tariffs, we anticipate a lower margin. In Resource Industries versus the prior year, we expect about 20% of the fourth quarter net incremental tariff impact will be incurred in Resource Industries. In Energy and Transportation, excluding the net impact from incremental tariffs, we anticipate a higher margin versus the prior year, mainly due to a higher sales volume and favorable price realization. Higher manufacturing costs should act as a partial offset. Including the net impact from incremental tariffs, we anticipate a slightly lower margin compared to the prior year. We expect about 25% of the fourth quarter net incremental tariff impact will be incurred in Energy and Transportation. Turning to slide 16, let me summarize. We remain optimistic about our underlying business and now anticipate modestly higher sales for the full year, including a strong fourth quarter business activity. Customer financial health remains strong, as do our balance sheet and liquidity positions. Including the net impact from incremental tariffs, we expect to remain near the bottom of our target range for adjusted operating profit margins, and we expect to be above the midpoint of the target range for ME&T free cash flow. We continue to execute our strategy for long-term profitable growth, and with that, we'll take your questions. Excuse me, this is Alex. Just one quick clarification before we jump into the Q& A. The operating profit in the third quarter actually decreased by 3% to $3.1 billion compared to the prior year. Adjusted operating profit actually decreased by 4% versus the prior year to $3.1 billion. With that, we'll take your questions. Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. Please note we are only allowing one question per analyst. Your first question comes from the line of Kyle Menges from Citi. Your line is now open. Thank you. It sounds like backlog growth was driven. By power gen, and you alluded to. Orders for data center prime power applications as well. Could you just talk to the. Emerging data center prime power opportunity? How much latent capacity do you think you have at Solar to meet this demand, and what do you think you could actually? Deliver in the next year given we've heard some big numbers getting thrown around. By some of your customers. I am also just curious what that data center prime power backlog is looking like today. Thank you. Yeah, good morning Kyle, this is Joe. We're definitely really excited about the prime power opportunity with data centers and more broadly, just the demand for power that data centers and broader trends in the industry are putting onto the grid. We're going to see a lot more of this. I believe prime power is a great opportunity for us because it creates services opportunity as we move forward as well. You saw the Joule announcement. That's in our reset part of our capacity addition that will go to serve some of that. With Solar we're seeing a lot of ordering activity and it's really healthy, as you suggest. It's not just power generation. Power generation is seeing more activity, but oil and gas has been really strong too because we're moving a lot of natural gas and I think that trend is going to continue. Definitely a really positive outlook. At Solar Turbines, we're able to keep up with the orders that we're seeing right now. Lead times are starting to get a little more extended at Solar. They're not, you know, to the extent of those super large class turbines that are more utility scale, but they are starting to get extended. I would say the way we're thinking, it's shaping up in our backlog. The larger turbines, the Titan 250, Titan 350, are longer lead times than the smaller ones where we're able to react a little faster and have a little more, you know, as it comes to capacity and things, we are always evaluating capacity. That'd be a great thing when we need it. We're prepared to act when we feel like we need it. We feel like we're able to meet the orders that are coming in right now. We'll move next to Angel Castillo at Morgan Stanley. Hi, good morning gentlemen and congrats on the strong quarter here. Just kind of following up on that E&T conversation. Obviously, growth year remains quite robust. I wanted to touch a little bit more on the kind of price realization and margins for the segment. Those have remained a little bit more stable, and I think you talked about a 140 basis point kind of headwind from tariffs, and maybe just to kind of expand on that topic a little bit more. Just two quick questions. One, is there anything else kind of capping prices and margins for E&T as a whole? I don't know if it's mix, first fit versus services, or anything else that you would note, and then related to that for power gen in particular, should we be assuming something kind of greater than the 30% type of incremental margins you typically see in E&T given the strong pricing and volume trends there for the next two years, or how would you kind of characterize that contribution to margins from power gen? I'll make a comment. I'll let Andrew maybe talk about the margins, but we're definitely each of our businesses and segments in a little bit of a different position. In the machine part of the business, we're in an unconstrained environment. We were constrained before, and we return to a much more normal competitive pricing environment. In E&T, as you know, we're putting capacity in. Demand is really strong, and we've been able to take pretty regular price increases. We expect that trend to continue. Tariffs as well are not evenly spread across there. We're a very heavy North America footprint in E&T, and when you look at the margins, they've hung in there a little bit better than maybe a couple of the other segments. Pricing across our businesses we take into account on many different things, and E&T is definitely in a better position just given where that business is in the cycle and where we are from a demand standpoint and the outlook moving forward. Yeah, and on the margins, I mean if you look this quarter, I think it was very impressive that E&T was actually able to manage flat margins despite the impact of tariffs. Tariffs actually would have grown substantially without that. I think that gives you an idea of the strength of the pull through that is occurring. Just to remind you that if you look at our margin targets as a whole and we manage margins at the enterprise basis, obviously our focus is always on absolute OpEx dollars and growing OpEx. If there's a volume opportunity which may not be necessarily as margin accretive, that doesn't mean necessarily we will pass on it because absolute OpEx dollars actually drives total shareholder return in our mind. If you look at our margin targets, that requires a pull through over 30% across the whole of the range when you look at where they are. That gives you an idea of what we would be expecting from all our businesses when we're looking at margin increase. We'll g o next to David Raso at Evercore ISI. Hi, thank you. Yeah, building on that, given the backlog, retail activity, lower rates, secular growth, the revenues, the expectations on the street for 2026 are going to go higher. The real debate is going to be the incremental margin. Building on what you just discussed, not looking for 2026 guidance but just some puts and takes. Thinking about 2026 at a high level. Obviously, I was intrigued by the price realization comment about being flat in the fourth quarter. Be curious in particular when you think about that going to 2026, especially for construction, also the capacity expansions out there, the efficiency of that capacity coming on, should we think of some potential headwinds adding be a turbine or even more recip capacity or maybe you can do it more efficiently, the sales mix, geographic let alone product. Maybe last of course, Andrew, anything else to consider, puts and takes that we're not thinking about, incentive comp, even things below the line tax rate. That's going to be the debate. Right. The margins, the incremental. Anything you want to answer from those, I really appreciate it. Thank you. Yeah. David, I think your question actually covers about the whole of 2026 guidance. As you know, we will talk a little bit more about that when we get to January when we update you. We're still in that planning process, so it's still very early and obviously just stepping back though. Demand across the business is strong with the backlog that positions us well. As you look out, we are now lapping the impact of price. That's why we don't expect price to have an impact on the fourth quarter. That's a positive, which means we don't have that headwind. Tariffs will still be a headwind as we move into 2026. You asked about the tax rate and as I indicated in my comments, this year we did see an increase in the tax rate that's just due to the changes in the way the legislation works from the capitalization of R&D in particular to the immediate expensing that is a cash benefit to us, but book tax negative, that goes away. You'll start seeing some of the benefits of some of the foreign tax adjustments that were made in the legislation, which will be a positive for the tax rate as we move forward. We'll give you more details and hopefully we'll give you a little bit more color on our expectations as we talk in Investor Day as well next week. We'll move next to Tami Zakaria at JPMorgan. Hi, good morning. Thank you so much. Curious about your thoughts on what drove the acceleration in sales to end users in the quarter in every segment, in every region except Asia Pacific. It seemed like some light switch got turned on. Did you anticipate this acceleration maybe because you had product launches or dealer incentives planned? My question is, are you gaining share or the end markets have just been getting better on all sides. Thank you. Thanks, Tami. We're definitely pleased with the momentum we have in all three of our segments and seeing positive STUs and momentum continue, definitely in E&T, as we mentioned in here. We're trying to get out as much product as we can, particularly on large engines. We were able to get out a little more product in the third quarter through the factory, and I'm happy with the way the capacity expansion is coming on. Many of you were able to see that earlier this year in Lafayette. As we're bringing that capacity online, we continue to work with our supply base and the team there to get out as many units as we can. That's creating some positive momentum there. I think when you get to RI some timing in some of the STUs as to when some of the things get commissioned. Just remember that we've got great momentum in orders and the way that business is going. From quarter- to- quarter, things can move from one quarter to the next. We continue to see just great pick up, particularly in North America on our merchandising programs with CI. We mentioned the industry dynamics are a little softer and we're continuing to perform and able to make strides. I think what we have in place is working and generating great momentum, and that gives us obviously the backlog going up as well, gives us good momentum heading into the fourth quarter and into next year. We're just really happy with the way the business is performing right now. We'll take our next question from Mircea Dobre at Baird. Thanks. Good morning. I'd like to go back to construction if we can. It's interesting that sales to end users are accelerating. I am curious, how much of this do you think is simply a function of the various incentives that you've put through rather than just the end market getting better? Sounds like your dealers are looking to add more fleet to their rental operations. Maybe you can talk a little bit about that. Perhaps the bigger picture, as we think about 2026, if demand does look to get better, this segment has been absorbing the brunt of these tariff headwinds. How do you think about the puts and takes next year? Do you think that you have the ability to manage these tariffs on the cost side, or should we be thinking that trends here are solid enough to where you can actually start pushing some price to be able to offset some of these very real cost headwinds that you've experienced in 2025? Thank you. There are a couple of different questions there. I'll start maybe on the demand side. I think the performance of the business has been better than the general industry and I believe that's due to the strategy we have in place and the merchandising programs that are out there. As we finish the year this year, as you point out, I think we'll be in great shape on dealer inventory. Heading into next year we'll see what happens. We've got great momentum and we're hopeful that continues into next year. We'll talk to you more about that in our fourth quarter earnings call. As it comes to pricing, keep in mind the fourth quarter, we said, is flat at the enterprise level. We're lapping the impact of these programs that are put in place. The way we're thinking about pricing is sort of our normal annual process and we're heading into that time period. Each of our segments, as I mentioned before, E&T is in a much different place than RI and much different place than CI, and then different regions of the world are also in very different positions competitively. We take a lot of factors into consideration. Cost inflation is one of them, but also market conditions and competitive situation. As Andrew said, our goal is to grow OpEx dollars. Any volume impacts to these decisions, we'll obviously take that into account as well. When it comes to tariffs, we've been able to really put some mitigating actions in. I would say on the margins, they're the no regrets actions. Same thing we talked to you about last time, short term cost reductions, more belt tightening type of things. We've made limited sourcing changes where we have the ability to move sources without investments in our supply chain, but that's fairly limited. We work on certifying more USMCA compliance products. When it comes to longer term actions, we've sort of talked about this before. We're a global business with a very complicated supply chain. We are heavily U.S. based. It's our largest footprint here. We have over 50,000 employees, 65 locations in 25 states. We're a net exporter. We've increased exports 75% over the last 9- 10 years and at the same time our hourly workforce has grown 29%. We have a broad and diverse portfolio that's very global, and the supply chain is complicated. If we're going to make longer term adjustments to really offset tariffs in that way, it will require investments to do that, and they'll take time because we'll have to certify components, we have to buy tooling, we have to validate them, and test them. For us to make those types of decisions, we really need to have a greater level of predictability and stability in the situation. As we know, trade deals are still being negotiated, and we're watching that very closely, and we have a lot of scenarios at play. We'll use everything in our toolkit when the time is right to react to the tariffs or to mitigate the tariffs. I'm confident we'll manage it over time. Right now, if we do something that requires investment, I don't want to have to spend that money and then turn around and spend money to reverse it. We're trying to take a measured approach. We have great momentum heading into 2026 and as we finish this year, and we're really happy with the way the business is performing. We'll continue to update you as we move forward. Next we'll go to Rob Wertheimer at Melius Research. Thank you. Good morning. Good morning Rob. Wanted to ask I guess around. The shape of demand in resources, which you've touched on a couple times, is the order strength largely in gold? Which obviously is going nuts, and copper. Is it a little bit more broad based? If you had any comments. We've seen a couple industry, including CAT investments in technology, software, autonomy. Is there any upshift or change in customer orders on, you know, on autonomy and or advanced powertrains or anything else notable changing there? Thank you. Yes, I mean obviously order rates have remained pretty strong as you would expect. Where order rates are principally is around large mining trucks. That is the area of strength from a commodity perspective. I would say to you, rather than any commodity is strong. Obviously gold prices and copper prices are high. It's coal, which is probably the little bit of the drag as you would expect. Particularly in Indonesia with regards to autonomy, we continue to see greater acceptance by our customers of the need for autonomous solutions. I think we'll be talking to you a little bit more about RPM and also about where we think the industry is headed next week, Rob. If you don't mind, I'm sure Denise will be giving you guys an update and you'll be able to ask more questions there about some of the things within RI in particular. Next we'll go to Kristen Owen at Oppenheimer. Good morning. Thank you. For the questions, two that are related to the backlog. First, can you comment on the contribution of CI and RI to the sequential backlog growth? You made some comments on the year-over-year, but if you could hit the sequential backlog growth. Second, when you talk about backlog or even revenue growth in oil and gas, would that include any turbine sales used for those prime power data center applications, or should we anticipate that those will be allocated to the power gen backlog? Commentary. Thank you. Thanks, Kristen. The consecutive sequential growth in the backlog primarily came from Energy and Transportation, and that was largely power generation and oil and gas contributing to that. As you did mention, year-over-year we saw our E&T up, so we're following a little bit of a seasonal pattern while still growing. The backlog order activity across all three segments has been really strong in the quarter, and we're really happy with the momentum we have when it comes to Solar and where those sales go and where you see them in the backlog and sales to users. If it's a data center application, it goes in power generation. If it's traditional offshore oil platforms or gas transmission, then it would be in oil and gas. That's how you should look at where those end up in the numbers. We'll move to our next question from Michael Feniger at Bank of America. Hi, good morning. Thanks for squeezing me in. Joe. Just in 2010, there was a filing Caterpillar had out that put turbines at $3.3 billion of revenue. That was 15 years ago, and that business is closer to like $7 billion today. Is that $7 billion too low, too high? The fact that some areas. Oil and gas CapEx like offshore has been weak. Is that why you have some capacity to meet the orders on power gen? Does that change at all to meet this demand? When you open the order book for Titan 350, when does that kind of plan happen and does that change the equation at all? You have to think about capacity going forward. Thank you. With regards to revenues, we are not going to disclose Solar Turbines revenues. Obviously, you know you are referring to a period a very long time ago. We split the business into oil and gas applications and power generation, and where it's mixed up with reciprocating engines for obvious reasons. Solar Turbines is a very strong business. It's a very good business for us, as you know, and one that we will continue to support very strongly. With regards to capacity, both oil and gas applications are doing pretty well as well. There are a lot of pipeline orders, particularly around gas transmission. There is not necessarily weakness, which allows us to continue to meet other demand. It's really about prioritization. As Joe Creed said, we will discuss and make capacity decisions when we're ready and when we see the need to do that. We'll notify you accordingly. Yeah, as you're thinking about this a long time ago, going back 15 years to 2010, the world in oil and gas is much different now as well. Right. You would have had a lot more offshore power in the Solar oil and gas business. Now, post shale, we're moving a lot of natural gas and that's where we are very, very strong is in the gas transmission side. I think the business is different now. We continue to grow services and services footprint. The first business where we really leaned in on the digital front with long term service agreements, and that's obviously with Jim's background, helped shape our strategy that's made us successful here the last few years. We're excited about the business. We're seeing a lot more demand in power generation. When we announced the Titan 350 and put that program through, we obviously had room to produce those units. We're excited that we're getting good uptake on them even sooner than we had thought when we started the program a few years ago. We'll move next to Jamie Cook at Truist Securities. Hi, good morning and congrats on a nice quarter. I guess two quick ones for me, Joe. What struck me about the quarter is just the backlog growth that you saw. To what degree do you think the street should continue to expect backlog to grow? Because on one side you have these, you know, projects like Joule, there could be more of those coming online. The other side of it is you have the law, large numbers and potentially capacity, you know, coming online. Just the ability to grow the backlog because it just provides such earnings visibility. My second follow up is just understanding what you're saying on tariffs, you know, by segment, etc. Should the street expect the fourth quarter to be the peak of tariff cost headwinds? Can it get better from here as we think about 2026? Thanks. Yeah. When we look at, you want to take the last one first? Yeah. With regards to tariffs, it really does. The timing of mitigation actions, as Joe mentioned, will really be determined by the greater degree of certainty that we get out there. All factors are on the table and that will include potential for price, but we will make those decisions as we would normally do within our normal time frame. With regards to the $650 - $800, it is based on most of the tariffs that will be in effect on November 1st. There is one month for some of the tariffs, the 232s. The other factors which impact tariffs are the degree of imports in any quarter. That would be the sort of run rate on an unmitigated basis that you would expect to see. Jamie, it's a good question on the backlog, and I think you expressed it well. There's a nuance to it. We continue to see significant demand, particularly in ET. We're seeing more. I think we're at the early stages of the prime power opportunities, so we're excited to have more of those come online. We talk to our large data center customers, both hyperscalers and colos, frequently, monthly, mostly even to manage that forecast. We have great confidence in the pipeline that's out there, and that's why we're putting the capacity in and we continue to raise the capacity. I think it kind of depends on the circumstance. We like the fact that the backlog is going up. I'd like to maybe, if the reason the backlog goes up a little less is that I'm able to get out more and more product and keep up, I think that's a good thing. We think it's positive. I would expect us to continue to see momentum in there, but we are getting pretty extended on some of our products at ET and I'd like to try to at least get that stabilized or brought back in if we can. Hey, Audra, we have time for one more question. Thank you. Today's final question comes from the line of Stephen Volkmann with Jefferies. Great. Thank you, guys. Joe, you mentioned services a few times with respect to Solar, and I know. For most of Cat equipment, a lot of that services revenue accrues to the dealer. I think Solar is a little bit different. Can you just talk about how that's d ifferent and how the services business kind o f impacts Cat directly rather than the dealers? Yeah, it's as you stated, Solar Turbines is a direct business model for us. In Cat branded products, obviously the dealers service the equipment in the field, we sell them parts and support them with some other ancillary services. When it comes to Solar Turbines, we have our own field technicians, our own group. Those units, as you know, run continuously. We pride ourselves as having tremendous customer service here, and that's why customers like us. As you point out, as Solar Turbines sales pick up, even the power generation space, it's all prime power. That's a great services growth opportunity for us. I would say even in the Caterpillar side, projects like Joule Capital Partners, and that will come in a few years' time, not as much in the early years. The more prime power opportunities we're able to satisfy with our customers, the greater service opportunity for us down the road in a few years' time. We're continuing to build that momentum. Services, and you'll get a little chance. Those of you who are coming to Investor Day next week, if you're able to stick around and go to the Solar Turbines plant in DeSoto, you'll be able to ask a lot more questions and get a better understanding of that. I'd like to thank everyone for joining us today. We always appreciate your questions and the interest in our results. We had a great quarter. I'm really proud of our team for the solid performance. We're really excited to see you all next week at Investor Day, and I look forward to sharing more about our bright future and the attractive growth opportunities ahead. With that, I'll turn it back over to Alex. Thank you, Joe, Andrew and everyone who joined us today. A replay of our call will be available online later this morning. We'll also post a transcript on our investor relations website as soon as it's available. You'll find a third quarter results video with our CFO and an SEC filing with our sales to users data. Visit investors.caterpillar.com and then click on Financials to view those materials. As Joe mentioned, we look forward to hosting you for our Investor Day on Tuesday, November 4th. The webcast information is already available on investors.caterpillar.com and we'll issue a press release with more details the morning of November 4th. If you have any questions, please reach out to me or to Rob Rengel. The Investor Relations general phone number is 309-675-4549. Now let's turn the call back to Audra to conclude our call. Thank you. That concludes our call. Thank you for joining. You may all disconnect.