CORE ATTRITION POLICY FOR REMAN PARTS RETURNED AS SURPLUS ON A PARTS RETURN AUTHORIZATIONS (PRA) FOR ALL MARKETING ORGANIZATIONS Caterpillar

CORE ATTRITION POLICY FOR REMAN PARTS

RETURNED AS SURPLUS ON A PARTS RETURN

AUTHORIZATION (PRA) FOR ALL MARKETING

ORGANIZATIONS

When processing surplus returns (PRA) provisions have been made in the Core Management

Information System (CMIS 2) to validate entitlements and to check for Caterpillar Attritions.

For dealers converted to the Core Management Information System (CMIS 2), at the time the

final PRA credit is issued to the dealer, entitlements are checked to determine if there are

active entitlements. If the dealer has no active entitlements, no core credit is allowed. If the

dealer has no active entitlements, but has had an entitlement attritioned by Caterpillar, the

entitlement is automatically reinstated so that core credit can be issued. This policy excludes

Major Components.

For example, if a dealer has no active entitlements on the final PRA credit issuance date

(June 1, 2002) and there have been no Caterpillar attritions for a similar part, the dealer is not

entitled to receive a core credit. If the dealer has no active entitlements on the final PRA

credit issuance date (June 1, 2002) but has had an entitlement attritioned by Caterpillar (on

October 1, 2001) within the 24 month period prior to the final PRA credit issuance date (the

process would look back as far as June 1, 2000 to find a core entitlement that was

attritioned), the entitlement is automatically reinstated and the appropriate core credit is

issued. In summary, these are special surplus return processing rules that considers the FIFO

Core Attrition Policy period plus 24 months prior to the final PRA credit issuance date for

Reman surplus part returns. Please refer below to your Marketing Organization processing

rule. If there have been no Caterpillar Attrition's or no entitlements, the dealer will not

receive core credit. All Reman surplus part returns must meet the normal resalable surplus

return guidelines to receive both the product price and core deposit. If the surplus return

falls outside of the 24-month rule, then the dealer will have to notify Caterpillar for

reinstatement. Caterpillar? Dealers can also request for an extension to handle unique

situations to avoid the entitlement from canceling. These special processing rules will

apply to all dealers that have been converted to CMIS 2 and apply to all Reman parts

excluding Major Components.

NACD

 The processing rules for NACD are based on a 15-month (455 days) Core Attrition Policy.

This means that the maximum amount of time that would be considered is a 39-month time

frame for automatic entitlement reinstatement for surplus returns.

 LACD

 The processing rules for LACD are based on a transition 18-month (548 days) policy from

June 30, 2002 through December 31, 2002 and a 15-month policy effective January 1, 2003.

This means that the maximum amount of time that would be considered is a 42-month time

frame for the rest of 2002 and a 39-month time frame effective January 1, 2003 for automatic

entitlement reinstatement for surplus returns.

 APD

 The processing rules for APD are based on an 18-month (548 days) Core Attrition Policy for

Asia Pacific dealers (including New Zealand, Papua New Guinea, Samoa, and other Pacific

Island dealers). This means that the maximum amount of time that would be considered is a

42-month time frame for automatic entitlement reinstatement for surplus returns. For

Australian dealers, a 15-month (455 days) Core Attrition Policy applies and the maximum

amount of time that would be considered is a 39-month time frame for automatic entitlement

reinstatement for surplus returns.

 EAME

 The processing rules for EAME are based on a 15-month (455 days) Core Attrition Policy.

This means that the maximum amount of time that would be considered is a 39-month time

frame for automatic entitlement reinstatement for surplus returns.

 Core Management

 Please refer to the Caterpillar Core Management Information System (CMIS 2) Parts

Information application describing all reman part/CAF and related information. Also refer to

other CMIS 2 inquiry applications such as Customer Profiles, Inspection Reason Codes,

Inspection Line Inquiry, Add Charge Information, Entitlement Activity, Entitlement Inquiry,

CCR Inquiry, CCR Entry, Shipment Processing; Process Packaging Grief; and Reporting to

properly manage core returns and monitor inspection performance. This information will be

available to all dealers worldwide after your CMIS 2 conversion date. In the meantime,

please continue to use the current CMIS Entitlement Parts Inquiry Screen describing the list

of parts in a Core Acceptability Family (CAF) and related part number detail.

For the latest updates of Reman Policies and Core Management (SELD0122), Core

Management Systems & Operations Procedures (SELD0040), and Shipping Instructions

(SELD0039), go to the Reman website and click on Procedures and Policies (listed under

Reman Program Information).

If you have any questions regarding core return processing, feel free to call your Corinth

Dealer Service Representative toll free at (800) 537-2928 or use our e-mail address --

reman_core_operations@cat.com. For assistance with technical questions, call the Peoria

Reman Customer Satisfaction Hot Line also toll free at (888) 88-REMAN or use our e-mail

address--Reman_Help@cat.com.