Caterpillar, Inc., is one of the world's largest manufacturers of construction, mining, and forestry machinery. The following disclosure note is included in the company's 2010 financial statements: D. Inventories ($ in millions) Inventories are stated at the lower of cost or market. Cost is principally determined using the last-in, first-out, (LIFO) method. The value of inventories on the LIFO basis represented about 70% of total inventories at December 31, 2010, 2009, and 2008. If the FIFO (first-in, first-out) method had been in use, inventories would have been $2,575 million, $3,022 million, and $3,216 million higher than reported at December 31, 2010, 2009, and 2008, respectively. If inventories valued at LIFO cost had been valued at FIFO cost, net income would have been $331 million lower in 2010 and $144 million lower in 2009.