Document and Entity Information
Document and Entity Information Document | 9 Months Ended |
Sep. 30, 2016shares | |
Document and Entity Information | |
Entity Registrant Name | CATERPILLAR INC |
Entity Central Index Key | 18,230 |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2016 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 585,072,585 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q3 |
Consolidated Statement of Resul
Consolidated Statement of Results of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Sales and revenues: | |||||
Sales of Machinery, Energy & Transportation | $ 8,463 | $ 10,285 | $ 26,888 | $ 33,829 | |
Revenues of Financial Products | 697 | 677 | 2,075 | 2,152 | |
Total sales and revenues | 9,160 | 10,962 | 28,963 | 35,981 | |
Operating costs: | |||||
Cost of goods sold | 6,527 | 7,872 | 20,768 | 25,306 | |
Selling, general and administrative expenses | 992 | 1,129 | 3,203 | 3,696 | |
Research and development expenses | 453 | 513 | 1,429 | 1,547 | |
Interest expense of Financial Products | 147 | 142 | 447 | 440 | |
Other operating (income) expenses | 560 | 381 | 1,356 | 1,032 | |
Total operating costs | 8,679 | 10,037 | 27,203 | 32,021 | |
Operating profit | 481 | 925 | 1,760 | 3,960 | |
Interest expense excluding Financial Products | 126 | 127 | 385 | 381 | |
Other income (expense) | 28 | (15) | 112 | 107 | |
Consolidated profit before taxes | 383 | 783 | 1,487 | 3,686 | |
Provision (benefit) for income taxes | 96 | 218 | 372 | 1,074 | |
Profit of consolidated companies | 287 | 565 | 1,115 | 2,612 | |
Equity in profit (loss) of unconsolidated affiliated companies | (4) | (3) | (7) | 1 | |
Profit of consolidated and affiliated companies | 283 | 562 | 1,108 | 2,613 | |
Less: Profit (loss) attributable to noncontrolling interests | 0 | 3 | 4 | 7 | |
Profit | [1] | $ 283 | $ 559 | $ 1,104 | $ 2,606 |
Profit per common share (in dollars per share) | $ 0.48 | $ 0.95 | $ 1.89 | $ 4.36 | |
Profit per common share - diluted (in dollars per share) | [2] | $ 0.48 | $ 0.94 | $ 1.88 | $ 4.30 |
Weighted-average common shares outstanding (millions) | |||||
Basic (in shares) | 584.7 | 588.4 | 583.8 | 597.9 | |
Diluted (in shares) | [2] | 589.6 | 594.8 | 588.7 | 605.3 |
Cash dividends declared per common share (in dollars per share) | $ 0 | $ 0 | $ 1.54 | $ 1.47 | |
[1] | 1 Profit attributable to common stockholders. | ||||
[2] | 2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method. |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Profit of consolidated and affiliated companies | $ 283 | $ 562 | $ 1,108 | $ 2,613 |
Other Comprehensive Income (Loss), Net of Tax: | ||||
Foreign currency translation, net of tax (provision)/benefit of: Three months ended: 2016-$4, 2015-$(5); Nine months ended: 2016-$16, 2015-$(60) | 137 | (236) | 442 | (806) |
Pension and other postretirement benefits: | ||||
Current year actuarial gain (loss), net of tax (provision)/benefit of: Three months ended: 2016-$0, 2015-$0; Nine months ended: 2016-$0, 2015-$0 | 0 | 0 | 0 | 0 |
Amortization of actuarial (gain) loss, net of tax (provision)/benefit of: Three months ended: 2016-$0, 2015-$0; Nine months ended: 2016-$0, 2015-$0 | 0 | 0 | 0 | 0 |
Current year prior service credit (cost), net of tax (provision)/benefit of: Three months ended: 2016-$0, 2015-$(1); Nine months ended: 2016-$(69), 2015-$(1) | 2 | 1 | 119 | 1 |
Amortization of prior service (credit) cost, net of tax (provision)/benefit of: Three months ended: 2016-$5, 2015-$5; Nine months ended: 2016-$16, 2015-$14 | (10) | (8) | (29) | (26) |
Derivative financial instruments: | ||||
Gains (losses) deferred, net of tax (provision)/benefit of: Three months ended: 2016-$16, 2015-$7; Nine months ended: 2016-$21, 2015-$9 | (28) | (12) | (37) | (15) |
(Gains) losses reclassified to earnings, net of tax (provision)/benefit of: Three months ended: 2016-$(2), 2015-$(11); Nine months ended: 2016-$(8), 2015-$(40) | 6 | 20 | 16 | 69 |
Available-for-sale securities: | ||||
Gains (losses) deferred, net of tax (provision)/benefit of: Three months ended: 2016-$(1), 2015-$10; Nine months ended: 2016-$(9), 2015-$10 | 5 | (15) | 21 | (13) |
(Gains) losses reclassified to earnings, net of tax (provision)/benefit of: Three months ended: 2016-$3, 2015-$9; Nine months ended: 2016-$12, 2015-$10 | (6) | (18) | (24) | (21) |
Total other comprehensive income (loss), net of tax | 106 | (268) | 508 | (811) |
Comprehensive Income | 389 | 294 | 1,616 | 1,802 |
Less: comprehensive income attributable to the noncontrolling interests | 0 | (2) | (4) | 2 |
Comprehensive income attributable to stockholders | $ 389 | $ 292 | $ 1,612 | $ 1,804 |
Consolidated Statement of Comp4
Consolidated Statement of Comprehensive Income (Parenthetical) (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation, tax (provision)/benefit | $ 4 | $ (5) | $ 16 | $ (60) |
Pension and other postretirement benefits, Current year prior service credit (cost), tax (provision)/benefit | 0 | (1) | (69) | (1) |
Pension and other postretirement benefits, Amortization of prior service (credit) cost, tax (provision)/benefit | 5 | 5 | 16 | 14 |
Derivative financial instruments, Gains (losses) deferred, tax (provision)/benefit | 16 | 7 | 21 | 9 |
Derivative financial instruments, (Gains) losses reclassified to earnings, tax (provision)/benefit | (2) | (11) | (8) | (40) |
Available-for-sale securities, Gains (losses) deferred, tax (provision)/benefit | (1) | 10 | (9) | 10 |
Available-for-sale securities, (Gains) losses reclassified to earnings, tax (provision)/benefit | $ 3 | $ 9 | $ 12 | $ 10 |
Consolidated Statement of Finan
Consolidated Statement of Financial Position - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and short-term investments | $ 6,113 | $ 6,460 |
Receivables - trade and other | 5,797 | 6,695 |
Receivables - finance | 8,719 | 8,991 |
Prepaid expenses and other current assets | 1,892 | 1,662 |
Inventories | 9,478 | 9,700 |
Total current assets | 31,999 | 33,508 |
Property, plant and equipment - net | 15,680 | 16,090 |
Long-term receivables - trade and other | 1,102 | 1,170 |
Long-term receivables - finance | 13,835 | 13,651 |
Noncurrent deferred and refundable income taxes | 2,579 | 2,489 |
Intangible assets | 2,453 | 2,821 |
Goodwill | 6,725 | 6,615 |
Other assets | 2,029 | 1,998 |
Total assets | 76,402 | 78,342 |
Short-term borrowings: | ||
Machinery, Energy & Transportation | 263 | 9 |
Financial Products | 6,702 | 6,958 |
Accounts payable | 4,713 | 5,023 |
Accrued expenses | 3,022 | 3,116 |
Accrued wages, salaries and employee benefits | 1,286 | 1,994 |
Customer advances | 1,161 | 1,146 |
Dividends payable | 0 | 448 |
Other current liabilities | 1,620 | 1,671 |
Long-term debt due within one year: | ||
Machinery, Energy & Transportation | 553 | 517 |
Financial Products | 5,970 | 5,360 |
Total current liabilities | 25,290 | 26,242 |
Long-term debt due after one year: | ||
Machinery, Energy & Transportation | 8,432 | 8,960 |
Financial Products | 15,190 | 16,209 |
Liability for postemployment benefits | 8,499 | 8,843 |
Other liabilities | 3,276 | 3,203 |
Total liabilities | 60,687 | 63,457 |
Commitments and contingencies (Notes 10 and 13) | ||
Stockholders' equity | ||
Common stock of $1.00 par value: Authorized shares: 2,000,000,000 Issued shares: (9/30/16 and 12/31/15 – 814,894,624) at paid-in amount | 5,266 | 5,238 |
Treasury stock (9/30/16 – 229,822,039 shares; 12/31/15 – 232,572,734 shares) at cost | (17,544) | (17,640) |
Profit employed in the business | 29,450 | 29,246 |
Accumulated other comprehensive income (loss) | (1,527) | (2,035) |
Noncontrolling interests | 70 | 76 |
Total stockholders' equity | 15,715 | 14,885 |
Total liabilities and stockholders' equity | $ 76,402 | $ 78,342 |
Consolidated Statement of Fina6
Consolidated Statement of Financial Position (Parenthetical) (Parentheticals) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, Authorized shares | 2,000,000,000 | 2,000,000,000 |
Common stock, Issued shares | 814,894,624 | 814,894,624 |
Treasury stock, shares | 229,822,039 | 232,572,734 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - USD ($) $ in Millions | Total | Common stock | Treasury stock | Profit employed in the business | Accumulated other comprehensive income (loss) | Noncontrolling interests | |
Balance at Dec. 31, 2014 | $ 16,826 | $ 5,016 | $ (15,726) | $ 28,515 | $ (1,059) | $ 80 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Profit of consolidated and affiliated companies | 2,613 | 0 | 0 | 2,606 | 0 | 7 | |
Foreign currency translation, net of tax | (806) | 0 | 0 | 0 | (797) | (9) | |
Pension and other postretirement benefits, net of tax | (25) | 0 | 0 | 0 | (25) | 0 | |
Derivative financial instruments, net of tax | 54 | 0 | 0 | 0 | 54 | 0 | |
Available-for-sale securities, net of tax | (34) | 0 | 0 | 0 | (34) | 0 | |
Dividends declared | (885) | 0 | 0 | (885) | 0 | 0 | |
Distribution to noncontrolling interests | (7) | 0 | 0 | 0 | 0 | (7) | |
Common shares issued from treasury stock for stock-based compensation: 2,750,695 and 2,843,506 for the nine months ended September 30, 2016 and 2015, respectively | 34 | (75) | 109 | 0 | 0 | 0 | |
Stock-based compensation expense | 240 | 240 | 0 | 0 | 0 | 0 | |
Net excess tax benefits from stock-based compensation | 7 | 7 | 0 | 0 | 0 | 0 | |
Common shares repurchased: 25,841,608 for the nine months ended September 30, 2015 | [1] | (2,025) | 0 | (2,025) | 0 | 0 | 0 |
Other | 3 | 2 | 0 | 0 | 0 | 1 | |
Balance at Sep. 30, 2015 | 15,995 | 5,190 | (17,642) | 30,236 | (1,861) | 72 | |
Balance at Dec. 31, 2015 | 14,885 | 5,238 | (17,640) | 29,246 | (2,035) | 76 | |
Increase (Decrease) in Stockholders' Equity | |||||||
Profit of consolidated and affiliated companies | 1,108 | 0 | 0 | 1,104 | 0 | 4 | |
Foreign currency translation, net of tax | 442 | 0 | 0 | 0 | 442 | 0 | |
Pension and other postretirement benefits, net of tax | 90 | 0 | 0 | 0 | 90 | 0 | |
Derivative financial instruments, net of tax | (21) | 0 | 0 | 0 | (21) | 0 | |
Available-for-sale securities, net of tax | (3) | 0 | 0 | 0 | (3) | 0 | |
Dividends declared | (900) | 0 | 0 | (900) | 0 | 0 | |
Distribution to noncontrolling interests | (10) | 0 | 0 | 0 | 0 | (10) | |
Common shares issued from treasury stock for stock-based compensation: 2,750,695 and 2,843,506 for the nine months ended September 30, 2016 and 2015, respectively | (54) | (150) | 96 | 0 | 0 | 0 | |
Stock-based compensation expense | 187 | 187 | 0 | 0 | 0 | 0 | |
Net excess tax benefits from stock-based compensation | (18) | (18) | 0 | 0 | 0 | 0 | |
Other | 9 | 9 | 0 | 0 | 0 | 0 | |
Balance at Sep. 30, 2016 | $ 15,715 | $ 5,266 | $ (17,544) | $ 29,450 | $ (1,527) | $ 70 | |
[1] | See Note 11 regarding shares repurchased. |
Consolidated Statement of Chan8
Consolidated Statement of Changes in Stockholders' Equity (Parenthetical) (Parentheticals) - shares | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Stockholders' Equity [Abstract] | ||
Common shares issued from treasury stock for stock-based compensation (in shares) | 2,750,695 | 2,843,506 |
Common shares repurchased (in shares) | 0 | 25,841,608 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flow - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flow from operating activities: | ||
Profit of consolidated and affiliated companies | $ 1,108 | $ 2,613 |
Adjustments for non-cash items: | ||
Depreciation and amortization | 2,255 | 2,272 |
Other | 640 | 323 |
Changes in assets and liabilities, net of acquisitions and divestitures: | ||
Receivables - trade and other | 1,128 | 614 |
Inventories | 331 | 840 |
Accounts payable | (163) | (893) |
Accrued expenses | (153) | (25) |
Accrued wages, salaries and employee benefits | (727) | (704) |
Customer advances | (24) | (36) |
Other assets - net | (141) | 96 |
Other liabilities - net | (291) | (236) |
Net cash provided by (used for) operating activities | 3,963 | 4,864 |
Cash flow from investing activities: | ||
Capital expenditures - excluding equipment leased to others | (807) | (946) |
Expenditures for equipment leased to others | (1,393) | (1,251) |
Proceeds from disposals of leased assets and property, plant and equipment | 572 | 473 |
Additions to finance receivables | (6,911) | (7,099) |
Collections of finance receivables | 6,968 | 6,849 |
Proceeds from sale of finance receivables | 55 | 101 |
Investments and acquisitions (net of cash acquired) | (72) | (140) |
Proceeds from sale of businesses and investments (net of cash sold) | 0 | 174 |
Proceeds from sale of securities | 304 | 238 |
Investments in securities | (339) | (296) |
Other - net | 5 | (76) |
Net cash provided by (used for) investing activities | (1,618) | (1,973) |
Cash flow from financing activities: | ||
Dividends paid | (1,348) | (1,309) |
Distribution to noncontrolling interests | (8) | (7) |
Common stock issued, including treasury shares reissued | (54) | 34 |
Treasury shares purchased | 0 | (2,025) |
Excess tax benefit from stock-based compensation | 12 | 20 |
Proceeds from debt issued (original maturities greater than three months): | ||
Machinery, Energy & Transportation | 6 | 3 |
Financial Products | 4,424 | 4,079 |
Payments on debt (original maturities greater than three months): | ||
Machinery, Energy & Transportation | (525) | (513) |
Financial Products | (5,077) | (6,259) |
Short-term borrowings - net (original maturities three months or less) | (111) | 1,922 |
Net cash provided by (used for) financing activities | (2,681) | (4,055) |
Effect of exchange rate changes on cash | (11) | (131) |
Increase (decrease) in cash and short-term investments | (347) | (1,295) |
Cash and short-term investments at beginning of period | 6,460 | 7,341 |
Cash and short-term investments at end of period | $ 6,113 | $ 6,046 |
Nature of Operations, Basis of
Nature of Operations, Basis of Presentation and Change in Accounting Principle | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | A. Nature of operations Information in our financial statements and related commentary are presented in the following categories: Machinery, Energy & Transportation – Represents the aggregate total of Construction Industries, Resource Industries, Energy & Transportation and All Other operating segments and related corporate items and eliminations. Financial Products – Primarily includes the company’s Financial Products Segment. This category includes Caterpillar Financial Services Corporation (Cat Financial), Caterpillar Financial Insurance Services (Insurance Services) and their respective subsidiaries. B. Basis of presentation In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the consolidated results of operations for the three and nine months ended September 30, 2016 and 2015 , (b) the consolidated comprehensive income for the three and nine months ended September 30, 2016 and 2015 , (c) the consolidated financial position at September 30, 2016 and December 31, 2015 , (d) the consolidated changes in stockholders’ equity for the nine months ended September 30, 2016 and 2015 and (e) the consolidated cash flow for the nine months ended September 30, 2016 and 2015 . The financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in our company’s annual report on Form 10-K for the year ended December 31, 2015 ( 2015 Form 10-K), which were retrospectively adjusted in the Current Report on Form 8-K filed with the SEC on May 16, 2016. The December 31, 2015 financial position data included herein is derived from the audited consolidated financial statements included in the 2015 Form 10-K, which were retrospectively adjusted in the Current Report on Form 8-K filed with the SEC on May 16, 2016, but does not include all disclosures required by U.S. GAAP. Certain amounts for prior periods have been reclassified to conform to the current period financial statement presentation. See Note 1C, Note 2, Note 7 and Note 15 for more information. Unconsolidated Variable Interest Entities (VIEs) We have affiliates, suppliers and dealers that are VIEs of which we are not the primary beneficiary. Although we have provided financial support, we do not have the power to direct the activities that most significantly impact the economic performance of each entity. Our maximum exposure to loss from VIEs for which we are not the primary beneficiary was as follows: (Millions of dollars) September 30, 2016 December 31, 2015 Receivables - trade and other $ 48 $ 19 Receivables - finance 192 466 Long-term receivables - finance 253 62 Other assets 31 35 Guarantees 211 175 Total $ 735 $ 757 |
Change in Accounting Principle | C. Change in Accounting Principle Effective January 1, 2016, we changed our accounting principle for recognizing actuarial gains and losses and expected returns on plan assets for our defined benefit pension and other postretirement benefit plans. Prior to 2016, actuarial gains and losses were recognized as a component of Accumulated other comprehensive income (loss) and were generally amortized into earnings in future periods. Under the new principle, actuarial gains and losses will be immediately recognized through net benefit cost upon the annual remeasurement in the fourth quarter, or on an interim basis as triggering events warrant remeasurement. In addition, we have changed our policy for recognizing the expected returns on plan assets from a market-related value method (based on a three-year smoothing of asset returns) to a fair value method. We believe these changes are preferable as they accelerate the recognition of changes in fair value of plan assets and actuarial gains and losses in our Consolidated Statement of Results of Operations, provide greater transparency of our economic obligations in accounting results and better align with the fair value principles by recognizing the effects of economic and interest rate changes on pension and other postretirement benefit assets and liabilities in the year in which the gains and losses are incurred. These changes have been applied retrospectively to prior years. As of January 1, 2015, the cumulative effect of the change resulted in a decrease of $5.4 billion in Profit employed in the business and a corresponding increase of $5.4 billion in Accumulated other comprehensive income (loss), both net of tax of $2.9 billion . Following are the changes to financial statement line items as a result of the accounting principle change for the periods presented in the accompanying unaudited consolidated financial statements: Consolidated Statement of Results of Operations (Dollars in millions except per share data) Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 As Reported Previous Accounting Method Effect of Accounting Change Recast Previously Reported Effect of Accounting Change Cost of goods sold $ 6,527 $ 6,588 $ (61 ) $ 7,872 $ 7,954 $ (82 ) Selling, general and administrative expenses $ 992 $ 1,025 $ (33 ) $ 1,129 $ 1,225 $ (96 ) Research and development expenses $ 453 $ 464 $ (11 ) $ 513 $ 534 $ (21 ) Other operating (income) expenses $ 560 $ 560 $ — $ 381 $ 394 $ (13 ) Total operating costs $ 8,679 $ 8,784 $ (105 ) $ 10,037 $ 10,249 $ (212 ) Operating profit $ 481 $ 376 $ 105 $ 925 $ 713 $ 212 Other income (expense) $ 28 $ 13 $ 15 $ (15 ) $ (68 ) $ 53 Consolidated profit before taxes $ 383 $ 263 $ 120 $ 783 $ 518 $ 265 Provision (benefit) for income taxes $ 96 $ 55 $ 41 $ 218 $ 144 $ 74 Profit of consolidated companies $ 287 $ 208 $ 79 $ 565 $ 374 $ 191 Profit of consolidated and affiliated companies $ 283 $ 204 $ 79 $ 562 $ 371 $ 191 Profit $ 283 $ 204 $ 79 $ 559 $ 368 $ 191 Profit per common share $ 0.48 $ 0.35 $ 0.13 $ 0.95 $ 0.63 $ 0.32 Profit per common share - diluted $ 0.48 $ 0.35 $ 0.13 $ 0.94 $ 0.62 $ 0.32 Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 As Reported Previous Accounting Method Effect of Accounting Change Recast Previously Reported Effect of Accounting Change Cost of goods sold $ 20,768 $ 20,949 $ (181 ) $ 25,306 $ 25,559 $ (253 ) Selling, general and administrative expenses $ 3,203 $ 3,305 $ (102 ) $ 3,696 $ 3,932 $ (236 ) Research and development expenses $ 1,429 $ 1,461 $ (32 ) $ 1,547 $ 1,612 $ (65 ) Other operating (income) expenses $ 1,356 $ 1,356 $ — $ 1,032 $ 1,068 $ (36 ) Total operating costs $ 27,203 $ 27,518 $ (315 ) $ 32,021 $ 32,611 $ (590 ) Operating profit $ 1,760 $ 1,445 $ 315 $ 3,960 $ 3,370 $ 590 Other income (expense) $ 112 $ 60 $ 52 $ 107 $ 76 $ 31 Consolidated profit before taxes $ 1,487 $ 1,120 $ 367 $ 3,686 $ 3,065 $ 621 Provision (benefit) for income taxes $ 372 $ 252 $ 120 $ 1,074 $ 870 $ 204 Profit of consolidated companies $ 1,115 $ 868 $ 247 $ 2,612 $ 2,195 $ 417 Profit of consolidated and affiliated companies $ 1,108 $ 861 $ 247 $ 2,613 $ 2,196 $ 417 Profit $ 1,104 $ 857 $ 247 $ 2,606 $ 2,189 $ 417 Profit per common share $ 1.89 $ 1.47 $ 0.42 $ 4.36 $ 3.66 $ 0.70 Profit per common share - diluted $ 1.88 $ 1.46 $ 0.42 $ 4.30 $ 3.62 $ 0.68 Consolidated Statement of Comprehensive Income (Dollars in millions) Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 As Reported Previous Accounting Method Effect of Accounting Change Recast Previously Reported Effect of Accounting Change Profit of consolidated and affiliated companies $ 283 $ 204 $ 79 $ 562 $ 371 $ 191 Foreign currency translation, net of tax $ 137 $ 139 $ (2 ) $ (236 ) $ (235 ) $ (1 ) Pension and other postretirement benefits: Current year actuarial gain (loss), net of tax $ — $ (2 ) $ 2 $ — $ 44 $ (44 ) Amortization of actuarial (gain) loss, net of tax $ — $ 79 $ (79 ) $ — $ 108 $ (108 ) Total other comprehensive income (loss), net of tax $ 106 $ 185 $ (79 ) $ (268 ) $ (115 ) $ (153 ) Comprehensive income $ 389 $ 389 $ — $ 294 $ 256 $ 38 Comprehensive income attributable to stockholders $ 389 $ 389 $ — $ 292 $ 254 $ 38 Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 As Reported Previous Accounting Method Effect of Accounting Change Recast Previously Reported Effect of Accounting Change Profit of consolidated and affiliated companies $ 1,108 $ 861 $ 247 $ 2,613 $ 2,196 $ 417 Foreign currency translation, net of tax $ 442 $ 447 $ (5 ) $ (806 ) $ (810 ) $ 4 Pension and other postretirement benefits: Current year actuarial gain (loss), net of tax $ — $ (5 ) $ 5 $ — $ 68 $ (68 ) Amortization of actuarial (gain) loss, net of tax $ — $ 237 $ (237 ) $ — $ 326 $ (326 ) Total other comprehensive income (loss), net of tax $ 508 $ 745 $ (237 ) $ (811 ) $ (421 ) $ (390 ) Comprehensive income $ 1,616 $ 1,606 $ 10 $ 1,802 $ 1,775 $ 27 Comprehensive income attributable to stockholders $ 1,612 $ 1,602 $ 10 $ 1,804 $ 1,777 $ 27 Consolidated Statement of Financial Position (Dollars in millions) September 30, 2016 As Reported Previous Accounting Method Effect of Accounting Change Noncurrent deferred and refundable income taxes $ 2,579 $ 2,590 $ (11 ) Liability for postemployment benefits $ 8,499 $ 8,520 $ (21 ) Profit employed in the business $ 29,450 $ 34,165 $ (4,715 ) Accumulated other comprehensive income (loss) $ (1,527 ) $ (6,252 ) $ 4,725 December 31, 2015 Recast Previously Reported Effect of Accounting Change Profit employed in the business $ 29,246 $ 34,208 $ (4,962 ) Accumulated other comprehensive income (loss) $ (2,035 ) $ (6,997 ) $ 4,962 Consolidated Statement of Changes in Stockholders' Equity (Dollars in millions) Nine Months Ended September 30, 2016 As Reported Previous Accounting Method Effect of Accounting Change Profit of consolidated and affiliated companies $ 1,108 $ 861 $ 247 Foreign currency translation, net of tax $ 442 $ 447 $ (5 ) Pension and other postretirement benefits, net of tax $ 90 $ 322 $ (232 ) Balance at September 30, 2016 $ 15,715 $ 15,705 $ 10 Nine Months Ended September 30, 2015 Recast Previously Reported Effect of Accounting Change Profit of consolidated and affiliated companies $ 2,613 $ 2,196 $ 417 Foreign currency translation, net of tax $ (806 ) $ (810 ) $ 4 Pension and other postretirement benefits, net of tax $ (25 ) $ 369 $ (394 ) Balance at September 30, 2015 $ 15,995 $ 15,968 $ 27 Consolidated Statement of Cash Flow (Millions of dollars) Nine Months Ended September 30, 2016 Cash flow from operating activities: As Reported Previous Accounting Method Effect of Accounting Change Profit of consolidated and affiliated companies $ 1,108 $ 861 $ 247 Adjustments for non-cash items: Other $ 640 $ 692 $ (52 ) Other assets – net $ (141 ) $ (261 ) $ 120 Other liabilities – net $ (291 ) $ 24 $ (315 ) Nine Months Ended September 30, 2015 Cash flow from operating activities: Recast Previously Reported Effect of Accounting Change Profit of consolidated and affiliated companies $ 2,613 $ 2,196 $ 417 Adjustments for non-cash items: Other $ 323 $ 354 $ (31 ) Other assets – net $ 96 $ (108 ) $ 204 Other liabilities – net $ (236 ) $ 354 $ (590 ) New accounting guidance Revenue recognition – In May 2014, the Financial Accounting Standards Board (FASB) issued new revenue recognition guidance to provide a single, comprehensive revenue recognition model for all contracts with customers. Under the new guidance, an entity will recognize revenue to depict the transfer of promised goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. A five step model has been introduced for an entity to apply when recognizing revenue. The new guidance also includes enhanced disclosure requirements, and is effective January 1, 2018, with early adoption permitted for January 1, 2017. Entities have the option to apply the new guidance under a retrospective approach to each prior reporting period presented, or a modified retrospective approach with the cumulative effect of initially applying the new guidance recognized at the date of initial application within the Consolidated Statement of Changes in Stockholders' Equity. We plan to adopt the new guidance effective January 1, 2018 and are in the process of evaluating the effect of the new guidance on our financial statements. Variable interest entities (VIE) – In February 2015, the FASB issued accounting guidance on the consolidation of VIEs. The new guidance revises previous guidance by establishing an analysis for determining whether a limited partnership or similar entity is a VIE and whether outsourced decision-maker fees are considered variable interests. In addition, the new guidance revises how a reporting entity evaluates economics and related parties when assessing who should consolidate a VIE. The guidance was effective January 1, 2016 and did not have a material impact on our financial statements. Presentation of debt issuance costs – In April 2015, the FASB issued accounting guidance which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability. Prior to the issuance of the new guidance, debt issuance costs were required to be presented in the balance sheet as an asset. The guidance was effective January 1, 2016 and was applied retrospectively. The adoption did not have a material impact on our financial statements. Fair value disclosures for investments in certain entities that calculate net asset value per share – In May 2015, the FASB issued accounting guidance which removes the requirement to categorize within the fair value hierarchy investments measured at net asset value (or its equivalent) as a practical expedient for fair value. The new guidance requires that the amount of these investments continue to be disclosed to reconcile the fair value hierarchy disclosure to the balance sheet. The guidance was effective January 1, 2016 and was applied retrospectively. The adoption did not have a material impact on our financial statements. Simplifying the measurement of inventory – In July 2015, the FASB issued accounting guidance which requires that inventory be measured at the lower of cost or net realizable value. Prior to the issuance of the new guidance, inventory was measured at the lower of cost or market. Replacing the concept of market with the single measurement of net realizable value is intended to create efficiencies for preparers. Inventory measured using the last-in, first-out (LIFO) method and the retail inventory method are not impacted by the new guidance. The guidance is effective January 1, 2017. We do not expect the adoption to have a material impact on our financial statements. Simplifying the accounting for measurement-period adjustments – In September 2015, the FASB issued accounting guidance which eliminates the requirement for an acquirer in a business combination to restate prior period financial statements for measurement period adjustments. An acquirer in a business combination is required to report provisional amounts when measurements are incomplete at the end of the reporting period covering the business combination. Prior to the issuance of the new guidance, an acquirer was required to adjust such provisional amounts by restating prior period financial statements. Under the new guidance, the acquirer will recognize the measurement-period adjustment in the period the adjustment is determined. The guidance was effective January 1, 2016 and was applied prospectively. The adoption did not have a material impact on our financial statements. Balance sheet classification of deferred taxes – In November 2015, the FASB issued accounting guidance that requires all deferred tax assets and liabilities, along with any related valuation allowance, to be classified as noncurrent on the Consolidated Statement of Financial Position. Previous guidance requires the deferred taxes for each jurisdiction to be presented as a net current asset or liability and net noncurrent asset or liability. As a result of the new guidance, each jurisdiction will now only have one net noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that only permits offsetting deferred tax assets and liabilities within a single jurisdiction. We had the option to apply the new guidance prospectively or retrospectively. The new guidance is effective January 1, 2017, with early adoption permitted. We adopted the new guidance effective January 1, 2016 and applied it retrospectively. The adoption resulted in the reclassification of current deferred tax assets and liabilities to noncurrent assets and liabilities on the Consolidated Statement of Financial Position. For the year ended December 31, 2015, Deferred and refundable income taxes were reduced by $910 million (the remaining balance of $616 million was reclassified to Prepaid expenses and other current assets), Noncurrent deferred and refundable income taxes were increased by $835 million , Other current liabilities were reduced by $59 million and Other liabilities were reduced by $16 million . Recognition and measurement of financial assets and financial liabilities – In January 2016, the FASB issued accounting guidance that affects the accounting for equity investments, financial liabilities accounted for under the fair value option and the presentation and disclosure requirements for financial instruments. Under the new guidance, all equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will generally be measured at fair value through earnings. There will no longer be an available-for-sale classification for equity securities with readily determinable fair values. For financial liabilities when the fair value option has been elected, changes in fair value due to instrument-specific credit risk will be recognized separately in other comprehensive income. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new guidance is effective January 1, 2018, with the cumulative effect adjustment from initially applying the new guidance recognized in the Consolidated Statement of Financial Position as of the beginning of the year of adoption. The impact on our financial statements at the time of adoption will primarily be based on changes in the fair value of our available-for-sale equity securities subsequent to January 1, 2018, which will be recorded through earnings. Lease accounting – In February 2016, the FASB issued accounting guidance that revises the accounting for leases. Under the new guidance, lessees are required to recognize a right-of-use asset and a lease liability for all leases. The new guidance will continue to classify leases as either financing or operating, with classification affecting the pattern of expense recognition. The accounting applied by a lessor under the new guidance will be substantially equivalent to current lease accounting guidance. The new guidance is effective January 1, 2019 with early adoption permitted. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented and provides for certain practical expedients. We are in the process of evaluating the effect of the new guidance on our financial statements. Stock-based compensation – In March 2016, the FASB issued accounting guidance to simplify several aspects of the accounting for share-based payments. The new guidance changes how reporting entities account for certain aspects of share-based payments, including the accounting for income taxes and the classification of the tax impact on the Consolidated Statement of Cash Flow. Under the new guidance all excess tax benefits and deficiencies during the period are to be recognized in income (rather than equity) on a prospective basis. The guidance removes the requirement to delay recognition of excess tax benefits until it reduces income taxes currently payable. This change is required to be applied on a modified retrospective basis, resulting in a cumulative-effect adjustment to opening retained earnings in the period of adoption. In addition, Cash flows related to excess tax benefits will be included in Cash provided by operating activities and will no longer be separately classified as a financing activity. We plan to adopt this change retrospectively. The new guidance is effective January 1, 2017 with early adoption permitted. We plan to adopt the new guidance effective January 1, 2017, and we do not expect the adoption to have a material impact on our financial statements. Measurement of credit losses on financial instruments – In June 2016, the FASB issued accounting guidance to introduce a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new guidance will apply to loans, accounts receivable, trade receivables, other financial assets measured at amortized cost, loan commitments and other off-balance sheet credit exposures. The new guidance will also apply to debt securities and other financial assets measured at fair value through other comprehensive income. The new guidance is effective January 1, 2020, with early adoption permitted beginning January 1, 2019. We are in the process of evaluating the effect of the new guidance on our financial statements. Classification for certain cash receipts and cash payments – In August 2016, the FASB issued accounting guidance related to the presentation and classification of certain transactions in the statement of cash flows where diversity in practice exists. The guidance is effective January 1, 2018 with early adoption permitted. We do not expect the adoption to have a material impact on our financial statements. Tax accounting for intra-entity asset transfers – In October 2016, the FASB issued accounting guidance that will require the tax effects of intra-entity asset transfers to be recognized in the period when the transfer occurs. Under current guidance, the tax effects of intra-entity sales of assets are deferred until the transferred asset is sold to a third party or otherwise recovered through use. The new guidance does not apply to intra-entity transfers of inventory. The guidance is effective January 1, 2018 with early adoption permitted and is required to be applied on a modified retrospective basis through a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. We are in the process of evaluating the effect of the new guidance on our financial statements. |
New Accounting Guidance
New Accounting Guidance | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Guidance | C. Change in Accounting Principle Effective January 1, 2016, we changed our accounting principle for recognizing actuarial gains and losses and expected returns on plan assets for our defined benefit pension and other postretirement benefit plans. Prior to 2016, actuarial gains and losses were recognized as a component of Accumulated other comprehensive income (loss) and were generally amortized into earnings in future periods. Under the new principle, actuarial gains and losses will be immediately recognized through net benefit cost upon the annual remeasurement in the fourth quarter, or on an interim basis as triggering events warrant remeasurement. In addition, we have changed our policy for recognizing the expected returns on plan assets from a market-related value method (based on a three-year smoothing of asset returns) to a fair value method. We believe these changes are preferable as they accelerate the recognition of changes in fair value of plan assets and actuarial gains and losses in our Consolidated Statement of Results of Operations, provide greater transparency of our economic obligations in accounting results and better align with the fair value principles by recognizing the effects of economic and interest rate changes on pension and other postretirement benefit assets and liabilities in the year in which the gains and losses are incurred. These changes have been applied retrospectively to prior years. As of January 1, 2015, the cumulative effect of the change resulted in a decrease of $5.4 billion in Profit employed in the business and a corresponding increase of $5.4 billion in Accumulated other comprehensive income (loss), both net of tax of $2.9 billion . Following are the changes to financial statement line items as a result of the accounting principle change for the periods presented in the accompanying unaudited consolidated financial statements: Consolidated Statement of Results of Operations (Dollars in millions except per share data) Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 As Reported Previous Accounting Method Effect of Accounting Change Recast Previously Reported Effect of Accounting Change Cost of goods sold $ 6,527 $ 6,588 $ (61 ) $ 7,872 $ 7,954 $ (82 ) Selling, general and administrative expenses $ 992 $ 1,025 $ (33 ) $ 1,129 $ 1,225 $ (96 ) Research and development expenses $ 453 $ 464 $ (11 ) $ 513 $ 534 $ (21 ) Other operating (income) expenses $ 560 $ 560 $ — $ 381 $ 394 $ (13 ) Total operating costs $ 8,679 $ 8,784 $ (105 ) $ 10,037 $ 10,249 $ (212 ) Operating profit $ 481 $ 376 $ 105 $ 925 $ 713 $ 212 Other income (expense) $ 28 $ 13 $ 15 $ (15 ) $ (68 ) $ 53 Consolidated profit before taxes $ 383 $ 263 $ 120 $ 783 $ 518 $ 265 Provision (benefit) for income taxes $ 96 $ 55 $ 41 $ 218 $ 144 $ 74 Profit of consolidated companies $ 287 $ 208 $ 79 $ 565 $ 374 $ 191 Profit of consolidated and affiliated companies $ 283 $ 204 $ 79 $ 562 $ 371 $ 191 Profit $ 283 $ 204 $ 79 $ 559 $ 368 $ 191 Profit per common share $ 0.48 $ 0.35 $ 0.13 $ 0.95 $ 0.63 $ 0.32 Profit per common share - diluted $ 0.48 $ 0.35 $ 0.13 $ 0.94 $ 0.62 $ 0.32 Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 As Reported Previous Accounting Method Effect of Accounting Change Recast Previously Reported Effect of Accounting Change Cost of goods sold $ 20,768 $ 20,949 $ (181 ) $ 25,306 $ 25,559 $ (253 ) Selling, general and administrative expenses $ 3,203 $ 3,305 $ (102 ) $ 3,696 $ 3,932 $ (236 ) Research and development expenses $ 1,429 $ 1,461 $ (32 ) $ 1,547 $ 1,612 $ (65 ) Other operating (income) expenses $ 1,356 $ 1,356 $ — $ 1,032 $ 1,068 $ (36 ) Total operating costs $ 27,203 $ 27,518 $ (315 ) $ 32,021 $ 32,611 $ (590 ) Operating profit $ 1,760 $ 1,445 $ 315 $ 3,960 $ 3,370 $ 590 Other income (expense) $ 112 $ 60 $ 52 $ 107 $ 76 $ 31 Consolidated profit before taxes $ 1,487 $ 1,120 $ 367 $ 3,686 $ 3,065 $ 621 Provision (benefit) for income taxes $ 372 $ 252 $ 120 $ 1,074 $ 870 $ 204 Profit of consolidated companies $ 1,115 $ 868 $ 247 $ 2,612 $ 2,195 $ 417 Profit of consolidated and affiliated companies $ 1,108 $ 861 $ 247 $ 2,613 $ 2,196 $ 417 Profit $ 1,104 $ 857 $ 247 $ 2,606 $ 2,189 $ 417 Profit per common share $ 1.89 $ 1.47 $ 0.42 $ 4.36 $ 3.66 $ 0.70 Profit per common share - diluted $ 1.88 $ 1.46 $ 0.42 $ 4.30 $ 3.62 $ 0.68 Consolidated Statement of Comprehensive Income (Dollars in millions) Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 As Reported Previous Accounting Method Effect of Accounting Change Recast Previously Reported Effect of Accounting Change Profit of consolidated and affiliated companies $ 283 $ 204 $ 79 $ 562 $ 371 $ 191 Foreign currency translation, net of tax $ 137 $ 139 $ (2 ) $ (236 ) $ (235 ) $ (1 ) Pension and other postretirement benefits: Current year actuarial gain (loss), net of tax $ — $ (2 ) $ 2 $ — $ 44 $ (44 ) Amortization of actuarial (gain) loss, net of tax $ — $ 79 $ (79 ) $ — $ 108 $ (108 ) Total other comprehensive income (loss), net of tax $ 106 $ 185 $ (79 ) $ (268 ) $ (115 ) $ (153 ) Comprehensive income $ 389 $ 389 $ — $ 294 $ 256 $ 38 Comprehensive income attributable to stockholders $ 389 $ 389 $ — $ 292 $ 254 $ 38 Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 As Reported Previous Accounting Method Effect of Accounting Change Recast Previously Reported Effect of Accounting Change Profit of consolidated and affiliated companies $ 1,108 $ 861 $ 247 $ 2,613 $ 2,196 $ 417 Foreign currency translation, net of tax $ 442 $ 447 $ (5 ) $ (806 ) $ (810 ) $ 4 Pension and other postretirement benefits: Current year actuarial gain (loss), net of tax $ — $ (5 ) $ 5 $ — $ 68 $ (68 ) Amortization of actuarial (gain) loss, net of tax $ — $ 237 $ (237 ) $ — $ 326 $ (326 ) Total other comprehensive income (loss), net of tax $ 508 $ 745 $ (237 ) $ (811 ) $ (421 ) $ (390 ) Comprehensive income $ 1,616 $ 1,606 $ 10 $ 1,802 $ 1,775 $ 27 Comprehensive income attributable to stockholders $ 1,612 $ 1,602 $ 10 $ 1,804 $ 1,777 $ 27 Consolidated Statement of Financial Position (Dollars in millions) September 30, 2016 As Reported Previous Accounting Method Effect of Accounting Change Noncurrent deferred and refundable income taxes $ 2,579 $ 2,590 $ (11 ) Liability for postemployment benefits $ 8,499 $ 8,520 $ (21 ) Profit employed in the business $ 29,450 $ 34,165 $ (4,715 ) Accumulated other comprehensive income (loss) $ (1,527 ) $ (6,252 ) $ 4,725 December 31, 2015 Recast Previously Reported Effect of Accounting Change Profit employed in the business $ 29,246 $ 34,208 $ (4,962 ) Accumulated other comprehensive income (loss) $ (2,035 ) $ (6,997 ) $ 4,962 Consolidated Statement of Changes in Stockholders' Equity (Dollars in millions) Nine Months Ended September 30, 2016 As Reported Previous Accounting Method Effect of Accounting Change Profit of consolidated and affiliated companies $ 1,108 $ 861 $ 247 Foreign currency translation, net of tax $ 442 $ 447 $ (5 ) Pension and other postretirement benefits, net of tax $ 90 $ 322 $ (232 ) Balance at September 30, 2016 $ 15,715 $ 15,705 $ 10 Nine Months Ended September 30, 2015 Recast Previously Reported Effect of Accounting Change Profit of consolidated and affiliated companies $ 2,613 $ 2,196 $ 417 Foreign currency translation, net of tax $ (806 ) $ (810 ) $ 4 Pension and other postretirement benefits, net of tax $ (25 ) $ 369 $ (394 ) Balance at September 30, 2015 $ 15,995 $ 15,968 $ 27 Consolidated Statement of Cash Flow (Millions of dollars) Nine Months Ended September 30, 2016 Cash flow from operating activities: As Reported Previous Accounting Method Effect of Accounting Change Profit of consolidated and affiliated companies $ 1,108 $ 861 $ 247 Adjustments for non-cash items: Other $ 640 $ 692 $ (52 ) Other assets – net $ (141 ) $ (261 ) $ 120 Other liabilities – net $ (291 ) $ 24 $ (315 ) Nine Months Ended September 30, 2015 Cash flow from operating activities: Recast Previously Reported Effect of Accounting Change Profit of consolidated and affiliated companies $ 2,613 $ 2,196 $ 417 Adjustments for non-cash items: Other $ 323 $ 354 $ (31 ) Other assets – net $ 96 $ (108 ) $ 204 Other liabilities – net $ (236 ) $ 354 $ (590 ) New accounting guidance Revenue recognition – In May 2014, the Financial Accounting Standards Board (FASB) issued new revenue recognition guidance to provide a single, comprehensive revenue recognition model for all contracts with customers. Under the new guidance, an entity will recognize revenue to depict the transfer of promised goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. A five step model has been introduced for an entity to apply when recognizing revenue. The new guidance also includes enhanced disclosure requirements, and is effective January 1, 2018, with early adoption permitted for January 1, 2017. Entities have the option to apply the new guidance under a retrospective approach to each prior reporting period presented, or a modified retrospective approach with the cumulative effect of initially applying the new guidance recognized at the date of initial application within the Consolidated Statement of Changes in Stockholders' Equity. We plan to adopt the new guidance effective January 1, 2018 and are in the process of evaluating the effect of the new guidance on our financial statements. Variable interest entities (VIE) – In February 2015, the FASB issued accounting guidance on the consolidation of VIEs. The new guidance revises previous guidance by establishing an analysis for determining whether a limited partnership or similar entity is a VIE and whether outsourced decision-maker fees are considered variable interests. In addition, the new guidance revises how a reporting entity evaluates economics and related parties when assessing who should consolidate a VIE. The guidance was effective January 1, 2016 and did not have a material impact on our financial statements. Presentation of debt issuance costs – In April 2015, the FASB issued accounting guidance which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability. Prior to the issuance of the new guidance, debt issuance costs were required to be presented in the balance sheet as an asset. The guidance was effective January 1, 2016 and was applied retrospectively. The adoption did not have a material impact on our financial statements. Fair value disclosures for investments in certain entities that calculate net asset value per share – In May 2015, the FASB issued accounting guidance which removes the requirement to categorize within the fair value hierarchy investments measured at net asset value (or its equivalent) as a practical expedient for fair value. The new guidance requires that the amount of these investments continue to be disclosed to reconcile the fair value hierarchy disclosure to the balance sheet. The guidance was effective January 1, 2016 and was applied retrospectively. The adoption did not have a material impact on our financial statements. Simplifying the measurement of inventory – In July 2015, the FASB issued accounting guidance which requires that inventory be measured at the lower of cost or net realizable value. Prior to the issuance of the new guidance, inventory was measured at the lower of cost or market. Replacing the concept of market with the single measurement of net realizable value is intended to create efficiencies for preparers. Inventory measured using the last-in, first-out (LIFO) method and the retail inventory method are not impacted by the new guidance. The guidance is effective January 1, 2017. We do not expect the adoption to have a material impact on our financial statements. Simplifying the accounting for measurement-period adjustments – In September 2015, the FASB issued accounting guidance which eliminates the requirement for an acquirer in a business combination to restate prior period financial statements for measurement period adjustments. An acquirer in a business combination is required to report provisional amounts when measurements are incomplete at the end of the reporting period covering the business combination. Prior to the issuance of the new guidance, an acquirer was required to adjust such provisional amounts by restating prior period financial statements. Under the new guidance, the acquirer will recognize the measurement-period adjustment in the period the adjustment is determined. The guidance was effective January 1, 2016 and was applied prospectively. The adoption did not have a material impact on our financial statements. Balance sheet classification of deferred taxes – In November 2015, the FASB issued accounting guidance that requires all deferred tax assets and liabilities, along with any related valuation allowance, to be classified as noncurrent on the Consolidated Statement of Financial Position. Previous guidance requires the deferred taxes for each jurisdiction to be presented as a net current asset or liability and net noncurrent asset or liability. As a result of the new guidance, each jurisdiction will now only have one net noncurrent deferred tax asset or liability. The new guidance does not change the existing requirement that only permits offsetting deferred tax assets and liabilities within a single jurisdiction. We had the option to apply the new guidance prospectively or retrospectively. The new guidance is effective January 1, 2017, with early adoption permitted. We adopted the new guidance effective January 1, 2016 and applied it retrospectively. The adoption resulted in the reclassification of current deferred tax assets and liabilities to noncurrent assets and liabilities on the Consolidated Statement of Financial Position. For the year ended December 31, 2015, Deferred and refundable income taxes were reduced by $910 million (the remaining balance of $616 million was reclassified to Prepaid expenses and other current assets), Noncurrent deferred and refundable income taxes were increased by $835 million , Other current liabilities were reduced by $59 million and Other liabilities were reduced by $16 million . Recognition and measurement of financial assets and financial liabilities – In January 2016, the FASB issued accounting guidance that affects the accounting for equity investments, financial liabilities accounted for under the fair value option and the presentation and disclosure requirements for financial instruments. Under the new guidance, all equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will generally be measured at fair value through earnings. There will no longer be an available-for-sale classification for equity securities with readily determinable fair values. For financial liabilities when the fair value option has been elected, changes in fair value due to instrument-specific credit risk will be recognized separately in other comprehensive income. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new guidance is effective January 1, 2018, with the cumulative effect adjustment from initially applying the new guidance recognized in the Consolidated Statement of Financial Position as of the beginning of the year of adoption. The impact on our financial statements at the time of adoption will primarily be based on changes in the fair value of our available-for-sale equity securities subsequent to January 1, 2018, which will be recorded through earnings. Lease accounting – In February 2016, the FASB issued accounting guidance that revises the accounting for leases. Under the new guidance, lessees are required to recognize a right-of-use asset and a lease liability for all leases. The new guidance will continue to classify leases as either financing or operating, with classification affecting the pattern of expense recognition. The accounting applied by a lessor under the new guidance will be substantially equivalent to current lease accounting guidance. The new guidance is effective January 1, 2019 with early adoption permitted. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented and provides for certain practical expedients. We are in the process of evaluating the effect of the new guidance on our financial statements. Stock-based compensation – In March 2016, the FASB issued accounting guidance to simplify several aspects of the accounting for share-based payments. The new guidance changes how reporting entities account for certain aspects of share-based payments, including the accounting for income taxes and the classification of the tax impact on the Consolidated Statement of Cash Flow. Under the new guidance all excess tax benefits and deficiencies during the period are to be recognized in income (rather than equity) on a prospective basis. The guidance removes the requirement to delay recognition of excess tax benefits until it reduces income taxes currently payable. This change is required to be applied on a modified retrospective basis, resulting in a cumulative-effect adjustment to opening retained earnings in the period of adoption. In addition, Cash flows related to excess tax benefits will be included in Cash provided by operating activities and will no longer be separately classified as a financing activity. We plan to adopt this change retrospectively. The new guidance is effective January 1, 2017 with early adoption permitted. We plan to adopt the new guidance effective January 1, 2017, and we do not expect the adoption to have a material impact on our financial statements. Measurement of credit losses on financial instruments – In June 2016, the FASB issued accounting guidance to introduce a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new guidance will apply to loans, accounts receivable, trade receivables, other financial assets measured at amortized cost, loan commitments and other off-balance sheet credit exposures. The new guidance will also apply to debt securities and other financial assets measured at fair value through other comprehensive income. The new guidance is effective January 1, 2020, with early adoption permitted beginning January 1, 2019. We are in the process of evaluating the effect of the new guidance on our financial statements. Classification for certain cash receipts and cash payments – In August 2016, the FASB issued accounting guidance related to the presentation and classification of certain transactions in the statement of cash flows where diversity in practice exists. The guidance is effective January 1, 2018 with early adoption permitted. We do not expect the adoption to have a material impact on our financial statements. Tax accounting for intra-entity asset transfers – In October 2016, the FASB issued accounting guidance that will require the tax effects of intra-entity asset transfers to be recognized in the period when the transfer occurs. Under current guidance, the tax effects of intra-entity sales of assets are deferred until the transferred asset is sold to a third party or otherwise recovered through use. The new guidance does not apply to intra-entity transfers of inventory. The guidance is effective January 1, 2018 with early adoption permitted and is required to be applied on a modified retrospective basis through a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. We are in the process of evaluating the effect of the new guidance on our financial statements. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-based compensation Accounting for stock-based compensation requires that the cost resulting from all stock-based payments be recognized in the financial statements based on the grant date fair value of the award. Our stock-based compensation primarily consists of stock options, restricted stock units (RSUs), performance-based restricted stock units (PRSUs) and stock-settled stock appreciation rights (SARs). Awards granted prior to 2015 generally vest three years after the date of grant (cliff vesting). The awards granted in 2015 and 2016 generally vest according to a three -year graded vesting schedule. Beginning in 2015, PRSUs were granted. PRSUs generally have a three -year performance period and cliff vest at the end of the period based upon achievement of performance targets established at the time of grant. Upon separation from service, if the participant is 55 years of age or older with more than five years of service, the participant meets the criteria for a "Long Service Separation" and all outstanding stock options, SARs and RSUs will vest. Outstanding PRSUs granted to employees with a "Long Service Separation" will vest at the end of the performance period based upon achievement of the performance target. For awards granted prior to 2016, if the "Long Service Separation" criteria are met, the vested options/SARs will have a life that is the lesser of ten years from the original grant date or five years from the separation date. For awards granted in 2016, the vested options/SARs will have a life equal to ten years from the original grant date. We recognized pretax stock-based compensation expense in the amount of $41 million and $187 million for the three and nine months ended September 30, 2016 , respectively and $48 million and $240 million for the three and nine months ended September 30, 2015 , respectively. The following table illustrates the type and fair value of the stock-based compensation awards granted during the nine months ended September 30, 2016 and 2015 , respectively: Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 Shares Granted Weighted-Average Fair Value Per Share Weighted-Average Grant Date Stock Price Shares Granted Weighted-Average Fair Value Per Share Weighted-Average Grant Date Stock Price Stock options 4,243,272 $ 20.64 $ 74.77 7,939,497 $ 23.61 $ 83.34 RSUs 1,085,505 $ 68.04 $ 74.77 1,690,661 $ 77.55 $ 83.02 PRSUs 614,347 $ 64.71 $ 74.77 132,068 $ 77.47 $ 82.90 The following table provides the assumptions used in determining the fair value of the stock-based awards for the nine months ended September 30, 2016 and 2015 , respectively: Grant Year 2016 2015 Weighted-average dividend yield 3.23% 2.27% Weighted-average volatility 31.1% 28.4% Range of volatilities 22.5-33.4% 19.9-35.9% Range of risk-free interest rates 0.62-1.73% 0.22-2.08% Weighted-average expected lives 8 years 8 years As of September 30, 2016 , the total remaining unrecognized compensation expense related to nonvested stock-based compensation awards was $213 million , which will be amortized over the weighted-average remaining requisite service periods of approximately 1.8 years. |
Derivative Financial Instrument
Derivative Financial Instruments and Risk Management | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Risk Management | Derivative financial instruments and risk management Our earnings and cash flow are subject to fluctuations due to changes in foreign currency exchange rates, interest rates and commodity prices. Our Risk Management Policy (policy) allows for the use of derivative financial instruments to prudently manage foreign currency exchange rate, interest rate and commodity price exposures. Our policy specifies that derivatives are not to be used for speculative purposes. Derivatives that we use are primarily foreign currency forward, option and cross currency contracts, interest rate contracts and commodity forward and option contracts. Our derivative activities are subject to the management, direction and control of our senior financial officers. Risk management practices, including the use of financial derivative instruments, are presented to the Audit Committee of the Board of Directors at least annually. All derivatives are recognized on the Consolidated Statement of Financial Position at their fair value. On the date the derivative contract is entered into, we designate the derivative as (1) a hedge of the fair value of a recognized asset or liability (fair value hedge), (2) a hedge of a forecasted transaction or the variability of cash flow (cash flow hedge) or (3) an undesignated instrument. Changes in the fair value of a derivative that is qualified, designated and highly effective as a fair value hedge, along with the gain or loss on the hedged recognized asset or liability that is attributable to the hedged risk, are recorded in current earnings. Changes in the fair value of a derivative that is qualified, designated and highly effective as a cash flow hedge are recorded in Accumulated other comprehensive income (loss) (AOCI), to the extent effective, on the Consolidated Statement of Financial Position until they are reclassified to earnings in the same period or periods during which the hedged transaction affects earnings. Changes in the fair value of undesignated derivative instruments and the ineffective portion of designated derivative instruments are reported in current earnings. Cash flows from designated derivative financial instruments are classified within the same category as the item being hedged on the Consolidated Statement of Cash Flow. Cash flows from undesignated derivative financial instruments are included in the investing category on the Consolidated Statement of Cash Flow. We formally document all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as fair value hedges to specific assets and liabilities on the Consolidated Statement of Financial Position and linking cash flow hedges to specific forecasted transactions or variability of cash flow. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the designated derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flow of hedged items. When a derivative is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, we discontinue hedge accounting prospectively, in accordance with the derecognition criteria for hedge accounting. Foreign Currency Exchange Rate Risk Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of sales made and costs incurred in foreign currencies. Movements in foreign currency rates also affect our competitive position as these changes may affect business practices and/or pricing strategies of non-U.S.-based competitors. Additionally, we have balance sheet positions denominated in foreign currencies, thereby creating exposure to movements in exchange rates. Our Machinery, Energy & Transportation operations purchase, manufacture and sell products in many locations around the world. As we have a diversified revenue and cost base, we manage our future foreign currency cash flow exposure on a net basis. We use foreign currency forward and option contracts to manage unmatched foreign currency cash inflow and outflow. Our objective is to minimize the risk of exchange rate movements that would reduce the U.S. dollar value of our foreign currency cash flow. Our policy allows for managing anticipated foreign currency cash flow for up to five years. As of September 30, 2016 , the maximum term of these outstanding contracts was approximately 51 months . We generally designate as cash flow hedges at inception of the contract any Australian dollar, Brazilian real, British pound, Canadian dollar, Chinese yuan, euro, Indian rupee, Japanese yen, Mexican peso, Norwegian krona, Singapore dollar, Swiss franc or Thailand baht forward or option contracts that meet the requirements for hedge accounting and the maturity extends beyond the current quarter-end. Designation is performed on a specific exposure basis to support hedge accounting. The remainder of Machinery, Energy & Transportation foreign currency contracts are undesignated. As of September 30, 2016 , $19 million of deferred net losses, net of tax, included in equity (AOCI in the Consolidated Statement of Financial Position), are expected to be reclassified to current earnings (Other income (expense) in the Consolidated Statement of Results of Operations) over the next twelve months when earnings are affected by the hedged transactions. The actual amount recorded in Other income (expense) will vary based on exchange rates at the time the hedged transactions impact earnings. In managing foreign currency risk for our Financial Products operations, our objective is to minimize earnings volatility resulting from conversion and the remeasurement of net foreign currency balance sheet positions, and future transactions denominated in foreign currencies. Our policy allows the use of foreign currency forward, option and cross currency contracts to offset the risk of currency mismatch between our assets and liabilities, and exchange rate risk associated with future transactions denominated in foreign currencies. Our foreign currency forward, option and cross currency contracts are primarily undesignated. We designate fixed-to-fixed cross currency contracts as cash flow hedges to protect against movements in exchange rates on foreign currency fixed rate assets and liabilities. Interest Rate Risk Interest rate movements create a degree of risk by affecting the amount of our interest payments and the value of our fixed-rate debt. Our practice is to use interest rate contracts to manage our exposure to interest rate changes. Our Machinery, Energy & Transportation operations generally use fixed-rate debt as a source of funding. Our objective is to minimize the cost of borrowed funds. Our policy allows us to enter into fixed-to-floating interest rate contracts and forward rate agreements to meet that objective. We designate fixed-to-floating interest rate contracts as fair value hedges at inception of the contract, and we designate certain forward rate agreements as cash flow hedges at inception of the contract. As of September 30, 2016 , $4 million of deferred net losses, net of tax, included in equity (AOCI in the Consolidated Statement of Financial Position), related to Machinery, Energy & Transportation forward rate agreements, are expected to be reclassified to current earnings (Interest expense excluding Financial Products in the Consolidated Statement of Results of Operations) over the next twelve months. Financial Products operations has a match-funding policy that addresses interest rate risk by aligning the interest rate profile (fixed or floating rate) of Cat Financial’s debt portfolio with the interest rate profile of their receivables portfolio within predetermined ranges on an ongoing basis. In connection with that policy, we use interest rate derivative instruments to modify the debt structure to match assets within the receivables portfolio. This matched funding reduces the volatility of margins between interest-bearing assets and interest-bearing liabilities, regardless of which direction interest rates move. Our policy allows us to use fixed-to-floating, floating-to-fixed and floating-to-floating interest rate contracts to meet the match-funding objective. We designate fixed-to-floating interest rate contracts as fair value hedges to protect debt against changes in fair value due to changes in the benchmark interest rate. We designate most floating-to-fixed interest rate contracts as cash flow hedges to protect against the variability of cash flows due to changes in the benchmark interest rate. As of September 30, 2016 , less than $1 million of deferred net gains, net of tax, included in equity (AOCI in the Consolidated Statement of Financial Position), related to Financial Products floating-to-fixed interest rate contracts, are expected to be reclassified to current earnings (Interest expense of Financial Products in the Consolidated Statement of Results of Operations) over the next twelve months. The actual amount recorded in Interest expense of Financial Products will vary based on interest rates at the time the hedged transactions impact earnings. We have, at certain times, liquidated fixed-to-floating and floating-to-fixed interest rate contracts at both Machinery, Energy & Transportation and Financial Products. The gains or losses associated with these contracts at the time of liquidation are amortized into earnings over the original term of the previously designated hedged item. Commodity Price Risk Commodity price movements create a degree of risk by affecting the price we must pay for certain raw material. Our policy is to use commodity forward and option contracts to manage the commodity risk and reduce the cost of purchased materials. Our Machinery, Energy & Transportation operations purchase base and precious metals embedded in the components we purchase from suppliers. Our suppliers pass on to us price changes in the commodity portion of the component cost. In addition, we are subject to price changes on energy products such as natural gas and diesel fuel purchased for operational use. Our objective is to minimize volatility in the price of these commodities. Our policy allows us to enter into commodity forward and option contracts to lock in the purchase price of a portion of these commodities within a five -year horizon. All such commodity forward and option contracts are undesignated. The location and fair value of derivative instruments reported in the Consolidated Statement of Financial Position are as follows: (Millions of dollars) Consolidated Statement of Financial Asset (Liability) Fair Value Position Location September 30, 2016 December 31, 2015 Designated derivatives Foreign exchange contracts Machinery, Energy & Transportation Receivables – trade and other $ 24 $ 12 Machinery, Energy & Transportation Long-term receivables – trade and other 1 — Machinery, Energy & Transportation Accrued expenses (55 ) (25 ) Machinery, Energy & Transportation Other liabilities (18 ) — Financial Products Long-term receivables – trade and other 4 — Financial Products Accrued expenses (15 ) — Interest rate contracts Financial Products Receivables – trade and other — 1 Financial Products Long-term receivables – trade and other 5 51 Financial Products Accrued expenses (2 ) (4 ) $ (56 ) $ 35 Undesignated derivatives Foreign exchange contracts Machinery, Energy & Transportation Receivables – trade and other $ 3 $ 2 Machinery, Energy & Transportation Accrued expenses (7 ) (9 ) Financial Products Receivables – trade and other 2 3 Financial Products Long-term receivables – trade and other 28 36 Financial Products Accrued expenses (5 ) (6 ) Commodity contracts Machinery, Energy & Transportation Receivables – trade and other 6 — Machinery, Energy & Transportation Accrued expenses — (12 ) $ 27 $ 14 The total notional amounts of the derivative instruments are as follows: (Millions of dollars) September 30, 2016 December 31, 2015 Machinery, Energy & Transportation $ 2,200 $ 2,040 Financial Products $ 2,909 $ 3,539 The notional amounts of the derivative financial instruments do not represent amounts exchanged by the parties. The amounts exchanged by the parties are calculated by reference to the notional amounts and by other terms of the derivatives, such as foreign currency exchange rates, interest rates or commodity prices. The effect of derivatives designated as hedging instruments on the Consolidated Statement of Results of Operations is as follows: Fair Value Hedges Three Months Ended Three Months Ended (Millions of dollars) Classification Gains (Losses) on Derivatives Gains (Losses) on Borrowings Gains (Losses) on Derivatives Gains (Losses) on Borrowings Interest rate contracts Financial Products Other income (expense) $ (11 ) $ 11 $ 3 $ (3 ) $ (11 ) $ 11 $ 3 $ (3 ) Nine Months Ended Nine Months Ended Classification Gains (Losses) on Derivatives Gains (Losses) on Borrowings Gains (Losses) on Derivatives Gains (Losses) on Borrowings Interest rate contracts Financial Products Other income (expense) $ (11 ) $ 10 $ (11 ) $ 10 $ (11 ) $ 10 $ (11 ) $ 10 Cash Flow Hedges Three Months Ended September 30, 2016 Recognized in Earnings (Millions of dollars) Amount of Gains (Losses) Recognized in AOCI (Effective Portion) Classification of Gains (Losses) Amount of Gains (Losses) Reclassified from AOCI to Earnings Recognized in Earnings (Ineffective Portion) Foreign exchange contracts Machinery, Energy & Transportation $ (29 ) Other income (expense) $ 4 $ — Financial Products (17 ) Other income (expense) (10 ) — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products (2 ) — Financial Products 2 Interest expense of Financial Products — — $ (44 ) $ (8 ) $ — Three Months Ended September 30, 2015 Recognized in Earnings Amount of Gains (Losses) Recognized in AOCI (Effective Portion) Classification of Gains (Losses) Amount of Gains (Losses) Reclassified from AOCI to Earnings Recognized in Earnings (Ineffective Portion) Foreign exchange contracts Machinery, Energy & Transportation $ (18 ) Other income (expense) $ (29 ) $ — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products (1 ) — Financial Products (1 ) Interest expense of Financial Products (1 ) — $ (19 ) $ (31 ) $ — Nine Months Ended September 30, 2016 Recognized in Earnings Amount of Gains (Losses) Recognized in AOCI (Effective Portion) Classification of Gains (Losses) Amount of Gains (Losses) Reclassified from AOCI to Earnings Recognized in Earnings (Ineffective Portion) Foreign exchange contracts Machinery, Energy & Transportation $ (35 ) Other income (expense) $ — $ — Financial Products (23 ) Other income (expense) (16 ) — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products (5 ) — Financial Products — Interest expense of Financial Products (3 ) — $ (58 ) $ (24 ) $ — Nine Months Ended September 30, 2015 Recognized in Earnings Amount of Gains (Losses) Recognized in AOCI (Effective Portion) Classification of Gains (Losses) Amount of Gains (Losses) Reclassified from AOCI to Earnings Recognized in Earnings (Ineffective Portion) Foreign exchange contracts Machinery, Energy & Transportation $ (25 ) Other income (expense) $ (101 ) $ — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products (4 ) — Financial Products 1 Interest expense of Financial Products (4 ) — $ (24 ) $ (109 ) $ — The effect of derivatives not designated as hedging instruments on the Consolidated Statement of Results of Operations is as follows: (Millions of dollars) Classification of Gains (Losses) Three Months Ended Three Months Ended Foreign exchange contracts Machinery, Energy & Transportation Other income (expense) $ 2 $ 7 Financial Products Other income (expense) (5 ) 6 Commodity contracts Machinery, Energy & Transportation Other income (expense) 3 (8 ) $ — $ 5 Classification of Gains (Losses) Nine Months Ended Nine Months Ended Foreign exchange contracts Machinery, Energy & Transportation Other income (expense) $ 24 $ (22 ) Financial Products Other income (expense) (33 ) (18 ) Commodity contracts Machinery, Energy & Transportation Other income (expense) 9 (15 ) $ — $ (55 ) We enter into International Swaps and Derivatives Association (ISDA) master netting agreements within Machinery, Energy & Transportation and Financial Products that permit the net settlement of amounts owed under their respective derivative contracts. Under these master netting agreements, net settlement generally permits the company or the counterparty to determine the net amount payable for contracts due on the same date and in the same currency for similar types of derivative transactions. The master netting agreements generally also provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event. Collateral is generally not required of the counterparties or of our company under the master netting agreements. As of September 30, 2016 and December 31, 2015 , no cash collateral was received or pledged under the master netting agreements. The effect of the net settlement provisions of the master netting agreements on our derivative balances upon an event of default or termination event is as follows: September 30, 2016 Gross Amounts Not Offset in the Statement of Financial Position (Millions of dollars) Gross Amount of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amount of Assets Presented in the Statement of Financial Position Financial Instruments Cash Collateral Received Net Amount of Assets Derivatives Machinery, Energy & Transportation $ 34 $ — $ 34 $ (33 ) $ — $ 1 Financial Products 39 — 39 (3 ) — 36 Total $ 73 $ — $ 73 $ (36 ) $ — $ 37 September 30, 2016 Gross Amounts Not Offset in the Statement of Financial Position (Millions of dollars) Gross Amount of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amount of Liabilities Presented in the Statement of Financial Position Financial Instruments Cash Collateral Pledged Net Amount of Liabilities Derivatives Machinery, Energy & Transportation $ (80 ) $ — $ (80 ) $ 33 $ — $ (47 ) Financial Products (22 ) — (22 ) 3 — (19 ) Total $ (102 ) $ — $ (102 ) $ 36 $ — $ (66 ) December 31, 2015 Gross Amounts Not Offset in the Statement of Financial Position (Millions of dollars) Gross Amount of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amount of Assets Presented in the Statement of Financial Position Financial Instruments Cash Collateral Received Net Amount of Assets Derivatives Machinery, Energy & Transportation $ 14 $ — $ 14 $ (14 ) $ — $ — Financial Products 91 — 91 (5 ) — 86 Total $ 105 $ — $ 105 $ (19 ) $ — $ 86 December 31, 2015 Gross Amounts Not Offset in the Statement of Financial Position (Millions of dollars) Gross Amount of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amount of Liabilities Presented in the Statement of Financial Position Financial Instruments Cash Collateral Pledged Net Amount of Liabilities Derivatives Machinery, Energy & Transportation $ (46 ) $ — $ (46 ) $ 14 $ — $ (32 ) Financial Products (10 ) — (10 ) 5 — (5 ) Total $ (56 ) $ — $ (56 ) $ 19 $ — $ (37 ) |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories (principally using the last-in, first-out (LIFO) method) are comprised of the following: (Millions of dollars) September 30, December 31, Raw materials $ 2,359 $ 2,467 Work-in-process 2,015 1,857 Finished goods 4,866 5,122 Supplies 238 254 Total inventories $ 9,478 $ 9,700 |
Investments in Unconsolidated A
Investments in Unconsolidated Affiliated Companies | 9 Months Ended |
Sep. 30, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Affiliated Companies | Investments in unconsolidated affiliated companies Investments in unconsolidated affiliated companies, included in Other assets in the Consolidated Statement of Financial Position, were as follows: Caterpillar’s investments in unconsolidated affiliated companies: (Millions of dollars) September 30, December 31, Investments in equity method companies $ 192 $ 203 Plus: Investments in cost method companies 55 43 Total investments in unconsolidated affiliated companies $ 247 $ 246 In February 2015, we sold our 35 percent equity interest in the third party logistics business, formerly Caterpillar Logistics Services LLC, to an affiliate of The Goldman Sachs Group, Inc. and investment funds affiliated with Rhône Capital LLC for $177 million , which was comprised of $167 million in cash and a $10 million note receivable included in Long-term receivables - trade and other in the Consolidated Statement of Financial Position. As a result of the sale, we recognized a pretax gain of $120 million (included in Other income (expense)) and derecognized the carrying value of our noncontrolling interest of $57 million , which was previously included in Other assets in the Consolidated Statement of Financial Position. The gain on the disposal is included as a reconciling item between Segment profit and Consolidated profit before taxes. The sale of this investment supports Caterpillar's increased focus on growth opportunities in its core businesses. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible assets and goodwill A. Intangible assets Intangible assets are comprised of the following: September 30, 2016 (Millions of dollars) Weighted Amortizable Life (Years) Gross Carrying Amount Accumulated Amortization Net Customer relationships 15 $ 2,424 $ (915 ) $ 1,509 Intellectual property 11 1,515 (681 ) 834 Other 14 184 (74 ) 110 Total finite-lived intangible assets 14 $ 4,123 $ (1,670 ) $ 2,453 December 31, 2015 Weighted Amortizable Life (Years) Gross Carrying Amount Accumulated Amortization Net Customer relationships 15 $ 2,489 $ (809 ) $ 1,680 Intellectual property 11 1,660 (626 ) 1,034 Other 12 174 (67 ) 107 Total finite-lived intangible assets 14 $ 4,323 $ (1,502 ) $ 2,821 Gross customer relationship intangibles of $96 million and related accumulated amortization of $27 million as well as gross intellectual property intangibles of $111 million and related accumulated amortization of $48 million from the Resource Industries segment were impaired during the three months ended September 30, 2016 . The fair value of these intangibles was determined to be insignificant based on an income approach using expected cash flows. The fair value determination is categorized as Level 3 in the fair value hierarchy due to its use of internal projections and unobservable measurement inputs. The total impairment of $132 million was a result of restructuring activities and is included in Other operating (income) expense in Statement 1. See Note 18 for information on restructuring costs. Amortization expense for the three and nine months ended September 30, 2016 was $82 million and $246 million , respectively. Amortization expense for the three and nine months ended September 30, 2015 was $81 million and $255 million , respectively. Amortization expense related to intangible assets is expected to be: (Millions of dollars) Remaining Three Months of 2016 2017 2018 2019 2020 Thereafter $79 $316 $308 $306 $295 $1,149 B. Goodwill No goodwill was impaired during the three and nine months ended September 30, 2016 or 2015 . As discussed in Note 15, effective January 1, 2016, we revised our reportable segments in line with the changes to our organization structure. As a result of these changes, $118 million of goodwill was reassigned to Energy & Transportation from All Other segments. The changes in carrying amount of goodwill by reportable segment for the nine months ended September 30, 2016 were as follows: (Millions of dollars) December 31, Acquisitions Other Adjustments 1 September 30, Construction Industries Goodwill $ 285 $ — $ 30 $ 315 Impairments (22 ) — — (22 ) Net goodwill 263 — 30 293 Resource Industries Goodwill 4,145 — 36 4,181 Impairments (580 ) — — (580 ) Net goodwill 3,565 — 36 3,601 Energy & Transportation Goodwill 2,738 26 8 2,772 All Other 2 Goodwill 49 — 10 59 Consolidated total Goodwill 7,217 26 84 7,327 Impairments (602 ) — — (602 ) Net goodwill $ 6,615 $ 26 $ 84 $ 6,725 1 Other adjustments are comprised primarily of foreign currency translation. 2 Includes All Other operating segments (See Note 15). |
Investments in Debt and Equity
Investments in Debt and Equity Securities | 9 Months Ended |
Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in Debt and Equity Securities | Investments in debt and equity securities We have investments in certain debt and equity securities, primarily at Insurance Services, that have been classified as available-for-sale and recorded at fair value. In addition, Insurance Services has an equity security investment in a real estate investment trust (REIT) which is recorded at fair value based on the net asset value (NAV) of the investment. These investments are primarily included in Other assets in the Consolidated Statement of Financial Position. Unrealized gains and losses arising from the revaluation of debt and equity securities are included, net of applicable deferred income taxes, in equity (Accumulated other comprehensive income (loss) in the Consolidated Statement of Financial Position). Realized gains and losses on sales of investments are generally determined using the specific identification method for debt and equity securities and are included in Other income (expense) in the Consolidated Statement of Results of Operations. The cost basis and fair value of debt and equity securities were as follows: September 30, 2016 December 31, 2015 (Millions of dollars) Cost Basis Unrealized Pretax Net Gains (Losses) Fair Value Cost Basis Unrealized Pretax Net Gains (Losses) Fair Value Government debt U.S. treasury bonds $ 10 $ — $ 10 $ 9 $ — $ 9 Other U.S. and non-U.S. government bonds 67 1 68 71 1 72 Corporate bonds Corporate bonds 697 13 710 701 7 708 Asset-backed securities 134 1 135 129 — 129 Mortgage-backed debt securities U.S. governmental agency 282 4 286 291 1 292 Residential 10 — 10 12 — 12 Commercial 62 1 63 59 2 61 Equity securities Large capitalization value 279 20 299 243 30 273 Real estate investment trust (REIT) 70 2 72 25 — 25 Smaller company growth 47 10 57 37 17 54 Total $ 1,658 $ 52 $ 1,710 $ 1,577 $ 58 $ 1,635 Available-for-sale investments in an unrealized loss position that are not other-than-temporarily impaired: September 30, 2016 Less than 12 months 1 12 months or more 1 Total (Millions of dollars) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate bonds Asset-backed securities $ — $ — $ 16 $ 1 $ 16 $ 1 Equity securities Large capitalization value 85 6 9 1 94 7 Small company growth 13 3 — — 13 3 Total $ 98 $ 9 $ 25 $ 2 $ 123 $ 11 December 31, 2015 Less than 12 months 1 12 months or more 1 Total (Millions of dollars) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate bonds Corporate bonds $ 242 $ 3 $ 27 $ 1 $ 269 $ 4 Asset-backed securities 84 1 10 1 94 2 Mortgage-backed debt securities U.S. governmental agency 135 1 57 1 192 2 Equity securities Large capitalization value 97 8 2 — 99 8 Smaller company growth 14 1 — — 14 1 Total $ 572 $ 14 $ 96 $ 3 $ 668 $ 17 1 Indicates length of time that individual securities have been in a continuous unrealized loss position. Corporate Bonds. The unrealized losses on our investments in asset-backed securities relate to changes in interest rates and credit-related yield spreads since time of purchase. We do not intend to sell the investments and it is not likely that we will be required to sell the investments before recovery of their amortized cost basis. We do not consider these investments to be other-than-temporarily impaired as of September 30, 2016 . Equity Securities. The unrealized losses on our investments in equity securities relate to inherent risks of individual holdings and/or their respective sectors. We do not consider these investments to be other-than-temporarily impaired as of September 30, 2016 . The cost basis and fair value of the available-for-sale debt securities at September 30, 2016 , by contractual maturity, is shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay and creditors may have the right to call obligations. September 30, 2016 (Millions of dollars) Cost Basis Fair Value Due in one year or less $ 209 $ 210 Due after one year through five years 622 634 Due after five years through ten years 50 52 Due after ten years 27 27 U.S. governmental agency mortgage-backed securities 282 286 Residential mortgage-backed securities 10 10 Commercial mortgage-backed securities 62 63 Total debt securities – available-for-sale $ 1,262 $ 1,282 Sales of Securities: Three Months Ended Nine Months Ended (Millions of dollars) 2016 2015 2016 2015 Proceeds from the sale of available-for-sale securities $ 109 $ 110 $ 304 $ 238 Gross gains from the sale of available-for-sale securities $ 10 $ 32 $ 43 $ 38 Gross losses from the sale of available-for-sale securities $ 1 $ 1 $ 3 $ 2 |
Postretirement Benefits
Postretirement Benefits | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Postretirement Benefits | Postretirement benefits A. Pension and postretirement benefit costs At December 31, 2015, we changed our method for calculating the service and interest cost components of net periodic benefit cost. Historically, these components were determined utilizing a single weighted-average discount rate based on the yield curve used to measure the benefit obligation at the beginning of the period. Beginning in 2016, we elected to utilize a full yield curve approach in the estimation of service and interest costs by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. We made this change to provide a more precise measurement of service and interest costs by improving the correlation between the projected cash flows to the corresponding spot rates along the yield curve. This change will have no impact on our year-end pension and other postretirement liabilities and has been accounted for prospectively as a change in accounting estimate beginning in the first quarter of 2016. The discount rates used to measure the 2016 service and interest cost components of net periodic benefit cost are provided in the table below. Under the previous method the discount rate used for these components of cost would have been 4.2 percent for U.S. pensions, 3.2 percent for non-U.S. pensions and 4.1 percent for other postretirement benefits (OPEB). Compared to the method used in 2015, this change lowered pension and OPEB expense by $45 million and $135 million and increased profit per share by $0.05 and $0.15 for the three and nine months ended September 30, 2016 , respectively. U.S. Pension Benefits Non-U.S. Pension Benefits Other Postretirement Benefits (Millions of dollars) September 30 September 30 September 30 2016 2015 2016 2015 2016 2015 For the three months ended: Components of net periodic benefit cost: Service cost $ 30 $ 45 $ 22 $ 28 $ 20 $ 26 Interest cost 129 151 30 37 33 46 Expected return on plan assets (190 ) (224 ) (59 ) (70 ) (11 ) (15 ) Amortization of prior service cost (credit) 1 — 1 — — (15 ) (14 ) Actuarial loss (gain) — — — (18 ) — (9 ) Net periodic benefit cost (benefit) (31 ) (27 ) (7 ) (23 ) 27 34 Curtailments and termination benefits 2 — — 1 (2 ) — (5 ) Total cost (benefit) included in operating profit $ (31 ) $ (27 ) $ (6 ) $ (25 ) $ 27 $ 29 For the nine months ended: Components of net periodic benefit cost: Service cost $ 89 $ 136 $ 68 $ 85 $ 61 $ 76 Interest cost 388 454 90 112 98 138 Expected return on plan assets (568 ) (672 ) (176 ) (207 ) (33 ) (43 ) Amortization of prior service cost (credit) 1 — 1 — — (45 ) (41 ) Actuarial loss (gain) — (8 ) — (18 ) — (9 ) Net periodic benefit cost (benefit) (91 ) (89 ) (18 ) (28 ) 81 121 Curtailments and termination benefits 2 — (19 ) 1 (2 ) (2 ) (5 ) Total cost (benefit) included in operating profit $ (91 ) $ (108 ) $ (17 ) $ (30 ) $ 79 $ 116 Weighted-average assumptions used to determine net cost: Discount rate used to measure service cost 4.5 % 3.8 % 2.9 % 3.3 % 4.4 % 3.9 % Discount rate used to measure interest cost 3.4 % 3.8 % 2.8 % 3.3 % 3.3 % 3.9 % Expected rate of return on plan assets 6.9 % 7.4 % 6.1 % 6.8 % 7.5 % 7.8 % Rate of compensation increase 4.0 % 4.0 % 3.5 % 4.0 % 4.0 % 4.0 % 1 Prior service cost (credit) for both pension and other postretirement benefits are generally amortized using the straight-line method over the average remaining service period of active employees expected to receive benefits from the plan. For pension plans in which all or almost all of the plan's participants are inactive and other postretirement benefit plans in which all or almost all of the plan's participants are fully eligible for benefits under the plan, prior service cost (credit) are amortized using the straight-line method over the remaining life expectancy of those participants. 2 Curtailments and termination benefits were recognized in Other operating (income) expenses in the Consolidated Statement of Results of Operations. We made $71 million and $270 million of contributions to our pension and other postretirement plans during the three and nine months ended September 30, 2016 , respectively. We currently anticipate full-year 2016 contributions of approximately $350 million . We made $65 million and $263 million of contributions to our pension and other postretirement plans during the three and nine months ended September 30, 2015 , respectively. B. Defined contribution benefit costs Total company costs related to our defined contribution plans were as follows: Three Months Ended Nine Months Ended (Millions of dollars) 2016 2015 2016 2015 U.S. Plans $ 83 $ 31 $ 235 $ 188 Non-U.S. Plans 16 19 51 58 $ 99 $ 50 $ 286 $ 246 |
Guarantees and Product Warranty
Guarantees and Product Warranty | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantees and Product Warranty | Guarantees and product warranty Caterpillar dealer performance guarantees We have provided an indemnity to a third-party insurance company for potential losses related to performance bonds issued on behalf of Caterpillar dealers. The bonds have varying terms and are issued to insure governmental agencies against nonperformance by certain dealers. We also provided guarantees to third-parties related to the performance of contractual obligations by certain Caterpillar dealers. These guarantees have varying terms and cover potential financial losses incurred by the third-parties resulting from the dealers’ nonperformance. Customer loan guarantees We provide loan guarantees to third-party lenders for financing associated with machinery purchased by customers. These guarantees have varying terms and are secured by the machinery. In addition, Cat Financial participates in standby letters of credit issued to third parties on behalf of their customers. These standby letters of credit have varying terms and beneficiaries and are secured by customer assets. Supplier consortium performance guarantee We have provided a guarantee to one of our customers in Brazil related to the performance of contractual obligations by a supplier consortium to which one of our Caterpillar subsidiaries is a member. The guarantee covers potential damages (some of them capped) incurred by the customer resulting from the supplier consortium’s non-performance. The guarantee will expire when the supplier consortium performs all its contractual obligations, which is expected to be completed in 2025. Third party logistics business lease guarantees We have provided guarantees to third-party lessors for certain properties leased by a third party logistics business, formerly Caterpillar Logistics Services LCC, in which we sold our 35 percent equity interest in the first quarter of 2015 (see Note 6). The guarantees are for the possibility that the third party logistics business would default on real estate lease payments. The guarantees were granted at lease inception and generally will expire at the end of the lease terms. No significant loss has been experienced or is anticipated under any of these guarantees. At both September 30, 2016 and December 31, 2015 , the related liability was $12 million . The maximum potential amount of future payments (undiscounted and without reduction for any amounts that may possibly be recovered under recourse or collateralized provisions) we could be required to make under the guarantees are as follows: (Millions of dollars) September 30, December 31, Caterpillar dealer performance guarantees $ 217 $ 216 Customer loan guarantees 51 47 Supplier consortium performance guarantee 295 286 Third party logistics business lease guarantees 92 107 Other guarantees 38 25 Total guarantees $ 693 $ 681 Cat Financial provides guarantees to repurchase certain loans of Caterpillar dealers from a special-purpose corporation (SPC) that qualifies as a variable interest entity. The purpose of the SPC is to provide short-term working capital loans to Caterpillar dealers. This SPC issues commercial paper and uses the proceeds to fund its loan program. Cat Financial has a loan purchase agreement with the SPC that obligates Cat Financial to purchase certain loans that are not paid at maturity. Cat Financial receives a fee for providing this guarantee, which provides a source of liquidity for the SPC. Cat Financial is the primary beneficiary of the SPC as its guarantees result in Cat Financial having both the power to direct the activities that most significantly impact the SPC’s economic performance and the obligation to absorb losses, and therefore Cat Financial has consolidated the financial statements of the SPC. As of September 30, 2016 and December 31, 2015 , the SPC’s assets of $1,152 million and $1,211 million , respectively, are primarily comprised of loans to dealers and the SPC’s liabilities of $1,151 million and $1,210 million , respectively, are primarily comprised of commercial paper. The assets of the SPC are not available to pay Cat Financial's creditors. Cat Financial may be obligated to perform under the guarantee if the SPC experiences losses. No loss has been experienced or is anticipated under this loan purchase agreement. Our product warranty liability is determined by applying historical claim rate experience to the current field population and dealer inventory. Generally, historical claim rates are based on actual warranty experience for each product by machine model/engine size by customer or dealer location (inside or outside North America). Specific rates are developed for each product shipment month and are updated monthly based on actual warranty claim experience. (Millions of dollars) 2016 Warranty liability, January 1 $ 1,354 Reduction in liability (payments) (676 ) Increase in liability (new warranties) 628 Warranty liability, September 30 $ 1,306 (Millions of dollars) 2015 Warranty liability, January 1 $ 1,426 Reduction in liability (payments) (874 ) Increase in liability (new warranties) 802 Warranty liability, December 31 $ 1,354 |
Profit Per Share
Profit Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Profit Per Share | Profit per share Computations of profit per share: Three Months Ended Nine Months Ended (Dollars in millions except per share data) 2016 2015 2016 2015 Profit for the period (A) 1 $ 283 $ 559 $ 1,104 $ 2,606 Determination of shares (in millions): Weighted-average number of common shares outstanding (B) 584.7 588.4 583.8 597.9 Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price 4.9 6.4 4.9 7.4 Average common shares outstanding for fully diluted computation (C) 2 589.6 594.8 588.7 605.3 Profit per share of common stock: Assuming no dilution (A/B) $ 0.48 $ 0.95 $ 1.89 $ 4.36 Assuming full dilution (A/C) 2 $ 0.48 $ 0.94 $ 1.88 $ 4.30 Shares outstanding as of September 30 (in millions) 585.1 582.2 1 Profit attributable to common stockholders. 2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method. SARs and stock options to purchase 21,874,118 and 26,088,324 common shares were outstanding for the three and nine months ended September 30, 2016 , respectively, which were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive. For the three and nine months ended September 30, 2015 , there were outstanding SARs and stock options to purchase 22,281,448 common shares which were anti-dilutive. In January 2014, the Board authorized the repurchase of up to $10.0 billion of Caterpillar common stock, which will expire on December 31, 2018. In July 2015, we entered into a definitive agreement with Citibank, N.A. to purchase shares of our common stock under an accelerated stock repurchase transaction (July 2015 ASR Agreement), which was completed in September 2015. Pursuant to the terms of the July 2015 ASR Agreement, a total of approximately 19.6 million shares of our common stock were repurchased at an aggregate cost to Caterpillar of $1.5 billion . For the nine months ended September 30, 2015 , a total of 25.8 million shares of our common stock were repurchased at an aggregate cost to Caterpillar of $2.0 billion . We did not purchase any Caterpillar common stock during the nine months ended September 30, 2016. As of September 30, 2016 , approximately $4.5 billion of the $10.0 billion authorization was spent. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive income (loss) Comprehensive income and its components are presented in the Consolidated Statement of Comprehensive Income. Changes in Accumulated other comprehensive income (loss), net of tax, included in the Consolidated Statement of Changes in Stockholders’ Equity, consisted of the following: (Millions of dollars) Foreign currency translation Pension and other postretirement benefits Derivative financial instruments Available-for-sale securities Total Three Months Ended September 30, 2016 Balance at June 30, 2016 $ (1,648 ) $ 29 $ (49 ) $ 35 $ (1,633 ) Other comprehensive income (loss) before reclassifications 124 2 (28 ) 5 103 Amounts reclassified from accumulated other comprehensive (income) loss 13 (10 ) 6 (6 ) 3 Other comprehensive income (loss) 137 (8 ) (22 ) (1 ) 106 Balance at September 30, 2016 $ (1,511 ) $ 21 $ (71 ) $ 34 $ (1,527 ) Three Months Ended September 30, 2015 Balance at June 30, 2015 $ (1,554 ) $ (49 ) $ (73 ) $ 82 $ (1,594 ) Other comprehensive income (loss) before reclassifications (235 ) 1 (12 ) (15 ) (261 ) Amounts reclassified from accumulated other comprehensive (income) loss — (8 ) 20 (18 ) (6 ) Other comprehensive income (loss) (235 ) (7 ) 8 (33 ) (267 ) Balance at September 30, 2015 $ (1,789 ) $ (56 ) $ (65 ) $ 49 $ (1,861 ) (Millions of dollars) Foreign currency translation Pension and other postretirement benefits Derivative financial instruments Available-for-sale securities Total Nine Months Ended September 30, 2016 Balance at December 31, 2015 $ (1,953 ) $ (69 ) $ (50 ) $ 37 $ (2,035 ) Other comprehensive income (loss) before reclassifications 429 119 (37 ) 21 532 Amounts reclassified from accumulated other comprehensive (income) loss 13 (29 ) 16 (24 ) (24 ) Other comprehensive income (loss) 442 90 (21 ) (3 ) 508 Balance at September 30, 2016 $ (1,511 ) $ 21 $ (71 ) $ 34 $ (1,527 ) Nine Months Ended September 30, 2015 Balance at December 31, 2014 $ (992 ) $ (31 ) $ (119 ) $ 83 $ (1,059 ) Other comprehensive income (loss) before reclassifications (797 ) 1 (15 ) (13 ) (824 ) Amounts reclassified from accumulated other comprehensive (income) loss — (26 ) 69 (21 ) 22 Other comprehensive income (loss) (797 ) (25 ) 54 (34 ) (802 ) Balance at September 30, 2015 $ (1,789 ) $ (56 ) $ (65 ) $ 49 $ (1,861 ) The effect of the reclassifications out of Accumulated other comprehensive income (loss) on the Consolidated Statement of Results of Operations is as follows: Three Months Ended September 30 (Millions of dollars) Classification of income (expense) 2016 2015 Foreign currency translation Gain (loss) on foreign currency translation Other income (expense) $ (13 ) $ — Tax (provision) benefit — — Reclassifications net of tax $ (13 ) $ — Pension and other postretirement benefits: Amortization of prior service credit (cost) Note 9 1 $ 15 $ 13 Tax (provision) benefit (5 ) (5 ) Reclassifications net of tax $ 10 $ 8 Derivative financial instruments: Foreign exchange contracts Other income (expense) $ (6 ) $ (29 ) Interest rate contracts Interest expense excluding Financial Products (2 ) (1 ) Interest rate contracts Interest expense of Financial Products — (1 ) Reclassifications before tax (8 ) (31 ) Tax (provision) benefit 2 11 Reclassifications net of tax $ (6 ) $ (20 ) Available-for-sale securities: Realized gain (loss) Other income (expense) $ 9 $ 27 Tax (provision) benefit (3 ) (9 ) Reclassifications net of tax $ 6 $ 18 Total reclassifications from Accumulated other comprehensive income (loss) $ (3 ) $ 6 1 Amounts are included in the calculation of net periodic benefit cost. See Note 9 for additional information. Nine Months Ended September 30 (Millions of dollars) Classification of income (expense) 2016 2015 Foreign currency translation Gain (loss) on foreign currency translation Other income (expense) $ (13 ) $ — Tax (provision) benefit — — Reclassifications net of tax $ (13 ) $ — Pension and other postretirement benefits: Amortization of prior service credit (cost) Note 9 1 $ 45 $ 40 Tax (provision) benefit (16 ) (14 ) Reclassifications net of tax $ 29 $ 26 Derivative financial instruments: Foreign exchange contracts Other income (expense) $ (16 ) $ (101 ) Interest rate contracts Interest expense excluding Financial Products (5 ) (4 ) Interest rate contracts Interest expense of Financial Products (3 ) (4 ) Reclassifications before tax (24 ) (109 ) Tax (provision) benefit 8 40 Reclassifications net of tax $ (16 ) $ (69 ) Available-for-sale securities: Realized gain (loss) Other income (expense) $ 36 $ 31 Tax (provision) benefit (12 ) (10 ) Reclassifications net of tax $ 24 $ 21 Total reclassifications from Accumulated other comprehensive income (loss) $ 24 $ (22 ) 1 Amounts are included in the calculation of net periodic benefit cost. See Note 9 for additional information. |
Environmental and legal matters
Environmental and legal matters | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Environmental and legal matters | Environmental and legal matters The Company is regulated by federal, state and international environmental laws governing our use, transport and disposal of substances and control of emissions. In addition to governing our manufacturing and other operations, these laws often impact the development of our products, including, but not limited to, required compliance with air emissions standards applicable to internal combustion engines. We have made, and will continue to make, significant research and development and capital expenditures to comply with these emissions standards. We are engaged in remedial activities at a number of locations, often with other companies, pursuant to federal and state laws. When it is probable we will pay remedial costs at a site, and those costs can be reasonably estimated, the investigation, remediation, and operating and maintenance costs are accrued against our earnings. Costs are accrued based on consideration of currently available data and information with respect to each individual site, including available technologies, current applicable laws and regulations, and prior remediation experience. Where no amount within a range of estimates is more likely, we accrue the minimum. Where multiple potentially responsible parties are involved, we consider our proportionate share of the probable costs. In formulating the estimate of probable costs, we do not consider amounts expected to be recovered from insurance companies or others. We reassess these accrued amounts on a quarterly basis. The amount recorded for environmental remediation is not material and is included in Accrued expenses. We believe there is no more than a remote chance that a material amount for remedial activities at any individual site, or at all the sites in the aggregate, will be required. On January 8, 2015, the Company received a grand jury subpoena from the U.S. District Court for the Central District of Illinois. The subpoena requests documents and information from the Company relating to, among other things, financial information concerning U.S. and non-U.S. Caterpillar subsidiaries (including undistributed profits of non-U.S. subsidiaries and the movement of cash among U.S. and non-U.S. subsidiaries). The Company has received additional subpoenas relating to this investigation requesting additional documents and information relating to, among other things, the purchase and resale of replacement parts by Caterpillar Inc. and non-U.S. Caterpillar subsidiaries, dividend distributions of certain non-U.S. Caterpillar subsidiaries, and Caterpillar SARL and related structures. The Company is cooperating with this investigation. The Company is unable to predict the outcome or reasonably estimate any potential loss; however, we currently believe that this matter will not have a material adverse effect on the Company’s consolidated results of operations, financial position or liquidity. On September 10, 2014, the SEC issued to Caterpillar a subpoena seeking information concerning the Company’s accounting for the goodwill relating to its acquisition of Bucyrus International Inc. in 2011 and related matters. The Company has received additional subpoenas relating to this investigation, and the Company is cooperating with the SEC regarding its ongoing investigation. The Company is unable to predict the outcome or reasonably estimate any potential loss; however, we currently believe that this matter will not have a material adverse effect on the Company's consolidated results of operations, financial position or liquidity. On March 20, 2014, Brazil’s Administrative Council for Economic Defense (CADE) published a Technical Opinion which named 18 companies and over 100 individuals as defendants, including two subsidiaries of Caterpillar Inc., MGE - Equipamentos e Serviços Ferroviários Ltda. (MGE) and Caterpillar Brasil Ltda. The publication of the Technical Opinion opened CADE's official administrative investigation into allegations that the defendants participated in anticompetitive bid activity for the construction and maintenance of metro and train networks in Brazil. While companies cannot be held criminally liable for anticompetitive conduct in Brazil, criminal charges have been brought against two current employees of MGE and one former employee of MGE involving the same conduct alleged by CADE. The Company has responded to all requests for information from the authorities. The Company is unable to predict the outcome or reasonably estimate the potential loss; however, we currently believe that this matter will not have a material adverse effect on the Company's consolidated results of operations, financial position or liquidity. On October 24, 2013, Progress Rail received a grand jury subpoena from the U.S. District Court for the Central District of California. The subpoena requests documents and information from Progress Rail, United Industries Corporation, a wholly-owned subsidiary of Progress Rail, and Caterpillar Inc. relating to allegations that Progress Rail conducted improper or unnecessary railcar inspections and repairs and improperly disposed of parts, equipment, tools and other items. In connection with this subpoena, Progress Rail was informed by the U.S. Attorney for the Central District of California that it is a target of a criminal investigation into potential violations of environmental laws and alleged improper business practices. The Company is cooperating with the authorities and is currently in discussions regarding a potential resolution of the matter. Although the Company believes a loss is probable, we currently believe that this matter will not have a material adverse effect on the Company's consolidated results of operations, financial position or liquidity. In addition, we are involved in other unresolved legal actions that arise in the normal course of business. The most prevalent of these unresolved actions involve disputes related to product design, manufacture and performance liability (including claimed asbestos and welding fumes exposure), contracts, employment issues, environmental matters or intellectual property rights. The aggregate range of reasonably possible losses in excess of accrued liabilities, if any, associated with these unresolved legal actions is not material. In some cases, we cannot reasonably estimate a range of loss because there is insufficient information regarding the matter. However, we believe there is no more than a remote chance that any liability arising from these matters would be material. Although it is not possible to predict with certainty the outcome of these unresolved legal actions, we believe that these actions will not individually or in the aggregate have a material adverse effect on our consolidated results of operations, financial position or liquidity. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income taxes The provision for income taxes for the first nine months of 2016 reflects an estimated annual tax rate of 25 percent compared to 28 percent for the first nine months of 2015 and 25.5 percent for the full-year 2015, excluding a $42 million discrete tax charge recorded in the third quarter of 2015. The full-year rate for 2015 of 25.5 percent was lower than the third-quarter 2015 rate of 28 percent , primarily due to the permanent renewal of the U.S. research and development tax credit along with changes in the geographic mix of profits from a tax perspective in the fourth quarter. Due to recent losses in the U.S. and the weight given to this negative objective evidence under the accounting rules, it is reasonably possible that up to approximately $230 million of U.S. state deferred tax assets as of September 30, 2016 will require additional valuation allowances in the next twelve months to reduce deferred tax assets to the amount more likely than not to be realized. Any non-cash adjustment to the valuation allowance for U.S. state deferred tax assets will be recorded in the provision for income taxes, net of a federal deferred tax adjustment at 35 percent . On January 30, 2015, we received a Revenue Agent's Report (RAR) from the Internal Revenue Service (IRS) indicating the end of the field examination of our U.S. tax returns for 2007 to 2009 including the impact of a loss carryback to 2005. The RAR proposed tax increases and penalties for these years of approximately $1 billion primarily related to two significant areas that we are vigorously contesting through the IRS Appeals process. In the first area, the IRS has proposed to tax in the United States profits earned from certain parts transactions by one of our non-U.S. subsidiaries, Caterpillar SARL (CSARL), based on the IRS examination team's application of the "substance-over-form" or "assignment-of-income" judicial doctrines. We believe that the relevant transactions complied with applicable tax laws and did not violate judicial doctrines. We have filed U.S. tax returns on this same basis for years after 2009. In the second area, the IRS disallowed approximately $125 million of foreign tax credits that arose as a result of certain financings unrelated to CSARL. Based on the information currently available, we do not anticipate a significant increase or decrease to our unrecognized tax benefits for these matters within the next 12 months. We currently believe the ultimate disposition of these matters will not have a material adverse effect on our consolidated financial position, liquidity or results of operations. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment information A. Basis for segment information Our Executive Office is comprised of five Group Presidents, a Senior Vice President, an Executive Vice President and a CEO. Group Presidents are accountable for a related set of end-to-end businesses that they manage. The Senior Vice President leads the Caterpillar Enterprise System Group and the Executive Vice President leads the Law and Public Policy Division. The CEO allocates resources and manages performance at the Group President level. As such, the CEO serves as our Chief Operating Decision Maker and operating segments are primarily based on the Group President reporting structure. Three of our operating segments, Construction Industries, Resource Industries and Energy & Transportation are led by Group Presidents. One operating segment, Financial Products, is led by a Group President who also has responsibility for Corporate Services. Corporate Services is a cost center primarily responsible for the performance of certain support functions globally and to provide centralized services; it does not meet the definition of an operating segment. One Group President leads two smaller operating segments that are included in the All Other operating segments. The Caterpillar Enterprise System Group and Law and Public Policy Division are cost centers and do not meet the definition of an operating segment. Effective January 1, 2016, we made the following changes to segment reporting. These changes were made to reflect changes in organizational accountabilities and refinements to our internal reporting. • Responsibility for remanufacturing of Cat engines and components and remanufacturing services for other companies moved from the All Other operating segments to Energy & Transportation. • Responsibility for business strategy, product management, development, manufacturing, marketing and product support for forestry and paving products moved from the All Other operating segments to Construction Industries. • Responsibility for business strategy, product management, development, manufacturing, marketing and product support for industrial and waste products moved from the All Other operating segments to Resource Industries. • Responsibility for sales and product support of on-highway vocational trucks for North America moved from the All Other operating segments to Energy & Transportation. • Internal charges for component manufacturing and logistics services provided by All Other operating segments to Construction Industries, Resource Industries and Energy & Transportation in excess of cost have been adjusted to approximate cost, resulting in a reduction in profit in the All Other operating segments and corresponding increases in profit in the other three segments. • Costs that previously had been included in Corporate costs, primarily for company-wide strategies such as information technology and manufacturing process transformation, have been included in the ME&T operating segments that benefit from the costs. Segment information for 2015 has been retrospectively adjusted to conform to the 2016 presentation. B. Description of segments We have six operating segments, of which four are reportable segments. Following is a brief description of our reportable segments and the business activities included in the All Other operating segments: Construction Industries : A segment primarily responsible for supporting customers using machinery in infrastructure, forestry and building construction applications. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes backhoe loaders, small wheel loaders, small track-type tractors, skid steer loaders, multi-terrain loaders, mini excavators, compact wheel loaders, telehandlers, select work tools, small, medium and large track excavators, wheel excavators, medium wheel loaders, compact track loaders, medium track-type tractors, track-type loaders, motor graders, pipelayers, forestry products, paving products and related parts. Inter-segment sales are a source of revenue for this segment. Resource Industries : A segment primarily responsible for supporting customers using machinery in mining, quarry, waste, and material handling applications. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes large track-type tractors, large mining trucks, hard rock vehicles, longwall miners, electric rope shovels, draglines, hydraulic shovels, track and rotary drills, highwall miners, large wheel loaders, off-highway trucks, articulated trucks, wheel tractor scrapers, wheel dozers, landfill compactors, soil compactors, material handlers, continuous miners, scoops and haulers, hardrock continuous mining systems, select work tools, machinery components, electronics and control systems and related parts. In addition to equipment, Resource Industries also develops and sells technology to provide customers fleet management systems, equipment management analytics and autonomous machine capabilities. Resource Industries also manages areas that provide services to other parts of the company, including integrated manufacturing and research and development. Inter-segment sales are a source of revenue for this segment. Energy & Transportation : A segment primarily responsible for supporting customers using reciprocating engines, turbines, diesel-electric locomotives and related parts across industries serving power generation, industrial, oil and gas and transportation applications, including marine and rail-related businesses. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing, sales and product support of turbines and turbine-related services, reciprocating engine powered generator sets, integrated systems used in the electric power generation industry, reciprocating engines and integrated systems and solutions for the marine and oil and gas industries; reciprocating engines supplied to the industrial industry as well as Cat machinery; the remanufacturing of Cat engines and components and remanufacturing services for other companies; the business strategy, product design, product management and development, manufacturing, remanufacturing, leasing and service of diesel-electric locomotives and components and other rail-related products and services and product support of on-highway vocational trucks for North America. Inter-segment sales are a source of revenue for this segment. Financial Products Segment : Provides financing to customers and dealers for the purchase and lease of Cat and other equipment, as well as some financing for Caterpillar sales to dealers. Financing plans include operating and finance leases, installment sale contracts, working capital loans and wholesale financing plans. The segment also provides various forms of insurance to customers and dealers to help support the purchase and lease of our equipment. All Other operating segments : Primarily includes activities such as: the business strategy, product management, development, and manufacturing of filters and fluids, undercarriage, tires and rims, ground engaging tools, fluid transfer products, precision seals and rubber, and sealing and connecting components primarily for Cat products; parts distribution; distribution services responsible for dealer development and administration including a wholly-owned dealer in Japan, dealer portfolio management and ensuring the most efficient and effective distribution of machines, engines and parts; digital investments for new customer and dealer solutions that integrate data analytics with state-of-the art digital technologies while transforming the buying experience. Results for the All Other operating segments are included as a reconciling item between reportable segments and consolidated external reporting. C. Segment measurement and reconciliations There are several methodology differences between our segment reporting and our external reporting. The following is a list of the more significant methodology differences: • Machinery, Energy & Transportation segment net assets generally include inventories, receivables, property, plant and equipment, goodwill, intangibles, accounts payable, and customer advances. Liabilities other than accounts payable and customer advances are generally managed at the corporate level and are not included in segment operations. Financial Products Segment assets generally include all categories of assets. • Segment inventories and cost of sales are valued using a current cost methodology. • Goodwill allocated to segments is amortized using a fixed amount based on a 20 year useful life. This methodology difference only impacts segment assets; no goodwill amortization expense is included in segment profit. In addition, only a portion of goodwill for certain acquisitions made in 2011 or later has been allocated to segments. • The present value of future lease payments for certain Machinery, Energy & Transportation operating leases is included in segment assets. The estimated financing component of the lease payments is excluded. • Currency exposures for Machinery, Energy & Transportation are generally managed at the corporate level and the effects of changes in exchange rates on results of operations within the year are not included in segment profit. The net difference created in the translation of revenues and costs between exchange rates used for U.S. GAAP reporting and exchange rates used for segment reporting is recorded as a methodology difference. • Stock-based compensation expense is not included in segment profit. • Postretirement benefit expenses are split; segments are generally responsible for service and prior service costs, with the remaining elements of net periodic benefit cost included as a methodology difference. • Machinery, Energy & Transportation segment profit is determined on a pretax basis and excludes interest expense and other income/expense items. Financial Products Segment profit is determined on a pretax basis and includes other income/expense items. Reconciling items are created based on accounting differences between segment reporting and our consolidated external reporting. Please refer to pages 44 to 50 for financial information regarding significant reconciling items. Most of our reconciling items are self-explanatory given the above explanations. For the reconciliation of profit, we have grouped the reconciling items as follows: • Corporate costs: These costs are related to corporate requirements primarily for compliance and legal functions for the benefit of the entire organization. • Restructuring costs: Primarily costs for employee separation costs, long-lived asset impairments and contract terminations. These costs are included in Other Operating (Income) Expenses. Restructuring costs also include other exit-related costs primarily for accelerated depreciation, equipment relocation, inventory write-downs and sales discounts and payments to dealers and customers related to discontinued products. A table, Reconciliation of Restructuring costs on page 47, has been included to illustrate how segment profit would have been impacted by the restructuring costs. See Note 18 for more information. • Methodology differences: See previous discussion of significant accounting differences between segment reporting and consolidated external reporting. • Timing: Timing differences in the recognition of costs between segment reporting and consolidated external reporting. For example, certain costs are reported on the cash basis for segment reporting and the accrual basis for consolidated external reporting. Reportable Segments Three Months Ended September 30 (Millions of dollars) 2016 External sales and revenues Inter- segment sales and revenues Total sales and revenues Depreciation and amortization Segment profit Segment assets at September 30 Capital expenditures Construction Industries $ 3,554 $ 27 $ 3,581 $ 117 $ 326 $ 5,521 $ 46 Resource Industries 1,377 69 1,446 150 (77 ) 8,017 68 Energy & Transportation 3,534 629 4,163 170 572 8,118 97 Machinery, Energy & Transportation $ 8,465 $ 725 $ 9,190 $ 437 $ 821 $ 21,656 $ 211 Financial Products Segment 749 — 749 215 183 36,330 357 Total $ 9,214 $ 725 $ 9,939 $ 652 $ 1,004 $ 57,986 $ 568 2015 External sales and revenues Inter- segment sales and revenues Total sales and revenues Depreciation and amortization Segment profit Segment assets at December 31 Capital expenditures Construction Industries $ 4,075 $ 17 $ 4,092 $ 139 $ 354 $ 6,176 $ 62 Resource Industries 1,842 88 1,930 144 (42 ) 8,931 73 Energy & Transportation 4,352 702 5,054 172 683 8,769 179 Machinery, Energy & Transportation $ 10,269 $ 807 $ 11,076 $ 455 $ 995 $ 23,876 $ 314 Financial Products Segment 752 — 752 210 207 35,729 359 Total $ 11,021 $ 807 $ 11,828 $ 665 $ 1,202 $ 59,605 $ 673 Reportable Segments Nine Months Ended September 30 (Millions of dollars) 2016 External sales and revenues Inter- segment sales and revenues Total sales and revenues Depreciation and amortization Segment profit Segment Capital expenditures Construction Industries $ 12,023 $ 47 $ 12,070 $ 346 $ 1,316 $ 5,521 $ 114 Resource Industries 4,283 197 4,480 458 (336 ) 8,017 162 Energy & Transportation 10,562 1,919 12,481 505 1,584 8,118 340 Machinery, Energy & Transportation $ 26,868 $ 2,163 $ 29,031 $ 1,309 $ 2,564 $ 21,656 $ 616 Financial Products Segment 2,251 — 2,251 633 553 36,330 1,266 Total $ 29,119 $ 2,163 $ 31,282 $ 1,942 $ 3,117 $ 57,986 $ 1,882 2015 External sales and revenues Inter- segment sales and revenues Total sales and revenues Depreciation and amortization Segment profit Segment assets at December 31 Capital expenditures Construction Industries $ 13,892 $ 66 $ 13,958 $ 419 $ 1,687 $ 6,176 $ 156 Resource Industries 5,861 250 6,111 441 81 8,931 152 Energy & Transportation 13,975 2,262 16,237 510 2,649 8,769 565 Machinery, Energy & Transportation $ 33,728 $ 2,578 $ 36,306 $ 1,370 $ 4,417 $ 23,876 $ 873 Financial Products Segment 2,332 — 2,332 638 618 35,729 995 Total $ 36,060 $ 2,578 $ 38,638 $ 2,008 $ 5,035 $ 59,605 $ 1,868 Reconciliation of Sales and revenues: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total Three Months Ended September 30, 2016 Total external sales and revenues from reportable segments $ 8,465 $ 749 $ — $ 9,214 All Other operating segments 28 — — 28 Other (30 ) 19 (71 ) 1 (82 ) Total sales and revenues $ 8,463 $ 768 $ (71 ) $ 9,160 Three Months Ended September 30, 2015 Total external sales and revenues from reportable segments $ 10,269 $ 752 $ — $ 11,021 All Other operating segments 39 — — 39 Other (23 ) 20 (95 ) 1 (98 ) Total sales and revenues $ 10,285 $ 772 $ (95 ) $ 10,962 1 Elimination of Financial Products revenues from Machinery, Energy & Transportation. Reconciliation of Sales and revenues: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total Nine Months Ended September 30, 2016 Total external sales and revenues from reportable segments $ 26,868 $ 2,251 $ — $ 29,119 All Other operating segments 107 — — 107 Other (87 ) 54 (230 ) 1 (263 ) Total sales and revenues $ 26,888 $ 2,305 $ (230 ) $ 28,963 Nine Months Ended September 30, 2015 Total external sales and revenues from reportable segments $ 33,728 $ 2,332 $ — $ 36,060 All Other operating segments 166 — — 166 Other (65 ) 58 (238 ) 1 (245 ) Total sales and revenues $ 33,829 $ 2,390 $ (238 ) $ 35,981 1 Elimination of Financial Products revenues from Machinery, Energy & Transportation. Reconciliation of Consolidated profit before taxes: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidated Total Three Months Ended September 30, 2016 Total profit from reportable segments $ 821 $ 183 $ 1,004 All Other operating segments (22 ) — (22 ) Cost centers 29 — 29 Corporate costs (121 ) — (121 ) Timing 12 — 12 Restructuring costs (323 ) (1 ) (324 ) Methodology differences: Inventory/cost of sales 19 — 19 Postretirement benefit expense 37 — 37 Stock-based compensation expense (40 ) (1 ) (41 ) Financing costs (129 ) — (129 ) Currency (10 ) — (10 ) Other income/expense methodology differences (60 ) — (60 ) Other methodology differences (11 ) — (11 ) Total consolidated profit before taxes $ 202 $ 181 $ 383 Three Months Ended September 30, 2015 Total profit from reportable segments $ 995 $ 207 $ 1,202 All Other operating segments (11 ) — (11 ) Cost centers 23 — 23 Corporate costs (136 ) — (136 ) Timing 37 — 37 Restructuring costs (98 ) — (98 ) Methodology differences: — Inventory/cost of sales (22 ) — (22 ) Postretirement benefit expense 131 — 131 Stock-based compensation expense (46 ) (2 ) (48 ) Financing costs (128 ) — (128 ) Currency (104 ) — (104 ) Other income/expense methodology differences (51 ) — (51 ) Other methodology differences (13 ) 1 (12 ) Total consolidated profit before taxes $ 577 $ 206 $ 783 Reconciliation of Consolidated profit before taxes: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidated Total Nine Months Ended September 30, 2016 Total profit from reportable segments $ 2,564 $ 553 $ 3,117 All Other operating segments (43 ) — (43 ) Cost centers 68 — 68 Corporate costs (429 ) — (429 ) Timing 53 — 53 Restructuring costs (619 ) (5 ) (624 ) Methodology differences: Inventory/cost of sales — — — Postretirement benefit expense 148 — 148 Stock-based compensation expense (180 ) (7 ) (187 ) Financing costs (396 ) — (396 ) Currency (22 ) — (22 ) Other income/expense methodology differences (170 ) — (170 ) Other methodology differences (34 ) 6 (28 ) Total consolidated profit before taxes $ 940 $ 547 $ 1,487 Nine Months Ended September 30, 2015 Total profit from reportable segments $ 4,417 $ 618 $ 5,035 All Other operating segments (36 ) — (36 ) Cost centers 31 — 31 Corporate costs (451 ) — (451 ) Timing 15 — 15 Restructuring costs (219 ) — (219 ) Methodology differences: Inventory/cost of sales (30 ) — (30 ) Postretirement benefit expense 282 — 282 Stock-based compensation expense (230 ) (10 ) (240 ) Financing costs (394 ) — (394 ) Currency (226 ) — (226 ) Other income/expense methodology differences (48 ) — (48 ) Other methodology differences (45 ) 12 (33 ) Total consolidated profit before taxes $ 3,066 $ 620 $ 3,686 Reconciliation of Restructuring costs: As noted above, restructuring costs are a reconciling item between Segment profit and Consolidated profit before taxes. Had we included the amounts in the segments' results, the profit would have been as shown below: Reconciliation of Restructuring costs: (Millions of dollars) Segment profit Restructuring costs Segment profit with restructuring costs Three Months Ended September 30, 2016 Construction Industries $ 326 $ (9 ) $ 317 Resource Industries (77 ) (254 ) (331 ) Energy & Transportation 572 (39 ) 533 Financial Products Segment 183 (1 ) 182 All Other operating segments (22 ) (15 ) (37 ) Total $ 982 $ (318 ) $ 664 Three Months Ended September 30, 2015 Construction Industries $ 354 $ (28 ) $ 326 Resource Industries (42 ) (39 ) (81 ) Energy & Transportation 683 (10 ) 673 Financial Products Segment 207 — 207 All Other operating segments (11 ) (9 ) (20 ) Total $ 1,191 $ (86 ) $ 1,105 Reconciliation of Restructuring costs: (Millions of dollars) Segment profit Restructuring costs Segment profit with restructuring costs Nine Months Ended September 30, 2016 Construction Industries $ 1,316 $ (34 ) $ 1,282 Resource Industries (336 ) (348 ) (684 ) Energy & Transportation 1,584 (194 ) 1,390 Financial Products Segment 553 (5 ) 548 All Other operating segments (43 ) (29 ) (72 ) Total $ 3,074 $ (610 ) $ 2,464 Nine Months Ended September 30, 2015 Construction Industries $ 1,687 $ (83 ) $ 1,604 Resource Industries 81 (83 ) (2 ) Energy & Transportation 2,649 (24 ) 2,625 Financial Products Segment 618 — 618 All Other operating segments (36 ) (12 ) (48 ) Total $ 4,999 $ (202 ) $ 4,797 Reconciliation of Assets: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total September 30, 2016 Total assets from reportable segments $ 21,656 $ 36,330 $ — $ 57,986 All Other operating segments 1,368 — — 1,368 Items not included in segment assets: Cash and short-term investments 4,894 — — 4,894 Intercompany receivables 1,877 — (1,877 ) — Investment in Financial Products 4,367 — (4,367 ) — Deferred income taxes 3,311 — (821 ) 2,490 Goodwill and intangible assets 4,055 — — 4,055 Property, plant and equipment – net and other assets 2,138 — — 2,138 Operating lease methodology difference (187 ) — — (187 ) Inventory methodology differences (2,243 ) — — (2,243 ) Intercompany loan included in Financial Products' assets — — (1,000 ) (1,000 ) Liabilities included in segment assets 7,394 — — 7,394 Other (380 ) (50 ) (63 ) (493 ) Total assets $ 48,250 $ 36,280 $ (8,128 ) $ 76,402 December 31, 2015 Total assets from reportable segments $ 23,876 $ 35,729 $ — $ 59,605 All Other operating segments 1,405 — — 1,405 Items not included in segment assets: Cash and short-term investments 5,340 — — 5,340 Intercompany receivables 1,087 — (1,087 ) — Investment in Financial Products 3,888 — (3,888 ) — Deferred income taxes 3,208 — (793 ) 2,415 Goodwill and intangible assets 3,571 — — 3,571 Property, plant and equipment – net and other assets 1,585 — — 1,585 Operating lease methodology difference (213 ) — — (213 ) Inventory methodology differences (2,646 ) — — (2,646 ) Liabilities included in segment assets 8,017 — — 8,017 Other (567 ) (93 ) (77 ) (737 ) Total assets $ 48,551 $ 35,636 $ (5,845 ) $ 78,342 Reconciliations of Depreciation and amortization: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidated Total Three Months Ended September 30, 2016 Total depreciation and amortization from reportable segments $ 437 $ 215 $ 652 Items not included in segment depreciation and amortization: All Other operating segments 53 — 53 Cost centers 39 — 39 Other 6 11 17 Total depreciation and amortization $ 535 $ 226 $ 761 Three Months Ended September 30, 2015 Total depreciation and amortization from reportable segments $ 455 $ 210 $ 665 Items not included in segment depreciation and amortization: All Other operating segments 51 — 51 Cost centers 39 — 39 Other (7 ) 10 3 Total depreciation and amortization $ 538 $ 220 $ 758 Reconciliations of Depreciation and amortization: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidated Total Nine Months Ended September 30, 2016 Total depreciation and amortization from reportable segments $ 1,309 $ 633 $ 1,942 Items not included in segment depreciation and amortization: All Other operating segments 158 — 158 Cost centers 117 — 117 Other 7 31 38 Total depreciation and amortization $ 1,591 $ 664 $ 2,255 Nine Months Ended September 30, 2015 Total depreciation and amortization from reportable segments $ 1,370 $ 638 $ 2,008 Items not included in segment depreciation and amortization: All Other operating segments 151 — 151 Cost centers 114 — 114 Other (27 ) 26 (1 ) Total depreciation and amortization $ 1,608 $ 664 $ 2,272 Reconciliations of Capital expenditures: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total Three Months Ended September 30, 2016 Total capital expenditures from reportable segments $ 211 $ 357 $ — $ 568 Items not included in segment capital expenditures: All Other operating segments 35 — — 35 Cost centers 20 — — 20 Timing 4 — — 4 Other (30 ) 22 (24 ) (32 ) Total capital expenditures $ 240 $ 379 $ (24 ) $ 595 Three Months Ended September 30, 2015 Total capital expenditures from reportable segments $ 314 $ 359 $ — $ 673 Items not included in segment capital expenditures: All Other operating segments 33 — — 33 Cost centers 52 — — 52 Timing (35 ) — — (35 ) Other (28 ) 35 (4 ) 3 Total capital expenditures $ 336 $ 394 $ (4 ) $ 726 Reconciliations of Capital expenditures: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total Nine Months Ended September 30, 2016 Total capital expenditures from reportable segments $ 616 $ 1,266 $ — $ 1,882 Items not included in segment capital expenditures: All Other operating segments 102 — — 102 Cost centers 48 — — 48 Timing 221 — — 221 Other (129 ) 117 (41 ) (53 ) Total capital expenditures $ 858 $ 1,383 $ (41 ) $ 2,200 Nine Months Ended September 30, 2015 Total capital expenditures from reportable segments $ 873 $ 995 $ — $ 1,868 Items not included in segment capital expenditures: All Other operating segments 86 — — 86 Cost centers 98 — — 98 Timing 199 — — 199 Other (161 ) 130 (23 ) (54 ) Total capital expenditures $ 1,095 $ 1,125 $ (23 ) $ 2,197 |
Cat Financial Financing Activit
Cat Financial Financing Activities | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Cat Financial Financing Activities | Cat Financial financing activities Allowance for credit losses The allowance for credit losses is an estimate of the losses inherent in Cat Financial’s finance receivable portfolio and includes consideration of accounts that have been individually identified as impaired, as well as pools of finance receivables where it is probable that certain receivables in the pool are impaired but the individual accounts cannot yet be identified. In identifying and measuring impairment, management takes into consideration past loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of underlying collateral and current economic conditions. Accounts are identified for individual review based on past-due status and using information available about the customer, such as financial statements, news reports and published credit ratings, as well as general information regarding industry trends and the economic environment in which Cat Financial’s customers operate. The allowance for credit losses attributable to finance receivables that are individually evaluated and determined to be impaired is based either on the present value of expected future cash flows discounted at the receivables' effective interest rate or the fair value of the collateral for collateral-dependent receivables. In determining collateral value, Cat Financial estimates the current fair market value of the collateral less selling costs. Cat Financial also considers credit enhancements such as additional collateral and contractual third-party guarantees. The allowance for credit losses attributable to the remaining accounts not yet individually identified as impaired is estimated based on loss forecast models utilizing probabilities of default, our estimate of the loss emergence period and the estimated loss given default. In addition, qualitative factors not able to be fully captured in the loss forecast models including industry trends, macroeconomic factors and model imprecision are considered in the evaluation of the adequacy of the allowance for credit losses. These qualitative factors are subjective and require a degree of management judgment. Cat Financial’s allowance for credit losses is segregated into two portfolio segments: • Customer - Finance receivables with retail customers. • Dealer - Finance receivables with Caterpillar dealers. A portfolio segment is the level at which the company develops a systematic methodology for determining its allowance for credit losses. Cat Financial further evaluates portfolio segments by the class of finance receivables, which is defined as a level of information (below a portfolio segment) in which the finance receivables have the same initial measurement attribute and a similar method for assessing and monitoring credit risk. Typically, Cat Financial’s finance receivables within a geographic area have similar credit risk profiles and methods for assessing and monitoring credit risk. Cat Financial’s classes, which align with management reporting for credit losses, are as follows: • North America - Includes finance receivables originated in the United States or Canada. • Europe - Includes finance receivables originated in Europe, Africa, Middle East and the Commonwealth of Independent States. • Asia Pacific - Includes finance receivables originated in Australia, New Zealand, China, Japan, South Korea and Southeast Asia. • Mining - Includes finance receivables related to large mining customers worldwide and project financing in various countries. • Latin America - Includes finance receivables originated in Central and South American countries. • Caterpillar Power Finance - Includes finance receivables related to marine vessels with Caterpillar engines worldwide and Caterpillar electrical power generation, gas compression and co-generation systems and non-Caterpillar equipment that is powered by these systems worldwide. An analysis of the allowance for credit losses was as follows: (Millions of dollars) September 30, 2016 Allowance for Credit Losses: Customer Dealer Total Balance at beginning of year $ 327 $ 9 $ 336 Receivables written off (118 ) — (118 ) Recoveries on receivables previously written off 25 — 25 Provision for credit losses 93 2 95 Other 6 — 6 Balance at end of period $ 333 $ 11 $ 344 Individually evaluated for impairment $ 85 $ — $ 85 Collectively evaluated for impairment 248 11 259 Ending Balance $ 333 $ 11 $ 344 Recorded Investment in Finance Receivables: Individually evaluated for impairment $ 819 $ — $ 819 Collectively evaluated for impairment 18,522 3,534 22,056 Ending Balance $ 19,341 $ 3,534 $ 22,875 (Millions of dollars) December 31, 2015 Allowance for Credit Losses: Customer Dealer Total Balance at beginning of year $ 388 $ 10 $ 398 Receivables written off (196 ) — (196 ) Recoveries on receivables previously written off 41 — 41 Provision for credit losses 119 (1 ) 118 Other (25 ) — (25 ) Balance at end of year $ 327 $ 9 $ 336 Individually evaluated for impairment $ 65 $ — $ 65 Collectively evaluated for impairment 262 9 271 Ending Balance $ 327 $ 9 $ 336 Recorded Investment in Finance Receivables: Individually evaluated for impairment $ 601 $ — $ 601 Collectively evaluated for impairment 18,788 3,570 22,358 Ending Balance $ 19,389 $ 3,570 $ 22,959 Credit quality of finance receivables At origination, Cat Financial evaluates credit risk based on a variety of credit quality factors including prior payment experience, customer financial information, credit-rating agency ratings, loan-to-value ratios and other internal metrics. On an ongoing basis, Cat Financial monitors credit quality based on past-due status and collection experience as there is a meaningful correlation between the past-due status of customers and the risk of loss. In determining past-due status, Cat Financial considers the entire finance receivable balance past due when any installment is over 30 days past due. The tables below summarize the recorded investment of finance receivables by aging category. September 30, 2016 (Millions of dollars) 31-60 Days Past Due 61-90 Days Past Due 91+ Days Past Due Total Past Due Current Recorded Investment in Finance Receivables 91+ Still Accruing Customer North America $ 66 $ 18 $ 72 $ 156 $ 7,903 $ 8,059 $ 10 Europe 21 16 83 120 2,424 2,544 47 Asia Pacific 28 10 20 58 1,506 1,564 4 Mining 4 1 63 68 1,802 1,870 — Latin America 57 39 222 318 1,866 2,184 — Caterpillar Power Finance 1 5 72 78 3,042 3,120 12 Dealer North America — — — — 2,069 2,069 — Europe — — — — 127 127 — Asia Pacific — — — — 599 599 — Mining — — — — 4 4 — Latin America — — — — 733 733 — Caterpillar Power Finance — — — — 2 2 — Total $ 177 $ 89 $ 532 $ 798 $ 22,077 $ 22,875 $ 73 December 31, 2015 (Millions of dollars) 31-60 Days Past Due 61-90 Days Past Due 91+ Days Past Due Total Past Due Current Recorded Investment in Finance Receivables 91+ Still Accruing Customer North America $ 45 $ 12 $ 30 $ 87 $ 7,850 $ 7,937 $ 4 Europe 18 7 44 69 2,358 2,427 9 Asia Pacific 21 12 21 54 1,647 1,701 6 Mining 6 1 68 75 1,793 1,868 1 Latin America 45 31 199 275 1,998 2,273 — Caterpillar Power Finance — 1 35 36 3,147 3,183 2 Dealer North America — — — — 2,209 2,209 — Europe — — — — 149 149 — Asia Pacific — — — — 552 552 — Mining — — — — 4 4 — Latin America — — — — 653 653 — Caterpillar Power Finance — — — — 3 3 — Total $ 135 $ 64 $ 397 $ 596 $ 22,363 $ 22,959 $ 22 Impaired finance receivables For all classes, a finance receivable is considered impaired, based on current information and events, if it is probable that Cat Financial will be unable to collect all amounts due according to the contractual terms. Impaired finance receivables include finance receivables that have been restructured and are considered to be troubled debt restructurings. There were no impaired finance receivables as of September 30, 2016 or December 31, 2015 , for the Dealer portfolio segment. Cat Financial’s recorded investment in impaired finance receivables and the related unpaid principal balances and allowance for the Customer portfolio segment were as follows: September 30, 2016 December 31, 2015 (Millions of dollars) Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance Impaired Finance Receivables With No Allowance Recorded North America $ 21 $ 21 $ — $ 12 $ 12 $ — Europe 49 48 — 41 41 — Asia Pacific 2 2 — 1 1 — Mining 119 118 — 84 84 — Latin America 73 73 — 28 28 — Caterpillar Power Finance 290 289 — 242 241 — Total $ 554 $ 551 $ — $ 408 $ 407 $ — Impaired Finance Receivables With An Allowance Recorded North America $ 50 $ 48 $ 19 $ 14 $ 13 $ 4 Europe 9 9 5 11 10 5 Asia Pacific 33 33 5 34 34 4 Mining 38 38 6 11 11 3 Latin America 91 103 33 53 53 21 Caterpillar Power Finance 44 44 17 70 70 28 Total $ 265 $ 275 $ 85 $ 193 $ 191 $ 65 Total Impaired Finance Receivables North America $ 71 $ 69 $ 19 $ 26 $ 25 $ 4 Europe 58 57 5 52 51 5 Asia Pacific 35 35 5 35 35 4 Mining 157 156 6 95 95 3 Latin America 164 176 33 81 81 21 Caterpillar Power Finance 334 333 17 312 311 28 Total $ 819 $ 826 $ 85 $ 601 $ 598 $ 65 Three Months Ended Three Months Ended (Millions of dollars) Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Impaired Finance Receivables With No Allowance Recorded North America $ 24 $ — $ 10 $ 1 Europe 49 1 43 — Asia Pacific 1 — 1 — Mining 90 2 63 — Latin America 58 — 32 — Caterpillar Power Finance 282 3 165 1 Total $ 504 $ 6 $ 314 $ 2 Impaired Finance Receivables With An Allowance Recorded North America $ 42 $ — $ 10 $ — Europe 10 — 15 — Asia Pacific 35 — 41 — Mining 19 — 9 — Latin America 67 1 69 1 Caterpillar Power Finance 43 — 125 2 Total $ 216 $ 1 $ 269 $ 3 Total Impaired Finance Receivables North America $ 66 $ — $ 20 $ 1 Europe 59 1 58 — Asia Pacific 36 — 42 — Mining 109 2 72 — Latin America 125 1 101 1 Caterpillar Power Finance 325 3 290 3 Total $ 720 $ 7 $ 583 $ 5 Nine Months Ended Nine Months Ended (Millions of dollars) Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Impaired Finance Receivables With No Allowance Recorded North America $ 19 $ 1 $ 12 $ 1 Europe 45 1 43 — Asia Pacific 2 — 2 — Mining 84 3 80 3 Latin America 39 — 32 — Caterpillar Power Finance 269 8 157 3 Total $ 458 $ 13 $ 326 $ 7 Impaired Finance Receivables With An Allowance Recorded North America $ 28 $ — $ 7 $ — Europe 11 — 15 1 Asia Pacific 34 2 33 1 Mining 15 — 47 1 Latin America 59 2 56 2 Caterpillar Power Finance 50 1 128 3 Total $ 197 $ 5 $ 286 $ 8 Total Impaired Finance Receivables North America $ 47 $ 1 $ 19 $ 1 Europe 56 1 58 1 Asia Pacific 36 2 35 1 Mining 99 3 127 4 Latin America 98 2 88 2 Caterpillar Power Finance 319 9 285 6 Total $ 655 $ 18 $ 612 $ 15 Recognition of income is suspended and the finance receivable is placed on non-accrual status when management determines that collection of future income is not probable (generally after 120 days past due). Recognition is resumed and previously suspended income is recognized when the finance receivable becomes current and collection of remaining amounts is considered probable. Payments received while the finance receivable is on non-accrual status are applied to interest and principal in accordance with the contractual terms. As of September 30, 2016 and December 31, 2015 , there were no finance receivables on non-accrual status for the Dealer portfolio segment. The recorded investment in customer finance receivables on non-accrual status was as follows: (Millions of dollars) September 30, 2016 December 31, 2015 North America $ 71 $ 31 Europe 38 39 Asia Pacific 16 15 Mining 131 106 Latin America 299 217 Caterpillar Power Finance 69 77 Total $ 624 $ 485 Troubled Debt Restructurings A restructuring of a finance receivable constitutes a troubled debt restructuring (TDR) when the lender grants a concession it would not otherwise consider to a borrower experiencing financial difficulties. Concessions granted may include extended contract maturities, inclusion of interest only periods, below market interest rates, extended skip payment periods and reduction of principal and/or accrued interest. As of September 30, 2016 and December 31, 2015 , there were $11 million and $3 million , respectively, of additional funds committed to lend to a borrower whose terms have been modified in a TDR. There were no finance receivables modified as TDRs during the three and nine months ended September 30, 2016 or 2015 for the Dealer portfolio segment. Finance receivables in the Customer portfolio segment modified as TDRs during the three and nine months ended September 30, 2016 and 2015 , were as follows: Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 (Millions of dollars) Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment North America 2 $ — $ — 6 $ — $ — Europe — — — 4 — — Asia Pacific 4 1 1 1 1 1 Mining 1 33 30 2 15 14 Latin America 1 341 105 74 10 1 2 Caterpillar Power Finance 4 13 13 8 93 79 Total 352 $ 152 $ 118 31 $ 110 $ 96 Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment North America 15 $ 16 $ 16 10 $ 1 $ 1 Europe 3 11 8 23 2 2 Asia Pacific 8 4 4 19 1 1 Mining 2 43 35 2 15 14 Latin America 431 117 87 10 1 2 Caterpillar Power Finance 34 196 177 12 197 180 Total 493 $ 387 $ 327 76 $ 217 $ 200 1 In Latin America, 321 contracts with a pre-TDR recorded investment of $94 million and a post-TDR recorded investment of $64 million are related to four customers. TDRs in the Customer portfolio segment with a payment default during the three and nine months ended September 30, 2016 and 2015 , which had been modified within twelve months prior to the default date, were as follows: Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 (Millions of dollars) Number of Contracts Post-TDR Recorded Investment Number of Contracts Post-TDR Recorded Investment North America 1 $ — 5 $ — Europe 1 — — — Latin America 2 — — — Total 4 $ — 5 $ — Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 Number of Contracts Post-TDR Recorded Investment Number of Contracts Post-TDR Recorded Investment North America 14 $ 3 10 $ 1 Europe 14 1 — — Asia Pacific 3 — — — Latin America 4 — 1 — Total 35 $ 4 11 $ 1 |
Fair Value Disclosures
Fair Value Disclosures | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | Fair value disclosures A. Fair value measurements The guidance on fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. This guidance also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. In accordance with this guidance, fair value measurements are classified under the following hierarchy: • Level 1 – Quoted prices for identical instruments in active markets. • Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets. • Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable. When available, we use quoted market prices to determine fair value, and we classify such measurements within Level 1. In some cases where market prices are not available, we make use of observable market based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon valuations in which one or more significant inputs are unobservable, including internally developed models that use, where possible, current market-based parameters such as interest rates, yield curves and currency rates. These measurements are classified within Level 3. Fair value measurements are classified according to the lowest level input or value-driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable. Fair value measurement includes the consideration of nonperformance risk. Nonperformance risk refers to the risk that an obligation (either by a counterparty or Caterpillar) will not be fulfilled. For financial assets traded in an active market (Level 1 and certain Level 2), the nonperformance risk is included in the market price. For certain other financial assets and liabilities (certain Level 2 and Level 3), our fair value calculations have been adjusted accordingly. Investments in debt and equity securities Investments in certain debt and equity securities, primarily at Insurance Services, have been classified as available-for-sale and recorded at fair value. Fair values for our U.S. treasury bonds and large capitalization value and smaller company growth equity securities are based upon valuations for identical instruments in active markets. Fair values for other government bonds, corporate bonds and mortgage-backed debt securities are based upon models that take into consideration such market-based factors as recent sales, risk-free yield curves and prices of similarly rated bonds. In addition, Insurance Services has an equity investment in a real estate investment trust (REIT) which is recorded at fair value based on the net asset value (NAV) of the investment. See Note 8 for additional information on our investments in debt and equity securities. Derivative financial instruments The fair value of interest rate contracts is primarily based on models that utilize the appropriate market-based forward swap curves and zero-coupon interest rates to determine discounted cash flows. The fair value of foreign currency and commodity forward, option and cross currency contracts is based on a valuation model that discounts cash flows resulting from the differential between the contract price and the market-based forward rate. Assets and liabilities measured on a recurring basis at fair value, primarily related to Financial Products, included in our Consolidated Statement of Financial Position as of September 30, 2016 and December 31, 2015 are summarized below: September 30, 2016 (Millions of dollars) Level 1 Level 2 Level 3 Total Assets / Liabilities, at Fair Value Assets Available-for-sale securities Government debt U.S. treasury bonds $ 10 $ — $ — $ 10 Other U.S. and non-U.S. government bonds — 68 — 68 Corporate bonds Corporate bonds — 710 — 710 Asset-backed securities — 135 — 135 Mortgage-backed debt securities U.S. governmental agency — 286 — 286 Residential — 10 — 10 Commercial — 63 — 63 Equity securities Large capitalization value 299 — — 299 Smaller company growth 57 — — 57 Total available-for-sale securities 366 1,272 — 1,638 REIT — — 72 72 Total Assets $ 366 $ 1,272 $ 72 $ 1,710 Liabilities Derivative financial instruments, net — 29 — 29 Total Liabilities $ — $ 29 $ — $ 29 December 31, 2015 (Millions of dollars) Level 1 Level 2 Level 3 Total Assets / Liabilities, at Fair Value Assets Available-for-sale securities Government debt U.S. treasury bonds $ 9 $ — $ — $ 9 Other U.S. and non-U.S. government bonds — 72 — 72 Corporate bonds Corporate bonds — 708 — 708 Asset-backed securities — 129 — 129 Mortgage-backed debt securities U.S. governmental agency — 292 — 292 Residential — 12 — 12 Commercial — 61 — 61 Equity securities Large capitalization value 273 — — 273 Smaller company growth 54 — — 54 Total available-for-sale securities 336 1,274 — 1,610 REIT — — 25 25 Derivative financial instruments, net — 49 — 49 Total Assets $ 336 $ 1,323 $ 25 $ 1,684 The fair value of our REIT investment is measured based on NAV, which is considered a Level 3 input. A roll-forward for the nine months ended September 30, 2016 of our REIT investment is as follows. (Millions of dollars) REIT Balance at December 31, 2015 $ 25 Purchases of securities 45 Sale of securities — Gains (losses) included in Accumulated other comprehensive income (loss) 2 Balance at September 30, 2016 $ 72 In addition to the amounts above, Cat Financial impaired loans are subject to measurement at fair value on a nonrecurring basis and are classified as Level 3 measurements. A loan is considered impaired when management determines that collection of contractual amounts due is not probable. In these cases, an allowance for credit losses may be established based either on the present value of expected future cash flows discounted at the receivables' effective interest rate, or the fair value of the collateral for collateral-dependent receivables. In determining collateral value, Cat Financial estimates the current fair market value of the collateral less selling costs. Cat Financial had impaired loans with a fair value of $122 million and $91 million as of September 30, 2016 and December 31, 2015 , respectively. B. Fair values of financial instruments In addition to the methods and assumptions we use to record the fair value of financial instruments as discussed in the Fair value measurements section above, we used the following methods and assumptions to estimate the fair value of our financial instruments: Cash and short-term investments Carrying amount approximated fair value. Restricted cash and short-term investments Carrying amount approximated fair value. Restricted cash and short-term investments are included in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position. Finance receivables Fair value was estimated by discounting the future cash flows using current rates, representative of receivables with similar remaining maturities. Wholesale inventory receivables Fair value was estimated by discounting the future cash flows using current rates, representative of receivables with similar remaining maturities. Short-term borrowings Carrying amount approximated fair value. Long-term debt Fair value for fixed and floating rate debt was estimated based on quoted market prices. Guarantees The fair value of guarantees is based upon our estimate of the premium a market participant would require to issue the same guarantee in a stand-alone arms-length transaction with an unrelated party. If quoted or observable market prices are not available, fair value is based upon internally developed models that utilize current market-based assumptions. Please refer to the table below for the fair values of our financial instruments. Fair Value of Financial Instruments September 30, 2016 December 31, 2015 (Millions of dollars) Carrying Amount Fair Value Carrying Amount Fair Value Fair Value Levels Reference Assets Cash and short-term investments $ 6,113 $ 6,113 $ 6,460 $ 6,460 1 Restricted cash and short-term investments 28 28 52 52 1 Investments in debt and equity securities 1,710 1,710 1,635 1,635 1, 2 & 3 Note 8 Finance receivables – net (excluding finance leases 1 ) 16,571 16,565 16,515 16,551 3 Note 16 Wholesale inventory receivables – net (excluding finance leases 1 ) 1,633 1,601 1,821 1,775 3 Note 16 Foreign currency contracts – net — — 13 13 2 Note 4 Interest rate contracts – net 3 3 48 48 2 Note 4 Commodity contracts – net 6 6 — — 2 Note 4 Liabilities Short-term borrowings 6,965 6,965 6,967 6,967 1 Long-term debt (including amounts due within one year) Machinery, Energy & Transportation 8,985 11,037 9,477 10,691 2 Financial Products 21,160 21,669 21,569 21,904 2 Foreign currency contracts – net 38 38 — — 2 Note 4 Commodity contracts – net — — 12 12 2 Note 4 Guarantees 12 12 12 12 3 Note 10 1 Total excluded items have a net carrying value at September 30, 2016 and December 31, 2015 of $6,221 million and $6,452 million , respectively. |
Restructuring Costs
Restructuring Costs | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring Charges [Abstract] | |
Restructuring Costs | Restructuring costs Our accounting for employee separations is dependent upon how the particular program is designed. For voluntary programs, eligible separation costs are recognized at the time of employee acceptance unless the acceptance requires explicit approval by the company. For involuntary programs, eligible costs are recognized when management has approved the program, the affected employees have been properly notified and the costs are estimable. Restructuring costs for the three and nine months ended September 30, 2016 and 2015 were as follows: (Millions of dollars) Three Months Ended September 30 2016 2015 Employee separations 1 $ 99 $ 60 Contract terminations 1 9 — Long-lived asset impairments 1 158 26 Other 2 58 12 Total restructuring costs $ 324 $ 98 Nine Months Ended September 30 2016 2015 Employee separations 1 $ 175 $ 180 Contract terminations 1 55 — Long-lived asset impairments 1 254 27 Other 2 140 12 Total restructuring costs $ 624 $ 219 1 Recognized in Other operating (income) expenses. 2 Represents costs related to our restructuring programs, primarily for accelerated depreciation, inventory write-downs, sales discounts and equipment relocation and were recognized primarily in Cost of goods sold. Restructuring costs incurred during the first nine months of 2016 have been primarily related to actions in Resource Industries in response to continued weakness in the mining industry. In addition, costs resulted from our decision to discontinue production of on-highway vocational trucks and other restructuring actions across the company, most of which were related to our September 2015 announcement regarding significant restructuring and cost reduction actions to lower our operating costs in response to weak economic and business conditions in most of the industries we serve. For the first nine months of 2015, the restructuring costs were related to several restructuring programs across the company. Restructuring costs for the year ended December 31, 2015 were $898 million which included $641 million of employee separation costs, $127 million of long-lived asset impairments and $82 million of defined benefit retirement plan curtailment losses and were recognized in Other operating (income) expense. In addition, in 2015 we incurred costs related to our restructuring programs of $48 million . These costs were primarily for accelerated depreciation and inventory write-downs and were recognized primarily in Cost of goods sold. The restructuring costs in 2015 were related to several restructuring programs across the company. Restructuring costs are a reconciling item between Segment profit and Consolidated profit before taxes. See Note 15 for more information. The following table summarizes the 2015 and 2016 employee separation activity: (Millions of dollars) Total Liability balance at December 31, 2014 $ 182 Increase in liability (separation charges) 641 Reduction in liability (payments) (340 ) Liability balance at December 31, 2015 $ 483 Increase in liability (separation charges) 175 Reduction in liability (payments) (507 ) Liability balance at September 30, 2016 $ 151 As part of our September 2015 announcement, we offered a voluntary retirement enhancement program to qualifying U.S. employees and various voluntary separation programs outside of the U.S. and implemented additional involuntary separation programs throughout the company. As of December 31, 2015 , we incurred $379 million of employee separation costs and $82 million of defined benefit retirement plan curtailment losses related to these programs. Additionally, for the three and nine months ended September 30, 2016 we incurred $2 million and $78 million of employee separation costs, respectively. Substantially all of the employee separation costs included in the December 31, 2015 liability balance were paid in the first quarter of 2016. The majority of the September 30, 2016 liability balance is expected to be paid in 2016 and 2017. In February 2016, we made the decision to discontinue production of on-highway vocational trucks. Based on the business climate in the truck industry and a thorough evaluation of the business, the company decided it would withdraw from this market. We estimate restructuring costs incurred under the restructuring plan to be $120 million . For the three and nine months ended September 30, 2016 , we recognized $10 million and $92 million , respectively, of restructuring costs primarily for long-lived asset impairments related to this restructuring plan. The remaining costs are expected to be recognized in 2016 and 2017. In the third quarter of 2016 for Resource Industries, we took additional restructuring actions, including ending the production of track drills; pursuing strategic alternatives, including a possible divestiture of room and pillar products; consolidation of two product development divisions; and additional restructuring actions. We estimate restructuring costs incurred under these restructuring plans to be $260 million . For the three and nine months ended September 30, 2016, we incurred $221 million of restructuring costs which included $132 million of intangible asset impairments, $72 million of employee separation costs and $17 million of other related costs. The remaining costs are expected to be recognized in 2016. |
Derivative Financial Instrume28
Derivative Financial Instruments and Risk Management (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Risk Management Policy | Foreign Currency Exchange Rate Risk Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of sales made and costs incurred in foreign currencies. Movements in foreign currency rates also affect our competitive position as these changes may affect business practices and/or pricing strategies of non-U.S.-based competitors. Additionally, we have balance sheet positions denominated in foreign currencies, thereby creating exposure to movements in exchange rates. Our Machinery, Energy & Transportation operations purchase, manufacture and sell products in many locations around the world. As we have a diversified revenue and cost base, we manage our future foreign currency cash flow exposure on a net basis. We use foreign currency forward and option contracts to manage unmatched foreign currency cash inflow and outflow. Our objective is to minimize the risk of exchange rate movements that would reduce the U.S. dollar value of our foreign currency cash flow. Our policy allows for managing anticipated foreign currency cash flow for up to five years. As of September 30, 2016 , the maximum term of these outstanding contracts was approximately 51 months . We generally designate as cash flow hedges at inception of the contract any Australian dollar, Brazilian real, British pound, Canadian dollar, Chinese yuan, euro, Indian rupee, Japanese yen, Mexican peso, Norwegian krona, Singapore dollar, Swiss franc or Thailand baht forward or option contracts that meet the requirements for hedge accounting and the maturity extends beyond the current quarter-end. Designation is performed on a specific exposure basis to support hedge accounting. The remainder of Machinery, Energy & Transportation foreign currency contracts are undesignated. As of September 30, 2016 , $19 million of deferred net losses, net of tax, included in equity (AOCI in the Consolidated Statement of Financial Position), are expected to be reclassified to current earnings (Other income (expense) in the Consolidated Statement of Results of Operations) over the next twelve months when earnings are affected by the hedged transactions. The actual amount recorded in Other income (expense) will vary based on exchange rates at the time the hedged transactions impact earnings. In managing foreign currency risk for our Financial Products operations, our objective is to minimize earnings volatility resulting from conversion and the remeasurement of net foreign currency balance sheet positions, and future transactions denominated in foreign currencies. Our policy allows the use of foreign currency forward, option and cross currency contracts to offset the risk of currency mismatch between our assets and liabilities, and exchange rate risk associated with future transactions denominated in foreign currencies. Our foreign currency forward, option and cross currency contracts are primarily undesignated. We designate fixed-to-fixed cross currency contracts as cash flow hedges to protect against movements in exchange rates on foreign currency fixed rate assets and liabilities. Interest Rate Risk Interest rate movements create a degree of risk by affecting the amount of our interest payments and the value of our fixed-rate debt. Our practice is to use interest rate contracts to manage our exposure to interest rate changes. Our Machinery, Energy & Transportation operations generally use fixed-rate debt as a source of funding. Our objective is to minimize the cost of borrowed funds. Our policy allows us to enter into fixed-to-floating interest rate contracts and forward rate agreements to meet that objective. We designate fixed-to-floating interest rate contracts as fair value hedges at inception of the contract, and we designate certain forward rate agreements as cash flow hedges at inception of the contract. As of September 30, 2016 , $4 million of deferred net losses, net of tax, included in equity (AOCI in the Consolidated Statement of Financial Position), related to Machinery, Energy & Transportation forward rate agreements, are expected to be reclassified to current earnings (Interest expense excluding Financial Products in the Consolidated Statement of Results of Operations) over the next twelve months. Financial Products operations has a match-funding policy that addresses interest rate risk by aligning the interest rate profile (fixed or floating rate) of Cat Financial’s debt portfolio with the interest rate profile of their receivables portfolio within predetermined ranges on an ongoing basis. In connection with that policy, we use interest rate derivative instruments to modify the debt structure to match assets within the receivables portfolio. This matched funding reduces the volatility of margins between interest-bearing assets and interest-bearing liabilities, regardless of which direction interest rates move. Our policy allows us to use fixed-to-floating, floating-to-fixed and floating-to-floating interest rate contracts to meet the match-funding objective. We designate fixed-to-floating interest rate contracts as fair value hedges to protect debt against changes in fair value due to changes in the benchmark interest rate. We designate most floating-to-fixed interest rate contracts as cash flow hedges to protect against the variability of cash flows due to changes in the benchmark interest rate. As of September 30, 2016 , less than $1 million of deferred net gains, net of tax, included in equity (AOCI in the Consolidated Statement of Financial Position), related to Financial Products floating-to-fixed interest rate contracts, are expected to be reclassified to current earnings (Interest expense of Financial Products in the Consolidated Statement of Results of Operations) over the next twelve months. The actual amount recorded in Interest expense of Financial Products will vary based on interest rates at the time the hedged transactions impact earnings. We have, at certain times, liquidated fixed-to-floating and floating-to-fixed interest rate contracts at both Machinery, Energy & Transportation and Financial Products. The gains or losses associated with these contracts at the time of liquidation are amortized into earnings over the original term of the previously designated hedged item. Commodity Price Risk Commodity price movements create a degree of risk by affecting the price we must pay for certain raw material. Our policy is to use commodity forward and option contracts to manage the commodity risk and reduce the cost of purchased materials. Our Machinery, Energy & Transportation operations purchase base and precious metals embedded in the components we purchase from suppliers. Our suppliers pass on to us price changes in the commodity portion of the component cost. In addition, we are subject to price changes on energy products such as natural gas and diesel fuel purchased for operational use. Our objective is to minimize volatility in the price of these commodities. Our policy allows us to enter into commodity forward and option contracts to lock in the purchase price of a portion of these commodities within a five -year horizon. All such commodity forward and option contracts are undesignated. |
Nature of Operations, Basis o29
Nature of Operations, Basis of Presentation and Change in Accounting Principle (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Nature of Operations and Basis of Presentation [Abstract] | |
Schedule of Maximum Exposure to Loss from Variable Interest Entities | Our maximum exposure to loss from VIEs for which we are not the primary beneficiary was as follows: (Millions of dollars) September 30, 2016 December 31, 2015 Receivables - trade and other $ 48 $ 19 Receivables - finance 192 466 Long-term receivables - finance 253 62 Other assets 31 35 Guarantees 211 175 Total $ 735 $ 757 |
Schedule of Change in Accounting Principle | Following are the changes to financial statement line items as a result of the accounting principle change for the periods presented in the accompanying unaudited consolidated financial statements: Consolidated Statement of Results of Operations (Dollars in millions except per share data) Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 As Reported Previous Accounting Method Effect of Accounting Change Recast Previously Reported Effect of Accounting Change Cost of goods sold $ 6,527 $ 6,588 $ (61 ) $ 7,872 $ 7,954 $ (82 ) Selling, general and administrative expenses $ 992 $ 1,025 $ (33 ) $ 1,129 $ 1,225 $ (96 ) Research and development expenses $ 453 $ 464 $ (11 ) $ 513 $ 534 $ (21 ) Other operating (income) expenses $ 560 $ 560 $ — $ 381 $ 394 $ (13 ) Total operating costs $ 8,679 $ 8,784 $ (105 ) $ 10,037 $ 10,249 $ (212 ) Operating profit $ 481 $ 376 $ 105 $ 925 $ 713 $ 212 Other income (expense) $ 28 $ 13 $ 15 $ (15 ) $ (68 ) $ 53 Consolidated profit before taxes $ 383 $ 263 $ 120 $ 783 $ 518 $ 265 Provision (benefit) for income taxes $ 96 $ 55 $ 41 $ 218 $ 144 $ 74 Profit of consolidated companies $ 287 $ 208 $ 79 $ 565 $ 374 $ 191 Profit of consolidated and affiliated companies $ 283 $ 204 $ 79 $ 562 $ 371 $ 191 Profit $ 283 $ 204 $ 79 $ 559 $ 368 $ 191 Profit per common share $ 0.48 $ 0.35 $ 0.13 $ 0.95 $ 0.63 $ 0.32 Profit per common share - diluted $ 0.48 $ 0.35 $ 0.13 $ 0.94 $ 0.62 $ 0.32 Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 As Reported Previous Accounting Method Effect of Accounting Change Recast Previously Reported Effect of Accounting Change Cost of goods sold $ 20,768 $ 20,949 $ (181 ) $ 25,306 $ 25,559 $ (253 ) Selling, general and administrative expenses $ 3,203 $ 3,305 $ (102 ) $ 3,696 $ 3,932 $ (236 ) Research and development expenses $ 1,429 $ 1,461 $ (32 ) $ 1,547 $ 1,612 $ (65 ) Other operating (income) expenses $ 1,356 $ 1,356 $ — $ 1,032 $ 1,068 $ (36 ) Total operating costs $ 27,203 $ 27,518 $ (315 ) $ 32,021 $ 32,611 $ (590 ) Operating profit $ 1,760 $ 1,445 $ 315 $ 3,960 $ 3,370 $ 590 Other income (expense) $ 112 $ 60 $ 52 $ 107 $ 76 $ 31 Consolidated profit before taxes $ 1,487 $ 1,120 $ 367 $ 3,686 $ 3,065 $ 621 Provision (benefit) for income taxes $ 372 $ 252 $ 120 $ 1,074 $ 870 $ 204 Profit of consolidated companies $ 1,115 $ 868 $ 247 $ 2,612 $ 2,195 $ 417 Profit of consolidated and affiliated companies $ 1,108 $ 861 $ 247 $ 2,613 $ 2,196 $ 417 Profit $ 1,104 $ 857 $ 247 $ 2,606 $ 2,189 $ 417 Profit per common share $ 1.89 $ 1.47 $ 0.42 $ 4.36 $ 3.66 $ 0.70 Profit per common share - diluted $ 1.88 $ 1.46 $ 0.42 $ 4.30 $ 3.62 $ 0.68 Consolidated Statement of Comprehensive Income (Dollars in millions) Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 As Reported Previous Accounting Method Effect of Accounting Change Recast Previously Reported Effect of Accounting Change Profit of consolidated and affiliated companies $ 283 $ 204 $ 79 $ 562 $ 371 $ 191 Foreign currency translation, net of tax $ 137 $ 139 $ (2 ) $ (236 ) $ (235 ) $ (1 ) Pension and other postretirement benefits: Current year actuarial gain (loss), net of tax $ — $ (2 ) $ 2 $ — $ 44 $ (44 ) Amortization of actuarial (gain) loss, net of tax $ — $ 79 $ (79 ) $ — $ 108 $ (108 ) Total other comprehensive income (loss), net of tax $ 106 $ 185 $ (79 ) $ (268 ) $ (115 ) $ (153 ) Comprehensive income $ 389 $ 389 $ — $ 294 $ 256 $ 38 Comprehensive income attributable to stockholders $ 389 $ 389 $ — $ 292 $ 254 $ 38 Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 As Reported Previous Accounting Method Effect of Accounting Change Recast Previously Reported Effect of Accounting Change Profit of consolidated and affiliated companies $ 1,108 $ 861 $ 247 $ 2,613 $ 2,196 $ 417 Foreign currency translation, net of tax $ 442 $ 447 $ (5 ) $ (806 ) $ (810 ) $ 4 Pension and other postretirement benefits: Current year actuarial gain (loss), net of tax $ — $ (5 ) $ 5 $ — $ 68 $ (68 ) Amortization of actuarial (gain) loss, net of tax $ — $ 237 $ (237 ) $ — $ 326 $ (326 ) Total other comprehensive income (loss), net of tax $ 508 $ 745 $ (237 ) $ (811 ) $ (421 ) $ (390 ) Comprehensive income $ 1,616 $ 1,606 $ 10 $ 1,802 $ 1,775 $ 27 Comprehensive income attributable to stockholders $ 1,612 $ 1,602 $ 10 $ 1,804 $ 1,777 $ 27 Consolidated Statement of Financial Position (Dollars in millions) September 30, 2016 As Reported Previous Accounting Method Effect of Accounting Change Noncurrent deferred and refundable income taxes $ 2,579 $ 2,590 $ (11 ) Liability for postemployment benefits $ 8,499 $ 8,520 $ (21 ) Profit employed in the business $ 29,450 $ 34,165 $ (4,715 ) Accumulated other comprehensive income (loss) $ (1,527 ) $ (6,252 ) $ 4,725 December 31, 2015 Recast Previously Reported Effect of Accounting Change Profit employed in the business $ 29,246 $ 34,208 $ (4,962 ) Accumulated other comprehensive income (loss) $ (2,035 ) $ (6,997 ) $ 4,962 Consolidated Statement of Changes in Stockholders' Equity (Dollars in millions) Nine Months Ended September 30, 2016 As Reported Previous Accounting Method Effect of Accounting Change Profit of consolidated and affiliated companies $ 1,108 $ 861 $ 247 Foreign currency translation, net of tax $ 442 $ 447 $ (5 ) Pension and other postretirement benefits, net of tax $ 90 $ 322 $ (232 ) Balance at September 30, 2016 $ 15,715 $ 15,705 $ 10 Nine Months Ended September 30, 2015 Recast Previously Reported Effect of Accounting Change Profit of consolidated and affiliated companies $ 2,613 $ 2,196 $ 417 Foreign currency translation, net of tax $ (806 ) $ (810 ) $ 4 Pension and other postretirement benefits, net of tax $ (25 ) $ 369 $ (394 ) Balance at September 30, 2015 $ 15,995 $ 15,968 $ 27 Consolidated Statement of Cash Flow (Millions of dollars) Nine Months Ended September 30, 2016 Cash flow from operating activities: As Reported Previous Accounting Method Effect of Accounting Change Profit of consolidated and affiliated companies $ 1,108 $ 861 $ 247 Adjustments for non-cash items: Other $ 640 $ 692 $ (52 ) Other assets – net $ (141 ) $ (261 ) $ 120 Other liabilities – net $ (291 ) $ 24 $ (315 ) Nine Months Ended September 30, 2015 Cash flow from operating activities: Recast Previously Reported Effect of Accounting Change Profit of consolidated and affiliated companies $ 2,613 $ 2,196 $ 417 Adjustments for non-cash items: Other $ 323 $ 354 $ (31 ) Other assets – net $ 96 $ (108 ) $ 204 Other liabilities – net $ (236 ) $ 354 $ (590 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of type and fair value of the stock-based compensation awards granted during the period | The following table illustrates the type and fair value of the stock-based compensation awards granted during the nine months ended September 30, 2016 and 2015 , respectively: Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 Shares Granted Weighted-Average Fair Value Per Share Weighted-Average Grant Date Stock Price Shares Granted Weighted-Average Fair Value Per Share Weighted-Average Grant Date Stock Price Stock options 4,243,272 $ 20.64 $ 74.77 7,939,497 $ 23.61 $ 83.34 RSUs 1,085,505 $ 68.04 $ 74.77 1,690,661 $ 77.55 $ 83.02 PRSUs 614,347 $ 64.71 $ 74.77 132,068 $ 77.47 $ 82.90 |
Schedule providing assumptions used in determining the fair value of stock-based awards | The following table provides the assumptions used in determining the fair value of the stock-based awards for the nine months ended September 30, 2016 and 2015 , respectively: Grant Year 2016 2015 Weighted-average dividend yield 3.23% 2.27% Weighted-average volatility 31.1% 28.4% Range of volatilities 22.5-33.4% 19.9-35.9% Range of risk-free interest rates 0.62-1.73% 0.22-2.08% Weighted-average expected lives 8 years 8 years |
Derivative Financial Instrume31
Derivative Financial Instruments and Risk Management (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Location and fair value of derivative instruments reported in the Consolidated Statement of Financial Position | The location and fair value of derivative instruments reported in the Consolidated Statement of Financial Position are as follows: (Millions of dollars) Consolidated Statement of Financial Asset (Liability) Fair Value Position Location September 30, 2016 December 31, 2015 Designated derivatives Foreign exchange contracts Machinery, Energy & Transportation Receivables – trade and other $ 24 $ 12 Machinery, Energy & Transportation Long-term receivables – trade and other 1 — Machinery, Energy & Transportation Accrued expenses (55 ) (25 ) Machinery, Energy & Transportation Other liabilities (18 ) — Financial Products Long-term receivables – trade and other 4 — Financial Products Accrued expenses (15 ) — Interest rate contracts Financial Products Receivables – trade and other — 1 Financial Products Long-term receivables – trade and other 5 51 Financial Products Accrued expenses (2 ) (4 ) $ (56 ) $ 35 Undesignated derivatives Foreign exchange contracts Machinery, Energy & Transportation Receivables – trade and other $ 3 $ 2 Machinery, Energy & Transportation Accrued expenses (7 ) (9 ) Financial Products Receivables – trade and other 2 3 Financial Products Long-term receivables – trade and other 28 36 Financial Products Accrued expenses (5 ) (6 ) Commodity contracts Machinery, Energy & Transportation Receivables – trade and other 6 — Machinery, Energy & Transportation Accrued expenses — (12 ) $ 27 $ 14 |
Total notional amounts of derivative instruments | The total notional amounts of the derivative instruments are as follows: (Millions of dollars) September 30, 2016 December 31, 2015 Machinery, Energy & Transportation $ 2,200 $ 2,040 Financial Products $ 2,909 $ 3,539 |
Effect of derivatives designated as hedging instruments on Consolidated Statement of Results of Operations | The effect of derivatives designated as hedging instruments on the Consolidated Statement of Results of Operations is as follows: Fair Value Hedges Three Months Ended Three Months Ended (Millions of dollars) Classification Gains (Losses) on Derivatives Gains (Losses) on Borrowings Gains (Losses) on Derivatives Gains (Losses) on Borrowings Interest rate contracts Financial Products Other income (expense) $ (11 ) $ 11 $ 3 $ (3 ) $ (11 ) $ 11 $ 3 $ (3 ) Nine Months Ended Nine Months Ended Classification Gains (Losses) on Derivatives Gains (Losses) on Borrowings Gains (Losses) on Derivatives Gains (Losses) on Borrowings Interest rate contracts Financial Products Other income (expense) $ (11 ) $ 10 $ (11 ) $ 10 $ (11 ) $ 10 $ (11 ) $ 10 Cash Flow Hedges Three Months Ended September 30, 2016 Recognized in Earnings (Millions of dollars) Amount of Gains (Losses) Recognized in AOCI (Effective Portion) Classification of Gains (Losses) Amount of Gains (Losses) Reclassified from AOCI to Earnings Recognized in Earnings (Ineffective Portion) Foreign exchange contracts Machinery, Energy & Transportation $ (29 ) Other income (expense) $ 4 $ — Financial Products (17 ) Other income (expense) (10 ) — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products (2 ) — Financial Products 2 Interest expense of Financial Products — — $ (44 ) $ (8 ) $ — Three Months Ended September 30, 2015 Recognized in Earnings Amount of Gains (Losses) Recognized in AOCI (Effective Portion) Classification of Gains (Losses) Amount of Gains (Losses) Reclassified from AOCI to Earnings Recognized in Earnings (Ineffective Portion) Foreign exchange contracts Machinery, Energy & Transportation $ (18 ) Other income (expense) $ (29 ) $ — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products (1 ) — Financial Products (1 ) Interest expense of Financial Products (1 ) — $ (19 ) $ (31 ) $ — Nine Months Ended September 30, 2016 Recognized in Earnings Amount of Gains (Losses) Recognized in AOCI (Effective Portion) Classification of Gains (Losses) Amount of Gains (Losses) Reclassified from AOCI to Earnings Recognized in Earnings (Ineffective Portion) Foreign exchange contracts Machinery, Energy & Transportation $ (35 ) Other income (expense) $ — $ — Financial Products (23 ) Other income (expense) (16 ) — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products (5 ) — Financial Products — Interest expense of Financial Products (3 ) — $ (58 ) $ (24 ) $ — Nine Months Ended September 30, 2015 Recognized in Earnings Amount of Gains (Losses) Recognized in AOCI (Effective Portion) Classification of Gains (Losses) Amount of Gains (Losses) Reclassified from AOCI to Earnings Recognized in Earnings (Ineffective Portion) Foreign exchange contracts Machinery, Energy & Transportation $ (25 ) Other income (expense) $ (101 ) $ — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products (4 ) — Financial Products 1 Interest expense of Financial Products (4 ) — $ (24 ) $ (109 ) $ — |
Effect of derivatives not designated as hedging instruments on the Consolidated Statement of Results of Operations | The effect of derivatives not designated as hedging instruments on the Consolidated Statement of Results of Operations is as follows: (Millions of dollars) Classification of Gains (Losses) Three Months Ended Three Months Ended Foreign exchange contracts Machinery, Energy & Transportation Other income (expense) $ 2 $ 7 Financial Products Other income (expense) (5 ) 6 Commodity contracts Machinery, Energy & Transportation Other income (expense) 3 (8 ) $ — $ 5 Classification of Gains (Losses) Nine Months Ended Nine Months Ended Foreign exchange contracts Machinery, Energy & Transportation Other income (expense) $ 24 $ (22 ) Financial Products Other income (expense) (33 ) (18 ) Commodity contracts Machinery, Energy & Transportation Other income (expense) 9 (15 ) $ — $ (55 ) |
Effect of net settlement provisions of the master netting agreements on derivative assets | December 31, 2015 Gross Amounts Not Offset in the Statement of Financial Position (Millions of dollars) Gross Amount of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amount of Assets Presented in the Statement of Financial Position Financial Instruments Cash Collateral Received Net Amount of Assets Derivatives Machinery, Energy & Transportation $ 14 $ — $ 14 $ (14 ) $ — $ — Financial Products 91 — 91 (5 ) — 86 Total $ 105 $ — $ 105 $ (19 ) $ — $ 86 The effect of the net settlement provisions of the master netting agreements on our derivative balances upon an event of default or termination event is as follows: September 30, 2016 Gross Amounts Not Offset in the Statement of Financial Position (Millions of dollars) Gross Amount of Recognized Assets Gross Amounts Offset in the Statement of Financial Position Net Amount of Assets Presented in the Statement of Financial Position Financial Instruments Cash Collateral Received Net Amount of Assets Derivatives Machinery, Energy & Transportation $ 34 $ — $ 34 $ (33 ) $ — $ 1 Financial Products 39 — 39 (3 ) — 36 Total $ 73 $ — $ 73 $ (36 ) $ — $ 37 |
Effect of net settlement provisions of the master netting agreements on derivative liabilities | September 30, 2016 Gross Amounts Not Offset in the Statement of Financial Position (Millions of dollars) Gross Amount of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amount of Liabilities Presented in the Statement of Financial Position Financial Instruments Cash Collateral Pledged Net Amount of Liabilities Derivatives Machinery, Energy & Transportation $ (80 ) $ — $ (80 ) $ 33 $ — $ (47 ) Financial Products (22 ) — (22 ) 3 — (19 ) Total $ (102 ) $ — $ (102 ) $ 36 $ — $ (66 ) December 31, 2015 Gross Amounts Not Offset in the Statement of Financial Position (Millions of dollars) Gross Amount of Recognized Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amount of Liabilities Presented in the Statement of Financial Position Financial Instruments Cash Collateral Pledged Net Amount of Liabilities Derivatives Machinery, Energy & Transportation $ (46 ) $ — $ (46 ) $ 14 $ — $ (32 ) Financial Products (10 ) — (10 ) 5 — (5 ) Total $ (56 ) $ — $ (56 ) $ 19 $ — $ (37 ) |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories (principally using the last-in, first-out (LIFO) method) are comprised of the following: (Millions of dollars) September 30, December 31, Raw materials $ 2,359 $ 2,467 Work-in-process 2,015 1,857 Finished goods 4,866 5,122 Supplies 238 254 Total inventories $ 9,478 $ 9,700 |
Investments in Unconsolidated33
Investments in Unconsolidated Affiliated Companies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Caterpillar's investments in unconsolidated affiliated companies | Caterpillar’s investments in unconsolidated affiliated companies: (Millions of dollars) September 30, December 31, Investments in equity method companies $ 192 $ 203 Plus: Investments in cost method companies 55 43 Total investments in unconsolidated affiliated companies $ 247 $ 246 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets | Intangible assets are comprised of the following: September 30, 2016 (Millions of dollars) Weighted Amortizable Life (Years) Gross Carrying Amount Accumulated Amortization Net Customer relationships 15 $ 2,424 $ (915 ) $ 1,509 Intellectual property 11 1,515 (681 ) 834 Other 14 184 (74 ) 110 Total finite-lived intangible assets 14 $ 4,123 $ (1,670 ) $ 2,453 December 31, 2015 Weighted Amortizable Life (Years) Gross Carrying Amount Accumulated Amortization Net Customer relationships 15 $ 2,489 $ (809 ) $ 1,680 Intellectual property 11 1,660 (626 ) 1,034 Other 12 174 (67 ) 107 Total finite-lived intangible assets 14 $ 4,323 $ (1,502 ) $ 2,821 |
Expected amortization expense related to intangible assets | Amortization expense related to intangible assets is expected to be: (Millions of dollars) Remaining Three Months of 2016 2017 2018 2019 2020 Thereafter $79 $316 $308 $306 $295 $1,149 |
Goodwill acquired | The changes in carrying amount of goodwill by reportable segment for the nine months ended September 30, 2016 were as follows: (Millions of dollars) December 31, Acquisitions Other Adjustments 1 September 30, Construction Industries Goodwill $ 285 $ — $ 30 $ 315 Impairments (22 ) — — (22 ) Net goodwill 263 — 30 293 Resource Industries Goodwill 4,145 — 36 4,181 Impairments (580 ) — — (580 ) Net goodwill 3,565 — 36 3,601 Energy & Transportation Goodwill 2,738 26 8 2,772 All Other 2 Goodwill 49 — 10 59 Consolidated total Goodwill 7,217 26 84 7,327 Impairments (602 ) — — (602 ) Net goodwill $ 6,615 $ 26 $ 84 $ 6,725 1 Other adjustments are comprised primarily of foreign currency translation. 2 Includes All Other operating segments (See Note 15). |
Investments in Debt and Equit35
Investments in Debt and Equity Securities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Cost basis and fair value of available-for-sale securities | The cost basis and fair value of debt and equity securities were as follows: September 30, 2016 December 31, 2015 (Millions of dollars) Cost Basis Unrealized Pretax Net Gains (Losses) Fair Value Cost Basis Unrealized Pretax Net Gains (Losses) Fair Value Government debt U.S. treasury bonds $ 10 $ — $ 10 $ 9 $ — $ 9 Other U.S. and non-U.S. government bonds 67 1 68 71 1 72 Corporate bonds Corporate bonds 697 13 710 701 7 708 Asset-backed securities 134 1 135 129 — 129 Mortgage-backed debt securities U.S. governmental agency 282 4 286 291 1 292 Residential 10 — 10 12 — 12 Commercial 62 1 63 59 2 61 Equity securities Large capitalization value 279 20 299 243 30 273 Real estate investment trust (REIT) 70 2 72 25 — 25 Smaller company growth 47 10 57 37 17 54 Total $ 1,658 $ 52 $ 1,710 $ 1,577 $ 58 $ 1,635 |
Investments in an unrealized loss position that are not other-than-temporarily impaired: | Available-for-sale investments in an unrealized loss position that are not other-than-temporarily impaired: September 30, 2016 Less than 12 months 1 12 months or more 1 Total (Millions of dollars) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate bonds Asset-backed securities $ — $ — $ 16 $ 1 $ 16 $ 1 Equity securities Large capitalization value 85 6 9 1 94 7 Small company growth 13 3 — — 13 3 Total $ 98 $ 9 $ 25 $ 2 $ 123 $ 11 December 31, 2015 Less than 12 months 1 12 months or more 1 Total (Millions of dollars) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate bonds Corporate bonds $ 242 $ 3 $ 27 $ 1 $ 269 $ 4 Asset-backed securities 84 1 10 1 94 2 Mortgage-backed debt securities U.S. governmental agency 135 1 57 1 192 2 Equity securities Large capitalization value 97 8 2 — 99 8 Smaller company growth 14 1 — — 14 1 Total $ 572 $ 14 $ 96 $ 3 $ 668 $ 17 1 Indicates length of time that individual securities have been in a continuous unrealized loss position. |
Cost basis and fair value of the available-for-sale debt securities by contractual maturity | The cost basis and fair value of the available-for-sale debt securities at September 30, 2016 , by contractual maturity, is shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay and creditors may have the right to call obligations. September 30, 2016 (Millions of dollars) Cost Basis Fair Value Due in one year or less $ 209 $ 210 Due after one year through five years 622 634 Due after five years through ten years 50 52 Due after ten years 27 27 U.S. governmental agency mortgage-backed securities 282 286 Residential mortgage-backed securities 10 10 Commercial mortgage-backed securities 62 63 Total debt securities – available-for-sale $ 1,262 $ 1,282 |
Schedule of proceeds and gross gain and losses from the sale of available-for-sale securities | Sales of Securities: Three Months Ended Nine Months Ended (Millions of dollars) 2016 2015 2016 2015 Proceeds from the sale of available-for-sale securities $ 109 $ 110 $ 304 $ 238 Gross gains from the sale of available-for-sale securities $ 10 $ 32 $ 43 $ 38 Gross losses from the sale of available-for-sale securities $ 1 $ 1 $ 3 $ 2 |
Postretirement Benefits (Tables
Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of net periodic cost and weighted-average assumptions used to determine net cost | U.S. Pension Benefits Non-U.S. Pension Benefits Other Postretirement Benefits (Millions of dollars) September 30 September 30 September 30 2016 2015 2016 2015 2016 2015 For the three months ended: Components of net periodic benefit cost: Service cost $ 30 $ 45 $ 22 $ 28 $ 20 $ 26 Interest cost 129 151 30 37 33 46 Expected return on plan assets (190 ) (224 ) (59 ) (70 ) (11 ) (15 ) Amortization of prior service cost (credit) 1 — 1 — — (15 ) (14 ) Actuarial loss (gain) — — — (18 ) — (9 ) Net periodic benefit cost (benefit) (31 ) (27 ) (7 ) (23 ) 27 34 Curtailments and termination benefits 2 — — 1 (2 ) — (5 ) Total cost (benefit) included in operating profit $ (31 ) $ (27 ) $ (6 ) $ (25 ) $ 27 $ 29 For the nine months ended: Components of net periodic benefit cost: Service cost $ 89 $ 136 $ 68 $ 85 $ 61 $ 76 Interest cost 388 454 90 112 98 138 Expected return on plan assets (568 ) (672 ) (176 ) (207 ) (33 ) (43 ) Amortization of prior service cost (credit) 1 — 1 — — (45 ) (41 ) Actuarial loss (gain) — (8 ) — (18 ) — (9 ) Net periodic benefit cost (benefit) (91 ) (89 ) (18 ) (28 ) 81 121 Curtailments and termination benefits 2 — (19 ) 1 (2 ) (2 ) (5 ) Total cost (benefit) included in operating profit $ (91 ) $ (108 ) $ (17 ) $ (30 ) $ 79 $ 116 Weighted-average assumptions used to determine net cost: Discount rate used to measure service cost 4.5 % 3.8 % 2.9 % 3.3 % 4.4 % 3.9 % Discount rate used to measure interest cost 3.4 % 3.8 % 2.8 % 3.3 % 3.3 % 3.9 % Expected rate of return on plan assets 6.9 % 7.4 % 6.1 % 6.8 % 7.5 % 7.8 % Rate of compensation increase 4.0 % 4.0 % 3.5 % 4.0 % 4.0 % 4.0 % 1 Prior service cost (credit) for both pension and other postretirement benefits are generally amortized using the straight-line method over the average remaining service period of active employees expected to receive benefits from the plan. For pension plans in which all or almost all of the plan's participants are inactive and other postretirement benefit plans in which all or almost all of the plan's participants are fully eligible for benefits under the plan, prior service cost (credit) are amortized using the straight-line method over the remaining life expectancy of those participants. 2 Curtailments and termination benefits were recognized in Other operating (income) expenses in the Consolidated Statement of Results of Operations. |
Components of net periodic cost and weighted-average assumptions used to determine net cost | U.S. Pension Benefits Non-U.S. Pension Benefits Other Postretirement Benefits (Millions of dollars) September 30 September 30 September 30 2016 2015 2016 2015 2016 2015 For the three months ended: Components of net periodic benefit cost: Service cost $ 30 $ 45 $ 22 $ 28 $ 20 $ 26 Interest cost 129 151 30 37 33 46 Expected return on plan assets (190 ) (224 ) (59 ) (70 ) (11 ) (15 ) Amortization of prior service cost (credit) 1 — 1 — — (15 ) (14 ) Actuarial loss (gain) — — — (18 ) — (9 ) Net periodic benefit cost (benefit) (31 ) (27 ) (7 ) (23 ) 27 34 Curtailments and termination benefits 2 — — 1 (2 ) — (5 ) Total cost (benefit) included in operating profit $ (31 ) $ (27 ) $ (6 ) $ (25 ) $ 27 $ 29 For the nine months ended: Components of net periodic benefit cost: Service cost $ 89 $ 136 $ 68 $ 85 $ 61 $ 76 Interest cost 388 454 90 112 98 138 Expected return on plan assets (568 ) (672 ) (176 ) (207 ) (33 ) (43 ) Amortization of prior service cost (credit) 1 — 1 — — (45 ) (41 ) Actuarial loss (gain) — (8 ) — (18 ) — (9 ) Net periodic benefit cost (benefit) (91 ) (89 ) (18 ) (28 ) 81 121 Curtailments and termination benefits 2 — (19 ) 1 (2 ) (2 ) (5 ) Total cost (benefit) included in operating profit $ (91 ) $ (108 ) $ (17 ) $ (30 ) $ 79 $ 116 Weighted-average assumptions used to determine net cost: Discount rate used to measure service cost 4.5 % 3.8 % 2.9 % 3.3 % 4.4 % 3.9 % Discount rate used to measure interest cost 3.4 % 3.8 % 2.8 % 3.3 % 3.3 % 3.9 % Expected rate of return on plan assets 6.9 % 7.4 % 6.1 % 6.8 % 7.5 % 7.8 % Rate of compensation increase 4.0 % 4.0 % 3.5 % 4.0 % 4.0 % 4.0 % 1 Prior service cost (credit) for both pension and other postretirement benefits are generally amortized using the straight-line method over the average remaining service period of active employees expected to receive benefits from the plan. For pension plans in which all or almost all of the plan's participants are inactive and other postretirement benefit plans in which all or almost all of the plan's participants are fully eligible for benefits under the plan, prior service cost (credit) are amortized using the straight-line method over the remaining life expectancy of those participants. 2 Curtailments and termination benefits were recognized in Other operating (income) expenses in the Consolidated Statement of Results of Operations. |
Company costs related to U.S. and non-U.S. defined contribution plans | Total company costs related to our defined contribution plans were as follows: Three Months Ended Nine Months Ended (Millions of dollars) 2016 2015 2016 2015 U.S. Plans $ 83 $ 31 $ 235 $ 188 Non-U.S. Plans 16 19 51 58 $ 99 $ 50 $ 286 $ 246 |
Guarantees and Product Warran37
Guarantees and Product Warranty (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantees | The maximum potential amount of future payments (undiscounted and without reduction for any amounts that may possibly be recovered under recourse or collateralized provisions) we could be required to make under the guarantees are as follows: (Millions of dollars) September 30, December 31, Caterpillar dealer performance guarantees $ 217 $ 216 Customer loan guarantees 51 47 Supplier consortium performance guarantee 295 286 Third party logistics business lease guarantees 92 107 Other guarantees 38 25 Total guarantees $ 693 $ 681 |
Product warranty | (Millions of dollars) 2016 Warranty liability, January 1 $ 1,354 Reduction in liability (payments) (676 ) Increase in liability (new warranties) 628 Warranty liability, September 30 $ 1,306 (Millions of dollars) 2015 Warranty liability, January 1 $ 1,426 Reduction in liability (payments) (874 ) Increase in liability (new warranties) 802 Warranty liability, December 31 $ 1,354 |
Profit Per Share (Tables)
Profit Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Computations of profit per share | Computations of profit per share: Three Months Ended Nine Months Ended (Dollars in millions except per share data) 2016 2015 2016 2015 Profit for the period (A) 1 $ 283 $ 559 $ 1,104 $ 2,606 Determination of shares (in millions): Weighted-average number of common shares outstanding (B) 584.7 588.4 583.8 597.9 Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price 4.9 6.4 4.9 7.4 Average common shares outstanding for fully diluted computation (C) 2 589.6 594.8 588.7 605.3 Profit per share of common stock: Assuming no dilution (A/B) $ 0.48 $ 0.95 $ 1.89 $ 4.36 Assuming full dilution (A/C) 2 $ 0.48 $ 0.94 $ 1.88 $ 4.30 Shares outstanding as of September 30 (in millions) 585.1 582.2 1 Profit attributable to common stockholders. 2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method. |
Accumulated Other Comprehensi39
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Changes in Accumulated other comprehensive income (loss), net of tax | Changes in Accumulated other comprehensive income (loss), net of tax, included in the Consolidated Statement of Changes in Stockholders’ Equity, consisted of the following: (Millions of dollars) Foreign currency translation Pension and other postretirement benefits Derivative financial instruments Available-for-sale securities Total Three Months Ended September 30, 2016 Balance at June 30, 2016 $ (1,648 ) $ 29 $ (49 ) $ 35 $ (1,633 ) Other comprehensive income (loss) before reclassifications 124 2 (28 ) 5 103 Amounts reclassified from accumulated other comprehensive (income) loss 13 (10 ) 6 (6 ) 3 Other comprehensive income (loss) 137 (8 ) (22 ) (1 ) 106 Balance at September 30, 2016 $ (1,511 ) $ 21 $ (71 ) $ 34 $ (1,527 ) Three Months Ended September 30, 2015 Balance at June 30, 2015 $ (1,554 ) $ (49 ) $ (73 ) $ 82 $ (1,594 ) Other comprehensive income (loss) before reclassifications (235 ) 1 (12 ) (15 ) (261 ) Amounts reclassified from accumulated other comprehensive (income) loss — (8 ) 20 (18 ) (6 ) Other comprehensive income (loss) (235 ) (7 ) 8 (33 ) (267 ) Balance at September 30, 2015 $ (1,789 ) $ (56 ) $ (65 ) $ 49 $ (1,861 ) (Millions of dollars) Foreign currency translation Pension and other postretirement benefits Derivative financial instruments Available-for-sale securities Total Nine Months Ended September 30, 2016 Balance at December 31, 2015 $ (1,953 ) $ (69 ) $ (50 ) $ 37 $ (2,035 ) Other comprehensive income (loss) before reclassifications 429 119 (37 ) 21 532 Amounts reclassified from accumulated other comprehensive (income) loss 13 (29 ) 16 (24 ) (24 ) Other comprehensive income (loss) 442 90 (21 ) (3 ) 508 Balance at September 30, 2016 $ (1,511 ) $ 21 $ (71 ) $ 34 $ (1,527 ) Nine Months Ended September 30, 2015 Balance at December 31, 2014 $ (992 ) $ (31 ) $ (119 ) $ 83 $ (1,059 ) Other comprehensive income (loss) before reclassifications (797 ) 1 (15 ) (13 ) (824 ) Amounts reclassified from accumulated other comprehensive (income) loss — (26 ) 69 (21 ) 22 Other comprehensive income (loss) (797 ) (25 ) 54 (34 ) (802 ) Balance at September 30, 2015 $ (1,789 ) $ (56 ) $ (65 ) $ 49 $ (1,861 ) |
Reclassifications out of Accumulated other comprehensive income (loss) | The effect of the reclassifications out of Accumulated other comprehensive income (loss) on the Consolidated Statement of Results of Operations is as follows: Three Months Ended September 30 (Millions of dollars) Classification of income (expense) 2016 2015 Foreign currency translation Gain (loss) on foreign currency translation Other income (expense) $ (13 ) $ — Tax (provision) benefit — — Reclassifications net of tax $ (13 ) $ — Pension and other postretirement benefits: Amortization of prior service credit (cost) Note 9 1 $ 15 $ 13 Tax (provision) benefit (5 ) (5 ) Reclassifications net of tax $ 10 $ 8 Derivative financial instruments: Foreign exchange contracts Other income (expense) $ (6 ) $ (29 ) Interest rate contracts Interest expense excluding Financial Products (2 ) (1 ) Interest rate contracts Interest expense of Financial Products — (1 ) Reclassifications before tax (8 ) (31 ) Tax (provision) benefit 2 11 Reclassifications net of tax $ (6 ) $ (20 ) Available-for-sale securities: Realized gain (loss) Other income (expense) $ 9 $ 27 Tax (provision) benefit (3 ) (9 ) Reclassifications net of tax $ 6 $ 18 Total reclassifications from Accumulated other comprehensive income (loss) $ (3 ) $ 6 1 Amounts are included in the calculation of net periodic benefit cost. See Note 9 for additional information. Nine Months Ended September 30 (Millions of dollars) Classification of income (expense) 2016 2015 Foreign currency translation Gain (loss) on foreign currency translation Other income (expense) $ (13 ) $ — Tax (provision) benefit — — Reclassifications net of tax $ (13 ) $ — Pension and other postretirement benefits: Amortization of prior service credit (cost) Note 9 1 $ 45 $ 40 Tax (provision) benefit (16 ) (14 ) Reclassifications net of tax $ 29 $ 26 Derivative financial instruments: Foreign exchange contracts Other income (expense) $ (16 ) $ (101 ) Interest rate contracts Interest expense excluding Financial Products (5 ) (4 ) Interest rate contracts Interest expense of Financial Products (3 ) (4 ) Reclassifications before tax (24 ) (109 ) Tax (provision) benefit 8 40 Reclassifications net of tax $ (16 ) $ (69 ) Available-for-sale securities: Realized gain (loss) Other income (expense) $ 36 $ 31 Tax (provision) benefit (12 ) (10 ) Reclassifications net of tax $ 24 $ 21 Total reclassifications from Accumulated other comprehensive income (loss) $ 24 $ (22 ) 1 Amounts are included in the calculation of net periodic benefit cost. See Note 9 for additional information. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments Three Months Ended September 30 (Millions of dollars) 2016 External sales and revenues Inter- segment sales and revenues Total sales and revenues Depreciation and amortization Segment profit Segment assets at September 30 Capital expenditures Construction Industries $ 3,554 $ 27 $ 3,581 $ 117 $ 326 $ 5,521 $ 46 Resource Industries 1,377 69 1,446 150 (77 ) 8,017 68 Energy & Transportation 3,534 629 4,163 170 572 8,118 97 Machinery, Energy & Transportation $ 8,465 $ 725 $ 9,190 $ 437 $ 821 $ 21,656 $ 211 Financial Products Segment 749 — 749 215 183 36,330 357 Total $ 9,214 $ 725 $ 9,939 $ 652 $ 1,004 $ 57,986 $ 568 2015 External sales and revenues Inter- segment sales and revenues Total sales and revenues Depreciation and amortization Segment profit Segment assets at December 31 Capital expenditures Construction Industries $ 4,075 $ 17 $ 4,092 $ 139 $ 354 $ 6,176 $ 62 Resource Industries 1,842 88 1,930 144 (42 ) 8,931 73 Energy & Transportation 4,352 702 5,054 172 683 8,769 179 Machinery, Energy & Transportation $ 10,269 $ 807 $ 11,076 $ 455 $ 995 $ 23,876 $ 314 Financial Products Segment 752 — 752 210 207 35,729 359 Total $ 11,021 $ 807 $ 11,828 $ 665 $ 1,202 $ 59,605 $ 673 Reportable Segments Nine Months Ended September 30 (Millions of dollars) 2016 External sales and revenues Inter- segment sales and revenues Total sales and revenues Depreciation and amortization Segment profit Segment Capital expenditures Construction Industries $ 12,023 $ 47 $ 12,070 $ 346 $ 1,316 $ 5,521 $ 114 Resource Industries 4,283 197 4,480 458 (336 ) 8,017 162 Energy & Transportation 10,562 1,919 12,481 505 1,584 8,118 340 Machinery, Energy & Transportation $ 26,868 $ 2,163 $ 29,031 $ 1,309 $ 2,564 $ 21,656 $ 616 Financial Products Segment 2,251 — 2,251 633 553 36,330 1,266 Total $ 29,119 $ 2,163 $ 31,282 $ 1,942 $ 3,117 $ 57,986 $ 1,882 2015 External sales and revenues Inter- segment sales and revenues Total sales and revenues Depreciation and amortization Segment profit Segment assets at December 31 Capital expenditures Construction Industries $ 13,892 $ 66 $ 13,958 $ 419 $ 1,687 $ 6,176 $ 156 Resource Industries 5,861 250 6,111 441 81 8,931 152 Energy & Transportation 13,975 2,262 16,237 510 2,649 8,769 565 Machinery, Energy & Transportation $ 33,728 $ 2,578 $ 36,306 $ 1,370 $ 4,417 $ 23,876 $ 873 Financial Products Segment 2,332 — 2,332 638 618 35,729 995 Total $ 36,060 $ 2,578 $ 38,638 $ 2,008 $ 5,035 $ 59,605 $ 1,868 |
Reconciliation of Sales and revenues: | Reconciliation of Sales and revenues: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total Three Months Ended September 30, 2016 Total external sales and revenues from reportable segments $ 8,465 $ 749 $ — $ 9,214 All Other operating segments 28 — — 28 Other (30 ) 19 (71 ) 1 (82 ) Total sales and revenues $ 8,463 $ 768 $ (71 ) $ 9,160 Three Months Ended September 30, 2015 Total external sales and revenues from reportable segments $ 10,269 $ 752 $ — $ 11,021 All Other operating segments 39 — — 39 Other (23 ) 20 (95 ) 1 (98 ) Total sales and revenues $ 10,285 $ 772 $ (95 ) $ 10,962 1 Elimination of Financial Products revenues from Machinery, Energy & Transportation. Reconciliation of Sales and revenues: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total Nine Months Ended September 30, 2016 Total external sales and revenues from reportable segments $ 26,868 $ 2,251 $ — $ 29,119 All Other operating segments 107 — — 107 Other (87 ) 54 (230 ) 1 (263 ) Total sales and revenues $ 26,888 $ 2,305 $ (230 ) $ 28,963 Nine Months Ended September 30, 2015 Total external sales and revenues from reportable segments $ 33,728 $ 2,332 $ — $ 36,060 All Other operating segments 166 — — 166 Other (65 ) 58 (238 ) 1 (245 ) Total sales and revenues $ 33,829 $ 2,390 $ (238 ) $ 35,981 1 Elimination of Financial Products revenues from Machinery, Energy & Transportation. |
Reconciliation of Consolidated profit before taxes: | Reconciliation of Consolidated profit before taxes: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidated Total Three Months Ended September 30, 2016 Total profit from reportable segments $ 821 $ 183 $ 1,004 All Other operating segments (22 ) — (22 ) Cost centers 29 — 29 Corporate costs (121 ) — (121 ) Timing 12 — 12 Restructuring costs (323 ) (1 ) (324 ) Methodology differences: Inventory/cost of sales 19 — 19 Postretirement benefit expense 37 — 37 Stock-based compensation expense (40 ) (1 ) (41 ) Financing costs (129 ) — (129 ) Currency (10 ) — (10 ) Other income/expense methodology differences (60 ) — (60 ) Other methodology differences (11 ) — (11 ) Total consolidated profit before taxes $ 202 $ 181 $ 383 Three Months Ended September 30, 2015 Total profit from reportable segments $ 995 $ 207 $ 1,202 All Other operating segments (11 ) — (11 ) Cost centers 23 — 23 Corporate costs (136 ) — (136 ) Timing 37 — 37 Restructuring costs (98 ) — (98 ) Methodology differences: — Inventory/cost of sales (22 ) — (22 ) Postretirement benefit expense 131 — 131 Stock-based compensation expense (46 ) (2 ) (48 ) Financing costs (128 ) — (128 ) Currency (104 ) — (104 ) Other income/expense methodology differences (51 ) — (51 ) Other methodology differences (13 ) 1 (12 ) Total consolidated profit before taxes $ 577 $ 206 $ 783 Reconciliation of Consolidated profit before taxes: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidated Total Nine Months Ended September 30, 2016 Total profit from reportable segments $ 2,564 $ 553 $ 3,117 All Other operating segments (43 ) — (43 ) Cost centers 68 — 68 Corporate costs (429 ) — (429 ) Timing 53 — 53 Restructuring costs (619 ) (5 ) (624 ) Methodology differences: Inventory/cost of sales — — — Postretirement benefit expense 148 — 148 Stock-based compensation expense (180 ) (7 ) (187 ) Financing costs (396 ) — (396 ) Currency (22 ) — (22 ) Other income/expense methodology differences (170 ) — (170 ) Other methodology differences (34 ) 6 (28 ) Total consolidated profit before taxes $ 940 $ 547 $ 1,487 Nine Months Ended September 30, 2015 Total profit from reportable segments $ 4,417 $ 618 $ 5,035 All Other operating segments (36 ) — (36 ) Cost centers 31 — 31 Corporate costs (451 ) — (451 ) Timing 15 — 15 Restructuring costs (219 ) — (219 ) Methodology differences: Inventory/cost of sales (30 ) — (30 ) Postretirement benefit expense 282 — 282 Stock-based compensation expense (230 ) (10 ) (240 ) Financing costs (394 ) — (394 ) Currency (226 ) — (226 ) Other income/expense methodology differences (48 ) — (48 ) Other methodology differences (45 ) 12 (33 ) Total consolidated profit before taxes $ 3,066 $ 620 $ 3,686 |
Reconciliation of Restructuring costs: | As noted above, restructuring costs are a reconciling item between Segment profit and Consolidated profit before taxes. Had we included the amounts in the segments' results, the profit would have been as shown below: Reconciliation of Restructuring costs: (Millions of dollars) Segment profit Restructuring costs Segment profit with restructuring costs Three Months Ended September 30, 2016 Construction Industries $ 326 $ (9 ) $ 317 Resource Industries (77 ) (254 ) (331 ) Energy & Transportation 572 (39 ) 533 Financial Products Segment 183 (1 ) 182 All Other operating segments (22 ) (15 ) (37 ) Total $ 982 $ (318 ) $ 664 Three Months Ended September 30, 2015 Construction Industries $ 354 $ (28 ) $ 326 Resource Industries (42 ) (39 ) (81 ) Energy & Transportation 683 (10 ) 673 Financial Products Segment 207 — 207 All Other operating segments (11 ) (9 ) (20 ) Total $ 1,191 $ (86 ) $ 1,105 Reconciliation of Restructuring costs: (Millions of dollars) Segment profit Restructuring costs Segment profit with restructuring costs Nine Months Ended September 30, 2016 Construction Industries $ 1,316 $ (34 ) $ 1,282 Resource Industries (336 ) (348 ) (684 ) Energy & Transportation 1,584 (194 ) 1,390 Financial Products Segment 553 (5 ) 548 All Other operating segments (43 ) (29 ) (72 ) Total $ 3,074 $ (610 ) $ 2,464 Nine Months Ended September 30, 2015 Construction Industries $ 1,687 $ (83 ) $ 1,604 Resource Industries 81 (83 ) (2 ) Energy & Transportation 2,649 (24 ) 2,625 Financial Products Segment 618 — 618 All Other operating segments (36 ) (12 ) (48 ) Total $ 4,999 $ (202 ) $ 4,797 |
Reconciliation of Assets: | Reconciliation of Assets: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total September 30, 2016 Total assets from reportable segments $ 21,656 $ 36,330 $ — $ 57,986 All Other operating segments 1,368 — — 1,368 Items not included in segment assets: Cash and short-term investments 4,894 — — 4,894 Intercompany receivables 1,877 — (1,877 ) — Investment in Financial Products 4,367 — (4,367 ) — Deferred income taxes 3,311 — (821 ) 2,490 Goodwill and intangible assets 4,055 — — 4,055 Property, plant and equipment – net and other assets 2,138 — — 2,138 Operating lease methodology difference (187 ) — — (187 ) Inventory methodology differences (2,243 ) — — (2,243 ) Intercompany loan included in Financial Products' assets — — (1,000 ) (1,000 ) Liabilities included in segment assets 7,394 — — 7,394 Other (380 ) (50 ) (63 ) (493 ) Total assets $ 48,250 $ 36,280 $ (8,128 ) $ 76,402 December 31, 2015 Total assets from reportable segments $ 23,876 $ 35,729 $ — $ 59,605 All Other operating segments 1,405 — — 1,405 Items not included in segment assets: Cash and short-term investments 5,340 — — 5,340 Intercompany receivables 1,087 — (1,087 ) — Investment in Financial Products 3,888 — (3,888 ) — Deferred income taxes 3,208 — (793 ) 2,415 Goodwill and intangible assets 3,571 — — 3,571 Property, plant and equipment – net and other assets 1,585 — — 1,585 Operating lease methodology difference (213 ) — — (213 ) Inventory methodology differences (2,646 ) — — (2,646 ) Liabilities included in segment assets 8,017 — — 8,017 Other (567 ) (93 ) (77 ) (737 ) Total assets $ 48,551 $ 35,636 $ (5,845 ) $ 78,342 |
Reconciliation of Depreciation and amortization: | Reconciliations of Depreciation and amortization: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidated Total Three Months Ended September 30, 2016 Total depreciation and amortization from reportable segments $ 437 $ 215 $ 652 Items not included in segment depreciation and amortization: All Other operating segments 53 — 53 Cost centers 39 — 39 Other 6 11 17 Total depreciation and amortization $ 535 $ 226 $ 761 Three Months Ended September 30, 2015 Total depreciation and amortization from reportable segments $ 455 $ 210 $ 665 Items not included in segment depreciation and amortization: All Other operating segments 51 — 51 Cost centers 39 — 39 Other (7 ) 10 3 Total depreciation and amortization $ 538 $ 220 $ 758 Reconciliations of Depreciation and amortization: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidated Total Nine Months Ended September 30, 2016 Total depreciation and amortization from reportable segments $ 1,309 $ 633 $ 1,942 Items not included in segment depreciation and amortization: All Other operating segments 158 — 158 Cost centers 117 — 117 Other 7 31 38 Total depreciation and amortization $ 1,591 $ 664 $ 2,255 Nine Months Ended September 30, 2015 Total depreciation and amortization from reportable segments $ 1,370 $ 638 $ 2,008 Items not included in segment depreciation and amortization: All Other operating segments 151 — 151 Cost centers 114 — 114 Other (27 ) 26 (1 ) Total depreciation and amortization $ 1,608 $ 664 $ 2,272 |
Reconciliation of Capital expenditures: | Reconciliations of Capital expenditures: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total Three Months Ended September 30, 2016 Total capital expenditures from reportable segments $ 211 $ 357 $ — $ 568 Items not included in segment capital expenditures: All Other operating segments 35 — — 35 Cost centers 20 — — 20 Timing 4 — — 4 Other (30 ) 22 (24 ) (32 ) Total capital expenditures $ 240 $ 379 $ (24 ) $ 595 Three Months Ended September 30, 2015 Total capital expenditures from reportable segments $ 314 $ 359 $ — $ 673 Items not included in segment capital expenditures: All Other operating segments 33 — — 33 Cost centers 52 — — 52 Timing (35 ) — — (35 ) Other (28 ) 35 (4 ) 3 Total capital expenditures $ 336 $ 394 $ (4 ) $ 726 Reconciliations of Capital expenditures: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total Nine Months Ended September 30, 2016 Total capital expenditures from reportable segments $ 616 $ 1,266 $ — $ 1,882 Items not included in segment capital expenditures: All Other operating segments 102 — — 102 Cost centers 48 — — 48 Timing 221 — — 221 Other (129 ) 117 (41 ) (53 ) Total capital expenditures $ 858 $ 1,383 $ (41 ) $ 2,200 Nine Months Ended September 30, 2015 Total capital expenditures from reportable segments $ 873 $ 995 $ — $ 1,868 Items not included in segment capital expenditures: All Other operating segments 86 — — 86 Cost centers 98 — — 98 Timing 199 — — 199 Other (161 ) 130 (23 ) (54 ) Total capital expenditures $ 1,095 $ 1,125 $ (23 ) $ 2,197 |
Cat Financial Financing Activ41
Cat Financial Financing Activities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Allowance for credit losses | An analysis of the allowance for credit losses was as follows: (Millions of dollars) September 30, 2016 Allowance for Credit Losses: Customer Dealer Total Balance at beginning of year $ 327 $ 9 $ 336 Receivables written off (118 ) — (118 ) Recoveries on receivables previously written off 25 — 25 Provision for credit losses 93 2 95 Other 6 — 6 Balance at end of period $ 333 $ 11 $ 344 Individually evaluated for impairment $ 85 $ — $ 85 Collectively evaluated for impairment 248 11 259 Ending Balance $ 333 $ 11 $ 344 Recorded Investment in Finance Receivables: Individually evaluated for impairment $ 819 $ — $ 819 Collectively evaluated for impairment 18,522 3,534 22,056 Ending Balance $ 19,341 $ 3,534 $ 22,875 (Millions of dollars) December 31, 2015 Allowance for Credit Losses: Customer Dealer Total Balance at beginning of year $ 388 $ 10 $ 398 Receivables written off (196 ) — (196 ) Recoveries on receivables previously written off 41 — 41 Provision for credit losses 119 (1 ) 118 Other (25 ) — (25 ) Balance at end of year $ 327 $ 9 $ 336 Individually evaluated for impairment $ 65 $ — $ 65 Collectively evaluated for impairment 262 9 271 Ending Balance $ 327 $ 9 $ 336 Recorded Investment in Finance Receivables: Individually evaluated for impairment $ 601 $ — $ 601 Collectively evaluated for impairment 18,788 3,570 22,358 Ending Balance $ 19,389 $ 3,570 $ 22,959 |
Aging related to finance receivables | The tables below summarize the recorded investment of finance receivables by aging category. September 30, 2016 (Millions of dollars) 31-60 Days Past Due 61-90 Days Past Due 91+ Days Past Due Total Past Due Current Recorded Investment in Finance Receivables 91+ Still Accruing Customer North America $ 66 $ 18 $ 72 $ 156 $ 7,903 $ 8,059 $ 10 Europe 21 16 83 120 2,424 2,544 47 Asia Pacific 28 10 20 58 1,506 1,564 4 Mining 4 1 63 68 1,802 1,870 — Latin America 57 39 222 318 1,866 2,184 — Caterpillar Power Finance 1 5 72 78 3,042 3,120 12 Dealer North America — — — — 2,069 2,069 — Europe — — — — 127 127 — Asia Pacific — — — — 599 599 — Mining — — — — 4 4 — Latin America — — — — 733 733 — Caterpillar Power Finance — — — — 2 2 — Total $ 177 $ 89 $ 532 $ 798 $ 22,077 $ 22,875 $ 73 December 31, 2015 (Millions of dollars) 31-60 Days Past Due 61-90 Days Past Due 91+ Days Past Due Total Past Due Current Recorded Investment in Finance Receivables 91+ Still Accruing Customer North America $ 45 $ 12 $ 30 $ 87 $ 7,850 $ 7,937 $ 4 Europe 18 7 44 69 2,358 2,427 9 Asia Pacific 21 12 21 54 1,647 1,701 6 Mining 6 1 68 75 1,793 1,868 1 Latin America 45 31 199 275 1,998 2,273 — Caterpillar Power Finance — 1 35 36 3,147 3,183 2 Dealer North America — — — — 2,209 2,209 — Europe — — — — 149 149 — Asia Pacific — — — — 552 552 — Mining — — — — 4 4 — Latin America — — — — 653 653 — Caterpillar Power Finance — — — — 3 3 — Total $ 135 $ 64 $ 397 $ 596 $ 22,363 $ 22,959 $ 22 |
Impaired finance receivables | Cat Financial’s recorded investment in impaired finance receivables and the related unpaid principal balances and allowance for the Customer portfolio segment were as follows: September 30, 2016 December 31, 2015 (Millions of dollars) Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance Impaired Finance Receivables With No Allowance Recorded North America $ 21 $ 21 $ — $ 12 $ 12 $ — Europe 49 48 — 41 41 — Asia Pacific 2 2 — 1 1 — Mining 119 118 — 84 84 — Latin America 73 73 — 28 28 — Caterpillar Power Finance 290 289 — 242 241 — Total $ 554 $ 551 $ — $ 408 $ 407 $ — Impaired Finance Receivables With An Allowance Recorded North America $ 50 $ 48 $ 19 $ 14 $ 13 $ 4 Europe 9 9 5 11 10 5 Asia Pacific 33 33 5 34 34 4 Mining 38 38 6 11 11 3 Latin America 91 103 33 53 53 21 Caterpillar Power Finance 44 44 17 70 70 28 Total $ 265 $ 275 $ 85 $ 193 $ 191 $ 65 Total Impaired Finance Receivables North America $ 71 $ 69 $ 19 $ 26 $ 25 $ 4 Europe 58 57 5 52 51 5 Asia Pacific 35 35 5 35 35 4 Mining 157 156 6 95 95 3 Latin America 164 176 33 81 81 21 Caterpillar Power Finance 334 333 17 312 311 28 Total $ 819 $ 826 $ 85 $ 601 $ 598 $ 65 Three Months Ended Three Months Ended (Millions of dollars) Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Impaired Finance Receivables With No Allowance Recorded North America $ 24 $ — $ 10 $ 1 Europe 49 1 43 — Asia Pacific 1 — 1 — Mining 90 2 63 — Latin America 58 — 32 — Caterpillar Power Finance 282 3 165 1 Total $ 504 $ 6 $ 314 $ 2 Impaired Finance Receivables With An Allowance Recorded North America $ 42 $ — $ 10 $ — Europe 10 — 15 — Asia Pacific 35 — 41 — Mining 19 — 9 — Latin America 67 1 69 1 Caterpillar Power Finance 43 — 125 2 Total $ 216 $ 1 $ 269 $ 3 Total Impaired Finance Receivables North America $ 66 $ — $ 20 $ 1 Europe 59 1 58 — Asia Pacific 36 — 42 — Mining 109 2 72 — Latin America 125 1 101 1 Caterpillar Power Finance 325 3 290 3 Total $ 720 $ 7 $ 583 $ 5 Nine Months Ended Nine Months Ended (Millions of dollars) Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Impaired Finance Receivables With No Allowance Recorded North America $ 19 $ 1 $ 12 $ 1 Europe 45 1 43 — Asia Pacific 2 — 2 — Mining 84 3 80 3 Latin America 39 — 32 — Caterpillar Power Finance 269 8 157 3 Total $ 458 $ 13 $ 326 $ 7 Impaired Finance Receivables With An Allowance Recorded North America $ 28 $ — $ 7 $ — Europe 11 — 15 1 Asia Pacific 34 2 33 1 Mining 15 — 47 1 Latin America 59 2 56 2 Caterpillar Power Finance 50 1 128 3 Total $ 197 $ 5 $ 286 $ 8 Total Impaired Finance Receivables North America $ 47 $ 1 $ 19 $ 1 Europe 56 1 58 1 Asia Pacific 36 2 35 1 Mining 99 3 127 4 Latin America 98 2 88 2 Caterpillar Power Finance 319 9 285 6 Total $ 655 $ 18 $ 612 $ 15 |
Investment in finance receivables on non-accrual status | The recorded investment in customer finance receivables on non-accrual status was as follows: (Millions of dollars) September 30, 2016 December 31, 2015 North America $ 71 $ 31 Europe 38 39 Asia Pacific 16 15 Mining 131 106 Latin America 299 217 Caterpillar Power Finance 69 77 Total $ 624 $ 485 |
Finance receivables modified as TDRs | TDRs in the Customer portfolio segment with a payment default during the three and nine months ended September 30, 2016 and 2015 , which had been modified within twelve months prior to the default date, were as follows: Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 (Millions of dollars) Number of Contracts Post-TDR Recorded Investment Number of Contracts Post-TDR Recorded Investment North America 1 $ — 5 $ — Europe 1 — — — Latin America 2 — — — Total 4 $ — 5 $ — Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 Number of Contracts Post-TDR Recorded Investment Number of Contracts Post-TDR Recorded Investment North America 14 $ 3 10 $ 1 Europe 14 1 — — Asia Pacific 3 — — — Latin America 4 — 1 — Total 35 $ 4 11 $ 1 Finance receivables in the Customer portfolio segment modified as TDRs during the three and nine months ended September 30, 2016 and 2015 , were as follows: Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 (Millions of dollars) Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment North America 2 $ — $ — 6 $ — $ — Europe — — — 4 — — Asia Pacific 4 1 1 1 1 1 Mining 1 33 30 2 15 14 Latin America 1 341 105 74 10 1 2 Caterpillar Power Finance 4 13 13 8 93 79 Total 352 $ 152 $ 118 31 $ 110 $ 96 Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment North America 15 $ 16 $ 16 10 $ 1 $ 1 Europe 3 11 8 23 2 2 Asia Pacific 8 4 4 19 1 1 Mining 2 43 35 2 15 14 Latin America 431 117 87 10 1 2 Caterpillar Power Finance 34 196 177 12 197 180 Total 493 $ 387 $ 327 76 $ 217 $ 200 1 In Latin America, 321 contracts with a pre-TDR recorded investment of $94 million and a post-TDR recorded investment of $64 million are related to four customers. |
TDRs with a payment default which had been modified within twelve months prior to the default date | TDRs in the Customer portfolio segment with a payment default during the three and nine months ended September 30, 2016 and 2015 , which had been modified within twelve months prior to the default date, were as follows: Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 (Millions of dollars) Number of Contracts Post-TDR Recorded Investment Number of Contracts Post-TDR Recorded Investment North America 1 $ — 5 $ — Europe 1 — — — Latin America 2 — — — Total 4 $ — 5 $ — Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 Number of Contracts Post-TDR Recorded Investment Number of Contracts Post-TDR Recorded Investment North America 14 $ 3 10 $ 1 Europe 14 1 — — Asia Pacific 3 — — — Latin America 4 — 1 — Total 35 $ 4 11 $ 1 Finance receivables in the Customer portfolio segment modified as TDRs during the three and nine months ended September 30, 2016 and 2015 , were as follows: Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 (Millions of dollars) Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment North America 2 $ — $ — 6 $ — $ — Europe — — — 4 — — Asia Pacific 4 1 1 1 1 1 Mining 1 33 30 2 15 14 Latin America 1 341 105 74 10 1 2 Caterpillar Power Finance 4 13 13 8 93 79 Total 352 $ 152 $ 118 31 $ 110 $ 96 Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment Number of Contracts Pre-TDR Recorded Investment Post-TDR Recorded Investment North America 15 $ 16 $ 16 10 $ 1 $ 1 Europe 3 11 8 23 2 2 Asia Pacific 8 4 4 19 1 1 Mining 2 43 35 2 15 14 Latin America 431 117 87 10 1 2 Caterpillar Power Finance 34 196 177 12 197 180 Total 493 $ 387 $ 327 76 $ 217 $ 200 1 In Latin America, 321 contracts with a pre-TDR recorded investment of $94 million and a post-TDR recorded investment of $64 million are related to four customers. |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured on a recurring basis at fair value | Assets and liabilities measured on a recurring basis at fair value, primarily related to Financial Products, included in our Consolidated Statement of Financial Position as of September 30, 2016 and December 31, 2015 are summarized below: September 30, 2016 (Millions of dollars) Level 1 Level 2 Level 3 Total Assets / Liabilities, at Fair Value Assets Available-for-sale securities Government debt U.S. treasury bonds $ 10 $ — $ — $ 10 Other U.S. and non-U.S. government bonds — 68 — 68 Corporate bonds Corporate bonds — 710 — 710 Asset-backed securities — 135 — 135 Mortgage-backed debt securities U.S. governmental agency — 286 — 286 Residential — 10 — 10 Commercial — 63 — 63 Equity securities Large capitalization value 299 — — 299 Smaller company growth 57 — — 57 Total available-for-sale securities 366 1,272 — 1,638 REIT — — 72 72 Total Assets $ 366 $ 1,272 $ 72 $ 1,710 Liabilities Derivative financial instruments, net — 29 — 29 Total Liabilities $ — $ 29 $ — $ 29 December 31, 2015 (Millions of dollars) Level 1 Level 2 Level 3 Total Assets / Liabilities, at Fair Value Assets Available-for-sale securities Government debt U.S. treasury bonds $ 9 $ — $ — $ 9 Other U.S. and non-U.S. government bonds — 72 — 72 Corporate bonds Corporate bonds — 708 — 708 Asset-backed securities — 129 — 129 Mortgage-backed debt securities U.S. governmental agency — 292 — 292 Residential — 12 — 12 Commercial — 61 — 61 Equity securities Large capitalization value 273 — — 273 Smaller company growth 54 — — 54 Total available-for-sale securities 336 1,274 — 1,610 REIT — — 25 25 Derivative financial instruments, net — 49 — 49 Total Assets $ 336 $ 1,323 $ 25 $ 1,684 |
Roll-forward of assets measured at fair value using Level 3 inputs | The fair value of our REIT investment is measured based on NAV, which is considered a Level 3 input. A roll-forward for the nine months ended September 30, 2016 of our REIT investment is as follows. (Millions of dollars) REIT Balance at December 31, 2015 $ 25 Purchases of securities 45 Sale of securities — Gains (losses) included in Accumulated other comprehensive income (loss) 2 Balance at September 30, 2016 $ 72 |
Fair values of financial instruments | Please refer to the table below for the fair values of our financial instruments. Fair Value of Financial Instruments September 30, 2016 December 31, 2015 (Millions of dollars) Carrying Amount Fair Value Carrying Amount Fair Value Fair Value Levels Reference Assets Cash and short-term investments $ 6,113 $ 6,113 $ 6,460 $ 6,460 1 Restricted cash and short-term investments 28 28 52 52 1 Investments in debt and equity securities 1,710 1,710 1,635 1,635 1, 2 & 3 Note 8 Finance receivables – net (excluding finance leases 1 ) 16,571 16,565 16,515 16,551 3 Note 16 Wholesale inventory receivables – net (excluding finance leases 1 ) 1,633 1,601 1,821 1,775 3 Note 16 Foreign currency contracts – net — — 13 13 2 Note 4 Interest rate contracts – net 3 3 48 48 2 Note 4 Commodity contracts – net 6 6 — — 2 Note 4 Liabilities Short-term borrowings 6,965 6,965 6,967 6,967 1 Long-term debt (including amounts due within one year) Machinery, Energy & Transportation 8,985 11,037 9,477 10,691 2 Financial Products 21,160 21,669 21,569 21,904 2 Foreign currency contracts – net 38 38 — — 2 Note 4 Commodity contracts – net — — 12 12 2 Note 4 Guarantees 12 12 12 12 3 Note 10 1 Total excluded items have a net carrying value at September 30, 2016 and December 31, 2015 of $6,221 million and $6,452 million , respectively. |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring Charges [Abstract] | |
Restructuring and related costs | Restructuring costs for the three and nine months ended September 30, 2016 and 2015 were as follows: (Millions of dollars) Three Months Ended September 30 2016 2015 Employee separations 1 $ 99 $ 60 Contract terminations 1 9 — Long-lived asset impairments 1 158 26 Other 2 58 12 Total restructuring costs $ 324 $ 98 Nine Months Ended September 30 2016 2015 Employee separations 1 $ 175 $ 180 Contract terminations 1 55 — Long-lived asset impairments 1 254 27 Other 2 140 12 Total restructuring costs $ 624 $ 219 1 Recognized in Other operating (income) expenses. 2 Represents costs related to our restructuring programs, primarily for accelerated depreciation, inventory write-downs, sales discounts and equipment relocation and were recognized primarily in Cost of goods sold. |
Summary of separation activity | The following table summarizes the 2015 and 2016 employee separation activity: (Millions of dollars) Total Liability balance at December 31, 2014 $ 182 Increase in liability (separation charges) 641 Reduction in liability (payments) (340 ) Liability balance at December 31, 2015 $ 483 Increase in liability (separation charges) 175 Reduction in liability (payments) (507 ) Liability balance at September 30, 2016 $ 151 |
Nature of Operations, Basis o44
Nature of Operations, Basis of Presentation and Change in Accounting Principle (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Variable Interest Entity Maximum Exposure | ||
Receivables - trade and other | $ 5,797 | $ 6,695 |
Receivables - finance | 8,719 | 8,991 |
Long-term receivables - finance | 13,835 | 13,651 |
Other assets | 247 | 246 |
Guarantees | 693 | 681 |
Variable Interest Entity | ||
Variable Interest Entity Maximum Exposure | ||
Receivables - trade and other | 48 | 19 |
Receivables - finance | 192 | 466 |
Long-term receivables - finance | 253 | 62 |
Other assets | 31 | 35 |
Guarantees | 211 | 175 |
Total | $ 735 | $ 757 |
Nature of Operations, Basis o45
Nature of Operations, Basis of Presentation and Change in Accounting Principle (Details 2) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Jan. 01, 2015 | ||
Statement of Results of Operations | ||||||||||
Cost of goods sold | $ 6,527 | $ 7,872 | $ 20,768 | $ 25,306 | ||||||
Selling, general and administrative expenses | 992 | 1,129 | 3,203 | 3,696 | ||||||
Research and development expenses | 453 | 513 | 1,429 | 1,547 | ||||||
Other operating (income) expenses | 560 | 381 | 1,356 | 1,032 | ||||||
Total operating costs | 8,679 | 10,037 | 27,203 | 32,021 | ||||||
Operating profit | 481 | 925 | 1,760 | 3,960 | ||||||
Other income (expense) | 28 | (15) | 112 | 107 | ||||||
Consolidated profit before taxes | 383 | 783 | 1,487 | 3,686 | ||||||
Provision (benefit) for income taxes | 96 | 218 | 372 | 1,074 | ||||||
Profit of consolidated companies | 287 | 565 | 1,115 | 2,612 | ||||||
Profit of consolidated and affiliated companies | 283 | 562 | 1,108 | 2,613 | ||||||
Profit | [1] | $ 283 | $ 559 | $ 1,104 | $ 2,606 | |||||
Profit per common share (in dollars per share) | $ 0.48 | $ 0.95 | $ 1.89 | $ 4.36 | ||||||
Profit per common share - diluted (in dollars per share) | [2] | $ 0.48 | $ 0.94 | $ 1.88 | $ 4.30 | |||||
Statement of Comprehensive Income | ||||||||||
Profit of consolidated and affiliated companies | $ 283 | $ 562 | $ 1,108 | $ 2,613 | ||||||
Foreign currency translation, net of tax | 137 | (236) | 442 | (806) | ||||||
Pension and other postretirement benefits: Current year actuarial gain (loss), net of tax | 0 | 0 | 0 | 0 | ||||||
Pension and other postretirement benefits: Amortization of actuarial (gain) loss, net of tax | 0 | 0 | 0 | 0 | ||||||
Total other comprehensive income (loss), net of tax | 106 | (268) | 508 | (811) | ||||||
Comprehensive income | 389 | 294 | 1,616 | 1,802 | ||||||
Comprehensive income attributable to stockholders | 389 | 292 | 1,612 | 1,804 | ||||||
Statement of Financial Position | ||||||||||
Noncurrent deferred and refundable income taxes | 2,579 | 2,579 | $ 2,489 | |||||||
Liability for postemployment benefits | 8,499 | 8,499 | 8,843 | |||||||
Profit employed in the business | 29,450 | 29,450 | 29,246 | |||||||
Accumulated other comprehensive income (loss) | (1,527) | (1,861) | (1,527) | (1,861) | $ (1,059) | $ (1,633) | (2,035) | $ (1,594) | ||
Statement of Stockholders' Equity | ||||||||||
Profit of consolidated and affiliated companies | 283 | 562 | 1,108 | 2,613 | ||||||
Foreign currency translation, net of tax | 137 | (236) | 442 | (806) | ||||||
Pension and other postretirement benefits, net of tax | 90 | (25) | ||||||||
Total stockholders' equity | 15,715 | 15,995 | 15,715 | 15,995 | 16,826 | 14,885 | ||||
Statement of Cash Flow | ||||||||||
Profit of consolidated and affiliated companies | 283 | 562 | 1,108 | 2,613 | ||||||
Adjustments for non-cash items: Other | 640 | 323 | ||||||||
Other assets - net | (141) | 96 | ||||||||
Other liabilities - net | (291) | (236) | ||||||||
Effect of Accounting Change | ||||||||||
Change in Accounting Principle | ||||||||||
Cumulative effect of change on equity | $ 5,400 | |||||||||
Cumulative effect of change on equity, net of tax | $ 2,900 | |||||||||
Statement of Results of Operations | ||||||||||
Cost of goods sold | (61) | (82) | (181) | (253) | ||||||
Selling, general and administrative expenses | (33) | (96) | (102) | (236) | ||||||
Research and development expenses | (11) | (21) | (32) | (65) | ||||||
Other operating (income) expenses | 0 | (13) | 0 | (36) | ||||||
Total operating costs | (105) | (212) | (315) | (590) | ||||||
Operating profit | 105 | 212 | 315 | 590 | ||||||
Other income (expense) | 15 | 53 | 52 | 31 | ||||||
Consolidated profit before taxes | 120 | 265 | 367 | 621 | ||||||
Provision (benefit) for income taxes | 41 | 74 | 120 | 204 | ||||||
Profit of consolidated companies | 79 | 191 | 247 | 417 | ||||||
Profit of consolidated and affiliated companies | 79 | 191 | 247 | 417 | ||||||
Profit | $ 79 | $ 191 | $ 247 | $ 417 | ||||||
Profit per common share (in dollars per share) | $ 0.13 | $ 0.32 | $ 0.42 | $ 0.70 | ||||||
Profit per common share - diluted (in dollars per share) | $ 0.13 | $ 0.32 | $ 0.42 | $ 0.68 | ||||||
Statement of Comprehensive Income | ||||||||||
Profit of consolidated and affiliated companies | $ 79 | $ 191 | $ 247 | $ 417 | ||||||
Foreign currency translation, net of tax | (2) | (1) | (5) | 4 | ||||||
Pension and other postretirement benefits: Current year actuarial gain (loss), net of tax | 2 | (44) | 5 | (68) | ||||||
Pension and other postretirement benefits: Amortization of actuarial (gain) loss, net of tax | (79) | (108) | (237) | (326) | ||||||
Total other comprehensive income (loss), net of tax | (79) | (153) | (237) | (390) | ||||||
Comprehensive income | 0 | 38 | 10 | 27 | ||||||
Comprehensive income attributable to stockholders | 0 | 38 | 10 | 27 | ||||||
Statement of Financial Position | ||||||||||
Noncurrent deferred and refundable income taxes | (11) | (11) | ||||||||
Liability for postemployment benefits | (21) | (21) | ||||||||
Profit employed in the business | (4,715) | (4,715) | (4,962) | |||||||
Accumulated other comprehensive income (loss) | 4,725 | 4,725 | 4,962 | |||||||
Statement of Stockholders' Equity | ||||||||||
Profit of consolidated and affiliated companies | 79 | 191 | 247 | 417 | ||||||
Foreign currency translation, net of tax | (2) | (1) | (5) | 4 | ||||||
Pension and other postretirement benefits, net of tax | (232) | (394) | ||||||||
Total stockholders' equity | 10 | 27 | 10 | 27 | ||||||
Statement of Cash Flow | ||||||||||
Profit of consolidated and affiliated companies | 79 | 191 | 247 | 417 | ||||||
Adjustments for non-cash items: Other | (52) | (31) | ||||||||
Other assets - net | 120 | 204 | ||||||||
Other liabilities - net | (315) | (590) | ||||||||
Previous Accounting Method | ||||||||||
Statement of Results of Operations | ||||||||||
Cost of goods sold | 6,588 | 20,949 | ||||||||
Selling, general and administrative expenses | 1,025 | 3,305 | ||||||||
Research and development expenses | 464 | 1,461 | ||||||||
Other operating (income) expenses | 560 | 1,356 | ||||||||
Total operating costs | 8,784 | 27,518 | ||||||||
Operating profit | 376 | 1,445 | ||||||||
Other income (expense) | 13 | 60 | ||||||||
Consolidated profit before taxes | 263 | 1,120 | ||||||||
Provision (benefit) for income taxes | 55 | 252 | ||||||||
Profit of consolidated companies | 208 | 868 | ||||||||
Profit of consolidated and affiliated companies | 204 | 861 | ||||||||
Profit | $ 204 | $ 857 | ||||||||
Profit per common share (in dollars per share) | $ 0.35 | $ 1.47 | ||||||||
Profit per common share - diluted (in dollars per share) | $ 0.35 | $ 1.46 | ||||||||
Statement of Comprehensive Income | ||||||||||
Profit of consolidated and affiliated companies | $ 204 | $ 861 | ||||||||
Foreign currency translation, net of tax | 139 | 447 | ||||||||
Pension and other postretirement benefits: Current year actuarial gain (loss), net of tax | (2) | (5) | ||||||||
Pension and other postretirement benefits: Amortization of actuarial (gain) loss, net of tax | 79 | 237 | ||||||||
Total other comprehensive income (loss), net of tax | 185 | 745 | ||||||||
Comprehensive income | 389 | 1,606 | ||||||||
Comprehensive income attributable to stockholders | 389 | 1,602 | ||||||||
Statement of Financial Position | ||||||||||
Noncurrent deferred and refundable income taxes | 2,590 | 2,590 | ||||||||
Liability for postemployment benefits | 8,520 | 8,520 | ||||||||
Profit employed in the business | 34,165 | 34,165 | ||||||||
Accumulated other comprehensive income (loss) | (6,252) | (6,252) | ||||||||
Statement of Stockholders' Equity | ||||||||||
Profit of consolidated and affiliated companies | 204 | 861 | ||||||||
Foreign currency translation, net of tax | 139 | 447 | ||||||||
Pension and other postretirement benefits, net of tax | 322 | |||||||||
Total stockholders' equity | 15,705 | 15,705 | ||||||||
Statement of Cash Flow | ||||||||||
Profit of consolidated and affiliated companies | $ 204 | 861 | ||||||||
Adjustments for non-cash items: Other | 692 | |||||||||
Other assets - net | (261) | |||||||||
Other liabilities - net | $ 24 | |||||||||
Previously Reported | ||||||||||
Statement of Results of Operations | ||||||||||
Cost of goods sold | 7,954 | 25,559 | ||||||||
Selling, general and administrative expenses | 1,225 | 3,932 | ||||||||
Research and development expenses | 534 | 1,612 | ||||||||
Other operating (income) expenses | 394 | 1,068 | ||||||||
Total operating costs | 10,249 | 32,611 | ||||||||
Operating profit | 713 | 3,370 | ||||||||
Other income (expense) | (68) | 76 | ||||||||
Consolidated profit before taxes | 518 | 3,065 | ||||||||
Provision (benefit) for income taxes | 144 | 870 | ||||||||
Profit of consolidated companies | 374 | 2,195 | ||||||||
Profit of consolidated and affiliated companies | 371 | 2,196 | ||||||||
Profit | $ 368 | $ 2,189 | ||||||||
Profit per common share (in dollars per share) | $ 0.63 | $ 3.66 | ||||||||
Profit per common share - diluted (in dollars per share) | $ 0.62 | $ 3.62 | ||||||||
Statement of Comprehensive Income | ||||||||||
Profit of consolidated and affiliated companies | $ 371 | $ 2,196 | ||||||||
Foreign currency translation, net of tax | (235) | (810) | ||||||||
Pension and other postretirement benefits: Current year actuarial gain (loss), net of tax | 44 | 68 | ||||||||
Pension and other postretirement benefits: Amortization of actuarial (gain) loss, net of tax | 108 | 326 | ||||||||
Total other comprehensive income (loss), net of tax | (115) | (421) | ||||||||
Comprehensive income | 256 | 1,775 | ||||||||
Comprehensive income attributable to stockholders | 254 | 1,777 | ||||||||
Statement of Financial Position | ||||||||||
Profit employed in the business | 34,208 | |||||||||
Accumulated other comprehensive income (loss) | $ (6,997) | |||||||||
Statement of Stockholders' Equity | ||||||||||
Profit of consolidated and affiliated companies | 371 | 2,196 | ||||||||
Foreign currency translation, net of tax | (235) | (810) | ||||||||
Pension and other postretirement benefits, net of tax | 369 | |||||||||
Total stockholders' equity | 15,968 | 15,968 | ||||||||
Statement of Cash Flow | ||||||||||
Profit of consolidated and affiliated companies | $ 371 | 2,196 | ||||||||
Adjustments for non-cash items: Other | 354 | |||||||||
Other assets - net | (108) | |||||||||
Other liabilities - net | $ 354 | |||||||||
[1] | 1 Profit attributable to common stockholders. | |||||||||
[2] | 2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method. |
New Accounting Guidance (Detail
New Accounting Guidance (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
New Accounting Pronouncements | ||
Prepaid expenses and other current assets | $ 1,892 | $ 1,662 |
Noncurrent deferred and refundable income taxes | 2,579 | 2,489 |
Other current liabilities | (1,620) | (1,671) |
Other liabilities | $ (3,276) | (3,203) |
New Accounting Pronouncement, Early Adoption, Effect | ||
New Accounting Pronouncements | ||
Deferred and refundable income taxes | 910 | |
Prepaid expenses and other current assets | 616 | |
Noncurrent deferred and refundable income taxes | 835 | |
Other current liabilities | 59 | |
Other liabilities | $ 16 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Stock-based compensation awards | |||||
Required minimum age of a participant upon separation from service to meet the criteria for Long Service Separation (in years) | 55 years | ||||
Minimum term of service to meet criteria for Long Service Separation (in years) | 5 years | ||||
Term life of SARs and option awards (in years) | 10 years | ||||
Term life of vested options/SARs from separation date (in years) | 5 years | ||||
Stock-based compensation expense, before tax (in dollars) | $ 41 | $ 48 | $ 187 | $ 240 | |
Assumptions used in determining the fair value of the stock-based awards | |||||
Weighted-average dividend yield (as a percent) | 3.23% | 2.27% | |||
Weighted-average volatility (as a percent) | 31.10% | 28.40% | |||
Volatilities, low end of range (as a percent) | 22.50% | 19.90% | |||
Volatilities, high end of range (as a percent) | 33.40% | 35.90% | |||
Risk-free interest rates, low end of range (as a percent) | 0.62% | 0.22% | |||
Risk-free interest rates, high end of range (as a percent) | 1.73% | 2.08% | |||
Weighted-average expected lives (in years) | 8 years | 8 years | |||
Unrecognized compensation cost related to nonvested stock-based compensation awards (in dollars) | $ 213 | $ 213 | |||
Term of amortization of unrecognized compensation cost over weighted-average remaining requisite service periods (in years) | 1 year 10 months | ||||
Stock Options | |||||
Stock-based compensation awards | |||||
Shares Granted (in shares) | 4,243,272 | 7,939,497 | |||
Weighted-Average Fair Value Per Share (in dollars per share) | $ 20.64 | $ 23.61 | |||
Weighted-Average Grant Date Stock Price (in dollars per share) | $ 74.77 | $ 83.34 | 74.77 | 83.34 | |
RSUs | |||||
Stock-based compensation awards | |||||
Weighted-Average Grant Date Stock Price (in dollars per share) | 74.77 | 83.02 | $ 74.77 | $ 83.02 | |
Shares Granted (in shares) | 1,085,505 | 1,690,661 | |||
Weighted-Average Fair Value Per Share (in dollars per share) | $ 68.04 | $ 77.55 | |||
PRSUs | |||||
Stock-based compensation awards | |||||
Weighted-Average Grant Date Stock Price (in dollars per share) | $ 74.77 | $ 82.90 | $ 74.77 | $ 82.90 | |
Shares Granted (in shares) | 614,347 | 132,068 | |||
Weighted-Average Fair Value Per Share (in dollars per share) | $ 64.71 | $ 77.47 | |||
Grants prior to 2015 | |||||
Stock-based compensation awards | |||||
Vesting period of awards, after the date of grant (in years) | 3 years | ||||
2015 and 2016 Grants | |||||
Stock-based compensation awards | |||||
Graded vesting period of awards granted (in years) | 3 years | ||||
2015 and 2016 Grants | PRSUs | |||||
Stock-based compensation awards | |||||
Vesting period of awards, after the date of grant (in years) | 3 years |
Derivative Financial Instrume48
Derivative Financial Instruments and Risk Management (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Foreign currency cash flow hedges, maximum allowable period (in years) | 5 years |
Foreign currency cash flow hedges, maximum period (in years) | 51 months |
Deferred net losses, foreign currency exchange rate risk, to be reclassified from equity to current earnings over the next twelve months | $ 19 |
Derivative | |
Commodity forward and option contracts, maximum period (in years) | 5 years |
Machinery, Energy & Transportation | |
Derivative | |
Deferred net gains (losses), interest rate risk, to be reclassified from equity to current earnings over the next twelve months | $ (4) |
Financial Products | |
Derivative | |
Deferred net gains (losses), interest rate risk, to be reclassified from equity to current earnings over the next twelve months | $ 1 |
Derivative Financial Instrume49
Derivative Financial Instruments and Risk Management (Details 2) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Derivatives Fair Value | ||
Asset Fair Value | $ 73 | $ 105 |
Liability Fair Value | (102) | (56) |
Machinery, Energy & Transportation | ||
Derivatives Fair Value | ||
Asset Fair Value | 34 | 14 |
Liability Fair Value | (80) | (46) |
Financial Products | ||
Derivatives Fair Value | ||
Asset Fair Value | 39 | 91 |
Liability Fair Value | (22) | (10) |
Designated Derivatives | ||
Derivatives Fair Value | ||
Asset (Liability) Fair Value | (56) | 35 |
Designated Derivatives | Foreign exchange contracts | Receivables-trade and other | Machinery, Energy & Transportation | ||
Derivatives Fair Value | ||
Asset Fair Value | 24 | 12 |
Designated Derivatives | Foreign exchange contracts | Long-term receivables-trade and other | Machinery, Energy & Transportation | ||
Derivatives Fair Value | ||
Asset Fair Value | 1 | 0 |
Designated Derivatives | Foreign exchange contracts | Long-term receivables-trade and other | Financial Products | ||
Derivatives Fair Value | ||
Asset Fair Value | 4 | 0 |
Designated Derivatives | Foreign exchange contracts | Accrued Expenses | Machinery, Energy & Transportation | ||
Derivatives Fair Value | ||
Liability Fair Value | (55) | (25) |
Designated Derivatives | Foreign exchange contracts | Accrued Expenses | Financial Products | ||
Derivatives Fair Value | ||
Liability Fair Value | (15) | 0 |
Designated Derivatives | Foreign exchange contracts | Other Liabilities | Machinery, Energy & Transportation | ||
Derivatives Fair Value | ||
Liability Fair Value | (18) | 0 |
Designated Derivatives | Interest rate contracts | Receivables-trade and other | Financial Products | ||
Derivatives Fair Value | ||
Asset Fair Value | 0 | 1 |
Designated Derivatives | Interest rate contracts | Long-term receivables-trade and other | Financial Products | ||
Derivatives Fair Value | ||
Asset Fair Value | 5 | 51 |
Designated Derivatives | Interest rate contracts | Accrued Expenses | Financial Products | ||
Derivatives Fair Value | ||
Liability Fair Value | (2) | (4) |
Undesignated Derivatives | ||
Derivatives Fair Value | ||
Asset (Liability) Fair Value | 27 | 14 |
Undesignated Derivatives | Foreign exchange contracts | Receivables-trade and other | Machinery, Energy & Transportation | ||
Derivatives Fair Value | ||
Asset Fair Value | 3 | 2 |
Undesignated Derivatives | Foreign exchange contracts | Receivables-trade and other | Financial Products | ||
Derivatives Fair Value | ||
Asset Fair Value | 2 | 3 |
Undesignated Derivatives | Foreign exchange contracts | Long-term receivables-trade and other | Financial Products | ||
Derivatives Fair Value | ||
Asset Fair Value | 28 | 36 |
Undesignated Derivatives | Foreign exchange contracts | Accrued Expenses | Machinery, Energy & Transportation | ||
Derivatives Fair Value | ||
Liability Fair Value | (7) | (9) |
Undesignated Derivatives | Foreign exchange contracts | Accrued Expenses | Financial Products | ||
Derivatives Fair Value | ||
Liability Fair Value | (5) | (6) |
Undesignated Derivatives | Commodity contracts | Receivables-trade and other | Machinery, Energy & Transportation | ||
Derivatives Fair Value | ||
Asset Fair Value | 6 | 0 |
Undesignated Derivatives | Commodity contracts | Accrued Expenses | Machinery, Energy & Transportation | ||
Derivatives Fair Value | ||
Liability Fair Value | $ 0 | $ (12) |
Derivative Financial Instrume50
Derivative Financial Instruments and Risk Management (Details 3) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Machinery, Energy & Transportation | ||
Derivative notional amounts | ||
Derivative instruments notional amount | $ 2,200 | $ 2,040 |
Financial Products | ||
Derivative notional amounts | ||
Derivative instruments notional amount | $ 2,909 | $ 3,539 |
Derivative Financial Instrume51
Derivative Financial Instruments and Risk Management (Details 4) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Designated Derivatives | Fair Value Hedges | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) on Derivatives | $ (11) | $ 3 | $ (11) | $ (11) |
Gains (Losses) on Borrowings | 11 | (3) | 10 | 10 |
Designated Derivatives | Fair Value Hedges | Interest rate contracts | Financial Products | Other Income (Expense) | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) on Derivatives | (11) | 3 | (11) | (11) |
Gains (Losses) on Borrowings | 11 | (3) | 10 | 10 |
Designated Derivatives | Cash Flow Hedges | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) | (44) | (19) | (58) | (24) |
Amount of Gains (Losses) Reclassified from AOCI to Earnings | (8) | (31) | (24) | (109) |
Recognized in Earnings (Ineffective Portion) | 0 | 0 | 0 | 0 |
Designated Derivatives | Cash Flow Hedges | Foreign exchange contracts | Machinery, Energy & Transportation | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) | (29) | (18) | (35) | (25) |
Designated Derivatives | Cash Flow Hedges | Foreign exchange contracts | Machinery, Energy & Transportation | Other Income (Expense) | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Reclassified from AOCI to Earnings | 4 | (29) | 0 | (101) |
Recognized in Earnings (Ineffective Portion) | 0 | 0 | 0 | 0 |
Designated Derivatives | Cash Flow Hedges | Foreign exchange contracts | Financial Products | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) | (17) | (23) | ||
Designated Derivatives | Cash Flow Hedges | Foreign exchange contracts | Financial Products | Other Income (Expense) | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Reclassified from AOCI to Earnings | (10) | (16) | ||
Recognized in Earnings (Ineffective Portion) | 0 | 0 | ||
Designated Derivatives | Cash Flow Hedges | Interest rate contracts | Machinery, Energy & Transportation | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) | 0 | 0 | 0 | 0 |
Designated Derivatives | Cash Flow Hedges | Interest rate contracts | Machinery, Energy & Transportation | Interest Expense | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Reclassified from AOCI to Earnings | (2) | (1) | (5) | (4) |
Recognized in Earnings (Ineffective Portion) | 0 | 0 | 0 | 0 |
Designated Derivatives | Cash Flow Hedges | Interest rate contracts | Financial Products | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) | 2 | (1) | 0 | 1 |
Designated Derivatives | Cash Flow Hedges | Interest rate contracts | Financial Products | Interest Expense | ||||
Derivative Instruments, Gain (Loss) | ||||
Amount of Gains (Losses) Reclassified from AOCI to Earnings | 0 | (1) | (3) | (4) |
Recognized in Earnings (Ineffective Portion) | 0 | 0 | 0 | 0 |
Undesignated Derivatives | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments | 0 | 5 | 0 | (55) |
Undesignated Derivatives | Foreign exchange contracts | Machinery, Energy & Transportation | Other Income (Expense) | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments | 2 | 7 | 24 | (22) |
Undesignated Derivatives | Foreign exchange contracts | Financial Products | Other Income (Expense) | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments | (5) | 6 | (33) | (18) |
Undesignated Derivatives | Commodity contracts | Machinery, Energy & Transportation | Other Income (Expense) | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments | $ 3 | $ (8) | $ 9 | $ (15) |
Derivative Financial Instrume52
Derivative Financial Instruments and Risk Management (Details 5) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Offsetting Assets | ||
Gross Amount of Recognized Assets | $ 73 | $ 105 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount of Assets Presented in the Statement of Financial Position | 73 | 105 |
Financial Instruments | (36) | (19) |
Cash Collateral Received | 0 | 0 |
Net Amount of Assets | 37 | 86 |
Machinery, Energy & Transportation | ||
Offsetting Assets | ||
Gross Amount of Recognized Assets | 34 | 14 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount of Assets Presented in the Statement of Financial Position | 34 | 14 |
Financial Instruments | (33) | (14) |
Cash Collateral Received | 0 | 0 |
Net Amount of Assets | 1 | 0 |
Financial Products | ||
Offsetting Assets | ||
Gross Amount of Recognized Assets | 39 | 91 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount of Assets Presented in the Statement of Financial Position | 39 | 91 |
Financial Instruments | (3) | (5) |
Cash Collateral Received | 0 | 0 |
Net Amount of Assets | $ 36 | $ 86 |
Derivative Financial Instrume53
Derivative Financial Instruments and Risk Management (Details 6) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Offsetting Liabilities | ||
Gross Amount of Recognized Liabilities | $ (102) | $ (56) |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount of Assets Presented in the Statement of Financial Position | (102) | (56) |
Financial Instruments | 36 | 19 |
Cash Collateral Pledged | 0 | 0 |
Net Amount of Liabilities | (66) | (37) |
Machinery, Energy & Transportation | ||
Offsetting Liabilities | ||
Gross Amount of Recognized Liabilities | (80) | (46) |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount of Assets Presented in the Statement of Financial Position | (80) | (46) |
Financial Instruments | 33 | 14 |
Cash Collateral Pledged | 0 | 0 |
Net Amount of Liabilities | (47) | (32) |
Financial Products | ||
Offsetting Liabilities | ||
Gross Amount of Recognized Liabilities | (22) | (10) |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount of Assets Presented in the Statement of Financial Position | (22) | (10) |
Financial Instruments | 3 | 5 |
Cash Collateral Pledged | 0 | 0 |
Net Amount of Liabilities | $ (19) | $ (5) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,359 | $ 2,467 |
Work-in-process | 2,015 | 1,857 |
Finished goods | 4,866 | 5,122 |
Supplies | 238 | 254 |
Total inventories | $ 9,478 | $ 9,700 |
Investments in Unconsolidated55
Investments in Unconsolidated Affiliated Companies (Details) - USD ($) $ in Millions | 1 Months Ended | ||
Feb. 28, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | |
Caterpillar's investments in unconsolidated affiliated companies: | |||
Investments in equity method companies | $ 192 | $ 203 | |
Plus: Investments in cost method companies | 55 | 43 | |
Total investments in unconsolidated affiliated companies | $ 247 | $ 246 | |
Third party logistics business, investment | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage of equity interest sold | 35.00% | ||
Sale price of investment | $ 177 | ||
Cash proceeds from sale | 167 | ||
Note receivable from sale | 10 | ||
Realized gain on disposal | 120 | ||
Carrying value of noncontrolling interest | $ 57 |
Intangible Assets and Goodwil56
Intangible Assets and Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Intangible assets | |||||
Finite-Lived Intangible Assets, Accumulated Amortization | $ 1,670 | $ 1,670 | $ 1,502 | ||
Weighted Amortizable Life (in years) | 14 years | 14 years | |||
Finite-Lived Intangible Assets, Gross | 4,123 | $ 4,123 | $ 4,323 | ||
Net | 2,453 | 2,453 | 2,821 | ||
Intangible assets | 2,453 | 2,453 | 2,821 | ||
Amortization expense | 82 | $ 81 | 246 | $ 255 | |
Remaining Three Months of 2016 | 79 | 79 | |||
2,017 | 316 | 316 | |||
2,018 | 308 | 308 | |||
2,019 | 306 | 306 | |||
2,020 | 295 | 295 | |||
Thereafter | 1,149 | 1,149 | |||
Customer Relationships | |||||
Intangible assets | |||||
Finite-Lived Intangible Assets, Accumulated Amortization | 915 | $ 915 | $ 809 | ||
Weighted Amortizable Life (in years) | 15 years | 15 years | |||
Finite-Lived Intangible Assets, Gross | 2,424 | $ 2,424 | $ 2,489 | ||
Net | 1,509 | 1,509 | 1,680 | ||
Intellectual Property | |||||
Intangible assets | |||||
Finite-Lived Intangible Assets, Accumulated Amortization | 681 | $ 681 | $ 626 | ||
Weighted Amortizable Life (in years) | 11 years | 11 years | |||
Finite-Lived Intangible Assets, Gross | 1,515 | $ 1,515 | $ 1,660 | ||
Net | 834 | 834 | 1,034 | ||
Other | |||||
Intangible assets | |||||
Finite-Lived Intangible Assets, Accumulated Amortization | 74 | $ 74 | $ 67 | ||
Weighted Amortizable Life (in years) | 14 years | 12 years | |||
Finite-Lived Intangible Assets, Gross | 184 | $ 184 | $ 174 | ||
Net | 110 | $ 110 | $ 107 | ||
Resource Industries | |||||
Intangible assets | |||||
Impairment of Intangible Assets, Finite-lived | 132 | ||||
Resource Industries | Customer Relationships | |||||
Intangible assets | |||||
Impairment of Finite-lived Intangible Assets, Gross | 96 | ||||
Impairment of Finite-lived Intangible Assets, Accumulated Amortization | 27 | ||||
Resource Industries | Intellectual Property | |||||
Intangible assets | |||||
Impairment of Finite-lived Intangible Assets, Gross | 111 | ||||
Impairment of Finite-lived Intangible Assets, Accumulated Amortization | $ 48 |
Intangible Assets and Goodwil57
Intangible Assets and Goodwill (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Changes in carrying amount of goodwill by reportable segment: | ||||
Goodwill, beginning of period | $ 7,217 | |||
Impairments, beginning of period | (602) | |||
Net goodwill, beginning of period | 6,615 | |||
Goodwill Acquired | 26 | |||
Goodwill impairment charge | $ 0 | $ 0 | 0 | $ 0 |
Other adjustments | 84 | |||
Goodwill, end of period | 7,327 | 7,327 | ||
Impairments, end of period | (602) | (602) | ||
Net goodwill, end of period | 6,725 | 6,725 | ||
Construction Industries | ||||
Changes in carrying amount of goodwill by reportable segment: | ||||
Goodwill, beginning of period | 285 | |||
Impairments, beginning of period | (22) | |||
Net goodwill, beginning of period | 263 | |||
Goodwill Acquired | 0 | |||
Other adjustments | 30 | |||
Goodwill, end of period | 315 | 315 | ||
Impairments, end of period | (22) | (22) | ||
Net goodwill, end of period | 293 | 293 | ||
Resource Industries | ||||
Changes in carrying amount of goodwill by reportable segment: | ||||
Goodwill, beginning of period | 4,145 | |||
Impairments, beginning of period | (580) | |||
Net goodwill, beginning of period | 3,565 | |||
Goodwill Acquired | 0 | |||
Other adjustments | 36 | |||
Goodwill, end of period | 4,181 | 4,181 | ||
Impairments, end of period | (580) | (580) | ||
Net goodwill, end of period | 3,601 | 3,601 | ||
Energy & Transportation | ||||
Changes in carrying amount of goodwill by reportable segment: | ||||
Goodwill, beginning of period | 2,738 | |||
Goodwill Acquired | 26 | |||
Other adjustments | 8 | |||
Goodwill, end of period | 2,772 | 2,772 | ||
Reassigned goodwill | 118 | |||
All Other | ||||
Changes in carrying amount of goodwill by reportable segment: | ||||
Goodwill, beginning of period | 49 | |||
Goodwill Acquired | 0 | |||
Other adjustments | 10 | |||
Goodwill, end of period | $ 59 | $ 59 |
Investments in Debt and Equit58
Investments in Debt and Equity Securities (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | $ 1,658 | $ 1,577 |
Unrealized Pretax Net Gains (Losses) | 52 | 58 |
Fair Value | 1,710 | 1,635 |
U.S. treasury bonds | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 10 | 9 |
Unrealized Pretax Net Gains (Losses) | 0 | 0 |
Fair Value | 10 | 9 |
Other U.S. and non-U.S. government bonds | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 67 | 71 |
Unrealized Pretax Net Gains (Losses) | 1 | 1 |
Fair Value | 68 | 72 |
Corporate bonds | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 697 | 701 |
Unrealized Pretax Net Gains (Losses) | 13 | 7 |
Fair Value | 710 | 708 |
Asset-backed securities | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 134 | 129 |
Unrealized Pretax Net Gains (Losses) | 1 | 0 |
Fair Value | 135 | 129 |
U.S. governmental agency mortgage-backed securities | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 282 | 291 |
Unrealized Pretax Net Gains (Losses) | 4 | 1 |
Fair Value | 286 | 292 |
Residential | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 10 | 12 |
Unrealized Pretax Net Gains (Losses) | 0 | 0 |
Fair Value | 10 | 12 |
Commercial | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 62 | 59 |
Unrealized Pretax Net Gains (Losses) | 1 | 2 |
Fair Value | 63 | 61 |
Large capitalization value | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 279 | 243 |
Unrealized Pretax Net Gains (Losses) | 20 | 30 |
Fair Value | 299 | 273 |
Real estate investment trust (REIT) | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 70 | 25 |
Unrealized Pretax Net Gains (Losses) | 2 | 0 |
Fair Value | 72 | 25 |
Smaller company growth | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 47 | 37 |
Unrealized Pretax Net Gains (Losses) | 10 | 17 |
Fair Value | $ 57 | $ 54 |
Investments in Debt and Equit59
Investments in Debt and Equity Securities (Details 2) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Less than 12 months | ||
Fair Value | $ 98 | $ 572 |
Unrealized Losses | 9 | 14 |
12 months or more | ||
Fair Value | 25 | 96 |
Unrealized Losses | 2 | 3 |
Total | ||
Fair Value | 123 | 668 |
Unrealized Losses | 11 | 17 |
Corporate bonds | ||
Less than 12 months | ||
Fair Value | 242 | |
Unrealized Losses | 3 | |
12 months or more | ||
Fair Value | 27 | |
Unrealized Losses | 1 | |
Total | ||
Fair Value | 269 | |
Unrealized Losses | 4 | |
Asset-backed securities | ||
Less than 12 months | ||
Fair Value | 0 | 84 |
Unrealized Losses | 0 | 1 |
12 months or more | ||
Fair Value | 16 | 10 |
Unrealized Losses | 1 | 1 |
Total | ||
Fair Value | 16 | 94 |
Unrealized Losses | 1 | 2 |
U.S. governmental agency mortgage-backed securities | ||
Less than 12 months | ||
Fair Value | 135 | |
Unrealized Losses | 1 | |
12 months or more | ||
Fair Value | 57 | |
Unrealized Losses | 1 | |
Total | ||
Fair Value | 192 | |
Unrealized Losses | 2 | |
Large capitalization value | ||
Less than 12 months | ||
Fair Value | 85 | 97 |
Unrealized Losses | 6 | 8 |
12 months or more | ||
Fair Value | 9 | 2 |
Unrealized Losses | 1 | 0 |
Total | ||
Fair Value | 94 | 99 |
Unrealized Losses | 7 | 8 |
Smaller company growth | ||
Less than 12 months | ||
Fair Value | 13 | 14 |
Unrealized Losses | 3 | 1 |
12 months or more | ||
Fair Value | 0 | 0 |
Unrealized Losses | 0 | 0 |
Total | ||
Fair Value | 13 | 14 |
Unrealized Losses | $ 3 | $ 1 |
Investments in Debt and Equit60
Investments in Debt and Equity Securities (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |||||
Due in one year or less, Cost Basis | $ 209 | $ 209 | |||
Due after one year through five years, Cost Basis | 622 | 622 | |||
Due after five through ten years, Cost Basis | 50 | 50 | |||
Due after ten years, Cost Basis | 27 | 27 | |||
Due in one year or less, Fair Value | 210 | 210 | |||
Due after one year through five years, Fair Value | 634 | 634 | |||
Due after five years through ten years, Fair Value | 52 | 52 | |||
Due after ten years, Fair Value | 27 | 27 | |||
Cost Basis | 1,262 | 1,262 | |||
Fair Value | 1,282 | 1,282 | |||
Schedule of Investments in Debt and Equity Securities | |||||
Cost Basis | 1,658 | 1,658 | $ 1,577 | ||
Available-for-sale securities, Fair Value | 1,710 | 1,710 | 1,635 | ||
Available-for-sale Securities, Proceeds, Gains and Losses | |||||
Proceeds from the sale of available-for-sale securities | 109 | $ 110 | 304 | $ 238 | |
Gross gains from the sale of available-for-sale securities | 10 | 32 | 43 | 38 | |
Gross losses from the sale of available-for-sale securities | 1 | $ 1 | 3 | $ 2 | |
U.S. governmental agency mortgage-backed securities | |||||
Schedule of Investments in Debt and Equity Securities | |||||
Cost Basis | 282 | 282 | 291 | ||
Available-for-sale securities, Fair Value | 286 | 286 | 292 | ||
Residential | |||||
Schedule of Investments in Debt and Equity Securities | |||||
Cost Basis | 10 | 10 | 12 | ||
Available-for-sale securities, Fair Value | 10 | 10 | 12 | ||
Commercial | |||||
Schedule of Investments in Debt and Equity Securities | |||||
Cost Basis | 62 | 62 | 59 | ||
Available-for-sale securities, Fair Value | $ 63 | $ 63 | $ 61 |
Postretirement Benefits (Detail
Postretirement Benefits (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Pension and Other Postretirement Benefits | ||||
Pension and other postretirement benefit contributions | ||||
Contributions to pension and other postretirement benefit plans | $ 71 | $ 65 | $ 270 | $ 263 |
Expected full year contributions to pension and other postretirement benefit plans during the year | 350 | 350 | ||
U.S. Pension Benefits | ||||
Components of net periodic benefit cost: | ||||
Service cost | 30 | 45 | 89 | 136 |
Interest cost | 129 | 151 | 388 | 454 |
Expected return on plan assets | (190) | (224) | (568) | (672) |
Amortization of prior service cost / (credit) | 0 | 1 | 0 | 1 |
Net actuarial loss / (gain) | 0 | 0 | 0 | (8) |
Net periodic benefit cost (benefit), excluding curtailments, settlements and termination benefits | (31) | (27) | (91) | (89) |
Curtailments, settlements and termination benefits | 0 | 0 | 0 | (19) |
Total cost (benefit) included in operating profit | (31) | (27) | $ (91) | $ (108) |
Weighted-average assumptions used to determine net cost: | ||||
Discount rate used to measure service cost | 4.50% | 3.80% | ||
Discount rate used to measure interest cost | 3.40% | 3.80% | ||
Expected return on plan assets (as a percent) | 6.90% | 7.40% | ||
Rate of compensation increase (as a percent) | 4.00% | 4.00% | ||
Non-U.S. Pension Benefits | ||||
Components of net periodic benefit cost: | ||||
Service cost | 22 | 28 | $ 68 | $ 85 |
Interest cost | 30 | 37 | 90 | 112 |
Expected return on plan assets | (59) | (70) | (176) | (207) |
Amortization of prior service cost / (credit) | 0 | 0 | 0 | 0 |
Net actuarial loss / (gain) | 0 | (18) | 0 | (18) |
Net periodic benefit cost (benefit), excluding curtailments, settlements and termination benefits | (7) | (23) | (18) | (28) |
Curtailments, settlements and termination benefits | 1 | (2) | 1 | (2) |
Total cost (benefit) included in operating profit | (6) | (25) | $ (17) | $ (30) |
Weighted-average assumptions used to determine net cost: | ||||
Discount rate used to measure service cost | 2.90% | 3.30% | ||
Discount rate used to measure interest cost | 2.80% | 3.30% | ||
Expected return on plan assets (as a percent) | 6.10% | 6.80% | ||
Rate of compensation increase (as a percent) | 3.50% | 4.00% | ||
Other Postretirement Benefits | ||||
Components of net periodic benefit cost: | ||||
Service cost | 20 | 26 | $ 61 | $ 76 |
Interest cost | 33 | 46 | 98 | 138 |
Expected return on plan assets | (11) | (15) | (33) | (43) |
Amortization of prior service cost / (credit) | (15) | (14) | (45) | (41) |
Net actuarial loss / (gain) | 0 | (9) | 0 | (9) |
Net periodic benefit cost (benefit), excluding curtailments, settlements and termination benefits | 27 | 34 | 81 | 121 |
Curtailments, settlements and termination benefits | 0 | (5) | (2) | (5) |
Total cost (benefit) included in operating profit | 27 | $ 29 | $ 79 | $ 116 |
Weighted-average assumptions used to determine net cost: | ||||
Discount rate used to measure service cost | 4.40% | 3.90% | ||
Discount rate used to measure interest cost | 3.30% | 3.90% | ||
Expected return on plan assets (as a percent) | 7.50% | 7.80% | ||
Rate of compensation increase (as a percent) | 4.00% | 4.00% | ||
Restatement Adjustment | ||||
Defined Benefit Plan Disclosure | ||||
Pension and other postretirement benefits (OPEB) expense | $ 45 | $ 135 | ||
Change in Accounting Estimate, Effect of Change on Diluted Earnings Per Share | $ 0.05 | $ 0.15 | ||
Previous Accounting Method | U.S. Pension Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Discount rate (as a percent) | 4.20% | |||
Previous Accounting Method | Non-U.S. Pension Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Discount rate (as a percent) | 3.20% | |||
Previous Accounting Method | Other Postretirement Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Discount rate (as a percent) | 4.10% |
Postretirement Benefits (Deta62
Postretirement Benefits (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Defined contribution plans | ||||
Costs related to defined contribution plans | $ 99 | $ 50 | $ 286 | $ 246 |
U.S. Plans | ||||
Defined contribution plans | ||||
Costs related to defined contribution plans | 83 | 31 | 235 | 188 |
Non-U.S. Plans | ||||
Defined contribution plans | ||||
Costs related to defined contribution plans | $ 16 | $ 19 | $ 51 | $ 58 |
Guarantees and Product Warran63
Guarantees and Product Warranty (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | Feb. 28, 2015 |
Commitments and Contingencies Disclosure [Abstract] | |||
Related liability | $ 12 | $ 12 | |
Guarantor Obligations | |||
Guarantees, maximum potential amount of future payments | 693 | 681 | |
Special-Purpose Corporation assets in Consolidated Statement of Financial Position | 1,152 | 1,211 | |
Special-Purpose Corporation liabilities in Consolidated Statement of Financial Position | 1,151 | 1,210 | |
Caterpillar dealer performance guarantees | |||
Guarantor Obligations | |||
Guarantees, maximum potential amount of future payments | 217 | 216 | |
Customer loan guarantees | |||
Guarantor Obligations | |||
Guarantees, maximum potential amount of future payments | 51 | 47 | |
Supplier consortium performance guarantee | |||
Guarantor Obligations | |||
Guarantees, maximum potential amount of future payments | 295 | 286 | |
Third party logistics business lease guarantees | |||
Guarantor Obligations | |||
Percentage of equity interest sold | 35.00% | ||
Guarantees, maximum potential amount of future payments | 92 | 107 | |
Other guarantees | |||
Guarantor Obligations | |||
Guarantees, maximum potential amount of future payments | $ 38 | $ 25 |
Guarantees and Product Warran64
Guarantees and Product Warranty (Details 2) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Movement in Standard Product Warranty Accrual | ||
Warranty liability, beginning balance | $ 1,354 | $ 1,426 |
Reduction in liability (payments) | (676) | (874) |
Increase in liability (new warranties) | 628 | 802 |
Warranty liability, ending balance | $ 1,306 | $ 1,354 |
Profit Per Share (Details)
Profit Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jan. 31, 2014 | ||
Earnings Per Share [Abstract] | ||||||
Profit for the period (A) (in dollars) | [1] | $ 283 | $ 559 | $ 1,104 | $ 2,606 | |
Determination of shares (in millions) | ||||||
Weighted-average number of common shares outstanding (B) (in shares) | 584,700,000 | 588,400,000 | 583,800,000 | 597,900,000 | ||
Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price (in shares) | 4,900,000 | 6,400,000 | 4,900,000 | 7,400,000 | ||
Average common shares outstanding for fully diluted computation (C) (in shares) | [2] | 589,600,000 | 594,800,000 | 588,700,000 | 605,300,000 | |
Profit (loss) per share of common stock: | ||||||
Assuming no dilution (A/B) (in dollars per share) | $ 0.48 | $ 0.95 | $ 1.89 | $ 4.36 | ||
Assuming full dilution (A/C) (in dollars per share) | [2] | $ 0.48 | $ 0.94 | $ 1.88 | $ 4.30 | |
Shares outstanding as of September 30 (in shares) | 585,100,000 | 582,200,000 | 585,100,000 | 582,200,000 | ||
Common shares under SARs and stock options not included in the computation of diluted earnings per share (in shares) | 21,874,118 | 22,281,448 | 26,088,324 | 22,281,448 | ||
Common stock repurchase | ||||||
Stock repurchase program, authorized amount | $ 10,000 | |||||
Common shares repurchased (in shares) | 19,600,000 | 0 | 25,841,608 | |||
Payments for repurchase of common stock | $ 1,500 | $ 0 | $ 2,025 | |||
Stock repurchase program, amount of authorized repurchase spent to date | $ 4,500 | |||||
[1] | 1 Profit attributable to common stockholders. | |||||
[2] | 2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method. |
Accumulated Other Comprehensi66
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive income (loss), start of period | $ (1,633) | $ (1,594) | $ (2,035) | $ (1,059) |
Other comprehensive income (loss) before reclassifications | 103 | (261) | 532 | (824) |
Amounts reclassified from accumulated other comprehensive (income) loss | 3 | (6) | (24) | 22 |
Other comprehensive income (loss) | 106 | (267) | 508 | (802) |
Accumulated other comprehensive income (loss), end of period | (1,527) | (1,861) | (1,527) | (1,861) |
Foreign currency translation | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive income (loss), start of period | (1,648) | (1,554) | (1,953) | (992) |
Other comprehensive income (loss) before reclassifications | 124 | (235) | 429 | (797) |
Amounts reclassified from accumulated other comprehensive (income) loss | 13 | 0 | 13 | 0 |
Other comprehensive income (loss) | 137 | (235) | 442 | (797) |
Accumulated other comprehensive income (loss), end of period | (1,511) | (1,789) | (1,511) | (1,789) |
Pension and other postretirement benefits | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive income (loss), start of period | 29 | (49) | (69) | (31) |
Other comprehensive income (loss) before reclassifications | 2 | 1 | 119 | 1 |
Amounts reclassified from accumulated other comprehensive (income) loss | (10) | (8) | (29) | (26) |
Other comprehensive income (loss) | (8) | (7) | 90 | (25) |
Accumulated other comprehensive income (loss), end of period | 21 | (56) | 21 | (56) |
Derivative financial instruments | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive income (loss), start of period | (49) | (73) | (50) | (119) |
Other comprehensive income (loss) before reclassifications | (28) | (12) | (37) | (15) |
Amounts reclassified from accumulated other comprehensive (income) loss | 6 | 20 | 16 | 69 |
Other comprehensive income (loss) | (22) | 8 | (21) | 54 |
Accumulated other comprehensive income (loss), end of period | (71) | (65) | (71) | (65) |
Available-for-sale securities | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive income (loss), start of period | 35 | 82 | 37 | 83 |
Other comprehensive income (loss) before reclassifications | 5 | (15) | 21 | (13) |
Amounts reclassified from accumulated other comprehensive (income) loss | (6) | (18) | (24) | (21) |
Other comprehensive income (loss) | (1) | (33) | (3) | (34) |
Accumulated other comprehensive income (loss), end of period | $ 34 | $ 49 | $ 34 | $ 49 |
Accumulated Other Comprehensi67
Accumulated Other Comprehensive Income (Loss) (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Other income (expense) | $ 28 | $ (15) | $ 112 | $ 107 | |
Interest expense excluding Financial Products | (126) | (127) | (385) | (381) | |
Interest expense of Financial Products | (147) | (142) | (447) | (440) | |
Reclassifications before tax | 383 | 783 | 1,487 | 3,686 | |
Tax (provision) benefit | (96) | (218) | (372) | (1,074) | |
Reclassifications net of tax | [1] | 283 | 559 | 1,104 | 2,606 |
Reclassification out of Accumulated Other Comprehensive Income | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Reclassifications net of tax | (3) | 6 | 24 | (22) | |
Reclassification out of Accumulated Other Comprehensive Income | Foreign currency translation | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Other income (expense) | (13) | 0 | (13) | 0 | |
Tax (provision) benefit | 0 | 0 | 0 | 0 | |
Reclassifications net of tax | (13) | 0 | (13) | 0 | |
Reclassification out of Accumulated Other Comprehensive Income | Pension and other postretirement benefits | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Amortization of prior service credit (cost) | 15 | 13 | 45 | 40 | |
Tax (provision) benefit | (5) | (5) | (16) | (14) | |
Reclassifications net of tax | 10 | 8 | 29 | 26 | |
Reclassification out of Accumulated Other Comprehensive Income | Derivative financial instruments | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Reclassifications before tax | (8) | (31) | (24) | (109) | |
Tax (provision) benefit | 2 | 11 | 8 | 40 | |
Reclassifications net of tax | (6) | (20) | (16) | (69) | |
Reclassification out of Accumulated Other Comprehensive Income | Derivative financial instruments | Foreign exchange contracts | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Other income (expense) | (6) | (29) | (16) | (101) | |
Reclassification out of Accumulated Other Comprehensive Income | Derivative financial instruments | Interest rate contracts | Machinery, Energy & Transportation | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Interest expense excluding Financial Products | (2) | (1) | (5) | (4) | |
Reclassification out of Accumulated Other Comprehensive Income | Derivative financial instruments | Interest rate contracts | Financial Products | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Interest expense of Financial Products | 0 | (1) | (3) | (4) | |
Reclassification out of Accumulated Other Comprehensive Income | Available-for-sale securities | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Other income (expense) | 9 | 27 | 36 | 31 | |
Tax (provision) benefit | (3) | (9) | (12) | (10) | |
Reclassifications net of tax | $ 6 | $ 18 | $ 24 | $ 21 | |
[1] | 1 Profit attributable to common stockholders. |
Environmental and legal matte68
Environmental and legal matters Environmental and legal matters (Details) | Mar. 20, 2014 |
Companies | |
Loss Contingencies | |
Number of Defendants | 18 |
Individuals | |
Loss Contingencies | |
Number of Defendants | 100 |
Subsidiaries | |
Loss Contingencies | |
Number of Defendants | 2 |
Current employees | |
Loss Contingencies | |
Number of Defendants | 2 |
Former employees | |
Loss Contingencies | |
Number of Defendants | 1 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Estimated annual effective tax rate (as a percent) | 25.00% | 28.00% | 25.50% |
Deferred Tax Assets, State, Net | $ 230 | ||
US Federal Statutory Income Tax Rate, Percent | 35.00% | ||
Prior year tax adjustment expense (benefit) | $ 42 | ||
Tax Year Prior Years | |||
Income Tax Contingency | |||
Income tax examination, proposed liability increase/(decrease) | $ 1,000 | ||
Income tax adjustment | $ 125 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)group_presidentssegmentsdealers | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting Information | |||||
Number of group presidents | group_presidents | 5 | ||||
Number of operating segments | segments | 6 | ||||
Useful life to amortize goodwill for segment assets | 20 years | ||||
Reportable Segments | |||||
Sales and revenues | $ 9,160 | $ 10,962 | $ 28,963 | $ 35,981 | |
Depreciation and amortization | 761 | 758 | 2,255 | 2,272 | |
Consolidated profit before taxes | 383 | 783 | 1,487 | 3,686 | |
Segment assets | 76,402 | 76,402 | $ 78,342 | ||
Capital expenditures | 595 | 726 | $ 2,200 | 2,197 | |
All Other operating segments | |||||
Segment Reporting Information | |||||
Number of group presidents | group_presidents | 1 | ||||
Number of smaller operating segments led by Group President | group_presidents | 2 | ||||
Number of wholly-owned dealers involved in segment reallocation | dealers | 1 | ||||
Reportable Segments | |||||
Sales and revenues | 28 | 39 | $ 107 | 166 | |
Depreciation and amortization | 53 | 51 | 158 | 151 | |
Consolidated profit before taxes | (22) | (11) | (43) | (36) | |
Segment assets | 1,368 | 1,368 | 1,405 | ||
Capital expenditures | 35 | 33 | 102 | 86 | |
Reportable Segments Including Intersegment Eliminations | |||||
Reportable Segments | |||||
Sales and revenues | 9,939 | 11,828 | $ 31,282 | 38,638 | |
Reportable Segments | |||||
Segment Reporting Information | |||||
Number of operating segments led by Group Presidents | segments | 3 | ||||
Number of operating segments led by Group President responsible for corporate services | segments | 1 | ||||
Reportable Segments | |||||
Number of reportable segments | segments | 4 | ||||
Sales and revenues | 9,214 | 11,021 | $ 29,119 | 36,060 | |
Depreciation and amortization | 652 | 665 | 1,942 | 2,008 | |
Consolidated profit before taxes | 1,004 | 1,202 | 3,117 | 5,035 | |
Segment assets | 57,986 | 57,986 | 59,605 | ||
Capital expenditures | 568 | 673 | 1,882 | 1,868 | |
Intersegment Eliminations | |||||
Reportable Segments | |||||
Sales and revenues | 725 | 807 | 2,163 | 2,578 | |
Machinery, Energy & Transportation | Reportable Segments Including Intersegment Eliminations | |||||
Reportable Segments | |||||
Sales and revenues | 9,190 | 11,076 | 29,031 | 36,306 | |
Machinery, Energy & Transportation | Reportable Segments | |||||
Reportable Segments | |||||
Sales and revenues | 8,465 | 10,269 | 26,868 | 33,728 | |
Depreciation and amortization | 437 | 455 | 1,309 | 1,370 | |
Consolidated profit before taxes | 821 | 995 | 2,564 | 4,417 | |
Segment assets | 21,656 | 21,656 | 23,876 | ||
Capital expenditures | 211 | 314 | 616 | 873 | |
Machinery, Energy & Transportation | Intersegment Eliminations | |||||
Reportable Segments | |||||
Sales and revenues | 725 | 807 | 2,163 | 2,578 | |
Construction Industries | Reportable Segments Including Intersegment Eliminations | |||||
Reportable Segments | |||||
Sales and revenues | 3,581 | 4,092 | 12,070 | 13,958 | |
Construction Industries | Reportable Segments | |||||
Reportable Segments | |||||
Sales and revenues | 3,554 | 4,075 | 12,023 | 13,892 | |
Depreciation and amortization | 117 | 139 | 346 | 419 | |
Consolidated profit before taxes | 326 | 354 | 1,316 | 1,687 | |
Segment assets | 5,521 | 5,521 | 6,176 | ||
Capital expenditures | 46 | 62 | 114 | 156 | |
Construction Industries | Intersegment Eliminations | |||||
Reportable Segments | |||||
Sales and revenues | 27 | 17 | 47 | 66 | |
Resource Industries | Reportable Segments Including Intersegment Eliminations | |||||
Reportable Segments | |||||
Sales and revenues | 1,446 | 1,930 | 4,480 | 6,111 | |
Resource Industries | Reportable Segments | |||||
Reportable Segments | |||||
Sales and revenues | 1,377 | 1,842 | 4,283 | 5,861 | |
Depreciation and amortization | 150 | 144 | 458 | 441 | |
Consolidated profit before taxes | (77) | (42) | (336) | 81 | |
Segment assets | 8,017 | 8,017 | 8,931 | ||
Capital expenditures | 68 | 73 | 162 | 152 | |
Resource Industries | Intersegment Eliminations | |||||
Reportable Segments | |||||
Sales and revenues | 69 | 88 | 197 | 250 | |
Energy & Transportation | Reportable Segments Including Intersegment Eliminations | |||||
Reportable Segments | |||||
Sales and revenues | 4,163 | 5,054 | 12,481 | 16,237 | |
Energy & Transportation | Reportable Segments | |||||
Reportable Segments | |||||
Sales and revenues | 3,534 | 4,352 | 10,562 | 13,975 | |
Depreciation and amortization | 170 | 172 | 505 | 510 | |
Consolidated profit before taxes | 572 | 683 | 1,584 | 2,649 | |
Segment assets | 8,118 | 8,118 | 8,769 | ||
Capital expenditures | 97 | 179 | 340 | 565 | |
Energy & Transportation | Intersegment Eliminations | |||||
Reportable Segments | |||||
Sales and revenues | 629 | 702 | 1,919 | 2,262 | |
Financial Products Segment | Reportable Segments Including Intersegment Eliminations | |||||
Reportable Segments | |||||
Sales and revenues | 749 | 752 | 2,251 | 2,332 | |
Financial Products Segment | Reportable Segments | |||||
Reportable Segments | |||||
Sales and revenues | 749 | 752 | 2,251 | 2,332 | |
Depreciation and amortization | 215 | 210 | 633 | 638 | |
Consolidated profit before taxes | 183 | 207 | 553 | 618 | |
Segment assets | 36,330 | 36,330 | $ 35,729 | ||
Capital expenditures | 357 | 359 | 1,266 | 995 | |
Financial Products Segment | Intersegment Eliminations | |||||
Reportable Segments | |||||
Sales and revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Segment Information (Details 2)
Segment Information (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation of Sales and revenues | ||||
Sales and revenues | $ 9,160 | $ 10,962 | $ 28,963 | $ 35,981 |
Reportable Segments | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | 9,214 | 11,021 | 29,119 | 36,060 |
All Other operating segments | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | 28 | 39 | 107 | 166 |
Other | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | (82) | (98) | (263) | (245) |
Consolidating Adjustments | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | (71) | (95) | (230) | (238) |
Consolidating Adjustments | Reportable Segments | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | 0 | 0 | 0 | 0 |
Consolidating Adjustments | All Other operating segments | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | 0 | 0 | 0 | 0 |
Consolidating Adjustments | Other | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | (71) | (95) | (230) | (238) |
Machinery, Energy & Transportation | Reportable Segments | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | 8,465 | 10,269 | 26,868 | 33,728 |
Machinery, Energy & Transportation | Business | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | 8,463 | 10,285 | 26,888 | 33,829 |
Machinery, Energy & Transportation | Business | Reportable Segments | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | 8,465 | 10,269 | 26,868 | 33,728 |
Machinery, Energy & Transportation | Business | All Other operating segments | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | 28 | 39 | 107 | 166 |
Machinery, Energy & Transportation | Business | Other | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | (30) | (23) | (87) | (65) |
Financial Products | Business | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | 768 | 772 | 2,305 | 2,390 |
Financial Products | Business | Reportable Segments | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | 749 | 752 | 2,251 | 2,332 |
Financial Products | Business | All Other operating segments | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | 0 | 0 | 0 | 0 |
Financial Products | Business | Other | ||||
Reconciliation of Sales and revenues | ||||
Sales and revenues | $ 19 | $ 20 | $ 54 | $ 58 |
Segment Information (Details 3)
Segment Information (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | $ 383 | $ 783 | $ 1,487 | $ 3,686 |
Reportable Segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 1,004 | 1,202 | 3,117 | 5,035 |
All Other operating segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (22) | (11) | (43) | (36) |
Cost Centers | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 29 | 23 | 68 | 31 |
Corporate Costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (121) | (136) | (429) | (451) |
Timing | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 12 | 37 | 53 | 15 |
Restructuring Costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (324) | (98) | (624) | (219) |
Inventory/cost of sales | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 19 | (22) | 0 | (30) |
Postretirement Benefits Expense | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 37 | 131 | 148 | 282 |
Stock-Based Compensation Expense [Member] | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (41) | (48) | (187) | (240) |
Financing Costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (129) | (128) | (396) | (394) |
Currency | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (10) | (104) | (22) | (226) |
Other Income Expense Methodology Differences | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (60) | (51) | (170) | (48) |
Other | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (11) | (12) | (28) | (33) |
Business | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 982 | 1,191 | 3,074 | 4,999 |
Machinery, Energy & Transportation | Reportable Segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 821 | 995 | 2,564 | 4,417 |
Machinery, Energy & Transportation | Business | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 202 | 577 | 940 | 3,066 |
Machinery, Energy & Transportation | Business | Reportable Segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 821 | 995 | 2,564 | 4,417 |
Machinery, Energy & Transportation | Business | All Other operating segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (22) | (11) | (43) | (36) |
Machinery, Energy & Transportation | Business | Cost Centers | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 29 | 23 | 68 | 31 |
Machinery, Energy & Transportation | Business | Corporate Costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (121) | (136) | (429) | (451) |
Machinery, Energy & Transportation | Business | Timing | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 12 | 37 | 53 | 15 |
Machinery, Energy & Transportation | Business | Restructuring Costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (323) | (98) | (619) | (219) |
Machinery, Energy & Transportation | Business | Inventory/cost of sales | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 19 | (22) | 0 | (30) |
Machinery, Energy & Transportation | Business | Postretirement Benefits Expense | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 37 | 131 | 148 | 282 |
Machinery, Energy & Transportation | Business | Stock-Based Compensation Expense [Member] | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (40) | (46) | (180) | (230) |
Machinery, Energy & Transportation | Business | Financing Costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (129) | (128) | (396) | (394) |
Machinery, Energy & Transportation | Business | Currency | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (10) | (104) | (22) | (226) |
Machinery, Energy & Transportation | Business | Other Income Expense Methodology Differences | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (60) | (51) | (170) | (48) |
Machinery, Energy & Transportation | Business | Other | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (11) | (13) | (34) | (45) |
Financial Products | Business | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 181 | 206 | 547 | 620 |
Financial Products | Business | Reportable Segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 183 | 207 | 553 | 618 |
Financial Products | Business | All Other operating segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 0 | 0 | 0 | 0 |
Financial Products | Business | Cost Centers | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 0 | 0 | 0 | 0 |
Financial Products | Business | Corporate Costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 0 | 0 | 0 | 0 |
Financial Products | Business | Timing | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 0 | 0 | 0 | 0 |
Financial Products | Business | Restructuring Costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (1) | 0 | (5) | 0 |
Financial Products | Business | Inventory/cost of sales | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 0 | 0 | 0 | 0 |
Financial Products | Business | Postretirement Benefits Expense | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 0 | 0 | 0 | 0 |
Financial Products | Business | Stock-Based Compensation Expense [Member] | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (1) | (2) | (7) | (10) |
Financial Products | Business | Financing Costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 0 | 0 | 0 | 0 |
Financial Products | Business | Currency | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 0 | 0 | 0 | 0 |
Financial Products | Business | Other Income Expense Methodology Differences | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 0 | 0 | 0 | 0 |
Financial Products | Business | Other | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | $ 0 | $ 1 | $ 6 | $ 12 |
Segment Information (Details 4)
Segment Information (Details 4) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Reconciliation of restructuring | |||||
Consolidated profit before taxes | $ 383 | $ 783 | $ 1,487 | $ 3,686 | |
Restructuring costs | (324) | (98) | (624) | (219) | $ (898) |
Reportable Segments | |||||
Reconciliation of restructuring | |||||
Consolidated profit before taxes | 1,004 | 1,202 | 3,117 | 5,035 | |
Reportable Segments | Construction Industries | |||||
Reconciliation of restructuring | |||||
Consolidated profit before taxes | 326 | 354 | 1,316 | 1,687 | |
Reportable Segments | Resource Industries | |||||
Reconciliation of restructuring | |||||
Consolidated profit before taxes | (77) | (42) | (336) | 81 | |
Reportable Segments | Energy & Transportation | |||||
Reconciliation of restructuring | |||||
Consolidated profit before taxes | 572 | 683 | 1,584 | 2,649 | |
Reportable Segments | Financial Products Segment | |||||
Reconciliation of restructuring | |||||
Consolidated profit before taxes | 183 | 207 | 553 | 618 | |
All Other operating segments | |||||
Reconciliation of restructuring | |||||
Consolidated profit before taxes | (22) | (11) | (43) | (36) | |
Business | |||||
Reconciliation of restructuring | |||||
Consolidated profit before taxes | 982 | 1,191 | 3,074 | 4,999 | |
Restructuring costs | (318) | (86) | (610) | (202) | |
Consolidated profit before taxes with restructuring costs | 664 | 1,105 | 2,464 | 4,797 | |
Business | Reportable Segments | Construction Industries | |||||
Reconciliation of restructuring | |||||
Consolidated profit before taxes | 326 | 354 | 1,316 | 1,687 | |
Restructuring costs | (9) | (28) | (34) | (83) | |
Consolidated profit before taxes with restructuring costs | 317 | 326 | 1,282 | 1,604 | |
Business | Reportable Segments | Resource Industries | |||||
Reconciliation of restructuring | |||||
Consolidated profit before taxes | (77) | (42) | (336) | 81 | |
Restructuring costs | (254) | (39) | (348) | (83) | |
Consolidated profit before taxes with restructuring costs | (331) | (81) | (684) | (2) | |
Business | Reportable Segments | Energy & Transportation | |||||
Reconciliation of restructuring | |||||
Consolidated profit before taxes | 572 | 683 | 1,584 | 2,649 | |
Restructuring costs | (39) | (10) | (194) | (24) | |
Consolidated profit before taxes with restructuring costs | 533 | 673 | 1,390 | 2,625 | |
Business | Reportable Segments | Financial Products Segment | |||||
Reconciliation of restructuring | |||||
Consolidated profit before taxes | 183 | 207 | 553 | 618 | |
Restructuring costs | (1) | 0 | (5) | 0 | |
Consolidated profit before taxes with restructuring costs | 182 | 207 | 548 | 618 | |
Business | All Other operating segments | All Other | |||||
Reconciliation of restructuring | |||||
Consolidated profit before taxes | (22) | (11) | (43) | (36) | |
Restructuring costs | (15) | (9) | (29) | (12) | |
Consolidated profit before taxes with restructuring costs | $ (37) | $ (20) | $ (72) | $ (48) |
Segment Information (Details 5)
Segment Information (Details 5) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Reconciliation of Assets | ||
Total assets | $ 76,402 | $ 78,342 |
Reportable Segments | ||
Reconciliation of Assets | ||
Total assets | 57,986 | 59,605 |
All Other operating segments | ||
Reconciliation of Assets | ||
Total assets | 1,368 | 1,405 |
Cash and Short Term Investments | ||
Reconciliation of Assets | ||
Total assets | 4,894 | 5,340 |
Intercompany Receivables | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Investment in Financial Products | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Deferred Income Taxes | ||
Reconciliation of Assets | ||
Total assets | 2,490 | 2,415 |
Goodwill and Intangible Assets | ||
Reconciliation of Assets | ||
Total assets | 4,055 | 3,571 |
Property Plant and Equipment-Net and Other Assets | ||
Reconciliation of Assets | ||
Total assets | 2,138 | 1,585 |
Operating Lease Methodology Difference | ||
Reconciliation of Assets | ||
Total assets | (187) | (213) |
Inventory Methodology Differences | ||
Reconciliation of Assets | ||
Total assets | (2,243) | (2,646) |
Intercompany Loan Included in Financial Products' Assets | ||
Reconciliation of Assets | ||
Total assets | (1,000) | |
Liabilities Included in Segment Assets | ||
Reconciliation of Assets | ||
Total assets | 7,394 | 8,017 |
Other | ||
Reconciliation of Assets | ||
Total assets | (493) | (737) |
Consolidating Adjustments | ||
Reconciliation of Assets | ||
Total assets | (8,128) | (5,845) |
Consolidating Adjustments | Reportable Segments | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Consolidating Adjustments | All Other operating segments | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Consolidating Adjustments | Cash and Short Term Investments | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Consolidating Adjustments | Intercompany Receivables | ||
Reconciliation of Assets | ||
Total assets | (1,877) | (1,087) |
Consolidating Adjustments | Investment in Financial Products | ||
Reconciliation of Assets | ||
Total assets | (4,367) | (3,888) |
Consolidating Adjustments | Deferred Income Taxes | ||
Reconciliation of Assets | ||
Total assets | (821) | (793) |
Consolidating Adjustments | Goodwill and Intangible Assets | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Consolidating Adjustments | Property Plant and Equipment-Net and Other Assets | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Consolidating Adjustments | Operating Lease Methodology Difference | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Consolidating Adjustments | Inventory Methodology Differences | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Consolidating Adjustments | Intercompany Loan Included in Financial Products' Assets | ||
Reconciliation of Assets | ||
Total assets | (1,000) | |
Consolidating Adjustments | Liabilities Included in Segment Assets | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Consolidating Adjustments | Other | ||
Reconciliation of Assets | ||
Total assets | (63) | (77) |
Machinery, Energy & Transportation | Reportable Segments | ||
Reconciliation of Assets | ||
Total assets | 21,656 | 23,876 |
Machinery, Energy & Transportation | Business | ||
Reconciliation of Assets | ||
Total assets | 48,250 | 48,551 |
Machinery, Energy & Transportation | Business | Reportable Segments | ||
Reconciliation of Assets | ||
Total assets | 21,656 | 23,876 |
Machinery, Energy & Transportation | Business | All Other operating segments | ||
Reconciliation of Assets | ||
Total assets | 1,368 | 1,405 |
Machinery, Energy & Transportation | Business | Cash and Short Term Investments | ||
Reconciliation of Assets | ||
Total assets | 4,894 | 5,340 |
Machinery, Energy & Transportation | Business | Intercompany Receivables | ||
Reconciliation of Assets | ||
Total assets | 1,877 | 1,087 |
Machinery, Energy & Transportation | Business | Investment in Financial Products | ||
Reconciliation of Assets | ||
Total assets | 4,367 | 3,888 |
Machinery, Energy & Transportation | Business | Deferred Income Taxes | ||
Reconciliation of Assets | ||
Total assets | 3,311 | 3,208 |
Machinery, Energy & Transportation | Business | Goodwill and Intangible Assets | ||
Reconciliation of Assets | ||
Total assets | 4,055 | 3,571 |
Machinery, Energy & Transportation | Business | Property Plant and Equipment-Net and Other Assets | ||
Reconciliation of Assets | ||
Total assets | 2,138 | 1,585 |
Machinery, Energy & Transportation | Business | Operating Lease Methodology Difference | ||
Reconciliation of Assets | ||
Total assets | (187) | (213) |
Machinery, Energy & Transportation | Business | Inventory Methodology Differences | ||
Reconciliation of Assets | ||
Total assets | (2,243) | (2,646) |
Machinery, Energy & Transportation | Business | Intercompany Loan Included in Financial Products' Assets | ||
Reconciliation of Assets | ||
Total assets | 0 | |
Machinery, Energy & Transportation | Business | Liabilities Included in Segment Assets | ||
Reconciliation of Assets | ||
Total assets | 7,394 | 8,017 |
Machinery, Energy & Transportation | Business | Other | ||
Reconciliation of Assets | ||
Total assets | (380) | (567) |
Financial Products | Business | ||
Reconciliation of Assets | ||
Total assets | 36,280 | 35,636 |
Financial Products | Business | Reportable Segments | ||
Reconciliation of Assets | ||
Total assets | 36,330 | 35,729 |
Financial Products | Business | All Other operating segments | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Financial Products | Business | Cash and Short Term Investments | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Financial Products | Business | Intercompany Receivables | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Financial Products | Business | Investment in Financial Products | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Financial Products | Business | Deferred Income Taxes | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Financial Products | Business | Goodwill and Intangible Assets | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Financial Products | Business | Property Plant and Equipment-Net and Other Assets | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Financial Products | Business | Operating Lease Methodology Difference | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Financial Products | Business | Inventory Methodology Differences | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Financial Products | Business | Intercompany Loan Included in Financial Products' Assets | ||
Reconciliation of Assets | ||
Total assets | 0 | |
Financial Products | Business | Liabilities Included in Segment Assets | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Financial Products | Business | Other | ||
Reconciliation of Assets | ||
Total assets | $ (50) | $ (93) |
Segment Information (Details 6)
Segment Information (Details 6) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | $ 761 | $ 758 | $ 2,255 | $ 2,272 |
Reportable Segments | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 652 | 665 | 1,942 | 2,008 |
All Other operating segments | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 53 | 51 | 158 | 151 |
Cost Centers | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 39 | 39 | 117 | 114 |
Other | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 17 | 3 | 38 | (1) |
Machinery, Energy & Transportation | Reportable Segments | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 437 | 455 | 1,309 | 1,370 |
Machinery, Energy & Transportation | Business | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 535 | 538 | 1,591 | 1,608 |
Machinery, Energy & Transportation | Business | Reportable Segments | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 437 | 455 | 1,309 | 1,370 |
Machinery, Energy & Transportation | Business | All Other operating segments | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 53 | 51 | 158 | 151 |
Machinery, Energy & Transportation | Business | Cost Centers | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 39 | 39 | 117 | 114 |
Machinery, Energy & Transportation | Business | Other | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 6 | (7) | 7 | (27) |
Financial Products | Business | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 226 | 220 | 664 | 664 |
Financial Products | Business | Reportable Segments | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 215 | 210 | 633 | 638 |
Financial Products | Business | All Other operating segments | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 0 | 0 | 0 | 0 |
Financial Products | Business | Cost Centers | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 0 | 0 | 0 | 0 |
Financial Products | Business | Other | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | $ 11 | $ 10 | $ 31 | $ 26 |
Segment Information (Details 7)
Segment Information (Details 7) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation of Capital expenditures | ||||
Total capital expenditures | $ 595 | $ 726 | $ 2,200 | $ 2,197 |
Reportable Segments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 568 | 673 | 1,882 | 1,868 |
All Other operating segments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 35 | 33 | 102 | 86 |
Cost Centers | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 20 | 52 | 48 | 98 |
Timing | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 4 | (35) | 221 | 199 |
Other | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | (32) | 3 | (53) | (54) |
Consolidating Adjustments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | (24) | (4) | (41) | (23) |
Consolidating Adjustments | Reportable Segments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 0 | 0 | 0 | 0 |
Consolidating Adjustments | All Other operating segments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 0 | 0 | 0 | 0 |
Consolidating Adjustments | Cost Centers | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 0 | 0 | 0 | 0 |
Consolidating Adjustments | Timing | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 0 | 0 | 0 | 0 |
Consolidating Adjustments | Other | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | (24) | (4) | (41) | (23) |
Machinery, Energy & Transportation | Reportable Segments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 211 | 314 | 616 | 873 |
Machinery, Energy & Transportation | Business | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 240 | 336 | 858 | 1,095 |
Machinery, Energy & Transportation | Business | Reportable Segments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 211 | 314 | 616 | 873 |
Machinery, Energy & Transportation | Business | All Other operating segments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 35 | 33 | 102 | 86 |
Machinery, Energy & Transportation | Business | Cost Centers | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 20 | 52 | 48 | 98 |
Machinery, Energy & Transportation | Business | Timing | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 4 | (35) | 221 | 199 |
Machinery, Energy & Transportation | Business | Other | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | (30) | (28) | (129) | (161) |
Financial Products | Business | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 379 | 394 | 1,383 | 1,125 |
Financial Products | Business | Reportable Segments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 357 | 359 | 1,266 | 995 |
Financial Products | Business | All Other operating segments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 0 | 0 | 0 | 0 |
Financial Products | Business | Cost Centers | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 0 | 0 | 0 | 0 |
Financial Products | Business | Timing | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 0 | 0 | 0 | 0 |
Financial Products | Business | Other | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | $ 22 | $ 35 | $ 117 | $ 130 |
Cat Financial Financing Activ77
Cat Financial Financing Activities (Details) - Finance Receivables - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | |
Allowance for Credit Loss Activity | ||||
Balance at beginning of year | $ 336 | $ 398 | ||
Receivables written off | (118) | (196) | ||
Recoveries on receivables previously written off | 25 | 41 | ||
Provision for credit losses | 95 | 118 | ||
Other | 6 | (25) | ||
Balance at end of period | 344 | 336 | ||
Allowance for Credit Losses | ||||
Individually evaluated for impairment | $ 85 | $ 65 | ||
Collectively evaluated for impairment | 259 | 271 | ||
Ending Balance | 336 | 398 | 344 | 336 |
Recorded Investment in Finance Receivables | ||||
Individually evaluated for impairment | 819 | 601 | ||
Collectively evaluated for impairment | 22,056 | 22,358 | ||
Ending balance-recorded investment in finance receivables | 22,875 | 22,959 | ||
Customer | ||||
Allowance for Credit Loss Activity | ||||
Balance at beginning of year | 327 | 388 | ||
Receivables written off | (118) | (196) | ||
Recoveries on receivables previously written off | 25 | 41 | ||
Provision for credit losses | 93 | 119 | ||
Other | 6 | (25) | ||
Balance at end of period | 333 | 327 | ||
Allowance for Credit Losses | ||||
Individually evaluated for impairment | 85 | 65 | ||
Collectively evaluated for impairment | 248 | 262 | ||
Ending Balance | 327 | 388 | 333 | 327 |
Recorded Investment in Finance Receivables | ||||
Individually evaluated for impairment | 819 | 601 | ||
Collectively evaluated for impairment | 18,522 | 18,788 | ||
Ending balance-recorded investment in finance receivables | 19,341 | 19,389 | ||
Dealer | ||||
Allowance for Credit Loss Activity | ||||
Balance at beginning of year | 9 | 10 | ||
Receivables written off | 0 | 0 | ||
Recoveries on receivables previously written off | 0 | 0 | ||
Provision for credit losses | 2 | (1) | ||
Other | 0 | 0 | ||
Balance at end of period | 11 | 9 | ||
Allowance for Credit Losses | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 11 | 9 | ||
Ending Balance | $ 9 | $ 10 | 11 | 9 |
Recorded Investment in Finance Receivables | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 3,534 | 3,570 | ||
Ending balance-recorded investment in finance receivables | $ 3,534 | $ 3,570 |
Cat Financial Financing Activ78
Cat Financial Financing Activities (Details 2) - Finance Receivables - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | $ 798 | $ 596 |
Current | 22,077 | 22,363 |
Total Finance Receivables | 22,875 | 22,959 |
91+ Still Accruing | 73 | 22 |
31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 177 | 135 |
61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 89 | 64 |
91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 532 | 397 |
Customer | ||
Aging related to loans and finance leases | ||
Total Finance Receivables | 19,341 | 19,389 |
Customer | North America | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 156 | 87 |
Current | 7,903 | 7,850 |
Total Finance Receivables | 8,059 | 7,937 |
91+ Still Accruing | 10 | 4 |
Customer | North America | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 66 | 45 |
Customer | North America | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 18 | 12 |
Customer | North America | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 72 | 30 |
Customer | Europe | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 120 | 69 |
Current | 2,424 | 2,358 |
Total Finance Receivables | 2,544 | 2,427 |
91+ Still Accruing | 47 | 9 |
Customer | Europe | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 21 | 18 |
Customer | Europe | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 16 | 7 |
Customer | Europe | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 83 | 44 |
Customer | Asia Pacific | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 58 | 54 |
Current | 1,506 | 1,647 |
Total Finance Receivables | 1,564 | 1,701 |
91+ Still Accruing | 4 | 6 |
Customer | Asia Pacific | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 28 | 21 |
Customer | Asia Pacific | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 10 | 12 |
Customer | Asia Pacific | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 20 | 21 |
Customer | Mining | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 68 | 75 |
Current | 1,802 | 1,793 |
Total Finance Receivables | 1,870 | 1,868 |
91+ Still Accruing | 0 | 1 |
Customer | Mining | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 4 | 6 |
Customer | Mining | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 1 | 1 |
Customer | Mining | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 63 | 68 |
Customer | Latin America | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 318 | 275 |
Current | 1,866 | 1,998 |
Total Finance Receivables | 2,184 | 2,273 |
91+ Still Accruing | 0 | 0 |
Customer | Latin America | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 57 | 45 |
Customer | Latin America | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 39 | 31 |
Customer | Latin America | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 222 | 199 |
Customer | Caterpillar Power Finance | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 78 | 36 |
Current | 3,042 | 3,147 |
Total Finance Receivables | 3,120 | 3,183 |
91+ Still Accruing | 12 | 2 |
Customer | Caterpillar Power Finance | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 1 | 0 |
Customer | Caterpillar Power Finance | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 5 | 1 |
Customer | Caterpillar Power Finance | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 72 | 35 |
Dealer | ||
Aging related to loans and finance leases | ||
Total Finance Receivables | 3,534 | 3,570 |
Dealer | North America | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Current | 2,069 | 2,209 |
Total Finance Receivables | 2,069 | 2,209 |
91+ Still Accruing | 0 | 0 |
Dealer | North America | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | North America | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | North America | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | Europe | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Current | 127 | 149 |
Total Finance Receivables | 127 | 149 |
91+ Still Accruing | 0 | 0 |
Dealer | Europe | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | Europe | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | Europe | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | Asia Pacific | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Current | 599 | 552 |
Total Finance Receivables | 599 | 552 |
91+ Still Accruing | 0 | 0 |
Dealer | Asia Pacific | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | Asia Pacific | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | Asia Pacific | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | Mining | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Current | 4 | 4 |
Total Finance Receivables | 4 | 4 |
91+ Still Accruing | 0 | 0 |
Dealer | Mining | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | Mining | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | Mining | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | Latin America | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Current | 733 | 653 |
Total Finance Receivables | 733 | 653 |
91+ Still Accruing | 0 | 0 |
Dealer | Latin America | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | Latin America | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | Latin America | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | Caterpillar Power Finance | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Current | 2 | 3 |
Total Finance Receivables | 2 | 3 |
91+ Still Accruing | 0 | 0 |
Dealer | Caterpillar Power Finance | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | Caterpillar Power Finance | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Dealer | Caterpillar Power Finance | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | $ 0 | $ 0 |
Cat Financial Financing Activ79
Cat Financial Financing Activities (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Dealer | |||||
Impaired finance receivables | |||||
Recorded Investment, Total | $ 0 | $ 0 | $ 0 | ||
Finance Receivables | Customer | |||||
Impaired finance receivables | |||||
Recorded Investment With No Allowance Recorded | 554 | 554 | 408 | ||
Unpaid Principal Balance With No Allowance Recorded | 551 | 551 | 407 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 265 | 265 | 193 | ||
Unpaid Principal Balance With An Allowance Recorded | 275 | 275 | 191 | ||
Related Allowance With An Allowance Recorded | 85 | 85 | 65 | ||
Recorded Investment, Total | 819 | 819 | 601 | ||
Unpaid Principal Balance, Total | 826 | 826 | 598 | ||
Related Allowance, Total | 85 | 85 | 65 | ||
Average Recorded Investment With No Allowance Recorded | 504 | $ 314 | 458 | $ 326 | |
Interest Income Recognized With No Allowance Recorded | 6 | 2 | 13 | 7 | |
Average Recorded Investment With An Allowance Recorded | 216 | 269 | 197 | 286 | |
Interest Income Recognized With An Allowance Recorded | 1 | 3 | 5 | 8 | |
Average Recorded Investment, Total | 720 | 583 | 655 | 612 | |
Interest Income Recognized, Total | 7 | 5 | 18 | 15 | |
Finance Receivables | Customer | North America | |||||
Impaired finance receivables | |||||
Recorded Investment With No Allowance Recorded | 21 | 21 | 12 | ||
Unpaid Principal Balance With No Allowance Recorded | 21 | 21 | 12 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 50 | 50 | 14 | ||
Unpaid Principal Balance With An Allowance Recorded | 48 | 48 | 13 | ||
Related Allowance With An Allowance Recorded | 19 | 19 | 4 | ||
Recorded Investment, Total | 71 | 71 | 26 | ||
Unpaid Principal Balance, Total | 69 | 69 | 25 | ||
Related Allowance, Total | 19 | 19 | 4 | ||
Average Recorded Investment With No Allowance Recorded | 24 | 10 | 19 | 12 | |
Interest Income Recognized With No Allowance Recorded | 0 | 1 | 1 | 1 | |
Average Recorded Investment With An Allowance Recorded | 42 | 10 | 28 | 7 | |
Interest Income Recognized With An Allowance Recorded | 0 | 0 | 0 | 0 | |
Average Recorded Investment, Total | 66 | 20 | 47 | 19 | |
Interest Income Recognized, Total | 0 | 1 | 1 | 1 | |
Finance Receivables | Customer | Europe | |||||
Impaired finance receivables | |||||
Recorded Investment With No Allowance Recorded | 49 | 49 | 41 | ||
Unpaid Principal Balance With No Allowance Recorded | 48 | 48 | 41 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 9 | 9 | 11 | ||
Unpaid Principal Balance With An Allowance Recorded | 9 | 9 | 10 | ||
Related Allowance With An Allowance Recorded | 5 | 5 | 5 | ||
Recorded Investment, Total | 58 | 58 | 52 | ||
Unpaid Principal Balance, Total | 57 | 57 | 51 | ||
Related Allowance, Total | 5 | 5 | 5 | ||
Average Recorded Investment With No Allowance Recorded | 49 | 43 | 45 | 43 | |
Interest Income Recognized With No Allowance Recorded | 1 | 0 | 1 | 0 | |
Average Recorded Investment With An Allowance Recorded | 10 | 15 | 11 | 15 | |
Interest Income Recognized With An Allowance Recorded | 0 | 0 | 0 | 1 | |
Average Recorded Investment, Total | 59 | 58 | 56 | 58 | |
Interest Income Recognized, Total | 1 | 0 | 1 | 1 | |
Finance Receivables | Customer | Asia Pacific | |||||
Impaired finance receivables | |||||
Recorded Investment With No Allowance Recorded | 2 | 2 | 1 | ||
Unpaid Principal Balance With No Allowance Recorded | 2 | 2 | 1 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 33 | 33 | 34 | ||
Unpaid Principal Balance With An Allowance Recorded | 33 | 33 | 34 | ||
Related Allowance With An Allowance Recorded | 5 | 5 | 4 | ||
Recorded Investment, Total | 35 | 35 | 35 | ||
Unpaid Principal Balance, Total | 35 | 35 | 35 | ||
Related Allowance, Total | 5 | 5 | 4 | ||
Average Recorded Investment With No Allowance Recorded | 1 | 1 | 2 | 2 | |
Interest Income Recognized With No Allowance Recorded | 0 | 0 | 0 | 0 | |
Average Recorded Investment With An Allowance Recorded | 35 | 41 | 34 | 33 | |
Interest Income Recognized With An Allowance Recorded | 0 | 0 | 2 | 1 | |
Average Recorded Investment, Total | 36 | 42 | 36 | 35 | |
Interest Income Recognized, Total | 0 | 0 | 2 | 1 | |
Finance Receivables | Customer | Mining | |||||
Impaired finance receivables | |||||
Recorded Investment With No Allowance Recorded | 119 | 119 | 84 | ||
Unpaid Principal Balance With No Allowance Recorded | 118 | 118 | 84 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 38 | 38 | 11 | ||
Unpaid Principal Balance With An Allowance Recorded | 38 | 38 | 11 | ||
Related Allowance With An Allowance Recorded | 6 | 6 | 3 | ||
Recorded Investment, Total | 157 | 157 | 95 | ||
Unpaid Principal Balance, Total | 156 | 156 | 95 | ||
Related Allowance, Total | 6 | 6 | 3 | ||
Average Recorded Investment With No Allowance Recorded | 90 | 63 | 84 | 80 | |
Interest Income Recognized With No Allowance Recorded | 2 | 0 | 3 | 3 | |
Average Recorded Investment With An Allowance Recorded | 19 | 9 | 15 | 47 | |
Interest Income Recognized With An Allowance Recorded | 0 | 0 | 0 | 1 | |
Average Recorded Investment, Total | 109 | 72 | 99 | 127 | |
Interest Income Recognized, Total | 2 | 0 | 3 | 4 | |
Finance Receivables | Customer | Latin America | |||||
Impaired finance receivables | |||||
Recorded Investment With No Allowance Recorded | 73 | 73 | 28 | ||
Unpaid Principal Balance With No Allowance Recorded | 73 | 73 | 28 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 91 | 91 | 53 | ||
Unpaid Principal Balance With An Allowance Recorded | 103 | 103 | 53 | ||
Related Allowance With An Allowance Recorded | 33 | 33 | 21 | ||
Recorded Investment, Total | 164 | 164 | 81 | ||
Unpaid Principal Balance, Total | 176 | 176 | 81 | ||
Related Allowance, Total | 33 | 33 | 21 | ||
Average Recorded Investment With No Allowance Recorded | 58 | 32 | 39 | 32 | |
Interest Income Recognized With No Allowance Recorded | 0 | 0 | 0 | 0 | |
Average Recorded Investment With An Allowance Recorded | 67 | 69 | 59 | 56 | |
Interest Income Recognized With An Allowance Recorded | 1 | 1 | 2 | 2 | |
Average Recorded Investment, Total | 125 | 101 | 98 | 88 | |
Interest Income Recognized, Total | 1 | 1 | 2 | 2 | |
Finance Receivables | Customer | Caterpillar Power Finance | |||||
Impaired finance receivables | |||||
Recorded Investment With No Allowance Recorded | 290 | 290 | 242 | ||
Unpaid Principal Balance With No Allowance Recorded | 289 | 289 | 241 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 44 | 44 | 70 | ||
Unpaid Principal Balance With An Allowance Recorded | 44 | 44 | 70 | ||
Related Allowance With An Allowance Recorded | 17 | 17 | 28 | ||
Recorded Investment, Total | 334 | 334 | 312 | ||
Unpaid Principal Balance, Total | 333 | 333 | 311 | ||
Related Allowance, Total | 17 | 17 | $ 28 | ||
Average Recorded Investment With No Allowance Recorded | 282 | 165 | 269 | 157 | |
Interest Income Recognized With No Allowance Recorded | 3 | 1 | 8 | 3 | |
Average Recorded Investment With An Allowance Recorded | 43 | 125 | 50 | 128 | |
Interest Income Recognized With An Allowance Recorded | 0 | 2 | 1 | 3 | |
Average Recorded Investment, Total | 325 | 290 | 319 | 285 | |
Interest Income Recognized, Total | $ 3 | $ 3 | $ 9 | $ 6 |
Cat Financial Financing Activ80
Cat Financial Financing Activities (Details 4) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Financing Receivable, Recorded Investment, Past Due | ||
Period after which Collection of Future Income is Considered as Not Probable | 120 days | |
Dealer | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 0 | $ 0 |
Finance Receivables | Customer | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 624 | 485 |
Finance Receivables | Customer | North America | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 71 | 31 |
Finance Receivables | Customer | Europe | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 38 | 39 |
Finance Receivables | Customer | Asia Pacific | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 16 | 15 |
Finance Receivables | Customer | Mining | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 131 | 106 |
Finance Receivables | Customer | Latin America | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 299 | 217 |
Finance Receivables | Customer | Caterpillar Power Finance | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 69 | $ 77 |
Cat Financial Financing Activ81
Cat Financial Financing Activities (Details 5) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($)Contracts | Sep. 30, 2015USD ($)Contracts | Sep. 30, 2016USD ($)CustomerContracts | Sep. 30, 2015USD ($)Contracts | Dec. 31, 2015USD ($) | |
Customer | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 352 | 31 | 493 | 76 | |
Pre-TDR Outstanding Recorded Investment | $ 152 | $ 110 | $ 387 | $ 217 | |
Post-TDR Outstanding Recorded Investment | $ 118 | $ 96 | $ 327 | $ 200 | |
TDRs with a payment default which had been modified within twelve months prior to the default date | |||||
Number of Contracts (in contracts) | Contracts | 4 | 5 | 35 | 11 | |
Post-TDR Recorded Investment | $ 0 | $ 0 | $ 4 | $ 1 | |
Customer | North America | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 2 | 6 | 15 | 10 | |
Pre-TDR Outstanding Recorded Investment | $ 0 | $ 0 | $ 16 | $ 1 | |
Post-TDR Outstanding Recorded Investment | $ 0 | $ 0 | $ 16 | $ 1 | |
TDRs with a payment default which had been modified within twelve months prior to the default date | |||||
Number of Contracts (in contracts) | Contracts | 1 | 5 | 14 | 10 | |
Post-TDR Recorded Investment | $ 0 | $ 0 | $ 3 | $ 1 | |
Customer | Europe | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 0 | 4 | 3 | 23 | |
Pre-TDR Outstanding Recorded Investment | $ 0 | $ 0 | $ 11 | $ 2 | |
Post-TDR Outstanding Recorded Investment | $ 0 | $ 0 | $ 8 | $ 2 | |
TDRs with a payment default which had been modified within twelve months prior to the default date | |||||
Number of Contracts (in contracts) | Contracts | 1 | 0 | 14 | 0 | |
Post-TDR Recorded Investment | $ 0 | $ 0 | $ 1 | $ 0 | |
Customer | Asia Pacific | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 4 | 1 | 8 | 19 | |
Pre-TDR Outstanding Recorded Investment | $ 1 | $ 1 | $ 4 | $ 1 | |
Post-TDR Outstanding Recorded Investment | $ 1 | $ 1 | $ 4 | $ 1 | |
TDRs with a payment default which had been modified within twelve months prior to the default date | |||||
Number of Contracts (in contracts) | Contracts | 3 | 0 | |||
Post-TDR Recorded Investment | $ 0 | $ 0 | |||
Customer | Mining | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 1 | 2 | 2 | 2 | |
Pre-TDR Outstanding Recorded Investment | $ 33 | $ 15 | $ 43 | $ 15 | |
Post-TDR Outstanding Recorded Investment | $ 30 | $ 14 | $ 35 | $ 14 | |
Customer | Latin America | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 341 | 10 | 431 | 10 | |
Pre-TDR Outstanding Recorded Investment | $ 105 | $ 1 | $ 117 | $ 1 | |
Post-TDR Outstanding Recorded Investment | $ 74 | $ 2 | $ 87 | $ 2 | |
TDRs with a payment default which had been modified within twelve months prior to the default date | |||||
Number of Contracts (in contracts) | Contracts | 2 | 0 | 4 | 1 | |
Post-TDR Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Customer | Caterpillar Power Finance | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 4 | 8 | 34 | 12 | |
Pre-TDR Outstanding Recorded Investment | $ 13 | $ 93 | $ 196 | $ 197 | |
Post-TDR Outstanding Recorded Investment | $ 13 | $ 79 | $ 177 | $ 180 | |
Dealer | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 0 | 0 | 0 | 0 | |
Finance Receivables | Customer | |||||
Finance receivables modified as TDRs | |||||
Remaining Commitments | $ 11 | $ 11 | $ 3 | ||
Amounts related to four customers | Customer | Latin America | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 321 | ||||
Pre-TDR Outstanding Recorded Investment | 94 | ||||
Post-TDR Outstanding Recorded Investment | $ 64 | ||||
Number of Customers | Customer | 4 |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 |
Assets | ||
Investments in debt and equity securities | $ 1,710 | $ 1,635 |
Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 1,638 | 1,610 |
Derivative Assets (Liabilities), at Fair Value, Net | 49 | |
Total Assets | 1,710 | 1,684 |
Liabilities | ||
Derivative Liabilities, at Fair Value, Net | 29 | |
Total Liabilities | 29 | |
U.S. treasury bonds | ||
Assets | ||
Investments in debt and equity securities | 10 | 9 |
U.S. treasury bonds | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 10 | 9 |
Other U.S. and non-U.S. government bonds | ||
Assets | ||
Investments in debt and equity securities | 68 | 72 |
Other U.S. and non-U.S. government bonds | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 68 | 72 |
Corporate bonds | ||
Assets | ||
Investments in debt and equity securities | 710 | 708 |
Corporate bonds | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 710 | 708 |
Asset-backed securities | ||
Assets | ||
Investments in debt and equity securities | 135 | 129 |
Asset-backed securities | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 135 | 129 |
U.S. governmental agency | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 286 | 292 |
Residential | ||
Assets | ||
Investments in debt and equity securities | 10 | 12 |
Residential | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 10 | 12 |
Commercial | ||
Assets | ||
Investments in debt and equity securities | 63 | 61 |
Commercial | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 63 | 61 |
Large capitalization value | ||
Assets | ||
Investments in debt and equity securities | 299 | 273 |
Large capitalization value | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 299 | 273 |
Smaller company growth | ||
Assets | ||
Investments in debt and equity securities | 57 | 54 |
Smaller company growth | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 57 | 54 |
REIT | ||
Assets | ||
Investments in debt and equity securities | 72 | 25 |
REIT | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 72 | 25 |
Level 1 | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 366 | 336 |
Derivative Assets (Liabilities), at Fair Value, Net | 0 | |
Total Assets | 366 | 336 |
Liabilities | ||
Derivative Liabilities, at Fair Value, Net | 0 | |
Total Liabilities | 0 | |
Level 1 | U.S. treasury bonds | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 10 | 9 |
Level 1 | Other U.S. and non-U.S. government bonds | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 1 | Corporate bonds | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 1 | Asset-backed securities | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 1 | U.S. governmental agency | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 1 | Residential | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 1 | Commercial | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 1 | Large capitalization value | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 299 | 273 |
Level 1 | Smaller company growth | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 57 | 54 |
Level 1 | REIT | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 2 | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 1,272 | 1,274 |
Derivative Assets (Liabilities), at Fair Value, Net | 49 | |
Total Assets | 1,272 | 1,323 |
Liabilities | ||
Derivative Liabilities, at Fair Value, Net | 29 | |
Total Liabilities | 29 | |
Level 2 | U.S. treasury bonds | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 2 | Other U.S. and non-U.S. government bonds | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 68 | 72 |
Level 2 | Corporate bonds | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 710 | 708 |
Level 2 | Asset-backed securities | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 135 | 129 |
Level 2 | U.S. governmental agency | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 286 | 292 |
Level 2 | Residential | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 10 | 12 |
Level 2 | Commercial | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 63 | 61 |
Level 2 | Large capitalization value | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 2 | Smaller company growth | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 2 | REIT | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 3 | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Derivative Assets (Liabilities), at Fair Value, Net | 0 | |
Total Assets | 72 | 25 |
Liabilities | ||
Derivative Liabilities, at Fair Value, Net | 0 | |
Total Liabilities | 0 | |
Level 3 | U.S. treasury bonds | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 3 | Other U.S. and non-U.S. government bonds | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 3 | Corporate bonds | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 3 | Asset-backed securities | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 3 | U.S. governmental agency | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 3 | Residential | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 3 | Commercial | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 3 | Large capitalization value | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 3 | Smaller company growth | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | 0 | 0 |
Level 3 | REIT | Recurring basis | ||
Assets | ||
Investments in debt and equity securities | $ 72 | $ 25 |
Fair Value Disclosures (Detai83
Fair Value Disclosures (Details 2) - Level 3 - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
REIT | Recurring basis | ||
Roll-forward of assets measured at fair value using Level 3 inputs | ||
Balance at beginning of period | $ 25 | |
Purchases of securities | 45 | |
Sale of securities | 0 | |
Gains (losses) included in Accumulated other comprehensive income (loss) | 2 | |
Balance at end of period | 72 | |
Financial Products | Nonrecurring basis | ||
Fair value of impaired loans | ||
Impaired loans | $ 122 | $ 91 |
Fair Value Disclosures (Detai84
Fair Value Disclosures (Details 3) - USD ($) $ in Millions | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Assets | ||||
Cash and short-term investments | $ 6,113 | $ 6,460 | $ 6,046 | $ 7,341 |
Investments in debt and equity securities | 1,710 | 1,635 | ||
Carrying Amount | ||||
Assets | ||||
Cash and short-term investments | 6,113 | 6,460 | ||
Restricted cash and short-term investments | 28 | 52 | ||
Investments in debt and equity securities | 1,710 | 1,635 | ||
Finance receivables-net (excluding finance leases) | 16,571 | 16,515 | ||
Wholesale inventory receivables-net (excluding finance leases) | 1,633 | 1,821 | ||
Foreign currency contracts-net | 0 | 13 | ||
Interest rate contracts-net | 3 | 48 | ||
Commodity contracts-net | 6 | 0 | ||
Liabilities | ||||
Short-term borrowings | 6,965 | 6,967 | ||
Foreign currency contracts-net | 38 | 0 | ||
Commodity contracts-net | 0 | 12 | ||
Guarantees | 12 | 12 | ||
Carrying Amount | Machinery, Energy & Transportation | ||||
Liabilities | ||||
Long-term debt (including amounts due within one year) | 8,985 | 9,477 | ||
Carrying Amount | Financial Products | ||||
Liabilities | ||||
Long-term debt (including amounts due within one year) | 21,160 | 21,569 | ||
Carrying amount of assets excluded from measurement at fair value | ||||
Assets | ||||
Finance leases | 6,221 | 6,452 | ||
Level 1 | Fair Value | ||||
Assets | ||||
Cash and short-term investments | 6,113 | 6,460 | ||
Restricted cash and short-term investments | 28 | 52 | ||
Liabilities | ||||
Short-term borrowings | 6,965 | 6,967 | ||
Level 1, 2 & 3 | Fair Value | ||||
Assets | ||||
Investments in debt and equity securities | 1,710 | 1,635 | ||
Level 2 | Fair Value | ||||
Assets | ||||
Foreign currency contracts-net | 0 | 13 | ||
Interest rate contracts-net | 3 | 48 | ||
Commodity contracts-net | 6 | 0 | ||
Liabilities | ||||
Foreign currency contracts-net | 38 | 0 | ||
Commodity contracts-net | 0 | 12 | ||
Level 2 | Fair Value | Machinery, Energy & Transportation | ||||
Liabilities | ||||
Long-term debt (including amounts due within one year) | 11,037 | 10,691 | ||
Level 2 | Fair Value | Financial Products | ||||
Liabilities | ||||
Long-term debt (including amounts due within one year) | 21,669 | 21,904 | ||
Level 3 | Fair Value | ||||
Assets | ||||
Finance receivables-net (excluding finance leases) | 16,565 | 16,551 | ||
Wholesale inventory receivables-net (excluding finance leases) | 1,601 | 1,775 | ||
Liabilities | ||||
Guarantees | $ 12 | $ 12 |
Restructuring Costs (Details)
Restructuring Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Restructuring and Related Cost [Abstract] | |||||
Restructuring costs | $ 324 | $ 98 | $ 624 | $ 219 | $ 898 |
Employee Separation Charges [Roll Forward] | |||||
Liability balance at beginning of period | 483 | 182 | 182 | ||
Increase in liability (separation charges) | 175 | 641 | |||
Reduction in liability (payments) | (507) | (340) | |||
Liability balance at end of period | 151 | 151 | 483 | ||
Discontinue production on-highway vocational trucks | |||||
Restructuring and Related Cost [Abstract] | |||||
Restructuring costs | 10 | 92 | |||
Estimated restructuring costs | 120 | 120 | |||
Q3 2016 announcement [Member] | |||||
Restructuring and Related Cost [Abstract] | |||||
Restructuring costs | 221 | ||||
Impairment of Intangible Assets, Finite-lived | 132 | ||||
Estimated restructuring costs | 260 | 260 | |||
Employee separations | September 2015 announcement | |||||
Restructuring and Related Cost [Abstract] | |||||
Restructuring costs | 2 | 78 | 379 | ||
Employee separations | Q3 2016 announcement [Member] | |||||
Restructuring and Related Cost [Abstract] | |||||
Restructuring costs | 72 | ||||
Employee separations | Other Operating Income (Expense) | |||||
Restructuring and Related Cost [Abstract] | |||||
Restructuring costs | 99 | 60 | 175 | 180 | 641 |
Contract terminations | Other Operating Income (Expense) | |||||
Restructuring and Related Cost [Abstract] | |||||
Restructuring costs | 9 | 0 | 55 | 0 | |
Long-lived asset impairments | Other Operating Income (Expense) | |||||
Restructuring and Related Cost [Abstract] | |||||
Restructuring costs | 158 | 26 | 254 | 27 | 127 |
Other | |||||
Restructuring and Related Cost [Abstract] | |||||
Restructuring costs | $ 58 | $ 12 | 140 | $ 12 | 48 |
Other | Q3 2016 announcement [Member] | |||||
Restructuring and Related Cost [Abstract] | |||||
Restructuring costs | $ 17 | ||||
Defined benefit retirement plan curtailment losses | September 2015 announcement | |||||
Restructuring and Related Cost [Abstract] | |||||
Restructuring costs | 82 | ||||
Defined benefit retirement plan curtailment losses | Other Operating Income (Expense) | |||||
Restructuring and Related Cost [Abstract] | |||||
Restructuring costs | $ 82 |
Uncategorized Items - cat-20160
Label | Element | Value |
Debt conversion, cash paid | cat_Debtconversioncashpaid | $ 15,000,000 |
Debt Conversion, Converted Instrument, Rate | us-gaap_DebtConversionConvertedInstrumentRate | 1.93% |
Debt Conversion, Converted Instrument, Amount | us-gaap_DebtConversionConvertedInstrumentAmount1 | $ 366,000,000 |
Debt exchange premium | cat_Debtexchangepremium | 33,000,000 |
Debt Conversion, Original Debt, Amount | us-gaap_DebtConversionOriginalDebtAmount1 | $ 381,000,000 |