Document and Entity Information
Document and Entity Information Document | 9 Months Ended |
Sep. 30, 2018shares | |
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, 2018 |
Amendment Flag | false |
Entity Emerging Growth Company | false |
Entity Small Business | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 590,106,711 |
Document Fiscal Year Focus | 2,018 |
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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Sales and revenues: | |||||
Total sales and revenues | $ 13,510 | $ 11,413 | $ 40,380 | $ 32,566 | |
Operating costs: | |||||
Cost of Revenue | 9,022 | 7,678 | 27,010 | 22,295 | |
Selling, general and administrative expenses | 1,299 | 1,254 | 4,015 | 3,619 | |
Research and development expenses | 479 | 461 | 1,384 | 1,344 | |
Interest expense of Financial Products | 185 | 163 | 533 | 484 | |
Other operating (income) expenses | 390 | 348 | 1,028 | 1,751 | |
Total operating costs | 11,375 | 9,904 | 33,970 | 29,493 | |
Operating profit | 2,135 | 1,509 | 6,410 | 3,073 | |
Interest expense excluding Financial Products | 102 | 118 | 305 | 362 | |
Other income (expense) | 102 | 132 | 350 | 260 | |
Consolidated profit before taxes | 2,135 | 1,523 | 6,455 | 2,971 | |
Provision (benefit) for income taxes | 415 | 470 | 1,377 | 921 | |
Profit of consolidated companies | 1,720 | 1,053 | 5,078 | 2,050 | |
Equity in profit (loss) of unconsolidated affiliated companies | 7 | 8 | 21 | 8 | |
Profit of consolidated and affiliated companies | 1,727 | 1,061 | 5,099 | 2,058 | |
Less: Profit (loss) attributable to noncontrolling interests | 0 | 2 | 0 | 5 | |
Profit | [1] | $ 1,727 | $ 1,059 | $ 5,099 | $ 2,053 |
Profit per common share (in dollars per share) | $ 2.92 | $ 1.79 | $ 8.57 | $ 3.48 | |
Profit per common share - diluted (in dollars per share) | [2] | $ 2.88 | $ 1.77 | $ 8.45 | $ 3.44 |
Weighted-average common shares outstanding (millions) | |||||
Basic (in shares) | 592.1 | 592.9 | 595.3 | 590.3 | |
Diluted (in shares) | [2] | 599.4 | 600.1 | 603.8 | 596.5 |
Cash dividends declared per common share (in dollars per share) | $ 0 | $ 0 | $ 1.64 | $ 1.55 | |
Machinery, Energy & Transportation | |||||
Sales and revenues: | |||||
Total sales and revenues | $ 12,763 | $ 10,713 | $ 38,192 | $ 30,482 | |
Financial Products | |||||
Sales and revenues: | |||||
Total sales and revenues | $ 747 | $ 700 | $ 2,188 | $ 2,084 | |
[1] | 1 Profit attributable to common shareholders. | ||||
[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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Profit of consolidated and affiliated companies | $ 1,727 | $ 1,061 | $ 5,099 | $ 2,058 |
Other Comprehensive Income (Loss), Net of Tax: | ||||
Foreign currency translation, net of tax (provision)/benefit of: Three months ended: 2018-$(3), 2017-$28; Nine months ended: 2018-$(18); 2017 - $86 | (65) | 248 | (292) | 719 |
Pension and other postretirement benefits: | ||||
Current year prior service credit (cost), net of tax (provision)/benefit of: Three months ended: 2018-$0, 2017 - $0; Nine months ended: 2018-$1, 2017-$(4) | (2) | 8 | ||
Amortization of prior service (credit) cost, net of tax (provision)/benefit of: Three months ended: 2018-$2, 2017 - $2; Nine months ended: 2018-$5, 2017-$6 | (7) | (4) | (21) | (12) |
Derivative financial instruments: | ||||
Gains (losses) deferred, net of tax (provision)/benefit of: Three months ended: 2018-$(9), 2017 - $2; Nine months ended: 2018-$(23), 2017-$(3) | 32 | (4) | 73 | 6 |
(Gains) losses reclassified to earnings, net of tax (provision)/benefit of: Three months ended: 2018-$8, 2017 - $(5); Nine months ended: 2018-$32, 2017-$(41) | (31) | 11 | (109) | 77 |
Available-for-sale securities: | ||||
Gains (losses) deferred, net of tax (provision)/benefit of: Three months ended: 2018-$0, 2017 - $(8); Nine months ended: 2018-$3, 2017-$(17) | (1) | 11 | (14) | 29 |
(Gains) losses reclassified to earnings, net of tax (provision)/benefit of: Three months ended: 2018-$0, 2017 - $12; Nine months ended: 2018-$0, 2017-$(1) | 0 | (24) | 0 | (21) |
Total other comprehensive income (loss), net of tax | (72) | 238 | (365) | 806 |
Comprehensive Income | 1,655 | 1,299 | 4,734 | 2,864 |
Less: comprehensive income attributable to the noncontrolling interests | 0 | (2) | 0 | (5) |
Comprehensive income attributable to stockholders | $ 1,655 | $ 1,297 | $ 4,734 | $ 2,859 |
Consolidated Statement of Com_2
Consolidated Statement of Comprehensive Income (Parenthetical) (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation, tax (provision)/benefit | $ (3) | $ 28 | $ (18) | $ 86 |
Pension and other postretirement benefits, Current year actuarial gain (loss), tax (provision)/benefit | 0 | 0 | 0 | 0 |
Pension and other postretirement benefits, Amortization of actuarial (gain) loss, tax (provision)/benefit | 0 | 0 | 0 | 0 |
Pension and other postretirement benefits, Current year prior service credit (cost), tax (provision)/benefit | 0 | 0 | 1 | (4) |
Pension and other postretirement benefits, Amortization of prior service (credit) cost, tax (provision)/benefit | 2 | 2 | 5 | 6 |
Other Comprehensive Income (Loss), Defined Benefit Plan, Transition Asset (Obligation), Reclassification Adjustment from AOCI, Tax | 0 | 0 | ||
Derivative financial instruments, Gains (losses) deferred, tax (provision)/benefit | (9) | 2 | (23) | (3) |
Derivative financial instruments, (Gains) losses reclassified to earnings, tax (provision)/benefit | 8 | (5) | 32 | (41) |
Available-for-sale securities, Gains (losses) deferred, tax (provision)/benefit | $ 0 | $ (8) | 3 | (17) |
Available-for-sale securities, (Gains) losses reclassified to earnings, tax (provision)/benefit | $ 0 | $ 11 |
Consolidated Statement of Finan
Consolidated Statement of Financial Position - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and short-term investments | $ 8,007 | $ 8,261 |
Receivables - trade and other | 7,974 | 7,436 |
Receivables - finance | 8,824 | 8,757 |
Prepaid expenses and other current assets | 1,835 | 1,772 |
Inventories | 11,814 | 10,018 |
Total current assets | 38,454 | 36,244 |
Property, plant and equipment - net | 13,607 | 14,155 |
Long-term receivables - trade and other | 1,129 | 990 |
Long-term receivables - finance | 13,244 | 13,542 |
Noncurrent deferred and refundable income taxes | 1,288 | 1,693 |
Intangible assets | 1,976 | 2,111 |
Goodwill | 6,233 | 6,200 |
Other assets | 2,278 | 2,027 |
Total assets | 78,209 | 76,962 |
Short-term borrowings: | ||
Machinery, Energy & Transportation | 59 | 1 |
Financial Products | 4,462 | 4,836 |
Accounts payable | 6,788 | 6,487 |
Accrued expenses | 3,423 | 3,220 |
Accrued wages, salaries and employee benefits | 2,132 | 2,559 |
Customer advances | 1,491 | 1,426 |
Dividends payable | 0 | 466 |
Other current liabilities | 1,867 | 1,742 |
Long-term debt due within one year: | ||
Machinery, Energy & Transportation | 10 | 6 |
Financial Products | 5,801 | 6,188 |
Total current liabilities | 26,033 | 26,931 |
Long-term debt due after one year: | ||
Machinery, Energy & Transportation | 7,991 | 7,929 |
Financial Products | 17,450 | 15,918 |
Liability for postemployment benefits | 7,046 | 8,365 |
Other liabilities | 3,799 | 4,053 |
Total liabilities | 62,319 | 63,196 |
Commitments and contingencies (Notes 10 and 13) | ||
Shareholders' equity | ||
Common stock of $1.00 par value: Authorized shares: 2,000,000,000 Issued shares: (9/30/18 and 12/31/17 – 814,894,624) at paid-in amount | 5,715 | 5,593 |
Treasury stock (9/30/18 – 224,787,913 shares; 12/31/17 – 217,268,852 shares) at cost | (18,681) | (17,005) |
Profit employed in the business | 30,384 | 26,301 |
Accumulated other comprehensive income (loss) | (1,568) | (1,192) |
Noncontrolling interests | 40 | 69 |
Total shareholders' equity | 15,890 | 13,766 |
Total liabilities and shareholders' equity | $ 78,209 | $ 76,962 |
Consolidated Statement of Fin_2
Consolidated Statement of Financial Position (Parenthetical) (Parentheticals) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
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 | 224,787,913 | 217,268,852 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Shareholders' 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, 2016 | $ 13,213 | $ 5,277 | $ (17,478) | $ 27,377 | $ (2,039) | $ 76 | |
Increase (Decrease) in Shareholders' Equity | |||||||
Adjustment to adopt stock-based compensation guidance | 15 | 0 | 0 | 15 | 0 | 0 | |
Balance at Jan. 01, 2017 | 13,228 | 5,277 | (17,478) | 27,392 | (2,039) | 76 | |
Balance at Dec. 31, 2016 | 13,213 | 5,277 | (17,478) | 27,377 | (2,039) | 76 | |
Increase (Decrease) in Shareholders' Equity | |||||||
Profit of consolidated and affiliated companies | 2,058 | 0 | 0 | 2,053 | 0 | 5 | |
Foreign currency translation, net of tax | 719 | 0 | 0 | 0 | 719 | 0 | |
Pension and other postretirement benefits, net of tax | (4) | 0 | 0 | 0 | (4) | 0 | |
Derivative financial instruments, net of tax | 83 | 0 | 0 | 0 | 83 | 0 | |
Available-for-sale securities, net of tax | 8 | 0 | 0 | 0 | 8 | 0 | |
Change in Ownership for Noncontrolling Interests | (1) | (4) | 0 | 0 | 0 | 3 | |
Dividends declared | (915) | 0 | 0 | (915) | 0 | 0 | |
Distribution to noncontrolling interests | (8) | 0 | 0 | 0 | 0 | (8) | |
Common shares issued from treasury stock for stock-based compensation: 5,284,974 and 8,447,558 for the nine months ended September 30, 2018 and 2017, respectively | 353 | 5 | 348 | 0 | 0 | 0 | |
Stock-based compensation expense, before tax (in dollars) | 165 | 165 | 0 | 0 | 0 | 0 | |
Other | 9 | 9 | 0 | 0 | 0 | 0 | |
Balance at Sep. 30, 2017 | 15,697 | 5,460 | (17,130) | 28,530 | (1,233) | 70 | |
Balance at Dec. 31, 2017 | 13,766 | 5,593 | (17,005) | 26,301 | (1,192) | 69 | |
Increase (Decrease) in Shareholders' Equity | |||||||
Adjustment to adopt stock-based compensation guidance | Revenue recognition | (12) | 0 | 0 | (12) | 0 | 0 | |
Adjustment to adopt stock-based compensation guidance | Tax accounting for intra-entity asset transfers | (35) | 0 | 0 | (35) | 0 | 0 | |
Adjustment to adopt stock-based compensation guidance | Recognition and measurement of financial assets and liabilities | 0 | 0 | 0 | 11 | (11) | 0 | |
Balance at Jan. 01, 2018 | 13,719 | 5,593 | (17,005) | 26,265 | (1,203) | 69 | |
Balance at Dec. 31, 2017 | 13,766 | 5,593 | (17,005) | 26,301 | (1,192) | 69 | |
Increase (Decrease) in Shareholders' Equity | |||||||
Profit of consolidated and affiliated companies | 5,099 | 0 | 0 | 5,099 | 0 | 0 | |
Profit of consolidated and affiliated companies | Revenue recognition | 11 | ||||||
Foreign currency translation, net of tax | (292) | 0 | 0 | 0 | (292) | 0 | |
Pension and other postretirement benefits, net of tax | (23) | 0 | 0 | 0 | (23) | 0 | |
Derivative financial instruments, net of tax | (36) | 0 | 0 | 0 | (36) | 0 | |
Available-for-sale securities, net of tax | (14) | 0 | 0 | 0 | (14) | 0 | |
Change in Ownership for Noncontrolling Interests | (43) | (25) | 0 | 0 | 0 | (18) | |
Dividends declared | (980) | 0 | 0 | (980) | 0 | 0 | |
Distribution to noncontrolling interests | (1) | 0 | 0 | 0 | 0 | (1) | |
Common shares issued from treasury stock for stock-based compensation: 5,284,974 and 8,447,558 for the nine months ended September 30, 2018 and 2017, respectively | 292 | 36 | 256 | 0 | 0 | 0 | |
Stock-based compensation expense, before tax (in dollars) | 164 | 164 | 0 | 0 | 0 | 0 | |
Common shares repurchased: 12,804,035 and 0 for the nine months ended September 30, 2018 and 2017, respectively | [1] | (1,932) | 0 | (1,932) | 0 | 0 | 0 |
Other | (63) | (53) | 0 | 0 | 0 | (10) | |
Balance at Sep. 30, 2018 | $ 15,890 | $ 5,715 | $ (18,681) | $ 30,384 | $ (1,568) | $ 40 | |
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Consolidated Statement of Cha_2
Consolidated Statement of Changes in Shareholders' Equity (Parenthetical) (Parentheticals) - shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Stockholders' Equity [Abstract] | ||
Common shares issued from treasury stock for stock-based compensation (in shares) | 5,284,974 | 8,447,558 |
Common shares repurchased (in shares) | 12,804,035 | 0 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flow - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flow from operating activities: | ||
Profit of consolidated and affiliated companies | $ 5,099 | $ 2,058 |
Adjustments for non-cash items: | ||
Depreciation and amortization | 2,065 | 2,153 |
Other | 630 | 596 |
Changes in assets and liabilities, net of acquisitions and divestitures: | ||
Receivables - trade and other | (725) | (455) |
Inventories | (1,822) | (1,489) |
Accounts payable | 496 | 1,371 |
Accrued expenses | (32) | 121 |
Accrued wages, salaries and employee benefits | (418) | 962 |
Customer advances | 59 | 358 |
Other assets - net | 394 | (137) |
Other liabilities - net | (1,271) | (373) |
Net cash provided by (used for) operating activities | 4,475 | 5,165 |
Cash flow from investing activities: | ||
Capital expenditures - excluding equipment leased to others | (921) | (566) |
Expenditures for equipment leased to others | (1,208) | (1,071) |
Proceeds from disposals of leased assets and property, plant and equipment | 732 | 864 |
Additions to finance receivables | (9,092) | (8,246) |
Collections of finance receivables | 8,032 | 8,532 |
Proceeds from sale of finance receivables | 416 | 98 |
Investments and acquisitions (net of cash acquired) | (357) | (47) |
Proceeds from sale of businesses and investments (net of cash sold) | 14 | 93 |
Proceeds from sale of securities | 363 | 431 |
Investments in securities | (417) | (594) |
Other - net | 24 | 73 |
Net cash provided by (used for) investing activities | (2,414) | (433) |
Cash flow from financing activities: | ||
Dividends paid | (1,444) | (1,367) |
Common stock issued, including treasury shares reissued | 292 | 353 |
Common shares repurchased | (2,000) | 0 |
Proceeds from debt issued (original maturities greater than three months): | ||
Machinery, Energy & Transportation | 47 | 362 |
Financial Products | 7,026 | 6,972 |
Payments on debt (original maturities greater than three months): | ||
Machinery, Energy & Transportation | (6) | (506) |
Financial Products | (5,636) | (5,718) |
Short-term borrowings - net (original maturities three months or less) | (465) | (2,403) |
Other - net | (32) | (7) |
Net cash provided by (used for) financing activities | (2,218) | (2,314) |
Effect of exchange rate changes on cash | (117) | 40 |
Increase (decrease) in cash and short-term investments and restricted cash | (274) | 2,458 |
Cash and short-term investments and restricted cash at beginning of period | 8,320 | 7,199 |
Cash and short-term investments and restricted cash at end of period | $ 8,046 | $ 9,657 |
Nature of Operations, Basis of
Nature of Operations, Basis of Presentation and Change in Accounting Principle | 9 Months Ended |
Sep. 30, 2018 | |
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 (ME&T) – 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 Insurance Holdings Inc. (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, 2018 and 2017 , (b) the consolidated comprehensive income for the three and nine months ended September 30, 2018 and 2017 , (c) the consolidated financial position at September 30, 2018 and December 31, 2017 , (d) the consolidated changes in shareholders’ equity for the nine months ended September 30, 2018 and 2017 and (e) the consolidated cash flow for the nine months ended September 30, 2018 and 2017 . 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, 2017 ( 2017 Form 10-K). The December 31, 2017 financial position data included herein is derived from the audited consolidated financial statements included in the 2017 Form 10-K 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 2 for more information. In addition, deferred revenue of $233 million was reclassified from Other current liabilities to Customer advances in the December 31, 2017 Consolidated Statement of Financial Position. 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, 2018 December 31, 2017 Receivables - trade and other $ 29 $ 34 Receivables - finance 47 42 Long-term receivables - finance 26 38 Investments in unconsolidated affiliated companies 30 39 Guarantees 1 — 259 Total $ 132 $ 412 1 Related contract was terminated during the first quarter of 2018. No payments were made under the guarantee. In addition, Cat Financial has end-user customers that are VIEs of which we are not the primary beneficiary. Although we have provided financial support to these entities and therefore have a variable interest, we do not have the power to direct the activities that most significantly impact their economic performance. Our maximum exposure to loss from our involvement with these VIEs is limited to the credit risk inherently present in the financial support that we have provided. These risks are evaluated and reflected in our financial statements as part of our overall portfolio of finance receivables and related allowance for credit losses. |
New Accounting Guidance
New Accounting Guidance | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Guidance | 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. The guidance was effective January 1, 2018, and was applied to contracts that were not completed at the date of initial application on a modified retrospective basis through a cumulative effect adjustment to retained earnings as of January 1, 2018. The prior period comparative information has not been recasted and continues to be reported under the accounting guidance in effect for those periods. Under the new guidance, sales of certain turbine machinery units changed to a point-in-time recognition model. Under previous guidance, we accounted for these sales under an over-time model following the percentage-of-completion method as the product was manufactured. In addition, under the new guidance we began to recognize an asset for the value of expected replacement part returns and discontinued lease accounting treatment for certain product sales containing residual value guarantees. See Note 3 for additional information. The cumulative effect of initially applying the new revenue recognition guidance to our consolidated financial statements on January 1, 2018 was as follows: Consolidated Statement of Financial Position (Millions of dollars) Balance as of December 31, 2017 Cumulative Impact from Adopting New Revenue Guidance Balance as of January 1, 2018 Assets Receivables - trade and other $ 7,436 $ (66 ) $ 7,370 Prepaid expenses and other current assets $ 1,772 $ 327 $ 2,099 Inventories $ 10,018 $ 4 $ 10,022 Property, plant and equipment - net $ 14,155 $ (190 ) $ 13,965 Noncurrent deferred and refundable income taxes $ 1,693 $ 2 $ 1,695 Liabilities Accrued expenses $ 3,220 $ 226 $ 3,446 Customer advances $ 1,426 $ 46 $ 1,472 Other current liabilities $ 1,742 $ (17 ) $ 1,725 Other liabilities $ 4,053 $ (166 ) $ 3,887 Shareholders' equity Profit employed in the business $ 26,301 $ (12 ) $ 26,289 The impact from adopting the new revenue recognition guidance on our consolidated financial statements was as follows: Consolidated Statement of Results of Operations Three Months Ended September 30, 2018 As Reported Previous Accounting Guidance Impact from Adopting New Revenue Guidance (Millions of dollars) Sales of Machinery, Energy & Transportation $ 12,763 $ 12,719 $ 44 Cost of goods sold $ 9,022 $ 8,997 $ 25 Operating profit $ 2,135 $ 2,116 $ 19 Consolidated profit before taxes $ 2,135 $ 2,116 $ 19 Provision (benefit) for income taxes $ 415 $ 411 $ 4 Profit of consolidated companies $ 1,720 $ 1,705 $ 15 Profit of consolidated and affiliated companies $ 1,727 $ 1,712 $ 15 Profit $ 1,727 $ 1,712 $ 15 Consolidated Statement of Results of Operations Nine Months Ended September 30, 2018 As Reported Previous Accounting Guidance Impact from Adopting New Revenue Guidance (Millions of dollars) Sales of Machinery, Energy & Transportation $ 38,192 $ 38,194 $ (2 ) Cost of goods sold $ 27,010 $ 27,020 $ (10 ) Other operating (income) expenses $ 1,028 $ 1,034 $ (6 ) Operating profit $ 6,410 $ 6,396 $ 14 Consolidated profit before taxes $ 6,455 $ 6,441 $ 14 Provision (benefit) for income taxes $ 1,377 $ 1,374 $ 3 Profit of consolidated companies $ 5,078 $ 5,067 $ 11 Profit of consolidated and affiliated companies $ 5,099 $ 5,088 $ 11 Profit $ 5,099 $ 5,088 $ 11 Consolidated Statement of Financial Position September 30, 2018 As Reported Previous Accounting Guidance Impact from Adopting New Revenue Guidance (Millions of dollars) Assets Receivables - trade and other $ 7,974 $ 8,011 $ (37 ) Prepaid expenses and other current assets $ 1,835 $ 1,502 $ 333 Inventories $ 11,814 $ 11,807 $ 7 Noncurrent deferred and refundable income taxes $ 1,288 $ 1,289 $ (1 ) Liabilities Accrued expenses $ 3,423 $ 3,203 $ 220 Customer advances $ 1,491 $ 1,408 $ 83 Shareholders' equity Profit employed in the business $ 30,384 $ 30,385 $ (1 ) 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 guidance was effective January 1, 2018, and was applied on a modified retrospective basis through a cumulative effect adjustment to retained earnings as of January 1, 2018. The adoption did not have a material impact on our financial statements. 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 substantially 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. Entities have the option to adopt the new guidance using a modified retrospective approach through a cumulative effect adjustment to retained earnings applied either to the beginning of the earliest period presented or the beginning of the period of adoption. We will adopt the new guidance effective January 1, 2019 using a modified retrospective approach through a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption. The new guidance provides a number of optional practical expedients in transition. We plan to elect the ‘package of practical expedients’, which allows us not to reassess under the new guidance our prior conclusions about lease identification, lease classification and initial direct costs. We do not expect to elect the use-of-hindsight practical expedient. In addition, the new guidance provides practical expedients for an entity’s ongoing accounting that we are still evaluating such as whether or not to separate lease and non-lease components. We plan to elect the short-term lease recognition exemption for all leases that qualify which means we will not recognize right-of-use assets or lease liabilities for these leases. We are currently designing new processes and controls, cataloging and entering our leases into a recently implemented software solution and evaluating our population of leased assets to assess the effect of the new guidance on our financial statements. While we continue to assess the effects of adoption, we believe the most significant effects relate to the recognition of right-of-use assets and lease liabilities on our balance sheet, and providing new disclosures about our leasing activities. In addition, we expect to derecognize about $125 million of existing assets and $375 million of debt obligations for a sale-leaseback transaction that qualifies for sale accounting under the new guidance. The gain associated with this change in accounting will be recognized through opening retained earnings as of January 1, 2019. We are continuing to evaluate the impact of the new guidance on lessor accounting, which will primarily impact Cat Financial. We do not expect the new guidance to have a material impact on our results of operations. 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 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 was 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 are now included in Cash provided by operating activities and will no longer be separately classified as a financing activity. This change was adopted retrospectively. The guidance was effective January 1, 2017, and did not 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 was effective January 1, 2018, and was applied on a retrospective basis. The adoption did not have a material impact on our financial statements. Tax accounting for intra-entity asset transfers – In October 2016, the FASB issued accounting guidance that requires the recognition of tax expense from the sales of intra-entity assets in the seller's tax jurisdiction at the time of transfer. The new guidance does not apply to intra-entity transfers of inventory. Under previous guidance, the tax effects of these assets were deferred until the transferred asset was sold to a third party or otherwise recovered through use. The guidance was effective January 1, 2018, and was applied on a modified retrospective basis through a cumulative effect adjustment to retained earnings as of January 1, 2018. The adoption did not have a material impact on our financial statements. Classification of restricted cash – In November 2016, the FASB issued accounting guidance related to the presentation and classification of changes in restricted cash on the statement of cash flows where diversity in practice exists. The guidance was effective January 1, 2018, and was applied on a retrospective basis. The adoption did not have a material impact on our financial statements. Presentation of net periodic pension costs and net periodic postretirement benefit costs – In March 2017, the FASB issued accounting guidance that requires an employer to disaggregate the service cost component from the other components of net periodic benefit cost. Service cost is required to be reported in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net periodic benefit cost are required to be reported outside the subtotal for income from operations. Additionally, only the service cost component of net periodic benefit costs is eligible for capitalization. The guidance was effective January 1, 2018. We applied the presentation changes retrospectively and the capitalization change prospectively. The adoption primarily resulted in the reclassification of other components of net periodic benefit cost outside of Operating profit in the Consolidated Statement of Results of Operations. Consolidated Statement of Results of Operations Three Months Ended September 30, 2017 (Millions of dollars) As Revised Previously Reported Effect of Change Cost of goods sold $ 7,678 $ 7,633 $ 45 Selling, general and administrative expenses $ 1,254 $ 1,237 $ 17 Research and development expenses $ 461 $ 455 $ 6 Total operating costs $ 9,904 $ 9,836 $ 68 Operating profit $ 1,509 $ 1,577 $ (68 ) Other income (expense) $ 132 $ 64 $ 68 Nine Months Ended September 30, 2017 As Revised Previously Reported Effect of Change Cost of goods sold $ 22,295 $ 22,160 $ 135 Selling, general and administrative expenses $ 3,619 $ 3,571 $ 48 Research and development expenses $ 1,344 $ 1,326 $ 18 Other operating (income) expenses $ 1,751 $ 1,780 $ (29 ) Total operating costs $ 29,493 $ 29,321 $ 172 Operating profit $ 3,073 $ 3,245 $ (172 ) Other income (expense) $ 260 $ 88 $ 172 Premium amortization on purchased callable debt securities – In March 2017, the FASB issued accounting guidance related to the amortization period for certain purchased callable debt securities held at a premium. Securities held at a premium will be required to be amortized to the earliest call date rather than the maturity date. The new standard is required to be applied with a modified retrospective approach through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We will adopt the new guidance effective January 1, 2019. We do not expect the adoption to have a material impact on our financial statements. Clarification on stock-based compensation – In May 2017, the FASB issued accounting guidance to clarify which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The guidance was effective January 1, 2018, and was applied prospectively. The adoption did not have a material impact on our financial statements. Derivatives and hedging – In August 2017, the FASB issued accounting guidance to better align hedge accounting with a company’s risk management activities, simplify the application of hedge accounting and improve the disclosures of hedging arrangements. The new guidance 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. We will adopt the new guidance effective January 1, 2019. The impact on our financial statements at the time of adoption will primarily be reclassification of our gains (losses) for designated ME&T foreign exchange contracts from Other income (expense) to components of Operating profit in the Consolidated Statement of Results of Operations. Reclassification of certain tax effects from accumulated other comprehensive income – In February 2018, the FASB issued accounting guidance to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from U.S. tax reform legislation. The new guidance is required to be applied either in the period of adoption or retrospectively to each period affected by U.S. tax reform legislation. The guidance is effective January 1, 2019, with early adoption permitted. We are in the process of evaluating the effect of the new guidance on our financial statements. Defined benefit plan disclosures – In August 2018, the FASB issued accounting guidance that revises the annual disclosure requirements for employers by removing and adding certain disclosures for these plans. The applicable requirements that were removed include the amount of prior service cost (credit) that will be amortized from Accumulated other comprehensive income (loss) into net periodic benefit cost for the next fiscal year and the effect of a one-percentage-point change in the assumed health care cost trend rates on the service and interest cost components of other postretirement benefit cost and on the accumulated postretirement benefit obligations. The new disclosure requirements include the weighted average interest crediting rates for cash balance plans and other plans with promised interest crediting rates and narrative description of the reasons for significant actuarial gains and losses related to changes in benefit plan obligations or assets for the period. The new guidance is required to be applied on a retrospective basis. The guidance is effective January 1, 2020, with early adoption permitted. We do not expect the adoption to have a material impact on our financial statements. |
Sales and revenue recognition
Sales and revenue recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition [Abstract] | |
Revenue from contracts with customers | Sales and revenue recognition A. Sales of Machinery, Energy & Transportation Sales of Machinery, Energy & Transportation are recognized when all the following criteria are satisfied: (i) a contract with an independently owned and operated dealer or an end user exists which has commercial substance; (ii) it is probable we will collect the amount charged to the dealer or end user; and (iii) we have completed our performance obligation whereby the dealer or end user has obtained control of the product. A contract with commercial substance exists once we receive and accept a purchase order under a dealer sales agreement, or once we enter into a contract with an end user. If collectibility is not probable, the sale is deferred and not recognized until collection is probable or payment is received. Control of our products typically transfers when title and risk of ownership of the product has transferred to the dealer or end user. Typically, where product is produced and sold in the same country, title and risk of ownership transfer when the product is shipped. Products that are exported from a country for sale typically transfer title and risk of ownership at the border of the destination country. Our remanufacturing operations are primarily focused on the remanufacture of Cat engines and components and rail related products. In this business, used engines and related components (core) are inspected, cleaned and remanufactured. In connection with the sale of our remanufactured product to dealers, we collect a deposit that is repaid if the dealer returns an acceptable core within a specified time period. Caterpillar owns and has title to the cores when they are returned from dealers. The rebuilt engine or component (the core plus any new content) is then sold as a remanufactured product to dealers and end users. Revenue is recognized pursuant to the same criteria as Machinery, Energy & Transportation sales noted above (title and risk of ownership of the entire remanufactured product passes to the dealer or end user upon sale). At the time of sale, the deposit is recognized in Other current liabilities in the Consolidated Statement of Financial Position, and the core to be returned is recognized as an asset in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position at the estimated replacement cost (based on historical experience with usable cores). Upon receipt of an acceptable core, we repay the deposit and relieve the liability. The returned core is then included in inventory. In the event that the deposit is forfeited (i.e., upon failure by the dealer to return an acceptable core in the specified time period), we recognize the core deposit and the cost of the core in Sales and Cost of goods sold, respectively. We provide discounts to dealers through merchandising programs. We have numerous programs that are designed to promote the sale of our products. The most common dealer programs provide a discount when the dealer sells a product to a targeted end user. Generally, the cost of these discounts is estimated for each product by model by geographic region based on historical experience and known changes in merchandising programs. The cost of these discounts is reported as a reduction to the transaction price when the product sale is recognized. A corresponding post-sale discount reserve is accrued in the Consolidated Statement of Financial Position, which represents discounts we expect to pay on previously sold units. If discounts paid differ from those estimated, the difference is reported as a change in the transaction price. Except for replacement parts, no right of return exists on the sale of our products. We estimate replacement part returns based on historical experience and recognize a parts return asset in Prepaid expenses and other current assets in the Consolidated Statement of Financial Position, which represents our right to recover replacement parts we expect will be returned. We also recognize a refund liability in Other current liabilities in the Consolidated Statement of Financial Position for the refund we expect to pay for returned parts. If actual replacement part returns differ from those estimated, the difference in the estimated replacement part return asset and refund liability is recognized in Cost of goods sold and Sales, respectively. Our standard dealer invoice terms are established by marketing region. Our invoice terms for end user sales are established by the responsible business unit. Payments from dealers are due shortly after the time of sale. When a sale is made to a dealer, the dealer is responsible for payment even if the product is not sold to an end user. Dealers and end users must make payment within the established invoice terms to avoid potential interest costs. Interest at or above prevailing market rates may be charged on any past due balance, and generally our practice is to not forgive this interest. In addition, Cat Financial provides wholesale inventory financing for a dealer's purchase of inventory. Wholesale inventory receivables have varying payment terms and are included in Receivables – trade and other and Long-term receivables – trade and other in the Consolidated Statement of Financial Position. Trade receivables from dealers and end users were $6,902 million and $6,399 million as of September 30, 2018 and January 1, 2018 , respectively, and are recognized in Receivables – trade and other in the Consolidated Statement of Financial Position. Long-term trade receivables from dealers and end users were $664 million and $639 million as of September 30, 2018 and January 1, 2018 , respectively, and are recognized in Long-term receivables – trade and other in the Consolidated Statement of Financial Position. We establish a bad debt allowance for Machinery, Energy & Transportation receivables when it becomes probable that the receivable will not be collected. Our allowance for bad debts is not significant. We invoice in advance of recognizing the sale of certain products. Advanced customer payments are recognized as a contract liability in Customer advances and Other liabilities in the Consolidated Statement of Financial Position. Long-term customer advances recognized in Other liabilities in the Consolidated Statement of Financial Position were $432 million and $396 million as of September 30, 2018 and January 1, 2018 , respectively. We reduce the contract liability when revenue is recognized. During the three and nine months ended September 30, 2018 , we recognized $145 million and $1,124 million , respectively, of revenue that was recorded as a contract liability at the beginning of 2018. We have elected the practical expedient to not adjust the amount of revenue to be recognized under a contract with a dealer or end user for the effects of time value of money when the timing difference between receipt of payment and recognition of revenue is less than one year. As of September 30, 2018 , we have entered into contracts with dealers and end users for which sales have not been recognized as we have not satisfied our performance obligations and transferred control of the products. The dollar amount of unsatisfied performance obligations for contracts with an original duration greater than one year is $5.9 billion , of which $2.7 billion is expected to be completed and revenue recognized in the twelve months following September 30, 2018 . We have elected the practical expedient to not disclose unsatisfied performance obligations with an original contract duration of one year or less. Contracts with an original duration of one year or less are primarily sales to dealers for machinery, engines and replacement parts. Sales and other related taxes are excluded from the transaction price. Shipping and handling costs associated with outbound freight after control over a product has transferred are accounted for as a fulfillment cost and are included in Cost of goods sold. We provide a standard manufacturer’s warranty of our products at no additional cost. At the time a sale is recognized, we record estimated future warranty costs. See Note 10 for further discussion of our product warranty liabilities. See Note 15 for further disaggregated sales and revenues information. B. Revenues of Financial Products Revenues of Financial Products are generated primarily from finance revenue on finance receivables and rental payments on operating leases. Finance revenue is recorded over the life of the related finance receivable using the interest method, including the accretion of certain direct origination costs that are deferred. Revenue from rental payments received on operating leases is recognized on a straight-line basis over the term of the lease. Recognition of finance revenue and rental revenue is suspended and the account 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 account becomes current and collection of remaining amounts is considered probable. See Note 16 for more information. Revenues are presented net of sales and other related taxes. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
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) and performance-based restricted stock units (PRSUs). Beginning with the 2018 grant, RSU and PRSU awards are credited with dividend equivalent units on each date that a cash dividend is paid to holders of Common Stock. The fair value of the RSU and PRSU awards granted in 2018 was determined as the closing stock price on the date of grant. Prior to 2018, RSU and PRSU awards were not credited with dividend equivalent units and the fair value was determined by reducing the stock price on the date of grant by the present value of the estimated dividends to be paid during the vesting period. The estimated dividends were based on Caterpillar's quarterly dividend per share at the time of grant. We recognized pretax stock-based compensation expense of $52 million and $164 million for the three and nine months ended September 30, 2018 , respectively, and $48 million and $165 million for the three and nine months ended September 30, 2017, respectively. The following table illustrates the type and fair value of the stock-based compensation awards granted during the nine months ended September 30, 2018 and 2017 , respectively: Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 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 1,605,220 $ 46.11 $ 150.90 2,701,644 $ 25.01 $ 95.66 RSUs 722,521 $ 150.64 $ 150.64 924,421 $ 90.11 $ 96.01 PRSUs 344,866 $ 150.93 $ 150.93 437,385 $ 86.78 $ 95.66 The following table provides the assumptions used in determining the fair value of the stock-based awards for the nine months ended September 30, 2018 and 2017 , respectively: Grant Year 2018 2017 Weighted-average dividend yield 2.70 % 3.42 % Weighted-average volatility 30.2 % 29.2 % Range of volatilities 21.5-33.0% 22.1-33.0% Range of risk-free interest rates 2.02-2.87% 0.81-2.35% Weighted-average expected lives 8 years 8 years As of September 30, 2018 , the total remaining unrecognized compensation expense related to nonvested stock-based compensation awards was $217 million , which will be amortized over the weighted-average remaining requisite service periods of approximately 1.9 years. |
Derivative Financial Instrument
Derivative Financial Instruments and Risk Management | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 , 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, Indian rupee, Japanese yen, Mexican peso, Singapore dollar 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, 2018 , $33 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 and option 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. 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. 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, 2018 December 31, 2017 Designated derivatives Foreign exchange contracts Machinery, Energy & Transportation Receivables – trade and other $ 4 $ 8 Machinery, Energy & Transportation Long-term receivables – trade and other — 4 Machinery, Energy & Transportation Accrued expenses (46 ) (14 ) Machinery, Energy & Transportation Other liabilities (6 ) (2 ) Financial Products Receivables – trade and other 50 — Financial Products Long-term receivables – trade and other 31 7 Financial Products Accrued expenses (17 ) (57 ) Interest rate contracts Financial Products Receivables – trade and other 1 — Financial Products Long-term receivables – trade and other 9 3 Financial Products Accrued expenses (3 ) (2 ) $ 23 $ (53 ) Undesignated derivatives Foreign exchange contracts Machinery, Energy & Transportation Receivables – trade and other $ 4 $ 19 Machinery, Energy & Transportation Accrued expenses (37 ) (9 ) Financial Products Receivables – trade and other 42 12 Financial Products Long-term receivables – trade and other 7 — Financial Products Accrued expenses (19 ) (9 ) Commodity contracts Machinery, Energy & Transportation Receivables – trade and other 10 21 Machinery, Energy & Transportation Accrued expenses (8 ) — $ (1 ) $ 34 The total notional amounts of the derivative instruments are as follows: (Millions of dollars) September 30, 2018 December 31, 2017 Machinery, Energy & Transportation $ 2,129 $ 3,190 Financial Products $ 7,517 $ 3,691 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. Cash Flow Hedges Three Months Ended September 30, 2018 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 $ (15 ) Other income (expense) $ (17 ) $ — Financial Products 53 Other income (expense) 51 — Financial Products — Interest expense of Financial Products 5 — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products — — Financial Products 3 Interest expense of Financial Products — — $ 41 $ 39 $ — Three Months Ended September 30, 2017 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 $ 16 Other income (expense) $ 4 $ — Financial Products (21 ) Other income (expense) (20 ) — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products (2 ) — Financial Products (1 ) Interest expense of Financial Products 2 — $ (6 ) $ (16 ) $ — Nine Months Ended September 30, 2018 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 $ (55 ) Other income (expense) $ (12 ) $ — Financial Products 143 Other income (expense) 141 — Financial Products — Interest expense of Financial Products 13 — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products (2 ) — Financial Products 8 Interest expense of Financial Products 1 — $ 96 $ 141 $ — Nine Months Ended September 30, 2017 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 $ 72 Other income (expense) $ (49 ) $ — Financial Products (62 ) Other income (expense) (69 ) — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products (5 ) — Financial Products (1 ) Interest expense of Financial Products 5 — $ 9 $ (118 ) $ — 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 September 30, 2018 Three Months Ended September 30, 2017 Foreign exchange contracts Machinery, Energy & Transportation Other income (expense) $ (5 ) $ 15 Financial Products Other income (expense) 13 11 Commodity contracts Machinery, Energy & Transportation Other income (expense) (5 ) 11 $ 3 $ 37 Classification of Gains (Losses) Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Foreign exchange contracts Machinery, Energy & Transportation Other income (expense) $ (43 ) $ 67 Financial Products Other income (expense) 29 21 Commodity contracts Machinery, Energy & Transportation Other income (expense) (5 ) 12 $ (19 ) $ 100 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, 2018 and December 31, 2017 , 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, 2018 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 $ 18 $ — $ 18 $ (18 ) $ — $ — Financial Products 140 — 140 (31 ) — 109 Total $ 158 $ — $ 158 $ (49 ) $ — $ 109 September 30, 2018 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 $ (97 ) $ — $ (97 ) $ 18 $ — $ (79 ) Financial Products (39 ) — (39 ) 31 — (8 ) Total $ (136 ) $ — $ (136 ) $ 49 $ — $ (87 ) December 31, 2017 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 $ 52 $ — $ 52 $ (22 ) $ — $ 30 Financial Products 22 — 22 (10 ) — 12 Total $ 74 $ — $ 74 $ (32 ) $ — $ 42 December 31, 2017 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 $ (25 ) $ — $ (25 ) $ 22 $ — $ (3 ) Financial Products (68 ) — (68 ) 10 — (58 ) Total $ (93 ) $ — $ (93 ) $ 32 $ — $ (61 ) |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
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 $ 3,413 $ 2,802 Work-in-process 2,764 2,254 Finished goods 5,425 4,761 Supplies 212 201 Total inventories $ 11,814 $ 10,018 During the first nine months of 2017, there was a liquidation of LIFO inventory resulting from closure of our facility in Gosselies, Belgium. The liquidated inventory was carried at lower costs prevailing in prior years as compared with current costs. The effect of this reduction of inventory decreased Cost of goods sold by approximately $62 million and increased Profit by approximately $45 million or $ 0.07 per share. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 (Millions of dollars) Weighted Amortizable Life (Years) Gross Carrying Amount Accumulated Amortization Net Customer relationships 15 $ 2,462 $ (1,212 ) $ 1,250 Intellectual property 12 1,562 (933 ) 629 Other 13 198 (101 ) 97 Total finite-lived intangible assets 14 $ 4,222 $ (2,246 ) $ 1,976 December 31, 2017 Weighted Amortizable Life (Years) Gross Carrying Amount Accumulated Amortization Net Customer relationships 15 $ 2,441 $ (1,122 ) $ 1,319 Intellectual property 11 1,538 (851 ) 687 Other 13 198 (93 ) 105 Total finite-lived intangible assets 14 $ 4,177 $ (2,066 ) $ 2,111 During the first quarter of 2018, we acquired finite-lived intangible assets of $112 million and $5 million due to the purchase of ECM S.p.A. and Downer Freight Rail, respectively. See Note 20 for details on these acquisitions. Amortization expense for the three and nine months ended September 30, 2018 was $82 million and $248 million , respectively. Amortization expense for the three and nine months ended September 30, 2017 was $82 million and $241 million , respectively. Amortization expense related to intangible assets is expected to be: (Millions of dollars) Remaining Three Months of 2018 2019 2020 2021 2022 Thereafter $84 $326 $311 $293 $274 $688 B. Goodwill No goodwill was impaired during the nine months ended September 30, 2018 or 2017 . During the first quarter of 2018, we acquired net assets with related goodwill of $121 million in the Energy & Transportation segment. We recorded goodwill of $109 million related to the acquisition of ECM S.p.A. and $12 million related to the acquisition of Downer Freight Rail. See Note 20 for details on these acquisitions. The changes in carrying amount of goodwill by reportable segment for the nine months ended September 30, 2018 were as follows: (Millions of dollars) December 31, Acquisitions 1 Other Adjustments 2 September 30, Construction Industries Goodwill $ 305 $ — $ — $ 305 Impairments (22 ) — — (22 ) Net goodwill 283 — — 283 Resource Industries Goodwill 4,232 — (46 ) 4,186 Impairments (1,175 ) — — (1,175 ) Net goodwill 3,057 — (46 ) 3,011 Energy & Transportation Goodwill 2,806 121 (44 ) 2,883 All Other 3 Goodwill 54 — 2 56 Consolidated total Goodwill 7,397 121 (88 ) 7,430 Impairments (1,197 ) — — (1,197 ) Net goodwill $ 6,200 $ 121 $ (88 ) $ 6,233 1 See Note 20 for additional details. 2 Other adjustments are comprised primarily of foreign currency translation. 3 Includes All Other operating segments (See Note 15). |
Investments in Debt and Equity
Investments in Debt and Equity Securities | 9 Months Ended |
Sep. 30, 2018 | |
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, which are recorded at fair value and are primarily included in Other assets in the Consolidated Statement of Financial Position. Debt securities have been classified as available-for-sale and the unrealized gains and losses arising from the revaluation of these debt 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 debt investments are generally determined using the specific identification method and are included in Other income (expense) in the Consolidated Statement of Results of Operations. Beginning January 1, 2018, we adopted new accounting guidance issued by the FASB resulting in the unrealized gains and losses arising from the revaluation of these equity securities to be included in Other income (expense) in the Consolidated Statement of Results of Operations. Prior to January 1, 2018, the unrealized gains and losses arising from revaluation of the available-for-sale equity securities and the Real Estate Investment Trust were included, net of applicable deferred income taxes, in equity (Accumulated other comprehensive income (loss) in the Consolidated Statement of Financial Position). See Note 2 for additional information. The cost basis and fair value of debt and equity securities with unrealized gains and losses included in equity (Accumulated other comprehensive income (loss) in the Consolidated Statement of Financial Position) were as follows: September 30, 2018 December 31, 2017 (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 $ 9 $ — $ 9 $ 10 $ — $ 10 Other U.S. and non-U.S. government bonds 48 — 48 42 — 42 Corporate bonds Corporate bonds 721 (11 ) 710 585 (1 ) 584 Asset-backed securities 61 — 61 67 — 67 Mortgage-backed debt securities U.S. governmental agency 300 (10 ) 290 265 (4 ) 261 Residential 7 — 7 8 — 8 Commercial 15 (1 ) 14 17 — 17 Total debt securities $ 1,161 $ (22 ) $ 1,139 $ 994 $ (5 ) $ 989 Equity securities 1 Large capitalization value 287 (3 ) 284 Real estate investment trust (REIT) 104 6 110 Smaller company growth 40 16 56 Total equity securities $ 431 $ 19 $ 450 1 Beginning January 1, 2018, the unrealized gains and losses arising from the revaluation of the equity securities are included in Other income (expense) in the Consolidated Statement of Results of Operations. See Note 2 for additional information. Available-for-sale investments in an unrealized loss position that are not other-than-temporarily impaired: September 30, 2018 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 $ 498 $ 8 $ 93 $ 3 $ 591 $ 11 Mortgage-backed debt securities U.S. governmental agency 119 3 163 8 282 11 Commercial 8 — 6 1 14 1 Total $ 625 $ 11 $ 262 $ 12 $ 887 $ 23 December 31, 2017 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 $ 312 $ 2 $ 38 $ — $ 350 $ 2 Mortgage-backed debt securities U.S. governmental agency 129 1 110 3 239 4 Equity securities Large capitalization value 129 5 14 2 143 7 Smaller company growth 17 1 1 — 18 1 Total $ 587 $ 9 $ 163 $ 5 $ 750 $ 14 1 Indicates the length of time that individual securities have been in a continuous unrealized loss position. Corporate Bonds. The unrealized losses on our investments in corporate bonds 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, 2018 . Mortgage-Backed Debt Securities. The unrealized losses on our investments in U.S. government agency mortgage-backed securities and commercial mortgage-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, 2018 . The cost basis and fair value of the available-for-sale debt securities at September 30, 2018 , 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, 2018 (Millions of dollars) Cost Basis Fair Value Due in one year or less $ 160 $ 159 Due after one year through five years 540 531 Due after five years through ten years 122 120 Due after ten years 17 18 U.S. governmental agency mortgage-backed securities 300 290 Residential mortgage-backed securities 7 7 Commercial mortgage-backed securities 15 14 Total debt securities – available-for-sale $ 1,161 $ 1,139 Sales of available-for-sale securities: Three Months Ended Nine Months Ended (Millions of dollars) 2018 1 2017 2018 1 2017 Proceeds from the sale of available-for-sale securities $ 41 $ 244 $ 181 $ 431 Gross gains from the sale of available-for-sale securities $ — $ 38 $ — $ 40 Gross losses from the sale of available-for-sale securities $ — $ 1 $ — $ 3 1 Beginning January 1, 2018, equity securities are no longer classified as available-for-sale securities. See Note 2 for additional information. For the three and nine months ended September 30, 2018 , the net unrealized gains (losses) for equity securities were $10 million and $14 million , respectively. For the three and nine months ended September 30, 2018, there were $4 million of realized net gains (losses) recognized on the sale of equity securities. |
Postretirement Benefits
Postretirement Benefits | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Postretirement Benefits | Postretirement benefits A. Pension and postretirement benefit costs In the first quarter of 2017, we announced the closure of our Gosselies, Belgium, facility. This announcement impacted certain employees that participated in a defined benefit pension plan and resulted in a net loss of $20 million in the first quarter of 2017 for curtailment and termination benefits. In addition during the first quarter of 2017, we announced the decision to phase out production at our Aurora, Illinois, facility, which resulted in termination benefits of $9 million for certain hourly employees that participate in our U.S. hourly defined benefit pension plan. See Note 19 for more information on the Gosselies closure. U.S. Pension Benefits Non-U.S. Pension Benefits Other Postretirement Benefits (Millions of dollars) September 30 September 30 September 30 2018 2017 2018 2017 2018 2017 For the three months ended: Components of net periodic benefit cost: Service cost $ 31 $ 29 $ 22 $ 23 $ 22 $ 19 Interest cost 134 131 25 23 31 33 Expected return on plan assets (202 ) (184 ) (55 ) (55 ) (9 ) (10 ) Amortization of prior service cost (credit) 1 — — — — (9 ) (6 ) Net periodic benefit cost (benefit) 2 $ (37 ) $ (24 ) $ (8 ) $ (9 ) $ 35 $ 36 For the nine months ended: Components of net periodic benefit cost: Service cost $ 94 $ 87 $ 67 $ 70 $ 64 $ 58 Interest cost 401 393 74 73 93 98 Expected return on plan assets (607 ) (551 ) (167 ) (168 ) (25 ) (28 ) Amortization of prior service cost (credit) 1 — — — (1 ) (26 ) (17 ) Curtailments and termination benefits — 9 — 20 — — Net periodic benefit cost (benefit) 2 $ (112 ) $ (62 ) $ (26 ) $ (6 ) $ 106 $ 111 Weighted-average assumptions used to determine net cost: Discount rate used to measure service cost 3.7 % 4.2 % 2.3 % 2.3 % 3.5 % 3.9 % Discount rate used to measure interest cost 3.2 % 3.3 % 2.2 % 2.3 % 3.2 % 3.3 % Expected rate of return on plan assets 6.3 % 6.7 % 5.2 % 5.9 % 7.5 % 7.5 % Rate of compensation increase 4.0 % 4.0 % 4.0 % 4.0 % 4.6 % 4.0 % 1 Prior service cost (credit) for both pension and other postretirement benefits is 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) is amortized using the straight-line method over the remaining life expectancy of those participants. 2 The service cost component of net periodic pension and other postretirement benefits cost (benefit) is included in Operating costs in the Consolidated Statement of Results of Operations. All other components of net periodic pension and other postretirement benefits cost (benefit) are included in Other income (expense) in the Consolidated Statement of Results of Operations. We made $1,064 million and $1,291 million of contributions to our pension and other postretirement plans during the three and nine months ended September 30, 2018 , respectively. The 2018 contributions include a $1.0 billion discretionary contribution made to our U.S. pension plans in September 2018. We currently anticipate full-year 2018 contributions of approximately $1,362 million . We made $324 million and $522 million of contributions to our pension and other postretirement plans during the three and nine months ended September 30, 2017 , 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) 2018 2017 2018 2017 U.S. Plans $ 97 $ 97 $ 247 $ 267 Non-U.S. Plans 21 19 64 54 $ 118 $ 116 $ 311 $ 321 |
Guarantees and Product Warranty
Guarantees and Product Warranty | 9 Months Ended |
Sep. 30, 2018 | |
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. In 2016, we provided a guarantee to an end user related to the performance of contractual obligations by a Caterpillar dealer. Under the guarantee, which expires in 2025, non-performance by the Caterpillar dealer could require Caterpillar to satisfy the contractual obligations by providing goods, services or financial compensation to the end user up to an annual designated cap. 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 guarantees We have provided guarantees to a customer in Brazil and a customer in Europe related to the performance of contractual obligations by supplier consortiums to which our Caterpillar subsidiaries are members. The guarantees cover potential damages incurred by the customers resulting from the supplier consortiums' non-performance. The damages are capped except for failure of the consortiums to meet certain obligations outlined in the contract in the normal course of business. The guarantees will expire when the supplier consortiums perform all their contractual obligations, which are expected to be completed in 2022 for the customer in Europe and 2025 for the customer in Brazil. 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 equity interest in 2015. 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. We have dealer performance guarantees and third party performance guarantees that do not limit potential payment to end users related to indemnities and other commercial contractual obligations. In addition, we have entered into contracts involving industry standard indemnifications that do not limit potential payment. For these unlimited guarantees, we are unable to estimate a maximum potential amount of future payments that could result from claims made. No significant loss has been experienced or is anticipated under any of these guarantees. At both September 30, 2018 and December 31, 2017 , the related liability was $8 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 $ 1,375 $ 1,313 Customer loan guarantees 31 40 Supplier consortium performance guarantees 556 565 Third party logistics business lease guarantees 68 69 Other guarantees 122 118 Total guarantees $ 2,152 $ 2,105 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, 2018 and December 31, 2017 , the SPC’s assets of $1,133 million and $1,107 million , respectively, were primarily comprised of loans to dealers, and the SPC’s liabilities of $1,133 million and $1,106 million , respectively, were 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) 2018 Warranty liability, January 1 $ 1,419 Reduction in liability (payments) (561 ) Increase in liability (new warranties) 556 Warranty liability, September 30 $ 1,414 (Millions of dollars) 2017 Warranty liability, January 1 $ 1,258 Reduction in liability (payments) (860 ) Increase in liability (new warranties) 1,021 Warranty liability, December 31 $ 1,419 |
Profit Per Share
Profit Per Share | 9 Months Ended |
Sep. 30, 2018 | |
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) 2018 2017 2018 2017 Profit for the period (A) 1 $ 1,727 $ 1,059 $ 5,099 $ 2,053 Determination of shares (in millions): Weighted-average number of common shares outstanding (B) 592.1 592.9 595.3 590.3 Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price 7.3 7.2 8.5 6.2 Average common shares outstanding for fully diluted computation (C) 2 599.4 600.1 603.8 596.5 Profit per share of common stock: Assuming no dilution (A/B) $ 2.92 $ 1.79 $ 8.57 $ 3.48 Assuming full dilution (A/C) 2 $ 2.88 $ 1.77 $ 8.45 $ 3.44 Shares outstanding as of September 30 (in millions) 590.1 594.9 1 Profit attributable to common shareholders. 2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method. SARs and stock options to purchase 1,471,071 and 5,136,715 common shares were outstanding for the three and nine months ended September 30, 2018 and 2017 , respectively, which were not included in the computation of diluted earnings per share because the effect would have been 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. During the first quarter of 2018, 3.1 million shares of our common stock were repurchased at an aggregate cost to Caterpillar of $500 million . During the second quarter of 2018, we repurchased $750 million of common stock. In May 2018, we entered into an accelerated stock repurchase agreement (ASR) with a third-party financial institution to purchase shares of our common stock. Pursuant to the terms of the ASR Agreement, 3.3 million shares of our common stock were repurchased at an aggregate cost to Caterpillar of $500 million . In May 2018, we repurchased 1.6 million shares for $250 million in open market transactions. During the third quarter of 2018, we entered into an ASR with a third-party financial institution to purchase $750 million of our common stock. In August 2018, upon payment of $750 million to the financial institution, we received 4.8 million shares. In October 2018, upon final settlement of the ASR, we received an additional 0.4 million shares. In total, we repurchased 5.2 million shares under this ASR. As of September 30, 2018 , approximately $3.5 billion of the 2014 $10.0 billion authorization remained. In July 2018, the Board approved a new share repurchase authorization of up to $10.0 billion of Caterpillar common stock effective January 1, 2019, with no expiration. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2018 | |
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 Shareholders’ 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, 2018 Balance at June 30, 2018 $ (1,432 ) $ 30 $ (78 ) $ (16 ) $ (1,496 ) Other comprehensive income (loss) before reclassifications (65 ) — 32 (1 ) (34 ) Amounts reclassified from accumulated other comprehensive (income) loss — (7 ) (31 ) — (38 ) Other comprehensive income (loss) (65 ) (7 ) 1 (1 ) (72 ) Balance at September 30, 2018 $ (1,497 ) $ 23 $ (77 ) $ (17 ) $ (1,568 ) Three Months Ended September 30, 2017 Balance at June 30, 2017 $ (1,499 ) $ 14 $ (39 ) $ 53 $ (1,471 ) Other comprehensive income (loss) before reclassifications 237 — (4 ) 11 244 Amounts reclassified from accumulated other comprehensive (income) loss 11 (4 ) 11 (24 ) (6 ) Other comprehensive income (loss) 248 (4 ) 7 (13 ) 238 Balance at September 30, 2017 $ (1,251 ) $ 10 $ (32 ) $ 40 $ (1,233 ) (Millions of dollars) Foreign currency translation Pension and other postretirement benefits Derivative financial instruments Available-for-sale securities Total Nine Months Ended September 30, 2018 Balance at December 31, 2017 $ (1,205 ) $ 46 $ (41 ) $ 8 $ (1,192 ) Adjustment to adopt recognition and measurement of financial assets and liabilities guidance 1 — — — (11 ) (11 ) Balance at January 1, 2018 (1,205 ) 46 (41 ) (3 ) (1,203 ) Other comprehensive income (loss) before reclassifications (293 ) (2 ) 73 (14 ) (236 ) Amounts reclassified from accumulated other comprehensive (income) loss 1 (21 ) (109 ) — (129 ) Other comprehensive income (loss) (292 ) (23 ) (36 ) (14 ) (365 ) Balance at September 30, 2018 $ (1,497 ) $ 23 $ (77 ) $ (17 ) $ (1,568 ) Nine Months Ended September 30, 2017 Balance at December 31, 2016 $ (1,970 ) $ 14 $ (115 ) $ 32 $ (2,039 ) Other comprehensive income (loss) before reclassifications 706 8 6 29 749 Amounts reclassified from accumulated other comprehensive (income) loss 13 (12 ) 77 (21 ) 57 Other comprehensive income (loss) 719 (4 ) 83 8 806 Balance at September 30, 2017 $ (1,251 ) $ 10 $ (32 ) $ 40 $ (1,233 ) 1 See Note 2 for additional information. 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) 2018 2017 Foreign currency translation Gain (loss) on foreign currency translation Other income (expense) $ — $ (11 ) Tax (provision) benefit — — Reclassifications net of tax $ — $ (11 ) Pension and other postretirement benefits: Amortization of prior service credit (cost) Other income (expense) $ 9 $ 6 Tax (provision) benefit (2 ) (2 ) Reclassifications net of tax $ 7 $ 4 Derivative financial instruments: Foreign exchange contracts Other income (expense) $ 34 $ (16 ) Foreign exchange contracts Interest expense of Financial Products 5 — Interest rate contracts Interest expense excluding Financial Products — (2 ) Interest rate contracts Interest expense of Financial Products — 2 Reclassifications before tax 39 (16 ) Tax (provision) benefit (8 ) 5 Reclassifications net of tax $ 31 $ (11 ) Available-for-sale securities: Realized gain (loss) Other income (expense) $ — $ 36 Tax (provision) benefit — (12 ) Reclassifications net of tax $ — $ 24 Total reclassifications from Accumulated other comprehensive income (loss) $ 38 $ 6 Nine Months Ended September 30 (Millions of dollars) Classification of income (expense) 2018 2017 Foreign currency translation Gain (loss) on foreign currency translation Other income (expense) $ (1 ) $ (13 ) Tax (provision) benefit — — Reclassifications net of tax $ (1 ) $ (13 ) Pension and other postretirement benefits: Amortization of prior service credit (cost) Other income (expense) $ 26 $ 18 Tax (provision) benefit (5 ) (6 ) Reclassifications net of tax $ 21 $ 12 Derivative financial instruments: Foreign exchange contracts Other income (expense) $ 129 $ (118 ) Foreign exchange contracts Interest expense of Financial Products 13 — Interest rate contracts Interest expense excluding Financial Products (2 ) (5 ) Interest rate contracts Interest expense of Financial Products 1 5 Reclassifications before tax 141 (118 ) Tax (provision) benefit (32 ) 41 Reclassifications net of tax $ 109 $ (77 ) Available-for-sale securities: Realized gain (loss) Other income (expense) $ — $ 32 Tax (provision) benefit — (11 ) Reclassifications net of tax $ — $ 21 Total reclassifications from Accumulated other comprehensive income (loss) $ 129 $ (57 ) |
Environmental and legal matters
Environmental and legal matters | 9 Months Ended |
Sep. 30, 2018 | |
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 its 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 7, 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. On March 2-3, 2017, agents with the Department of Commerce, the Federal Deposit Insurance Corporation and the Internal Revenue Service executed search and seizure warrants at three facilities of the Company in the Peoria, Illinois area, including its former corporate headquarters. The warrants identify, and agents seized, documents and information related to, among other things, the export of products from the United States, the movement of products between the United States and Switzerland, the relationship between Caterpillar Inc. and Caterpillar SARL, and sales outside the United States. It is the Company’s understanding that the warrants, which concern both tax and export activities, are related to the ongoing grand jury investigation. The Company is continuing to cooperate 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 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. 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, intellectual property rights, taxes (other than income taxes) and securities laws. 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, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income taxes The provision for income taxes for the first nine months of 2018 reflected an estimated annual tax rate of 24 percent , compared to 32 percent for the first nine months of 2017 , excluding the discrete items discussed in the following paragraph. The decrease was primarily due to the reduction in the U.S. corporate tax rate beginning January 1, 2018, along with other changes in the geographic mix of profits from a tax perspective. The 2018 provision for income taxes for the first nine months of 2018 also included a $154 million reduction to the provisionally estimated charge of $2.371 billion recognized during the fourth quarter of 2017 due to enactment of U.S. tax reform legislation. The $154 million benefit revises the estimated impact of the write-down of U.S. net deferred tax assets to reflect the reduction in the U.S. corporate tax rate from 35 percent to 21 percent . This benefit primarily related to the decision to make an additional discretionary pension contribution of $1.0 billion to U.S. pension plans in the third quarter of 2018 treated as deductible on the 2017 U.S. tax return. The provision for income taxes for the first nine months of 2018 also includes a charge of $59 million to correct for an error which resulted in an understatement of the valuation allowance offsetting deferred tax assets for prior years. This error had the effect of overstating profit by $17 million , $33 million and $9 million for the years ended December 31, 2017, 2016 and 2015, respectively. Management has concluded that the error was not material to any period presented. In addition, a discrete tax benefit of $52 million was recorded in the first nine months of 2018, compared to $45 million in the first nine months of 2017, for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense. The provision for income taxes for the first nine months of 2018 also included a $25 million benefit for the release of a valuation allowance against the deferred tax assets of a non-U.S. subsidiary. The provision for income taxes for the first nine months of 2017 also included a $15 million increase to prior year taxes related to non-U.S. restructuring costs. Our analysis of U.S. tax reform legislation, updated through September 30, 2018, resulted in no other changes to the 2017 year-end provisional charge. We will continue to update our calculations as additional required information is prepared and analyzed, interpretations and assumptions are refined, and additional guidance is issued. These updates could significantly impact the provision for income taxes, the amount of taxes payable and the deferred tax asset and liability balances. We account for the new U.S. tax on global intangible low-taxed income as a period cost. On January 31, 2018, we received a Revenue Agent's Report from the Internal Revenue Service (IRS) indicating the end of the field examination of our U.S. income tax returns for 2010 to 2012. In the audits of 2007 to 2012 including the impact of a loss carryback to 2005, the IRS has proposed to tax in the United States profits earned from certain parts transactions by Caterpillar SARL, based on the IRS examination team's application of the "substance-over-form" or "assignment-of-income" judicial doctrines. We are vigorously contesting the proposed increases to tax and penalties for these years of approximately $2.3 billion . We believe that the relevant transactions complied with applicable tax laws and did not violate judicial doctrines. We have filed U.S. income tax returns on this same basis for years after 2012. Based on the information currently available, we do not anticipate a significant increase or decrease to our unrecognized tax benefits for this matter within the next 12 months. We currently believe the ultimate disposition of this matter 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, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment information A. Basis for segment information Our Executive Office is comprised of a Chief Executive Officer (CEO), four Group Presidents, a Chief Financial Officer (CFO), a General Counsel & Corporate Secretary and a Chief Human Resources Officer. The Group Presidents and CFO are accountable for a related set of end-to-end businesses that they manage. The General Counsel & Corporate Secretary leads the Law, Security and Public Policy Division. The Chief Human Resources Officer leads the Human Resources Organization. The CEO allocates resources and manages performance at the Group President/CFO level. As such, the CEO serves as our Chief Operating Decision Maker, and operating segments are primarily based on the Group President/CFO 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 the CFO 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 Law, Security and Public Policy Division and the Human Resources Organization are cost centers and do not meet the definition of an operating segment. Segment information for 2017 has been recast due to our adoption of new accounting guidance issued by the FASB related to the presentation of net periodic pension costs and net periodic postretirement benefit costs. Prior service cost (credits) is no longer included in segment profit. See Note 2 for additional information. 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 asphalt pavers, backhoe loaders, compactors, cold planers, compact track and multi-terrain loaders, mini, small, medium and large track excavators, forestry excavators, feller bunchers, harvesters, knuckleboom loaders, motor graders, pipelayers, road reclaimers, site prep tractors, skidders, skid steer loaders, telehandlers, small and medium track-type tractors, track-type loaders, utility vehicles, wheel excavators, compact, small and medium wheel loaders and related parts and work tools. 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 and aggregates, 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, rotary drills, large wheel loaders, off-highway trucks, articulated trucks, wheel tractor scrapers, wheel dozers, landfill compactors, soil compactors, hard rock 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 products and services to provide customers fleet management, 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 Oil and Gas, Power Generation, Industrial and Transportation applications, including marine and rail-related businesses. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support of turbine machinery and integrated systems and solutions 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 alternatives to customers and dealers around the world for Caterpillar products, as well as financing for vehicles, power generation facilities and marine vessels that, in most cases, incorporate Caterpillar products. Financing plans include operating and finance leases, installment sale contracts, working capital loans and wholesale financing plans. The segment also provides insurance and risk management products and services that help customers and dealers manage their business risk. Insurance and risk management products offered include physical damage insurance, inventory protection plans, extended service coverage for machines and engines, and dealer property and casualty insurance. The various forms of financing, insurance and risk management products offered to customers and dealers help support the purchase and lease of our equipment. The segment also earns revenues from Machinery, Energy & Transportation, but the related costs are not allocated to operating segments. All Other operating segments : Primarily includes activities such as: business strategy, product management and development, manufacturing of filters and fluids, undercarriage, ground engaging tools, fluid transfer products, precision seals, rubber sealing and connecting components primarily for Cat products; parts distribution; integrated logistics solutions, 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 reported 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 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 most 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 45 to 51 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, long-lived asset impairments and contract terminations. These costs are included in Other operating (income) expenses except for defined-benefit plan curtailment losses and special termination benefits, which are included in Other income (expense). Restructuring costs also include other exit-related costs primarily for accelerated depreciation, inventory write-downs, equipment relocation and project management costs and LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold. A table, Reconciliation of Restructuring costs on page 48, has been included to illustrate how segment profit would have been impacted by the restructuring costs. See Note 19 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) 2018 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 $ 5,654 $ 29 $ 5,683 $ 93 $ 1,058 $ 5,071 $ 58 Resource Industries 2,538 100 2,638 115 414 6,439 49 Energy & Transportation 4,577 978 5,555 159 973 8,302 161 Machinery, Energy & Transportation $ 12,769 $ 1,107 $ 13,876 $ 367 $ 2,445 $ 19,812 $ 268 Financial Products Segment 845 1 — 845 212 201 35,729 298 Total $ 13,614 $ 1,107 $ 14,721 $ 579 $ 2,646 $ 55,541 $ 566 2017 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 $ 4,854 $ 32 $ 4,886 $ 99 $ 884 $ 4,838 $ 50 Resource Industries 1,870 86 1,956 129 229 6,403 41 Energy & Transportation 3,961 877 4,838 165 743 7,564 113 Machinery, Energy & Transportation $ 10,685 $ 995 $ 11,680 $ 393 $ 1,856 $ 18,805 $ 204 Financial Products Segment 774 1 — 774 204 185 34,893 308 Total $ 11,459 $ 995 $ 12,454 $ 597 $ 2,041 $ 53,698 $ 512 1 Includes revenues from Machinery, Energy & Transportation of $122 million and $93 million in the third quarter of 2018 and 2017, respectively. Reportable Segments Nine Months Ended September 30 (Millions of dollars) 2018 External sales and revenues Inter- segment sales and revenues Total sales and revenues Depreciation and amortization Segment profit Segment Capital expenditures Construction Industries $ 17,450 $ 82 $ 17,532 $ 272 $ 3,329 $ 5,071 $ 162 Resource Industries 7,177 296 7,473 346 1,203 6,439 111 Energy & Transportation 13,567 2,931 16,498 474 2,859 8,302 463 Machinery, Energy & Transportation $ 38,194 $ 3,309 $ 41,503 $ 1,092 $ 7,391 $ 19,812 $ 736 Financial Products Segment 2,467 1 — 2,467 627 476 35,729 1,192 Total $ 40,661 $ 3,309 $ 43,970 $ 1,719 $ 7,867 $ 55,541 $ 1,928 2017 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 $ 13,875 $ 70 $ 13,945 $ 301 $ 2,418 $ 4,838 $ 107 Resource Industries 5,299 254 5,553 386 488 6,403 93 Energy & Transportation 11,258 2,484 13,742 485 1,982 7,564 320 Machinery, Energy & Transportation $ 30,432 $ 2,808 $ 33,240 $ 1,172 $ 4,888 $ 18,805 $ 520 Financial Products Segment 2,310 1 — 2,310 616 559 34,893 1,018 Total $ 32,742 $ 2,808 $ 35,550 $ 1,788 $ 5,447 $ 53,698 $ 1,538 1 Includes revenues from Machinery, Energy & Transportation of $345 million and $281 million through the first three quarters of 2018 and 2017, respectively. For the three and nine months ending September 30, 2018 , sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows: Sales and Revenues by Geographic Region (Millions of dollars) North America Latin America EAME Asia/ Pacific External Sales and Revenues Three Months Ended September 30, 2018 Construction Industries $ 2,646 $ 369 $ 1,109 $ 1,530 $ 5,654 Resource Industries 849 427 574 688 2,538 Energy & Transportation 2,309 330 1,180 758 4,577 All Other operating segments 15 — 4 18 37 Corporate Items and Eliminations (40 ) 1 (5 ) 1 (43 ) Machinery, Energy & Transportation Sales 5,779 1,127 2,862 2,995 12,763 Financial Products Segment 559 68 101 117 845 Corporate Items and Eliminations (62 ) (12 ) (6 ) (18 ) (98 ) Financial Products Revenues 497 56 95 99 747 Consolidated Sales and Revenues $ 6,276 $ 1,183 $ 2,957 $ 3,094 $ 13,510 Nine Months Ended September 30, 2018 Construction Industries $ 8,005 $ 1,105 $ 3,347 $ 4,993 $ 17,450 Resource Industries 2,451 1,181 1,663 1,882 7,177 Energy & Transportation 7,116 897 3,425 2,129 13,567 All Other operating segments 47 1 12 55 115 Corporate Items and Eliminations (108 ) (1 ) (8 ) — (117 ) Machinery, Energy & Transportation Sales 17,511 3,183 8,439 9,059 38,192 Financial Products Segment 1,608 213 303 343 2,467 Corporate Items and Eliminations (168 ) (36 ) (18 ) (57 ) (279 ) Financial Products Revenues 1,440 177 285 286 2,188 Consolidated Sales and Revenues $ 18,951 $ 3,360 $ 8,724 $ 9,345 $ 40,380 For the three and nine months ending September 30, 2018 , Energy & Transportation segment sales by end user application were as follows: Energy & Transportation External Sales (Millions of dollars) Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Oil and gas $ 1,362 $ 4,044 Power generation 1,102 3,063 Industrial 863 2,738 Transportation 1,250 3,722 Energy & Transportation External Sales $ 4,577 $ 13,567 Reconciliation of Sales and revenues: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total Three Months Ended September 30, 2017 Total external sales and revenues from reportable segments $ 10,685 $ 774 $ — $ 11,459 All Other operating segments 56 — — 56 Other (28 ) 19 (93 ) 1 (102 ) Total sales and revenues $ 10,713 $ 793 $ (93 ) $ 11,413 Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total Nine Months Ended September 30, 2017 Total external sales and revenues from reportable segments $ 30,432 $ 2,310 $ — $ 32,742 All Other operating segments 126 — — 126 Other (76 ) 53 (279 ) 1 (302 ) Total sales and revenues $ 30,482 $ 2,363 $ (279 ) $ 32,566 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, 2018 Total profit from reportable segments $ 2,445 $ 201 $ 2,646 All Other operating segments (10 ) — (10 ) Cost centers 29 — 29 Corporate costs (134 ) — (134 ) Timing (18 ) — (18 ) Restructuring costs (96 ) (14 ) (110 ) Methodology differences: Inventory/cost of sales (20 ) — (20 ) Postretirement benefit expense 58 — 58 Stock-based compensation expense (50 ) (2 ) (52 ) Financing costs (56 ) — (56 ) Currency (96 ) — (96 ) Other income/expense methodology differences (88 ) — (88 ) Other methodology differences (19 ) 5 (14 ) Total consolidated profit before taxes $ 1,945 $ 190 $ 2,135 Three Months Ended September 30, 2017 Total profit from reportable segments $ 1,856 $ 185 $ 2,041 All Other operating segments 5 — 5 Cost centers 17 — 17 Corporate costs (158 ) — (158 ) Timing (21 ) — (21 ) Restructuring costs (89 ) (1 ) (90 ) Methodology differences: Inventory/cost of sales (4 ) — (4 ) Postretirement benefit expense 38 — 38 Stock-based compensation expense (46 ) (2 ) (48 ) Financing costs (116 ) — (116 ) Currency (37 ) — (37 ) Other income/expense methodology differences (71 ) — (71 ) Other methodology differences (32 ) (1 ) (33 ) Total consolidated profit before taxes $ 1,342 $ 181 $ 1,523 Reconciliation of Consolidated profit before taxes: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidated Total Nine Months Ended September 30, 2018 Total profit from reportable segments $ 7,391 $ 476 $ 7,867 All Other operating segments 70 — 70 Cost centers 55 — 55 Corporate costs (480 ) — (480 ) Timing (168 ) — (168 ) Restructuring costs (278 ) (15 ) (293 ) Methodology differences: Inventory/cost of sales 3 — 3 Postretirement benefit expense 227 — 227 Stock-based compensation expense (158 ) (6 ) (164 ) Financing costs (203 ) — (203 ) Currency (145 ) — (145 ) Other income/expense methodology differences (261 ) — (261 ) Other methodology differences (61 ) 8 (53 ) Total consolidated profit before taxes $ 5,992 $ 463 $ 6,455 Nine Months Ended September 30, 2017 Total profit from reportable segments $ 4,888 $ 559 $ 5,447 All Other operating segments (28 ) — (28 ) Cost centers 13 — 13 Corporate costs (447 ) — (447 ) Timing (128 ) — (128 ) Restructuring costs (1,009 ) (2 ) (1,011 ) Methodology differences: Inventory/cost of sales (80 ) — (80 ) Postretirement benefit expense 129 — 129 Stock-based compensation expense (158 ) (7 ) (165 ) Financing costs (369 ) — (369 ) Currency (195 ) — (195 ) Other income/expense methodology differences (105 ) — (105 ) Other methodology differences (93 ) 3 (90 ) Total consolidated profit before taxes $ 2,418 $ 553 $ 2,971 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 (loss) Restructuring costs Segment profit (loss) with restructuring costs Three Months Ended September 30, 2018 Construction Industries $ 1,058 $ (19 ) $ 1,039 Resource Industries 414 (53 ) 361 Energy & Transportation 973 (31 ) 942 Financial Products Segment 201 — 201 All Other operating segments (10 ) (4 ) (14 ) Total $ 2,636 $ (107 ) $ 2,529 Three Months Ended September 30, 2017 Construction Industries $ 884 $ (15 ) $ 869 Resource Industries 229 (59 ) 170 Energy & Transportation 743 (28 ) 715 Financial Products Segment 185 — 185 All Other operating segments 5 (13 ) (8 ) Total $ 2,046 $ (115 ) $ 1,931 Reconciliation of Restructuring costs: (Millions of dollars) Segment profit (loss) Restructuring costs Segment profit (loss) with restructuring costs Nine Months Ended September 30, 2018 Construction Industries $ 3,329 $ (62 ) $ 3,267 Resource Industries 1,203 (149 ) 1,054 Energy & Transportation 2,859 (60 ) 2,799 Financial Products Segment 476 (1 ) 475 All Other operating segments 70 (13 ) 57 Total $ 7,937 $ (285 ) $ 7,652 Nine Months Ended September 30, 2017 Construction Industries $ 2,418 $ (709 ) $ 1,709 Resource Industries 488 (229 ) 259 Energy & Transportation 1,982 (86 ) 1,896 Financial Products Segment 559 (2 ) 557 All Other operating segments (28 ) (32 ) (60 ) Total $ 5,419 $ (1,058 ) $ 4,361 Reconciliation of Assets: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total September 30, 2018 Total assets from reportable segments $ 19,812 $ 35,729 $ — $ 55,541 All Other operating segments 1,273 — — 1,273 Items not included in segment assets: Cash and short-term investments 7,189 — — 7,189 Intercompany receivables 1,644 — (1,644 ) — Investment in Financial Products 4,165 — (4,165 ) — Deferred income taxes 1,818 — (628 ) 1,190 Goodwill and intangible assets 4,304 — — 4,304 Property, plant and equipment – net and other assets 2,035 — — 2,035 Operating lease methodology difference (184 ) — — (184 ) Inventory methodology differences (2,374 ) — — (2,374 ) Liabilities included in segment assets 9,814 — — 9,814 Other (510 ) (13 ) (56 ) (579 ) Total assets $ 48,986 $ 35,716 $ (6,493 ) $ 78,209 December 31, 2017 Total assets from reportable segments $ 18,805 $ 34,893 $ — $ 53,698 All Other operating segments 1,312 — — 1,312 Items not included in segment assets: Cash and short-term investments 7,381 — — 7,381 Intercompany receivables 1,733 — (1,733 ) — Investment in Financial Products 4,064 — (4,064 ) — Deferred income taxes 2,166 — (574 ) 1,592 Goodwill and intangible assets 4,210 — — 4,210 Property, plant and equipment – net and other assets 2,341 — — 2,341 Operating lease methodology difference (191 ) — — (191 ) Inventory methodology differences (2,287 ) — — (2,287 ) Liabilities included in segment assets 9,352 — — 9,352 Other (399 ) (14 ) (33 ) (446 ) Total assets $ 48,487 $ 34,879 $ (6,404 ) $ 76,962 Reconciliations of Depreciation and amortization: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidated Total Three Months Ended September 30, 2018 Total depreciation and amortization from reportable segments $ 367 $ 212 $ 579 Items not included in segment depreciation and amortization: All Other operating segments 55 — 55 Cost centers 33 — 33 Other 22 9 31 Total depreciation and amortization $ 477 $ 221 $ 698 Three Months Ended September 30, 2017 Total depreciation and amortization from reportable segments $ 393 $ 204 $ 597 Items not included in segment depreciation and amortization: All Other operating segments 52 — 52 Cost centers 36 — 36 Other 28 10 38 Total depreciation and amortization $ 509 $ 214 $ 723 Reconciliations of Depreciation and amortization: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidated Total Nine Months Ended September 30, 2018 Total depreciation and amortization from reportable segments $ 1,092 $ 627 $ 1,719 Items not included in segment depreciation and amortization: All Other operating segments 170 — 170 Cost centers 96 — 96 Other 52 28 80 Total depreciation and amortization $ 1,410 $ 655 $ 2,065 Nine Months Ended September 30, 2017 Total depreciation and amortization from reportable segments $ 1,172 $ 616 $ 1,788 Items not included in segment depreciation and amortization: All Other operating segments 162 — 162 Cost centers 106 — 106 Other 67 30 97 Total depreciation and amortization $ 1,507 $ 646 $ 2,153 Reconciliations of Capital expenditures: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total Three Months Ended September 30, 2018 Total capital expenditures from reportable segments $ 268 $ 298 $ — $ 566 Items not included in segment capital expenditures: All Other operating segments 63 — — 63 Cost centers 30 — — 30 Timing (5 ) — — (5 ) Other (65 ) 45 (33 ) (53 ) Total capital expenditures $ 291 $ 343 $ (33 ) $ 601 Three Months Ended September 30, 2017 Total capital expenditures from reportable segments $ 204 $ 308 $ — $ 512 Items not included in segment capital expenditures: All Other operating segments 26 — — 26 Cost centers 17 — — 17 Timing (21 ) — — (21 ) Other (31 ) 19 (9 ) (21 ) Total capital expenditures $ 195 $ 327 $ (9 ) $ 513 Reconciliations of Capital expenditures: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total Nine Months Ended September 30, 2018 Total capital expenditures from reportable segments $ 736 $ 1,192 $ — $ 1,928 Items not included in segment capital expenditures: All Other operating segments 101 — — 101 Cost centers 70 — — 70 Timing 152 — — 152 Other (214 ) 165 (73 ) (122 ) Total capital expenditures $ 845 $ 1,357 $ (73 ) $ 2,129 Nine Months Ended September 30, 2017 Total capital expenditures from reportable segments $ 520 $ 1,018 $ — $ 1,538 Items not included in segment capital expenditures: All Other operating segments 71 — — 71 Cost centers 40 — — 40 Timing 58 — — 58 Other (115 ) 62 (17 ) (70 ) Total capital expenditures $ 574 $ 1,080 $ (17 ) $ 1,637 |
Cat Financial Financing Activit
Cat Financial Financing Activities | 9 Months Ended |
Sep. 30, 2018 | |
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 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 on the present value of expected future cash flows discounted at the receivables' effective interest rate, the fair value of the collateral for collateral-dependent receivables or the observable market price of the receivable. 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 - Finance receivables originated in the United States or Canada. • Europe - Finance receivables originated in Europe, Africa, the Middle East and the Commonwealth of Independent States. • Asia Pacific - Finance receivables originated in Australia, New Zealand, China, Japan and Southeast Asia. • Mining - Finance receivables related to large mining customers worldwide and project financing in various countries. • Latin America - Finance receivables originated in Mexico, and Central and South American countries. • Caterpillar Power Finance - Finance receivables originated worldwide related to marine vessels with Caterpillar engines and Caterpillar electrical power generation, gas compression and co-generation systems and non-Caterpillar equipment that is powered by these systems. An analysis of the allowance for credit losses was as follows: (Millions of dollars) September 30, 2018 Allowance for Credit Losses: Customer Dealer Total Balance at beginning of year $ 353 $ 9 $ 362 Receivables written off (181 ) — (181 ) Recoveries on receivables previously written off 31 — 31 Provision for credit losses 216 (2 ) 214 Other (14 ) — (14 ) Balance at end of period $ 405 $ 7 $ 412 Individually evaluated for impairment $ 229 $ — $ 229 Collectively evaluated for impairment 176 7 183 Ending Balance $ 405 $ 7 $ 412 Recorded Investment in Finance Receivables: Individually evaluated for impairment $ 802 $ — $ 802 Collectively evaluated for impairment 18,193 3,467 21,660 Ending Balance $ 18,995 $ 3,467 $ 22,462 (Millions of dollars) December 31, 2017 Allowance for Credit Losses: Customer Dealer Total Balance at beginning of year $ 331 $ 10 $ 341 Receivables written off (157 ) — (157 ) Recoveries on receivables previously written off 43 — 43 Provision for credit losses 129 (1 ) 128 Other 7 — 7 Balance at end of year $ 353 $ 9 $ 362 Individually evaluated for impairment $ 149 $ — $ 149 Collectively evaluated for impairment 204 9 213 Ending Balance $ 353 $ 9 $ 362 Recorded Investment in Finance Receivables: Individually evaluated for impairment $ 942 $ — $ 942 Collectively evaluated for impairment 18,226 3,464 21,690 Ending Balance $ 19,168 $ 3,464 $ 22,632 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 recorded investment in finance receivables past due when any installment is over 30 days past due. The tables below summarize the recorded investment in finance receivables by aging category. September 30, 2018 (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 $ 74 $ 17 $ 46 $ 137 $ 7,834 $ 7,971 $ 7 Europe 19 9 122 150 2,848 2,998 6 Asia Pacific 30 14 8 52 2,399 2,451 5 Mining 5 — 9 14 1,623 1,637 — Latin America 35 15 84 134 1,380 1,514 — Caterpillar Power Finance 116 45 298 459 1,965 2,424 8 Dealer North America — — — — 1,978 1,978 — Europe — — — — 321 321 — Asia Pacific — — — — 473 473 — Mining — — — — 4 4 — Latin America — — 79 79 610 689 — Caterpillar Power Finance — — — — 2 2 — Total $ 279 $ 100 $ 646 $ 1,025 $ 21,437 $ 22,462 $ 26 December 31, 2017 (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 $ 71 $ 15 $ 42 $ 128 $ 7,950 $ 8,078 $ 8 Europe 21 10 46 77 2,718 2,795 13 Asia Pacific 13 7 14 34 2,009 2,043 5 Mining 3 1 60 64 1,751 1,815 9 Latin America 37 55 142 234 1,531 1,765 — Caterpillar Power Finance 20 32 144 196 2,476 2,672 1 Dealer North America — — — — 1,920 1,920 — Europe — — — — 222 222 — Asia Pacific — — — — 553 553 — Mining — — — — 4 4 — Latin America — 72 — 72 691 763 — Caterpillar Power Finance — — — — 2 2 — Total $ 165 $ 192 $ 448 $ 805 $ 21,827 $ 22,632 $ 36 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, 2018 or December 31, 2017 , 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, 2018 December 31, 2017 (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 $ 17 $ 17 $ — $ 19 $ 19 $ — Europe 2 1 — 45 45 — Asia Pacific 28 28 — 34 33 — Mining 34 34 — 121 121 — Latin America 31 31 — 45 45 — Caterpillar Power Finance 61 74 — 160 172 — Total $ 173 $ 185 $ — $ 424 $ 435 $ — Impaired Finance Receivables With An Allowance Recorded North America $ 41 $ 39 $ 18 $ 44 $ 43 $ 17 Europe 66 66 36 9 8 5 Asia Pacific 2 2 1 8 8 2 Mining 58 58 22 — — — Latin America 61 61 34 95 106 42 Caterpillar Power Finance 401 408 118 362 365 83 Total $ 629 $ 634 $ 229 $ 518 $ 530 $ 149 Total Impaired Finance Receivables North America $ 58 $ 56 $ 18 $ 63 $ 62 $ 17 Europe 68 67 36 54 53 5 Asia Pacific 30 30 1 42 41 2 Mining 92 92 22 121 121 — Latin America 92 92 34 140 151 42 Caterpillar Power Finance 462 482 118 522 537 83 Total $ 802 $ 819 $ 229 $ 942 $ 965 $ 149 Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 (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 $ — $ 14 $ 1 Europe 4 — 47 — Asia Pacific 29 1 30 1 Mining 35 — 128 1 Latin America 37 1 68 1 Caterpillar Power Finance 94 2 171 1 Total $ 218 $ 4 $ 458 $ 5 Impaired Finance Receivables With An Allowance Recorded North America $ 47 $ — $ 44 $ — Europe 59 — 6 — Asia Pacific 2 — 28 1 Mining 60 1 — — Latin America 51 1 102 1 Caterpillar Power Finance 374 4 251 3 Total $ 593 $ 6 $ 431 $ 5 Total Impaired Finance Receivables North America $ 66 $ — $ 58 $ 1 Europe 63 — 53 — Asia Pacific 31 1 58 2 Mining 95 1 128 1 Latin America 88 2 170 2 Caterpillar Power Finance 468 6 422 4 Total $ 811 $ 10 $ 889 $ 10 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 (Millions of dollars) Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Impaired Finance Receivables With No Allowance Recorded Customer North America $ 17 $ 1 $ 12 $ 1 Europe 17 — 48 1 Asia Pacific 30 2 22 2 Mining 65 2 128 5 Latin America 41 2 69 2 Caterpillar Power Finance 149 5 233 7 Total $ 319 $ 12 $ 512 $ 18 Impaired Finance Receivables With An Allowance Recorded Customer North America $ 51 $ 1 $ 52 $ 1 Europe 41 1 6 — Asia Pacific 4 — 35 2 Mining 43 2 — — Latin America 69 3 101 3 Caterpillar Power Finance 364 8 141 4 Total $ 572 $ 15 $ 335 $ 10 Total Impaired Finance Receivables Customer North America $ 68 $ 2 $ 64 $ 2 Europe 58 1 54 1 Asia Pacific 34 2 57 4 Mining 108 4 128 5 Latin America 110 5 170 5 Caterpillar Power Finance 513 13 374 11 Total $ 891 $ 27 $ 847 $ 28 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, 2018 , there were finance receivables on non-accrual status for the Dealer portfolio segment of $79 million , all of which were in the Latin America finance receivable class. As of December 31, 2017 , 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, 2018 December 31, 2017 North America $ 44 $ 38 Europe 124 37 Asia Pacific 4 10 Mining 10 63 Latin America 118 192 Caterpillar Power Finance 451 343 Total $ 751 $ 683 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, 2018 and December 31, 2017 , there were no 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 or nine months ended September 30, 2018 or 2017 for the Dealer portfolio segment. Cat Financial's investment in finance receivables in the Customer portfolio segment modified as TDRs during the three and nine months ended September 30, 2018 and 2017 , were as follows: Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 (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 4 $ — $ — 11 $ 4 $ 5 Europe — — — 1 — — Latin America — — — 3 21 22 Caterpillar Power Finance 2 40 40 5 51 44 Total 6 $ 40 $ 40 20 $ 76 $ 71 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Number of Contracts Pre-TDR Outstanding Recorded Investment Post-TDR Outstanding Recorded Investment Number of Contracts Pre-TDR Outstanding Recorded Investment Post-TDR Outstanding Recorded Investment North America 34 $ 13 $ 13 37 $ 13 $ 13 Europe — — — 2 — — Asia Pacific — — — 6 39 30 Mining 1 29 29 2 57 56 Latin America 1 3 3 17 26 27 Caterpillar Power Finance 1 7 93 60 59 319 305 Total 43 $ 138 $ 105 123 $ 454 $ 431 1 In Caterpillar Power Finance, during the nine months ended September 30, 2017, 44 contracts with a pre-TDR recorded investment of $200 million and a post-TDR recorded investment of $200 million were related to four customers. TDRs in the Customer portfolio segment with a payment default (defined as 91+ days past due) which had been modified within twelve months prior to the default date, were as follows: Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 (Millions of dollars) Number of Contracts Post-TDR Recorded Investment Number of Contracts Post-TDR Recorded Investment Customer North America 7 $ 9 — $ — Latin America 1 — 1 — Caterpillar Power Finance 3 33 — — Total 11 $ 42 1 $ — Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Number of Contracts Post-TDR Recorded Investment Number of Contracts Post-TDR Recorded Investment Customer North America 10 $ 10 — $ — Latin America 3 1 241 16 Caterpillar Power Finance 3 33 — — Total 16 $ 44 241 $ 16 |
Fair Value Disclosures
Fair Value Disclosures | 9 Months Ended |
Sep. 30, 2018 | |
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 We have investments in certain debt and equity securities, primarily at Insurance Services, that are 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. Beginning January 1, 2018, we adopted new accounting guidance issued by the FASB which results in the fair value of the REIT no longer being classified within the fair value hierarchy. Prior to January 1, 2018, the fair value was classified as Level 3. 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, 2018 and December 31, 2017 are summarized below: September 30, 2018 (Millions of dollars) Level 1 Level 2 Level 3 Measured at NAV Total Assets / Liabilities, at Fair Value Assets Debt securities Government debt U.S. treasury bonds $ 9 $ — $ — $ — $ 9 Other U.S. and non-U.S. government bonds — 48 — — 48 Corporate bonds Corporate bonds — 710 — — 710 Asset-backed securities — 61 — — 61 Mortgage-backed debt securities U.S. governmental agency — 290 — — 290 Residential — 7 — — 7 Commercial — 14 — — 14 Total debt securities 9 1,130 — — 1,139 Equity securities Large capitalization value 298 — — — 298 Smaller company growth 65 — — — 65 REIT — — — 117 117 Total equity securities 363 — — 117 480 Derivative financial instruments, net — 22 — — 22 Total assets $ 372 $ 1,152 $ — $ 117 $ 1,641 December 31, 2017 (Millions of dollars) Level 1 Level 2 Level 3 Total Assets / Liabilities, at Fair Value Assets Debt securities Government debt U.S. treasury bonds $ 10 $ — $ — $ 10 Other U.S. and non-U.S. government bonds — 42 — 42 Corporate bonds Corporate bonds — 584 — 584 Asset-backed securities — 67 — 67 Mortgage-backed debt securities U.S. governmental agency — 261 — 261 Residential — 8 — 8 Commercial — 17 — 17 Total debt securities 10 979 — 989 Equity securities Large capitalization value 284 — — 284 Smaller company growth 56 — — 56 REIT — — 110 110 Total equity securities 340 — 110 450 Total assets $ 350 $ 979 $ 110 $ 1,439 Liabilities Derivative financial instruments, net $ — $ 19 $ — $ 19 Total liabilities $ — $ 19 $ — $ 19 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, the fair value of the collateral for collateral-dependent receivables, or the observable market price of the receivable. 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 $366 million and $341 million as of September 30, 2018 and December 31, 2017 , 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, 2018 December 31, 2017 (Millions of dollars) Carrying Amount Fair Value Carrying Amount Fair Value Fair Value Levels Reference Assets Cash and short-term investments $ 8,007 $ 8,007 $ 8,261 $ 8,261 1 Restricted cash and short-term investments $ 39 $ 39 $ 194 $ 194 1 Investments in debt and equity securities $ 1,619 $ 1,619 $ 1,439 $ 1,439 1, 2 & 3 Note 8 Finance receivables – net (excluding finance leases 1 ) $ 14,815 $ 14,764 $ 15,452 $ 15,438 3 Note 16 Wholesale inventory receivables – net (excluding finance leases 1 ) $ 1,194 $ 1,168 $ 1,153 $ 1,123 3 Foreign currency contracts – net $ 13 $ 13 $ — $ — 2 Note 5 Interest rate contracts – net $ 7 $ 7 $ 1 $ 1 2 Note 5 Commodity contracts – net $ 2 $ 2 $ 21 $ 21 2 Note 5 Liabilities Short-term borrowings $ 4,521 $ 4,521 $ 4,837 $ 4,837 1 Long-term debt (including amounts due within one year) Machinery, Energy & Transportation $ 8,001 $ 9,155 $ 7,935 $ 9,863 2 Financial Products $ 23,251 $ 23,110 $ 22,106 $ 22,230 2 Foreign currency contracts – net $ — $ — $ 41 $ 41 2 Note 5 Guarantees $ 8 $ 8 $ 8 $ 8 3 Note 10 1 Total excluded items have a net carrying value at September 30, 2018 and December 31, 2017 of $7,481 million and $7,063 million , respectively. |
Other Income (expense)
Other Income (expense) | 9 Months Ended |
Sep. 30, 2018 | |
Other Income (expense) [Abstract] | |
Other income (expense) | Other income (expense) Three Months Ended Nine Months Ended September 30 (Millions of dollars) 2018 2017 2018 2017 Investment and interest income $ 59 $ 32 $ 139 $ 86 Foreign exchange gains (losses) 1 (81 ) (29 ) (160 ) (189 ) License fee income 29 27 96 74 Gain on sale of securities and affiliated company 4 36 4 121 2 Net periodic pension and OPEB income (cost), excluding service cost 85 68 257 172 Miscellaneous income (loss) 6 (2 ) 14 (4 ) Total $ 102 $ 132 $ 350 $ 260 1 Includes gains (losses) from foreign exchange derivative contracts. See Note 5 for further details. 2 Includes pretax gain of $85 million related to the sale of Caterpillar's equity interest in Iron Planet Holdings Inc. |
Restructuring Costs
Restructuring Costs | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 and 2017 were as follows: (Millions of dollars) Three Months Ended September 30 2018 2017 Employee separations 1 $ 44 $ 8 Contract terminations 1 — 6 Long-lived asset impairments 1 18 31 Other 2 48 45 Total restructuring costs $ 110 $ 90 Nine Months Ended September 30 2018 2017 Employee separations 1 $ 121 $ 514 Contract terminations 1 — 32 Long-lived asset impairments 1 49 306 Defined benefit plan curtailments and termination benefits 3 — 29 Other 2 123 130 Total restructuring costs $ 293 $ 1,011 1 Recognized in Other operating (income) expenses. 2 Represents costs related to our restructuring programs, primarily for accelerated depreciation, project management costs, equipment relocation, inventory write-downs and LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold. 3 Recognized in Other income (expense). For the nine months ended September 30, 2018, the restructuring costs were primarily related to ongoing facility closures across the company. Restructuring costs of $649 million for the nine months ended September 30, 2017, were related to the closure of the facility in Gosselies, Belgium, within Construction Industries. The remaining restructuring costs for the first nine months of 2017 were primarily related to restructuring actions in Resource Industries. 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 2017 and 2018 employee separation activity: (Millions of dollars) Liability balance at December 31, 2016 $ 147 Increase in liability (separation charges) 525 Reduction in liability (payments) (423 ) Liability balance at December 31, 2017 $ 249 Increase in liability (separation charges) 121 Reduction in liability (payments) (233 ) Liability balance at September 30, 2018 $ 137 Most of the liability balance at September 30, 2018 is expected to be paid in 2018 and 2019. About one-third of this balance is for employee separation payments related to closure of the Gosselies, Belgium, facility. In March 2017, Caterpillar informed Belgian authorities of the decision to proceed to a collective dismissal, which led to the closure of the Gosselies site, impacting about 2,000 employees. Production of Caterpillar products at the Gosselies site ended during the second quarter of 2017. The other operations and functions at the Gosselies site were phased out by the end of the second quarter of 2018. We estimate restructuring costs incurred under this program to be about $675 million . In the first nine months of 2018 , we incurred $11 million of restructuring costs, and we incurred $653 million in 2017 for a total of $664 million through September 30, 2018. We expect to recognize the remaining costs in 2018. In September 2015, we announced a large scale restructuring plan (the Plan) including a voluntary retirement enhancement program for qualifying U.S. employees, several voluntary separation programs outside of the U.S., additional involuntary programs throughout the company and manufacturing facility consolidations and closures expected to occur through 2018. The largest action among those included in the Plan was related to our European manufacturing footprint, which led to the Gosselies, Belgium, facility closure as discussed above. In the first nine months of 2018 , we incurred $109 million of restructuring costs related to the Plan, and we have incurred $1,776 million related to the Plan through September 30, 2018 . We expect to recognize approximately $50 million of additional restructuring costs related to the Plan in 2018 . |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2018 | |
Acquisitions [Abstract] | |
Acquisitions | Acquisitions ECM S.p.A. On January 2, 2018, we acquired 100 percent of the equity in privately held ECM S.p.A. (ECM). Headquartered in Pistoia, Italy, ECM designs, manufactures, sells and services advanced signal systems for the rail industry. The ECM acquisition was executed to expand our presence in the international freight and transit industries through a combination of broad product offerings and strong reputation in the signaling market. The purchase price for the acquisition was $225 million , consisting of $249 million paid at closing, net of $25 million of cash acquired and $1 million of debt assumed. The transaction was financed with available cash. Tangible assets as of the acquisition date were $109 million , recorded at their fair values, and primarily included cash of $25 million , receivables of $28 million , inventories of $29 million , and property, plant and equipment of $17 million . Finite-lived intangible assets acquired of $112 million included customer relationships, developed technology and trade names. The finite lived intangible assets are being amortized on a straight-line basis over a weighted-average amortization period of approximately 13 years . Liabilities assumed as of the acquisition date were $79 million , recorded at their fair values, and primarily included accounts payable of $38 million and net deferred tax liabilities of $29 million . Goodwill of $109 million , non-deductible for income tax purposes, represented the excess of the consideration transferred over the net assets recognized and represented the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Factors that contributed to a purchase price resulting in the recognition of goodwill include ECM’s strategic fit into our rail product portfolio, the opportunity to provide a complete line-up of signaling and train control systems and the acquired assembled workforce. These values represent a preliminary allocation of purchase price subject to finalization of post-closing procedures. The results of the acquired business for the period from the acquisition date are included in the accompanying consolidated financial statements and reported in the Energy & Transportation segment in Note 15. Assuming this transaction had been made at the beginning of any period presented, the consolidated pro forma results would not be materially different from reported results. Downer Freight Rail On January 2, 2018, we completed the acquisition of certain assets and liabilities of the Downer Freight Rail business (Downer Freight Rail). Headquartered in North Ryde, Australia, Downer Freight Rail provides a full suite of rolling stock, aftermarket parts and services throughout Australia. The acquisition was executed to strengthen our existing Rail footprint in Australia, which currently includes rolling stock maintenance facilities, as well as infrastructure and signaling facilities. The purchase price for the acquisition was $99 million . The transaction was financed with available cash. Tangible assets as of the acquisition date were $92 million , recorded at their fair values, and primarily included receivables of $26 million , inventories of $42 million , and property, plant and equipment of $17 million . Finite-lived customer relationship intangible assets acquired were $5 million . The finite lived intangible assets are being amortized on a straight-line basis over an amortization period of 15 years . Liabilities assumed as of the acquisition date were $10 million , which represented their fair values. Goodwill of $12 million , not expected to be deducted for income tax purposes, represented the excess of the consideration transferred over the net assets recognized and represented the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Factors that contributed to a purchase price resulting in the recognition of goodwill include Downer Freight Rail’s strategic fit into our rail product portfolio, the opportunity to expand our aftermarket parts and maintenance service portfolio in Australia and the acquired assembled workforce. These values represent a preliminary allocation of purchase price subject to finalization of post-closing procedures. The results of the acquired business for the period from the acquisition date are included in the accompanying consolidated financial statements and reported in the Energy & Transportation segment in Note 15. Assuming this transaction had been made at the beginning of any period presented, the consolidated pro forma results would not be materially different from reported results. |
Derivative Financial Instrume_2
Derivative Financial Instruments and Risk Management (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 , 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, Indian rupee, Japanese yen, Mexican peso, Singapore dollar 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, 2018 , $33 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 and option 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. 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. 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 o_2
Nature of Operations, Basis of Presentation and Change in Accounting Principle (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 December 31, 2017 Receivables - trade and other $ 29 $ 34 Receivables - finance 47 42 Long-term receivables - finance 26 38 Investments in unconsolidated affiliated companies 30 39 Guarantees 1 — 259 Total $ 132 $ 412 1 Related contract was terminated during the first quarter of 2018. No payments were made under the guarantee. |
New Accounting Guidance (Tables
New Accounting Guidance (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
New Accounting Pronouncements | |
Schedule of New Accounting Guidance | The adoption primarily resulted in the reclassification of other components of net periodic benefit cost outside of Operating profit in the Consolidated Statement of Results of Operations. Consolidated Statement of Results of Operations Three Months Ended September 30, 2017 (Millions of dollars) As Revised Previously Reported Effect of Change Cost of goods sold $ 7,678 $ 7,633 $ 45 Selling, general and administrative expenses $ 1,254 $ 1,237 $ 17 Research and development expenses $ 461 $ 455 $ 6 Total operating costs $ 9,904 $ 9,836 $ 68 Operating profit $ 1,509 $ 1,577 $ (68 ) Other income (expense) $ 132 $ 64 $ 68 Nine Months Ended September 30, 2017 As Revised Previously Reported Effect of Change Cost of goods sold $ 22,295 $ 22,160 $ 135 Selling, general and administrative expenses $ 3,619 $ 3,571 $ 48 Research and development expenses $ 1,344 $ 1,326 $ 18 Other operating (income) expenses $ 1,751 $ 1,780 $ (29 ) Total operating costs $ 29,493 $ 29,321 $ 172 Operating profit $ 3,073 $ 3,245 $ (172 ) Other income (expense) $ 260 $ 88 $ 172 The cumulative effect of initially applying the new revenue recognition guidance to our consolidated financial statements on January 1, 2018 was as follows: Consolidated Statement of Financial Position (Millions of dollars) Balance as of December 31, 2017 Cumulative Impact from Adopting New Revenue Guidance Balance as of January 1, 2018 Assets Receivables - trade and other $ 7,436 $ (66 ) $ 7,370 Prepaid expenses and other current assets $ 1,772 $ 327 $ 2,099 Inventories $ 10,018 $ 4 $ 10,022 Property, plant and equipment - net $ 14,155 $ (190 ) $ 13,965 Noncurrent deferred and refundable income taxes $ 1,693 $ 2 $ 1,695 Liabilities Accrued expenses $ 3,220 $ 226 $ 3,446 Customer advances $ 1,426 $ 46 $ 1,472 Other current liabilities $ 1,742 $ (17 ) $ 1,725 Other liabilities $ 4,053 $ (166 ) $ 3,887 Shareholders' equity Profit employed in the business $ 26,301 $ (12 ) $ 26,289 The impact from adopting the new revenue recognition guidance on our consolidated financial statements was as follows: Consolidated Statement of Results of Operations Three Months Ended September 30, 2018 As Reported Previous Accounting Guidance Impact from Adopting New Revenue Guidance (Millions of dollars) Sales of Machinery, Energy & Transportation $ 12,763 $ 12,719 $ 44 Cost of goods sold $ 9,022 $ 8,997 $ 25 Operating profit $ 2,135 $ 2,116 $ 19 Consolidated profit before taxes $ 2,135 $ 2,116 $ 19 Provision (benefit) for income taxes $ 415 $ 411 $ 4 Profit of consolidated companies $ 1,720 $ 1,705 $ 15 Profit of consolidated and affiliated companies $ 1,727 $ 1,712 $ 15 Profit $ 1,727 $ 1,712 $ 15 Consolidated Statement of Results of Operations Nine Months Ended September 30, 2018 As Reported Previous Accounting Guidance Impact from Adopting New Revenue Guidance (Millions of dollars) Sales of Machinery, Energy & Transportation $ 38,192 $ 38,194 $ (2 ) Cost of goods sold $ 27,010 $ 27,020 $ (10 ) Other operating (income) expenses $ 1,028 $ 1,034 $ (6 ) Operating profit $ 6,410 $ 6,396 $ 14 Consolidated profit before taxes $ 6,455 $ 6,441 $ 14 Provision (benefit) for income taxes $ 1,377 $ 1,374 $ 3 Profit of consolidated companies $ 5,078 $ 5,067 $ 11 Profit of consolidated and affiliated companies $ 5,099 $ 5,088 $ 11 Profit $ 5,099 $ 5,088 $ 11 Consolidated Statement of Financial Position September 30, 2018 As Reported Previous Accounting Guidance Impact from Adopting New Revenue Guidance (Millions of dollars) Assets Receivables - trade and other $ 7,974 $ 8,011 $ (37 ) Prepaid expenses and other current assets $ 1,835 $ 1,502 $ 333 Inventories $ 11,814 $ 11,807 $ 7 Noncurrent deferred and refundable income taxes $ 1,288 $ 1,289 $ (1 ) Liabilities Accrued expenses $ 3,423 $ 3,203 $ 220 Customer advances $ 1,491 $ 1,408 $ 83 Shareholders' equity Profit employed in the business $ 30,384 $ 30,385 $ (1 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 and 2017 , respectively: Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 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 1,605,220 $ 46.11 $ 150.90 2,701,644 $ 25.01 $ 95.66 RSUs 722,521 $ 150.64 $ 150.64 924,421 $ 90.11 $ 96.01 PRSUs 344,866 $ 150.93 $ 150.93 437,385 $ 86.78 $ 95.66 |
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, 2018 and 2017 , respectively: Grant Year 2018 2017 Weighted-average dividend yield 2.70 % 3.42 % Weighted-average volatility 30.2 % 29.2 % Range of volatilities 21.5-33.0% 22.1-33.0% Range of risk-free interest rates 2.02-2.87% 0.81-2.35% Weighted-average expected lives 8 years 8 years |
Derivative Financial Instrume_3
Derivative Financial Instruments and Risk Management (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 December 31, 2017 Designated derivatives Foreign exchange contracts Machinery, Energy & Transportation Receivables – trade and other $ 4 $ 8 Machinery, Energy & Transportation Long-term receivables – trade and other — 4 Machinery, Energy & Transportation Accrued expenses (46 ) (14 ) Machinery, Energy & Transportation Other liabilities (6 ) (2 ) Financial Products Receivables – trade and other 50 — Financial Products Long-term receivables – trade and other 31 7 Financial Products Accrued expenses (17 ) (57 ) Interest rate contracts Financial Products Receivables – trade and other 1 — Financial Products Long-term receivables – trade and other 9 3 Financial Products Accrued expenses (3 ) (2 ) $ 23 $ (53 ) Undesignated derivatives Foreign exchange contracts Machinery, Energy & Transportation Receivables – trade and other $ 4 $ 19 Machinery, Energy & Transportation Accrued expenses (37 ) (9 ) Financial Products Receivables – trade and other 42 12 Financial Products Long-term receivables – trade and other 7 — Financial Products Accrued expenses (19 ) (9 ) Commodity contracts Machinery, Energy & Transportation Receivables – trade and other 10 21 Machinery, Energy & Transportation Accrued expenses (8 ) — $ (1 ) $ 34 |
Total notional amounts of derivative instruments | The total notional amounts of the derivative instruments are as follows: (Millions of dollars) September 30, 2018 December 31, 2017 Machinery, Energy & Transportation $ 2,129 $ 3,190 Financial Products $ 7,517 $ 3,691 |
Effect of derivatives designated as hedging instruments on Consolidated Statement of Results of Operations | Cash Flow Hedges Three Months Ended September 30, 2018 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 $ (15 ) Other income (expense) $ (17 ) $ — Financial Products 53 Other income (expense) 51 — Financial Products — Interest expense of Financial Products 5 — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products — — Financial Products 3 Interest expense of Financial Products — — $ 41 $ 39 $ — Three Months Ended September 30, 2017 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 $ 16 Other income (expense) $ 4 $ — Financial Products (21 ) Other income (expense) (20 ) — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products (2 ) — Financial Products (1 ) Interest expense of Financial Products 2 — $ (6 ) $ (16 ) $ — Nine Months Ended September 30, 2018 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 $ (55 ) Other income (expense) $ (12 ) $ — Financial Products 143 Other income (expense) 141 — Financial Products — Interest expense of Financial Products 13 — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products (2 ) — Financial Products 8 Interest expense of Financial Products 1 — $ 96 $ 141 $ — Nine Months Ended September 30, 2017 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 $ 72 Other income (expense) $ (49 ) $ — Financial Products (62 ) Other income (expense) (69 ) — Interest rate contracts Machinery, Energy & Transportation — Interest expense excluding Financial Products (5 ) — Financial Products (1 ) Interest expense of Financial Products 5 — $ 9 $ (118 ) $ — |
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 September 30, 2018 Three Months Ended September 30, 2017 Foreign exchange contracts Machinery, Energy & Transportation Other income (expense) $ (5 ) $ 15 Financial Products Other income (expense) 13 11 Commodity contracts Machinery, Energy & Transportation Other income (expense) (5 ) 11 $ 3 $ 37 Classification of Gains (Losses) Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Foreign exchange contracts Machinery, Energy & Transportation Other income (expense) $ (43 ) $ 67 Financial Products Other income (expense) 29 21 Commodity contracts Machinery, Energy & Transportation Other income (expense) (5 ) 12 $ (19 ) $ 100 |
Effect of net settlement provisions of the master netting agreements on derivative assets | December 31, 2017 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 $ 52 $ — $ 52 $ (22 ) $ — $ 30 Financial Products 22 — 22 (10 ) — 12 Total $ 74 $ — $ 74 $ (32 ) $ — $ 42 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, 2018 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 $ 18 $ — $ 18 $ (18 ) $ — $ — Financial Products 140 — 140 (31 ) — 109 Total $ 158 $ — $ 158 $ (49 ) $ — $ 109 |
Effect of net settlement provisions of the master netting agreements on derivative liabilities | September 30, 2018 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 $ (97 ) $ — $ (97 ) $ 18 $ — $ (79 ) Financial Products (39 ) — (39 ) 31 — (8 ) Total $ (136 ) $ — $ (136 ) $ 49 $ — $ (87 ) December 31, 2017 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 $ (25 ) $ — $ (25 ) $ 22 $ — $ (3 ) Financial Products (68 ) — (68 ) 10 — (58 ) Total $ (93 ) $ — $ (93 ) $ 32 $ — $ (61 ) |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 $ 3,413 $ 2,802 Work-in-process 2,764 2,254 Finished goods 5,425 4,761 Supplies 212 201 Total inventories $ 11,814 $ 10,018 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets | Intangible assets are comprised of the following: September 30, 2018 (Millions of dollars) Weighted Amortizable Life (Years) Gross Carrying Amount Accumulated Amortization Net Customer relationships 15 $ 2,462 $ (1,212 ) $ 1,250 Intellectual property 12 1,562 (933 ) 629 Other 13 198 (101 ) 97 Total finite-lived intangible assets 14 $ 4,222 $ (2,246 ) $ 1,976 December 31, 2017 Weighted Amortizable Life (Years) Gross Carrying Amount Accumulated Amortization Net Customer relationships 15 $ 2,441 $ (1,122 ) $ 1,319 Intellectual property 11 1,538 (851 ) 687 Other 13 198 (93 ) 105 Total finite-lived intangible assets 14 $ 4,177 $ (2,066 ) $ 2,111 |
Expected amortization expense related to intangible assets | Amortization expense related to intangible assets is expected to be: (Millions of dollars) Remaining Three Months of 2018 2019 2020 2021 2022 Thereafter $84 $326 $311 $293 $274 $688 |
Goodwill acquired | The changes in carrying amount of goodwill by reportable segment for the nine months ended September 30, 2018 were as follows: (Millions of dollars) December 31, Acquisitions 1 Other Adjustments 2 September 30, Construction Industries Goodwill $ 305 $ — $ — $ 305 Impairments (22 ) — — (22 ) Net goodwill 283 — — 283 Resource Industries Goodwill 4,232 — (46 ) 4,186 Impairments (1,175 ) — — (1,175 ) Net goodwill 3,057 — (46 ) 3,011 Energy & Transportation Goodwill 2,806 121 (44 ) 2,883 All Other 3 Goodwill 54 — 2 56 Consolidated total Goodwill 7,397 121 (88 ) 7,430 Impairments (1,197 ) — — (1,197 ) Net goodwill $ 6,200 $ 121 $ (88 ) $ 6,233 1 See Note 20 for additional details. 2 Other adjustments are comprised primarily of foreign currency translation. 3 Includes All Other operating segments (See Note 15). |
Investments in Debt and Equit_2
Investments in Debt and Equity Securities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 with unrealized gains and losses included in equity (Accumulated other comprehensive income (loss) in the Consolidated Statement of Financial Position) were as follows: September 30, 2018 December 31, 2017 (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 $ 9 $ — $ 9 $ 10 $ — $ 10 Other U.S. and non-U.S. government bonds 48 — 48 42 — 42 Corporate bonds Corporate bonds 721 (11 ) 710 585 (1 ) 584 Asset-backed securities 61 — 61 67 — 67 Mortgage-backed debt securities U.S. governmental agency 300 (10 ) 290 265 (4 ) 261 Residential 7 — 7 8 — 8 Commercial 15 (1 ) 14 17 — 17 Total debt securities $ 1,161 $ (22 ) $ 1,139 $ 994 $ (5 ) $ 989 Equity securities 1 Large capitalization value 287 (3 ) 284 Real estate investment trust (REIT) 104 6 110 Smaller company growth 40 16 56 Total equity securities $ 431 $ 19 $ 450 1 Beginning January 1, 2018, the unrealized gains and losses arising from the revaluation of the equity securities are included in Other income (expense) in the Consolidated Statement of Results of Operations. See Note 2 for additional information. |
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, 2018 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 $ 498 $ 8 $ 93 $ 3 $ 591 $ 11 Mortgage-backed debt securities U.S. governmental agency 119 3 163 8 282 11 Commercial 8 — 6 1 14 1 Total $ 625 $ 11 $ 262 $ 12 $ 887 $ 23 December 31, 2017 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 $ 312 $ 2 $ 38 $ — $ 350 $ 2 Mortgage-backed debt securities U.S. governmental agency 129 1 110 3 239 4 Equity securities Large capitalization value 129 5 14 2 143 7 Smaller company growth 17 1 1 — 18 1 Total $ 587 $ 9 $ 163 $ 5 $ 750 $ 14 1 Indicates the 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, 2018 , 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, 2018 (Millions of dollars) Cost Basis Fair Value Due in one year or less $ 160 $ 159 Due after one year through five years 540 531 Due after five years through ten years 122 120 Due after ten years 17 18 U.S. governmental agency mortgage-backed securities 300 290 Residential mortgage-backed securities 7 7 Commercial mortgage-backed securities 15 14 Total debt securities – available-for-sale $ 1,161 $ 1,139 |
Schedule of proceeds and gross gain and losses from the sale of available-for-sale securities | Sales of available-for-sale securities: Three Months Ended Nine Months Ended (Millions of dollars) 2018 1 2017 2018 1 2017 Proceeds from the sale of available-for-sale securities $ 41 $ 244 $ 181 $ 431 Gross gains from the sale of available-for-sale securities $ — $ 38 $ — $ 40 Gross losses from the sale of available-for-sale securities $ — $ 1 $ — $ 3 1 Beginning January 1, 2018, equity securities are no longer classified as available-for-sale securities. See Note 2 for additional information. |
Postretirement Benefits (Tables
Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [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 2018 2017 2018 2017 2018 2017 For the three months ended: Components of net periodic benefit cost: Service cost $ 31 $ 29 $ 22 $ 23 $ 22 $ 19 Interest cost 134 131 25 23 31 33 Expected return on plan assets (202 ) (184 ) (55 ) (55 ) (9 ) (10 ) Amortization of prior service cost (credit) 1 — — — — (9 ) (6 ) Net periodic benefit cost (benefit) 2 $ (37 ) $ (24 ) $ (8 ) $ (9 ) $ 35 $ 36 For the nine months ended: Components of net periodic benefit cost: Service cost $ 94 $ 87 $ 67 $ 70 $ 64 $ 58 Interest cost 401 393 74 73 93 98 Expected return on plan assets (607 ) (551 ) (167 ) (168 ) (25 ) (28 ) Amortization of prior service cost (credit) 1 — — — (1 ) (26 ) (17 ) Curtailments and termination benefits — 9 — 20 — — Net periodic benefit cost (benefit) 2 $ (112 ) $ (62 ) $ (26 ) $ (6 ) $ 106 $ 111 Weighted-average assumptions used to determine net cost: Discount rate used to measure service cost 3.7 % 4.2 % 2.3 % 2.3 % 3.5 % 3.9 % Discount rate used to measure interest cost 3.2 % 3.3 % 2.2 % 2.3 % 3.2 % 3.3 % Expected rate of return on plan assets 6.3 % 6.7 % 5.2 % 5.9 % 7.5 % 7.5 % Rate of compensation increase 4.0 % 4.0 % 4.0 % 4.0 % 4.6 % 4.0 % 1 Prior service cost (credit) for both pension and other postretirement benefits is 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) is amortized using the straight-line method over the remaining life expectancy of those participants. 2 The service cost component of net periodic pension and other postretirement benefits cost (benefit) is included in Operating costs in the Consolidated Statement of Results of Operations. All other components of net periodic pension and other postretirement benefits cost (benefit) are included in Other income (expense) 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 2018 2017 2018 2017 2018 2017 For the three months ended: Components of net periodic benefit cost: Service cost $ 31 $ 29 $ 22 $ 23 $ 22 $ 19 Interest cost 134 131 25 23 31 33 Expected return on plan assets (202 ) (184 ) (55 ) (55 ) (9 ) (10 ) Amortization of prior service cost (credit) 1 — — — — (9 ) (6 ) Net periodic benefit cost (benefit) 2 $ (37 ) $ (24 ) $ (8 ) $ (9 ) $ 35 $ 36 For the nine months ended: Components of net periodic benefit cost: Service cost $ 94 $ 87 $ 67 $ 70 $ 64 $ 58 Interest cost 401 393 74 73 93 98 Expected return on plan assets (607 ) (551 ) (167 ) (168 ) (25 ) (28 ) Amortization of prior service cost (credit) 1 — — — (1 ) (26 ) (17 ) Curtailments and termination benefits — 9 — 20 — — Net periodic benefit cost (benefit) 2 $ (112 ) $ (62 ) $ (26 ) $ (6 ) $ 106 $ 111 Weighted-average assumptions used to determine net cost: Discount rate used to measure service cost 3.7 % 4.2 % 2.3 % 2.3 % 3.5 % 3.9 % Discount rate used to measure interest cost 3.2 % 3.3 % 2.2 % 2.3 % 3.2 % 3.3 % Expected rate of return on plan assets 6.3 % 6.7 % 5.2 % 5.9 % 7.5 % 7.5 % Rate of compensation increase 4.0 % 4.0 % 4.0 % 4.0 % 4.6 % 4.0 % 1 Prior service cost (credit) for both pension and other postretirement benefits is 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) is amortized using the straight-line method over the remaining life expectancy of those participants. 2 The service cost component of net periodic pension and other postretirement benefits cost (benefit) is included in Operating costs in the Consolidated Statement of Results of Operations. All other components of net periodic pension and other postretirement benefits cost (benefit) are included in Other income (expense) 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) 2018 2017 2018 2017 U.S. Plans $ 97 $ 97 $ 247 $ 267 Non-U.S. Plans 21 19 64 54 $ 118 $ 116 $ 311 $ 321 |
Guarantees and Product Warran_2
Guarantees and Product Warranty (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 $ 1,375 $ 1,313 Customer loan guarantees 31 40 Supplier consortium performance guarantees 556 565 Third party logistics business lease guarantees 68 69 Other guarantees 122 118 Total guarantees $ 2,152 $ 2,105 |
Product warranty | Specific rates are developed for each product shipment month and are updated monthly based on actual warranty claim experience. (Millions of dollars) 2018 Warranty liability, January 1 $ 1,419 Reduction in liability (payments) (561 ) Increase in liability (new warranties) 556 Warranty liability, September 30 $ 1,414 (Millions of dollars) 2017 Warranty liability, January 1 $ 1,258 Reduction in liability (payments) (860 ) Increase in liability (new warranties) 1,021 Warranty liability, December 31 $ 1,419 |
Profit Per Share (Tables)
Profit Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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) 2018 2017 2018 2017 Profit for the period (A) 1 $ 1,727 $ 1,059 $ 5,099 $ 2,053 Determination of shares (in millions): Weighted-average number of common shares outstanding (B) 592.1 592.9 595.3 590.3 Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price 7.3 7.2 8.5 6.2 Average common shares outstanding for fully diluted computation (C) 2 599.4 600.1 603.8 596.5 Profit per share of common stock: Assuming no dilution (A/B) $ 2.92 $ 1.79 $ 8.57 $ 3.48 Assuming full dilution (A/C) 2 $ 2.88 $ 1.77 $ 8.45 $ 3.44 Shares outstanding as of September 30 (in millions) 590.1 594.9 1 Profit attributable to common shareholders. 2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 Shareholders’ 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, 2018 Balance at June 30, 2018 $ (1,432 ) $ 30 $ (78 ) $ (16 ) $ (1,496 ) Other comprehensive income (loss) before reclassifications (65 ) — 32 (1 ) (34 ) Amounts reclassified from accumulated other comprehensive (income) loss — (7 ) (31 ) — (38 ) Other comprehensive income (loss) (65 ) (7 ) 1 (1 ) (72 ) Balance at September 30, 2018 $ (1,497 ) $ 23 $ (77 ) $ (17 ) $ (1,568 ) Three Months Ended September 30, 2017 Balance at June 30, 2017 $ (1,499 ) $ 14 $ (39 ) $ 53 $ (1,471 ) Other comprehensive income (loss) before reclassifications 237 — (4 ) 11 244 Amounts reclassified from accumulated other comprehensive (income) loss 11 (4 ) 11 (24 ) (6 ) Other comprehensive income (loss) 248 (4 ) 7 (13 ) 238 Balance at September 30, 2017 $ (1,251 ) $ 10 $ (32 ) $ 40 $ (1,233 ) (Millions of dollars) Foreign currency translation Pension and other postretirement benefits Derivative financial instruments Available-for-sale securities Total Nine Months Ended September 30, 2018 Balance at December 31, 2017 $ (1,205 ) $ 46 $ (41 ) $ 8 $ (1,192 ) Adjustment to adopt recognition and measurement of financial assets and liabilities guidance 1 — — — (11 ) (11 ) Balance at January 1, 2018 (1,205 ) 46 (41 ) (3 ) (1,203 ) Other comprehensive income (loss) before reclassifications (293 ) (2 ) 73 (14 ) (236 ) Amounts reclassified from accumulated other comprehensive (income) loss 1 (21 ) (109 ) — (129 ) Other comprehensive income (loss) (292 ) (23 ) (36 ) (14 ) (365 ) Balance at September 30, 2018 $ (1,497 ) $ 23 $ (77 ) $ (17 ) $ (1,568 ) Nine Months Ended September 30, 2017 Balance at December 31, 2016 $ (1,970 ) $ 14 $ (115 ) $ 32 $ (2,039 ) Other comprehensive income (loss) before reclassifications 706 8 6 29 749 Amounts reclassified from accumulated other comprehensive (income) loss 13 (12 ) 77 (21 ) 57 Other comprehensive income (loss) 719 (4 ) 83 8 806 Balance at September 30, 2017 $ (1,251 ) $ 10 $ (32 ) $ 40 $ (1,233 ) 1 See Note 2 for additional information. |
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) 2018 2017 Foreign currency translation Gain (loss) on foreign currency translation Other income (expense) $ — $ (11 ) Tax (provision) benefit — — Reclassifications net of tax $ — $ (11 ) Pension and other postretirement benefits: Amortization of prior service credit (cost) Other income (expense) $ 9 $ 6 Tax (provision) benefit (2 ) (2 ) Reclassifications net of tax $ 7 $ 4 Derivative financial instruments: Foreign exchange contracts Other income (expense) $ 34 $ (16 ) Foreign exchange contracts Interest expense of Financial Products 5 — Interest rate contracts Interest expense excluding Financial Products — (2 ) Interest rate contracts Interest expense of Financial Products — 2 Reclassifications before tax 39 (16 ) Tax (provision) benefit (8 ) 5 Reclassifications net of tax $ 31 $ (11 ) Available-for-sale securities: Realized gain (loss) Other income (expense) $ — $ 36 Tax (provision) benefit — (12 ) Reclassifications net of tax $ — $ 24 Total reclassifications from Accumulated other comprehensive income (loss) $ 38 $ 6 Nine Months Ended September 30 (Millions of dollars) Classification of income (expense) 2018 2017 Foreign currency translation Gain (loss) on foreign currency translation Other income (expense) $ (1 ) $ (13 ) Tax (provision) benefit — — Reclassifications net of tax $ (1 ) $ (13 ) Pension and other postretirement benefits: Amortization of prior service credit (cost) Other income (expense) $ 26 $ 18 Tax (provision) benefit (5 ) (6 ) Reclassifications net of tax $ 21 $ 12 Derivative financial instruments: Foreign exchange contracts Other income (expense) $ 129 $ (118 ) Foreign exchange contracts Interest expense of Financial Products 13 — Interest rate contracts Interest expense excluding Financial Products (2 ) (5 ) Interest rate contracts Interest expense of Financial Products 1 5 Reclassifications before tax 141 (118 ) Tax (provision) benefit (32 ) 41 Reclassifications net of tax $ 109 $ (77 ) Available-for-sale securities: Realized gain (loss) Other income (expense) $ — $ 32 Tax (provision) benefit — (11 ) Reclassifications net of tax $ — $ 21 Total reclassifications from Accumulated other comprehensive income (loss) $ 129 $ (57 ) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Reconciliation of Sales and revenues | |
Reportable Segments | Reportable Segments Three Months Ended September 30 (Millions of dollars) 2018 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 $ 5,654 $ 29 $ 5,683 $ 93 $ 1,058 $ 5,071 $ 58 Resource Industries 2,538 100 2,638 115 414 6,439 49 Energy & Transportation 4,577 978 5,555 159 973 8,302 161 Machinery, Energy & Transportation $ 12,769 $ 1,107 $ 13,876 $ 367 $ 2,445 $ 19,812 $ 268 Financial Products Segment 845 1 — 845 212 201 35,729 298 Total $ 13,614 $ 1,107 $ 14,721 $ 579 $ 2,646 $ 55,541 $ 566 2017 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 $ 4,854 $ 32 $ 4,886 $ 99 $ 884 $ 4,838 $ 50 Resource Industries 1,870 86 1,956 129 229 6,403 41 Energy & Transportation 3,961 877 4,838 165 743 7,564 113 Machinery, Energy & Transportation $ 10,685 $ 995 $ 11,680 $ 393 $ 1,856 $ 18,805 $ 204 Financial Products Segment 774 1 — 774 204 185 34,893 308 Total $ 11,459 $ 995 $ 12,454 $ 597 $ 2,041 $ 53,698 $ 512 1 Includes revenues from Machinery, Energy & Transportation of $122 million and $93 million in the third quarter of 2018 and 2017, respectively. Reportable Segments Nine Months Ended September 30 (Millions of dollars) 2018 External sales and revenues Inter- segment sales and revenues Total sales and revenues Depreciation and amortization Segment profit Segment Capital expenditures Construction Industries $ 17,450 $ 82 $ 17,532 $ 272 $ 3,329 $ 5,071 $ 162 Resource Industries 7,177 296 7,473 346 1,203 6,439 111 Energy & Transportation 13,567 2,931 16,498 474 2,859 8,302 463 Machinery, Energy & Transportation $ 38,194 $ 3,309 $ 41,503 $ 1,092 $ 7,391 $ 19,812 $ 736 Financial Products Segment 2,467 1 — 2,467 627 476 35,729 1,192 Total $ 40,661 $ 3,309 $ 43,970 $ 1,719 $ 7,867 $ 55,541 $ 1,928 2017 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 $ 13,875 $ 70 $ 13,945 $ 301 $ 2,418 $ 4,838 $ 107 Resource Industries 5,299 254 5,553 386 488 6,403 93 Energy & Transportation 11,258 2,484 13,742 485 1,982 7,564 320 Machinery, Energy & Transportation $ 30,432 $ 2,808 $ 33,240 $ 1,172 $ 4,888 $ 18,805 $ 520 Financial Products Segment 2,310 1 — 2,310 616 559 34,893 1,018 Total $ 32,742 $ 2,808 $ 35,550 $ 1,788 $ 5,447 $ 53,698 $ 1,538 1 Includes revenues from Machinery, Energy & Transportation of $345 million and $281 million through the first three quarters of 2018 and 2017, respectively. |
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, 2017 Total external sales and revenues from reportable segments $ 10,685 $ 774 $ — $ 11,459 All Other operating segments 56 — — 56 Other (28 ) 19 (93 ) 1 (102 ) Total sales and revenues $ 10,713 $ 793 $ (93 ) $ 11,413 Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total Nine Months Ended September 30, 2017 Total external sales and revenues from reportable segments $ 30,432 $ 2,310 $ — $ 32,742 All Other operating segments 126 — — 126 Other (76 ) 53 (279 ) 1 (302 ) Total sales and revenues $ 30,482 $ 2,363 $ (279 ) $ 32,566 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, 2018 Total profit from reportable segments $ 2,445 $ 201 $ 2,646 All Other operating segments (10 ) — (10 ) Cost centers 29 — 29 Corporate costs (134 ) — (134 ) Timing (18 ) — (18 ) Restructuring costs (96 ) (14 ) (110 ) Methodology differences: Inventory/cost of sales (20 ) — (20 ) Postretirement benefit expense 58 — 58 Stock-based compensation expense (50 ) (2 ) (52 ) Financing costs (56 ) — (56 ) Currency (96 ) — (96 ) Other income/expense methodology differences (88 ) — (88 ) Other methodology differences (19 ) 5 (14 ) Total consolidated profit before taxes $ 1,945 $ 190 $ 2,135 Three Months Ended September 30, 2017 Total profit from reportable segments $ 1,856 $ 185 $ 2,041 All Other operating segments 5 — 5 Cost centers 17 — 17 Corporate costs (158 ) — (158 ) Timing (21 ) — (21 ) Restructuring costs (89 ) (1 ) (90 ) Methodology differences: Inventory/cost of sales (4 ) — (4 ) Postretirement benefit expense 38 — 38 Stock-based compensation expense (46 ) (2 ) (48 ) Financing costs (116 ) — (116 ) Currency (37 ) — (37 ) Other income/expense methodology differences (71 ) — (71 ) Other methodology differences (32 ) (1 ) (33 ) Total consolidated profit before taxes $ 1,342 $ 181 $ 1,523 Reconciliation of Consolidated profit before taxes: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidated Total Nine Months Ended September 30, 2018 Total profit from reportable segments $ 7,391 $ 476 $ 7,867 All Other operating segments 70 — 70 Cost centers 55 — 55 Corporate costs (480 ) — (480 ) Timing (168 ) — (168 ) Restructuring costs (278 ) (15 ) (293 ) Methodology differences: Inventory/cost of sales 3 — 3 Postretirement benefit expense 227 — 227 Stock-based compensation expense (158 ) (6 ) (164 ) Financing costs (203 ) — (203 ) Currency (145 ) — (145 ) Other income/expense methodology differences (261 ) — (261 ) Other methodology differences (61 ) 8 (53 ) Total consolidated profit before taxes $ 5,992 $ 463 $ 6,455 Nine Months Ended September 30, 2017 Total profit from reportable segments $ 4,888 $ 559 $ 5,447 All Other operating segments (28 ) — (28 ) Cost centers 13 — 13 Corporate costs (447 ) — (447 ) Timing (128 ) — (128 ) Restructuring costs (1,009 ) (2 ) (1,011 ) Methodology differences: Inventory/cost of sales (80 ) — (80 ) Postretirement benefit expense 129 — 129 Stock-based compensation expense (158 ) (7 ) (165 ) Financing costs (369 ) — (369 ) Currency (195 ) — (195 ) Other income/expense methodology differences (105 ) — (105 ) Other methodology differences (93 ) 3 (90 ) Total consolidated profit before taxes $ 2,418 $ 553 $ 2,971 |
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 (loss) Restructuring costs Segment profit (loss) with restructuring costs Three Months Ended September 30, 2018 Construction Industries $ 1,058 $ (19 ) $ 1,039 Resource Industries 414 (53 ) 361 Energy & Transportation 973 (31 ) 942 Financial Products Segment 201 — 201 All Other operating segments (10 ) (4 ) (14 ) Total $ 2,636 $ (107 ) $ 2,529 Three Months Ended September 30, 2017 Construction Industries $ 884 $ (15 ) $ 869 Resource Industries 229 (59 ) 170 Energy & Transportation 743 (28 ) 715 Financial Products Segment 185 — 185 All Other operating segments 5 (13 ) (8 ) Total $ 2,046 $ (115 ) $ 1,931 Reconciliation of Restructuring costs: (Millions of dollars) Segment profit (loss) Restructuring costs Segment profit (loss) with restructuring costs Nine Months Ended September 30, 2018 Construction Industries $ 3,329 $ (62 ) $ 3,267 Resource Industries 1,203 (149 ) 1,054 Energy & Transportation 2,859 (60 ) 2,799 Financial Products Segment 476 (1 ) 475 All Other operating segments 70 (13 ) 57 Total $ 7,937 $ (285 ) $ 7,652 Nine Months Ended September 30, 2017 Construction Industries $ 2,418 $ (709 ) $ 1,709 Resource Industries 488 (229 ) 259 Energy & Transportation 1,982 (86 ) 1,896 Financial Products Segment 559 (2 ) 557 All Other operating segments (28 ) (32 ) (60 ) Total $ 5,419 $ (1,058 ) $ 4,361 |
Reconciliation of Assets: | Reconciliation of Assets: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total September 30, 2018 Total assets from reportable segments $ 19,812 $ 35,729 $ — $ 55,541 All Other operating segments 1,273 — — 1,273 Items not included in segment assets: Cash and short-term investments 7,189 — — 7,189 Intercompany receivables 1,644 — (1,644 ) — Investment in Financial Products 4,165 — (4,165 ) — Deferred income taxes 1,818 — (628 ) 1,190 Goodwill and intangible assets 4,304 — — 4,304 Property, plant and equipment – net and other assets 2,035 — — 2,035 Operating lease methodology difference (184 ) — — (184 ) Inventory methodology differences (2,374 ) — — (2,374 ) Liabilities included in segment assets 9,814 — — 9,814 Other (510 ) (13 ) (56 ) (579 ) Total assets $ 48,986 $ 35,716 $ (6,493 ) $ 78,209 December 31, 2017 Total assets from reportable segments $ 18,805 $ 34,893 $ — $ 53,698 All Other operating segments 1,312 — — 1,312 Items not included in segment assets: Cash and short-term investments 7,381 — — 7,381 Intercompany receivables 1,733 — (1,733 ) — Investment in Financial Products 4,064 — (4,064 ) — Deferred income taxes 2,166 — (574 ) 1,592 Goodwill and intangible assets 4,210 — — 4,210 Property, plant and equipment – net and other assets 2,341 — — 2,341 Operating lease methodology difference (191 ) — — (191 ) Inventory methodology differences (2,287 ) — — (2,287 ) Liabilities included in segment assets 9,352 — — 9,352 Other (399 ) (14 ) (33 ) (446 ) Total assets $ 48,487 $ 34,879 $ (6,404 ) $ 76,962 |
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, 2018 Total depreciation and amortization from reportable segments $ 367 $ 212 $ 579 Items not included in segment depreciation and amortization: All Other operating segments 55 — 55 Cost centers 33 — 33 Other 22 9 31 Total depreciation and amortization $ 477 $ 221 $ 698 Three Months Ended September 30, 2017 Total depreciation and amortization from reportable segments $ 393 $ 204 $ 597 Items not included in segment depreciation and amortization: All Other operating segments 52 — 52 Cost centers 36 — 36 Other 28 10 38 Total depreciation and amortization $ 509 $ 214 $ 723 Reconciliations of Depreciation and amortization: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidated Total Nine Months Ended September 30, 2018 Total depreciation and amortization from reportable segments $ 1,092 $ 627 $ 1,719 Items not included in segment depreciation and amortization: All Other operating segments 170 — 170 Cost centers 96 — 96 Other 52 28 80 Total depreciation and amortization $ 1,410 $ 655 $ 2,065 Nine Months Ended September 30, 2017 Total depreciation and amortization from reportable segments $ 1,172 $ 616 $ 1,788 Items not included in segment depreciation and amortization: All Other operating segments 162 — 162 Cost centers 106 — 106 Other 67 30 97 Total depreciation and amortization $ 1,507 $ 646 $ 2,153 |
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, 2018 Total capital expenditures from reportable segments $ 268 $ 298 $ — $ 566 Items not included in segment capital expenditures: All Other operating segments 63 — — 63 Cost centers 30 — — 30 Timing (5 ) — — (5 ) Other (65 ) 45 (33 ) (53 ) Total capital expenditures $ 291 $ 343 $ (33 ) $ 601 Three Months Ended September 30, 2017 Total capital expenditures from reportable segments $ 204 $ 308 $ — $ 512 Items not included in segment capital expenditures: All Other operating segments 26 — — 26 Cost centers 17 — — 17 Timing (21 ) — — (21 ) Other (31 ) 19 (9 ) (21 ) Total capital expenditures $ 195 $ 327 $ (9 ) $ 513 Reconciliations of Capital expenditures: (Millions of dollars) Machinery, Energy & Transportation Financial Products Consolidating Adjustments Consolidated Total Nine Months Ended September 30, 2018 Total capital expenditures from reportable segments $ 736 $ 1,192 $ — $ 1,928 Items not included in segment capital expenditures: All Other operating segments 101 — — 101 Cost centers 70 — — 70 Timing 152 — — 152 Other (214 ) 165 (73 ) (122 ) Total capital expenditures $ 845 $ 1,357 $ (73 ) $ 2,129 Nine Months Ended September 30, 2017 Total capital expenditures from reportable segments $ 520 $ 1,018 $ — $ 1,538 Items not included in segment capital expenditures: All Other operating segments 71 — — 71 Cost centers 40 — — 40 Timing 58 — — 58 Other (115 ) 62 (17 ) (70 ) Total capital expenditures $ 574 $ 1,080 $ (17 ) $ 1,637 |
Sales and Revenues by Geographi
Sales and Revenues by Geographic Region (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Sales and revenues by geographic region | |
Sales and revenues by geographic region | For the three and nine months ending September 30, 2018 , Energy & Transportation segment sales by end user application were as follows: Energy & Transportation External Sales (Millions of dollars) Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Oil and gas $ 1,362 $ 4,044 Power generation 1,102 3,063 Industrial 863 2,738 Transportation 1,250 3,722 Energy & Transportation External Sales $ 4,577 $ 13,567 For the three and nine months ending September 30, 2018 , sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows: Sales and Revenues by Geographic Region (Millions of dollars) North America Latin America EAME Asia/ Pacific External Sales and Revenues Three Months Ended September 30, 2018 Construction Industries $ 2,646 $ 369 $ 1,109 $ 1,530 $ 5,654 Resource Industries 849 427 574 688 2,538 Energy & Transportation 2,309 330 1,180 758 4,577 All Other operating segments 15 — 4 18 37 Corporate Items and Eliminations (40 ) 1 (5 ) 1 (43 ) Machinery, Energy & Transportation Sales 5,779 1,127 2,862 2,995 12,763 Financial Products Segment 559 68 101 117 845 Corporate Items and Eliminations (62 ) (12 ) (6 ) (18 ) (98 ) Financial Products Revenues 497 56 95 99 747 Consolidated Sales and Revenues $ 6,276 $ 1,183 $ 2,957 $ 3,094 $ 13,510 Nine Months Ended September 30, 2018 Construction Industries $ 8,005 $ 1,105 $ 3,347 $ 4,993 $ 17,450 Resource Industries 2,451 1,181 1,663 1,882 7,177 Energy & Transportation 7,116 897 3,425 2,129 13,567 All Other operating segments 47 1 12 55 115 Corporate Items and Eliminations (108 ) (1 ) (8 ) — (117 ) Machinery, Energy & Transportation Sales 17,511 3,183 8,439 9,059 38,192 Financial Products Segment 1,608 213 303 343 2,467 Corporate Items and Eliminations (168 ) (36 ) (18 ) (57 ) (279 ) Financial Products Revenues 1,440 177 285 286 2,188 Consolidated Sales and Revenues $ 18,951 $ 3,360 $ 8,724 $ 9,345 $ 40,380 |
Cat Financial Financing Activ_2
Cat Financial Financing Activities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Allowance for credit losses | An analysis of the allowance for credit losses was as follows: (Millions of dollars) September 30, 2018 Allowance for Credit Losses: Customer Dealer Total Balance at beginning of year $ 353 $ 9 $ 362 Receivables written off (181 ) — (181 ) Recoveries on receivables previously written off 31 — 31 Provision for credit losses 216 (2 ) 214 Other (14 ) — (14 ) Balance at end of period $ 405 $ 7 $ 412 Individually evaluated for impairment $ 229 $ — $ 229 Collectively evaluated for impairment 176 7 183 Ending Balance $ 405 $ 7 $ 412 Recorded Investment in Finance Receivables: Individually evaluated for impairment $ 802 $ — $ 802 Collectively evaluated for impairment 18,193 3,467 21,660 Ending Balance $ 18,995 $ 3,467 $ 22,462 (Millions of dollars) December 31, 2017 Allowance for Credit Losses: Customer Dealer Total Balance at beginning of year $ 331 $ 10 $ 341 Receivables written off (157 ) — (157 ) Recoveries on receivables previously written off 43 — 43 Provision for credit losses 129 (1 ) 128 Other 7 — 7 Balance at end of year $ 353 $ 9 $ 362 Individually evaluated for impairment $ 149 $ — $ 149 Collectively evaluated for impairment 204 9 213 Ending Balance $ 353 $ 9 $ 362 Recorded Investment in Finance Receivables: Individually evaluated for impairment $ 942 $ — $ 942 Collectively evaluated for impairment 18,226 3,464 21,690 Ending Balance $ 19,168 $ 3,464 $ 22,632 |
Aging related to finance receivables | The tables below summarize the recorded investment in finance receivables by aging category. September 30, 2018 (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 $ 74 $ 17 $ 46 $ 137 $ 7,834 $ 7,971 $ 7 Europe 19 9 122 150 2,848 2,998 6 Asia Pacific 30 14 8 52 2,399 2,451 5 Mining 5 — 9 14 1,623 1,637 — Latin America 35 15 84 134 1,380 1,514 — Caterpillar Power Finance 116 45 298 459 1,965 2,424 8 Dealer North America — — — — 1,978 1,978 — Europe — — — — 321 321 — Asia Pacific — — — — 473 473 — Mining — — — — 4 4 — Latin America — — 79 79 610 689 — Caterpillar Power Finance — — — — 2 2 — Total $ 279 $ 100 $ 646 $ 1,025 $ 21,437 $ 22,462 $ 26 December 31, 2017 (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 $ 71 $ 15 $ 42 $ 128 $ 7,950 $ 8,078 $ 8 Europe 21 10 46 77 2,718 2,795 13 Asia Pacific 13 7 14 34 2,009 2,043 5 Mining 3 1 60 64 1,751 1,815 9 Latin America 37 55 142 234 1,531 1,765 — Caterpillar Power Finance 20 32 144 196 2,476 2,672 1 Dealer North America — — — — 1,920 1,920 — Europe — — — — 222 222 — Asia Pacific — — — — 553 553 — Mining — — — — 4 4 — Latin America — 72 — 72 691 763 — Caterpillar Power Finance — — — — 2 2 — Total $ 165 $ 192 $ 448 $ 805 $ 21,827 $ 22,632 $ 36 |
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, 2018 December 31, 2017 (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 $ 17 $ 17 $ — $ 19 $ 19 $ — Europe 2 1 — 45 45 — Asia Pacific 28 28 — 34 33 — Mining 34 34 — 121 121 — Latin America 31 31 — 45 45 — Caterpillar Power Finance 61 74 — 160 172 — Total $ 173 $ 185 $ — $ 424 $ 435 $ — Impaired Finance Receivables With An Allowance Recorded North America $ 41 $ 39 $ 18 $ 44 $ 43 $ 17 Europe 66 66 36 9 8 5 Asia Pacific 2 2 1 8 8 2 Mining 58 58 22 — — — Latin America 61 61 34 95 106 42 Caterpillar Power Finance 401 408 118 362 365 83 Total $ 629 $ 634 $ 229 $ 518 $ 530 $ 149 Total Impaired Finance Receivables North America $ 58 $ 56 $ 18 $ 63 $ 62 $ 17 Europe 68 67 36 54 53 5 Asia Pacific 30 30 1 42 41 2 Mining 92 92 22 121 121 — Latin America 92 92 34 140 151 42 Caterpillar Power Finance 462 482 118 522 537 83 Total $ 802 $ 819 $ 229 $ 942 $ 965 $ 149 Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 (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 $ — $ 14 $ 1 Europe 4 — 47 — Asia Pacific 29 1 30 1 Mining 35 — 128 1 Latin America 37 1 68 1 Caterpillar Power Finance 94 2 171 1 Total $ 218 $ 4 $ 458 $ 5 Impaired Finance Receivables With An Allowance Recorded North America $ 47 $ — $ 44 $ — Europe 59 — 6 — Asia Pacific 2 — 28 1 Mining 60 1 — — Latin America 51 1 102 1 Caterpillar Power Finance 374 4 251 3 Total $ 593 $ 6 $ 431 $ 5 Total Impaired Finance Receivables North America $ 66 $ — $ 58 $ 1 Europe 63 — 53 — Asia Pacific 31 1 58 2 Mining 95 1 128 1 Latin America 88 2 170 2 Caterpillar Power Finance 468 6 422 4 Total $ 811 $ 10 $ 889 $ 10 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 (Millions of dollars) Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Impaired Finance Receivables With No Allowance Recorded Customer North America $ 17 $ 1 $ 12 $ 1 Europe 17 — 48 1 Asia Pacific 30 2 22 2 Mining 65 2 128 5 Latin America 41 2 69 2 Caterpillar Power Finance 149 5 233 7 Total $ 319 $ 12 $ 512 $ 18 Impaired Finance Receivables With An Allowance Recorded Customer North America $ 51 $ 1 $ 52 $ 1 Europe 41 1 6 — Asia Pacific 4 — 35 2 Mining 43 2 — — Latin America 69 3 101 3 Caterpillar Power Finance 364 8 141 4 Total $ 572 $ 15 $ 335 $ 10 Total Impaired Finance Receivables Customer North America $ 68 $ 2 $ 64 $ 2 Europe 58 1 54 1 Asia Pacific 34 2 57 4 Mining 108 4 128 5 Latin America 110 5 170 5 Caterpillar Power Finance 513 13 374 11 Total $ 891 $ 27 $ 847 $ 28 |
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, 2018 December 31, 2017 North America $ 44 $ 38 Europe 124 37 Asia Pacific 4 10 Mining 10 63 Latin America 118 192 Caterpillar Power Finance 451 343 Total $ 751 $ 683 |
Finance receivables modified as TDRs | Cat Financial's investment in finance receivables in the Customer portfolio segment modified as TDRs during the three and nine months ended September 30, 2018 and 2017 , were as follows: Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 (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 4 $ — $ — 11 $ 4 $ 5 Europe — — — 1 — — Latin America — — — 3 21 22 Caterpillar Power Finance 2 40 40 5 51 44 Total 6 $ 40 $ 40 20 $ 76 $ 71 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Number of Contracts Pre-TDR Outstanding Recorded Investment Post-TDR Outstanding Recorded Investment Number of Contracts Pre-TDR Outstanding Recorded Investment Post-TDR Outstanding Recorded Investment North America 34 $ 13 $ 13 37 $ 13 $ 13 Europe — — — 2 — — Asia Pacific — — — 6 39 30 Mining 1 29 29 2 57 56 Latin America 1 3 3 17 26 27 Caterpillar Power Finance 1 7 93 60 59 319 305 Total 43 $ 138 $ 105 123 $ 454 $ 431 1 In Caterpillar Power Finance, during the nine months ended September 30, 2017, 44 contracts with a pre-TDR recorded investment of $200 million and a post-TDR recorded investment of $200 million were related to four customers. TDRs in the Customer portfolio segment with a payment default (defined as 91+ days past due) which had been modified within twelve months prior to the default date, were as follows: Three Months Ended September 30, 2018 Three Months Ended September 30, 2017 (Millions of dollars) Number of Contracts Post-TDR Recorded Investment Number of Contracts Post-TDR Recorded Investment Customer North America 7 $ 9 — $ — Latin America 1 — 1 — Caterpillar Power Finance 3 33 — — Total 11 $ 42 1 $ — Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Number of Contracts Post-TDR Recorded Investment Number of Contracts Post-TDR Recorded Investment Customer North America 10 $ 10 — $ — Latin America 3 1 241 16 Caterpillar Power Finance 3 33 — — Total 16 $ 44 241 $ 16 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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, 2018 and December 31, 2017 are summarized below: September 30, 2018 (Millions of dollars) Level 1 Level 2 Level 3 Measured at NAV Total Assets / Liabilities, at Fair Value Assets Debt securities Government debt U.S. treasury bonds $ 9 $ — $ — $ — $ 9 Other U.S. and non-U.S. government bonds — 48 — — 48 Corporate bonds Corporate bonds — 710 — — 710 Asset-backed securities — 61 — — 61 Mortgage-backed debt securities U.S. governmental agency — 290 — — 290 Residential — 7 — — 7 Commercial — 14 — — 14 Total debt securities 9 1,130 — — 1,139 Equity securities Large capitalization value 298 — — — 298 Smaller company growth 65 — — — 65 REIT — — — 117 117 Total equity securities 363 — — 117 480 Derivative financial instruments, net — 22 — — 22 Total assets $ 372 $ 1,152 $ — $ 117 $ 1,641 December 31, 2017 (Millions of dollars) Level 1 Level 2 Level 3 Total Assets / Liabilities, at Fair Value Assets Debt securities Government debt U.S. treasury bonds $ 10 $ — $ — $ 10 Other U.S. and non-U.S. government bonds — 42 — 42 Corporate bonds Corporate bonds — 584 — 584 Asset-backed securities — 67 — 67 Mortgage-backed debt securities U.S. governmental agency — 261 — 261 Residential — 8 — 8 Commercial — 17 — 17 Total debt securities 10 979 — 989 Equity securities Large capitalization value 284 — — 284 Smaller company growth 56 — — 56 REIT — — 110 110 Total equity securities 340 — 110 450 Total assets $ 350 $ 979 $ 110 $ 1,439 Liabilities Derivative financial instruments, net $ — $ 19 $ — $ 19 Total liabilities $ — $ 19 $ — $ 19 |
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, 2018 December 31, 2017 (Millions of dollars) Carrying Amount Fair Value Carrying Amount Fair Value Fair Value Levels Reference Assets Cash and short-term investments $ 8,007 $ 8,007 $ 8,261 $ 8,261 1 Restricted cash and short-term investments $ 39 $ 39 $ 194 $ 194 1 Investments in debt and equity securities $ 1,619 $ 1,619 $ 1,439 $ 1,439 1, 2 & 3 Note 8 Finance receivables – net (excluding finance leases 1 ) $ 14,815 $ 14,764 $ 15,452 $ 15,438 3 Note 16 Wholesale inventory receivables – net (excluding finance leases 1 ) $ 1,194 $ 1,168 $ 1,153 $ 1,123 3 Foreign currency contracts – net $ 13 $ 13 $ — $ — 2 Note 5 Interest rate contracts – net $ 7 $ 7 $ 1 $ 1 2 Note 5 Commodity contracts – net $ 2 $ 2 $ 21 $ 21 2 Note 5 Liabilities Short-term borrowings $ 4,521 $ 4,521 $ 4,837 $ 4,837 1 Long-term debt (including amounts due within one year) Machinery, Energy & Transportation $ 8,001 $ 9,155 $ 7,935 $ 9,863 2 Financial Products $ 23,251 $ 23,110 $ 22,106 $ 22,230 2 Foreign currency contracts – net $ — $ — $ 41 $ 41 2 Note 5 Guarantees $ 8 $ 8 $ 8 $ 8 3 Note 10 1 Total excluded items have a net carrying value at September 30, 2018 and December 31, 2017 of $7,481 million and $7,063 million , respectively. |
Other income (expense) (Tables)
Other income (expense) (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other income (expense) | Three Months Ended Nine Months Ended September 30 (Millions of dollars) 2018 2017 2018 2017 Investment and interest income $ 59 $ 32 $ 139 $ 86 Foreign exchange gains (losses) 1 (81 ) (29 ) (160 ) (189 ) License fee income 29 27 96 74 Gain on sale of securities and affiliated company 4 36 4 121 2 Net periodic pension and OPEB income (cost), excluding service cost 85 68 257 172 Miscellaneous income (loss) 6 (2 ) 14 (4 ) Total $ 102 $ 132 $ 350 $ 260 1 Includes gains (losses) from foreign exchange derivative contracts. See Note 5 for further details. 2 Includes pretax gain of $85 million related to the sale of Caterpillar's equity interest in Iron Planet Holdings Inc. |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Restructuring Charges [Abstract] | |
Restructuring and related costs | Restructuring costs for the three and nine months ended September 30, 2018 and 2017 were as follows: (Millions of dollars) Three Months Ended September 30 2018 2017 Employee separations 1 $ 44 $ 8 Contract terminations 1 — 6 Long-lived asset impairments 1 18 31 Other 2 48 45 Total restructuring costs $ 110 $ 90 Nine Months Ended September 30 2018 2017 Employee separations 1 $ 121 $ 514 Contract terminations 1 — 32 Long-lived asset impairments 1 49 306 Defined benefit plan curtailments and termination benefits 3 — 29 Other 2 123 130 Total restructuring costs $ 293 $ 1,011 1 Recognized in Other operating (income) expenses. 2 Represents costs related to our restructuring programs, primarily for accelerated depreciation, project management costs, equipment relocation, inventory write-downs and LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold. 3 Recognized in Other income (expense). |
Summary of separation activity | The following table summarizes the 2017 and 2018 employee separation activity: (Millions of dollars) Liability balance at December 31, 2016 $ 147 Increase in liability (separation charges) 525 Reduction in liability (payments) (423 ) Liability balance at December 31, 2017 $ 249 Increase in liability (separation charges) 121 Reduction in liability (payments) (233 ) Liability balance at September 30, 2018 $ 137 |
Nature of Operations, Basis o_3
Nature of Operations, Basis of Presentation and Change in Accounting Principle (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Variable Interest Entity Maximum Exposure | |||
Payments made for terminated contract with a related guarantee | $ 0 | ||
Receivables - trade and other | 7,974 | $ 7,370 | $ 7,436 |
Receivables - finance | 8,824 | 8,757 | |
Long-term receivables - finance | 13,244 | 13,542 | |
Guarantees | 2,152 | 2,105 | |
Amount of deferred revenue reclassified from other current liabilities to customer advances | 233 | ||
Variable Interest Entity | |||
Variable Interest Entity Maximum Exposure | |||
Receivables - trade and other | 29 | 34 | |
Receivables - finance | 47 | 42 | |
Long-term receivables - finance | 26 | 38 | |
Investments in unconsolidated affiliated companies | 30 | 39 | |
Guarantees | 0 | 259 | |
Total | $ 132 | $ 412 |
Nature of Operations, Basis o_4
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 | |||||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Jan. 01, 2017 | Dec. 31, 2016 | ||
Statement of Results of Operations | |||||||||||
Cost of Revenue | $ 9,022 | $ 7,678 | $ 27,010 | $ 22,295 | |||||||
Selling, general and administrative expenses | 1,299 | 1,254 | 4,015 | 3,619 | |||||||
Research and development expenses | 479 | 461 | 1,384 | 1,344 | |||||||
Other operating (income) expenses | (390) | (348) | (1,028) | (1,751) | |||||||
Total operating costs | 11,375 | 9,904 | 33,970 | 29,493 | |||||||
Operating profit | 2,135 | 1,509 | 6,410 | 3,073 | |||||||
Other income (expense) | 102 | 132 | 350 | 260 | |||||||
Consolidated profit before taxes | 2,135 | 1,523 | 6,455 | 2,971 | |||||||
Provision (benefit) for income taxes | 415 | 470 | 1,377 | 921 | |||||||
Profit (loss) of consolidated companies | 1,720 | 1,053 | 5,078 | 2,050 | |||||||
Profit of consolidated and affiliated companies | 1,727 | 1,061 | 5,099 | 2,058 | |||||||
Profit | [1] | $ 1,727 | $ 1,059 | $ 5,099 | $ 2,053 | ||||||
Profit per common share (in dollars per share) | $ 2.92 | $ 1.79 | $ 8.57 | $ 3.48 | |||||||
Profit per common share - diluted (in dollars per share) | [2] | $ 2.88 | $ 1.77 | $ 8.45 | $ 3.44 | ||||||
Statement of Comprehensive Income | |||||||||||
Profit of consolidated and affiliated companies | $ 1,727 | $ 1,061 | $ 5,099 | $ 2,058 | |||||||
Foreign currency translation, net of tax | (65) | 248 | (292) | 719 | |||||||
Total other comprehensive income (loss), net of tax | (72) | 238 | (365) | 806 | |||||||
Comprehensive income | 1,655 | 1,299 | 4,734 | 2,864 | |||||||
Comprehensive income attributable to stockholders | 1,655 | 1,297 | 4,734 | 2,859 | |||||||
Statement of Financial Position | |||||||||||
Noncurrent deferred and refundable income taxes | 1,288 | 1,288 | $ 1,695 | $ 1,693 | |||||||
Liability for postemployment benefits | 7,046 | 7,046 | 8,365 | ||||||||
Profit employed in the business | 30,384 | 30,384 | 26,289 | 26,301 | |||||||
Accumulated other comprehensive income (loss) | (1,568) | (1,233) | (1,568) | (1,233) | $ (1,496) | (1,203) | (1,192) | $ (1,471) | $ (2,039) | ||
Statement of Shareholders' Equity | |||||||||||
Profit of consolidated and affiliated companies | 1,727 | 1,061 | 5,099 | 2,058 | |||||||
Foreign currency translation, net of tax | (65) | 248 | (292) | 719 | |||||||
Pension and other postretirement benefits, net of tax | (23) | (4) | |||||||||
Total stockholders' equity | 15,890 | 15,697 | 15,890 | 15,697 | $ 13,719 | $ 13,766 | $ 13,228 | $ 13,213 | |||
Statement of Cash Flow | |||||||||||
Profit of consolidated and affiliated companies | 1,727 | 1,061 | 5,099 | 2,058 | |||||||
Adjustments for non-cash items: Other | 630 | 596 | |||||||||
Other assets - net | 394 | (137) | |||||||||
Other liabilities - net | (1,271) | (373) | |||||||||
Previous Accounting Guidance | |||||||||||
Statement of Results of Operations | |||||||||||
Cost of Revenue | 8,997 | 27,020 | |||||||||
Other operating (income) expenses | (1,034) | ||||||||||
Operating profit | 2,116 | 6,396 | |||||||||
Consolidated profit before taxes | 2,116 | 6,441 | |||||||||
Provision (benefit) for income taxes | 411 | 1,374 | |||||||||
Profit (loss) of consolidated companies | 1,705 | 5,067 | |||||||||
Profit of consolidated and affiliated companies | 1,712 | 5,088 | |||||||||
Profit | 1,712 | 5,088 | |||||||||
Statement of Comprehensive Income | |||||||||||
Profit of consolidated and affiliated companies | 1,712 | 5,088 | |||||||||
Statement of Financial Position | |||||||||||
Noncurrent deferred and refundable income taxes | 1,289 | 1,289 | |||||||||
Profit employed in the business | 30,385 | 30,385 | |||||||||
Statement of Shareholders' Equity | |||||||||||
Profit of consolidated and affiliated companies | 1,712 | 5,088 | |||||||||
Statement of Cash Flow | |||||||||||
Profit of consolidated and affiliated companies | $ 1,712 | $ 5,088 | |||||||||
Previously Reported | |||||||||||
Statement of Results of Operations | |||||||||||
Cost of Revenue | 7,633 | 22,160 | |||||||||
Selling, general and administrative expenses | 1,237 | 3,571 | |||||||||
Research and development expenses | 455 | 1,326 | |||||||||
Other operating (income) expenses | (1,780) | ||||||||||
Total operating costs | 9,836 | 29,321 | |||||||||
Operating profit | 1,577 | 3,245 | |||||||||
Other income (expense) | $ 64 | $ 88 | |||||||||
[1] | 1 Profit attributable to common shareholders. | ||||||||||
[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 | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | ||
New Accounting Pronouncements | |||||||
Revenues | $ 13,510 | $ 11,413 | $ 40,380 | $ 32,566 | |||
Cost of Revenue | 9,022 | 7,678 | 27,010 | 22,295 | |||
Other operating (income) expenses | 390 | 348 | 1,028 | 1,751 | |||
Total operating costs | 11,375 | 9,904 | 33,970 | 29,493 | |||
Operating profit | 2,135 | 1,509 | 6,410 | 3,073 | |||
Consolidated profit before taxes | 2,135 | 1,523 | 6,455 | 2,971 | |||
Provision (benefit) for income taxes | 415 | 470 | 1,377 | 921 | |||
Profit (loss) of consolidated companies | 1,720 | 1,053 | 5,078 | 2,050 | |||
Profit of consolidated and affiliated companies | 1,727 | 1,061 | 5,099 | 2,058 | |||
Profit | [1] | 1,727 | 1,059 | 5,099 | 2,053 | ||
Receivables - trade and other | 7,974 | 7,974 | $ 7,370 | $ 7,436 | |||
Prepaid expenses and other current assets | 1,835 | 1,835 | 2,099 | 1,772 | |||
Inventories | 11,814 | 11,814 | 10,022 | 10,018 | |||
Property, plant and equipment - net | 13,607 | 13,607 | 13,965 | 14,155 | |||
Noncurrent deferred and refundable income taxes | 1,288 | 1,288 | 1,695 | 1,693 | |||
Accrued expenses | 3,423 | 3,423 | 3,446 | 3,220 | |||
Customer advances | 1,491 | 1,491 | 1,472 | 1,426 | |||
Other current liabilities | 1,867 | 1,867 | 1,725 | 1,742 | |||
Other liabilities | 3,799 | 3,799 | 3,887 | 4,053 | |||
Profit employed in the business | 30,384 | 30,384 | 26,289 | $ 26,301 | |||
Expected impact from adoption of new Lease Accounting guidance related to derecognition of assets for a Sale Lease Back transaction that qualifies for sale accounting under the new guidance | (125) | (125) | |||||
Expected impact from adoption of new Lease Accounting guidance related to derecognition of debt obligations for a Sale Lease Back transaction that qualifies for sale accounting under the new guidance | (375) | (375) | |||||
Revenue recognition | |||||||
New Accounting Pronouncements | |||||||
Revenues | 44 | (2) | |||||
Cost of Revenue | 25 | (10) | |||||
Other operating (income) expenses | (6) | ||||||
Operating profit | 19 | 14 | |||||
Consolidated profit before taxes | 19 | 14 | |||||
Provision (benefit) for income taxes | 4 | 3 | |||||
Profit (loss) of consolidated companies | 15 | 11 | |||||
Profit of consolidated and affiliated companies | 15 | 11 | |||||
Profit | 15 | 11 | |||||
Receivables - trade and other | (37) | (37) | (66) | ||||
Prepaid expenses and other current assets | 333 | 333 | 327 | ||||
Inventories | 7 | 7 | 4 | ||||
Property, plant and equipment - net | (190) | ||||||
Noncurrent deferred and refundable income taxes | (1) | (1) | 2 | ||||
Accrued expenses | 220 | 220 | 226 | ||||
Customer advances | 83 | 83 | 46 | ||||
Other current liabilities | (17) | ||||||
Other liabilities | (166) | ||||||
Profit employed in the business | (1) | (1) | $ (12) | ||||
Previous Accounting Guidance | |||||||
New Accounting Pronouncements | |||||||
Revenues | 12,719 | 38,194 | |||||
Cost of Revenue | 8,997 | 27,020 | |||||
Other operating (income) expenses | 1,034 | ||||||
Operating profit | 2,116 | 6,396 | |||||
Consolidated profit before taxes | 2,116 | 6,441 | |||||
Provision (benefit) for income taxes | 411 | 1,374 | |||||
Profit (loss) of consolidated companies | 1,705 | 5,067 | |||||
Profit of consolidated and affiliated companies | 1,712 | 5,088 | |||||
Profit | 1,712 | 5,088 | |||||
Receivables - trade and other | 8,011 | 8,011 | |||||
Prepaid expenses and other current assets | 1,502 | 1,502 | |||||
Inventories | 11,807 | 11,807 | |||||
Noncurrent deferred and refundable income taxes | 1,289 | 1,289 | |||||
Accrued expenses | 3,203 | 3,203 | |||||
Customer advances | 1,408 | 1,408 | |||||
Profit employed in the business | 30,385 | 30,385 | |||||
Machinery, Energy & Transportation | |||||||
New Accounting Pronouncements | |||||||
Revenues | $ 12,763 | $ 10,713 | $ 38,192 | $ 30,482 | |||
[1] | 1 Profit attributable to common shareholders. |
New Accounting Guidance New Acc
New Accounting Guidance New Acconting Guidance (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements | ||||
Cost of Revenue | $ 9,022 | $ 7,678 | $ 27,010 | $ 22,295 |
Revenues | 13,510 | 11,413 | 40,380 | 32,566 |
Selling, general and administrative expenses | 1,299 | 1,254 | 4,015 | 3,619 |
Research and development expenses | 479 | 461 | 1,384 | 1,344 |
Other operating (income) expenses | 390 | 348 | 1,028 | 1,751 |
Total operating costs | 11,375 | 9,904 | 33,970 | 29,493 |
Operating profit | 2,135 | 1,509 | 6,410 | 3,073 |
Other income (expense) | 102 | 132 | 350 | 260 |
Previous Accounting Guidance | ||||
New Accounting Pronouncements | ||||
Cost of Revenue | 8,997 | 27,020 | ||
Revenues | 12,719 | 38,194 | ||
Other operating (income) expenses | 1,034 | |||
Operating profit | $ 2,116 | $ 6,396 | ||
Previously Reported | ||||
New Accounting Pronouncements | ||||
Cost of Revenue | 7,633 | 22,160 | ||
Selling, general and administrative expenses | 1,237 | 3,571 | ||
Research and development expenses | 455 | 1,326 | ||
Other operating (income) expenses | 1,780 | |||
Total operating costs | 9,836 | 29,321 | ||
Operating profit | 1,577 | 3,245 | ||
Other income (expense) | 64 | 88 | ||
Components of net periodic benefit cost | ||||
New Accounting Pronouncements | ||||
Cost of Revenue | 45 | 135 | ||
Selling, general and administrative expenses | 17 | 48 | ||
Research and development expenses | 6 | 18 | ||
Other operating (income) expenses | (29) | |||
Total operating costs | 68 | 172 | ||
Operating profit | (68) | (172) | ||
Other income (expense) | $ 68 | $ 172 |
Sales and revenue recognition (
Sales and revenue recognition (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Jan. 01, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Trade receivables from dealers and end users | $ 6,902 | $ 6,902 | $ 6,399 |
Long term trade receivables from dealers and end users | 664 | 664 | 639 |
Long-term customer advances | 432 | 432 | $ 396 |
Revenue recognized from contract liability balance at beginning of period | 145 | 1,124 | |
Unsatisfied performance obligations with an original contract duration greater than one year | 5,900 | $ 5,900 | |
Period after which Collection of Future Income is Considered as Not Probable | 120 days | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Unsatisfied performance obligations with an original contract duration greater than one year | $ 2,700 | $ 2,700 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock-based compensation awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Minimum | 21.50% | 22.10% | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum | 33.00% | 33.00% | ||
Share-based Compensation, Stock Options, Activity [Table Text Block] | nine | |||
Stock-based compensation expense, before tax (in dollars) | $ 52 | $ 48 | $ 164 | $ 165 |
Assumptions used in determining the fair value of the stock-based awards | ||||
Weighted-average dividend yield (as a percent) | 2.70% | 3.42% | ||
Weighted-average volatility (as a percent) | 30.20% | 29.20% | ||
Risk-free interest rates, low end of range (as a percent) | 2.02% | 0.81% | ||
Risk-free interest rates, high end of range (as a percent) | 2.87% | 2.35% | ||
Weighted-average expected lives (in years) | 8 years | 8 years | ||
Unrecognized compensation cost related to nonvested stock-based compensation awards (in dollars) | $ 217 | $ 217 | ||
Term of amortization of unrecognized compensation cost over weighted-average remaining requisite service periods (in years) | 1 year 11 months | |||
Stock Options | ||||
Stock-based compensation awards | ||||
Shares Granted (in shares) | 1,605,220 | 2,701,644 | ||
Weighted-Average Fair Value Per Share (in dollars per share) | $ 46.11 | $ 25.01 | ||
Weighted-Average Grant Date Stock Price (in dollars per share) | $ 150.90 | $ 95.66 | 150.90 | 95.66 |
RSUs | ||||
Stock-based compensation awards | ||||
Weighted-Average Grant Date Stock Price (in dollars per share) | 150.64 | 96.01 | $ 150.64 | $ 96.01 |
Shares Granted (in shares) | 722,521 | 924,421 | ||
Weighted-Average Fair Value Per Share (in dollars per share) | $ 150.64 | $ 90.11 | ||
PRSUs | ||||
Stock-based compensation awards | ||||
Weighted-Average Grant Date Stock Price (in dollars per share) | $ 150.93 | $ 95.66 | $ 150.93 | $ 95.66 |
Shares Granted (in shares) | 344,866 | 437,385 | ||
Weighted-Average Fair Value Per Share (in dollars per share) | $ 150.93 | $ 86.78 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Risk Management (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
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 months) | 51 months |
Deferred net losses, foreign currency exchange rate risk, to be reclassified from equity to current earnings over the next twelve months | $ (33) |
Derivative | |
Commodity forward and option contracts, maximum period (in years) | 5 years |
Derivative Financial Instrume_5
Derivative Financial Instruments and Risk Management (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Derivatives Fair Value | |||||
Asset Fair Value | $ 158 | $ 158 | $ 74 | ||
Liability Fair Value | (136) | (136) | (93) | ||
Machinery, Energy & Transportation | |||||
Derivatives Fair Value | |||||
Asset Fair Value | 18 | 18 | 52 | ||
Liability Fair Value | (97) | (97) | (25) | ||
Financial Products | |||||
Derivatives Fair Value | |||||
Asset Fair Value | 140 | 140 | 22 | ||
Liability Fair Value | (39) | (39) | (68) | ||
Designated Derivatives | |||||
Derivatives Fair Value | |||||
Asset (Liability) Fair Value | 23 | 23 | (53) | ||
Designated Derivatives | Foreign exchange contracts | Receivables-trade and other | Machinery, Energy & Transportation | |||||
Derivatives Fair Value | |||||
Asset Fair Value | 4 | 4 | 8 | ||
Designated Derivatives | Foreign exchange contracts | Receivables-trade and other | Financial Products | |||||
Derivatives Fair Value | |||||
Asset Fair Value | 50 | 50 | 0 | ||
Designated Derivatives | Foreign exchange contracts | Long-term receivables-trade and other | Machinery, Energy & Transportation | |||||
Derivatives Fair Value | |||||
Asset Fair Value | 0 | 0 | 4 | ||
Designated Derivatives | Foreign exchange contracts | Long-term receivables-trade and other | Financial Products | |||||
Derivatives Fair Value | |||||
Asset Fair Value | 31 | 31 | 7 | ||
Designated Derivatives | Foreign exchange contracts | Accrued Expenses | Machinery, Energy & Transportation | |||||
Derivatives Fair Value | |||||
Liability Fair Value | (46) | (46) | (14) | ||
Designated Derivatives | Foreign exchange contracts | Accrued Expenses | Financial Products | |||||
Derivatives Fair Value | |||||
Liability Fair Value | (17) | (17) | (57) | ||
Designated Derivatives | Foreign exchange contracts | Other Liabilities | Machinery, Energy & Transportation | |||||
Derivatives Fair Value | |||||
Liability Fair Value | (6) | (6) | (2) | ||
Designated Derivatives | Interest rate contracts | Receivables-trade and other | Financial Products | |||||
Derivatives Fair Value | |||||
Asset Fair Value | 1 | 1 | 0 | ||
Designated Derivatives | Interest rate contracts | Long-term receivables-trade and other | Financial Products | |||||
Derivatives Fair Value | |||||
Asset Fair Value | 9 | 9 | 3 | ||
Designated Derivatives | Interest rate contracts | Accrued Expenses | Financial Products | |||||
Derivatives Fair Value | |||||
Liability Fair Value | (3) | (3) | (2) | ||
Undesignated Derivatives | |||||
Derivatives Fair Value | |||||
Asset (Liability) Fair Value | (1) | (1) | 34 | ||
Undesignated Derivatives | Foreign exchange contracts | Receivables-trade and other | Machinery, Energy & Transportation | |||||
Derivatives Fair Value | |||||
Asset Fair Value | 4 | 4 | 19 | ||
Undesignated Derivatives | Foreign exchange contracts | Receivables-trade and other | Financial Products | |||||
Derivatives Fair Value | |||||
Asset Fair Value | 42 | 42 | 12 | ||
Undesignated Derivatives | Foreign exchange contracts | Long-term receivables-trade and other | Financial Products | |||||
Derivatives Fair Value | |||||
Asset Fair Value | 7 | 7 | 0 | ||
Undesignated Derivatives | Foreign exchange contracts | Accrued Expenses | Machinery, Energy & Transportation | |||||
Derivatives Fair Value | |||||
Liability Fair Value | (37) | (37) | (9) | ||
Undesignated Derivatives | Foreign exchange contracts | Accrued Expenses | Financial Products | |||||
Derivatives Fair Value | |||||
Liability Fair Value | (19) | (19) | (9) | ||
Undesignated Derivatives | Commodity contracts | Receivables-trade and other | Machinery, Energy & Transportation | |||||
Derivatives Fair Value | |||||
Asset Fair Value | 10 | 10 | 21 | ||
Undesignated Derivatives | Commodity contracts | Accrued Expenses | Machinery, Energy & Transportation | |||||
Derivatives Fair Value | |||||
Liability Fair Value | (8) | (8) | $ 0 | ||
Cash Flow Hedges | Designated Derivatives | |||||
Derivatives Fair Value | |||||
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) | 41 | $ (6) | 96 | $ 9 | |
Amount of Gains (Losses) Reclassified from AOCI to Earnings | 39 | (16) | 141 | (118) | |
Recognized in Earnings (Ineffective Portion) | 0 | 0 | 0 | 0 | |
Cash Flow Hedges | Designated Derivatives | Foreign exchange contracts | Machinery, Energy & Transportation | |||||
Derivatives Fair Value | |||||
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) | (15) | 16 | (55) | 72 | |
Cash Flow Hedges | Designated Derivatives | Foreign exchange contracts | Financial Products | |||||
Derivatives Fair Value | |||||
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) | 53 | (21) | 143 | (62) | |
Cash Flow Hedges | Designated Derivatives | Interest rate contracts | Machinery, Energy & Transportation | |||||
Derivatives Fair Value | |||||
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) | 0 | 0 | 0 | 0 | |
Cash Flow Hedges | Designated Derivatives | Interest rate contracts | Financial Products | |||||
Derivatives Fair Value | |||||
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) | 3 | (1) | 8 | (1) | |
Interest Expense | Cash Flow Hedges | Designated Derivatives | Foreign exchange contracts | Financial Products | |||||
Derivatives Fair Value | |||||
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) | 0 | 0 | |||
Amount of Gains (Losses) Reclassified from AOCI to Earnings | 5 | 13 | |||
Recognized in Earnings (Ineffective Portion) | 0 | 0 | |||
Interest Expense | Cash Flow Hedges | Designated Derivatives | Interest rate contracts | Machinery, Energy & Transportation | |||||
Derivatives Fair Value | |||||
Amount of Gains (Losses) Reclassified from AOCI to Earnings | 0 | (2) | (2) | (5) | |
Recognized in Earnings (Ineffective Portion) | 0 | 0 | 0 | 0 | |
Interest Expense | Cash Flow Hedges | Designated Derivatives | Interest rate contracts | Financial Products | |||||
Derivatives Fair Value | |||||
Amount of Gains (Losses) Reclassified from AOCI to Earnings | 0 | 2 | 1 | 5 | |
Recognized in Earnings (Ineffective Portion) | $ 0 | $ 0 | $ 0 | $ 0 |
Derivative Financial Instrume_6
Derivative Financial Instruments and Risk Management (Details 3) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Machinery, Energy & Transportation | ||
Derivative notional amounts | ||
Derivative instruments notional amount | $ 2,129 | $ 3,190 |
Financial Products | ||
Derivative notional amounts | ||
Derivative instruments notional amount | $ 7,517 | $ 3,691 |
Derivative Financial Instrume_7
Derivative Financial Instruments and Risk Management (Details 4) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Derivative Instruments, Gain (Loss) | |||||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 0 | ||||
Designated Derivatives | Cash Flow Hedges | |||||
Derivative Instruments, Gain (Loss) | |||||
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) | $ 41 | $ (6) | $ 96 | $ 9 | |
Amount of Gains (Losses) Reclassified from AOCI to Earnings | 39 | (16) | 141 | (118) | |
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) | (15) | 16 | (55) | 72 | |
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 | (17) | 4 | (12) | (49) | |
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) | 53 | (21) | 143 | (62) | |
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 | 51 | (20) | 141 | (69) | |
Recognized in Earnings (Ineffective Portion) | 0 | 0 | 0 | 0 | |
Designated Derivatives | Cash Flow Hedges | Foreign exchange contracts | Financial Products | Interest Expense | |||||
Derivative Instruments, Gain (Loss) | |||||
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) | 0 | 0 | |||
Amount of Gains (Losses) Reclassified from AOCI to Earnings | 5 | 13 | |||
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 | 0 | (2) | (2) | (5) | |
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) | 3 | (1) | 8 | (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 | 2 | 1 | 5 | |
Recognized in Earnings (Ineffective Portion) | 0 | 0 | 0 | 0 | |
Undesignated Derivatives | |||||
Derivative Instruments, Gain (Loss) | |||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments | 3 | 37 | (19) | 100 | |
Undesignated Derivatives | Foreign exchange contracts | Machinery, Energy & Transportation | Other Income (Expense) | |||||
Derivative Instruments, Gain (Loss) | |||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments | (5) | 15 | (43) | 67 | |
Undesignated Derivatives | Foreign exchange contracts | Financial Products | Other Income (Expense) | |||||
Derivative Instruments, Gain (Loss) | |||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments | 13 | 11 | 29 | 21 | |
Undesignated Derivatives | Commodity contracts | Machinery, Energy & Transportation | Other Income (Expense) | |||||
Derivative Instruments, Gain (Loss) | |||||
Gains (Losses) on Derivatives Not Designated as Hedging Instruments | $ (5) | $ 11 | $ (5) | $ 12 |
Derivative Financial Instrume_8
Derivative Financial Instruments and Risk Management (Details 5) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Offsetting Assets | ||
Gross Amount of Recognized Assets | $ 158 | $ 74 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount of Assets Presented in the Statement of Financial Position | 158 | 74 |
Financial Instruments | (49) | (32) |
Cash Collateral Received | 0 | 0 |
Net Amount of Assets | 109 | 42 |
Machinery, Energy & Transportation | ||
Offsetting Assets | ||
Gross Amount of Recognized Assets | 18 | 52 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount of Assets Presented in the Statement of Financial Position | 18 | 52 |
Financial Instruments | (18) | (22) |
Cash Collateral Received | 0 | 0 |
Net Amount of Assets | 0 | 30 |
Financial Products | ||
Offsetting Assets | ||
Gross Amount of Recognized Assets | 140 | 22 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount of Assets Presented in the Statement of Financial Position | 140 | 22 |
Financial Instruments | (31) | (10) |
Cash Collateral Received | 0 | 0 |
Net Amount of Assets | $ 109 | $ 12 |
Derivative Financial Instrume_9
Derivative Financial Instruments and Risk Management (Details 6) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Offsetting Liabilities | ||
Gross Amount of Recognized Liabilities | $ (136) | $ (93) |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount of Liabilities Presented in the Statement of Financial Position | (136) | (93) |
Financial Instruments | 49 | 32 |
Cash Collateral Pledged | 0 | 0 |
Net Amount of Liabilities | (87) | (61) |
Machinery, Energy & Transportation | ||
Offsetting Liabilities | ||
Gross Amount of Recognized Liabilities | (97) | (25) |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount of Liabilities Presented in the Statement of Financial Position | (97) | (25) |
Financial Instruments | 18 | 22 |
Cash Collateral Pledged | 0 | 0 |
Net Amount of Liabilities | (79) | (3) |
Financial Products | ||
Offsetting Liabilities | ||
Gross Amount of Recognized Liabilities | (39) | (68) |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount of Liabilities Presented in the Statement of Financial Position | (39) | (68) |
Financial Instruments | 31 | 10 |
Cash Collateral Pledged | 0 | 0 |
Net Amount of Liabilities | $ (8) | $ (58) |
Inventories (Details)
Inventories (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | ||||
Raw materials | $ 3,413 | $ 2,802 | ||
Work-in-process | 2,764 | 2,254 | ||
Finished goods | 5,425 | 4,761 | ||
Supplies | 212 | 201 | ||
Total inventories | $ 11,814 | $ 10,022 | $ 10,018 | |
Effect of LIFO inventory liquidation on cost of goods sold | $ 62 | |||
Effect of LIFO Inventory Liquidation on Income | $ 45 | |||
Effect of LIFO inventory liquidation on profit per share | $ 0.07 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Jan. 02, 2018 | |
Intangible assets | ||||||
Weighted Amortizable Life (in years) | 14 years | 14 years | ||||
Finite-Lived Intangible Assets, Gross | $ 4,222 | $ 4,222 | $ 4,177 | |||
Finite-Lived Intangible Assets, Accumulated Amortization | 2,246 | 2,246 | 2,066 | |||
Net | 1,976 | 1,976 | 2,111 | |||
Intangible assets | 1,976 | 1,976 | $ 2,111 | |||
Amortization expense | 82 | $ 82 | 248 | $ 241 | ||
Remaining three months of 2018 | 84 | 84 | ||||
2,019 | 326 | 326 | ||||
2,020 | 311 | 311 | ||||
2,021 | 293 | 293 | ||||
2,022 | 274 | 274 | ||||
Thereafter | 688 | $ 688 | ||||
Customer Relationships | ||||||
Intangible assets | ||||||
Weighted Amortizable Life (in years) | 15 years | 15 years | ||||
Finite-Lived Intangible Assets, Gross | 2,462 | $ 2,462 | $ 2,441 | |||
Finite-Lived Intangible Assets, Accumulated Amortization | 1,212 | 1,212 | 1,122 | |||
Net | 1,250 | $ 1,250 | $ 1,319 | |||
Intellectual Property | ||||||
Intangible assets | ||||||
Weighted Amortizable Life (in years) | 12 years | 11 years | ||||
Finite-Lived Intangible Assets, Gross | 1,562 | $ 1,562 | $ 1,538 | |||
Finite-Lived Intangible Assets, Accumulated Amortization | 933 | 933 | 851 | |||
Net | 629 | $ 629 | $ 687 | |||
Other | ||||||
Intangible assets | ||||||
Weighted Amortizable Life (in years) | 13 years | 13 years | ||||
Finite-Lived Intangible Assets, Gross | 198 | $ 198 | $ 198 | |||
Finite-Lived Intangible Assets, Accumulated Amortization | 101 | 101 | 93 | |||
Net | $ 97 | $ 97 | $ 105 | |||
ECM S.p.A. | ||||||
Intangible assets | ||||||
Finite-lived intangible assets | $ 112 | |||||
Downer Freight Rail | ||||||
Intangible assets | ||||||
Finite-lived intangible assets | $ 5 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill (Details 2) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Jan. 02, 2018 | |
Changes in carrying amount of goodwill by reportable segment: | |||
Goodwill, beginning of period | $ 7,397 | ||
Impairments, beginning of period | (1,197) | ||
Net goodwill, beginning of period | 6,200 | ||
Goodwill Acquired | 121 | ||
Goodwill impairment charge | 0 | $ 0 | |
Other adjustments | (88) | ||
Goodwill, end of period | 7,430 | ||
Impairments, end of period | (1,197) | ||
Net goodwill, end of period | 6,233 | ||
Goodwill | 6,200 | ||
Construction Industries | |||
Changes in carrying amount of goodwill by reportable segment: | |||
Goodwill, beginning of period | 305 | ||
Impairments, beginning of period | (22) | ||
Net goodwill, beginning of period | 283 | ||
Goodwill Acquired | 0 | ||
Other adjustments | 0 | ||
Goodwill, end of period | 305 | ||
Impairments, end of period | (22) | ||
Net goodwill, end of period | 283 | ||
Goodwill | 283 | ||
Resource Industries | |||
Changes in carrying amount of goodwill by reportable segment: | |||
Goodwill, beginning of period | 4,232 | ||
Impairments, beginning of period | (1,175) | ||
Net goodwill, beginning of period | 3,057 | ||
Goodwill Acquired | 0 | ||
Other adjustments | (46) | ||
Goodwill, end of period | 4,186 | ||
Impairments, end of period | (1,175) | ||
Net goodwill, end of period | 3,011 | ||
Goodwill | 3,057 | ||
Energy & Transportation | |||
Changes in carrying amount of goodwill by reportable segment: | |||
Goodwill, beginning of period | 2,806 | ||
Goodwill Acquired | 121 | ||
Other adjustments | (44) | ||
Goodwill, end of period | 2,883 | ||
All Other | |||
Changes in carrying amount of goodwill by reportable segment: | |||
Goodwill, beginning of period | 54 | ||
Goodwill Acquired | 0 | ||
Other adjustments | 2 | ||
Goodwill, end of period | $ 56 | ||
ECM S.p.A. | |||
Changes in carrying amount of goodwill by reportable segment: | |||
Goodwill | $ 109 | ||
Downer Freight Rail | |||
Changes in carrying amount of goodwill by reportable segment: | |||
Goodwill | $ 12 |
Investments in Debt and Equit_3
Investments in Debt and Equity Securities (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | $ 1,161 | $ 994 |
Unrealized Pretax Net Gains (Losses) | (22) | (5) |
Fair value | 1,139 | 989 |
U.S. treasury bonds | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 9 | 10 |
Unrealized Pretax Net Gains (Losses) | 0 | 0 |
Fair value | 9 | 10 |
Other U.S. and non-U.S. government bonds | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 48 | 42 |
Unrealized Pretax Net Gains (Losses) | 0 | 0 |
Fair value | 48 | 42 |
Corporate bonds | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 721 | 585 |
Unrealized Pretax Net Gains (Losses) | (11) | (1) |
Fair value | 710 | 584 |
Asset-backed securities | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 61 | 67 |
Unrealized Pretax Net Gains (Losses) | 0 | 0 |
Fair value | 61 | 67 |
U.S. governmental agency mortgage-backed securities | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 300 | 265 |
Unrealized Pretax Net Gains (Losses) | (10) | (4) |
Fair value | 290 | 261 |
Residential | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 7 | 8 |
Unrealized Pretax Net Gains (Losses) | 0 | 0 |
Fair value | 7 | 8 |
Commercial | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 15 | 17 |
Unrealized Pretax Net Gains (Losses) | (1) | 0 |
Fair value | $ 14 | 17 |
Equity securities | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 431 | |
Unrealized Pretax Net Gains (Losses) | 19 | |
Fair value | 450 | |
Large capitalization value | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 287 | |
Unrealized Pretax Net Gains (Losses) | (3) | |
Fair value | 284 | |
Real estate investment trust (REIT) | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 104 | |
Unrealized Pretax Net Gains (Losses) | 6 | |
Fair value | 110 | |
Smaller company growth | ||
Schedule of Investments in Debt and Equity Securities | ||
Cost Basis | 40 | |
Unrealized Pretax Net Gains (Losses) | 16 | |
Fair value | $ 56 |
Investments in Debt and Equit_4
Investments in Debt and Equity Securities (Details 2) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Less than 12 months | ||
Fair Value | $ 625 | $ 587 |
Unrealized Losses | 11 | 9 |
12 months or more | ||
Fair Value | 262 | 163 |
Unrealized Losses | 12 | 5 |
Total | ||
Fair Value | 887 | 750 |
Unrealized Losses | 23 | 14 |
Corporate bonds | ||
Less than 12 months | ||
Fair Value | 498 | 312 |
Unrealized Losses | 8 | 2 |
12 months or more | ||
Fair Value | 93 | 38 |
Unrealized Losses | 3 | 0 |
Total | ||
Fair Value | 591 | 350 |
Unrealized Losses | 11 | 2 |
U.S. governmental agency mortgage-backed securities | ||
Less than 12 months | ||
Fair Value | 119 | 129 |
Unrealized Losses | 3 | 1 |
12 months or more | ||
Fair Value | 163 | 110 |
Unrealized Losses | 8 | 3 |
Total | ||
Fair Value | 282 | 239 |
Unrealized Losses | 11 | 4 |
Commercial | ||
Less than 12 months | ||
Fair Value | 8 | |
Unrealized Losses | 0 | |
12 months or more | ||
Fair Value | 6 | |
Unrealized Losses | 1 | |
Total | ||
Fair Value | 14 | |
Unrealized Losses | $ 1 | |
Large capitalization value | ||
Less than 12 months | ||
Fair Value | 129 | |
Unrealized Losses | 5 | |
12 months or more | ||
Fair Value | 14 | |
Unrealized Losses | 2 | |
Total | ||
Fair Value | 143 | |
Unrealized Losses | 7 | |
Smaller company growth | ||
Less than 12 months | ||
Fair Value | 17 | |
Unrealized Losses | 1 | |
12 months or more | ||
Fair Value | 1 | |
Unrealized Losses | 0 | |
Total | ||
Fair Value | 18 | |
Unrealized Losses | $ 1 |
Investments in Debt and Equit_5
Investments in Debt and Equity Securities (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |||||
Due in one year or less, Cost Basis | $ 160 | $ 160 | |||
Due after one year through five years, Cost Basis | 540 | 540 | |||
Due after five through ten years, Cost Basis | 122 | 122 | |||
Due after ten years, Cost Basis | 17 | 17 | |||
Due in one year or less, Fair Value | 159 | 159 | |||
Due after one year through five years, Fair Value | 531 | 531 | |||
Due after five years through ten years, Fair Value | 120 | 120 | |||
Due after ten years, Fair Value | 18 | 18 | |||
Cost Basis | 1,161 | 1,161 | |||
Fair Value | 1,139 | 1,139 | |||
Schedule of Investments in Debt and Equity Securities | |||||
Cost Basis | 1,161 | 1,161 | $ 994 | ||
Available-for-sale securities, fair value | 1,139 | 1,139 | 989 | ||
Net unrealized gain (losses) for equity securities with a readily determinable fair value | 10 | 14 | |||
Realized net gains (losses) recognized on the sale of equity securities with a readily determinable fair value | 4 | 4 | |||
Available-for-sale Securities, Proceeds, Gains and Losses | |||||
Proceeds from the sale of available-for-sale securities | 41 | $ 244 | 181 | $ 431 | |
Gross gains from the sale of available-for-sale securities | 0 | 38 | 0 | 40 | |
Gross losses from the sale of available-for-sale securities | 0 | $ 1 | 0 | $ 3 | |
U.S. governmental agency mortgage-backed securities | |||||
Schedule of Investments in Debt and Equity Securities | |||||
Cost Basis | 300 | 300 | 265 | ||
Available-for-sale securities, fair value | 290 | 290 | 261 | ||
Residential | |||||
Schedule of Investments in Debt and Equity Securities | |||||
Cost Basis | 7 | 7 | 8 | ||
Available-for-sale securities, fair value | 7 | 7 | 8 | ||
Commercial | |||||
Schedule of Investments in Debt and Equity Securities | |||||
Cost Basis | 15 | 15 | 17 | ||
Available-for-sale securities, fair value | $ 14 | $ 14 | $ 17 |
Postretirement Benefits (Detail
Postretirement Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Pension and Other Postretirement Benefits | |||||
Pension and other postretirement benefit contributions | |||||
Contributions to pension and other postretirement benefit plans | $ 1,064 | $ 324 | $ 1,291 | $ 522 | |
Expected full year contributions to pension and other postretirement benefit plans during the year | 1,362 | 1,362 | |||
UNITED STATES | |||||
Components of net periodic benefit cost: | |||||
Service cost | 31 | 29 | 94 | 87 | |
Interest cost | 134 | 131 | 401 | 393 | |
Expected return on plan assets | (202) | (184) | (607) | (551) | |
Amortization of prior service cost / (credit) | 0 | 0 | 0 | 0 | |
Curtailments and termination benefits | $ 9 | 0 | 9 | ||
Net periodic benefit cost (benefit) | (37) | (24) | $ (112) | $ (62) | |
Weighted-average assumptions used to determine net cost: | |||||
Discount rate used to measure service cost | 3.70% | 4.20% | |||
Discount rate used to measure interest cost | 3.20% | 3.30% | |||
Expected rate of return on plan assets (as a percent) | 6.30% | 6.70% | |||
Rate of compensation increase (as a percent) | 4.00% | 4.00% | |||
Foreign Plan | |||||
Components of net periodic benefit cost: | |||||
Service cost | 22 | 23 | $ 67 | $ 70 | |
Interest cost | 25 | 23 | 74 | 73 | |
Expected return on plan assets | (55) | (55) | (167) | (168) | |
Amortization of prior service cost / (credit) | 0 | 0 | 0 | (1) | |
Curtailments and termination benefits | $ 20 | 0 | 20 | ||
Net periodic benefit cost (benefit) | (8) | (9) | $ (26) | $ (6) | |
Weighted-average assumptions used to determine net cost: | |||||
Discount rate used to measure service cost | 2.30% | 2.30% | |||
Discount rate used to measure interest cost | 2.20% | 2.30% | |||
Expected rate of return on plan assets (as a percent) | 5.20% | 5.90% | |||
Rate of compensation increase (as a percent) | 4.00% | 4.00% | |||
Discretionary contribution | |||||
Pension and other postretirement benefit contributions | |||||
Contributions to pension and other postretirement benefit plans | 1,000 | ||||
Other Postretirement Benefits Plan | |||||
Components of net periodic benefit cost: | |||||
Service cost | 22 | 19 | $ 64 | $ 58 | |
Interest cost | 31 | 33 | 93 | 98 | |
Expected return on plan assets | (9) | (10) | (25) | (28) | |
Amortization of prior service cost / (credit) | (9) | (6) | (26) | (17) | |
Curtailments and termination benefits | 0 | 0 | |||
Net periodic benefit cost (benefit) | $ 35 | $ 36 | $ 106 | $ 111 | |
Weighted-average assumptions used to determine net cost: | |||||
Discount rate used to measure service cost | 3.50% | 3.90% | |||
Discount rate used to measure interest cost | 3.20% | 3.30% | |||
Expected rate of return on plan assets (as a percent) | 7.50% | 7.50% | |||
Rate of compensation increase (as a percent) | 4.60% | 4.00% |
Postretirement Benefits (Deta_2
Postretirement Benefits (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Defined contribution plans | ||||
Costs related to defined contribution plans | $ 118 | $ 116 | $ 311 | $ 321 |
U.S. Plans | ||||
Defined contribution plans | ||||
Costs related to defined contribution plans | 97 | 97 | 247 | 267 |
Non-U.S. Plans | ||||
Defined contribution plans | ||||
Costs related to defined contribution plans | $ 21 | $ 19 | $ 64 | $ 54 |
Guarantees and Product Warran_3
Guarantees and Product Warranty (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Related liability | $ 8 | $ 8 |
Guarantor Obligations | ||
Guarantees, maximum potential amount of future payments | 2,152 | 2,105 |
Special-Purpose Corporation assets in Consolidated Statement of Financial Position | 1,133 | 1,107 |
Special-Purpose Corporation liabilities in Consolidated Statement of Financial Position | 1,133 | 1,106 |
Caterpillar dealer performance guarantees | ||
Guarantor Obligations | ||
Guarantees, maximum potential amount of future payments | 1,375 | 1,313 |
Customer loan guarantees | ||
Guarantor Obligations | ||
Guarantees, maximum potential amount of future payments | 31 | 40 |
Supplier consortium performance guarantees | ||
Guarantor Obligations | ||
Guarantees, maximum potential amount of future payments | 556 | 565 |
Third party logistics business lease guarantees | ||
Guarantor Obligations | ||
Guarantees, maximum potential amount of future payments | 68 | 69 |
Other guarantees | ||
Guarantor Obligations | ||
Guarantees, maximum potential amount of future payments | $ 122 | $ 118 |
Guarantees and Product Warran_4
Guarantees and Product Warranty (Details 2) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Movement in Standard Product Warranty Accrual | ||
Warranty liability, beginning balance | $ 1,419 | $ 1,258 |
Reduction in liability (payments) | (561) | (860) |
Increase in liability (new warranties) | 556 | 1,021 |
Warranty liability, ending balance | $ 1,414 | $ 1,419 |
Profit Per Share (Details)
Profit Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||
Oct. 31, 2018 | Aug. 31, 2018 | May 31, 2018 | Jun. 30, 2018 | Oct. 31, 2018 | Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jul. 01, 2018 | Jan. 31, 2014 | ||
Accelerated Stock Repurchase Agreement [Line Items] | ||||||||||||||
Common shares repurchased (in shares) | 4,800,000 | 1,600,000 | 3,300,000 | 3,100,000 | 12,804,035 | 0 | ||||||||
Common shares under SARs and stock options not included in the computation of diluted earnings per share (in shares) | 1,471,071 | 5,136,715 | ||||||||||||
Share-based Compensation, Stock Options, Activity [Table Text Block] | nine | |||||||||||||
Accelerated share repurchase, amount | $ 500 | |||||||||||||
Profit for the period (A) (in dollars) | [1] | $ 1,727 | $ 1,059 | $ 5,099 | $ 2,053 | |||||||||
Determination of shares (in millions) | ||||||||||||||
Weighted-average number of common shares outstanding (B) (in shares) | 592,100,000 | 592,900,000 | 595,300,000 | 590,300,000 | ||||||||||
Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price (in shares) | 7,300,000 | 7,200,000 | 8,500,000 | 6,200,000 | ||||||||||
Average common shares outstanding for fully diluted computation (C) (in shares) | [2] | 599,400,000 | 600,100,000 | 603,800,000 | 596,500,000 | |||||||||
Profit (loss) per share of common stock: | ||||||||||||||
Assuming no dilution (A/B) (in dollars per share) | $ 2.92 | $ 1.79 | $ 8.57 | $ 3.48 | ||||||||||
Assuming full dilution (A/C) (in dollars per share) | [2] | $ 2.88 | $ 1.77 | $ 8.45 | $ 3.44 | |||||||||
Shares outstanding as of September 30 (in shares) | 590,100,000 | 594,900,000 | 590,100,000 | 594,900,000 | ||||||||||
Common stock repurchase | ||||||||||||||
Stock repurchase program, authorized amount | $ 750 | $ 750 | $ 10,000 | $ 10,000 | ||||||||||
Common shares repurchased (in shares) | 4,800,000 | 1,600,000 | 3,300,000 | 3,100,000 | 12,804,035 | 0 | ||||||||
Payments for repurchase of common stock | $ 750 | $ 250 | $ 500 | $ 750 | $ 2,000 | $ 0 | ||||||||
Stock repurchase program, remaining authorized repurchase amount | $ 3,500 | $ 3,500 | ||||||||||||
Subsequent Event [Member] | ||||||||||||||
Accelerated Stock Repurchase Agreement [Line Items] | ||||||||||||||
Common shares repurchased (in shares) | 400,000 | 5,200,000 | ||||||||||||
Common stock repurchase | ||||||||||||||
Common shares repurchased (in shares) | 400,000 | 5,200,000 | ||||||||||||
[1] | 1 Profit attributable to common shareholders. | |||||||||||||
[2] | 2 Diluted by assumed exercise of stock-based compensation awards using the treasury stock method. |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss) | |||||||||
Adjustment to adopt recognition and measurement of financial assets and liabilities guidance | $ (11) | ||||||||
Accumulated other comprehensive income (loss), start of period | $ (1,568) | $ (1,233) | $ (1,568) | $ (1,233) | $ (1,496) | (1,203) | $ (1,192) | $ (1,471) | $ (2,039) |
Other comprehensive income (loss) before reclassifications | (34) | 244 | (236) | 749 | |||||
Amounts reclassified from accumulated other comprehensive (income) loss | (38) | (6) | (129) | 57 | |||||
Other comprehensive income (loss) | (72) | 238 | (365) | 806 | |||||
Accumulated other comprehensive income (loss), end of period | (1,568) | (1,233) | (1,568) | (1,233) | |||||
Foreign currency translation | |||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||
Adjustment to adopt recognition and measurement of financial assets and liabilities guidance | 0 | ||||||||
Accumulated other comprehensive income (loss), start of period | (1,497) | (1,251) | (1,497) | (1,251) | (1,432) | (1,205) | (1,205) | (1,499) | (1,970) |
Other comprehensive income (loss) before reclassifications | (65) | 237 | (293) | 706 | |||||
Amounts reclassified from accumulated other comprehensive (income) loss | 0 | 11 | 1 | 13 | |||||
Other comprehensive income (loss) | (65) | 248 | (292) | 719 | |||||
Accumulated other comprehensive income (loss), end of period | (1,497) | (1,251) | (1,497) | (1,251) | |||||
Pension and other postretirement benefits | |||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||
Adjustment to adopt recognition and measurement of financial assets and liabilities guidance | 0 | ||||||||
Accumulated other comprehensive income (loss), start of period | 23 | 10 | 23 | 10 | 30 | 46 | 46 | 14 | 14 |
Other comprehensive income (loss) before reclassifications | 0 | 0 | (2) | 8 | |||||
Amounts reclassified from accumulated other comprehensive (income) loss | (7) | (4) | (21) | (12) | |||||
Other comprehensive income (loss) | (7) | (4) | (23) | (4) | |||||
Accumulated other comprehensive income (loss), end of period | 23 | 10 | 23 | 10 | |||||
Derivative financial instruments | |||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||
Adjustment to adopt recognition and measurement of financial assets and liabilities guidance | 0 | ||||||||
Accumulated other comprehensive income (loss), start of period | (77) | (32) | (77) | (32) | (78) | (41) | (41) | (39) | (115) |
Other comprehensive income (loss) before reclassifications | 32 | (4) | 73 | 6 | |||||
Amounts reclassified from accumulated other comprehensive (income) loss | (31) | 11 | (109) | 77 | |||||
Other comprehensive income (loss) | 1 | 7 | (36) | 83 | |||||
Accumulated other comprehensive income (loss), end of period | (77) | (32) | (77) | (32) | |||||
Available-for-sale securities | |||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||
Adjustment to adopt recognition and measurement of financial assets and liabilities guidance | (11) | ||||||||
Accumulated other comprehensive income (loss), start of period | (17) | 40 | (17) | 40 | $ (16) | $ (3) | $ 8 | $ 53 | $ 32 |
Other comprehensive income (loss) before reclassifications | (1) | 11 | (14) | 29 | |||||
Amounts reclassified from accumulated other comprehensive (income) loss | 0 | (24) | 0 | (21) | |||||
Other comprehensive income (loss) | (1) | (13) | (14) | 8 | |||||
Accumulated other comprehensive income (loss), end of period | $ (17) | $ 40 | $ (17) | $ 40 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Other income (expense) | $ 102 | $ 132 | $ 350 | $ 260 | |
Interest expense excluding Financial Products | (102) | (118) | (305) | (362) | |
Interest expense of Financial Products | (185) | (163) | (533) | (484) | |
Reclassifications before tax | 2,135 | 1,523 | 6,455 | 2,971 | |
Tax (provision) benefit | (415) | (470) | (1,377) | (921) | |
Reclassifications net of tax | [1] | 1,727 | 1,059 | 5,099 | 2,053 |
Reclassification out of Accumulated Other Comprehensive Income | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Reclassifications net of tax | 38 | 6 | 129 | (57) | |
Reclassification out of Accumulated Other Comprehensive Income | Foreign currency translation | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Other income (expense) | 0 | (11) | (1) | (13) | |
Tax (provision) benefit | 0 | 0 | 0 | 0 | |
Reclassifications net of tax | 0 | (11) | (1) | (13) | |
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) | 9 | 6 | 26 | 18 | |
Tax (provision) benefit | (2) | (2) | (5) | (6) | |
Reclassifications net of tax | 7 | 4 | 21 | 12 | |
Reclassification out of Accumulated Other Comprehensive Income | Derivative financial instruments | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Reclassifications before tax | 39 | (16) | 141 | (118) | |
Tax (provision) benefit | (8) | 5 | (32) | 41 | |
Reclassifications net of tax | 31 | (11) | 109 | (77) | |
Reclassification out of Accumulated Other Comprehensive Income | Derivative financial instruments | Foreign exchange contracts | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Other income (expense) | 34 | (16) | 129 | (118) | |
Reclassification out of Accumulated Other Comprehensive Income | Derivative financial instruments | Foreign exchange contracts | Financial Products | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Interest expense of Financial Products | (5) | 0 | (13) | 0 | |
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 | 0 | (2) | (2) | (5) | |
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 | 2 | 1 | 5 | |
Reclassification out of Accumulated Other Comprehensive Income | Available-for-sale securities | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | |||||
Other income (expense) | 0 | 36 | 0 | 32 | |
Tax (provision) benefit | 0 | (12) | 0 | (11) | |
Reclassifications net of tax | $ 0 | $ 24 | $ 0 | $ 21 | |
[1] | 1 Profit attributable to common shareholders. |
Environmental and legal matte_2
Environmental and legal matters Environmental and legal matters (Details) | Mar. 03, 2017 | Mar. 20, 2014 |
Loss Contingencies | ||
Number of facilities served search and seizure warrants | 3 | |
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 | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||||||
Estimated annual effective tax rate (as a percent) | 24.00% | 32.00% | ||||
Adjustment to U.S. Deferred Tax Rate change 2017 U.S. Tax Reform Amount | $ 154 | |||||
U.S. 2017 tax reform estimated impact | $ 2,371 | |||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | ||||
Correction of Prior Year Valuation Allowance | $ 59 | $ (17) | $ (33) | $ (9) | ||
Tax benefit for settlement of stock-based compensation awards | 52 | $ 45 | ||||
Valuation allowance increase (decrease) | (25) | |||||
Prior year tax adjustment expense (benefit) | $ 15 | |||||
Tax Year Prior Years | ||||||
Income Tax Contingency | ||||||
Income tax examination, proposed liability increase/(decrease) | $ 2,300 | $ 2,300 | ||||
Discretionary contribution | ||||||
Income Tax Disclosure [Abstract] | ||||||
Contributions to pension and other postretirement benefit plans | $ 1,000 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)group_presidentssegmentsdealers | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information | |||||
Number of group presidents | group_presidents | 4 | ||||
Number of operating segments | segments | 6 | ||||
Useful life to amortize goodwill for segment assets | 20 years | ||||
Reportable Segments | |||||
Total sales and revenues | $ 13,510 | $ 11,413 | $ 40,380 | $ 32,566 | |
Depreciation and amortization | 698 | 723 | 2,065 | 2,153 | |
Consolidated profit before taxes | 2,135 | 1,523 | 6,455 | 2,971 | |
Segment assets | 78,209 | 78,209 | $ 76,962 | ||
Capital expenditures | 601 | 513 | 2,129 | 1,637 | |
Revenues earned from Machinery, Energy & Transportation | 122 | 93 | $ 345 | 281 | |
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 | |||||
Total sales and revenues | 56 | 126 | |||
Depreciation and amortization | 55 | 52 | $ 170 | 162 | |
Consolidated profit before taxes | (10) | 5 | 70 | (28) | |
Segment assets | 1,273 | 1,273 | 1,312 | ||
Capital expenditures | 63 | 26 | 101 | 71 | |
Reportable Segments Including Intersegment Eliminations | |||||
Reportable Segments | |||||
Total sales and revenues | 14,721 | 12,454 | $ 43,970 | 35,550 | |
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 | ||||
Total sales and revenues | 13,614 | 11,459 | $ 40,661 | 32,742 | |
Depreciation and amortization | 579 | 597 | 1,719 | 1,788 | |
Consolidated profit before taxes | 2,646 | 2,041 | 7,867 | 5,447 | |
Segment assets | 55,541 | 55,541 | 53,698 | ||
Capital expenditures | 566 | 512 | 1,928 | 1,538 | |
Intersegment sales and revenues | |||||
Reportable Segments | |||||
Total sales and revenues | 1,107 | 995 | 3,309 | 2,808 | |
Machinery, Energy & Transportation | Reportable Segments Including Intersegment Eliminations | |||||
Reportable Segments | |||||
Total sales and revenues | 13,876 | 11,680 | 41,503 | 33,240 | |
Machinery, Energy & Transportation | Reportable Segments | |||||
Reportable Segments | |||||
Total sales and revenues | 12,769 | 10,685 | 38,194 | 30,432 | |
Depreciation and amortization | 367 | 393 | 1,092 | 1,172 | |
Consolidated profit before taxes | 2,445 | 1,856 | 7,391 | 4,888 | |
Segment assets | 19,812 | 19,812 | 18,805 | ||
Capital expenditures | 268 | 204 | 736 | 520 | |
Machinery, Energy & Transportation | Intersegment sales and revenues | |||||
Reportable Segments | |||||
Total sales and revenues | 1,107 | 995 | 3,309 | 2,808 | |
Construction Industries | Reportable Segments Including Intersegment Eliminations | |||||
Reportable Segments | |||||
Total sales and revenues | 5,683 | 4,886 | 17,532 | 13,945 | |
Construction Industries | Reportable Segments | |||||
Reportable Segments | |||||
Total sales and revenues | 5,654 | 4,854 | 17,450 | 13,875 | |
Depreciation and amortization | 93 | 99 | 272 | 301 | |
Consolidated profit before taxes | 1,058 | 884 | 3,329 | 2,418 | |
Segment assets | 5,071 | 5,071 | 4,838 | ||
Capital expenditures | 58 | 50 | 162 | 107 | |
Construction Industries | Intersegment sales and revenues | |||||
Reportable Segments | |||||
Total sales and revenues | 29 | 32 | 82 | 70 | |
Resource Industries | Reportable Segments Including Intersegment Eliminations | |||||
Reportable Segments | |||||
Total sales and revenues | 2,638 | 1,956 | 7,473 | 5,553 | |
Resource Industries | Reportable Segments | |||||
Reportable Segments | |||||
Total sales and revenues | 2,538 | 1,870 | 7,177 | 5,299 | |
Depreciation and amortization | 115 | 129 | 346 | 386 | |
Consolidated profit before taxes | 414 | 229 | 1,203 | 488 | |
Segment assets | 6,439 | 6,439 | 6,403 | ||
Capital expenditures | 49 | 41 | 111 | 93 | |
Resource Industries | Intersegment sales and revenues | |||||
Reportable Segments | |||||
Total sales and revenues | 100 | 86 | 296 | 254 | |
Energy & Transportation | Reportable Segments Including Intersegment Eliminations | |||||
Reportable Segments | |||||
Total sales and revenues | 5,555 | 4,838 | 16,498 | 13,742 | |
Energy & Transportation | Reportable Segments | |||||
Reportable Segments | |||||
Total sales and revenues | 4,577 | 3,961 | 13,567 | 11,258 | |
Depreciation and amortization | 159 | 165 | 474 | 485 | |
Consolidated profit before taxes | 973 | 743 | 2,859 | 1,982 | |
Segment assets | 8,302 | 8,302 | 7,564 | ||
Capital expenditures | 161 | 113 | 463 | 320 | |
Energy & Transportation | Intersegment sales and revenues | |||||
Reportable Segments | |||||
Total sales and revenues | 978 | 877 | 2,931 | 2,484 | |
Financial Products Segment | Reportable Segments Including Intersegment Eliminations | |||||
Reportable Segments | |||||
Total sales and revenues | 845 | 774 | 2,467 | 2,310 | |
Financial Products Segment | Reportable Segments | |||||
Reportable Segments | |||||
Total sales and revenues | 845 | 774 | 2,467 | 2,310 | |
Depreciation and amortization | 212 | 204 | 627 | 616 | |
Consolidated profit before taxes | 201 | 185 | 476 | 559 | |
Segment assets | 35,729 | 35,729 | $ 34,893 | ||
Capital expenditures | 298 | 308 | 1,192 | 1,018 | |
Financial Products Segment | Intersegment sales and revenues | |||||
Reportable Segments | |||||
Total 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, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Sales and revenues by geographic region | ||||
Revenues | $ 13,510 | $ 11,413 | $ 40,380 | $ 32,566 |
Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Revenues | 13,614 | 11,459 | 40,661 | 32,742 |
All Other operating segments | ||||
Sales and revenues by geographic region | ||||
Revenues | 56 | 126 | ||
Corporate items and eliminations | ||||
Sales and revenues by geographic region | ||||
Revenues | 1,107 | 995 | 3,309 | 2,808 |
Construction Industries | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 5,654 | 17,450 | ||
Revenues | 5,654 | 4,854 | 17,450 | 13,875 |
Construction Industries | Corporate items and eliminations | ||||
Sales and revenues by geographic region | ||||
Revenues | 29 | 32 | 82 | 70 |
Resource Industries | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 2,538 | 7,177 | ||
Revenues | 2,538 | 1,870 | 7,177 | 5,299 |
Resource Industries | Corporate items and eliminations | ||||
Sales and revenues by geographic region | ||||
Revenues | 100 | 86 | 296 | 254 |
Energy & Transportation | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 4,577 | 13,567 | ||
Revenues | 4,577 | 3,961 | 13,567 | 11,258 |
Energy & Transportation | Corporate items and eliminations | ||||
Sales and revenues by geographic region | ||||
Revenues | 978 | 877 | 2,931 | 2,484 |
All Other | All Other operating segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 37 | 115 | ||
Machinery, Energy & Transportation | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 12,763 | 38,192 | ||
Machinery, Energy & Transportation | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Revenues | 12,769 | 10,685 | 38,194 | 30,432 |
Machinery, Energy & Transportation | Corporate items and eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | (43) | (117) | ||
Revenues | 1,107 | 995 | 3,309 | 2,808 |
Financial Products | ||||
Sales and revenues by geographic region | ||||
Revenues | 747 | 2,188 | ||
Financial Products | Corporate items and eliminations | ||||
Sales and revenues by geographic region | ||||
Revenues | (98) | (279) | ||
Financial Products Segment | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Revenues | 845 | 774 | 2,467 | 2,310 |
Financial Products Segment | Corporate items and eliminations | ||||
Sales and revenues by geographic region | ||||
Revenues | 0 | 0 | 0 | 0 |
Business | Energy & Transportation | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 4,577 | 13,567 | ||
Business | Machinery, Energy & Transportation | ||||
Sales and revenues by geographic region | ||||
Revenues | 10,713 | 30,482 | ||
Business | Machinery, Energy & Transportation | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Revenues | 10,685 | 30,432 | ||
Business | Machinery, Energy & Transportation | All Other operating segments | ||||
Sales and revenues by geographic region | ||||
Revenues | 56 | 126 | ||
Business | Financial Products | ||||
Sales and revenues by geographic region | ||||
Revenues | 793 | 2,363 | ||
Business | Financial Products | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Revenues | 774 | 2,310 | ||
Business | Financial Products | All Other operating segments | ||||
Sales and revenues by geographic region | ||||
Revenues | $ 0 | $ 0 | ||
North America | ||||
Sales and revenues by geographic region | ||||
Revenues | 6,276 | 18,951 | ||
North America | Machinery, Energy & Transportation | Corporate items and eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | (40) | (108) | ||
North America | Financial Products | Corporate items and eliminations | ||||
Sales and revenues by geographic region | ||||
Revenues | (62) | (168) | ||
North America | Business | Construction Industries | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 2,646 | 8,005 | ||
North America | Business | Resource Industries | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 849 | 2,451 | ||
North America | Business | Energy & Transportation | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 2,309 | 7,116 | ||
North America | Business | All Other | All Other operating segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 15 | 47 | ||
North America | Business | Machinery, Energy & Transportation | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 5,779 | 17,511 | ||
North America | Business | Financial Products | ||||
Sales and revenues by geographic region | ||||
Revenues | 497 | 1,440 | ||
North America | Business | Financial Products Segment | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Revenues | 559 | 1,608 | ||
Latin America | ||||
Sales and revenues by geographic region | ||||
Revenues | 1,183 | 3,360 | ||
Latin America | Machinery, Energy & Transportation | Corporate items and eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 1 | (1) | ||
Latin America | Financial Products | Corporate items and eliminations | ||||
Sales and revenues by geographic region | ||||
Revenues | (12) | (36) | ||
Latin America | Business | Construction Industries | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 369 | 1,105 | ||
Latin America | Business | Resource Industries | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 427 | 1,181 | ||
Latin America | Business | Energy & Transportation | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 330 | 897 | ||
Latin America | Business | All Other | All Other operating segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 0 | 1 | ||
Latin America | Business | Machinery, Energy & Transportation | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 1,127 | 3,183 | ||
Latin America | Business | Financial Products | ||||
Sales and revenues by geographic region | ||||
Revenues | 56 | 177 | ||
Latin America | Business | Financial Products Segment | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Revenues | 68 | 213 | ||
EAME | ||||
Sales and revenues by geographic region | ||||
Revenues | 2,957 | 8,724 | ||
EAME | Machinery, Energy & Transportation | Corporate items and eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | (5) | (8) | ||
EAME | Financial Products | Corporate items and eliminations | ||||
Sales and revenues by geographic region | ||||
Revenues | (6) | (18) | ||
EAME | Business | Construction Industries | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 1,109 | 3,347 | ||
EAME | Business | Resource Industries | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 574 | 1,663 | ||
EAME | Business | Energy & Transportation | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 1,180 | 3,425 | ||
EAME | Business | All Other | All Other operating segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 4 | 12 | ||
EAME | Business | Machinery, Energy & Transportation | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 2,862 | 8,439 | ||
EAME | Business | Financial Products | ||||
Sales and revenues by geographic region | ||||
Revenues | 95 | 285 | ||
EAME | Business | Financial Products Segment | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Revenues | 101 | 303 | ||
Asia Pacific | ||||
Sales and revenues by geographic region | ||||
Revenues | 3,094 | 9,345 | ||
Asia Pacific | Machinery, Energy & Transportation | Corporate items and eliminations | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 1 | 0 | ||
Asia Pacific | Financial Products | Corporate items and eliminations | ||||
Sales and revenues by geographic region | ||||
Revenues | (18) | (57) | ||
Asia Pacific | Business | Construction Industries | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 1,530 | 4,993 | ||
Asia Pacific | Business | Resource Industries | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 688 | 1,882 | ||
Asia Pacific | Business | Energy & Transportation | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 758 | 2,129 | ||
Asia Pacific | Business | All Other | All Other operating segments | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 18 | 55 | ||
Asia Pacific | Business | Machinery, Energy & Transportation | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 2,995 | 9,059 | ||
Asia Pacific | Business | Financial Products | ||||
Sales and revenues by geographic region | ||||
Revenues | 99 | 286 | ||
Asia Pacific | Business | Financial Products Segment | Reportable Segments | ||||
Sales and revenues by geographic region | ||||
Revenues | 117 | 343 | ||
Oil and gas | Energy & Transportation | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 1,362 | 4,044 | ||
Power generation | Energy & Transportation | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 1,102 | 3,063 | ||
Industrial | Energy & Transportation | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | 863 | 2,738 | ||
Transportation | Energy & Transportation | ||||
Sales and revenues by geographic region | ||||
Sales and revenues by geographic region | $ 1,250 | $ 3,722 |
Segment Information (Details 3)
Segment Information (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | $ 13,510 | $ 11,413 | $ 40,380 | $ 32,566 |
Reportable Segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | 13,614 | 11,459 | 40,661 | 32,742 |
All Other operating segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | 56 | 126 | ||
Other | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | (102) | (302) | ||
Machinery, Energy & Transportation | Reportable Segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | 12,769 | 10,685 | 38,194 | 30,432 |
Financial Products | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | $ 747 | $ 2,188 | ||
Business | Machinery, Energy & Transportation | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | 10,713 | 30,482 | ||
Business | Machinery, Energy & Transportation | Reportable Segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | 10,685 | 30,432 | ||
Business | Machinery, Energy & Transportation | All Other operating segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | 56 | 126 | ||
Business | Machinery, Energy & Transportation | Other | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | (28) | (76) | ||
Business | Financial Products | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | 793 | 2,363 | ||
Business | Financial Products | Reportable Segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | 774 | 2,310 | ||
Business | Financial Products | All Other operating segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | 0 | 0 | ||
Business | Financial Products | Other | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | 19 | 53 | ||
Consolidating Adjustments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | (93) | (279) | ||
Consolidating Adjustments | Reportable Segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | 0 | 0 | ||
Consolidating Adjustments | All Other operating segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | 0 | 0 | ||
Consolidating Adjustments | Other | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Total sales and revenues | $ (93) | $ (279) |
Segment Information (Details 4)
Segment Information (Details 4) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | $ 2,135 | $ 1,523 | $ 6,455 | $ 2,971 |
Reportable Segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 2,646 | 2,041 | 7,867 | 5,447 |
All Other operating segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (10) | 5 | 70 | (28) |
Cost Centers | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 29 | 17 | 55 | 13 |
Corporate Costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (134) | (158) | (480) | (447) |
Timing | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (18) | (21) | (168) | (128) |
Restructuring Costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (110) | (90) | (293) | (1,011) |
Inventory/cost of sales | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (20) | (4) | 3 | (80) |
Postretirement Benefits Expense | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 58 | 38 | 227 | 129 |
Stock-Based Compensation Expense [Member] | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (52) | (48) | (164) | (165) |
Financing Costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (56) | (116) | (203) | (369) |
Currency | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (96) | (37) | (145) | (195) |
Other Income Expense Methodology Differences | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (88) | (71) | (261) | (105) |
Other | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (14) | (33) | (53) | (90) |
Business | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 2,636 | 2,046 | 7,937 | 5,419 |
Machinery, Energy & Transportation | Reportable Segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 2,445 | 1,856 | 7,391 | 4,888 |
Machinery, Energy & Transportation | Business | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 1,945 | 1,342 | 5,992 | 2,418 |
Machinery, Energy & Transportation | Business | Reportable Segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 2,445 | 1,856 | 7,391 | 4,888 |
Machinery, Energy & Transportation | Business | All Other operating segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (10) | 5 | 70 | (28) |
Machinery, Energy & Transportation | Business | Cost Centers | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 29 | 17 | 55 | 13 |
Machinery, Energy & Transportation | Business | Corporate Costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (134) | (158) | (480) | (447) |
Machinery, Energy & Transportation | Business | Timing | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (18) | (21) | (168) | (128) |
Machinery, Energy & Transportation | Business | Restructuring Costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (96) | (89) | (278) | (1,009) |
Machinery, Energy & Transportation | Business | Inventory/cost of sales | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (20) | (4) | 3 | (80) |
Machinery, Energy & Transportation | Business | Postretirement Benefits Expense | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 58 | 38 | 227 | 129 |
Machinery, Energy & Transportation | Business | Stock-Based Compensation Expense [Member] | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (50) | (46) | (158) | (158) |
Machinery, Energy & Transportation | Business | Financing Costs | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (56) | (116) | (203) | (369) |
Machinery, Energy & Transportation | Business | Currency | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (96) | (37) | (145) | (195) |
Machinery, Energy & Transportation | Business | Other Income Expense Methodology Differences | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (88) | (71) | (261) | (105) |
Machinery, Energy & Transportation | Business | Other | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | (19) | (32) | (61) | (93) |
Financial Products | Business | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 190 | 181 | 463 | 553 |
Financial Products | Business | Reportable Segments | ||||
Reconciliation of Consolidated profit (loss) before taxes | ||||
Consolidated profit before taxes | 201 | 185 | 476 | 559 |
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 | (14) | (1) | (15) | (2) |
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 | (2) | (2) | (6) | (7) |
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 | $ 5 | $ (1) | $ 8 | $ 3 |
Segment Information (Details 5)
Segment Information (Details 5) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reconciliation of restructuring | ||||
Consolidated profit before taxes | $ 2,135 | $ 1,523 | $ 6,455 | $ 2,971 |
Restructuring costs | (110) | (90) | (293) | (1,011) |
Reportable Segments | ||||
Reconciliation of restructuring | ||||
Consolidated profit before taxes | 2,646 | 2,041 | 7,867 | 5,447 |
Reportable Segments | Construction Industries | ||||
Reconciliation of restructuring | ||||
Consolidated profit before taxes | 1,058 | 884 | 3,329 | 2,418 |
Reportable Segments | Resource Industries | ||||
Reconciliation of restructuring | ||||
Consolidated profit before taxes | 414 | 229 | 1,203 | 488 |
Reportable Segments | Energy & Transportation | ||||
Reconciliation of restructuring | ||||
Consolidated profit before taxes | 973 | 743 | 2,859 | 1,982 |
Reportable Segments | Financial Products Segment | ||||
Reconciliation of restructuring | ||||
Consolidated profit before taxes | 201 | 185 | 476 | 559 |
All Other operating segments | ||||
Reconciliation of restructuring | ||||
Consolidated profit before taxes | (10) | 5 | 70 | (28) |
Business | ||||
Reconciliation of restructuring | ||||
Consolidated profit before taxes | 2,636 | 2,046 | 7,937 | 5,419 |
Restructuring costs | (107) | (115) | (285) | (1,058) |
Consolidated profit before taxes with restructuring costs | 2,529 | 1,931 | 7,652 | 4,361 |
Business | Reportable Segments | Construction Industries | ||||
Reconciliation of restructuring | ||||
Consolidated profit before taxes | 1,058 | 884 | 3,329 | 2,418 |
Restructuring costs | (19) | (15) | (62) | (709) |
Consolidated profit before taxes with restructuring costs | 1,039 | 869 | 3,267 | 1,709 |
Business | Reportable Segments | Resource Industries | ||||
Reconciliation of restructuring | ||||
Consolidated profit before taxes | 414 | 229 | 1,203 | 488 |
Restructuring costs | (53) | (59) | (149) | (229) |
Consolidated profit before taxes with restructuring costs | 361 | 170 | 1,054 | 259 |
Business | Reportable Segments | Energy & Transportation | ||||
Reconciliation of restructuring | ||||
Consolidated profit before taxes | 973 | 743 | 2,859 | 1,982 |
Restructuring costs | (31) | (28) | (60) | (86) |
Consolidated profit before taxes with restructuring costs | 942 | 715 | 2,799 | 1,896 |
Business | Reportable Segments | Financial Products Segment | ||||
Reconciliation of restructuring | ||||
Consolidated profit before taxes | 201 | 185 | 476 | 559 |
Restructuring costs | 0 | 0 | (1) | (2) |
Consolidated profit before taxes with restructuring costs | 201 | 185 | 475 | 557 |
Business | All Other operating segments | All Other | ||||
Reconciliation of restructuring | ||||
Consolidated profit before taxes | (10) | 5 | 70 | (28) |
Restructuring costs | (4) | (13) | (13) | (32) |
Consolidated profit before taxes with restructuring costs | $ (14) | $ (8) | $ 57 | $ (60) |
Segment Information (Details 6)
Segment Information (Details 6) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Reconciliation of Assets | ||
Total assets | $ 78,209 | $ 76,962 |
Reportable Segments | ||
Reconciliation of Assets | ||
Total assets | 55,541 | 53,698 |
All Other operating segments | ||
Reconciliation of Assets | ||
Total assets | 1,273 | 1,312 |
Cash and Short Term Investments | ||
Reconciliation of Assets | ||
Total assets | 7,189 | 7,381 |
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 | 1,190 | 1,592 |
Goodwill and Intangible Assets | ||
Reconciliation of Assets | ||
Total assets | 4,304 | 4,210 |
Property Plant and Equipment-Net and Other Assets | ||
Reconciliation of Assets | ||
Total assets | 2,035 | 2,341 |
Operating Lease Methodology Difference | ||
Reconciliation of Assets | ||
Total assets | (184) | (191) |
Inventory Methodology Differences | ||
Reconciliation of Assets | ||
Total assets | (2,374) | (2,287) |
Liabilities Included in Segment Assets | ||
Reconciliation of Assets | ||
Total assets | 9,814 | 9,352 |
Other | ||
Reconciliation of Assets | ||
Total assets | (579) | (446) |
Consolidating Adjustments | ||
Reconciliation of Assets | ||
Total assets | (6,493) | (6,404) |
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 | (1,644) | (1,733) |
Consolidating Adjustments | Investment in Financial Products | ||
Reconciliation of Assets | ||
Total assets | (4,165) | (4,064) |
Consolidating Adjustments | Deferred Income Taxes | ||
Reconciliation of Assets | ||
Total assets | (628) | (574) |
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 | Liabilities Included in Segment Assets | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Consolidating Adjustments | Other | ||
Reconciliation of Assets | ||
Total assets | (56) | (33) |
Machinery, Energy & Transportation | Reportable Segments | ||
Reconciliation of Assets | ||
Total assets | 19,812 | 18,805 |
Machinery, Energy & Transportation | Business | ||
Reconciliation of Assets | ||
Total assets | 48,986 | 48,487 |
Machinery, Energy & Transportation | Business | Reportable Segments | ||
Reconciliation of Assets | ||
Total assets | 19,812 | 18,805 |
Machinery, Energy & Transportation | Business | All Other operating segments | ||
Reconciliation of Assets | ||
Total assets | 1,273 | 1,312 |
Machinery, Energy & Transportation | Business | Cash and Short Term Investments | ||
Reconciliation of Assets | ||
Total assets | 7,189 | 7,381 |
Machinery, Energy & Transportation | Business | Intercompany Receivables | ||
Reconciliation of Assets | ||
Total assets | 1,644 | 1,733 |
Machinery, Energy & Transportation | Business | Investment in Financial Products | ||
Reconciliation of Assets | ||
Total assets | 4,165 | 4,064 |
Machinery, Energy & Transportation | Business | Deferred Income Taxes | ||
Reconciliation of Assets | ||
Total assets | 1,818 | 2,166 |
Machinery, Energy & Transportation | Business | Goodwill and Intangible Assets | ||
Reconciliation of Assets | ||
Total assets | 4,304 | 4,210 |
Machinery, Energy & Transportation | Business | Property Plant and Equipment-Net and Other Assets | ||
Reconciliation of Assets | ||
Total assets | 2,035 | 2,341 |
Machinery, Energy & Transportation | Business | Operating Lease Methodology Difference | ||
Reconciliation of Assets | ||
Total assets | (184) | (191) |
Machinery, Energy & Transportation | Business | Inventory Methodology Differences | ||
Reconciliation of Assets | ||
Total assets | (2,374) | (2,287) |
Machinery, Energy & Transportation | Business | Liabilities Included in Segment Assets | ||
Reconciliation of Assets | ||
Total assets | 9,814 | 9,352 |
Machinery, Energy & Transportation | Business | Other | ||
Reconciliation of Assets | ||
Total assets | (510) | (399) |
Financial Products | Business | ||
Reconciliation of Assets | ||
Total assets | 35,716 | 34,879 |
Financial Products | Business | Reportable Segments | ||
Reconciliation of Assets | ||
Total assets | 35,729 | 34,893 |
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 | Liabilities Included in Segment Assets | ||
Reconciliation of Assets | ||
Total assets | 0 | 0 |
Financial Products | Business | Other | ||
Reconciliation of Assets | ||
Total assets | $ (13) | $ (14) |
Segment Information (Details 7)
Segment Information (Details 7) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | $ 698 | $ 723 | $ 2,065 | $ 2,153 |
Reportable Segments | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 579 | 597 | 1,719 | 1,788 |
All Other operating segments | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 55 | 52 | 170 | 162 |
Cost Centers | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 33 | 36 | 96 | 106 |
Other | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 31 | 38 | 80 | 97 |
Machinery, Energy & Transportation | Reportable Segments | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 367 | 393 | 1,092 | 1,172 |
Machinery, Energy & Transportation | Business | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 477 | 509 | 1,410 | 1,507 |
Machinery, Energy & Transportation | Business | Reportable Segments | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 367 | 393 | 1,092 | 1,172 |
Machinery, Energy & Transportation | Business | All Other operating segments | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 55 | 52 | 170 | 162 |
Machinery, Energy & Transportation | Business | Cost Centers | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 33 | 36 | 96 | 106 |
Machinery, Energy & Transportation | Business | Other | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 22 | 28 | 52 | 67 |
Financial Products | Business | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 221 | 214 | 655 | 646 |
Financial Products | Business | Reportable Segments | ||||
Reconciliation of Depreciation and amortization | ||||
Total depreciation and amortization | 212 | 204 | 627 | 616 |
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 | $ 9 | $ 10 | $ 28 | $ 30 |
Segment Information (Details 8)
Segment Information (Details 8) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reconciliation of Capital expenditures | ||||
Total capital expenditures | $ 601 | $ 513 | $ 2,129 | $ 1,637 |
Reportable Segments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 566 | 512 | 1,928 | 1,538 |
All Other operating segments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 63 | 26 | 101 | 71 |
Cost Centers | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 30 | 17 | 70 | 40 |
Timing | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | (5) | (21) | 152 | 58 |
Other | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | (53) | (21) | (122) | (70) |
Consolidating Adjustments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | (33) | (9) | (73) | (17) |
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 | (33) | (9) | (73) | (17) |
Machinery, Energy & Transportation | Reportable Segments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 268 | 204 | 736 | 520 |
Machinery, Energy & Transportation | Business | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 291 | 195 | 845 | 574 |
Machinery, Energy & Transportation | Business | Reportable Segments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 268 | 204 | 736 | 520 |
Machinery, Energy & Transportation | Business | All Other operating segments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 63 | 26 | 101 | 71 |
Machinery, Energy & Transportation | Business | Cost Centers | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 30 | 17 | 70 | 40 |
Machinery, Energy & Transportation | Business | Timing | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | (5) | (21) | 152 | 58 |
Machinery, Energy & Transportation | Business | Other | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | (65) | (31) | (214) | (115) |
Financial Products | Business | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 343 | 327 | 1,357 | 1,080 |
Financial Products | Business | Reportable Segments | ||||
Reconciliation of Capital expenditures | ||||
Total capital expenditures | 298 | 308 | 1,192 | 1,018 |
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 | $ 45 | $ 19 | $ 165 | $ 62 |
Cat Financial Financing Activ_3
Cat Financial Financing Activities (Details) - Finance Receivables - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | |
Allowance for Credit Loss Activity | ||||
Balance at beginning of year | $ 362 | $ 341 | ||
Receivables written off | (181) | (157) | ||
Recoveries on receivables previously written off | 31 | 43 | ||
Provision for credit losses | 214 | 128 | ||
Other | (14) | 7 | ||
Balance at end of period | 412 | 362 | ||
Allowance for Credit Losses | ||||
Individually evaluated for impairment | $ 229 | $ 149 | ||
Collectively evaluated for impairment | 183 | 213 | ||
Ending Balance | 362 | 341 | 412 | 362 |
Recorded Investment in Finance Receivables | ||||
Individually evaluated for impairment | 802 | 942 | ||
Collectively evaluated for impairment | 21,660 | 21,690 | ||
Ending balance-recorded investment in finance receivables | 22,462 | 22,632 | ||
Customer | ||||
Allowance for Credit Loss Activity | ||||
Balance at beginning of year | 353 | 331 | ||
Receivables written off | (181) | (157) | ||
Recoveries on receivables previously written off | 31 | 43 | ||
Provision for credit losses | 216 | 129 | ||
Other | (14) | 7 | ||
Balance at end of period | 405 | 353 | ||
Allowance for Credit Losses | ||||
Individually evaluated for impairment | 229 | 149 | ||
Collectively evaluated for impairment | 176 | 204 | ||
Ending Balance | 353 | 331 | 405 | 353 |
Recorded Investment in Finance Receivables | ||||
Individually evaluated for impairment | 802 | 942 | ||
Collectively evaluated for impairment | 18,193 | 18,226 | ||
Ending balance-recorded investment in finance receivables | 18,995 | 19,168 | ||
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 | 7 | 9 | ||
Allowance for Credit Losses | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 7 | 9 | ||
Ending Balance | $ 9 | $ 10 | 7 | 9 |
Recorded Investment in Finance Receivables | ||||
Individually evaluated for impairment | 0 | 0 | ||
Collectively evaluated for impairment | 3,467 | 3,464 | ||
Ending balance-recorded investment in finance receivables | $ 3,467 | $ 3,464 |
Cat Financial Financing Activ_4
Cat Financial Financing Activities (Details 2) - Finance Receivables - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | $ 1,025 | $ 805 |
Current | 21,437 | 21,827 |
Ending balance-recorded investment in finance receivables | 22,462 | 22,632 |
91+ Still Accruing | 26 | 36 |
31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 279 | 165 |
61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 100 | 192 |
91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 646 | 448 |
Customer | ||
Aging related to loans and finance leases | ||
Ending balance-recorded investment in finance receivables | 18,995 | 19,168 |
Customer | North America | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 137 | 128 |
Current | 7,834 | 7,950 |
Ending balance-recorded investment in finance receivables | 7,971 | 8,078 |
91+ Still Accruing | 7 | 8 |
Customer | North America | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 74 | 71 |
Customer | North America | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 17 | 15 |
Customer | North America | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 46 | 42 |
Customer | Europe | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 150 | 77 |
Current | 2,848 | 2,718 |
Ending balance-recorded investment in finance receivables | 2,998 | 2,795 |
91+ Still Accruing | 6 | 13 |
Customer | Europe | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 19 | 21 |
Customer | Europe | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 9 | 10 |
Customer | Europe | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 122 | 46 |
Customer | Asia Pacific | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 52 | 34 |
Current | 2,399 | 2,009 |
Ending balance-recorded investment in finance receivables | 2,451 | 2,043 |
91+ Still Accruing | 5 | 5 |
Customer | Asia Pacific | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 30 | 13 |
Customer | Asia Pacific | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 14 | 7 |
Customer | Asia Pacific | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 8 | 14 |
Customer | Mining | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 14 | 64 |
Current | 1,623 | 1,751 |
Ending balance-recorded investment in finance receivables | 1,637 | 1,815 |
91+ Still Accruing | 0 | 9 |
Customer | Mining | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 5 | 3 |
Customer | Mining | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 1 |
Customer | Mining | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 9 | 60 |
Customer | Latin America | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 134 | 234 |
Current | 1,380 | 1,531 |
Ending balance-recorded investment in finance receivables | 1,514 | 1,765 |
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 | 35 | 37 |
Customer | Latin America | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 15 | 55 |
Customer | Latin America | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 84 | 142 |
Customer | Caterpillar Power Finance | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 459 | 196 |
Current | 1,965 | 2,476 |
Ending balance-recorded investment in finance receivables | 2,424 | 2,672 |
91+ Still Accruing | 8 | 1 |
Customer | Caterpillar Power Finance | 31 to 60 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 116 | 20 |
Customer | Caterpillar Power Finance | 61 to 90 Days Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 45 | 32 |
Customer | Caterpillar Power Finance | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 298 | 144 |
Dealer | ||
Aging related to loans and finance leases | ||
Ending balance-recorded investment in finance receivables | 3,467 | 3,464 |
Dealer | North America | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Current | 1,978 | 1,920 |
Ending balance-recorded investment in finance receivables | 1,978 | 1,920 |
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 | 321 | 222 |
Ending balance-recorded investment in finance receivables | 321 | 222 |
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 | 473 | 553 |
Ending balance-recorded investment in finance receivables | 473 | 553 |
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 |
Ending balance-recorded investment in 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 | 79 | 72 |
Current | 610 | 691 |
Ending balance-recorded investment in finance receivables | 689 | 763 |
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 | 72 |
Dealer | Latin America | 91 Days of More Past Due | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 79 | 0 |
Dealer | Caterpillar Power Finance | ||
Aging related to loans and finance leases | ||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 |
Current | 2 | 2 |
Ending balance-recorded investment in finance receivables | 2 | 2 |
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 Activ_5
Cat Financial Financing Activities (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Dealer | |||||
Impaired finance receivables | |||||
Recorded Investment, Total | $ 0 | $ 0 | $ 0 | ||
Finance Receivables | Customer | |||||
Impaired finance receivables | |||||
Recorded Investment With No Allowance Recorded | 173 | 173 | 424 | ||
Unpaid Principal Balance With No Allowance Recorded | 185 | 185 | 435 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 629 | 629 | 518 | ||
Unpaid Principal Balance With An Allowance Recorded | 634 | 634 | 530 | ||
Related Allowance With An Allowance Recorded | 229 | 229 | 149 | ||
Recorded Investment, Total | 802 | 802 | 942 | ||
Unpaid Principal Balance, Total | 819 | 819 | 965 | ||
Related Allowance, Total | 229 | 229 | 149 | ||
Average Recorded Investment With No Allowance Recorded | 218 | $ 458 | 319 | $ 512 | |
Interest Income Recognized With No Allowance Recorded | 4 | 5 | 12 | 18 | |
Average Recorded Investment With An Allowance Recorded | 593 | 431 | 572 | 335 | |
Interest Income Recognized With An Allowance Recorded | 6 | 5 | 15 | 10 | |
Average Recorded Investment, Total | 811 | 889 | 891 | 847 | |
Interest Income Recognized, Total | 10 | 10 | 27 | 28 | |
Finance Receivables | Customer | North America | |||||
Impaired finance receivables | |||||
Recorded Investment With No Allowance Recorded | 17 | 17 | 19 | ||
Unpaid Principal Balance With No Allowance Recorded | 17 | 17 | 19 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 41 | 41 | 44 | ||
Unpaid Principal Balance With An Allowance Recorded | 39 | 39 | 43 | ||
Related Allowance With An Allowance Recorded | 18 | 18 | 17 | ||
Recorded Investment, Total | 58 | 58 | 63 | ||
Unpaid Principal Balance, Total | 56 | 56 | 62 | ||
Related Allowance, Total | 18 | 18 | 17 | ||
Average Recorded Investment With No Allowance Recorded | 19 | 14 | 17 | 12 | |
Interest Income Recognized With No Allowance Recorded | 0 | 1 | 1 | 1 | |
Average Recorded Investment With An Allowance Recorded | 47 | 44 | 51 | 52 | |
Interest Income Recognized With An Allowance Recorded | 0 | 0 | 1 | 1 | |
Average Recorded Investment, Total | 66 | 58 | 68 | 64 | |
Interest Income Recognized, Total | 0 | 1 | 2 | 2 | |
Finance Receivables | Customer | Europe | |||||
Impaired finance receivables | |||||
Recorded Investment With No Allowance Recorded | 2 | 2 | 45 | ||
Unpaid Principal Balance With No Allowance Recorded | 1 | 1 | 45 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 66 | 66 | 9 | ||
Unpaid Principal Balance With An Allowance Recorded | 66 | 66 | 8 | ||
Related Allowance With An Allowance Recorded | 36 | 36 | 5 | ||
Recorded Investment, Total | 68 | 68 | 54 | ||
Unpaid Principal Balance, Total | 67 | 67 | 53 | ||
Related Allowance, Total | 36 | 36 | 5 | ||
Average Recorded Investment With No Allowance Recorded | 4 | 47 | 17 | 48 | |
Interest Income Recognized With No Allowance Recorded | 0 | 0 | 0 | 1 | |
Average Recorded Investment With An Allowance Recorded | 59 | 6 | 41 | 6 | |
Interest Income Recognized With An Allowance Recorded | 0 | 0 | 1 | 0 | |
Average Recorded Investment, Total | 63 | 53 | 58 | 54 | |
Interest Income Recognized, Total | 0 | 0 | 1 | 1 | |
Finance Receivables | Customer | Asia Pacific | |||||
Impaired finance receivables | |||||
Recorded Investment With No Allowance Recorded | 28 | 28 | 34 | ||
Unpaid Principal Balance With No Allowance Recorded | 28 | 28 | 33 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 2 | 2 | 8 | ||
Unpaid Principal Balance With An Allowance Recorded | 2 | 2 | 8 | ||
Related Allowance With An Allowance Recorded | 1 | 1 | 2 | ||
Recorded Investment, Total | 30 | 30 | 42 | ||
Unpaid Principal Balance, Total | 30 | 30 | 41 | ||
Related Allowance, Total | 1 | 1 | 2 | ||
Average Recorded Investment With No Allowance Recorded | 29 | 30 | 30 | 22 | |
Interest Income Recognized With No Allowance Recorded | 1 | 1 | 2 | 2 | |
Average Recorded Investment With An Allowance Recorded | 2 | 28 | 4 | 35 | |
Interest Income Recognized With An Allowance Recorded | 0 | 1 | 0 | 2 | |
Average Recorded Investment, Total | 31 | 58 | 34 | 57 | |
Interest Income Recognized, Total | 1 | 2 | 2 | 4 | |
Finance Receivables | Customer | Mining | |||||
Impaired finance receivables | |||||
Recorded Investment With No Allowance Recorded | 34 | 34 | 121 | ||
Unpaid Principal Balance With No Allowance Recorded | 34 | 34 | 121 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 58 | 58 | 0 | ||
Unpaid Principal Balance With An Allowance Recorded | 58 | 58 | 0 | ||
Related Allowance With An Allowance Recorded | 22 | 22 | 0 | ||
Recorded Investment, Total | 92 | 92 | 121 | ||
Unpaid Principal Balance, Total | 92 | 92 | 121 | ||
Related Allowance, Total | 22 | 22 | 0 | ||
Average Recorded Investment With No Allowance Recorded | 35 | 128 | 65 | 128 | |
Interest Income Recognized With No Allowance Recorded | 0 | 1 | 2 | 5 | |
Average Recorded Investment With An Allowance Recorded | 60 | 0 | 43 | 0 | |
Interest Income Recognized With An Allowance Recorded | 1 | 0 | 2 | 0 | |
Average Recorded Investment, Total | 95 | 128 | 108 | 128 | |
Interest Income Recognized, Total | 1 | 1 | 4 | 5 | |
Finance Receivables | Customer | Latin America | |||||
Impaired finance receivables | |||||
Recorded Investment With No Allowance Recorded | 31 | 31 | 45 | ||
Unpaid Principal Balance With No Allowance Recorded | 31 | 31 | 45 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 61 | 61 | 95 | ||
Unpaid Principal Balance With An Allowance Recorded | 61 | 61 | 106 | ||
Related Allowance With An Allowance Recorded | 34 | 34 | 42 | ||
Recorded Investment, Total | 92 | 92 | 140 | ||
Unpaid Principal Balance, Total | 92 | 92 | 151 | ||
Related Allowance, Total | 34 | 34 | 42 | ||
Average Recorded Investment With No Allowance Recorded | 37 | 68 | 41 | 69 | |
Interest Income Recognized With No Allowance Recorded | 1 | 1 | 2 | 2 | |
Average Recorded Investment With An Allowance Recorded | 51 | 102 | 69 | 101 | |
Interest Income Recognized With An Allowance Recorded | 1 | 1 | 3 | 3 | |
Average Recorded Investment, Total | 88 | 170 | 110 | 170 | |
Interest Income Recognized, Total | 2 | 2 | 5 | 5 | |
Finance Receivables | Customer | Caterpillar Power Finance | |||||
Impaired finance receivables | |||||
Recorded Investment With No Allowance Recorded | 61 | 61 | 160 | ||
Unpaid Principal Balance With No Allowance Recorded | 74 | 74 | 172 | ||
Related Allowance With No Allowance Recorded | 0 | 0 | 0 | ||
Recorded Investment With An Allowance Recorded | 401 | 401 | 362 | ||
Unpaid Principal Balance With An Allowance Recorded | 408 | 408 | 365 | ||
Related Allowance With An Allowance Recorded | 118 | 118 | 83 | ||
Recorded Investment, Total | 462 | 462 | 522 | ||
Unpaid Principal Balance, Total | 482 | 482 | 537 | ||
Related Allowance, Total | 118 | 118 | $ 83 | ||
Average Recorded Investment With No Allowance Recorded | 94 | 171 | 149 | 233 | |
Interest Income Recognized With No Allowance Recorded | 2 | 1 | 5 | 7 | |
Average Recorded Investment With An Allowance Recorded | 374 | 251 | 364 | 141 | |
Interest Income Recognized With An Allowance Recorded | 4 | 3 | 8 | 4 | |
Average Recorded Investment, Total | 468 | 422 | 513 | 374 | |
Interest Income Recognized, Total | $ 6 | $ 4 | $ 13 | $ 11 |
Cat Financial Financing Activ_6
Cat Financial Financing Activities (Details 4) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Financing Receivable, Recorded Investment, Past Due | ||
Period after which Collection of Future Income is Considered as Not Probable | 120 days | |
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 0 | |
Dealer | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 0 | |
Dealer | Latin America | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 79 | |
Finance Receivables | Customer | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 751 | 683 |
Finance Receivables | Customer | North America | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 44 | 38 |
Finance Receivables | Customer | Europe | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 124 | 37 |
Finance Receivables | Customer | Asia Pacific | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 4 | 10 |
Finance Receivables | Customer | Mining | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 10 | 63 |
Finance Receivables | Customer | Latin America | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | 118 | 192 |
Finance Receivables | Customer | Caterpillar Power Finance | ||
Financing Receivable, Recorded Investment, Past Due | ||
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest | $ 451 | $ 343 |
Cat Financial Financing Activ_7
Cat Financial Financing Activities (Details 5) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($)Contracts | Sep. 30, 2017USD ($)ContractsCustomer | Sep. 30, 2018USD ($)Contracts | Sep. 30, 2017USD ($)Contracts | Dec. 31, 2017USD ($) | |
Customer | |||||
Loan receivables | |||||
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | Contracts | 11 | 1 | 16 | 241 | |
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $ 42 | $ 0 | $ 44 | $ 16 | |
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 6 | 20 | 43 | 123 | |
Pre-TDR Outstanding Recorded Investment | $ 40 | $ 76 | $ 138 | $ 454 | |
Post-TDR Outstanding Recorded Investment | $ 40 | $ 71 | $ 105 | $ 431 | |
Customer | North America | |||||
Loan receivables | |||||
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | Contracts | 7 | 0 | 10 | 0 | |
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $ 9 | $ 0 | $ 10 | $ 0 | |
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 4 | 11 | 34 | 37 | |
Pre-TDR Outstanding Recorded Investment | $ 0 | $ 4 | $ 13 | $ 13 | |
Post-TDR Outstanding Recorded Investment | $ 0 | $ 5 | $ 13 | $ 13 | |
Customer | Europe | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 0 | 1 | 0 | 2 | |
Pre-TDR Outstanding Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Post-TDR Outstanding Recorded Investment | $ 0 | $ 0 | $ 0 | $ 0 | |
Customer | Asia Pacific | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 0 | 6 | |||
Pre-TDR Outstanding Recorded Investment | $ 0 | $ 39 | |||
Post-TDR Outstanding Recorded Investment | $ 0 | $ 30 | |||
Customer | Mining | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 1 | 2 | |||
Pre-TDR Outstanding Recorded Investment | $ 29 | $ 57 | |||
Post-TDR Outstanding Recorded Investment | $ 29 | $ 56 | |||
Customer | Latin America | |||||
Loan receivables | |||||
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | Contracts | 1 | 1 | 3 | 241 | |
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $ 0 | $ 0 | $ 1 | $ 16 | |
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 0 | 3 | 1 | 17 | |
Pre-TDR Outstanding Recorded Investment | $ 0 | $ 21 | $ 3 | $ 26 | |
Post-TDR Outstanding Recorded Investment | $ 0 | $ 22 | $ 3 | $ 27 | |
Customer | Caterpillar Power Finance | |||||
Loan receivables | |||||
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | Contracts | 3 | 0 | 3 | 0 | |
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $ 33 | $ 0 | $ 33 | $ 0 | |
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 2 | 5 | 7 | 59 | |
Pre-TDR Outstanding Recorded Investment | $ 40 | $ 51 | $ 93 | $ 319 | |
Post-TDR Outstanding Recorded Investment | $ 40 | $ 44 | $ 60 | $ 305 | |
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 | $ 0 | $ 0 | $ 0 | ||
Significant Amount of Amount Disclosed Represented by a Certain Number of Customers [Member] | Customer | Caterpillar Power Finance | |||||
Finance receivables modified as TDRs | |||||
Number of Contracts (in contracts) | Contracts | 44 | ||||
Pre-TDR Outstanding Recorded Investment | $ 200 | ||||
Post-TDR Outstanding Recorded Investment | $ 200 | ||||
Number of Significant Customers Disclosed | Customer | 4 |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | $ 1,139 | $ 989 |
Equity securities | 480 | 450 |
Derivative Assets (Liabilities), at Fair Value, Net | 22 | |
Total Assets | 1,641 | 1,439 |
Liabilities | ||
Derivative Liabilities, at Fair Value, Net | 19 | |
Total Liabilities | 19 | |
U.S. treasury bonds | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 9 | 10 |
Other U.S. and non-U.S. government bonds | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 48 | 42 |
Corporate bonds | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 710 | 584 |
Asset-backed securities | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 61 | 67 |
U.S. governmental agency | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 290 | 261 |
Residential | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 7 | 8 |
Commercial | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 14 | 17 |
Large capitalization value | Recurring basis | ||
Assets | ||
Equity securities | 298 | 284 |
Smaller company growth | Recurring basis | ||
Assets | ||
Equity securities | 65 | 56 |
REIT | Recurring basis | ||
Assets | ||
Equity securities | 117 | 110 |
Level 1 | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 9 | 10 |
Equity securities | 363 | 340 |
Derivative Assets (Liabilities), at Fair Value, Net | 0 | |
Total Assets | 372 | 350 |
Liabilities | ||
Derivative Liabilities, at Fair Value, Net | 0 | |
Total Liabilities | 0 | |
Level 1 | U.S. treasury bonds | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 9 | 10 |
Level 1 | Other U.S. and non-U.S. government bonds | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | 0 |
Level 1 | Corporate bonds | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | 0 |
Level 1 | Asset-backed securities | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | 0 |
Level 1 | U.S. governmental agency | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | 0 |
Level 1 | Residential | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | 0 |
Level 1 | Commercial | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | 0 |
Level 1 | Large capitalization value | Recurring basis | ||
Assets | ||
Equity securities | 298 | 284 |
Level 1 | Smaller company growth | Recurring basis | ||
Assets | ||
Equity securities | 65 | 56 |
Level 1 | REIT | Recurring basis | ||
Assets | ||
Equity securities | 0 | 0 |
Level 2 | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 1,130 | 979 |
Equity securities | 0 | 0 |
Derivative Assets (Liabilities), at Fair Value, Net | 22 | |
Total Assets | 1,152 | 979 |
Liabilities | ||
Derivative Liabilities, at Fair Value, Net | 19 | |
Total Liabilities | 19 | |
Level 2 | U.S. treasury bonds | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | 0 |
Level 2 | Other U.S. and non-U.S. government bonds | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 48 | 42 |
Level 2 | Corporate bonds | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 710 | 584 |
Level 2 | Asset-backed securities | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 61 | 67 |
Level 2 | U.S. governmental agency | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 290 | 261 |
Level 2 | Residential | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 7 | 8 |
Level 2 | Commercial | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 14 | 17 |
Level 2 | Large capitalization value | Recurring basis | ||
Assets | ||
Equity securities | 0 | 0 |
Level 2 | Smaller company growth | Recurring basis | ||
Assets | ||
Equity securities | 0 | 0 |
Level 2 | REIT | Recurring basis | ||
Assets | ||
Equity securities | 0 | 0 |
Level 3 | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | 0 |
Equity securities | 0 | 110 |
Derivative Assets (Liabilities), at Fair Value, Net | 0 | |
Total Assets | 0 | 110 |
Liabilities | ||
Derivative Liabilities, at Fair Value, Net | 0 | |
Total Liabilities | 0 | |
Level 3 | U.S. treasury bonds | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | 0 |
Level 3 | Other U.S. and non-U.S. government bonds | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | 0 |
Level 3 | Corporate bonds | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | 0 |
Level 3 | Asset-backed securities | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | 0 |
Level 3 | U.S. governmental agency | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | 0 |
Level 3 | Residential | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | 0 |
Level 3 | Commercial | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | 0 |
Level 3 | Large capitalization value | Recurring basis | ||
Assets | ||
Equity securities | 0 | 0 |
Level 3 | Smaller company growth | Recurring basis | ||
Assets | ||
Equity securities | 0 | 0 |
Level 3 | REIT | Recurring basis | ||
Assets | ||
Equity securities | 0 | 110 |
Fair Value Measured on Net Asset Value (NAV) [Member] | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | |
Equity securities | 117 | |
Derivative Assets (Liabilities), at Fair Value, Net | 0 | |
Total Assets | 117 | |
Fair Value Measured on Net Asset Value (NAV) [Member] | U.S. treasury bonds | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | |
Fair Value Measured on Net Asset Value (NAV) [Member] | Other U.S. and non-U.S. government bonds | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | |
Fair Value Measured on Net Asset Value (NAV) [Member] | Corporate bonds | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | |
Fair Value Measured on Net Asset Value (NAV) [Member] | Asset-backed securities | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | |
Fair Value Measured on Net Asset Value (NAV) [Member] | U.S. governmental agency | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | |
Fair Value Measured on Net Asset Value (NAV) [Member] | Residential | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | |
Fair Value Measured on Net Asset Value (NAV) [Member] | Commercial | Recurring basis | ||
Assets | ||
Available-for-sale securities, debt securities | 0 | |
Fair Value Measured on Net Asset Value (NAV) [Member] | Large capitalization value | Recurring basis | ||
Assets | ||
Equity securities | 0 | |
Fair Value Measured on Net Asset Value (NAV) [Member] | Smaller company growth | Recurring basis | ||
Assets | ||
Equity securities | 0 | |
Fair Value Measured on Net Asset Value (NAV) [Member] | REIT | Recurring basis | ||
Assets | ||
Equity securities | 117 | |
Financial Products | Level 3 | Nonrecurring basis | ||
Assets and liabilities measured on a recurring basis at fair value | ||
Impaired Financing Receivable, Recorded Investment | $ 366 | $ 341 |
Fair Value Disclosures (Detai_2
Fair Value Disclosures (Details 2) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and short-term investments | $ 8,007 | $ 8,261 |
Carrying Amount | ||
Assets | ||
Cash and short-term investments | 8,007 | 8,261 |
Restricted cash and short-term investments | 39 | 194 |
Investments in debt and equity securities | 1,619 | 1,439 |
Finance receivables-net (excluding finance leases) | 14,815 | 15,452 |
Wholesale inventory receivables-net (excluding finance leases) | 1,194 | 1,153 |
Foreign currency contracts-net | 13 | 0 |
Interest rate contracts-net | 7 | 1 |
Commodity contracts-net | 2 | 21 |
Liabilities | ||
Short-term borrowings | 4,521 | 4,837 |
Foreign currency contracts-net | 0 | 41 |
Guarantees | 8 | 8 |
Carrying Amount | Machinery, Energy & Transportation | ||
Liabilities | ||
Long-term debt (including amounts due within one year) | 8,001 | 7,935 |
Carrying Amount | Financial Products | ||
Liabilities | ||
Long-term debt (including amounts due within one year) | 23,251 | 22,106 |
Carrying amount of assets excluded from measurement at fair value | ||
Assets | ||
Finance leases | 7,481 | 7,063 |
Level 1 | Fair Value | ||
Assets | ||
Cash and short-term investments | 8,007 | 8,261 |
Restricted cash and short-term investments | 39 | 194 |
Liabilities | ||
Short-term borrowings | 4,521 | 4,837 |
Level 1, 2 & 3 | Fair Value | ||
Assets | ||
Investments in debt and equity securities | 1,619 | 1,439 |
Level 2 | Fair Value | ||
Assets | ||
Foreign currency contracts-net | 13 | 0 |
Interest rate contracts-net | 7 | 1 |
Commodity contracts-net | 2 | 21 |
Liabilities | ||
Foreign currency contracts-net | 0 | 41 |
Level 2 | Fair Value | Machinery, Energy & Transportation | ||
Liabilities | ||
Long-term debt (including amounts due within one year) | 9,155 | 9,863 |
Level 2 | Fair Value | Financial Products | ||
Liabilities | ||
Long-term debt (including amounts due within one year) | 23,110 | 22,230 |
Level 3 | Fair Value | ||
Assets | ||
Finance receivables-net (excluding finance leases) | 14,764 | 15,438 |
Wholesale inventory receivables-net (excluding finance leases) | 1,168 | 1,123 |
Liabilities | ||
Guarantees | $ 8 | $ 8 |
Other income (expense) (Details
Other income (expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other Income and Expenses [Abstract] | |||||
Investment and interest income | $ 59 | $ 32 | $ 139 | $ 86 | |
Foreign exchange gains (losses) | (81) | (29) | (160) | (189) | |
Royalty Income, Nonoperating | 29 | 27 | 96 | 74 | |
Gain on sale of affiliated company | 4 | 36 | $ 85 | 4 | 121 |
Net periodic pension and OPEB income (cost), excluding service cost | 85 | 68 | 257 | 172 | |
Miscellaneous income (loss) | 6 | (2) | 14 | (4) | |
Other income (expense) | $ 102 | $ 132 | $ 350 | $ 260 |
Restructuring Costs (Details)
Restructuring Costs (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 21 Months Ended | 37 Months Ended | ||
Mar. 31, 2017 | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | |
Restructuring and Related Cost [Abstract] | ||||||||
Restructuring costs | $ 110 | $ 90 | $ 293 | $ 1,011 | ||||
Employee Separation Charges [Roll Forward] | ||||||||
Liability balance at beginning of period | 249 | 147 | $ 147 | $ 147 | ||||
Increase in liability (separation charges) | 121 | 525 | ||||||
Reduction in liability (payments) | (233) | (423) | ||||||
Liability balance at end of period | 137 | 137 | 249 | 137 | $ 137 | |||
September 2015 announcement | ||||||||
Restructuring and Related Cost [Abstract] | ||||||||
Restructuring costs | 109 | 1,776 | ||||||
Estimated restructuring costs | 50 | 50 | 50 | 50 | ||||
Gosselies closure announcement | ||||||||
Restructuring and Related Cost [Abstract] | ||||||||
Restructuring costs | 11 | 649 | $ 653 | 664 | ||||
Estimated restructuring costs | 675 | 675 | $ 675 | $ 675 | ||||
Positions eliminated | 2,000 | |||||||
Employee separations | Other Operating Income (Expense) | ||||||||
Restructuring and Related Cost [Abstract] | ||||||||
Restructuring costs | 44 | 8 | 121 | 514 | ||||
Contract terminations | Other Operating Income (Expense) | ||||||||
Restructuring and Related Cost [Abstract] | ||||||||
Restructuring costs | 0 | 6 | 0 | 32 | ||||
Long-lived asset impairments | Other Operating Income (Expense) | ||||||||
Restructuring and Related Cost [Abstract] | ||||||||
Restructuring costs | 18 | 31 | 49 | 306 | ||||
Defined benefit retirement plan curtailments and termination benefits | Other Operating Income (Expense) | ||||||||
Restructuring and Related Cost [Abstract] | ||||||||
Restructuring costs | 0 | 29 | ||||||
Other | Other Operating Income (Expense) | ||||||||
Restructuring and Related Cost [Abstract] | ||||||||
Restructuring costs | $ 48 | $ 45 | $ 123 | $ 130 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Millions | Jan. 02, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Net cash paid for acquisition | $ 357 | $ 47 | ||
Assets acquired | ||||
Goodwill | $ 6,233 | $ 6,200 | ||
ECM S.p.A. | ||||
Business Acquisition [Line Items] | ||||
Percentage of equity acquired (as a percent) | 100.00% | |||
Net cash paid for acquisition | $ 225 | |||
Cash paid at closing | 249 | |||
Assets acquired | ||||
Cash | 25 | |||
Receivables | 28 | |||
Inventory | 29 | |||
Property, plant, and equipment | 17 | |||
Finite-lived intangible assets | $ 112 | |||
Finite-lived intangible assets, weighted average useful life (in years) | 13 years | |||
Tangible assets | $ 109 | |||
Goodwill | 109 | |||
Total liabilities assumed | 79 | |||
Debt assumed | 1 | |||
Accounts payable | 38 | |||
Deferred tax liabilities | 29 | |||
Downer Freight Rail | ||||
Business Acquisition [Line Items] | ||||
Net cash paid for acquisition | 99 | |||
Assets acquired | ||||
Receivables | 26 | |||
Inventory | 42 | |||
Property, plant, and equipment | 17 | |||
Finite-lived intangible assets | 5 | |||
Finite-lived customer relationship intangible assets | $ 5 | |||
Finite-lived intangible assets, weighted average useful life (in years) | 15 years | |||
Tangible assets | $ 92 | |||
Goodwill | 12 | |||
Total liabilities assumed | $ 10 |