CATERPILLAR INC, 10-K filed on 2/14/2019
Annual Report
v3.10.0.1
Document and Entity Information - USD ($)
$ in Billions
 12 Months Ended
Dec. 31, 2018
Jun. 30, 2018
Document And Entity Information1    
Entity Registrant Name CATERPILLAR INC  
Entity Central Index Key 0000018230  
Document Type 10-K  
Document Period End Date Dec. 31, 2018  
Amendment Flag false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Small Business false  
Current Fiscal Year End Date --12-31  
Entity Well-known Seasoned Issuer Yes  
Entity Voluntary Filers No  
Entity Current Reporting Status Yes  
Entity Filer Category Large Accelerated Filer  
Entity Public Float   $ 81.2
Entity Common Stock, Shares Outstanding 575,542,738  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus FY  
v3.10.0.1
Consolidated Results of Operations - USD ($)
shares in Millions, $ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Sales and revenues:      
Sales and revenues $ 54,722 $ 45,462 $ 38,537
Cost of goods sold 36,997 31,260 28,044
Operating costs:      
Selling, general and administrative expenses 5,478 4,999 4,383
Research and development expenses 1,850 1,842 1,853
Interest expense of Financial Products 722 646 596
Goodwill impairment charge 0 0 595
Other operating (income) expenses 1,382 2,255 1,904
Total operating costs 46,429 41,002 37,375
Operating profit 8,293 4,460 1,162
Interest expense excluding Financial Products 404 531 505
Other income (expense) (67) 153 (518)
Consolidated profit before taxes 7,822 4,082 139
Provision (benefit) for income taxes 1,698 3,339 192
Profit (loss) of consolidated companies 6,124 743 (53)
Equity in profit (loss) of unconsolidated affiliated companies 24 16 (6)
Profit (loss) of consolidated and affiliated companies 6,148 759 (59)
Less: Profit (loss) attributable to noncontrolling interests 1 5 8
Profit (loss) [1] $ 6,147 $ 754 $ (67)
Profit (loss) per common share (in dollars per share) $ 10.39 $ 1.27 $ (0.11)
Profit (loss) per common share - diluted (in dollars per share) [2],[3] $ 10.26 $ 1.26 $ (0.11)
Weighted-average common shares outstanding (millions)      
Basic (in shares) 591.4 591.8 584.3
Diluted (in shares) [2],[3] 599.4 599.3 584.3
Machinery, Energy & Transportation      
Sales and revenues:      
Sales and revenues $ 51,822 $ 42,676 $ 35,773
Financial Service [Member]      
Sales and revenues:      
Sales and revenues $ 2,900 $ 2,786 $ 2,764
[1] 1 Profit (loss) attributable to common shareholders.
[2] 2 Diluted by assumed exercise of stock-based compensation awards, using the treasury stock method.
[3] 3 In 2016, the assumed exercise of stock-based compensation awards was not considered because the impact would be antidilutive.
v3.10.0.1
Consolidated Comprehensive Income - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Profit (loss) of consolidated and affiliated companies $ 6,148 $ 759 $ (59)
Other comprehensive income (loss), Net of Tax:      
Foreign currency translation, net of tax (provision)/benefit of: 2018-$(24); 2017 - $96; 2016 - $(30) (396) 765 (17)
Pension and other postretirement benefits:      
Current year prior service credit (cost), net of tax (provision)/benefit of: 2018 - $(6); 2017 - $(26); 2016 - $(69) (6) 48 118
Amortization of prior service (credit) cost, net of tax (provision)/benefit of: 2018 -$8; 2017 - $9; 2016 - $21 (28) (16) (35)
Derivative financial instruments:      
Gains (losses) deferred, net of tax (provision)/benefit of: 2018 - $(19); 2017 - $2; 2016 - $33 61 (3) (62)
(Gains) losses reclassified to earnings, net of tax (provision)/benefit of: 2018 - $31; 2017 - $(44); 2016 - $2 (100) 77 (3)
Available-for-sale securities:      
Gains (losses) deferred, net of tax (provision)/benefit of: 2017 - $(23); 2016 - $(12); 2015 - $9 (12) 41 26
(Gains) losses reclassified to earnings, net of tax (provision)/benefit of: 2018 - $0; 2017 - $35; 2016 - $15 0 (65) (31)
Total other comprehensive income (loss), net of tax (481) 847 (4)
Comprehensive income 5,667 1,606 (63)
Less: comprehensive income attributable to the noncontrolling interests 1 5 8
Comprehensive income attributable to shareholders $ 5,666 $ 1,601 $ (71)
v3.10.0.1
Consolidated Comprehensive Income (Parenthetical) (Parentheticals) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Statement of Comprehensive Income [Abstract]      
Foreign currency translation, tax (provision)/benefit $ (24) $ 96 $ (30)
Pension and other postretirement benefits, Current year prior service credit (cost), tax (provision)/benefit (6) (26) (69)
Pension and other postretirement benefits, Amortization of prior service (credit) cost, tax (provision)/benefit 8 9 21
Derivative financial instruments, Gains (losses) deferred, tax (provision)/benefit (19) 2 33
Derivative financial instruments, (Gains) losses reclassified to earnings, tax (provision)/benefit 31 (44) 2
Available-for-sale securities, Gains (losses) deferred, tax (provision)/benefit 3 (23) (12)
Available-for-sale securities, (Gains) losses reclassified to earnings, tax (provision)/benefit $ 0 $ 35 $ 15
v3.10.0.1
Consolidated Financial Position - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Current assets:    
Cash and short-term investments $ 7,857 $ 8,261
Receivables - trade and other 8,802 7,436
Receivables - finance 8,650 8,757
Prepaid expenses and other current assets 1,765 1,772
Inventories 11,529 10,018
Total current assets 38,603 36,244
Property, plant and equipment - net 13,574 14,155
Long-term receivables - trade and other 1,161 990
Long-term receivables - finance 13,286 13,542
Noncurrent deferred and refundable income taxes 1,439 1,693
Intangible assets 1,897 2,111
Goodwill 6,217 6,200
Other assets 2,332 2,027
Total assets 78,509 76,962
Short-term borrowings:    
Machinery, Energy & Transportation 0 1
Financial Products 5,723 4,836
Accounts payable 7,051 6,487
Accrued expenses 3,573 3,220
Accrued wages, salaries and employee benefits 2,384 2,559
Customer advances 1,243 1,426
Dividends payable 495 466
Other current liabilities 1,919 1,742
Long-term debt due within one year:    
Machinery, Energy & Transportation 10 6
Financial Products 5,820 6,188
Total current liabilities 28,218 26,931
Long-term debt due after one year:    
Machinery, Energy & Transportation 8,005 7,929
Financial Products 16,995 15,918
Liability for postemployment benefits 7,455 8,365
Other liabilities 3,756 4,053
Total liabilities 64,429 63,196
Commitments and contingencies (Notes 21 and 22)
Shareholders' equity    
Common stock of $1.00 par value: Authorized shares: 2,000,000,000 Issued shares: (2018 and 2017 – 814,894,624 shares) at paid-in amount 5,827 5,593
Treasury stock: (2018 - 239,351,886 shares; and 2017 – 217,268,852 shares) at cost (20,531) (17,005)
Profit employed in the business 30,427 26,301
Accumulated other comprehensive income (loss) (1,684) (1,192)
Noncontrolling interests 41 69
Total stockholders' equity 14,080 13,766
Total liabilities and stockholders' equity $ 78,509 $ 76,962
v3.10.0.1
Consolidated Financial Position (Parenthetical) (Parentheticals) - $ / shares
Dec. 31, 2018
Dec. 31, 2017
Statement of Financial Position [Abstract]    
Common Stock, par value (in dollars per share) $ 1.00 $ 1.00
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 239,351,886 217,268,852
v3.10.0.1
Changes in Consolidated 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, 2015 $ 14,885 $ 5,238 $ (17,640) $ 29,246 $ (2,035) $ 76
Increase (Decrease) in Stockholders' Equity            
Profit (loss) of consolidated and affiliated companies (59) 0 0 (67) 0 8
Foreign currency translation, net of tax (17) 0 0 0 (17) 0
Pension and other postretirement benefits, net of tax 83 0 0 0 83 0
Derivative financial instruments, net of tax (65) 0 0 0 (65) 0
Available-for-sale securities, net of tax (5) 0 0 0 (5) 0
Change in ownership from noncontrolling interests 0 (2) 0 0 0 2
Dividends declared (1,802) 0 0 (1,802) 0 0
Distribution to noncontrolling interests (10) 0 0 0 0 (10)
Common shares issued from treasury stock for stock-based compensation: 5,590,641, 11,139,748, and 4,164,134 for the years ended December 31, 2018, 2017 and 2016 respectively (23) (185) 162 0 0 0
Stock-based compensation expense 218 218 0 0 0 0
Net excess tax benefits(deficiencies) from stock-based compensation (6) (6) 0 0 0 0
Other 14 (14) 0 0 0 0
Balance at Dec. 31, 2016 13,213 5,277 (17,478) 27,377 (2,039) 76
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification 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 Stockholders' Equity            
Profit (loss) of consolidated and affiliated companies 759 0 0 754 0 5
Foreign currency translation, net of tax 765 0 0 0 765 0
Pension and other postretirement benefits, net of tax 32 0 0 0 32 0
Derivative financial instruments, net of tax 74 0 0 0 74 0
Available-for-sale securities, net of tax (24) 0 0 0 (24) 0
Change in ownership from noncontrolling interests 1 4 0 0 0 (3)
Dividends declared (1,845) 0 0 (1,845) 0 0
Distribution to noncontrolling interests (9) 0 0 0 0 (9)
Common shares issued from treasury stock for stock-based compensation: 5,590,641, 11,139,748, and 4,164,134 for the years ended December 31, 2018, 2017 and 2016 respectively 566 93 473 0 0 0
Stock-based compensation expense 206 206 0 0 0 0
Other 13 (13) 0 0 0 0
Balance at Dec. 31, 2017 13,766 5,593 (17,005) 26,301 (1,192) 69
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | Accounting Standards Update 2016-16 (35) 0 0 (35) 0 0
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | Accounting Standards Update 2016-01 0 0 0 11 (11) 0
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | Accounting Standards Update 2014-09 (12) 0 0 (12) 0 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 Stockholders' Equity            
Profit (loss) of consolidated and affiliated companies 6,148 0 0 6,147 0 1
Profit (loss) of consolidated and affiliated companies | Accounting Standards Update 2014-09 19          
Foreign currency translation, net of tax (396) 0 0 0 (396) 0
Pension and other postretirement benefits, net of tax (34) 0 0 0 (34) 0
Derivative financial instruments, net of tax (39) 0 0 0 (39) 0
Available-for-sale securities, net of tax (12) 0 0 0 (12) 0
Change in ownership from noncontrolling interests (53) (25) 0 0 0 (28)
Dividends declared (1,985) 0 0 (1,985) 0 0
Distribution to noncontrolling interests (1) 0 0 0 0 (1)
Common shares issued from treasury stock for stock-based compensation: 5,590,641, 11,139,748, and 4,164,134 for the years ended December 31, 2018, 2017 and 2016 respectively 313 41 272 0 0 0
Stock-based compensation expense 197 197 0 0 0 0
Common shares repurchased: 27,673,675, 0 and 0 shares for years ended December 31, 2018, 2017 and 2016, respectively [1] (3,798) 0 (3,798) 0 0 0
Other (21) 21 0 0 0 0
Balance at Dec. 31, 2018 $ 14,080 $ 5,827 $ (20,531) $ 30,427 $ (1,684) $ 41
[1] 2
v3.10.0.1
Changes in Consolidated Shareholders' Equity (Parenthetical) (Parentheticals) - shares
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Statement of Stockholders' Equity [Abstract]      
Common shares issued from treasury stock for stock-based compensation (in shares) 5,590,641 11,139,748 4,164,134
Common shares repurchased (in shares) 27,673,675 0 0
v3.10.0.1
Consolidated Statement of Cash Flow - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Cash flow from operating activities:      
Profit (loss) of consolidated and affiliated companies $ 6,148 $ 759 $ (59)
Adjustments for non-cash items:      
Depreciation and amortization 2,766 2,877 3,034
Actuarial (gain) loss on pension and postretirement benefits 495 301 985
Provision (benefit) for deferred income taxes 220 1,213 (431)
Goodwill impairment charge 0 0 595
Other 1,006 750 859
Changes in assets and liabilities, net of acquisitions and divestitures:      
Receivables - trade and other (1,619) (1,151) 829
Inventories (1,579) (1,295) 1,109
Accounts payable 709 1,478 (200)
Accrued expenses 101 175 (201)
Accrued wages, salaries and employee benefits (162) 1,187 (708)
Customer advances (183) (8) (41)
Other assets - net 41 (192) 224
Other liabilities - net (1,385) (388) (356)
Net cash provided by (used for) operating activities 6,558 5,706 5,639
Cash flow from investing activities:      
Capital expenditures - excluding equipment leased to others (1,276) (898) (1,109)
Expenditures for equipment leased to others (1,640) (1,438) (1,819)
Proceeds from disposals of leased assets and property, plant and equipment 936 1,164 899
Additions to finance receivables (12,183) (11,953) (9,339)
Collections of finance receivables 10,901 12,018 9,369
Proceeds from sale of finance receivables 477 127 127
Investments and acquisitions (net of cash acquired) (392) (59) (191)
Proceeds from sale of businesses and investments (net of cash sold) 16 100 0
Proceeds from sale of securities 442 932 694
Investments in securities (506) (1,048) (391)
Other - net 13 89 (20)
Net cash provided by (used for) investing activities (3,212) (966) (1,780)
Cash flow from financing activities:      
Dividends paid (1,951) (1,831) (1,799)
Common stock issued, including treasury shares reissued 313 566 (23)
Common shares repurchased (3,798) 0 0
Proceeds from debt issued (original maturities greater than three months):      
Machinery, Energy & Transportation 57 361 6
Financial Products 8,850 8,702 5,109
Payments on debt (original maturities greater than three months):      
Machinery, Energy & Transportation (7) (1,465) (533)
Financial Products (7,822) (6,923) (6,035)
Short-term borrowings - net (original maturities three months or less) 762 (3,058) 140
Other - net (54) (9) (8)
Net cash provided by (used for) financing activities (3,650) (3,657) (3,143)
Effect of exchange rate changes on cash (126) 38 (28)
Increase (decrease) in cash and short-term investments and restricted cash (430) 1,121 688
Cash and short- term investments and restricted cash at beginning of period 8,320 7,199 6,511
Cash and short- term investments and restricted cash at end of period $ 7,890 $ 8,320 $ 7,199
v3.10.0.1
Operations and summary of significant accounting policies
 12 Months Ended
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Operations and summary of significant accounting policies
Operations and summary of significant accounting policies
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.
 
Our products are sold primarily under the brands “Caterpillar,” “CAT,” design versions of “CAT” and “Caterpillar,” "EMD," “FG Wilson,” “MaK,” “MWM,” “Perkins,” “Progress Rail,” “SEM” and “Solar Turbines”.
 
We conduct operations in our Machinery, Energy & Transportation lines of business under highly competitive conditions, including intense price competition. We place great emphasis on the high quality and performance of our products and our dealers’ service support. Although no one competitor is believed to produce all of the same types of equipment that we do, there are numerous companies, large and small, which compete with us in the sale of each of our products.
 
Our machines are distributed principally through a worldwide organization of dealers (dealer network), 47 located in the United States and 121 located outside the United States, serving 193 countries.  Reciprocating engines are sold principally through the dealer network and to other manufacturers for use in products. Some of the reciprocating engines manufactured by our subsidiary Perkins Engines Company Limited, are also sold through its worldwide network of 90 distributors covering 177 countries. The FG Wilson branded electric power generation systems primarily manufactured by our subsidiary Caterpillar Northern Ireland Limited are sold through its worldwide network of 150 distributors covering 109 countries.  Some of the large, medium speed reciprocating engines are also sold under the MaK brand through a worldwide network of 20 distributors covering 130 countries.  Our dealers do not deal exclusively with our products; however, in most cases sales and servicing of our products are the dealers’ principal business. Some products, primarily turbines and locomotives, are sold directly to end customers through sales forces employed by the company. At times, these employees are assisted by independent sales representatives.
 
The Financial Products line of business also conducts operations under highly competitive conditions. Financing for users of Caterpillar products is available through a variety of competitive sources, principally commercial banks and finance and leasing companies. We offer various financing plans designed to increase the opportunity for sales of our products and generate financing income for our company. A significant portion of Financial Products activity is conducted in North America, with additional offices in Latin America, Asia/Pacific, Europe, Africa and Middle East.
B.
Basis of presentation
 
The consolidated financial statements include the accounts of Caterpillar Inc. and its subsidiaries where we have a controlling financial interest.

Investments in companies where our ownership exceeds 20 percent and we do not have a controlling interest or where the ownership is less than 20 percent and for which we have a significant influence are accounted for by the equity method.  

We consolidate all variable interest entities (VIEs) where Caterpillar Inc. is the primary beneficiary.  For VIEs, we assess whether we are the primary beneficiary as prescribed by the accounting guidance on the consolidation of VIEs.  The primary beneficiary of a VIE is the party that has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. See Note 21 for further discussion on a consolidated VIE.

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:

 
 
December 31,
(Millions of dollars)
 
2018
 
2017
 
Receivables - trade and other
 
$
31

 
$
34

 
Receivables - finance
 
45

 
42

 
Long-term receivables - finance
 
26

 
38

 
Investments in unconsolidated affiliated companies
 
29

 
39

 
Guarantees 1
 
—

 
259

 
Total
 
$
131

 
$
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.

Shipping and handling costs are included in Cost of goods sold in Statement 1.  Other operating (income) expenses primarily include Cat Financial’s depreciation of equipment leased to others, Insurance Services’ underwriting expenses, (gains) losses on disposal of long-lived assets, long-lived asset impairment charges, legal settlements and accruals, contract termination costs and employee separation charges.
 
Prepaid expenses and other current assets in Statement 3 primarily include prepaid rent, prepaid insurance, contract assets, right of return assets, prepaid and refundable income tax, assets held for sale, core to be returned for remanufacturing, restricted cash and other short-term investments.

Certain amounts for prior years have been reclassified to conform with the current-year financial statement presentation. See Note 1J for more information. In addition, deferred revenue of $233 million was reclassified from Other current liabilities to Customer advances in Statement 3 as of December 31, 2017 to conform to the current period presentation.
C.
Inventories
 
Inventories are stated at the lower of cost or net realizable value. Cost is principally determined using the last-in, first-out (LIFO) method. The value of inventories on the LIFO basis represented about 65 percent of total inventories at December 31, 2018 and 2017.
 
If the FIFO (first-in, first-out) method had been in use, inventories would have been $2,009 million and $1,934 million higher than reported at December 31, 2018 and 2017, respectively.
D.
Depreciation and amortization
 
Depreciation of plant and equipment is computed principally using accelerated methods. Depreciation on equipment leased to others, primarily for Financial Products, is computed using the straight-line method over the term of the lease. The depreciable basis is the original cost of the equipment less the estimated residual value of the equipment at the end of the lease term. In 2018, 2017 and 2016, Cat Financial depreciation on equipment leased to others was $819 million, $810 million and $841 million, respectively, and was included in Other operating (income) expenses in Statement 1. In 2018, 2017 and 2016, consolidated depreciation expense was $2,435 million, $2,555 million and $2,707 million, respectively. Amortization of purchased finite-lived intangibles is computed principally using the straight-line method, generally not to exceed a period of 20 years.
E.
Foreign currency translation
 
The functional currency for most of our Machinery, Energy & Transportation consolidated companies is the U.S. dollar. The functional currency for most of our Financial Products and affiliates accounted for under the equity method is the respective local currency.  Gains and losses resulting from the remeasurement of foreign currency amounts to the functional currency are included in Other income (expense) in Statement 1. Gains and losses resulting from translating assets and liabilities from the functional currency to U.S. dollars are included in Accumulated other comprehensive income (loss) in Statement 3.
F.
Derivative financial instruments
 
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. All derivatives are recorded at fair value.  See Note 4 for more information.
G.
Income taxes
 
The provision for income taxes is determined using the asset and liability approach taking into account guidance related to uncertain tax positions.  Tax laws require items to be included in tax filings at different times than the items are reflected in the financial statements.  A current liability is recognized for the estimated taxes payable for the current year.  Deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid.  Deferred taxes are adjusted for enacted changes in tax rates and tax laws.  Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.
H.
Goodwill
 
For acquisitions accounted for as a business combination, goodwill represents the excess of the cost over the fair value of the net assets acquired.  We are required to test goodwill for impairment, at the reporting unit level, annually and when events or circumstances make it more likely than not that an impairment may have occurred.  A reporting unit is an operating segment or one level below an operating segment (referred to as a component) to which goodwill is assigned when initially recorded. We assign goodwill to reporting units based on our integration plans and the expected synergies resulting from the acquisition.  Because Caterpillar is a highly integrated company, the businesses we acquire are sometimes combined with or integrated into existing reporting units.  When changes occur in the composition of our operating segments or reporting units, goodwill is reassigned to the affected reporting units based on their relative fair values. 

We perform our annual goodwill impairment test as of October 1 and monitor for interim triggering events on an ongoing basis.  Goodwill is reviewed for impairment utilizing either a qualitative assessment or a quantitative goodwill impairment test.  If we choose to perform a qualitative assessment and determine the fair value more likely than not exceeds the carrying value, no further evaluation is necessary.  For reporting units where we perform the quantitative goodwill impairment test, we compare the fair value of each reporting unit, which we primarily determine using an income approach based on the present value of discounted cash flows, to the respective carrying value, which includes goodwill.  If the fair value of the reporting unit exceeds its carrying value, the goodwill is not considered impaired.  Beginning in 2017, if the carrying value is higher than the fair value, the difference would be recognized as an impairment loss. Prior to 2017, a two-step process was used. For reporting units where we performed the two-step process, the first step required us to compare the fair value of each reporting unit, which we primarily determined using an income approach based on the present value of discounted cash flows, to the respective carrying value, which includes goodwill. If the fair value of the reporting unit exceeded its carrying value, the goodwill was not considered impaired. If the carrying value was higher than the fair value, there was an indication that an impairment may have existed and the second step was required.  In step two, the implied fair value of goodwill was calculated as the excess of the fair value of a reporting unit over the fair values assigned to its assets and liabilities.  If the implied fair value of goodwill was less than the carrying value of the reporting unit’s goodwill, the difference was recognized as an impairment loss.  See Note 10 for further details.
I.
Estimates in financial statements
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts. The more significant estimates include: residual values for leased assets; fair values for goodwill impairment tests; warranty liability; stock-based compensation and reserves for product liability and insurance losses, postretirement benefits, post-sale discounts, credit losses and income taxes.
J.
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 2 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
 
Year Ended December 31, 2018
 
 
As Reported
 
Previous Accounting Guidance
 
Impact from Adopting New Revenue Guidance
(Millions of dollars)
 
 
 
 
 
 
Sales of Machinery, Energy & Transportation
 
$
51,822

 
$
51,814

 
$
8

Cost of goods sold
 
$
36,997

 
$
37,007

 
$
(10
)
Other operating (income) expenses
 
$
1,382

 
$
1,388

 
$
(6
)
Operating profit
 
$
8,293

 
$
8,269

 
$
24

Consolidated profit before taxes
 
$
7,822

 
$
7,798

 
$
24

Provision (benefit) for income taxes
 
$
1,698

 
$
1,693

 
$
5

Profit of consolidated companies
 
$
6,124

 
$
6,105

 
$
19

Profit of consolidated and affiliated companies
 
$
6,148

 
$
6,129

 
$
19

Profit
 
$
6,147

 
$
6,128

 
$
19

 
 
 
 
 
 
 
Consolidated Statement of Financial Position
 
December 31, 2018
 
 
As Reported
 
Previous Accounting Guidance
 
Impact from Adopting New Revenue Guidance
(Millions of dollars)
 
 
 
 
 
 
Assets
 
 
 
 
 
 
Receivables - trade and other
 
$
8,802

 
$
8,865

 
$
(63
)
Prepaid expenses and other current assets
 
$
1,765

 
$
1,405

 
$
360

Inventories
 
$
11,529

 
$
11,523

 
$
6

Noncurrent deferred and refundable income taxes
 
$
1,439

 
$
1,442

 
$
(3
)
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
Accrued expenses
 
$
3,573

 
$
3,341

 
$
232

Customer advances
 
$
1,243

 
$
1,182

 
$
61

 
 
 
 
 
 
 
Shareholders' equity
 
 
 
 
 
 
Profit employed in the business
 
$
30,427

 
$
30,420

 
$
7

 
 
 
 
 
 
 


Simplifying the measurement of inventory - In July 2015, the FASB issued accounting guidance which requires that inventory be measured at the lower of cost or net realizable value. Prior to the issuance of the new guidance, inventory was measured at the lower of cost or market. Replacing the concept of market with the single measurement of net realizable value is intended to create efficiencies for preparers. Inventory measured using the last-in, first-out (LIFO) method and the retail inventory method are not impacted by the new guidance. The guidance was effective January 1, 2017, and was applied prospectively. The adoption did not have a material impact on our financial statements.

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. The new guidance was effective January 1, 2019 and will be applied using a modified retrospective approach through a cumulative effect adjustment to retained earnings as of January 1, 2019.

The new guidance provides a number of optional practical expedients in transition. We elected 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 did not elect the use-of-hindsight practical expedient. In addition, the new guidance provides practical expedients for an entity’s ongoing lessee accounting. We have elected to not separate lease and non-lease components for the majority of our asset classes. We have elected 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.

The most significant effects of adoption relate to the recognition of right-of-use assets and lease liabilities on our balance sheet for operating leases and providing new disclosures about our leasing activities. We currently expect the right-of-use assets and lease liabilities as of January 1, 2019 will be approximately $750 million. In addition, we will derecognize about $135 million of existing assets and $360 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 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 plan to adopt the new guidance effective January 1, 2020. 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.

Clarification on the definition of a business - In January 2017, the FASB issued accounting guidance to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance was effective January 1, 2018, with early adoption permitted. We adopted the guidance effective January 1, 2017, and the adoption did not have a material impact on our financial statements.

Simplifying the measurement for goodwill - In January 2017, the FASB issued guidance to simplify the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The new guidance will be applied prospectively and is effective January 1, 2020, with early adoption permitted beginning January 1, 2017. We adopted the guidance effective January 1, 2017. 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
 
 
 
 
 
 
 
 
Year Ended
December 31, 2017
(Millions of dollars)
 
As Revised
 
Previously Reported
 
Effect of Change
Cost of goods sold
 
$
31,260

 
$
31,049

 
$
211

Selling, general and administrative expenses
 
$
4,999

 
$
5,177

 
$
(178
)
Research and development expenses
 
$
1,842

 
$
1,905

 
$
(63
)
Other operating (income) expenses
 
$
2,255

 
$
2,279

 
$
(24
)
Total operating costs
 
$
41,002

 
$
41,056

 
$
(54
)
Operating profit
 
$
4,460

 
$
4,406

 
$
54

Other income (expense)
 
$
153

 
$
207

 
$
(54
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended
December 31, 2016

 
As Revised
 
Previously Reported
 
Effect of Change
Cost of goods sold
 
$
28,044

 
$
28,309

 
$
(265
)
Selling, general and administrative expenses
 
$
4,383

 
$
4,686

 
$
(303
)
Research and development expenses
 
$
1,853

 
$
1,951

 
$
(98
)
Other operating (income) expenses
 
$
1,904

 
$
1,902

 
$
2

Total operating costs
 
$
37,375

 
$
38,039

 
$
(664
)
Operating profit
 
$
1,162

 
$
498

 
$
664

Other income (expense)
 
$
(518
)
 
$
146

 
$
(664
)
 
 
 
 
 
 
 


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 was effective January 1, 2019, and will be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of 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 was effective January 1, 2019, and will be applied using a modified retrospective approach through a cumulative effect adjustment to retained earnings as of 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 Statement 1. We do not expect the adoption to have a material impact on our financial statements.
 
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 guidance was effective January 1, 2019, and we will make the reclassification in the period of adoption. We do not expect the adoption to have a material impact 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 disclosure of 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 plan to adopt the new guidance effective January 1, 2020, and do not expect the adoption to have a material impact on our financial statements.
v3.10.0.1
Sales and revenue recognition Sales and revenue recognition (Notes)
 12 Months Ended
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer [Text Block]
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 transfer of control criteria as Machinery, Energy & Transportation sales noted above.  At the time of sale, the deposit is recognized in Other current liabilities in Statement 3, and the core to be returned is recognized as an asset in Prepaid expenses and other current assets in Statement 3 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 asset is then transferred into 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 Statement 3, 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 Statement 3, which represents our right to recover replacement parts we expect will be returned. We also recognize a refund liability in Other current liabilities in Statement 3 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 Statement 3. See Note 7 for further information. Trade receivables from dealers and end users were $7,743 million and $6,399 million as of December 31, 2018 and January 1, 2018, respectively, and are recognized in Receivables – trade and other in Statement 3. Long-term trade receivables from dealers and end users were $674 million and $639 million as of December 31, 2018 and January 1, 2018, respectively, and are recognized in Long-term receivables – trade and other in Statement 3.

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 Statement 3. Long-term customer advances recognized in Other liabilities in Statement 3 were $437 million and $396 million as of December 31, 2018 and January 1, 2018, respectively. We reduce the contract liability when revenue is recognized. During 2018, we recognized $1,294 million 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 December 31, 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 $5.8 billion, of which $2.5 billion is expected to be completed and revenue recognized in the twelve months following December 31, 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 21 for further discussion of our product warranty liabilities.

See Note 23 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 7 for more information.

Revenues are presented net of sales and other related taxes.
v3.10.0.1
Stock-based compensation
 12 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-based compensation
Stock-based compensation
 
Our stock-based compensation plans primarily provide for the granting of stock options, stock-settled stock appreciation rights (SARs), restricted stock units (RSUs) and performance-based restricted stock units (PRSUs) to Officers and other key employees, as well as non-employee Directors. Stock options permit a holder to buy Caterpillar stock at the stock’s price when the option was granted. SARs permit a holder the right to receive the value in shares of the appreciation in Caterpillar stock that occurred from the date the right was granted up to the date of exercise.  RSUs are agreements to issue shares of Caterpillar stock at the time of vesting. PRSUs are similar to RSUs and include performance conditions in the vesting terms of the award.
 
Our long-standing practices and policies specify that all stock-based compensation awards are approved by the Compensation Committee (the Committee) of the Board of Directors.  The award approval process specifies the grant date, value and terms of the award.  The same terms and conditions are consistently applied to all employee grants, including Officers. The Committee approves all individual Officer grants.  The number of stock-based compensation award units included in an individual’s award is determined based on the methodology approved by the Committee.  The exercise price methodology approved by the Committee is the closing price of the Company stock on the date of the grant. In June of 2014, shareholders approved the Caterpillar Inc. 2014 Long-Term Incentive Plan (the Plan) under which all new stock-based compensation awards are granted. In June of 2017, the Plan was amended and restated. The Plan initially provided that up to 38,800,000 Common Shares would be reserved for future issuance under the Plan, subject to adjustment in certain events. Subsequent to the shareholder approval of the amendment and restatement of the Plan, an additional 36,000,000 Common Shares became available for all awards under the Plan.
 
Common stock issued from Treasury stock under the plans totaled 5,590,641 for 2018, 11,139,748 for 2017 and 4,164,134 for 2016. The total number of shares authorized for equity awards under the amended and restated Caterpillar Inc. 2014 Long-Term Incentive Plan is 74,800,000, of which 44,139,162 shares remained available for issuance as of December 31, 2018.
 
Stock option and RSU awards generally vest according to a three-year graded vesting schedule. One-third of the award will become vested on the first anniversary of the grant date, one-third of the award will become vested on the second anniversary of the grant date and one-third of the award will become vested on the third anniversary of the grant date. PRSU awards generally have a three-year performance period and cliff vest at the end of the period based upon achievement of performance targets established at the time of grant.

Upon separation from service, if the participant is 55 years of age or older with more than five years of service, the participant meets the criteria for a "Long Service Separation." Award terms for awards granted in 2016 allow for immediate vesting upon separation of all outstanding options and RSUs with no requisite service period for employees who meet the criteria for a "Long Service Separation." Compensation expense for the 2016 grant was fully recognized immediately on the grant date for these employees. Award terms for the 2018 and 2017 grants allow for continued vesting as of each vesting date specified in the award document for employees who meet the criteria for a "Long Service Separation" and fulfill a requisite service period of six months. Compensation expense for eligible employees for the 2018 and 2017 grants was recognized over the period from the grant date to the end date of the six-month requisite service period. For employees who become eligible for a "Long Service Separation" subsequent to the end date of the six-month requisite service period and prior to the completion of the vesting period, compensation expense is recognized over the period from the grant date to the date eligibility is achieved.

At grant, SARs and option awards have a term life of ten years.  For awards granted prior to 2016, if the “Long Service Separation” criteria are met, the vested options/SARs have a life that is the lesser of ten years from the original grant date or five years from the separation date. For awards granted in 2018, 2017, and 2016, the vested options have a life equal to ten years from the original grant date.

Prior to 2017, all outstanding PRSU awards granted to employees eligible for a "Long Service Separation" may vest at the end of the performance period based upon achievement of the performance target. Compensation expense for the 2016 PRSU grant was fully recognized immediately on the grant date for these employees. For PRSU awards granted in 2018 and 2017, only a prorated number of shares may vest at the end of the performance period based upon achievement of the performance target, with the proration based upon the number of months of continuous employment during the three-year performance period. Employees with a "Long Service Separation" must also fulfill a six-month requisite service period in order to be eligible for the prorated vesting of outstanding PRSU awards granted in 2018 and 2017. Compensation expense for the 2018 and 2017 PRSU grants is being recognized on a straight-line basis over the three-year performance period for all participants.
 
Accounting guidance on share-based payments requires companies to estimate the fair value of options/SARs on the date of grant using an option-pricing model.  The fair value of our option/SAR grants was estimated using a lattice-based option-pricing model.  The lattice-based option-pricing model considers a range of assumptions related to volatility, risk-free interest rate and historical employee behavior.  Expected volatility was based on historical Caterpillar stock price movement and current implied volatilities from traded options on Caterpillar stock. The risk-free interest rate was based on U.S. Treasury security yields at the time of grant.  The weighted-average dividend yield was based on historical information.  The expected life was determined from the lattice-based model. The lattice-based model incorporated exercise and post vesting forfeiture assumptions based on analysis of historical data. The following table provides the assumptions used in determining the fair value of the Option/SAR awards for the years ended December 31, 2018, 2017 and 2016, respectively.

 
Grant Year
 
2018
 
2017
 
2016
Weighted-average dividend yield
2.7
%
 
3.4
%
 
3.2
%
Weighted-average volatility
30.2
%
 
29.2
%
 
31.1
%
Range of volatilities
21.5-33.0%

 
22.1-33.0%

 
22.5-33.4%

Range of risk-free interest rates
2.02-2.87%

 
0.81-2.35%

 
0.62-1.73%

Weighted-average expected lives
8 years

 
8 years

 
8 years

 
 
 
 
 
 

 
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 the 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 the 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 divided per share at the time of the grant.
Please refer to Tables I and II below for additional information on our stock-based compensation awards.  

TABLE I — Financial Information Related to Stock-based Compensation
 
 
 
 
 
 
 
Stock options / SARs
 
RSUs
 
PRSUs
 
Shares
 
Weighted-
 Average
 Exercise
 Price
 
Shares
 
Weighted-
Average
Grant Date Fair Value
 
Shares
 
Weighted-
Average
Grant Date Fair Value
 
 

 
 

 
 

 
 

 
 

 
 

Outstanding at January 1, 2018
21,499,895

 
$
86.86

 
1,964,517

 
$
80.04

 
1,006,991

 
$
74.06

Granted to officers and key employees 1
1,605,220

 
$
150.85

 
734,732

 
$
150.58

 
350,724

 
$
150.98

Exercised
(5,156,489
)
 
$
87.90

 
—

 
$
—

 
—

 
$
—

Vested
—

 
$
—

 
(1,065,853
)
 
$
78.11

 
(549,330
)
 
$
127.07

Forfeited / expired
(106,957
)
 
$
151.13

 
(67,326
)
 
$
113.29

 
(73,086
)
 
$
100.30

Outstanding at December 31, 2018
17,841,669

 
$
91.93

 
1,566,070

 
$
112.99

 
735,299

 
$
115.18

Exercisable at December 31, 2018
13,858,401

 
$
86.05

 
 
 
 
 
 
 
 

Stock options/SARs outstanding and exercisable as of December 31, 2018:
 
 
 
 
 
 
 
Outstanding
 
Exercisable
Exercise Prices
 
Shares Outstanding at 12/31/18
 
Weighted-
 Average
 Remaining
 Contractual Life (Years)
 
Weighted-
 Average
 Exercise Price
 
Aggregate
 Intrinsic Value 2
 
Shares Outstanding at 12/31/18
 
Weighted-
 Average
 Remaining
Contractual Life (Years)
 
Weighted-
 Average
 Exercise Price
 
Aggregate
 Intrinsic Value 2
$22.17-57.85
 
973,032

 
1.04
 
$
53.08

 
$
72

 
973,032

 
0.96
 
$
53.08

 
$
72

$74.77-89.75
 
8,954,712

 
6.27
 
$
81.25

 
410

 
8,186,590

 
6.17
 
$
81.86

 
370

$95.66-96.31
 
4,573,457

 
6.90
 
$
95.96

 
142

 
2,856,943

 
6.06
 
$
96.13

 
88

$102.13-110.09
 
1,840,740

 
2.75
 
$
106.38

 
38

 
1,840,740

 
2.75
 
$
106.38

 
38

$138.51-151.12
 
1,499,728

 
9.32
 
$
150.84

 
—

 
1,096

 
9.30
 
$
151.12

 
—

 
 
17,841,669

 
 
 
$
91.93

 
$
662

 
13,858,401

 
 
 
$
86.05

 
$
568


1 
No SARs were granted during the year ended December 31, 2018.
2 
The difference between a stock award’s exercise price and the underlying stock’s closing market price at December 31, 2018, for awards with market price greater than the exercise price. Amounts are in millions of dollars.
 
 
 
 
 


The computations of weighted-average exercise prices and aggregate intrinsic values are not applicable to RSUs or PRSUs since these awards represent an agreement to issue shares of stock at the time of vesting.  At December 31, 2018, there were 1,566,070 outstanding RSUs with a weighted average remaining contractual life of 1.4 years and 735,299 outstanding PRSUs with a weighted-average remaining contractual life of 1.5 years.
 

TABLE II— Additional Stock-based Award Information
 
 
 
 
 
 
 
(Dollars in millions except per share data)
 
2018
 
2017
 
2016
Stock options/SARs activity:
 
 

 
 

 
 

Weighted-average fair value per share of stock awards granted
 
$
46.09

 
$
25.01

 
$
20.64

Intrinsic value of stock awards exercised
 
$
348

 
$
504

 
$
185

Fair value of stock awards vested 1
 
$
86

 
$
191

 
$
163

Cash received from stock awards exercised
 
$
370

 
$
629

 
$
30

 
 
 
 
 
 
 
RSUs activity:
 
 

 
 

 
 

Weighted-average fair value per share of stock awards granted
 
$
150.58

 
$
90.11

 
$
68.04

Fair value of stock awards vested 2
 
$
180

 
$
189

 
$
162

 
 
 
 
 
 
 
PRSUs activity:
 
 

 
 

 
 

Weighted-average fair value per share of stock awards granted
 
$
150.98

 
$
86.78

 
$
64.71

Fair value of stock awards vested 2
 
$
70

 
$
20

 
$
—

 
1 
Based on the grant date fair value.
2 
Based on the underlying stock's closing market price on the vesting date.
 
 
 
 
 

In accordance with guidance on share-based payments, stock-based compensation expense is based on the grant date fair value and is classified within Cost of goods sold, Selling, general and administrative expenses and Research and development expenses corresponding to the same line item as the cash compensation paid to respective employees, officers and non-employee directors. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period for awards with terms that specify cliff or graded vesting and contain only service conditions. Stock-based compensation expense for PRSUs is based on the probable number of shares expected to vest and is recognized primarily on a straight-line basis.

Before tax, stock-based compensation expense for 2018, 2017 and 2016 was $197 million, $206 million and $218 million, respectively, with a corresponding income tax benefit of $36 million, $40 million and $61 million, respectively.

The amount of stock-based compensation expense capitalized for the years ended December 31, 2018, 2017 and 2016 did not have a significant impact on our financial statements.
 
At December 31, 2018, there was $180 million of total unrecognized compensation cost from stock-based compensation arrangements granted under the plans, which is related to non-vested stock-based awards.  The compensation expense is expected to be recognized over a weighted-average period of approximately 1.8 years.

We currently use shares in treasury stock to satisfy share award exercises.
 
The cash tax benefits realized from stock awards exercised for 2018, 2017 and 2016 were $103 million, $205 million and $104 million, respectively. We use the direct only method and tax law ordering approach to calculate the tax effects of stock-based compensation.
v3.10.0.1
Derivative financial instruments and risk management
 12 Months Ended
Dec. 31, 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 in Statement 3 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, in Statement 3 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 Statement 5.  Cash flows from undesignated derivative financial instruments are included in the investing category on Statement 5.
 
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 in Statement 3 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.
 
A.
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 December 31, 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 December 31, 2018, $8 million of deferred net losses, net of tax, included in equity (AOCI in Statement 3), are expected to be reclassified to current earnings (Other income (expense) in Statement 1) 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.
 
B.
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.
 
C.
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 Statement 3 are as follows: 

 
Consolidated
 Statement of Financial Position Location
 
Asset (Liability) Fair Value
(Millions of dollars)
 
 
Years ended December 31,
 
 
 
2018
 
2017
Designated derivatives
 
 
 

 
 

Foreign exchange contracts
 
 
 

 
 

Machinery, Energy & Transportation
Receivables — trade and other
 
$
16

 
$
8

Machinery, Energy & Transportation
Long-term receivables — trade and other
 
—

 
4

Machinery, Energy & Transportation
Accrued expenses
 
(26
)
 
(14
)
Machinery, Energy & Transportation
Other liabilities
 
(9
)
 
(2
)
Financial Products
Receivables — trade and other
 
53

 
—

Financial Products
Long-term receivables — trade and other
 
35

 
7

Financial Products
Accrued expenses
 
(9
)
 
(57
)
Interest rate contracts
 
 
 

 
 

Financial Products
Receivables — trade and other
 
1

 
—

Financial Products
Long-term receivables — trade and other
 
3

 
3

Financial Products
Accrued expenses
 
(40
)
 
(2
)
 
 
 
$
24

 
$
(53
)
 
 
 
 
 
 
Undesignated derivatives
 
 
 

 
 

Foreign exchange contracts
 
 
 

 
 

Machinery, Energy & Transportation
Receivables — trade and other
 
$
2

 
$
19

Machinery, Energy & Transportation
Accrued expenses
 
(21
)
 
(9
)
Financial Products
Receivables — trade and other
 
15

 
12

Financial Products
Long-term receivables — trade and other
 
5

 
—

Financial Products
Accrued expenses
 
(14
)
 
(9
)
Commodity contracts
 
 
 

 
 

Machinery, Energy & Transportation
Receivables — trade and other
 
1

 
21

Machinery, Energy & Transportation
Accrued expenses
 
(31
)
 
—

 
 
 
$
(43
)
 
$
34

 
 
 
 
 
 


The total notional amounts of the derivative instruments are as follows:

 
Years ended December 31,
(Millions of dollars)
 
2018
 
2017
 
 
 
 
 
Machinery, Energy & Transportation
 
$
1,834

 
$
3,190

Financial Products
 
$
10,210

 
$
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.
 
 
 
 
 
 
 

The effect of derivatives designated as hedging instruments on Statement 1 is as follows: 
 
 
 
 
 
Cash Flow Hedges
 
 
 
 
 
 
 
 
 
(Millions of dollars)
 
Year ended December 31, 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
 
$
(47
)
 
Other income (expense)
 
$
(33
)
 
$
—

 
Financial Products
 
165

 
Other income (expense)
 
148

 
—

 
Financial Products
 
—

 
Interest expense of Financial Products
 
19

 
—

 
Interest rate contracts
 
 

 
 
 
 

 
 

 
Machinery, Energy & Transportation
 
—

 
Interest expense excluding Financial Products
 
(3
)
 
—

 
Financial Products
 
(38
)
 
Interest expense of Financial Products
 
—

 
—

 
 
 
$
80

 
 
 
$
131

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 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)
 
$
(40
)
 
$
—

 
Financial Products
 
(77
)
 
Other income (expense)
 
(81
)
 
—

 
Financial Products
 
—

 
Interest expense of Financial Products
 
6

 
—

 
Interest rate contracts
 
 

 
 
 
 

 
 

 
Machinery, Energy & Transportation
 
—

 
Interest expense excluding Financial Products
 
(9
)
 
—

 
Financial Products
 
—

 
Interest expense of Financial Products
 
3

 
—

 
 
 
$
(5
)
 
 
 
$
(121
)
 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2016
 
 
 
 
 
Recognized in Earnings
 
 
 
Amount of
Gains (Losses) Recognized in AOCI (Effective Portion)
 
Classification of
 Gains (Losses)
 
Amount of
Gains (Losses)
Reclassified
from AOCI to
Earnings
 
Recognized in Earnings (Ineffective Portion)
 
Foreign exchange contracts
 
 
 
 
 
 
 
 
 
Machinery, Energy & Transportation
 
$
(118
)
 
Other income (expense)
 
$
(14
)
 
$
—

 
Financial Products
 
15

 
Other income (expense)
 
28

 
—

 
Interest rate contracts
 
 

 
 
 
 

 
 

 
Machinery, Energy & Transportation
 
—

 
Interest expense excluding Financial Products
 
(6
)
 
—

 
Financial Products
 
8

 
Interest expense of Financial Products
 
(3
)
 
—

 
 
 
$
(95
)
 
 
 
$
5

 
$
—

 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 



The effect of derivatives not designated as hedging instruments on Statement 1 is as follows: 

 
 
 
 
Years ended December 31,
(Millions of dollars)
 
Classification of Gains (Losses)
 
2018
 
2017
 
2016
Foreign exchange contracts
 
 
 
 

 
 

 
 

Machinery, Energy & Transportation
 
Other income (expense)
 
$
(54
)
 
$
72

 
$
(4
)
Financial Products
 
Other income (expense)
 
19

 
9

 
(24
)
Interest rate contracts
 
 
 
 

 
 

 
 

Machinery, Energy & Transportation
 
Other income (expense)
 
—

 
—

 
2

Commodity contracts
 
 
 
 

 
 

 
 

Machinery, Energy & Transportation
 
Other income (expense)
 
(39
)
 
30

 
16

 
 
 
 
$
(74
)
 
$
111

 
$
(10
)
 
 
 
 
 
 
 
 
 

 
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 December 31, 2018 and 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:

December 31, 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
 
$
19

 
$
—

 
$
19

 
$
(19
)
 
$
—

 
$
—

 
Financial Products
 
112

 
—

 
112

 
(34
)
 
—

 
78

 
 Total
 
$
131

 
$
—

 
$
131

 
$
(53
)
 
$
—

 
$
78

 

December 31, 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
 
$
(87
)
 
$
—

 
$
(87
)
 
$
19

 
$
—

 
$
(68
)
 
Financial Products
 
(63
)
 
—

 
(63
)
 
34

 
—

 
(29
)
 
 Total
 
$
(150
)
 
$
—

 
$
(150
)
 
$
53

 
$
—

 
$
(97
)
 

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
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
v3.10.0.1
Other income (expense)
 12 Months Ended
Dec. 31, 2018
Other Income and Expenses [Abstract]  
Other income (expense)
5.
Other income (expense)
 
 
 
Years ended December 31,
 
(Millions of dollars)
 
2018
 
2017
 
2016
 
Investment and interest income
 
$
195

 
$
122

 
$
74

 
Foreign exchange gains (losses) 1 
 
(201
)
 
(213
)
 
(57
)
 
License fee income
 
125

 
100

 
92

 
Gains (losses) on sale of securities and affiliated companies
 
4

 
187

2 
47

 
Net periodic pension and OPEB income (cost), excluding service cost
 
(118
)
 
(54
)
 
(664
)
 
Gains (losses) on equity securities measured at fair value3
 
(33
)
 
—

 
—

 
Miscellaneous income (loss)
 
(39
)
 
11

 
(10
)
 
Total
 
$
(67
)
 
$
153

 
$
(518
)
 

1 
Includes gains (losses) from foreign exchange derivative contracts.  See Note 4 for further details.
2 
Includes pretax gain of $85 million related to the sale of Caterpillar's equity interest in Iron Planet Holdings Inc.
3 Beginning January 1, 2018, the unrealized gains and losses arising from the revaluation of equity securities are included in Other income (expense) in Statement 1. See Note 1J for additional information.
 
 
 
 
 
v3.10.0.1
Income taxes
 12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
Income taxes
6.
Income taxes

Reconciliation of the U.S. federal statutory rate to effective rate:

 
 
Years ended December 31,
(Millions of dollars)
 
2018
 
2017
 
2016
Taxes at U.S. statutory rate
 
$
1,643

 
21.0
 %
 
$
1,429

 
35.0
 %
 
$
49

 
35.0
 %
(Decreases) increases resulting from:
 
 

 
 

 
 

 
 

 
 

 
 

Non-U.S. subsidiaries taxed at other than the U.S. rate
 
282

 
3.6
 %
 
(282
)
 
(6.9
)%
 
(119
)
 
(85.6
)%
State and local taxes, net of federal 1
 
22

 
0.3
 %
 
27

 
0.7
 %
 
(1
)
 
(0.7
)%
Interest and penalties, net of tax
 
33

 
0.4
 %
 
28

 
0.7
 %
 
24

 
17.2
 %
U.S. tax incentives
 
(106
)
 
(1.3
)%
 
(52
)
 
(1.3
)%
 
(52
)
 
(37.4
)%
ESOP dividend tax benefit
 
(12
)
 
(0.2
)%
 
(21
)
 
(0.5
)%
 
(27
)
 
(19.4
)%
Net excess tax benefits from stock-based compensation
 
(56
)
 
(0.7
)%
 
(64
)
 
(1.6
)%
 
—

 
—
 %
U.S. deferred tax rate change
 
(154
)
 
(2.0
)%
 
596

 
14.6
 %
 
—

 
—
 %
Mandatory deemed repatriation of non-U.S. earnings
 
50

 
0.7
 %
 
1,775

 
43.5
 %
 
—

 
—
 %
Valuation allowances
 
(29
)
 
(0.4
)%
 
(111
)
 
(2.7
)%
 
141

 
101.4
 %
Nondeductible goodwill 2
 
—

 
—
 %
 
—

 
—
 %
 
191

 
137.4
 %
Other—net
 
25

 
0.3
 %
 
14

 
0.3
 %
 
(14
)
 
(10.1
)%
Provision (benefit) for income taxes
 
$
1,698

 
21.7
 %
 
$
3,339

 
81.8
 %
 
$
192

 
137.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Excludes amounts included in valuation allowances and mandatory deemed repatriation of non-U.S. earnings.
 
 
2 Portion of Surface Mining & Technology goodwill impairment not deductible for tax purposes. See Note 10 for further discussion.

 
Included in the line item above labeled "Non-U.S. subsidiaries taxed at other than the U.S. rate" are the effects of local and U.S. taxes related to earnings of non-U.S. subsidiaries, changes in the amount of unrecognized tax benefits associated with these earnings, losses at non-U.S. subsidiaries without local tax benefits due to valuation allowances, and other permanent differences between tax and U.S. GAAP results. Although not individually significant by jurisdiction, pre-tax permanent differences due to nondeductible net foreign exchange gains/losses of non-U.S. subsidiaries were approximately $180 million of net losses in 2018, $160 million of net gains in 2017, and $130 million of net losses in 2016.

Included in the line item above labeled "Valuation Allowances" for 2018 is a decrease in the valuation allowance for U.S. state deferred tax assets resulting in a $63 million non-cash benefit, net of federal deferred tax adjustment at 21 percent, along with a decrease in the valuation allowance for a non-U.S. subsidiary of $25 million. The primary driver of the decrease in the U.S. state valuation allowance was improved U.S. GAAP profits expected to recur in certain state jurisdictions. This compares to a decrease of $111 million in 2017 and an increase of $141 million in 2016 to the provision for income taxes related to changes in the valuation allowance for U.S. state deferred tax assets, net of federal deferred tax adjustment at 35 percent. Also included was 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 and $33 million million for the years ended December 31, 2017 and 2016, respectively. Management has concluded that the error was not material to any period presented.

We have completed our accounting for the income tax effects of U.S. tax reform legislation and included measurement period adjustments in 2018 of $104 million to reduce the provisionally estimated charge of $2.371 billion recognized during the fourth quarter of 2017. A $154 million benefit revised 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 2018 which was treated as deductible on the 2017 U.S. tax return. A $50 million charge revised the estimated cost of a mandatory deemed repatriation of non-U.S. earnings, including changes in the deferred tax liability related to the amount of earnings considered not indefinitely reinvested as well as the amount of unrecognized tax benefits and state tax liabilities associated with these tax positions.

The impacts of U.S. tax reform on the financial statements were based on enacted law and related guidance received as of December 31, 2018. On January 15, 2019, the U.S. Treasury issued final regulations providing additional guidance related to the calculation of the mandatory deemed repatriation of non-U.S. earnings. We are currently evaluating the impact of these regulations and will recognize any resulting adjustments in the first quarter of 2019.

As a result of U.S. tax reform legislation, distributions of profits from non-U.S. subsidiaries are not expected to cause a significant incremental U.S. tax impact in the future. However, these distributions may be subject to non-U.S. withholding taxes if profits are distributed from certain jurisdictions. Undistributed profits of non-U.S. subsidiaries of approximately $14 billion are considered indefinitely reinvested. Determination of the amount of unrecognized deferred tax liability related to indefinitely reinvested profits is not feasible primarily due to our legal entity structure and the complexity of U.S. and local tax laws.

The components of profit (loss) before taxes were: 
 
 
 
 
 
 
 
 
Years ended December 31,
(Millions of dollars)
 
2018
 
2017
 
2016
U.S.
 
$
2,131

 
$
240

 
$
(2,053
)
Non-U.S.
 
5,691

 
3,842

 
2,192

 
 
$
7,822

 
$
4,082

 
$
139

 
 
 
 
 
 
 

 
Profit before taxes, as shown above, is based on the location of the entity to which such earnings are attributable. Where an entity’s earnings are subject to taxation, however, may not correlate solely to where an entity is located.  Thus, the income tax provision shown below as U.S. or non-U.S. may not correspond to the earnings shown above.
 
The components of the provision (benefit) for income taxes were:
 
 
 
 
 
 
 
 
Years ended December 31,
(Millions of dollars)
 
2018
 
2017
 
2016
Current tax provision (benefit):
 
 

 
 

 
 

U.S.1
 
$
179

 
$
963

 
$
(90
)
Non-U.S.
 
1,291

 
1,124

 
718

State (U.S.)
 
8

 
39

 
(5
)
 
 
1,478

 
2,126

 
623

 
 
 
 
 
 
 
Deferred tax provision (benefit):
 
 

 
 

 
 

U.S.1
 
298

 
1,385

 
(544
)
Non-U.S.
 
4

 
(17
)
 
(108
)
State (U.S.)
 
(82
)
 
(155
)
 
221

 
 
220

 
1,213

 
(431
)
Total provision (benefit) for income taxes
 
$
1,698

 
$
3,339

 
$
192

1 Includes U.S. taxes related to non-U.S. earnings. We account for U.S. taxes on global intangible low-taxed income as a period cost.
 
We paid net income tax and related interest of $1,429 million, $1,404 million and $522 million in 2018, 2017 and 2016, respectively.

Accounting for income taxes under U.S. GAAP requires that individual tax-paying entities of the company offset all deferred tax liabilities and assets within each particular tax jurisdiction and present them as a noncurrent deferred tax liability or asset in the Consolidated Financial Position. Amounts in different tax jurisdictions cannot be offset against each other. The amount of deferred income taxes at December 31, included on the following lines in Statement 3, are as follows:
 
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
Assets:
 
 

 
 

Noncurrent deferred and refundable income taxes
 
$
1,363

 
$
1,569

Liabilities:
 
 

 
 

Other liabilities
 
331

 
281

Deferred income taxes—net
 
$
1,032

 
$
1,288

 
 
 
 
 
 
Deferred income tax assets and liabilities:
 
 
 
 
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
Deferred income tax assets:
 
 

 
 

Tax carryforwards
 
$
1,312

 
$
1,286

Pension
 
785

 
980

Postemployment benefits other than pensions
 
793

 
841

Warranty reserves
 
237

 
226

Stock-based compensation
 
121

 
135

Allowance for credit losses
 
155

 
149

Post sale discounts
 
158

 
160

Other employee compensation and benefits
 
186

 
203

Other—net
 
298

 
302

 
 
4,045

 
4,282

 
 
 
 
 
Deferred income tax liabilities:
 
 

 
 

Capital and intangible assets
 
(1,381
)
 
(1,360
)
Bond discount
 
(127
)
 
(133
)
Translation
 
(190
)
 
(165
)
Other outside basis differences
 
(271
)
 
(205
)
Undistributed profits of non-U.S. subsidiaries
 
(129
)
 
(138
)
 
 
(2,098
)
 
(2,001
)
Valuation allowance for deferred tax assets
 
(915
)
 
(993
)
Deferred income taxes—net
 
$
1,032

 
$
1,288

 
 
 
 
 
 
At December 31, 2018, approximately $1,804 million of U.S. state tax net operating losses (NOLs) and $134 million of U.S. state tax credit carryforwards were available. The state NOLs primarily expire over the next twenty years.  The state tax credit carryforwards primarily expire over the next fifteen years. In total, we have established a valuation allowance of $192 million related to certain of these carryforwards.

At December 31, 2018, approximately $500 million of U.S. foreign tax credits were available for carryforward. These credits expire in 2028.

At December 31, 2018, amounts and expiration dates of net operating loss carryforwards in various non-U.S. taxing jurisdictions were:
 
(Millions of dollars)
2019
 
2020
 
2021
 
2022-2024
 
2025-2039
 
Unlimited
 
Total
$
23

 
$
124

 
$
92

 
$
147

 
$
506

 
$
3,597

 
$
4,489

 
At December 31, 2018, non-U.S. entities that have not yet demonstrated consistent and/or sustainable profitability to support the realization of net deferred tax assets have recorded valuation allowances of $723 million, including certain entities in Luxembourg.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for uncertain tax positions, including positions impacting only the timing of tax benefits, follows.
 
Reconciliation of unrecognized tax benefits: 1
 
 
 
 
 
 
 
 
Years ended December 31,
(Millions of dollars)
 
2018
 
2017
 
2016
Balance at January 1,
 
$
1,286

 
$
1,032

 
$
968

 
 
 
 
 
 
 
Additions for tax positions related to current year
 
61

 
270

 
73

Additions for tax positions related to prior years
 
461

 
20

 
55

Reductions for tax positions related to prior years
 
(5
)
 
(27
)
 
(36
)
Reductions for settlements 2 
 
(6
)
 
(9
)
 
(24
)
Reductions for expiration of statute of limitations
 
(1
)
 
—

 
(4
)
 
 
 
 
 
 
 
Balance at December 31,
 
$
1,796

 
$
1,286

 
$
1,032

 
 
 
 
 
 
 
Amount that, if recognized, would impact the effective tax rate
 
$
1,716

 
$
1,209

 
$
963


1 
Foreign currency impacts are included within each line as applicable.
2 
Includes cash payment or other reduction of assets to settle liability.
 
 
 
 
 


We classify interest and penalties on income taxes as a component of the provision for income taxes. We recognized a net provision for interest and penalties of $42 million, $38 million and $34 million during the years ended December 31, 2018, 2017 and 2016, respectively. The total amount of interest and penalties accrued was $190 million and $157 million as of December 31, 2018 and 2017, respectively.
 
On January 31, 2018, we received a Revenue Agent's Report from the 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 (CSARL), 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 change to our unrecognized tax benefits for this position 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.

With the exception of a loss carryback to 2005, tax years prior to 2007 are generally no longer subject to U.S. tax assessment. In our major non-U.S. jurisdictions including Australia, Brazil, China, Germany, Japan, Mexico, Switzerland, Singapore and the U.K., tax years are typically subject to examination for three to ten years. Due to the uncertainty related to the timing and potential outcome of audits, we cannot estimate the range of reasonably possible change in unrecognized tax benefits in the next 12 months.
v3.10.0.1
Cat Financial Financing Activities
 12 Months Ended
Dec. 31, 2018
Receivables [Abstract]  
Cat Financial Financing Activities
Cat Financial Financing Activities
A.
Wholesale inventory receivables
 
Wholesale inventory receivables are receivables of Cat Financial that arise when Cat Financial provides financing for a dealer’s purchase of inventory. These receivables are included in Receivables—trade and other and Long-term receivables—trade and other in Statement 3 and were $1,308 million and $1,398 million, at December 31, 2018 and 2017, respectively.
 
Contractual maturities of outstanding wholesale inventory receivables:
(Millions of dollars)
 
December 31, 2018
Amounts Due In
 
Wholesale
Loans
 
Wholesale
Leases
 
Total
2019
 
$
564

 
$
70

 
$
634

2020
 
229

 
48

 
277

2021
 
157

 
30

 
187

2022
 
71

 
16

 
87

2023
 
21

 
6

 
27

Thereafter
 
16

 
3

 
19

Total
 
1,058

 
173

 
1,231

Guaranteed residual value
 
—

 
66

 
66

Unguaranteed residual value
 
—

 
35

 
35

Less: Unearned income
 
(8
)
 
(16
)
 
(24
)
Total
 
$
1,050

 
$
258

 
$
1,308

 
 
 
 
 
 
 

 
Cat Financial’s wholesale inventory receivables generally may be repaid or refinanced without penalty prior to contractual maturity. Accordingly, this presentation should not be regarded as a forecast of future cash collections.

Please refer to Note 18 and Table III for fair value information.
B.
Finance receivables
 
Finance receivables are receivables of Cat Financial and are reported in Statement 3 net of an allowance for credit losses.
 
Contractual maturities of outstanding finance receivables:
(Millions of dollars)
 
December 31, 2018
Amounts Due In
 
Retail
Loans
 
Retail
Leases
 
Total
2019
 
$
5,769

 
$
2,981

 
$
8,750

2020
 
3,742

 
2,026

 
5,768

2021
 
2,560

 
1,073

 
3,633

2022
 
1,750

 
453

 
2,203

2023
 
833

 
166

 
999

Thereafter
 
683

 
56

 
739

Total
 
15,337

 
6,755

 
22,092

Guaranteed residual value
 
—

 
392

 
392

Unguaranteed residual value
 
—

 
822

 
822

Less: Unearned income
 
(252
)
 
(628
)
 
(880
)
Total
 
$
15,085

 
$
7,341

 
$
22,426

 
 
 
 
 
 
 
 
 
 
 
 
 
 

 Cat Financial’s finance receivables generally may be repaid or refinanced without penalty prior to contractual maturity. Accordingly, this presentation should not be regarded as a forecast of future cash collections.

Please refer to Note 18 and Table III for fair value information.
C.
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 end-user 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 and Canada.

•
Europe - Finance receivables originated in Europe, Africa, Middle East and the Commonwealth of Independent States.

•
Asia Pacific - Finance receivables originated in Australia, New Zealand, China, Japan, Southeast Asia and India.

•
Mining - Finance receivables related to large mining customers worldwide and project financing in various countries.

•
Latin America - Finance receivables originated in Mexico, Central and South American countries.

•
Caterpillar Power Finance - Finance receivables related to marine vessels with Caterpillar engines worldwide and Caterpillar electrical power generation, gas compression and co-generation systems and non-Caterpillar equipment that is powered by these systems worldwide.

An analysis of the allowance for credit losses was as follows:
(Millions of dollars)
 
December 31, 2018
 
 
Customer
 
Dealer
 
Total
Allowance for Credit Losses:
 
 

 
 

 
 

Balance at beginning of year
 
$
353

 
$
9

 
$
362

Receivables written off
 
(235
)
 
—

 
(235
)
Recoveries on receivables previously written off
 
46

 
—

 
46

Provision for credit losses
 
337

 
12

 
349

Other
 
(15
)
 
—

 
(15
)
Balance at end of year
 
$
486

 
$
21

 
$
507

 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
288

 
$
14

 
$
302

Collectively evaluated for impairment
 
198

 
7

 
205

Ending Balance
 
$
486

 
$
21

 
$
507

 
 
 
 
 
 
 
Recorded Investment in Finance Receivables:
 
 

 
 

 
 

Individually evaluated for impairment
 
$
858

 
$
78

 
$
936

Collectively evaluated for impairment
 
18,152

 
3,338

 
21,490

Ending Balance
 
$
19,010

 
$
3,416

 
$
22,426

 
 
 
 
 
 
 
 
(Millions of dollars)
 
December 31, 2017
 
 
Customer
 
Dealer
 
Total
Allowance for Credit Losses:
 
 

 
 

 
 

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 receivable past due when any installment is over 30 days past due. The tables below summarize the recorded investment of finance receivables by aging category.

(Millions of dollars)
 
December 31, 2018
 
 
31-60 Days Past Due
 
61-90 Days Past Due
 
91+
Days Past Due
 
Total Past
Due
 
Current
 
Total
Finance
Receivables
 
91+ Still
Accruing
Customer
 
 

 
 

 
 

 
 

 
 

 
 

 
 

North America
 
$
65

 
$
18

 
$
84

 
$
167

 
$
7,825

 
$
7,992

 
$
14

Europe
 
19

 
9

 
153

 
181

 
2,850

 
3,031

 
5

Asia Pacific
 
24

 
9

 
8

 
41

 
2,409

 
2,450

 
5

Mining
 
28

 
1

 
9

 
38

 
1,642

 
1,680

 
—

Latin America
 
38

 
29

 
71

 
138

 
1,421

 
1,559

 
—

Caterpillar Power Finance
 
10

 
1

 
384

 
395

 
1,903

 
2,298

 
—

Dealer
 
 

 
 

 
 

 
 
 
 

 
 
 
 

North America
 
—

 
—

 
—

 
—

 
1,895

 
1,895

 
—

Europe
 
—

 
—

 
—

 
—

 
333

 
333

 
—

Asia Pacific
 
—

 
—

 
—

 
—

 
466

 
466

 
—

Mining
 
—

 
—

 
—

 
—

 
4

 
4

 
—

Latin America
 
—

 
—

 
78

 
78

 
638

 
716

 
—

Caterpillar Power Finance
 
—

 
—

 
—

 
—

 
2

 
2

 
—

Total
 
$
184

 
$
67

 
$
787

 
$
1,038

 
$
21,388

 
$
22,426

 
$
24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Millions of dollars)
 
December 31, 2017
 
 
31-60 Days Past Due
 
61-90 Days Past Due
 
91+
Days Past Due
 
Total Past
Due
 
Current
 
Total
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 $78 million in impaired finance receivables as of December 31, 2018 for the Dealer portfolio segment. There were no impaired finance receivables as of December 31, 2017 and 2016 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: 

 
December 31, 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
$
10

 
$
10

 
$
—

 
$
19

 
$
19

 
$
—

Europe
1

 
1

 
—

 
45

 
45

 
—

Asia Pacific
—

 
—

 
—

 
34

 
33

 
—

Mining
33

 
33

 
—

 
121

 
121

 
—

Latin America
29

 
29

 
—

 
45

 
45

 
—

Caterpillar Power Finance
69

 
83

 
—

 
160

 
172

 
—

Total
$
142

 
$
156

 
$
—

 
$
424

 
$
435

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
Impaired Finance Receivables With An Allowance Recorded
 

 
 

 
 

 
 

 
 

 
 

North America
$
40

 
$
41

 
$
14

 
$
44

 
$
43

 
$
17

Europe
92

 
92

 
57

 
9

 
8

 
5

Asia Pacific
4

 
4

 
2

 
8

 
8

 
2

Mining
56

 
55

 
26

 
—

 
—

 
—

Latin America
75

 
75

 
25

 
95

 
106

 
42

Caterpillar Power Finance
449

 
455

 
164

 
362

 
365

 
83

Total
$
716

 
$
722

 
$
288

 
$
518

 
$
530

 
$
149

 
 
 
 
 
 
 
 
 
 
 
 
Total Impaired Finance Receivables
 

 
 

 
 

 
 

 
 

 
 

North America
$
50

 
$
51

 
$
14

 
$
63

 
$
62

 
$
17

Europe
93

 
93

 
57

 
54

 
53

 
5

Asia Pacific
4

 
4

 
2

 
42

 
41

 
2

Mining
89

 
88

 
26

 
121

 
121

 
—

Latin America
104

 
104

 
25

 
140

 
151

 
42

Caterpillar Power Finance
518

 
538

 
164

 
522

 
537

 
83

Total
$
858

 
$
878

 
$
288

 
$
942

 
$
965

 
$
149

 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 

 
 
Years ended December 31,
 
 
2018
 
2017
 
2016
(Millions of dollars)
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Impaired Finance Receivables With No Allowance Recorded
 
 

 
 

 
 

 
 

 
 
 
 
North America
 
$
16

 
$
1

 
$
13

 
$
1

 
$
18

 
$
1

Europe
 
14

 
—

 
48

 
1

 
46

 
1

Asia Pacific
 
27

 
3

 
24

 
2

 
2

 
—

Mining
 
57

 
2

 
126

 
7

 
98

 
4

Latin America
 
38

 
2

 
64

 
3

 
47

 
1

Caterpillar Power Finance
 
130

 
7

 
221

 
9

 
270

 
11

Total
 
$
282

 
$
15

 
$
496

 
$
23

 
$
481

 
$
18

 
 
 
 
 
 
 
 
 
 
 
 
 
Impaired Finance Receivables With An Allowance Recorded
 
 

 
 

 
 

 
 

 
 
 
 
North America
 
$
49

 
$
2

 
$
49

 
$
1

 
$
34

 
$
—

Europe
 
53

 
2

 
6

 
—

 
11

 
1

Asia Pacific
 
4

 
—

 
31

 
2

 
37

 
3

Mining
 
46

 
3

 
—

 
—

 
13

 
—

Latin America
 
67

 
3

 
99

 
4

 
66

 
2

Caterpillar Power Finance
 
378

 
12

 
180

 
6

 
50

 
1

Total
 
$
597

 
$
22

 
$
365

 
$
13

 
$
211

 
$
7

 
 
 
 
 
 
 
 
 
 
 
 
 
Total Impaired Finance Receivables
 
 

 
 

 
 

 
 

 
 
 
 
North America
 
$
65

 
$
3

 
$
62

 
$
2

 
$
52

 
$
1

Europe
 
67

 
2

 
54

 
1

 
57

 
2

Asia Pacific
 
31

 
3

 
55

 
4

 
39

 
3

Mining
 
103

 
5

 
126

 
7

 
111

 
4

Latin America
 
105

 
5

 
163

 
7

 
113

 
3

Caterpillar Power Finance
 
508

 
19

 
401

 
15

 
320

 
12

Total
 
$
879

 
$
37

 
$
861

 
$
36

 
$
692

 
$
25

 
 
 
 
 
 
 
 
 
 
 
 
 

 
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 December 31, 2018, there were $78 million in finance receivables on non-accrual status for the Dealer portfolio segment. 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 receivable on non-accrual status was as follows:

 
 
December 31,
(Millions of dollars)
 
2018
 
2017
North America
 
$
77

 
$
38

Europe
 
154

 
37

Asia Pacific
 
4

 
10

Mining
 
50

 
63

Latin America
 
106

 
192

Caterpillar Power Finance
 
416

 
343

Total
 
$
807

 
$
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 December 31, 2018 and 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 years ended December 31, 2018, 2017 or 2016 for the Dealer portfolio segment. Cat Financial's recorded investment in finance receivables in the Customer portfolio segment modified as TDRs during the years ended December 31, 2018, 2017 and 2016 were as follows: 

(Millions of dollars)
 
Year ended December 31, 2018
 
 
 
Number
 of Contracts
 
Pre-TDR
 Recorded
Investment
 
Post-TDR
Recorded
Investment
 
North America
 
38

 
$
21

 
$
21

 
Europe 
 
—

 
—

 
—

 
Asia Pacific
 
—

 
—

 
—

 
Mining
 
1

 
29

 
29

 
Latin America
 
1

 
3

 
3

 
Caterpillar Power Finance 
 
12

 
133

 
99

 
Total
 
52

 
$
186

 
$
152

 
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2017
 
 
 
Number
 of Contracts
 
Pre-TDR 
Recorded
Investment
 
Post-TDR
Recorded
Investment
 
North America
 
43

 
$
34

 
$
35

 
Europe 
 
4

 
1

 
1

 
Asia Pacific
 
10

 
39

 
31

 
Mining
 
2

 
57

 
56

 
Latin America 
 
17

 
26

 
27

 
Caterpillar Power Finance 1
 
68

 
422

 
407

 
Total
 
144

 
$
579

 
$
557

 
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2016
 
 
 
Number
 of Contracts
 
Pre-TDR
 Recorded
Investment
 
Post-TDR
 Recorded
Investment
 
North America
 
25

 
$
25

 
$
25

 
Europe 
 
43

 
12

 
9

 
Asia Pacific
 
31

 
29

 
28

 
Mining
 
4

 
74

 
66

 
Latin America 2
 
437

 
118

 
82

 
Caterpillar Power Finance
 
34

 
196

 
177

 
Total
 
574

 
$
454

 
$
387

 
 
 
 
 
 
 
 
 
1 
In Caterpillar Power Finance, 48 contracts with a pre-TDR recorded investment of $265 million and a post-TDR recorded investment of $258 million were related to six customers.
2 
In Latin America, 321 contracts with a pre-TDR recorded investment of $94 million and a post-TDR recorded investment of $64 million were related to four customers.
 
 
 
 
 




TDRs in the Customer portfolio segment with a payment default (defined as 91+ days past due) during the years ended December 31, 2018, 2017 and 2016 which had been modified within twelve months prior to the default date, were as follows:
 
(Millions of dollars)
 
Year ended December 31, 2018
 
Year ended December 31, 2017
 
Year ended December 31, 2016
 
 
 
Number
of Contracts
 
Post-TDR
Recorded
Investment
 
Number
of Contracts
 
Post-TDR
Recorded
Investment
 
Number
of Contracts
 
Post-TDR
Recorded
Investment
 
North America
 
10

 
$
10

 
4

 
$
3

 
5

 
$
2

 
Europe
 
—

 
—

 
1

 
—

 
5

 
2

 
Asia Pacific
 
—

 
—

 
4

 
1

 
1

 
—

 
Latin America1
 
3

 
1

 
243

 
17

 
4

 
1

 
Caterpillar Power Finance
 
3

 
33

 
—

 
—

 
—

 
—

 
Total
 
16

 
$
44

 
252

 
$
21

 
15

 
$
5

 
1 
In Latin America, 238 contracts with a post-TDR recorded investment of $16 million were related to two customers for the year ended December 31, 2017.
 
 
 
 
 
v3.10.0.1
Inventories
 12 Months Ended
Dec. 31, 2018
Inventory Disclosure [Abstract]  
Inventories
Inventories
 
Inventories (principally using the LIFO method) are comprised of the following:
 
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
Raw materials
 
$
3,382

 
$
2,802

Work-in-process
 
2,674

 
2,254

Finished goods
 
5,241

 
4,761

Supplies
 
232

 
201

Total inventories
 
$
11,529

 
$
10,018

 
 
 
 
 

 
During 2017, closure of our facility in Gosselies, Belgium resulted in a liquidation of LIFO inventory. The liquidated inventory was carried at lower costs prevailing in prior years as compared with current costs. The effect of this reduction in inventory decreased Cost of goods sold by approximately $66 million and increased Profit by approximately $49 million or $0.08 per share.

We had long-term material purchase obligations of approximately $310 million at December 31, 2018.
v3.10.0.1
Property, plant and equipment
 12 Months Ended
Dec. 31, 2018
Property, Plant and Equipment [Abstract]  
Property, plant and equipment
Property, plant and equipment
 
 
 
 
 
December 31,
(Millions of dollars)
 
Useful
Lives (Years)
 
2018
 
2017
Land
 
—
 
$
671

 
$
664

Buildings and land improvements
 
20-45
 
6,977

 
7,515

Machinery, equipment and other
 
2-10
 
13,733

 
14,888

Software
 
3-7
 
1,703

 
1,745

Equipment leased to others
 
1-7
 
6,015

 
6,038

Construction-in-process
 
—
 
682

 
688

Total property, plant and equipment, at cost
 
 
 
29,781

 
31,538

Less: Accumulated depreciation
 
 
 
(16,207
)
 
(17,383
)
Property, plant and equipment–net
 
 
 
$
13,574

 
$
14,155

 
 
 
 
 
 
 
 
We had commitments for the purchase or construction of capital assets of approximately $124 million at December 31, 2018.

Assets recorded under capital leases: 1
 
 
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
Gross capital leases 2 
 
$
129

 
$
96

Less: Accumulated depreciation
 
(27
)
 
(19
)
Net capital leases
 
$
102

 
$
77

 
1 
Included in Property, plant and equipment table above.
2 
Consists primarily of machinery and equipment.
 
 
 
 
 

 
At December 31, 2018, scheduled minimum rental payments on assets recorded under capital leases were:
 
(Millions of dollars)
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
$
8

 
$
9

 
$
29

 
$
9

 
$
7

 
$
32

 
Equipment leased to others (primarily by Cat Financial):
 
 
 
 
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
Equipment leased to others–at original cost
 
$
6,015

 
$
6,038

Less: Accumulated depreciation
 
(1,744
)
 
(1,656
)
Equipment leased to others–net
 
$
4,271

 
$
4,382

 
 
 
 
 
 
At December 31, 2018, scheduled minimum rental payments to be received for equipment leased to others were:
 
(Millions of dollars)
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
$
896

 
$
574

 
$
314

 
$
158

 
$
71

 
$
69
v3.10.0.1
Intangible assets and goodwill
 12 Months Ended
Dec. 31, 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:
 
 
 
 
 
December 31, 2018
(Millions of dollars)
 
Weighted
Amortizable
Life (Years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Customer relationships
 
15
 
$
2,463

 
$
(1,249
)
 
$
1,214

Intellectual property
 
11
 
1,557

 
(965
)
 
592

Other
 
13
 
199

 
(108
)
 
91

Total finite-lived intangible assets
 
14
 
$
4,219

 
$
(2,322
)
 
$
1,897

 
 
 
 
 
 
 
 
 
 
 
 
 
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 2018, we acquired finite-lived intangible assets of $112 million and $6 million due to the purchase of ECM S.p.A. and Downer Freight Rail, respectively. See Note 24 for details on these acquisitions.

Finite-lived intangible assets are amortized over their estimated useful lives and tested for impairment if events or changes in circumstances indicate that the asset may be impaired.

In 2016, gross customer relationship intangibles of $96 million and related accumulated amortization of $27 million as well as gross intellectual property intangibles of $111 million and related accumulated amortization of $48 million from the Resource Industries segment were impaired. The fair value of these intangibles was determined to be insignificant based on an income approach using expected cash flows. The fair value determination is categorized as Level 3 in the fair value hierarchy due to its use of internal projections and unobservable measurement inputs. The total impairment of $132 million was a result of restructuring activities and is included in Other operating (income) expense in Statement 1. See Note 25 for information on restructuring costs.

Amortization expense related to intangible assets was $331 million, $323 million and $326 million for 2018, 2017 and 2016, respectively.

As of December 31, 2018, amortization expense related to intangible assets is expected to be: 

(Millions of dollars)
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
$
326

 
$
311

 
$
293

 
$
274

 
$
216

 
$
477

 
 
 
 
 
 
 
 
 
 
 

 
B.
Goodwill
 
In 2018, we acquired net assets with related goodwill of $127 million in the Energy & Transportation segment. We recorded goodwill of $109 million related to the acquisition of ECM S.p.A. and $18 million related to the acquisition of Downer Freight Rail. See Note 24 for details on these acquisitions.

There were no goodwill impairments during 2018 or 2017.

The annual impairment test completed in the fourth quarter of 2016 indicated that the fair value of the Surface Mining & Technology reporting unit was below its carrying value requiring the second step of the goodwill impairment test process. The fair value of Surface Mining & Technology was determined primarily using an income approach based on a discounted ten year cash flow. We assigned the fair value to Surface Mining & Technology’s assets and liabilities using various valuation techniques that required assumptions about royalty rates, dealer attrition, technological obsolescence and discount rates. The resulting implied fair value of goodwill was below the carrying value. Accordingly, we recognized a goodwill impairment charge of $595 million, which resulted in goodwill of $629 million remaining for Surface Mining & Technology as of October 1, 2016. The fair value determination is categorized as Level 3 in the fair value hierarchy due to its use of internal projections and unobservable measurement inputs. There was a $17 million tax benefit associated with this impairment charge.
The changes in carrying amount of goodwill by reportable segment for the years ended December 31, 2018 and 2017 were as follows:

(Millions of dollars)
 
December 31, 2017
 
Acquisitions
 
Other Adjustments 1
 
December 31, 2018
Construction Industries
 
 
 
 
 
 
 
 
Goodwill
 
$
305

 
$
—

 
$
(1
)
 
$
304

Impairment
 
(22
)
 
—

 
—

 
(22
)
Net goodwill
 
283

 
—

 
(1
)
 
282

Resource Industries
 
 
 
 
 
 
 
 
Goodwill
 
4,232

 
—

 
(60
)
 
4,172

Impairment
 
(1,175
)
 
—

 
—

 
(1,175
)
Net goodwill
 
3,057

 
—

 
(60
)
 
2,997

Energy & Transportation
 
 
 
 
 
 
 
 
Goodwill
 
2,806

 
127

 
(51
)
 
2,882

All Other 2
 
 
 
 
 
 
 
 
Goodwill
 
54

 
—

 
2

 
56

Consolidated total
 
 
 
 
 
 
 
 
Goodwill
 
7,397

 
127

 
(110
)
 
7,414

Impairment
 
(1,197
)
 
—

 
—

 
(1,197
)
Net goodwill
 
$
6,200

 
$
127

 
$
(110
)
 
$
6,217

 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
Acquisitions
 
Other Adjustments 1
 
December 31, 2017
Construction Industries
 
 
 
 
 
 
 
 
Goodwill
 
$
296

 
$
—

 
$
9

 
$
305

Impairment
 
(22
)
 
—

 
—

 
(22
)
Net goodwill
 
274

 
—

 
9

 
283

Resource Industries
 
 
 
 
 
 
 
 
Goodwill
 
4,110

 
—

 
122

 
4,232

Impairment
 
(1,175
)
 
—

 
—

 
(1,175
)
Net goodwill
 
2,935

 
—

 
122

 
3,057

Energy & Transportation
 
 
 
 
 
 
 
 
Goodwill
 
2,756

 
—

 
50

 
2,806

All Other 2
 
 
 
 
 
 
 
 
Goodwill
 
55

 
—

 
(1
)
 
54

Consolidated total
 
 
 
 
 
 
 
 
Goodwill
 
7,217

 
—

 
180

 
7,397

Impairment
 
(1,197
)
 
—

 
—

 
(1,197
)
Net goodwill
 
$
6,020

 
$
—

 
$
180

 
$
6,200


1 Other adjustments are comprised primarily of foreign currency translation.
2 Includes All Other operating segments (See Note 23).
 
 
 
 
 
v3.10.0.1
Investments in debt and equity securities
 12 Months Ended
Dec. 31, 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 Statement 3.

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 Statement 3). 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 Statement 1.

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 Statement 1. 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 Statement 3).  See Note 1J 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 Statement 3) were as follows:


 
 
December 31, 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
 
42

 
—

 
42

 
42

 
—

 
42

 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
 
 

 
 

 
 

 
 

 
 

 
 

Corporate bonds
 
735

 
(15
)
 
720

 
585

 
(1
)
 
584

Asset-backed securities
 
63

 
—

 
63

 
67

 
—

 
67

 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed debt securities
 
 
 
 
 
 

 
 

 
 

 
 

U.S. governmental agency
 
301

 
(4
)
 
297

 
265

 
(4
)
 
261

Residential
 
7

 
—

 
7

 
8

 
—

 
8

Commercial
 
14

 
(1
)
 
13

 
17

 
—

 
17

Total debt securities
 
$
1,171

 
$
(20
)
 
$
1,151

 
$
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
 
 
 
 
 
 
 
$
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 Statement 1. See Note 1J for additional information.
 
 
 
 
 
 
 
 
 
 
 
 
 
  
Available-for-sale investments in an unrealized loss position that are not other-than-temporarily impaired:
 
 
December 31, 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
 
$
280

 
$
3

 
$
391

 
$
11

 
$
671

 
$
14

Asset-backed securities
 
6

 
—

 
38

 
1

 
44

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed debt securities
 
 

 
 

 
 

 
 

 
 

 
 

U.S. governmental agency
 
52

 
—

 
223

 
5

 
275

 
5

Commercial
 
—

 
—

 
14

 
1

 
14

 
1

Total
 
$
338

 
$
3

 
$
666

 
$
18

 
$
1,004

 
$
21

 
 
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 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 and asset-backed securities relate to changes in interest rates and credit-related yield spreads since time of purchase. We do not intend to sell the investments and it is not likely that we will be required to sell the investments before recovery of their amortized cost basis. We do not consider these investments to be other-than-temporarily impaired as of December 31, 2018.

Mortgage-Backed Debt Securities.  The unrealized losses on our investments in U.S. governmental 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 December 31, 2018.

The cost basis and fair value of the available-for-sale debt securities at December 31, 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.
 
 
 
 
 
 
 
December 31, 2018
(Millions of dollars)
 
Cost Basis
 
Fair Value
Due in one year or less
 
$
139

 
$
139

Due after one year through five years
 
647

 
635

Due after five years through ten years
 
46

 
43

Due after ten years
 
17

 
17

U.S. governmental agency mortgage-backed securities
 
301

 
297

Residential mortgage-backed securities
 
7

 
7

Commercial mortgage-backed securities
 
14

 
13

Total debt securities – available-for-sale
 
$
1,171

 
$
1,151

 
 
 
 
 
  
 
 
 
 
 
 
 
Sales of Securities:
 
 
 
 
 
 
 
 
Years Ended December 31,
(Millions of dollars)
 
2018
1 
2017
 
2016
Proceeds from the sale of available-for-sale securities
 
$
247

 
$
930

 
$
694

Gross gains from the sale of available-for-sale securities
 
$
—

 
$
109

 
$
55

Gross losses from the sale of available-for-sale securities
 
$
—

 
$
5

 
$
4

 
 
 
 
 
 
 
1 Beginning January 1, 2018, equity securities are no longer classified as available-for-sale securities.
 
 
 
 
 
 
 
 
As of December 31, 2018, the net unrealized losses for equity securities were $25 million.
v3.10.0.1
Postemployment benefit plans
 12 Months Ended
Dec. 31, 2018
Retirement Benefits [Abstract]  
Postemployment benefit plans
Postemployment benefit plans
 
We provide defined benefit pension plans, defined contribution plans and/or other postretirement benefit plans (retirement health care and life insurance) to employees in many of our locations throughout the world. Our defined benefit pension plans provide a benefit based on years of service and/or the employee’s average earnings near retirement. Our defined contribution plans allow employees to contribute a portion of their salary to help save for retirement, and in most cases, we provide a matching contribution. The benefit obligation related to our non-U.S. defined benefit pension plans are for employees located primarily in Europe, Japan and Brazil. For other postretirement benefits (OPEB), substantially all of our benefit obligation is for employees located in the United States.
 
Our U.S. defined benefit pension plans for support and management employees were frozen for certain employees on December 31, 2010, and will freeze for remaining employees on December 31, 2019. On the respective transition dates employees move to a retirement benefit that provides a frozen pension benefit and a 401(k) plan that will include a matching contribution and a new annual employer contribution.

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.

All curtailments and termination benefits were recognized in Other income (expense) in Statement 1.
A.
Benefit obligations
 
 
 
U.S. Pension Benefits
 
Non-U.S. 
Pension Benefits
 
Other Postretirement 
Benefits
(Millions of dollars)
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Change in benefit obligation:
 
 

 
 

 
 

 
 

 
 

 
 

Benefit obligation, beginning of year
 
$
17,326

 
$
16,218

 
$
4,606

 
$
4,472

 
$
4,002

 
$
4,088

Service cost
 
125

 
115

 
89

 
95

 
83

 
78

Interest cost
 
534

 
525

 
96

 
101

 
125

 
130

Plan amendments
 
—

 
—

 
26

 
(1
)
 
(25
)
 
(79
)
Actuarial losses (gains)
 
(1,058
)
 
1,439

 
(88
)
 
(75
)
 
(195
)
 
71

Foreign currency exchange rates
 
—

 
—

 
(205
)
 
312

 
(28
)
 
4

Participant contributions
 
—

 
—

 
6

 
6

 
51

 
59

Benefits paid - gross
 
(971
)
 
(977
)
 
(277
)
 
(203
)
 
(369
)
 
(361
)
Less: federal subsidy on benefits paid
 
—

 
—

 
—

 
—

 
7

 
10

Curtailments, settlements and termination benefits
 
(3
)
 
6

 
(38
)
 
(101
)
 
(2
)
 
2

Benefit obligation, end of year
 
$
15,953

 
$
17,326

 
$
4,215

 
$
4,606

 
$
3,649

 
$
4,002

Accumulated benefit obligation, end of year
 
$
15,877

 
$
17,175

 
$
4,038

 
$
4,335

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average assumptions used to determine benefit obligation:
 
 

 
 

 
 

 
 

 
 

 
 

Discount rate
 
4.2
%
 
3.5
%
 
2.5
%
 
2.4
%
 
4.2
%
 
3.6
%
Rate of compensation increase
 
4.0
%
 
4.0
%
 
3.0
%
 
4.0
%
 
4.0
%
 
4.0
%
 
 
 
 
 


The assumed discount rate is used to discount future benefit obligations back to today’s dollars.  The U.S. discount rate is based on a benefit cash flow-matching approach and represents the rate at which our benefit obligations could effectively be settled as of our measurement date, December 31.  The benefit cash flow-matching approach involves analyzing Caterpillar’s projected cash flows against a high quality bond yield curve, calculated using a wide population of corporate Aa bonds available on the measurement date.  A similar process is used to determine the assumed discount rate for our most significant non-U.S. plans. This rate is sensitive to changes in interest rates. A decrease in the discount rate would increase our obligation and future expense.
B.
Plan assets

 
 
U.S. Pension Benefits
 
Non-U.S. 
Pension Benefits
 
Other Postretirement 
Benefits
(Millions of dollars)
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Change in plan assets:
 
 
 
 

 
 

 
 

 
 

 
 

Fair value of plan assets, beginning of year
 
$
13,416

 
$
11,354

 
$
4,305

 
$
3,887

 
$
504

 
$
550

Actual return on plan assets
 
(784
)
 
1,692

 
13

 
350

 
(5
)
 
101

Foreign currency exchange rates
 
—

 
—

 
(187
)
 
278

 
—

 
—

Company contributions
 
1,039

 
1,350

 
165

 
107

 
147

 
155

Participant contributions
 
—

 
—

 
6

 
6

 
51

 
59

Benefits paid
 
(971
)
 
(977
)
 
(277
)
 
(203
)
 
(369
)
 
(361
)
Settlements and termination benefits
 
(3
)
 
(3
)
 
—

 
(120
)
 
—

 
—

Fair value of plan assets, end of year
 
$
12,697

 
$
13,416

 
$
4,025

 
$
4,305

 
$
328

 
$
504

 
 
 
 
 


In general, our strategy for both the U.S. and non-U.S. pensions includes ongoing alignment of our investments to our liabilities, while reducing risk in our portfolio. The current U.S. pension target asset allocation is 70 percent fixed income and 30 percent equities. This target allocation will be revisited periodically to ensure it reflects our overall objectives. The non-U.S. pension weighted-average target allocations are 78 percent fixed income, 13 percent equities, 5 percent real estate and 4 percent other.  The target allocations for each plan vary based upon local statutory requirements, demographics of plan participants and funded status.  The non-U.S. plan assets are primarily invested in non-U.S. securities.
 
Our target allocation for the other postretirement benefit plans is 70 percent equities and 30 percent fixed income. 
 
The U.S. plans are rebalanced to within the appropriate target asset allocation ranges on a monthly basis.  The frequency of rebalancing for the non-U.S. plans varies depending on the plan. As a result of our diversification strategies, there are no significant concentrations of risk within the portfolio of investments.
 
The use of certain derivative instruments is permitted where appropriate and necessary for achieving overall investment policy objectives.  The plans do not engage in derivative contracts for speculative purposes.
 
The accounting guidance on fair value measurements specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques (Level 1, 2 and 3).  See Note 18 for a discussion of the fair value hierarchy.
 
Fair values are determined as follows:
 
•
Equity securities are primarily based on valuations for identical instruments in active markets.
•
Fixed income securities are primarily based upon models that take into consideration such market-based factors as recent sales, risk-free yield curves and prices of similarly rated bonds.
•
Real estate is stated at the fund’s net asset value or at appraised value.
•
Cash, short-term instruments and other are based on the carrying amount, which approximates fair value, or the fund’s net asset value.

The fair value of the pension and other postretirement benefit plan assets by category is summarized below:
 
 
 
December 31, 2018
(Millions of dollars)
 
Level 1
 
Level 2
 
Level 3
 
Measured at NAV
 
Total Assets at Fair Value
U.S. Pension
 
 

 
 

 
 

 
 

 
 

Equity securities:
 
 

 
 

 
 

 
 

 
 

U.S. equities
 
$
1,971

 
$
—

 
$
35

 
$
155

 
$
2,161

Non-U.S. equities
 
1,279

 
—

 
1

 
—

 
1,280

 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 

 
 

 
 

 
 
 
 

U.S. corporate bonds
 
—

 
6,371

 
61

 
52

 
6,484

Non-U.S. corporate bonds
 
—

 
1,332

 
—

 
—

 
1,332

U.S. government bonds
 
—

 
590

 
—

 
—

 
590

U.S. governmental agency mortgage-backed securities
 
—

 
384

 
—

 
—

 
384

Non-U.S. government bonds
 
—

 
79

 
—

 
—

 
79

 
 
 
 
 
 
 
 
 
 
 
Real estate
 
—

 
—

 
10

 
—

 
10

 
 
 
 
 
 
 
 
 
 
 
Cash, short-term instruments and other
 
202

 
9

 
—

 
166

 
377

Total U.S. pension assets
 
$
3,452

 
$
8,765

 
$
107

 
$
373

 
$
12,697

 
 
December 31, 2017
(Millions of dollars)
 
Level 1
 
Level 2
 
Level 3
 
Measured at NAV
 
Total Assets at Fair Value
U.S. Pension
 
 

 
 

 
 

 
 
 
 

Equity securities:
 
 

 
 

 
 

 
 
 
 

U.S. equities
 
$
2,745

 
$
—

 
$
20

 
$
165

 
$
2,930

Non-U.S. equities
 
1,573

 
15

 
—

 
—

 
1,588

 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 

 
 

 
 

 
 
 
 

U.S. corporate bonds
 
—

 
5,886

 
60

 
49

 
5,995

Non-U.S. corporate bonds
 
—

 
1,165

 
—

 
—

 
1,165

U.S. government bonds
 
—

 
793

 
—

 
—

 
793

U.S. governmental agency mortgage-backed securities
 
—

 
369

 
—

 
—

 
369

Non-U.S. government bonds
 
—

 
68

 
—

 
—

 
68

 
 
 
 
 
 
 
 
 
 
 
Real estate
 
—

 
—

 
10

 
—

 
10

 
 
 
 
 
 
 
 
 
 
 
Cash, short-term instruments and other
 
173

 
101

 
—

 
224

 
498

Total U.S. pension assets
 
$
4,491

 
$
8,397

 
$
90

 
$
438

 
$
13,416

 
 
 
 
 
 
 
 
 
 
 


 
 
December 31, 2018
(Millions of dollars)
 
Level 1
 
Level 2
 
Level 3
 
Measured at NAV
 
Total Assets at Fair Value
Non-U.S. Pension
 
 

 
 

 
 

 
 
 
 

Equity securities:
 
 

 
 

 
 

 
 
 
 

U.S. equities
 
$
43

 
$
—

 
$
—

 
$
—

 
$
43

Non-U.S. equities
 
312

 
28

 
—

 
—

 
340

Global equities 1 
 
113

 
23

 
—

 
—

 
136

 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 

 
 

 
 

 
 
 
 

U.S. corporate bonds
 
—

 
206

 
—

 
—

 
206

Non-U.S. corporate bonds
 
—

 
690

 
—

 
6

 
696

U.S. government bonds
 
—

 
74

 
—

 
—

 
74

Non-U.S. government bonds
 
—

 
1,721

 
—

 
—

 
1,721

Global fixed income 1 
 
—

 
261

 
—

 
215

 
476

 
 
 
 
 
 
 
 
 
 
 
Real estate
 
—

 
185

 
—

 
—

 
185

 
 
 
 
 
 
 
 
 
 
 
Cash, short-term instruments and other 2 
 
66

 
82

 
—

 
—

 
148

Total non-U.S. pension assets
 
$
534

 
$
3,270

 
$
—

 
$
221

 
$
4,025

 
 
December 31, 2017
(Millions of dollars)
 
Level 1
 
Level 2
 
Level 3
 
Measured at NAV
 
Total Assets at Fair Value
Non-U.S. Pension
 
 

 
 

 
 

 
 
 
 

Equity securities:
 
 

 
 

 
 

 
 
 
 

U.S. equities
 
$
55

 
$
—

 
$
—

 
$
137

 
$
192

Non-U.S. equities
 
400

 
34

 
—

 
929

 
1,363

Global equities 1 
 
116

 
33

 
—

 
—

 
149

 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 

 
 

 
 

 
 
 
 

U.S. corporate bonds
 
—

 
156

 
—

 
—

 
156

Non-U.S. corporate bonds
 
—

 
363

 
5

 
6

 
374

U.S. government bonds
 
—

 
64

 
—

 
—

 
64

Non-U.S. government bonds
 
—

 
1,229

 
—

 
—

 
1,229

Global fixed income 1 
 
—

 
250

 
—

 
218

 
468

 
 
 
 
 
 
 
 
 
 
 
Real estate
 
—

 
186

 
—

 
—

 
186

 
 
 
 
 
 
 
 
 
 
 
Cash, short-term instruments and other 2 
 
64

 
60

 
—

 
—

 
124

Total non-U.S. pension assets
 
$
635

 
$
2,375

 
$
5

 
$
1,290

 
$
4,305

1 Includes funds that invest in both U.S. and non-U.S. securities.
2 Includes funds that invest in multiple asset classes, hedge funds and other.
 
 
 
 
 
 
 
 
 
 
 


 
 
December 31, 2018
(Millions of dollars)
 
Level 1
 
Level 2
 
Level 3
 
Measured at NAV
 
Total Assets at Fair Value
Other Postretirement Benefits
 
 

 
 

 
 

 
 
 
 

Equity securities:
 
 

 
 

 
 

 
 
 
 

U.S. equities
 
$
151

 
$
1

 
$
—

 
$
—

 
$
152

Non-U.S. equities
 
64

 
—

 
—

 
—

 
64

 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 

 
 

 
 

 
 
 
 

U.S. corporate bonds
 
—

 
45

 
—

 
—

 
45

Non-U.S. corporate bonds
 
—

 
11

 
—

 
—

 
11

U.S. government bonds
 
—

 
8

 
—

 
—

 
8

U.S. governmental agency mortgage-backed securities
 
—

 
25

 
—

 
—

 
25

Non-U.S. government bonds
 
—

 
3

 
—

 
—

 
3

 
 
 
 
 
 
 
 
 
 
 
Cash, short-term instruments and other
 
3

 
1

 
—

 
16

 
20

Total other postretirement benefit assets
 
$
218

 
$
94

 
$
—

 
$
16

 
$
328

 
 
December 31, 2017
(Millions of dollars)
 
Level 1
 
Level 2
 
Level 3
 
Measured at NAV
 
Total Assets at Fair Value
Other Postretirement Benefits
 
 

 
 

 
 

 
 
 
 

Equity securities:
 
 

 
 

 
 

 
 
 
 

U.S. equities
 
$
255

 
$
1

 
$
—

 
$
—

 
$
256

Non-U.S. equities
 
103

 
—

 
—

 
—

 
103

 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 

 
 

 
 

 
 
 
 

U.S. corporate bonds
 
—

 
60

 
—

 
1

 
61

Non-U.S. corporate bonds
 
—

 
15

 
—

 
—

 
15

U.S. government bonds
 
—

 
17

 
—

 
—

 
17

U.S. governmental agency mortgage-backed securities
 
—

 
34

 
—

 
—

 
34

Non-U.S. government bonds
 
—

 
4

 
—

 
—

 
4

 
 
 
 
 
 
 
 
 
 
 
Cash, short-term instruments and other
 
—

 
3

 
—

 
11

 
14

Total other postretirement benefit assets
 
$
358

 
$
134

 
$
—

 
$
12

 
$
504

 
 
 
 
 
 
 
 
 
 
 


Below are roll-forwards of assets measured at fair value using Level 3 inputs for the years ended December 31, 2018 and 2017.  These instruments were valued using pricing models that, in management’s judgment, reflect the assumptions a market participant would use.
 
(Millions of dollars)
 
Equities
 
Fixed Income
 
Real Estate
 
Other
U.S. Pension
 
 

 
 

 
 

 
 

Balance at December 31, 2016
 
$
5

 
$
31

 
$
10

 
$
11

Unrealized gains (losses)
 
15

 
13

 
—

 
—

Realized gains (losses)
 
(1
)
 
—

 
—

 
—

Purchases, issuances and settlements, net
 
—

 
16

 
—

 
(11
)
Transfers in and/or out of Level 3
 
1

 
—

 
—

 
—

Balance at December 31, 2017
 
$
20

 
$
60

 
$
10

 
$
—

Unrealized gains (losses)
 
(6
)
 
(12
)
 
—

 
—

Realized gains (losses)
 
—

 
—

 
—

 
—

Purchases, issuances and settlements, net
 
21

 
11

 
—

 
—

Transfers in and/or out of Level 3
 
1

 
2

 
—

 
—

Balance at December 31, 2018
 
$
36

 
$
61

 
$
10

 
$
—

 
 
 
 
 
 
 
 
 
Non-U.S. Pension
 
 

 
 

 
 

 
 

Balance at December 31, 2016
 
$
—

 
$
2

 
$
—

 
$
—

Unrealized gains (losses)
 
—

 
—

 
—

 
—

Realized gains (losses)
 
—

 
—

 
—

 
—

Purchases, issuances and settlements, net
 
—

 
2

 
—

 
—

Transfers in and/or out of Level 3
 
—

 
1

 
—

 
—

Balance at December 31, 2017
 
$
—

 
$
5

 
$
—

 
$
—

Unrealized gains (losses)
 
—

 
(2
)
 
—

 
—

Realized gains (losses)
 
—

 
—

 
—

 
—

Purchases, issuances and settlements, net
 
—

 
—

 
—

 
—

Transfers in and/or out of Level 3
 
—

 
(3
)
 
—

 
—

Balance at December 31, 2018
 
$
—

 
$
—

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
C.
Funded status
 
The funded status of the plans, reconciled to the amount reported on Statement 3, is as follows:
 
 
 
U.S. Pension Benefits
 
Non-U.S. 
Pension Benefits
Other Postretirement Benefits
(Millions of dollars)
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
End of Year
 
 

 
 

 
 

 
 

 
 

 
 

Fair value of plan assets
 
$
12,697

 
$
13,416

 
$
4,025

 
$
4,305

 
$
328

 
$
504

Benefit obligations
 
15,953

 
17,326

 
4,215

 
4,606

 
3,649

 
4,002

Over (under) funded status recognized in financial position
 
$
(3,256
)
 
$
(3,910
)
 
$
(190
)
 
$
(301
)
 
$
(3,321
)
 
$
(3,498
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Components of net amount recognized in financial position:
 
 

 
 

 
 

 
 

 
 

 
 

Other assets (non-current asset)
 
$
9

 
$
19

 
$
442

 
$
358

 
$
—

 
$
—

Accrued wages, salaries and employee benefits (current liability)
 
(40
)
 
(38
)
 
(20
)
 
(20
)
 
(173
)
 
(163
)
Liability for postemployment benefits (non-current liability)
 
(3,225
)
 
(3,891
)
 
(612
)
 
(639
)
 
(3,148
)
 
(3,335
)
Net liability recognized
 
$
(3,256
)
 
$
(3,910
)
 
$
(190
)
 
$
(301
)
 
$
(3,321
)
 
$
(3,498
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Amounts recognized in Accumulated other comprehensive income (pre-tax) consist of:
 
 

 
 

 
 

 
 

 
 

 
 

Prior service cost (credit)
 
$
—

 
$
—

 
$
20

 
$
—

 
$
(126
)
 
$
(138
)
 
 
 
 
 
 
 
 
 
 
 
 
 

 
The estimated amount of prior service cost (credit) that will be amortized from Accumulated other comprehensive income (loss) at December 31, 2018 into net periodic benefit cost (pre-tax) in 2019 are as follows:
 
(Millions of dollars)
 
U.S.
Pension Benefits
 
Non-U.S.
Pension Benefits
 
Other
Postretirement
Benefits
Prior service cost (credit)
 
$
—

 
$
—

 
$
(41
)
 
 
 
 
 
 
 

 
The following amounts relate to our pension plans with projected benefit obligations in excess of plan assets:
 
 
 
U.S. Pension Benefits at Year-end
 
Non-U.S. Pension Benefits at Year-end
(Millions of dollars)
 
2018
 
2017
 
2018
 
2017
Projected benefit obligation
 
$
15,614

 
$
16,904

 
$
1,821

 
$
1,853

Accumulated benefit obligation
 
$
15,541

 
$
16,761

 
$
1,723

 
$
1,708

Fair value of plan assets
 
$
12,349

 
$
12,975

 
$
1,189

 
$
1,194

 
 
 
 
 
 
 
 
 

 
The following amounts relate to our pension plans with accumulated benefit obligations in excess of plan assets:

 
 
U.S. Pension Benefits at Year-end
 
Non-U.S. Pension Benefits at Year-end
(Millions of dollars)
 
2018
 
2017
 
2018
 
2017
Projected benefit obligation
 
$
15,614

 
$
16,904

 
$
1,655

 
$
1,720

Accumulated benefit obligation
 
$
15,541

 
$
16,761

 
$
1,603

 
$
1,641

Fair value of plan assets
 
$
12,349

 
$
12,975

 
$
1,047

 
$
1,107

 
 
 
 
 
 
 
 
 

 
The accumulated postretirement benefit obligation exceeds plan assets for all of our other postretirement benefit plans for all years presented.
D.
Expected contributions and benefit payments
 
Information about expected contributions and benefit payments for pension and other postretirement benefit plans is as follows:
 
(Millions of dollars)
 
U.S.
Pension Benefits
 
Non-U.S.
Pension Benefits
 
Other
Postretirement
Benefits
Employer contributions:
 
 

 
 

 
 

2019 (expected)
 
$
40

 
$
130

 
$
145

 
 
 
 
 
 
 
Expected benefit payments:
 
 

 
 

 
 

2019
 
$
1,000

 
$
240

 
$
290

2020
 
1,000

 
170

 
290

2021
 
1,000

 
170

 
290

2022
 
1,000

 
170

 
280

2023
 
1,000

 
180

 
280

2024-2028
 
5,000

 
990

 
1,350

Total
 
$
10,000

 
$
1,920

 
$
2,780

 
 
 
 
 
 
 

 
The above table reflects the total employer contributions and benefits expected to be paid from the plan or from company assets and does not include the participants’ share of the cost. The expected benefit payments for our other postretirement benefits include payments for prescription drug benefits. Medicare Part D subsidy amounts expected to be received by the company which will offset other postretirement benefit payments are as follows:
 
(Millions of dollars)
 
2019
 
2020
 
2021
 
2022
 
2023
 
2024-2028
 
Total
Other postretirement benefits
 
$
15

 
$
15

 
$
10

 
$
10

 
$
10

 
$
55

 
$
115

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
E.
Net periodic cost
 
 
 
U.S. Pension Benefits
 
Non-U.S. Pension Benefits
 
Other Postretirement Benefits
(Millions of dollars)
 
2018
 
2017
 
2016
 
2018
 
2017
 
2016
 
2018
 
2017
 
2016
Components of net periodic benefit cost:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Service cost
 
$
125

 
$
115

 
$
119

 
$
89

 
$
95

 
$
92

 
$
83

 
$
78

 
$
82

Interest cost
 
534

 
525

 
517

 
96

 
101

 
117

 
125

 
130

 
131

Expected return on plan assets 1
 
(808
)
 
(734
)
 
(757
)
 
(221
)
 
(231
)
 
(227
)
 
(32
)
 
(37
)
 
(44
)
Curtailments and termination benefits
 
—

 
9

 
6

 
(33
)
 
15

 
1

 
(2
)
 
—

 
(9
)
Amortization of prior service cost (credit) 2
 
—

 
—

 
—

 
—

 
(2
)
 
3

 
(36
)
 
(23
)
 
(59
)
Actuarial loss (gain) 3
 
534

 
481

 
664

 
111

 
(195
)
 
262

 
(150
)
 
15

 
59

Net Periodic benefit cost (benefit) 4
 
$
385

 
$
396

 
$
549

 
$
42

 
$
(217
)
 
$
248

 
$
(12
)
 
$
163

 
$
160

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other changes in plan assets and benefit obligations recognized in other comprehensive income (pre-tax):
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Current year prior service cost (credit)
 
$
—

 
$
—

 
$
—

 
$
20

 
$
3

 
$
(3
)
 
$
(20
)
 
$
(77
)
 
$
(184
)
Amortization of prior service (cost) credit
 
—

 
—

 
—

 
—

 
2

 
(3
)
 
36

 
23

 
59

Total recognized in other comprehensive income
 
—

 
—

 
—

 
20

 
5

 
(6
)
 
16

 
(54
)
 
(125
)
Total recognized in net periodic cost and other comprehensive income
 
$
385

 
$
396

 
$
549

 
$
62

 
$
(212
)
 
$
242

 
$
4

 
$
109

 
$
35

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average assumptions used to determine net cost:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Discount rate used to measure service cost
 
3.7
%
 
4.2
%
 
4.5
%
 
2.3
%
 
2.4
%
 
2.9
%
 
3.5
%
 
3.9
%
 
4.2
%
Discount rate used to measure interest cost
 
3.2
%
 
3.3
%
 
3.4
%
 
2.2
%
 
2.3
%
 
2.8
%
 
3.2
%
 
3.3
%
 
3.3
%
Expected rate of return on plan assets 5 
 
6.3
%
 
6.7
%
 
6.9
%
 
5.2
%
 
5.9
%
 
6.1
%
 
7.5
%
 
7.5
%
 
7.5
%
Rate of compensation increase
 
4.0
%
 
4.0
%
 
4.0
%
 
4.0
%
 
4.0
%
 
3.6
%
 
4.0
%
 
4.0
%
 
4.0
%
1 
Expected return on plan assets developed using the fair value of plan assets.
2 
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.
3 
Actuarial loss (gain) represents the effects of actual results differing from our assumptions and the effects of changing assumptions. We recognize actuarial loss (gain) immediately through earnings upon the annual remeasurement in the fourth quarter, or on an interim basis as triggering events warrant remeasurement.
4 
The service cost component of net periodic pension and other postretirement benefits cost (benefit) is included in Operating costs in Statement 1. All other components of net periodic pension and other postretirement benefits cost (benefit) are included in Other income (expense) in Statement 1.
5 
The weighted-average rates for 2019 are 5.9 percent and 3.8 percent for U.S. and non-U.S. pension plans, respectively.
 
 
 
 
 


The discount rates used in the determination of our service and interest cost components are determined by utilizing a full yield curve approach which applies specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.
 
Our U.S. expected long-term rate of return on plan assets is based on our estimate of long-term passive returns for equities and fixed income securities weighted by the allocation of our pension assets. Based on historical performance, we increase the passive returns due to our active management of the plan assets. To arrive at our expected long-term return, the amount added for active management was 0.75 percent for 2018, 0.80 percent for 2017 and 0.90 percent for 2016.  A similar process is used to determine this rate for our non-U.S. plans.
 
The assumed health care trend rate represents the rate at which health care costs are assumed to increase. We assumed a weighted-average increase of 6.1 percent in our calculation of 2018 benefit expense.  We expect a weighted-average increase of 6.1 percent during 2019.  The 2019 rates are assumed to decrease gradually to the ultimate health care trend rate of 5 percent in 2025. This rate represents 3 percent general inflation plus 2 percent additional health care inflation.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have had the following effects:

(Millions of dollars)
 
One-percentage-
point increase
 
One-percentage-
point decrease
Effect on 2018 service and interest cost components of other postretirement benefit cost
 
$
14

 
$
(11
)
Effect on accumulated postretirement benefit obligation
 
$
138

 
$
(117
)
F.
Other postemployment benefit plans
 
We offer long-term disability benefits, continued health care for disabled employees, survivor income benefit insurance and supplemental unemployment benefits to substantially all U.S. employees.
G.
Defined contribution plans
 
We have both U.S. and non-U.S. employee defined contribution plans to help employees save for retirement. Our primary U.S. 401(k) plan allows eligible employees to contribute a portion of their cash compensation to the plan on a tax-deferred basis. Employees with frozen defined benefit pension accruals are eligible for matching contributions equal to 100 percent of employee contributions to the plan up to 6 percent of cash compensation and an annual employer contribution that ranges from 3 to 5 percent of cash compensation (depending on years of service and age). Employees that are still accruing benefits under a defined benefit pension plan are eligible for matching contributions equal to 50 percent of employee contributions up to 6 percent of cash compensation. These 401(k) plans include various investment funds, including a non-leveraged employee stock ownership plan (ESOP). As of December 31, 2018 and December 31, 2017, the ESOP held 17.2 million and 17.7 million shares, respectively. All of the shares held by the ESOP were allocated to participant accounts. Dividends paid to participants are automatically reinvested into company shares unless the participant elects to have all or a portion of the dividend paid to the participant. Various other U.S. and non-U.S. defined contribution plans generally allow eligible employees to contribute a portion of their cash compensation to the plans, and in most cases, we provide a matching contribution to the funds.
 
Total company costs related to U.S. and non-U.S. defined contribution plans were as follows:
 
(Millions of dollars)
 
2018
 
2017
 
2016
U.S. plans
 
$
271

 
$
375

 
$
301

Non-U.S. plans
 
89

 
73

 
68

 
 
$
360

 
$
448

 
$
369

 
 
 
 
 
 
 
H.
Summary of long-term liability:
 
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
Pensions:
 
 

 
 

U.S. pensions
 
$
3,225

 
$
3,891

Non-U.S. pensions
 
612

 
639

Total pensions
 
3,837

 
4,530

Postretirement benefits other than pensions
 
3,148

 
3,335

Other postemployment benefits
 
119

 
109

Defined contribution
 
351

 
391

 
 
$
7,455

 
$
8,365

 
 
 
 
 
v3.10.0.1
Short-term borrowings
 12 Months Ended
Dec. 31, 2018
Short-term Borrowings Disclosure [Abstract]  
Short-term borrowings
Short-term borrowings
 
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
 
Machinery, Energy & Transportation:
 
 

 
 

 
Notes payable to banks
 
$
—

 
$
1

 
 
 
—

 
1

 
Financial Products:
 
 

 
 

 
Notes payable to banks
 
526

 
675

 
Commercial paper
 
4,759

 
3,680

 
Demand notes
 
438

 
481

 
 
 
5,723

 
4,836

 
Total short-term borrowings
 
$
5,723

 
$
4,837

 
 
 
 
 
 
 

 
The weighted-average interest rates on short-term borrowings outstanding were:

 
 
December 31,
 
 
2018
 
2017
 
Notes payable to banks
 
5.3
%
 
5.2
%
 
Commercial paper
 
2.0
%
 
1.1
%
 
Demand notes
 
2.2
%
 
1.1
%
 
 
 
 
 
 
 

 
Please refer to Note 18 and Table III for fair value information on short-term borrowings.
v3.10.0.1
Long-term debt
 12 Months Ended
Dec. 31, 2018
Debt Disclosure [Abstract]  
Long-term debt
Long-term debt

 
 
 
December 31,
 
(Millions of dollars)
Effective Yield to Maturity 1
 
2018
 
2017
 
Machinery, Energy & Transportation:
 
 
 

 
 

 
Notes—$1,250 million of 3.900% due 2021 2
4.01%
 
$
1,247

 
$
1,246

 
Notes—$759 million of 5.200% due 2041 2
5.27%
 
751

 
752

 
Debentures—$120 million of 9.375% due 2021
9.41%
 
120

 
120

 
Debentures—$500 million of 2.600% due 2022 2
2.70%
 
498

 
498

 
Debentures—$82 million of 8.000% due 2023
8.06%
 
82

 
82

 
Debentures—$1,000 million of 3.400% due 2024
3.46%
 
997

 
997

 
Debentures—$193 million of 6.625% due 2028 2
6.68%
 
192

 
192

 
Debentures—$242 million of 7.300% due 2031 2
7.38%
 
240

 
241

 
Debentures—$307 million of 5.300% due 2035 2
8.64%
 
218

 
216

 
Debentures—$460 million of 6.050% due 2036 2
6.12%
 
456

 
456

 
Debentures—$65 million of 8.250% due 2038 2
8.38%
 
64

 
64

 
Debentures—$160 million of 6.950% due 2042 2
7.02%
 
158

 
159

 
Debentures—$1,722 million of 3.803% due 2042 2
6.39%
 
1,257

 
1,236

 
Debentures—$500 million of 4.300% due 2044
4.39%
 
493

 
493

 
Debentures—$500 million of 4.750% due 2064
4.81%
 
494

 
494

 
Debentures—$246 million of 7.375% due 2097 2
7.51%
 
241

 
242

 
Capital lease obligations 3
 
 
456

 
437

 
Other 4
 
 
41

 
4

 
Total Machinery, Energy & Transportation
 
 
8,005

 
7,929

 
Financial Products:
 
 
 

 
 

 
Medium-term notes
 
 
16,592

 
15,415

 
Other
 
 
403

 
503

 
Total Financial Products
 
 
16,995

 
15,918

 
Total long-term debt due after one year
 
 
$
25,000

 
$
23,847

 

1 
Effective yield to maturity includes the impact of discounts, premiums and debt issuance costs.
2 
Redeemable at our option in whole or in part at any time at a redemption price equal to the greater of (i) 100% of the principal amount or (ii) the discounted present value of the notes or debentures, calculated in accordance with the terms of such notes or debentures.
3 
Includes $360 million related to a financing transaction in Japan entered into in 2017.
4 
Includes $38 million of financing activity related to a build-to-suit real estate transaction.
 
 
 
 
 


All outstanding notes and debentures are unsecured and rank equally with one another.

Cat Financial's medium-term notes are offered by prospectus and are issued through agents at fixed and floating rates. Medium-term notes due after one year have a weighted average interest rate of 2.6% with remaining maturities up to 9 years at December 31, 2018.
 
The above table includes $238 million of medium-term notes that can be called at par.

The aggregate amounts of maturities of long-term debt during each of the years 2019 through 2023, including amounts due within one year and classified as current, are:

 
 
December 31,
(Millions of dollars)
 
2019
 
2020
 
2021
 
2022
 
2023
Machinery, Energy & Transportation
 
$
10

 
$
35

 
$
1,398

 
$
510

 
$
92

Financial Products
 
5,820

 
6,407

 
4,884

 
2,053

 
2,158

 
 
$
5,830

 
$
6,442

 
$
6,282

 
$
2,563

 
$
2,250

 
 
 
 
 
 
 
 
 
 
 


Interest paid on short-term and long-term borrowings for 2018, 2017 and 2016 was $1,088 million, $1,131 million and $1,075 million, respectively. Interest paid in 2017 includes a prepayment fee of $58 million related to the early retirement of our 7.90% senior notes due December 2018.
 
Please refer to Note 18 and Table III for fair value information on long-term debt.
v3.10.0.1
Credit commitments
 12 Months Ended
Dec. 31, 2018
Credit Commitments [Abstract]  
Credit commitments
Credit commitments
 
 
 
December 31, 2018
(Millions of dollars)
 
Consolidated
 
Machinery,
Energy &
Transportation
 
Financial
Products
Credit lines available:
 
 

 
 

 
 

Global credit facilities
 
$
10,500

 
$
2,750

 
$
7,750

Other external
 
4,577

 
—

 
4,577

Total credit lines available
 
15,077

 
2,750

 
12,327

Less: Commercial paper outstanding
 
(4,759
)
 
—

 
(4,759
)
Less: Utilized credit
 
(1,172
)
 
—

 
(1,172
)
Available credit
 
$
9,146

 
$
2,750

 
$
6,396

 
 
 
 
 
 
 
 
We have three global credit facilities with a syndicate of banks totaling $10.50 billion (Credit Facility) available in the aggregate to both Caterpillar and Cat Financial for general liquidity purposes.  Based on management's allocation decision, which can be revised from time to time, the portion of the Credit Facility available to ME&T as of December 31, 2018 was $2.75 billion. Information on our Credit Facility is as follows:
 
•
The 364-day facility of $3.15 billion (of which $0.82 billion is available to ME&T) expires in September 2019.
•
The three-year facility, as amended and restated in September 2018, of $2.73 billion (of which $0.72 billion is available to ME&T) expires in September 2021.
•
The five-year facility, as amended and restated in September 2018, of $4.62 billion (of which $1.21 billion is available to ME&T) expires in September 2023.

Other consolidated credit lines with banks as of December 31, 2018 totaled $4.58 billion. These committed and uncommitted credit lines, which may be eligible for renewal at various future dates or have no specified expiration date, are used primarily by our subsidiaries for local funding requirements.  Caterpillar or Cat Financial may guarantee subsidiary borrowings under these lines.

At December 31, 2018, Caterpillar's consolidated net worth was $14.07 billion, which was above the $9.00 billion required under the Credit Facility.  The consolidated net worth is defined as the consolidated shareholder's equity including preferred stock but excluding the pension and other postretirement benefits balance within Accumulated other comprehensive income (loss).

At December 31, 2018, Cat Financial's covenant interest coverage ratio was 1.56 to 1.  This is above the 1.15 to 1 minimum ratio, calculated as (1) profit excluding income taxes, interest expense and net gain/(loss) from interest rate derivatives to (2) interest expense calculated at the end of each calendar quarter for the rolling four quarter period then most recently ended, required by the Credit Facility.

In addition, at December 31, 2018, Cat Financial's six-month covenant leverage ratio was 7.69 to 1 and year-end covenant leverage ratio was 8.33 to 1.  This is below the maximum ratio of debt to net worth of 10 to 1, calculated (1) on a monthly basis as the average of the leverage ratios determined on the last day of each of the six preceding calendar months and (2) at each December 31, required by the Credit Facility.

In the event Caterpillar or Cat Financial does not meet one or more of their respective financial covenants under the Credit Facility in the future (and are unable to obtain a consent or waiver), the syndicate of banks may terminate the commitments allocated to the party that does not meet its covenants.  Additionally, in such event, certain of Cat Financial's other lenders under other loan agreements where similar financial covenants or cross default provisions are applicable, may, at their election, choose to pursue remedies under those loan agreements, including accelerating the repayment of outstanding borrowings.  At December 31, 2018, there were no borrowings under the Credit Facility.
v3.10.0.1
Profit per share
 12 Months Ended
Dec. 31, 2018
Earnings Per Share [Abstract]  
Profit per share
Profit per share
 
Computations of profit per share:
 
 
 
 
 
 
(Dollars in millions except per share data)
 
2018
 
2017
 
2016
Profit (loss) for the period (A) 1 
 
$
6,147

 
$
754

 
$
(67
)
Determination of shares (in millions):
 
 

 
 

 
 

Weighted average number of common shares outstanding (B)
 
591.4

 
591.8

 
584.3

Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price
 
8.0

 
7.5

 
—

Average common shares outstanding for fully diluted computation (C) 2,3
 
599.4

 
599.3

 
584.3

Profit (loss) per share of common stock:
 
 

 
 

 
 

Assuming no dilution (A/B)
 
$
10.39

 
$
1.27

 
$
(0.11
)
Assuming full dilution (A/C) 2,3
 
$
10.26

 
$
1.26

 
$
(0.11
)
Shares outstanding as of December 31 (in millions)
 
575.5

 
597.6

 
586.5

1 
Profit (loss) attributable to common shareholders.
2 
Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.
3 
In 2016, the assumed exercise of stock-based compensation awards was not considered because the impact would be antidilutive.
 
 
 
 
 


For the year ended December 31, 2018, 1.5 million outstanding SARs and stock options were excluded from the computation of diluted earnings per share because the effect would have been antidilutive. For 2017, no outstanding SARs and stock options were excluded from the computation of diluted earnings per share because all outstanding SARs and stock options had a dilutive effect. SARs and stock options to purchase 32.1 million common shares were outstanding in 2016, which were not included in the computation of diluted earnings per share because the effect would have been antidilutive.

In January 2014, the Board of Directors approved an authorization to repurchase up to $10.0 billion of Caterpillar common stock, which expired on December 31, 2018.

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.

During 2018, we repurchased 27.7 million shares of Caterpillar common stock at an aggregate cost of $3.8 billion.  These purchases were made through a combination of accelerated stock repurchase agreements with third-party financial institutions and open market transactions.
 



We did not purchase any Caterpillar common stock during 2017 or 2016.
v3.10.0.1
Accumulated other comprehensive income (loss)
 12 Months Ended
Dec. 31, 2018
Equity [Abstract]  
Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss)

Comprehensive income and its components are presented in Statement 2. Changes in Accumulated other comprehensive income (loss), net of tax, included in Statement 4, consisted of the following:

 
 
 
 
 
 
 
 
 
 
 
(Millions of dollars)
 
Foreign currency translation
 
Pension and other postretirement benefits
 
Derivative financial instruments
 
Available-for-sale securities
 
Total
Balance at December 31, 2015
 
$
(1,953
)
 
$
(69
)
 
$
(50
)
 
$
37

 
$
(2,035
)
Other comprehensive income (loss) before reclassifications
 
(34
)
 
118

 
(62
)
 
26

 
48

Amounts reclassified from accumulated other comprehensive (income) loss
 
17

 
(35
)
 
(3
)
 
(31
)
 
(52
)
Other comprehensive income (loss)
 
(17
)
 
83

 
(65
)
 
(5
)
 
(4
)
Balance at December 31, 2016
 
$
(1,970
)
 
$
14

 
$
(115
)
 
$
32

 
$
(2,039
)
Other comprehensive income (loss) before reclassifications
 
752

 
48

 
(3
)
 
41

 
838

Amounts reclassified from accumulated other comprehensive (income) loss
 
13

 
(16
)
 
77

 
(65
)
 
9

Other comprehensive income (loss)
 
765

 
32

 
74

 
(24
)
 
847

Balance at December 31, 2017
 
$
(1,205
)
 
$
46

 
$
(41
)
 
$
8

 
$
(1,192
)
Adjustment to adopt recognition and measurement of financial assets and liabilities guidance
 
—

 
—

 
—

 
(11
)
 
(11
)
Balance at January 1, 2018
 
(1,205
)
 
46

 
(41
)
 
(3
)
 
(1,203
)
Other comprehensive income (loss) before reclassifications
 
(397
)
 
(6
)
 
61

 
(12
)
 
(354
)
Amounts reclassified from accumulated other comprehensive (income) loss
 
1

 
(28
)
 
(100
)
 
—

 
(127
)
Other comprehensive income (loss)
 
(396
)
 
(34
)
 
(39
)
 
(12
)
 
(481
)
Balance at December 31, 2018
 
$
(1,601
)
 
$
12

 
$
(80
)
 
$
(15
)
 
$
(1,684
)

 
 
 
 
 


The effect of the reclassifications out of Accumulated other comprehensive income (loss) on Statement 1 is as follows:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended December 31,
 
(Millions of dollars)
 
Classification of income (expense)
 
2018
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation:
 
 
 
 
 
 
 
 
 
Gain (loss) on foreign currency translation
 
Other income (expense)
 
$
(1
)
 
$
(13
)
 
$
(17
)
 
Tax (provision) benefit
 
—

 
—

 
—

 
Reclassifications net of tax
 
$
(1
)
 
$
(13
)
 
$
(17
)
 
 
 
 
 
 
 
 
 
 
 
Pension and other postretirement benefits:
 
 
 
 
 
 
 
 
 
Amortization of prior service credit (cost)
 
Note 12 1
 
$
36

 
$
25

 
$
56

 
Tax (provision) benefit
 
(8
)
 
(9
)
 
(21
)
 
Reclassifications net of tax
 
$
28

 
$
16

 
$
35

 
 
 
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
Other income (expense)
 
$
115

 
$
(121
)
 
$
14

 
Foreign exchange contracts
 
Interest expense of Financial Products
 
19

 
6

 
—

 
Interest rate contracts
 
Interest expense excluding Financial Products
 
(3
)
 
(9
)
 
(6
)
 
Interest rate contracts
 
Interest expense of Financial Products
 
—

 
3

 
(3
)
 
Reclassifications before tax
 
131

 
(121
)
 
5

 
Tax (provision) benefit
 
(31
)
 
44

 
(2
)
 
Reclassifications net of tax
 
$
100

 
$
(77
)
 
$
3

 
 
 
 
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
Realized gain (loss) on sale of securities
 
Other income (expense)
 
$
—

 
$
100

 
$
46

 
Tax (provision) benefit
 
—

 
(35
)
 
(15
)
 
Reclassifications net of tax
 
$
—

 
$
65

 
$
31

 
 
 
 
 
 
 
 
 
 
 
Total reclassifications from Accumulated other comprehensive income (loss)
 
$
127

 
$
(9
)
 
$
52

 

1    Amounts are included in the calculation of net periodic benefit cost. See Note 12 for additional information.
 
 
 
 
 
v3.10.0.1
Fair value disclosures
 12 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]  
Fair values of financial instruments
Please refer to the table below for the fair values of our financial instruments.
 
TABLE III—Fair Values of Financial Instruments
 
 
2018
 
2017
 
 
 
 
(Millions of dollars)
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
 
Fair Value Levels
 
Reference
Assets at December 31,
 
 

 
 

 
 

 
 

 
 
 
 
Cash and short-term investments
 
$
7,857

 
$
7,857

 
$
8,261

 
$
8,261

 
1
 
Statement 3
Restricted cash and short-term investments
 
33

 
33

 
194

 
194

 
1
 
Statement 3
Investments in debt and equity securities
 
1,576

 
1,576

 
1,439

 
1,439

 
1, 2 & 3
 
Notes 11 & 19
Finance receivables–net (excluding finance leases 1)
 
14,714

 
14,798

 
15,452

 
15,438

 
3
 
Notes 7 & 19
Wholesale inventory receivables–net (excluding finance leases 1)
 
1,050

 
1,025

 
1,153

 
1,123

 
3
 
Notes 7 & 19
Foreign currency contracts–net
 
47

 
47

 
—

 
—

 
2
 
Notes 4 & 19
Interest rate swaps–net
 
—

 
—

 
1

 
1

 
2
 
Notes 4 & 19
Commodity contracts–net
 
—

 
—

 
21

 
21

 
2
 
Notes 4 & 19
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities at December 31,
 
 

 
 

 
 

 
 

 
 
 
 
Short-term borrowings
 
5,723

 
5,723

 
4,837

 
4,837

 
1
 
Note 13
Long-term debt (including amounts due within one year):
 
 

 
 

 
 

 
 

 
 
 
 
Machinery, Energy & Transportation
 
8,015

 
9,046

 
7,935

 
9,863

 
2
 
Note 14
Financial Products
 
22,815

 
22,684

 
22,106

 
22,230

 
2
 
Note 14
Foreign currency contracts–net
 
—

 
—

 
41

 
41

 
2
 
Notes 4 & 19
Interest rate swaps–net
 
36

 
36

 
—

 
—

 
2
 
Notes 4 & 19
Commodity contracts–net
 
30

 
30

 
—

 
—

 
2
 
Notes 4 & 19
Guarantees
 
8

 
8

 
8

 
8

 
3
 
Note 21
 
1 
Total excluded items have a net carrying value at December 31, 2018 and 2017 of $7,463 million and $7,063 million, respectively.
 
 
 
 
 
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 resulted 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 11 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 Statement 3 as of December 31, 2018 and 2017 are summarized below:

 
 
December 31, 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
 
—

 
42

 
—

 
—

 
42

 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
 
 

 
 
 
 

 
 
 
 

Corporate bonds
 
—

 
720

 
—

 
—

 
720

Asset-backed securities
 
—

 
63

 
—

 
—

 
63

 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed debt securities
 
 

 
 
 
 

 
 
 
 

U.S. governmental agency
 
—

 
297

 
—

 
—

 
297

Residential
 
—

 
7

 
—

 
—

 
7

Commercial
 
—

 
13

 
—

 
—

 
13

Total debt securities
 
9

 
1,142

 
—

 
—

 
1,151

Equity securities
 
 
 
 
 
 
 
 
 
 

Large capitalization value
 
260

 
—

 
—

 
—

 
260

Smaller company growth
 
46

 
—

 
—

 
—

 
46

REIT
 
—

 
—

 
—

 
119

 
119

Total equity securities
 
306

 
—

 
—

 
119

 
425

 
 
 
 
 
 
 
 
 
 
 
Total Assets
 
$
315

 
$
1,142

 
$
—

 
$
119

 
$
1,576

 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 

 
 

 
 

 
 
 
 

Derivative financial instruments, net
 
$
—

 
$
19

 
$
—

 
$
—

 
$
19

Total Liabilities
 
$
—

 
$
19

 
$
—

 
$
—

 
$
19

 
 
 
 
 
 
 
 
 
 
 

 
 
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 $469 million and $341 million for the years ended December 31, 2018 and 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 Statement 3.
 
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.
 
TABLE III—Fair Values of Financial Instruments
 
 
2018
 
2017
 
 
 
 
(Millions of dollars)
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
 
Fair Value Levels
 
Reference
Assets at December 31,
 
 

 
 

 
 

 
 

 
 
 
 
Cash and short-term investments
 
$
7,857

 
$
7,857

 
$
8,261

 
$
8,261

 
1
 
Statement 3
Restricted cash and short-term investments
 
33

 
33

 
194

 
194

 
1
 
Statement 3
Investments in debt and equity securities
 
1,576

 
1,576

 
1,439

 
1,439

 
1, 2 & 3
 
Notes 11 & 19
Finance receivables–net (excluding finance leases 1)
 
14,714

 
14,798

 
15,452

 
15,438

 
3
 
Notes 7 & 19
Wholesale inventory receivables–net (excluding finance leases 1)
 
1,050

 
1,025

 
1,153

 
1,123

 
3
 
Notes 7 & 19
Foreign currency contracts–net
 
47

 
47

 
—

 
—

 
2
 
Notes 4 & 19
Interest rate swaps–net
 
—

 
—

 
1

 
1

 
2
 
Notes 4 & 19
Commodity contracts–net
 
—

 
—

 
21

 
21

 
2
 
Notes 4 & 19
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities at December 31,
 
 

 
 

 
 

 
 

 
 
 
 
Short-term borrowings
 
5,723

 
5,723

 
4,837

 
4,837

 
1
 
Note 13
Long-term debt (including amounts due within one year):
 
 

 
 

 
 

 
 

 
 
 
 
Machinery, Energy & Transportation
 
8,015

 
9,046

 
7,935

 
9,863

 
2
 
Note 14
Financial Products
 
22,815

 
22,684

 
22,106

 
22,230

 
2
 
Note 14
Foreign currency contracts–net
 
—

 
—

 
41

 
41

 
2
 
Notes 4 & 19
Interest rate swaps–net
 
36

 
36

 
—

 
—

 
2
 
Notes 4 & 19
Commodity contracts–net
 
30

 
30

 
—

 
—

 
2
 
Notes 4 & 19
Guarantees
 
8

 
8

 
8

 
8

 
3
 
Note 21
 
1 
Total excluded items have a net carrying value at December 31, 2018 and 2017 of $7,463 million and $7,063 million, respectively.
 
 
 
 
 
v3.10.0.1
Concentration of credit risk
 12 Months Ended
Dec. 31, 2018
Risks and Uncertainties [Abstract]  
Concentration of credit risk
Concentration of credit risk
 
Financial instruments with potential credit risk consist primarily of trade and finance receivables and short-term and long-term investments. Additionally, to a lesser extent, we have a potential credit risk associated with counterparties to derivative contracts.
 
Trade receivables are primarily short-term receivables from independently owned and operated dealers and customers which arise in the normal course of business. We perform regular credit evaluations of our dealers and customers. Collateral generally is not required, and the majority of our trade receivables are unsecured. We do, however, when deemed necessary, make use of various devices such as security agreements and letters of credit to protect our interests. No single dealer or customer represents a significant concentration of credit risk.
 
Finance receivables and wholesale inventory receivables primarily represent receivables under installment sales contracts, receivables arising from leasing transactions and notes receivable. We generally maintain a secured interest in the equipment financed. No single customer or dealer represents a significant concentration of credit risk.
 
Short-term and long-term investments are held with high quality institutions and, by policy, the amount of credit exposure to any one institution is limited. Long-term investments, primarily included in Other assets in Statement 3, are comprised primarily of available-for-sale debt securities and equity securities at Insurance Services.
 
For derivative contracts, collateral is generally not required of the counterparties or of our company.  The company generally enters 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.  Our exposure to credit loss in the event of nonperformance by the counterparties is limited to only those gains that we have recorded, but for which we have not yet received cash payment. The master netting agreements reduce the amount of loss the company would incur should the counterparties fail to meet their obligations.  At December 31, 2018 and 2017, the maximum exposure to credit loss was $131 million and $74 million, respectively, before the application of any master netting agreements.  

Please refer to Note 18 and Table III above for fair value information.
v3.10.0.1
Operating leases
 12 Months Ended
Dec. 31, 2018
Leases [Abstract]  
Operating leases
Operating leases
 
We lease certain property, information technology equipment, warehouse equipment, vehicles and other equipment through operating leases. Total rental expense for operating leases was $322 million, $331 million and $375 million for 2018, 2017 and 2016, respectively.
 
Minimum payments for operating leases having initial or remaining non-cancelable terms in excess of one year are:
  
Years ended December 31,
(Millions of dollars)
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
 
Total
$
205

 
$
154

 
$
111

 
$
67

 
$
50

 
$
185

 
$
772

 
 
 
 
 
 
 
 
 
 
 
 
 
v3.10.0.1
Guarantees and product warranty
 12 Months Ended
Dec. 31, 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 December 31, 2018 and 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 at December 31 are as follows:
 
(Millions of dollars)
 
2018
 
2017
Caterpillar dealer performance guarantees
 
$
1,244

 
$
1,313

Customer loan guarantees
 
31

 
40

Supplier consortium performance guarantees
 
527

 
565

Third party logistics business lease guarantees
 
60

 
69

Other guarantees
 
116

 
118

Total guarantees
 
$
1,978

 
$
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 December 31, 2018 and 2017, the SPC’s assets of $1,149 million and $1,107 million, respectively, were primarily comprised of loans to dealers, and the SPC’s liabilities of $1,148 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.
 
Cat Financial is party to agreements in the normal course of business with selected customers and Caterpillar dealers in which they commit to provide a set dollar amount of financing on a pre-approved basis.  They also provide lines of credit to certain customers and Caterpillar dealers, of which a portion remains unused as of the end of the period.  Commitments and lines of credit generally have fixed expiration dates or other termination clauses. It has been Cat Financial's experience that not all commitments and lines of credit will be used. Management applies the same credit policies when making commitments and granting lines of credit as it does for any other financing.
 
Cat Financial does not require collateral for these commitments/lines, but if credit is extended, collateral may be required upon funding.  The amount of the unused commitments and lines of credit for dealers as of December 31, 2018 and 2017 was $11,853 million and $10,933 million, respectively.  The amount of the unused commitments for customers as of December 31, 2018 and 2017 was $815 million and $715 million, respectively.
 
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
 
2017
 
Warranty liability, January 1
 
$
1,419

 
$
1,258

 
Reduction in liability (payments)
 
(783
)
 
(860
)
 
Increase in liability (new warranties)
 
755

 
1,021

 
Warranty liability, December 31
 
$
1,391

 
$
1,419

 
 
 
 
 
 
 

 
 
 
 
 
v3.10.0.1
Environmental and legal matters
 12 Months Ended
Dec. 31, 2018
Environmental and legal matters [Abstract]  
Environmental and legal matters
22.
Environmental and legal matters

The Company is regulated by federal, state and international environmental laws governing our use, transport and disposal of substances and control of emissions. In addition to governing our manufacturing and other operations, these laws often impact the development of our products, including, but not limited to, required compliance with air emissions standards applicable to internal combustion engines. We have made, and will continue to make, significant research and development and capital expenditures to comply with these emissions standards.

We are engaged in remedial activities at a number of locations, often with other companies, pursuant to federal and state laws. When it is probable we will pay remedial costs at a site, and those costs can be reasonably estimated, the investigation, remediation, and operating and maintenance costs are accrued against our earnings. Costs are accrued based on consideration of currently available data and information with respect to each individual site, including available technologies, current applicable laws and regulations, and prior remediation experience. Where no amount within a range of estimates is more likely, we accrue the minimum. Where multiple potentially responsible parties are involved, we consider our proportionate share of the probable costs. In formulating the estimate of probable costs, we do not consider amounts expected to be recovered from insurance companies or others. We reassess these accrued amounts on a quarterly basis. The amount recorded for environmental remediation is not material and is included in Accrued expenses. We believe there is no more than a remote chance that a material amount for remedial activities at any individual site, or at all the sites in the aggregate, will be required.

On January 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.
v3.10.0.1
Segment information
 12 Months Ended
Dec. 31, 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 and 2016 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 1J 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 Caterpillar 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 141 to 146 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 143, has been included to illustrate how segment profit would have been impacted by the restructuring costs. See Note 25 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.
Segment Information
(Millions of dollars) 
Reportable Segments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
External
sales and
revenues
 
Inter-
segment
sales and
revenues
 
Total sales
and
revenues
 
Depreciation
and
amortization

Segment
profit (loss)
 
Segment
assets at
December 31
 
Capital
expenditures
2018
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Construction Industries
 
$
23,116

 
$
121

 
$
23,237

 
$
367

 
$
4,174

 
$
4,902

 
$
266

Resource Industries
 
9,888

 
382

 
10,270

 
462

 
1,603

 
6,442

 
188

Energy & Transportation
 
18,832

 
3,953

 
22,785

 
640

 
3,938

 
8,386

 
742

Machinery, Energy & Transportation
 
$
51,836

 
$
4,456

 
$
56,292

 
$
1,469

 
$
9,715

 
$
19,730

 
$
1,196

Financial Products Segment
 
3,279

1 
—

 
3,279

 
834

 
505

 
36,002

 
1,559

Total
 
$
55,115

 
$
4,456

 
$
59,571

 
$
2,303

 
$
10,220

 
$
55,732

 
$
2,755

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2017
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Construction Industries
 
$
19,133

 
$
107

 
$
19,240

 
$
400

 
$
3,255

 
$
4,838

 
$
228

Resource Industries
 
7,504

 
357

 
7,861

 
514

 
698

 
6,403

 
183

Energy & Transportation
 
15,964

 
3,418

 
19,382

 
653

 
2,856

 
7,564

 
527

Machinery, Energy & Transportation
 
$
42,601

 
$
3,882

 
$
46,483

 
$
1,567

 
$
6,809

 
$
18,805

 
$
938

Financial Products Segment
 
3,093

1 
—

 
3,093

 
820

 
792

 
34,893

 
1,373

Total
 
$
45,694

 
$
3,882

 
$
49,576

 
$
2,387

 
$
7,601

 
$
53,698

 
$
2,311

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2016
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Construction Industries
 
$
15,612

 
$
78

 
$
15,690

 
$
458

 
$
1,639

 
$
5,367

 
$
186

Resource Industries
 
5,726

 
284

 
6,010

 
607

 
(1,045
)
 
7,135

 
243

Energy & Transportation
 
14,411

 
2,540

 
16,951

 
677

 
2,187

 
7,791

 
519

Machinery, Energy & Transportation
 
$
35,749

 
$
2,902

 
$
38,651

 
$
1,742

 
$
2,781

 
$
20,293

 
$
948

Financial Products Segment
 
2,993

1 
—

 
2,993

 
849

 
702

 
35,224

 
1,638

Total
 
$
38,742

 
$
2,902

 
$
41,644

 
$
2,591

 
$
3,483

 
$
55,517

 
$
2,586

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


1 Includes revenues from Machinery, Energy & Transportation of $470 million, $384 million and $302 million for the years 2018, 2017 and 2016, respectively.
 
 
 
 
 

For the year ended December 31, 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
2018
 
 

 
 

 
 

 
 

 
 
Construction Industries
 
$
10,754

 
$
1,479

 
$
4,410

 
$
6,473

 
$
23,116

Resource Industries
 
3,357

 
1,647

 
2,217

 
2,667

 
$
9,888

Energy & Transportation
 
9,685

 
1,331

 
4,934

 
2,882

 
$
18,832

All Other operating segments
 
63

 
3

 
18

 
70

 
$
154

Corporate Items and Eliminations
 
(155
)
 
—

 
(11
)
 
(2
)
 
(168
)
Machinery, Energy & Transportation Sales
 
23,704

 
4,460

 
11,568

 
12,090

 
$
51,822

 
 
 
 
 
 
 
 
 
 
 
Financial Products Segment
 
2,153

 
281

 
387

 
458

 
3,279

Corporate Items and Eliminations
 
(234
)
 
(46
)
 
(26
)
 
(73
)
 
(379
)
Financial Products Revenues
 
1,919

 
235

 
361

 
385

 
2,900

 
 
 
 
 
 
 
 
 
 
 
Consolidated Sales and Revenues
 
$
25,623

 
$
4,695

 
$
11,929

 
$
12,475

 
$
54,722

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


For the year ended December 31, 2018, Energy & Transportation segment sales by end user application were as follows:
Energy & Transportation External Sales
 
(Millions of dollars)
2018
Oil and gas
$
5,763

Power generation
4,334

Industrial
3,640

Transportation
5,095

Energy & Transportation External Sales
$
18,832

 
 


Reconciliation of Sales and Revenues: 
 
 
 
 
 
 
 
 
(Millions of dollars)
 
Machinery,
Energy &
Transportation
 
Financial
Products
 
Consolidating
Adjustments
 
Consolidated
Total
2017
 
 

 
 

 
 

 
 

Total external sales and revenues from reportable segments
 
$
42,601

 
$
3,093

 
$
—

 
$
45,694

All Other operating segments
 
178

 
—

 
—

 
178

Other
 
(103
)
 
74

 
(381
)
1 
(410
)
Total sales and revenues
 
$
42,676

 
$
3,167

 
$
(381
)
 
$
45,462

 
 
 
 
 
 
 
 
 
2016
 
 

 
 

 
 

 
 

Total external sales and revenues from reportable segments
 
$
35,749

 
$
2,993

 
$
—

 
$
38,742

All Other operating segments
 
139

 
—

 
—

 
139

Other
 
(115
)
 
72

 
(301
)
1 
(344
)
Total sales and revenues
 
$
35,773

 
$
3,065

 
$
(301
)
 
$
38,537

 
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
2018
 
 

 
 

 
 

Total profit from reportable segments
 
$
9,715

 
$
505

 
$
10,220

All Other operating segments
 
23

 
—

 
23

Cost centers
 
2

 
—

 
2

Corporate costs
 
(610
)
 
—

 
(610
)
Timing
 
(257
)
 
—

 
(257
)
Restructuring costs
 
(370
)
 
(16
)
 
(386
)
Methodology differences:
 
 

 
 

 


Inventory/cost of sales
 
51

 
—

 
51

Postretirement benefit expense
 
(124
)
 
—

 
(124
)
Stock-based compensation expense
 
(190
)
 
(8
)
 
(198
)
Financing costs
 
(257
)
 
—

 
(257
)
Currency
 
(219
)
 
—

 
(219
)
Other income/expense methodology differences
 
(362
)
 
—

 
(362
)
Other methodology differences
 
(86
)
 
25

 
(61
)
Total consolidated profit before taxes
 
$
7,316

 
$
506

 
$
7,822

 
 
 
 
 
 
 
2017
 
 

 
 

 
 

Total profit from reportable segments
 
$
6,809

 
$
792

 
$
7,601

All Other operating segments
 
(44
)
 
—

 
(44
)
Cost centers
 
22

 
—

 
22

Corporate costs
 
(633
)
 
—

 
(633
)
Timing
 
(151
)
 
—

 
(151
)
Restructuring costs
 
(1,253
)
 
(3
)
 
(1,256
)
Methodology differences:
 
 

 
 

 
 

Inventory/cost of sales
 
(77
)
 
—

 
(77
)
Postretirement benefit expense
 
(141
)
 
—

 
(141
)
Stock-based compensation expense
 
(198
)
 
(8
)
 
(206
)
Financing costs
 
(524
)
 
—

 
(524
)
Currency
 
(218
)
 
—

 
(218
)
Other income/expense methodology differences
 
(181
)
 
—

 
(181
)
Other methodology differences
 
(97
)
 
(13
)
 
(110
)
Total consolidated profit before taxes
 
$
3,314

 
$
768

 
$
4,082

 
 
 
 
 
 
 
2016
 
 

 
 

 
 

Total profit from reportable segments
 
$
2,781

 
$
702

 
$
3,483

All Other operating segments
 
(85
)
 
—

 
(85
)
Cost centers
 
1

 
—

 
1

Corporate costs
 
(527
)
 
—

 
(527
)
Timing
 
40

 
—

 
40

Restructuring costs
 
(1,014
)
 
(5
)
 
(1,019
)
Methodology differences:
 
 

 
 

 
 

Inventory/cost of sales
 
—

 
—

 
—

Postretirement benefit expense
 
(729
)
 
—

 
(729
)
Stock-based compensation expense
 
(209
)
 
(9
)
 
(218
)
Financing costs
 
(517
)
 
—

 
(517
)
Currency
 
(22
)
 
—

 
(22
)
Other income/expense methodology differences
 
(225
)
 
—

 
(225
)
Other methodology differences
 
(47
)
 
4

 
(43
)
Total consolidated profit before taxes
 
$
(553
)
 
$
692

 
$
139

 
 
 
 
 
 
 

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
2018
 
 
 
 
 
 
Construction Industries
 
$
4,174

 
$
(58
)
 
$
4,116

Resource Industries
 
1,603

 
(191
)
 
1,412

Energy & Transportation
 
3,938

 
(84
)
 
3,854

Financial Products Segment
 
505

 
(2
)
 
503

All Other operating segments
 
23

 
(40
)
 
(17
)
Total
 
$
10,243

 
$
(375
)
 
$
9,868

 
 
 
 
 
 
 
2017
 
 
 
 
 
 
Construction Industries
 
$
3,255

 
$
(719
)
 
$
2,536

Resource Industries
 
698

 
(276
)
 
422

Energy & Transportation
 
2,856

 
(115
)
 
2,741

Financial Products Segment
 
792

 
(3
)
 
789

All Other operating segments
 
(44
)
 
(39
)
 
(83
)
Total
 
$
7,557

 
$
(1,152
)
 
$
6,405

 
 
 
 
 
 
 
2016
 
 
 
 
 
 
Construction Industries
 
$
1,639

 
$
(41
)
 
$
1,598

Resource Industries
 
(1,045
)
 
(540
)
 
(1,585
)
Energy & Transportation
 
2,187

 
(248
)
 
1,939

Financial Products Segment
 
702

 
(5
)
 
697

All Other operating segments
 
(85
)
 
(45
)
 
(130
)
Total
 
$
3,398

 
$
(879
)
 
$
2,519

 
 
 
 
 
 
 


Reconciliation of Assets:
 
 
 
 
 
 
 
 
(Millions of dollars)
 
Machinery,
Energy &
Transportation
 
Financial
Products
 
Consolidating
Adjustments
 
Consolidated
Total
2018
 
 

 
 

 
 

 
 

Total assets from reportable segments
 
$
19,730

 
$
36,002

 
$
—

 
$
55,732

All Other operating segments
 
1,279

 
—

 
—

 
1,279

Items not included in segment assets:
 
 

 
 

 
 

 
 

Cash and short-term investments
 
6,968

 
—

 
—

 
6,968

Intercompany receivables
 
1,633

 
—

 
(1,633
)
 
—

Investment in Financial Products
 
3,672

 
—

 
(3,672
)
 
—

Deferred income taxes
 
2,015

 
—

 
(692
)
 
1,323

Goodwill and intangible assets
 
4,279

 
—

 
—

 
4,279

Property, plant and equipment – net and other assets
 
1,998

 
—

 
—

 
1,998

Operating lease methodology difference
 
(196
)
 
—

 
—

 
(196
)
Inventory methodology differences
 
(2,503
)
 
—

 
—

 
(2,503
)
Liabilities included in segment assets
 
9,766

 
—

 
—

 
9,766

Other
 
(166
)
 
66

 
(37
)
 
(137
)
Total assets
 
$
48,475

 
$
36,068

 
$
(6,034
)
 
$
78,509

 
 
 
 
 
 
 
 
 
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

 
 
 
 
 
 
 
 
 
2016
 
 

 
 

 
 

 
 

Total assets from reportable segments
 
$
20,293

 
$
35,224

 
$
—

 
$
55,517

All Other operating segments
 
1,381

 
—

 
—

 
1,381

Items not included in segment assets:
 
 

 
 

 
 

 


Cash and short-term investments
 
5,257

 
—

 
—

 
5,257

Intercompany receivables
 
1,713

 
—

 
(1,713
)
 
—

Investment in Financial Products
 
3,638

 
—

 
(3,638
)
 
—

Deferred income taxes
 
3,648

 
—

 
(947
)
 
2,701

Goodwill and intangible assets
 
3,883

 
—

 
—

 
3,883

Property, plant and equipment – net and other assets
 
1,645

 
—

 
—

 
1,645

Operating lease methodology difference
 
(186
)
 
—

 
—

 
(186
)
Inventory methodology differences
 
(2,373
)
 
—

 
—

 
(2,373
)
Liabilities included in segment assets
 
7,400

 
—

 
—

 
7,400

Other
 
(436
)
 
(29
)
 
(56
)
 
(521
)
Total assets
 
$
45,863

 
$
35,195

 
$
(6,354
)
 
$
74,704

 
 
 
 
 
 
 
 
 

Reconciliation of Depreciation and amortization:
 
 
 
 
 
 
(Millions of dollars)
 
Machinery,
Energy &
Transportation
 
Financial
Products
 
Consolidated
Total
2018
 
 

 
 

 
 

Total depreciation and amortization from reportable segments
 
$
1,469

 
$
834

 
$
2,303

Items not included in segment depreciation and amortization:
 
 

 
 

 
 

All Other operating segments
 
225

 
—

 
225

Cost centers
 
130

 
—

 
130

Other
 
71

 
37

 
108

Total depreciation and amortization
 
$
1,895

 
$
871

 
$
2,766

 
 
 
 
 
 
 
2017
 
 

 
 

 
 

Total depreciation and amortization from reportable segments
 
$
1,567

 
$
820

 
$
2,387

Items not included in segment depreciation and amortization:
 
 

 
 

 
 

All Other operating segments
 
220

 
—

 
220

Cost centers
 
143

 
—

 
143

Other
 
86

 
41

 
127

Total depreciation and amortization
 
$
2,016

 
$
861

 
$
2,877

 
 
 
 
 
 
 
2016
 
 

 
 

 
 

Total depreciation and amortization from reportable segments
 
$
1,742

 
$
849

 
$
2,591

Items not included in segment depreciation and amortization:
 
 

 
 

 
 

All Other operating segments
 
219

 
—

 
219

Cost centers
 
156

 
—

 
156

Other
 
27

 
41

 
68

Total depreciation and amortization
 
$
2,144

 
$
890

 
$
3,034

 
 
 
 
 
 
 
 
Reconciliation of Capital expenditures:
 
 
 
 
 
 
 
 
(Millions of dollars)
 
Machinery,
Energy &
Transportation
 
Financial
Products
 
Consolidating
Adjustments
 
Consolidated
Total
2018
 
 

 
 

 
 

 
 

Total capital expenditures from reportable segments
 
$
1,196

 
$
1,559

 
$
—

 
$
2,755

Items not included in segment capital expenditures:
 
 

 
 

 
 

 
 

All Other operating segments
 
170

 
—

 
—

 
170

Cost centers
 
100

 
—

 
—

 
100

Timing
 
42

 
—

 
—

 
42

Other
 
(287
)
 
216

 
(80
)
 
(151
)
Total capital expenditures
 
$
1,221

 
$
1,775

 
$
(80
)
 
$
2,916

 
 
 
 
 
 
 
 
 
2017
 
 

 
 

 
 

 
 

Total capital expenditures from reportable segments
 
$
938

 
$
1,373

 
$
—

 
$
2,311

Items not included in segment capital expenditures:
 
 

 
 

 
 

 
 

All Other operating segments
 
134

 
—

 
—

 
134

Cost centers
 
84

 
—

 
—

 
84

Timing
 
(96
)
 
—

 
—

 
(96
)
Other
 
(144
)
 
80

 
(33
)
 
(97
)
Total capital expenditures
 
$
916

 
$
1,453

 
$
(33
)
 
$
2,336

 
 
 
 
 
 
 
 
 
2016
 
 

 
 

 
 

 
 

Total capital expenditures from reportable segments
 
$
948

 
$
1,638

 
$
—

 
$
2,586

Items not included in segment capital expenditures:
 
 

 
 

 
 

 
 

All Other operating segments
 
182

 
—

 
—

 
182

Cost centers
 
72

 
—

 
—

 
72

Timing
 
153

 
—

 
—

 
153

Other
 
(149
)
 
133

 
(49
)
 
(65
)
Total capital expenditures
 
$
1,206

 
$
1,771

 
$
(49
)
 
$
2,928

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Enterprise-wide Disclosures:
 
Information about Geographic Areas:
 
 
 
 
 
 
 
 
 
Property, plant and equipment - net
 
 
External sales and revenues 1
 
December 31,
(Millions of dollars)
 
2018
 
2017
 
2016
 
2018
 
2017
Inside United States
 
$
22,690

 
$
18,552

 
$
15,956

 
$
8,152

 
$
8,126

Outside United States
 
32,032


26,910


22,581


5,422


6,029

Total
 
$
54,722

 
$
45,462

 
$
38,537

 
$
13,574

 
$
14,155

 
1 
Sales of Machinery, Energy & Transportation are based on dealer or customer location. Revenues from services provided are based on where service is rendered.
 
 
 
 
 
v3.10.0.1
Acquisitions
 12 Months Ended
Dec. 31, 2018
Business Combinations [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. 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 23. 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 $97 million.

The transaction was financed with available cash. Tangible assets as of the acquisition date were $86 million, recorded at their fair values, and primarily included receivables of $23 million, inventories of $40 million, and property, plant and equipment of $15 million. Finite-lived customer relationship intangible assets acquired were $6 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 $14 million, which represented their fair values. Goodwill of $18 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. 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 23. 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.

Kemper Valve & Fittings Corp.

On December 15, 2016, we acquired 100 percent of the equity in privately held Kemper Valve & Fittings Corp. (Kemper). Kemper is headquartered in Island Lake, Illinois and designs, manufactures, sells, and services high pressure flow iron to the well service segment of the Oil & Gas industry. This acquisition provides Caterpillar with a new product offering which complements its existing products in the Oil & Gas industry. The purchase price, net of $12 million of acquired cash, consisted of $92 million paid at closing, $1 million paid in 2017, and $8 million paid in 2018. In addition, there is contingent consideration with a fair value of $38 million as of the acquisition date which is comprised of two components: 1) our expected use of a charitable contribution carry forward for U.S. tax purposes acquired from Kemper which has an estimated maximum payment of $20 million and 2) a specified industry performance index price target during the period from January 1, 2017 to December 31, 2021 which is capped at $20 million per year. As of December 31, 2018, $10 million was paid related to the use of the charitable contribution carry forward for U.S. tax purposes with an additional $10 million paid in January of 2019.  No amounts were paid through 2018 for the contingent consideration related to the specified industry performance index price target, which continues to be remeasured each reporting period at its estimated fair value with any adjustment included in Other operating (income) expenses in Statement 1.

The transaction was financed with available cash. Tangible assets as of the acquisition date were $147 million, recorded at their fair values, and included cash of $12 million, receivables of $7 million, short term investments of $3 million, net deferred tax assets of $21 million, inventories of $63 million, and property, plant and equipment of $41 million. Finite-lived intangible assets acquired of $8 million included customer relationships, developed technology and trade names. The finite lived intangible assets are being amortized on a straight-line basis over an amortization period of 10 years. Liabilities assumed as of the acquisition date were $6 million, which represented their fair values. Goodwill of $1 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. 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 23. 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.
v3.10.0.1
Restructuring Costs
 12 Months Ended
Dec. 31, 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 2018, 2017 and 2016 were as follows:

 
 
 
 
 
 
 
(Millions of dollars)
 
2018
 
2017
 
2016
Employee separations 1
 
$
112

 
$
525

 
$
297

Contract terminations 1
 
7

 
183

 
62

Long-lived asset impairments 1
 
93

 
346

 
391

Defined benefit plan curtailments and termination benefits 2
 
(8
)
 
29

 
7

Other 3
 
182

 
173

 
262

Total restructuring costs
 
$
386

 
$
1,256

 
$
1,019

 
 
 
 
 
 
 
1 Recognized in Other operating (income) expenses.
 
 
 
 
 
 
2 Recognized in Other income (expense).
3 Represents costs related to our restructuring programs, primarily for accelerated depreciation, project management costs, equipment relocation and inventory write-downs, and also LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold.
 
 
 
 
 
 
 


The restructuring costs in 2018 were primarily related to ongoing facility closures across the company. In 2017, about half of the restructuring costs were related to the closure of the facility in Gosselies, Belgium, within Construction Industries, and the remainder was related to other restructuring actions across the company. The restructuring costs in 2016 were primarily related to actions in Resource Industries in response to continued weakness in the mining industry. In addition, costs in 2016 resulted from our decision to discontinue production of on-highway vocational trucks within Energy & Transportation and other restructuring actions across the company.

Restructuring costs are a reconciling item between Segment profit and Consolidated profit before taxes. See Note 23 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)
112

Reduction in liability (payments)
(276
)
Liability balance at December 31, 2018
$
85

 
 

 
Most of the remaining liability balance as of December 31, 2018 is expected to be paid in 2019.

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. The program concluded in 2018, and we incurred a total of $647 million of restructuring costs (primarily in 2017) under the program. Those costs were primarily related to employee separation costs, long-lived asset impairments, and other costs which were partially offset by a LIFO inventory decrement benefit.

Restructuring costs for the year ended December 31, 2016 were $1,019 million. Throughout 2016, we initiated the following restructuring plans:

•
In February 2016, we made the decision to discontinue production of on-highway vocational trucks. Based on the business climate in the truck industry and a thorough evaluation of the business, the company decided it would withdraw from this market. We recognized $104 million of restructuring costs, primarily related to long-lived asset impairments and sales discounts.

•
In the second half of 2016, we took additional restructuring actions in Resource Industries, including ending the production of track drills; pursuing strategic alternatives related to room and pillar products; consolidation of two product development divisions; and additional actions in response to ongoing weakness in the mining industry. For the year ended December 31, 2016, we incurred $369 million of restructuring costs for these plans primarily related to long-lived asset impairments, employee separation costs and inventory write-downs.

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 that occurred 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. We incurred $121 million, $817 million and $281 million of restructuring costs associated with these actions in 2018, 2017 and 2016, respectively. Total restructuring costs incurred since inception of the Plan were $1,788 million. The remaining costs of approximately $50 million related to the Plan are expected to be recognized in 2019.
v3.10.0.1
Selected quarterly financial results (unaudited)
 12 Months Ended
Dec. 31, 2018
Quarterly Financial Information Disclosure [Abstract]  
Selected quarterly financial results (unaudited)
Selected quarterly financial results (unaudited) 
 
 
 
 
 
 
 
 
 
 
 
 
2018 Quarter
 
(Dollars in millions except per share data)
 
1st
 
2nd
 
3rd
 
4th
 
Sales and revenues
 
$
12,859

 
$
14,011

 
$
13,510

 
$
14,342

 
Less: Revenues
 
(709
)
 
(732
)
 
(747
)
 
(712
)
 
Sales
 
12,150

 
13,279

 
12,763

 
13,630

 
Cost of goods sold
 
8,566

 
9,422

 
9,022

 
9,987

 
Gross margin
 
3,584

 
3,857

 
3,741

 
3,643

 
Profit 1
 
$
1,665

 
$
1,707

 
$
1,727

4 
$
1,048

5,6,7 
Profit per common share
 
$
2.78

 
$
2.86

 
$
2.92

 
$
1.80

 
Profit per common share–diluted 2
 
$
2.74

 
$
2.82

 
$
2.88

 
$
1.78

 
 
 
 
 
 
 
 
 
 
 
 
 
2017 Quarter
 
 
 
1st
 
2nd
 
3rd
 
4th
 
Sales and revenues
 
$
9,822

 
$
11,331

 
$
11,413

 
$
12,896

 
Less: Revenues
 
(692
)
 
(692
)
 
(700
)
 
(702
)
 
Sales
 
9,130

 
10,639

 
10,713

 
12,194

 
Cost of goods sold
 
6,801

 
7,816

 
7,678

 
8,965

 
Gross margin
 
2,329

 
2,823

 
3,035

 
3,229

 
Profit (loss) 1
 
$
192

 
$
802

 
$
1,059

 
$
(1,299
)
5,6,7 
Profit (loss) per common share
 
$
0.33

 
$
1.36

 
$
1.79

 
$
(2.18
)
 
Profit (loss) per common share–diluted 2
 
$
0.32

 
$
1.35

 
$
1.77

 
$
(2.18
)
3 
 

1 
Profit (loss) attributable to common shareholders.
2 
Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.
3 
In the fourth quarter of 2017, the assumed exercise of stock-based compensation awards was not considered because the impact would be antidilutive.
4 
The third quarter of 2018 includes a benefit of $154 million due to the revised 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. The third quarter of 2018 also includes a charge of $59 million to increase the valuation allowance against deferred tax assets for prior years.  See Note 6 for additional details.
5 
The fourth quarter of 2018 and fourth quarter of 2017 include pre-tax pension and other postretirement benefit plan actuarial losses of $495 million and $301 million, respectively. See Note 12 for additional information on these costs.
6 
The fourth quarter of 2018 includes a benefit of $63 million from reductions in the valuation allowance against U.S. state deferred tax assets. The fourth quarter of 2017 includes a benefit of $111 million from increases in the valuation allowance against U.S. state deferred tax assets. See Note 6 for additional information.
7 
The fourth quarter of 2018 includes a charge of $50 million due to an increase to the $2,371 million charge in the fourth quarter of 2017 due to the enactment of U.S. tax reform legislation on December 22, 2017. See Note 6 for additional information.
 
 
 
 
 
v3.10.0.1
Operations and summary of significant accounting policies (Policies)
 12 Months Ended
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation, Policy
B.
Basis of presentation
 
The consolidated financial statements include the accounts of Caterpillar Inc. and its subsidiaries where we have a controlling financial interest.

Investments in companies where our ownership exceeds 20 percent and we do not have a controlling interest or where the ownership is less than 20 percent and for which we have a significant influence are accounted for by the equity method.  

We consolidate all variable interest entities (VIEs) where Caterpillar Inc. is the primary beneficiary.  For VIEs, we assess whether we are the primary beneficiary as prescribed by the accounting guidance on the consolidation of VIEs.  The primary beneficiary of a VIE is the party that has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. See Note 21 for further discussion on a consolidated VIE.

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:

 
 
December 31,
(Millions of dollars)
 
2018
 
2017
 
Receivables - trade and other
 
$
31

 
$
34

 
Receivables - finance
 
45

 
42

 
Long-term receivables - finance
 
26

 
38

 
Investments in unconsolidated affiliated companies
 
29

 
39

 
Guarantees 1
 
—

 
259

 
Total
 
$
131

 
$
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.

Shipping and handling costs are included in Cost of goods sold in Statement 1.  Other operating (income) expenses primarily include Cat Financial’s depreciation of equipment leased to others, Insurance Services’ underwriting expenses, (gains) losses on disposal of long-lived assets, long-lived asset impairment charges, legal settlements and accruals, contract termination costs and employee separation charges.
 
Prepaid expenses and other current assets in Statement 3 primarily include prepaid rent, prepaid insurance, contract assets, right of return assets, prepaid and refundable income tax, assets held for sale, core to be returned for remanufacturing, restricted cash and other short-term investments.

Certain amounts for prior years have been reclassified to conform with the current-year financial statement presentation. See Note 1J for more information. In addition, deferred revenue of $233 million was reclassified from Other current liabilities to Customer advances in Statement 3 as of December 31, 2017 to conform to the current period presentation.
Inventories, Policy
C.
Inventories
 
Inventories are stated at the lower of cost or net realizable value. Cost is principally determined using the last-in, first-out (LIFO) method. The value of inventories on the LIFO basis represented about 65 percent of total inventories at December 31, 2018 and 2017.
 
If the FIFO (first-in, first-out) method had been in use, inventories would have been $2,009 million and $1,934 million higher than reported at December 31, 2018 and 2017, respectively.
Depreciation and Amortization, Policy
D.
Depreciation and amortization
 
Depreciation of plant and equipment is computed principally using accelerated methods. Depreciation on equipment leased to others, primarily for Financial Products, is computed using the straight-line method over the term of the lease. The depreciable basis is the original cost of the equipment less the estimated residual value of the equipment at the end of the lease term. In 2018, 2017 and 2016, Cat Financial depreciation on equipment leased to others was $819 million, $810 million and $841 million, respectively, and was included in Other operating (income) expenses in Statement 1. In 2018, 2017 and 2016, consolidated depreciation expense was $2,435 million, $2,555 million and $2,707 million, respectively. Amortization of purchased finite-lived intangibles is computed principally using the straight-line method, generally not to exceed a period of 20 years.
Foreign Currency Translation, Policy
E.
Foreign currency translation
 
The functional currency for most of our Machinery, Energy & Transportation consolidated companies is the U.S. dollar. The functional currency for most of our Financial Products and affiliates accounted for under the equity method is the respective local currency.  Gains and losses resulting from the remeasurement of foreign currency amounts to the functional currency are included in Other income (expense) in Statement 1. Gains and losses resulting from translating assets and liabilities from the functional currency to U.S. dollars are included in Accumulated other comprehensive income (loss) in Statement 3.
Derivative Financial Instruments, Policy
F.
Derivative financial instruments
 
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. All derivatives are recorded at fair value.  See Note 4 for more information.
Income Taxes, Policy
G.
Income taxes
 
The provision for income taxes is determined using the asset and liability approach taking into account guidance related to uncertain tax positions.  Tax laws require items to be included in tax filings at different times than the items are reflected in the financial statements.  A current liability is recognized for the estimated taxes payable for the current year.  Deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid.  Deferred taxes are adjusted for enacted changes in tax rates and tax laws.  Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.
Goodwill, Policy
H.
Goodwill
 
For acquisitions accounted for as a business combination, goodwill represents the excess of the cost over the fair value of the net assets acquired.  We are required to test goodwill for impairment, at the reporting unit level, annually and when events or circumstances make it more likely than not that an impairment may have occurred.  A reporting unit is an operating segment or one level below an operating segment (referred to as a component) to which goodwill is assigned when initially recorded. We assign goodwill to reporting units based on our integration plans and the expected synergies resulting from the acquisition.  Because Caterpillar is a highly integrated company, the businesses we acquire are sometimes combined with or integrated into existing reporting units.  When changes occur in the composition of our operating segments or reporting units, goodwill is reassigned to the affected reporting units based on their relative fair values. 

We perform our annual goodwill impairment test as of October 1 and monitor for interim triggering events on an ongoing basis.  Goodwill is reviewed for impairment utilizing either a qualitative assessment or a quantitative goodwill impairment test.  If we choose to perform a qualitative assessment and determine the fair value more likely than not exceeds the carrying value, no further evaluation is necessary.  For reporting units where we perform the quantitative goodwill impairment test, we compare the fair value of each reporting unit, which we primarily determine using an income approach based on the present value of discounted cash flows, to the respective carrying value, which includes goodwill.  If the fair value of the reporting unit exceeds its carrying value, the goodwill is not considered impaired.  Beginning in 2017, if the carrying value is higher than the fair value, the difference would be recognized as an impairment loss. Prior to 2017, a two-step process was used. For reporting units where we performed the two-step process, the first step required us to compare the fair value of each reporting unit, which we primarily determined using an income approach based on the present value of discounted cash flows, to the respective carrying value, which includes goodwill. If the fair value of the reporting unit exceeded its carrying value, the goodwill was not considered impaired. If the carrying value was higher than the fair value, there was an indication that an impairment may have existed and the second step was required.  In step two, the implied fair value of goodwill was calculated as the excess of the fair value of a reporting unit over the fair values assigned to its assets and liabilities.  If the implied fair value of goodwill was less than the carrying value of the reporting unit’s goodwill, the difference was recognized as an impairment loss.  See Note 10 for further details.
Estimates in Financial Statements, Policy
I.
Estimates in financial statements
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts. The more significant estimates include: residual values for leased assets; fair values for goodwill impairment tests; warranty liability; stock-based compensation and reserves for product liability and insurance losses, postretirement benefits, post-sale discounts, credit losses and income taxes.
v3.10.0.1
Sales and revenue recognition sales and revenue recognition (Policies)
 12 Months Ended
Dec. 31, 2018
Revenue from Contract with Customer [Abstract]  
Revenue Recognition, Policy [Policy Text Block]
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 transfer of control criteria as Machinery, Energy & Transportation sales noted above.  At the time of sale, the deposit is recognized in Other current liabilities in Statement 3, and the core to be returned is recognized as an asset in Prepaid expenses and other current assets in Statement 3 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 asset is then transferred into 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 Statement 3, 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 Statement 3, which represents our right to recover replacement parts we expect will be returned. We also recognize a refund liability in Other current liabilities in Statement 3 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 Statement 3. See Note 7 for further information. Trade receivables from dealers and end users were $7,743 million and $6,399 million as of December 31, 2018 and January 1, 2018, respectively, and are recognized in Receivables – trade and other in Statement 3. Long-term trade receivables from dealers and end users were $674 million and $639 million as of December 31, 2018 and January 1, 2018, respectively, and are recognized in Long-term receivables – trade and other in Statement 3.

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 Statement 3. Long-term customer advances recognized in Other liabilities in Statement 3 were $437 million and $396 million as of December 31, 2018 and January 1, 2018, respectively. We reduce the contract liability when revenue is recognized. During 2018, we recognized $1,294 million 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 December 31, 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 $5.8 billion, of which $2.5 billion is expected to be completed and revenue recognized in the twelve months following December 31, 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 21 for further discussion of our product warranty liabilities.

See Note 23 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 7 for more information.

Revenues are presented net of sales and other related taxes.
v3.10.0.1
Derivative financial instruments and risk management (Policies)
 12 Months Ended
Dec. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Risk Management, Policy
A.
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 December 31, 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 December 31, 2018, $8 million of deferred net losses, net of tax, included in equity (AOCI in Statement 3), are expected to be reclassified to current earnings (Other income (expense) in Statement 1) 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.
 
B.
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.
 
C.
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.
v3.10.0.1
Operations and summary of significant accounting policies (Tables)
 12 Months Ended
Dec. 31, 2018
Variable Interest Entity, Not Primary Beneficiary, Disclosures [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:

 
 
December 31,
(Millions of dollars)
 
2018
 
2017
 
Receivables - trade and other
 
$
31

 
$
34

 
Receivables - finance
 
45

 
42

 
Long-term receivables - finance
 
26

 
38

 
Investments in unconsolidated affiliated companies
 
29

 
39

 
Guarantees 1
 
—

 
259

 
Total
 
$
131

 
$
412

 
 
 
 
 
 
 
1 Related contract was terminated during the first quarter of 2018. No payments were made under the guarantee.
 
 
 
 
 
 
 
 
 
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]
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
 
Year Ended December 31, 2018
 
 
As Reported
 
Previous Accounting Guidance
 
Impact from Adopting New Revenue Guidance
(Millions of dollars)
 
 
 
 
 
 
Sales of Machinery, Energy & Transportation
 
$
51,822

 
$
51,814

 
$
8

Cost of goods sold
 
$
36,997

 
$
37,007

 
$
(10
)
Other operating (income) expenses
 
$
1,382

 
$
1,388

 
$
(6
)
Operating profit
 
$
8,293

 
$
8,269

 
$
24

Consolidated profit before taxes
 
$
7,822

 
$
7,798

 
$
24

Provision (benefit) for income taxes
 
$
1,698

 
$
1,693

 
$
5

Profit of consolidated companies
 
$
6,124

 
$
6,105

 
$
19

Profit of consolidated and affiliated companies
 
$
6,148

 
$
6,129

 
$
19

Profit
 
$
6,147

 
$
6,128

 
$
19

 
 
 
 
 
 
 
Consolidated Statement of Financial Position
 
December 31, 2018
 
 
As Reported
 
Previous Accounting Guidance
 
Impact from Adopting New Revenue Guidance
(Millions of dollars)
 
 
 
 
 
 
Assets
 
 
 
 
 
 
Receivables - trade and other
 
$
8,802

 
$
8,865

 
$
(63
)
Prepaid expenses and other current assets
 
$
1,765

 
$
1,405

 
$
360

Inventories
 
$
11,529

 
$
11,523

 
$
6

Noncurrent deferred and refundable income taxes
 
$
1,439

 
$
1,442

 
$
(3
)
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
Accrued expenses
 
$
3,573

 
$
3,341

 
$
232

Customer advances
 
$
1,243

 
$
1,182

 
$
61

 
 
 
 
 
 
 
Shareholders' equity
 
 
 
 
 
 
Profit employed in the business
 
$
30,427

 
$
30,420

 
$
7

 
 
 
 
 
 
 
Schedule of new accounting guidance -Pension [Table Text Block]
Consolidated Statement of Results of Operations
 
 
 
 
 
 
 
 
Year Ended
December 31, 2017
(Millions of dollars)
 
As Revised
 
Previously Reported
 
Effect of Change
Cost of goods sold
 
$
31,260

 
$
31,049

 
$
211

Selling, general and administrative expenses
 
$
4,999

 
$
5,177

 
$
(178
)
Research and development expenses
 
$
1,842

 
$
1,905

 
$
(63
)
Other operating (income) expenses
 
$
2,255

 
$
2,279

 
$
(24
)
Total operating costs
 
$
41,002

 
$
41,056

 
$
(54
)
Operating profit
 
$
4,460

 
$
4,406

 
$
54

Other income (expense)
 
$
153

 
$
207

 
$
(54
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended
December 31, 2016

 
As Revised
 
Previously Reported
 
Effect of Change
Cost of goods sold
 
$
28,044

 
$
28,309

 
$
(265
)
Selling, general and administrative expenses
 
$
4,383

 
$
4,686

 
$
(303
)
Research and development expenses
 
$
1,853

 
$
1,951

 
$
(98
)
Other operating (income) expenses
 
$
1,904

 
$
1,902

 
$
2

Total operating costs
 
$
37,375

 
$
38,039

 
$
(664
)
Operating profit
 
$
1,162

 
$
498

 
$
664

Other income (expense)
 
$
(518
)
 
$
146

 
$
(664
)
 
 
 
 
 
 
 
v3.10.0.1
Stock-based compensation (Tables)
 12 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
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 Option/SAR awards for the years ended December 31, 2018, 2017 and 2016, respectively.

 
Grant Year
 
2018
 
2017
 
2016
Weighted-average dividend yield
2.7
%
 
3.4
%
 
3.2
%
Weighted-average volatility
30.2
%
 
29.2
%
 
31.1
%
Range of volatilities
21.5-33.0%

 
22.1-33.0%

 
22.5-33.4%

Range of risk-free interest rates
2.02-2.87%

 
0.81-2.35%

 
0.62-1.73%

Weighted-average expected lives
8 years

 
8 years

 
8 years

 
 
 
 
 
 
Schedule of stock-based compensation activity
Please refer to Tables I and II below for additional information on our stock-based compensation awards.  

TABLE I — Financial Information Related to Stock-based Compensation
 
 
 
 
 
 
 
Stock options / SARs
 
RSUs
 
PRSUs
 
Shares
 
Weighted-
 Average
 Exercise
 Price
 
Shares
 
Weighted-
Average
Grant Date Fair Value
 
Shares
 
Weighted-
Average
Grant Date Fair Value
 
 

 
 

 
 

 
 

 
 

 
 

Outstanding at January 1, 2018
21,499,895

 
$
86.86

 
1,964,517

 
$
80.04

 
1,006,991

 
$
74.06

Granted to officers and key employees 1
1,605,220

 
$
150.85

 
734,732

 
$
150.58

 
350,724

 
$
150.98

Exercised
(5,156,489
)
 
$
87.90

 
—

 
$
—

 
—

 
$
—

Vested
—

 
$
—

 
(1,065,853
)
 
$
78.11

 
(549,330
)
 
$
127.07

Forfeited / expired
(106,957
)
 
$
151.13

 
(67,326
)
 
$
113.29

 
(73,086
)
 
$
100.30

Outstanding at December 31, 2018
17,841,669

 
$
91.93

 
1,566,070

 
$
112.99

 
735,299

 
$
115.18

Exercisable at December 31, 2018
13,858,401

 
$
86.05

 
 
 
 
 
 
 
 

Stock options/SARs outstanding and exercisable as of December 31, 2018:
 
 
 
 
 
 
 
Outstanding
 
Exercisable
Exercise Prices
 
Shares Outstanding at 12/31/18
 
Weighted-
 Average
 Remaining
 Contractual Life (Years)
 
Weighted-
 Average
 Exercise Price
 
Aggregate
 Intrinsic Value 2
 
Shares Outstanding at 12/31/18
 
Weighted-
 Average
 Remaining
Contractual Life (Years)
 
Weighted-
 Average
 Exercise Price
 
Aggregate
 Intrinsic Value 2
$22.17-57.85
 
973,032

 
1.04
 
$
53.08

 
$
72

 
973,032

 
0.96
 
$
53.08

 
$
72

$74.77-89.75
 
8,954,712

 
6.27
 
$
81.25

 
410

 
8,186,590

 
6.17
 
$
81.86

 
370

$95.66-96.31
 
4,573,457

 
6.90
 
$
95.96

 
142

 
2,856,943

 
6.06
 
$
96.13

 
88

$102.13-110.09
 
1,840,740

 
2.75
 
$
106.38

 
38

 
1,840,740

 
2.75
 
$
106.38

 
38

$138.51-151.12
 
1,499,728

 
9.32
 
$
150.84

 
—

 
1,096

 
9.30
 
$
151.12

 
—

 
 
17,841,669

 
 
 
$
91.93

 
$
662

 
13,858,401

 
 
 
$
86.05

 
$
568


1 
No SARs were granted during the year ended December 31, 2018.
2 
The difference between a stock award’s exercise price and the underlying stock’s closing market price at December 31, 2018, for awards with market price greater than the exercise price. Amounts are in millions of dollars.
 
 
 
 
 
Schedule of financial information related to stock-based compensation
TABLE II— Additional Stock-based Award Information
 
 
 
 
 
 
 
(Dollars in millions except per share data)
 
2018
 
2017
 
2016
Stock options/SARs activity:
 
 

 
 

 
 

Weighted-average fair value per share of stock awards granted
 
$
46.09

 
$
25.01

 
$
20.64

Intrinsic value of stock awards exercised
 
$
348

 
$
504

 
$
185

Fair value of stock awards vested 1
 
$
86

 
$
191

 
$
163

Cash received from stock awards exercised
 
$
370

 
$
629

 
$
30

 
 
 
 
 
 
 
RSUs activity:
 
 

 
 

 
 

Weighted-average fair value per share of stock awards granted
 
$
150.58

 
$
90.11

 
$
68.04

Fair value of stock awards vested 2
 
$
180

 
$
189

 
$
162

 
 
 
 
 
 
 
PRSUs activity:
 
 

 
 

 
 

Weighted-average fair value per share of stock awards granted
 
$
150.98

 
$
86.78

 
$
64.71

Fair value of stock awards vested 2
 
$
70

 
$
20

 
$
—

 
1 
Based on the grant date fair value.
2 
Based on the underlying stock's closing market price on the vesting date.
 
 
 
 
 
v3.10.0.1
Derivative financial instruments and risk management (Tables)
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]    
Location and fair value of derivative instruments reported in the Consolidated Financial Position
The location and fair value of derivative instruments reported in Statement 3 are as follows: 

 
Consolidated
 Statement of Financial Position Location
 
Asset (Liability) Fair Value
(Millions of dollars)
 
 
Years ended December 31,
 
 
 
2018
 
2017
Designated derivatives
 
 
 

 
 

Foreign exchange contracts
 
 
 

 
 

Machinery, Energy & Transportation
Receivables — trade and other
 
$
16

 
$
8

Machinery, Energy & Transportation
Long-term receivables — trade and other
 
—

 
4

Machinery, Energy & Transportation
Accrued expenses
 
(26
)
 
(14
)
Machinery, Energy & Transportation
Other liabilities
 
(9
)
 
(2
)
Financial Products
Receivables — trade and other
 
53

 
—

Financial Products
Long-term receivables — trade and other
 
35

 
7

Financial Products
Accrued expenses
 
(9
)
 
(57
)
Interest rate contracts
 
 
 

 
 

Financial Products
Receivables — trade and other
 
1

 
—

Financial Products
Long-term receivables — trade and other
 
3

 
3

Financial Products
Accrued expenses
 
(40
)
 
(2
)
 
 
 
$
24

 
$
(53
)
 
 
 
 
 
 
Undesignated derivatives
 
 
 

 
 

Foreign exchange contracts
 
 
 

 
 

Machinery, Energy & Transportation
Receivables — trade and other
 
$
2

 
$
19

Machinery, Energy & Transportation
Accrued expenses
 
(21
)
 
(9
)
Financial Products
Receivables — trade and other
 
15

 
12

Financial Products
Long-term receivables — trade and other
 
5

 
—

Financial Products
Accrued expenses
 
(14
)
 
(9
)
Commodity contracts
 
 
 

 
 

Machinery, Energy & Transportation
Receivables — trade and other
 
1

 
21

Machinery, Energy & Transportation
Accrued expenses
 
(31
)
 
—

 
 
 
$
(43
)
 
$
34

 
 
 
 
 
 
  
Total notional amounts of derivative instruments
The total notional amounts of the derivative instruments are as follows:

 
Years ended December 31,
(Millions of dollars)
 
2018
 
2017
 
 
 
 
 
Machinery, Energy & Transportation
 
$
1,834

 
$
3,190

Financial Products
 
$
10,210

 
$
3,691

 
 
 
 
 
  
Effect of derivatives designated as hedging instruments on Consolidated Results of Operations
 
 
 
 
 
 
 

The effect of derivatives designated as hedging instruments on Statement 1 is as follows: 
 
 
 
 
 
Cash Flow Hedges
 
 
 
 
 
 
 
 
 
(Millions of dollars)
 
Year ended December 31, 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
 
$
(47
)
 
Other income (expense)
 
$
(33
)
 
$
—

 
Financial Products
 
165

 
Other income (expense)
 
148

 
—

 
Financial Products
 
—

 
Interest expense of Financial Products
 
19

 
—

 
Interest rate contracts
 
 

 
 
 
 

 
 

 
Machinery, Energy & Transportation
 
—

 
Interest expense excluding Financial Products
 
(3
)
 
—

 
Financial Products
 
(38
)
 
Interest expense of Financial Products
 
—

 
—

 
 
 
$
80

 
 
 
$
131

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 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)
 
$
(40
)
 
$
—

 
Financial Products
 
(77
)
 
Other income (expense)
 
(81
)
 
—

 
Financial Products
 
—

 
Interest expense of Financial Products
 
6

 
—

 
Interest rate contracts
 
 

 
 
 
 

 
 

 
Machinery, Energy & Transportation
 
—

 
Interest expense excluding Financial Products
 
(9
)
 
—

 
Financial Products
 
—

 
Interest expense of Financial Products
 
3

 
—

 
 
 
$
(5
)
 
 
 
$
(121
)
 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2016
 
 
 
 
 
Recognized in Earnings
 
 
 
Amount of
Gains (Losses) Recognized in AOCI (Effective Portion)
 
Classification of
 Gains (Losses)
 
Amount of
Gains (Losses)
Reclassified
from AOCI to
Earnings
 
Recognized in Earnings (Ineffective Portion)
 
Foreign exchange contracts
 
 
 
 
 
 
 
 
 
Machinery, Energy & Transportation
 
$
(118
)
 
Other income (expense)
 
$
(14
)
 
$
—

 
Financial Products
 
15

 
Other income (expense)
 
28

 
—

 
Interest rate contracts
 
 

 
 
 
 

 
 

 
Machinery, Energy & Transportation
 
—

 
Interest expense excluding Financial Products
 
(6
)
 
—

 
Financial Products
 
8

 
Interest expense of Financial Products
 
(3
)
 
—

 
 
 
$
(95
)
 
 
 
$
5

 
$
—

 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
  
Effect of derivatives not designated as hedging instruments on the Consolidated Results of Operations
The effect of derivatives not designated as hedging instruments on Statement 1 is as follows: 

 
 
 
 
Years ended December 31,
(Millions of dollars)
 
Classification of Gains (Losses)
 
2018
 
2017
 
2016
Foreign exchange contracts
 
 
 
 

 
 

 
 

Machinery, Energy & Transportation
 
Other income (expense)
 
$
(54
)
 
$
72

 
$
(4
)
Financial Products
 
Other income (expense)
 
19

 
9

 
(24
)
Interest rate contracts
 
 
 
 

 
 

 
 

Machinery, Energy & Transportation
 
Other income (expense)
 
—

 
—

 
2

Commodity contracts
 
 
 
 

 
 

 
 

Machinery, Energy & Transportation
 
Other income (expense)
 
(39
)
 
30

 
16

 
 
 
 
$
(74
)
 
$
111

 
$
(10
)
 
 
 
 
 
 
 
 
 
  
Effect of net settlement provisions of the master netting agreements on derivative assets
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:

December 31, 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
 
$
19

 
$
—

 
$
19

 
$
(19
)
 
$
—

 
$
—

 
Financial Products
 
112

 
—

 
112

 
(34
)
 
—

 
78

 
 Total
 
$
131

 
$
—

 
$
131

 
$
(53
)
 
$
—

 
$
78

 

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

 
Effect of net settlement provisions of the master netting agreements on derivative liabilities

December 31, 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
 
$
(87
)
 
$
—

 
$
(87
)
 
$
19

 
$
—

 
$
(68
)
 
Financial Products
 
(63
)
 
—

 
(63
)
 
34

 
—

 
(29
)
 
 Total
 
$
(150
)
 
$
—

 
$
(150
)
 
$
53

 
$
—

 
$
(97
)
 

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
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
v3.10.0.1
Other income (expense) (Tables)
 12 Months Ended
Dec. 31, 2018
Other Income and Expenses [Abstract]  
Other income (expense)
 
 
Years ended December 31,
 
(Millions of dollars)
 
2018
 
2017
 
2016
 
Investment and interest income
 
$
195

 
$
122

 
$
74

 
Foreign exchange gains (losses) 1 
 
(201
)
 
(213
)
 
(57
)
 
License fee income
 
125

 
100

 
92

 
Gains (losses) on sale of securities and affiliated companies
 
4

 
187

2 
47

 
Net periodic pension and OPEB income (cost), excluding service cost
 
(118
)
 
(54
)
 
(664
)
 
Gains (losses) on equity securities measured at fair value3
 
(33
)
 
—

 
—

 
Miscellaneous income (loss)
 
(39
)
 
11

 
(10
)
 
Total
 
$
(67
)
 
$
153

 
$
(518
)
 

1 
Includes gains (losses) from foreign exchange derivative contracts.  See Note 4 for further details.
2 
Includes pretax gain of $85 million related to the sale of Caterpillar's equity interest in Iron Planet Holdings Inc.
3 Beginning January 1, 2018, the unrealized gains and losses arising from the revaluation of equity securities are included in Other income (expense) in Statement 1. See Note 1J for additional information.
 
 
 
 
 
v3.10.0.1
Income taxes (Tables)
 12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
Reconciliation of the U.S. federal statutory rate to effective rate
Reconciliation of the U.S. federal statutory rate to effective rate:

 
 
Years ended December 31,
(Millions of dollars)
 
2018
 
2017
 
2016
Taxes at U.S. statutory rate
 
$
1,643

 
21.0
 %
 
$
1,429

 
35.0
 %
 
$
49

 
35.0
 %
(Decreases) increases resulting from:
 
 

 
 

 
 

 
 

 
 

 
 

Non-U.S. subsidiaries taxed at other than the U.S. rate
 
282

 
3.6
 %
 
(282
)
 
(6.9
)%
 
(119
)
 
(85.6
)%
State and local taxes, net of federal 1
 
22

 
0.3
 %
 
27

 
0.7
 %
 
(1
)
 
(0.7
)%
Interest and penalties, net of tax
 
33

 
0.4
 %
 
28

 
0.7
 %
 
24

 
17.2
 %
U.S. tax incentives
 
(106
)
 
(1.3
)%
 
(52
)
 
(1.3
)%
 
(52
)
 
(37.4
)%
ESOP dividend tax benefit
 
(12
)
 
(0.2
)%
 
(21
)
 
(0.5
)%
 
(27
)
 
(19.4
)%
Net excess tax benefits from stock-based compensation
 
(56
)
 
(0.7
)%
 
(64
)
 
(1.6
)%
 
—

 
—
 %
U.S. deferred tax rate change
 
(154
)
 
(2.0
)%
 
596

 
14.6
 %
 
—

 
—
 %
Mandatory deemed repatriation of non-U.S. earnings
 
50

 
0.7
 %
 
1,775

 
43.5
 %
 
—

 
—
 %
Valuation allowances
 
(29
)
 
(0.4
)%
 
(111
)
 
(2.7
)%
 
141

 
101.4
 %
Nondeductible goodwill 2
 
—

 
—
 %
 
—

 
—
 %
 
191

 
137.4
 %
Other—net
 
25

 
0.3
 %
 
14

 
0.3
 %
 
(14
)
 
(10.1
)%
Provision (benefit) for income taxes
 
$
1,698

 
21.7
 %
 
$
3,339

 
81.8
 %
 
$
192

 
137.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Excludes amounts included in valuation allowances and mandatory deemed repatriation of non-U.S. earnings.
 
 
2 Portion of Surface Mining & Technology goodwill impairment not deductible for tax purposes. See Note 10 for further discussion.
Components of profit (loss) before taxes
The components of profit (loss) before taxes were: 
 
 
 
 
 
 
 
 
Years ended December 31,
(Millions of dollars)
 
2018
 
2017
 
2016
U.S.
 
$
2,131

 
$
240

 
$
(2,053
)
Non-U.S.
 
5,691

 
3,842

 
2,192

 
 
$
7,822

 
$
4,082

 
$
139

 
 
 
 
 
 
 
Components of the provision (benefit) for income taxes
The components of the provision (benefit) for income taxes were:
 
 
 
 
 
 
 
 
Years ended December 31,
(Millions of dollars)
 
2018
 
2017
 
2016
Current tax provision (benefit):
 
 

 
 

 
 

U.S.1
 
$
179

 
$
963

 
$
(90
)
Non-U.S.
 
1,291

 
1,124

 
718

State (U.S.)
 
8

 
39

 
(5
)
 
 
1,478

 
2,126

 
623

 
 
 
 
 
 
 
Deferred tax provision (benefit):
 
 

 
 

 
 

U.S.1
 
298

 
1,385

 
(544
)
Non-U.S.
 
4

 
(17
)
 
(108
)
State (U.S.)
 
(82
)
 
(155
)
 
221

 
 
220

 
1,213

 
(431
)
Total provision (benefit) for income taxes
 
$
1,698

 
$
3,339

 
$
192

1 Includes U.S. taxes related to non-U.S. earnings. We account for U.S. taxes on global intangible low-taxed income as a period cost.
 
Deferred income tax assets and liabilities
The amount of deferred income taxes at December 31, included on the following lines in Statement 3, are as follows:
 
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
Assets:
 
 

 
 

Noncurrent deferred and refundable income taxes
 
$
1,363

 
$
1,569

Liabilities:
 
 

 
 

Other liabilities
 
331

 
281

Deferred income taxes—net
 
$
1,032

 
$
1,288

 
 
 
 
 
 
Deferred income tax assets and liabilities:
 
 
 
 
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
Deferred income tax assets:
 
 

 
 

Tax carryforwards
 
$
1,312

 
$
1,286

Pension
 
785

 
980

Postemployment benefits other than pensions
 
793

 
841

Warranty reserves
 
237

 
226

Stock-based compensation
 
121

 
135

Allowance for credit losses
 
155

 
149

Post sale discounts
 
158

 
160

Other employee compensation and benefits
 
186

 
203

Other—net
 
298

 
302

 
 
4,045

 
4,282

 
 
 
 
 
Deferred income tax liabilities:
 
 

 
 

Capital and intangible assets
 
(1,381
)
 
(1,360
)
Bond discount
 
(127
)
 
(133
)
Translation
 
(190
)
 
(165
)
Other outside basis differences
 
(271
)
 
(205
)
Undistributed profits of non-U.S. subsidiaries
 
(129
)
 
(138
)
 
 
(2,098
)
 
(2,001
)
Valuation allowance for deferred tax assets
 
(915
)
 
(993
)
Deferred income taxes—net
 
$
1,032

 
$
1,288

 
 
 
 
 
 
Summary of net operating loss carryforwards
At December 31, 2018, amounts and expiration dates of net operating loss carryforwards in various non-U.S. taxing jurisdictions were:
 
(Millions of dollars)
2019
 
2020
 
2021
 
2022-2024
 
2025-2039
 
Unlimited
 
Total
$
23

 
$
124

 
$
92

 
$
147

 
$
506

 
$
3,597

 
$
4,489

 
Reconciliation of unrecognized tax benefits
Reconciliation of unrecognized tax benefits: 1
 
 
 
 
 
 
 
 
Years ended December 31,
(Millions of dollars)
 
2018
 
2017
 
2016
Balance at January 1,
 
$
1,286

 
$
1,032

 
$
968

 
 
 
 
 
 
 
Additions for tax positions related to current year
 
61

 
270

 
73

Additions for tax positions related to prior years
 
461

 
20

 
55

Reductions for tax positions related to prior years
 
(5
)
 
(27
)
 
(36
)
Reductions for settlements 2 
 
(6
)
 
(9
)
 
(24
)
Reductions for expiration of statute of limitations
 
(1
)
 
—

 
(4
)
 
 
 
 
 
 
 
Balance at December 31,
 
$
1,796

 
$
1,286

 
$
1,032

 
 
 
 
 
 
 
Amount that, if recognized, would impact the effective tax rate
 
$
1,716

 
$
1,209

 
$
963


1 
Foreign currency impacts are included within each line as applicable.
2 
Includes cash payment or other reduction of assets to settle liability.
 
 
 
 
 
v3.10.0.1
Cat Financial Financing Activities (Tables)
 12 Months Ended
Dec. 31, 2018
Receivables [Abstract]  
Contractual maturities of outstanding wholesale inventory receivables
Contractual maturities of outstanding wholesale inventory receivables:
(Millions of dollars)
 
December 31, 2018
Amounts Due In
 
Wholesale
Loans
 
Wholesale
Leases
 
Total
2019
 
$
564

 
$
70

 
$
634

2020
 
229

 
48

 
277

2021
 
157

 
30

 
187

2022
 
71

 
16

 
87

2023
 
21

 
6

 
27

Thereafter
 
16

 
3

 
19

Total
 
1,058

 
173

 
1,231

Guaranteed residual value
 
—

 
66

 
66

Unguaranteed residual value
 
—

 
35

 
35

Less: Unearned income
 
(8
)
 
(16
)
 
(24
)
Total
 
$
1,050

 
$
258

 
$
1,308

 
 
 
 
 
 
 
Contractual maturities of outstanding finance receivables
Finance receivables are receivables of Cat Financial and are reported in Statement 3 net of an allowance for credit losses.
 
Contractual maturities of outstanding finance receivables:
(Millions of dollars)
 
December 31, 2018
Amounts Due In
 
Retail
Loans
 
Retail
Leases
 
Total
2019
 
$
5,769

 
$
2,981

 
$
8,750

2020
 
3,742

 
2,026

 
5,768

2021
 
2,560

 
1,073

 
3,633

2022
 
1,750

 
453

 
2,203

2023
 
833

 
166

 
999

Thereafter
 
683

 
56

 
739

Total
 
15,337

 
6,755

 
22,092

Guaranteed residual value
 
—

 
392

 
392

Unguaranteed residual value
 
—

 
822

 
822

Less: Unearned income
 
(252
)
 
(628
)
 
(880
)
Total
 
$
15,085

 
$
7,341

 
$
22,426

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses and recorded investment in finance receivables
An analysis of the allowance for credit losses was as follows:
(Millions of dollars)
 
December 31, 2018
 
 
Customer
 
Dealer
 
Total
Allowance for Credit Losses:
 
 

 
 

 
 

Balance at beginning of year
 
$
353

 
$
9

 
$
362

Receivables written off
 
(235
)
 
—

 
(235
)
Recoveries on receivables previously written off
 
46

 
—

 
46

Provision for credit losses
 
337

 
12

 
349

Other
 
(15
)
 
—

 
(15
)
Balance at end of year
 
$
486

 
$
21

 
$
507

 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
288

 
$
14

 
$
302

Collectively evaluated for impairment
 
198

 
7

 
205

Ending Balance
 
$
486

 
$
21

 
$
507

 
 
 
 
 
 
 
Recorded Investment in Finance Receivables:
 
 

 
 

 
 

Individually evaluated for impairment
 
$
858

 
$
78

 
$
936

Collectively evaluated for impairment
 
18,152

 
3,338

 
21,490

Ending Balance
 
$
19,010

 
$
3,416

 
$
22,426

 
 
 
 
 
 
 
 
(Millions of dollars)
 
December 31, 2017
 
 
Customer
 
Dealer
 
Total
Allowance for Credit Losses:
 
 

 
 

 
 

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 loans and finance leases
In determining past-due status, Cat Financial considers the entire recorded investment in finance receivable past due when any installment is over 30 days past due. The tables below summarize the recorded investment of finance receivables by aging category.

(Millions of dollars)
 
December 31, 2018
 
 
31-60 Days Past Due
 
61-90 Days Past Due
 
91+
Days Past Due
 
Total Past
Due
 
Current
 
Total
Finance
Receivables
 
91+ Still
Accruing
Customer
 
 

 
 

 
 

 
 

 
 

 
 

 
 

North America
 
$
65

 
$
18

 
$
84

 
$
167

 
$
7,825

 
$
7,992

 
$
14

Europe
 
19

 
9

 
153

 
181

 
2,850

 
3,031

 
5

Asia Pacific
 
24

 
9

 
8

 
41

 
2,409

 
2,450

 
5

Mining
 
28

 
1

 
9

 
38

 
1,642

 
1,680

 
—

Latin America
 
38

 
29

 
71

 
138

 
1,421

 
1,559

 
—

Caterpillar Power Finance
 
10

 
1

 
384

 
395

 
1,903

 
2,298

 
—

Dealer
 
 

 
 

 
 

 
 
 
 

 
 
 
 

North America
 
—

 
—

 
—

 
—

 
1,895

 
1,895

 
—

Europe
 
—

 
—

 
—

 
—

 
333

 
333

 
—

Asia Pacific
 
—

 
—

 
—

 
—

 
466

 
466

 
—

Mining
 
—

 
—

 
—

 
—

 
4

 
4

 
—

Latin America
 
—

 
—

 
78

 
78

 
638

 
716

 
—

Caterpillar Power Finance
 
—

 
—

 
—

 
—

 
2

 
2

 
—

Total
 
$
184

 
$
67

 
$
787

 
$
1,038

 
$
21,388

 
$
22,426

 
$
24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Millions of dollars)
 
December 31, 2017
 
 
31-60 Days Past Due
 
61-90 Days Past Due
 
91+
Days Past Due
 
Total Past
Due
 
Current
 
Total
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: 

 
December 31, 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
$
10

 
$
10

 
$
—

 
$
19

 
$
19

 
$
—

Europe
1

 
1

 
—

 
45

 
45

 
—

Asia Pacific
—

 
—

 
—

 
34

 
33

 
—

Mining
33

 
33

 
—

 
121

 
121

 
—

Latin America
29

 
29

 
—

 
45

 
45

 
—

Caterpillar Power Finance
69

 
83

 
—

 
160

 
172

 
—

Total
$
142

 
$
156

 
$
—

 
$
424

 
$
435

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
Impaired Finance Receivables With An Allowance Recorded
 

 
 

 
 

 
 

 
 

 
 

North America
$
40

 
$
41

 
$
14

 
$
44

 
$
43

 
$
17

Europe
92

 
92

 
57

 
9

 
8

 
5

Asia Pacific
4

 
4

 
2

 
8

 
8

 
2

Mining
56

 
55

 
26

 
—

 
—

 
—

Latin America
75

 
75

 
25

 
95

 
106

 
42

Caterpillar Power Finance
449

 
455

 
164

 
362

 
365

 
83

Total
$
716

 
$
722

 
$
288

 
$
518

 
$
530

 
$
149

 
 
 
 
 
 
 
 
 
 
 
 
Total Impaired Finance Receivables
 

 
 

 
 

 
 

 
 

 
 

North America
$
50

 
$
51

 
$
14

 
$
63

 
$
62

 
$
17

Europe
93

 
93

 
57

 
54

 
53

 
5

Asia Pacific
4

 
4

 
2

 
42

 
41

 
2

Mining
89

 
88

 
26

 
121

 
121

 
—

Latin America
104

 
104

 
25

 
140

 
151

 
42

Caterpillar Power Finance
518

 
538

 
164

 
522

 
537

 
83

Total
$
858

 
$
878

 
$
288

 
$
942

 
$
965

 
$
149

 
 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 

 
 
Years ended December 31,
 
 
2018
 
2017
 
2016
(Millions of dollars)
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Impaired Finance Receivables With No Allowance Recorded
 
 

 
 

 
 

 
 

 
 
 
 
North America
 
$
16

 
$
1

 
$
13

 
$
1

 
$
18

 
$
1

Europe
 
14

 
—

 
48

 
1

 
46

 
1

Asia Pacific
 
27

 
3

 
24

 
2

 
2

 
—

Mining
 
57

 
2

 
126

 
7

 
98

 
4

Latin America
 
38

 
2

 
64

 
3

 
47

 
1

Caterpillar Power Finance
 
130

 
7

 
221

 
9

 
270

 
11

Total
 
$
282

 
$
15

 
$
496

 
$
23

 
$
481

 
$
18

 
 
 
 
 
 
 
 
 
 
 
 
 
Impaired Finance Receivables With An Allowance Recorded
 
 

 
 

 
 

 
 

 
 
 
 
North America
 
$
49

 
$
2

 
$
49

 
$
1

 
$
34

 
$
—

Europe
 
53

 
2

 
6

 
—

 
11

 
1

Asia Pacific
 
4

 
—

 
31

 
2

 
37

 
3

Mining
 
46

 
3

 
—

 
—

 
13

 
—

Latin America
 
67

 
3

 
99

 
4

 
66

 
2

Caterpillar Power Finance
 
378

 
12

 
180

 
6

 
50

 
1

Total
 
$
597

 
$
22

 
$
365

 
$
13

 
$
211

 
$
7

 
 
 
 
 
 
 
 
 
 
 
 
 
Total Impaired Finance Receivables
 
 

 
 

 
 

 
 

 
 
 
 
North America
 
$
65

 
$
3

 
$
62

 
$
2

 
$
52

 
$
1

Europe
 
67

 
2

 
54

 
1

 
57

 
2

Asia Pacific
 
31

 
3

 
55

 
4

 
39

 
3

Mining
 
103

 
5

 
126

 
7

 
111

 
4

Latin America
 
105

 
5

 
163

 
7

 
113

 
3

Caterpillar Power Finance
 
508

 
19

 
401

 
15

 
320

 
12

Total
 
$
879

 
$
37

 
$
861

 
$
36

 
$
692

 
$
25

 
 
 
 
 
 
 
 
 
 
 
 
 
Investment in loans and finance leases on non-accrual status
The recorded investment in Customer finance receivable on non-accrual status was as follows:

 
 
December 31,
(Millions of dollars)
 
2018
 
2017
North America
 
$
77

 
$
38

Europe
 
154

 
37

Asia Pacific
 
4

 
10

Mining
 
50

 
63

Latin America
 
106

 
192

Caterpillar Power Finance
 
416

 
343

Total
 
$
807

 
$
683

 
 
 
 
 
TDR tables
Cat Financial's recorded investment in finance receivables in the Customer portfolio segment modified as TDRs during the years ended December 31, 2018, 2017 and 2016 were as follows: 

(Millions of dollars)
 
Year ended December 31, 2018
 
 
 
Number
 of Contracts
 
Pre-TDR
 Recorded
Investment
 
Post-TDR
Recorded
Investment
 
North America
 
38

 
$
21

 
$
21

 
Europe 
 
—

 
—

 
—

 
Asia Pacific
 
—

 
—

 
—

 
Mining
 
1

 
29

 
29

 
Latin America
 
1

 
3

 
3

 
Caterpillar Power Finance 
 
12

 
133

 
99

 
Total
 
52

 
$
186

 
$
152

 
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2017
 
 
 
Number
 of Contracts
 
Pre-TDR 
Recorded
Investment
 
Post-TDR
Recorded
Investment
 
North America
 
43

 
$
34

 
$
35

 
Europe 
 
4

 
1

 
1

 
Asia Pacific
 
10

 
39

 
31

 
Mining
 
2

 
57

 
56

 
Latin America 
 
17

 
26

 
27

 
Caterpillar Power Finance 1
 
68

 
422

 
407

 
Total
 
144

 
$
579

 
$
557

 
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2016
 
 
 
Number
 of Contracts
 
Pre-TDR
 Recorded
Investment
 
Post-TDR
 Recorded
Investment
 
North America
 
25

 
$
25

 
$
25

 
Europe 
 
43

 
12

 
9

 
Asia Pacific
 
31

 
29

 
28

 
Mining
 
4

 
74

 
66

 
Latin America 2
 
437

 
118

 
82

 
Caterpillar Power Finance
 
34

 
196

 
177

 
Total
 
574

 
$
454

 
$
387

 
 
 
 
 
 
 
 
 
1 
In Caterpillar Power Finance, 48 contracts with a pre-TDR recorded investment of $265 million and a post-TDR recorded investment of $258 million were related to six customers.
2 
In Latin America, 321 contracts with a pre-TDR recorded investment of $94 million and a post-TDR recorded investment of $64 million were related to four customers.
 
 
 
 
 




TDRs in the Customer portfolio segment with a payment default (defined as 91+ days past due) during the years ended December 31, 2018, 2017 and 2016 which had been modified within twelve months prior to the default date, were as follows:
 
(Millions of dollars)
 
Year ended December 31, 2018
 
Year ended December 31, 2017
 
Year ended December 31, 2016
 
 
 
Number
of Contracts
 
Post-TDR
Recorded
Investment
 
Number
of Contracts
 
Post-TDR
Recorded
Investment
 
Number
of Contracts
 
Post-TDR
Recorded
Investment
 
North America
 
10

 
$
10

 
4

 
$
3

 
5

 
$
2

 
Europe
 
—

 
—

 
1

 
—

 
5

 
2

 
Asia Pacific
 
—

 
—

 
4

 
1

 
1

 
—

 
Latin America1
 
3

 
1

 
243

 
17

 
4

 
1

 
Caterpillar Power Finance
 
3

 
33

 
—

 
—

 
—

 
—

 
Total
 
16

 
$
44

 
252

 
$
21

 
15

 
$
5

 
1 
In Latin America, 238 contracts with a post-TDR recorded investment of $16 million were related to two customers for the year ended December 31, 2017.
 
 
 
 
 
v3.10.0.1
Inventories (Tables)
 12 Months Ended
Dec. 31, 2018
Inventory Disclosure [Abstract]  
Inventories
Inventories (principally using the LIFO method) are comprised of the following:
 
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
Raw materials
 
$
3,382

 
$
2,802

Work-in-process
 
2,674

 
2,254

Finished goods
 
5,241

 
4,761

Supplies
 
232

 
201

Total inventories
 
$
11,529

 
$
10,018

 
 
 
 
 
v3.10.0.1
Property, plant and equipment (Tables)
 12 Months Ended
Dec. 31, 2018
Property, Plant and Equipment [Abstract]  
Property, plant and equipment
 
 
 
 
December 31,
(Millions of dollars)
 
Useful
Lives (Years)
 
2018
 
2017
Land
 
—
 
$
671

 
$
664

Buildings and land improvements
 
20-45
 
6,977

 
7,515

Machinery, equipment and other
 
2-10
 
13,733

 
14,888

Software
 
3-7
 
1,703

 
1,745

Equipment leased to others
 
1-7
 
6,015

 
6,038

Construction-in-process
 
—
 
682

 
688

Total property, plant and equipment, at cost
 
 
 
29,781

 
31,538

Less: Accumulated depreciation
 
 
 
(16,207
)
 
(17,383
)
Property, plant and equipment–net
 
 
 
$
13,574

 
$
14,155

 
 
 
 
 
 
 
 
Assets recorded under capital leases
Assets recorded under capital leases: 1
 
 
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
Gross capital leases 2 
 
$
129

 
$
96

Less: Accumulated depreciation
 
(27
)
 
(19
)
Net capital leases
 
$
102

 
$
77

 
1 
Included in Property, plant and equipment table above.
2 
Consists primarily of machinery and equipment.
 
 
 
 
 
Scheduled minimum rental payments on assets recorded under capital leases
At December 31, 2018, scheduled minimum rental payments on assets recorded under capital leases were:
 
(Millions of dollars)
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
$
8

 
$
9

 
$
29

 
$
9

 
$
7

 
$
32

 
Equipment leased to others
Equipment leased to others (primarily by Cat Financial):
 
 
 
 
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
Equipment leased to others–at original cost
 
$
6,015

 
$
6,038

Less: Accumulated depreciation
 
(1,744
)
 
(1,656
)
Equipment leased to others–net
 
$
4,271

 
$
4,382

 
 
 
 
 
 
Scheduled minimum rental payments to be received for equipment leased to others
At December 31, 2018, scheduled minimum rental payments to be received for equipment leased to others were:
 
(Millions of dollars)
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
$
896

 
$
574

 
$
314

 
$
158

 
$
71

 
$
69
v3.10.0.1
Intangible assets and goodwill (Tables)
 12 Months Ended
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible assets
Intangible assets are comprised of the following:
 
 
 
 
 
December 31, 2018
(Millions of dollars)
 
Weighted
Amortizable
Life (Years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Customer relationships
 
15
 
$
2,463

 
$
(1,249
)
 
$
1,214

Intellectual property
 
11
 
1,557

 
(965
)
 
592

Other
 
13
 
199

 
(108
)
 
91

Total finite-lived intangible assets
 
14
 
$
4,219

 
$
(2,322
)
 
$
1,897

 
 
 
 
 
 
 
 
 
 
 
 
 
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
As of December 31, 2018, amortization expense related to intangible assets is expected to be: 

(Millions of dollars)
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
$
326

 
$
311

 
$
293

 
$
274

 
$
216

 
$
477

 
 
 
 
 
 
 
 
 
 
 
Goodwill
The changes in carrying amount of goodwill by reportable segment for the years ended December 31, 2018 and 2017 were as follows:

(Millions of dollars)
 
December 31, 2017
 
Acquisitions
 
Other Adjustments 1
 
December 31, 2018
Construction Industries
 
 
 
 
 
 
 
 
Goodwill
 
$
305

 
$
—

 
$
(1
)
 
$
304

Impairment
 
(22
)
 
—

 
—

 
(22
)
Net goodwill
 
283

 
—

 
(1
)
 
282

Resource Industries
 
 
 
 
 
 
 
 
Goodwill
 
4,232

 
—

 
(60
)
 
4,172

Impairment
 
(1,175
)
 
—

 
—

 
(1,175
)
Net goodwill
 
3,057

 
—

 
(60
)
 
2,997

Energy & Transportation
 
 
 
 
 
 
 
 
Goodwill
 
2,806

 
127

 
(51
)
 
2,882

All Other 2
 
 
 
 
 
 
 
 
Goodwill
 
54

 
—

 
2

 
56

Consolidated total
 
 
 
 
 
 
 
 
Goodwill
 
7,397

 
127

 
(110
)
 
7,414

Impairment
 
(1,197
)
 
—

 
—

 
(1,197
)
Net goodwill
 
$
6,200

 
$
127

 
$
(110
)
 
$
6,217

 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
Acquisitions
 
Other Adjustments 1
 
December 31, 2017
Construction Industries
 
 
 
 
 
 
 
 
Goodwill
 
$
296

 
$
—

 
$
9

 
$
305

Impairment
 
(22
)
 
—

 
—

 
(22
)
Net goodwill
 
274

 
—

 
9

 
283

Resource Industries
 
 
 
 
 
 
 
 
Goodwill
 
4,110

 
—

 
122

 
4,232

Impairment
 
(1,175
)
 
—

 
—

 
(1,175
)
Net goodwill
 
2,935

 
—

 
122

 
3,057

Energy & Transportation
 
 
 
 
 
 
 
 
Goodwill
 
2,756

 
—

 
50

 
2,806

All Other 2
 
 
 
 
 
 
 
 
Goodwill
 
55

 
—

 
(1
)
 
54

Consolidated total
 
 
 
 
 
 
 
 
Goodwill
 
7,217

 
—

 
180

 
7,397

Impairment
 
(1,197
)
 
—

 
—

 
(1,197
)
Net goodwill
 
$
6,020

 
$
—

 
$
180

 
$
6,200


1 Other adjustments are comprised primarily of foreign currency translation.
2 Includes All Other operating segments (See Note 23).
 
 
 
 
 
v3.10.0.1
Investments in debt and equity securities (Tables)
 12 Months Ended
Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]  
Schedule of available-for-sale securities


 
 
December 31, 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
 
42

 
—

 
42

 
42

 
—

 
42

 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
 
 

 
 

 
 

 
 

 
 

 
 

Corporate bonds
 
735

 
(15
)
 
720

 
585

 
(1
)
 
584

Asset-backed securities
 
63

 
—

 
63

 
67

 
—

 
67

 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed debt securities
 
 
 
 
 
 

 
 

 
 

 
 

U.S. governmental agency
 
301

 
(4
)
 
297

 
265

 
(4
)
 
261

Residential
 
7

 
—

 
7

 
8

 
—

 
8

Commercial
 
14

 
(1
)
 
13

 
17

 
—

 
17

Total debt securities
 
$
1,171

 
$
(20
)
 
$
1,151

 
$
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
 
 
 
 
 
 
 
$
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 Statement 1. See Note 1J 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:
 
 
December 31, 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
 
$
280

 
$
3

 
$
391

 
$
11

 
$
671

 
$
14

Asset-backed securities
 
6

 
—

 
38

 
1

 
44

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed debt securities
 
 

 
 

 
 

 
 

 
 

 
 

U.S. governmental agency
 
52

 
—

 
223

 
5

 
275

 
5

Commercial
 
—

 
—

 
14

 
1

 
14

 
1

Total
 
$
338

 
$
3

 
$
666

 
$
18

 
$
1,004

 
$
21

 
 
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 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
 
 
 
 
 
 
 
December 31, 2018
(Millions of dollars)
 
Cost Basis
 
Fair Value
Due in one year or less
 
$
139

 
$
139

Due after one year through five years
 
647

 
635

Due after five years through ten years
 
46

 
43

Due after ten years
 
17

 
17

U.S. governmental agency mortgage-backed securities
 
301

 
297

Residential mortgage-backed securities
 
7

 
7

Commercial mortgage-backed securities
 
14

 
13

Total debt securities – available-for-sale
 
$
1,171

 
$
1,151

 
 
 
 
 
  
Schedule of proceeds and gross gain and losses from the sale of available-for-sale securities
 
 
 
 
 
 
 
Sales of Securities:
 
 
 
 
 
 
 
 
Years Ended December 31,
(Millions of dollars)
 
2018
1 
2017
 
2016
Proceeds from the sale of available-for-sale securities
 
$
247

 
$
930

 
$
694

Gross gains from the sale of available-for-sale securities
 
$
—

 
$
109

 
$
55

Gross losses from the sale of available-for-sale securities
 
$
—

 
$
5

 
$
4

 
 
 
 
 
 
 
1 Beginning January 1, 2018, equity securities are no longer classified as available-for-sale securities.
 
 
 
 
 
 
 
 
v3.10.0.1
Postemployment benefit plans (Tables)
 12 Months Ended
Dec. 31, 2018
Retirement Benefits [Abstract]  
Schedule of changes in projected benefit obligations
 
 
U.S. Pension Benefits
 
Non-U.S. 
Pension Benefits
 
Other Postretirement 
Benefits
(Millions of dollars)
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Change in benefit obligation:
 
 

 
 

 
 

 
 

 
 

 
 

Benefit obligation, beginning of year
 
$
17,326

 
$
16,218

 
$
4,606

 
$
4,472

 
$
4,002

 
$
4,088

Service cost
 
125

 
115

 
89

 
95

 
83

 
78

Interest cost
 
534

 
525

 
96

 
101

 
125

 
130

Plan amendments
 
—

 
—

 
26

 
(1
)
 
(25
)
 
(79
)
Actuarial losses (gains)
 
(1,058
)
 
1,439

 
(88
)
 
(75
)
 
(195
)
 
71

Foreign currency exchange rates
 
—

 
—

 
(205
)
 
312

 
(28
)
 
4

Participant contributions
 
—

 
—

 
6

 
6

 
51

 
59

Benefits paid - gross
 
(971
)
 
(977
)
 
(277
)
 
(203
)
 
(369
)
 
(361
)
Less: federal subsidy on benefits paid
 
—

 
—

 
—

 
—

 
7

 
10

Curtailments, settlements and termination benefits
 
(3
)
 
6

 
(38
)
 
(101
)
 
(2
)
 
2

Benefit obligation, end of year
 
$
15,953

 
$
17,326

 
$
4,215

 
$
4,606

 
$
3,649

 
$
4,002

Accumulated benefit obligation, end of year
 
$
15,877

 
$
17,175

 
$
4,038

 
$
4,335

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average assumptions used to determine benefit obligation:
 
 

 
 

 
 

 
 

 
 

 
 

Discount rate
 
4.2
%
 
3.5
%
 
2.5
%
 
2.4
%
 
4.2
%
 
3.6
%
Rate of compensation increase
 
4.0
%
 
4.0
%
 
3.0
%
 
4.0
%
 
4.0
%
 
4.0
%
 
 
 
 
 
Schedule of assumptions used to determine benefit obligation
 
 
U.S. Pension Benefits
 
Non-U.S. 
Pension Benefits
 
Other Postretirement 
Benefits
(Millions of dollars)
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Change in benefit obligation:
 
 

 
 

 
 

 
 

 
 

 
 

Benefit obligation, beginning of year
 
$
17,326

 
$
16,218

 
$
4,606

 
$
4,472

 
$
4,002

 
$
4,088

Service cost
 
125

 
115

 
89

 
95

 
83

 
78

Interest cost
 
534

 
525

 
96

 
101

 
125

 
130

Plan amendments
 
—

 
—

 
26

 
(1
)
 
(25
)
 
(79
)
Actuarial losses (gains)
 
(1,058
)
 
1,439

 
(88
)
 
(75
)
 
(195
)
 
71

Foreign currency exchange rates
 
—

 
—

 
(205
)
 
312

 
(28
)
 
4

Participant contributions
 
—

 
—

 
6

 
6

 
51

 
59

Benefits paid - gross
 
(971
)
 
(977
)
 
(277
)
 
(203
)
 
(369
)
 
(361
)
Less: federal subsidy on benefits paid
 
—

 
—

 
—

 
—

 
7

 
10

Curtailments, settlements and termination benefits
 
(3
)
 
6

 
(38
)
 
(101
)
 
(2
)
 
2

Benefit obligation, end of year
 
$
15,953

 
$
17,326

 
$
4,215

 
$
4,606

 
$
3,649

 
$
4,002

Accumulated benefit obligation, end of year
 
$
15,877

 
$
17,175

 
$
4,038

 
$
4,335

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average assumptions used to determine benefit obligation:
 
 

 
 

 
 

 
 

 
 

 
 

Discount rate
 
4.2
%
 
3.5
%
 
2.5
%
 
2.4
%
 
4.2
%
 
3.6
%
Rate of compensation increase
 
4.0
%
 
4.0
%
 
3.0
%
 
4.0
%
 
4.0
%
 
4.0
%
 
 
 
 
 
Change in plan assets
 
 
U.S. Pension Benefits
 
Non-U.S. 
Pension Benefits
 
Other Postretirement 
Benefits
(Millions of dollars)
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Change in plan assets:
 
 
 
 

 
 

 
 

 
 

 
 

Fair value of plan assets, beginning of year
 
$
13,416

 
$
11,354

 
$
4,305

 
$
3,887

 
$
504

 
$
550

Actual return on plan assets
 
(784
)
 
1,692

 
13

 
350

 
(5
)
 
101

Foreign currency exchange rates
 
—

 
—

 
(187
)
 
278

 
—

 
—

Company contributions
 
1,039

 
1,350

 
165

 
107

 
147

 
155

Participant contributions
 
—

 
—

 
6

 
6

 
51

 
59

Benefits paid
 
(971
)
 
(977
)
 
(277
)
 
(203
)
 
(369
)
 
(361
)
Settlements and termination benefits
 
(3
)
 
(3
)
 
—

 
(120
)
 
—

 
—

Fair value of plan assets, end of year
 
$
12,697

 
$
13,416

 
$
4,025

 
$
4,305

 
$
328

 
$
504

 
 
 
 
 
Fair value of pension and other postretirement benefit plan assets, by category

The fair value of the pension and other postretirement benefit plan assets by category is summarized below:
 
 
 
December 31, 2018
(Millions of dollars)
 
Level 1
 
Level 2
 
Level 3
 
Measured at NAV
 
Total Assets at Fair Value
U.S. Pension
 
 

 
 

 
 

 
 

 
 

Equity securities:
 
 

 
 

 
 

 
 

 
 

U.S. equities
 
$
1,971

 
$
—

 
$
35

 
$
155

 
$
2,161

Non-U.S. equities
 
1,279

 
—

 
1

 
—

 
1,280

 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 

 
 

 
 

 
 
 
 

U.S. corporate bonds
 
—

 
6,371

 
61

 
52

 
6,484

Non-U.S. corporate bonds
 
—

 
1,332

 
—

 
—

 
1,332

U.S. government bonds
 
—

 
590

 
—

 
—

 
590

U.S. governmental agency mortgage-backed securities
 
—

 
384

 
—

 
—

 
384

Non-U.S. government bonds
 
—

 
79

 
—

 
—

 
79

 
 
 
 
 
 
 
 
 
 
 
Real estate
 
—

 
—

 
10

 
—

 
10

 
 
 
 
 
 
 
 
 
 
 
Cash, short-term instruments and other
 
202

 
9

 
—

 
166

 
377

Total U.S. pension assets
 
$
3,452

 
$
8,765

 
$
107

 
$
373

 
$
12,697

 
 
December 31, 2017
(Millions of dollars)
 
Level 1
 
Level 2
 
Level 3
 
Measured at NAV
 
Total Assets at Fair Value
U.S. Pension
 
 

 
 

 
 

 
 
 
 

Equity securities:
 
 

 
 

 
 

 
 
 
 

U.S. equities
 
$
2,745

 
$
—

 
$
20

 
$
165

 
$
2,930

Non-U.S. equities
 
1,573

 
15

 
—

 
—

 
1,588

 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 

 
 

 
 

 
 
 
 

U.S. corporate bonds
 
—

 
5,886

 
60

 
49

 
5,995

Non-U.S. corporate bonds
 
—

 
1,165

 
—

 
—

 
1,165

U.S. government bonds
 
—

 
793

 
—

 
—

 
793

U.S. governmental agency mortgage-backed securities
 
—

 
369

 
—

 
—

 
369

Non-U.S. government bonds
 
—

 
68

 
—

 
—

 
68

 
 
 
 
 
 
 
 
 
 
 
Real estate
 
—

 
—

 
10

 
—

 
10

 
 
 
 
 
 
 
 
 
 
 
Cash, short-term instruments and other
 
173

 
101

 
—

 
224

 
498

Total U.S. pension assets
 
$
4,491

 
$
8,397

 
$
90

 
$
438

 
$
13,416

 
 
 
 
 
 
 
 
 
 
 


 
 
December 31, 2018
(Millions of dollars)
 
Level 1
 
Level 2
 
Level 3
 
Measured at NAV
 
Total Assets at Fair Value
Non-U.S. Pension
 
 

 
 

 
 

 
 
 
 

Equity securities:
 
 

 
 

 
 

 
 
 
 

U.S. equities
 
$
43

 
$
—

 
$
—

 
$
—

 
$
43

Non-U.S. equities
 
312

 
28

 
—

 
—

 
340

Global equities 1 
 
113

 
23

 
—

 
—

 
136

 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 

 
 

 
 

 
 
 
 

U.S. corporate bonds
 
—

 
206

 
—

 
—

 
206

Non-U.S. corporate bonds
 
—

 
690

 
—

 
6

 
696

U.S. government bonds
 
—

 
74

 
—

 
—

 
74

Non-U.S. government bonds
 
—

 
1,721

 
—

 
—

 
1,721

Global fixed income 1 
 
—

 
261

 
—

 
215

 
476

 
 
 
 
 
 
 
 
 
 
 
Real estate
 
—

 
185

 
—

 
—

 
185

 
 
 
 
 
 
 
 
 
 
 
Cash, short-term instruments and other 2 
 
66

 
82

 
—

 
—

 
148

Total non-U.S. pension assets
 
$
534

 
$
3,270

 
$
—

 
$
221

 
$
4,025

 
 
December 31, 2017
(Millions of dollars)
 
Level 1
 
Level 2
 
Level 3
 
Measured at NAV
 
Total Assets at Fair Value
Non-U.S. Pension
 
 

 
 

 
 

 
 
 
 

Equity securities:
 
 

 
 

 
 

 
 
 
 

U.S. equities
 
$
55

 
$
—

 
$
—

 
$
137

 
$
192

Non-U.S. equities
 
400

 
34

 
—

 
929

 
1,363

Global equities 1 
 
116

 
33

 
—

 
—

 
149

 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 

 
 

 
 

 
 
 
 

U.S. corporate bonds
 
—

 
156

 
—

 
—

 
156

Non-U.S. corporate bonds
 
—

 
363

 
5

 
6

 
374

U.S. government bonds
 
—

 
64

 
—

 
—

 
64

Non-U.S. government bonds
 
—

 
1,229

 
—

 
—

 
1,229

Global fixed income 1 
 
—

 
250

 
—

 
218

 
468

 
 
 
 
 
 
 
 
 
 
 
Real estate
 
—

 
186

 
—

 
—

 
186

 
 
 
 
 
 
 
 
 
 
 
Cash, short-term instruments and other 2 
 
64

 
60

 
—

 
—

 
124

Total non-U.S. pension assets
 
$
635

 
$
2,375

 
$
5

 
$
1,290

 
$
4,305

1 Includes funds that invest in both U.S. and non-U.S. securities.
2 Includes funds that invest in multiple asset classes, hedge funds and other.
 
 
 
 
 
 
 
 
 
 
 


 
 
December 31, 2018
(Millions of dollars)
 
Level 1
 
Level 2
 
Level 3
 
Measured at NAV
 
Total Assets at Fair Value
Other Postretirement Benefits
 
 

 
 

 
 

 
 
 
 

Equity securities:
 
 

 
 

 
 

 
 
 
 

U.S. equities
 
$
151

 
$
1

 
$
—

 
$
—

 
$
152

Non-U.S. equities
 
64

 
—

 
—

 
—

 
64

 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 

 
 

 
 

 
 
 
 

U.S. corporate bonds
 
—

 
45

 
—

 
—

 
45

Non-U.S. corporate bonds
 
—

 
11

 
—

 
—

 
11

U.S. government bonds
 
—

 
8

 
—

 
—

 
8

U.S. governmental agency mortgage-backed securities
 
—

 
25

 
—

 
—

 
25

Non-U.S. government bonds
 
—

 
3

 
—

 
—

 
3

 
 
 
 
 
 
 
 
 
 
 
Cash, short-term instruments and other
 
3

 
1

 
—

 
16

 
20

Total other postretirement benefit assets
 
$
218

 
$
94

 
$
—

 
$
16

 
$
328

 
 
December 31, 2017
(Millions of dollars)
 
Level 1
 
Level 2
 
Level 3
 
Measured at NAV
 
Total Assets at Fair Value
Other Postretirement Benefits
 
 

 
 

 
 

 
 
 
 

Equity securities:
 
 

 
 

 
 

 
 
 
 

U.S. equities
 
$
255

 
$
1

 
$
—

 
$
—

 
$
256

Non-U.S. equities
 
103

 
—

 
—

 
—

 
103

 
 
 
 
 
 
 
 
 
 
 
Fixed income securities:
 
 

 
 

 
 

 
 
 
 

U.S. corporate bonds
 
—

 
60

 
—

 
1

 
61

Non-U.S. corporate bonds
 
—

 
15

 
—

 
—

 
15

U.S. government bonds
 
—

 
17

 
—

 
—

 
17

U.S. governmental agency mortgage-backed securities
 
—

 
34

 
—

 
—

 
34

Non-U.S. government bonds
 
—

 
4

 
—

 
—

 
4

 
 
 
 
 
 
 
 
 
 
 
Cash, short-term instruments and other
 
—

 
3

 
—

 
11

 
14

Total other postretirement benefit assets
 
$
358

 
$
134

 
$
—

 
$
12

 
$
504

 
 
 
 
 
 
 
 
 
 
 
Roll forward of assets measured at fair value using level 3 inputs
Below are roll-forwards of assets measured at fair value using Level 3 inputs for the years ended December 31, 2018 and 2017.  These instruments were valued using pricing models that, in management’s judgment, reflect the assumptions a market participant would use.
 
(Millions of dollars)
 
Equities
 
Fixed Income
 
Real Estate
 
Other
U.S. Pension
 
 

 
 

 
 

 
 

Balance at December 31, 2016
 
$
5

 
$
31

 
$
10

 
$
11

Unrealized gains (losses)
 
15

 
13

 
—

 
—

Realized gains (losses)
 
(1
)
 
—

 
—

 
—

Purchases, issuances and settlements, net
 
—

 
16

 
—

 
(11
)
Transfers in and/or out of Level 3
 
1

 
—

 
—

 
—

Balance at December 31, 2017
 
$
20

 
$
60

 
$
10

 
$
—

Unrealized gains (losses)
 
(6
)
 
(12
)
 
—

 
—

Realized gains (losses)
 
—

 
—

 
—

 
—

Purchases, issuances and settlements, net
 
21

 
11

 
—

 
—

Transfers in and/or out of Level 3
 
1

 
2

 
—

 
—

Balance at December 31, 2018
 
$
36

 
$
61

 
$
10

 
$
—

 
 
 
 
 
 
 
 
 
Non-U.S. Pension
 
 

 
 

 
 

 
 

Balance at December 31, 2016
 
$
—

 
$
2

 
$
—

 
$
—

Unrealized gains (losses)
 
—

 
—

 
—

 
—

Realized gains (losses)
 
—

 
—

 
—

 
—

Purchases, issuances and settlements, net
 
—

 
2

 
—

 
—

Transfers in and/or out of Level 3
 
—

 
1

 
—

 
—

Balance at December 31, 2017
 
$
—

 
$
5

 
$
—

 
$
—

Unrealized gains (losses)
 
—

 
(2
)
 
—

 
—

Realized gains (losses)
 
—

 
—

 
—

 
—

Purchases, issuances and settlements, net
 
—

 
—

 
—

 
—

Transfers in and/or out of Level 3
 
—

 
(3
)
 
—

 
—

Balance at December 31, 2018
 
$
—

 
$
—

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
Defined benefit plan funded status, components of net amount recognized in financial position and accumulated other comprehensive income
The funded status of the plans, reconciled to the amount reported on Statement 3, is as follows:
 
 
 
U.S. Pension Benefits
 
Non-U.S. 
Pension Benefits
Other Postretirement Benefits
(Millions of dollars)
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
End of Year
 
 

 
 

 
 

 
 

 
 

 
 

Fair value of plan assets
 
$
12,697

 
$
13,416

 
$
4,025

 
$
4,305

 
$
328

 
$
504

Benefit obligations
 
15,953

 
17,326

 
4,215

 
4,606

 
3,649

 
4,002

Over (under) funded status recognized in financial position
 
$
(3,256
)
 
$
(3,910
)
 
$
(190
)
 
$
(301
)
 
$
(3,321
)
 
$
(3,498
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Components of net amount recognized in financial position:
 
 

 
 

 
 

 
 

 
 

 
 

Other assets (non-current asset)
 
$
9

 
$
19

 
$
442

 
$
358

 
$
—

 
$
—

Accrued wages, salaries and employee benefits (current liability)
 
(40
)
 
(38
)
 
(20
)
 
(20
)
 
(173
)
 
(163
)
Liability for postemployment benefits (non-current liability)
 
(3,225
)
 
(3,891
)
 
(612
)
 
(639
)
 
(3,148
)
 
(3,335
)
Net liability recognized
 
$
(3,256
)
 
$
(3,910
)
 
$
(190
)
 
$
(301
)
 
$
(3,321
)
 
$
(3,498
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Amounts recognized in Accumulated other comprehensive income (pre-tax) consist of:
 
 

 
 

 
 

 
 

 
 

 
 

Prior service cost (credit)
 
$
—

 
$
—

 
$
20

 
$
—

 
$
(126
)
 
$
(138
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Estimated amounts that will be amortized from Accumulated other comprehensive income (loss) into net periodic benefit cost (pre-tax) in the next fiscal year
The estimated amount of prior service cost (credit) that will be amortized from Accumulated other comprehensive income (loss) at December 31, 2018 into net periodic benefit cost (pre-tax) in 2019 are as follows:
 
(Millions of dollars)
 
U.S.
Pension Benefits
 
Non-U.S.
Pension Benefits
 
Other
Postretirement
Benefits
Prior service cost (credit)
 
$
—

 
$
—

 
$
(41
)
 
 
 
 
 
 
 
Schedule of pension plans with projected benefit obligation in excess of plan assets for all U.S and Non U.S Pension benefits
The following amounts relate to our pension plans with projected benefit obligations in excess of plan assets:
 
 
 
U.S. Pension Benefits at Year-end
 
Non-U.S. Pension Benefits at Year-end
(Millions of dollars)
 
2018
 
2017
 
2018
 
2017
Projected benefit obligation
 
$
15,614

 
$
16,904

 
$
1,821

 
$
1,853

Accumulated benefit obligation
 
$
15,541

 
$
16,761

 
$
1,723

 
$
1,708

Fair value of plan assets
 
$
12,349

 
$
12,975

 
$
1,189

 
$
1,194

 
 
 
 
 
 
 
 
 
Schedule of pension plans with accumulated benefit obligation in excess of plan assets for all U.S and Non U.S Pension benefits
The following amounts relate to our pension plans with accumulated benefit obligations in excess of plan assets:

 
 
U.S. Pension Benefits at Year-end
 
Non-U.S. Pension Benefits at Year-end
(Millions of dollars)
 
2018
 
2017
 
2018
 
2017
Projected benefit obligation
 
$
15,614

 
$
16,904

 
$
1,655

 
$
1,720

Accumulated benefit obligation
 
$
15,541

 
$
16,761

 
$
1,603

 
$
1,641

Fair value of plan assets
 
$
12,349

 
$
12,975

 
$
1,047

 
$
1,107

 
 
 
 
 
 
 
 
 
Information about the expected contributions and benefit payments for the pension and other postretirement benefit plans
Information about expected contributions and benefit payments for pension and other postretirement benefit plans is as follows:
 
(Millions of dollars)
 
U.S.
Pension Benefits
 
Non-U.S.
Pension Benefits
 
Other
Postretirement
Benefits
Employer contributions:
 
 

 
 

 
 

2019 (expected)
 
$
40

 
$
130

 
$
145

 
 
 
 
 
 
 
Expected benefit payments:
 
 

 
 

 
 

2019
 
$
1,000

 
$
240

 
$
290

2020
 
1,000

 
170

 
290

2021
 
1,000

 
170

 
290

2022
 
1,000

 
170

 
280

2023
 
1,000

 
180

 
280

2024-2028
 
5,000

 
990

 
1,350

Total
 
$
10,000

 
$
1,920

 
$
2,780

 
 
 
 
 
 
 
Expected Medicare Part D subsidy receipts
Medicare Part D subsidy amounts expected to be received by the company which will offset other postretirement benefit payments are as follows:
 
(Millions of dollars)
 
2019
 
2020
 
2021
 
2022
 
2023
 
2024-2028
 
Total
Other postretirement benefits
 
$
15

 
$
15

 
$
10

 
$
10

 
$
10

 
$
55

 
$
115

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Components of net periodic benefit cost, other changes in plan assets and benefits obligations recognized in other comprehensive income and weighted-average assumptions used to determine net cost
 
 
U.S. Pension Benefits
 
Non-U.S. Pension Benefits
 
Other Postretirement Benefits
(Millions of dollars)
 
2018
 
2017
 
2016
 
2018
 
2017
 
2016
 
2018
 
2017
 
2016
Components of net periodic benefit cost:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Service cost
 
$
125

 
$
115

 
$
119

 
$
89

 
$
95

 
$
92

 
$
83

 
$
78

 
$
82

Interest cost
 
534

 
525

 
517

 
96

 
101

 
117

 
125

 
130

 
131

Expected return on plan assets 1
 
(808
)
 
(734
)
 
(757
)
 
(221
)
 
(231
)
 
(227
)
 
(32
)
 
(37
)
 
(44
)
Curtailments and termination benefits
 
—

 
9

 
6

 
(33
)
 
15

 
1

 
(2
)
 
—

 
(9
)
Amortization of prior service cost (credit) 2
 
—

 
—

 
—

 
—

 
(2
)
 
3

 
(36
)
 
(23
)
 
(59
)
Actuarial loss (gain) 3
 
534

 
481

 
664

 
111

 
(195
)
 
262

 
(150
)
 
15

 
59

Net Periodic benefit cost (benefit) 4
 
$
385

 
$
396

 
$
549

 
$
42

 
$
(217
)
 
$
248

 
$
(12
)
 
$
163

 
$
160

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other changes in plan assets and benefit obligations recognized in other comprehensive income (pre-tax):
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Current year prior service cost (credit)
 
$
—

 
$
—

 
$
—

 
$
20

 
$
3

 
$
(3
)
 
$
(20
)
 
$
(77
)
 
$
(184
)
Amortization of prior service (cost) credit
 
—

 
—

 
—

 
—

 
2

 
(3
)
 
36

 
23

 
59

Total recognized in other comprehensive income
 
—

 
—

 
—

 
20

 
5

 
(6
)
 
16

 
(54
)
 
(125
)
Total recognized in net periodic cost and other comprehensive income
 
$
385

 
$
396

 
$
549

 
$
62

 
$
(212
)
 
$
242

 
$
4

 
$
109

 
$
35

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average assumptions used to determine net cost:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Discount rate used to measure service cost
 
3.7
%
 
4.2
%
 
4.5
%
 
2.3
%
 
2.4
%
 
2.9
%
 
3.5
%
 
3.9
%
 
4.2
%
Discount rate used to measure interest cost
 
3.2
%
 
3.3
%
 
3.4
%
 
2.2
%
 
2.3
%
 
2.8
%
 
3.2
%
 
3.3
%
 
3.3
%
Expected rate of return on plan assets 5 
 
6.3
%
 
6.7
%
 
6.9
%
 
5.2
%
 
5.9
%
 
6.1
%
 
7.5
%
 
7.5
%
 
7.5
%
Rate of compensation increase
 
4.0
%
 
4.0
%
 
4.0
%
 
4.0
%
 
4.0
%
 
3.6
%
 
4.0
%
 
4.0
%
 
4.0
%
1 
Expected return on plan assets developed using the fair value of plan assets.
2 
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.
3 
Actuarial loss (gain) represents the effects of actual results differing from our assumptions and the effects of changing assumptions. We recognize actuarial loss (gain) immediately through earnings upon the annual remeasurement in the fourth quarter, or on an interim basis as triggering events warrant remeasurement.
4 
The service cost component of net periodic pension and other postretirement benefits cost (benefit) is included in Operating costs in Statement 1. All other components of net periodic pension and other postretirement benefits cost (benefit) are included in Other income (expense) in Statement 1.
5 
The weighted-average rates for 2019 are 5.9 percent and 3.8 percent for U.S. and non-U.S. pension plans, respectively.
 
 
 
 
 
Effects of one-percentage point change in the assumed health care cost trend rates
A one-percentage-point change in assumed health care cost trend rates would have had the following effects:

(Millions of dollars)
 
One-percentage-
point increase
 
One-percentage-
point decrease
Effect on 2018 service and interest cost components of other postretirement benefit cost
 
$
14

 
$
(11
)
Effect on accumulated postretirement benefit obligation
 
$
138

 
$
(117
)
Company costs related to U.S. and non-U.S. defined contribution plans
Total company costs related to U.S. and non-U.S. defined contribution plans were as follows:
 
(Millions of dollars)
 
2018
 
2017
 
2016
U.S. plans
 
$
271

 
$
375

 
$
301

Non-U.S. plans
 
89

 
73

 
68

 
 
$
360

 
$
448

 
$
369

 
 
 
 
 
 
 
Summary of long-term liability for postemployment benefit plans
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
Pensions:
 
 

 
 

U.S. pensions
 
$
3,225

 
$
3,891

Non-U.S. pensions
 
612

 
639

Total pensions
 
3,837

 
4,530

Postretirement benefits other than pensions
 
3,148

 
3,335

Other postemployment benefits
 
119

 
109

Defined contribution
 
351

 
391

 
 
$
7,455

 
$
8,365

 
 
 
 
 
v3.10.0.1
Short-term borrowings (Tables)
 12 Months Ended
Dec. 31, 2018
Short-term Borrowings Disclosure [Abstract]  
Short-term borrowings
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
 
Machinery, Energy & Transportation:
 
 

 
 

 
Notes payable to banks
 
$
—

 
$
1

 
 
 
—

 
1

 
Financial Products:
 
 

 
 

 
Notes payable to banks
 
526

 
675

 
Commercial paper
 
4,759

 
3,680

 
Demand notes
 
438

 
481

 
 
 
5,723

 
4,836

 
Total short-term borrowings
 
$
5,723

 
$
4,837

 
 
 
 
 
 
 

 
The weighted-average interest rates on short-term borrowings outstanding were:

 
 
December 31,
 
 
2018
 
2017
 
Notes payable to banks
 
5.3
%
 
5.2
%
 
Commercial paper
 
2.0
%
 
1.1
%
 
Demand notes
 
2.2
%
 
1.1
%
 
 
 
 
 
 
 
v3.10.0.1
Long-term debt (Tables)
 12 Months Ended
Dec. 31, 2018
Debt Disclosure [Abstract]  
Long-term debt
 
 
 
December 31,
 
(Millions of dollars)
Effective Yield to Maturity 1
 
2018
 
2017
 
Machinery, Energy & Transportation:
 
 
 

 
 

 
Notes—$1,250 million of 3.900% due 2021 2
4.01%
 
$
1,247

 
$
1,246

 
Notes—$759 million of 5.200% due 2041 2
5.27%
 
751

 
752

 
Debentures—$120 million of 9.375% due 2021
9.41%
 
120

 
120

 
Debentures—$500 million of 2.600% due 2022 2
2.70%
 
498

 
498

 
Debentures—$82 million of 8.000% due 2023
8.06%
 
82

 
82

 
Debentures—$1,000 million of 3.400% due 2024
3.46%
 
997

 
997

 
Debentures—$193 million of 6.625% due 2028 2
6.68%
 
192

 
192

 
Debentures—$242 million of 7.300% due 2031 2
7.38%
 
240

 
241

 
Debentures—$307 million of 5.300% due 2035 2
8.64%
 
218

 
216

 
Debentures—$460 million of 6.050% due 2036 2
6.12%
 
456

 
456

 
Debentures—$65 million of 8.250% due 2038 2
8.38%
 
64

 
64

 
Debentures—$160 million of 6.950% due 2042 2
7.02%
 
158

 
159

 
Debentures—$1,722 million of 3.803% due 2042 2
6.39%
 
1,257

 
1,236

 
Debentures—$500 million of 4.300% due 2044
4.39%
 
493

 
493

 
Debentures—$500 million of 4.750% due 2064
4.81%
 
494

 
494

 
Debentures—$246 million of 7.375% due 2097 2
7.51%
 
241

 
242

 
Capital lease obligations 3
 
 
456

 
437

 
Other 4
 
 
41

 
4

 
Total Machinery, Energy & Transportation
 
 
8,005

 
7,929

 
Financial Products:
 
 
 

 
 

 
Medium-term notes
 
 
16,592

 
15,415

 
Other
 
 
403

 
503

 
Total Financial Products
 
 
16,995

 
15,918

 
Total long-term debt due after one year
 
 
$
25,000

 
$
23,847

 

1 
Effective yield to maturity includes the impact of discounts, premiums and debt issuance costs.
2 
Redeemable at our option in whole or in part at any time at a redemption price equal to the greater of (i) 100% of the principal amount or (ii) the discounted present value of the notes or debentures, calculated in accordance with the terms of such notes or debentures.
3 
Includes $360 million related to a financing transaction in Japan entered into in 2017.
4 
Includes $38 million of financing activity related to a build-to-suit real estate transaction.
 
 
 
 
 
Aggregate amounts of maturities of long-term debt
The aggregate amounts of maturities of long-term debt during each of the years 2019 through 2023, including amounts due within one year and classified as current, are:

 
 
December 31,
(Millions of dollars)
 
2019
 
2020
 
2021
 
2022
 
2023
Machinery, Energy & Transportation
 
$
10

 
$
35

 
$
1,398

 
$
510

 
$
92

Financial Products
 
5,820

 
6,407

 
4,884

 
2,053

 
2,158

 
 
$
5,830

 
$
6,442

 
$
6,282

 
$
2,563

 
$
2,250

 
 
 
 
 
 
 
 
 
 
 
v3.10.0.1
Credit commitments (Tables)
 12 Months Ended
Dec. 31, 2018
Credit Commitments [Abstract]  
Credit commitments
 
 
December 31, 2018
(Millions of dollars)
 
Consolidated
 
Machinery,
Energy &
Transportation
 
Financial
Products
Credit lines available:
 
 

 
 

 
 

Global credit facilities
 
$
10,500

 
$
2,750

 
$
7,750

Other external
 
4,577

 
—

 
4,577

Total credit lines available
 
15,077

 
2,750

 
12,327

Less: Commercial paper outstanding
 
(4,759
)
 
—

 
(4,759
)
Less: Utilized credit
 
(1,172
)
 
—

 
(1,172
)
Available credit
 
$
9,146

 
$
2,750

 
$
6,396

 
 
 
 
 
 
 
 
v3.10.0.1
Profit per share (Tables)
 12 Months Ended
Dec. 31, 2018
Earnings Per Share [Abstract]  
Computations of Profit Per Share
Computations of profit per share:
 
 
 
 
 
 
(Dollars in millions except per share data)
 
2018
 
2017
 
2016
Profit (loss) for the period (A) 1 
 
$
6,147

 
$
754

 
$
(67
)
Determination of shares (in millions):
 
 

 
 

 
 

Weighted average number of common shares outstanding (B)
 
591.4

 
591.8

 
584.3

Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price
 
8.0

 
7.5

 
—

Average common shares outstanding for fully diluted computation (C) 2,3
 
599.4

 
599.3

 
584.3

Profit (loss) per share of common stock:
 
 

 
 

 
 

Assuming no dilution (A/B)
 
$
10.39

 
$
1.27

 
$
(0.11
)
Assuming full dilution (A/C) 2,3
 
$
10.26

 
$
1.26

 
$
(0.11
)
Shares outstanding as of December 31 (in millions)
 
575.5

 
597.6

 
586.5

1 
Profit (loss) attributable to common shareholders.
2 
Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.
3 
In 2016, the assumed exercise of stock-based compensation awards was not considered because the impact would be antidilutive.
 
 
 
 
 
v3.10.0.1
Accumulated other comprehensive income (loss) (Tables)
 12 Months Ended
Dec. 31, 2018
Equity [Abstract]  
Schedule of Accumulated other comprehensive income (loss)
Changes in Accumulated other comprehensive income (loss), net of tax, included in Statement 4, consisted of the following:

 
 
 
 
 
 
 
 
 
 
 
(Millions of dollars)
 
Foreign currency translation
 
Pension and other postretirement benefits
 
Derivative financial instruments
 
Available-for-sale securities
 
Total
Balance at December 31, 2015
 
$
(1,953
)
 
$
(69
)
 
$
(50
)
 
$
37

 
$
(2,035
)
Other comprehensive income (loss) before reclassifications
 
(34
)
 
118

 
(62
)
 
26

 
48

Amounts reclassified from accumulated other comprehensive (income) loss
 
17

 
(35
)
 
(3
)
 
(31
)
 
(52
)
Other comprehensive income (loss)
 
(17
)
 
83

 
(65
)
 
(5
)
 
(4
)
Balance at December 31, 2016
 
$
(1,970
)
 
$
14

 
$
(115
)
 
$
32

 
$
(2,039
)
Other comprehensive income (loss) before reclassifications
 
752

 
48

 
(3
)
 
41

 
838

Amounts reclassified from accumulated other comprehensive (income) loss
 
13

 
(16
)
 
77

 
(65
)
 
9

Other comprehensive income (loss)
 
765

 
32

 
74

 
(24
)
 
847

Balance at December 31, 2017
 
$
(1,205
)
 
$
46

 
$
(41
)
 
$
8

 
$
(1,192
)
Adjustment to adopt recognition and measurement of financial assets and liabilities guidance
 
—

 
—

 
—

 
(11
)
 
(11
)
Balance at January 1, 2018
 
(1,205
)
 
46

 
(41
)
 
(3
)
 
(1,203
)
Other comprehensive income (loss) before reclassifications
 
(397
)
 
(6
)
 
61

 
(12
)
 
(354
)
Amounts reclassified from accumulated other comprehensive (income) loss
 
1

 
(28
)
 
(100
)
 
—

 
(127
)
Other comprehensive income (loss)
 
(396
)
 
(34
)
 
(39
)
 
(12
)
 
(481
)
Balance at December 31, 2018
 
$
(1,601
)
 
$
12

 
$
(80
)
 
$
(15
)
 
$
(1,684
)

 
 
 
 
 
Reclassification out of Accumulated other comprehensive income (loss)
The effect of the reclassifications out of Accumulated other comprehensive income (loss) on Statement 1 is as follows:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended December 31,
 
(Millions of dollars)
 
Classification of income (expense)
 
2018
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation:
 
 
 
 
 
 
 
 
 
Gain (loss) on foreign currency translation
 
Other income (expense)
 
$
(1
)
 
$
(13
)
 
$
(17
)
 
Tax (provision) benefit
 
—

 
—

 
—

 
Reclassifications net of tax
 
$
(1
)
 
$
(13
)
 
$
(17
)
 
 
 
 
 
 
 
 
 
 
 
Pension and other postretirement benefits:
 
 
 
 
 
 
 
 
 
Amortization of prior service credit (cost)
 
Note 12 1
 
$
36

 
$
25

 
$
56

 
Tax (provision) benefit
 
(8
)
 
(9
)
 
(21
)
 
Reclassifications net of tax
 
$
28

 
$
16

 
$
35

 
 
 
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
Other income (expense)
 
$
115

 
$
(121
)
 
$
14

 
Foreign exchange contracts
 
Interest expense of Financial Products
 
19

 
6

 
—

 
Interest rate contracts
 
Interest expense excluding Financial Products
 
(3
)
 
(9
)
 
(6
)
 
Interest rate contracts
 
Interest expense of Financial Products
 
—

 
3

 
(3
)
 
Reclassifications before tax
 
131

 
(121
)
 
5

 
Tax (provision) benefit
 
(31
)
 
44

 
(2
)
 
Reclassifications net of tax
 
$
100

 
$
(77
)
 
$
3

 
 
 
 
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
Realized gain (loss) on sale of securities
 
Other income (expense)
 
$
—

 
$
100

 
$
46

 
Tax (provision) benefit
 
—

 
(35
)
 
(15
)
 
Reclassifications net of tax
 
$
—

 
$
65

 
$
31

 
 
 
 
 
 
 
 
 
 
 
Total reclassifications from Accumulated other comprehensive income (loss)
 
$
127

 
$
(9
)
 
$
52

 

1    Amounts are included in the calculation of net periodic benefit cost. See Note 12 for additional information.
 
 
 
 
 
v3.10.0.1
Fair value disclosures (Tables)
 12 Months Ended
Dec. 31, 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 Statement 3 as of December 31, 2018 and 2017 are summarized below:

 
 
December 31, 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
 
—

 
42

 
—

 
—

 
42

 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
 
 

 
 
 
 

 
 
 
 

Corporate bonds
 
—

 
720

 
—

 
—

 
720

Asset-backed securities
 
—

 
63

 
—

 
—

 
63

 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed debt securities
 
 

 
 
 
 

 
 
 
 

U.S. governmental agency
 
—

 
297

 
—

 
—

 
297

Residential
 
—

 
7

 
—

 
—

 
7

Commercial
 
—

 
13

 
—

 
—

 
13

Total debt securities
 
9

 
1,142

 
—

 
—

 
1,151

Equity securities
 
 
 
 
 
 
 
 
 
 

Large capitalization value
 
260

 
—

 
—

 
—

 
260

Smaller company growth
 
46

 
—

 
—

 
—

 
46

REIT
 
—

 
—

 
—

 
119

 
119

Total equity securities
 
306

 
—

 
—

 
119

 
425

 
 
 
 
 
 
 
 
 
 
 
Total Assets
 
$
315

 
$
1,142

 
$
—

 
$
119

 
$
1,576

 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 

 
 

 
 

 
 
 
 

Derivative financial instruments, net
 
$
—

 
$
19

 
$
—

 
$
—

 
$
19

Total Liabilities
 
$
—

 
$
19

 
$
—

 
$
—

 
$
19

 
 
 
 
 
 
 
 
 
 
 

 
 
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

 
 
 
 
 
 
 
 
 
Roll-forward of REIT investments


Fair values of financial instruments
Please refer to the table below for the fair values of our financial instruments.
 
TABLE III—Fair Values of Financial Instruments
 
 
2018
 
2017
 
 
 
 
(Millions of dollars)
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
 
Fair Value Levels
 
Reference
Assets at December 31,
 
 

 
 

 
 

 
 

 
 
 
 
Cash and short-term investments
 
$
7,857

 
$
7,857

 
$
8,261

 
$
8,261

 
1
 
Statement 3
Restricted cash and short-term investments
 
33

 
33

 
194

 
194

 
1
 
Statement 3
Investments in debt and equity securities
 
1,576

 
1,576

 
1,439

 
1,439

 
1, 2 & 3
 
Notes 11 & 19
Finance receivables–net (excluding finance leases 1)
 
14,714

 
14,798

 
15,452

 
15,438

 
3
 
Notes 7 & 19
Wholesale inventory receivables–net (excluding finance leases 1)
 
1,050

 
1,025

 
1,153

 
1,123

 
3
 
Notes 7 & 19
Foreign currency contracts–net
 
47

 
47

 
—

 
—

 
2
 
Notes 4 & 19
Interest rate swaps–net
 
—

 
—

 
1

 
1

 
2
 
Notes 4 & 19
Commodity contracts–net
 
—

 
—

 
21

 
21

 
2
 
Notes 4 & 19
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities at December 31,
 
 

 
 

 
 

 
 

 
 
 
 
Short-term borrowings
 
5,723

 
5,723

 
4,837

 
4,837

 
1
 
Note 13
Long-term debt (including amounts due within one year):
 
 

 
 

 
 

 
 

 
 
 
 
Machinery, Energy & Transportation
 
8,015

 
9,046

 
7,935

 
9,863

 
2
 
Note 14
Financial Products
 
22,815

 
22,684

 
22,106

 
22,230

 
2
 
Note 14
Foreign currency contracts–net
 
—

 
—

 
41

 
41

 
2
 
Notes 4 & 19
Interest rate swaps–net
 
36

 
36

 
—

 
—

 
2
 
Notes 4 & 19
Commodity contracts–net
 
30

 
30

 
—

 
—

 
2
 
Notes 4 & 19
Guarantees
 
8

 
8

 
8

 
8

 
3
 
Note 21
 
1 
Total excluded items have a net carrying value at December 31, 2018 and 2017 of $7,463 million and $7,063 million, respectively.
 
 
 
 
 
v3.10.0.1
Operating leases (Tables)
 12 Months Ended
Dec. 31, 2018
Leases [Abstract]  
Minimum payments for operating leases having initial or remaining non-cancelable terms in excess of one year
Minimum payments for operating leases having initial or remaining non-cancelable terms in excess of one year are:
  
Years ended December 31,
(Millions of dollars)
2019
 
2020
 
2021
 
2022
 
2023
 
Thereafter
 
Total
$
205

 
$
154

 
$
111

 
$
67

 
$
50

 
$
185

 
$
772

 
 
 
 
 
 
 
 
 
 
 
 
 
v3.10.0.1
Guarantees and product warranty (Tables)
 12 Months Ended
Dec. 31, 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 at December 31 are as follows:
 
(Millions of dollars)
 
2018
 
2017
Caterpillar dealer performance guarantees
 
$
1,244

 
$
1,313

Customer loan guarantees
 
31

 
40

Supplier consortium performance guarantees
 
527

 
565

Third party logistics business lease guarantees
 
60

 
69

Other guarantees
 
116

 
118

Total guarantees
 
$
1,978

 
$
2,105

 
 
 
 
 
Product warranty
(Millions of dollars)
 
2018
 
2017
 
Warranty liability, January 1
 
$
1,419

 
$
1,258

 
Reduction in liability (payments)
 
(783
)
 
(860
)
 
Increase in liability (new warranties)
 
755

 
1,021

 
Warranty liability, December 31
 
$
1,391

 
$
1,419

 
 
 
 
 
 
 

 
 
 
 
 
v3.10.0.1
Segment information (Tables)
 12 Months Ended
Dec. 31, 2018
Segment Reporting Information  
Reportable Segments
Segment Information
(Millions of dollars) 
Reportable Segments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
External
sales and
revenues
 
Inter-
segment
sales and
revenues
 
Total sales
and
revenues
 
Depreciation
and
amortization

Segment
profit (loss)
 
Segment
assets at
December 31
 
Capital
expenditures
2018
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Construction Industries
 
$
23,116

 
$
121

 
$
23,237

 
$
367

 
$
4,174

 
$
4,902

 
$
266

Resource Industries
 
9,888

 
382

 
10,270

 
462

 
1,603

 
6,442

 
188

Energy & Transportation
 
18,832

 
3,953

 
22,785

 
640

 
3,938

 
8,386

 
742

Machinery, Energy & Transportation
 
$
51,836

 
$
4,456

 
$
56,292

 
$
1,469

 
$
9,715

 
$
19,730

 
$
1,196

Financial Products Segment
 
3,279

1 
—

 
3,279

 
834

 
505

 
36,002

 
1,559

Total
 
$
55,115

 
$
4,456

 
$
59,571

 
$
2,303

 
$
10,220

 
$
55,732

 
$
2,755

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2017
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Construction Industries
 
$
19,133

 
$
107

 
$
19,240

 
$
400

 
$
3,255

 
$
4,838

 
$
228

Resource Industries
 
7,504

 
357

 
7,861

 
514

 
698

 
6,403

 
183

Energy & Transportation
 
15,964

 
3,418

 
19,382

 
653

 
2,856

 
7,564

 
527

Machinery, Energy & Transportation
 
$
42,601

 
$
3,882

 
$
46,483

 
$
1,567

 
$
6,809

 
$
18,805

 
$
938

Financial Products Segment
 
3,093

1 
—

 
3,093

 
820

 
792

 
34,893

 
1,373

Total
 
$
45,694

 
$
3,882

 
$
49,576

 
$
2,387

 
$
7,601

 
$
53,698

 
$
2,311

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2016
 
 

 
 

 
 

 
 

 
 

 
 

 
 

Construction Industries
 
$
15,612

 
$
78

 
$
15,690

 
$
458

 
$
1,639

 
$
5,367

 
$
186

Resource Industries
 
5,726

 
284

 
6,010

 
607

 
(1,045
)
 
7,135

 
243

Energy & Transportation
 
14,411

 
2,540

 
16,951

 
677

 
2,187

 
7,791

 
519

Machinery, Energy & Transportation
 
$
35,749

 
$
2,902

 
$
38,651

 
$
1,742

 
$
2,781

 
$
20,293

 
$
948

Financial Products Segment
 
2,993

1 
—

 
2,993

 
849

 
702

 
35,224

 
1,638

Total
 
$
38,742

 
$
2,902

 
$
41,644

 
$
2,591

 
$
3,483

 
$
55,517

 
$
2,586

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


1 Includes revenues from Machinery, Energy & Transportation of $470 million, $384 million and $302 million for the years 2018, 2017 and 2016, respectively.
Sales and revenues by geographic region
For the year ended December 31, 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
2018
 
 

 
 

 
 

 
 

 
 
Construction Industries
 
$
10,754

 
$
1,479

 
$
4,410

 
$
6,473

 
$
23,116

Resource Industries
 
3,357

 
1,647

 
2,217

 
2,667

 
$
9,888

Energy & Transportation
 
9,685

 
1,331

 
4,934

 
2,882

 
$
18,832

All Other operating segments
 
63

 
3

 
18

 
70

 
$
154

Corporate Items and Eliminations
 
(155
)
 
—

 
(11
)
 
(2
)
 
(168
)
Machinery, Energy & Transportation Sales
 
23,704

 
4,460

 
11,568

 
12,090

 
$
51,822

 
 
 
 
 
 
 
 
 
 
 
Financial Products Segment
 
2,153

 
281

 
387

 
458

 
3,279

Corporate Items and Eliminations
 
(234
)
 
(46
)
 
(26
)
 
(73
)
 
(379
)
Financial Products Revenues
 
1,919

 
235

 
361

 
385

 
2,900

 
 
 
 
 
 
 
 
 
 
 
Consolidated Sales and Revenues
 
$
25,623

 
$
4,695

 
$
11,929

 
$
12,475

 
$
54,722

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the year ended December 31, 2018, Energy & Transportation segment sales by end user application were as follows:
Energy & Transportation External Sales
 
(Millions of dollars)
2018
Oil and gas
$
5,763

Power generation
4,334

Industrial
3,640

Transportation
5,095

Energy & Transportation External Sales
$
18,832

 
 
Reconciliation of Sales and revenues:
Reconciliation of Sales and Revenues: 
 
 
 
 
 
 
 
 
(Millions of dollars)
 
Machinery,
Energy &
Transportation
 
Financial
Products
 
Consolidating
Adjustments
 
Consolidated
Total
2017
 
 

 
 

 
 

 
 

Total external sales and revenues from reportable segments
 
$
42,601

 
$
3,093

 
$
—

 
$
45,694

All Other operating segments
 
178

 
—

 
—

 
178

Other
 
(103
)
 
74

 
(381
)
1 
(410
)
Total sales and revenues
 
$
42,676

 
$
3,167

 
$
(381
)
 
$
45,462

 
 
 
 
 
 
 
 
 
2016
 
 

 
 

 
 

 
 

Total external sales and revenues from reportable segments
 
$
35,749

 
$
2,993

 
$
—

 
$
38,742

All Other operating segments
 
139

 
—

 
—

 
139

Other
 
(115
)
 
72

 
(301
)
1 
(344
)
Total sales and revenues
 
$
35,773

 
$
3,065

 
$
(301
)
 
$
38,537

 
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
2018
 
 

 
 

 
 

Total profit from reportable segments
 
$
9,715

 
$
505

 
$
10,220

All Other operating segments
 
23

 
—

 
23

Cost centers
 
2

 
—

 
2

Corporate costs
 
(610
)
 
—

 
(610
)
Timing
 
(257
)
 
—

 
(257
)
Restructuring costs
 
(370
)
 
(16
)
 
(386
)
Methodology differences:
 
 

 
 

 


Inventory/cost of sales
 
51

 
—

 
51

Postretirement benefit expense
 
(124
)
 
—

 
(124
)
Stock-based compensation expense
 
(190
)
 
(8
)
 
(198
)
Financing costs
 
(257
)
 
—

 
(257
)
Currency
 
(219
)
 
—

 
(219
)
Other income/expense methodology differences
 
(362
)
 
—

 
(362
)
Other methodology differences
 
(86
)
 
25

 
(61
)
Total consolidated profit before taxes
 
$
7,316

 
$
506

 
$
7,822

 
 
 
 
 
 
 
2017
 
 

 
 

 
 

Total profit from reportable segments
 
$
6,809

 
$
792

 
$
7,601

All Other operating segments
 
(44
)
 
—

 
(44
)
Cost centers
 
22

 
—

 
22

Corporate costs
 
(633
)
 
—

 
(633
)
Timing
 
(151
)
 
—

 
(151
)
Restructuring costs
 
(1,253
)
 
(3
)
 
(1,256
)
Methodology differences:
 
 

 
 

 
 

Inventory/cost of sales
 
(77
)
 
—

 
(77
)
Postretirement benefit expense
 
(141
)
 
—

 
(141
)
Stock-based compensation expense
 
(198
)
 
(8
)
 
(206
)
Financing costs
 
(524
)
 
—

 
(524
)
Currency
 
(218
)
 
—

 
(218
)
Other income/expense methodology differences
 
(181
)
 
—

 
(181
)
Other methodology differences
 
(97
)
 
(13
)
 
(110
)
Total consolidated profit before taxes
 
$
3,314

 
$
768

 
$
4,082

 
 
 
 
 
 
 
2016
 
 

 
 

 
 

Total profit from reportable segments
 
$
2,781

 
$
702

 
$
3,483

All Other operating segments
 
(85
)
 
—

 
(85
)
Cost centers
 
1

 
—

 
1

Corporate costs
 
(527
)
 
—

 
(527
)
Timing
 
40

 
—

 
40

Restructuring costs
 
(1,014
)
 
(5
)
 
(1,019
)
Methodology differences:
 
 

 
 

 
 

Inventory/cost of sales
 
—

 
—

 
—

Postretirement benefit expense
 
(729
)
 
—

 
(729
)
Stock-based compensation expense
 
(209
)
 
(9
)
 
(218
)
Financing costs
 
(517
)
 
—

 
(517
)
Currency
 
(22
)
 
—

 
(22
)
Other income/expense methodology differences
 
(225
)
 
—

 
(225
)
Other methodology differences
 
(47
)
 
4

 
(43
)
Total consolidated profit before taxes
 
$
(553
)
 
$
692

 
$
139

 
 
 
 
 
 
 
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
2018
 
 
 
 
 
 
Construction Industries
 
$
4,174

 
$
(58
)
 
$
4,116

Resource Industries
 
1,603

 
(191
)
 
1,412

Energy & Transportation
 
3,938

 
(84
)
 
3,854

Financial Products Segment
 
505

 
(2
)
 
503

All Other operating segments
 
23

 
(40
)
 
(17
)
Total
 
$
10,243

 
$
(375
)
 
$
9,868

 
 
 
 
 
 
 
2017
 
 
 
 
 
 
Construction Industries
 
$
3,255

 
$
(719
)
 
$
2,536

Resource Industries
 
698

 
(276
)
 
422

Energy & Transportation
 
2,856

 
(115
)
 
2,741

Financial Products Segment
 
792

 
(3
)
 
789

All Other operating segments
 
(44
)
 
(39
)
 
(83
)
Total
 
$
7,557

 
$
(1,152
)
 
$
6,405

 
 
 
 
 
 
 
2016
 
 
 
 
 
 
Construction Industries
 
$
1,639

 
$
(41
)
 
$
1,598

Resource Industries
 
(1,045
)
 
(540
)
 
(1,585
)
Energy & Transportation
 
2,187

 
(248
)
 
1,939

Financial Products Segment
 
702

 
(5
)
 
697

All Other operating segments
 
(85
)
 
(45
)
 
(130
)
Total
 
$
3,398

 
$
(879
)
 
$
2,519

 
 
 
 
 
 
 
Reconciliation of Assets:
Reconciliation of Assets:
 
 
 
 
 
 
 
 
(Millions of dollars)
 
Machinery,
Energy &
Transportation
 
Financial
Products
 
Consolidating
Adjustments
 
Consolidated
Total
2018
 
 

 
 

 
 

 
 

Total assets from reportable segments
 
$
19,730

 
$
36,002

 
$
—

 
$
55,732

All Other operating segments
 
1,279

 
—

 
—

 
1,279

Items not included in segment assets:
 
 

 
 

 
 

 
 

Cash and short-term investments
 
6,968

 
—

 
—

 
6,968

Intercompany receivables
 
1,633

 
—

 
(1,633
)
 
—

Investment in Financial Products
 
3,672

 
—

 
(3,672
)
 
—

Deferred income taxes
 
2,015

 
—

 
(692
)
 
1,323

Goodwill and intangible assets
 
4,279

 
—

 
—

 
4,279

Property, plant and equipment – net and other assets
 
1,998

 
—

 
—

 
1,998

Operating lease methodology difference
 
(196
)
 
—

 
—

 
(196
)
Inventory methodology differences
 
(2,503
)
 
—

 
—

 
(2,503
)
Liabilities included in segment assets
 
9,766

 
—

 
—

 
9,766

Other
 
(166
)
 
66

 
(37
)
 
(137
)
Total assets
 
$
48,475

 
$
36,068

 
$
(6,034
)
 
$
78,509

 
 
 
 
 
 
 
 
 
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

 
 
 
 
 
 
 
 
 
2016
 
 

 
 

 
 

 
 

Total assets from reportable segments
 
$
20,293

 
$
35,224

 
$
—

 
$
55,517

All Other operating segments
 
1,381

 
—

 
—

 
1,381

Items not included in segment assets:
 
 

 
 

 
 

 


Cash and short-term investments
 
5,257

 
—

 
—

 
5,257

Intercompany receivables
 
1,713

 
—

 
(1,713
)
 
—

Investment in Financial Products
 
3,638

 
—

 
(3,638
)
 
—

Deferred income taxes
 
3,648

 
—

 
(947
)
 
2,701

Goodwill and intangible assets
 
3,883

 
—

 
—

 
3,883

Property, plant and equipment – net and other assets
 
1,645

 
—

 
—

 
1,645

Operating lease methodology difference
 
(186
)
 
—

 
—

 
(186
)
Inventory methodology differences
 
(2,373
)
 
—

 
—

 
(2,373
)
Liabilities included in segment assets
 
7,400

 
—

 
—

 
7,400

Other
 
(436
)
 
(29
)
 
(56
)
 
(521
)
Total assets
 
$
45,863

 
$
35,195

 
$
(6,354
)
 
$
74,704

 
 
 
 
 
 
 
 
 
Reconciliation of Depreciation and amortization:
Reconciliation of Depreciation and amortization:
 
 
 
 
 
 
(Millions of dollars)
 
Machinery,
Energy &
Transportation
 
Financial
Products
 
Consolidated
Total
2018
 
 

 
 

 
 

Total depreciation and amortization from reportable segments
 
$
1,469

 
$
834

 
$
2,303

Items not included in segment depreciation and amortization:
 
 

 
 

 
 

All Other operating segments
 
225

 
—

 
225

Cost centers
 
130

 
—

 
130

Other
 
71

 
37

 
108

Total depreciation and amortization
 
$
1,895

 
$
871

 
$
2,766

 
 
 
 
 
 
 
2017
 
 

 
 

 
 

Total depreciation and amortization from reportable segments
 
$
1,567

 
$
820

 
$
2,387

Items not included in segment depreciation and amortization:
 
 

 
 

 
 

All Other operating segments
 
220

 
—

 
220

Cost centers
 
143

 
—

 
143

Other
 
86

 
41

 
127

Total depreciation and amortization
 
$
2,016

 
$
861

 
$
2,877

 
 
 
 
 
 
 
2016
 
 

 
 

 
 

Total depreciation and amortization from reportable segments
 
$
1,742

 
$
849

 
$
2,591

Items not included in segment depreciation and amortization:
 
 

 
 

 
 

All Other operating segments
 
219

 
—

 
219

Cost centers
 
156

 
—

 
156

Other
 
27

 
41

 
68

Total depreciation and amortization
 
$
2,144

 
$
890

 
$
3,034

 
 
 
 
 
 
 
Reconciliation of Capital expenditures:
Reconciliation of Capital expenditures:
 
 
 
 
 
 
 
 
(Millions of dollars)
 
Machinery,
Energy &
Transportation
 
Financial
Products
 
Consolidating
Adjustments
 
Consolidated
Total
2018
 
 

 
 

 
 

 
 

Total capital expenditures from reportable segments
 
$
1,196

 
$
1,559

 
$
—

 
$
2,755

Items not included in segment capital expenditures:
 
 

 
 

 
 

 
 

All Other operating segments
 
170

 
—

 
—

 
170

Cost centers
 
100

 
—

 
—

 
100

Timing
 
42

 
—

 
—

 
42

Other
 
(287
)
 
216

 
(80
)
 
(151
)
Total capital expenditures
 
$
1,221

 
$
1,775

 
$
(80
)
 
$
2,916

 
 
 
 
 
 
 
 
 
2017
 
 

 
 

 
 

 
 

Total capital expenditures from reportable segments
 
$
938

 
$
1,373

 
$
—

 
$
2,311

Items not included in segment capital expenditures:
 
 

 
 

 
 

 
 

All Other operating segments
 
134

 
—

 
—

 
134

Cost centers
 
84

 
—

 
—

 
84

Timing
 
(96
)
 
—

 
—

 
(96
)
Other
 
(144
)
 
80

 
(33
)
 
(97
)
Total capital expenditures
 
$
916

 
$
1,453

 
$
(33
)
 
$
2,336

 
 
 
 
 
 
 
 
 
2016
 
 

 
 

 
 

 
 

Total capital expenditures from reportable segments
 
$
948

 
$
1,638

 
$
—

 
$
2,586

Items not included in segment capital expenditures:
 
 

 
 

 
 

 
 

All Other operating segments
 
182

 
—

 
—

 
182

Cost centers
 
72

 
—

 
—

 
72

Timing
 
153

 
—

 
—

 
153

Other
 
(149
)
 
133

 
(49
)
 
(65
)
Total capital expenditures
 
$
1,206

 
$
1,771

 
$
(49
)
 
$
2,928

 
 
 
 
 
 
 
 
 
 
Information about Geographic Areas
Information about Geographic Areas:
 
 
 
 
 
 
 
 
 
Property, plant and equipment - net
 
 
External sales and revenues 1
 
December 31,
(Millions of dollars)
 
2018
 
2017
 
2016
 
2018
 
2017
Inside United States
 
$
22,690

 
$
18,552

 
$
15,956

 
$
8,152

 
$
8,126

Outside United States
 
32,032


26,910


22,581


5,422


6,029

Total
 
$
54,722

 
$
45,462

 
$
38,537

 
$
13,574

 
$
14,155

 
1 
Sales of Machinery, Energy & Transportation are based on dealer or customer location. Revenues from services provided are based on where service is rendered.
 
 
 
 
 
v3.10.0.1
Segment information Sales and Revenue by Geographic Region (Tables)
 12 Months Ended
Dec. 31, 2018
Sales and revenue by geographic region  
Sales and revenues by geographic region
For the year ended December 31, 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
2018
 
 

 
 

 
 

 
 

 
 
Construction Industries
 
$
10,754

 
$
1,479

 
$
4,410

 
$
6,473

 
$
23,116

Resource Industries
 
3,357

 
1,647

 
2,217

 
2,667

 
$
9,888

Energy & Transportation
 
9,685

 
1,331

 
4,934

 
2,882

 
$
18,832

All Other operating segments
 
63

 
3

 
18

 
70

 
$
154

Corporate Items and Eliminations
 
(155
)
 
—

 
(11
)
 
(2
)
 
(168
)
Machinery, Energy & Transportation Sales
 
23,704

 
4,460

 
11,568

 
12,090

 
$
51,822

 
 
 
 
 
 
 
 
 
 
 
Financial Products Segment
 
2,153

 
281

 
387

 
458

 
3,279

Corporate Items and Eliminations
 
(234
)
 
(46
)
 
(26
)
 
(73
)
 
(379
)
Financial Products Revenues
 
1,919

 
235

 
361

 
385

 
2,900

 
 
 
 
 
 
 
 
 
 
 
Consolidated Sales and Revenues
 
$
25,623

 
$
4,695

 
$
11,929

 
$
12,475

 
$
54,722

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the year ended December 31, 2018, Energy & Transportation segment sales by end user application were as follows:
Energy & Transportation External Sales
 
(Millions of dollars)
2018
Oil and gas
$
5,763

Power generation
4,334

Industrial
3,640

Transportation
5,095

Energy & Transportation External Sales
$
18,832

 
 
v3.10.0.1
Restructuring Costs (Tables)
 12 Months Ended
Dec. 31, 2018
Restructuring Charges [Abstract]  
Restructuring and Related Costs
Restructuring costs for 2018, 2017 and 2016 were as follows:

 
 
 
 
 
 
 
(Millions of dollars)
 
2018
 
2017
 
2016
Employee separations 1
 
$
112

 
$
525

 
$
297

Contract terminations 1
 
7

 
183

 
62

Long-lived asset impairments 1
 
93

 
346

 
391

Defined benefit plan curtailments and termination benefits 2
 
(8
)
 
29

 
7

Other 3
 
182

 
173

 
262

Total restructuring costs
 
$
386

 
$
1,256

 
$
1,019

 
 
 
 
 
 
 
1 Recognized in Other operating (income) expenses.
 
 
 
 
 
 
2 Recognized in Other income (expense).
3 Represents costs related to our restructuring programs, primarily for accelerated depreciation, project management costs, equipment relocation and inventory write-downs, and also LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold.
 
 
 
 
 
 
 
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)
112

Reduction in liability (payments)
(276
)
Liability balance at December 31, 2018
$
85

 
 
v3.10.0.1
Selected quarterly financial results (unaudited) (Tables)
 12 Months Ended
Dec. 31, 2018
Quarterly Financial Information Disclosure [Abstract]  
Selected quarterly financial results
 
 
 
 
 
 
 
 
 
 
 
 
2018 Quarter
 
(Dollars in millions except per share data)
 
1st
 
2nd
 
3rd
 
4th
 
Sales and revenues
 
$
12,859

 
$
14,011

 
$
13,510

 
$
14,342

 
Less: Revenues
 
(709
)
 
(732
)
 
(747
)
 
(712
)
 
Sales
 
12,150

 
13,279

 
12,763

 
13,630

 
Cost of goods sold
 
8,566

 
9,422

 
9,022

 
9,987

 
Gross margin
 
3,584

 
3,857

 
3,741

 
3,643

 
Profit 1
 
$
1,665

 
$
1,707

 
$
1,727

4 
$
1,048

5,6,7 
Profit per common share
 
$
2.78

 
$
2.86

 
$
2.92

 
$
1.80

 
Profit per common share–diluted 2
 
$
2.74

 
$
2.82

 
$
2.88

 
$
1.78

 
 
 
 
 
 
 
 
 
 
 
 
 
2017 Quarter
 
 
 
1st
 
2nd
 
3rd
 
4th
 
Sales and revenues
 
$
9,822

 
$
11,331

 
$
11,413

 
$
12,896

 
Less: Revenues
 
(692
)
 
(692
)
 
(700
)
 
(702
)
 
Sales
 
9,130

 
10,639

 
10,713

 
12,194

 
Cost of goods sold
 
6,801

 
7,816

 
7,678

 
8,965

 
Gross margin
 
2,329

 
2,823

 
3,035

 
3,229

 
Profit (loss) 1
 
$
192

 
$
802

 
$
1,059

 
$
(1,299
)
5,6,7 
Profit (loss) per common share
 
$
0.33

 
$
1.36

 
$
1.79

 
$
(2.18
)
 
Profit (loss) per common share–diluted 2
 
$
0.32

 
$
1.35

 
$
1.77

 
$
(2.18
)
3 
 

1 
Profit (loss) attributable to common shareholders.
2 
Diluted by assumed exercise of stock-based compensation awards using the treasury stock method.
3 
In the fourth quarter of 2017, the assumed exercise of stock-based compensation awards was not considered because the impact would be antidilutive.
4 
The third quarter of 2018 includes a benefit of $154 million due to the revised 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. The third quarter of 2018 also includes a charge of $59 million to increase the valuation allowance against deferred tax assets for prior years.  See Note 6 for additional details.
5 
The fourth quarter of 2018 and fourth quarter of 2017 include pre-tax pension and other postretirement benefit plan actuarial losses of $495 million and $301 million, respectively. See Note 12 for additional information on these costs.
6 
The fourth quarter of 2018 includes a benefit of $63 million from reductions in the valuation allowance against U.S. state deferred tax assets. The fourth quarter of 2017 includes a benefit of $111 million from increases in the valuation allowance against U.S. state deferred tax assets. See Note 6 for additional information.
7 
The fourth quarter of 2018 includes a charge of $50 million due to an increase to the $2,371 million charge in the fourth quarter of 2017 due to the enactment of U.S. tax reform legislation on December 22, 2017. See Note 6 for additional information.
 
 
 
 
 
v3.10.0.1
Operations and summary of significant accounting policies (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2018
USD ($)
dealers
countries
distributors
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Operations and summary of significant accounting policies      
Number of countries served by dealers 193    
Percentage of value of inventories on the LIFO basis to total inventories 65.00% 65.00%  
Maximum amortizable period of purchased intangibles (in years) 14 years 14 years  
Incremental value of inventory if FIFO method had been in use | $ $ 2,009 $ 1,934  
Consolidated depreciation expense | $ 2,435 2,555 $ 2,707
Depreciation on equipment leased to others | $ $ 819 $ 810 $ 841
U.S. pensions      
Operations and summary of significant accounting policies      
Number of dealers | dealers 47    
Countries Outside United States      
Operations and summary of significant accounting policies      
Number of dealers | dealers 121    
Perkins      
Operations and summary of significant accounting policies      
Number of countries where distributors are located 177    
Number of distributors | distributors 90    
FG Wilson      
Operations and summary of significant accounting policies      
Number of countries where distributors are located 109    
Number of distributors | distributors 150    
MaK      
Operations and summary of significant accounting policies      
Number of countries where distributors are located 130    
Number of distributors | distributors 20    
Maximum      
Operations and summary of significant accounting policies      
Maximum amortizable period of purchased intangibles (in years) 20 years    
v3.10.0.1
Operations and summary of significant accounting policies (Details 2- Basis of presentation) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]      
Ownership percentage of investments in companies below which the entity must exercise significant influence in order to be accounted for under the equity method 20.00%    
Amount reclassified from other current liabilities to customer advances     $ 233
Payments made for terminated contract with a related guarantee $ 0    
Variable Interest Entity      
Receivables - trade and other 8,802 $ 7,370 7,436
Receivables - finance 8,650   8,757
Long-term receivables - finance 13,286   13,542
Guarantees 1,978   2,105
Variable Interest Entity, Not Primary Beneficiary      
Variable Interest Entity      
Receivables - trade and other 31   34
Receivables - finance 45   42
Long-term receivables - finance 26   38
Investments in unconsolidated affiliated companies 29   39
Guarantees 0   259
Total $ 131   $ 412
Minimum      
Variable Interest Entity      
Equity Method Investment, Ownership Percentage 20.00%    
v3.10.0.1
Operations and summary of significant accounting policies (Details 3 - Revenue recognition) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Jan. 01, 2018
Revenue recognition new guidance impact-Statement of financial position                        
Receivables - trade and other $ 8,802       $ 7,436       $ 8,802 $ 7,436   $ 7,370
Prepaid expenses and other current assets 1,765       1,772       1,765 1,772   2,099
Inventories 11,529       10,018       11,529 10,018   10,022
Property, plant and equipment - net 13,574       14,155       13,574 14,155   13,965
Noncurrent deferred and refundable income taxes 1,439       1,693       1,439 1,693   1,695
Accrued expenses 3,573       3,220       3,573 3,220   3,446
Customer advances 1,243       1,426       1,243 1,426   1,472
Other current liabilities 1,919       1,742       1,919 1,742   1,725
Other liabilities 3,756       4,053       3,756 4,053   3,887
Profit employed in the business 30,427       26,301       30,427 26,301   26,289
Revenue recognition new guidance impact - Results of operations                        
Sales of machinery, energy & transportation 14,342 $ 13,510 $ 14,011 $ 12,859 12,896 $ 11,413 $ 11,331 $ 9,822 54,722 45,462 $ 38,537  
Cost of goods sold 9,987 9,022 9,422 8,566 8,965 7,678 7,816 6,801 36,997 31,260 28,044  
Other operating (income) expenses                 1,382 2,255 1,904  
Operating profit                 8,293 4,460 1,162  
Consolidated profit before taxes                 7,822 4,082 139  
Provision (benefit) for income taxes                 1,698 3,339 192  
Profit (loss) of consolidated companies                 6,124 743 (53)  
Profit (loss) of consolidated and affiliated companies                 6,148 759 (59)  
Profit (loss) 1,048 1,727 1,707 1,665 (1,299) 1,059 802 192 6,147 [1] 754 [1] (67) [1]  
Accounting Standards Update 2014-09                        
Revenue recognition new guidance impact-Statement of financial position                        
Receivables - trade and other (63)               (63)     (66)
Prepaid expenses and other current assets 360               360     327
Inventories 6               6     4
Property, plant and equipment - net                       (190)
Noncurrent deferred and refundable income taxes (3)               (3)     2
Accrued expenses 232               232     226
Customer advances 61               61     46
Other current liabilities                       (17)
Other liabilities                       (166)
Profit employed in the business 7               7     $ (12)
Revenue recognition new guidance impact - Results of operations                        
Cost of goods sold                 (10)      
Other operating (income) expenses                 (6)      
Operating profit                 24      
Consolidated profit before taxes                 24      
Provision (benefit) for income taxes                 5      
Profit (loss) of consolidated companies                 19      
Profit (loss) of consolidated and affiliated companies                 19      
Profit (loss)                 19      
Machinery, Energy & Transportation                        
Revenue recognition new guidance impact - Results of operations                        
Sales of machinery, energy & transportation 13,630 $ 12,763 $ 13,279 $ 12,150 $ 12,194 $ 10,713 $ 10,639 $ 9,130 51,822 $ 42,676 $ 35,773  
Machinery, Energy & Transportation | Accounting Standards Update 2014-09                        
Revenue recognition new guidance impact - Results of operations                        
Sales of machinery, energy & transportation                 8      
Previous Accounting Method                        
Revenue recognition new guidance impact-Statement of financial position                        
Receivables - trade and other 8,865               8,865      
Prepaid expenses and other current assets 1,405               1,405      
Inventories 11,523               11,523      
Noncurrent deferred and refundable income taxes 1,442               1,442      
Accrued expenses 3,341               3,341      
Customer advances 1,182               1,182      
Profit employed in the business $ 30,420               30,420      
Revenue recognition new guidance impact - Results of operations                        
Cost of goods sold                 37,007      
Other operating (income) expenses                 1,388      
Operating profit                 8,269      
Consolidated profit before taxes                 7,798      
Provision (benefit) for income taxes                 1,693      
Profit (loss) of consolidated companies                 6,105      
Profit (loss) of consolidated and affiliated companies                 6,129      
Profit (loss)                 6,128      
Previous Accounting Method | Machinery, Energy & Transportation                        
Revenue recognition new guidance impact - Results of operations                        
Sales of machinery, energy & transportation                 $ 51,814      
[1] 1 Profit (loss) attributable to common shareholders.
v3.10.0.1
Operations and summary of significant accounting policies (Details 4- Pension) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]                      
Cost of goods sold $ 9,987 $ 9,022 $ 9,422 $ 8,566 $ 8,965 $ 7,678 $ 7,816 $ 6,801 $ 36,997 $ 31,260 $ 28,044
Selling, general and administrative expenses                 5,478 4,999 4,383
Research and development expenses                 1,850 1,842 1,853
Other operating (income) expenses                 1,382 2,255 1,904
Total operating costs                 46,429 41,002 37,375
Operating profit                 8,293 4,460 1,162
Other income (expense)                 $ (67) 153 (518)
Components of net periodic benefit cost                      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]                      
Cost of goods sold                   211 (265)
Selling, general and administrative expenses                   (178) (303)
Research and development expenses                   (63) (98)
Other operating (income) expenses                   (24) 2
Total operating costs                   (54) (664)
Operating profit                   54 664
Other income (expense)                   (54) (664)
Previously Reported                      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]                      
Cost of goods sold                   31,049 28,309
Selling, general and administrative expenses                   5,177 4,686
Research and development expenses                   1,905 1,951
Other operating (income) expenses                   2,279 1,902
Total operating costs                   41,056 38,039
Operating profit                   4,406 498
Other income (expense)                   $ 207 $ 146
v3.10.0.1
Operations and summary of significant accounting policies Operations and summary of significant accounting polices (Details 5 - lease accounting)
$ in Millions
Jan. 01, 2019
USD ($)
Operations and summary of significant accounting policies  
Expected amount, Right-of-Use asset under operating leases $ 750
Expected amount, operating lease liability 750
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 135
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 $ 360
v3.10.0.1
Sales and revenue recognition (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Jan. 01, 2018
Revenue from External Customer [Line Items]    
Receivables, Net, Current $ 7,743 $ 6,399
Long term trade receivables from dealers and end users 674 639
Contract with Customer, Liability, Noncurrent 437 $ 396
Contract with Customer, Liability, Revenue Recognized 1,294  
Revenue, Remaining Performance Obligation, Amount $ 5,800  
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]: 2019-01-01    
Revenue from External Customer [Line Items]    
Revenue, Remaining Performance Obligation, Amount $ 2,500  
v3.10.0.1
Stock-based compensation (Details) - $ / shares
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Common shares issued from treasury stock for stock-based compensation (in shares) 5,590,641 11,139,748 4,164,134  
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant 44,139,162      
Term life of SARs and option awards (in years) 10 years      
Required minimum age of a participant upon separation from service to meet the criteria for Long Service Separation (in years) 55 years      
Minimum term of service to meet criteria for Long Service Separation (in years) 5 years      
Term life of vested options/SARs from separation date (in years) 5 years      
Assumptions used in determining the fair value of the stock-based awards        
Weighted-average dividend yield (as a percent) 2.70% 3.40% 3.20%  
Weighted-average volatility (as a percent) 30.20% 29.20% 31.10%  
Volatilities, low end of range (as a percent) 21.50% 22.10% 22.50%  
Volatilities, high end of range (as a percent) 33.00% 33.00% 33.40%  
Risk-free interest rates, low end of range (as a percent) 2.02% 0.81% 0.62%  
Risk-free interest rates, high end of range (as a percent) 2.87% 2.35% 1.73%  
Weighted-average expected lives (in years) 8 years 8 years 8 years  
Weighted-Average Grant Date Fair Value for RSUs and PSUs        
Number of additional shares authorized under the plan (in shares)   36,000,000    
Number of shares authorized under the plans (in shares) 74,800,000     38,800,000
Stock Options and Stock Appreciation Rights (SARs)        
Stock options/SARs activity        
Outstanding at beginning of year (in shares) 21,499,895      
Granted to officers and key employees (in shares) 1,605,220      
Exercised (in shares) (5,156,489)      
Forfeited / expired (in shares) (106,957)      
Outstanding at end of year (in shares) 17,841,669 21,499,895    
Number of stock awards exercisable at end of the period (in shares) 13,858,401      
Weighted- Average Exercise Price for Stock options/SARs        
Outstanding at beginning of year (in dollars per shares) $ 86.86      
Granted to officers and key employees (in dollars per shares) 150.85      
Exercised (in dollars per shares) 87.90      
Forfeited / expired (in dollars per shares) 151.13      
Outstanding at end of year (in dollars per shares) 91.93 $ 86.86    
Exercisable at year-end (in dollars per share) $ 86.05      
Stock Appreciation Rights (SARs)        
Stock options/SARs activity        
Granted to officers and key employees (in shares) 0      
Restricted Stock Units (RSUs)        
RSUs/PSUs activity        
Outstanding at beginning of year (in shares) 1,964,517      
Granted to officers and key employees (in shares) 734,732      
Vested (in shares) (1,065,853)      
Forfeited (in shares) (67,326)      
Outstanding at end of year (in shares) 1,566,070 1,964,517    
Weighted-Average Grant Date Fair Value for RSUs and PSUs        
Outstanding at beginning of year (in dollars per shares) $ 80.04      
Granted to officers and key employees (in dollars per shares) 150.58      
Vested (in dollars per shares) 78.11      
Forfeited (in dollars per shares) 113.29      
Outstanding at end of year (in dollars per shares) $ 112.99 $ 80.04    
Performance Restricted Stock Units (PRSUs)        
RSUs/PSUs activity        
Outstanding at beginning of year (in shares) 1,006,991      
Granted to officers and key employees (in shares) 350,724      
Vested (in shares) (549,330)      
Forfeited (in shares) (73,086)      
Outstanding at end of year (in shares) 735,299 1,006,991    
Weighted-Average Grant Date Fair Value for RSUs and PSUs        
Outstanding at beginning of year (in dollars per shares) $ 74.06      
Granted to officers and key employees (in dollars per shares) 150.98      
Vested (in dollars per shares) 127.07      
Forfeited (in dollars per shares) 100.30      
Outstanding at end of year (in dollars per shares) $ 115.18 $ 74.06    
2015 and later grants        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Graded vesting period of awards granted (in years) 10 years      
2015 and later grants | Performance Restricted Stock Units (PRSUs)        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Graded vesting period of awards granted (in years) 3 years      
Percentage of award vested on first anniversary of grant date | 2015 and later grants        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Portion of the award vested on each anniversary of the grant date 33.33%      
Percentage of award vested on second anniversary of grant date | 2015 and later grants        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Portion of the award vested on each anniversary of the grant date 33.33%      
Percentage of award vested on third anniversary of grant date | 2015 and later grants        
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]        
Portion of the award vested on each anniversary of the grant date 33.33%      
v3.10.0.1
Stock-based compensation (Details 2) - USD ($)
$ / shares in Units, $ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Additional Stock-based Award Information under Restricted Stock Units Activity      
Stock-based compensation expense, before tax (in dollars) $ 197 $ 206 $ 218
Income tax benefit corresponding to stock-based compensation expense 36 40 61
Unrecognized compensation cost related to nonvested stock-based compensation awards (in dollars) $ 180    
Term of amortization of unrecognized compensation cost over weighted-average remaining requisite service periods (in years) 1 year 10 months    
Cash tax benefits realized from stock awards exercised $ 103 205 104
Exercise Price Range 22.17 To 57.85      
Exercise Prices Stock Options/SARs outstanding and exercisable      
Exercise Price Range, Minimum (in dollars per share) $ 22.17    
Exercise Price Range, Maximum (in dollars per share) 57.85    
Exercise Price Range 74.77 To 89.75      
Exercise Prices Stock Options/SARs outstanding and exercisable      
Exercise Price Range, Minimum (in dollars per share) 74.77    
Exercise Price Range, Maximum (in dollars per share) 89.75    
Exercise Price Range 95.66 To 96.31      
Exercise Prices Stock Options/SARs outstanding and exercisable      
Exercise Price Range, Minimum (in dollars per share) 95.66    
Exercise Price Range, Maximum (in dollars per share) 96.31    
Exercise Price Range 102.13 to 110.09      
Exercise Prices Stock Options/SARs outstanding and exercisable      
Exercise Price Range, Minimum (in dollars per share) 102.13    
Exercise Price Range, Maximum (in dollars per share) 110.09    
Exercise Price Range 138.51 To 151.12      
Exercise Prices Stock Options/SARs outstanding and exercisable      
Exercise Price Range, Minimum (in dollars per share) 138.51    
Exercise Price Range, Maximum (in dollars per share) $ 151.12    
Stock Options and Stock Appreciation Rights (SARs)      
Stock Options/SARs outstanding and exercisable      
Number of stock awards outstanding at end of the period (in shares) 17,841,669    
Weighted Average Exercise Price (in dollars per share) $ 91.93    
Aggregate Intrinsic Value outstanding $ 662    
Number of stock awards exercisable at end of the period (in shares) 13,858,401    
Weighted Average Exercise Price (in dollars per share) $ 86.05    
Aggregate Intrinsic Value exercisable $ 568    
Additional Stock-based Award Information under Stock Option and Stock Appreciation Rights      
Intrinsic value of stock awards exercised 348 504 185
Fair value of stock awards vested 86 191 163
Cash received from stock awards exercised $ 370 629 30
Stock Options and Stock Appreciation Rights (SARs) | Exercise Price Range 22.17 To 57.85      
Stock Options/SARs outstanding and exercisable      
Number of stock awards outstanding at end of the period (in shares) 973,032    
Weighted Average Remaining Contractual Life outstanding (in years) 1 year 15 days    
Weighted Average Exercise Price (in dollars per share) $ 53.08    
Aggregate Intrinsic Value outstanding $ 72    
Number of stock awards exercisable at end of the period (in shares) 973,032    
Weighted-Average Remaining Contractual Life exercisable (in years) 11 months 16 days    
Weighted Average Exercise Price (in dollars per share) $ 53.08    
Aggregate Intrinsic Value exercisable $ 72    
Stock Options and Stock Appreciation Rights (SARs) | Exercise Price Range 74.77 To 89.75      
Stock Options/SARs outstanding and exercisable      
Number of stock awards outstanding at end of the period (in shares) 8,954,712    
Weighted Average Remaining Contractual Life outstanding (in years) 6 years 3 months 8 days    
Weighted Average Exercise Price (in dollars per share) $ 81.25    
Aggregate Intrinsic Value outstanding $ 410    
Number of stock awards exercisable at end of the period (in shares) 8,186,590    
Weighted-Average Remaining Contractual Life exercisable (in years) 6 years 1 month 30 days    
Weighted Average Exercise Price (in dollars per share) $ 81.86    
Aggregate Intrinsic Value exercisable $ 370    
Stock Options and Stock Appreciation Rights (SARs) | Exercise Price Range 95.66 To 96.31      
Stock Options/SARs outstanding and exercisable      
Number of stock awards outstanding at end of the period (in shares) 4,573,457    
Weighted Average Remaining Contractual Life outstanding (in years) 6 years 10 months 24 days    
Weighted Average Exercise Price (in dollars per share) $ 95.96    
Aggregate Intrinsic Value outstanding $ 142    
Number of stock awards exercisable at end of the period (in shares) 2,856,943    
Weighted-Average Remaining Contractual Life exercisable (in years) 6 years 22 days    
Weighted Average Exercise Price (in dollars per share) $ 96.13    
Aggregate Intrinsic Value exercisable $ 88    
Stock Options and Stock Appreciation Rights (SARs) | Exercise Price Range 102.13 to 110.09      
Stock Options/SARs outstanding and exercisable      
Number of stock awards outstanding at end of the period (in shares) 1,840,740    
Weighted Average Remaining Contractual Life outstanding (in years) 2 years 9 months 1 day    
Weighted Average Exercise Price (in dollars per share) $ 106.38    
Aggregate Intrinsic Value outstanding $ 38    
Number of stock awards exercisable at end of the period (in shares) 1,840,740    
Weighted-Average Remaining Contractual Life exercisable (in years) 2 years 9 months 1 day    
Weighted Average Exercise Price (in dollars per share) $ 106.38    
Aggregate Intrinsic Value exercisable $ 38    
Stock Options and Stock Appreciation Rights (SARs) | Exercise Price Range 138.51 To 151.12      
Stock Options/SARs outstanding and exercisable      
Number of stock awards outstanding at end of the period (in shares) 1,499,728    
Weighted Average Remaining Contractual Life outstanding (in years) 9 years 3 months 26 days    
Weighted Average Exercise Price (in dollars per share) $ 150.84    
Aggregate Intrinsic Value outstanding $ 0    
Number of stock awards exercisable at end of the period (in shares) 1,096    
Weighted-Average Remaining Contractual Life exercisable (in years) 9 years 3 months 20 days    
Weighted Average Exercise Price (in dollars per share) $ 151.12    
Aggregate Intrinsic Value exercisable $ 0    
Restricted Stock Units (RSUs)      
Additional Stock-based Award Information under Restricted Stock Units Activity      
Weighted-average fair value per share of stock awards granted $ 150.58    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value $ 180 $ 189 162
Outstanding at end of year (in shares) 1,566,070 1,964,517  
Weighted average remaining contractual life (in years) 1 year 5 months    
Performance Restricted Stock Units (PRSUs)      
Additional Stock-based Award Information under Restricted Stock Units Activity      
Weighted-average fair value per share of stock awards granted $ 150.98    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value $ 70 $ 20 $ 0
Outstanding at end of year (in shares) 735,299 1,006,991  
Weighted average remaining contractual life (in years) 1 year 6 months    
v3.10.0.1
Derivative financial instruments and risk management (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2018
USD ($)
Derivative [Line Items]  
Maximum length of time policy, foreign currency cash flow hedge 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 $ 8
Commodity forward and option contracts, maximum period (in years) 5 years
v3.10.0.1
Derivative financial instruments and risk management (Details 2) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Derivatives Fair Value      
Asset Fair Value $ 131 $ 74  
Liability Fair Value (150) (93)  
Machinery, Energy & Transportation      
Derivatives Fair Value      
Asset Fair Value 19 52  
Liability Fair Value (87) (25)  
Financial Products      
Derivatives Fair Value      
Asset Fair Value 112 22  
Liability Fair Value (63) (68)  
Designated derivatives      
Derivatives Fair Value      
Asset (Liability) Fair Value 24 (53)  
Undesignated derivatives      
Derivatives Fair Value      
Asset (Liability) Fair Value (43) 34  
Foreign exchange contracts | Designated derivatives | Receivables - trade and other | Machinery, Energy & Transportation      
Derivatives Fair Value      
Asset Fair Value 16 8  
Foreign exchange contracts | Designated derivatives | Long-term receivables - trade and other | Machinery, Energy & Transportation      
Derivatives Fair Value      
Asset Fair Value 0 4  
Foreign exchange contracts | Designated derivatives | Long-term receivables - trade and other | Financial Products      
Derivatives Fair Value      
Asset Fair Value 35 7  
Foreign exchange contracts | Designated derivatives | Accrued expenses | Machinery, Energy & Transportation      
Derivatives Fair Value      
Liability Fair Value (26) (14)  
Foreign exchange contracts | Designated derivatives | Accrued expenses | Financial Products      
Derivatives Fair Value      
Liability Fair Value (9) (57)  
Foreign exchange contracts | Designated derivatives | Other liabilities | Machinery, Energy & Transportation      
Derivatives Fair Value      
Liability Fair Value (9) (2)  
Foreign exchange contracts | Undesignated derivatives | Receivables - trade and other | Machinery, Energy & Transportation      
Derivatives Fair Value      
Asset Fair Value 2 19  
Foreign exchange contracts | Undesignated derivatives | Receivables - trade and other | Financial Products      
Derivatives Fair Value      
Asset Fair Value 15 12  
Foreign exchange contracts | Undesignated derivatives | Long-term receivables - trade and other | Financial Products      
Derivatives Fair Value      
Asset Fair Value 5 0  
Foreign exchange contracts | Undesignated derivatives | Accrued expenses | Machinery, Energy & Transportation      
Derivatives Fair Value      
Liability Fair Value (21) (9)  
Foreign exchange contracts | Undesignated derivatives | Accrued expenses | Financial Products      
Derivatives Fair Value      
Liability Fair Value (14) (9)  
Interest rate contracts | Designated derivatives | Receivables - trade and other | Financial Products      
Derivatives Fair Value      
Asset Fair Value 1 0  
Interest rate contracts | Designated derivatives | Long-term receivables - trade and other | Financial Products      
Derivatives Fair Value      
Asset Fair Value 3 3  
Interest rate contracts | Designated derivatives | Accrued expenses | Financial Products      
Derivatives Fair Value      
Liability Fair Value (40) (2)  
Commodity contracts | Undesignated derivatives | Receivables - trade and other | Machinery, Energy & Transportation      
Derivatives Fair Value      
Asset Fair Value 1 21  
Commodity contracts | Undesignated derivatives | Accrued expenses | Machinery, Energy & Transportation      
Derivatives Fair Value      
Liability Fair Value (31) 0  
Cash Flow Hedges | Designated derivatives      
Derivatives Fair Value      
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) 80 (5) $ (95)
Cash Flow Hedges | Foreign exchange contracts | Designated derivatives | Machinery, Energy & Transportation      
Derivatives Fair Value      
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) (47) 72 (118)
Cash Flow Hedges | Foreign exchange contracts | Designated derivatives | Financial Products      
Derivatives Fair Value      
Amount of Gains (Losses) Recognized in AOCI (Effective Portion)   (77) 15
Cash Flow Hedges | Interest rate contracts | Designated derivatives | Machinery, Energy & Transportation      
Derivatives Fair Value      
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) 0 0 0
Cash Flow Hedges | Interest rate contracts | Designated derivatives | Financial Products      
Derivatives Fair Value      
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) (38) $ 0 $ 8
Other Income (Expense) | Cash Flow Hedges | Foreign exchange contracts | Designated derivatives | Financial Products      
Derivatives Fair Value      
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) 165    
Interest expense | Cash Flow Hedges | Foreign exchange contracts | Designated derivatives | Financial Products      
Derivatives Fair Value      
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) $ 0    
v3.10.0.1
Derivative financial instruments and risk management (Details 3) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Machinery, Energy & Transportation    
Derivative notional amounts    
Derivative instruments notional amount $ 1,834 $ 3,190
Financial Products    
Derivative notional amounts    
Derivative instruments notional amount $ 10,210 $ 3,691
v3.10.0.1
Derivative financial instruments and risk management (Details 4) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Designated derivatives | Cash Flow Hedges      
Derivative Instruments, Gain (Loss)      
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) $ 80 $ (5) $ (95)
Amount of Gains (Losses) Reclassified from AOCI to Earnings 131 (121) 5
Recognized in Earnings (Ineffective Portion) 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) (47) 72 (118)
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 (33) (40) (14)
Recognized in Earnings (Ineffective Portion) 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)   (77) 15
Designated derivatives | Cash Flow Hedges | Foreign exchange contracts | Financial Products | Other Income (Expense)      
Derivative Instruments, Gain (Loss)      
Amount of Gains (Losses) Recognized in AOCI (Effective Portion) 165    
Amount of Gains (Losses) Reclassified from AOCI to Earnings 148 (81) 28
Recognized in Earnings (Ineffective Portion) 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    
Amount of Gains (Losses) Reclassified from AOCI to Earnings 19    
Recognized in Earnings (Ineffective Portion) 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
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 (3) (9) (6)
Recognized in Earnings (Ineffective Portion) 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) (38) 0 8
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 3 (3)
Recognized in Earnings (Ineffective Portion) 0 0 0
Undesignated derivatives      
Derivative Instruments, Gain (Loss)      
Gains (Losses) on Derivatives Not Designated as Hedging Instruments (74) 111 (10)
Undesignated derivatives | Foreign exchange contracts | Machinery, Energy & Transportation | Other Income (Expense)      
Derivative Instruments, Gain (Loss)      
Gains (Losses) on Derivatives Not Designated as Hedging Instruments (54) 72 (4)
Undesignated derivatives | Foreign exchange contracts | Financial Products | Other Income (Expense)      
Derivative Instruments, Gain (Loss)      
Gains (Losses) on Derivatives Not Designated as Hedging Instruments 19 9 (24)
Undesignated derivatives | Interest rate contracts | Machinery, Energy & Transportation | Other Income (Expense)      
Derivative Instruments, Gain (Loss)      
Gains (Losses) on Derivatives Not Designated as Hedging Instruments 0 0 2
Undesignated derivatives | Commodity contracts | Machinery, Energy & Transportation | Other Income (Expense)      
Derivative Instruments, Gain (Loss)      
Gains (Losses) on Derivatives Not Designated as Hedging Instruments $ (39) $ 30 $ 16
v3.10.0.1
Derivative financial instruments and risk management (Details 5) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Offsetting Assets    
Gross Amount of Recognized Assets $ 131 $ 74
Gross Amounts Offset in the Statement of Financial Position 0 0
Net Amount of Assets Presented in the Statement of Financial Position 131 74
Financial Instruments (53) (32)
Cash Collateral Received 0 0
Net Amount of Assets 78 42
Machinery, Energy & Transportation    
Offsetting Assets    
Gross Amount of Recognized Assets 19 52
Gross Amounts Offset in the Statement of Financial Position 0 0
Net Amount of Assets Presented in the Statement of Financial Position 19 52
Financial Instruments (19) (22)
Cash Collateral Received 0 0
Net Amount of Assets 0 30
Financial Products    
Offsetting Assets    
Gross Amount of Recognized Assets 112 22
Gross Amounts Offset in the Statement of Financial Position 0 0
Net Amount of Assets Presented in the Statement of Financial Position 112 22
Financial Instruments (34) (10)
Cash Collateral Received 0 0
Net Amount of Assets $ 78 $ 12
v3.10.0.1
Derivative financial instruments and risk management (Details 6) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Offsetting Liabilities    
Derivative Asset, Collateral, Obligation to Return Cash, Offset $ 0  
Gross Amount of Recognized Liabilities (150) $ (93)
Gross Amounts Offset in the Statement of Financial Position 0 0
Net Amount of Liabilities Presented in the Statement of Financial Position (150) (93)
Financial Instruments 53 32
Cash Collateral Pledged 0 0
Net Amount of Liabilities 97 61
Machinery, Energy & Transportation    
Offsetting Liabilities    
Gross Amount of Recognized Liabilities (87) (25)
Gross Amounts Offset in the Statement of Financial Position 0 0
Net Amount of Liabilities Presented in the Statement of Financial Position (87) (25)
Financial Instruments 19 22
Cash Collateral Pledged 0 0
Net Amount of Liabilities 68 3
Financial Products    
Offsetting Liabilities    
Gross Amount of Recognized Liabilities (63) (68)
Gross Amounts Offset in the Statement of Financial Position 0 0
Net Amount of Liabilities Presented in the Statement of Financial Position (63) (68)
Financial Instruments 34 10
Cash Collateral Pledged 0 0
Net Amount of Liabilities $ 29 $ 58
v3.10.0.1
Other income (expense) (Details) - USD ($)
$ in Millions
 12 Months Ended
May 01, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Other Income and Expenses [Abstract]        
Investment and interest income   $ 195 $ 122 $ 74
Foreign exchange gains (losses)   (201) (213) (57)
License fee income   125 100 92
Gains (losses) on sale of securities and affiliated companies   4 187 47
Net periodic pension and OPEB income (cost), excluding service cost   (118) (54) (664)
Unrealized gain (loss) on investment in equity securities   (33) 0 0
Miscellaneous income (loss)   (39) 11 (10)
Other income (expense)   $ (67) $ 153 $ (518)
Iron Planet Holdings, Inc. investment        
Schedule of Equity Method Investments [Line Items]        
Equity Method Investment, Realized Gain (Loss) on Disposal $ 85      
v3.10.0.1
Income taxes (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
(Decreases) increases in taxes resulting from:      
Taxes at U.S. statutory rate $ 1,643 $ 1,429 $ 49
Taxes at U. S. statutory rate (as a percent) 21.00% 35.00% 35.00%
Non-U.S. subsidiaries taxed at other than the U.S. rate $ 282 $ (282) $ (119)
Non-U.S. subsidiaries taxed at other than the U.S. rate (as a percent) 3.60% (6.90%) (85.60%)
State and local taxes, net of federal $ 22 $ 27 $ (1)
State and local taxes, net of federal (as a percent) 0.30% 0.70% (0.70%)
Interest and penalties, net of tax $ 33 $ 28 $ 24
Interest and penalties, net of tax (as a percent) 0.40% 0.70% 17.20%
U.S. tax incentives $ (106) $ (52) $ (52)
U.S. tax incentives (as a percent) (1.30%) (1.30%) (37.40%)
ESOP dividend tax benefit $ (12) $ (21) $ (27)
ESOP dividend tax benefit (as a percent) (0.20%) (0.50%) (19.40%)
Net excess tax benefits from stock-based compensation $ (56) $ (64) $ 0
Net excess tax benefits from stock-based compensation, percent (0.70%) (1.60%) 0.00%
U.S. deferred tax rate change $ (154) $ 596 $ 0
U.S. deferred tax rate change (as a percent) (2.00%) 14.60% 0.00%
Mandatory deemed repatriation of non-U.S. earnings $ 50 $ 1,775 $ 0
Mandatory deemed repatriation of non-U.S. earnings (as a percent) 0.70% 43.50% 0.00%
Valuation allowances $ (29) $ (111) $ 141
Valuation allowances (as a percent) (0.40%) (2.70%) 101.40%
Nondeductible goodwill $ 0 $ 0 $ 191
Nondeductible goodwill (as a percent) 0.00% 0.00% 137.40%
Other-net $ 25 $ 14 $ (14)
Other-net (as a percent) 0.30% 0.30% (10.10%)
Provision (benefit) for income taxes $ 1,698 $ 3,339 $ 192
Provision (benefit) for income taxes (as a percent) 21.70% 81.80% 137.80%
U.S. state taxing jurisdictions      
(Decreases) increases in taxes resulting from:      
Valuation allowances   $ (111) $ 141
v3.10.0.1
Income taxes Income taxes (Details 2) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Dec. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Income Tax Contingency            
Pre-tax foreign currency permanent difference       $ 180 $ (160) $ 130
Taxes at U. S. statutory rate (as a percent)       21.00% 35.00% 35.00%
Adjustment to estimated tax for mandatory deemed repatriation of non-U.S. earnings $ 50     $ 50    
Adjustment to U.S. 2017 tax reform estimated impact       (104)    
Correction of Prior Year Valuation Allowance   $ 59   59 $ (17) $ (33)
U.S. 2017 tax reform provisionally estimated impact     $ 2,371   2,371  
Charge/ (benefit) to U.S. deferred tax rate change 2017 U.S. tax reform   $ 154   (154)    
Undistributed earnings of foreign subsidiaries $ 14,000     14,000    
Valuation allowances       (29) (111) 141
U.S. state taxing jurisdictions            
Income Tax Contingency            
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount       (63)    
Valuation allowances         $ (111) $ 141
Outside the United States            
Income Tax Contingency            
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount       (25)    
Discretionary Contribution            
Income Tax Contingency            
Payment for Pension and Other Postretirement Benefits       $ 1,000    
v3.10.0.1
Income taxes (Details 3) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Components of profit (loss) before taxes      
U.S $ 2,131 $ 240 $ (2,053)
Non-U.S 5,691 3,842 2,192
Consolidated profit before taxes 7,822 4,082 139
Current tax provision (benefit):      
U.S. 179 963 (90)
Non-U.S. 1,291 1,124 718
State (U.S.) 8 39 (5)
Current tax provision (benefit) 1,478 2,126 623
Deferred tax provision (benefit):      
U.S. 298 1,385 (544)
Non-U.S. 4 (17) (108)
State (U.S.) (82) (155) 221
Deferred tax provision (benefit) 220 1,213 (431)
Provision (benefit) for income taxes 1,698 3,339 192
Income Taxes Paid $ 1,429 $ 1,404 $ 522
v3.10.0.1
Income taxes (Details 4) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Deferred tax assets    
Noncurrent deferred and refundable income taxes $ 1,363 $ 1,569
Deferred tax liabilities    
Other liabilities 331 281
Deferred income taxes-net $ 1,032 $ 1,288
v3.10.0.1
Income taxes (Details 5) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Deferred income tax assets:    
Tax carryforwards $ 1,312 $ 1,286
Pension 785 980
Postemployment benefits other than pensions 793 841
Warranty reserves 237 226
Stock-based compensation 121 135
Allowance for credit losses 155 149
Post sale discounts 158 160
Other employee compensation and benefits 186 203
Other-net 298 302
Deferred income tax assets, Total 4,045 4,282
Deferred income tax liabilities:    
Capital and intangible assets (1,381) (1,360)
Bond discount (127) (133)
Translation (190) (165)
Other outside basis differences (271) (205)
Undistributed profits of non-U.S. subsidiaries (129) (138)
Deferred income tax liabilities, Total (2,098) (2,001)
Valuation allowance for deferred tax assets (915) (993)
Deferred income taxes-net $ 1,032 $ 1,288
v3.10.0.1
Income taxes (Details 6) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Operating loss and Tax credit carryforwards    
Valuation allowance for deferred tax assets $ 915 $ 993
Deferred Tax Assets, Tax Credit Carryforwards, Foreign $ 500  
U.S. state taxing jurisdictions    
Operating loss and Tax credit carryforwards    
Net operating loss carryforward expiration, years 20 years  
State tax credit carryforward expiration date, years 15 years  
U.S. state taxing jurisdictions | Primarily over the next 20 years    
Operating loss and Tax credit carryforwards    
Net operating loss carryforwards $ 1,804  
Valuation allowance for deferred tax assets 192  
U.S. state taxing jurisdictions | Expiration date next one to fifteen years    
Operating loss and Tax credit carryforwards    
Tax credit carryforwards 134  
Non-U.S. taxing jurisdictions    
Operating loss and Tax credit carryforwards    
Net operating loss carryforwards 4,489  
Valuation allowance for deferred tax assets 723  
Non-U.S. taxing jurisdictions | Expiring in 2019    
Operating loss and Tax credit carryforwards    
Net operating loss carryforwards 23  
Non-U.S. taxing jurisdictions | Expiring in 2020    
Operating loss and Tax credit carryforwards    
Net operating loss carryforwards 124  
Non-U.S. taxing jurisdictions | Expiring in 2021    
Operating loss and Tax credit carryforwards    
Net operating loss carryforwards 92  
Non-U.S. taxing jurisdictions | Expire between 2022-2024    
Operating loss and Tax credit carryforwards    
Net operating loss carryforwards 147  
Non-U.S. taxing jurisdictions | Expire between 2025-2039    
Operating loss and Tax credit carryforwards    
Net operating loss carryforwards 506  
Non-U.S. taxing jurisdictions | Unlimited    
Operating loss and Tax credit carryforwards    
Net operating loss carryforwards $ 3,597  
v3.10.0.1
Income taxes (Details 7) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits      
Unrecognized tax benefits, beginning $ 1,286 $ 1,032 $ 968
Additions for tax positions related to current year 61 270 73
Additions for tax positions related to prior years 461 20 55
Reductions for tax positions related to prior years (5) (27) (36)
Reductions for settlements (6) (9) (24)
Reductions for expiration of statute of limitations (1) 0 (4)
Unrecognized tax benefits, ending 1,796 1,286 1,032
Unrecognized tax benefits that, if recognized, would impact the effective tax rate 1,716 1,209 963
Net provision for interest and penalties 42 38 $ 34
Interest and penalties, accrued 190 $ 157  
Income tax examination, proposed liability increase/(decrease) $ 2,300    
v3.10.0.1
Cat Financial Financing Activities (Details) - Wholesale receivables - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Contractual maturities of wholesale inventory receivables    
2019 $ 634  
2020 277  
2021 187  
2022 87  
2023 27  
Thereafter 19  
Total Amounts Due 1,231  
Guaranteed residual value 66  
Unguaranteed residual value 35  
Less: Unearned Income (24)  
Total 1,308 $ 1,398
Wholesale loans    
Contractual maturities of wholesale inventory receivables    
2019 564  
2020 229  
2021 157  
2022 71  
2023 21  
Thereafter 16  
Total Amounts Due 1,058  
Guaranteed residual value 0  
Unguaranteed residual value 0  
Less: Unearned Income (8)  
Total 1,050  
Wholesale leases    
Contractual maturities of wholesale inventory receivables    
2019 70  
2020 48  
2021 30  
2022 16  
2023 6  
Thereafter 3  
Total Amounts Due 173  
Guaranteed residual value 66  
Unguaranteed residual value 35  
Less: Unearned Income (16)  
Total $ 258  
v3.10.0.1
Cat Financial Financing Activities (Details 2) - Finance Receivables - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Contractual maturities of outstanding finance receivables    
2019 $ 8,750  
2020 5,768  
2021 3,633  
2022 2,203  
2023 999  
Thereafter 739  
Total Amounts Due 22,092  
Guaranteed residual value 392  
Unguaranteed residual value 822  
Less: Unearned Income (880)  
Total 22,426 $ 22,632
Retail loans    
Contractual maturities of outstanding finance receivables    
2019 5,769  
2020 3,742  
2021 2,560  
2022 1,750  
2023 833  
Thereafter 683  
Total Amounts Due 15,337  
Guaranteed residual value 0  
Unguaranteed residual value 0  
Less: Unearned Income (252)  
Total 15,085  
Retail leases    
Contractual maturities of outstanding finance receivables    
2019 2,981  
2020 2,026  
2021 1,073  
2022 453  
2023 166  
Thereafter 56  
Total Amounts Due 6,755  
Guaranteed residual value 392  
Unguaranteed residual value 822  
Less: Unearned Income (628)  
Total $ 7,341  
v3.10.0.1
Cat Financial Financing Activities (Details 3) - Finance Receivables - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Allowance for credit loss activity:        
Balance at beginning of year $ 362 $ 341    
Receivables written off (235) (157)    
Recoveries on receivables previously written off 46 43    
Provision for credit losses 349 128    
Other (15) 7    
Balance at end of year 507 362    
Allowance for Credit Losses:        
Individually evaluated for impairment     $ 302 $ 149
Collectively evaluated for impairment     205 213
Ending Balance 362 341 507 362
Recorded Investment in Finance Receivables:        
Individually evaluated for impairment     936 942
Collectively evaluated for impairment     21,490 21,690
Ending balance-recorded investment in finance receivables     22,426 22,632
Customer        
Allowance for credit loss activity:        
Balance at beginning of year 353 331    
Receivables written off (235) (157)    
Recoveries on receivables previously written off 46 43    
Provision for credit losses 337 129    
Other (15) 7    
Balance at end of year 486 353    
Allowance for Credit Losses:        
Individually evaluated for impairment     288 149
Collectively evaluated for impairment     198 204
Ending Balance 353 331 486 353
Recorded Investment in Finance Receivables:        
Individually evaluated for impairment     858 942
Collectively evaluated for impairment     18,152 18,226
Ending balance-recorded investment in finance receivables     19,010 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 12 (1)    
Other 0 0    
Balance at end of year 21 9    
Allowance for Credit Losses:        
Individually evaluated for impairment     14 0
Collectively evaluated for impairment     7 9
Ending Balance $ 9 $ 10 21 9
Recorded Investment in Finance Receivables:        
Individually evaluated for impairment     78 0
Collectively evaluated for impairment     3,338 3,464
Ending balance-recorded investment in finance receivables     $ 3,416 $ 3,464
v3.10.0.1
Cat Financial Financing Activities (Details 4) - Finance Receivables - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due $ 1,038 $ 805  
Current 21,388 21,827  
Total 22,426 22,632  
91 Days or More Past Due and Still Accruing 24 36  
31 to 60 Days Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 184 165  
61 to 90 Days Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 67 192  
91 Days or More Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 787 448  
Customer      
Non-accrual and past due loans and finance leases      
Impaired finance receivable 858 942  
Aging related to loans and finance leases      
Total 19,010 19,168  
Customer | North America      
Non-accrual and past due loans and finance leases      
Impaired finance receivable 50 63  
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 167 128  
Current 7,825 7,950  
Total 7,992 8,078  
91 Days or More Past Due and Still Accruing 14 8  
Customer | North America | 31 to 60 Days Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 65 71  
Customer | North America | 61 to 90 Days Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 18 15  
Customer | North America | 91 Days or More Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 84 42  
Customer | Europe      
Non-accrual and past due loans and finance leases      
Impaired finance receivable 93 54  
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 181 77  
Current 2,850 2,718  
Total 3,031 2,795  
91 Days or More Past Due and Still Accruing 5 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 or More Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 153 46  
Customer | Asia Pacific      
Non-accrual and past due loans and finance leases      
Impaired finance receivable 4 42  
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 41 34  
Current 2,409 2,009  
Total 2,450 2,043  
91 Days or More Past Due and 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 24 13  
Customer | Asia Pacific | 61 to 90 Days Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 9 7  
Customer | Asia Pacific | 91 Days or More Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 8 14  
Customer | Mining      
Non-accrual and past due loans and finance leases      
Impaired finance receivable 89 121  
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 38 64  
Current 1,642 1,751  
Total 1,680 1,815  
91 Days or More Past Due and 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 28 3  
Customer | Mining | 61 to 90 Days Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 1 1  
Customer | Mining | 91 Days or More Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 9 60  
Customer | Latin America      
Non-accrual and past due loans and finance leases      
Impaired finance receivable 104 140  
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 138 234  
Current 1,421 1,531  
Total 1,559 1,765  
91 Days or More Past Due and 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 38 37  
Customer | Latin America | 61 to 90 Days Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 29 55  
Customer | Latin America | 91 Days or More Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 71 142  
Customer | Caterpillar Power Finance      
Non-accrual and past due loans and finance leases      
Impaired finance receivable 518 522  
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 395 196  
Current 1,903 2,476  
Total 2,298 2,672  
91 Days or More Past Due and Still Accruing 0 1  
Customer | Caterpillar Power Finance | 31 to 60 Days Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 10 20  
Customer | Caterpillar Power Finance | 61 to 90 Days Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 1 32  
Customer | Caterpillar Power Finance | 91 Days or More Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 384 144  
Dealer      
Non-accrual and past due loans and finance leases      
Impaired finance receivable 78 0 $ 0
Aging related to loans and finance leases      
Total 3,416 3,464  
Dealer | North America      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 0 0  
Current 1,895 1,920  
Total 1,895 1,920  
91 Days or More Past Due and 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 or 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 333 222  
Total 333 222  
91 Days or More Past Due and 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 or 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 466 553  
Total 466 553  
91 Days or More Past Due and 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 or More Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 0 0  
Dealer | Mining      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 0 0  
Current 4 4  
Total 4 4  
91 Days or More Past Due and 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 or 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 78 72  
Current 638 691  
Total 716 763  
91 Days or More Past Due and 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 or More Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 78 0  
Dealer | Caterpillar Power Finance      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due 0 0  
Current 2 2  
Total 2 2  
91 Days or More Past Due and 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 or More Past Due      
Aging related to loans and finance leases      
Financing Receivable, Recorded Investment, Past Due $ 0 $ 0  
v3.10.0.1
Cat Financial Financing Activities (Details 5) - Finance Receivables - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Customer      
Impaired finance receivables      
Recorded Investment With No Allowance Recorded $ 142 $ 424  
Unpaid Principal Balance With No Allowance Recorded 156 435  
Related Allowance With No Allowance Recorded 0 0  
Recorded Investment With An Allowance Recorded 716 518  
Unpaid Principal Balance With An Allowance Recorded 722 530  
Related Allowance With An Allowance Recorded 288 149  
Unpaid Principal Balance, Total 878 965  
Related Allowance, Total 288 149  
Average Recorded Investment With No Allowance Recorded 282 496 $ 481
Interest Income Recognized With No Allowance Recorded 15 23 18
Average Recorded Investment With An Allowance Recorded 597 365 211
Interest Income Recognized With An Allowance Recorded 22 13 7
Interest Income Recognized, Total 37 36 25
Average Recorded Investment, Total 879 861 692
Impaired finance receivable 858 942  
Customer | North America      
Impaired finance receivables      
Recorded Investment With No Allowance Recorded 10 19  
Unpaid Principal Balance With No Allowance Recorded 10 19  
Related Allowance With No Allowance Recorded 0 0  
Recorded Investment With An Allowance Recorded 40 44  
Unpaid Principal Balance With An Allowance Recorded 41 43  
Related Allowance With An Allowance Recorded 14 17  
Unpaid Principal Balance, Total 51 62  
Related Allowance, Total 14 17  
Average Recorded Investment With No Allowance Recorded 16 13 18
Interest Income Recognized With No Allowance Recorded 1 1 1
Average Recorded Investment With An Allowance Recorded 49 49 34
Interest Income Recognized With An Allowance Recorded 2 1 0
Interest Income Recognized, Total 3 2 1
Average Recorded Investment, Total 65 62 52
Impaired finance receivable 50 63  
Customer | Europe      
Impaired finance receivables      
Recorded Investment With No Allowance Recorded 1 45  
Unpaid Principal Balance With No Allowance Recorded 1 45  
Related Allowance With No Allowance Recorded 0 0  
Recorded Investment With An Allowance Recorded 92 9  
Unpaid Principal Balance With An Allowance Recorded 92 8  
Related Allowance With An Allowance Recorded 57 5  
Unpaid Principal Balance, Total 93 53  
Related Allowance, Total 57 5  
Average Recorded Investment With No Allowance Recorded 14 48 46
Interest Income Recognized With No Allowance Recorded 0 1 1
Average Recorded Investment With An Allowance Recorded 53 6 11
Interest Income Recognized With An Allowance Recorded 2 0 1
Interest Income Recognized, Total 2 1 2
Average Recorded Investment, Total 67 54 57
Impaired finance receivable 93 54  
Customer | Asia Pacific      
Impaired finance receivables      
Recorded Investment With No Allowance Recorded 0 34  
Unpaid Principal Balance With No Allowance Recorded 0 33  
Related Allowance With No Allowance Recorded 0 0  
Recorded Investment With An Allowance Recorded 4 8  
Unpaid Principal Balance With An Allowance Recorded 4 8  
Related Allowance With An Allowance Recorded 2 2  
Unpaid Principal Balance, Total 4 41  
Related Allowance, Total 2 2  
Average Recorded Investment With No Allowance Recorded 27 24 2
Interest Income Recognized With No Allowance Recorded 3 2 0
Average Recorded Investment With An Allowance Recorded 4 31 37
Interest Income Recognized With An Allowance Recorded 0 2 3
Interest Income Recognized, Total 3 4 3
Average Recorded Investment, Total 31 55 39
Impaired finance receivable 4 42  
Customer | Mining      
Impaired finance receivables      
Recorded Investment With No Allowance Recorded 33 121  
Unpaid Principal Balance With No Allowance Recorded 33 121  
Related Allowance With No Allowance Recorded 0 0  
Recorded Investment With An Allowance Recorded 56 0  
Unpaid Principal Balance With An Allowance Recorded 55 0  
Related Allowance With An Allowance Recorded 26 0  
Unpaid Principal Balance, Total 88 121  
Related Allowance, Total 26 0  
Average Recorded Investment With No Allowance Recorded 57 126 98
Interest Income Recognized With No Allowance Recorded 2 7 4
Average Recorded Investment With An Allowance Recorded 46 0 13
Interest Income Recognized With An Allowance Recorded 3 0 0
Interest Income Recognized, Total 5 7 4
Average Recorded Investment, Total 103 126 111
Impaired finance receivable 89 121  
Customer | Latin America      
Impaired finance receivables      
Recorded Investment With No Allowance Recorded 29 45  
Unpaid Principal Balance With No Allowance Recorded 29 45  
Related Allowance With No Allowance Recorded 0 0  
Recorded Investment With An Allowance Recorded 75 95  
Unpaid Principal Balance With An Allowance Recorded 75 106  
Related Allowance With An Allowance Recorded 25 42  
Unpaid Principal Balance, Total 104 151  
Related Allowance, Total 25 42  
Average Recorded Investment With No Allowance Recorded 38 64 47
Interest Income Recognized With No Allowance Recorded 2 3 1
Average Recorded Investment With An Allowance Recorded 67 99 66
Interest Income Recognized With An Allowance Recorded 3 4 2
Interest Income Recognized, Total 5 7 3
Average Recorded Investment, Total 105 163 113
Impaired finance receivable 104 140  
Customer | Caterpillar Power Finance      
Impaired finance receivables      
Recorded Investment With No Allowance Recorded 69 160  
Unpaid Principal Balance With No Allowance Recorded 83 172  
Related Allowance With No Allowance Recorded 0 0  
Recorded Investment With An Allowance Recorded 449 362  
Unpaid Principal Balance With An Allowance Recorded 455 365  
Related Allowance With An Allowance Recorded 164 83  
Unpaid Principal Balance, Total 538 537  
Related Allowance, Total 164 83  
Average Recorded Investment With No Allowance Recorded 130 221 270
Interest Income Recognized With No Allowance Recorded 7 9 11
Average Recorded Investment With An Allowance Recorded 378 180 50
Interest Income Recognized With An Allowance Recorded 12 6 1
Interest Income Recognized, Total 19 15 12
Average Recorded Investment, Total 508 401 320
Impaired finance receivable 518 522  
Dealer      
Impaired finance receivables      
Average Recorded Investment, Total   0 0
Impaired finance receivable $ 78 $ 0 $ 0
v3.10.0.1
Cat Financial Finacning Activities (Details 6) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Period after which Collection of Future Income is Considered as Not Probable 120 days  
Finance Receivables    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Period after which Collection of Future Income is Considered as Not Probable 120 days  
Finance Receivables | Dealer    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest $ 78 $ 0
Finance Receivables | Customer    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest 807 683
Finance Receivables | Customer | North America    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest 77 38
Finance Receivables | Customer | Europe    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest 154 37
Finance Receivables | Customer | Asia Pacific    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest 4 10
Finance Receivables | Customer | Mining    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest 50 63
Finance Receivables | Customer | Latin America    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest 106 192
Finance Receivables | Customer | Caterpillar Power Finance    
Financing Receivable, Recorded Investment, Past Due [Line Items]    
Loans and Leases Receivable, Nonperforming, Nonaccrual of Interest $ 416 $ 343
v3.10.0.1
Cat Financial Financing Activities (Details 7)
$ in Millions
 12 Months Ended
Dec. 31, 2018
USD ($)
Customer
Contracts
Dec. 31, 2017
USD ($)
Contracts
Dec. 31, 2016
USD ($)
Contracts
Finance Receivables | Customer      
Loan and finance lease receivables      
Loans and leases receivable, impaired, commitment to lend $ 0    
Loan and finance lease receivables modified as TDRs      
Number of Contracts (in contracts) | Contracts 52 144 574
Pre-TDR Outstanding Recorded Investment $ 186 $ 579 $ 454
Post-TDR Outstanding Recorded Investment $ 152 $ 557 $ 387
TDRs with a payment default which had been modified within twelve months prior to the default date      
Number of Contracts (in contracts) | Contracts 16 252 15
Financing Receivable, Modifications, Subsequent Default, Recorded Investment $ 44 $ 21 $ 5
Finance Receivables | Customer | North America      
Loan and finance lease receivables modified as TDRs      
Number of Contracts (in contracts) | Contracts 38 43 25
Pre-TDR Outstanding Recorded Investment $ 21 $ 34 $ 25
Post-TDR Outstanding Recorded Investment $ 21 $ 35 $ 25
TDRs with a payment default which had been modified within twelve months prior to the default date      
Number of Contracts (in contracts) | Contracts 10 4 5
Financing Receivable, Modifications, Subsequent Default, Recorded Investment $ 10 $ 3 $ 2
Finance Receivables | Customer | Europe      
Loan and finance lease receivables modified as TDRs      
Number of Contracts (in contracts) | Contracts 0 4 43
Pre-TDR Outstanding Recorded Investment $ 0 $ 1 $ 12
Post-TDR Outstanding Recorded Investment $ 0 $ 1 $ 9
TDRs with a payment default which had been modified within twelve months prior to the default date      
Number of Contracts (in contracts) | Contracts 0 1 5
Financing Receivable, Modifications, Subsequent Default, Recorded Investment $ 0 $ 0 $ 2
Finance Receivables | Customer | Asia Pacific      
Loan and finance lease receivables modified as TDRs      
Number of Contracts (in contracts) | Contracts 0 10 31
Pre-TDR Outstanding Recorded Investment $ 0 $ 39 $ 29
Post-TDR Outstanding Recorded Investment $ 0 $ 31 $ 28
TDRs with a payment default which had been modified within twelve months prior to the default date      
Number of Contracts (in contracts) | Contracts 0 4 1
Financing Receivable, Modifications, Subsequent Default, Recorded Investment $ 0 $ 1 $ 0
Finance Receivables | Customer | Mining      
Loan and finance lease receivables modified as TDRs      
Number of Contracts (in contracts) | Contracts 1 2 4
Pre-TDR Outstanding Recorded Investment $ 29 $ 57 $ 74
Post-TDR Outstanding Recorded Investment $ 29 $ 56 $ 66
Finance Receivables | Customer | Latin America      
Loan and finance lease receivables modified as TDRs      
Number of Contracts (in contracts) | Contracts 1 17 437
Pre-TDR Outstanding Recorded Investment $ 3 $ 26 $ 118
Post-TDR Outstanding Recorded Investment $ 3 $ 27 $ 82
TDRs with a payment default which had been modified within twelve months prior to the default date      
Number of Contracts (in contracts) | Contracts 3 243 4
Financing Receivable, Modifications, Subsequent Default, Recorded Investment $ 1 $ 17 $ 1
Finance Receivables | Customer | Caterpillar Power Finance      
Loan and finance lease receivables modified as TDRs      
Number of Contracts (in contracts) | Contracts 12 68 34
Pre-TDR Outstanding Recorded Investment $ 133 $ 422 $ 196
Post-TDR Outstanding Recorded Investment $ 99 $ 407 $ 177
TDRs with a payment default which had been modified within twelve months prior to the default date      
Number of Contracts (in contracts) | Contracts 3 0 0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment $ 33 $ 0 $ 0
Finance Receivables | Dealer      
Loan and finance lease receivables modified as TDRs      
Number of Contracts (in contracts) 0 0 0
Significant Amount of Amount Disclosed Represented by a Certain Number of Customers [Member] | Customer | Latin America      
Loan and finance lease receivables modified as TDRs      
Number of Contracts (in contracts) | Contracts 321    
Pre-TDR Outstanding Recorded Investment $ 94    
Post-TDR Outstanding Recorded Investment $ 64    
TDRs with a payment default which had been modified within twelve months prior to the default date      
Number of Contracts (in contracts) | Contracts   238  
Financing Receivable, Modifications, Subsequent Default, Recorded Investment   $ 16  
Number of Significant Customers Disclosed 4 2  
Significant Amount of Amount Disclosed Represented by a Certain Number of Customers [Member] | Customer | Caterpillar Power Finance      
Loan and finance lease receivables modified as TDRs      
Number of Contracts (in contracts) | Contracts 48    
Pre-TDR Outstanding Recorded Investment $ 265    
Post-TDR Outstanding Recorded Investment $ 258    
TDRs with a payment default which had been modified within twelve months prior to the default date      
Number of Significant Customers Disclosed | Customer 6    
v3.10.0.1
Inventories (Details) - USD ($)
$ / shares in Units, $ in Millions
 12 Months Ended
Dec. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
Inventory Disclosure [Abstract]      
Effect of LIFO inventory liquidation on cost of goods sold $ 66    
Effect of LIFO Inventory Liquidation on Income $ 49    
Effect of LIFO inventory liquidation on profit per share $ 0.08    
Percentage of LIFO Inventory 65.00%   65.00%
Raw materials $ 3,382   $ 2,802
Work-in-process 2,674   2,254
Finished goods 5,241   4,761
Supplies 232   201
Total inventories 11,529 $ 10,022 $ 10,018
Long-term material purchase obligations $ 310    
v3.10.0.1
Property, plant and equipment (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
Property, plant and equipment      
Total property, plant and equipment, at cost $ 29,781   $ 31,538
Less: Accumulated depreciation (16,207)   (17,383)
Property, plant and equipment - net 13,574 $ 13,965 14,155
Commitments for the purchase or construction of capital assets 124    
Assets recorded under capital leases      
Gross capital leases 129   96
Less: Accumulated depreciation (27)   (19)
Net capital leases 102   77
Minimum rental payments on assets recorded under capital leases were:      
2019 8    
2020 9    
2021 29    
2022 9    
2023 7    
Thereafter 32    
Minimum rental payments to be received for equipment leased to others were:      
2019 896    
2020 574    
2021 314    
2022 158    
2023 71    
Thereafter 69    
Land      
Property, plant and equipment      
Total property, plant and equipment, at cost 671   664
Buildings and land improvements      
Property, plant and equipment      
Total property, plant and equipment, at cost 6,977   7,515
Machinery, equipment and other      
Property, plant and equipment      
Total property, plant and equipment, at cost 13,733   14,888
Software      
Property, plant and equipment      
Total property, plant and equipment, at cost 1,703   1,745
Equipment leased to others      
Property, plant and equipment      
Total property, plant and equipment, at cost 6,015   6,038
Less: Accumulated depreciation (1,744)   (1,656)
Property, plant and equipment - net 4,271   4,382
Construction-in-process      
Property, plant and equipment      
Total property, plant and equipment, at cost $ 682   $ 688
Minimum | Buildings and land improvements      
Property, plant and equipment      
Useful Lives (Years) 20 years    
Minimum | Machinery, equipment and other      
Property, plant and equipment      
Useful Lives (Years) 2 years    
Minimum | Software      
Property, plant and equipment      
Useful Lives (Years) 3 years    
Minimum | Equipment leased to others      
Property, plant and equipment      
Useful Lives (Years) 1 year    
Maximum | Buildings and land improvements      
Property, plant and equipment      
Useful Lives (Years) 45 years    
Maximum | Machinery, equipment and other      
Property, plant and equipment      
Useful Lives (Years) 10 years    
Maximum | Software      
Property, plant and equipment      
Useful Lives (Years) 7 years    
Maximum | Equipment leased to others      
Property, plant and equipment      
Useful Lives (Years) 7 years    
v3.10.0.1
Intangible assets and goodwill (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Jan. 02, 2018
Oct. 01, 2016
Intangible assets          
Goodwill impairment charge $ 0 $ 0 $ 595    
Goodwill $ 6,217 $ 6,200 6,020    
Tax benefit from goodwill impairment loss     17    
Weighted Amortizable Life (in years) 14 years 14 years      
Gross Carrying Amount $ 4,219 $ 4,177      
Accumulated Amortization (2,322) (2,066)      
Net 1,897 2,111      
Total intangible assets, net 1,897 2,111      
Amortization expense 331 $ 323 326    
2019 326        
2020 311        
2021 293        
2022 274        
2023 216        
Thereafter $ 477        
ECM S.p.A.          
Intangible assets          
Goodwill       $ 109  
Finite-lived intangible assets       112  
Downer Freight Rail          
Intangible assets          
Goodwill       18  
Finite-lived intangible assets       6  
Customer relationships          
Intangible assets          
Weighted Amortizable Life (in years) 15 years 15 years      
Gross Carrying Amount $ 2,463 $ 2,441      
Accumulated Amortization (1,249) (1,122)      
Net $ 1,214 $ 1,319      
Intellectual property          
Intangible assets          
Weighted Amortizable Life (in years) 11 years 11 years      
Gross Carrying Amount $ 1,557 $ 1,538      
Accumulated Amortization (965) (851)      
Net $ 592 $ 687      
Other          
Intangible assets          
Weighted Amortizable Life (in years) 13 years 13 years      
Gross Carrying Amount $ 199 $ 198      
Accumulated Amortization (108) (93)      
Net 91 105      
Resource Industries          
Intangible assets          
Goodwill 2,997 3,057 2,935    
Impairment of Intangible Assets, Finite-lived     132    
Resource Industries | Customer relationships          
Intangible assets          
Impairment of Finite-lived Intangible Assets, Gross     96    
Impairment of Finite-lived Intangible Assets, Accumulated Amortization     27    
Resource Industries | Intellectual property          
Intangible assets          
Impairment of Finite-lived Intangible Assets, Gross     111    
Impairment of Finite-lived Intangible Assets, Accumulated Amortization     $ 48    
Energy & Transportation          
Intangible assets          
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest       $ 127  
Goodwill $ 2,882 $ 2,806      
Surface Mining & Technology          
Intangible assets          
Goodwill         $ 629
v3.10.0.1
Intangible assets and goodwill (Details 2) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Carrying amount of goodwill by reportable segment      
Goodwill acquired $ 127 $ 0  
Changes in carrying amount of goodwill by reportable segment:      
Goodwill, beginning of year 7,397 7,217  
Impairments, beginning of year (1,197) (1,197)  
Goodwill acquired 127 0  
Goodwill impairment charge 0 0 $ 595
Other Adjustments (110) 180  
Goodwill, end of year 7,414 7,397 7,217
Impairments, end of year (1,197) (1,197) (1,197)
Net Goodwill, end of year 6,217 6,200 6,020
Construction Industries      
Carrying amount of goodwill by reportable segment      
Goodwill acquired 0 0  
Changes in carrying amount of goodwill by reportable segment:      
Goodwill, beginning of year 305 296  
Impairments, beginning of year (22) (22)  
Goodwill acquired 0 0  
Other Adjustments (1) 9  
Goodwill, end of year 304 305 296
Impairments, end of year (22) (22) (22)
Net Goodwill, end of year 282 283 274
Resource Industries      
Carrying amount of goodwill by reportable segment      
Goodwill acquired 0 0  
Changes in carrying amount of goodwill by reportable segment:      
Goodwill, beginning of year 4,232 4,110  
Impairments, beginning of year (1,175) (1,175)  
Goodwill acquired 0 0  
Other Adjustments (60) 122  
Goodwill, end of year 4,172 4,232 4,110
Impairments, end of year (1,175) (1,175) (1,175)
Net Goodwill, end of year 2,997 3,057 2,935
Energy & Transportation      
Carrying amount of goodwill by reportable segment      
Goodwill acquired 127 0  
Changes in carrying amount of goodwill by reportable segment:      
Goodwill, beginning of year 2,806 2,756  
Goodwill acquired 127 0  
Other Adjustments (51) 50  
Goodwill, end of year 2,882 2,806 2,756
Net Goodwill, end of year 2,882 2,806  
All Other      
Carrying amount of goodwill by reportable segment      
Goodwill acquired 0 0  
Changes in carrying amount of goodwill by reportable segment:      
Goodwill, beginning of year 54 55  
Goodwill acquired 0 0  
Other Adjustments 2 (1)  
Goodwill, end of year $ 56 $ 54 $ 55
v3.10.0.1
Investments in debt and equity securities (Details) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Schedule of Debt and Equity Securities    
Cost Basis $ 1,171 $ 994
Unrealized pretax net gains (losses) (20) (5)
Fair Value (1,151) (989)
U.S. treasury bonds    
Schedule of 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 Debt and Equity Securities    
Cost Basis 42 42
Unrealized pretax net gains (losses) 0 0
Fair Value (42) (42)
Corporate bonds    
Schedule of Debt and Equity Securities    
Cost Basis 735 585
Unrealized pretax net gains (losses) (15) (1)
Fair Value (720) (584)
Asset-backed securities    
Schedule of Debt and Equity Securities    
Cost Basis 63 67
Unrealized pretax net gains (losses) 0 0
Fair Value (63) (67)
U.S. governmental agency mortgage-backed securities    
Schedule of Debt and Equity Securities    
Cost Basis 301 265
Unrealized pretax net gains (losses) (4) (4)
Fair Value (297) (261)
Residential    
Schedule of Debt and Equity Securities    
Cost Basis 7 8
Unrealized pretax net gains (losses) 0 0
Fair Value (7) (8)
Commercial    
Schedule of Debt and Equity Securities    
Cost Basis 14 17
Unrealized pretax net gains (losses) (1) 0
Fair Value $ (13) (17)
Large capitalization value    
Schedule of Debt and Equity Securities    
Cost Basis   287
Unrealized pretax net gains (losses)   (3)
Fair Value   (284)
REIT    
Schedule of Debt and Equity Securities    
Cost Basis   104
Unrealized pretax net gains (losses)   6
Fair Value   (110)
Smaller company growth    
Schedule of Debt and Equity Securities    
Cost Basis   40
Unrealized pretax net gains (losses)   16
Fair Value   (56)
Equities    
Schedule of Debt and Equity Securities    
Cost Basis   431
Unrealized pretax net gains (losses)   19
Fair Value   $ (450)
v3.10.0.1
Investments in debt and equity securities (Details 2) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Less than 12 months    
Fair Value $ 338 $ 587
Unrealized Losses 3 9
12 months or more    
Fair Value 666 163
Unrealized Losses 18 5
Total    
Fair Value 1,004 750
Unrealized Losses 21 14
Corporate bonds    
Less than 12 months    
Fair Value 280 312
Unrealized Losses 3 2
12 months or more    
Fair Value 391 38
Unrealized Losses 11 0
Total    
Fair Value 671 350
Unrealized Losses 14 2
Asset-backed securities    
Less than 12 months    
Fair Value 6  
Unrealized Losses 0  
12 months or more    
Fair Value 38  
Unrealized Losses 1  
Total    
Fair Value 44  
Unrealized Losses 1  
U.S. governmental agency mortgage-backed securities    
Less than 12 months    
Fair Value 52 129
Unrealized Losses 0 1
12 months or more    
Fair Value 223 110
Unrealized Losses 5 3
Total    
Fair Value 275 239
Unrealized Losses 5 4
Commercial    
Less than 12 months    
Fair Value 0  
Unrealized Losses 0  
12 months or more    
Fair Value 14  
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
v3.10.0.1
Investments in debt and equity securities (Details 3) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]      
Due in one year or less, Cost Basis $ 139    
Due after one year through five years, Cost Basis 647    
Due after five years through ten years, Cost Basis 46    
Due after ten years, Cost Basis 17    
Due in one year or less, Fair Value 139    
Due after one year through five years, Fair Value 635    
Due after five years through ten years, Fair Value 43    
Due after ten years, Fair Value 17    
Cost Basis 1,171    
Fair Value 1,151    
Schedule of Debt and Equity Securities      
Cost Basis 1,171 $ 994  
Fair Value 1,151 989  
Available-for-sale Securities, Proceeds, Gains and Losses      
Proceeds from the sale of available-for-sale securities 247 930 $ 694
Gross gains from the sale of available-for-sale securities 0 109 55
Gross losses from the sale of available-for-sale securities 0 5 $ 4
Unrealized gain (loss) on investment in equity securities held on report date (25)    
U.S. governmental agency mortgage-backed securities      
Schedule of Debt and Equity Securities      
Cost Basis 301 265  
Fair Value 297 261  
Residential      
Schedule of Debt and Equity Securities      
Cost Basis 7 8  
Fair Value 7 8  
Commercial      
Schedule of Debt and Equity Securities      
Cost Basis 14 17  
Fair Value $ 13 $ 17  
v3.10.0.1
Postemployment benefit plans (Details)
$ in Millions
 3 Months Ended
Mar. 31, 2017
USD ($)
Non-U.S. pensions  
Defined Benefit Plan Disclosure  
Curtailments, settlements and termination benefits $ 20
v3.10.0.1
Postemployment benefit plans (Details 2) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Change in benefit obligation:          
Actuarial losses (gains) $ 495 $ 301 $ 495 $ 301 $ 985
U.S. pensions          
Change in benefit obligation:          
Benefit obligation, beginning of year     17,326 16,218  
Service cost     125 115 119
Interest cost     534 525 517
Plan amendments     0 0  
Actuarial losses (gains)     (1,058) 1,439  
Foreign currency exchange rates     0 0  
Participant contributions     0 0  
Benefits paid - gross     (971) (977)  
Less: federal subsidy on benefits paid     0 0  
Curtailments, settlements and termination benefits     (3) 6  
Benefit obligation, end of year 15,953 17,326 15,953 17,326 16,218
Accumulated benefit obligation, end of year $ 15,877 $ 17,175 $ 15,877 $ 17,175  
Weighted-average assumptions used to determine benefit obligation:          
Discount rate (as a percent) 4.20% 3.50% 4.20% 3.50%  
Rate of compensation increase (as a percent) 4.00% 4.00% 4.00% 4.00%  
Non-U.S. pensions          
Change in benefit obligation:          
Benefit obligation, beginning of year     $ 4,606 $ 4,472  
Service cost     89 95 92
Interest cost     96 101 117
Plan amendments     26 (1)  
Actuarial losses (gains)     (88) (75)  
Foreign currency exchange rates     (205) 312  
Participant contributions     6 6  
Benefits paid - gross     (277) (203)  
Less: federal subsidy on benefits paid     0 0  
Curtailments, settlements and termination benefits     (38) (101)  
Benefit obligation, end of year $ 4,215 $ 4,606 4,215 4,606 4,472
Accumulated benefit obligation, end of year $ 4,038 $ 4,335 $ 4,038 $ 4,335  
Weighted-average assumptions used to determine benefit obligation:          
Discount rate (as a percent) 2.50% 2.40% 2.50% 2.40%  
Rate of compensation increase (as a percent) 3.00% 4.00% 3.00% 4.00%  
Other postretirement benefits          
Change in benefit obligation:          
Benefit obligation, beginning of year     $ 4,002 $ 4,088  
Service cost     83 78 82
Interest cost     125 130 131
Plan amendments     (25) (79)  
Actuarial losses (gains)     (195) 71  
Foreign currency exchange rates     (28) 4  
Participant contributions     51 59  
Benefits paid - gross     (369) (361)  
Less: federal subsidy on benefits paid     7 10  
Curtailments, settlements and termination benefits     (2) 2  
Benefit obligation, end of year $ 3,649 $ 4,002 $ 3,649 $ 4,002 $ 4,088
Weighted-average assumptions used to determine benefit obligation:          
Discount rate (as a percent) 4.20% 3.60% 4.20% 3.60%  
Rate of compensation increase (as a percent) 4.00% 4.00% 4.00% 4.00%  
v3.10.0.1
Postemployment benefit plans (Details 3) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
U.S. pensions    
Change in plan assets:    
Fair value of plan assets, beginning of year $ 13,416 $ 11,354
Actual return on plan assets (784) 1,692
Foreign currency exchange rates 0 0
Company contributions 1,039 1,350
Participant contributions 0 0
Benefits paid (971) (977)
Settlements and termination benefits (3) (3)
Fair value of plan assets, end of year $ 12,697 13,416
U.S. pensions | Equities    
Information about plan asset allocations    
Target allocation of plan assets (as a percent) 30.00%  
U.S. pensions | Debt securities    
Information about plan asset allocations    
Target allocation of plan assets (as a percent) 70.00%  
U.S. pensions | Real estate    
Change in plan assets:    
Fair value of plan assets, beginning of year $ 10  
Fair value of plan assets, end of year 10 10
Non-U.S. pensions    
Change in plan assets:    
Fair value of plan assets, beginning of year 4,305 3,887
Actual return on plan assets 13 350
Foreign currency exchange rates (187) 278
Company contributions 165 107
Participant contributions 6 6
Benefits paid (277) (203)
Settlements and termination benefits 0 (120)
Fair value of plan assets, end of year $ 4,025 4,305
Non-U.S. pensions | Equities    
Information about plan asset allocations    
Target allocation of plan assets (as a percent) 13.00%  
Non-U.S. pensions | Debt securities    
Information about plan asset allocations    
Target allocation of plan assets (as a percent) 78.00%  
Non-U.S. pensions | Real estate    
Change in plan assets:    
Fair value of plan assets, beginning of year $ 186  
Fair value of plan assets, end of year $ 185 186
Information about plan asset allocations    
Target allocation of plan assets (as a percent) 5.00%  
Non-U.S. pensions | Other    
Information about plan asset allocations    
Target allocation of plan assets (as a percent) 4.00%  
Other postretirement benefits    
Change in plan assets:    
Fair value of plan assets, beginning of year $ 504 550
Actual return on plan assets (5) 101
Foreign currency exchange rates 0 0
Company contributions 147 155
Participant contributions 51 59
Benefits paid (369) (361)
Settlements and termination benefits 0 0
Fair value of plan assets, end of year $ 328 $ 504
Other postretirement benefits | Equities    
Information about plan asset allocations    
Target allocation of plan assets (as a percent) 70.00%  
Other postretirement benefits | Debt securities    
Information about plan asset allocations    
Target allocation of plan assets (as a percent) 30.00%  
v3.10.0.1
Postemployment benefit plans (Details 4) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
U.S. pensions      
Defined Benefit Plan Disclosure      
Fair value of plan assets $ 12,697 $ 13,416 $ 11,354
U.S. pensions | U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 2,161 2,930  
U.S. pensions | Non-U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 1,280 1,588  
U.S. pensions | U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 6,484 5,995  
U.S. pensions | Non-U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 1,332 1,165  
U.S. pensions | U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 590 793  
U.S. pensions | U.S. governmental agency mortgage-backed securities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 384 369  
U.S. pensions | Non-U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 79 68  
U.S. pensions | Real estate      
Defined Benefit Plan Disclosure      
Fair value of plan assets 10 10  
U.S. pensions | Cash, short-term instruments and other      
Defined Benefit Plan Disclosure      
Fair value of plan assets 377 498  
U.S. pensions | Level 1      
Defined Benefit Plan Disclosure      
Fair value of plan assets 3,452 4,491  
U.S. pensions | Level 1 | U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 1,971 2,745  
U.S. pensions | Level 1 | Non-U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 1,279 1,573  
U.S. pensions | Level 1 | U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
U.S. pensions | Level 1 | Non-U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
U.S. pensions | Level 1 | U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
U.S. pensions | Level 1 | U.S. governmental agency mortgage-backed securities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
U.S. pensions | Level 1 | Non-U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
U.S. pensions | Level 1 | Real estate      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
U.S. pensions | Level 1 | Cash, short-term instruments and other      
Defined Benefit Plan Disclosure      
Fair value of plan assets 202 173  
U.S. pensions | Level 2      
Defined Benefit Plan Disclosure      
Fair value of plan assets 8,765 8,397  
U.S. pensions | Level 2 | U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
U.S. pensions | Level 2 | Non-U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 15  
U.S. pensions | Level 2 | U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 6,371 5,886  
U.S. pensions | Level 2 | Non-U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 1,332 1,165  
U.S. pensions | Level 2 | U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 590 793  
U.S. pensions | Level 2 | U.S. governmental agency mortgage-backed securities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 384 369  
U.S. pensions | Level 2 | Non-U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 79 68  
U.S. pensions | Level 2 | Real estate      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
U.S. pensions | Level 2 | Cash, short-term instruments and other      
Defined Benefit Plan Disclosure      
Fair value of plan assets 9 101  
U.S. pensions | Level 3      
Defined Benefit Plan Disclosure      
Fair value of plan assets 107 90  
U.S. pensions | Level 3 | U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 35 20  
U.S. pensions | Level 3 | Non-U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 1 0  
U.S. pensions | Level 3 | Fixed income securities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 61 60 31
U.S. pensions | Level 3 | U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 61 60  
U.S. pensions | Level 3 | Non-U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
U.S. pensions | Level 3 | U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
U.S. pensions | Level 3 | U.S. governmental agency mortgage-backed securities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
U.S. pensions | Level 3 | Non-U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
U.S. pensions | Level 3 | Real estate      
Defined Benefit Plan Disclosure      
Fair value of plan assets 10 10 10
U.S. pensions | Level 3 | Other      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0 11
U.S. pensions | Level 3 | Cash, short-term instruments and other      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
U.S. pensions | Measured at NAV      
Defined Benefit Plan Disclosure      
Fair value of plan assets 373 438  
U.S. pensions | Measured at NAV | U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 155 165  
U.S. pensions | Measured at NAV | U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 52 49  
U.S. pensions | Measured at NAV | Cash, short-term instruments and other      
Defined Benefit Plan Disclosure      
Fair value of plan assets 166 224  
Non-U.S. pensions      
Defined Benefit Plan Disclosure      
Fair value of plan assets 4,025 4,305 3,887
Non-U.S. pensions | U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 43 192  
Non-U.S. pensions | Non-U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 340 1,363  
Non-U.S. pensions | Global equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 136 149  
Non-U.S. pensions | U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 206 156  
Non-U.S. pensions | Non-U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 696 374  
Non-U.S. pensions | U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 74 64  
Non-U.S. pensions | Non-U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 1,721 1,229  
Non-U.S. pensions | Global fixed income      
Defined Benefit Plan Disclosure      
Fair value of plan assets 476 468  
Non-U.S. pensions | Real estate      
Defined Benefit Plan Disclosure      
Fair value of plan assets 185 186  
Non-U.S. pensions | Cash, short-term instruments and other      
Defined Benefit Plan Disclosure      
Fair value of plan assets 148 124  
Non-U.S. pensions | Level 1      
Defined Benefit Plan Disclosure      
Fair value of plan assets 534 635  
Non-U.S. pensions | Level 1 | U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 43 55  
Non-U.S. pensions | Level 1 | Non-U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 312 400  
Non-U.S. pensions | Level 1 | Global equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 113 116  
Non-U.S. pensions | Level 1 | U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Non-U.S. pensions | Level 1 | Non-U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Non-U.S. pensions | Level 1 | U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Non-U.S. pensions | Level 1 | Non-U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Non-U.S. pensions | Level 1 | Global fixed income      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Non-U.S. pensions | Level 1 | Real estate      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Non-U.S. pensions | Level 1 | Cash, short-term instruments and other      
Defined Benefit Plan Disclosure      
Fair value of plan assets 66 64  
Non-U.S. pensions | Level 2      
Defined Benefit Plan Disclosure      
Fair value of plan assets 3,270 2,375  
Non-U.S. pensions | Level 2 | U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Non-U.S. pensions | Level 2 | Non-U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 28 34  
Non-U.S. pensions | Level 2 | Global equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 23 33  
Non-U.S. pensions | Level 2 | U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 206 156  
Non-U.S. pensions | Level 2 | Non-U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 690 363  
Non-U.S. pensions | Level 2 | U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 74 64  
Non-U.S. pensions | Level 2 | Non-U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 1,721 1,229  
Non-U.S. pensions | Level 2 | Global fixed income      
Defined Benefit Plan Disclosure      
Fair value of plan assets 261 250  
Non-U.S. pensions | Level 2 | Real estate      
Defined Benefit Plan Disclosure      
Fair value of plan assets 185 186  
Non-U.S. pensions | Level 2 | Cash, short-term instruments and other      
Defined Benefit Plan Disclosure      
Fair value of plan assets 82 60  
Non-U.S. pensions | Level 3      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 5  
Non-U.S. pensions | Level 3 | U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Non-U.S. pensions | Level 3 | Non-U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Non-U.S. pensions | Level 3 | Global equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Non-U.S. pensions | Level 3 | Fixed income securities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 5 2
Non-U.S. pensions | Level 3 | U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Non-U.S. pensions | Level 3 | Non-U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 5  
Non-U.S. pensions | Level 3 | U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Non-U.S. pensions | Level 3 | Non-U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Non-U.S. pensions | Level 3 | Global fixed income      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Non-U.S. pensions | Level 3 | Real estate      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0 0
Non-U.S. pensions | Level 3 | Other      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0 0
Non-U.S. pensions | Level 3 | Cash, short-term instruments and other      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Non-U.S. pensions | Measured at NAV      
Defined Benefit Plan Disclosure      
Fair value of plan assets 221 1,290  
Non-U.S. pensions | Measured at NAV | U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets   137  
Non-U.S. pensions | Measured at NAV | Non-U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets   929  
Non-U.S. pensions | Measured at NAV | Non-U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 6 6  
Non-U.S. pensions | Measured at NAV | Global fixed income      
Defined Benefit Plan Disclosure      
Fair value of plan assets 215 218  
Other postretirement benefits      
Defined Benefit Plan Disclosure      
Fair value of plan assets 328 504 $ 550
Other postretirement benefits | U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 152 256  
Other postretirement benefits | Non-U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 64 103  
Other postretirement benefits | U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 45 61  
Other postretirement benefits | Non-U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 11 15  
Other postretirement benefits | U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 8 17  
Other postretirement benefits | U.S. governmental agency mortgage-backed securities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 25 34  
Other postretirement benefits | Non-U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 3 4  
Other postretirement benefits | Cash, short-term instruments and other      
Defined Benefit Plan Disclosure      
Fair value of plan assets 20 14  
Other postretirement benefits | Level 1      
Defined Benefit Plan Disclosure      
Fair value of plan assets 218 358  
Other postretirement benefits | Level 1 | U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 151 255  
Other postretirement benefits | Level 1 | Non-U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 64 103  
Other postretirement benefits | Level 1 | U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Other postretirement benefits | Level 1 | Non-U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Other postretirement benefits | Level 1 | U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Other postretirement benefits | Level 1 | U.S. governmental agency mortgage-backed securities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Other postretirement benefits | Level 1 | Non-U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Other postretirement benefits | Level 1 | Cash, short-term instruments and other      
Defined Benefit Plan Disclosure      
Fair value of plan assets 3 0  
Other postretirement benefits | Level 2      
Defined Benefit Plan Disclosure      
Fair value of plan assets 94 134  
Other postretirement benefits | Level 2 | U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 1 1  
Other postretirement benefits | Level 2 | Non-U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Other postretirement benefits | Level 2 | U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 45 60  
Other postretirement benefits | Level 2 | Non-U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 11 15  
Other postretirement benefits | Level 2 | U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 8 17  
Other postretirement benefits | Level 2 | U.S. governmental agency mortgage-backed securities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 25 34  
Other postretirement benefits | Level 2 | Non-U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 3 4  
Other postretirement benefits | Level 2 | Cash, short-term instruments and other      
Defined Benefit Plan Disclosure      
Fair value of plan assets 1 3  
Other postretirement benefits | Level 3      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Other postretirement benefits | Level 3 | U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Other postretirement benefits | Level 3 | Non-U.S. equities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Other postretirement benefits | Level 3 | U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Other postretirement benefits | Level 3 | Non-U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Other postretirement benefits | Level 3 | U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Other postretirement benefits | Level 3 | U.S. governmental agency mortgage-backed securities      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Other postretirement benefits | Level 3 | Non-U.S. government bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Other postretirement benefits | Level 3 | Cash, short-term instruments and other      
Defined Benefit Plan Disclosure      
Fair value of plan assets 0 0  
Other postretirement benefits | Measured at NAV      
Defined Benefit Plan Disclosure      
Fair value of plan assets 16 12  
Other postretirement benefits | Measured at NAV | U.S. corporate bonds      
Defined Benefit Plan Disclosure      
Fair value of plan assets   1  
Other postretirement benefits | Measured at NAV | Cash, short-term instruments and other      
Defined Benefit Plan Disclosure      
Fair value of plan assets $ 16 $ 11  
v3.10.0.1
Postemployment benefit plans (Details 5) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
U.S. pensions    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year $ 13,416 $ 11,354
Fair value of plan assets, end of year 12,697 13,416
U.S. pensions | Real estate    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year 10  
Fair value of plan assets, end of year 10 10
Non-U.S. pensions    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year 4,305 3,887
Fair value of plan assets, end of year 4,025 4,305
Non-U.S. pensions | Real estate    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year 186  
Fair value of plan assets, end of year 185 186
Other postretirement benefits    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year 504 550
Fair value of plan assets, end of year 328 504
Level 3 | U.S. pensions    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year 90  
Fair value of plan assets, end of year 107 90
Level 3 | U.S. pensions | Equities    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year 20 5
Unrealized gains (losses) (6) 15
Realized gains (losses) 0 (1)
Purchases, issuances and settlements 21 0
Transfers in and/or out of Level 3 1 1
Fair value of plan assets, end of year 36 20
Level 3 | U.S. pensions | Fixed income securities    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year 60 31
Unrealized gains (losses) (12) 13
Realized gains (losses) 0 0
Purchases, issuances and settlements 11 16
Transfers in and/or out of Level 3 2 0
Fair value of plan assets, end of year 61 60
Level 3 | U.S. pensions | Real estate    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year 10 10
Unrealized gains (losses) 0 0
Realized gains (losses) 0 0
Purchases, issuances and settlements 0 0
Transfers in and/or out of Level 3 0 0
Fair value of plan assets, end of year 10 10
Level 3 | U.S. pensions | Other    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year 0 11
Unrealized gains (losses) 0 0
Realized gains (losses) 0 0
Purchases, issuances and settlements 0 (11)
Transfers in and/or out of Level 3 0 0
Fair value of plan assets, end of year 0 0
Level 3 | Non-U.S. pensions    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year 5  
Fair value of plan assets, end of year 0 5
Level 3 | Non-U.S. pensions | Equities    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year 0 0
Unrealized gains (losses) 0 0
Realized gains (losses) 0 0
Purchases, issuances and settlements 0 0
Transfers in and/or out of Level 3 0 0
Fair value of plan assets, end of year 0 0
Level 3 | Non-U.S. pensions | Fixed income securities    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year 5 2
Unrealized gains (losses) (2) 0
Realized gains (losses) 0 0
Purchases, issuances and settlements 0 2
Transfers in and/or out of Level 3 (3) 1
Fair value of plan assets, end of year 0 5
Level 3 | Non-U.S. pensions | Real estate    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year 0 0
Unrealized gains (losses) 0 0
Realized gains (losses) 0 0
Purchases, issuances and settlements 0 0
Transfers in and/or out of Level 3 0 0
Fair value of plan assets, end of year 0 0
Level 3 | Non-U.S. pensions | Other    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year 0 0
Unrealized gains (losses) 0 0
Realized gains (losses) 0 0
Purchases, issuances and settlements 0 0
Transfers in and/or out of Level 3 0 0
Fair value of plan assets, end of year 0 0
Level 3 | Other postretirement benefits    
Change in Fair Value of Plan Assets    
Fair value of plan assets, beginning of year 0  
Fair value of plan assets, end of year $ 0 $ 0
v3.10.0.1
Postemployment benefit plans (Details 6) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
U.S. pensions      
Funded Status, end of year      
Fair value of plan assets, end of year $ 12,697 $ 13,416 $ 11,354
Benefit obligations, end of year 15,953 17,326 16,218
Over (under) funded status recognized in financial position (3,256) (3,910)  
Components of net amount recognized in financial position:      
Other assets (non-current asset) 9 19  
Accrued wages, salaries and employee benefits (current liability) (40) (38)  
Liability for postemployment benefits (non-current liability) (3,225) (3,891)  
Net liability recognized (3,256) (3,910)  
Amounts recognized in Accumulated other comprehensive income (pre-tax) consist of:      
Prior service cost (credit) 0 0  
Estimated amounts that will be amortized from Accumulated other comprehensive income (loss) during the next fiscal year      
Prior service cost (credit) 0    
Pension plans with projected benefit obligations in excess of plan assets      
Projected Benefit Obligations 15,614 16,904  
Accumulated benefit obligation 15,541 16,761  
Fair value of plant assets 12,349 12,975  
Pension plans with accumulated benefit obligations in excess of plan assets      
Projected benefit obligation 15,614 16,904  
Accumulated benefit obligation 15,541 16,761  
Fair value of plan assets 12,349 12,975  
Non-U.S. pensions      
Funded Status, end of year      
Fair value of plan assets, end of year 4,025 4,305 3,887
Benefit obligations, end of year 4,215 4,606 4,472
Over (under) funded status recognized in financial position (190) (301)  
Components of net amount recognized in financial position:      
Other assets (non-current asset) 442 358  
Accrued wages, salaries and employee benefits (current liability) (20) (20)  
Liability for postemployment benefits (non-current liability) (612) (639)  
Net liability recognized (190) (301)  
Amounts recognized in Accumulated other comprehensive income (pre-tax) consist of:      
Prior service cost (credit) 20 0  
Estimated amounts that will be amortized from Accumulated other comprehensive income (loss) during the next fiscal year      
Prior service cost (credit) 0    
Pension plans with projected benefit obligations in excess of plan assets      
Projected Benefit Obligations 1,821 1,853  
Accumulated benefit obligation 1,723 1,708  
Fair value of plant assets 1,189 1,194  
Pension plans with accumulated benefit obligations in excess of plan assets      
Projected benefit obligation 1,655 1,720  
Accumulated benefit obligation 1,603 1,641  
Fair value of plan assets 1,047 1,107  
Other postretirement benefits      
Funded Status, end of year      
Fair value of plan assets, end of year 328 504 550
Benefit obligations, end of year 3,649 4,002 $ 4,088
Over (under) funded status recognized in financial position (3,321) (3,498)  
Components of net amount recognized in financial position:      
Other assets (non-current asset) 0 0  
Accrued wages, salaries and employee benefits (current liability) (173) (163)  
Liability for postemployment benefits (non-current liability) (3,148) (3,335)  
Net liability recognized (3,321) (3,498)  
Amounts recognized in Accumulated other comprehensive income (pre-tax) consist of:      
Prior service cost (credit) (126) $ (138)  
Estimated amounts that will be amortized from Accumulated other comprehensive income (loss) during the next fiscal year      
Prior service cost (credit) $ (41)    
v3.10.0.1
Postemployment benefit plans (Details 7)
$ in Millions
Dec. 31, 2018
USD ($)
U.S. pensions  
Expected contributions and benefit payments for pension and other Postretirement benefit plans  
Employer contribution expected for 2019 $ 40
Expected benefit payments for 2019 1,000
Expected benefit payments for 2020 1,000
Expected benefit payments for 2021 1,000
Expected benefit payments for 2022 1,000
Expected benefit payments for 2023 1,000
Expected benefit payments from 2024-2028 5,000
Total expected benefit payments 10,000
Non-U.S. pensions  
Expected contributions and benefit payments for pension and other Postretirement benefit plans  
Employer contribution expected for 2019 130
Expected benefit payments for 2019 240
Expected benefit payments for 2020 170
Expected benefit payments for 2021 170
Expected benefit payments for 2022 170
Expected benefit payments for 2023 180
Expected benefit payments from 2024-2028 990
Total expected benefit payments 1,920
Other postretirement benefits  
Expected contributions and benefit payments for pension and other Postretirement benefit plans  
Employer contribution expected for 2019 145
Expected benefit payments for 2019 290
Expected benefit payments for 2020 290
Expected benefit payments for 2021 290
Expected benefit payments for 2022 280
Expected benefit payments for 2023 280
Expected benefit payments from 2024-2028 1,350
Total expected benefit payments 2,780
Other postretirement benefits, Medicare Part D subsidy expected  
Other postretirement benefits, Medicare Part D subsidy expected in 2019 15
Other postretirement benefits, Medicare Part D subsidy expected in 2020 15
Other postretirement benefits, Medicare Part D subsidy expected in 2021 10
Other postretirement benefits, Medicare Part D subsidy expected in 2022 10
Other postretirement benefits, Medicare Part D subsidy expected in 2023 10
Other postretirement benefits, Medicare Part D subsidy expected from 2024-2028 55
Total expected Medicare D subsidy receipts $ 115
v3.10.0.1
Postemployment benefit plans (Details 8) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Effect of a one-percentage-point change in assumed health care cost trend      
Effect of a one-percentage-point increase in current year service and interest cost components of other postretirement benefit cost $ 14    
Effect of a one-percentage-point decrease in current year service and interest cost components of other postretirement benefit cost (11)    
Effect of a one-percentage-point increase on accumulated postretirement benefit obligation 138    
Effect of a one-percentage-point decrease on accumulated postretirement benefit obligation (117)    
U.S. pensions      
Components of net periodic benefit cost:      
Service cost 125 $ 115 $ 119
Interest cost 534 525 517
Expected return on plan assets (808) (734) (757)
Curtailments and termination benefits 0 9 6
Amortization of:      
Prior service cost / (credit) 0 0 0
Net actuarial loss / (gain) 534 481 664
Net periodic benefit cost (benefit) 385 396 549
Other changes in plan assets and benefit obligations recognized in other comprehensive income (pre-tax):      
Current year prior service cost (credit) 0 0 0
Amortization of prior service (cost) credit 0 0 0
Total recognized in other comprehensive income 0 0 0
Total recognized in net periodic cost and other comprehensive income $ 385 $ 396 $ 549
Weighted-average assumptions used to determine net cost:      
Discount rate (as a percent) 3.70% 4.20% 4.50%
Discount rate used to measure interest cost (as a percent) 3.20% 3.30% 3.40%
Expected return on plan assets (as a percent) 6.30% 6.70% 6.90%
Rate of compensation increase (as a percent) 4.00% 4.00% 4.00%
Expected return on plan assets, next fiscal year (as a percent) 5.90%    
Additional percentage amount added to long-term passive rate of returns to arrive at the long-term expected rate of return (as a percent) 0.75% 0.80% 0.90%
Non-U.S. pensions      
Components of net periodic benefit cost:      
Service cost $ 89 $ 95 $ 92
Interest cost 96 101 117
Expected return on plan assets (221) (231) (227)
Curtailments and termination benefits (33) 15 1
Amortization of:      
Prior service cost / (credit) 0 (2) 3
Net actuarial loss / (gain) 111 (195) 262
Net periodic benefit cost (benefit) 42 (217) 248
Other changes in plan assets and benefit obligations recognized in other comprehensive income (pre-tax):      
Current year prior service cost (credit) 20 3 (3)
Amortization of prior service (cost) credit 0 2 (3)
Total recognized in other comprehensive income 20 5 (6)
Total recognized in net periodic cost and other comprehensive income $ 62 $ (212) $ 242
Weighted-average assumptions used to determine net cost:      
Discount rate (as a percent) 2.30% 2.40% 2.90%
Discount rate used to measure interest cost (as a percent) 2.20% 2.30% 2.80%
Expected return on plan assets (as a percent) 5.20% 5.90% 6.10%
Rate of compensation increase (as a percent) 4.00% 4.00% 3.60%
Expected return on plan assets, next fiscal year (as a percent) 3.80%    
Other postretirement benefits      
Components of net periodic benefit cost:      
Service cost $ 83 $ 78 $ 82
Interest cost 125 130 131
Expected return on plan assets (32) (37) (44)
Curtailments and termination benefits (2) 0 (9)
Amortization of:      
Prior service cost / (credit) (36) (23) (59)
Net actuarial loss / (gain) (150) 15 59
Net periodic benefit cost (benefit) (12) 163 160
Other changes in plan assets and benefit obligations recognized in other comprehensive income (pre-tax):      
Current year prior service cost (credit) (20) (77) (184)
Amortization of prior service (cost) credit 36 23 59
Total recognized in other comprehensive income 16 (54) (125)
Total recognized in net periodic cost and other comprehensive income $ 4 $ 109 $ 35
Weighted-average assumptions used to determine net cost:      
Discount rate (as a percent) 3.50% 3.90% 4.20%
Discount rate used to measure interest cost (as a percent) 3.20% 3.30% 3.30%
Expected return on plan assets (as a percent) 7.50% 7.50% 7.50%
Rate of compensation increase (as a percent) 4.00% 4.00% 4.00%
Assumed increase in health care trend rate      
Assumed increase in health care trend rate over the current period to calculate benefit expenses (as a percent) 6.10%    
Assumed increase in health care trend rate for the next year to calculate benefit expenses (as a percent) 6.10%    
Year that heath care trend rate is assumed to reach ultimate trend rate (year) 2025    
Ultimate health care cost trend rate (as a percent) 5.00%    
General inflation rate that forms a part of ultimate health care trend rate (as a percent) 3.00%    
Additional healthcare inflation rate that forms a part of ultimate health care trend rate (as a percent) 2.00%    
v3.10.0.1
Postemployment benefit plans (Details 9) - USD ($)
shares in Millions, $ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Defined contribution plans      
ESOP, number of allocated shares 17.2 17.7  
Costs related to defined contribution plans $ 360 $ 448 $ 369
U.S. Plans      
Defined contribution plans      
Percentage that the employer generally matches of employee contributions to U.S. defined contribution plans 100.00%    
Employee compensation percentage contributed to defined contribution plan eligible for employer matching contributions 6.00%    
New annual employer contribution, percentage of compensation, low end of range 3.00%    
New annual employer contribution, percentage of compensation, high end of range 5.00%    
Percentage that the employer generally matches of employee contributions to U.S. defined contribution plans for employees accruing benefits under a defined benefit plan 50.00%    
Compensation percentage contributed to defined contribution plan eligible for employer matching contributions, for employees accruing benefits under defined benefit pension plan 6.00%    
Costs related to defined contribution plans $ 271 375 301
Non-U.S. Plans      
Defined contribution plans      
Costs related to defined contribution plans $ 89 $ 73 $ 68
v3.10.0.1
Postemployment benefit plans (Details 10) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Postemployment Benefit Plan    
Liability for postemployment benefits $ 7,455 $ 8,365
U.S. pensions    
Postemployment Benefit Plan    
Liability for postemployment benefits 3,225 3,891
Non-U.S. pensions    
Postemployment Benefit Plan    
Liability for postemployment benefits 612 639
Total pensions    
Postemployment Benefit Plan    
Liability for postemployment benefits 3,837 4,530
Postretirement benefits other than pensions    
Postemployment Benefit Plan    
Liability for postemployment benefits 3,148 3,335
Other postretirement benefits    
Postemployment Benefit Plan    
Liability for postemployment benefits 119 109
Defined contribution    
Postemployment Benefit Plan    
Liability for postemployment benefits $ 351 $ 391
v3.10.0.1
Short-term borrowings (Details) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Short-term borrowings:    
Short-term borrowings $ 5,723 $ 4,837
Notes payable to banks    
Short-term borrowings:    
Weighted-average interest rates on short-term borrowings (as a percent) 5.30% 5.20%
Commercial paper    
Short-term borrowings:    
Weighted-average interest rates on short-term borrowings (as a percent) 2.00% 1.10%
Demand notes    
Short-term borrowings:    
Weighted-average interest rates on short-term borrowings (as a percent) 2.20% 1.10%
Machinery, Energy & Transportation    
Short-term borrowings:    
Short-term borrowings $ 0 $ 1
Machinery, Energy & Transportation | Notes payable to banks    
Short-term borrowings:    
Short-term borrowings 0 1
Financial Products    
Short-term borrowings:    
Short-term borrowings 5,723 4,836
Financial Products | Notes payable to banks    
Short-term borrowings:    
Short-term borrowings 526 675
Financial Products | Commercial paper    
Short-term borrowings:    
Short-term borrowings 4,759 3,680
Financial Products | Demand notes    
Short-term borrowings:    
Short-term borrowings $ 438 $ 481
v3.10.0.1
Long-term debt (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2017
Dec. 31, 2018
Long-term Debt    
Total Machinery, Energy & Transportation $ 7,929 $ 8,005
Total Financial Products 15,918 16,995
Total long-term debt due after one year 23,847 25,000
Financing transaction in Japan 360  
Payment for debt prepayment cost 58  
Machinery, Energy & Transportation    
Long-term Debt    
Total Machinery, Energy & Transportation 7,929 8,005
Other 4 $ 41
Machinery, Energy & Transportation | Notes-$1,250 million of 3.900% due 2021    
Long-term Debt    
Effective Yield to Maturity (as a percent)   4.01%
Notes 1,246 $ 1,247
Debt instrument, interest rate (as a percent)   3.90%
Debt instrument, face value   $ 1,250
Percentage of the redemption price to the principal amount of debentures to be redeemed   100.00%
Machinery, Energy & Transportation | Notes-$759 million of 5.200% due 2041    
Long-term Debt    
Effective Yield to Maturity (as a percent)   5.27%
Notes 752 $ 751
Debt instrument, interest rate (as a percent)   5.20%
Debt instrument, face value   $ 759
Percentage of the redemption price to the principal amount of debentures to be redeemed   100.00%
Machinery, Energy & Transportation | Debentures-$120 million of 9.375% due 2021    
Long-term Debt    
Effective Yield to Maturity (as a percent)   9.41%
Debentures 120 $ 120
Debt instrument, interest rate (as a percent)   9.375%
Debt instrument, face value   $ 120
Machinery, Energy & Transportation | Debentures-$500 million of 2.600% due 2022    
Long-term Debt    
Effective Yield to Maturity (as a percent)   2.70%
Debentures 498 $ 498
Debt instrument, interest rate (as a percent)   2.60%
Debt instrument, face value   $ 500
Percentage of the redemption price to the principal amount of debentures to be redeemed   100.00%
Machinery, Energy & Transportation | Debentures-$82 million of 8.000% due 2023    
Long-term Debt    
Effective Yield to Maturity (as a percent)   8.06%
Debentures 82 $ 82
Debt instrument, interest rate (as a percent)   8.00%
Debt instrument, face value   $ 82
Machinery, Energy & Transportation | Debentures-$1,000 million of 3.400% due 2024    
Long-term Debt    
Effective Yield to Maturity (as a percent)   3.46%
Debentures 997 $ 997
Debt instrument, interest rate (as a percent)   3.40%
Debt instrument, face value   $ 1,000
Machinery, Energy & Transportation | Debentures-$193 million of 6.625% due 2028    
Long-term Debt    
Effective Yield to Maturity (as a percent)   6.68%
Debentures 192 $ 192
Debt instrument, interest rate (as a percent)   6.625%
Debt instrument, face value   $ 193
Percentage of the redemption price to the principal amount of debentures to be redeemed   100.00%
Machinery, Energy & Transportation | Debentures-$242 million of 7.300% due 2031    
Long-term Debt    
Effective Yield to Maturity (as a percent)   7.38%
Debentures 241 $ 240
Debt instrument, interest rate (as a percent)   7.30%
Debt instrument, face value   $ 242
Percentage of the redemption price to the principal amount of debentures to be redeemed   100.00%
Machinery, Energy & Transportation | Debentures-$307 million of 5.300% due 2035    
Long-term Debt    
Effective Yield to Maturity (as a percent)   8.64%
Debentures 216 $ 218
Debt instrument, interest rate (as a percent)   5.30%
Debt instrument, face value   $ 307
Percentage of the redemption price to the principal amount of debentures to be redeemed   100.00%
Machinery, Energy & Transportation | Debentures-$460 million of 6.050% due 2036    
Long-term Debt    
Effective Yield to Maturity (as a percent)   6.12%
Debentures 456 $ 456
Debt instrument, interest rate (as a percent)   6.05%
Debt instrument, face value   $ 460
Percentage of the redemption price to the principal amount of debentures to be redeemed   100.00%
Machinery, Energy & Transportation | Debentures-$65 million of 8.250% due 2038    
Long-term Debt    
Effective Yield to Maturity (as a percent)   8.38%
Debentures 64 $ 64
Debt instrument, interest rate (as a percent)   8.25%
Debt instrument, face value   $ 65
Percentage of the redemption price to the principal amount of debentures to be redeemed   100.00%
Machinery, Energy & Transportation | Debentures-$160 million of 6.950% due 2042    
Long-term Debt    
Effective Yield to Maturity (as a percent)   7.02%
Debentures 159 $ 158
Debt instrument, interest rate (as a percent)   6.95%
Debt instrument, face value   $ 160
Percentage of the redemption price to the principal amount of debentures to be redeemed   100.00%
Machinery, Energy & Transportation | Debentures-$1,722 million of 3.803% due 2042    
Long-term Debt    
Effective Yield to Maturity (as a percent)   6.39%
Debentures 1,236 $ 1,257
Debt instrument, interest rate (as a percent)   3.803%
Debt instrument, face value   $ 1,722
Percentage of the redemption price to the principal amount of debentures to be redeemed   100.00%
Machinery, Energy & Transportation | Debentures-$500 million of 4.300% due 2044    
Long-term Debt    
Effective Yield to Maturity (as a percent)   4.39%
Debentures 493 $ 493
Debt instrument, interest rate (as a percent)   4.30%
Debt instrument, face value   $ 500
Machinery, Energy & Transportation | Debentures-$500 million of 4.750% due 2064    
Long-term Debt    
Effective Yield to Maturity (as a percent)   4.81%
Debentures 494 $ 494
Debt instrument, interest rate (as a percent)   4.75%
Debt instrument, face value   $ 500
Machinery, Energy & Transportation | Debentures-$246 million of 7.375% due 2097    
Long-term Debt    
Effective Yield to Maturity (as a percent)   7.51%
Debentures 242 $ 241
Debt instrument, interest rate (as a percent)   7.375%
Debt instrument, face value   $ 246
Percentage of the redemption price to the principal amount of debentures to be redeemed   100.00%
Machinery, Energy & Transportation | Capital lease obligations    
Long-term Debt    
Capital lease obligations 437 $ 456
Machinery, Energy & Transportation | Build-to-suit real estate transaction [Member]    
Long-term Debt    
Other   38
Financial Products    
Long-term Debt    
Medium-term notes 15,415 16,592
Other 503 403
Total Financial Products $ 15,918 $ 16,995
v3.10.0.1
Long-term debt (Details 2) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2016
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Long-term Debt        
2019   $ 5,830    
2020   6,442    
2021   6,282    
2022   2,563    
2023   2,250    
Interest paid on short-term and long-term borrowings   1,088 $ 1,131 $ 1,075
Debt conversion, original debt, amount $ 381      
Debt conversion, converted instrument, amount $ 366      
Debt conversion, converted instrument, rate 1.93%      
Debt conversion, cash paid $ 15      
Debt exchange premium $ 33      
Medium-term Notes   238    
Payment for debt prepayment cost     $ 58  
Machinery, Energy & Transportation        
Long-term Debt        
2019   10    
2020   35    
2021   1,398    
2022   510    
2023   $ 92    
Financial Products        
Long-term Debt        
Medium-term notes, weighted-average interest rate (as a percent)   2.60%    
Medium-term notes, maximum remaining maturity (in years)   9 years    
2019   $ 5,820    
2020   6,407    
2021   4,884    
2022   2,053    
2023   $ 2,158    
Unsecured Debentures Due in 2018 at 7.900 Percent [Member] | Machinery, Energy & Transportation        
Long-term Debt        
Debt instrument, interest rate (as a percent)     7.90%  
v3.10.0.1
Credit commitments (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2018
USD ($)
facilities
Credit lines available:  
Global credit facilities $ 10,500
Other external 4,577
Total credit lines available 15,077
Less: Commercial paper outstanding (4,759)
Less: Utilized credit (1,172)
Available credit $ 9,146
Number of global credit facilities | facilities 3
Consolidated net worth $ 14,070
Minimum consolidated net worth required under credit facilities 9,000
Utilized credit $ 1,172
Cat Financial  
Credit lines available:  
Interest coverage ratio, numerator 1.56
Interest coverage ratio, denominator 1
Minimum interest coverage ratio required under credit facilities, numerator 1.15
Minimum interest coverage ratio required under credit facilities, denominator 1
Six-month leverage ratio, numerator 7.69
Six month leverage ratio, denominator 1
Year-end leverage ratio, numerator 8.33
Year-end leverage ratio denominator 1
Maximum leverage ratio permissible under credit facility, numerator 10
Maximum leverage ratio permissible under credit facility, denominator 1
Credit Facility  
Credit lines available:  
Global credit facilities $ 10,500
Less: Utilized credit 0
Utilized credit 0
364-day facility expires in September 2019  
Credit lines available:  
Global credit facilities $ 3,150
Duration of credit facility (in years or days) 364 days
Three-year facility expires in September 2021  
Credit lines available:  
Global credit facilities $ 2,730
Duration of credit facility (in years or days) 3 years
Five-year facility expires in September 2023  
Credit lines available:  
Global credit facilities $ 4,620
Duration of credit facility (in years or days) 5 years
Consolidated credit lines with banks  
Credit lines available:  
Other external $ 4,580
Machinery, Energy & Transportation  
Credit lines available:  
Global credit facilities 2,750
Other external 0
Total credit lines available 2,750
Less: Commercial paper outstanding 0
Less: Utilized credit 0
Available credit 2,750
Utilized credit 0
Machinery, Energy & Transportation | Credit Facility  
Credit lines available:  
Global credit facilities 2,750
Machinery, Energy & Transportation | 364-day facility expires in September 2019  
Credit lines available:  
Global credit facilities 820
Machinery, Energy & Transportation | Three-year facility expires in September 2021  
Credit lines available:  
Global credit facilities 720
Machinery, Energy & Transportation | Five-year facility expires in September 2023  
Credit lines available:  
Global credit facilities 1,210
Financial Products  
Credit lines available:  
Global credit facilities 7,750
Other external 4,577
Total credit lines available 12,327
Less: Commercial paper outstanding (4,759)
Less: Utilized credit (1,172)
Available credit 6,396
Utilized credit $ 1,172
v3.10.0.1
Profit per share (Details) - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Jul. 01, 2018
Jan. 31, 2014
Earnings Per Share [Abstract]                          
Profit for the period (A) (in millions of dollars) $ 1,048 $ 1,727 $ 1,707 $ 1,665 $ (1,299) $ 1,059 $ 802 $ 192 $ 6,147 [1] $ 754 [1] $ (67) [1]    
Determination of shares (in millions)                          
Weighted-average number of common shares outstanding (B) (in shares)                 591,400,000 591,800,000 584,300,000    
Shares issuable on exercise of stock awards, net of shares assumed to be purchased out of proceeds at average market price (in shares)                 8,000,000 7,500,000 0    
Average common shares outstanding for fully diluted computation (C) (in shares) [2],[3]                 599,400,000 599,300,000 584,300,000    
Profit (loss) per share of common stock:                          
Assuming no dilution (A/B) (in dollars per share) $ 1.80 $ 2.92 $ 2.86 $ 2.78 $ (2.18) $ 1.79 $ 1.36 $ 0.33 $ 10.39 $ 1.27 $ (0.11)    
Assuming full dilution (A/C) (in dollars per share) $ 1.78 $ 2.88 $ 2.82 $ 2.74 $ (2.18) $ 1.77 $ 1.35 $ 0.32 $ 10.26 [2],[3] $ 1.26 [2],[3] $ (0.11) [2],[3]    
Shares outstanding as of December 31 575,500,000       597,600,000       575,500,000 597,600,000 586,500,000    
Common shares under SARs and stock options not included in the computation of diluted earnings per share (in shares)                 1,500,000 0 32,100,000    
Common Stock Repurchase                          
Stock Repurchase Program, Authorized Amount                       $ 10,000 $ 10,000
Common shares repurchased (in shares)                 27,673,675 0 0    
Payments for repurchase of common stock                 $ 3,798 $ 0 $ 0    
[1] 1 Profit (loss) attributable to common shareholders.
[2] 2 Diluted by assumed exercise of stock-based compensation awards, using the treasury stock method.
[3] 3 In 2016, the assumed exercise of stock-based compensation awards was not considered because the impact would be antidilutive.
v3.10.0.1
Accumulated other comprehensive income (loss) (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Jan. 01, 2018
Dec. 31, 2015
Accumulated Other Comprehensive Income (Loss)                          
Adjustment to adopt recognition and measurement of financial assets and liabilities guidance                       $ (11)  
Other income (expense)                 $ (67) $ 153 $ (518)    
Accumulated other comprehensive income (loss), start of period $ (1,684)       $ (1,192)       (1,684) (1,192) (2,039) (1,203) $ (2,035)
Other comprehensive income (loss), before reclassifications                 (354) 838 48    
Amounts reclassified from accumulated other comprehensive (income) loss                 (127) 9 (52)    
Other comprehensive income (loss)                 (481) 847 (4)    
Accumulated other comprehensive income (loss), end of period (1,684)       (1,192)       (1,684) (1,192) (2,039)    
Provision (benefit) for income taxes                 1,698 3,339 192    
Reclassifications net of tax 1,048 $ 1,727 $ 1,707 $ 1,665 (1,299) $ 1,059 $ 802 $ 192 6,147 [1] 754 [1] (67) [1]    
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 (1,601)       (1,205)       (1,601) (1,205) (1,970) (1,205) (1,953)
Other comprehensive income (loss), before reclassifications                 (397) 752 (34)    
Amounts reclassified from accumulated other comprehensive (income) loss                 1 13 17    
Other comprehensive income (loss)                 (396) 765 (17)    
Accumulated other comprehensive income (loss), end of period (1,601)       (1,205)       (1,601) (1,205) (1,970)    
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 12       46       12 46 14 46 (69)
Other comprehensive income (loss), before reclassifications                 (6) 48 118    
Amounts reclassified from accumulated other comprehensive (income) loss                 (28) (16) (35)    
Other comprehensive income (loss)                 (34) 32 83    
Accumulated other comprehensive income (loss), end of period 12       46       12 46 14    
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 (80)       (41)       (80) (41) (115) (41) (50)
Other comprehensive income (loss), before reclassifications                 61 (3) (62)    
Amounts reclassified from accumulated other comprehensive (income) loss                 (100) 77 (3)    
Other comprehensive income (loss)                 (39) 74 (65)    
Accumulated other comprehensive income (loss), end of period (80)       (41)       (80) (41) (115)    
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 (15)       8       (15) 8 32 $ (3) $ 37
Other comprehensive income (loss), before reclassifications                 (12) 41 26    
Amounts reclassified from accumulated other comprehensive (income) loss                 0 (65) (31)    
Other comprehensive income (loss)                 (12) (24) (5)    
Accumulated other comprehensive income (loss), end of period $ (15)       $ 8       (15) 8 32    
Reclassification out of Accumulated Other Comprehensive Income                          
Accumulated Other Comprehensive Income (Loss)                          
Reclassifications net of tax                 127 (9) 52    
Reclassification out of Accumulated Other Comprehensive Income | Foreign currency translation                          
Accumulated Other Comprehensive Income (Loss)                          
Other income (expense)                 (1) (13) (17)    
Provision (benefit) for income taxes                 0 0 0    
Reclassifications net of tax                 (1) (13) (17)    
Reclassification out of Accumulated Other Comprehensive Income | Pension and other postretirement benefits                          
Accumulated Other Comprehensive Income (Loss)                          
Provision (benefit) for income taxes                 8 9 21    
Reclassifications net of tax                 28 16 35    
Reclassification out of Accumulated Other Comprehensive Income | Derivative financial instruments                          
Accumulated Other Comprehensive Income (Loss)                          
Provision (benefit) for income taxes                 31 (44) 2    
Reclassifications net of tax                 100 (77) 3    
Reclassification out of Accumulated Other Comprehensive Income | Available-for-sale securities                          
Accumulated Other Comprehensive Income (Loss)                          
Other income (expense)                 0 100 46    
Provision (benefit) for income taxes                 0 35 15    
Reclassifications net of tax                 $ 0 $ 65 $ 31    
[1] 1 Profit (loss) attributable to common shareholders.
v3.10.0.1
Accumulated other comprehensive income (loss) (Details 2) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Reclassification Adjustment out of Accumulated Other Comprehensive Income                      
Other income (expense)                 $ (67) $ 153 $ (518)
Interest expense excluding Financial Products                 (404) (531) (505)
Interest expense of Financial Products                 (722) (646) (596)
Consolidated profit before taxes                 7,822 4,082 139
Tax (provision) benefit                 (1,698) (3,339) (192)
Reclassifications net of tax $ 1,048 $ 1,727 $ 1,707 $ 1,665 $ (1,299) $ 1,059 $ 802 $ 192 6,147 [1] 754 [1] (67) [1]
Reclassification out of Accumulated Other Comprehensive Income                      
Reclassification Adjustment out of Accumulated Other Comprehensive Income                      
Reclassifications net of tax                 127 (9) 52
Reclassification out of Accumulated Other Comprehensive Income | Foreign currency translation                      
Reclassification Adjustment out of Accumulated Other Comprehensive Income                      
Other income (expense)                 (1) (13) (17)
Tax (provision) benefit                 0 0 0
Reclassifications net of tax                 (1) (13) (17)
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)                 36 25 56
Tax (provision) benefit                 (8) (9) (21)
Reclassifications net of tax                 28 16 35
Reclassification out of Accumulated Other Comprehensive Income | Derivative financial instruments                      
Reclassification Adjustment out of Accumulated Other Comprehensive Income                      
Consolidated profit before taxes                 131 (121) 5
Tax (provision) benefit                 (31) 44 (2)
Reclassifications net of tax                 100 (77) 3
Reclassification out of Accumulated Other Comprehensive Income | Derivative financial instruments | Foreign exchange contracts | Machinery, Energy & Transportation                      
Reclassification Adjustment out of Accumulated Other Comprehensive Income                      
Other income (expense)                 115 (121) 14
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                 (19) (6) 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                 (3) (9) (6)
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 3 (3)
Reclassification out of Accumulated Other Comprehensive Income | Available-for-sale securities                      
Reclassification Adjustment out of Accumulated Other Comprehensive Income                      
Other income (expense)                 0 100 46
Tax (provision) benefit                 0 (35) (15)
Reclassifications net of tax                 $ 0 $ 65 $ 31
[1] 1 Profit (loss) attributable to common shareholders.
v3.10.0.1
Fair value disclosures (Details) - USD ($)
$ in Millions
Dec. 31, 2018
Sep. 30, 2018
Dec. 31, 2017
Assets      
Available-for-sale securities $ 1,151   $ 989
Recurring basis      
Assets      
Available-for-sale securities 425   450
Debt Securities, Available-for-sale   $ 1,151 989
Total Assets 1,576   1,439
Liabilities      
Derivative Liabilities, at Fair Value, Net 19   19
Total Liabilities 19   19
U.S. treasury bonds      
Assets      
Available-for-sale securities 9   10
U.S. treasury bonds | Recurring basis      
Assets      
Available-for-sale securities 9   10
Other U.S. and non-U.S. government bonds      
Assets      
Available-for-sale securities 42   42
Other U.S. and non-U.S. government bonds | Recurring basis      
Assets      
Available-for-sale securities 42   42
Corporate bonds      
Assets      
Available-for-sale securities 720   584
Corporate bonds | Recurring basis      
Assets      
Available-for-sale securities 720   584
Asset-backed securities      
Assets      
Available-for-sale securities 63   67
Asset-backed securities | Recurring basis      
Assets      
Available-for-sale securities 63   67
U.S. governmental agency | Recurring basis      
Assets      
Available-for-sale securities 297   261
Residential      
Assets      
Available-for-sale securities 7   8
Residential | Recurring basis      
Assets      
Available-for-sale securities 7   8
Commercial      
Assets      
Available-for-sale securities 13   17
Commercial | Recurring basis      
Assets      
Available-for-sale securities 13   17
Large capitalization value      
Assets      
Available-for-sale securities     284
Large capitalization value | Recurring basis      
Assets      
Available-for-sale securities 260   284
REIT      
Assets      
Available-for-sale securities     110
REIT | Recurring basis      
Assets      
Available-for-sale Securities, Equity Securities 119   110
Smaller company growth      
Assets      
Available-for-sale securities     56
Smaller company growth | Recurring basis      
Assets      
Available-for-sale securities 46   56
Level 1 | Recurring basis      
Assets      
Available-for-sale securities 306   340
Debt Securities, Available-for-sale   9 10
Total Assets 315   350
Liabilities      
Derivative Liabilities, at Fair Value, Net 0   0
Total Liabilities 0   0
Level 1 | U.S. treasury bonds | Recurring basis      
Assets      
Available-for-sale securities 9   10
Level 1 | Other U.S. and non-U.S. government bonds | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 1 | Corporate bonds | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 1 | Asset-backed securities | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 1 | U.S. governmental agency | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 1 | Residential | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 1 | Commercial | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 1 | Large capitalization value | Recurring basis      
Assets      
Available-for-sale securities 260   284
Level 1 | REIT | Recurring basis      
Assets      
Available-for-sale Securities, Equity Securities     0
Level 1 | Smaller company growth | Recurring basis      
Assets      
Available-for-sale securities 46   56
Level 2 | Recurring basis      
Assets      
Available-for-sale securities 0   0
Debt Securities, Available-for-sale   1,142 979
Total Assets 1,142   979
Liabilities      
Derivative Liabilities, at Fair Value, Net 19   19
Total Liabilities 19   19
Level 2 | U.S. treasury bonds | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 2 | Other U.S. and non-U.S. government bonds | Recurring basis      
Assets      
Available-for-sale securities 42   42
Level 2 | Corporate bonds | Recurring basis      
Assets      
Available-for-sale securities 720   584
Level 2 | Asset-backed securities | Recurring basis      
Assets      
Available-for-sale securities 63   67
Level 2 | U.S. governmental agency | Recurring basis      
Assets      
Available-for-sale securities 297   261
Level 2 | Residential | Recurring basis      
Assets      
Available-for-sale securities 7   8
Level 2 | Commercial | Recurring basis      
Assets      
Available-for-sale securities 13   17
Level 2 | Large capitalization value | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 2 | REIT | Recurring basis      
Assets      
Available-for-sale Securities, Equity Securities     0
Level 2 | Smaller company growth | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 3 | Recurring basis      
Assets      
Available-for-sale securities 0   110
Debt Securities, Available-for-sale   $ 0 0
Total Assets 0   110
Liabilities      
Derivative Liabilities, at Fair Value, Net 0   0
Total Liabilities 0   0
Level 3 | U.S. treasury bonds | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 3 | Other U.S. and non-U.S. government bonds | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 3 | Corporate bonds | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 3 | Asset-backed securities | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 3 | U.S. governmental agency | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 3 | Residential | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 3 | Commercial | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 3 | Large capitalization value | Recurring basis      
Assets      
Available-for-sale securities 0   0
Level 3 | REIT | Recurring basis      
Assets      
Available-for-sale Securities, Equity Securities     110
Level 3 | Smaller company growth | Recurring basis      
Assets      
Available-for-sale securities 0   $ 0
Measured at NAV | Recurring basis      
Assets      
Available-for-sale Securities, Equity Securities 119    
Total Assets 119    
Measured at NAV | REIT | Recurring basis      
Assets      
Available-for-sale Securities, Equity Securities $ 119    
v3.10.0.1
Fair value disclosures (Details 2) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Financial Products | Nonrecurring basis    
Fair value of impaired loans    
Impaired finance receivable $ 469 $ 341
v3.10.0.1
Fair value disclosures (Details 3) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Carrying Amount    
Assets    
Cash and short-term investments $ 7,857 $ 8,261
Restricted cash and short-term investments 33 194
Investments in debt and equity securities 1,576 1,439
Finance receivables-net (excluding finance leases) 14,714 15,452
Wholesale inventory receivables-net (excluding finance leases) 1,050 1,153
Foreign currency contracts-net 47 0
Interest rate swap assets 0 1
Price Risk Derivative Assets, at Fair Value 0 21
Liabilities    
Short-term borrowings 5,723 4,837
Foreign currency contracts-net 0 41
Interest rate swap liabilities 36 0
Commodity contracts-net 30 0
Guarantees 8 8
Carrying Amount | Machinery, Energy & Transportation    
Liabilities    
Long-term debt (including amounts due within one year) 8,015 7,935
Carrying Amount | Financial Products    
Liabilities    
Long-term debt (including amounts due within one year) 22,815 22,106
Carrying amount of assets excluded from measurement at fair value    
Liabilities    
Total excluded items 7,463 7,063
Level 1 | Fair Value    
Assets    
Cash and short-term investments 7,857 8,261
Restricted cash and short-term investments 33 194
Liabilities    
Short-term borrowings 5,723 4,837
Level 1, 2 & 3 | Fair Value    
Assets    
Investments in debt and equity securities 1,576 1,439
Level 2 | Fair Value    
Assets    
Foreign currency contracts-net 47 0
Interest rate swap assets 0 1
Price Risk Derivative Assets, at Fair Value 0 21
Liabilities    
Foreign currency contracts-net 0 41
Interest rate swap liabilities 36 0
Commodity contracts-net 30 0
Level 2 | Fair Value | Machinery, Energy & Transportation    
Liabilities    
Long-term debt (including amounts due within one year) 9,046 9,863
Level 2 | Fair Value | Financial Products    
Liabilities    
Long-term debt (including amounts due within one year) 22,684 22,230
Level 3 | Fair Value    
Assets    
Finance receivables-net (excluding finance leases) 14,798 15,438
Wholesale inventory receivables-net (excluding finance leases) 1,025 1,123
Liabilities    
Guarantees $ 8 $ 8
v3.10.0.1
Concentration of credit risk (Details) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Risks and Uncertainties [Abstract]    
Derivative contracts, maximum exposure to credit loss $ 131 $ 74
v3.10.0.1
Operating leases (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Leases [Abstract]      
Rental expense for operating leases $ 322 $ 331 $ 375
Minimum payments for operating leases having initial or remaining non-cancelable terms      
2019 205    
2020 154    
2021 111    
2022 67    
2023 50    
Thereafter 185    
Total $ 772    
v3.10.0.1
Guarantees and product warranty (Details) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]    
Related liability $ 8 $ 8
Guarantor Obligations    
Guarantees, maximum potential amount of future payments 1,978 2,105
Special-Purpose Company's assets in Consolidated Statement of Financial Position 1,149 1,107
Special-Purpose Company's liabilities in Consolidated Statement of Financial Position 1,148 1,106
Unused commitments and lines of credit for dealers 11,853 10,933
Unused commitments and lines of credit for customers 815 715
Caterpillar dealer performance guarantees    
Guarantor Obligations    
Guarantees, maximum potential amount of future payments 1,244 1,313
Customer loan guarantees    
Guarantor Obligations    
Guarantees, maximum potential amount of future payments 31 40
Supplier consortium performance guarantee    
Guarantor Obligations    
Guarantees, maximum potential amount of future payments 527 565
Third party logistics business guarantees    
Guarantor Obligations    
Guarantees, maximum potential amount of future payments 60 69
Other guarantees    
Guarantor Obligations    
Guarantees, maximum potential amount of future payments $ 116 $ 118
v3.10.0.1
Guarantees and product warranty (Details 2) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Movement in Standard Product Warranty Accrual    
Warranty liability, beginning balance $ 1,419 $ 1,258
Reduction in liability (payments) (783) (860)
Increase in liability (new warranties) 755 1,021
Warranty liability, ending balance $ 1,391 $ 1,419
v3.10.0.1
Environmental and legal matters (Details)
Mar. 03, 2017
Mar. 20, 2014
Loss Contingency [Abstract]    
Number of facilities served search warrants 3  
Number of defendants, companies    
Loss Contingencies [Line Items]    
Loss Contingency, Number of Defendants   18
Number of defendants, individuals    
Loss Contingencies [Line Items]    
Loss Contingency, Number of Defendants   100
Number of defendants, subsidiaries    
Loss Contingencies [Line Items]    
Loss Contingency, Number of Defendants   2
Number of defendants, current employee    
Loss Contingencies [Line Items]    
Loss Contingency, Number of Defendants   2
Number of defendants, former employee    
Loss Contingencies [Line Items]    
Loss Contingency, Number of Defendants   1
v3.10.0.1
Segment information (Details)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2018
USD ($)
Sep. 30, 2018
USD ($)
Jun. 30, 2018
USD ($)
Mar. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Sep. 30, 2017
USD ($)
Jun. 30, 2017
USD ($)
Mar. 31, 2017
USD ($)
Dec. 31, 2018
USD ($)
group_presidents
segments
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Segment Reporting Information                      
Revenue from Related Parties                 $ 470 $ 384 $ 302
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                      
External sales and revenues $ 14,342 $ 13,510 $ 14,011 $ 12,859 $ 12,896 $ 11,413 $ 11,331 $ 9,822 $ 54,722 45,462 38,537
Depreciation and amortization                 2,766 2,877 3,034
Consolidated profit before taxes                 7,822 4,082 139
Segment assets 78,509       76,962       78,509 76,962 74,704
Capital expenditures                 $ 2,916 2,336 2,928
All Other operating segments                      
Segment Reporting Information                      
Number of group presidents | group_presidents                 1    
Number of smaller operating segments led by Group President | segments                 2    
Reportable Segments                      
External sales and revenues                   178 139
Depreciation and amortization                 $ 225 220 219
Consolidated profit before taxes                 23 (44) (85)
Segment assets 1,279       1,312       1,279 1,312 1,381
Capital expenditures                 170 134 182
Reportable Segments Including Intersegment Eliminations                      
Reportable Segments                      
External sales and revenues                 $ 59,571 49,576 41,644
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    
Number of reportable segments | segments                 4    
Reportable Segments                      
External sales and revenues                 $ 55,115 45,694 38,742
Depreciation and amortization                 2,303 2,387 2,591
Consolidated profit before taxes                 10,220 7,601 3,483
Segment assets 55,732       53,698       55,732 53,698 55,517
Capital expenditures                 2,755 2,311 2,586
Intersegment Eliminations                      
Reportable Segments                      
External sales and revenues                 4,456 3,882 2,902
Machinery, Energy & Transportation | Reportable Segments Including Intersegment Eliminations                      
Reportable Segments                      
External sales and revenues                 56,292 46,483 38,651
Machinery, Energy & Transportation | Reportable segments                      
Reportable Segments                      
External sales and revenues                 51,836 42,601 35,749
Depreciation and amortization                 1,469 1,567 1,742
Consolidated profit before taxes                 9,715 6,809 2,781
Segment assets 19,730       18,805       19,730 18,805 20,293
Capital expenditures                 1,196 938 948
Machinery, Energy & Transportation | Intersegment Eliminations                      
Reportable Segments                      
External sales and revenues                 4,456 3,882 2,902
Construction Industries | Reportable Segments Including Intersegment Eliminations                      
Reportable Segments                      
External sales and revenues                 23,237 19,240 15,690
Construction Industries | Reportable segments                      
Reportable Segments                      
External sales and revenues                 23,116 19,133 15,612
Depreciation and amortization                 367 400 458
Consolidated profit before taxes                 4,174 3,255 1,639
Segment assets 4,902       4,838       4,902 4,838 5,367
Capital expenditures                 266 228 186
Construction Industries | Intersegment Eliminations                      
Reportable Segments                      
External sales and revenues                 121 107 78
Resource Industries | Reportable Segments Including Intersegment Eliminations                      
Reportable Segments                      
External sales and revenues                 10,270 7,861 6,010
Resource Industries | Reportable segments                      
Reportable Segments                      
External sales and revenues                 9,888 7,504 5,726
Depreciation and amortization                 462 514 607
Consolidated profit before taxes                 1,603 698 (1,045)
Segment assets 6,442       6,403       6,442 6,403 7,135
Capital expenditures                 188 183 243
Resource Industries | Intersegment Eliminations                      
Reportable Segments                      
External sales and revenues                 382 357 284
Energy & Transportation | Reportable Segments Including Intersegment Eliminations                      
Reportable Segments                      
External sales and revenues                 22,785 19,382 16,951
Energy & Transportation | Reportable segments                      
Reportable Segments                      
External sales and revenues                 18,832 15,964 14,411
Depreciation and amortization                 640 653 677
Consolidated profit before taxes                 3,938 2,856 2,187
Segment assets 8,386       7,564       8,386 7,564 7,791
Capital expenditures                 742 527 519
Energy & Transportation | Intersegment Eliminations                      
Reportable Segments                      
External sales and revenues                 3,953 3,418 2,540
Financial Products Segment | Reportable Segments Including Intersegment Eliminations                      
Reportable Segments                      
External sales and revenues                 3,279 3,093 2,993
Financial Products Segment | Reportable segments                      
Reportable Segments                      
External sales and revenues                 3,279 3,093 2,993
Depreciation and amortization                 834 820 849
Consolidated profit before taxes                 505 792 702
Segment assets $ 36,002       $ 34,893       36,002 34,893 35,224
Capital expenditures                 1,559 1,373 1,638
Financial Products Segment | Intersegment Eliminations                      
Reportable Segments                      
External sales and revenues                 $ 0 $ 0 $ 0
v3.10.0.1
Segment information Segment Information (Details 2) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Sales and revenue by geographic region                      
External sales and revenues $ 14,342 $ 13,510 $ 14,011 $ 12,859 $ 12,896 $ 11,413 $ 11,331 $ 9,822 $ 54,722 $ 45,462 $ 38,537
Reportable segments                      
Sales and revenue by geographic region                      
External sales and revenues                 55,115 45,694 38,742
All Other operating segments                      
Sales and revenue by geographic region                      
External sales and revenues                   178 139
Intersegment Eliminations                      
Sales and revenue by geographic region                      
External sales and revenues                 4,456 3,882 2,902
Construction Industries | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 23,116    
External sales and revenues                 23,116 19,133 15,612
Construction Industries | Intersegment Eliminations                      
Sales and revenue by geographic region                      
External sales and revenues                 121 107 78
Resource Industries | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 9,888    
External sales and revenues                 9,888 7,504 5,726
Resource Industries | Intersegment Eliminations                      
Sales and revenue by geographic region                      
External sales and revenues                 382 357 284
Energy & Transportation | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 18,832    
External sales and revenues                 18,832 15,964 14,411
Energy & Transportation | Intersegment Eliminations                      
Sales and revenue by geographic region                      
External sales and revenues                 3,953 3,418 2,540
All Other | All Other operating segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 154    
Machinery, Energy & Transportation                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 51,822    
Machinery, Energy & Transportation | Reportable segments                      
Sales and revenue by geographic region                      
External sales and revenues                 51,836 42,601 35,749
Machinery, Energy & Transportation | Intersegment Eliminations                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 (168)    
External sales and revenues                 4,456 3,882 2,902
Financial Products Segment | Reportable segments                      
Sales and revenue by geographic region                      
External sales and revenues                 3,279 3,093 2,993
Financial Products Segment | Intersegment Eliminations                      
Sales and revenue by geographic region                      
External sales and revenues                 0 0 0
Financial Products                      
Sales and revenue by geographic region                      
External sales and revenues                 2,900    
Financial Products | Intersegment Eliminations                      
Sales and revenue by geographic region                      
External sales and revenues                 (379)    
Business | Energy & Transportation | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 18,832    
Business | Machinery, Energy & Transportation                      
Sales and revenue by geographic region                      
External sales and revenues                   42,676 35,773
Business | Machinery, Energy & Transportation | Reportable segments                      
Sales and revenue by geographic region                      
External sales and revenues                   42,601 35,749
Business | Machinery, Energy & Transportation | All Other operating segments                      
Sales and revenue by geographic region                      
External sales and revenues                   178 139
Business | Financial Products                      
Sales and revenue by geographic region                      
External sales and revenues                   3,167 3,065
Business | Financial Products | Reportable segments                      
Sales and revenue by geographic region                      
External sales and revenues                   3,093 2,993
Business | Financial Products | All Other operating segments                      
Sales and revenue by geographic region                      
External sales and revenues                   $ 0 $ 0
North America                      
Sales and revenue by geographic region                      
External sales and revenues                 25,623    
North America | Machinery, Energy & Transportation | Intersegment Eliminations                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 (155)    
North America | Financial Products | Intersegment Eliminations                      
Sales and revenue by geographic region                      
External sales and revenues                 (234)    
North America | Business | Construction Industries | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 10,754    
North America | Business | Resource Industries | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 3,357    
North America | Business | Energy & Transportation | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 9,685    
North America | Business | All Other | All Other operating segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 63    
North America | Business | Machinery, Energy & Transportation                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 23,704    
North America | Business | Financial Products Segment | Reportable segments                      
Sales and revenue by geographic region                      
External sales and revenues                 2,153    
North America | Business | Financial Products                      
Sales and revenue by geographic region                      
External sales and revenues                 1,919    
Latin America                      
Sales and revenue by geographic region                      
External sales and revenues                 4,695    
Latin America | Machinery, Energy & Transportation | Intersegment Eliminations                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 0    
Latin America | Financial Products | Intersegment Eliminations                      
Sales and revenue by geographic region                      
External sales and revenues                 (46)    
Latin America | Business | Construction Industries | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 1,479    
Latin America | Business | Resource Industries | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 1,647    
Latin America | Business | Energy & Transportation | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 1,331    
Latin America | Business | All Other | All Other operating segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 3    
Latin America | Business | Machinery, Energy & Transportation                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 4,460    
Latin America | Business | Financial Products Segment | Reportable segments                      
Sales and revenue by geographic region                      
External sales and revenues                 281    
Latin America | Business | Financial Products                      
Sales and revenue by geographic region                      
External sales and revenues                 235    
Europe                      
Sales and revenue by geographic region                      
External sales and revenues                 11,929    
Europe | Machinery, Energy & Transportation | Intersegment Eliminations                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 (11)    
Europe | Financial Products | Intersegment Eliminations                      
Sales and revenue by geographic region                      
External sales and revenues                 (26)    
Europe | Business | Construction Industries | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 4,410    
Europe | Business | Resource Industries | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 2,217    
Europe | Business | Energy & Transportation | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 4,934    
Europe | Business | All Other | All Other operating segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 18    
Europe | Business | Machinery, Energy & Transportation                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 11,568    
Europe | Business | Financial Products Segment | Reportable segments                      
Sales and revenue by geographic region                      
External sales and revenues                 387    
Europe | Business | Financial Products                      
Sales and revenue by geographic region                      
External sales and revenues                 361    
Asia Pacific                      
Sales and revenue by geographic region                      
External sales and revenues                 12,475    
Asia Pacific | Machinery, Energy & Transportation | Intersegment Eliminations                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 (2)    
Asia Pacific | Financial Products | Intersegment Eliminations                      
Sales and revenue by geographic region                      
External sales and revenues                 (73)    
Asia Pacific | Business | Construction Industries | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 6,473    
Asia Pacific | Business | Resource Industries | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 2,667    
Asia Pacific | Business | Energy & Transportation | Reportable segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 2,882    
Asia Pacific | Business | All Other | All Other operating segments                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 70    
Asia Pacific | Business | Machinery, Energy & Transportation                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 12,090    
Asia Pacific | Business | Financial Products Segment | Reportable segments                      
Sales and revenue by geographic region                      
External sales and revenues                 458    
Asia Pacific | Business | Financial Products                      
Sales and revenue by geographic region                      
External sales and revenues                 385    
Oil and Gas [Member] | Energy & Transportation                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 5,763    
Power generation [Member] | Energy & Transportation                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 4,334    
Industrial [Member] | Energy & Transportation                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 3,640    
Transportation [Member] | Energy & Transportation                      
Sales and revenue by geographic region                      
Sales and revenues by geographic region                 $ 5,095    
v3.10.0.1
Segment information (Details 3) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation $ 14,342 $ 13,510 $ 14,011 $ 12,859 $ 12,896 $ 11,413 $ 11,331 $ 9,822 $ 54,722 $ 45,462 $ 38,537
Reportable segments                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                 55,115 45,694 38,742
All Other operating segments                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                   178 139
Other                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                   (410) (344)
Consolidating Adjustments                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                   (381) (301)
Consolidating Adjustments | Reportable segments                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                   0 0
Consolidating Adjustments | All Other operating segments                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                   0 0
Consolidating Adjustments | Other                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                   (381) (301)
Machinery, Energy & Transportation | Reportable segments                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                 51,836 42,601 35,749
Machinery, Energy & Transportation | Business                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                   42,676 35,773
Machinery, Energy & Transportation | Business | Reportable segments                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                   42,601 35,749
Machinery, Energy & Transportation | Business | All Other operating segments                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                   178 139
Machinery, Energy & Transportation | Business | Other                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                   (103) (115)
Financial Products                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                 $ 2,900    
Financial Products | Business                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                   3,167 3,065
Financial Products | Business | Reportable segments                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                   3,093 2,993
Financial Products | Business | All Other operating segments                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                   0 0
Financial Products | Business | Other                      
Reconciliation of Sales and revenues                      
Sales of machinery, energy & transportation                   $ 74 $ 72
v3.10.0.1
Segment information (Details 4) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes $ 7,822 $ 4,082 $ 139
Reportable segments      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 10,220 7,601 3,483
All Other operating segments      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 23 (44) (85)
Cost Centers      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 2 22 1
Corporate Costs      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (610) (633) (527)
Timing      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (257) (151) 40
Restructuring Costs      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (386) (1,256) (1,019)
Inventory/cost of sales      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 51 (77) 0
Postretirement Benefits Expense      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (124) (141) (729)
Stock-Based Compensation Expense      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (198) (206) (218)
Financing Costs      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (257) (524) (517)
Currency      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (219) (218) (22)
Other Income Expense Methodology Differences      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (362) (181) (225)
Other      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (61) (110) (43)
Business      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 10,243 7,557 3,398
Machinery, Energy & Transportation | Reportable segments      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 9,715 6,809 2,781
Machinery, Energy & Transportation | Business      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 7,316 3,314 (553)
Machinery, Energy & Transportation | Business | Reportable segments      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 9,715 6,809 2,781
Machinery, Energy & Transportation | Business | All Other operating segments      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 23 (44) (85)
Machinery, Energy & Transportation | Business | Cost Centers      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 2 22 1
Machinery, Energy & Transportation | Business | Corporate Costs      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (610) (633) (527)
Machinery, Energy & Transportation | Business | Timing      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (257) (151) 40
Machinery, Energy & Transportation | Business | Restructuring Costs      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (370) (1,253) (1,014)
Machinery, Energy & Transportation | Business | Inventory/cost of sales      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 51 (77) 0
Machinery, Energy & Transportation | Business | Postretirement Benefits Expense      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (124) (141) (729)
Machinery, Energy & Transportation | Business | Stock-Based Compensation Expense      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (190) (198) (209)
Machinery, Energy & Transportation | Business | Financing Costs      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (257) (524) (517)
Machinery, Energy & Transportation | Business | Currency      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (219) (218) (22)
Machinery, Energy & Transportation | Business | Other Income Expense Methodology Differences      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (362) (181) (225)
Machinery, Energy & Transportation | Business | Other      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (86) (97) (47)
Financial Products | Business      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 506 768 692
Financial Products | Business | Reportable segments      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 505 792 702
Financial Products | Business | All Other operating segments      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 0 0 0
Financial Products | Business | Cost Centers      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 0 0 0
Financial Products | Business | Corporate Costs      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 0 0 0
Financial Products | Business | Timing      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 0 0 0
Financial Products | Business | Restructuring Costs      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (16) (3) (5)
Financial Products | Business | Inventory/cost of sales      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 0 0 0
Financial Products | Business | Postretirement Benefits Expense      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 0 0 0
Financial Products | Business | Stock-Based Compensation Expense      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes (8) (8) (9)
Financial Products | Business | Financing Costs      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 0 0 0
Financial Products | Business | Currency      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes 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
Financial Products | Business | Other      
Reconciliation of Consolidated profit (loss) before taxes      
Consolidated profit before taxes $ 25 $ (13) $ 4
v3.10.0.1
Segment information (Details 5) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Segment Reporting Information      
Consolidated profit before taxes $ 7,822 $ 4,082 $ 139
Restructuring costs (386) (1,256) (1,019)
Reportable segments      
Segment Reporting Information      
Consolidated profit before taxes 10,220 7,601 3,483
Reportable segments | Construction Industries      
Segment Reporting Information      
Consolidated profit before taxes 4,174 3,255 1,639
Reportable segments | Resource Industries      
Segment Reporting Information      
Consolidated profit before taxes 1,603 698 (1,045)
Reportable segments | Energy & Transportation      
Segment Reporting Information      
Consolidated profit before taxes 3,938 2,856 2,187
Reportable segments | Financial Products Segment      
Segment Reporting Information      
Consolidated profit before taxes 505 792 702
All Other operating segments      
Segment Reporting Information      
Consolidated profit before taxes 23 (44) (85)
Business      
Segment Reporting Information      
Consolidated profit before taxes 10,243 7,557 3,398
Restructuring costs (375) (1,152) (879)
Consolidated profit before taxes with restructuring costs 9,868 6,405 2,519
Business | Reportable segments | Construction Industries      
Segment Reporting Information      
Consolidated profit before taxes 4,174 3,255 1,639
Restructuring costs (58) (719) (41)
Consolidated profit before taxes with restructuring costs 4,116 2,536 1,598
Business | Reportable segments | Resource Industries      
Segment Reporting Information      
Consolidated profit before taxes 1,603 698 (1,045)
Restructuring costs (191) (276) (540)
Consolidated profit before taxes with restructuring costs 1,412 422 (1,585)
Business | Reportable segments | Energy & Transportation      
Segment Reporting Information      
Consolidated profit before taxes 3,938 2,856 2,187
Restructuring costs (84) (115) (248)
Consolidated profit before taxes with restructuring costs 3,854 2,741 1,939
Business | Reportable segments | Financial Products Segment      
Segment Reporting Information      
Consolidated profit before taxes 505 792 702
Restructuring costs (2) (3) (5)
Consolidated profit before taxes with restructuring costs 503 789 697
Business | All Other operating segments | All Other      
Segment Reporting Information      
Consolidated profit before taxes 23 (44) (85)
Restructuring costs (40) (39) (45)
Consolidated profit before taxes with restructuring costs $ (17) $ (83) $ (130)
v3.10.0.1
Segment information (Details 6) - USD ($)
$ in Millions
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Reconciliation of assets      
Total assets $ 78,509 $ 76,962 $ 74,704
Reportable segments      
Reconciliation of assets      
Total assets 55,732 53,698 55,517
All Other operating segments      
Reconciliation of assets      
Total assets 1,279 1,312 1,381
Cash and Short Term Investments      
Reconciliation of assets      
Total assets 6,968 7,381 5,257
Intercompany Receivables      
Reconciliation of assets      
Total assets 0 0 0
Investment in Financial Products      
Reconciliation of assets      
Total assets 0 0 0
Deferred income taxes      
Reconciliation of assets      
Total assets 1,323 1,592 2,701
Goodwill and Intangible Assets      
Reconciliation of assets      
Total assets 4,279 4,210 3,883
Property Plant and Equipment-Net and Other Assets      
Reconciliation of assets      
Total assets 1,998 2,341 1,645
Operating Lease Methodology Difference      
Reconciliation of assets      
Total assets (196) (191) (186)
Liabilities Included in Segment Assets      
Reconciliation of assets      
Total assets 9,766 9,352 7,400
Inventory Methodology Differences      
Reconciliation of assets      
Total assets (2,503) (2,287) (2,373)
Other      
Reconciliation of assets      
Total assets (137) (446) (521)
Consolidating Adjustments      
Reconciliation of assets      
Total assets (6,034) (6,404) (6,354)
Consolidating Adjustments | Reportable segments      
Reconciliation of assets      
Total assets 0 0 0
Consolidating Adjustments | All Other operating segments      
Reconciliation of assets      
Total assets 0 0 0
Consolidating Adjustments | Cash and Short Term Investments      
Reconciliation of assets      
Total assets 0 0 0
Consolidating Adjustments | Intercompany Receivables      
Reconciliation of assets      
Total assets (1,633) (1,733) (1,713)
Consolidating Adjustments | Investment in Financial Products      
Reconciliation of assets      
Total assets (3,672) (4,064) (3,638)
Consolidating Adjustments | Deferred income taxes      
Reconciliation of assets      
Total assets (692) (574) (947)
Consolidating Adjustments | Goodwill and Intangible Assets      
Reconciliation of assets      
Total assets 0 0 0
Consolidating Adjustments | Property Plant and Equipment-Net and Other Assets      
Reconciliation of assets      
Total assets 0 0 0
Consolidating Adjustments | Operating Lease Methodology Difference      
Reconciliation of assets      
Total assets 0 0 0
Consolidating Adjustments | Liabilities Included in Segment Assets      
Reconciliation of assets      
Total assets 0 0 0
Consolidating Adjustments | Inventory Methodology Differences      
Reconciliation of assets      
Total assets 0 0 0
Consolidating Adjustments | Other      
Reconciliation of assets      
Total assets (37) (33) (56)
Machinery, Energy & Transportation | Reportable segments      
Reconciliation of assets      
Total assets 19,730 18,805 20,293
Machinery, Energy & Transportation | Business      
Reconciliation of assets      
Total assets 48,475 48,487 45,863
Machinery, Energy & Transportation | Business | Reportable segments      
Reconciliation of assets      
Total assets 19,730 18,805 20,293
Machinery, Energy & Transportation | Business | All Other operating segments      
Reconciliation of assets      
Total assets 1,279 1,312 1,381
Machinery, Energy & Transportation | Business | Cash and Short Term Investments      
Reconciliation of assets      
Total assets 6,968 7,381 5,257
Machinery, Energy & Transportation | Business | Intercompany Receivables      
Reconciliation of assets      
Total assets 1,633 1,733 1,713
Machinery, Energy & Transportation | Business | Investment in Financial Products      
Reconciliation of assets      
Total assets 3,672 4,064 3,638
Machinery, Energy & Transportation | Business | Deferred income taxes      
Reconciliation of assets      
Total assets 2,015 2,166 3,648
Machinery, Energy & Transportation | Business | Goodwill and Intangible Assets      
Reconciliation of assets      
Total assets 4,279 4,210 3,883
Machinery, Energy & Transportation | Business | Property Plant and Equipment-Net and Other Assets      
Reconciliation of assets      
Total assets 1,998 2,341 1,645
Machinery, Energy & Transportation | Business | Operating Lease Methodology Difference      
Reconciliation of assets      
Total assets (196) (191) (186)
Machinery, Energy & Transportation | Business | Liabilities Included in Segment Assets      
Reconciliation of assets      
Total assets 9,766 9,352 7,400
Machinery, Energy & Transportation | Business | Inventory Methodology Differences      
Reconciliation of assets      
Total assets (2,503) (2,287) (2,373)
Machinery, Energy & Transportation | Business | Other      
Reconciliation of assets      
Total assets (166) (399) (436)
Financial Products | Business      
Reconciliation of assets      
Total assets 36,068 34,879 35,195
Financial Products | Business | Reportable segments      
Reconciliation of assets      
Total assets 36,002 34,893 35,224
Financial Products | Business | All Other operating segments      
Reconciliation of assets      
Total assets 0 0 0
Financial Products | Business | Cash and Short Term Investments      
Reconciliation of assets      
Total assets 0 0 0
Financial Products | Business | Intercompany Receivables      
Reconciliation of assets      
Total assets 0 0 0
Financial Products | Business | Investment in Financial Products      
Reconciliation of assets      
Total assets 0 0 0
Financial Products | Business | Deferred income taxes      
Reconciliation of assets      
Total assets 0 0 0
Financial Products | Business | Goodwill and Intangible Assets      
Reconciliation of assets      
Total assets 0 0 0
Financial Products | Business | Property Plant and Equipment-Net and Other Assets      
Reconciliation of assets      
Total assets 0 0 0
Financial Products | Business | Operating Lease Methodology Difference      
Reconciliation of assets      
Total assets 0 0 0
Financial Products | Business | Liabilities Included in Segment Assets      
Reconciliation of assets      
Total assets 0 0 0
Financial Products | Business | Inventory Methodology Differences      
Reconciliation of assets      
Total assets 0 0 0
Financial Products | Business | Other      
Reconciliation of assets      
Total assets $ 66 $ (14) $ (29)
v3.10.0.1
Segment information (Details 7) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization $ 2,766 $ 2,877 $ 3,034
Reportable segments      
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization 2,303 2,387 2,591
All Other operating segments      
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization 225 220 219
Cost Centers      
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization 130 143 156
Other      
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization 108 127 68
Machinery, Energy & Transportation | Reportable segments      
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization 1,469 1,567 1,742
Machinery, Energy & Transportation | Business      
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization 1,895 2,016 2,144
Machinery, Energy & Transportation | Business | Reportable segments      
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization 1,469 1,567 1,742
Machinery, Energy & Transportation | Business | All Other operating segments      
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization 225 220 219
Machinery, Energy & Transportation | Business | Cost Centers      
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization 130 143 156
Machinery, Energy & Transportation | Business | Other      
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization 71 86 27
Financial Products | Business      
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization 871 861 890
Financial Products | Business | Reportable segments      
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization 834 820 849
Financial Products | Business | All Other operating segments      
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization 0 0 0
Financial Products | Business | Cost Centers      
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization 0 0 0
Financial Products | Business | Other      
Reconciliation of Depreciation and amortization:      
Total depreciation and amortization $ 37 $ 41 $ 41
v3.10.0.1
Segment information (Details 8) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Reconciliation of Capital expenditures      
Total capital expenditures $ 2,916 $ 2,336 $ 2,928
Reportable segments      
Reconciliation of Capital expenditures      
Total capital expenditures 2,755 2,311 2,586
All Other operating segments      
Reconciliation of Capital expenditures      
Total capital expenditures 170 134 182
Cost Centers      
Reconciliation of Capital expenditures      
Total capital expenditures 100 84 72
Timing      
Reconciliation of Capital expenditures      
Total capital expenditures 42 (96) 153
Other      
Reconciliation of Capital expenditures      
Total capital expenditures (151) (97) (65)
Consolidating Adjustments      
Reconciliation of Capital expenditures      
Total capital expenditures (80) (33) (49)
Consolidating Adjustments | Reportable segments      
Reconciliation of Capital expenditures      
Total capital expenditures 0 0 0
Consolidating Adjustments | All Other operating segments      
Reconciliation of Capital expenditures      
Total capital expenditures 0 0 0
Consolidating Adjustments | Cost Centers      
Reconciliation of Capital expenditures      
Total capital expenditures 0 0 0
Consolidating Adjustments | Timing      
Reconciliation of Capital expenditures      
Total capital expenditures 0 0 0
Consolidating Adjustments | Other      
Reconciliation of Capital expenditures      
Total capital expenditures (80) (33) (49)
Machinery, Energy & Transportation | Reportable segments      
Reconciliation of Capital expenditures      
Total capital expenditures 1,196 938 948
Machinery, Energy & Transportation | Business      
Reconciliation of Capital expenditures      
Total capital expenditures 1,221 916 1,206
Machinery, Energy & Transportation | Business | Reportable segments      
Reconciliation of Capital expenditures      
Total capital expenditures 1,196 938 948
Machinery, Energy & Transportation | Business | All Other operating segments      
Reconciliation of Capital expenditures      
Total capital expenditures 170 134 182
Machinery, Energy & Transportation | Business | Cost Centers      
Reconciliation of Capital expenditures      
Total capital expenditures 100 84 72
Machinery, Energy & Transportation | Business | Timing      
Reconciliation of Capital expenditures      
Total capital expenditures 42 (96) 153
Machinery, Energy & Transportation | Business | Other      
Reconciliation of Capital expenditures      
Total capital expenditures (287) (144) (149)
Financial Products | Business      
Reconciliation of Capital expenditures      
Total capital expenditures 1,775 1,453 1,771
Financial Products | Business | Reportable segments      
Reconciliation of Capital expenditures      
Total capital expenditures 1,559 1,373 1,638
Financial Products | Business | All Other operating segments      
Reconciliation of Capital expenditures      
Total capital expenditures 0 0 0
Financial Products | Business | Cost Centers      
Reconciliation of Capital expenditures      
Total capital expenditures 0 0 0
Financial Products | Business | Timing      
Reconciliation of Capital expenditures      
Total capital expenditures 0 0 0
Financial Products | Business | Other      
Reconciliation of Capital expenditures      
Total capital expenditures $ 216 $ 80 $ 133
v3.10.0.1
Segment information (Details 9) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Jan. 01, 2018
Segment Reporting Information                        
External sales and revenues $ 14,342 $ 13,510 $ 14,011 $ 12,859 $ 12,896 $ 11,413 $ 11,331 $ 9,822 $ 54,722 $ 45,462 $ 38,537  
Property, plant and equipment - net 13,574       14,155       13,574 14,155   $ 13,965
U.S. pensions                        
Segment Reporting Information                        
External sales and revenues                 22,690 18,552 15,956  
Property, plant and equipment - net 8,152       8,126       8,152 8,126    
Outside the United States                        
Segment Reporting Information                        
External sales and revenues                 32,032 26,910 $ 22,581  
Property, plant and equipment - net $ 5,422       $ 6,029       $ 5,422 $ 6,029    
v3.10.0.1
Acquisitions (Details)
$ in Millions
 1 Months Ended 12 Months Ended
Jan. 02, 2018
USD ($)
Dec. 15, 2016
USD ($)
Dec. 31, 2016
USD ($)
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Jan. 01, 2019
USD ($)
Acquisitions              
Net cash paid for acquisition       $ 392 $ 59 $ 191  
Assets acquired              
Goodwill     $ 6,020 6,217 6,200 $ 6,020  
ECM S.p.A.              
Acquisitions              
Percentage of equity acquired (as a percent) 100.00%            
Net cash paid for acquisition $ 225            
Payments to acquire businesses, gross 249            
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Financial Liabilities 1            
Assets acquired              
Tangible assets acquired 109            
Cash 25            
Receivables 28            
Inventory 29            
Property, plant and equipment 17            
Finite-lived intangible assets $ 112            
Finite-lived intangible assets, weighed average useful life (in years) 13 years            
Goodwill $ 109            
Liabilities assumed              
Total liabilities assumed 79            
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable 38            
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities 29            
Downer Freight Rail              
Acquisitions              
Net cash paid for acquisition 97            
Assets acquired              
Tangible assets acquired 86            
Receivables 23            
Inventory 40            
Property, plant and equipment 15            
Finite-Lived Customer Relationships, Gross 6            
Finite-lived intangible assets $ 6            
Finite-lived intangible assets, weighed average useful life (in years) 15 years            
Goodwill $ 18            
Liabilities assumed              
Total liabilities assumed $ 14            
Kemper Valve & Fittings Corp.              
Acquisitions              
Percentage of equity acquired (as a percent)   100.00%          
Fair value of contingent consideration   $ 38          
Number of components of contingent considerations arising from acquisition   2          
Payments to acquire businesses, gross   $ 92   8 $ 1    
Assets acquired              
Tangible assets acquired   147          
Cash   12          
Receivables   7          
Short term investments   3          
Net deferred tax assets acquired   21          
Inventory   63          
Property, plant and equipment   41          
Finite-lived intangible assets   8          
Finite-lived intangible assets, weighed average useful life (in years)     10 years        
Goodwill   1          
Liabilities assumed              
Total liabilities assumed   6          
Kemper Valve & Fittings Corp. | Contribution of nonmonetary assets to charitable organization              
Acquisitions              
Fair value of contingent consideration   20          
Business combination, payment to liabilities assumed that arise from contingencies       10     $ 10
Kemper Valve & Fittings Corp. | Guarantee based on industry performance price index              
Acquisitions              
Fair value of contingent consideration   $ 20          
Business combination, payment to liabilities assumed that arise from contingencies       $ 0      
v3.10.0.1
Divestitures (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Disposal groups      
Cat Financial financing of transactions $ 12,183 $ 11,953 $ 9,339
v3.10.0.1
Restructuring Costs (Details)
$ in Millions
 1 Months Ended 12 Months Ended 24 Months Ended 40 Months Ended
Mar. 31, 2017
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Dec. 31, 2018
USD ($)
Dec. 31, 2018
USD ($)
Restructuring Cost [Abstract]            
Restructuring costs   $ 386 $ 1,256 $ 1,019    
Employee separation costs   112 525      
Employee Separation Activity            
Liability balance at beginning of period   249 147   $ 147  
Employee separation costs   112 525      
Reduction in liability (payments and other adjustments)   276 423      
Liability balance at end of period   85 249 147 85 $ 85
Other restructuring costs            
Restructuring Cost [Abstract]            
Restructuring costs   182 173 262    
Other operating income (expense) | Employee separation            
Restructuring Cost [Abstract]            
Restructuring costs   112 525 297    
Other operating income (expense) | Contract termination            
Restructuring Cost [Abstract]            
Restructuring costs   7 183 62    
Other operating income (expense) | Long-lived asset impairments            
Restructuring Cost [Abstract]            
Restructuring costs   93 346 391    
Other operating income (expense) | Defined benefit retirement plan curtailment losses            
Restructuring Cost [Abstract]            
Restructuring costs   (8) 29 7    
Gosselies closure announcement            
Restructuring Cost [Abstract]            
Restructuring and Related Cost, Number of Positions Eliminated 2,000          
Restructuring costs         647  
Discontinue production on-highway vocational trucks            
Restructuring Cost [Abstract]            
Restructuring costs       104    
Second half of 2016 announcement            
Restructuring Cost [Abstract]            
Restructuring costs       369    
September 2015 announcement            
Restructuring Cost [Abstract]            
Restructuring costs   121 $ 817 $ 281   1,788
Estimated restructuring costs   $ 50     $ 50 $ 50
v3.10.0.1
Selected quarterly financial results (unaudited) (Details) - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Mar. 31, 2018
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Sales and revenues $ 14,342 $ 13,510 $ 14,011 $ 12,859 $ 12,896 $ 11,413 $ 11,331 $ 9,822 $ 54,722 $ 45,462 $ 38,537
Cost of goods sold 9,987 9,022 9,422 8,566 8,965 7,678 7,816 6,801 36,997 31,260 28,044
Gross margin 3,643 3,741 3,857 3,584 3,229 3,035 2,823 2,329      
Profit (loss) $ 1,048 $ 1,727 $ 1,707 $ 1,665 $ (1,299) $ 1,059 $ 802 $ 192 $ 6,147 [1] $ 754 [1] $ (67) [1]
Profit (loss) per common share $ 1.80 $ 2.92 $ 2.86 $ 2.78 $ (2.18) $ 1.79 $ 1.36 $ 0.33 $ 10.39 $ 1.27 $ (0.11)
Profit (loss) per common share - diluted $ 1.78 $ 2.88 $ 2.82 $ 2.74 $ (2.18) $ 1.77 $ 1.35 $ 0.32 $ 10.26 [2],[3] $ 1.26 [2],[3] $ (0.11) [2],[3]
Pre-tax pension and other postretirement benefit plan actuarial losses $ (495)       $ (301)       $ (495) $ (301) $ (985)
Charge/ (benefit) to U.S. deferred tax rate change 2017 U.S. tax reform   $ 154             $ (154)    
Taxes at U. S. statutory rate (as a percent)                 21.00% 35.00% 35.00%
Correction of Prior Year Valuation Allowance   59             $ 59 $ (17) $ (33)
Valuation allowances                 (29) (111) 141
Adjustment to estimated tax for mandatory deemed repatriation of non-U.S. earnings 50               50    
U.S. 2017 tax reform estimated impact         2,371         2,371  
U.S. state taxing jurisdictions                      
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount                 (63)    
Valuation allowances                   (111) 141
Financial Service [Member]                      
Sales and revenues 712 747 $ 732 $ 709 702 $ 700 $ 692 $ 692 2,900 2,786 2,764
Machinery, Energy & Transportation                      
Sales and revenues $ 13,630 $ 12,763 $ 13,279 $ 12,150 $ 12,194 $ 10,713 $ 10,639 $ 9,130 $ 51,822 $ 42,676 $ 35,773
[1] 1 Profit (loss) attributable to common shareholders.
[2] 2 Diluted by assumed exercise of stock-based compensation awards, using the treasury stock method.
[3] 3 In 2016, the assumed exercise of stock-based compensation awards was not considered because the impact would be antidilutive.