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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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37-0602744
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(State or other jurisdiction of incorporation)
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(IRS Employer I.D. No.)
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510 Lake Cook Road, Suite 100, Deerfield, Illinois
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60015
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange
on which registered
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Common Stock ($1.00 par value)
(1)
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New York Stock Exchange
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9 3/8% Debentures due March 15, 2021
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New York Stock Exchange
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8% Debentures due February 15, 2023
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New York Stock Exchange
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5.3% Debentures due September 15, 2035
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New York Stock Exchange
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(1)
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In addition to the New York Stock Exchange, Caterpillar common stock is also listed on stock exchanges in France and Switzerland.
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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Smaller reporting company
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o
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Emerging growth company
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Part III
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2019 Annual Meeting Proxy Statement (Proxy Statement) to be filed with the Securities and Exchange Commission (SEC) within 120 days after the end of the calendar year.
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Item 1.
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Business.
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•
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reciprocating engine powered generator sets
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•
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reciprocating engines supplied to the industrial industry as well as Caterpillar machinery
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•
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integrated systems used in the electric power generation industry
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•
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turbines, centrifugal gas compressors and related services
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•
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reciprocating engines and integrated systems and solutions for the marine and oil and gas industries
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•
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remanufactured reciprocating engines and components
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•
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diesel-electric locomotives and components and other rail-related products and services
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•
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Loans that allow customers and dealers to use their Caterpillar equipment or other assets as collateral to obtain financing (26 percent*).
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•
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Installment sale contracts, which are equipment loans that enable customers to purchase equipment with a down payment or trade-in and structure payments over time (23 percent*).
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•
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Tax leases that are classified as either operating or finance leases for financial accounting purposes, depending on the characteristics of the lease. For tax purposes, Cat Financial is considered the owner of the equipment (12 percent*).
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•
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Finance (non-tax) leases, where the lessee for tax purposes is considered to be the owner of the equipment during the term of the lease, that either require or allow the customer to purchase the equipment for a fixed price at the end of the term (21 percent*).
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•
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Governmental lease-purchase plans in the U.S. that offer low interest rates and flexible terms to qualified non-federal government agencies (1 percent*).
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•
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Contractual Liability Insurance to Caterpillar and its affiliates, Caterpillar dealers and original equipment manufacturers (OEMs) for extended service contracts (parts and labor) offered by Caterpillar, third party dealers and OEMs.
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•
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Cargo insurance for the worldwide cargo risks of Caterpillar products.
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•
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Contractors’ Equipment Physical Damage Insurance for equipment manufactured by Caterpillar or OEMs, which is leased, rented or sold by third party dealers to customers.
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•
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General liability, employer’s liability, auto liability and property insurance for Caterpillar.
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•
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Retiree Medical Stop Loss Insurance for medical claims under the VEBA.
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•
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Brokerage services for property and casualty and life and health business.
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view additional financial information on-line at www.caterpillar.com/en/investors/financial-information.html
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•
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request, view or download materials on-line or register for email alerts at www.Caterpillar.com/materialsrequest
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•
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view/download on-line at www.Caterpillar.com/historical
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Item 1A.
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Risk Factors.
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•
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multiple and potentially conflicting laws, regulations and policies that are subject to change;
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•
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imposition of currency restrictions, restrictions on repatriation of earnings or other restraints;
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•
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imposition of new or additional tariffs or quotas;
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•
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withdrawal from or modification of trade agreements or the negotiation of new trade agreements;
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•
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imposition of new or additional trade and economic sanctions laws imposed by the U.S. or foreign governments;
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•
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war or terrorist acts; and
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•
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political and economic instability or civil unrest that may severely disrupt economic activity in affected countries.
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•
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the business culture of the acquired business may not match well with our culture;
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•
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technological and product synergies, economies of scale and cost reductions may not occur as expected;
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•
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unforeseen expenses, delays or conditions may be imposed upon the acquisition, including due to required regulatory approvals or consents;
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•
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we may acquire or assume unexpected liabilities or be subject to unexpected penalties or other enforcement actions;
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•
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faulty assumptions may be made regarding the macroeconomic environment or the integration process;
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•
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unforeseen difficulties may arise in integrating operations, processes and systems;
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•
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higher than expected investments may be required to implement necessary compliance processes and related systems, including IT systems, accounting systems and internal controls over financial reporting;
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•
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we may fail to retain, motivate and integrate key management and other employees of the acquired business;
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•
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higher than expected costs may arise due to unforeseen changes in tax, trade, environmental, labor, safety, payroll or pension policies in any jurisdiction in which the acquired business conducts its operations; and
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•
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we may experience problems in retaining customers and integrating customer bases.
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•
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Market developments that may affect customer confidence levels and cause declines in the demand for financing and adverse changes in payment patterns, causing increases in delinquencies and default rates, which could impact Cat Financial’s write-offs and provision for credit losses.
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•
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The process Cat Financial uses to estimate losses inherent in its credit exposure requires a high degree of management’s judgment regarding numerous subjective qualitative factors, including forecasts of economic conditions and how economic predictors might impair the ability of its borrowers to repay their loans. Financial market disruption and volatility may impact the accuracy of these judgments.
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•
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Cat Financial’s ability to engage in routine funding transactions or borrow from other financial institutions on acceptable terms or at all could be adversely affected by disruptions in the capital markets or other events, including actions by rating agencies and deteriorating investor expectations.
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•
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As Cat Financial’s lending agreements are primarily with financial institutions, their ability to perform in accordance with any of its underlying agreements could be adversely affected by market volatility and/or disruptions in financial markets.
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Item 1B.
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Unresolved Staff Comments.
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Item 1C.
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Executive Officers of the Registrant.
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Name and age
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Present Caterpillar Inc. position
and date of initial election
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Principal positions held during the
past five years if other than
Caterpillar Inc. position currently held
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D. James Umpleby, III (60)
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Chairman of the Board (2018) and Chief Executive Officer (2017)
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Group President (2013-2016)
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Andrew R.J. Bonfield (56)
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Chief Financial Officer (2018)
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Group Chief Financial Officer for a multinational electricity and gas utility company (2010-2018)
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Bob De Lange (49)
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Group President (2017)
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Vice President (2015-2016), Worldwide Product Manager, Medium Wheel Loaders, (2013-2014)
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Denise C. Johnson (52)
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Group President (2016)
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Vice President (2012-2016)
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Thomas A. Pellette (56)
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Group President (2015)
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Vice President (2013-2015)
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Ramin Younessi (54)
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Group President (2018)
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Vice President (2013-2018)
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Suzette M. Long (53)
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General Counsel and Corporate Secretary (2017)
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Interim Executive Vice President, Law and Public Policy (2017), Deputy General Counsel (2013-2017)
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Cheryl C. Johnson (58)
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Chief Human Resources Officer (2017)
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Executive Vice President of Human Resources for a global multi-industry aerospace, defense and industrial manufacturing company (2012-2017)
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Jananne A. Copeland (56)
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Chief Accounting Officer (2007)
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Item 2.
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Properties.
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Segment
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U.S. Facilities
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Facilities Outside the U.S.
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Construction Industries
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Arkansas:
North Little Rock
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Brazil:
Campo Largo, Piracicaba
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Georgia:
Athens, LaGrange
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China:
Suzhou, Wujiang, Xuzhou, Qingzhou
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Illinois:
Decatur, East Peoria
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France:
Grenoble, Echirolles
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Kansas:
Wamego
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Hungary:
Godollo
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Minnesota:
Brooklyn Park
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India:
Thiruvallar
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North Carolina:
Clayton, Sanford
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Indonesia:
Jakarta
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Texas:
Victoria, Waco
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Italy:
Minerbio
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Japan:
Akashi
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Mexico:
Torreon
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Netherlands:
Den Bosch
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Poland:
Janow, Sosnowiec
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Thailand:
Rayong
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United Kingdom:
Desford, Stockton
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Resource Industries
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Illinois:
Aurora, Decatur, East Peoria, Joliet
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China:
Wuxi
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South Carolina:
Sumter
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Germany:
Dortmund, Lunen
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Tennessee:
Dyersburg
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India:
Thiruvallur
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Texas:
Denison
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Indonesia:
Batam
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Wisconsin:
South Milwaukee
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Italy:
Jesi
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Mexico:
Acuna, Monterrey, Reynosa
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Russia:
Tosno
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Thailand:
Rayong
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United Kingdom:
Peterlee, Springvale
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Energy & Transportation
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Alabama:
Albertville, Montgomery
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Australia:
Cardiff, Perth, Redbank, Revesby
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California:
San Diego
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Brazil:
Curitiba, Hortolandia, Piracicaba, Sete Lagoas
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Georgia:
Griffin
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China
: Tianjin, Wuxi
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Illinois:
Island Lake,
LaGrange, Mossville, Mapleton, Pontiac
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Czech Republic:
Zatec, Zebrak
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Indiana:
Lafayette, Muncie
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Germany:
Kiel, Mannheim, Rostock
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Kentucky:
Decoursey, Mayfield
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India:
Aurangabad, Hosur
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Oklahoma:
Broken Arrow
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Italy
: Pistoria
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North Carolina:
Winston-Salem
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Mexico:
San Luis Potosi, Tijuana
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Texas:
Channelview, DeSoto, Mabank, San Antonio, Schertz, Seguin, Sherman
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Republic of Singapore:
Singapore
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Sweden:
Ockero Islands
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United Kingdom:
Larne, Peterborough, Sandiacre, South Queensferry, Stafford, Wimborne
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Item 3.
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Legal Proceedings.
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Item 4.
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Mine Safety Disclosures.
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
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2013
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2014
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2015
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2016
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2017
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2018
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||||||||||||
Caterpillar Inc.
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$
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100.00
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$
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103.48
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$
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79.70
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$
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113.26
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$
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198.25
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$
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163.44
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S&P 500
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$
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100.00
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$
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113.69
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$
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115.26
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$
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129.05
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$
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157.22
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$
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150.33
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S&P 500 Machinery
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$
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100.00
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$
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104.42
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$
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88.98
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$
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119.18
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$
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169.59
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$
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144.76
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Period
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Total Number
of Shares
Purchased
2,3,4
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|
Average Price
Paid per Share
2,3,4
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Total Number
of Shares Purchased
as Part of Publicly Announced Program
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|
Approximate Dollar
Value of Shares that
May Yet be Purchased
under the Program (in billions)
1
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||||||
October 1-31, 2018
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7,492,531
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$
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124.66
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7,492,531
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$
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2.609
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November 1-30, 2018
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|
5,622,285
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$
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125.89
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|
5,622,285
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$
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1.901
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|
December 1-31, 2018
|
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1,754,824
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|
$
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126.19
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|
1,754,824
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|
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$
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1.680
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Total
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14,869,640
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$
|
125.30
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|
14,869,640
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||
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||||||
1
In January 2014, the Board of Directors authorized the repurchase of up to $10.0 billion of Caterpillar common stock, which expired on December 31, 2018 (the 2014 Authorization). 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.
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2
During the third quarter of 2018, we entered into an accelerated stock repurchase (ASR) with a third-party financial institution to purchase $750 million of our common stock. In August 2018, upon payment of the $750 million to the financial institution, we received 4.8 million shares. In October 2018, upon final settlement of the August 2018 ASR, we received 0.4 million shares at an average price of $143.31.
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3
During the fourth quarter of 2018, we entered into an ASR with a third-party financial institution to purchase $750 million of our common stock. In October 2018, upon payment of $750 million to the financial institution, we received 6.0 million shares. In December 2018, upon final settlement of the ASR, we received an additional 0.1 million shares. In total, we repurchased 6.1 million shares under this ASR at an average price per share of $124.40.
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4
In October, November, and December of 2018, we repurchased 1.1 million, 5.6 million, and 1.7 million additional shares respectively, for an aggregate of $1.0 billion in open market transactions at an average price per share of $118.28, $125.89, and $126.29, respectively. Some purchases made during the fourth quarter of 2018 were made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934.
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Share repurchases in the table above are reported based on the trade dates.
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Item 6.
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Selected Financial Data.
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Five-year Financial Summary
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(Dollars in millions except per share data)
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||||||||||
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2018
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2017
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2016
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2015
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2014
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||||||||||
Years ended December 31,
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Sales and revenues
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$
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54,722
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$
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45,462
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$
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38,537
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$
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47,011
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$
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55,184
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Percent inside the United States
|
|
41
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%
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|
41
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%
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|
41
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%
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|
41
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%
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38
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%
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|||||
Percent outside the United States
|
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59
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%
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59
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%
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59
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%
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59
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%
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|
62
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%
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|
|||||
Sales
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|
$
|
51,822
|
|
|
$
|
42,676
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|
|
$
|
35,773
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$
|
44,147
|
|
|
$
|
52,142
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Revenues
|
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$
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2,900
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|
|
$
|
2,786
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$
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2,764
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$
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2,864
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$
|
3,042
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Profit (loss)
1
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$
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6,147
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$
|
754
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$
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(67
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)
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$
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2,512
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|
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$
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2,452
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|
|
Profit (loss) per common share
2
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$
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10.39
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$
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1.27
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$
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(0.11
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)
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$
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4.23
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$
|
3.97
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|
Profit (loss) per common share–diluted
3
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$
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10.26
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$
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1.26
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|
|
$
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(0.11
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)
|
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$
|
4.18
|
|
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$
|
3.90
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|
|
Dividends declared per share of common stock
|
|
$
|
3.36
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|
|
$
|
3.11
|
|
|
$
|
3.08
|
|
|
$
|
3.01
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|
|
$
|
2.70
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|
|
Return on average common shareholders’ equity
4
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|
44.1
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%
|
|
5.6
|
%
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|
(0.5
|
)%
|
|
15.8
|
%
|
|
13.0
|
%
|
|
|||||
Capital expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Property, plant and equipment
|
|
$
|
1,276
|
|
|
$
|
898
|
|
|
$
|
1,109
|
|
|
$
|
1,388
|
|
|
$
|
1,539
|
|
|
Equipment leased to others
|
|
$
|
1,640
|
|
|
$
|
1,438
|
|
|
$
|
1,819
|
|
|
$
|
1,873
|
|
|
$
|
1,840
|
|
|
Depreciation and amortization
|
|
$
|
2,766
|
|
|
$
|
2,877
|
|
|
$
|
3,034
|
|
|
$
|
3,046
|
|
|
$
|
3,163
|
|
|
Research and development expenses
5
|
|
$
|
1,850
|
|
|
$
|
1,842
|
|
|
$
|
1,853
|
|
|
$
|
2,134
|
|
|
$
|
2,107
|
|
|
As a percent of sales and revenues
|
|
3.4
|
%
|
|
4.1
|
%
|
|
4.8
|
%
|
|
4.5
|
%
|
|
3.8
|
%
|
|
|||||
Average number of employees
|
|
101,500
|
|
|
96,000
|
|
|
99,500
|
|
|
110,800
|
|
|
115,600
|
|
|
|||||
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total assets
|
|
$
|
78,509
|
|
|
$
|
76,962
|
|
|
$
|
74,704
|
|
|
$
|
78,342
|
|
|
$
|
84,498
|
|
|
Long-term debt due after one year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Consolidated
|
|
$
|
25,000
|
|
|
$
|
23,847
|
|
|
$
|
22,818
|
|
|
$
|
25,169
|
|
|
$
|
27,696
|
|
|
Machinery, Energy & Transportation
|
|
$
|
8,005
|
|
|
$
|
7,929
|
|
|
$
|
8,436
|
|
|
$
|
8,960
|
|
|
$
|
9,445
|
|
|
Financial Products
|
|
$
|
16,995
|
|
|
$
|
15,918
|
|
|
$
|
14,382
|
|
|
$
|
16,209
|
|
|
$
|
18,251
|
|
|
Total debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Consolidated
|
|
$
|
36,553
|
|
|
$
|
34,878
|
|
|
$
|
36,783
|
|
|
$
|
38,013
|
|
|
$
|
39,195
|
|
|
Machinery, Energy & Transportation
|
|
$
|
8,015
|
|
|
$
|
7,936
|
|
|
$
|
9,152
|
|
|
$
|
9,486
|
|
|
$
|
9,964
|
|
|
Financial Products
|
|
$
|
28,538
|
|
|
$
|
26,942
|
|
|
$
|
27,631
|
|
|
$
|
28,527
|
|
|
$
|
29,231
|
|
|
1
|
Profit (loss) attributable to common shareholders.
|
2
|
Computed on weighted-average number of shares outstanding.
|
3
|
Computed on weighted-average number of shares outstanding diluted by assumed exercise of stock-based compensation awards, using the treasury stock method. In 2016, the assumed exercise of stock-based compensation awards was not considered because the impact would be antidilutive.
|
4
|
Represents profit (loss) divided by average shareholders’ equity (beginning of year shareholders’ equity plus end of year shareholders’ equity divided by two).
|
5
|
Effective January 1, 2018, we adopted new accounting guidance issued by the FASB related to the presentation of net periodic pension costs and net periodic postretirement benefit costs. The change was applied retrospectively to prior years. For further information see Note 1J - “Operations and summary of significant accounting policies - New Accounting Guidance” of Part II, Item 8 “Financial Statements and Supplementary Data”.
|
|
|
|
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Sales and revenues in 2018 were $54.722 billion, up 20 percent from 2017. Sales improved in all regions and across the three primary segments.
|
•
|
Operating profit as a percent of sales and revenues was 15.2 percent in 2018, compared with 9.8 percent in 2017.
Adjusted operating profit margin
was 15.9 percent in 2018, compared with 12.5 percent in 2017.
|
•
|
Profit was $10.26 per share for 2018, and excluding the items in the table below,
adjusted profit per share
was $11.22. For 2017 profit was $1.26 per share, and excluding the items in the table below, adjusted profit per share was $6.88.
|
•
|
In order for our results to be more meaningful to our readers, we have separately quantified the impact of several significant items:
|
|
Full Year 2018
|
|
Full Year 2017
|
|
||||||||||||
(Millions of dollars)
|
Profit Before Taxes
|
|
Profit
Per Share
|
|
Profit Before Taxes
|
|
Profit
Per Share
|
|
||||||||
Profit
|
$
|
7,822
|
|
|
$
|
10.26
|
|
|
$
|
4,082
|
|
|
$
|
1.26
|
|
|
Restructuring costs
|
386
|
|
|
0.50
|
|
|
1,256
|
|
|
1.68
|
|
|
||||
Mark-to-market losses
|
495
|
|
|
0.64
|
|
|
301
|
|
|
0.26
|
|
|
||||
Deferred tax valuation allowance adjustments
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
|
(0.18
|
)
|
|
||||
U.S. tax reform impact
|
—
|
|
|
(0.17
|
)
|
|
—
|
|
|
3.95
|
|
|
||||
Gain on sale of equity investment
|
—
|
|
|
—
|
|
|
(85
|
)
|
|
(0.09
|
)
|
|
||||
Adjusted profit
|
$
|
8,703
|
|
|
$
|
11.22
|
|
|
$
|
5,554
|
|
|
$
|
6.88
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
•
|
Machinery, Energy & Transportation (ME&T)
operating cash flow for 2018 was about $6.3 billion, more than sufficient to cover capital expenditures and dividends. ME&T operating cash flow for 2017 was about $5.5 billion.
|
•
|
Glossary of terms included on pages 43-45; first occurrence of terms shown in bold italics.
|
•
|
Information on non-GAAP financial measures is included on pages 58-59.
|
Sales and Revenues by Segment
|
|||||||||||||||||||||||||||||||
(Millions of dollars)
|
|
2017
|
|
Sales
Volume
|
|
Price
Realization
|
|
Currency
|
|
Inter-Segment / Other
|
|
2018
|
|
$
Change
|
|
%
Change |
|||||||||||||||
Construction Industries
|
|
$
|
19,240
|
|
|
$
|
3,663
|
|
|
$
|
122
|
|
|
$
|
198
|
|
|
$
|
14
|
|
|
$
|
23,237
|
|
|
$
|
3,997
|
|
|
21
|
%
|
Resource Industries
|
|
7,861
|
|
|
2,082
|
|
|
316
|
|
|
(14
|
)
|
|
25
|
|
|
10,270
|
|
|
2,409
|
|
|
31
|
%
|
|||||||
Energy & Transportation
|
|
19,382
|
|
|
2,637
|
|
|
163
|
|
|
68
|
|
|
535
|
|
|
22,785
|
|
|
3,403
|
|
|
18
|
%
|
|||||||
All Other Segments
|
|
570
|
|
|
(26
|
)
|
|
(1
|
)
|
|
3
|
|
|
(64
|
)
|
|
482
|
|
|
(88
|
)
|
|
(15
|
)%
|
|||||||
Corporate Items and Eliminations
|
|
(4,377
|
)
|
|
(65
|
)
|
|
1
|
|
|
(1
|
)
|
|
(510
|
)
|
|
(4,952
|
)
|
|
(575
|
)
|
|
|
|
|||||||
Machinery, Energy & Transportation
|
|
42,676
|
|
|
8,291
|
|
|
601
|
|
|
254
|
|
|
—
|
|
|
51,822
|
|
|
9,146
|
|
|
21
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Financial Products Segment
|
|
3,093
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
186
|
|
|
3,279
|
|
|
186
|
|
|
6
|
%
|
|||||||
Corporate Items and Eliminations
|
|
(307
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(72
|
)
|
|
(379
|
)
|
|
(72
|
)
|
|
|
|
|||||||
Financial Products Revenues
|
|
2,786
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
114
|
|
|
2,900
|
|
|
114
|
|
|
4
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Consolidated Sales and Revenues
|
|
$
|
45,462
|
|
|
$
|
8,291
|
|
|
$
|
601
|
|
|
$
|
254
|
|
|
$
|
114
|
|
|
$
|
54,722
|
|
|
$
|
9,260
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and Revenues by Geographic Region
|
|||||||||||||||||||||||||||||||||||||||||
|
North America
|
|
Latin America
|
|
EAME
|
|
Asia/Pacific
|
|
External Sales and Revenues
|
|
Inter-Segment
|
|
Total Sales and Revenues
|
||||||||||||||||||||||||||||
(Millions of dollars)
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Construction Industries
|
$
|
10,754
|
|
|
23%
|
|
$
|
1,479
|
|
|
6%
|
|
$
|
4,410
|
|
|
17%
|
|
$
|
6,473
|
|
|
24%
|
|
$
|
23,116
|
|
|
21%
|
|
$
|
121
|
|
|
13%
|
|
$
|
23,237
|
|
|
21%
|
Resource Industries
|
3,357
|
|
|
30%
|
|
1,647
|
|
|
29%
|
|
2,217
|
|
|
25%
|
|
2,667
|
|
|
43%
|
|
9,888
|
|
|
32%
|
|
382
|
|
|
7%
|
|
10,270
|
|
|
31%
|
|||||||
Energy & Transportation
|
9,685
|
|
|
22%
|
|
1,331
|
|
|
6%
|
|
4,934
|
|
|
11%
|
|
2,882
|
|
|
25%
|
|
18,832
|
|
|
18%
|
|
3,953
|
|
|
16%
|
|
22,785
|
|
|
18%
|
|||||||
All Other Segments
|
63
|
|
|
(10%)
|
|
3
|
|
|
—%
|
|
18
|
|
|
(67%)
|
|
70
|
|
|
37%
|
|
154
|
|
|
(13%)
|
|
328
|
|
|
(16%)
|
|
482
|
|
|
(15%)
|
|||||||
Corporate Items and Eliminations
|
(155
|
)
|
|
|
|
—
|
|
|
|
|
(11
|
)
|
|
|
|
(2
|
)
|
|
|
|
(168
|
)
|
|
|
|
(4,784
|
)
|
|
|
|
(4,952
|
)
|
|
|
|||||||
Machinery, Energy & Transportation
|
23,704
|
|
|
23%
|
|
4,460
|
|
|
13%
|
|
11,568
|
|
|
16%
|
|
12,090
|
|
|
28%
|
|
51,822
|
|
|
21%
|
|
—
|
|
|
—%
|
|
51,822
|
|
|
21%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Financial Products Segment
|
2,153
|
|
|
7%
|
|
281
|
|
|
(8%)
|
|
387
|
|
|
(7%)
|
|
458
|
|
|
26%
|
|
3,279
|
|
|
6%
|
|
—
|
|
|
—%
|
|
3,279
|
|
|
6%
|
|||||||
Corporate Items and Eliminations
|
(234
|
)
|
|
|
|
(46
|
)
|
|
|
|
(26
|
)
|
|
|
|
(73
|
)
|
|
|
|
(379
|
)
|
|
|
|
—
|
|
|
|
|
(379
|
)
|
|
|
|||||||
Financial Products Revenues
|
1,919
|
|
|
6%
|
|
235
|
|
|
(10%)
|
|
361
|
|
|
(10%)
|
|
385
|
|
|
24%
|
|
2,900
|
|
|
4%
|
|
—
|
|
|
—%
|
|
2,900
|
|
|
4%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Consolidated Sales and Revenues
|
$
|
25,623
|
|
|
22%
|
|
$
|
4,695
|
|
|
12%
|
|
$
|
11,929
|
|
|
15%
|
|
$
|
12,475
|
|
|
28%
|
|
$
|
54,722
|
|
|
20%
|
|
$
|
—
|
|
|
—%
|
|
$
|
54,722
|
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Construction Industries
|
$
|
8,742
|
|
|
|
|
$
|
1,396
|
|
|
|
|
$
|
3,760
|
|
|
|
|
$
|
5,235
|
|
|
|
|
$
|
19,133
|
|
|
|
|
$
|
107
|
|
|
|
|
$
|
19,240
|
|
|
|
Resource Industries
|
2,582
|
|
|
|
|
1,281
|
|
|
|
|
1,775
|
|
|
|
|
1,866
|
|
|
|
|
7,504
|
|
|
|
|
357
|
|
|
|
|
7,861
|
|
|
|
|||||||
Energy & Transportation
|
7,959
|
|
|
|
|
1,261
|
|
|
|
|
4,431
|
|
|
|
|
2,313
|
|
|
|
|
15,964
|
|
|
|
|
3,418
|
|
|
|
|
19,382
|
|
|
|
|||||||
All Other Segments
|
70
|
|
|
|
|
3
|
|
|
|
|
54
|
|
|
|
|
51
|
|
|
|
|
178
|
|
|
|
|
392
|
|
|
|
|
570
|
|
|
|
|||||||
Corporate Items and Eliminations
|
(97
|
)
|
|
|
|
(1
|
)
|
|
|
|
(6
|
)
|
|
|
|
1
|
|
|
|
|
(103
|
)
|
|
|
|
(4,274
|
)
|
|
|
|
(4,377
|
)
|
|
|
|||||||
Machinery, Energy & Transportation
|
19,256
|
|
|
|
|
3,940
|
|
|
|
|
10,014
|
|
|
|
|
9,466
|
|
|
|
|
42,676
|
|
|
|
|
—
|
|
|
|
|
42,676
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Financial Products Segment
|
2,006
|
|
|
|
|
306
|
|
|
|
|
418
|
|
|
|
|
363
|
|
|
|
|
3,093
|
|
|
|
|
—
|
|
|
|
|
3,093
|
|
|
|
|||||||
Corporate Items and Eliminations
|
(190
|
)
|
|
|
|
(46
|
)
|
|
|
|
(19
|
)
|
|
|
|
(52
|
)
|
|
|
|
(307
|
)
|
|
|
|
—
|
|
|
|
|
(307
|
)
|
|
|
|||||||
Financial Products Revenues
|
1,816
|
|
|
|
|
260
|
|
|
|
|
399
|
|
|
|
|
311
|
|
|
|
|
2,786
|
|
|
|
|
—
|
|
|
|
|
2,786
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Consolidated Sales and Revenues
|
$
|
21,072
|
|
|
|
|
$
|
4,200
|
|
|
|
|
$
|
10,413
|
|
|
|
|
$
|
9,777
|
|
|
|
|
$
|
45,462
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
45,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (Loss) by Segment
|
|
|
|
|
|
|
|
|
|||||||
(Millions of dollars)
|
|
2018
|
|
2017
|
|
$
Change
|
|
%
Change
|
|||||||
Construction Industries
|
|
$
|
4,174
|
|
|
$
|
3,255
|
|
|
$
|
919
|
|
|
28
|
%
|
Resource Industries
|
|
1,603
|
|
|
698
|
|
|
905
|
|
|
130
|
%
|
|||
Energy & Transportation
|
|
3,938
|
|
|
2,856
|
|
|
1,082
|
|
|
38
|
%
|
|||
All Other Segments
|
|
23
|
|
|
(44
|
)
|
|
67
|
|
|
152
|
%
|
|||
Corporate Items and Eliminations
|
|
(1,583
|
)
|
|
(2,659
|
)
|
|
1,076
|
|
|
|
|
|||
Machinery, Energy & Transportation
|
|
8,155
|
|
|
4,106
|
|
|
4,049
|
|
|
99
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Financial Products Segment
|
|
505
|
|
|
792
|
|
|
(287
|
)
|
|
(36
|
)%
|
|||
Corporate Items and Eliminations
|
|
17
|
|
|
(116
|
)
|
|
133
|
|
|
|
|
|||
Financial Products
|
|
522
|
|
|
676
|
|
|
(154
|
)
|
|
(23
|
)%
|
|||
Consolidating Adjustments
|
|
(384
|
)
|
|
(322
|
)
|
|
(62
|
)
|
|
|
|
|||
Consolidated Operating Profit
|
|
$
|
8,293
|
|
|
$
|
4,460
|
|
|
$
|
3,833
|
|
|
86
|
%
|
|
|
|
|
|
|
|
|
|
•
|
Other income/expense
in 2018 was expense of $67 million, compared with income of $153 million in 2017. The unfavorable change was primarily a result of an unfavorable impact from equity securities in Insurance Services. Effective January 1, 2018, we adopted a new U.S. GAAP accounting rule that requires our equity securities to be measured at fair value through earnings. Previously, the fair value adjustments for these securities were reported in equity until the securities were sold or an impairment was recognized. We adopted the standard using the modified retrospective approach, with no change to prior year financial statements. During 2018, we recognized a loss of $33 million related to fair value adjustments. During 2017, we recognized gains on sales of securities of $104 million. In addition, the absence of a 2017 pretax gain of $85 million on the sale of Caterpillar’s equity investment in IronPlanet contributed to the unfavorable change.
|
•
|
The
provision for income taxes
for 2018 reflects an annual effective tax rate of 24.1 percent, compared with 27.7 percent for the full year of 2017, excluding the items discussed below. The decrease was primarily due to the reduction in the U.S. corporate tax rate beginning January 1, 2018, along with other changes in the geographic mix of profits from a tax perspective.
|
▪
|
Sales volume increased primarily due to higher demand for construction equipment and the impact of favorable changes in dealer inventories. Dealer inventories increased significantly more during 2018 than during 2017.
|
▪
|
In North America, the sales increase was primarily due to higher demand for construction equipment, primarily to support oil and gas activities, including pipelines, non-residential building construction and infrastructure activities. In addition, sales increased due to the favorable impact of dealer inventories, which increased during 2018, compared with a slight decrease during 2017. We believe the strength of the U.S. economy, continued pipeline construction and state and local funding for infrastructure development will be favorable to sales in 2019.
|
▪
|
Although construction activities remained weak in Latin America, sales were higher in the region.
|
▪
|
Sales increased in EAME primarily due to higher demand and the favorable impact of currency, mostly from a stronger euro. Higher demand was driven by increased construction activities across several countries in the region. Favorable price realization also contributed to the sales increase.
|
▪
|
Sales in Asia/Pacific were higher in several countries in the region, most significantly in China, stemming from increased building construction and infrastructure investment. Favorable changes in dealer inventories contributed to the sales improvement as dealer inventories increased in 2018 and were about flat in 2017. In 2019, we expect demand in China to be about flat after two years of significant growth.
|
Sales by Application
|
|
|
|
|
|
|
|
|
|||||||
(Millions of dollars)
|
|
2018
|
|
2017
|
|
$
Change
|
|
%
Change
|
|||||||
Oil and Gas
|
|
$
|
5,763
|
|
|
$
|
4,424
|
|
|
$
|
1,339
|
|
|
30
|
%
|
Power Generation
|
|
4,334
|
|
|
3,551
|
|
|
783
|
|
|
22
|
%
|
|||
Industrial
|
|
3,640
|
|
|
3,445
|
|
|
195
|
|
|
6
|
%
|
|||
Transportation
|
|
5,095
|
|
|
4,544
|
|
|
551
|
|
|
12
|
%
|
|||
External Sales
|
|
18,832
|
|
|
15,964
|
|
|
2,868
|
|
|
18
|
%
|
|||
Inter-Segment
|
|
3,953
|
|
|
3,418
|
|
|
535
|
|
|
16
|
%
|
|||
Total Sales
|
|
$
|
22,785
|
|
|
$
|
19,382
|
|
|
$
|
3,403
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
•
|
Oil and Gas
- Sales increased due to higher demand in North America for well servicing and gas compression applications. Growth in U.S. onshore oil and gas drove increased sales for reciprocating engines and related aftermarket parts. Sales of turbines and turbine-related services were higher for production applications.
|
•
|
Power Generation
- Sales improved across all regions, with the largest increase in North America, primarily for reciprocating engine applications including data centers, and for aftermarket parts. In addition, sales increased in EAME from reciprocating engine projects, turbines and turbine-related services and favorable currency.
|
•
|
Industrial
- Sales were higher in Asia/Pacific and North America, primarily due to improving economic conditions supporting higher engine sales into industrial applications. Sales in EAME were about flat as economic uncertainty in a few countries in the Middle East was mostly offset by favorable currency impacts.
|
•
|
Transportation
- Sales were higher for rail services driven by acquisitions in Asia/Pacific and EAME and increased rail traffic in North America. Marine sales were higher in Asia/Pacific, led by increased activity in the ferry sector.
|
Sales and Revenues by Segment
|
|||||||||||||||||||||||||||||||
(Millions of dollars)
|
|
Fourth Quarter 2017
|
|
Sales
Volume
|
|
Price
Realization
|
|
Currency
|
|
Inter-Segment / Other
|
|
Fourth Quarter 2018
|
|
$
Change
|
|
%
Change
|
|||||||||||||||
Construction Industries
|
|
$
|
5,295
|
|
|
$
|
382
|
|
|
$
|
111
|
|
|
$
|
(85
|
)
|
|
$
|
2
|
|
|
$
|
5,705
|
|
|
$
|
410
|
|
|
8
|
%
|
Resource Industries
|
|
2,308
|
|
|
504
|
|
|
34
|
|
|
(32
|
)
|
|
(17
|
)
|
|
2,797
|
|
|
489
|
|
|
21
|
%
|
|||||||
Energy & Transportation
|
|
5,640
|
|
|
599
|
|
|
33
|
|
|
(73
|
)
|
|
88
|
|
|
6,287
|
|
|
647
|
|
|
11
|
%
|
|||||||
All Other Segments
|
|
155
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
129
|
|
|
(26
|
)
|
|
(17
|
)%
|
|||||||
Corporate Items and Eliminations
|
|
(1,204
|
)
|
|
(25
|
)
|
|
1
|
|
|
—
|
|
|
(60
|
)
|
|
(1,288
|
)
|
|
(84
|
)
|
|
|
|
|||||||
Machinery, Energy & Transportation
|
|
12,194
|
|
|
1,447
|
|
|
179
|
|
|
(190
|
)
|
|
—
|
|
|
13,630
|
|
|
1,436
|
|
|
12
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Financial Products Segment
|
|
783
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
812
|
|
|
29
|
|
|
4
|
%
|
|||||||
Corporate Items and Eliminations
|
|
(81
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(100
|
)
|
|
(19
|
)
|
|
|
|
|||||||
Financial Products Revenues
|
|
702
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
712
|
|
|
10
|
|
|
1
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Consolidated Sales and Revenues
|
|
$
|
12,896
|
|
|
$
|
1,447
|
|
|
$
|
179
|
|
|
$
|
(190
|
)
|
|
$
|
10
|
|
|
$
|
14,342
|
|
|
$
|
1,446
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and Revenues by Geographic Region
|
|||||||||||||||||||||||||||||||||||||||||
|
North America
|
|
Latin America
|
|
EAME
|
|
Asia/Pacific
|
|
External Sales and Revenues
|
|
Inter-Segment
|
|
Total Sales and Revenues
|
||||||||||||||||||||||||||||
(Millions of dollars)
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
||||||||||||||
Fourth Quarter 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Construction Industries
|
$
|
2,749
|
|
|
17%
|
|
$
|
374
|
|
|
(5%)
|
|
$
|
1,063
|
|
|
9%
|
|
$
|
1,480
|
|
|
(4%)
|
|
$
|
5,666
|
|
|
8%
|
|
$
|
39
|
|
|
5%
|
|
$
|
5,705
|
|
|
8%
|
Resource Industries
|
906
|
|
|
15%
|
|
466
|
|
|
21%
|
|
554
|
|
|
17%
|
|
785
|
|
|
41%
|
|
2,711
|
|
|
23%
|
|
86
|
|
|
(17%)
|
|
2,797
|
|
|
21%
|
|||||||
Energy & Transportation
|
2,569
|
|
|
10%
|
|
434
|
|
|
16%
|
|
1,509
|
|
|
17%
|
|
753
|
|
|
5%
|
|
5,265
|
|
|
12%
|
|
1,022
|
|
|
9%
|
|
6,287
|
|
|
11%
|
|||||||
All Other Segments
|
16
|
|
|
(27%)
|
|
2
|
|
|
100%
|
|
6
|
|
|
(57%)
|
|
15
|
|
|
—%
|
|
39
|
|
|
(25%)
|
|
90
|
|
|
(13%)
|
|
129
|
|
|
(17%)
|
|||||||
Corporate Items and Eliminations
|
(47
|
)
|
|
|
|
1
|
|
|
|
|
(3
|
)
|
|
|
|
(2
|
)
|
|
|
|
(51
|
)
|
|
|
|
(1,237
|
)
|
|
|
|
(1,288
|
)
|
|
|
|||||||
Machinery, Energy & Transportation
|
6,193
|
|
|
13%
|
|
1,277
|
|
|
11%
|
|
3,129
|
|
|
14%
|
|
3,031
|
|
|
7%
|
|
13,630
|
|
|
12%
|
|
—
|
|
|
—%
|
|
13,630
|
|
|
12%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Financial Products Segment
|
545
|
|
|
8%
|
|
68
|
|
|
(15%)
|
|
84
|
|
|
(21%)
|
|
115
|
|
|
26%
|
|
812
|
|
|
4%
|
|
—
|
|
|
—%
|
|
812
|
|
|
4%
|
|||||||
Corporate Items and Eliminations
|
(66
|
)
|
|
|
|
(10
|
)
|
|
|
|
(8
|
)
|
|
|
|
(16
|
)
|
|
|
|
(100
|
)
|
|
|
|
—
|
|
|
|
|
(100
|
)
|
|
|
|||||||
Financial Products Revenues
|
479
|
|
|
5%
|
|
58
|
|
|
(15%)
|
|
76
|
|
|
(25%)
|
|
99
|
|
|
27%
|
|
712
|
|
|
1%
|
|
—
|
|
|
—%
|
|
712
|
|
|
1%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Consolidated Sales and Revenues
|
$
|
6,672
|
|
|
13%
|
|
$
|
1,335
|
|
|
10%
|
|
$
|
3,205
|
|
|
12%
|
|
$
|
3,130
|
|
|
8%
|
|
$
|
14,342
|
|
|
11%
|
|
$
|
—
|
|
|
—%
|
|
$
|
14,342
|
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fourth Quarter 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Construction Industries
|
$
|
2,346
|
|
|
|
|
$
|
392
|
|
|
|
|
$
|
976
|
|
|
|
|
$
|
1,544
|
|
|
|
|
$
|
5,258
|
|
|
|
|
$
|
37
|
|
|
|
|
$
|
5,295
|
|
|
|
Resource Industries
|
791
|
|
|
|
|
384
|
|
|
|
|
475
|
|
|
|
|
555
|
|
|
|
|
2,205
|
|
|
|
|
103
|
|
|
|
|
2,308
|
|
|
|
|||||||
Energy & Transportation
|
2,327
|
|
|
|
|
374
|
|
|
|
|
1,286
|
|
|
|
|
719
|
|
|
|
|
4,706
|
|
|
|
|
934
|
|
|
|
|
5,640
|
|
|
|
|||||||
All Other Segments
|
22
|
|
|
|
|
1
|
|
|
|
|
14
|
|
|
|
|
15
|
|
|
|
|
52
|
|
|
|
|
103
|
|
|
|
|
155
|
|
|
|
|||||||
Corporate Items and Eliminations
|
(27
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(27
|
)
|
|
|
|
(1,177
|
)
|
|
|
|
(1,204
|
)
|
|
|
|||||||
Machinery, Energy & Transportation
|
5,459
|
|
|
|
|
1,151
|
|
|
|
|
2,751
|
|
|
|
|
2,833
|
|
|
|
|
12,194
|
|
|
|
|
—
|
|
|
|
|
12,194
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Financial Products Segment
|
505
|
|
|
|
|
80
|
|
|
|
|
107
|
|
|
|
|
91
|
|
|
|
|
783
|
|
|
|
|
—
|
|
|
|
|
783
|
|
|
|
|||||||
Corporate Items and Eliminations
|
(50
|
)
|
|
|
|
(12
|
)
|
|
|
|
(6
|
)
|
|
|
|
(13
|
)
|
|
|
|
(81
|
)
|
|
|
|
—
|
|
|
|
|
(81
|
)
|
|
|
|||||||
Financial Products Revenues
|
455
|
|
|
|
|
68
|
|
|
|
|
101
|
|
|
|
|
78
|
|
|
|
|
702
|
|
|
|
|
—
|
|
|
|
|
702
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Consolidated Sales and Revenues
|
$
|
5,914
|
|
|
|
|
$
|
1,219
|
|
|
|
|
$
|
2,852
|
|
|
|
|
$
|
2,911
|
|
|
|
|
$
|
12,896
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
12,896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (Loss) by Segment
|
|
|
|
|
|
|
|
|
|||||||
(Millions of dollars)
|
|
Fourth Quarter 2018
|
|
Fourth Quarter 2017
|
|
$
Change
|
|
%
Change
|
|||||||
Construction Industries
|
|
$
|
845
|
|
|
$
|
837
|
|
|
$
|
8
|
|
|
1
|
%
|
Resource Industries
|
|
400
|
|
|
210
|
|
|
190
|
|
|
90
|
%
|
|||
Energy & Transportation
|
|
1,079
|
|
|
874
|
|
|
205
|
|
|
23
|
%
|
|||
All Other Segments
|
|
(47
|
)
|
|
(16
|
)
|
|
(31
|
)
|
|
(194
|
)%
|
|||
Corporate Items and Eliminations
|
|
(375
|
)
|
|
(588
|
)
|
|
213
|
|
|
|
|
|||
Machinery, Energy & Transportation
|
|
1,902
|
|
|
1,317
|
|
|
585
|
|
|
44
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Financial Products Segment
|
|
29
|
|
|
233
|
|
|
(204
|
)
|
|
(88
|
)%
|
|||
Corporate Items and Eliminations
|
|
54
|
|
|
(77
|
)
|
|
131
|
|
|
|
|
|||
Financial Products
|
|
83
|
|
|
156
|
|
|
(73
|
)
|
|
(47
|
)%
|
|||
Consolidating Adjustments
|
|
(102
|
)
|
|
(86
|
)
|
|
(16
|
)
|
|
|
|
|||
Consolidated Operating Profit
|
|
$
|
1,883
|
|
|
$
|
1,387
|
|
|
$
|
496
|
|
|
36
|
%
|
|
|
|
|
|
|
|
|
|
•
|
Interest expense excluding Financial Products
in the fourth quarter of 2018 was $99 million, a decrease of $70 million primarily due to an early debt retirement in the fourth quarter of 2017.
|
•
|
Other income/expense
in the fourth quarter of 2018 was a loss of $417 million, compared with a loss of $107 million in the fourth quarter of 2017. The unfavorable change was primarily a result of an increase in mark-to-market losses related to
pension and other postemployment benefit (OPEB)
plans and an unfavorable impact from equity securities.
|
•
|
The
provision for income taxes
in the fourth quarter of 2018 reflects an annual effective tax rate of 24.1 percent, compared with 27.7 percent for the full year of 2017, excluding the items discussed below. The decrease was primarily due to the reduction in the U.S. corporate tax rate beginning January 1, 2018, along with other changes in the geographic mix of profits from a tax perspective.
|
•
|
In North America, the sales increase was driven by higher demand for new equipment, with about half due to an increase in dealer inventories. The increase in demand was primarily to support oil and gas activities, including pipelines, and non-residential building construction activities. Favorable price realization also contributed to the sales improvement.
|
•
|
Construction activities remained at low levels in Latin America.
|
•
|
Sales increased in EAME as infrastructure, road and non-residential building construction activities drove higher demand in Europe, partially offset by weakness in the Middle East.
|
•
|
Sales in Asia/Pacific declined due to lower demand in China, partially offset by higher demand in a few other countries in the region. Unfavorable currency impacts also contributed to the sales decline.
|
Sales by Application
|
|
|
|
|
|
|
|
|
|||||||
(Millions of dollars)
|
|
Fourth Quarter 2018
|
|
Fourth Quarter 2017
|
|
$
Change
|
|
%
Change
|
|||||||
Oil and Gas
|
|
$
|
1,719
|
|
|
$
|
1,497
|
|
|
$
|
222
|
|
|
15
|
%
|
Power Generation
|
|
1,271
|
|
|
1,060
|
|
|
211
|
|
|
20
|
%
|
|||
Industrial
|
|
902
|
|
|
899
|
|
|
3
|
|
|
—
|
%
|
|||
Transportation
|
|
1,373
|
|
|
1,250
|
|
|
123
|
|
|
10
|
%
|
|||
External Sales
|
|
5,265
|
|
|
4,706
|
|
|
559
|
|
|
12
|
%
|
|||
Inter-Segment
|
|
1,022
|
|
|
934
|
|
|
88
|
|
|
9
|
%
|
|||
Total Sales
|
|
$
|
6,287
|
|
|
$
|
5,640
|
|
|
$
|
647
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
•
|
Oil and Gas
- Sales increased due to higher demand for reciprocating engines in North America for gas compression and well servicing applications. Sales of turbines and turbine-related services were about flat.
|
•
|
Power Generation
- Sales improved across all regions, with the largest increases in North America and EAME primarily for reciprocating engine applications, including data centers and other large power generation projects.
|
•
|
Industrial
- Sales were flat, with increases in Asia/Pacific and North America about offset by lower sales in EAME and Latin America.
|
•
|
Transportation
- Sales were higher primarily due to rail services, driven by acquisitions.
|
Sales and Revenues by Segment
|
|||||||||||||||||||||||||||||||
(Millions of dollars)
|
|
2016
|
|
Sales
Volume
|
|
Price
Realization
|
|
Currency
|
|
Inter-Segment / Other
|
|
2017
|
|
$
Change
|
|
%
Change |
|||||||||||||||
Construction Industries
|
|
$
|
15,690
|
|
|
$
|
2,810
|
|
|
$
|
751
|
|
|
$
|
(40
|
)
|
|
$
|
29
|
|
|
$
|
19,240
|
|
|
$
|
3,550
|
|
|
23
|
%
|
Resource Industries
|
|
6,010
|
|
|
1,638
|
|
|
118
|
|
|
22
|
|
|
73
|
|
|
7,861
|
|
|
1,851
|
|
|
31
|
%
|
|||||||
Energy & Transportation
|
|
16,951
|
|
|
1,556
|
|
|
(42
|
)
|
|
39
|
|
|
878
|
|
|
19,382
|
|
|
2,431
|
|
|
14
|
%
|
|||||||
All Other Segments
|
|
544
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
570
|
|
|
26
|
|
|
5
|
%
|
|||||||
Corporate Items and Eliminations
|
|
(3,422
|
)
|
|
12
|
|
|
—
|
|
|
—
|
|
|
(967
|
)
|
|
(4,377
|
)
|
|
(955
|
)
|
|
|
|
|||||||
Machinery, Energy & Transportation
|
|
35,773
|
|
|
6,055
|
|
|
827
|
|
|
21
|
|
|
—
|
|
|
42,676
|
|
|
6,903
|
|
|
19
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Financial Products Segment
|
|
2,993
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100
|
|
|
3,093
|
|
|
100
|
|
|
3
|
%
|
|||||||
Corporate Items and Eliminations
|
|
(229
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(78
|
)
|
|
(307
|
)
|
|
(78
|
)
|
|
|
|
|||||||
Financial Products Revenues
|
|
2,764
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
2,786
|
|
|
22
|
|
|
1
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Consolidated Sales and Revenues
|
|
$
|
38,537
|
|
|
$
|
6,055
|
|
|
$
|
827
|
|
|
$
|
21
|
|
|
$
|
22
|
|
|
$
|
45,462
|
|
|
$
|
6,925
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and Revenues by Geographic Region
|
|||||||||||||||||||||||||||||||||||||||||
|
North America
|
|
Latin America
|
|
EAME
|
|
Asia/Pacific
|
|
External Sales and Revenues
|
|
Inter-Segment
|
|
Total Sales and Revenues
|
||||||||||||||||||||||||||||
(Millions of dollars)
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
|
$
|
|
% Chg
|
||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Construction Industries
|
$
|
8,742
|
|
|
16%
|
|
$
|
1,396
|
|
|
32%
|
|
$
|
3,760
|
|
|
15%
|
|
$
|
5,235
|
|
|
39%
|
|
$
|
19,133
|
|
|
23%
|
|
$
|
107
|
|
|
37%
|
|
$
|
19,240
|
|
|
23%
|
Resource Industries
|
2,582
|
|
|
25%
|
|
1,281
|
|
|
28%
|
|
1,775
|
|
|
51%
|
|
1,866
|
|
|
26%
|
|
7,504
|
|
|
31%
|
|
357
|
|
|
26%
|
|
7,861
|
|
|
31%
|
|||||||
Energy & Transportation
|
7,959
|
|
|
19%
|
|
1,261
|
|
|
14%
|
|
4,431
|
|
|
5%
|
|
2,313
|
|
|
(5%)
|
|
15,964
|
|
|
11%
|
|
3,418
|
|
|
35%
|
|
19,382
|
|
|
14%
|
|||||||
All Other Segments
|
70
|
|
|
52%
|
|
3
|
|
|
—%
|
|
54
|
|
|
93%
|
|
51
|
|
|
(18%)
|
|
178
|
|
|
28%
|
|
392
|
|
|
(3%)
|
|
570
|
|
|
5%
|
|||||||
Corporate Items and Eliminations
|
(97
|
)
|
|
|
|
(1
|
)
|
|
|
|
(6
|
)
|
|
|
|
1
|
|
|
|
|
(103
|
)
|
|
|
|
(4,274
|
)
|
|
|
|
(4,377
|
)
|
|
|
|||||||
Machinery, Energy & Transportation
|
19,256
|
|
|
19%
|
|
3,940
|
|
|
25%
|
|
10,014
|
|
|
16%
|
|
9,466
|
|
|
23%
|
|
42,676
|
|
|
19%
|
|
—
|
|
|
—%
|
|
42,676
|
|
|
19%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Financial Products Segment
|
2,006
|
|
|
8%
|
|
306
|
|
|
(9%)
|
|
418
|
|
|
4%
|
|
363
|
|
|
(8%)
|
|
3,093
|
|
|
3%
|
|
—
|
|
|
—%
|
|
3,093
|
|
|
3%
|
|||||||
Corporate Items and Eliminations
|
(190
|
)
|
|
|
|
(46
|
)
|
|
|
|
(19
|
)
|
|
|
|
(52
|
)
|
|
|
|
(307
|
)
|
|
|
|
—
|
|
|
|
|
(307
|
)
|
|
|
|||||||
Financial Products Revenues
|
1,816
|
|
|
5%
|
|
260
|
|
|
(11%)
|
|
399
|
|
|
4%
|
|
311
|
|
|
(12%)
|
|
2,786
|
|
|
1%
|
|
—
|
|
|
—%
|
|
2,786
|
|
|
1%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Consolidated Sales and Revenues
|
$
|
21,072
|
|
|
17%
|
|
$
|
4,200
|
|
|
22%
|
|
$
|
10,413
|
|
|
15%
|
|
$
|
9,777
|
|
|
21%
|
|
$
|
45,462
|
|
|
18%
|
|
$
|
—
|
|
|
—%
|
|
$
|
45,462
|
|
|
18%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Construction Industries
|
$
|
7,529
|
|
|
|
|
$
|
1,059
|
|
|
|
|
$
|
3,270
|
|
|
|
|
$
|
3,754
|
|
|
|
|
$
|
15,612
|
|
|
|
|
$
|
78
|
|
|
|
|
$
|
15,690
|
|
|
|
Resource Industries
|
2,068
|
|
|
|
|
1,001
|
|
|
|
|
1,179
|
|
|
|
|
1,478
|
|
|
|
|
5,726
|
|
|
|
|
284
|
|
|
|
|
6,010
|
|
|
|
|||||||
Energy & Transportation
|
6,680
|
|
|
|
|
1,104
|
|
|
|
|
4,201
|
|
|
|
|
2,426
|
|
|
|
|
14,411
|
|
|
|
|
2,540
|
|
|
|
|
16,951
|
|
|
|
|||||||
All Other Segments
|
46
|
|
|
|
|
3
|
|
|
|
|
28
|
|
|
|
|
62
|
|
|
|
|
139
|
|
|
|
|
405
|
|
|
|
|
544
|
|
|
|
|||||||
Corporate Items and Eliminations
|
(98
|
)
|
|
|
|
(3
|
)
|
|
|
|
(9
|
)
|
|
|
|
(5
|
)
|
|
|
|
(115
|
)
|
|
|
|
(3,307
|
)
|
|
|
|
(3,422
|
)
|
|
|
|||||||
Machinery, Energy & Transportation
|
16,225
|
|
|
|
|
3,164
|
|
|
|
|
8,669
|
|
|
|
|
7,715
|
|
|
|
|
35,773
|
|
|
|
|
—
|
|
|
|
|
35,773
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Financial Products Segment
|
1,862
|
|
|
|
|
336
|
|
|
|
|
401
|
|
|
|
|
394
|
|
|
|
|
2,993
|
|
|
|
|
—
|
|
|
|
|
2,993
|
|
|
|
|||||||
Corporate Items and Eliminations
|
(125
|
)
|
|
|
|
(45
|
)
|
|
|
|
(17
|
)
|
|
|
|
(42
|
)
|
|
|
|
(229
|
)
|
|
|
|
—
|
|
|
|
|
(229
|
)
|
|
|
|||||||
Financial Products Revenues
|
1,737
|
|
|
|
|
291
|
|
|
|
|
384
|
|
|
|
|
352
|
|
|
|
|
2,764
|
|
|
|
|
—
|
|
|
|
|
2,764
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Consolidated Sales and Revenues
|
$
|
17,962
|
|
|
|
|
$
|
3,455
|
|
|
|
|
$
|
9,053
|
|
|
|
|
$
|
8,067
|
|
|
|
|
$
|
38,537
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
38,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (Loss) by Segment
|
|
|
|
|
|
|
|
|
|||||||
(Millions of dollars)
|
|
2017
|
|
2016
|
|
$
Change
|
|
%
Change
|
|||||||
Construction Industries
|
|
$
|
3,255
|
|
|
$
|
1,639
|
|
|
$
|
1,616
|
|
|
99
|
%
|
Resource Industries
|
|
698
|
|
|
(1,045
|
)
|
|
1,743
|
|
|
n/a
|
|
|||
Energy & Transportation
|
|
2,856
|
|
|
2,187
|
|
|
669
|
|
|
31
|
%
|
|||
All Other Segments
|
|
(44
|
)
|
|
(85
|
)
|
|
41
|
|
|
48
|
%
|
|||
Corporate Items and Eliminations
|
|
(2,659
|
)
|
|
(1,943
|
)
|
|
(716
|
)
|
|
|
|
|||
Machinery, Energy & Transportation
|
|
4,106
|
|
|
753
|
|
|
3,353
|
|
|
445
|
%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Financial Products Segment
|
|
792
|
|
|
702
|
|
|
90
|
|
|
13
|
%
|
|||
Corporate Items and Eliminations
|
|
(116
|
)
|
|
(53
|
)
|
|
(63
|
)
|
|
|
|
|||
Financial Products
|
|
676
|
|
|
649
|
|
|
27
|
|
|
4
|
%
|
|||
Consolidating Adjustments
|
|
(322
|
)
|
|
(240
|
)
|
|
(82
|
)
|
|
|
|
|||
Consolidated Operating Profit
|
|
$
|
4,460
|
|
|
$
|
1,162
|
|
|
$
|
3,298
|
|
|
284
|
%
|
|
|
|
|
|
|
|
|
|
•
|
Other income/expense
in 2017 was income of $153 million, compared with a loss of $518 million in 2016. The improvement was primarily due to a decrease in mark-to-market losses related to pension and OPEB plans, a pretax gain on the sale of Caterpillar's equity investment in IronPlanet, gains on sale of securities and an increase in interest income. The favorable change was partially offset by an unfavorable net impact from currency translation and hedging gains and losses. Currency translation and hedging net losses in 2017 were significantly higher than the net losses in 2016.
|
•
|
The
provision for income taxes
for 2017 reflects an annual effective tax rate of 27.7 percent, compared with 36.4 percent for the full-year 2016, excluding the items discussed below. The effective tax rate related to 2017 full-year adjusted profit before tax, excluding a discrete benefit from stock-based compensation awards, was 27 percent, compared with 26 percent in 2016.
|
•
|
A non-cash benefit of $111 million, net of U.S. federal tax at 35 percent, from reductions in the valuation allowance against U.S. state deferred tax assets due to improved profits in the United States.
|
•
|
A tax benefit of $64 million for the settlement of stock-based compensation awards with associated tax deductions in excess of cumulative U.S. GAAP compensation expense.
|
•
|
A charge of $15 million for an increase in prior year taxes related to the Gosselies, Belgium, facility restructuring costs.
|
•
|
Sales volume increased due to higher end-user demand, primarily for equipment in Asia/Pacific and North America. In addition, sales volume increased due to favorable changes in dealer inventories, as inventories decreased in 2016 and increased in 2017.
|
•
|
Although market conditions remained competitive, price realization was favorable due to a particularly weak pricing environment in 2016, and previously implemented price increases impacting 2017.
|
•
|
Sales in Asia/Pacific were higher as a result of an increase in end-user demand, primarily in China, stemming from increased building construction and infrastructure investment.
|
•
|
In North America, sales increased primarily due to higher end-user demand for construction equipment, mostly due to improved oil and gas, residential and nonresidential construction activities. Also contributing to higher sales was the impact of favorable changes in dealer inventories, as inventories decreased more in 2016 than in 2017, and favorable price realization.
|
•
|
Sales in EAME increased due to favorable changes in dealer inventories and favorable price realization. The favorable impact of change in dealer inventories resulted from a decrease in 2016 and an increase in 2017.
|
•
|
Although construction activity remained weak in Latin America, sales were higher as end-user demand increased from low levels due to stabilizing economic conditions in several countries in the region. In addition, sales volume increased due to favorable changes in dealer inventories, as dealer inventories increased in 2017 and decreased in 2016.
|
•
|
Oil and Gas
- Sales increased in North America due to higher sales of reciprocating engines and aftermarket parts used in on-shore gas compression and well servicing applications. Sales in remaining regions were about flat.
|
•
|
Industrial
- Sales were higher in all regions, reflecting increased sales for equipment across end-user applications and aftermarket parts.
|
•
|
Transportation
- Sales were higher primarily in North America for rail services driven by increased rail traffic.
|
•
|
Power Generation
- Sales were about flat in all regions as the industry remains challenged.
|
|
|
|
|
|
|
|
||||||
(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.
|
||||||||||||
|
|
|
|
|
|
|
|
|
||
(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
|
|
|
|
•
|
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.
|
1.
|
Adjusted Operating Profit Margin
- Operating profit excluding restructuring costs as a percent of sales and revenues.
|
2.
|
Adjusted Profit Per Share
- Profit per share excluding restructuring costs, pension and OPEB mark-to-market losses, certain deferred tax valuation allowance adjustments and the impact of the U.S. tax reform. For 2017, adjusted profit per share also excludes a gain on the sale of an equity investment in IronPlanet.
|
3.
|
All Other 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
|
4.
|
Consolidating Adjustments
- Elimination of transactions between Machinery, Energy & Transportation and Financial Products.
|
5.
|
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.
|
6.
|
Corporate Items and Eliminations
- Includes restructuring costs; corporate-level expenses; timing differences, as some expenses are reported in segment profit on a cash basis; methodology differences between segment and consolidated external reporting; and inter-segment eliminations.
|
7.
|
Currency
- With respect to sales and revenues, currency represents the translation impact on sales resulting from changes in foreign currency exchange rates versus the U.S. dollar. With respect to operating profit, currency represents the net translation impact on sales and operating costs resulting from changes in foreign currency exchange rates versus the U.S. dollar. Currency only includes the impact on sales and operating profit for the Machinery, Energy & Transportation lines of business excluding restructuring costs; currency impacts on Financial Products’ revenues and operating profit are included in the Financial Products’ portions of the respective analyses. With respect to other income/expense, currency represents the effects of forward and option contracts entered into by the company to reduce the risk of fluctuations in exchange rates (hedging) and the net effect of changes in foreign currency exchange rates on our foreign currency assets and liabilities for consolidated results (translation).
|
8.
|
EAME
- A geographic region including Europe, Africa, the Middle East and the Commonwealth of Independent States (CIS).
|
9.
|
Earning Assets
- Assets consisting primarily of total finance receivables net of unearned income, plus equipment on operating leases, less accumulated depreciation at Cat Financial.
|
10.
|
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.
|
11.
|
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. Financial Products’ segment profit is determined on a pretax basis and includes other income/expense items.
|
12.
|
Latin America
- A geographic region including Central and South American countries and Mexico.
|
13.
|
Machinery, Energy & Transportation (ME&T)
- Represents the aggregate total of Construction Industries, Resource Industries, Energy & Transportation, All Other Segments and related corporate items and eliminations.
|
14.
|
Machinery, Energy & Transportation Other Operating (Income) Expenses
- Comprised primarily of gains/losses on disposal of long-lived assets, gains/losses on divestitures and legal settlements and accruals. Restructuring costs classified as other operating expenses on the Results of Operations are presented separately on the Operating Profit Comparison.
|
15.
|
Manufacturing Costs
- Manufacturing costs exclude the impacts of currency and restructuring costs (see definition below) and represent the volume-adjusted change for variable costs and the absolute dollar change for period manufacturing costs. Variable manufacturing costs are defined as having a direct relationship with the volume of production. This includes material costs, direct labor and other costs that vary directly with production volume such as freight, power to operate machines and supplies that are consumed in the manufacturing process. Period manufacturing costs support production but are defined as generally not having a direct relationship to short-term changes in volume. Examples include machinery and equipment repair, depreciation on manufacturing assets, facility support, procurement, factory scheduling, manufacturing planning and operations management.
|
16.
|
Mark-to-market gains/losses
- Represents the net gain or loss of actual results differing from our assumptions and the effects of changing assumptions for our defined benefit pension and OPEB plans. These gains and losses are immediately recognized through earnings upon the annual remeasurement in the fourth quarter, or on an interim basis as triggering events warrant remeasurement.
|
17.
|
Pension and Other Postemployment Benefit (OPEB)
- The company’s defined-benefit pension and postretirement benefit plans.
|
18.
|
Price Realization
- The impact of net price changes excluding currency and new product introductions. Price realization includes geographic mix of sales, which is the impact of changes in the relative weighting of sales prices between geographic regions.
|
19.
|
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.
|
20.
|
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.
|
21.
|
Sales Volume
- With respect to sales and revenues, sales volume represents the impact of changes in the quantities sold for Machinery, Energy & Transportation as well as the incremental sales impact of new product introductions, including emissions-related product updates. With respect to operating profit, sales volume represents the impact of changes in the quantities sold for Machinery, Energy & Transportation combined with product mix as well as the net operating profit impact of new product introductions, including emissions-related product updates. Product mix represents the net operating profit impact of changes in the relative weighting of Machinery, Energy & Transportation sales with respect to total sales. The impact of sales volume on segment profit includes inter-segment sales.
|
•
|
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 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 in September 2018, of $4.62 billion (of which $1.21 billion is available to ME&T) expires in September 2023.
|
|
|
|
|
|
|
|
||||||
|
|
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
|
|
|
|
|
|
|
|
|
(Millions of dollars)
|
|
2019
|
|
2020-2021
|
|
2022-2023
|
|
After 2023
|
|
Total
|
||||||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Machinery, Energy & Transportation (excluding capital leases)
|
|
$
|
2
|
|
|
$
|
1,374
|
|
|
$
|
588
|
|
|
$
|
6,189
|
|
|
$
|
8,153
|
|
Machinery, Energy & Transportation-capital leases
|
|
8
|
|
|
63
|
|
|
16
|
|
|
32
|
|
|
119
|
|
|||||
Financial Products
|
|
5,823
|
|
|
11,330
|
|
|
4,224
|
|
|
1,490
|
|
|
22,867
|
|
|||||
Total long-term debt
1
|
|
5,833
|
|
|
12,767
|
|
|
4,828
|
|
|
7,711
|
|
|
31,139
|
|
|||||
Operating leases
|
|
205
|
|
|
265
|
|
|
117
|
|
|
185
|
|
|
772
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Postretirement benefit obligations
2
|
|
315
|
|
|
680
|
|
|
1,200
|
|
|
2,850
|
|
|
5,045
|
|
|||||
Purchase obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Accounts payable
3
|
|
7,051
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,051
|
|
|||||
Purchase orders
4
|
|
6,451
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,451
|
|
|||||
Other contractual obligations
5
|
|
267
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|||||
Total purchase obligations
|
|
13,769
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
13,810
|
|
|||||
Interest on long-term debt
6
|
|
921
|
|
|
1,399
|
|
|
878
|
|
|
5,792
|
|
|
8,990
|
|
|||||
Other long-term obligations
7
|
|
564
|
|
|
819
|
|
|
416
|
|
|
362
|
|
|
2,161
|
|
|||||
Total contractual obligations
|
|
$
|
21,607
|
|
|
$
|
15,971
|
|
|
$
|
7,439
|
|
|
$
|
16,900
|
|
|
$
|
61,917
|
|
1
|
Amounts exclude unamortized discounts, a non-cash settlement for a capital lease, debt issuance costs, and fair value adjustments.
|
2
|
Amounts represent expected contributions to our pension and other postretirement benefit plans through 2028, offset by expected Medicare Part D subsidy receipts.
|
3
|
Amount represents invoices received and recorded as liabilities in 2018, but scheduled for payment in 2019. These represent short-term obligations made in the ordinary course of business.
|
4
|
Amount represents contractual obligations for material and services on order at December 31, 2018 but not yet delivered. These represent short-term obligations made in the ordinary course of business.
|
5
|
Amounts represent long-term commitments entered into with key suppliers for minimum purchases quantities.
|
6
|
Amounts represent estimated contractual interest payments on long-term debt, including capital lease interest payments.
|
7
|
Amounts represent contractual obligations primarily for logistics services agreements related to our former third party logistics business, software license and development contracts, IT consulting contracts and outsourcing contracts for benefit plan administration and software system support, and estimated income tax payments for mandatory deemed repatriation as a result of U.S. tax reform.
|
|
|
|
|
|
•
|
Volatility is a measure of the amount by which the stock price is expected to fluctuate each year during the expected term of the award and is based on historical Caterpillar stock price movement and current implied volatilities from traded options on Caterpillar stock. The implied volatilities from traded options are impacted by changes in market conditions. An increase in the volatility would result in an increase in our expense.
|
•
|
The expected term represents the period of time that awards granted are expected to be outstanding and is an output of the lattice-based option-pricing model. In determining the expected term of the award, future exercise and forfeiture patterns are estimated from Caterpillar employee historical exercise behavior. These patterns are also affected by the vesting conditions of the award. Changes in the future exercise behavior of employees or in the vesting period of the award could result in a change in the expected term. An increase in the expected term would result in an increase to our expense.
|
•
|
The weighted-average dividend yield is based on Caterpillar’s historical dividend yields. As holders of stock options and SARs do not receive dividend payments, this could result in employees retaining the award for a longer period of time if dividend yields decrease or exercising the award sooner if dividend yields increase. A decrease in the dividend yield would result in an increase in our expense.
|
•
|
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at time of grant. As the risk-free interest rate increases, the expected term increases, resulting in an increase in our expense.
|
•
|
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 approach is used to determine the assumed discount rate for our most significant non-U.S. plans. In estimating the service and interest cost components of net periodic benefit cost, we utilize a full yield curve approach in determining a discount rate. This approach applies the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.
|
•
|
The 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 plan assets. Based on historical performance, we increase the passive returns due to our active management of the plan assets. This rate is impacted by changes in general market conditions, but because it represents a long-term rate, it is not significantly impacted by short-term market swings. Changes in our allocation of plan assets would also impact this rate. For example, a shift to more fixed income securities would lower the rate. A decrease in the rate would increase our expense. The expected return on plan assets is calculated using the fair value of plan assets as of our measurement date, December 31.
|
•
|
The expected rate of compensation increase is used to develop benefit obligations using projected pay at retirement. It represents average long-term salary increases. This rate is influenced by our long-term compensation policies. An increase in the rate would increase our obligation and expense.
|
•
|
The assumed health care trend rate represents the rate at which health care costs are assumed to increase and is based on historical and expected experience. Changes in our projections of future health care costs due to general economic conditions and those specific to health care (e.g., technology driven cost changes) will impact this trend rate. An increase in the trend rate would increase our obligation and expense.
|
•
|
2018 net mark-to-market loss of $495 million
- Primarily due to the difference between the actual return on plan assets compared to the expected return on plan assets (U.S. pension plans had an actual rate of return of negative 5.4 percent compared to an expected rate of return of 6.3 percent). This was partially offset by higher discount rates at the end of 2018 compared to the end of 2017.
|
•
|
2017 net mark-to-market loss of $301 million
- Primarily due to lower discount rates at the end of 2017 compared to the end of 2016 and changes in our mortality assumption (discussed below). This was partially offset by the difference between the actual return on plan assets compared to the expected return on plan assets (U.S. pension plans had an actual rate of return of 15.5 percent compared to an expected rate of return of 6.7 percent).
|
•
|
2016 net mark-to-market loss of $985 million
- Primarily due to lower discount rates at the end of 2016 compared to the end of 2015 and changes in our U.S. mortality assumption (discussed below). This was partially offset by the difference between the actual return on plan assets compared to the expected return on plan assets (U.S. pension plans had an actual rate of return of 7.8 percent compared to an expected rate of return of 6.9 percent).
|
|
|
|
|
|
|
|
2018 Benefit Cost
|
|
Year-end Benefit Obligation
|
||||||||||||
(Millions of dollars)
|
|
One percentage-
point increase
|
|
One percentage-
point decrease
|
|
One percentage-
point increase
|
|
One percentage-
point decrease
|
||||||||
U.S. Pension benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assumed discount rate
|
|
$
|
64
|
|
|
$
|
(85
|
)
|
|
$
|
(1,625
|
)
|
|
$
|
1,970
|
|
Expected rate of compensation increase
|
|
1
|
|
|
(2
|
)
|
|
5
|
|
|
(5
|
)
|
||||
Expected long-term rate of return on plan assets
|
|
(129
|
)
|
|
129
|
|
|
—
|
|
|
—
|
|
||||
Non-U.S. Pension benefits:
|
|
|
|
|
|
|
|
|
||||||||
Assumed discount rate
|
|
7
|
|
|
(11
|
)
|
|
(560
|
)
|
|
720
|
|
||||
Expected rate of compensation increase
|
|
7
|
|
|
(6
|
)
|
|
41
|
|
|
(36
|
)
|
||||
Expected long-term rate of return on plan assets
|
|
(42
|
)
|
|
42
|
|
|
—
|
|
|
—
|
|
||||
Other postretirement benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assumed discount rate
|
|
9
|
|
|
(12
|
)
|
|
(318
|
)
|
|
377
|
|
||||
Expected rate of compensation increase
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Expected long-term rate of return on plan assets
|
|
(4
|
)
|
|
4
|
|
|
—
|
|
|
—
|
|
||||
Assumed health care cost trend rate
|
|
14
|
|
|
(11
|
)
|
|
138
|
|
|
(117
|
)
|
||||
|
|
|
|
|
|
|
|
|
Primary Actuarial Assumptions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
U.S. Pension Benefits
|
|
Non-U.S. Pension Benefits
|
|
Other Postretirement Benefits
|
|||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
|||||||||
Weighted-average assumptions used to determine benefit obligations, end of year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
|
4.2
|
%
|
|
3.5
|
%
|
|
4.0
|
%
|
|
2.5
|
%
|
|
2.4
|
%
|
|
2.5
|
%
|
|
4.2
|
%
|
|
3.6
|
%
|
|
4.0
|
%
|
Rate of compensation increase
|
|
4.0
|
%
|
|
4.0
|
%
|
|
4.0
|
%
|
|
3.0
|
%
|
|
4.0
|
%
|
|
4.0
|
%
|
|
4.0
|
%
|
|
4.0
|
%
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
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
|
|
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
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Health care cost trend rates at year-end:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health care trend rate assumed for next year
|
|
6.1
|
%
|
|
6.1
|
%
|
|
6.6
|
%
|
||||||||||||||||||
Rate that the cost trend rate gradually declines to
|
|
5.0
|
%
|
|
5.0
|
%
|
|
5.0
|
%
|
||||||||||||||||||
Year that the cost trend rate reaches ultimate rate
|
|
2025
|
|
|
2022
|
|
|
2022
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Twelve Months Ended December 31,
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Operating profit as a percent of total sales and revenues
|
|
13.1
|
%
|
|
10.8
|
%
|
|
15.2
|
%
|
|
9.8
|
%
|
Restructuring costs
|
|
0.7
|
%
|
|
1.9
|
%
|
|
0.7
|
%
|
|
2.7
|
%
|
Adjusted operating profit margin
|
|
13.8
|
%
|
|
12.7
|
%
|
|
15.9
|
%
|
|
12.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Twelve Months Ended December 31,
|
||||||||||||
(millions of dollars)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Profit before taxes
|
|
$
|
1,367
|
|
|
$
|
1,111
|
|
|
$
|
7,822
|
|
|
$
|
4,082
|
|
Restructuring costs
|
|
$
|
93
|
|
|
$
|
245
|
|
|
$
|
386
|
|
|
$
|
1,256
|
|
Mark-to-market losses
|
|
$
|
495
|
|
|
$
|
301
|
|
|
$
|
495
|
|
|
$
|
301
|
|
Gain on sale of equity investment
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(85
|
)
|
Adjusted profit before taxes
|
|
$
|
1,955
|
|
|
$
|
1,657
|
|
|
$
|
8,703
|
|
|
$
|
5,554
|
|
|
|
|
|
|
|
|
|
|
1
|
Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis.
|
2
|
Elimination of Financial Products’ revenues earned from Machinery, Energy & Transportation.
|
3
|
Elimination of net expenses recorded by Machinery, Energy & Transportation paid to Financial Products.
|
4
|
Elimination of interest expense recorded between Financial Products and Machinery, Energy & Transportation.
|
5
|
Elimination of discount recorded by Machinery, Energy & Transportation on receivables sold to Financial Products and of interest earned between Machinery, Energy & Transportation and Financial Products.
|
6
|
Elimination of Financial Products’ profit due to equity method of accounting.
|
7
|
Profit (loss) attributable to common shareholders.
|
|
|
|
|
|
Supplemental Data for Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
At December 31
|
|
|
|
|
|
Supplemental consolidating data
|
|
||||||||||||||||||||||||||
|
|
Consolidated
|
|
Machinery,
Energy & Transportation
1
|
|
Financial
Products
|
|
Consolidating
Adjustments
|
|
||||||||||||||||||||||||
(Millions of dollars)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and short-term investments
|
|
$
|
7,857
|
|
|
$
|
8,261
|
|
|
$
|
6,968
|
|
|
$
|
7,381
|
|
|
$
|
889
|
|
|
$
|
880
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Receivables - trade and other
|
|
8,802
|
|
|
7,436
|
|
|
4,677
|
|
|
4,596
|
|
|
401
|
|
|
343
|
|
|
3,724
|
|
2,3
|
2,497
|
|
2,3
|
||||||||
Receivables - finance
|
|
8,650
|
|
|
8,757
|
|
|
—
|
|
|
—
|
|
|
13,989
|
|
|
12,985
|
|
|
(5,339
|
)
|
3
|
(4,228
|
)
|
3
|
||||||||
Prepaid expenses and other current assets
|
|
1,765
|
|
|
1,772
|
|
|
1,227
|
|
|
1,099
|
|
|
583
|
|
|
679
|
|
|
(45
|
)
|
4
|
(6
|
)
|
4
|
||||||||
Inventories
|
|
11,529
|
|
|
10,018
|
|
|
11,529
|
|
|
10,018
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||
Total current assets
|
|
38,603
|
|
|
36,244
|
|
|
24,401
|
|
|
23,094
|
|
|
15,862
|
|
|
14,887
|
|
|
(1,660
|
)
|
|
(1,737
|
)
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Property, plant and equipment - net
|
|
13,574
|
|
|
14,155
|
|
|
9,085
|
|
|
9,823
|
|
|
4,489
|
|
|
4,332
|
|
|
—
|
|
|
—
|
|
|
||||||||
Long-term receivables - trade and other
|
|
1,161
|
|
|
990
|
|
|
302
|
|
|
229
|
|
|
204
|
|
|
162
|
|
|
655
|
|
2,3
|
599
|
|
2,3
|
||||||||
Long-term receivables - finance
|
|
13,286
|
|
|
13,542
|
|
|
—
|
|
|
—
|
|
|
13,951
|
|
|
14,170
|
|
|
(665
|
)
|
3
|
(628
|
)
|
3
|
||||||||
Investments in Financial Products subsidiaries
|
|
—
|
|
|
—
|
|
|
3,672
|
|
|
4,064
|
|
|
—
|
|
|
—
|
|
|
(3,672
|
)
|
5
|
(4,064
|
)
|
5
|
||||||||
Noncurrent deferred and refundable income taxes
|
|
1,439
|
|
|
1,693
|
|
|
2,015
|
|
|
2,166
|
|
|
116
|
|
|
101
|
|
|
(692
|
)
|
6
|
(574
|
)
|
6
|
||||||||
Intangible assets
|
|
1,897
|
|
|
2,111
|
|
|
1,897
|
|
|
2,106
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
||||||||
Goodwill
|
|
6,217
|
|
|
6,200
|
|
|
6,217
|
|
|
6,183
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
||||||||
Other assets
|
|
2,332
|
|
|
2,027
|
|
|
886
|
|
|
822
|
|
|
1,446
|
|
|
1,205
|
|
|
—
|
|
|
—
|
|
|
||||||||
Total assets
|
|
$
|
78,509
|
|
|
$
|
76,962
|
|
|
$
|
48,475
|
|
|
$
|
48,487
|
|
|
$
|
36,068
|
|
|
$
|
34,879
|
|
|
$
|
(6,034
|
)
|
|
$
|
(6,404
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Short-term borrowings
|
|
$
|
5,723
|
|
|
$
|
4,837
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
5,723
|
|
|
$
|
4,836
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Short-term borrowings with consolidated companies
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,500
|
|
|
1,623
|
|
|
(1,500
|
)
|
7
|
(1,623
|
)
|
7
|
||||||||
Accounts payable
|
|
7,051
|
|
|
6,487
|
|
|
6,972
|
|
|
6,330
|
|
|
194
|
|
|
265
|
|
|
(115
|
)
|
8
|
(108
|
)
|
8
|
||||||||
Accrued expenses
|
|
3,573
|
|
|
3,220
|
|
|
3,212
|
|
|
2,880
|
|
|
361
|
|
|
340
|
|
|
—
|
|
|
—
|
|
|
||||||||
Accrued wages, salaries and employee benefits
|
|
2,384
|
|
|
2,559
|
|
|
2,350
|
|
|
2,504
|
|
|
34
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
||||||||
Customer advances
|
|
1,243
|
|
|
1,426
|
|
|
1,243
|
|
|
1,426
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||
Dividends payable
|
|
495
|
|
|
466
|
|
|
495
|
|
|
466
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||
Other current liabilities
|
|
1,919
|
|
|
1,742
|
|
|
1,532
|
|
|
1,327
|
|
|
433
|
|
|
423
|
|
|
(46
|
)
|
6,9
|
(8
|
)
|
6,9
|
||||||||
Long-term debt due within one year
|
|
5,830
|
|
|
6,194
|
|
|
10
|
|
|
6
|
|
|
5,820
|
|
|
6,188
|
|
|
—
|
|
|
—
|
|
|
||||||||
Total current liabilities
|
|
28,218
|
|
|
26,931
|
|
|
15,814
|
|
|
14,940
|
|
|
14,065
|
|
|
13,730
|
|
|
(1,661
|
)
|
|
(1,739
|
)
|
|
||||||||
Long-term debt due after one year
|
|
25,000
|
|
|
23,847
|
|
|
8,015
|
|
|
7,958
|
|
|
16,995
|
|
|
15,918
|
|
|
(10
|
)
|
7
|
(29
|
)
|
7
|
||||||||
Liability for postemployment benefits
|
|
7,455
|
|
|
8,365
|
|
|
7,455
|
|
|
8,365
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||
Other liabilities
|
|
3,756
|
|
|
4,053
|
|
|
3,111
|
|
|
3,458
|
|
|
1,336
|
|
|
1,167
|
|
|
(691
|
)
|
6
|
(572
|
)
|
6
|
||||||||
Total liabilities
|
|
64,429
|
|
|
63,196
|
|
|
34,395
|
|
|
34,721
|
|
|
32,396
|
|
|
30,815
|
|
|
(2,362
|
)
|
|
(2,340
|
)
|
|
||||||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Common stock
|
|
5,827
|
|
|
5,593
|
|
|
5,827
|
|
|
5,593
|
|
|
919
|
|
|
918
|
|
|
(919
|
)
|
5
|
(918
|
)
|
5
|
||||||||
Treasury stock
|
|
(20,531
|
)
|
|
(17,005
|
)
|
|
(20,531
|
)
|
|
(17,005
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||
Profit employed in the business
|
|
30,427
|
|
|
26,301
|
|
|
30,427
|
|
|
26,301
|
|
|
3,543
|
|
|
3,598
|
|
|
(3,543
|
)
|
5
|
(3,598
|
)
|
5
|
||||||||
Accumulated other comprehensive income (loss)
|
|
(1,684
|
)
|
|
(1,192
|
)
|
|
(1,684
|
)
|
|
(1,192
|
)
|
|
(943
|
)
|
|
(592
|
)
|
|
943
|
|
5
|
592
|
|
5
|
||||||||
Noncontrolling interests
|
|
41
|
|
|
69
|
|
|
41
|
|
|
69
|
|
|
153
|
|
|
140
|
|
|
(153
|
)
|
5
|
(140
|
)
|
5
|
||||||||
Total shareholders’ equity
|
|
14,080
|
|
|
13,766
|
|
|
14,080
|
|
|
13,766
|
|
|
3,672
|
|
|
4,064
|
|
|
(3,672
|
)
|
|
(4,064
|
)
|
|
||||||||
Total liabilities and shareholders’ equity
|
|
$
|
78,509
|
|
|
$
|
76,962
|
|
|
$
|
48,475
|
|
|
$
|
48,487
|
|
|
$
|
36,068
|
|
|
$
|
34,879
|
|
|
$
|
(6,034
|
)
|
|
$
|
(6,404
|
)
|
|
1
|
Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis.
|
2
|
Elimination of receivables between Machinery, Energy & Transportation and Financial Products.
|
3
|
Reclassification of Machinery, Energy & Transportation's trade receivables purchased by Financial Products and Financial Products' wholesale inventory receivables.
|
4
|
Elimination of Machinery, Energy & Transportation's insurance premiums that are prepaid to Financial Products.
|
5
|
Elimination of Financial Products’ equity which is accounted for by Machinery, Energy & Transportation on the equity basis.
|
6
|
Reclassification reflecting required netting of deferred tax assets/liabilities by taxing jurisdiction.
|
7
|
Elimination of debt between Machinery, Energy & Transportation and Financial Products.
|
8
|
Elimination of payables between Machinery, Energy & Transportation and Financial Products.
|
9
|
Elimination of prepaid insurance in Financial Products’ other liabilities.
|
|
|
|
|
|
Supplemental Data for Statement of Cash Flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
For the Years Ended December 31
|
|
|
|
Supplemental consolidating data
|
|
||||||||||||||||||||||||||||
|
|
Consolidated
|
|
Machinery,
Energy & Transportation
1
|
|
Financial
Products
|
|
Consolidating
Adjustments
|
|
||||||||||||||||||||||||
(Millions of dollars)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||||||||||
Cash flow from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Profit (loss) of consolidated and affiliated companies
|
|
$
|
6,148
|
|
|
$
|
759
|
|
|
$
|
6,128
|
|
|
$
|
751
|
|
|
$
|
382
|
|
|
$
|
746
|
|
|
$
|
(362
|
)
|
2
|
$
|
(738
|
)
|
2
|
Adjustments for non-cash items:
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|||||||||||||
Depreciation and amortization
|
|
2,766
|
|
|
2,877
|
|
|
1,895
|
|
|
2,016
|
|
|
871
|
|
|
861
|
|
|
—
|
|
|
—
|
|
|
||||||||
Undistributed profit of Financial Products
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
3
|
||||||||
Actuarial (gain) loss on pension and postretirement benefits
|
|
495
|
|
|
301
|
|
|
495
|
|
|
301
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||
Provision (benefit) for deferred income taxes
|
|
220
|
|
|
1,213
|
|
|
149
|
|
|
1,500
|
|
|
71
|
|
|
(285
|
)
|
|
—
|
|
|
(2
|
)
|
4
|
||||||||
Other
|
|
1,006
|
|
|
750
|
|
|
434
|
|
|
673
|
|
|
178
|
|
|
(175
|
)
|
|
394
|
|
4
|
252
|
|
4
|
||||||||
Financial Products' dividend in excess of profit
|
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
5
|
—
|
|
|
||||||||
Changes in assets and liabilities, net of acquisitions and divestitures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Receivables - trade and other
|
|
(1,619
|
)
|
|
(1,151
|
)
|
|
(396
|
)
|
|
(649
|
)
|
|
6
|
|
|
90
|
|
|
(1,229
|
)
|
4,6
|
(592
|
)
|
4,6
|
||||||||
Inventories
|
|
(1,579
|
)
|
|
(1,295
|
)
|
|
(1,528
|
)
|
|
(1,282
|
)
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
4
|
(13
|
)
|
4
|
||||||||
Accounts payable
|
|
709
|
|
|
1,478
|
|
|
771
|
|
|
1,588
|
|
|
(55
|
)
|
|
(85
|
)
|
|
(7
|
)
|
4
|
(25
|
)
|
4
|
||||||||
Accrued expenses
|
|
101
|
|
|
175
|
|
|
71
|
|
|
169
|
|
|
30
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
||||||||
Accrued wages, salaries and employee benefits
|
|
(162
|
)
|
|
1,187
|
|
|
(141
|
)
|
|
1,160
|
|
|
(21
|
)
|
|
27
|
|
|
—
|
|
|
—
|
|
|
||||||||
Customer advances
|
|
(183
|
)
|
|
(8
|
)
|
|
(183
|
)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||
Other assets—net
|
|
41
|
|
|
(192
|
)
|
|
16
|
|
|
(186
|
)
|
|
(14
|
)
|
|
8
|
|
|
39
|
|
4
|
(14
|
)
|
4
|
||||||||
Other liabilities—net
|
|
(1,385
|
)
|
|
(388
|
)
|
|
(1,421
|
)
|
|
(561
|
)
|
|
75
|
|
|
157
|
|
|
(39
|
)
|
4
|
16
|
|
4
|
||||||||
Net cash provided by (used for) operating activities
|
|
6,558
|
|
|
5,706
|
|
|
6,347
|
|
|
5,459
|
|
|
1,523
|
|
|
1,350
|
|
|
(1,312
|
)
|
|
(1,103
|
)
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash flow from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures—excluding equipment leased to others
|
|
(1,276
|
)
|
|
(898
|
)
|
|
(1,168
|
)
|
|
(889
|
)
|
|
(108
|
)
|
|
(10
|
)
|
|
—
|
|
|
1
|
|
4
|
||||||||
Expenditures for equipment leased to others
|
|
(1,640
|
)
|
|
(1,438
|
)
|
|
(53
|
)
|
|
(27
|
)
|
|
(1,667
|
)
|
|
(1,443
|
)
|
|
80
|
|
4
|
32
|
|
4
|
||||||||
Proceeds from disposals of leased assets and property, plant and equipment
|
|
936
|
|
|
1,164
|
|
|
152
|
|
|
192
|
|
|
811
|
|
|
987
|
|
|
(27
|
)
|
4
|
(15
|
)
|
4
|
||||||||
Additions to finance receivables
|
|
(12,183
|
)
|
|
(11,953
|
)
|
|
—
|
|
|
—
|
|
|
(13,595
|
)
|
|
(13,920
|
)
|
|
1,412
|
|
6,7
|
1,967
|
|
6
|
||||||||
Collections of finance receivables
|
|
10,901
|
|
|
12,018
|
|
|
—
|
|
|
—
|
|
|
12,513
|
|
|
14,357
|
|
|
(1,612
|
)
|
6
|
(2,339
|
)
|
6
|
||||||||
Net intercompany purchased receivables
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,046
|
)
|
|
(732
|
)
|
|
1,046
|
|
6
|
732
|
|
6
|
||||||||
Proceeds from sale of finance receivables
|
|
477
|
|
|
127
|
|
|
—
|
|
|
—
|
|
|
477
|
|
|
127
|
|
|
—
|
|
|
—
|
|
|
||||||||
Net intercompany borrowings
|
|
—
|
|
|
—
|
|
|
112
|
|
|
21
|
|
|
31
|
|
|
—
|
|
|
(143
|
)
|
8
|
(21
|
)
|
8
|
||||||||
Investments and acquisitions (net of cash acquired)
|
|
(392
|
)
|
|
(59
|
)
|
|
(392
|
)
|
|
(59
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||
Proceeds from sale of businesses and investments (net of cash sold)
|
|
16
|
|
|
100
|
|
|
22
|
|
|
100
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
7
|
—
|
|
|
||||||||
Proceeds from sale of securities
|
|
442
|
|
|
932
|
|
|
162
|
|
|
79
|
|
|
280
|
|
|
853
|
|
|
—
|
|
|
—
|
|
|
||||||||
Investments in securities
|
|
(506
|
)
|
|
(1,048
|
)
|
|
(24
|
)
|
|
(198
|
)
|
|
(482
|
)
|
|
(850
|
)
|
|
—
|
|
|
—
|
|
|
||||||||
Other—net
|
|
13
|
|
|
89
|
|
|
2
|
|
|
54
|
|
|
10
|
|
|
35
|
|
|
1
|
|
9
|
—
|
|
|
||||||||
Net cash provided by (used for) investing activities
|
|
(3,212
|
)
|
|
(966
|
)
|
|
(1,187
|
)
|
|
(727
|
)
|
|
(2,776
|
)
|
|
(596
|
)
|
|
751
|
|
|
357
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash flow from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends paid
|
|
(1,951
|
)
|
|
(1,831
|
)
|
|
(1,951
|
)
|
|
(1,831
|
)
|
|
(419
|
)
|
|
(725
|
)
|
|
419
|
|
10
|
725
|
|
10
|
||||||||
Common stock issued, including treasury shares reissued
|
|
313
|
|
|
566
|
|
|
313
|
|
|
566
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
9
|
—
|
|
|
||||||||
Common shares repurchased
|
|
(3,798
|
)
|
|
—
|
|
|
(3,798
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||
Net intercompany borrowings
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
(112
|
)
|
|
(21
|
)
|
|
143
|
|
8
|
21
|
|
8
|
||||||||
Proceeds from debt issued (original maturities greater than three months)
|
|
8,907
|
|
|
9,063
|
|
|
57
|
|
|
361
|
|
|
8,850
|
|
|
8,702
|
|
|
—
|
|
|
—
|
|
|
||||||||
Payments on debt (original maturities greater than three months)
|
|
(7,829
|
)
|
|
(8,388
|
)
|
|
(7
|
)
|
|
(1,465
|
)
|
|
(7,822
|
)
|
|
(6,923
|
)
|
|
—
|
|
|
—
|
|
|
||||||||
Short-term borrowings - net (original maturities three months or less)
|
|
762
|
|
|
(3,058
|
)
|
|
—
|
|
|
(204
|
)
|
|
762
|
|
|
(2,854
|
)
|
|
—
|
|
|
—
|
|
|
||||||||
Other—net
|
|
(54
|
)
|
|
(9
|
)
|
|
(54
|
)
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||
Net cash provided by (used for) financing activities
|
|
(3,650
|
)
|
|
(3,657
|
)
|
|
(5,471
|
)
|
|
(2,582
|
)
|
|
1,260
|
|
|
(1,821
|
)
|
|
561
|
|
|
746
|
|
|
||||||||
Effect of exchange rate changes on cash
|
|
(126
|
)
|
|
38
|
|
|
(111
|
)
|
|
7
|
|
|
(15
|
)
|
|
31
|
|
|
—
|
|
|
—
|
|
|
||||||||
Increase (decrease) in cash and short-term investments and restricted cash
|
|
(430
|
)
|
|
1,121
|
|
|
(422
|
)
|
|
2,157
|
|
|
(8
|
)
|
|
(1,036
|
)
|
|
—
|
|
|
—
|
|
|
||||||||
Cash and short-term investments and restricted cash at beginning of period
|
|
8,320
|
|
|
7,199
|
|
|
7,416
|
|
|
5,259
|
|
|
904
|
|
|
1,940
|
|
|
—
|
|
|
—
|
|
|
||||||||
Cash and short-term investments and restricted cash at end of period
|
|
$
|
7,890
|
|
|
$
|
8,320
|
|
|
$
|
6,994
|
|
|
$
|
7,416
|
|
|
$
|
896
|
|
|
$
|
904
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
1
|
Represents Caterpillar Inc. and its subsidiaries with Financial Products accounted for on the equity basis.
|
2
|
Elimination of Financial Products’ profit after tax due to equity method of accounting.
|
3
|
Elimination of non-cash adjustment for the undistributed earnings from Financial Products.
|
4
|
Elimination of non-cash adjustments and changes in assets and liabilities related to consolidated reporting.
|
5
|
Elimination of Financial Products' dividend to Machinery, Energy & Transportation in excess of Financial Products' profit.
|
6
|
Reclassification of Financial Products' cash flow activity from investing to operating for receivables that arose from the sale of inventory.
|
7
|
Elimination of proceeds received from Financial Products related to Machinery, Energy & Transportation's sale of businesses and investments.
|
8
|
Elimination of net proceeds and payments to/from Machinery, Energy & Transportation and Financial Products.
|
9
|
Elimination of change in investment and common stock related to Financial Products.
|
10
|
Elimination of dividend from Financial Products to Machinery, Energy & Transportation.
|
|
|
|
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
|
/s/ D. James Umpleby, III
|
|
|
D. James Umpleby, III
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Andrew R.J. Bonfield
|
|
|
Andrew R.J. Bonfield
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
February 14, 2019
|
|
STATEMENT 1
|
Caterpillar Inc.
|
|
|||||||||
Consolidated Results of Operations for the Years Ended
December 31
|
|
|
|
|
|
||||||
(Dollars in millions except per share data)
|
|
|
|
|
|
||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Sales and revenues:
|
|
|
|
|
|
|
|
|
|||
Sales of Machinery, Energy & Transportation
|
$
|
51,822
|
|
|
$
|
42,676
|
|
|
$
|
35,773
|
|
Revenues of Financial Products
|
2,900
|
|
|
2,786
|
|
|
2,764
|
|
|||
Total sales and revenues
|
54,722
|
|
|
45,462
|
|
|
38,537
|
|
|||
|
|
|
|
|
|
||||||
Operating costs:
|
|
|
|
|
|
|
|
|
|||
Cost of goods sold
|
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
|
|
|||
Interest expense of Financial Products
|
722
|
|
|
646
|
|
|
596
|
|
|||
Goodwill impairment charge
|
—
|
|
|
—
|
|
|
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
|
$
|
10.39
|
|
|
$
|
1.27
|
|
|
$
|
(0.11
|
)
|
|
|
|
|
|
|
||||||
Profit (loss) per common share — diluted
2,3
|
$
|
10.26
|
|
|
$
|
1.26
|
|
|
$
|
(0.11
|
)
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding (millions)
|
|
|
|
|
|
|
|
|
|||
- Basic
|
591.4
|
|
|
591.8
|
|
|
584.3
|
|
|||
- Diluted
2,3
|
599.4
|
|
|
599.3
|
|
|
584.3
|
|
|||
|
|
|
|
|
|
1
|
Profit (loss) attributable to common shareholders.
|
2
|
Diluted by assumed exercise of stock-based compensation awards, using the treasury stock method.
|
3
|
In 2016, the assumed exercise of stock-based compensation awards was not considered because the impact would be antidilutive.
|
See accompanying notes to Consolidated Financial Statements.
|
STATEMENT 2
|
|
|
Caterpillar Inc.
|
|
|||||||
Consolidated Comprehensive Income (Loss) for the Years Ended December 31
|
|||||||||||
(Millions of dollars)
|
|
|
|
|
|
||||||
|
2018
|
|
2017
|
|
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: 2018 - $3; 2017 - $(23); 2016 - $(12)
|
(12
|
)
|
|
41
|
|
|
26
|
|
|||
(Gains) losses reclassified to earnings, net of tax (provision)/benefit of: 2018 - $0; 2017 - $35; 2016 - $15
|
—
|
|
|
(65
|
)
|
|
(31
|
)
|
|||
|
|
|
|
|
|
||||||
Total other comprehensive income (loss), net of tax
|
(481
|
)
|
|
847
|
|
|
(4
|
)
|
|||
Comprehensive income (loss)
|
5,667
|
|
|
1,606
|
|
|
(63
|
)
|
|||
Less: comprehensive income attributable to the noncontrolling interests
|
1
|
|
|
5
|
|
|
8
|
|
|||
Comprehensive income (loss) attributable to shareholders
|
$
|
5,666
|
|
|
$
|
1,601
|
|
|
$
|
(71
|
)
|
|
|
|
|
|
|
See accompanying notes to Consolidated Financial Statements.
|
STATEMENT 3
|
Caterpillar Inc.
|
|
|||||
Consolidated Financial Position at
December 31
|
|
|
|
||||
(Dollars in millions)
|
|
|
|
||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
|
|
||
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
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Short-term borrowings:
|
|
|
|
|
|
||
Machinery, Energy & Transportation
|
$
|
—
|
|
|
$
|
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 shareholders’ equity
|
14,080
|
|
|
13,766
|
|
||
Total liabilities and shareholders’ equity
|
$
|
78,509
|
|
|
$
|
76,962
|
|
|
|
|
|
See accompanying notes to Consolidated Financial Statements.
|
STATEMENT 4
|
|
Caterpillar Inc.
|
|
||||||||||||||||||||
Changes in Consolidated Shareholders’ Equity for the Years Ended December 31
|
|||||||||||||||||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Common
stock
|
|
Treasury
stock
|
|
Profit
employed
in the
business
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Noncontrolling
interests
|
|
Total
|
||||||||||||
Balance at January 1, 2016
|
$
|
5,238
|
|
|
$
|
(17,640
|
)
|
|
$
|
29,246
|
|
|
$
|
(2,035
|
)
|
|
$
|
76
|
|
|
$
|
14,885
|
|
Profit (loss) of consolidated and affiliated companies
|
—
|
|
|
—
|
|
|
(67
|
)
|
|
—
|
|
|
8
|
|
|
(59
|
)
|
||||||
Foreign currency translation, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
||||||
Pension and other postretirement benefits, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
83
|
|
|
—
|
|
|
83
|
|
||||||
Derivative financial instruments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(65
|
)
|
|
—
|
|
|
(65
|
)
|
||||||
Available-for-sale securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
||||||
Change in ownership from noncontrolling interests
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
(1,802
|
)
|
|
—
|
|
|
—
|
|
|
(1,802
|
)
|
||||||
Distribution to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
||||||
Common shares issued from treasury stock for stock-based compensation: 4,164,134
|
(185
|
)
|
|
162
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
||||||
Stock-based compensation expense
|
218
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
218
|
|
||||||
Net excess tax benefits from stock-based compensation
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||||
Other
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||||
Balance at December 31, 2016
|
$
|
5,277
|
|
|
$
|
(17,478
|
)
|
|
$
|
27,377
|
|
|
$
|
(2,039
|
)
|
|
$
|
76
|
|
|
$
|
13,213
|
|
Adjustment to adopt stock-based compensation guidance
1
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||||
Balance at January 1, 2017
|
$
|
5,277
|
|
|
$
|
(17,478
|
)
|
|
$
|
27,392
|
|
|
$
|
(2,039
|
)
|
|
$
|
76
|
|
|
$
|
13,228
|
|
Profit (loss) of consolidated and affiliated companies
|
—
|
|
|
—
|
|
|
754
|
|
|
—
|
|
|
5
|
|
|
759
|
|
||||||
Foreign currency translation, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
765
|
|
|
—
|
|
|
765
|
|
||||||
Pension and other postretirement benefits, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
||||||
Derivative financial instruments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|
—
|
|
|
74
|
|
||||||
Available-for-sale securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
(24
|
)
|
||||||
Change in ownership from noncontrolling interests
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
1
|
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
(1,845
|
)
|
|
—
|
|
|
—
|
|
|
(1,845
|
)
|
||||||
Distribution to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
||||||
Common shares issued from treasury stock for stock-based compensation: 11,139,748
|
93
|
|
|
473
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
566
|
|
||||||
Stock-based compensation expense
|
206
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
206
|
|
||||||
Other
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||||
Balance at December 31, 2017
|
$
|
5,593
|
|
|
$
|
(17,005
|
)
|
|
$
|
26,301
|
|
|
$
|
(1,192
|
)
|
|
$
|
69
|
|
|
$
|
13,766
|
|
STATEMENT 4
|
|
Caterpillar Inc.
|
|
||||||||||||||||||||
Changes in Consolidated Shareholders’ Equity for the Years Ended December 31
|
|||||||||||||||||||||||
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Common
stock
|
|
Treasury
stock
|
|
Profit
employed
in the
business
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Noncontrolling
interests
|
|
Total
|
||||||||||||
Balance at December 31, 2017
|
$
|
5,593
|
|
|
$
|
(17,005
|
)
|
|
$
|
26,301
|
|
|
$
|
(1,192
|
)
|
|
$
|
69
|
|
|
$
|
13,766
|
|
Adjustments to adopt new accounting guidance
1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue recognition
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
||||||
Tax accounting for intra-entity asset transfers
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
||||||
Recognition and measurement of financial assets and liabilities
|
—
|
|
|
—
|
|
|
11
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
||||||
Balance at January 1, 2018
|
$
|
5,593
|
|
|
$
|
(17,005
|
)
|
|
$
|
26,265
|
|
|
$
|
(1,203
|
)
|
|
$
|
69
|
|
|
$
|
13,719
|
|
Profit (loss) of consolidated and affiliated companies
|
—
|
|
|
—
|
|
|
6,147
|
|
|
—
|
|
|
1
|
|
|
6,148
|
|
||||||
Foreign currency translation, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(396
|
)
|
|
—
|
|
|
(396
|
)
|
||||||
Pension and other postretirement benefits, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
(34
|
)
|
||||||
Derivative financial instruments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|
(39
|
)
|
||||||
Available-for-sale securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
||||||
Change in ownership from noncontrolling interests
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
(53
|
)
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
(1,985
|
)
|
|
—
|
|
|
—
|
|
|
(1,985
|
)
|
||||||
Distribution to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Common shares issued from treasury stock for stock-based compensation: 5,590,641
|
41
|
|
|
272
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
313
|
|
||||||
Stock-based compensation expense
|
197
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
197
|
|
||||||
Common shares repurchased: 27,673,675
2
|
—
|
|
|
(3,798
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,798
|
)
|
||||||
Other
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
||||||
Balance at December 31, 2018
|
$
|
5,827
|
|
|
$
|
(20,531
|
)
|
|
$
|
30,427
|
|
|
$
|
(1,684
|
)
|
|
$
|
41
|
|
|
$
|
14,080
|
|
1
|
See Note 1J regarding new accounting guidance.
|
2
|
See Note 16 regarding shares repurchased.
|
See accompanying notes to Consolidated Financial Statements.
|
STATEMENT 5
|
|
Caterpillar Inc.
|
|
||||||||
Consolidated Statement of Cash Flow for the Years Ended December 31
|
|
|
|
|
|
||||||
(Millions of dollars)
|
|
|
|
|
|
||||||
|
2018
|
|
2017
|
|
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
|
—
|
|
|
—
|
|
|
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
|
|
|
—
|
|
|||
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
|
)
|
|
—
|
|
|
—
|
|
|||
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
|
|
See accompanying notes to Consolidated Financial Statements.
|
1.
|
Operations and summary of significant accounting policies
|
A.
|
Nature of operations
|
B.
|
Basis of presentation
|
C.
|
Inventories
|
D.
|
Depreciation and amortization
|
E.
|
Foreign currency translation
|
F.
|
Derivative financial instruments
|
G.
|
Income taxes
|
H.
|
Goodwill
|
I.
|
Estimates in financial statements
|
J.
|
New accounting guidance
|
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
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
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
|
)
|
|
|
|
|
|
|
|
2.
|
Sales and revenue recognition
|
3.
|
Stock-based compensation
|
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
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
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.
|
|
|
|
|
|
4.
|
Derivative financial instruments and risk management
|
A.
|
Foreign currency exchange rate risk
|
B.
|
Interest rate risk
|
C.
|
Commodity price risk
|
|
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
|
|
|
|
|
|
|
|
|
Years ended December 31,
|
|||||||
(Millions of dollars)
|
|
2018
|
|
2017
|
||||
|
|
|
|
|
||||
Machinery, Energy & Transportation
|
|
$
|
1,834
|
|
|
$
|
3,190
|
|
Financial Products
|
|
$
|
10,210
|
|
|
$
|
3,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
)
|
|
|
|
|
|
|
|
|
|
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
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 value
3
|
|
(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.
|
|
|
|
|
|
6.
|
Income taxes
|
|
|
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
|
|
|
|
|
|
|
(Millions of dollars)
|
||||||||||||||||||||||||||
2019
|
|
2020
|
|
2021
|
|
2022-2024
|
|
2025-2039
|
|
Unlimited
|
|
Total
|
||||||||||||||
$
|
23
|
|
|
$
|
124
|
|
|
$
|
92
|
|
|
$
|
147
|
|
|
$
|
506
|
|
|
$
|
3,597
|
|
|
$
|
4,489
|
|
1
|
Foreign currency impacts are included within each line as applicable.
|
2
|
Includes cash payment or other reduction of assets to settle liability.
|
|
|
|
|
|
7.
|
Cat Financial Financing Activities
|
A.
|
Wholesale inventory receivables
|
B.
|
Finance receivables
|
C.
|
Allowance for credit losses
|
•
|
Customer - Finance receivables with end-user customers.
|
•
|
Dealer - Finance receivables with Caterpillar dealers.
|
•
|
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.
|
(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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
(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 America
1
|
|
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.
|
|
|
|
|
|
8.
|
Inventories
|
|
|
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
|
|
|
|
|
|
|
9.
|
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
|
|
|
|
|
|
|
|
|
1
|
Included in Property, plant and equipment table above.
|
2
|
Consists primarily of machinery and equipment.
|
|
|
|
|
|
(Millions of dollars)
|
||||||||||||||||||||||
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||
$
|
8
|
|
|
$
|
9
|
|
|
$
|
29
|
|
|
$
|
9
|
|
|
$
|
7
|
|
|
$
|
32
|
|
(Millions of dollars)
|
||||||||||||||||||||||
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||
$
|
896
|
|
|
$
|
574
|
|
|
$
|
314
|
|
|
$
|
158
|
|
|
$
|
71
|
|
|
$
|
69
|
|
A.
|
Intangible assets
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
(Millions of dollars)
|
||||||||||||||||||||||
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||
$
|
326
|
|
|
$
|
311
|
|
|
$
|
293
|
|
|
$
|
274
|
|
|
$
|
216
|
|
|
$
|
477
|
|
|
|
|
|
|
|
|
|
|
|
|
B.
|
Goodwill
|
(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
|
|
|
|
|
|
|
11.
|
Investments in debt and equity securities
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
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
|
|
|
|
|
|
|
12.
|
Postemployment benefit plans
|
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
|
%
|
|
|
|
|
|
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
|
|
|
|
|
|
|
•
|
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.
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
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
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions of dollars)
|
|
U.S.
Pension Benefits
|
|
Non-U.S.
Pension Benefits
|
|
Other
Postretirement
Benefits
|
||||||
Prior service cost (credit)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(41
|
)
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
D.
|
Expected contributions and benefit payments
|
(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
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
(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
|
G.
|
Defined contribution plans
|
(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
|
|
|
|
|
|
|
13.
|
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
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|||||
|
|
2018
|
|
2017
|
|
||
Notes payable to banks
|
|
5.3
|
%
|
|
5.2
|
%
|
|
Commercial paper
|
|
2.0
|
%
|
|
1.1
|
%
|
|
Demand notes
|
|
2.2
|
%
|
|
1.1
|
%
|
|
|
|
|
|
|
|
14.
|
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.
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
15.
|
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
|
|
|
|
|
|
|
|
|
•
|
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.
|
16.
|
Profit per share
|
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.
|
|
|
|
|
|
17.
|
Accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(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
|
)
|
|
|
|
|
|
|
|
|
|
|
18.
|
Fair value disclosures
|
A.
|
Fair value measurements
|
•
|
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.
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
B.
|
Fair values of 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.
|
|
|
|
|
|
19.
|
Concentration of credit risk
|
20.
|
Operating leases
|
Years ended December 31,
|
||||||||||||||||||||||||||
(Millions of dollars)
|
||||||||||||||||||||||||||
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
$
|
205
|
|
|
$
|
154
|
|
|
$
|
111
|
|
|
$
|
67
|
|
|
$
|
50
|
|
|
$
|
185
|
|
|
$
|
772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21.
|
Guarantees and product warranty
|
(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
|
|
|
|
|
|
|
(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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22.
|
Environmental and legal matters
|
23.
|
Segment information
|
A.
|
Basis for segment information
|
•
|
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.
|
•
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
1
|
Elimination of Financial Products revenues from Machinery, Energy & Transportation.
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
24.
|
Acquisitions
|
(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
|
|
|
|
•
|
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.
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
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.
|
|
|
|
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Plan category
|
|
(a)
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
(b)
Weighted-
average
exercise
price of outstanding options, warrants and rights
|
|
(c)
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
|||
Equity compensation plans approved by security holders
|
|
21,212,942
|
|
|
$
|
91.92
|
|
|
44,139,162
|
Equity compensation plans not approved by security holders
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Total
|
|
21,212,942
|
|
|
$
|
91.92
|
|
|
44,139,162
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accountant Fees and Services.
|
|
Exhibits:
|
|
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
4.4
|
|
|
4.5
|
|
|
4.6
|
|
|
4.7
|
|
|
4.8
|
|
|
4.9
|
|
|
4.10
|
|
|
4.11
|
|
|
4.12
|
|
|
4.13
|
|
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
|
10.9
|
|
|
10.10
|
|
|
10.11
|
|
|
10.12
|
|
|
10.13
|
|
|
10.14
|
|
|
10.15
|
|
|
10.16
|
|
|
10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
10.20
|
|
|
10.21
|
|
|
10.22
|
|
|
10.23
|
|
|
10.24
|
|
|
10.25
|
|
|
10.26
|
|
|
10.27
|
|
10.28
|
|
|
10.29
|
|
|
10.30
|
|
|
10.31
|
|
|
10.32
|
|
|
10.33
|
|
|
10.34
|
|
|
10.35
|
|
|
10.36
|
|
|
10.37
|
|
|
10.38
|
|
|
10.39
|
|
|
10.40
|
|
|
10.41
|
|
|
10.42
|
|
|
10.43
|
|
|
10.44
|
|
|
10.45
|
|
10.46
|
|
|
10.47
|
|
|
10.48
|
|
|
10.49
|
|
|
10.50
|
|
|
10.51
|
|
|
10.52
|
|
|
10.53
|
|
|
10.54
|
|
|
10.55
|
|
|
21
|
|
|
23
|
|
|
31.1
|
|
|
31.2
|
|
32
|
|
|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
CATERPILLAR INC.
|
|
|
Registrant
|
|
|
|
|
February 14, 2019
|
By:
|
/s/ Suzette M. Long
|
|
|
Suzette M. Long
|
|
|
General Counsel & Corporate Secretary
|
|
|
Chairman of the Board and Chief Executive Officer
|
February 14, 2019
|
/s/ D. James Umpleby, III
|
|
|
D. James Umpleby, III
|
|
|
|
|
|
|
|
February 14, 2019
|
/s/ Andrew R.J. Bonfield
|
Chief Financial Officer
|
|
Andrew R.J. Bonfield
|
|
|
|
|
|
|
|
February 14, 2019
|
/s/ Jananne A. Copeland
|
Chief Accounting Officer
|
|
Jananne A. Copeland
|
|
|
|
|
|
|
|
February 14, 2019
|
/s/ Kelly A. Ayotte
|
Director
|
|
Kelly A. Ayotte
|
|
|
|
|
|
|
|
February 14, 2019
|
/s/ David L. Calhoun
|
Presiding Director
|
|
David L. Calhoun
|
|
|
|
|
|
|
|
February 14, 2019
|
/s/ Daniel M. Dickinson
|
Director
|
|
Daniel M. Dickinson
|
|
|
|
|
|
|
|
February 14, 2019
|
/s/ Juan Gallardo
|
Director
|
|
Juan Gallardo
|
|
|
|
|
|
|
|
February 14, 2019
|
/s/ Dennis A. Muilenburg
|
Director
|
|
Dennis A. Muilenburg
|
|
|
|
|
|
|
|
February 14, 2019
|
/s/ William A. Osborn
|
Director
|
|
William A. Osborn
|
|
|
|
|
|
|
|
February 14, 2019
|
/s/ Debra L. Reed-Klages
|
Director
|
|
Debra L. Reed-Klages
|
|
|
|
|
|
|
|
February 14, 2019
|
/s/ Edward B. Rust, Jr.
|
Director
|
|
Edward B. Rust, Jr.
|
|
|
|
|
|
|
|
February 14, 2019
|
/s/ Susan C. Schwab
|
Director
|
|
Susan C. Schwab
|
|
|
|
|
|
|
|
February 14, 2019
|
/s/ Miles D. White
|
Director
|
|
Miles D. White
|
|
|
|
|
|
|
|
February 14, 2019
|
/s/ Rayford Wilkins, Jr.
|
Director
|
|
Rayford Wilkins, Jr.
|
|
•
|
Long-Service Separation
|
•
|
Death
|
•
|
Change in Control
|
•
|
Other
|
EXHIBIT 21
|
|
CATERPILLAR INC.
List of Subsidiaries and Affiliated Companies
(as of December 31, 2018)
|
|
Direct and Indirect Wholly-Owned Subsidiaries
|
|
Name of Company
|
Where Organized
|
Caterpillar Brasil Comercio de Maquinas e Pecas Ltda.
|
Brazil
|
Caterpillar Brasil Ltda.
|
Brazil
|
Caterpillar Brazil LLC
|
Delaware
|
Caterpillar Castings Kiel GmbH
|
Germany
|
Caterpillar Centro de Formacion, S.L.
|
Spain
|
Caterpillar China Limited
|
Hong Kong
|
Caterpillar Commercial Australia Pty. Ltd.
|
Australia
|
Caterpillar Commercial LLC
|
Delaware
|
Caterpillar Commercial Northern Europe Limited
|
England and Wales
|
Caterpillar Commercial S.A.
|
Belgium
|
Caterpillar Commercial S.A.R.L.
|
France
|
Caterpillar Commercial Services S.A.R.L.
|
France
|
Caterpillar Communications LLC
|
Delaware
|
Caterpillar Corporativo Mexico, S. de R.L. de C.V.
|
Mexico
|
Caterpillar Cote D’Ivoire
|
Ivory Coast
|
Caterpillar Crédito, S.A. de C.V., SOFOM, E.N.R.
|
Mexico
|
Caterpillar DC Pension Trust Limited
|
England and Wales
|
Caterpillar Digital Services & Solutions SARL
|
Switzerland
|
Caterpillar Distribution International LLC
|
Russia
|
Caterpillar Distribution Services Europe B.V.B.A.
|
Belgium
|
Caterpillar East Real Estate Holding Ltd.
|
Japan
|
Caterpillar Emissions Solutions Inc.
|
New Mexico
|
Caterpillar Energy Solutions Asia Pacific Pte. Ltd.
|
Singapore
|
Caterpillar Energy Solutions GmbH
|
Germany
|
Caterpillar Energy Solutions Inc.
|
Delaware
|
Caterpillar Energy Solutions, S.A.
|
Spain
|
Caterpillar Energy System Technology (Beijing) Co., Ltd.
|
China
|
Caterpillar Engine Systems Inc.
|
Delaware
|
Caterpillar Equipos Mexico, S. de R.L. de C.V.
|
Mexico
|
Caterpillar Eurasia LLC
|
Russia
|
Caterpillar Finance France S.A.
|
France
|
Caterpillar Finance Kabushiki Kaisha
|
Japan
|
Caterpillar Financial Acquisition Funding LLC
|
Delaware
|
Caterpillar Financial Aftermarket Solutions Corporation
|
Delaware
|
Caterpillar Financial Australia Leasing Pty Limited
|
Australia
|
Caterpillar Financial Australia Limited
|
Australia
|
Caterpillar Financial Commercial Account Corporation
|
Nevada
|
Caterpillar Financial Corporacion Financiera, S.A., E.F.C.
|
Spain
|
Caterpillar Financial Dealer Funding LLC
|
Delaware
|
Caterpillar Financial Funding Corporation
|
Nevada
|
Caterpillar Financial Kazakhstan Limited Liability Partnership
|
Kazakhstan
|
Caterpillar Financial Leasing (Shanghai) Co., Ltd.
|
China
|
Caterpillar Financial New Zealand Limited
|
New Zealand
|
Caterpillar Financial Nordic Services AB
|
Sweden
|
Caterpillar Financial Nova Scotia Corporation
|
Canada
|
Caterpillar Financial OOO
|
Russia
|
Caterpillar Financial Receivables Corporation
|
Nevada
|
Caterpillar Financial Renting, S.A.
|
Spain
|
Caterpillar Financial SARL
|
Switzerland
|
Caterpillar Financial Services (Dubai) Limited
|
United Arab Emirates
|
Caterpillar Financial Services (Ireland) plc
|
Ireland
|
Caterpillar Financial Services (UK) Limited
|
England and Wales
|
Caterpillar Financial Services Argentina S.A.
|
Argentina
|
Caterpillar Financial Services Asia Pte. Ltd.
|
Singapore
|
Caterpillar Financial Services Belgium S.P.R.L.
|
Belgium
|
Caterpillar Financial Services Corporation
|
Delaware
|
Caterpillar Financial Services CR, s.r.o.
|
Czech Republic
|
Caterpillar Financial Services GmbH
|
Germany
|
Caterpillar Financial Services India Private Limited
|
India
|
Caterpillar Financial Services Leasing ULC
|
Canada
|
Caterpillar Financial Services Limited Les Services Financiers Caterpillar Limitee
|
Canada
|
Caterpillar Financial Services Malaysia Sdn Bhd
|
Malaysia
|
Caterpillar Financial Services Netherlands B.V.
|
Netherlands
|
Caterpillar Financial Services Norway AS
|
Norway
|
Caterpillar Financial Services Poland Sp. z o.o.
|
Poland
|
Caterpillar Financial Services South Africa (Pty) Limited
|
South Africa
|
Caterpillar Financial UK Acquisition Funding Partners
|
England and Wales
|
Caterpillar Financial Ukraine LLC
|
Ukraine
|
Caterpillar Fluid Systems S.r.l.
|
Italy
|
Caterpillar Fomento Comercial Ltda.
|
Brazil
|
Caterpillar Forest Products Inc.
|
Delaware
|
Caterpillar France S.A.S.
|
France
|
Caterpillar FS (QFC) LLC
|
United Arab Emirates
|
Caterpillar GB, L.L.C.
|
Delaware
|
Caterpillar Global Investments S.a r.l.
|
Luxembourg
|
Caterpillar Global Mining America LLC
|
Delaware
|
Caterpillar Global Mining Equipamentos De Mineracao do Brasil Ltda.
|
Brazil
|
Caterpillar Global Mining Equipment LLC
|
Delaware
|
Caterpillar Global Mining Europe GmbH
|
Germany
|
Caterpillar Global Mining Expanded Products Pty Ltd
|
Australia
|
Caterpillar Global Mining Germany Holdings GmbH
|
Germany
|
Caterpillar Global Mining HMS GmbH
|
Germany
|
Caterpillar Global Mining Holdings GmbH
|
Germany
|
Caterpillar Global Mining Hong Kong AFC Manufacturing Holding Co., Limited
|
Hong Kong
|
Caterpillar Global Mining Hong Kong Limited
|
Hong Kong
|
Caterpillar Global Mining LLC
|
Delaware
|
Caterpillar Global Mining Mexico LLC
|
Delaware
|
Caterpillar Global Mining Pty. Ltd.
|
Australia
|
Caterpillar Global Mining SARL
|
Switzerland
|
Caterpillar Global Mining U.S. Parts LLC
|
Delaware
|
Caterpillar Global Services LLC
|
Delaware
|
Caterpillar Group Services S.A.
|
Belgium
|
Caterpillar Holding (France) S.A.S.
|
France
|
Caterpillar Holding Germany GmbH
|
Germany
|
Caterpillar Holdings Australia Pty. Ltd.
|
Australia
|
Caterpillar Hungary Components Manufacturing Ltd.
|
Hungary
|
Caterpillar Hydraulics Italia S.r.l.
|
Italy
|
Caterpillar Impact Products Limited
|
England and Wales
|
Caterpillar India Private Limited
|
India
|
Caterpillar Industrial Inc.
|
Ohio
|
Caterpillar Industrias Mexico, S. de R.L. de C.V.
|
Mexico
|
Caterpillar Industries (Pty) Ltd
|
South Africa
|
Caterpillar Insurance Co. Ltd.
|
Bermuda
|
Caterpillar Insurance Company
|
Missouri
|
Caterpillar Insurance Holdings Inc.
|
Delaware
|
Caterpillar Insurance Services Corporation
|
Tennessee
|
Caterpillar International Finance Designated Activity Company
|
Ireland
|
Caterpillar International Finance Luxembourg Holding S. à r.l.
|
Luxembourg
|
Caterpillar International Finance Luxembourg S. à r.l.
|
Luxembourg
|
Caterpillar International Holding S. à r.l.
|
Luxembourg
|
Caterpillar International Luxembourg I S. à r.l.
|
Luxembourg
|
Caterpillar International Luxembourg II S. à r.l.
|
Luxembourg
|
Caterpillar International Product SARL
|
Switzerland
|
Caterpillar International Services Corporation
|
Nevada
|
Caterpillar International Services del Peru S.A.
|
Peru
|
Caterpillar Investment Limited
|
Ireland
|
Caterpillar Investment One SARL
|
Switzerland
|
Caterpillar Investment Two SARL
|
Switzerland
|
Caterpillar Investments
|
England and Wales
|
Caterpillar IPX LLC
|
Delaware
|
Caterpillar IRB LLC
|
Delaware
|
Caterpillar Japan LLC
|
Japan
|
Caterpillar Latin America Services de Mexico, S. de R.L. de C.V.
|
Mexico
|
Caterpillar Latin America Services de Panama, S. de R.L.
|
Panama
|
Caterpillar Latin America Services, S.R.L.
|
Costa Rica
|
Caterpillar Latin America Servicios de Chile Limitada
|
Chile
|
Caterpillar Latin America Support Services, S. DE R.L.
|
Panama
|
Caterpillar Leasing (Thailand) Limited
|
Thailand
|
Caterpillar Leasing Chile, S.A.
|
Chile
|
Caterpillar Leasing GmbH (Leipzig)
|
Germany
|
Caterpillar Leasing Operativo Limitada
|
Chile
|
Caterpillar Life Insurance Company
|
Missouri
|
Caterpillar Logistics (Shanghai) Co. Ltd.
|
China
|
Caterpillar Logistics (UK) Limited
|
England and Wales
|
Caterpillar Logistics Inc.
|
Delaware
|
Caterpillar Logistics ML Services France S.A.S.
|
France
|
Caterpillar Logistics Services China Limited
|
Hong Kong
|
Caterpillar Luxembourg Group S.ar.l.
|
Luxembourg
|
Caterpillar Luxembourg LLC
|
Delaware
|
Caterpillar Luxembourg S.a r.l.
|
Luxembourg
|
Caterpillar Machinery Nantong Co., Ltd.
|
China
|
Caterpillar Marine Asia Pacific Pte. Ltd.
|
Singapore
|
Caterpillar Marine Power UK Limited
|
England and Wales
|
Caterpillar Marine Trading (Shanghai) Co., Ltd.
|
China
|
Caterpillar Maroc SARL
|
Morocco
|
Caterpillar Materiels Routiers SAS
|
France
|
Caterpillar Mexico LLC
|
Delaware
|
Caterpillar Mexico, S.A. de C.V.
|
Mexico
|
Caterpillar Mining Canada ULC
|
Canada
|
Caterpillar Mining Chile Servicios Limitada
|
Chile
|
Caterpillar Motoren (Guangdong) Co. Ltd.
|
China
|
Caterpillar Motoren GmbH & Co. KG
|
Germany
|
Caterpillar Motoren Henstedt-Ulzburg GmbH
|
Germany
|
Caterpillar Motoren Rostock GmbH
|
Germany
|
Caterpillar Motoren Verwaltungs-GmbH
|
Germany
|
Caterpillar Netherlands Holding B.V.
|
Netherlands
|
Caterpillar North America C.V.
|
Netherlands
|
Caterpillar of Australia Pty. Ltd.
|
Australia
|
Caterpillar of Canada Corporation
|
Canada
|
Caterpillar of Delaware, Inc.
|
Delaware
|
Caterpillar Operator Training Ltd.
|
Japan
|
Caterpillar Overseas Credit Corporation SARL
|
Switzerland
|
Caterpillar Overseas Investment Holding SARL
|
Switzerland
|
Caterpillar Overseas Limited
|
England and Wales
|
Caterpillar Overseas SARL
|
Switzerland
|
Caterpillar Panama Services S.A.
|
Panama
|
Caterpillar Paving Products Inc.
|
Oklahoma
|
Caterpillar Paving Products Xuzhou Ltd.
|
China
|
Caterpillar Pension Trust Limited
|
England and Wales
|
Caterpillar Poland Sp. z o.o.
|
Poland
|
Caterpillar Power Generation Systems (Bangladesh) Limited
|
Bangladesh
|
Caterpillar Power Generation Systems L.L.C.
|
Delaware
|
Caterpillar Power Systems Inc.
|
Delaware
|
Caterpillar Power Ventures International, Ltd.
|
Bermuda
|
Caterpillar Precision Seals Korea
|
South Korea
|
Caterpillar Prodotti Stradali S.r.l.
|
Italy
|
Caterpillar Product Services Corporation
|
Missouri
|
Caterpillar Propulsion AB
|
Sweden
|
Caterpillar Propulsion International Trading (Shanghai) Co., Ltd.
|
China
|
Caterpillar Propulsion Italy S.R.L.
|
Italy
|
Caterpillar Propulsion Namibia (Proprietary) Limited
|
Namibia
|
Caterpillar Propulsion Production AB
|
Sweden
|
Caterpillar Propulsion Pte. Ltd.
|
Singapore
|
Caterpillar Propulsion Singapore Pte. Ltd.
|
Singapore
|
Caterpillar R&D Center (China) Co., Ltd.
|
China
|
Caterpillar Ramos Arizpe LLC
|
Delaware
|
Caterpillar Ramos Arizpe Servicios S.A. de C.V.
|
Mexico
|
Caterpillar Ramos Arizpe, S. de R.L. de C.V.
|
Mexico
|
Caterpillar Reman Powertrain Indiana LLC
|
Delaware
|
Caterpillar Remanufacturing Drivetrain LLC
|
Delaware
|
Caterpillar Remanufacturing Services (Shanghai) Co., Ltd.
|
China
|
Caterpillar Renting France S.A.S.
|
France
|
Caterpillar Reynosa, S.A. de C.V.
|
Mexico
|
Caterpillar SARL
|
Switzerland
|
Caterpillar Services Germany GmbH
|
Germany
|
Caterpillar Servicios Limitada
|
Chile
|
Caterpillar Servicios Mexico, S. de R.L. de C.V.
|
Mexico
|
Caterpillar Servizi Italia Srl
|
Italy
|
Caterpillar Shrewsbury Limited
|
England and Wales
|
Caterpillar Skinningrove Limited
|
England and Wales
|
Caterpillar Southern Africa (Pty) Ltd.
|
South Africa
|
Caterpillar Special Services Belgium S.P.R.L.
|
Belgium
|
Caterpillar Switchgear Americas LLC
|
Delaware
|
Caterpillar Switchgear Holding Inc.
|
Georgia
|
Caterpillar Tianjin Ltd.
|
China
|
Caterpillar Torreon S. de R.L. de C.V.
|
Mexico
|
Caterpillar Tosno, L.L.C.
|
Russia
|
Caterpillar Transmissions France S.A.R.L.
|
France
|
Caterpillar Tunneling Canada Holdings Ltd.
|
Canada
|
Caterpillar Tunnelling Canada Corporation
|
Canada
|
Caterpillar Tunnelling Europe Limited
|
England and Wales
|
Caterpillar UK Employee Trust Limited
|
England and Wales
|
Caterpillar UK Engines Company Limited
|
England and Wales
|
Caterpillar UK Group Limited
|
England and Wales
|
Caterpillar UK Holdings Limited
|
England and Wales
|
Caterpillar Undercarriage (Xuzhou) Co., Ltd.
|
China
|
Caterpillar Underground Mining Pty. Ltd.
|
Australia
|
Caterpillar Used Equipment Services Inc.
|
Delaware
|
Caterpillar Venture Capital Inc.
|
Delaware
|
Caterpillar Work Tools B.V.
|
Netherlands
|
Caterpillar Work Tools, Inc.
|
Kansas
|
Caterpillar World Trading Corporation
|
Delaware
|
Centre de Distribution de Wallonie SPRL
|
Belgium
|
ECM Railway Evolution Romania s.r.l.
|
Romania
|
ECM S.p.A.
|
Italy
|
EDC European Excavator Design Center GmbH
|
Germany
|
Electro-Motive Diesel Limited
|
England and Wales
|
Electro-Motive Locomotive Technologies LLC
|
Russia
|
Electro-Motive Technical Consulting Co. (Beijing) Ltd.
|
China
|
EMC Holding Corp.
|
Delaware
|
EMD International Holdings, Inc.
|
Delaware
|
Energy Services International Limited
|
Bermuda
|
Equipos de Acuña, S.A. de C.V.
|
Mexico
|
ERA Information & Entertainment (BVI) Limited
|
British Virgin Islands
|
ERA Mining Machinery Limited
|
Cayman Islands
|
F. G. Wilson (Proprietary) Limited
|
South Africa
|
F. Perkins Limited
|
England and Wales
|
FG Wilson (Engineering) Limited
|
England and Wales
|
GB Holdco (China), Inc.
|
Delaware
|
GFCM Comercial Mexico, S.A. de C.V., SOFOM, E.N.R.
|
Mexico
|
GFCM Servicios, S.A. de C.V.
|
Mexico
|
Hong Kong Siwei Holdings Limited
|
Hong Kong
|
Inmobiliaria Conek, S.A. de C.V.
|
Mexico
|
Kemper Valve & Fittings Corp.
|
Illinois
|
Leo, Inc.
|
Washington
|
Locomotive Demand Power Pty Ltd.
|
Australia
|
Locomotoras Progress Mexico, S. de R.L. de C.V.
|
Mexico
|
M2M Data Corporation
|
Colorado
|
MaK Americas Inc.
|
Illinois
|
MaK Americas Inc. (Canada)
|
Canada
|
Mec-Track S.r.l.
|
Italy
|
Metalmark Financial Services Limited
|
England and Wales
|
Motoren Steffens GmbH
|
Germany
|
MWM Austria GmbH
|
Austria
|
MWM Benelux B.V.
|
Netherlands
|
MWM Energy Australia Pty Ltd
|
Australia
|
MWM France S.A.S
|
France
|
MWM Real Estate GmbH
|
Germany
|
Nippon Caterpillar LLC
|
Japan
|
Perkins Engines (Asia Pacific) Pte Ltd
|
Singapore
|
Perkins Engines Company Limited
|
England and Wales
|
Perkins Engines Group Limited
|
England and Wales
|
Perkins Engines, Inc.
|
Maryland
|
Perkins Group Limited
|
England and Wales
|
Perkins Holdings Limited LLC
|
Delaware
|
Perkins India Private Limited
|
India
|
Perkins International Inc.
|
Delaware
|
Perkins Japan LLC
|
Japan
|
Perkins Limited
|
England and Wales
|
Perkins Machinery (Changshu) Co., Ltd.
|
China
|
Perkins Motores do Brasil Ltda.
|
Brazil
|
Perkins Power Systems Technology (Wuxi) Co., Ltd.
|
China
|
Perkins Small Engines (Wuxi) Co., Ltd.
|
China
|
Perkins Small Engines Limited
|
England and Wales
|
Perkins Small Engines LLC
|
Delaware
|
Perkins Technology Inc.
|
Delaware
|
Progress Metal Reclamation Company
|
Kentucky
|
Progress Rail Australia Pty Ltd
|
Australia
|
Progress Rail Canada Corporation
|
Canada
|
Progress Rail de Mexico, S.A. de C.V.
|
Mexico
|
Progress Rail Equipamentos e Servicos Ferroviarios do Brasil Ltda.
|
Brazil
|
Progress Rail Equipment Leasing Corporation
|
Michigan
|
Progress Rail Holdings, Inc.
|
Alabama
|
Progress Rail Innovations Private Limited
|
India
|
Progress Rail Inspection & Information Systems GmbH
|
Germany
|
Progress Rail Inspection & Information Systems S.r.l.
|
Italy
|
Progress Rail International Corp.
|
Delaware
|
Progress Rail Leasing Canada Corporation
|
Delaware
|
Progress Rail Leasing Corporation
|
Delaware
|
Progress Rail Leasing de Mexico, S. de R.L. de C.V.
|
Mexico
|
Progress Rail Locomotivas (do Brasil) Ltda.
|
Brazil
|
Progress Rail Locomotive Canada Co.
|
Canada
|
Progress Rail Locomotive Chile SpA
|
Chile
|
Progress Rail Locomotive Inc.
|
Delaware
|
Progress Rail Maintenance de Mexico S.A. de C.V.
|
Mexico
|
Progress Rail Manufacturing Corporation
|
Delaware
|
Progress Rail Raceland Corporation
|
Delaware
|
Progress Rail Rocklin Corporation
|
Delaware
|
Progress Rail SA Proprietary Limited
|
South Africa
|
Progress Rail Services Corporation
|
Alabama
|
Progress Rail Services Holdings Corp.
|
Delaware
|
Progress Rail Services LLC
|
Delaware
|
Progress Rail Services UK Limited
|
England and Wales
|
Progress Rail Switching Services LLC
|
Delaware
|
Progress Rail Transcanada Corporation
|
Canada
|
Progress Rail Welding Corporation
|
Delaware
|
Progress Rail Wildwood, LLC
|
Florida
|
PT Caterpillar Finance Indonesia
|
Indonesia
|
PT. Bucyrus Indonesia
|
Indonesia
|
PT. Caterpillar Indonesia
|
Indonesia
|
PT. Caterpillar Indonesia Batam
|
Indonesia
|
PT. Caterpillar Remanufacturing Indonesia
|
Indonesia
|
Pyrrha Investments B.V.
|
Netherlands
|
Pyrrha Investments Limited
|
England and Wales
|
S&L Railroad, LLC
|
Nebraska
|
SCM Singapore Holdings Pte. Ltd.
|
Singapore
|
Servicios de Turbinas Solar, S. de R.L. de C.V.
|
Mexico
|
Shandong SEM Machinery Co., Ltd.
|
China
|
Solar Turbines (Beijing) Trading Services Co., Ltd.
|
China
|
Solar Turbines (Thailand) Ltd.
|
Thailand
|
Solar Turbines Canada Ltd./Ltee.
|
Canada
|
Solar Turbines Central Asia Limited Liability Partnership
|
Kazakhstan
|
Solar Turbines CIS Limited Liability Company
|
Russia
|
Solar Turbines EAME s.r.o.
|
Czech Republic
|
Solar Turbines Egypt Limited Liability Company
|
Egypt
|
Solar Turbines Europe S.A.
|
Belgium
|
Solar Turbines Incorporated
|
Delaware
|
Solar Turbines India Private Limited
|
India
|
Solar Turbines International Company
|
Delaware
|
Solar Turbines Italy S.R.L.
|
Italy
|
Solar Turbines Malaysia Sdn Bhd
|
Malaysia
|
Solar Turbines Middle East Limited
|
United Arab Emirates
|
Solar Turbines New Zealand Limited
|
New Zealand
|
Solar Turbines Saudi Arabia Limited
|
Saudi Arabia
|
Solar Turbines Services Company
|
California
|
Solar Turbines Services Nigeria Limited
|
Nigeria
|
Solar Turbines Services of Argentina S.R.L.
|
Argentina
|
Solar Turbines Switzerland Sagl
|
Switzerland
|
Solar Turbines Trinidad & Tobago Limited
|
Trinidad and Tobago
|
Solar Turbines West-Africa SARL
|
Gabon
|
SPL Software Alliance LLC
|
Delaware
|
Tangshan DBT Machinery Co., Ltd.
|
China
|
Tecnologia Modificada, S.A. de C.V.
|
Mexico
|
Majority-Owned Subsidiaries
|
|
Name of Company
|
Where Organized
|
AsiaTrak (Tianjin) Ltd.
|
China
|
Caterpillar Financial Services Philippines Inc.
|
Philippines
|
Magnum Power Products, LLC
|
Delaware
|
P. T. Solar Services Indonesia
|
Indonesia
|
Progress Rail Arabia Limited Company
|
Saudi Arabia
|
Wetland Sustainability Fund I, LLC
|
Delaware
|
Affiliated Companies (50% and less ownership)
|
|
Name of Company
|
Where Organized
|
10G LLC
|
Delaware
|
Advanced Filtration Systems Inc.
|
Delaware
|
AFSI Europe s.r.o.
|
Czech Republic
|
Amsted RPS/Schwihag JV LLC
|
Delaware
|
AP Operation & Maintenance Limited
|
Channel Islands
|
Atlas Heavy Engineering Pty Ltd
|
Australia
|
Black Horse LLC
|
Delaware
|
Caterpillar Trimble Control Technologies LLC
|
Delaware
|
CSSC Motoren Anqing-Kiel Co., Ltd.
|
China
|
Datong Tongbi Machinery Company Limited
|
China
|
Electro-Motive Diesel Africa Proprietary Limited
|
South Africa
|
Evercompounds LLC
|
Delaware
|
Landscape Management Network Inc.
|
Canada
|
MaK Middle East LLC
|
United Arab Emirates
|
Shanxi Xishan Siwei Mechanical & Electrical Equipment Manufacturing Co., Ltd.
|
China
|
Terex NHL Mining Equipment Company Limited
|
China
|
Turboservices SDN BHD
|
Malaysia
|
VirtualSite Solutions LLC
|
Delaware
|
Xi'an FC Intelligence Transmission Co., Ltd.
|
China
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
|
February 14, 2019
|
/s/ D. James Umpleby, III
|
|
Chief Executive Officer
|
|
D. James Umpleby, III
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 14, 2019
|
/s/ Andrew R.J. Bonfield
|
|
Chief Financial Officer
|
|
Andrew R.J. Bonfield
|
|
|