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Intangible assets and goodwill
 12 Months Ended
Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible assets and goodwill
Intangible assets and goodwill

A.
Intangible assets
 
Intangible assets are comprised of the following:
 
 
 
 
 
December 31, 2014
(Millions of dollars)
 
Weighted
Amortizable
Life (Years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Customer relationships
 
15
 
$
2,489

 
$
(669
)
 
$
1,820

Intellectual property
 
11
 
1,724

 
(578
)
 
1,146

Other
 
11
 
239

 
(129
)
 
110

Total finite-lived intangible assets
 
14
 
$
4,452

 
$
(1,376
)
 
$
3,076

 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2013
 
 
Weighted
Amortizable
Life (Years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Customer relationships
 
15
 
$
2,653

 
$
(539
)
 
$
2,114

Intellectual property
 
11
 
1,821

 
(495
)
 
1,326

Other
 
10
 
274

 
(136
)
 
138

Total finite-lived intangible assets
 
13
 
4,748

 
(1,170
)
 
3,578

Indefinite-lived intangible assets - In-process research & development
 
 
 
18

 
—

 
18

Total intangible assets
 
 
 
$
4,766

 
$
(1,170
)
 
$
3,596

 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2012
 
 
Weighted
Amortizable
Life (Years)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Customer relationships
 
15
 
$
2,756

 
$
(377
)
 
$
2,379

Intellectual property
 
12
 
1,767

 
(342
)
 
1,425

Other
 
10
 
299

 
(105
)
 
194

Total finite-lived intangible assets
 
13
 
4,822

 
(824
)
 
3,998

Indefinite-lived intangible assets - In-process research & development
 
 
 
18

 
—

 
18

Total intangible assets
 
 
 
$
4,840

 
$
(824
)
 
$
4,016

 
 
 
 
 
 
 
 
 

 
Gross customer relationship intangibles of $48 million and related accumulated amortization of $9 million were divested during 2014, and are not included in the December 31, 2014 balances in the table above. These transactions were related to the divestiture of portions of the Bucyrus distribution business. See Note 26 for additional information on divestitures.

In-process research & development indefinite-lived intangibles of $18 million from the Energy & Transportation segment were impaired during 2014. Fair value of the intangibles was determined using an income approach based on the present value of discounted cash flows. The impairment of $18 million was recognized in Other operating (income) expenses in Statement 1 and included in the Energy & Transportation segment.

During 2013, we acquired finite-lived intangible assets aggregating $70 million due to the purchase of Johan Walter Berg AB (Berg). See Note 24 for details on this acquisition.

Gross customer relationship intangibles of $168 million and related accumulated amortization of $25 million were reclassified from Intangible assets to assets held for sale and/or divested during 2013, and are not included in the December 31, 2013 balances in the table above. These transactions were related to the divestiture of portions of the Bucyrus distribution business. See Note 26 for additional information on divestitures.

During 2012, we acquired finite-lived intangible assets aggregating $120 million due to purchases of ERA Mining Machinery Limited (Siwei) ($112 million) and Caterpillar Tohoku Ltd. (Cat Tohoku) ($8 million). See Note 24 for details on these acquisitions.

Gross customer relationship intangibles of $207 million with related accumulated amortization of $93 million were reclassified from Intangible assets to held for sale and/or divested during 2012, and are not included in the December 31, 2012 balances in the table above. These transactions primarily related to the divestiture of portions of the Bucyrus distribution business and our third party logistics business. See Note 26 for additional information on divestitures.

Gross customer relationship intangibles of $51 million with related accumulated amortization of $29 million from the All Other segments were impaired during 2012. Fair value of the intangibles was determined using an income approach based on the present value of discounted cash flows. The impairment of $22 million was recognized in Other operating (income) expenses in Statement 1 and included in the All Other segments.

Finite-lived intangible assets are amortized over their estimated useful lives and tested for impairment if events or changes in circumstances indicate that the asset may be impaired.  Indefinite-lived intangible assets are tested for impairment at least annually.
 
Amortization expense related to intangible assets was $365 million, $371 million and $387 million for 2014, 2013 and 2012, respectively.

As of December 31, 2014, amortization expense related to intangible assets is expected to be:
 
(Millions of dollars)
2015
 
2016
 
2017
 
2018
 
2019
 
Thereafter
$
345

 
$
323

 
$
322

 
$
320

 
$
318

 
$
1,448

 
 
 
 
 
 
 
 
 
 
 

 
B.
Goodwill
 
During 2013, we acquired net assets with related goodwill of $106 million due to the purchase of Berg. In 2014, we finalized the allocation of the Berg purchase price to identifiable assets and liabilities, adjusting goodwill from our December 31, 2013 preliminary allocation by an increase of $7 million. See Note 24 for details on this acquisition.

There were no goodwill impairments during 2014 or 2013.

As discussed in Note 24, we recorded goodwill of $625 million related to our May 2012 acquisition of Siwei. In November 2012, Caterpillar became aware of inventory accounting discrepancies at Siwei which led to an internal investigation. Caterpillar's investigation determined that Siwei had engaged in accounting misconduct prior to Caterpillar's acquisition of Siwei in mid-2012. The accounting misconduct included inappropriate accounting practices involving improper cost allocation that resulted in overstated profit and improper revenue recognition practices involving early and, at times unsupported, revenue recognition.

Because of the accounting misconduct identified in the fourth quarter of 2012, Siwei's goodwill was tested for impairment as of November 30, 2012. We determined the carrying value of Siwei, which was a separate reporting unit, exceeded its fair value at the measurement date, requiring step two in the impairment test process.  The fair value of the Siwei reporting unit was determined primarily using an income approach based on the present value of discounted cash flows. We assigned the fair value to the reporting unit's assets and liabilities and determined the implied fair value of goodwill was substantially below the carrying value of the reporting unit's goodwill.  Accordingly, we recognized a $580 million goodwill impairment charge, which resulted in goodwill of $45 million remaining for Siwei as of December 31, 2012. The goodwill impairment was a result of changes in the assumptions used to determine the fair value resulting from the accounting misconduct that occurred before the acquisition. There was no tax benefit associated with this impairment charge. The Siwei goodwill impairment charge is reported in the Resource Industries segment.

Additionally, during 2012, we recorded goodwill of $22 million related to the acquisition of Cat Tohoku. See Note 24 for details on this acquisition.

Goodwill of $15 million, $65 million and $181 million was reclassified to held for sale and/or divested during 2014, 2013 and 2012, respectively, and is not included in the December 31, 2014, 2013 and 2012 respective balances in the table below. The reclassified/divested amount in 2014 and 2012 primarily related to the divestiture of portions of the Bucyrus distribution business. The reclassified/divested amounts in 2013 was related to the divestiture of portions of the Bucyrus distribution business and the sale of certain Energy & Transportation assets that were accounted for as a business. See Note 26 for additional information on divestitures.
 
As discussed in Note 23, effective January 1, 2014, we revised our reportable segments in line with the changes to our organization structure. Our reporting units did not significantly change as a result of the changes to our reportable segments.

The changes in carrying amount of goodwill by reportable segment for the years ended December 31, 2014, 2013 and 2012 were as follows:
 

(Millions of dollars)
 
December 31, 2013
 
Acquisitions 1
 
Held for Sale and Business Divestitures 2
 
Impairment Loss
 
Other Adjustments 3
 
December 31, 2014
Construction Industries
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
$
291

 
$
—

 
$
—

 
$
—

 
$
(16
)
 
$
275

Resource Industries
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
4,468

 
—

 
(15
)
 
—

 
(166
)
 
4,287

Impairments
 
(580
)
 
—

 
—

 
—

 
—

 
(580
)
Net goodwill
 
3,888

 
—

 
(15
)
 
—

 
(166
)
 
3,707

Energy & Transportation
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
2,600

 
7

 
—

 
—

 
(65
)
 
2,542

All Other 4
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
199

 
—

 
—

 
—

 
(7
)
 
192

Impairment
 
(22
)
 
—

 
—

 
—

 
—

 
(22
)
Net goodwill
 
177

 
—

 
—

 
—

 
(7
)
 
170

Consolidated total
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
7,558

 
7

 
(15
)
 
—

 
(254
)
 
7,296

Impairments
 
(602
)
 
—

 
—

 
—

 
—

 
(602
)
Net goodwill
 
$
6,956

 
$
7

 
$
(15
)
 
$
—

 
$
(254
)
 
$
6,694

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2012
 
Acquisitions 1
 
Held for Sale and Business Divestitures 2
 
Impairment Loss
 
Other Adjustments 3
 
December 31, 2013
Construction Industries
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
$
333

 
$
—

 
$
—

 
$
—

 
$
(42
)
 
$
291

Resource Industries
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
4,511

 
—

 
(55
)
 
—

 
12

 
4,468

Impairments
 
(580
)
 
—

 
—

 
—

 
—

 
(580
)
Net goodwill
 
3,931

 
—

 
(55
)
 
—

 
12

 
3,888

Energy & Transportation
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
2,486

 
106

 
(10
)
 
—

 
18

 
2,600

All Other 4
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
214

 
—

 
—

 
—

 
(15
)
 
199

Impairment
 
(22
)
 
—

 
—

 
—

 
—

 
(22
)
Net goodwill
 
192

 
—

 
—

 
—

 
(15
)
 
177

Consolidated total
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
7,544

 
106

 
(65
)
 
—

 
(27
)
 
7,558

Impairments
 
(602
)
 
—

 
—

 
—

 
—

 
(602
)
Net goodwill
 
$
6,942

 
$
106

 
$
(65
)
 
$
—

 
$
(27
)
 
$
6,956

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2011
 
Acquisitions 1
 
Held for Sale and Business Divestitures 2
 
Impairment Loss
 
Other Adjustments 3
 
December 31, 2012
Construction Industries
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
$
331

 
$
15

 
$
—

 
$
—

 
$
(13
)
 
$
333

Resource Industries
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
4,073

 
597

 
(181
)
 
—

 
22

 
4,511

Impairments
 
—

 
—

 
—

 
(580
)
 
—

 
(580
)
Net goodwill
 
4,073

 
597

 
(181
)
 
(580
)
 
22

 
3,931

Energy & Transportation
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
2,486

 
9

 
—

 
—

 
(9
)
 
2,486

All Other 4
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
212

 
7

 
—

 
—

 
(5
)
 
214

Impairment
 
(22
)
 
—

 
—

 
—

 
—

 
(22
)
Net goodwill
 
190

 
7

 
—

 
—

 
(5
)
 
192

Consolidated total
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
 
7,102

 
628

 
(181
)
 
—

 
(5
)
 
7,544

Impairments
 
(22
)
 
—

 
—

 
(580
)
 
—

 
(602
)
Net goodwill
 
$
7,080

 
$
628

 
$
(181
)
 
$
(580
)
 
$
(5
)
 
$
6,942

 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
See Note 24 for additional information.
2 
See Note 26 for additional information.
3 
Other adjustments are comprised primarily of foreign currency translation.
4 
Includes All Other operating segments (See Note 23).