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Derivative financial instruments and risk management (Tables)
 12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]    
Location and fair value of derivative instruments reported in the Consolidated Financial Position
The location and fair value of derivative instruments reported in Statement 3 are as follows:
 
 
Consolidated
 Statement of Financial Position Location
 
Asset (Liability) Fair Value
(Millions of dollars)
 
 
Years ended December 31,
 
 
 
2016
 
2015
Designated derivatives
 
 
 

 
 

Foreign exchange contracts
 
 
 

 
 

Machinery, Energy & Transportation
Receivables — trade and other
 
$
13

 
$
12

Machinery, Energy & Transportation
Accrued expenses
 
(93
)
 
(25
)
Machinery, Energy & Transportation
Other liabilities
 
(36
)
 
—

Financial Products
Long-term receivables — trade and other
 
29

 
—

Financial Products
Accrued expenses
 
(3
)
 
—

Interest rate contracts
 
 
 

 
 

Financial Products
Receivables — trade and other
 
—

 
1

Financial Products
Long-term receivables — trade and other
 
4

 
51

Financial Products
Accrued expenses
 
(1
)
 
(4
)
 
 
 
$
(87
)
 
$
35

 
 
 
 
 
 
Undesignated derivatives
 
 
 

 
 

Foreign exchange contracts
 
 
 

 
 

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

 
$
2

Machinery, Energy & Transportation
Accrued expenses
 
(30
)
 
(9
)
Financial Products
Receivables — trade and other
 
39

 
3

Financial Products
Long-term receivables — trade and other
 
—

 
36

Financial Products
Accrued expenses
 
(4
)
 
(6
)
Commodity contracts
 
 
 

 
 

Machinery, Energy & Transportation
Receivables — trade and other
 
10

 
—

Machinery, Energy & Transportation
Accrued expenses
 
—

 
(12
)
 
 
 
$
15

 
$
14

 
 
 
 
 
 
  
Total notional amounts of derivative instruments
The total notional amounts of the derivative instruments are as follows:
 
Years ended December 31,
(Millions of dollars)
 
2016
 
2015
 
 
 
 
 
Machinery, Energy & Transportation
 
$
2,530

 
$
2,040

Financial Products
 
$
2,626

 
$
3,539

 
 
 
 
 
  
Effect of derivatives designated as hedging instruments on Consolidated Results of Operations
The effect of derivatives designated as hedging instruments on Statement 1 is as follows:
Fair Value Hedges
 
 
 
Year ended December 31, 2016
(Millions of dollars)
 
Classification
 
Gains (Losses)
 on Derivatives
 
Gains (Losses)
 on Borrowings
Interest rate contracts
 
 
 
 

 
 

Financial Products
 
Other income (expense)
 
$
(12
)
 
$
11

 
 
 
 
$
(12
)
 
$
11

 
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2015
 
 
Classification
 
Gains (Losses)
 on Derivatives
 
Gains (Losses)
 on Borrowings
Interest rate contracts
 
 
 
 

 
 

Financial Products
 
Other income (expense)
 
$
(27
)
 
$
26

 
 
 
 
$
(27
)
 
$
26

 
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2014
 
 
Classification
 
Gains (Losses)
 on Derivatives
 
Gains (Losses)
 on Borrowings
Interest rate contracts
 
 
 
 

 
 

Financial Products
 
Other income (expense)
 
$
(41
)
 
$
23

 
 
 
 
$
(41
)
 
$
23

 
 
 
 
 
 
 

 
 
 
 
 

Cash Flow Hedges
 
 
 
 
 
 
 
 
 
(Millions of dollars)
 
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

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2015
 
 
 
 
 
Recognized in Earnings
 
 
 
Amount of
Gains (Losses) Recognized in AOCI (Effective Portion)
 
Classification of
Gains (Losses)
 
Amount of
Gains (Losses)
Reclassified
from AOCI to
Earnings
 
Recognized in Earnings (Ineffective Portion)
 
Foreign exchange contracts
 
 

 
 
 
 

 
 

 
Machinery, Energy & Transportation
 
$
(33
)
 
Other income (expense)
 
$
(128
)
 
$
—

 
Financial Products
 
—

 
Other income (expense)
 
1

 
—

 
Interest rate contracts
 
 

 
 
 
 

 
 

 
Machinery, Energy & Transportation
 
—

 
Interest expense excluding Financial Products
 
(6
)
 
—

 
Financial Products
 
3

 
Interest expense of Financial Products
 
(6
)
 
—

 
 
 
$
(30
)
 
 
 
$
(139
)
 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2014
 
 
 
 
 
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)
 
$
5

 
$
—

 
Interest rate contracts
 
 

 
 
 
 

 
 

 
Machinery, Energy & Transportation
 
(63
)
 
Interest expense excluding Financial Products
 
(5
)
 
—

 
Financial Products
 
(6
)
 
Interest expense of Financial Products
 
(6
)
 
—

 
 
 
$
(187
)
 
 
 
$
(6
)
 
$
—

 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
  
Effect of derivatives not designated as hedging instruments on the Consolidated Results of Operations
The effect of derivatives not designated as hedging instruments on Statement 1 is as follows:
 
 
 
 
 
Years ended December 31,
(Millions of dollars)
 
Classification of Gains (Losses)
 
2016
 
2015
 
2014
Foreign exchange contracts
 
 
 
 

 
 

 
 

Machinery, Energy & Transportation
 
Other income (expense)
 
$
(4
)
 
$
(32
)
 
$
(60
)
Financial Products
 
Other income (expense)
 
(24
)
 
(34
)
 
(47
)
Interest rate contracts
 
 
 
 

 
 

 
 

Machinery, Energy & Transportation
 
Other income (expense)
 
2

 
2

 
2

Commodity contracts
 
 
 
 

 
 

 
 

Machinery, Energy & Transportation
 
Other income (expense)
 
16

 
(23
)
 
(15
)
 
 
 
 
$
(10
)
 
$
(87
)
 
$
(120
)
 
 
 
 
 
 
 
 
 
  
Effect of net settlement provisions of the master netting agreements on derivative assets
The effect of the net settlement provisions of the master netting agreements on our derivative balances upon an event of default or termination event is as follows:
December 31, 2016
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Statement of Financial Position
 
 
 
(Millions of dollars)
 
Gross Amount of Recognized Assets
 
Gross Amounts Offset in the Statement of Financial Position
 
Net Amount of Assets Presented in the Statement of Financial Position
 
Financial Instruments
 
Cash Collateral Received
 
Net Amount of Assets
 
Derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
Machinery, Energy & Transportation
 
$
23

 
$
—

 
$
23

 
$
(21
)
 
$
—

 
$
2

 
Financial Products
 
72

 
—

 
72

 
(7
)
 
—

 
65

 
 Total
 
$
95

 
$
—

 
$
95

 
$
(28
)
 
$
—

 
$
67

 

December 31, 2015
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Statement of Financial Position
 
 
 
(Millions of dollars)
 
Gross Amount of Recognized Assets
 
Gross Amounts Offset in the Statement of Financial Position
 
Net Amount of Assets Presented in the Statement of Financial Position
 
Financial Instruments
 
Cash Collateral Received
 
Net Amount of Assets
 
Derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
Machinery, Energy & Transportation
 
$
14

 
$
—

 
$
14

 
$
(14
)
 
$
—

 
$
—

 
Financial Products
 
91

 
—

 
91

 
(5
)
 
—

 
86

 
 Total
 
$
105

 
$
—

 
$
105

 
$
(19
)
 
$
—

 
$
86

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

December 31, 2016
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Statement of Financial Position
 
 
 
(Millions of dollars)
 
Gross Amount of Recognized Liabilities
 
Gross Amounts Offset in the Statement of Financial Position
 
Net Amount of Liabilities Presented in the Statement of Financial Position
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount of Liabilities
 
Derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
Machinery, Energy & Transportation
 
$
(159
)
 
$
—

 
$
(159
)
 
$
21

 
$
—

 
$
(138
)
 
Financial Products
 
(8
)
 
—

 
(8
)
 
7

 
—

 
(1
)
 
 Total
 
$
(167
)
 
$
—

 
$
(167
)
 
$
28

 
$
—

 
$
(139
)
 

December 31, 2015
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Statement of Financial Position
 
 
 
(Millions of dollars)
 
Gross Amount of Recognized Liabilities
 
Gross Amounts Offset in the Statement of Financial Position
 
Net Amount of Liabilities Presented in the Statement of Financial Position
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount of Liabilities
 
Derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
Machinery, Energy & Transportation
 
$
(46
)
 
$
—

 
$
(46
)
 
$
14

 
$
—

 
$
(32
)
 
Financial Products
 
(10
)
 
—

 
(10
)
 
5

 
—

 
(5
)
 
 Total
 
$
(56
)
 
$
—

 
$
(56
)
 
$
19

 
$
—

 
$
(37
)