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Derivative financial instruments and risk management (Tables)
 12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
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,
 
 
 
2019
 
2018
Designated derivatives
 
 
 

 
 

Foreign exchange contracts
 
 
 

 
 

Machinery, Energy & Transportation
Receivables — trade and other
 
$
18

 
$
16

Machinery, Energy & Transportation
Long-term receivables — trade and other
 
9

 
—

Machinery, Energy & Transportation
Accrued expenses
 
(20
)
 
(26
)
Machinery, Energy & Transportation
Other liabilities
 
—

 
(9
)
Financial Products
Receivables — trade and other
 
54

 
53

Financial Products
Long-term receivables — trade and other
 
13

 
35

Financial Products
Accrued expenses
 
(3
)
 
(9
)
Interest rate contracts
 
 
 

 
 

Financial Products
Receivables — trade and other
 
—

 
1

Financial Products
Long-term receivables — trade and other
 
5

 
3

Financial Products
Accrued expenses
 
(25
)
 
(40
)
 
 
 
$
51

 
$
24

 
 
 
 
 
 
Undesignated derivatives
 
 
 

 
 

Foreign exchange contracts
 
 
 

 
 

Machinery, Energy & Transportation
Receivables — trade and other
 
$
1

 
$
2

Machinery, Energy & Transportation
Accrued expenses
 
—

 
(21
)
Financial Products
Receivables — trade and other
 
7

 
15

Financial Products
Long-term receivables — trade and other
 
5

 
5

Financial Products
Accrued expenses
 
(22
)
 
(14
)
Commodity contracts
 
 
 

 
 

Machinery, Energy & Transportation
Receivables — trade and other
 
4

 
1

Machinery, Energy & Transportation
Accrued expenses
 
(1
)
 
(31
)
 
 
 
$
(6
)
 
$
(43
)
 
 
 
 
 
 

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

 
Years ended December 31,
(Millions of dollars)
 
2019
 
2018
 
 
 
 
 
Machinery, Energy & Transportation
 
$
2,563

 
$
1,834

Financial Products
 
$
8,931

 
$
10,210

 
 
 
 
 

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

The effect of derivatives designated as hedging instruments on Statement 1 is as follows: 

Cash Flow Hedges
 
 
 
 
 
 
 
 
(Millions of dollars)
 
Year ended December 31, 2019
 
 
 
 
Recognized in Earnings
 
 
Amount of
Gains (Losses) Recognized in AOCI
 
Classification of
Gains (Losses)
 
Amount of Gains (Losses) Reclassified from AOCI
 
Amount of the line items in Statement 1
Foreign exchange contracts
 
 

 
 
 
 

 
 

Machinery, Energy & Transportation
 
$
34

 
Sales of Machinery, Energy & Transportation
 
$
11

 
$
50,755

 
 
 
 
Cost of goods sold
 
(3
)
 
36,630

Financial Products
 
93

 
Interest expense of Financial Products
 
33

 
754

 
 
 
 
Other income (expense)
 
37

 
(57
)
Interest rate contracts
 
 

 
 
 
 

 
 

Machinery, Energy & Transportation
 
—

 
Interest expense excluding Financial Products
 
(4
)
 
421

Financial Products
 
(70
)
 
Interest expense of Financial Products
 
(8
)
 
754

 
 
$
57

 
 
 
$
66

 
 
 
 
 
 
 
 
 
 
 
 
 
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

 
—

 
 
 
 
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
)
 
—

 
 
 
 
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
)
 
$
—


 
 
 
 
 

  
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)
 
2019
 
2018
 
2017
Foreign exchange contracts
 
 
 
 

 
 

 
 

Machinery, Energy & Transportation
 
Other income (expense)
 
$
13

 
$
(54
)
 
$
72

Financial Products
 
Other income (expense)
 
(37
)
 
19

 
9

Commodity contracts
 
 
 
 

 
 

 
 

Machinery, Energy & Transportation
 
Other income (expense)
 
18

 
(39
)
 
30

 
 
 
 
$
(6
)
 
$
(74
)
 
$
111

 
 
 
 
 
 
 
 
 

  
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, 2019
 
 
 
 
 
 
 
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
 
$
32

 
$
—

 
$
32

 
$
(13
)
 
$
—

 
$
19

 
Financial Products
 
84

 
—

 
84

 
(21
)
 
—

 
63

 
 Total
 
$
116

 
$
—

 
$
116

 
$
(34
)
 
$
—

 
$
82

 
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

 
Effect of net settlement provisions of the master netting agreements on derivative liabilities
December 31, 2019
 
 
 
 
 
 
 
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
 
$
(21
)
 
$
—

 
$
(21
)
 
$
13

 
$
—

 
$
(8
)
 
Financial Products
 
(50
)
 
—

 
(50
)
 
21

 
—

 
(29
)
 
 Total
 
$
(71
)
 
$
—

 
$
(71
)
 
$
34

 
$
—

 
$
(37
)
 
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
)