CATERPILLAR INC. 
The effect of derivatives not designated as hedging instruments on the Consolidated Statement of Results of Operations was as follows:
Classification of Gains (Losses) Three Months Ended Three Months Ended
Foreign exchange contracts March 31, 2021 March 31, 2020
Machinery, Energy & Transportation...... Other income (expense).......... USD (8) USD (3)
Financial Products.................. Other income (expense).......... 86 108
Commodity contracts
Other income (expense).......... 20 (46)
Machinery, Energy & Transportation......
USD 98 USD 59 We enter into International Swaps and Derivatives Association (ISDA) master netting agreements within ME&T and Financial Products that permit the net settlement of amounts owed under their respective derivative contracts. Under these master netting agreements, net settlement generally permits the company or the counterparty to determine the net amount payable for contracts due on the same date and in the same currency for similar types of derivative transactions. The master netting agreements generally also provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event.
Collateral is generally not required of the counterparties or of our company under the master netting agreements. As of March 31, 2021 and December 31, 2020, no cash collateral was received or pledged under the master netting agreements.
14
Table of Contents 6. Inventories
Inventories (principally using the last-in, first-out (LIFO) method) were comprised of the following:
March 31, December 31,
(Millions of dollars)
2021 2020
Raw materials................................................ USD 4,233 USD 4,021
Work-in-process............................................... 1,267 1,052
Finished goods................................................ 6,371 6,054
Supplies................................................... 278 275
Total inventories.............................................. USD 12,149 USD 11,402 1. Intangible assets and goodwill A. Intangible assets
Intangible assets were comprised of the following:
March 31, 2021
(Millions of dollars) Weighted Gross
Amortizable Carrying Accumulated
Life (Years) Amount Amortization Net
Customer relationships............................... 15 USD 2,451 USD (1,614) USD 837
Intellectual property................................. 12 1,444 (1,097) 347
Other........................................... 14 179 (117) 62
Total finite-lived intangible assets........................ 14 USD 4,074 USD (2,828) USD 1,246 December 31, 2020
Weighted Gross Accumulated
Amortizable Carrying Amortization Net
Life (Years) Amount
Customer relationships............................... 15 USD 2,493 USD (1,600) USD 893
Intellectual property................................. 12 1,439 (1,073) 366
Other........................................... 14 164 (115) 49
Total finite-lived intangible assets........................ 14 USD 4,096 USD (2,788) USD 1,308 Amortization expense for the three months ended March 31, 2021 and 2020 was USD77 million and USD80 million, respectively. Amortization expense related to intangible assets is expected to be:
(Millions of dollars)
Remaining Nine Months of 2021 2022 2023 2024 2025 Thereafter USD225 USD284 USD225 USD167 USD157 USD188
B. Goodwill
No goodwill was impaired during the three months ended March 31, 2021 or 2020.
16
Table of Contents
The changes in carrying amount of goodwill by reportable segment for the three months ended March 31, 2021 were as follows:
December 31, Other March 31,
(Millions of dollars) Acquisitions 1
Construction Industries 2020 Adjustments 2 2021
Goodwill........................ USD 320 USD - USD (14) USD 306
Impairments....................... (22) - - (22)
Net goodwill...................... 298 (14) 284
Resource Industries
Goodwill........................ 4,253 - (43) 4,210
Impairments....................... (1,175) (1,175)
Net goodwill...................... 3,078 (43) 3,035
Energy & Transportation
2,959 32 (22) 2,969
Goodwill........................
All Other 3
59 - (4) 55
Goodwill........................
Consolidated total
Goodwill........................ 7,591 32 (83) 7,540
Impairments....................... (1,197) (1,197)
Net goodwill...................... USD 6,394 USD 32 USD (83) USD 6,343 1 See Note 21 for additional details.
2 Other adjustments are comprised primarily of foreign currency translation.
3 Includes All Other operating segment (See Note 16).
8. Investments in debt and equity securities
We have investments in certain debt and equity securities, primarily at Insurance Services, which we record at fair value and primarily include in Other assets in the Consolidated Statement of Financial Position.
We classify debt securities as available-for-sale, and we include the unrealized gains and losses arising from the revaluation of these debt securities, net of applicable deferred income taxes, in equity (Accumulated other comprehensive income (loss) in the Consolidated Statement of Financial Position). We include the unrealized gains and losses arising from the revaluation of the equity securities in Other income (expense) in the Consolidated Statement of Results of Operations. We generally determine realized gains and losses on sales of investments using the specific identification method for debt and equity securities and include them in Other income (expense) in the Consolidated Statement of Results of Operations.
The cost basis and fair value of debt securities with unrealized gains and losses included in equity (Accumulated other comprehensive income (loss) in the Consolidated Statement of Financial Position) were as follows:
17
Table of Contents
March 31, 2021 December 31, 2020
Unrealized Unrealized
Pretax Net Pretax Net
(Millions of dollars) Cost Gains Fair Cost Gains Fair
Basis (Losses) Value Basis (Losses) Value
Government debt
U.S. treasury bonds................. USD 10 USD - USD 10 USD 10 USD - USD 10
Other U.S. and non-U.S. government bonds. 58 1 59 58 1 59
Corporate bonds
Corporate bonds................... 998 34 1,032 962 50 1,012
Asset-backed securities.............. 150 2 152 156 3 159
Mortgage-backed debt securities
U.S. governmental agency............ 349 10 359 362 12 374
Residential...................... 5 - 5 5 - 5
Commercial...................... 75 2 77 60 4 64
Total debt securities................ USD 1,645 USD 49 USD 1,694 USD 1,613 USD 70 USD 1,683 Available-for-sale investments in an unrealized loss position:
March 31, 2021
(Millions of dollars)
Less than 12 months 1 12 months or more 1 Total
Corporate bonds
Fair Fair Unrealized Fair Unrealized
Corporate bonds................ Value Unrealized Losses Value Losses
Losses Value
Mortgage-backed debt securities....
USD 154 USD 2 USD 4 USD - USD 158 2
U.S. governmental agency......... USD
80 1 1 - 81 1
Total.......................
USD 234 USD 3 USD 5 USD - USD 239 USD 3 December 31, 2020
Less than 12 months 1 12 months or more 1 Total
(Millions of dollars) Fair Unrealized Fair Unrealized Fair Unrealized
Value Losses Value Losses Value Losses
Corporate bonds
Corporate bonds............... USD 13 USD - USD 4 USD - USD 17 USD -
(MORE TO FOLLOW) Dow Jones Newswires
May 12, 2021 19:45 ET (23:45 GMT)
