Basis of Presentation

3 Months Ended

Mar. 31, 2012

Basis of Presentation

Basis of Presentation

1.A.  Basis of Presentation

In the opinion of management, the accompanying financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of (a) the consolidated results of operations for the three month periods ended March 31, 2012 and 2011, (b) the consolidated comprehensive income for the three month periods ended March 31, 2012 and 2011, (c) the consolidated financial position at March 31, 2012 and December 31, 2011, (d) the consolidated changes in stockholders’ equity for the three month periods ended March 31, 2012 and 2011, and (e) the consolidated cash flow for the three month periods ended March 31, 2012 and 2011.  The financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).  Certain amounts for prior periods have been reclassified to conform to the current period financial statement presentation.

Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in our Company’s annual report on Form 10-K for the year ended December 31, 2011 (2011 Form 10-K).

The December 31, 2011 financial position data included herein is derived from the audited consolidated financial statements included in the 2011 Form 10-K but does not include all disclosures required by U.S. GAAP.

B.  Nature of Operations

Information in our financial statements and related commentary are presented in the following categories:

Machinery and Power Systems — Represents the aggregate total of Construction Industries, Resource Industries, Power Systems, and All Other segments and related corporate items and eliminations.

Financial Products — Primarily includes the company’s Financial Products Segment.  This category includes Caterpillar Financial Services Corporation (Cat Financial), Caterpillar Insurance Holdings Inc. (Cat Insurance) and their respective subsidiaries.

C.  Accumulated Other Comprehensive Income (Loss)

Comprehensive income (loss) and its components are presented in the Consolidated Statement of Comprehensive Income. Accumulated other comprehensive income (loss), net of tax, included in the Consolidated Statement of Changes in Stockholders’ Equity, consisted of the following:

(Millions of dollars)	March 31, 2012			March 31, 2011
Foreign currency translation	$	401		$	768
Pension and other postretirement benefits	(6,458		)	(4,600		)
Derivative financial instruments	(38		)	55
Available-for-sale securities	62			53
Total accumulated other comprehensive income (loss)	$	(6,033	)	$	(3,724	)