after the global business reorganization, caterpillar inc.'s role included acting as a service provider for certain purchases method by caterpillar in exchange for a service fee. caterpillar licensed its rights to caterpillar csarl to make machines to purchase and distribute replacement parts and to use caterpillar technology and trademark on the products for sale outside the united states, in exchange for a license fee. because cat pill splash caterpillar csarl were related companies these payments were subject to irs transfer pricing rules. pwc tested the prices annually, not only under the best method as required by u.s. law but also enough each of the other relevant transfer pricing methods prescribed by the treasury regulations. each analysis supported the arms length nate tour of cat pillar's related party pricing in addition to providing tax services pwc has been auditing cat pail already's statements for many years. we have been asked to -- the independent rules. the delivery of task consulting services to audit clients has long been p

>> who owns csarl. >> ultimately owned by caterpillar inc. but every government in the world expects us to report by legal intent. >> so csarl is owned by caterpillar. >> that's correct. >> you say csarl owns the warehouses? >> csarl either owns the warehouses or owns the entity that owns them. >> who owns the entity that owns csarl? >> again, ultimately, caterpillar inc. >> are the names stewart -- and steven larson and barbara hodo -- are those names familiar you? >> i recognize those names. >> you know those names? >> die. >> do they work in the united states? do you know? >> cue read the his again. >> stewart levny ik, steve ven gosselin, steven larson, barbara hodel. >> yes, all of them work in the united states. >> are they key leaders caterpillar's parts business? >> they are key leaders but, again, keep in mind, we do not have a parts business. >> i'm sure. are they key leaders in the parts part of your business? >> they are key leaders of caterpillar. >> do they work heavily in the parts part of caterpillar, even though it's not signi

. >> ultimately owned by caterpillar inc. but every government in the world expects us to report by legal intent. >> so csarl is owned by caterpillar. >> that's correct. >> you say csarl owns the warehouses? >> csarl either owns the warehouses or owns the entity that owns them. >> who owns the entity that owns csarl? >> again, ultimately, caterpillar inc. >> are the names stewart -- and steven larson and barbara hodo -- are those names familiar you? >> i recognize those names. >> you know those names? >> die. >> do they work in the united states? do you know? >> cue read the his again. >> stewart levny ik, steve ven gosselin, steven larson, barbara hodel. >> yes, all of them work in the united states. >> are they key leaders caterpillar's parts business? >> they are key leaders but, again, keep in mind, we do not have a parts business. >> i'm sure. are they key leaders in the parts part of your business? >> they are key leaders of caterpillar. >> do they work heavily in the parts part of caterpillar, even though it's not signi

. >> the description of the idea was to remove caterpillar inc. from the chain of title passage for purchased finish parts. from the u.s. or foreign sources sold to foreign marketers. the foreign marketers would buy and sell two unrelated markets of this was the description of the idea. your own description. >> this is a pwc document. >> to remove from the chain of title to purchase parts. the benefits and lemonades sub character of foreign marketers profits and purchased finish parts sales and a relatively simple re-invoicing requirements the reimbursing requirement. do you read those words there? did i read those words correct? >> i would also reflects senator that in light of this was done at the beginning of the project in terms of providing ideas in response to caterpillar's tax department with respect to our investigation. i can tell you these invoicing requirements that following the implementation of this, those relatively simple re-invoicing requirements to probably three to four years a very difficult work by caterpillar system team in o

after the global business reorganization, caterpillar inc.'s role included acting as a service provider for certain purchases method by caterpillar in exchange for a service fee. caterpillar licensed its rights to caterpillar csarl to make machines to purchase and distribute replacement parts and to use caterpillar technology and trademark on the products for sale outside the united states, in exchange for a license fee. because cat pill splash caterpillar csarl were related companies these payments were subject to irs transfer pricing rules. pwc tested the prices annually, not only under the best method as required by u.s. law but also enough each of the other relevant transfer pricing methods prescribed by the treasury regulations. each analysis supported the arms length nate tour of cat pillar's related party pricing in addition to providing tax services pwc has been auditing cat pail already's statements for many years. we have been asked to -- the independent rules. the delivery of task consulting services to audit clients has long been p

to a csarl as well as ongoing services for all activities performed by caterpillar, inc. fur csarl. so even with respect to parts that are sold to dealers located outside of the united states commits a portion of the resulting income is subject to current basic u.s. tax. the direct purchase of its parts inventory reflects nothing more than the standard business operations and tax planning that any prudent business would employ in conducting its operations and complying with u.s. tax laws. in closing, i would like to emphasize again that caterpillar is a great american company, and iconic company might say, a publicly listed since 1929. we have steadily grown by working our business model day in and day out. caterpillar does a significant amount of business around the world, creates jobs, invests in the communities where we do business, and there is one of the highest effective tax rates for manufacturing company. caterpillar complies with its legal obligation with respect to payment of taxes. we are happy to answer your questions. thank you. >> ms. legacy, my first question is of vi

. >> executives of caterpillar inc. will appear before a senate committee today to explain how the company used its swiss affiliate to avoid paying more than $2 billion in taxes. the company admits that they shifted some of the profit to a firm called csarl. it is fully controlled by caterpillar. tax rates lower in switzerland. caterpillar says the tax strategy is completely legal. >> tiger woods is out of this year's masters tournament. he says he will not be able to play in the 2014 masters after undergoing surgery on his back for a pinch nerve. the 17th time major winner will miss the tournament for the first time since making his debut at a cuss the national. he says he is disappointed and it looks like you have to miss several upcoming tournament. >> finally felt like spring for his last opening day of his career. the white sox and twins tied. he was 2-4 in his debut. the white sox up to in the sixth. the insist second home run of the day. the first multi home run game of his career. he struck out eight and the clo

senate investigators have said that their sites to caterpillar inc.ver tax avoidance schemes. carl levin released a study on operationsturing of and why it may have done. phil mattingly joins us now from the hill as company executives face a senate committee. what are we likely to hear and see from this? >> the hearing is already underway. one senator levin is conducting an investigative hearing, the company will probably have a hard time. he has laid out systematically piece by piece the strategy caterpillar put in place. put in place in 1999 with the help of price waterhouse coopers. the company paid the $5 million to figure out a way to shift the third tardy parts business, at least the prophets, to a swiss subsidiary. according to investigators, and that ended up saving or allowing the company to do for two $.4 billion over the last 13 years, not a small amount of money. i think we will see multiple panels trying to point to the strategy as another way the are trying to make sure they do not have to pay the full share of taxes inside the u.s.. >>