having joined pwc in 1976, mr. bower has been advising clients with respect to tax obligations for over 37 years. i'm also joined by steven williams, managing director with pwc. mr. williams is an economy exist holds a masters degree with concentration in international economics. he has been we pwc since 1982 and specializes the transfer pricing for 28 years. understand that today's hearing relates to the tax implications of a business reorganization that caterpillar gap 15 years ago. i was one of the pwc partners who provided advice in connection with the matter. mr. bowers is a tax partner who assisted the audit team with the audit of the tax aspects of caterpillar's national statements, and mr. williams provided caterpillar with assistance regarding transfer pricing rules. at the outset, let me say on behalf of pwc, we recognize both the long-standing interest of this subcommittee in corporate tax issues and the importance of those issues. in that spirit, pwc has cooperated fully with the subcommittee throughout

having joined pwc in 1976, mr. bower has been advising clients with respect to tax obligations for over 37 years. i'm also joined by steven williams, managing director with pwc. mr. williams is an economy exist holds a masters degree with concentration in international economics. he has been we pwc since 1982 and specializes the transfer pricing for 28 years. understand that today's hearing relates to the tax implications of a business reorganization that caterpillar gap 15 years ago. i was one of the pwc partners who provided advice in connection with the matter. mr. bowers is a tax partner who assisted the audit team with the audit of the tax aspects of caterpillar's national statements, and mr. williams provided caterpillar with assistance regarding transfer pricing rules. at the outset, let me say on behalf of pwc, we recognize both the long-standing interest of this subcommittee in corporate tax issues and the importance of those issues. in that spirit, pwc has cooperated fully with the subcommittee throughout

. >> is a notch or that pwc had an ongoing program called g. top global tax program to reduce corporate taxes? is that true? >> yes. >> pw ce approached a number of corporations to talk them about the g. top program. is that correct? >> that is correct. >> so that the caterpillar tax strategy was the result of that pwc g. top effort. is that correct? >> it follow that presentation. >> the tax consults pwc conducted a review of caterpillar's operations in the 1998 gave caterpillar a list of 49 possible ways to lower its taxes one of which was the swiss tax strategies that involve assigning of non-u.s. parts profits to a swiss affiliate and that's exhibit seven. is that correct? >> this exhibit seven is from that report and is part of that original investigation. >> was this the strategy that was adopted finally? and very simplified form. >> if you take a look at the top of that exhibit this is 4618. the purpose was to get cat incorporated out of the chain. that's the top headline. re-characterize marketing company income to achieve u.s. tax defe

this was the document that laid out 30 to tax strategies for caterpillar pwc. >> yes. >> page loads a strategy for caterpillar. do you see that? you would develop the strategy we believe will be a tax optimization for caterpillar and this can be summarized as follows. summarized as follows. migrating come from the u.s. to lower tax jurisdictions. do you see that? and you see below that global income migration? >> yes, i do. >> on that strategy is there any reference there at all to hiring new people are moving people are changing operations? >> it can only be- >> i'm sure that but do you see it anywhere on this document? >> it's not in this document senator. >> wasn't on any document at the time that they would have to move people? >> yes it certainly would have been. >> how many people would they have had to have moved? if they had less than 100 people working in parts. >> if i can ask what particular part of your position might be in. >> and switzerland. >> in switzerland as it relates to the overall business? >> the parts business. they have less than 100 before and they have less

and this is a pwc document that addresses that question. what intangible property will be transferred from cat inc. to csarl under the replacement parts license? under the replacement parts license. that's what we're talking about. replacement parts. not machines. replacement parts license. into, first, please note that the document talks about parts, not machines. and cosarl refers to what we have been calling csarl. here's here it what was transfer ted patents and designs, parts including patent elements, trademarks, parts sold under cat trademark, contracts, buying from suppliers. caterpillar already has screened. qualified. negotiated prices with. systems and procedures, cat proprietary log information. no how, methods, forecast, estimates. now, if you take a look at exhibit 51, if you would, page 2, under intellectual property. this was transferred. bill ledge property throughs but notice immigrant led to know how, processes, designs, specifications, engineering standards, trade secrets, inventions, pant tent applications, caterpillar

and this is a pwc document that addresses that question. what intangible property will be transferred from cat inc. to csarl under the replacement parts license? under the replacement parts license. that's what we're talking about. replacement parts. not machines. replacement parts license. into, first, please note that the document talks about parts, not machines. and cosarl refers to what we have been calling csarl. here's here it what was transfer ted patents and designs, parts including patent elements, trademarks, parts sold under cat trademark, contracts, buying from suppliers. caterpillar already has screened. qualified. negotiated prices with. systems and procedures, cat proprietary log information. no how, methods, forecast, estimates. now, if you take a look at exhibit 51, if you would, page 2, under intellectual property. this was transferred. bill ledge property throughs but notice immigrant led to know how, processes, designs, specifications, engineering standards, trade secrets, inventions, pant tent applications, caterpillar

international banks, big data, and appears in the shadows says hoffman from pwc. >> there will be a moveent the question is, who is going to really create the most frictionless customer experience? who is going to have the trust on of the consumer, whether it's a deposit or a loan account, and who are the regulators going to ultimately let in the business. >> we talked to consultants from pricewaterhousecoopers, oliver why man on where the future is going. tech companies will take overpayments without these huge compliance costs could end up being your run of the mill consumer spender. a lot, joe, will change. >> yes. i don't know. because my kids decided they were e going to work on wall street. now we have to get a new plan, kayla. we'll see. anyway, thank you. we'll see you back here probably tomorrow. coming up, jim cramer joins us to break down the news. to tell you what it needs for the trading day. "squawk box" will be right back. >> cnbc is joining force toss bring the future of finance to the financial capital of the world. learn how artificial spwels and biomedicine will transf

pwc completed its acquisition of booz & company this morning.oining us is bob moritz, chairman and senior partner at pricewaterhousecoopers. >> nice to be here. >> tell us what this deal does mean. how will it change your business. >> you have to remain relative to stake holers. there's two benefits, first and foremost for our nonaudit clients that need help, it's strategy and execution. 70 some odd percent of the ceos we interview year after year have a concern about can i think about what my strategy should be and equal amounts have problems with how do i get the impact and the results? the acquisition gives us that strategy piece. where before we've been in the consulting business. it's been more around the execution. that's why we've changed the brand from booz & co. the second piece is when you think about our audit business, we need to continue to invest. and the diverse fiction ificati revenues around that entire client base is where that helps. even though we're not able to bring those services in today. >> why do you have to continue to