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## 5. Other income (expense) 

<img src='content_image/1019672.jpg'>

1 Includes gains (losses) from foreign exchange derivative contracts. See Note 4 for further details. 2 

Includes pretax gain of $85 million related to the sale of Caterpillar's equity interest in Iron Planet Holdings Inc. 

$^{3}$ Beginning January 1, 2018, the unrealized gains and losses arising from the revaluation of equity securities are included in Other income (expense) in Statement 1. See Note 1J for additional information. 

## 6. Income taxes 

## Reconciliation of the U.S. federal statutory rate to effective rate: 

<img src='content_image/1019673.jpg'>

$^{1}$ Excludes amounts included in valuation allowances and mandatory deemed repatriation of non-U.S. earnings. 

$^{2}$ Portion of Surface Mining & Technology goodwill impairment not deductible for tax purposes. See Note 10 for further discussion. 

Included in the line item above labeled "Non-U.S. subsidiaries taxed at other than the U.S. rate" are the effects of local and U.S. taxes related to earnings of non-U.S. subsidiaries, changes in the amount of unrecognized tax benefits associated with these earnings, losses at non-U.S. subsidiaries without local tax benefits due to valuation allowances, and other permanent differences between tax and U.S. GAAP results. Although not individually significant by jurisdiction, pre-tax permanent 

