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Segment Information
 3 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
Segment Information Segment information
 
A.    Basis for segment information
 
Our Executive Office is comprised of a Chief Executive Officer (CEO), four Group Presidents, a Chief Financial Officer (CFO), a Chief Legal Officer and General Counsel and a Chief Human Resources Officer. The Group Presidents and CFO are accountable for a related set of end-to-end businesses that they manage.  The Chief Legal Officer and General Counsel leads the Law, Security and Public Policy Division. The Chief Human Resources Officer leads the Human Resources Organization. The CEO allocates resources and manages performance at the Group President/CFO level.  As such, the CEO serves as our Chief Operating Decision Maker, and operating segments are primarily based on the Group President/CFO reporting structure.
 
Three of our operating segments, Construction Industries, Resource Industries and Energy & Transportation are led by Group Presidents.  One operating segment, Financial Products, is led by the CFO who also has responsibility for Corporate Services. Corporate Services is a cost center primarily responsible for the performance of certain support functions globally and to provide centralized services; it does not meet the definition of an operating segment. One Group President leads one smaller operating segment that is included in the All Other operating segment.  The Law, Security and Public Policy Division and the Human Resources Organization are cost centers and do not meet the definition of an operating segment.

Segment information for 2021 has been recast due to a methodology change related to how we assign intersegment sales and segment profit from our technology products and services to Construction Industries, Resource Industries and Energy & Transportation. This methodology change did not have a material impact on our segment results.

B.    Description of segments
 
We have five operating segments, of which four are reportable segments. Following is a brief description of our reportable segments and the business activities included in the All Other operating segment:
 
Construction Industries: A segment primarily responsible for supporting customers using machinery in infrastructure and building construction applications. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes asphalt pavers; backhoe loaders; compactors; cold planers; compact track and multi-terrain loaders; mini, small, medium and large track excavators; motor graders; pipelayers; road reclaimers; skid steer loaders; telehandlers; small and medium track-type tractors; track-type loaders; wheel excavators; compact, small and medium wheel loaders; and related parts and work tools. Inter-segment sales are a source of revenue for this segment.
Resource Industries:  A segment primarily responsible for supporting customers using machinery in mining, heavy construction and quarry and aggregates. Responsibilities include business strategy, product design, product management and development, manufacturing, marketing and sales and product support. The product portfolio includes large track-type tractors; large mining trucks; hard rock vehicles; longwall miners; electric rope shovels; draglines; hydraulic shovels; rotary drills; large wheel loaders; off-highway trucks; articulated trucks; wheel tractor scrapers; wheel dozers; landfill compactors; soil compactors; select work tools; machinery components; electronics and control systems and related parts. In addition to equipment, Resource Industries also develops and sells technology products and services to provide customers fleet management, equipment management analytics, autonomous machine capabilities, safety services and mining performance solutions. Resource Industries also manages areas that provide services to other parts of the company, including strategic procurement, lean center of excellence, integrated manufacturing, research and development for hydraulic systems, automation, electronics and software for Cat machines and engines. Inter-segment sales are a source of revenue for this segment.

Energy & Transportation:  A segment primarily responsible for supporting customers using reciprocating engines, turbines, diesel-electric locomotives and related services across industries serving Oil and Gas, Power Generation, Industrial and Transportation applications, including marine- and rail-related businesses. Responsibilities include business strategy, product design, product management, development and testing manufacturing, marketing and sales and product support. The product and services portfolio includes turbines, centrifugal gas compressors, and turbine-related services; reciprocating engine-powered generator sets; integrated systems and solutions used in the electric power generation industry; reciprocating engines, drivetrain and integrated systems and solutions for the marine and oil and gas industries; reciprocating engines, drivetrain and integrated systems and solutions supplied to the industrial industry as well as Cat machinery; and diesel-electric locomotives and components and other rail-related products and services, including remanufacturing and leasing. Responsibilities also include the remanufacturing of Caterpillar reciprocating engines and components and remanufacturing services for other companies; and product support of on-highway vocational trucks for North America. Inter-segment sales are a source of revenue for this segment.
 
Financial Products Segment:  Provides financing alternatives to customers and dealers around the world for Caterpillar products and services, as well as financing for vehicles, power generation facilities and marine vessels that, in most cases, incorporate Caterpillar products. Financing plans include operating and finance leases, installment sale contracts, repair/rebuild financing, working capital loans and wholesale financing plans. The segment also provides insurance and risk management products and services that help customers and dealers manage their business risk. Insurance and risk management products offered include physical damage insurance, inventory protection plans, extended service coverage and maintenance plans for machines and engines, and dealer property and casualty insurance. The various forms of financing, insurance and risk management products offered to customers and dealers help support the purchase and lease of Caterpillar equipment. The segment also earns revenues from ME&T, but the related costs are not allocated to operating segments. Financial Products’ segment profit is determined on a pretax basis and includes other income/expense items.
 
All Other operating segment:  Primarily includes activities such as: business strategy; product management and development; manufacturing and sourcing of filters and fluids, undercarriage, ground-engaging tools, fluid transfer products, precision seals, rubber sealing and connecting components primarily for Cat® products; parts distribution; integrated logistics solutions; distribution services responsible for dealer development and administration, including a wholly owned dealer in Japan; dealer portfolio management and ensuring the most efficient and effective distribution of machines, engines and parts; brand management and marketing strategy; and digital investments for new customer and dealer solutions that integrate data analytics with state-of-the-art digital technologies while transforming the buying experience. Results for the All Other operating segment are included as a reconciling item between reportable segments and consolidated external reporting.
 
C.    Segment measurement and reconciliations
 
There are several methodology differences between our segment reporting and our external reporting.  The following is a list of the more significant methodology differences:
 
•ME&T segment net assets generally include inventories, receivables, property, plant and equipment, goodwill, intangibles, accounts payable and customer advances. We generally manage at the corporate level liabilities other than accounts payable and customer advances, and we do not include these in segment operations.  Financial Products Segment assets generally include all categories of assets.
 
•We value segment inventories and cost of sales using a current cost methodology.
•We amortize goodwill allocated to segments using a fixed amount based on a 20-year useful life.  This methodology difference only impacts segment assets. We do not include goodwill amortization expense in segment profit. In addition, we have allocated to segments only a portion of goodwill for certain acquisitions made in 2011 or later.

•We generally manage currency exposures for ME&T at the corporate level and do not include in segment profit the effects of changes in exchange rates on results of operations within the year.  We report the net difference created in the translation of revenues and costs between exchange rates used for U.S. GAAP reporting and exchange rates used for segment reporting as a methodology difference.

•We do not include stock-based compensation expense in segment profit.

•Postretirement benefit expenses are split; segments are generally responsible for service costs, with the remaining elements of net periodic benefit cost included as a methodology difference.

•We determine ME&T segment profit on a pretax basis and exclude interest expense and most other income/expense items.  We determine Financial Products Segment profit on a pretax basis and include other income/expense items.
Reconciling items are created based on accounting differences between segment reporting and our consolidated external reporting. Please refer to pages 26 to 28 for financial information regarding significant reconciling items.  Most of our reconciling items are self-explanatory given the above explanations.  For the reconciliation of profit, we have grouped the reconciling items as follows:
 
•Corporate costs:  These costs are related to corporate requirements primarily for compliance and legal functions for the benefit of the entire organization.

•Restructuring costs: May include costs for employee separation, long-lived asset impairments and contract terminations. These costs are included in Other operating (income) expenses except for defined-benefit plan curtailment losses and special termination benefits, which are included in Other income (expense). Restructuring costs also include other exit-related costs, which may consist of accelerated depreciation, inventory write-downs, building demolition, equipment relocation and project management costs and LIFO inventory decrement benefits from inventory liquidations at closed facilities, all of which are primarily included in Cost of goods sold. See Note 20 for more information.

•Methodology differences:  See previous discussion of significant accounting differences between segment reporting and consolidated external reporting.

•Timing:   Timing differences in the recognition of costs between segment reporting and consolidated external reporting. For example, we report certain costs on the cash basis for segment reporting and the accrual basis for consolidated external reporting.
For the three months ended March 31, 2022 and 2021, sales and revenues by geographic region reconciled to consolidated sales and revenues were as follows:
Sales and Revenues by Geographic Region
(Millions of dollars)
North
 America
Latin
 America
EAME
Asia/
 Pacific
External Sales and RevenuesIntersegment Sales and RevenuesTotal Sales and Revenues
Three Months Ended March 31, 2022    
Construction Industries$2,720 $627 $1,277 $1,462 $6,086 $29 $6,115 
Resource Industries1,018 399 594 748 2,759 71 2,830 
Energy & Transportation1,938 310 1,184 600 4,032 1,006 5,038 
Financial Products Segment503 73 96 111 783 
1
— 783 
Total sales and revenues from reportable segments6,179 1,409 3,151 2,921 13,660 1,106 14,766 
All Other operating segment18 — 5 16 39 79 118 
Corporate Items and Eliminations(60)(16)(11)(23)(110)(1,185)(1,295)
Total Sales and Revenues$6,137 $1,393 $3,145 $2,914 $13,589 $— $13,589 
Three Months Ended March 31, 2021    
Construction Industries$2,126 $392 $1,081 $1,842 $5,441 $18 $5,459 
Resource Industries657 405 474 561 2,097 81 2,178 
Energy & Transportation1,782 256 1,093 527 3,658 849 4,507 
Financial Products Segment476 62 100 123 761 
1
— 761 
Total sales and revenues from reportable segments5,041 1,115 2,748 3,053 11,957 948 12,905 
All Other operating segment13 — 3 22 38 92 130 
Corporate Items and Eliminations(63)(11)(8)(26)(108)(1,040)(1,148)
Total Sales and Revenues$4,991 $1,104 $2,743 $3,049 $11,887 $— $11,887 
1 Includes revenues from Construction Industries, Resource Industries, Energy & Transportation and All Other operating segment of $100 million and $84 million in the three months ended March 31, 2022 and 2021, respectively.
For the three months ended March 31, 2022 and 2021, Energy & Transportation segment sales by end user application were as follows:
Energy & Transportation External Sales
Three Months Ended March 31
(Millions of dollars)20222021
Oil and gas$948 $915 
Power generation1,012 963 
Industrial1,020 813 
Transportation1,052 967 
Energy & Transportation External Sales$4,032 $3,658 
Reconciliation of Consolidated profit before taxes:
(Millions of dollars)Three Months Ended March 31
20222021
Profit from reportable segments:
Construction Industries$1,057 $1,042 
Resource Industries361 312 
Energy & Transportation538 675 
Financial Products Segment238 244 
Total profit from reportable segments2,194 2,273 
Profit from All Other operating segment3 3 
Cost centers10 21 
Corporate costs(198)(185)
Timing(98)(66)
Restructuring costs(13)(64)
Methodology differences:
Inventory/cost of sales168 — 
Postretirement benefit expense81 68 
Stock-based compensation expense(40)(42)
Financing costs(100)(130)
Currency106 186 
Other income/expense methodology differences(81)(49)
Other methodology differences(33)(18)
Total consolidated profit before taxes$1,999 $1,997 

Reconciliation of Assets:
(Millions of dollars)March 31, 2022December 31, 2021
Assets from reportable segments:
Construction Industries$5,019 $4,547 
Resource Industries5,717 5,962 
Energy & Transportation9,480 9,253 
Financial Products Segment35,108 34,860 
Total assets from reportable segments55,324 54,622 
Assets from All Other operating segment2,568 1,678 
Items not included in segment assets:  
Cash and cash equivalents5,662 8,428 
Deferred income taxes1,862 1,735 
Goodwill and intangible assets4,842 4,859 
Property, plant and equipment – net and other assets3,149 4,056 
Inventory methodology differences(2,901)(2,656)
Liabilities included in segment assets11,378 10,777 
Other392 (706)
Total assets$82,276 $82,793 
Reconciliation of Depreciation and amortization:
(Millions of dollars)
Three Months Ended March 31
20222021
Depreciation and amortization from reportable segments:
   Construction Industries$58 $59 
   Resource Industries92 99 
   Energy & Transportation134 142 
   Financial Products Segment188 196 
Total depreciation and amortization from reportable segments472 496 
Items not included in segment depreciation and amortization:
All Other operating segment58 62 
Cost centers21 26 
Other6 2 
Total depreciation and amortization$557 $586 

Reconciliation of Capital expenditures:  
(Millions of dollars)
Three Months Ended March 31
20222021
Capital expenditures from reportable segments:
Construction Industries$32 $28 
Resource Industries22 23 
Energy & Transportation177 81 
Financial Products Segment241 228 
Total capital expenditures from reportable segments472 360 
Items not included in segment capital expenditures:
All Other operating segment16 15 
Cost centers9 19 
Timing192 124 
Other(10)(14)
Total capital expenditures$679 $504