Segment Information

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

We conduct our financing operations directly and indirectly through our subsidiaries and affiliates. We offer substantially similar products and services throughout many different regions, subject to local legal restrictions and market conditions. We divide our business segments based on geographic regions: the North America Segment (includes operations in the United States and Canada) and the International Segment (includes operations in all other countries).

We measure the performance of our segments primarily on an income before income taxes basis, after excluding the impact to earnings from gains and losses related to market valuation adjustments to derivatives primarily related to movements in interest rates. These adjustments are included in unallocated risk management and are excluded in assessing our North America and International Segment performance because they are carried out on a centralized basis at the corporate level, with only certain elements allocated to these segments. We also adjust segment performance to re-allocate interest expense between the North America and International Segments reflecting debt and equity levels proportionate to their product risk. Receivables for the North America and International Segments are presented on a managed basis. Management believes that managed receivables is the appropriate measurement of business growth, as it closely approximates the customers’ outstanding balance on the receivables, which is the basis for earning revenue. As a result, managed receivables equals total net finance receivables and net investment in operating leases, excluding unearned interest supplements and residual support, allowance for credit losses, and other (primarily accumulated supplemental depreciation).

Key operating data for our business segments for the periods ended or at September 30 were as follows (in millions):

					Unallocated/Eliminations
	North America Segment		International Segment		Unallocated Risk Management			Adjustment to Receivables (a)		Total Unallocated/Eliminations			Total
Third Quarter 2014
Total revenue (b)	$	1,883	$	438	$	(9	)	$	—	$	(9	)	$	2,312
Income before income taxes	374		133		(9		)	—		(9		)	498
Other disclosures
Depreciation on vehicles subject to operating leases	791		10		—			—		—			801
Interest expense	498		165		—			—		—			663
Provision for credit losses	48		9		—			—		—			57
Third Quarter 2013
Total revenue (b)	$	1,711	$	394	$	(22	)	$	—	$	(22	)	$	2,083
Income before income taxes	358		91		(22		)	—		(22		)	427
Other disclosures
Depreciation on vehicles subject to operating leases	621		8		—			—		—			629
Interest expense	536		155		—			—		—			691
Provision for credit losses	31		1		—			—		—			32

__________

(a) Includes unearned interest supplements and residual support, allowances for credit losses, and other (primarily accumulated supplemental depreciation).

(b) Represents Total financing revenue, Insurance premiums earned, and Other income, net.

NOTE 14. SEGMENT INFORMATION (Continued)

					Unallocated/Eliminations
	North America Segment		International Segment		Unallocated Risk Management			Adjustment to Receivables (a)			Total Unallocated/Eliminations			Total
First Nine Months 2014
Total revenue (b)	$	5,470	$	1,258	$	(23	)	$	—		$	(23	)	$	6,705
Income before income taxes	1,069		385		(23		)	—			(23		)	1,431
Other disclosures
Depreciation on vehicles subject to operating leases	2,218		30		—			—			—			2,248
Interest expense	1,521		481		—			—			—			2,002
Provision for credit losses	94		21		—			—			—			115
Net finance receivables and net investment in operating leases	88,599		21,766		—			(4,252		)	(4,252		)	106,113
Total assets	95,491		25,725		—			—			—			121,216
First Nine Months 2013
Total revenue (b)	$	4,931	$	1,133	$	(38	)	$	—		$	(38	)	$	6,026
Income before income taxes	1,156		270		(38		)	—			(38		)	1,388
Other disclosures
Depreciation on vehicles subject to operating leases	1,641		22		—			—			—			1,663
Interest expense	1,576		480		—			—			—			2,056
Provision for credit losses	57		24		—			—			—			81
Net finance receivables and net investment in operating leases	80,236		19,174		—			(3,336		)	(3,336		)	96,074
Total assets	88,476		23,358		—			—			—			111,834

__________

(a) Includes unearned interest supplements and residual support, allowances for credit losses, and other (primarily accumulated supplemental depreciation).

(b) Represents Total financing revenue, Insurance premiums earned, and Other income, net.