Segment Information

6 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Segment Information

Segment Information

A.     Description of segments

Our segment data is based on disclosure requirements of accounting guidance on segment reporting, which requires that financial information be reported on the basis that is used internally for measuring segment performance. Internally, we report information for operating segments based on management responsibility. Our operating segments offer primarily the same types of services within each of the respective segments. The operating segments are as follows:

• North America - We have offices in the United States and Canada that serve local dealers and customers.

• Europe and Caterpillar Power Finance - This segment includes our offices that serve dealers and customers in Europe, Africa, Middle East and the Commonwealth of Independent States.  This segment also includes Caterpillar Power Finance (CPF), which finances marine vessels with Caterpillar engines worldwide and also provides debt financing for Caterpillar electrical power generation, gas compression and co-generation systems, as well as non-Caterpillar equipment that is powered by these systems worldwide. 

• Asia/Pacific - This segment includes offices in Australia, China, Japan, South Korea and Southeast Asia that serve local dealers and customers.  

• Latin America - We have offices in Brazil, Mexico and Chile that serve local dealers and customers in Central and South America.

• Mining - This segment includes large mining customers worldwide. This segment also provides project financing in various countries. 

To align with changes in our executive management responsibilities at Cat Financial, our management reporting structure was updated effective January 1, 2012. Prior year data has been revised to conform to the 2012 presentation.

B.     Measurement and reconciliations

Debt and other expenses are allocated to operating segments based on their respective portfolios. The related Interest expense is calculated based on the amount of allocated debt and the rates associated with that debt. The Provision for credit losses included in each operating segment's profit is based on each operating segment's share of the Company's Allowance for credit losses.

Reconciling items are created based on accounting differences between operating segment reporting and our consolidated external reporting. For the reconciliation of profit before income taxes, we have grouped the reconciling items as follows:

• Unallocated - This item is related to corporate requirements and strategies that are considered to be for the benefit of the entire organization. Also included are the consolidated results of the special purpose corporation (see Note 7 for additional information) and other miscellaneous items.

• Timing - Timing differences in the recognition of costs between operating segment reporting and consolidated external reporting.

• Methodology - Methodology differences between our operating segment reporting and our external reporting are as follows:

◦ Segment assets include other managed assets for which we typically maintain servicing responsibilities.

◦ Interest expense includes realized forward points on foreign currency forward contracts, with the mark-to-market elements of the forward exchange contracts included as a methodology difference.

◦ The profit attributable to noncontrolling interests is considered a component of segment profit.

As noted above, the operating segment information is presented on a management-reporting basis. Unlike financial reporting, there is no authoritative guidance for management reporting equivalent to U.S. GAAP.

Supplemental segment data and reconciliations to consolidated external reporting for the three months ended June 30 was as follows:

(Millions of dollars) 2012	Revenues			Segment Profit			Interest Expense			Depreciation on equipment leased to others		Provision for credit losses			Segment Assets at June 30, 2012			Capital expenditures
North America	$	240		$	65		$	72		$	69	$	5		$	11,570		$	119
Europe and CPF	113			28			32			20		9			7,281			52
Asia/Pacific	95			30			36			5		8			5,254			12
Latin America	94			32			32			15		4			4,292			28
Mining	116			21			23			62		3			3,129			245
Total Segments	658			176			195			171		29			31,526			456
Unallocated	16			(23		)	11			1		—			1,437			—
Timing	(6		)	(11		)	5			—		5			7			1
Methodology	—			2			(13		)	—		—			(24		)	—
Inter-segment Eliminations	—			—			—			—		—			(191		)	—
Total	$	668		$	144		$	198		$	172	$	34		$	32,755		$	457
2011	Revenues			Segment Profit			Interest Expense			Depreciation on equipment leased to others		Provision for credit losses			Segment Assets at December 31, 2011			Capital expenditures
North America	$	248		$	61		$	80		$	71	$	4		$	11,177		$	159
Europe and CPF	127			14			36			23		27			6,601			26
Asia/Pacific	84			32			32			5		5			4,557			20
Latin America	89			32			33			10		2			3,947			34
Mining	115			26			22			66		(4		)	2,645			97
Total Segments	663			165			203			175		34			28,927			336
Unallocated	17			(12		)	3			1		(1		)	1,350			3
Timing	(5		)	(4		)	7			—		(2		)	67			—
Methodology	—			3			(4		)	—		—			15			—
Inter-segment Eliminations	—			—			—			—		—			(247		)	—
Total	$	675		$	152		$	209		$	176	$	31		$	30,112		$	339

Supplemental segment data and reconciliations to consolidated external reporting for the six months ended June 30 was as follows:

(Millions of dollars) 2012	Revenues			Segment Profit			Interest Expense			Depreciation on equipment leased to others		Provision for credit losses			Segment Assets at June 30, 2012			Capital expenditures
North America	$	478		$	139		$	145		$	135	$	1		$	11,570		$	184
Europe and CPF	233			63			66			39		17			7,281			143
Asia/Pacific	187			66			67			10		12			5,254			70
Latin America	189			66			64			29		7			4,292			49
Mining	228			38			46			127		5			3,129			353
Total Segments	1,315			372			388			340		42			31,526			799
Unallocated	32			(44		)	24			1		1			1,437			—
Timing	(11		)	(14		)	2			—		10			7			1
Methodology	—			—			(12		)	—		—			(24		)	—
Inter-segment Eliminations	—			—			—			—		—			(191		)	—
Total	$	1,336		$	314		$	402		$	341	$	53		$	32,755		$	800
2011	Revenues			Segment Profit			Interest Expense			Depreciation on equipment leased to others		Provision for credit losses			Segment Assets at December 31, 2011			Capital expenditures
North America	$	495		$	103		$	163		$	141	$	26		$	11,177		$	213
Europe and CPF	251			44			73			46		39			6,601			49
Asia/Pacific	155			54			60			8		13			4,557			26
Latin America	166			52			61			20		11			3,947			74
Mining	223			40			44			130		(1		)	2,645			154
Total Segments	1,290			293			401			345		88			28,927			516
Unallocated	36			(25		)	12			2		2			1,350			3
Timing	(11		)	(3		)	5			—		(4		)	67			—
Methodology	—			2			(5		)	—		—			15			—
Inter-segment Eliminations	—			—			—			—		—			(247		)	—
Total	$	1,315		$	267		$	413		$	347	$	86		$	30,112		$	519