Segment Information

3 Months Ended

Mar. 31, 2013

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 - Includes our operations in the United States and Canada that serve local dealers and customers.

• Europe and Caterpillar Power Finance - This segment includes our operations 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 our operations in Australia, China, Japan, South Korea and Southeast Asia that serve local dealers and customers.  

• Latin America - Includes our operations 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. 

B.     Measurement and Reconciliations

Cash, 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. Effective January 1, 2013, the performance of each segment is assessed based on a consistent leverage ratio. 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.

To align with changes in executive management responsibilities and measurement of segment performance, our management reporting was updated effective January 1, 2013. Prior year data has been revised to conform to the 2013 presentation.

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 off-balance sheet managed assets for which we typically maintain servicing responsibilities.

◦ The impact of the difference between the actual leverage and the segment leverage ratios is included as a methodology difference.

◦ 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 March 31 was as follows:

(Millions of dollars) 2013	Revenues			Segment Profit			Interest Expense			Depreciation on equipment leased to others		Provision for credit losses			Segment Assets at March 31, 2013			Capital expenditures
North America	$	225		$	64		$	65		$	70	$	(1	)	$	11,467		$	108
Europe and CPF	122			37			28			19		9			7,901			31
Asia/Pacific	106			46			35			7		2			6,083			11
Latin America	106			28			36			20		8			5,084			64
Mining	110			14			20			58		11			3,377			105
Total Segments	669			189			184			174		29			33,912			319
Unallocated	17			(16		)	15			1		(1		)	1,371			1
Timing	(6		)	9			—			—		(12		)	28			—
Methodology	—			5			(8		)	—		—			(78		)	—
Inter-segment Eliminations	—			—			—			—		—			(146		)	—
Total	$	680		$	187		$	191		$	175	$	16		$	35,087		$	320
2012	Revenues			Segment Profit			Interest Expense			Depreciation on equipment leased to others		Provision for credit losses			Segment Assets at December 31, 2012			Capital expenditures
North America	$	236		$	72		$	71		$	66	$	(4	)	$	11,305		$	65
Europe and CPF	120			31			38			19		8			7,785			91
Asia/Pacific	92			32			35			5		4			6,151			58
Latin America	95			30			36			14		3			4,973			21
Mining	112			17			24			65		2			3,212			108
Total Segments	655			182			204			169		13			33,426			343
Unallocated	18			(19		)	16			—		1			1,529			—
Timing	(5		)	(7		)	—			—		5			17			—
Methodology	—			14			(16		)	—		—			(61		)	—
Inter-segment Eliminations	—			—			—			—		—			(169		)	—
Total	$	668		$	170		$	204		$	169	$	19		$	34,742		$	343