SEGMENT AND GEOGRAPHIC INFORMATION

A. Basis for Segment Information

We report information internally for operating segments based on management responsibility. Our operating segments offer financing to customers and dealers for the purchase and lease of Caterpillar and other equipment, as well as financing for Caterpillar sales to dealers. Financing plans include operating and finance leases, installment sale contracts, working capital loans and wholesale financing plans within each of the respective segments.

B. Description of Segments

We have six operating segments that offer financing services. Following is a brief description of our segments:


•	North America - Includes our operations in the United States and Canada.


•	Europe - Includes our operations in Europe, Africa, the Middle East and the Commonwealth of Independent States.


•	Asia/Pacific - Includes our operations in Australia, New Zealand, China, Japan, Southeast Asia and India.


•	Latin America - Includes our operations in Mexico and Central and South American countries.


•	Caterpillar Power Finance - Provides financing worldwide for marine vessels with Caterpillar engines and for Caterpillar electrical power generation, gas compression and co-generation systems and non-Caterpillar equipment that is powered by these systems.


•	Mining - Serves large mining customers worldwide and provides project financing in various countries.

To align with the review of operating results by the Chief Executive Officer, our segment reporting was updated effective February 1, 2018. Prior year data has been revised to conform to the current period segment presentation.

C. Segment Measurement and Reconciliations

Cash, debt and other expenses are allocated to our 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 performance of each segment is assessed based on a consistent leverage ratio. The Provision for credit losses is based on each segment's respective finance receivable portfolio. Capital expenditures include expenditures for equipment on operating leases and other miscellaneous capital expenditures.

Reconciling items are created based on accounting differences between segment reporting and 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 11 for additional information) and other miscellaneous items.


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


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


◦	Segment assets include off-balance sheet managed assets for which we maintain servicing responsibilities.


◦	The impact of differences between the actual leverage and the segment leverage ratios.


◦	Interest expense includes realized forward points on foreign currency forward contracts.


◦	The net gain or loss from interest rate derivatives.

Supplemental segment data and reconciliations to consolidated external reporting for the years ended December 31:



(Millions of dollars) 2018	External Revenues			Profit before income taxes			Interest Expense			Depreciation on equipment leased to others		Provision for credit losses			Assets at December 31, 2018			Capital expenditures
North America	$	1,533		$	434		$	363		$	572	$	42		$	15,632		$	1,108
Europe	279			14			50			71		58			4,862			108
Asia/Pacific	357			168			111			18		(5		)	4,639			14
Latin America	254			(3		)	101			27		73			2,972			32
Caterpillar Power Finance	110			(143		)	55			2		171			2,259			—
Mining	256			34			60			128		8			2,234			192
Total Segments	2,789			504			740			818		347			32,598			1,454
Unallocated	92			(267		)	248			1		—			1,957			104
Timing	(34		)	(1		)	—			—		7			55			1
Methodology	—			197			(231		)	—		—			(159		)	—
Inter-segment Eliminations ⁽¹⁾	—			—			—			—		—			(270		)	—
Total	$	2,847		$	433		$	757		$	819	$	354		$	34,181		$	1,559

2017	External Revenues			Profit before income taxes			Interest Expense			Depreciation on equipment leased to others		Provision for credit losses			Assets at December 31, 2017			Capital expenditures
North America	$	1,337		$	353		$	306		$	520	$	36		$	14,790		$	992
Europe	307			116			37			80		4			4,332			103
Asia/Pacific	267			99			87			25		(5		)	4,214			6
Latin America	292			5			121			38		55			3,407			54
Caterpillar Power Finance	155			42			44			3		39			2,746			—
Mining	272			49			50			142		8			2,399			210
Total Segments	2,630			664			645			808		137			31,888			1,365
Unallocated	90			(220		)	193			—		—			1,719			8
Timing	(31		)	(6		)	—			2		(5		)	53			—
Methodology	—			152			(171		)	—		—			(256		)	—
Inter-segment Eliminations ⁽¹⁾	—			—			—			—		—			(244		)	—
Total	$	2,689		$	590		$	667		$	810	$	132		$	33,160		$	1,373

2016	External Revenues			Profit before income taxes			Interest Expense			Depreciation on equipment leased to others		Provision for credit losses			Assets at December 31, 2016			Capital expenditures
North America	$	1,230		$	326		$	287		$	477	$	28		$	14,925		$	1,174
Europe	268			86			33			83		—			3,834			147
Asia/Pacific	254			82			81			29		3			3,620			74
Latin America	320			11			118			57		69			3,861			26
Caterpillar Power Finance	167			66			38			4		31			3,409			—
Mining	308			49			47			188		7			2,734			206
Total Segments	2,547			620			604			838		138			32,383			1,627
Unallocated	80			(138		)	116			—		—			1,688			6
Timing	(32		)	(12		)	—			3		(3		)	27			3
Methodology	—			91			(109		)	—		—			(220		)	—
Inter-segment Eliminations ⁽¹⁾	—			—			—			—		—			(263		)	—
Total	$	2,595		$	561		$	611		$	841	$	135		$	33,615		$	1,636

⁽¹⁾ Elimination is primarily related to intercompany loans.

Geographic information:



(Millions of dollars)
	2018		2017		2016
Revenues
Inside U.S.	$	1,684	$	1,551	$	1,397
Inside Canada	163		157		171
Inside Australia	134		139		176
All other	866		842		851
Total	$	2,847	$	2,689	$	2,595

Equipment on Operating Leases and Non-Leased Equipment (included in Other Assets), Net	2018		2017
Inside U.S.	$	2,775	$	2,554
Inside Canada	402		413
All other	513		663
Total	$	3,690	$	3,630