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Segment Information
 9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Segment Information Segment Information
A.     Basis for Segment Information

We report information internally for operating segments based on management responsibility. Our operating segments provide financing alternatives to customers and dealers around the world for Caterpillar products and provide financing for vehicles, power generation facilities and marine vessels that, in most cases, incorporate Caterpillar products. Financing plans include operating and finance leases, retail loans, working capital loans to Caterpillar dealers and wholesale financing plans within each of the operating segments. Certain operating segments also purchase short-term trade receivables from Caterpillar.

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.
•EAME - 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 - Provides financing for large mining customers worldwide.

To align with changes in executive management responsibilities and measurement of segment performance, our management reporting was updated effective January 1, 2020. Prior year data has been revised to conform to the 2020 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 7 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 is excluded from segment reporting.

Supplemental segment data and reconciliations to consolidated external reporting for the three months ended September 30 was as follows:
(Millions of dollars)


 
2020
External
Revenues		Profit
before
income
taxes		Interest
Expense		Depreciation
on equipment
leased to
others		Provision
for
credit
losses		Assets at
September 30,
2020		Capital
expenditures
North America$314 $81 $72 $116 $7 $14,686 $206 
EAME70 (3)7 16 31 4,968 10 
Asia/Pacific83 38 20 1 9 4,444 1 
Latin America50 19 12 3 4 2,630 3 
Caterpillar Power Finance12 (25)7 — 25 1,394 16 
Mining68 20 14 33 (5)2,572 41 
Total Segments597 130 132 169 71 30,694 277 
Unallocated5 (76)59 — (1)1,613 3 
Timing(4)(1)— — — 11 — 
Methodology— 43 (54)— — (161)— 
Inter-segment Eliminations (1)
— — — — — (392)— 
Total$598 $96 $137 $169 $70 $31,765 $280 
2019External
Revenues		Profit
before
income
taxes		Interest
Expense		Depreciation
on equipment
leased to
others		Provision
for
credit
losses		Assets at
December 31,
2019		Capital
expenditures
North America$412 $126 $99 $146 $3 $15,496 $265 
EAME70 13 12 16 5 4,918 21 
Asia/Pacific90 42 25 3 6 4,540 (1)
Latin America64 19 24 4 3 2,809 2 
Caterpillar Power Finance23 9 10 1 (3)1,673 — 
Mining82 14 18 35 6 2,966 99 
Total Segments741 223 188 205 20 32,402 386 
Unallocated14 (87)66 — — 1,896 2 
Timing(7)(4)— — — 16 — 
Methodology— 52 (56)— — (216)— 
Inter-segment Eliminations (1)
— — — — — (405)— 
Total$748 $184 $198 $205 $20 $33,693 $388 
 (1) Elimination is primarily related to intercompany loans.
Supplemental segment data and reconciliations to consolidated external reporting for the nine months ended September 30 was as follows:
(Millions of dollars)


 
2020
External
Revenues		Profit
before
income
taxes		Interest
Expense		Depreciation
on equipment
leased to
others		Provision
for
credit
losses		Assets at
September 30,
2020		Capital
expenditures
North America$1,052 $218 $253 $399 $54 $14,686 $647 
EAME203 27 30 47 44 4,968 23 
Asia/Pacific251 113 70 6 23 4,444 6 
Latin America151 27 56 9 23 2,630 7 
Caterpillar Power Finance49 (34)21 — 48 1,394 16 
Mining224 27 45 103 26 2,572 75 
Total Segments1,930 378 475 564 218 30,694 774 
Unallocated20 (210)161 — (1)1,613 9 
Timing(16)(3)— — — 11 — 
Methodology— 147 (174)— — (161)— 
Inter-segment Eliminations (1)
— — — — — (392)— 
Total$1,934 $312 $462 $564 $217 $31,765 $783 
2019External
Revenues		Profit
before
income
taxes		Interest
Expense		Depreciation
on equipment
leased to
others		Provision
for
credit
losses		Assets at
December 31,
2019		Capital
expenditures
North America$1,224 $373 $294 $434 $12 $15,496 $831 
EAME211 58 38 50 2 4,918 62 
Asia/Pacific277 128 81 9 14 4,540 9 
Latin America181 25 70 13 31 2,809 9 
Caterpillar Power Finance78 (40)34 2 65 1,673 — 
Mining245 41 54 103 20 2,966 171 
Total Segments2,216 585 571 611 144 32,402 1,082 
Unallocated48 (253)195 — — 1,896 11 
Timing(23)(13)— — — 16 — 
Methodology— 148 (167)— — (216)— 
Inter-segment Eliminations (1)
— — — — — (405)— 
Total$2,241 $467 $599 $611 $144 $33,693 $1,093 
(1) Elimination is primarily related to intercompany loans.