Segment Information

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Segment Information

Segment Information

A.     Basis for Segment Information

The Chief Operating Decision Maker (the CEO) allocates resources and manages performance for our six operating segments described below. Our operating segments provide financing alternatives to customers and dealers around the world for Caterpillar products and services and power generation facilities that, in most cases, incorporate Caterpillar products. Financing plans include operating and finance leases, revolving charge accounts, 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 Eurasia.

•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.

•Mining - Provides financing for large mining customers worldwide.

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

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 - 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 (SPC) (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 March 31 were as follows:

(Millions of dollars) 2024	External revenues		Profit before income taxes		Interest expense		Depreciation on equipment leased to others		Provision for credit losses		Assets at March 31, 2024		Capital expenditures
North America	$	485	$	144	$	143	$	129	$	19	$	16,673	$	161
EAME	92		30		33		14		(8)		4,969		8
Asia/Pacific	66		21		26		1		(1)		3,305		2
Latin America	85		29		40		3		(2)		2,539		8
Mining	92		26		24		33		—		3,012		49
Power	15		5		7		1		(1)		632		—
Total Segments	835		255		273		181		7		31,130		228
Unallocated	22		(104)		113		—		—		1,999		5
Timing	(4)		—		—		—		—		20		—
Methodology	—		78		(88)		—		—		166		—
Inter-segment Eliminations (1)	—		—		—		—		—		(228)		—
Total	$	853	$	229	$	298	$	181	$	7	$	33,087	$	233
2023	External revenues		Profit before income taxes		Interest expense		Depreciation on equipment leased to others		Provision for credit losses		Assets at December 31, 2023		Capital expenditures
North America	$	418	$	149	$	95	$	123	$	5	$	16,303	$	222
EAME	84		26		21		14		—		5,117		24
Asia/Pacific	70		34		23		1		(1)		3,435		1
Latin America	82		19		40		3		6		2,583		3
Mining	88		34		15		32		(1)		3,059		23
Power	14		5		6		1		—		662		—
Total Segments	756		267		200		174		9		31,159		273
Unallocated	15		(110)		76		—		—		2,054		5
Timing	(3)		—		—		—		—		20		—
Methodology	—		47		(59)		—		—		145		—
Inter-segment Eliminations (1)	—		—		—		—		—		(266)		—
Total	$	768	$	204	$	217	$	174	$	9	$	33,112	$	278

 (1) Eliminations are primarily related to intercompany loans.