Segment Information

6 Months Ended

Jun. 30, 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 (loss) 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.

•Divestiture - Loss on divestiture included in Other income (expense). See Note 10 for more information.

Supplemental segment data and reconciliations to consolidated external reporting for the three months ended June 30 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 June 30, 2024		Capital expenditures
North America	$	493	$	148	$	152	$	128	$	15	$	17,309	$	250
EAME	93		22		36		13		(4)		4,755		11
Asia/Pacific	68		25		22		1		(1)		3,385		2
Latin America	84		23		38		4		5		2,437		4
Mining	93		18		25		34		5		2,995		50
Power	15		19		8		—		(14)		700		—
Total Segments	846		255		281		180		6		31,581		317
Unallocated	22		(142)		119		—		—		2,075		3
Timing	(3)		1		—		—		—		20		—
Methodology	—		78		(85)		—		—		105		—
Divestiture	—		(210)		—		—		—		—		—
Inter-segment Eliminations (1)	—		—		—		—		—		(275)		—
Total	$	865	$	(18)	$	315	$	180	$	6	$	33,506	$	320
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	$	436	$	154	$	108	$	127	$	2	$	16,303	$	293
EAME	88		18		25		15		2		5,117		12
Asia/Pacific	73		33		23		1		(3)		3,435		1
Latin America	87		47		44		3		(21)		2,583		7
Mining	79		25		18		30		(6)		3,059		96
Power	14		(1)		6		—		5		662		—
Total Segments	777		276		224		176		(21)		31,159		409
Unallocated	20		(131)		95		—		—		2,054		1
Timing	(4)		—		—		—		—		20		—
Methodology	—		60		(74)		—		—		145		—
Inter-segment Eliminations (1)	—		—		—		—		—		(266)		—
Total	$	793	$	205	$	245	$	176	$	(21)	$	33,112	$	410

 (1) Eliminations are primarily related to intercompany loans.