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Cummins Reports Third Quarter 2017 Results
  • Third quarter revenues of $5.3 billion, GAAP1 Net Income of $453 million
  • EBIT of 12.1% of sales, Diluted EPS of $2.71
  • Cummins expects full-year 2017 revenues to be up 14% to 15%
  • EBIT is expected to be in the range of 11.8% to 12.2%

COLUMBUS, Ind.--(BUSINESS WIRE)--Oct. 31, 2017-- Cummins Inc. (NYSE:CMI) today reported results for the third quarter of 2017.

Third quarter revenues of $5.3 billion increased 26% from the same quarter in 2016. Revenues in North America increased 25% due to higher demand in truck, oil and gas and construction markets. International sales grew 28% primarily due to strong truck and construction demand in China, sales of new products in India, and increased demand from global mining customers.

Net income attributable to Cummins in the third quarter was $453 million, or $2.71 per diluted share, compared to $289 million, or $1.72 per diluted share. The tax rate in the third quarter of 2017 was 26.5%.

Earnings before interest and taxes (EBIT) was $640 million, or 12.1% of sales, an increase from $398 million, or 9.5% of sales, a year ago.

“Cummins experienced positive momentum in demand in a number of important markets, resulting in strong sales growth in the third quarter,” said Chairman and CEO Tom Linebarger. “Earnings improved over the year-ago period due to stronger volumes and operational improvements that more than offset increased quality costs. Year to date, we have returned $913 million to shareholders in the form of dividends and share repurchases consistent with our plan to return 50% of Operating Cash Flow in 2017.”

Outlook

Based on its current forecast, Cummins expects full-year 2017 revenues to grow 14% to 15%, an increase from the company’s previous projection of 9% to 11% growth. EBIT is expected to be in the range of 11.8% to 12.2% of sales, which is unchanged from the prior guidance except for the inclusion of the impact of the new Eaton Cummins Automated Transmission Technologies joint venture. The joint venture, which is consolidated within the Components segment, is expected to report 2017 sales of approximately $150 million and negative EBIT of $25 million due in part to the amortization of intangible assets.

Third quarter 2017 highlights:

  • The Company entered into an asset purchase agreement with Brammo, Inc., which designs and develops battery packs for mobile and stationary applications. When complete, this will be an important milestone in Cummins’ efforts to become a global electrified power leader.
  • The Eaton Cummins Automated Transmission Technologies joint venture became fully operational on schedule on August 1. The joint venture will capitalize on the secular shift to more automated transmissions in commercial vehicle markets.

1 Generally Accepted Accounting Principles

Third quarter 2017 detail (all comparisons to same period in 2016)

Engine Segment

  • Sales - $2.3 billion, up 26%
  • Segment EBIT - $229 million, or 9.8% of sales, compared to $89 million or 4.8% of sales
  • EBIT includes a $63 million warranty charge related to a quality campaign
  • On-highway revenues increased by 25%, and off-highway revenues increased 30% primarily due to increased demand globally in truck and construction markets

Distribution Segment

  • Sales - $1.8 billion, up 17%
  • Segment EBIT - $91 million, or 5.2% of sales, compared to $96 million or 6.4% of sales
  • Organic sales increased 12% due to improved sales to off-highway markets
  • The impact of acquisitions and the disposal of power generation rental assets in North America resulted in a net percent increase in revenues

Components Segment

  • Sales - $1.5 billion, up 34%.
  • Segment EBIT - $217 million , or 14.2% of sales, compared to $148 million or 12.9% of sales
  • International revenue increased 45%, primarily due to higher truck demand in China and the sale of new products in India
  • Sales in North America increased 26% due to stronger orders from on-highway customers

Power Systems Segment

  • Sales - $1.1 billion, up 23%
  • Segment EBIT - $81 million, or 7.7% of sales, compared to $59 million, or 6.9% of sales
  • Increased demand for industrial engines from mining and oil & gas customers was the main contributor to the revenue growth

About Cummins

Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service diesel and natural gas engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Headquartered in Columbus, Indiana, (USA) Cummins currently employs approximately 55,400 people worldwide and serves customers in approximately 190 countries and territories through a network of approximately 600 company-owned and independent distributor locations and approximately 7,400 dealer locations. Cummins earned $1.39 billion on sales of $17.5 billion in 2016. Press releases can be found on the Web at www.cummins.com. Follow Cummins on Twitter at www.twitter.com/cummins and on YouTube at www.youtube.com/cumminsinc.

Forward-looking disclosure statement

Information provided in this release that is not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our forecasts, guidance, preliminary results, expectations, hopes, beliefs and intentions on strategies regarding the future. These forward looking statements include, without limitation, statements relating to our plans and expectations for our revenues for the full year of 2017. Our actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including, but not limited to: the adoption and implementation of global emission standards; the price and availability of energy; the pace of infrastructure development; increasing global competition among our customers; general economic, business and financing conditions; governmental action; changes in our customers’ business strategies; competitor pricing activity; expense volatility; labor relations; and other risks detailed from time to time in our Securities and Exchange Commission filings, including particularly in the Risk Factors section of our 2016 Annual Report on Form 10-K. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this press release and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, which are available at http://www.sec.gov or at http://www.cummins.com in the Investor Relations section of our website.

Presentation of Non-GAAP Financial Information

EBIT is a non-GAAP measure used in this release, and is defined and reconciled to what management believes to be the most comparable GAAP measure in a schedule attached to this release. Cummins presents this information as it believes it is useful to understanding the Company's operating performance, and because EBIT is a measure used internally to assess the performance of the operating units.

Webcast information

Cummins management will host a teleconference to discuss these results today at 10 a.m. EST. This teleconference will be webcast and available on the Investor Relations section of the Cummins website at www.cummins.com. Participants wishing to view the visuals available with the audio are encouraged to sign-in a few minutes prior to the start of the teleconference.

CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited) (a)

 
  Three months ended

October 1,

 

October 2,

In millions, except per share amounts

2017

2016

NET SALES $ 5,285 $

4,187

 

Cost of sales 3,946   3,108  
GROSS MARGIN 1,339 1,079
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses 624 513
Research, development and engineering expenses 213 157
Equity, royalty and interest income from investees 95 74
Loss contingency 99
Other operating income (expense), net 32    
OPERATING INCOME 629 384
Interest income 4 6
Interest expense 18 16
Other income (expense), net 7   8  
INCOME BEFORE INCOME TAXES 622 382
Income tax expense 165   82  
CONSOLIDATED NET INCOME 457 300
Less: Net income attributable to noncontrolling interests 4   11  
NET INCOME ATTRIBUTABLE TO CUMMINS INC. $ 453   $ 289  
 
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
Basic $ 2.72 $ 1.72
Diluted $ 2.71 $ 1.72
 
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 166.3 167.8
Diluted 167.0 168.2
 
CASH DIVIDENDS DECLARED PER COMMON SHARE $ 1.08 $ 1.025
 
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.
 

CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited) (a)

 
  Nine months ended

October 1,

 

October 2,

In millions, except per share amounts

2017

2016

NET SALES $ 14,952 $ 13,006
Cost of sales 11,236   9,674  
GROSS MARGIN 3,716 3,332
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses 1,757 1,527
Research, development and engineering expenses 545 478
Equity, royalty and interest income from investees 301 234
Loss contingency 138
Other operating income (expense), net 55   (2 )
OPERATING INCOME 1,770 1,421
Interest income 11 18
Interest expense 57 51
Other income (expense), net 45   34  
INCOME BEFORE INCOME TAXES 1,769 1,422
Income tax expense 466   362  
CONSOLIDATED NET INCOME 1,303 1,060
Less: Net income attributable to noncontrolling interests 30   44  
NET INCOME ATTRIBUTABLE TO CUMMINS INC. $ 1,273   $ 1,016  
 
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
Basic $ 7.62 $ 5.99
Diluted $ 7.60 $ 5.99
 
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 167.0 169.5
Diluted 167.6 169.7
 
CASH DIVIDENDS DECLARED PER COMMON SHARE $ 3.13 $ 2.975
 
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.
 

CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited) (a)

       

October 1,

December 31,

In millions, except par value

2017

2016

ASSETS
Current assets
Cash and cash equivalents $ 1,290 $ 1,120
Marketable securities 154   260  
Total cash, cash equivalents and marketable securities 1,444 1,380
Accounts and notes receivable, net 3,810 3,025
Inventories 3,146 2,675
Prepaid expenses and other current assets 656   627  
Total current assets 9,056   7,707  
Long-term assets
Property, plant and equipment 7,901 7,635
Accumulated depreciation (4,085 ) (3,835 )
Property, plant and equipment, net 3,816 3,800
Investments and advances related to equity method investees 1,213 946
Goodwill 1,036 480
Other intangible assets, net 964 332
Pension assets 912 731
Other assets 995   1,015  
Total assets $ 17,992   $ 15,011  
 
LIABILITIES
Current liabilities
Accounts payable (principally trade) $ 2,486 $ 1,854
Loans payable 64 41
Commercial paper 514 212
Accrued compensation, benefits and retirement costs 674 412
Current portion of accrued product warranty 462 333
Current portion of deferred revenue 528 468
Other accrued expenses 968 970
Current maturities of long-term debt 62   35  
Total current liabilities 5,758   4,325  
Long-term liabilities
Long-term debt 1,615 1,568
Postretirement benefits other than pensions 319 329
Pensions 328 326
Other liabilities and deferred revenue 1,411   1,289  
Total liabilities $ 9,431   $ 7,837  
 
EQUITY
Cummins Inc. shareholders’ equity
Common stock, $2.50 par value, 500 shares authorized, 222.4 and 222.4 shares issued $ 2,198 $ 2,153
Retained earnings 11,791 11,040
Treasury stock, at cost, 56.4 and 54.2 shares (4,849 ) (4,489 )
Common stock held by employee benefits trust, at cost, 0.6 and 0.7 shares (7 ) (8 )
Accumulated other comprehensive loss (1,504 ) (1,821 )
Total Cummins Inc. shareholders’ equity 7,629 6,875
Noncontrolling interests 932   299  
Total equity $ 8,561   $ 7,174  
Total liabilities and equity $ 17,992   $ 15,011  
 
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.
 

CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (a)

 
  Nine months ended

October 1,

 

October 2,

In millions

2017

2016

CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated net income $ 1,303 $ 1,060
Adjustments to reconcile consolidated net income to net cash provided by operating activities
Depreciation and amortization 433 391
Deferred income taxes 26 60
Equity in income of investees, net of dividends (166 ) (94 )
Pension contributions in excess of expense (63 ) (92 )
Other post retirement benefits payments in excess of expense (4 ) (16 )
Stock-based compensation expense 34 28
Restructuring payments (53 )
Loss contingency 138
Translation and hedging activities 61 (39 )
Changes in current assets and liabilities, net of acquisitions
Accounts and notes receivable (722 ) (112 )
Inventories (401 ) (150 )
Other current assets (28 ) 138
Accounts payable 567 101
Accrued expenses 369 (279 )
Changes in other liabilities and deferred revenue 177 188
Other, net (115 ) 45  
Net cash provided by operating activities 1,471   1,314  
 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (282 ) (312 )
Investments in internal use software (59 ) (42 )
Proceeds from disposals of property, plant and equipment 104 11
Investments in and advances to equity investees (71 ) (29 )
Acquisitions of businesses, net of cash acquired (600 ) (1 )
Investments in marketable securities—acquisitions (106 ) (447 )
Investments in marketable securities—liquidations 218 291
Cash flows from derivatives not designated as hedges 9 (64 )
Other, net 1   3  
Net cash used in investing activities (786 ) (590 )
 
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 4 111
Net borrowings of commercial paper 302 273
Payments on borrowings and capital lease obligations (38 ) (156 )
Net borrowings under short-term credit agreements 19 25
Distributions to noncontrolling interests (29 ) (42 )
Dividend payments on common stock (522 ) (505 )
Repurchases of common stock (391 ) (745 )
Other, net 55   (6 )
Net cash used in financing activities (600 ) (1,045 )
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 85   (139 )
Net increase (decrease) in cash and cash equivalents 170 (460 )
Cash and cash equivalents at beginning of year 1,120   1,711  
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,290   $ 1,251  
 
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.
 

CUMMINS INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Unaudited)

 
       

Power

 

Total

 

Intersegment

 
In millions Engine Distribution Components(1)

Systems

Segment

Eliminations (2)

Total
Three months ended October 1, 2017
External sales $ 1,783 $ 1,748 $ 1,139 $ 615 $ 5,285 $ $ 5,285
Intersegment sales 553   5   394   441   1,393   (1,393 )  
Total sales 2,336 1,753 1,533 1,056 6,678 (1,393 ) 5,285
Depreciation and amortization (3) 47 29 42 30 148 148
Research, development and engineering expenses 83 6 63 61 213 213
Equity, royalty and interest income from investees 58 11 12 14 95 95
Interest income 1 2 1 4 4
EBIT 229 91 217 81 618 22 640
 
EBIT as a percentage of total sales 9.8 % 5.2 % 14.2 % 7.7 % 9.3 % 12.1 %
 
Three months ended October 2, 2016
External sales $ 1,357 $ 1,497 $ 824 $ 509 $ 4,187 $ $ 4,187
Intersegment sales 502   7   319   347   1,175   (1,175 )  
Total sales 1,859 1,504 1,143 856 5,362 (1,175 ) 4,187
Depreciation and amortization (3) 42 28 32 29 131 131
Research, development and engineering expenses 56 3 54 44 157 157
Equity, royalty and interest income from investees 38 19 9 8 74 74
Loss contingency 99 99 99
Interest income 3 1 1 1 6 6
EBIT 89 96 148 59 392 6 398
 
EBIT as a percentage of total sales 4.8 % 6.4 % 12.9 % 6.9 % 7.3 % 9.5 %
 

(1)

 

The 2017 disclosures include Eaton Cummins Automated Transmission Technologies joint venture results consolidated during the third quarter of 2017. See "ACQUISITION," footnote for additional information.

(2)

Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended October 1, 2017 and October 2, 2016.

(3)

Depreciation and amortization as shown on a segment basis excludes the amortization of debt discount and deferred costs included in the Condensed Consolidated Statements of Income as "Interest expense."

 

CUMMINS INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Unaudited)

 
       

Power

 

Total

 

Intersegment

 
In millions Engine Distribution Components(1)

Systems

Segment

 

Eliminations (2)

Total
Nine months ended October 1, 2017
External sales $ 4,951 $ 5,101 $ 3,183 $ 1,717 $ 14,952 $ $ 14,952
Intersegment sales 1,715   19   1,148   1,238   4,120   (4,120 )  
Total sales 6,666 5,120 4,331 2,955 19,072 (4,120 ) 14,952
Depreciation and amortization (3) 137 90 117 87 431 431
Research, development and engineering expenses 200 14 170 161 545 545
Equity, royalty and interest income from investees 186 35 40 40 301 301
Interest income 4 4 1 2 11 11
EBIT 735 287 586 199 1,807 19 1,826
 
EBIT as a percentage of total sales 11.0 % 5.6 % 13.5 % 6.7 % 9.5 % 12.2 %
 
Nine months ended October 2, 2016
External sales $ 4,350 $ 4,493 $ 2,654 $ 1,509 $ 13,006 $ $ 13,006
Intersegment sales 1,487   18   1,005   1,076   3,586     (3,586 )  
Total sales 5,837 4,511 3,659 2,585 16,592 (3,586 ) 13,006
Depreciation and amortization (3) 122 85 95 87 389 389
Research, development and engineering expenses 166 10 161 141 478 478
Equity, royalty and interest income from investees 120 56 29 29 234 234
Loss contingency 138 138 138
Interest income 8 3 3 4 18 18
EBIT 492 270 501 195 1,458 15 1,473
 
EBIT as a percentage of total sales 8.4 % 6.0 % 13.7 % 7.5 % 8.8 % 11.3 %
 
(1)   The 2017 disclosures include Eaton Cummins Automated Transmission Technologies joint venture results consolidated during the third quarter of 2017. See "ACQUISITION," footnote for additional information.
(2) Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the nine months ended October 1, 2017 and October 2, 2016.
(3) Depreciation and amortization as shown on a segment basis excludes the amortization of debt discount and deferred costs included in the Condensed Consolidated Statements of Income as "Interest expense." The amortization of debt discount and deferred costs was $2 million for both of the nine months ended October 1, 2017 and October 2, 2016.
 

A reconciliation of our segment information to the corresponding amounts in the Condensed Consolidated Statements of Income is shown in the table below:

  Three months ended   Nine months ended

October 1,

 

October 2,

October 1,

 

October 2,

In millions

2017

2016

2017

2016

Total EBIT $ 640 $ 398 $ 1,826 $

1,473

 

Less: Interest expense 18   16   57   51  
Income before income taxes $ 622   $ 382   $ 1,769   $ 1,422  
 

CUMMINS INC. AND SUBSIDIARIES
SELECT FOOTNOTE DATA
(Unaudited)

EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES

Equity, royalty and interest income from investees included in our Condensed Consolidated Statements of Income for the reporting periods was as follows:

  Three months ended   Nine months ended

October 1,

 

October 2,

October 1,

 

October 2,

In millions

2017

2016

2017

2016

Distribution entities
Komatsu Cummins Chile, Ltda. $ 8 $ 8 $ 23 $

26

 

North American distributors 7 18
All other distributors (1 ) 1 (1 ) 2
Manufacturing entities
Beijing Foton Cummins Engine Co., Ltd. 24 19 79 59
Dongfeng Cummins Engine Company, Ltd. 15 10 56 32
Chongqing Cummins Engine Company, Ltd. 11 11 30 28
All other manufacturers 27   8   78   40  
Cummins share of net income 84 64 265 205
Royalty and interest income 11   10   36   29  
Equity, royalty and interest income from investees $ 95   $ 74   $ 301   $ 234  
 

ACQUISITION

In April 2017, we entered into an agreement to form a joint venture with Eaton Corporation PLC (Eaton), which closed on July 31, 2017 (the acquisition date). We purchased a 50 percent interest in the new venture named Eaton Cummins Automated Transmission Technologies for $600 million in cash. In addition, each partner contributed $20 million for working capital. The joint venture will design, assemble, sell and support medium-duty and heavy-duty automated transmissions for the commercial vehicle market, including new product launches. We consolidated the results of the joint venture in our Components segment as we have a majority voting interest in the venture by virtue of a tie-breaking vote on the joint venture's board of directors. We do not expect this new venture to have a significant impact on our consolidated results in 2017.

ENGINE SYSTEM LOSS CONTINGENCY

During 2017, the CARB and U.S. EPA began selecting certain of our pre-2013 model year engine systems for additional emissions testing. We have been notified that a portion of the CARB and EPA selected engine systems have failed emissions testing due to the unexpected degradation of an aftertreatment component. Although we have no official notice from the CARB or EPA on these engine systems to date, we are working with the agencies on a resolution of these matters. We are developing and testing solutions to address the technical issues, which could include a combination of calibration changes, service practices and hardware changes. We recorded a charge of $29 million to "cost of sales" in our Condensed Consolidated Statements of Income in the third quarter of 2017 for the expected cost of field campaigns to repair some of these engine systems.

In addition, we are currently evaluating other engine systems for model years 2010 through 2015 that could potentially be subject to similar degradation issues. At this point in time, we have not yet determined the impact to other model years and engine systems or the percentage of the engine system populations affected.

Because this remains under review with a number of yet unresolved variables, we are not yet able to estimate the outcome for these matters. It is possible, however, that they could have a material effect on our results of operations in the periods in which the uncertainties are resolved.

We do not currently expect any fines or penalties from the EPA or CARB related to this matter.

SUBSEQUENT EVENT

On October 12, 2017, we entered into an asset purchase agreement with Brammo Inc., an engineer and manufacturer of lithium ion batteries primarily related to the utility vehicle markets, for approximately $70 million to be paid in cash at closing. In addition to the closing consideration, the agreement contains an earnout based on future results of the acquired business, which could result in a maximum additional $100 million payment to the former owners. The majority of the purchase price will likely be assigned to intangible assets and goodwill. We expect the transaction to close in the fourth quarter of 2017.

CUMMINS INC. AND SUBSIDIARIES
FINANCIAL MEASURES THAT SUPPLEMENT GAAP
(Unaudited)

Earnings before interest, income taxes and noncontrolling interests

We define EBIT as earnings before interest expense, income tax expense and noncontrolling interests in income of consolidated subsidiaries. We use EBIT to assess and measure the performance of our operating segments and also as a component in measuring our variable compensation programs. This measure is not in accordance with, or an alternative for, accounting principles generally accepted in the United States and may not be consistent with measures used by other companies. It should be considered supplemental data. Below is a reconciliation of “Net income attributable to Cummins Inc.” to EBIT for each of the applicable periods:

  Three months ended   Nine months ended

October 1,

 

October 2,

October 1,

 

October 2,

In millions

2017

2016

2017

2016

Net income attributable to Cummins Inc. $ 453 $ 289 $ 1,273 $ 1,016
 
Net income attributable to Cummins Inc. as a percentage of net sales 8.6 % 6.9 % 8.5 % 7.8 %
 
Add
Net income attributable to noncontrolling interests 4   11   30   44  
Consolidated net income 457   300   1,303   1,060  
 
Add
Interest expense 18 16 57 51
Income tax expense 165   82   466   362  
Earnings before interest expense and income taxes $ 640   $ 398   $ 1,826   $ 1,473  
 
EBIT as a percentage of net sales 12.1 % 9.5 % 12.2 % 11.3 %
 

CUMMINS INC. AND SUBSIDIARIES
BUSINESS UNIT SALES DATA
(Unaudited)

Engine Segment Sales by Market and Unit Shipments by Engine Classification

Sales for our Engine segment by market were as follows:

2017              
In millions Q1 Q2 Q3 Q4 YTD
Heavy-duty truck $ 620 $ 714 $ 776 $ $

2,110

 

Medium-duty truck and bus 544 701 625 1,870
Light-duty automotive 423 429 452 1,304
Off-highway 436   463   483     1,382  
Total sales $ 2,023   $ 2,307   $ 2,336   $   $ 6,666  
 
2016
In millions Q1 Q2 Q3 Q4 YTD
Heavy-duty truck $ 631 $ 622 $ 625 $ 565 $ 2,443
Medium-duty truck and bus 549 600 517 606 2,272
Light-duty automotive 433 394 345 409 1,581
Off-highway 363   386   372   387   1,508  
Total sales $ 1,976   $ 2,002   $ 1,859   $ 1,967   $ 7,804  
 

Unit shipments by engine classification (including unit shipments to Power Systems and off-highway engine units included in their respective classification) were as follows:

2017              
Units Q1 Q2 Q3 Q4 YTD
Heavy-duty 19,200 24,100 28,100

71,400

 

Medium-duty 60,300 71,600 68,500 200,400
Light-duty 63,100   65,600   66,300     195,000  
Total units 142,600   161,300   162,900     466,800  
 
2016
Units Q1 Q2 Q3 Q4 YTD
Heavy-duty 19,700 20,700 20,100 18,500 79,000
Medium-duty 55,400 62,300 53,400 58,000 229,100
Light-duty 61,700   57,100   49,800   60,000   228,600  
Total units 136,800   140,100   123,300   136,500   536,700  
 

Distribution Segment Sales by Product Line

Sales for our Distribution segment by product line were as follows:

2017              
In millions Q1 Q2 Q3 Q4 YTD
Parts $ 745 $ 759 $ 768 $ $

2,272

 

Service 319 320 326 965
Power generation 306 329 317 952
Engines 275   314   342     931  
Total sales $ 1,645   $ 1,722   $ 1,753   $   $ 5,120  
 
2016
In millions Q1 Q2 Q3 Q4 YTD
Parts $ 648 $ 642 $ 643 $ 694 $ 2,627
Service 299 297 299 320 1,215
Power generation 275 326 291 347 1,239
Engines 241   279   271   309   1,100  
Total sales $ 1,463   $ 1,544   $ 1,504   $ 1,670   $ 6,181  
 

Component Segment Sales by Business

In the first quarter of 2017, our Components segment reorganized its reporting structure to move an element of the emission solutions business to the fuel systems business to enhance operational, administrative and product development efficiencies. Prior year sales were reclassified to conform with this change.

In the third quarter of 2017, we completed the Eaton Cummins Automated Transmission Technologies joint venture (ECJV), which was consolidated and included in our Components segment as the automated transmissions business.

Sales for our Components segment by product line were as follows:

2017          
In millions Q1 Q2 Q3 Q4 YTD
Emission solutions $ 616 $ 674 $ 696 $ $

1,986

 

Turbo technologies 287 307 297 891
Filtration 277 291 287 855
Fuel systems 164 182 184 530
Automated transmissions     69     69  
Total sales $ 1,344   $ 1,454   $ 1,533   $   $ 4,331  
 
2016
In millions Q1 Q2 Q3 Q4 YTD
Emission solutions $ 589 $ 603 $ 522 $ 524 $ 2,238
Turbo technologies 265 276 241 254 1,036
Filtration 252 262 244 252 1,010
Fuel systems 131   138   136   147   552  
Total sales $ 1,237   $ 1,279   $ 1,143   $ 1,177   $ 4,836  
 
2015
In millions YTD
Emission solutions $ 2,449
Turbo technologies 1,141
Filtration 1,010
Fuel systems 572  
Total sales $ 5,172  
 

Power Systems Segment Sales by Product Line and Unit Shipments by Engine Classification

In the first quarter of 2017, our Power Systems segment reorganized its product lines to better reflect how the segment is managed. Prior year sales were reclassified to reflect these changes.

Sales for our Power Systems segment by product line were as follows:

2017              
In millions Q1 Q2 Q3 Q4 YTD
Power generation $ 526 $ 570 $ 580 $ $

1,676

 

Industrial 275 353 385 1,013
Generator technologies 81   94   91     266  
Total sales $ 882   $ 1,017   $ 1,056   $   $ 2,955  
 
2016
In millions Q1 Q2 Q3 Q4 YTD
Power generation $ 518 $ 602 $ 543 $ 593 $ 2,256
Industrial 215 236 235 255 941
Generator technologies 75   83   78   84   320  
Total sales $ 808   $ 921   $ 856   $ 932   $ 3,517  
 
2015
In millions YTD
Power generation $ 2,588
Industrial 1,121
Generator technologies 358  
Total sales $ 4,067  
 

High-horsepower unit shipments by engine classification were as follows:

2017              
Units Q1 Q2 Q3 Q4 YTD
Power generation 1,900 2,100 2,200

6,200

 

Industrial 1,300   1,700   1,600     4,600  
Total units 3,200   3,800   3,800     10,800  
 
2016
Units Q1 Q2 Q3 Q4 YTD
Power generation 1,800 2,200 2,000 1,900 7,900
Industrial 1,000   1,100   1,000   1,300   4,400  
Total units 2,800   3,300   3,000   3,200   12,300  

Source: Cummins Inc.

Cummins Inc.
Carole Casto, 317-610-2480
Vice President - Marketing and Communications
carole.casto@cummins.com

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