Cummins Reports Sharply Higher Second Quarter Sales and Profitability, Increases Full-Year Guidance
-- Manufacturing productivity improvements and performance in international
markets fuel growth
-- Company now expects to earn 12 percent EBIT on $13 billion in sales in
2010
COLUMBUS, Ind.--(BUSINESS WIRE)-- Cummins Inc. (NYSE: CMI) today reported for the second quarter its highest quarterly earnings as a percentage of sales in more than 25 years. Continued productivity improvements in the Company's manufacturing operations, as well as strong performance in international markets, drove significant year-over-year gains across all the Company's business segments.
Earnings Before Interest and Taxes (EBIT) was $401 million, or 12.5 percent of sales, up from $109 million or 4.5 percent of sales in the second quarter of 2009. EBIT also improved from 10.7 percent in the first quarter of 2010. For the first time ever, all four segments posted quarterly EBIT in excess of 10 percent of sales.
Sales of $3.21 billion in the second quarter were 32 percent higher than $2.43 billion in the same quarter in 2009. Net income attributable to Cummins Inc. in the second quarter more than quadrupled to $246 million, or $1.25 a share, compared to $56 million, or $0.28 a share, in the same period a year ago.
The sales gains were led by the Company's Engine and Components segments, which each reported 45 percent sales improvements compared to the same period in 2009. Power Generation sales increased 16 percent, while Distribution sales rose 24 percent. The Company delivered these strong results even though the North American heavy duty truck market remains weak as result of the transition to new on-highway emissions standards at the beginning of the year.
Based on the Company's performance in the first half of 2010 and its forecast for the rest of the year, Cummins today increased its financial guidance for 2010. The Company now expects to generate EBIT of 12 percent of sales on revenues of $13 billion.
"We had an outstanding quarter," said Cummins Chairman and Chief Executive Officer Tim Solso. "The work we have done to strengthen our manufacturing operations during the downturn has resulted in significant productivity gains, and we continue to benefit from our leadership position in large and growing international markets such as China, India and Brazil."
The Company's non- U.S. markets continued to perform well, with sales up 51 percent outside the United States in the second quarter compared to a year ago. Sales outside the U.S. accounted for 64 percent of the Company's revenue in the quarter.
The Company continued to return value to shareholders by repurchasing $123 million of its shares during the second quarter. The Company has now repurchased $310 million worth of stock under its current $500 million authorization.
Even with the stock repurchase, the Company improved its cash position from the first quarter of the year. The Company generated $301 million in cash from operations in the second quarter, compared to $245 million in the same period last year and $126 million in the first quarter.
"Our strong performance during the downturn has allowed us to make the investments necessary to position the Company for a period of long-term profitable growth as our markets continue to improve," said Cummins President and Chief Operating Officer Tom Linebarger. "We are working hard to prepare for future growth, even as we continue to concentrate on managing the business through this challenging economic period."
In other recent news:
-- In early July, Cummins announced a $100 million expansion of the
High-Horsepower Technical Center and high-horsepower engine product line
in Seymour, Ind. The investment in the newly renamed Seymour Engine
Plant is expected to add about 200 engineering and manufacturing jobs
over the next five years.
-- The Company increased the quarterly cash dividend on its common stock by
50 percent to 26.25 cents per share from 17.5 cents per share. The
dividend is payable on Sept. 1, 2010 to shareholders of record on Aug.
23, 2010. Cummins last raised its dividend in July 2008.
-- Cummins negotiated a $1.24 billion, four-year credit facility to replace
its previous $1.1 billion line of credit, which was set to expire in
2011. The revolver, combined with the Company's strong cash balance,
ensures that Cummins will have adequate liquidity over the next several
years.
-- Moody's Investor Service raised the Company's senior unsecured debt
rating from Baa3 to Baa2 and said the rating outlook remains "stable."
In raising its investment grade rating, Moody's cited Cummins' ability
to "maintain solid debt protection measures despite the most severe
downturn in the North American medium and heavy-duty truck industry, and
the broader weakening in the global economy."
-- Cummins also was recognized for its long-term return to shareholders
recently by Bloomberg BusinessWeek magazine, which ranked Cummins' stock
performance 12thamong the Standard & Poor's 500 companies from March
2005- March 2010.
Second quarter details (all comparisons to same period in 2009)
Engine Segment
-- Sales - $1.9 billion, up 45 percent
-- Segment EBIT - $197 million, or 10.4 percent of sales, compared to a
loss of $4 million. EBIT percentage is a quarterly record for the Engine
segment.
-- Total on-highway sales increased 36 percent
o Global heavy-duty truck engine sales declined 14 percent as result of
transition to 2010 EPA-compliant engines in North America, where unit
sales declined 58 percent.
o Medium-duty truck and bus sales increased 47 percent on strength of
international markets and North American share gains
o Light-duty auto and RV sales more than tripled from very low base in
2009 when Chrysler ceased truck production for several weeks as part
of its reorganization efforts
-- Industrial sales increased 49 percent
o Construction sales increased 111 percent led by infrastructure
investments in emerging markets such as China
o Mining sales increased 32 percent
Power Generation
-- Sales - $708 million, up 16 percent
-- Segment EBIT - $76 million, or 10.7 percent of sales, compared to $41
million or 6.7 percent of sales
-- Commercial Products sales rose 20 percent; Commercial Projects up 24
percent; Consumer sales increased 48 percent; Generator Technologies
sales were flat; and Power Electronics down 6 percent
-- Sales gains led by India, China, Latin America and Russia. North
American sales declined 16 percent
Components
-- Sales - $729 million up 45 percent
-- Segment EBIT - $75 million, or 10.3 percent of sales, compared to a loss
of $10 million. EBIT percentage was a quarterly record for the
Components segment.
-- Turbo Technologies sales increased by 69 percent; Emission Solutions
rose 53 percent, Fuel Systems up 41 percent, Filtration up 26 percent
-- Higher volumes, increased product content on the aftertreatment product
and manufacturing productivity improvements contributed to EBIT gain
Distribution
-- Sales - $576 million, an increase of 24 percent
-- Segment EBIT - $69 million, or 12 percent of sales, compared to $55
million, or 11.9 percent of sales
-- Consolidation of Western Canada distributor contributed 13 percent
growth in revenue
-- Organic growth of 7.5 percent from global aftermarket and industrial
engine sales and service in support of construction and mining markets
Presentation of Non-GAAP Financial Information
EBIT is a
non-GAAP measures used in this release. EBIT 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. EDT. 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.
About Cummins
Cummins Inc., a global power leader, is a
corporation of complementary business units that design, manufacture,
distribute and service engines and related technologies, including fuel
systems, controls, air handling, filtration, emission solutions and
electrical power generation systems. Headquartered in Columbus, Indiana,
(USA) Cummins serves customers in approximately 190 countries and
territories through a network of more than 500 company-owned and
independent distributor locations and approximately 5,200 dealer
locations. The Company reported net income attributable to Cummins Inc.
of $428 million on sales of $10.8 billion in 2009. Press releases can be
found on the Web at www.cummins.com. Follow
Cummins on Twitter at http://twitter.com/cummins.
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 the company's
expectations, hopes, beliefs and intentions on strategies regarding the
future. It is important to note that the company's 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, general economic, business and financing conditions, labor
relations, governmental action, competitor pricing activity, expense
volatility and other risks detailed from time to time in Cummins
Securities and Exchange Commission filings.
CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (a)
Three months ended
June 27, March 28, June 28,
In millions, except per share amounts 2010 2010 2009
NET SALES $ 3,208 $ 2,478 $ 2,431
Cost of sales 2,455 1,877 1,983
GROSS MARGIN 753 601 448
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses 354 335 287
Research, development and engineering expenses 96 92 79
Equity, royalty and interest income from 97 76 57
investees
Restructuring charges 7
Other operating expense, net 4 4 11
OPERATING INCOME 396 246 121
Interest income 5 3 1
Interest expense 9 9 10
Other income (expense), net 17 (13 )
INCOME BEFORE INCOME TAXES 392 257 99
Income tax expense 122 87 29
CONSOLIDATED NET INCOME 270 170 70
Less: net income attributable to 24 21 14
noncontrolling interests
NET INCOME ATTRIBUTABLE TO CUMMINS INC. $ 246 $ 149 $ 56
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO
CUMMINS INC.
Basic $ 1.25 $ 0.75 $ 0.28
Diluted $ 1.25 $ 0.75 $ 0.28
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 196.9 198.4 197.1
Diluted 197.3 198.7 197.4
CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.175 $ 0.175 $ 0.175
(a) Prepared on an unaudited basis in accordance with accounting principles
generally accepted in the United States of America (GAAP).
CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (a)
Six months ended
June 27, June 28,
In millions, except per share amounts 2010 2009
NET SALES $ 5,686 $ 4,870
Cost of sales 4,332 3,977
GROSS MARGIN 1,354 893
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses 689 587
Research, development and engineering expenses 188 164
Equity, royalty and interest income from investees 173 90
Restructuring charges 73
Other operating expense, net 8 9
OPERATING INCOME 642 150
Interest income 8 3
Interest expense 18 17
Other income (expense), net 17 (16 )
INCOME BEFORE INCOME TAXES 649 120
Income tax expense 209 36
CONSOLIDATED NET INCOME 440 84
Less: net income attributable to noncontrolling interests 45 21
NET INCOME ATTRIBUTABLE TO CUMMINS INC. $ 395 $ 63
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
Basic $ 2.00 $ 0.32
Diluted $ 2.00 $ 0.32
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 197.6 197.0
Diluted 197.9 197.2
CASH DIVIDENDS DECLARED PER COMMON SHARE $ 0.35 $ 0.35
(a) Prepared on an unaudited basis in accordance with accounting principles
generally accepted in the United States of America (GAAP).
CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (a)
June 27, December 31,
In millions, except par value 2010 2009
ASSETS
Current assets
Cash and cash equivalents $ 924 $ 930
Marketable securities 269 190
Accounts and notes receivable, net 2,052 2,004
Inventories 1,652 1,341
Deferred income taxes 312 295
Prepaid expenses and other current assets 236 243
Total current assets 5,445 5,003
Long-term assets
Property, plant and equipment 4,705 4,765
Accumulated depreciation (2,867 ) (2,879 )
Property, plant and equipment, net 1,838 1,886
Investments and advances related to equity method 622 574
investees
Goodwill 363 364
Other intangible assets, net 225 228
Deferred income taxes 377 436
Other assets 340 325
Total assets $ 9,210 $ 8,816
LIABILITIES
Current liabilities
Loans payable $ 87 $ 37
Accounts payable (principally trade) 1,213 957
Current portion of accrued product warranty 407 426
Accrued compensation, benefits and retirement costs 346 366
Deferred revenue 142 128
Other accrued expenses 612 518
Total current liabilities 2,807 2,432
Long-term liabilities
Long-term debt 669 637
Pensions 370 514
Postretirement benefits other than pensions 461 453
Other liabilities and deferred revenue 743 760
Total liabilities 5,050 4,796
EQUITY
Cummins Inc. shareholders' equity
Common stock, $2.50 par value, 500 shares authorized, 1,868 1,860
221.9 and 222.0 shares issued
Retained earnings 3,900 3,575
Treasury stock, at cost, 23.1 and 20.7 shares (890 ) (731 )
Common stock held by employee benefits trust, at (35 ) (36 )
cost, 2.9 and 3.0 shares
Accumulated other comprehensive loss
Defined benefit postretirement plans (786 ) (788 )
Other (174 ) (107 )
Total accumulated other comprehensive loss (960 (895 )
Total Cummins Inc. shareholders' equity 3,883 3,773
Noncontrolling interests 277 247
Total equity 4,160 4,020
Total liabilities and equity $ 9,210 $ 8,816
(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)
Six months ended
June 27, June 28,
In millions 2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated net income $ 440 $ 84
Adjustments to reconcile consolidated net income to net
cash provided by operating activities:
Restructuring charges, net of cash payments 20
Depreciation and amortization 161 154
Gain on fair value adjustment for consolidated investee (12 )
Deferred income taxes 43 20
Equity in income of investees, net of dividends (49 ) 60
Pension expense, net of pension contributions (116 ) (15 )
Other post-retirement benefits expense, net of cash (7 ) (16 )
payments
Stock-based compensation expense 11 12
Translation and hedging activities 3 51
Changes in current assets and liabilities, net of
acquisitions and divestitures:
Accounts and notes receivable (57 ) 86
Inventories (301 ) 282
Other current assets 1 22
Accounts payable 239 (253 )
Accrued expenses (14 ) (242 )
Changes in long-term liabilities 66 73
Other, net 19 (17 )
Net cash provided by operating activities 427 321
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (91 ) (139 )
Investments in internal use software (22 ) (19 )
Proceeds from disposals of property, plant and equipment 42 7
Investments in and advances (to) from equity investees (1 ) 1
Acquisition of businesses, net of cash acquired (71 ) (2 )
Investments in marketable securities--acquisitions (358 ) (69 )
Investments in marketable securities--liquidations 278 133
Cash flows from derivatives not designated as hedges (18 ) (21 )
Other, net (2 ) -
Net cash used in investing activities (243 ) (109 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 85 10
Payments on borrowings and capital lease obligations (37 ) (44 )
Net borrowings under short-term credit agreements (1 ) (5 )
Distributions to noncontrolling interests (4 ) (10 )
Dividend payments on common stock (70 ) (71 )
Repurchases of common stock (162 ) -
Other, net 16 1
Net cash used in financing activities (173 ) (119 )
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH (17 ) 15
EQUIVALENTS
Net (decrease) increase in cash and cash equivalents (6 ) 108
Cash and cash equivalents at beginning of year 930 426
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 924 $ 534
(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)
In millions Engine Power Components Distribution Non-segment Total
Generation items(1)
Three months
ended June
27, 2010
External $ 1,595 $ 518 $ 522 $ 573 $ $ 3,208
sales
Intersegment 304 190 207 3 (704 )
sales
Total sales 1,899 708 729 576 (704 ) 3,208
Depreciation
and 42 11 21 7 81
amortization
(2)
Research,
development
and 62 8 26 96
engineering
expense
Equity,
royalty and
interest 52 9 6 30 97
income from
investees
Interest 2 1 1 1 5
income
Segment EBIT 197 76 75 69 (16 ) 401
Three months
ended March
28, 2010
External $ 1,173 $ 378 $ 453 $ 474 $ $ 2,478
sales
Intersegment 250 139 177 2 (568 )
sales
Total sales 1,423 517 630 476 (568 ) 2,478
Depreciation
and 41 10 20 7 78
amortization
(2)
Research,
development
and 60 7 25 92
engineering
expense
Equity,
royalty and
interest 35 6 5 30 76
income from
investees
Interest 2 1 3
income
Segment EBIT 133 34 57 72 (30 ) 266
Three months
ended June
28, 2009
External $ 1,133 $ 481 $ 355 $ 462 $ $ 2,431
sales
Intersegment 173 129 147 1 (450 )
sales
Total sales 1,306 610 502 463 (450 ) 2,431
Depreciation
and 45 11 17 4 -- 77
amortization
(2)
Research,
development
and 51 8 20 -- 79
engineering
expense
Equity,
royalty and
interest 17 6 4 30 -- 57
income from
investees
Restructuring 7 7
charges
Interest 1 1
income
Segment EBIT (4 ) 41 (10 ) 55 27 109
Six months
ended June
27, 2010
External $ 2,768 $ 896 $ 975 $ 1,047 $ $ 5,686
sales
Intersegment 554 329 384 5 (1,272 )
sales
Total sales 3,322 1,225 1,359 1,052 (1,272 ) 5,686
Depreciation
and 83 21 41 14 159
amortization
(2)
Research,
development
and 122 15 51 188
engineering
expense
Equity,
royalty and
interest 87 15 11 60 173
income from
investees
Interest 4 2 1 1 8
income
Segment EBIT 330 110 132 141 (46 ) 667
Six months
ended June
28, 2009
External $ 2,338 $ 958 $ 701 $ 873 $ - $ 4,870
sales
Intersegment 460 309 331 3 (1,103 )
sales
Total sales 2,798 1,267 1,032 876 (1,103 ) 4,870
Depreciation
and 86 22 35 9 152
amortization
(2)
Research,
development
and 109 16 39 164
engineering
expense
Equity,
royalty and
interest 14 11 5 60 90
income from
investees
Restructuring 73 73
charges
Interest 1 1 1 3
income
Segment EBIT (20 ) 110 (9 ) 113 (57 ) 137
Includes intersegment sales and profit in inventory eliminations and
unallocated corporate expenses. There were no significant unallocated
corporate expenses for the three and six months ended June 27, 2010 or the
(1) three months ended March 28, 2010. For the three and six months ended June
28, 2009, unallocated corporate expenses included restructuring charges of
$7 million and $73 million and losses of $9 million and $3 million related
to flood damages, respectively.
Depreciation and amortization as shown on a segment basis excludes the
(2) amortization of debt discount that is included in the Condensed
Consolidated Statements of Income as Interest expense.
CUMMINS INC. AND SUBSIDIARIES RECONCILIATION OF SEGMENT INFORMATION (Unaudited) 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 Six months ended
June 27, March 28, June 28, June 27, June 28,
In millions 2010 2010 2009 2010 2009
Segment EBIT $ 401 $ 266 $ 109 $ 667 $ 137
Less:
Interest expense 9 9 10 18 17
Income before income taxes $ 392 $ 257 $ 99 $ 649 $ 120
FINANCIAL MEASURES THAT SUPPLEMENT GAAP (Unaudited) Earnings before interest, taxes, noncontrolling interests and restructuring and other charges We define EBIT as earnings or loss before interest expense, income tax expense and noncontrolling interests in income of consolidated subsidiaries (EBIT). We use EBIT to assess and measure the performance of our operating segments and also as a component in measuring our variable compensation programs. Below is a reconciliation of EBIT, a non-GAAP financial measure, to "Net income attributable to Cummins Inc.," for each of the applicable periods:
Three months ended Six months ended
June 27, March 28, June 28, June 27, June 28,
In millions 2010 2010 2009 2010 2009
Earnings before
interest expense, $ 401 $ 266 $ 116 $ 667 $ 210
income taxes and
restructuring charges
Earnings before
interest expense,
income taxes and 12.5 % 10.7 % 4.8 % 11.7 % 4.3 %
restructuring and
other charges as a
percentage of sales
Less:
Restructuring charges 7 73
Earnings before
interest and income $ 401 $ 266 $ 109 $ 667 $ 137
taxes
EBIT as a percentage 12.5 % 10.7 % 4.5 % 11.7 % 2.8 %
of net sales
Less:
Interest expense 9 9 10 18 17
Income tax expense 122 87 29 209 36
Consolidated net 270 170 70 440 84
income
Less:
Net income
attributable to 24 21 14 45 21
noncontrolling
interests
Net income
attributable to $ 246 $ 149 $ 56 $ 395 $ 63
Cummins Inc.
Net income
attributable to
Cummins Inc. as a 7.7 % 6.0 % 2.3 % 6.9 % 1.3 %
percentage of net
sales
CUMMINS INC. AND SUBSIDIARIES FINANCIAL MEASURES THAT SUPPLEMENT GAAP (Unaudited) Net income and diluted earnings per share (EPS) attributable to Cummins Inc. excluding restructuring charges We believe this is a useful measure of our operating performance for the periods presented as it illustrates our operating performance without regard to restructuring. This measure is not in accordance with, or an alternative for, accounting principles generally accepted in the United States of America and may not be consistent with measures used by other companies. It should be considered supplemental data. The following table reconciles net income attributable to Cummins Inc. excluding restructuring and other charges to "Net income attributable to Cummins Inc." for the three and six months ended June 28, 2009. There were no restructuring actions taken in the three or six months ended June 27, 2010 or three months ended March 28, 2010.
Three months ended Six months ended
June 28, 2009 June 28, 2009
In millions Net Diluted Net Diluted
Income EPS Income EPS
Net income attributable to Cummins Inc. $ 60 $ 0.30 $ 111 $ 0.56
excluding restructuring charges
Less:
Restructuring charges, net(1) 4 0.02 48 0.24
Net income attributable to Cummins Inc. $ 56 $ 0.28 $ 63 $ 0.32
During the three and six months ended June 28, 2009, management approved
and committed to undertake actions, which resulted in a pretax charge of
$7 million and $73 million, respectively. These charges included
(1) employee-related liabilities for severance and benefits of approximately
$8 million and $68 million, net of changes in estimate and exit costs of
approximately zero and $6 million, for the three and six months ended,
respectively.
CUMMINS INC. AND SUBSIDIARIES SELECTED FOOTNOTE DATA (Unaudited) NOTE 1. EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES Equity, royalty and interest income from investees included in our Condensed Consolidated Statements of Income for the interim reporting periods was as follows:
Three months ended Six months ended
June 27, March 28, June 28, June 27, June 28,
In millions 2010 2010 2009 2010 2009
Distribution Entities
North American distributors $ 23 $ 23 $ 23 $ 46 $ 49
All other distributors 4 4 4 8 7
Manufacturing Entities
Dongfeng Cummins Engine 34 18 7 52 7
Company, Ltd.
Chongqing Cummins Engine 13 10 12 23 20
Company, Ltd.
All other manufacturers 15 14 7 29
Cummins share of net income 89 69 53 158 83
Royalty and interest income 8 7 4 15 7
Equity, royalty and
interest income from $ 97 $ 76 $ 57 $ 173 $ 90
investees
NOTE 2. OTHER INCOME (EXPENSE)
Other income (expense) included the following:
Three months ended Six months ended
In millions June 27, March 28, June 28, June 27, 2010 June 28, 2009
2010 2010 2009
Foreign
currency
gains $ 2 $ 7 $ (10) $ 9 $ (18 )
(losses),
net
Gain on
acquisition
of Cummins 12 12
Western
Canada
Other, net (2 ) (2 ) (3) (4 ) 2
Total other
income $ $ 17 $ (13) $ 17 $ (16 )
(expense),
net
NOTE 3. INCOME TAXES
Our effective tax rate for the year is expected to approximate 31 percent, absent any additional discrete period activity. Our tax rate is generally less than the 35 percent U.S. income tax rate primarily due to lower tax rates on foreign income. The tax rates for the three and six month periods ended June 27, 2010, were 31 percent and 32 percent. The tax rate for the six month period includes a discrete tax charge of $7 million (one percent) related to the enactment of the "Patient Protection and Affordable Care Act." The tax rate for the three month period ended March 28, 2010, was 34 percent and also included a discrete charge of $7 million (3 percent) related to the enactment of the "Patient Protection and Affordable Care Act.'
Our effective tax rates for the comparable prior year periods were 29 percent and 30 percent, respectively. These rates were less than the 35 percent U.S. income tax rate primarily due to lower tax rates on foreign income.
SUPPLEMENTAL INFORMATION Sales $Millions Q1 Q2 Q3 Q4 YTD 2010 Engine Business Heavy-Duty Truck 252 340 592 Medium Duty Truck+Bus 217 352 569 Light Duty Auto+RV 207 296 503 Industrial 577 656 1,233 Stationary Power 170 255 425 TOTAL ENGINE BUSINESS 1,423 1,899 3,322 Power Generation 517 708 1,225 Components 630 729 1,359 Distributors 476 576 1,052 Eliminations (568) (704) (1,272) TOTAL 2,478 3,208 0 0 5,686 2009 Engine Business Heavy-Duty Truck 394 395 493 714 1,996 Medium Duty Truck+Bus 229 240 294 469 1,232 Light Duty Auto+RV 156 94 120 318 688 Industrial 467 440 407 507 1,821 Stationary Power 246 137 125 160 668 TOTAL ENGINE BUSINESS 1,492 1,306 1,439 2,168 6,405 Power Generation 657 610 549 601 2,417 Components 530 502 591 732 2,355 Distributors 413 463 422 486 1,784 Eliminations (653) (450) (471) (587) (2,161) TOTAL 2,439 2,431 2,530 3,400 10,800 Engine Shipments Units Q1 Q2 Q3 Q4 YTD 2010 Midrange 69,100 90,500 159,600 Heavy-duty 8,700 14,500 23,200 High Horsepower 3,400 4,800 8,200 TOTAL 81,200 109,800 0 0 191,000 2009 Midrange 60,600 49,200 58,800 100,600 269,200 Heavy-duty 16,600 16,400 20,600 32,300 85,900 High Horsepower 3,900 3,200 2,600 3,700 13,400 TOTAL 81,100 68,800 82,000 136,600 368,500 2008 Midrange 114,200 114,800 102,400 86,900 418,300 Heavy-duty 24,700 31,700 29,400 22,500 108,300 High Horsepower 4,600 5,500 5,300 5,200 20,600 TOTAL 143,500 152,000 137,100 114,600 547,200
Source: Cummins Inc.
Released July 27, 2010