Item 9.01 Financial Statements and Exhibits
In millions
 
Engine
 
Distribution
 
Components
 
Power Generation
 
Non-segment
Items
 
Total
Three months ended April 3, 2016, As Previously Filed
 
 

 
 
 
 

 
 

 
 

 
 

External sales
 
$
1,624

 
$
1,458

 
$
897

 
$
312

 
$

 
$
4,291

Intersegment sales
 
710

 
5

 
340

 
238

 
(1,293
)
 

Total sales
 
2,334

 
1,463

 
1,237

 
550

 
(1,293
)
 
4,291

Depreciation and amortization
 
58

 
26

 
27

 
16

 

 
127

Research, development and engineering expenses
 
97

 
2

 
54

 
13

 

 
166

Equity, royalty and interest income from investees
 
41

 
18

 
8

 
5

 

 
72

Interest income
 
3

 
1

 
1

 
1

 

 
6

Segment EBIT
 
200

 
95

 
173

 
31

 
(15
)
 
484

In millions
 
Engine
 
Distribution
 
Components
 
Power Systems
 
Non-segment
Items
 
Total
Three months ended April 3, 2016, Revised
 
 

 
 
 
 

 
 

 
 

 
 

External sales
 
$
1,489

 
$
1,458

 
$
897

 
$
447

 
$

 
$
4,291

Intersegment sales
 
487

 
5

 
340

 
361

 
(1,193
)
 

Total sales
 
1,976

 
1,463

 
1,237

 
808

 
(1,193
)
 
4,291

Depreciation and amortization
 
39

 
28

 
31

 
29

 

 
127

Research, development and engineering expenses
 
57

 
4

 
56

 
49

 

 
166

Equity, royalty and interest income from investees
 
36

 
18

 
8

 
10

 

 
72

Interest income
 
2

 
1

 
1

 
2

 

 
6

Segment EBIT
 
197

 
87

 
163

 
46

 
(9
)
 
484

In millions
 
Engine
 
Distribution
 
Components
 
Power Generation
 
Non-segment
Items
 
Total
Three months ended March 29, 2015, As Previously Filed
 
 

 
 
 
 

 
 

 
 

 
 

External sales
 
$
1,889

 
$
1,469

 
$
931

 
$
420

 
$

 
$
4,709

Intersegment sales
 
707

 
7

 
368

 
260

 
(1,342
)
 

Total sales
 
2,596

 
1,476

 
1,299

 
680

 
(1,342
)
 
4,709

Depreciation and amortization
 
58

 
27

 
26

 
16

 

 
127

Research, development and engineering expenses
 
114

 
3

 
61

 
17

 

 
195

Equity, royalty and interest income from investees
 
30

 
20

 
9

 
9

 

 
68

Interest income
 
2

 
1

 
1

 
1

 

 
5

Segment EBIT
 
253

 
88

 
195

 
49

 
(23
)
 
562

In millions
 
Engine
 
Distribution
 
Components
 
Power Systems
 
Non-segment
Items
 
Total
Three months ended March 29, 2015, Revised
 
 

 
 
 
 

 
 

 
 

 
 

External sales
 
$
1,689

 
$
1,469

 
$
931

 
$
620

 
$

 
$
4,709

Intersegment sales
 
456

 
7

 
368

 
382

 
(1,213
)
 

Total sales
 
2,145

 
1,476

 
1,299

 
1,002

 
(1,213
)
 
4,709

Depreciation and amortization
 
46

 
27

 
26

 
28

 

 
127

Research, development and engineering expenses
 
69

 
3

 
61

 
62

 

 
195

Equity, royalty and interest income from investees
 
23

 
20

 
9

 
16

 

 
68

Interest income
 
2

 
1

 
1

 
1

 

 
5

Segment EBIT
 
200

 
88

 
195

 
101

 
(22
)
 
562





In millions
 
Engine
 
Distribution
 
Components
 
Power Generation
 
Non-segment
Items
 
Total
Three months ended June 28, 2015, As Previously Filed
 
 

 
 
 
 

 
 

 
 

 
 

External sales
 
$
2,058

 
$
1,487

 
$
1,017

 
$
453

 
$

 
$
5,015

Intersegment sales
 
739

 
8

 
380

 
294

 
(1,421
)
 

Total sales
 
2,797

 
1,495

 
1,397

 
747

 
(1,421
)
 
5,015

Depreciation and amortization
 
60

 
25

 
28

 
13

 

 
126

Research, development and engineering expenses
 
91

 
3

 
57

 
15

 

 
166

Equity, royalty and interest income from investees
 
57

 
21

 
8

 
8

 

 
94

Interest income
 
3

 
1

 
1

 
1

 

 
6

Segment EBIT
 
341

 
113

 
223

 
57

 
(13
)
 
721

In millions
 
Engine
 
Distribution
 
Components
 
Power Systems
 
Non-segment
Items
 
Total
Three months ended June 28, 2015, Revised
 
 

 
 
 
 

 
 

 
 

 
 

External sales
 
$
1,834

 
$
1,487

 
$
1,017

 
$
677

 
$

 
$
5,015

Intersegment sales
 
491

 
8

 
380

 
420

 
(1,299
)
 

Total sales
 
2,325

 
1,495

 
1,397

 
1,097

 
(1,299
)
 
5,015

Depreciation and amortization
 
47

 
25

 
28

 
26

 

 
126

Research, development and engineering expenses
 
53

 
3

 
57

 
53

 

 
166

Equity, royalty and interest income from investees
 
51

 
21

 
8

 
14

 

 
94

Interest income
 
2

 
1

 
1

 
2

 

 
6

Segment EBIT
 
278

 
113

 
223

 
127

 
(20
)
 
721

In millions
 
Engine
 
Distribution
 
Components
 
Power Generation
 
Non-segment
Items
 
Total
Three months ended September 27, 2015, As Previously Filed
 
 

 
 
 
 

 
 

 
 

 
 

External sales
 
$
1,800

 
$
1,543

 
$
891

 
$
386

 
$

 
$
4,620

Intersegment sales
 
728

 
8

 
349

 
273

 
(1,358
)
 

Total sales
 
2,528

 
1,551

 
1,240

 
659

 
(1,358
)
 
4,620

Depreciation and amortization
 
60

 
26

 
28

 
14

 

 
128

Research, development and engineering expenses
 
116

 
2

 
65

 
14

 

 
197

Equity, royalty and interest income from investees
 
40

 
19

 
9

 
10

 

 
78

Interest income
 
6

 
1

 
1

 
1

 

 
9

Segment EBIT
 
252

 
123

 
156

 
42

 
4

 
577

In millions
 
Engine
 
Distribution
 
Components
 
Power Systems
 
Non-segment
Items
 
Total
Three months ended September 27, 2015, Revised
 
 

 
 
 
 

 
 

 
 

 
 

External sales
 
$
1,627

 
$
1,543

 
$
891

 
$
559

 
$

 
$
4,620

Intersegment sales
 
475

 
8

 
349

 
423

 
(1,255
)
 

Total sales
 
2,102

 
1,551

 
1,240

 
982

 
(1,255
)
 
4,620

Depreciation and amortization
 
47

 
26

 
28

 
27

 

 
128

Research, development and engineering expenses
 
73

 
2

 
65

 
57

 

 
197

Equity, royalty and interest income from investees
 
33

 
19

 
9

 
17

 

 
78

Interest income
 
6

 
1

 
1

 
1

 

 
9

Segment EBIT
 
217

 
123

 
156

 
74

 
7

 
577





In millions
 
Engine
 
Distribution
 
Components
 
Power Generation
 
Non-segment
Items
 
Total
Three months ended December 31, 2015, As Previously Filed
 
 

 
 
 
 

 
 

 
 

 
 

External sales
 
$
1,793

 
$
1,699

 
$
906

 
$
368

 
$

 
$
4,766

Intersegment sales
 
735

 
8

 
330

 
286

 
(1,359
)
 

Total sales
 
2,528

 
1,707

 
1,236

 
654

 
(1,359
)
 
4,766

Depreciation and amortization
 
61

 
27

 
27

 
15

 

 
130

Research, development and engineering expenses
 
107

 
2

 
53

 
15

 

 
177

Equity, royalty and interest income from investees
 
44

 
18

 
9

 
4

 

 
75

Interest income
 
2

 
1

 
1

 

 

 
4

Impairment of light-duty diesel assets
 
202

 

 
9

 

 

 
211

Restructuring actions and other charges
 
26

 
23

 
13

 
19

 
9

 
90

Segment EBIT
 
(39
)
 
88

 
153

 
8

 
20

 
230

In millions
 
Engine
 
Distribution
 
Components
 
Power Systems
 
Non-segment
Items
 
Total
Three months ended December 31, 2015, Revised
 
 

 
 
 
 

 
 

 
 

 
 

External sales
 
$
1,583

 
$
1,699

 
$
906

 
$
578

 
$

 
$
4,766

Intersegment sales
 
515

 
8

 
330

 
408

 
(1,261
)
 

Total sales
 
2,098

 
1,707

 
1,236

 
986

 
(1,261
)
 
4,766

Depreciation and amortization
 
47

 
27

 
27

 
29

 

 
130

Research, development and engineering expenses
 
68

 
2

 
53

 
54

 

 
177

Equity, royalty and interest income from investees
 
39

 
18

 
9

 
9

 

 
75

Interest income
 
1

 
1

 
1

 
1

 

 
4

Impairment of light-duty diesel assets
 
202

 

 
9

 

 

 
211

Restructuring actions and other charges
 
17

 
23

 
13

 
26

 
11

 
90

Segment EBIT
 
(59
)
 
88

 
153

 
33

 
15

 
230

In millions
 
Engine
 
Distribution
 
Components
 
Power Generation
 
Non-segment
Items
 
Total
Year ended December 31, 2015, As Previously Filed
 
 
 
 
 
 
 
 
 
 
 
 
External sales
 
$
7,540

 
$
6,198

 
$
3,745

 
$
1,627

 
$

 
$
19,110

Intersegment sales
 
2,909

 
31

 
1,427

 
1,113

 
(5,480
)
 

Total sales
 
10,449

 
6,229

 
5,172

 
2,740

 
(5,480
)
 
19,110

Depreciation and amortization
 
239

 
105

 
109

 
58

 

 
511

Research, development and engineering expenses
 
428

 
10

 
236

 
61

 

 
735

Equity, royalty and interest income from investees
 
171

 
78

 
35

 
31

 

 
315

Interest income
 
13

 
4

 
4

 
3

 

 
24

Impairment of light-duty diesel assets
 
202

 

 
9

 

 

 
211

Restructuring actions and other charges
 
26

 
23

 
13

 
19

 
9

 
90

Segment EBIT
 
807

 
412

 
727

 
156

 
(12
)
 
2,090

Net assets
 
3,238

 
2,330

 
1,891

 
1,605

 

 
9,064

Investments and advances to equity investees
 
491

 
192

 
150

 
142

 

 
975

Capital expenditures
 
428

 
125

 
137

 
54

 

 
744





In millions
 
Engine
 
Distribution
 
Components
 
Power Systems
 
Non-segment
Items
 
Total
Year ended December 31, 2015, Revised
 
 
 
 
 
 
 
 
 
 
 
 
External sales
 
$
6,733

 
$
6,198

 
$
3,745

 
$
2,434

 
$

 
$
19,110

Intersegment sales
 
1,937

 
31

 
1,427

 
1,633

 
(5,028
)
 

Total sales
 
8,670

 
6,229

 
5,172

 
4,067

 
(5,028
)
 
19,110

Depreciation and amortization
 
187

 
105

 
109

 
110

 

 
511

Research, development and engineering expenses
 
263

 
10

 
236

 
226

 

 
735

Equity, royalty and interest income from investees
 
146

 
78

 
35

 
56

 

 
315

Interest income
 
11

 
4

 
4

 
5

 

 
24

Impairment of light-duty diesel assets
 
202

 

 
9

 

 

 
211

Restructuring actions and other charges
 
17

 
23

 
13

 
26

 
11

 
90

Segment EBIT
 
636

 
412

 
727

 
335

 
(20
)
 
2,090

Net assets
 
2,107

 
2,330

 
1,891

 
2,736

 

 
9,064

Investments and advances to equity investees
 
445

 
192

 
150

 
188

 

 
975

Capital expenditures
 
345

 
125

 
137

 
137

 

 
744

In millions
 
Engine
 
Distribution
 
Components
 
Power Generation
 
Non-segment Items
 
Total
Year ended December 31, 2014, As Previously Filed
 
 
 
 
 
 
 
 
 
 
 
 
External sales
 
$
8,437

 
$
5,135

 
$
3,791

 
$
1,858

 
$

 
$
19,221

Intersegment sales
 
2,525

 
39

 
1,327

 
1,038

 
(4,929
)
 

Total sales
 
10,962

 
5,174

 
5,118

 
2,896

 
(4,929
)
 
19,221

Depreciation and amortization
 
207

 
86

 
106

 
53

 

 
452

Research, development and engineering expenses
 
438

 
9

 
230

 
77

 

 
754

Equity, royalty and interest income from investees
 
147

 
148

 
36

 
39

 

 
370

Interest income
 
12

 
4

 
4

 
3

 

 
23

Segment EBIT
 
1,225

 
491

 
684

 
168

 
(70
)
 
2,498

Net assets
 
3,450

 
2,441

 
2,152

 
1,694

 

 
9,737

Investments and advances to equity investees
 
468

 
209

 
164

 
140

 

 
981

Capital expenditures
 
395

 
89

 
162

 
97

 

 
743

In millions
 
Engine
 
Distribution
 
Components
 
Power Systems
 
Non-segment Items
 
Total
Year ended December 31, 2014, Revised
 
 
 
 
 
 
 
 
 
 
 
 
External sales
 
$
7,462

 
$
5,135

 
$
3,791

 
$
2,833

 
$

 
$
19,221

Intersegment sales
 
1,505

 
39

 
1,327

 
1,581

 
(4,452
)
 

Total sales
 
8,967

 
5,174

 
5,118

 
4,414

 
(4,452
)
 
19,221

Depreciation and amortization
 
163

 
86

 
106

 
97

 

 
452

Research, development and engineering expenses
 
265

 
9

 
230

 
250

 

 
754

Equity, royalty and interest income from investees
 
118

 
148

 
36

 
68

 

 
370

Interest income
 
9

 
4

 
4

 
6

 

 
23

Segment EBIT
 
1,031

 
491

 
684

 
361

 
(69
)
 
2,498

Net assets
 
2,401

 
2,441

 
2,152

 
2,743

 

 
9,737

Investments and advances to equity investees
 
415

 
209

 
164

 
193

 

 
981

Capital expenditures
 
268

 
89

 
162

 
224

 

 
743

Power Systems Segment Sales by Markets
In the second quarter of 2016, our Power Systems segment reorganized its reporting structure to include the following product lines:
Power generation - We design, manufacture, sell and support generators ranging from 2 kilowatts to 3.5 megawatts, as well as paralleling systems and transfer switches, for applications such as residential, commercial, industrial, data centers, health care, telecommunications and waste water treatment plants. We also provide turnkey solutions for




distributed generation and energy management applications using natural gas or biogas as a fuel. The business also serves global rental accounts for diesel and gas generator sets.
Industrial - We design, manufacture, sell and support diesel and natural gas high-horsepower engines up to 5,500 horsepower for a wide variety of equipment in the mining, rail, defense, oil and gas, and commercial and marine applications throughout the world. Across these markets, we have major customers in North America, Europe, Middle East, Africa, China, Korea, Japan, Latin America, India, Russia, Southeast Asia, South Pacific and Mexico.
Generator technologies - We design, manufacture, sell and support A/C generator/alternator products for internal consumption and for external generator set assemblers. Our products are sold under the Stamford, AVK and Markon brands and range in output from 3 kilovolt-amperes (kVA) to 12,000 kVA.
Sales for our Power Systems segment by business (including 2016, 2015 and 2014 revised balances) were as follows:
2016
 
 
 
 
 
 
 
 
 
 
In millions
 
Q1
 
 
 
 
 
 
 
 
Power generation
 
$
520

 
 
 
 
 
 
 
 
Industrial
 
215

 
 
 
 
 
 
 
 
Generator technologies
 
73

 
 
 
 
 
 
 
 
Total sales
 
$
808

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
 
 
 
 
 
 
 
 
 
In millions
 
Q1
 
Q2
 
Q3
 
Q4
 
YTD
Power generation
 
$
624

 
$
710

 
$
621

 
$
615

 
$
2,570

Industrial
 
280

 
295

 
275

 
287

 
1,137

Generator technologies
 
98

 
92

 
86

 
84

 
360

Total sales
 
$
1,002

 
$
1,097

 
$
982

 
$
986

 
$
4,067

 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
In millions
 
YTD
 
 
 
 
 
 
 
 
Power generation
 
$
2,633

 
 
 
 
 
 
 
 
Industrial
 
1,331

 
 
 
 
 
 
 
 
Generator technologies
 
450

 
 
 
 
 
 
 
 
Total sales
 
$
4,414

 
 
 
 
 
 
 
 
High-horsepower unit shipments by market (including 2016, 2015 and 2014 revised units) were as follows:
2016
 
 
 
 
 
 
 
 
 
 
Units
 
Q1
 
 
 
 
 
 
 
 
Power generation
 
1,800

 
 
 
 
 
 
 
 
Industrial
 
1,000

 
 
 
 
 
 
 
 
Total units
 
2,800

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
 
 
 
 
 
 
 
 
 
Units
 
Q1
 
Q2
 
Q3
 
Q4
 
YTD
Power generation
 
2,200

 
2,500

 
2,000

 
1,900

 
8,600

Industrial
 
1,300

 
1,200

 
1,200

 
1,500

 
5,200

Total units
 
3,500

 
3,700

 
3,200

 
3,400

 
13,800

 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
Units
 
YTD
 
 
 
 
 
 
 
 
Power generation
 
8,700

 
 
 
 
 
 
 
 
Industrial
 
6,100

 
 
 
 
 
 
 
 
Total units
 
14,800

 
 
 
 
 
 
 
 




Engine Segment Sales by Market and Unit Shipments by Product Lines
In the second quarter of 2016, our Engine segment reorganized its reporting structure to include the following product lines:
Heavy-duty truck - We manufacture diesel engines that range from 310 to 600 horsepower serving global heavy-duty truck customers worldwide, primarily in North America.
Medium-duty truck and bus - We manufacture diesel engines ranging from 200 to 450 horsepower serving medium-duty truck and bus customers worldwide, with key markets including North America, Latin America, Europe and Mexico. We also provide diesel and natural gas engines for school buses, transit buses and shuttle buses worldwide, with key markets including North America, Europe, Latin America and Asia, and diesel engines for Class A motor homes (RVs), primarily in North America.
Light-duty automotive (Pickup and Light Commercial Vehicle (LCV)) - We manufacture 105 to 385 horsepower diesel engines, including engines for the pickup truck market for Chrysler and Nissan in North America, and LCV markets in Europe, Latin America and Asia.
Off-highway - We provide diesel engines that range from 60 to 755 horsepower to key global markets including construction, mining, rail, defense, agriculture, marine, and oil and gas equipment and also to the power generation business for standby, mobile and distributed power generation solutions throughout the world.
Sales for our Engine segment by business (including 2016, 2015 and 2014 revised balances) were as follows:
2016
 
 
 
 
 
 
 
 
 
 
In millions
 
Q1
 
 
 
 
 
 
 
 
Heavy-duty truck
 
$
631

 
 
 
 
 
 
 
 
Medium-duty truck and bus
 
549

 
 
 
 
 
 
 
 
Light-duty automotive
 
433

 
 
 
 
 
 
 
 
Off-highway
 
363

 
 
 
 
 
 
 
 
Total sales
 
$
1,976

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
 
 
 
 
 
 
 
 
 
In millions
 
Q1
 
Q2
 
Q3
 
Q4
 
YTD
Heavy-duty truck
 
$
757

 
$
875

 
$
784

 
$
700

 
$
3,116

Medium-duty truck and bus
 
608

 
674

 
585

 
640

 
2,507

Light-duty automotive
 
381

 
354

 
339

 
401

 
1,475

Off-highway
 
399

 
422

 
394

 
357

 
1,572

Total sales
 
$
2,145

 
$
2,325

 
$
2,102

 
$
2,098

 
$
8,670

 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
In millions
 
YTD
 
 
 
 
 
 
 
 
Heavy-duty truck
 
$
3,072

 
 
 
 
 
 
 
 
Medium-duty truck and bus
 
2,431

 
 
 
 
 
 
 
 
Light-duty automotive
 
1,567

 
 
 
 
 
 
 
 
Off-highway
 
1,897

 
 
 
 
 
 
 
 
Total sales
 
$
8,967

 
 
 
 
 
 
 
 




Revised unit shipments by engine classification (including unit shipments to Power Systems and off-highway engine units included in their respective classification) were as follows:
2016
 
 
 
 
 
 
 
 
 
 
Units
 
Q1
 
 
 
 
 
 
 
 
Heavy-duty
 
19,700

 
 
 
 
 
 
 
 
Medium-duty
 
55,400

 
 
 
 
 
 
 
 
Light-duty
 
61,700

 
 
 
 
 
 
 
 
Total units
 
136,800

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
 
 
 
 
 
 
 
 
 
Units
 
Q1
 
Q2
 
Q3
 
Q4
 
YTD
Heavy-duty
 
28,700

 
32,800

 
28,600

 
24,300

 
114,400

Medium-duty
 
61,200

 
66,600

 
59,600

 
59,700

 
247,100

Light-duty
 
51,200

 
53,400

 
47,800

 
56,900

 
209,300

Total units
 
141,100

 
152,800

 
136,000

 
140,900

 
570,800

 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
Units
 
YTD
 
 
 
 
 
 
 
 
Heavy-duty
 
122,100

 
 
 
 
 
 
 
 
Medium-duty
 
266,800

 
 
 
 
 
 
 
 
Light-duty
 
204,400

 
 
 
 
 
 
 
 
Total units
 
593,300