UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report:  August 2, 2016

 

  CUMMINS INC.

(Exact name of registrant as specified in its charter)

Indiana (State or other Jurisdiction of Incorporation)	1-4949  (Commission File Number)	35-0257090  (I.R.S. Employer Identification No.)

500 Jackson Street

P. O. Box 3005

Columbus, IN  47202-3005

(Principal Executive Office)  (Zip Code)

Registrant's telephone number, including area code:  (812) 377-5000

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

  

 

1

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Item 2.02. Results of Operations and Financial Condition.

 

On August 2, 2016, Cummins Inc. (“Cummins,” “the Company,” “the registrant,” “we,” “our,” or “us”) issued the attached press release reporting its financial results for the second quarter of 2016, which is furnished herewith as Exhibit 99.

The information furnished pursuant to this Item 2.02, including Exhibit 99, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.

Item 9.01. Financial Statements and Exhibits.

 

(d)	The following exhibit is furnished pursuant to Item 2.02 herewith:

99-Press Release dated August 2, 2016

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: August 2, 2016

 

CUMMINS INC.

/s/ Marsha L. Hunt

Marsha L. Hunt Vice President - Corporate Controller (Principal Accounting Officer)

 

2

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CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited) (a)

		Three months ended
In millions, except per share amounts		July 3, 2016				June 28, 2015
NET SALES		$	4,528			$	5,015
Cost of sales		3,331				3,683
GROSS MARGIN		1,197				1,332
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses		524				537
Research, development and engineering expenses		155				166
Equity, royalty and interest income from investees		88				94
Other operating expense, net		(39		)		—
OPERATING INCOME		567				723
Interest income		6				6
Interest expense		16				17
Other income (expense), net		18				(8		)
INCOME BEFORE INCOME TAXES		575				704
Income tax expense		148				208
CONSOLIDATED NET INCOME		427				496
Less: Net income attributable to noncontrolling interests		21				25
NET INCOME ATTRIBUTABLE TO CUMMINS INC.		$	406			$	471
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
Basic		$	2.41			$	2.63
Diluted		$	2.40			$	2.62
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		168.8				179.2
Diluted		169.0				179.6
CASH DIVIDENDS DECLARED PER COMMON SHARE		$	0.975			$	0.78
(a)  Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.

3

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CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited) (a)

		Six months ended
In millions, except per share amounts		July 3, 2016				June 28, 2015
NET SALES		$	8,819			$	9,724
Cost of sales		6,566				7,197
GROSS MARGIN		2,253				2,527
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses		1,014				1,054
Research, development and engineering expenses		321				361
Equity, royalty and interest income from investees		160				162
Other operating expense, net		(41		)		(3		)
OPERATING INCOME		1,037				1,271
Interest income		12				11
Interest expense		35				31
Other income, net		26				1
INCOME BEFORE INCOME TAXES		1,040				1,252
Income tax expense		280				352
CONSOLIDATED NET INCOME		760				900
Less: Net income attributable to noncontrolling interests		33				42
NET INCOME ATTRIBUTABLE TO CUMMINS INC.		$	727			$	858
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
Basic		$	4.27			$	4.77
Diluted		$	4.26			$	4.76
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		170.3				179.9
Diluted		170.5				180.3
CASH DIVIDENDS DECLARED PER COMMON SHARE		$	1.95			$	1.56
(a)  Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.

4

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CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited) (a)

In millions, except par value		July 3, 2016				December 31, 2015
ASSETS
Current assets
Cash and cash equivalents		$	1,045			$	1,711
Marketable securities		235				100
Total cash, cash equivalents and marketable securities		1,280				1,811
Accounts and notes receivable, net		3,023				2,820
Inventories		2,778				2,707
Prepaid expenses and other current assets		549				609
Total current assets		7,630				7,947
Long-term assets
Property, plant and equipment		7,432				7,322
Accumulated depreciation		(3,729		)		(3,577		)
Property, plant and equipment, net		3,703				3,745
Investments and advances related to equity method investees		1,073				975
Goodwill		481				482
Other intangible assets, net		328				328
Pension assets		764				735
Other assets		1,041				922
Total assets		$	15,020			$	15,134
LIABILITIES
Current liabilities
Accounts payable (principally trade)		$	1,825			$	1,706
Loans payable		19				24
Commercial paper		200				—
Accrued compensation, benefits and retirement costs		353				409
Current portion of accrued product warranty		335				359
Current portion of deferred revenue		433				403
Other accrued expenses		947				863
Current maturities of long-term debt		38				39
Total current liabilities		4,150				3,803
Long-term liabilities
Long-term debt		1,614				1,576
Postretirement benefits other than pensions		328				349
Pensions		299				298
Other liabilities and deferred revenue		1,434				1,358
Total liabilities		$	7,825			$	7,384
EQUITY
Cummins Inc. shareholders’ equity
Common stock, $2.50 par value, 500 shares authorized, 222.4 and 222.4 shares issued		$	2,196			$	2,178
Retained earnings		10,716				10,322
Treasury stock, at cost, 53.7 and 47.2 shares		(4,422		)		(3,735		)
Common stock held by employee benefits trust, at cost, 0.7 and 0.9 shares		(9		)		(11		)
Accumulated other comprehensive loss		(1,620		)		(1,348		)
Total Cummins Inc. shareholders’ equity		6,861				7,406
Noncontrolling interests		334				344
Total equity		$	7,195			$	7,750
Total liabilities and equity		$	15,020			$	15,134
(a)  Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.

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CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (a)

		Six months ended
In millions		July 3, 2016				June 28, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated net income		$	760			$	900
Adjustments to reconcile consolidated net income to net cash provided by operating activities
Restructuring payments		(42		)		—
Loss contingency		39				—
Depreciation and amortization		259				254
Deferred income taxes		2				(63		)
Equity in income of investees, net of dividends		(87		)		(68		)
Pension contributions in excess of expense		(82		)		(122		)
Other post-retirement benefits payments in excess of expense		(17		)		(15		)
Stock-based compensation expense		20				17
Translation and hedging activities		(45		)		27
Changes in current assets and liabilities, net of acquisitions
Accounts and notes receivable		(252		)		(426		)
Inventories		(101		)		(127		)
Other current assets		189				18
Accounts payable		139				97
Accrued expenses		(209		)		(21		)
Changes in other liabilities and deferred revenue		129				133
Other, net		32				(35		)
Net cash provided by operating activities		734				569
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(189		)		(247		)
Investments in internal use software		(27		)		(22		)
Investments in and advances to equity investees		(17		)		(17		)
Acquisitions of businesses, net of cash acquired		(1		)		(15		)
Investments in marketable securities—acquisitions		(379		)		(173		)
Investments in marketable securities—liquidations		237				155
Cash flows from derivatives not designated as hedges		(21		)		5
Other, net		6				14
Net cash used in investing activities		(391		)		(300		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings		109				12
Net borrowings of commercial paper		200				—
Payments on borrowings and capital lease obligations		(133		)		(31		)
Distributions to noncontrolling interests		(24		)		(14		)
Dividend payments on common stock		(333		)		(280		)
Repurchases of common stock		(695		)		(514		)
Other, net		(16		)		(2		)
Net cash used in financing activities		(892		)		(829		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		(117		)		19
Net decrease in cash and cash equivalents		(666		)		(541		)
Cash and cash equivalents at beginning of year		1,711				2,301
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$	1,045			$	1,760
(a)  Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.

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CUMMINS INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Unaudited)

As previously announced, beginning with the second quarter of 2016, we realigned certain of our reportable segments to be consistent with changes to our organizational structure and how the Chief Operating Decision Maker monitors the performance of our segments. We reorganized our business to combine our Power Generation segment and our high horsepower engine business to create the new Power Systems segment. Our reportable operating segments consist of: Engine, Distribution, Components and Power Systems. We began to report results for our new reporting structure in the second quarter of 2016 and also reflected this change for historical periods.

We allocate certain common costs and expenses, primarily corporate functions, among segments. These include certain costs and expenses of shared services, such as information technology, human resources, legal, finance and supply chain management. In addition to the reorganization noted above, we reevaluated the allocation of these costs, considering the new segment structure created in April 2016 and adjusted our allocation methodology accordingly. The revised methodology, which is based on a combination of relative segment sales and relative service usage levels, is effective for the periods beginning after January 1, 2016 and resulted in the revision of our segment operating results, including segment earnings before interest, income taxes and noncontrolling interests (EBIT), for all four segments for the first quarter of 2016 with a greater share of costs allocated to the Distribution and Components segments than in previous years. Prior periods were not revised for the new allocation methodology. These changes had no impact on our consolidated results.

		In millions		Engine				Distribution				Components				Power Systems				Non-segment Items (1)				Total
		Three months ended July 3, 2016
		External sales		$	1,504			$	1,538			$	933			$	553			$	—			$	4,528
		Intersegment sales		498				6				346				368				(1,218		)		—
		Total sales		2,002				1,544				1,279				921				(1,218		)		4,528
		Depreciation and amortization(2)		41				29				32				29				—				131
		Research, development and engineering expenses		53				3				51				48				—				155
		Equity, royalty and interest income from investees		46				19				12				11				—				88
		Interest income		3				1				1				1				—				6
		Segment EBIT		206				87				190				90				18				591
		Segment EBIT as a percentage of total sales		10.3		%		5.6		%		14.9		%		9.8		%						13.1		%
		Three months ended June 28, 2015
		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(2)		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
		Segment EBIT as a percentage of total sales		12.0		%		7.6		%		16.0		%		11.6		%						14.4		%
(1	)	Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended July 3, 2016 and June 28, 2015.
(2	)	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."

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CUMMINS INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Unaudited)

		In millions		Engine				Distribution				Components				Power Systems				Non-segment Items (1)				Total
		Six months ended July 3, 2016
		External sales		$	2,993			$	2,996			$	1,830			$	1,000			$	—			$	8,819
		Intersegment sales		985				11				686				729				(2,411		)		—
		Total sales		3,978				3,007				2,516				1,729				(2,411		)		8,819
		Depreciation and amortization(2)		80				57				63				58				—				258
		Research, development and engineering expenses		110				7				107				97				—				321
		Equity, royalty and interest income from investees		82				37				20				21				—				160
		Interest income		5				2				2				3				—				12
		Segment EBIT		403				174				353				136				9				1,075
		Segment EBIT as a percentage of total sales		10.1		%		5.8		%		14.0		%		7.9		%						12.2		%
		Six months ended June 28, 2015
		External sales		$	3,523			$	2,956			$	1,948			$	1,297			$	—			$	9,724
		Intersegment sales		947				15				748				802				(2,512		)		—
		Total sales		4,470				2,971				2,696				2,099				(2,512		)		9,724
		Depreciation and amortization(2)		93				52				54				54				—				253
		Research, development and engineering expenses		122				6				118				115				—				361
		Equity, royalty and interest income from investees		74				41				17				30				—				162
		Interest income		4				2				2				3				—				11
		Segment EBIT		478				201				418				228				(42		)		1,283
		Segment EBIT as a percentage of total sales		10.7		%		6.8		%		15.5		%		10.9		%						13.2		%
(1	)	Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the six months ended July 3, 2016 and June 28, 2015.
(2	)	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 $1 million for both of the six months ended July 3, 2016 and June 28, 2015.

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
In millions		July 3, 2016				June 28, 2015				July 3, 2016				June 28, 2015
Total segment EBIT		$	591			$	721			$	1,075			$	1,283
Less: Interest expense		16				17				35				31
Income before income taxes		$	575			$	704			$	1,040			$	1,252
Income before income taxes as a percentage of net sales		12.7		%		14.0		%		11.8		%		12.9		%

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CUMMINS INC. AND SUBSIDIARIES

EQUITY INVESTEES 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								Six months ended
In millions		July 3, 2016				June 28, 2015				July 3, 2016				June 28, 2015
Distribution Entities
Komatsu Cummins Chile, Ltda.		$	8			$	8			$	18			$	15
North American distributors		6				8				11				18
All other distributors		1				—				1				1
Manufacturing Entities
Beijing Foton Cummins Engine Co., Ltd.		22				22				40				29
Dongfeng Cummins Engine Company, Ltd.		15				15				22				29
Chongqing Cummins Engine Company, Ltd.		9				11				17				23
All other manufacturers		16				21				32				28
Cummins share of net income		77				85				141				143
Royalty and interest income		11				9				19				19
Equity, royalty and interest income from investees		$	88			$	94			$	160			$	162

 

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CUMMINS INC. AND SUBSIDIARIES

FINANCIAL MEASURES THAT SUPPLEMENT GAAP

(Unaudited)

Net income and diluted earnings per share (EPS) attributable to Cummins Inc. excluding special items

We believe these are useful measures of our operating performance for the periods presented as they illustrate our operating performance without regard to special items including tax adjustments. These measures are not in accordance with, or an alternative for, accounting principles generally accepted in the United States of America (GAAP) 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. to net income attributable to Cummins Inc. excluding special items for the following periods:

			Six months ended
			July 3, 2016								June 28, 2015
In millions			Net Income				Diluted EPS				Net Income				Diluted EPS
Net income attributable to Cummins Inc.			$	727			$	4.26			$	858			$	4.76
Less
Tax benefit			—				—				18				0.10
Net income attributable to Cummins Inc. excluding special items			$	727			$	4.26			$	840			$	4.66

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 (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. This measure is not in accordance with, or an alternative for, GAAP and may not be consistent with measures used by other companies. It should be considered supplemental data. Below is a reconciliation of EBIT to “Net income attributable to Cummins Inc.” for each of the applicable periods:

		Three months ended								Six months ended
In millions		July 3, 2016				June 28, 2015				July 3, 2016				June 28, 2015
Earnings before interest expense and income taxes		$	591			$	721			$	1,075			$	1,283
EBIT as a percentage of net sales		13.1		%		14.4		%		12.2		%		13.2		%
Less
Interest expense		16				17				35				31
Income tax expense		148				208				280				352
Consolidated net income		427				496				760				900
Less
Net income attributable to noncontrolling interests		21				25				33				42
Net income attributable to Cummins Inc.		$	406			$	471			$	727			$	858
Net income attributable to Cummins Inc. as a percentage of net sales		9.0		%		9.4		%		8.2		%		8.8		%

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CUMMINS INC. AND SUBSIDIARIES

BUSINESS UNIT SALES DATA

(Unaudited)

Engine Segment Sales by Market and Unit Shipments by Engine Classification

In the second quarter of 2016, in conjunction with the reorganization of our segments, our Engine segment reorganized its reporting structure as follows:

•	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 market (including 2016, 2015 and 2014 revised balances) were as follows:

2016
In millions		Q1				Q2				Q3				Q4				YTD
Heavy-duty truck		$	631			$	622			$	—			$	—			$	1,253
Medium-duty truck and bus		549				600				—				—				1,149
Light-duty automotive		433				394				—				—				827
Off-highway		363				386				—				—				749
Total sales		$	1,976			$	2,002			$	—			$	—			$	3,978
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

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CUMMINS INC. AND SUBSIDIARIES

BUSINESS UNIT SALES DATA

(Unaudited)

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			Q2			Q3			Q4			YTD
Heavy-duty		19,700			20,700			—			—			40,400
Mid-range		55,400			62,300			—			—			117,700
Light-duty		61,700			57,100			—			—			118,800
Total units		136,800			140,100			—			—			276,900
2015
Units		Q1			Q2			Q3			Q4			YTD
Heavy-duty		28,700			32,800			28,600			24,300			114,400
Mid-range		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
Mid-range		266,800
Light-duty		204,400
Total units		593,300

Distribution Segment Sales by Product Line

2016
In millions		Q1				Q2				Q3				Q4				YTD
Parts		$	648			$	642			$	—			$	—			$	1,290
Service		299				297				—				—				596
Power generation		275				326				—				—				601
Engines		241				279				—				—				520
Total sales		$	1,463			$	1,544			$	—			$	—			$	3,007
2015
In millions		Q1				Q2				Q3				Q4				YTD
Parts		$	573			$	598			$	604			$	648			$	2,423
Service		284				307				301				330				1,222
Power generation		298				272				323				397				1,290
Engines		321				318				323				332				1,294
Total sales		$	1,476			$	1,495			$	1,551			$	1,707			$	6,229

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CUMMINS INC. AND SUBSIDIARIES

BUSINESS UNIT SALES DATA

(Unaudited)

Component Segment Sales by Business

2016
In millions		Q1				Q2				Q3				Q4				YTD
Emission solutions		$	607			$	624			$	—			$	—			$	1,231
Turbo technologies		265				276				—				—				541
Filtration		252				262				—				—				514
Fuel systems		113				117				—				—				230
Total sales		$	1,237			$	1,279			$	—			$	—			$	2,516
2015
In millions		Q1				Q2				Q3				Q4				YTD
Emission solutions		$	613			$	679			$	607			$	600			$	2,499
Turbo technologies		301				307				266				267				1,141
Filtration		255				266				240				249				1,010
Fuel systems		130				145				127				120				522
Total sales		$	1,299			$	1,397			$	1,240			$	1,236			$	5,172

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

In the second quarter of 2016, in conjunction with the reorganization of our segments, our Power Systems segment reorganized its reporting structure as follows:

•

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. We 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 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.

13

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CUMMINS INC. AND SUBSIDIARIES

BUSINESS UNIT SALES DATA

(Unaudited)

Sales for our Power Systems segment by product line (including 2016, 2015 and 2014 revised balances) were as follows:

2016
In millions		Q1				Q2				Q3				Q4				YTD
Power generation		$	520			$	597			$	—			$	—			$	1,117
Industrial		215				240				—				—				455
Generator technologies		73				84				—				—				157
Total sales		$	808			$	921			$	—			$	—			$	1,729
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 engine classification (including 2016, 2015 and 2014 revised units) were as follows: 

2016
Units		Q1			Q2			Q3			Q4			YTD
Power generation		1,800			2,200			—			—			4,000
Industrial		1,000			1,100			—			—			2,100
Total units		2,800			3,300			—			—			6,100
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

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