Annual report pursuant to Section 13 and 15(d)

INVESTMENTS IN EQUITY INVESTEES (Tables)

v3.10.0.1
INVESTMENTS IN EQUITY INVESTEES (Tables)
 12 Months Ended
Dec. 31, 2018
Equity Method Investments and Joint Ventures [Abstract]  
Summary of investments in and advances to equity investees and our ownership percentage Investments and advances related to equity method investees and our ownership percentage was as follows:
 
 
 
 
December 31,
In millions
 
Ownership %
 
2018
 
2017
Komatsu alliances
 
20-50%
 
$
238

 
$
219

Beijing Foton Cummins Engine Co., Ltd.
 
50%
 
203

 
223

Dongfeng Cummins Engine Company, Ltd.
 
50%
 
160

 
146

Chongqing Cummins Engine Company, Ltd.
 
50%
 
102

 
84

Cummins-Scania XPI Manufacturing, LLC
 
50%
 
101

 
87

Tata Cummins, Ltd.
 
50%
 
58

 
59

Other
 
Various
 
360

 
338

Investments and advances related to equity method investees
 
 
 
$
1,222

 
$
1,156



Equity, royalty and interest income from investees Equity, royalty and interest income from investees, net of applicable taxes, was as follows:
 
 
Years ended December 31,
 
In millions
 
2018
 
2017
 
2016
 
Manufacturing entities
 
 
 
 
 
 
 
Beijing Foton Cummins Engine Co., Ltd.
 
$
72

 
$
94

 
$
52

 
Dongfeng Cummins Engine Company, Ltd.
 
58

 
73

 
46

 
Chongqing Cummins Engine Company, Ltd.
 
51

 
41

 
38

 
Cummins Westport, Inc.
 
28

 
9

(1) 
11

 
Dongfeng Cummins Emission Solutions Co., Ltd.
 
14

 
13

 
9

 
Tata Cummins, Ltd.
 
14

 
(7
)
(1) 
6

 
All other manufacturers
 
73

 
56

(1) 
43

 
Distribution entities
 
 
 
 
 
 
 
Komatsu Cummins Chile, Ltda.
 
26

 
30

 
34

 
North American distributors
 
—

 
—

 
21

(2) 
All other distributors
 
—

 
(1
)
 
—

 
Cummins share of net income
 
336

 
308

 
260

 
Royalty and interest income
 
58

 
49

 
41

 
Equity, royalty and interest income from investees
 
$
394

 
$
357

 
$
301

 

___________________________________________________________
(1) U.S. tax legislation passed in December 2017 decreased our equity earnings at certain equity investees, including a $7 million unfavorable impact to Cummins Westport, Inc. due to the remeasurement of deferred taxes and $15 million unfavorable impact to Tata Cummins, Ltd. and a $17 million unfavorable impact to "All other manufacturers" due to withholding tax adjustments on foreign earnings. See Note 4, "INCOME TAXES," to our Consolidated Financial Statements for additional information.
(2) During 2016, we acquired the remaining interest in the final unconsolidated North American distributor joint venture.
Summary of financial information for equity investees Summary financial information for our equity investees was as follows:
 
 
For the years ended and at December 31,
In millions
 
2018
 
2017
 
2016
Net sales
 
$
7,352

 
$
7,050

 
$
5,654

Gross margin
 
1,373

 
1,422

 
1,182

Net income
 
647

 
680

 
499

 
 
 
 
 
 
 
Cummins share of net income
 
$
336

 
$
308

 
$
260

Royalty and interest income
 
58

 
49

 
41

Total equity, royalty and interest from investees
 
$
394

 
$
357

 
$
301

 
 
 
 
 
 
 
Current assets
 
$
3,401

 
$
3,416

 
 

Non-current assets
 
1,449

 
1,379

 
 

Current liabilities
 
(2,669
)
 
(2,567
)
 
 

Non-current liabilities
 
(218
)
 
(237
)
 
 

Net assets
 
$
1,963

 
$
1,991

 
 

 
 
 
 
 
 
 
Cummins share of net assets
 
$
1,144

 
$
1,116