Cummins Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

OPERATING SEGMENTS (Tables)

OPERATING SEGMENTS (Tables)

12 Months Ended

Dec. 31, 2012

Financial information regarding reportable operating segments

In millions	Engine		Components		Power Generation		Distribution		Non-segment Items(1)			Total

2012
External sales	$	9,101	$	2,809	$	2,163	$	3,261	$	—		$	17,334
Intersegment sales		1,632		1,203		1,105		16		(3,956	)		—

Total sales		10,733		4,012		3,268		3,277		(3,956	)		17,334
Depreciation and amortization(2)		192		82		47		34		—			355
Research, development and engineering expenses		433		213		76		6		—			728
Equity, royalty and interest income from investees		127		29		40		188		—			384
Interest income		11		3		9		2		—			25
Segment EBIT(3)		1,248		426		285		369		(25	)		2,303
Net assets		3,373		1,830		1,582		1,392		—			8,177
Investments and advances to equity investees		401		127		88		281		—			897
Capital expenditures		399		134		95		62		—			690
2011
External sales	$	9,649	$	2,886	$	2,492	$	3,021	$	—		$	18,048
Intersegment sales		1,658		1,177		1,006		23		(3,864	)		—

Total sales		11,307		4,063		3,498		3,044		(3,864	)		18,048
Depreciation and amortization(2)		181		73		42		25		—			321
Research, development and engineering expenses		397		175		54		3		—			629
Equity, royalty and interest income from investees		166		31		47		172		—			416
Interest income		18		5		8		3		—			34
Segment EBIT		1,384		470		373		386		102			2,715
Net assets		3,167		1,467		1,547		1,123		—			7,304
Investments and advances to equity investees		398		123		79		238		—			838
Capital expenditures		339		141		87		55		—			622
2010
External sales	$	6,594	$	2,171	$	2,150	$	2,311	$	—		$	13,226
Intersegment sales		1,294		875		769		13		(2,951	)		—

Total sales		7,888		3,046		2,919		2,324		(2,951	)		13,226
Depreciation and amortization(2)		171		79		41		25		—			316
Research, development and engineering expenses		263		114		36		1		—			414
Equity, royalty and interest income from investees		161		23		35		132		—			351
Interest income		12		2		5		2		—			21
Segment EBIT		809		278		299		297		(26	)		1,657
Net assets		2,662		1,450		1,286		929		—			6,327
Investments and advances to equity investees		355		106		73		200		—			734
Capital expenditures		197		78		53		36		—			364

(1): Includes intersegment sales and profit in inventory eliminations and unallocated corporate expenses. The year ended December 31, 2012, includes a $6 million gain ($4 million after-tax) related to adjustments from our 2011 divestitures and a $20 million reserve ($12 million after-tax) related to legal matters. The year ended December 31, 2011, includes a $68 million gain ($37 million after-tax) related to the sale of certain assets and liabilities of our exhaust business and a $53 million gain ($33 million after-tax) recorded for the sale of certain assets and liabilities of our light-duty filtration business, both from the Components segment, and a $38 million gain ($24 million after-tax) related to flood damage recoveries from the insurance settlement regarding a June 2008 flood in Southern Indiana. For the year ended December 31, 2010, unallocated corporate expenses include $32 million in Brazil tax recoveries ($21 million after-tax) and $2 million in flood damage expenses. The gains and losses have been excluded from segment results as they were not considered in our evaluation of operating results for the years ended December 31, 2012, 2011 and 2010.
(2): Depreciation and amortization as shown on a segment basis excludes the amortization of debt discount that is included in the Consolidated Statements of Income as "Interest expense."
(3): Segment EBIT includes restructuring and other charges for each business segment of $20 million for the Engine segment, $6 million for the Components segment, $12 million for the Power Generation segment and $14 million for the Distribution segment. See Note 19, "RESTRUCTURING CHARGES," for additional detail.

Reconciliation of segment information

	Years ended December 31,

In millions	2012		2011		2010
Segment EBIT	$	2,303	$	2,715	$	1,657
Less: Interest expense		32		44		40

Income before income taxes	$	2,271	$	2,671	$	1,617

Reconciliation of segment information from net assets to total assets

	December 31,

In millions	2012			2011			2010
Net assets for operating segments	$	8,177		$	7,304		$	6,327
Liabilities deducted in arriving at net assets		4,913			4,832			4,412
Pension and other postretirement benefit adjustments excluded from net assets		(977	)		(928	)		(879	)
Deferred tax assets not allocated to segments		410			435			517
Debt-related costs not allocated to segments		25			25			25

Total assets	$	12,548		$	11,668		$	10,402

Net sales attributed to geographic areas based on the location of the customer

	Years ended and as of December 31,

In millions Net Sales	2012		2011		2010
United States	$	8,107	$	7,354	$	4,817
China		1,056		1,452		1,206
Brazil		798		1,286		1,014
India		757		859		808
Mexico		692		631		415
United Kingdom		660		727		562
Canada		642		653		506
Other foreign countries		4,622		5,086		3,898

Total net sales	$	17,334	$	18,048	$	13,226

Long-lived assets attributed to geographic areas

	Years ended and as of December 31,

In millions Long-lived assets	2012		2011		2010
United States	$	2,440	$	2,218	$	1,981
China		589		520		446
United Kingdom		339		318		266
India		243		203		173
Brazil		170		151		146
Netherlands		130		111		—
Mexico		77		72		62
Canada		69		64		64
Germany		49		47		44
Korea		37		27		19
Turkey		29		19		1
Australia		25		34		48
United Arab Emirates		16		14		9
Singapore		16		9		7
Romania		15		10		10
France		13		13		14
Other foreign countries		33		32		32

Total long-lived assets	$	4,290	$	3,862	$	3,322

- Definition

Tabular disclosure of all significant reconciling items in the reconciliation of total profit or loss from reportable segments, to the entity's consolidated income before income taxes, extraordinary items, and discontinued operations.

+ References + Details

- Definition

Tabular disclosure of the names of foreign countries from which revenue is material and the amount of revenue from external customers attributed to those countries. An entity may also provide subtotals of geographic information about groups of countries.

+ References + Details

- Definition

Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

+ References + Details