Cummins Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

OPERATING SEGMENTS (Tables)

OPERATING SEGMENTS (Tables)

6 Months Ended

Jun. 28, 2020

Financial information regarding reportable operating segments

Summarized financial information regarding our reportable operating segments for the three months ended is shown in the table below:


In millions	Engine		Distribution		Components		Power Systems		New Power		Total Segments		Intersegment Eliminations ⁽¹⁾		Total
Three months ended June 28, 2020
External sales	$	937	$	1,601	$	876	$	428	$	10	$	3,852	$	—	$	3,852
Intersegment sales	486		4		274		349		—		1,113		(1,113)		—
Total sales	1,423		1,605		1,150		777		10		4,965		(1,113)		3,852
Research, development and engineering expenses	65		4		55		41		24		189		—		189
Equity, royalty and interest income from investees	84		11		12		9		(1)		115		—		115

Interest income	1		1		1		1		—		4		—		4
Segment EBITDA	150		160		141		91		(38)		504		45		549
Depreciation and amortization ⁽²⁾	51		30		47		32		4		164		—		164



Three months ended June 30, 2019
External sales	$	2,073	$	2,015	$	1,401	$	724	$	8	$	6,221	$	—	$	6,221
Intersegment sales	630		13		445		479		—		1,567		(1,567)		—
Total sales	2,703		2,028		1,846		1,203		8		7,788		(1,567)		6,221
Research, development and engineering expenses	88		7		75		57		24		251		—		251
Equity, royalty and interest income from investees	62		12		11		11		—		96		—		96

Interest income	4		4		2		2		—		12		—		12
Segment EBITDA	416		172		297		173		(33)		1,025		33		1,058
Depreciation and amortization ⁽²⁾	51		28		47		30		2		158		—		158



⁽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 June 28, 2020 and June 30, 2019.

⁽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 Net Income as "Interest expense." A portion of depreciation expense is included in "Research, development and engineering expenses."

Summarized financial information regarding our reportable operating segments for the six months ended is shown in the table below:



In millions	Engine		Distribution		Components		Power Systems		New Power		Total Segments		Intersegment Eliminations ⁽¹⁾		Total
Six months ended June 28, 2020
External sales	$	2,516	$	3,408	$	1,991	$	928	$	20	$	8,863	$	—	$	8,863
Intersegment sales	1,065		11		661		733		—		2,470		(2,470)		—
Total sales	3,581		3,419		2,652		1,661		20		11,333		(2,470)		8,863
Research, development and engineering expenses	145		11		123		95		53		427		—		427
Equity, royalty and interest income from investees	162		32		33		18		(1)		244		—		244

Interest income	5		2		2		2		—		11		—		11
Segment EBITDA	515		318		420		168		(81)		1,340		55		1,395
Depreciation and amortization⁽²⁾	104		61		95		64		8		332		—		332


Six months ended June 30, 2019
External sales	$	4,057	$	4,008	$	2,802	$	1,347	$	11	$	12,225	$	—	$	12,225
Intersegment sales	1,299		21		905		933		—		3,158		(3,158)		—
Total sales	5,356		4,029		3,707		2,280		11		15,383		(3,158)		12,225
Research, development and engineering expenses	166		14		150		113		45		488		—		488
Equity, royalty and interest income from investees	118		23		21		26		—		188		—		188

Interest income	8		8		4		4		—		24		—		24
Segment EBITDA	854		343		622		311		(62)		2,068		23		2,091
Depreciation and amortization⁽²⁾	101		57		93		59		4		314		—		314

⁽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 June 28, 2020 and June 30, 2019.
⁽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 Net Income as "Interest expense." The amortization of debt discount and deferred costs was $1 million and $1 million for the six months ended June 28, 2020 and June 30, 2019, respectively. A portion of depreciation expense is included in "Research, development and engineering expenses."

Reconciliation of segment information

A reconciliation of our segment information to the corresponding amounts in the Condensed Consolidated Statements of Net Income is shown in the table below:


	Three months ended						Six months ended
In millions	June 28, 2020		June 30, 2019		June 28, 2020		June 30, 2019
Total EBITDA	$	549	$	1,058	$	1,395	$	2,091
Less:
Depreciation and amortization	164		158		332		314
Interest expense	23		29		46		61
Income before income taxes	$	362	$	871	$	1,017	$	1,716