Quarterly report [Sections 13 or 15(d)]

REPORTABLE SEGMENTS (Tables)

v3.26.1
REPORTABLE SEGMENTS (Tables)
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
Summary of Financial Information Regarding Reportable Operating Segments
Summarized financial information regarding our reportable segments for the three months ended March 31, 2026 and 2025 is shown in the table below:
In millions Engine Components Distribution Power Systems Accelera Total Segments
Three months ended March 31, 2026  
External sales $ 1,966  $ 2,138  $ 3,109  $ 1,093  $ 92  $ 8,398 
Intersegment sales 706  392  7  863  9  1,977 
Total sales 2,672  2,530  3,116  1,956  101  10,375 
Cost of goods sold (excluding warranty expenses) 2,074  2,024  2,463  1,228  121  7,910 
Warranty expenses 93  27  7  17  13  157 
Selling expenses 69  47  164  48  6  334 
Administrative expenses 162  134  104  101  10  511 
Research, development and engineering expenses 164  81  15  66  32  358 
Equity, royalty and interest income (loss) from investees 80  10  28  36  (6) 148 
Other income (expense) (1)
17  (18) 18  9  (199)
(2)
 (173)
Add back: Depreciation and amortization (3)
72  128  35  36  9  280 
Segment EBITDA $ 279  $ 337  $ 444  $ 577  $ (277)
(2)
 $ 1,360 
Interest income (4)
$ 10  $ 11  $ 6  $ 5  $ —  $ 32 
Three months ended March 31, 2025    
External sales $ 2,040  $ 2,270  $ 2,902  $ 872  $ 90  $ 8,174 
Intersegment sales 731  400  5  777  13  1,926 
Total sales 2,771  2,670  2,907  1,649  103  10,100 
Cost of goods sold (excluding warranty expenses) 2,036  2,139  2,332  1,090  121  7,718 
Warranty expenses 85  26  6  32  8  157 
Selling expenses 59  41  157  46  7  310 
Administrative expenses 138  119  91  100  13  461 
Research, development and engineering expenses 155  75  14  57  43  344 
Equity, royalty and interest income (loss) from investees 73  7  28  29  (6) 131 
Other income (expense) (1)
20  (17) 9  3  (3) 12 
Add back: Depreciation and amortization (3)
67  122  32  33  12  266 
Segment EBITDA $ 458  $ 382  $ 376  $ 389  $ (86) $ 1,519 
Interest income (4)
$ 10  $ 7  $ 5  $ 4  $ —  $ 26 
(1) Other income (expense) includes other operating expense, net and other income, net from our Condensed Consolidated Statements of Net Income.
(2) On March 31, 2026, we sold our low pressure fuel cell business to a customer, cancelled future commitments and resolved certain claims against us with that customer resulting in a net payment by us of $175 million. These transactions resulted in a net charge of $199 million which is reflected in other operating expense, net in our Condensed Consolidated Statements of Net Income.
(3) Depreciation and amortization are not considered significant segment expenses but are presented here to reconcile to EBITDA, the measure used by our CODM. Depreciation and amortization, as shown on a segment basis, excludes the amortization of debt discount and deferred costs included in our Condensed Consolidated Statements of Net Income as interest expense. The amortization of debt discount and deferred costs was $2 million and $3 million for the three months ended March 31, 2026 and 2025, respectively. A portion of depreciation expense is included in research, development and engineering expenses.
(4) Interest income is a component of other income (expense).
Summary of 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
  March 31,
In millions 2026 2025
TOTAL SEGMENT EBITDA $ 1,360  $ 1,519 
Intersegment eliminations and other (1)
(70) (59)
Less:
Interest expense 76  77 
Depreciation and amortization 280  266 
INCOME BEFORE INCOME TAXES $ 934  $ 1,117 
(1) Included intersegment sales, intersegment profit in inventory and unallocated corporate expenses.