Annual report pursuant to Section 13 and 15(d)

OPERATING SEGMENTS FINANCIAL INFORMATION (Details)

v3.8.0.1
OPERATING SEGMENTS FINANCIAL INFORMATION (Details)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2017
USD ($)
l
Oct. 01, 2017
USD ($)
Jul. 02, 2017
USD ($)
Apr. 02, 2017
USD ($)
Dec. 31, 2016
USD ($)
Oct. 02, 2016
USD ($)
Jul. 03, 2016
USD ($)
Apr. 03, 2016
USD ($)
Dec. 31, 2015
USD ($)
Dec. 31, 2017
USD ($)
l
Dec. 31, 2016
USD ($)
Dec. 31, 2015
USD ($)
Operating results:                        
Total sales $ 5,476 $ 5,285 $ 5,078 $ 4,589 $ 4,503 $ 4,187 $ 4,528 $ 4,291   $ 20,428 [1] $ 17,509 [1] $ 19,110 [1]
Depreciation and amortization (3) [2]                   580 527 511
Research, development and engineering expenses                   752 636 735
Equity, royalty and interest income from investees                   357 301 315
Interest income                   18 23 24
Loss contingency (Note 12) [3]                   5 138 60
Impairment of light-duty diesel assets                   0 0 211 [2],[4]
Restructuring actions and other charges                 $ 90     90 [5]
Segment EBIT                   2,446 1,999 2,090
Less: Interest expense                   81 69 65
INCOME BEFORE INCOME TAXES                   2,365 1,930 2,025
Amortization of Debt Discount (Premium)                   3 3 3
Tax Cuts and Jobs Act of 2017, Change in Tax Rate (applied to deferred tax balances), Provisional Income Tax Expense (Benefit)                   152    
Gain on remeasurement of pre-existing ownership interest in the acquiree company                   0 15 18
Statement of Financial Position [Abstract]                        
Net assets 10,142       8,721       9,064 10,142 8,721 9,064
Investments and advances to equity method investees 1,156       946       975 1,156 946 975
Capital expenditures                   506 531 744
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets 72 [6]       0       0 72 [6] 0 0
Liabilities deducted in arriving at net assets 7,397       6,152       5,920 7,397 6,152 5,920
Pension and other postretirement benefit adjustments excluded from net assets 156       (284)       (242) 156 (284) (242)
Deferred tax assets not allocated to segments 306       420       390 306 420 390
Debt-related costs not allocated to segments 2       2       2 2 2 2
Total assets 18,075       15,011       15,134 18,075 15,011 15,134
Engine                        
Operating results:                        
Total sales                   8,953 7,804 8,670
Depreciation and amortization (3) [2]                   184 163 187
Research, development and engineering expenses                   279 226 263
Equity, royalty and interest income from investees                   219 [7] 148 146
Interest income                   6 10 11
Loss contingency (Note 12) 5 [3]         $ 99 $ 39     5 [3] 138 [3] 60 [3]
Impairment of light-duty diesel assets [4]                       202
Restructuring actions and other charges [5]                       17
Segment EBIT                   959 686 636
Statement of Financial Position [Abstract]                        
Net assets 1,290       1,620       2,107 1,290 1,620 2,107
Investments and advances to equity method investees 531       427       445 531 427 445
Capital expenditures                   188 200 345
Distribution                        
Operating results:                        
Total sales                   7,058 6,181 6,229
Depreciation and amortization (3) [2]                   116 116 105
Research, development and engineering expenses                   19 13 10
Equity, royalty and interest income from investees                   44 [7] 70 78
Interest income                   6 4 4
Restructuring actions and other charges [5]                       23
Segment EBIT                   384 392 [8] 412 [8]
Gain on remeasurement of pre-existing ownership interest in the acquiree company                     15 18
Statement of Financial Position [Abstract]                        
Net assets 2,700       2,604       2,330 2,700 2,604 2,330
Investments and advances to equity method investees 267       204       192 267 204 192
Capital expenditures                   101 96 125
Components                        
Operating results:                        
Total sales                   5,889 [9] 4,836 5,172
Depreciation and amortization (3) [2]                   163 [9] 133 109
Research, development and engineering expenses                   240 [9] 208 236
Equity, royalty and interest income from investees                   40 [9] 41 35
Interest income                   3 [9] 4 4
Impairment of light-duty diesel assets [4]                       9
Restructuring actions and other charges [5]                       13
Segment EBIT                   754 [9] 641 727
Statement of Financial Position [Abstract]                        
Net assets 3,028 [9]       1,868       1,891 3,028 [9] 1,868 1,891
Investments and advances to equity method investees 194 [9]       176       150 194 [9] 176 150
Capital expenditures                   127 [9] 143 137
Power Systems                        
Operating results:                        
Total sales                   4,058 3,517 4,067
Depreciation and amortization (3) [2]                   117 115 110
Research, development and engineering expenses                   214 189 226
Equity, royalty and interest income from investees                   54 42 56
Interest income                   3 5 5
Restructuring actions and other charges [5]                       26
Segment EBIT                   294 263 [10] 335
Statement of Financial Position [Abstract]                        
Net assets 3,124       2,629       2,736 3,124 2,629 2,736
Investments and advances to equity method investees 164       139       188 164 139 188
Capital expenditures                   90 92 137
Power Systems | Cummins Olayan Energy                        
Operating results:                        
Gain (Loss) on Sale of Equity Investments                     17  
Total Segment                        
Operating results:                        
Total sales                   25,958 22,338 24,138
Depreciation and amortization (3) [2]                   580 527 511
Research, development and engineering expenses                   752 636 735
Equity, royalty and interest income from investees                   357 301 315
Interest income                   18 23 24
Loss contingency (Note 12) [3]                   5 138 60
Impairment of light-duty diesel assets [4]                       211
Restructuring actions and other charges [5]                       79
Segment EBIT                   2,391 1,982 2,110
Statement of Financial Position [Abstract]                        
Net assets 10,142       8,721       9,064 10,142 8,721 9,064
Investments and advances to equity method investees $ 1,156       $ 946       $ 975 1,156 946 975
Capital expenditures                   506 531 744
Intersegment Eliminations                        
Operating results:                        
Total sales [11]                   (5,530) (4,829) (5,028)
Non-Segment Items                        
Operating results:                        
Restructuring actions and other charges [5],[11]                       11
Segment EBIT [11]                   55 17 (20)
External Sales | Engine                        
Operating results:                        
Total sales                   6,661 5,774 6,733
External Sales | Distribution                        
Operating results:                        
Total sales                   7,029 6,157 6,198
External Sales | Components                        
Operating results:                        
Total sales                   4,363 [9] 3,514 3,745
External Sales | Power Systems                        
Operating results:                        
Total sales                   2,375 2,064 2,434
External Sales | Total Segment                        
Operating results:                        
Total sales                   20,428 17,509 19,110
Intersegment sales | Engine                        
Operating results:                        
Total sales                   2,292 2,030 1,937
Intersegment sales | Distribution                        
Operating results:                        
Total sales                   29 24 31
Intersegment sales | Components                        
Operating results:                        
Total sales                   1,526 [9] 1,322 1,427
Intersegment sales | Power Systems                        
Operating results:                        
Total sales                   1,683 1,453 1,633
Intersegment sales | Total Segment                        
Operating results:                        
Total sales                   5,530 4,829 5,028
Intersegment sales | Intersegment Eliminations                        
Operating results:                        
Total sales [11]                   (5,530) (4,829) (5,028)
Operating Segments | External Sales                        
Operating results:                        
Total sales                   20,428 $ 17,509 $ 19,110
Tax Cuts and Jobs Act of 2017 Impact | Engine                        
Operating results:                        
Tax Cuts and Jobs Act of 2017, Change in Tax Rate (applied to deferred tax balances), Provisional Income Tax Expense (Benefit)                   23    
Tax Cuts and Jobs Act of 2017 Impact | Distribution                        
Operating results:                        
Tax Cuts and Jobs Act of 2017, Change in Tax Rate (applied to deferred tax balances), Provisional Income Tax Expense (Benefit)                   4    
Tax Cuts and Jobs Act of 2017 Impact | Components                        
Operating results:                        
Tax Cuts and Jobs Act of 2017, Change in Tax Rate (applied to deferred tax balances), Provisional Income Tax Expense (Benefit)                   $ 12    
Maximum | Engine                        
Segment reporting                        
Capacity of mechanical engines (in liters) | l 15                 15    
Minimum | Power Systems                        
Segment reporting                        
Capacity of mechanical engines (in liters) | l 16                 16    
[1] Includes sales to nonconsolidated equity investees of $1,174 million, $1,028 million and $1,209 million for the years ended December 31, 2017, 2016 and 2015, respectively.
[2] Depreciation and amortization as shown on a segment basis excludes the amortization of debt discount and deferred costs that are included in the Consolidated Statements of Income as "Interest expense." The amortization of debt discount and deferred costs were $3 million, $3 million and $3 million for the years ended December 31, 2017, 2016 and 2015, respectively.
[3] See Note 12, "COMMITMENTS AND CONTINGENCIES," for additional information.
[4] See Note 19, "IMPAIRMENT OF LIGHT-DUTY DIESEL ASSETS," for additional information.
[5] See Note 20, "RESTRUCTURING ACTIONS AND OTHER CHARGES," for additional information.
[6] Assets associated with the Brammo Inc. acquisition were presented as a reconciling item as Brammo Inc. had not yet been assigned to a reportable segment at December 31, 2017. See Note 18, "ACQUISITIONS," for additional information.
[7] U.S. tax legislation passed in December 2017 decreased our equity earnings at certain equity investees, negatively impacting our equity, royalty and interest income from investees by $23 million, $4 million and $12 million for the Engine, Distribution and Components segments, respectively. See Note 2, "INCOME TAXES," for additional information.
[8] Distribution segment EBIT included gains on the fair value adjustment resulting from the acquisition of controlling interests in North American distributors of $15 million and $18 million for the years ended December 31, 2016 and 2015, respectively. See Note 18, "ACQUISITIONS," for additional information.
[9] ncludes Eaton Cummins Automated Transmission Technologies joint venture results consolidated during the third quarter of 2017. See Note 18 , "ACQUISITIONS," for additional information.
[10] Power Systems segment EBIT included a $17 million gain on the sale of an equity investee for the year ended December 31, 2016.
[11] Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the years ended December 31, 2017, 2016 and 2015, respectively.