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)

3 Months Ended

Apr. 01, 2018

Financial information regarding reportable operating segments

Summarized financial information regarding our reportable operating segments is shown in the table below:



In millions	Engine		Distribution		Components		Power Systems		Electrified Power			Total Segment		Intersegment Eliminations ⁽¹⁾			Total
Three months ended April 1, 2018
External sales	$	1,813	$	1,847	$	1,313	$	595	$	2		$	5,570	$	—		$	5,570
Intersegment sales	633		6		440		479		—			1,558		(1,558		)	—
Total sales	2,446		1,853		1,753		1,074		2			7,128		(1,558		)	5,570
Research, development and engineering expenses	79		5		62		57		7			210		—			210
Equity, royalty and interest income from investees	67		13		16		19		—			115		—			115
Interest income	2		2		1		2		—			7		—			7
Segment EBITDA	286		123		227		142		(10		)	768		(68		)	700
Depreciation and amortization ⁽²⁾	49		27		46		30		1			153		—			153

Three months ended April 2, 2017
External sales	$	1,457	$	1,637	$	980	$	515	$	—		$	4,589	$	—		$	4,589
Intersegment sales	566		8		364		367		—			1,305		(1,305		)	—
Total sales	2,023		1,645		1,344		882		—			5,894		(1,305		)	4,589
Research, development and engineering expenses	54		4		50		50		—			158		—			158
Equity, royalty and interest income from investees	72		11		13		12		—			108		—			108
Interest income	1		1		—		—		—			2		—			2
Segment EBITDA	273		130		216		85		—			704		1			705
Depreciation and amortization ⁽²⁾	44		30		37		28		—			139		—			139

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⁽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 April 1, 2018 and April 2, 2017.

⁽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 Income as interest expense. The amortization of debt discount and deferred costs was $1 million and less than $1 million for the three month periods ended April 1, 2018 and April 2, 2017, respectively.

Reconciliation of segment information

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



	Three months ended
In millions	April 1, 2018		April 2, 2017
Total EBITDA	$	700	$	705
Less:
Depreciation and amortization	153		139
Interest expense	24		18
Income before income taxes	$	523	$	548