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, 2013

Financial information regarding reportable operating segments

Summarized financial information regarding our reportable operating segments at December 31, is shown in the table below:



In millions	Engine		Components		Power Generation		Distribution			Non-segment Items⁽¹⁾			Total
2013
External sales	$	8,270	$	3,151	$	2,154	$	3,726		$	—		$	17,301
Intersegment sales	1,743		1,191		877		23			(3,834		)	—
Total sales	10,013		4,342		3,031		3,749			(3,834		)	17,301
Depreciation and amortization⁽²⁾	205		96		50		54			—			405
Research, development and engineering expenses	416		218		73		6			—			713
Equity, royalty and interest income from investees	136		28		32		165			—			361
Interest income	16		3		6		2			—			27
Segment EBIT	1,041		527		218		388		⁽⁴⁾	(14		)	2,160
Net assets	4,323		1,885		1,801		1,637			—			9,646
Investments and advances to equity investees	419		140		110		262			—			931
Capital expenditures	372		141		106		57			—			676
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		⁽⁴⁾	(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

____________________________________________________

⁽¹⁾

Includes intersegment sales and profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the year ended December 31, 2013. The year ended December 31, 2012, included a $6 million gain ($4 million after-tax) related to adjustments from our 2011 divestitures and a $20 million charge ($12 million after-tax) related to legal matters. The year ended December 31, 2011, included a $68 million gain ($37 million after-tax) and a $53 million gain ($33 million after-tax) related to the Component segment sales of certain assets and liabilities from our exhaust and light-duty filtration businesses, respectively, and a $38 million gain ($24 million after-tax) related to the insurance settlement regarding the June 2008 flood in Southern Indiana. 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 and 2011.


⁽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."


⁽³⁾	Segment EBIT included restructuring and other charges for each business segment of $20 million (Engine), $6 million (Components), $12 million (Power Generation) and $14 million (Distribution). See NOTE 19, "RESTRUCTURING AND OTHER CHARGES," for additional detail.

⁽⁴⁾

Distribution segment EBIT for the year ended December 31, 2013, included a $7 million gain and $5 million gain for the fair value adjustment resulting from the acquisitions of a controlling interest in Northwest and Rocky Mountain, respectively. Distribution segment EBIT for the year ended December 31, 2012, included a $7 million gain on the fair value adjustment resulting from the acquisition of a controlling interest in Central Power. See NOTE 2, "ACQUISITIONS AND DIVESTITURES," for additional detail.

Reconciliation of segment information

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



	Years ended December 31,
In millions	2013		2012		2011
Total EBIT	$	2,160	$	2,303	$	2,715
Less: Interest expense	41		32		44
Income before income taxes	$	2,119	$	2,271	$	2,671

Reconciliation of segment information from net assets to total assets



	December 31,
In millions	2013			2012			2011
Net assets for operating segments	$	9,646		$	8,177		$	7,304
Liabilities deducted in arriving at net assets	5,103			4,913			4,832
Pension and other postretirement benefit adjustments excluded from net assets	(346		)	(977		)	(928		)
Deferred tax assets not allocated to segments	292			410			435
Debt-related costs not allocated to segments	33			25			25
Total assets	$	14,728		$	12,548		$	11,668

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

The tables below present certain segment information by geographic area. Net sales attributed to geographic areas were based on the location of the customer. Long-lived assets include property, plant and equipment, net of depreciation, investments and advances to equity investees and other assets, excluding deferred tax assets.



In millions	Years ended as of December 31,
Net Sales	2013		2012		2011
United States	$	8,382	$	8,107	$	7,354
China	1,194		1,056		1,452
Brazil	882		798		1,286
India	630		757		859
Mexico	556		692		631
United Kingdom	453		660		727
Canada	655		642		653
Other foreign countries	4,549		4,622		5,086
Total net sales	$	17,301	$	17,334	$	18,048

Long-lived assets attributed to geographic areas



In millions	Years ended as of December 31,
Long-lived assets	2013		2012		2011
United States	$	2,606	$	2,440	$	2,218
China	646		589		520
India	330		243		203
United Kingdom	319		339		318
Brazil	172		170		151
Netherlands	138		130		111
Mexico	87		77		72
Germany	69		49		47
Canada	68		69		64
Korea	37		37		27
Turkey	28		29		19
Romania	27		15		10
Australia	18		25		34
Singapore	17		16		9
United Arab Emirates	15		16		14
France	13		13		13
Other foreign countries	34		33		32
Total long-lived assets	$	4,624	$	4,290	$	3,862

- 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.

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