Annual report pursuant to Section 13 and 15(d)

OPERATING SEGMENTS FINANCIAL INFORMATION (Details) Reportable Operating Segments, EBITDA Reconciliation to GAAP

v3.10.0.1
OPERATING SEGMENTS FINANCIAL INFORMATION (Details) Reportable Operating Segments, EBITDA Reconciliation to GAAP - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Dec. 31, 2018
Sep. 30, 2018
Jul. 01, 2018
Apr. 01, 2018
Dec. 31, 2017
Oct. 01, 2017
Jul. 02, 2017
Apr. 02, 2017
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Operating results:                        
Net sales $ 6,126 $ 5,943 $ 6,132 $ 5,570 $ 5,476 $ 5,285 $ 5,078 $ 4,589 $ 23,771 [1] $ 20,428 [1] $ 17,509 [1]  
Research, development and engineering expenses                 902 754 637  
Equity, royalty and interest income from investees                 394 357 [2] 301  
Interest income                 35 18 23  
Loss Contingency                 0 5 [3] 138 [3]  
Segment EBITDA                 3,476 3,026 2,526  
Depreciation and Amortization [4]                 609 580 527  
Amortization of Debt Discount                 2 3 3  
Tax Legislation Impact to JV Earnings                   152    
Interest Expense                 114 81 69  
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest                 2,753 2,365 1,930  
Statement of Financial Position [Abstract]                        
Net assets [5],[6] 9,220       8,574       9,220 8,574 7,336  
Investments and advances to equity method investees 1,222       1,156       1,222 1,156 946  
Capital expenditures                 709 506 531  
Engine                        
Operating results:                        
Net sales                 10,566 8,953 7,804  
Research, development and engineering expenses                 311 280 227  
Equity, royalty and interest income from investees                 238 219 [2] 148  
Interest income                 11 6 10  
Loss Contingency         5 [3]           138 [3] $ 60
Segment EBITDA                 1,446 1,143 849  
Depreciation and Amortization [4]                 190 184 163  
Statement of Financial Position [Abstract]                        
Net assets [6] 1,265       1,180       1,265 1,180 1,334  
Investments and advances to equity method investees 561       531       561 531 427  
Capital expenditures                 254 188 200  
Distribution                        
Operating results:                        
Net sales                 7,828 7,058 6,181  
Research, development and engineering expenses                 20 19 13  
Equity, royalty and interest income from investees                 46 44 [2] 70  
Interest income                 13 6 4  
Segment EBITDA                 563 500 508 [7]  
Depreciation and Amortization [4]                 109 116 116  
Gain on remeasurement of pre-existing ownership interest in the acquiree company                   15    
Statement of Financial Position [Abstract]                        
Net assets [6] 2,677       2,446       2,677 2,446 2,157  
Investments and advances to equity method investees 278       267       278 267 204  
Capital expenditures                 133 101 96  
Components                        
Operating results:                        
Net sales                 7,166 [8] 5,889 [8] 4,836  
Research, development and engineering expenses                 272 [8] 241 [8] 208  
Equity, royalty and interest income from investees                 54 [8] 40 [2],[8] 41  
Interest income                 5 [8] 3 [8] 4  
Segment EBITDA                 1,030 [8] 917 [8] 774  
Depreciation and Amortization [4]                 185 [8] 163 [8] 133  
Statement of Financial Position [Abstract]                        
Net assets [6] 2,878 [8]       2,811 [8]       2,878 [8] 2,811 [8] 1,643  
Investments and advances to equity method investees 206 [8]       194 [8]       206 [8] 194 [8] 176  
Capital expenditures                 182 [8] 127 [8] 143  
Power Systems                        
Operating results:                        
Net sales                 4,626 4,058 3,517  
Research, development and engineering expenses                 230 214 189  
Equity, royalty and interest income from investees                 56 54 42  
Interest income                 6 3 5  
Segment EBITDA                 614 411 378 [9]  
Depreciation and Amortization [4]                 119 117 115  
Statement of Financial Position [Abstract]                        
Net assets [6] 2,262       2,137       2,262 2,137 2,202  
Investments and advances to equity method investees 177       164       177 164 139  
Capital expenditures                 129 90 92  
Power Systems | Cummins Olayan Energy                        
Operating results:                        
Gain (Loss) on Sale of Equity Investments                     17  
Electrified Power                        
Operating results:                        
Net sales                 7 0 0  
Research, development and engineering expenses                 69 0 0  
Equity, royalty and interest income from investees                 0 0 0  
Interest income                 0 0 0  
Segment EBITDA                 (90) 0 0  
Depreciation and Amortization                 6 [4] 0 [4] 0  
Statement of Financial Position [Abstract]                        
Net assets [6] 138       0       138 0 0  
Investments and advances to equity method investees 0       0       0 0 0  
Capital expenditures                 11 0 0  
Total Segment                        
Operating results:                        
Net sales                 30,193 25,958 22,338  
Research, development and engineering expenses                 902 754 637  
Equity, royalty and interest income from investees                 394 357 [2] 301  
Interest income                 35 18 23  
Loss Contingency [3]                   5 138  
Segment EBITDA                 3,563 2,971 2,509  
Depreciation and Amortization [4]                 609 580 527  
Statement of Financial Position [Abstract]                        
Net assets [6] 9,220       8,574       9,220 8,574 7,336  
Investments and advances to equity method investees $ 1,222       $ 1,156       1,222 1,156 946  
Capital expenditures                 709 506 531  
Intersegment Eliminations                        
Operating results:                        
Net sales [10]                 (6,422) (5,530) (4,829)  
Non-Segment Items                        
Operating results:                        
Segment EBITDA [10]                 (87) 55 17  
External Sales                        
Operating results:                        
Net sales                 23,771 20,428 17,509  
External Sales | Engine                        
Operating results:                        
Net sales                 8,002 6,661 5,774  
External Sales | Distribution                        
Operating results:                        
Net sales                 7,807 7,029 6,157  
External Sales | Components                        
Operating results:                        
Net sales                 5,331 [8] 4,363 [8] 3,514  
External Sales | Power Systems                        
Operating results:                        
Net sales                 2,625 2,375 2,064  
External Sales | Electrified Power                        
Operating results:                        
Net sales                 6 0 0  
External Sales | Total Segment                        
Operating results:                        
Net sales                 23,771 20,428 17,509  
Intersegment sales | Engine                        
Operating results:                        
Net sales                 2,564 2,292 2,030  
Intersegment sales | Distribution                        
Operating results:                        
Net sales                 21 29 24  
Intersegment sales | Components                        
Operating results:                        
Net sales                 1,835 [8] 1,526 [8] 1,322  
Intersegment sales | Power Systems                        
Operating results:                        
Net sales                 2,001 1,683 1,453  
Intersegment sales | Electrified Power                        
Operating results:                        
Net sales                 1 0 0  
Intersegment sales | Total Segment                        
Operating results:                        
Net sales                 6,422 5,530 4,829  
Intersegment sales | Intersegment Eliminations                        
Operating results:                        
Net sales [10]                 $ (6,422) (5,530) $ (4,829)  
Tax Legislation Impact | Engine                        
Operating results:                        
Tax Legislation Impact to JV Earnings                   (23)    
Tax Legislation Impact | Distribution                        
Operating results:                        
Tax Legislation Impact to JV Earnings                   (4)    
Tax Legislation Impact | Components                        
Operating results:                        
Tax Legislation Impact to JV Earnings                   $ (12)    
[1] Includes sales to nonconsolidated equity investees of $1,267 million, $1,174 million and $1,028 million for the years ended December 31, 2018, 2017 and 2016, respectively.
[2] 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 4, "INCOME TAXES," for additional information.
[3] See Note 9, "PRODUCT WARRANTY LIABILITY," for additional information.
[4] 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 $2 million, $3 million and $3 million for the years ended 2018, 2017 and 2016, respectively. A portion of depreciation expense is included in "Research, development and engineering expense."
[5] In 2018, we reevaluated our net asset allocation methodology and realigned it to both simplify and better represent our reportable segments consistent with how the Chief Operating Decision Maker evaluates them. In accordance with the realignment, we reclassified historical segment net assets for 2016 and 2017 to be consistent with our 2018 presentation. Key changes during the realignment were to remove cash equivalents and marketable securities from segment net assets as these corporate items are not managed and evaluated at the segment level.
[6] In 2018, we reevaluated our net asset allocation methodology and realigned it to both simplify and better represent our reportable segments consistent with how the Chief Operating Decision Maker evaluates them. In accordance with the realignment, we reclassified historical segment net assets for 2016 and 2017 to be consistent with our 2018 presentation. Key changes during the realignment were to remove cash equivalents and marketable securities from segment net assets as these corporate items are not managed and evaluated at the segment level.
[7] Distribution segment EBITDA included gains on the fair value adjustment resulting from the acquisition of controlling interests in North American distributors of $15 million for the year ended December 31, 2016. See Note 19, "ACQUISITIONS," for additional information.
[8] Includes Eaton Cummins Automated Transmission Technologies joint venture results consolidated during the third quarter of 2017. See Note 19, "ACQUISITIONS," for additional information.
[9] Power Systems segment EBITDA included a $17 million gain on the sale of an equity investee for the year ended December 31, 2016. See Note 3, "INVESTMENTS IN EQUITY INVESTEES," for additional information.
[10] Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the years ended 2018, 2017 and 2016, respectively.