Quarterly report pursuant to Section 13 or 15(d)

OPERATING SEGMENTS (Details)

v3.19.2
OPERATING SEGMENTS (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2019
Jul. 01, 2018
Jun. 30, 2019
Jul. 01, 2018
Segment reporting        
Net Sales [1] $ 6,221 $ 6,132 $ 12,225 $ 11,702
Research, development and engineering expenses 251 219 488 429
Equity, royalty and interest income from investees 96 110 188 225
Interest income 12 10 24 17
Segment EBITDA 1,058 897 2,091 1,597
Depreciation and amortization (2) 158 [2] 154 [2] 314 [3] 307 [3]
Less: Interest expense 29 28 61 52
INCOME BEFORE INCOME TAXES 871 715 1,716 1,238
Amortization of Debt Discount (Premium)     1 1
Engine        
Segment reporting        
Net Sales 2,703 2,696 5,356 5,142
Research, development and engineering expenses 88 76 166 155
Equity, royalty and interest income from investees 62 67 118 134
Interest income 4 3 8 5
Segment EBITDA 416 362 854 648
Depreciation and amortization (2) 51 [2] 47 [2] 101 [3] 96 [3]
Distribution        
Segment reporting        
Net Sales 2,028 1,994 4,029 3,847
Research, development and engineering expenses 7 5 14 10
Equity, royalty and interest income from investees 12 11 23 24
Interest income 4 3 8 5
Segment EBITDA 172 145 343 268
Depreciation and amortization (2) 28 [2] 27 [2] 57 [3] 54 [3]
Components        
Segment reporting        
Net Sales 1,846 1,887 3,707 3,640
Research, development and engineering expenses 75 62 150 124
Equity, royalty and interest income from investees 11 14 21 30
Interest income 2 2 4 3
Segment EBITDA 297 237 622 464
Depreciation and amortization (2) 47 [2] 47 [2] 93 [3] 93 [3]
Power Systems        
Segment reporting        
Net Sales 1,203 1,246 2,280 2,320
Research, development and engineering expenses 57 60 113 117
Equity, royalty and interest income from investees 11 18 26 37
Interest income 2 2 4 4
Segment EBITDA 173 186 311 328
Depreciation and amortization (2) 30 [2] 32 [2] 59 [3] 62 [3]
Electrified Power        
Segment reporting        
Net Sales 8 1 11 3
Research, development and engineering expenses 24 16 45 23
Equity, royalty and interest income from investees 0 0 0 0
Interest income 0 0 0 0
Segment EBITDA (33) (21) (62) (31)
Depreciation and amortization (2) 2 [2] 1 [2] 4 [3] 2 [3]
Total Segments        
Segment reporting        
Net Sales 7,788 7,824 15,383 14,952
Research, development and engineering expenses 251 219 488 429
Equity, royalty and interest income from investees 96 110 188 225
Interest income 12 10 24 17
Segment EBITDA 1,025 909 2,068 1,677
Depreciation and amortization (2) 158 [2] 154 [2] 314 [3] 307 [3]
Intersegment Eliminations        
Segment reporting        
Net Sales (1,567) [4] (1,692) [4] (3,158) [5] (3,250) [5]
Non-segment items        
Segment reporting        
Segment EBITDA 33 [4] (12) [4] 23 [5] (80) [5]
External Sales        
Segment reporting        
Net Sales 6,221 6,132 12,225 11,702
External Sales | Engine        
Segment reporting        
Net Sales 2,073 2,050 4,057 3,863
External Sales | Distribution        
Segment reporting        
Net Sales 2,015 1,988 4,008 3,835
External Sales | Components        
Segment reporting        
Net Sales 1,401 1,402 2,802 2,715
External Sales | Power Systems        
Segment reporting        
Net Sales 724 691 1,347 1,286
External Sales | Electrified Power        
Segment reporting        
Net Sales 8 1 11 3
External Sales | Total Segments        
Segment reporting        
Net Sales 6,221 6,132 12,225 11,702
Intersegment sales | Engine        
Segment reporting        
Net Sales 630 646 1,299 1,279
Intersegment sales | Distribution        
Segment reporting        
Net Sales 13 6 21 12
Intersegment sales | Components        
Segment reporting        
Net Sales 445 485 905 925
Intersegment sales | Power Systems        
Segment reporting        
Net Sales 479 555 933 1,034
Intersegment sales | Electrified Power        
Segment reporting        
Net Sales 0 0 0 0
Intersegment sales | Total Segments        
Segment reporting        
Net Sales 1,567 1,692 3,158 3,250
Intersegment sales | Intersegment Eliminations        
Segment reporting        
Net Sales $ (1,567) [4] $ (1,692) [4] $ (3,158) [5] $ (3,250) [5]
[1] Includes sales to nonconsolidated equity investees of $317 million and $602 million and $340 million and $637 million for the three and six months ended June 30, 2019 and July 1, 2018, respectively.
[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 Net Income as "Interest expense." A portion of depreciation expense is included in "Research, development and engineering expenses."
[3] 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 Net Income as "Interest expense." The amortization of debt discount and deferred costs was $1 million and $1 million for the six months ended June 30, 2019 and July 1, 2018, respectively. A portion of depreciation expense is included in "Research, development and engineering expenses."
[4] Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended June 30, 2019 and July 1, 2018.
[5] Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the six months ended June 30, 2019 and July 1, 2018.