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, 2011

Financial information regarding reportable operating segments

In millions	Engine		Components		Power Generation		Distribution		Non-segment Items(1)			Total

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
2010
External sales	$	6,594	$	2,171	$	2,150	$	2,311	$	—		$	13,226
Intersegment sales		1,294		875		769		13		(2,951	)		—

Total sales		7,888		3,046		2,919		2,324		(2,951	)		13,226
Depreciation and amortization(2)		171		79		41		25		—			316
Research, development and engineering expenses		263		114		36		1		—			414
Equity, royalty and interest income from investees		161		23		35		132		—			351
Interest income		12		2		5		2		—			21
Segment EBIT		809		278		299		297		(26	)		1,657
Net assets		2,662		1,450		1,286		929		—			6,327
Investments and advances to equity investees		355		106		73		200		—			734
Capital expenditures		197		78		53		36		—			364
2009
External sales	$	5,582	$	1,562	$	1,879	$	1,777	$	—		$	10,800
Intersegment sales		823		793		538		7		(2,161	)		—

Total sales		6,405		2,355		2,417		1,784		(2,161	)		10,800
Depreciation and amortization(2)		185		73		49		17		—			324
Research, development and engineering expenses		241		88		33		—		—			362
Equity, royalty and interest income from investees		54		13		22		125		—			214
Restructuring and other charges		—		—		—		—		99			99
Interest income		3		1		3		1		—			8
Segment EBIT		252		95		167		235		(74	)		675
Net assets		2,176		1,287		1,123		687		—			5,273
Investments and advances to equity investees		261		91		50		172		—			574
Capital expenditures		207		59		34		10		—			310

(1): Includes intersegment sales and profit in inventory eliminations and unallocated corporate expenses. The year ended December 31, 2011, includes a $68 million gain ($37 million after-tax) related to the sale of certain assets and liabilities of our exhaust business and a $53 million gain ($33 million after-tax) recorded for the sale of certain assets and liabilities of our light-duty filtration business, both from the Components segment, and a $38 million gain ($24 million after-tax) related to flood damage recoveries from the insurance settlement regarding a June 2008 flood in Southern Indiana. The gains have been excluded from segment results as they were not considered in our evaluation of operating results for the year ended December 31, 2011. For the year ended December 31, 2010, unallocated corporate expenses include $32 million in Brazil tax recoveries ($21 million after-tax) and $2 million in flood damage expenses. The Brazil tax recovery has been excluded from segment results as it was not considered in our evaluation of operating results for the year ended December 31, 2010. For the year ended December 31, 2009, unallocated corporate expenses included $99 million in restructuring and other charges and a gain of $12 million related to flood damage recoveries.
(2): Depreciation and amortization as shown on a segment basis excludes the amortization of debt discount that is included in the Consolidated Statements of Income as "Interest expense."

Reconciliation of segment information

	Years ended December 31,

In millions	2011		2010		2009
Segment EBIT	$	2,715	$	1,657	$	675
Less:
Interest expense		44		40		35

Income before income taxes	$	2,671	$	1,617	$	640

Reconciliation of segment information from net assets to total assets

	December 31,

In millions	2011			2010			2009
Net assets for operating segments	$	7,304		$	6,327		$	5,273
Liabilities deducted in arriving at net assets		4,832			4,412			4,018
Pension and other postretirement benefit adjustments excluded from net assets		(928	)		(879	)		(1,180	)
Deferred tax assets not allocated to segments		435			517			680
Debt-related costs not allocated to segments		25			25			25

Total assets	$	11,668		$	10,402		$	8,816

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

	Years ended and as of December 31,

In millions	2011		2010		2009
*Net Sales*
United States	$	7,354	$	4,817	$	5,141
China		1,452		1,206		630
Brazil		1,286		1,014		596
India		859		808		592
United Kingdom		727		562		406
Canada		653		506		327
Mexico		631		415		240
Other foreign countries		5,086		3,898		2,868

Total net sales	$	18,048	$	13,226	$	10,800

Long-lived assets attributed to geographic areas

	Years ended and as of December 31,

In millions	2011		2010		2009
*Long-lived assets*
United States	$	2,218	$	1,981	$	1,811
China		520		446		322
United Kingdom		318		266		188
India		203		173		134
Brazil		151		146		125
Netherlands		111		—		—
Mexico		72		62		54
Canada		64		64		27
Germany		47		44		37
Australia		34		48		11
Korea		27		19		2
Turkey		19		1		1
Other foreign countries		78		72		74

Total long-lived assets	$	3,862	$	3,322	$	2,786

- Definition

Tabular disclosure of all significant reconciling items in the reconciliation of total profit or loss from reportable segments, to the entity's consolidated income before income taxes, extraordinary items, and discontinued operations.

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- Definition

Tabular disclosure of the names of foreign countries from which revenue is material and the amount of revenue from external customers attributed to those countries. An entity may also provide subtotals of geographic information about groups of countries.

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- 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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