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

Mar. 29, 2020

Financial information regarding reportable operating segments

Summarized financial information regarding our reportable operating segments for the three months ended is shown in the table below:


In millions	Engine		Distribution		Components		Power Systems		New Power		Total Segments		Intersegment Eliminations ⁽¹⁾		Total
Three months ended March 29, 2020
External sales	$	1,579	$	1,807	$	1,115	$	500	$	10	$	5,011	$	—	$	5,011
Intersegment sales	579		7		387		384		—		1,357		(1,357)		—
Total sales	2,158		1,814		1,502		884		10		6,368		(1,357)		5,011
Research, development and engineering expenses	80		7		68		54		29		238		—		238
Equity, royalty and interest income from investees	78		21		21		9		—		129		—		129

Interest income ⁽²⁾	4		1		1		1		—		7		—		7
Segment EBITDA	365		158		279		77		(43)		836		10		846
Depreciation and amortization ⁽³⁾	53		31		48		32		4		168		—		168



Three months ended March 31, 2019
External sales	$	1,984	$	1,993	$	1,401	$	623	$	3	$	6,004	$	—	$	6,004
Intersegment sales	669		8		460		454		—		1,591		(1,591)		—
Total sales	2,653		2,001		1,861		1,077		3		7,595		(1,591)		6,004
Research, development and engineering expenses	78		7		75		56		21		237		—		237
Equity, royalty and interest income from investees	56		11		10		15		—		92		—		92

Interest income ⁽²⁾	4		4		2		2		—		12		—		12
Segment EBITDA	438		171		325		138		(29)		1,043		(10)		1,033
Depreciation and amortization ⁽³⁾	50		29		46		29		2		156		—		156



⁽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 March 29, 2020 and March 31, 2019.
⁽²⁾"Interest income" is managed at the corporate level and allocated to each operating segment.
⁽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 less than $1 million and $1 million for the three months ended March 29, 2020 and March 31, 2019, respectively. A portion of depreciation expense is included in "Research, development and engineering expenses."

Reconciliation of segment information

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


	Three months ended
In millions	March 29, 2020		March 31, 2019
Total EBITDA	$	846	$	1,033
Less:
Depreciation and amortization	168		156
Interest expense	23		32
Income before income taxes	$	655	$	845