Quarterly report pursuant to Section 13 or 15(d)

OPERATING SEGMENTS (Tables)

v3.20.2
OPERATING SEGMENTS (Tables)
 9 Months Ended
Sep. 27, 2020
Segment Reporting [Abstract]  
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 September 27, 2020        
External sales $ 1,617  $ 1,715  $ 1,201  $ 567  $ 18  $ 5,118  $ —  $ 5,118 
Intersegment sales 495  6  340  414  —  1,255  (1,255) — 
Total sales 2,112  1,721  1,541  981  18  6,373  (1,255) 5,118 
Research, development and engineering expenses 72  9  64  53  26  224  —  224 
Equity, royalty and interest income (loss) from investees 74  13  13  —  (2) 98  —  98 
Interest income 1  1  1  1  —  4  —  4 
EBITDA 382  182  261  101  (40) 886  (10) 876 
Depreciation and amortization (2)
51  30  47  32  5  165  —  165 
Three months ended September 29, 2019            
External sales $ 1,822  $ 2,001  $ 1,253  $ 683  $ 9  $ 5,768  $ —  $ 5,768 
Intersegment sales 594  3  397  443  —  1,437  (1,437) — 
Total sales 2,416  2,004  1,650  1,126  9  7,205  (1,437) 5,768 
Research, development and engineering expenses 79  7  73  58  25  242  —  242 
Equity, royalty and interest income from investees 34  12  9  13  —  68  —  68 
Interest income 5  4  2  3  —  14  —  14 
EBITDA 341  186  286  158  (36) 935  23  958 
Depreciation and amortization (2)
50  29  67  29  2  177  —  177 
(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 September 27, 2020 and September 29, 2019.
(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."
Summarized financial information regarding our reportable operating segments for the nine months ended is shown in the table below:
In millions Engine Distribution Components Power Systems New Power Total Segments
Intersegment Eliminations (1)
Total
Nine months ended September 27, 2020            
External sales $ 4,133  $ 5,123  $ 3,192  $ 1,495  $ 38  $ 13,981  $ —  $ 13,981 
Intersegment sales 1,560  17  1,001  1,147  —  3,725  (3,725) — 
Total sales 5,693  5,140  4,193  2,642  38  17,706  (3,725) 13,981 
Research, development and engineering expenses 217  20  187  148  79  651  —  651 
Equity, royalty and interest income (loss) from investees 236  45  46  18  (3) 342  —  342 
Interest income 6  3  3  3  —  15  —  15 
EBITDA 897  500  681  269  (121) 2,226  45  2,271 
Depreciation and amortization(2)
155  91  142  96  13  497  —  497 
Nine months ended September 29, 2019            
External sales $ 5,879  $ 6,009  $ 4,055  $ 2,030  $ 20  $ 17,993  $ —  $ 17,993 
Intersegment sales 1,893  24  1,302  1,376  —  4,595  (4,595) — 
Total sales 7,772  6,033  5,357  3,406  20  22,588  (4,595) 17,993 
Research, development and engineering expenses 245  21  223  171  70  730  —  730 
Equity, royalty and interest income from investees 152  35  30  39  —  256  —  256 
Interest income 13  12  6  7  —  38  —  38 
EBITDA 1,195  529  908  469  (98) 3,003  46  3,049 
Depreciation and amortization(2)
151  86  160  88  6  491  —  491 
(1) Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the nine months ended September 27, 2020 and September 29, 2019.
(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." The amortization of debt discount and deferred costs was $2 million and $2 million for the nine months ended September 27, 2020 and September 29, 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 Nine months ended
In millions September 27,
2020		 September 29,
2019		 September 27,
2020		 September 29,
2019
Total EBITDA $ 876  $ 958  $ 2,271  $ 3,049 
Less:
Depreciation and amortization 165  177  497  491 
Interest expense 25  26  71  87 
Income before income taxes $ 686  $ 755  $ 1,703  $ 2,471