Quarterly report pursuant to Section 13 or 15(d)

OPERATING SEGMENTS (Tables)

v3.21.2
OPERATING SEGMENTS (Tables)
 9 Months Ended
Oct. 03, 2021
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
Three months ended October 3, 2021    
External sales $ 1,961  $ 1,952  $ 1,347  $ 688  $ 20  $ 5,968 
Intersegment sales 617  7  446  476  3  1,549 
Total sales 2,578  1,959  1,793  1,164  23  7,517 
Research, development and engineering expenses 97  10  78  55  26  266 
Equity, royalty and interest income (loss) from investees 61  15  10  11  (3) 94 
Interest income 3  2  1  1  —  7 
EBITDA 391  192  253  134  (58) 912 
Depreciation and amortization(1)
53  28  44  29  5  159 
Three months ended September 27, 2020        
External sales $ 1,617  $ 1,715  $ 1,201  $ 567  $ 18  $ 5,118 
Intersegment sales 495  6  340  414  —  1,255 
Total sales 2,112  1,721  1,541  981  18  6,373 
Research, development and engineering expenses 72  9  64  53  26  224 
Equity, royalty and interest income (loss) from investees 74  13  13  —  (2) 98 
Interest income 1  1  1  1  —  4 
EBITDA 382  182  261  101  (40) 886 
Depreciation and amortization(1)
51  30  47  32  5  165 
(1) 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
Nine months ended October 3, 2021        
External sales $ 5,776  $ 5,692  $ 4,627  $ 1,999  $ 77  $ 18,171 
Intersegment sales 1,752  22  1,312  1,330  5  4,421 
Total sales 7,528  5,714  5,939  3,329  82  22,592 
Research, development and engineering expenses 288  35  232  172  75  802 
Equity, royalty and interest income (loss) from investees 278  47  41  32  (1) 397 
Interest income 7  5  3  3  —  18 
EBITDA 1,147  553  975  399  (169) 2,905 
Depreciation and amortization(1)
154  88  138  97  17  494 
Nine months ended September 27, 2020        
External sales $ 4,133  $ 5,123  $ 3,192  $ 1,495  $ 38  $ 13,981 
Intersegment sales 1,560  17  1,001  1,147  —  3,725 
Total sales 5,693  5,140  4,193  2,642  38  17,706 
Research, development and engineering expenses 217  20  187  148  79  651 
Equity, royalty and interest income (loss) from investees 236  45  46  18  (3) 342 
Interest income 6  3  3  3  —  15 
EBITDA 897  500  681  269  (121) 2,226 
Depreciation and amortization(1)
155  91  142  96  13  497 
(1) 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 $3 million and $2 million for the nine months ended October 3, 2021 and September 27, 2020, respectively. A portion of depreciation expense is included in "Research, development and engineering expenses."
Reconciliation of Revenue from Segments to Consolidated
A reconciliation of our total segment sales to total net sales in the Condensed Consolidated Statements of Net Income was as follows:
  Three months ended Nine months ended
In millions October 3,
2021		 September 27,
2020		 October 3,
2021		 September 27,
2020
Total segment sales $ 7,517  $ 6,373  $ 22,592  $ 17,706 
Elimination of intersegment sales (1,549) (1,255) (4,421) (3,725)
Total net sales $ 5,968  $ 5,118  $ 18,171  $ 13,981 
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 October 3,
2021		 September 27,
2020		 October 3,
2021		 September 27,
2020
TOTAL SEGMENT EBITDA $ 912  $ 886  $ 2,905  $ 2,226 
Intersegment elimination (50) (10) (89) 45 
Less:
Interest expense 28  25  85  71 
Depreciation and amortization 159  165  494  497 
INCOME BEFORE INCOME TAXES 675  686  2,237  1,703 
Less: Income tax expense 134  182  473  402 
CONSOLIDATED NET INCOME 541  504  1,764  1,301 
Less: Net income attributable to noncontrolling interests 7  3  27  13 
NET INCOME ATTRIBUTABLE TO CUMMINS INC. $ 534  $ 501  $ 1,737  $ 1,288