Quarterly report [Sections 13 or 15(d)]

OPERATING SEGMENTS (Tables)

v3.25.1
OPERATING SEGMENTS (Tables)
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
Financial information regarding reportable operating segments
Summarized financial information regarding our reportable operating segments for the three months ended March 31, 2025 and 2024 is shown in the table below:
In millions Engine Components Distribution Power Systems Accelera Total Segments
Three months ended March 31, 2025  
External sales $ 2,040  $ 2,270  $ 2,902  $ 872  $ 90  $ 8,174 
Intersegment sales 731  400  5  777  13  1,926 
Total sales 2,771  2,670  2,907  1,649  103  10,100 
Cost of goods sold (excluding warranty expenses) 2,036  2,139  2,332  1,090  121  7,718 
Warranty expenses 85  26  6  32  8  157 
Selling expenses 59  41  157  46  7  310 
Administrative expenses 138  119  91  100  13  461 
Research, development and engineering expenses 155  75  14  57  43  344 
Equity, royalty and interest income (loss) from investees 73  7  28  29  (6) 131 
Other income (expense) (1)
20  (17) 9  3  (3) 12 
Add back: Depreciation and amortization (2)
67  122  32  33  12  266 
Segment EBITDA $ 458  $ 382  $ 376  $ 389  $ (86) $ 1,519 
Interest income (3)
$ 10  $ 7  $ 5  $ 4  $ —  $ 26 
Three months ended March 31, 2024    
External sales $ 2,240  $ 2,842  $ 2,529  $ 708  $ 84  $ 8,403 
Intersegment sales 688  490  6  681  9  1,874 
Total sales 2,928  3,332  2,535  1,389  93  10,277 
Cost of goods sold (excluding warranty expenses) 2,190  2,636  2,046  997  120  7,989 
Warranty expenses 105  62  5  15  8  195 
Selling expenses 52  55  153  40  8  308 
Administrative expenses 144  158  91  99  13  505 
Research, development and engineering expenses 154  84  14  60  55  367 
Equity, royalty and interest income (loss) from investees 57  26  24  19  (3) 123 
Other income (expense) (1)
16  (15) 13  6  (1) 19 
Add back: Depreciation and amortization (2)
58  125  31  34  14  262 
Segment EBITDA $ 414  $ 473 
(4)
 $ 294  $ 237  $ (101) $ 1,317 
Interest income (3)
$ 7  $ 8  $ 11  $ 3  $ —  $ 29 
(1) Other income (expense) includes other operating expense, net and other income, net from our Condensed Consolidated Statements of Net Income.
(2) Depreciation and amortization are not considered significant segment expenses but are presented here to reconcile to EBITDA, the measure used by our CODM. Depreciation and amortization, as shown on a segment basis, excludes the amortization of debt discount and deferred costs included in our Condensed Consolidated Statements of Net Income as interest expense. The amortization of debt discount and deferred costs was $3 million and $3 million for the three months ended March 31, 2025 and March 31, 2024, respectively. A portion of depreciation expense is included in research, development and engineering expenses.
(3) Interest income is a component of other income (expense).
(4) Included $21 million of costs associated with the divestiture of Atmus for the three months ended March 31, 2024. See NOTE 14, "ATMUS DIVESTITURE," for additional information.
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
  March 31,
In millions 2025 2024
TOTAL SEGMENT EBITDA $ 1,519  $ 1,317 
Intersegment eliminations and other (1)
(59) 1,255 
(2)
Less:
Interest expense 77  89 
Depreciation and amortization 266  262 
INCOME BEFORE INCOME TAXES $ 1,117  $ 2,221 
(1) Included intersegment sales, intersegment profit in inventory and unallocated corporate expenses.
(2) Included a $1.3 billion gain related the divestiture of Atmus and $14 million of costs associated with the divestiture of Atmus (included in corporate expenses) for the three months ended March 31, 2024. See NOTE 14, "ATMUS DIVESTITURE," for additional information.