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, 2014

Financial information regarding reportable operating segments

Summarized financial information regarding our reportable operating segments at December 31, is shown in the table below:



In millions	Engine		Distribution			Components		Power Generation		Non-segment Items⁽¹⁾			Total
2014
External sales	$	8,437	$	5,135		$	3,791	$	1,858	$	—		$	19,221
Intersegment sales	2,525		39			1,327		1,038		(4,929		)	—
Total sales	10,962		5,174			5,118		2,896		(4,929		)	19,221
Depreciation and amortization⁽²⁾	207		86			106		53		—			452
Research, development and engineering expenses	438		9			230		77		—			754
Equity, royalty and interest income from investees	147		148			36		39		—			370
Interest income	12		4			4		3		—			23
Segment EBIT	1,225		491		⁽³⁾	684		168		(70		)	2,498
Net assets	3,450		2,441			2,152		1,694		—			9,737
Investments and advances to equity investees	468		209			164		140		—			981
Capital expenditures	395		89			162		97		—			743
2013
External sales	$	8,270	$	3,726		$	3,151	$	2,154	$	—		$	17,301
Intersegment sales	1,743		23			1,191		877		(3,834		)	—
Total sales	10,013		3,749			4,342		3,031		(3,834		)	17,301
Depreciation and amortization⁽²⁾	205		54			96		50		—			405
Research, development and engineering expenses	416		6			218		73		—			713
Equity, royalty and interest income from investees	136		165			28		32		—			361
Interest income	16		2			3		6		—			27
Segment EBIT⁽³⁾	1,041		388		⁽³⁾	527		218		(14		)	2,160
Net assets	4,323		1,637			1,885		1,801		—			9,646
Investments and advances to equity investees	419		262			140		110		—			931
Capital expenditures	372		57			141		106		—			676
2012
External sales	$	9,101	$	3,261		$	2,809	$	2,163	$	—		$	17,334
Intersegment sales	1,632		16			1,203		1,105		(3,956		)	—
Total sales	10,733		3,277			4,012		3,268		(3,956		)	17,334
Depreciation and amortization⁽²⁾	192		34			82		47		—			355
Research, development and engineering expenses	433		6			213		76		—			728
Equity, royalty and interest income from investees	127		188			29		40		—			384
Interest income	11		2			3		9		—			25
Segment EBIT	1,248		369		⁽³⁾	426		285		(25		)	2,303
Net assets	3,373		1,392			1,830		1,582		—			8,177
Investments and advances to equity investees	401		281			127		88		—			897
Capital expenditures	399		62			134		95		—			690

____________________________________________________

⁽¹⁾

Includes intersegment sales and profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the years ended December 31, 2014 and 2013. The year ended December 31, 2012, included a $20 million charge ($12 million after-tax) related to legal matters. The charge was excluded from segment results as it was not considered in our evaluation of operating results for the year ended December 31, 2012.


⁽²⁾	Depreciation and amortization as shown on a segment basis excludes the amortization of debt discount and deferred costs that are included in the Consolidated Statements of Income as "Interest expense." The amortization of debt discount and deferred costs were $3 million, $2 million and $6 million for the years ended December 31, 2014, 2013 and 2012, respectively.


⁽³⁾	Distribution segment EBIT included gains on the fair value adjustment resulting from the acquisition of controlling interests in North American distributors of $73 million, $12 million and $7 million for the periods ended December 31, 2014, 2013, and 2012, respectively. See Note 2, "ACQUISITIONS," for additional information.

Reconciliation of segment information

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



	Years ended December 31,
In millions	2014		2013		2012
Total EBIT	$	2,498	$	2,160	$	2,303
Less: Interest expense	64		41		32
Income before income taxes	$	2,434	$	2,119	$	2,271

Reconciliation of segment information from net assets to total assets



	December 31,
In millions	2014			2013			2012
Net assets for operating segments	$	9,737		$	9,646		$	8,177
Liabilities deducted in arriving at net assets	6,009			5,103			4,913
Pension and other postretirement benefit adjustments excluded from net assets	(319		)	(346		)	(977		)
Deferred tax assets not allocated to segments	314			292			410
Debt-related costs not allocated to segments	35			33			25
Total assets	$	15,776		$	14,728		$	12,548

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

The tables below present certain segment information by geographic area. Net sales attributed to geographic areas were based on the location of the customer. Long-lived assets include property, plant and equipment, net of depreciation, investments and advances to equity investees and other assets, excluding deferred tax assets, refundable taxes and deferred debt expenses.



In millions	Years ended December 31,
Net Sales	2014		2013		2012
United States	$	10,058	$	8,382	$	8,107
China	1,446		1,194		1,056
Canada	771		655		642
Brazil	730		882		798
India	546		630		757
Mexico	561		556		692
United Kingdom	479		453		660
Other foreign countries	4,630		4,549		4,622
Total net sales	$	19,221	$	17,301	$	17,334

Long-lived assets attributed to geographic areas



In millions	December 31,
Long-lived assets	2014		2013		2012
United States	$	2,949	$	2,606	$	2,440
China	692		646		589
India	391		330		243
United Kingdom	339		319		339
Brazil	161		172		170
Netherlands	156		138		130
Canada	126		68		69
Mexico	96		87		77
Germany	79		69		49
Korea	34		37		37
Romania	31		27		15
Turkey	30		28		29
Australia	17		18		25
United Arab Emirates	16		15		16
Singapore	13		17		16
France	12		13		13
Other foreign countries	42		34		33
Total long-lived assets	$	5,184	$	4,624	$	4,290

- 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.

+ References + Details