Cummins Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

RESTRUCTURING AND OTHER CHARGES (Tables)

RESTRUCTURING AND OTHER CHARGES (Tables)

12 Months Ended

Dec. 31, 2015

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Reserve by Type of Cost

Restructuring actions during 2015 included:



In millions	Year ended December 31, 2015
Workforce reductions	$	86
Impairments and other charges	4
Restructuring actions and other charges	$	90

Restructuring and other charges by segment

Restructuring actions and other charges were included in each segment in our operating results as follows:



In millions	Year ended December 31, 2015
Engine	$	26
Distribution	23
Power Generation	19
Components	13
Non-segment	9
Restructuring actions and other charges	$	90

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
2015
External sales	$	7,540		$	6,198		$	3,745	$	1,627		$	—		$	19,110
Intersegment sales	2,909			31			1,427		1,113			(5,480		)	—
Total sales	10,449			6,229			5,172		2,740			(5,480		)	19,110
Depreciation and amortization⁽²⁾	239			105			109		58			—			511
Research, development and engineering expenses	428			10			236		61			—			735
Equity, royalty and interest income from investees	171			78			35		31			—			315
Interest income	13			4			4		3			—			24

Segment EBIT (excluding impairment of light-duty diesel assets and restructuring actions and other charges)	1,035		⁽⁵⁾	435		⁽⁶⁾	749		175			(3		)	2,391
Impairment of light-duty diesel assets⁽³⁾	202			—			9		—			—			211
Restructuring actions and other charges⁽⁴⁾	26			23			13		19			9			90
Segment EBIT	807		⁽⁵⁾	412		⁽⁶⁾	727		156			(12		)	2,090
Net assets	3,238			2,330			1,891		1,605			—			9,064
Investments and advances to equity investees	491			192			150		142			—			975
Capital expenditures	428			125			137		54			—			744
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		⁽⁶⁾	684		168		⁽⁷⁾	(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	1,041			388		⁽⁶⁾	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

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⁽¹⁾	Includes intersegment sales and profit in inventory eliminations and unallocated corporate expenses. The year ended December 31, 2015, includes a $9 million corporate restructuring charge. There were no significant unallocated corporate expenses for the years ended December 31, 2014 and 2013.


⁽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, $3 million and $2 million for the years ended December 31, 2015, 2014 and 2013, respectively.


⁽³⁾	See Note 3, "IMPAIRMENT OF LIGHT-DUTY DIESEL ASSETS," for additional information.


⁽⁴⁾	See Note 4, "RESTRUCTURING ACTIONS AND OTHER CHARGES," for additional information.


⁽⁵⁾	Engine segment EBIT for the year ended December 31, 2015 included an accrual for a loss contingency of $60 million. See Note 14, "COMMITMENTS AND CONTINGENCIES," for additional information.


⁽⁶⁾	Distribution segment EBIT included gains on the fair value adjustment resulting from the acquisition of controlling interests in North American distributors of $18 million, $73 million and $12 million for the periods ended December 31, 2015, 2014 and 2013, respectively. See Note 20, "ACQUISITIONS," for additional information.


⁽⁷⁾	Power Generation segment EBIT included $32 million of restructuring charges primarily related to the closure of a plant in Germany.

Schedule of Restructuring and Related Costs Accrual Rollforward

The table below summarizes the activity and balance of accrued restructuring charges, which is included in "Other accrued expenses" in our Consolidated Balance Sheets:



In millions	December 31, 2015
Workforce reductions	$	86
Cash payments	(26		)
Balance at December 31, 2015	$	60