Cummins Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

RESTRUCTURING ACTIONS AND OTHER CHARGES RESTRUCTURING ACTIONS AND OTHER CHARGES (Tables)

RESTRUCTURING ACTIONS AND OTHER CHARGES RESTRUCTURING ACTIONS AND OTHER CHARGES (Tables)

6 Months Ended

Jul. 03, 2016

Restructuring and Related Activities [Abstract]

Schedule of Segment Reporting Information, 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 ⁽¹⁾
Power Systems	26
Distribution	23
Engine	17
Components	13
Non-segment	11
Restructuring actions and other charges	$	90

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⁽¹⁾ Restructuring actions and other charges by segment were re-allocated in conjunction with our segment realignment. See Note 13, "OPERATING SEGMENTS," for additional information.

Summarized financial information regarding our reportable operating segments for the three and six month periods is shown in the table below:



In millions	Engine			Distribution		Components		Power Systems		Non-segment Items ⁽¹⁾			Total
Three months ended July 3, 2016
External sales	$	1,504		$	1,538	$	933	$	553	$	—		$	4,528
Intersegment sales	498			6		346		368		(1,218		)	—
Total sales	2,002			1,544		1,279		921		(1,218		)	4,528
Depreciation and amortization⁽²⁾	41			29		32		29		—			131
Research, development and engineering expenses	53			3		51		48		—			155
Equity, royalty and interest income from investees	46			19		12		11		—			88
Interest income	3			1		1		1		—			6
Segment EBIT	206		⁽³⁾	87		190		90		18			591

Three months ended June 28, 2015
External sales	$	1,834		$	1,487	$	1,017	$	677	$	—		$	5,015
Intersegment sales	491			8		380		420		(1,299		)	—
Total sales	2,325			1,495		1,397		1,097		(1,299		)	5,015
Depreciation and amortization⁽²⁾	47			25		28		26		—			126
Research, development and engineering expenses	53			3		57		53		—			166
Equity, royalty and interest income from investees	51			21		8		14		—			94
Interest income	2			1		1		2		—			6
Segment EBIT	278			113		223		127		(20		)	721

Six months ended July 3, 2016
External sales	$	2,993		$	2,996	$	1,830	$	1,000	$	—		$	8,819
Intersegment sales	985			11		686		729		(2,411		)	—
Total sales	3,978			3,007		2,516		1,729		(2,411		)	8,819
Depreciation and amortization⁽²⁾	80			57		63		58		—			258
Research, development and engineering expenses	110			7		107		97		—			321
Equity, royalty and interest income from investees	82			37		20		21		—			160
Interest income	5			2		2		3		—			12
Segment EBIT	403		⁽³⁾	174		353		136		9			1,075

Six months ended June 28, 2015
External sales	$	3,523		$	2,956	$	1,948	$	1,297	$	—		$	9,724
Intersegment sales	947			15		748		802		(2,512		)	—
Total sales	4,470			2,971		2,696		2,099		(2,512		)	9,724
Depreciation and amortization⁽²⁾	93			52		54		54		—			253
Research, development and engineering expenses	122			6		118		115		—			361
Equity, royalty and interest income from investees	74			41		17		30		—			162
Interest income	4			2		2		3		—			11
Segment EBIT	478			201		418		228		(42		)	1,283

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⁽¹⁾Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three and six months ended July 3, 2016 and June 28, 2015.

⁽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 Income as "Interest expense." The amortization of debt discount and deferred costs were $1 million and $1 million for the six months ended July 3, 2016 and June 28, 2015, respectively.

Schedule of Restructuring and Related Costs Accrual Rollforward

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



In millions
Balance at December 31, 2015	$	60
Cash payments for 2015 actions	(42		)
Balance at July 3, 2016	$	18