Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED STATEMENTS OF INCOME

v3.8.0.1
CONSOLIDATED STATEMENTS OF INCOME - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Income Statement [Abstract]      
NET SALES [1] $ 20,428 $ 17,509 $ 19,110
Cost of sales 15,338 13,057 14,163
GROSS MARGIN 5,090 4,452 4,947
OPERATING EXPENSES AND INCOME      
Selling, general and administrative expenses 2,390 2,046 2,092
Research, development and engineering expenses 752 636 735
Equity, royalty and interest income from investees (Note 3) 357 301 315
Loss contingency (Note 12) [2] 5 138 60
Impairment of light-duty diesel assets (Note 19) 0 0 211 [3],[4]
Restructuring actions and other charges (Note 20) [5]     90
Other operating income (expense), net 65 (5) (17)
OPERATING INCOME 2,365 1,928 2,057
Interest income 18 23 24
Interest expense (Note 9) 81 69 65
Other income, net 63 48 9
INCOME BEFORE INCOME TAXES 2,365 1,930 2,025
Income tax expense (Note 2) 1,371 474 555
CONSOLIDATED NET INCOME 994 1,456 1,470
Less: Net (loss) income attributable to noncontrolling interests (Note 16) (5) 62 71
NET INCOME ATTRIBUTABLE TO CUMMINS INC. $ 999 $ 1,394 $ 1,399
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC. (Note 17)      
Basic (in dollars per share) $ 5.99 $ 8.25 $ 7.86
Diluted (in dollars per share) $ 5.97 $ 8.23 $ 7.84
Sales to nonconsolidated equity investees $ 1,174 $ 1,028 $ 1,209
[1] Includes sales to nonconsolidated equity investees of $1,174 million, $1,028 million and $1,209 million for the years ended December 31, 2017, 2016 and 2015, respectively.
[2] See Note 12, "COMMITMENTS AND CONTINGENCIES," for additional information.
[3] 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 $3 million for the years ended December 31, 2017, 2016 and 2015, respectively.
[4] See Note 19, "IMPAIRMENT OF LIGHT-DUTY DIESEL ASSETS," for additional information.
[5] See Note 20, "RESTRUCTURING ACTIONS AND OTHER CHARGES," for additional information.