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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 29, 2020
Commission File Number 1-4949
CUMMINS INC.
(Exact name of registrant as specified in its charter)
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Indiana | | 35-0257090 |
(State of Incorporation) | | (IRS Employer Identification No.) |
500 Jackson Street
Box 3005
Columbus, Indiana 47202-3005
(Address of principal executive offices)
Telephone (812) 377-5000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | | Trading symbol(s) | | Name of each exchange on which registered |
Common stock, $2.50 par value | | CMI | | New York Stock Exchange |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that registrant was required to submit such files). Yes x No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
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Large Accelerated Filer | x | | Accelerated filer | ☐ | | Non-accelerated filer | ☐ | | | | |
Smaller reporting company | ☐ | | Emerging growth company | ☐ | | | | | | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
As of March 29, 2020, there were 147,526,086 shares of common stock outstanding with a par value of $2.50 per share.
CUMMINS INC. AND SUBSIDIARIES
TABLE OF CONTENTS
QUARTERLY REPORT ON FORM 10-Q
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| Condensed Consolidated Statements of Net Income for the three months ended March 29, 2020 and March 31, 2019 | |
| Condensed Consolidated Statements of Comprehensive Income for the three months ended March 29, 2020 and March 31, 2019 | |
| Condensed Consolidated Balance Sheets at March 29, 2020 and December 31, 2019 | |
| Condensed Consolidated Statements of Cash Flows for the three months ended March 29, 2020 and March 31, 2019 | |
| Condensed Consolidated Statements of Changes in Equity for the three months ended March 29, 2020 and March 31, 2019 | |
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PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements
CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME
(Unaudited)
| | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| | Three months ended | | | | | | |
In millions, except per share amounts | | March 29, 2020 | | March 31, 2019 | | | | |
NET SALES (a) (Note 3) | | $ | 5,011 | | | $ | 6,004 | | | | | |
Cost of sales | | 3,717 | | | 4,472 | | | | | |
GROSS MARGIN | | 1,294 | | | 1,532 | | | | | |
| | | | | | | | |
OPERATING EXPENSES AND INCOME | | | | | | | | |
Selling, general and administrative expenses | | 546 | | | 593 | | | | | |
Research, development and engineering expenses | | 238 | | | 237 | | | | | |
Equity, royalty and interest income from investees (Note 5) | | 129 | | | 92 | | | | | |
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Other operating (expense) income, net | | (5) | | | 5 | | | | | |
OPERATING INCOME | | 634 | | | 799 | | | | | |
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Interest income | | 7 | | | 12 | | | | | |
Interest expense | | 23 | | | 32 | | | | | |
Other income, net | | 37 | | | 66 | | | | | |
INCOME BEFORE INCOME TAXES | | 655 | | | 845 | | | | | |
| | | | | | | | |
Income tax expense (Note 6) | | 127 | | | 176 | | | | | |
CONSOLIDATED NET INCOME | | 528 | | | 669 | | | | | |
| | | | | | | | |
Less: Net income attributable to noncontrolling interests | | 17 | | | 6 | | | | | |
NET INCOME ATTRIBUTABLE TO CUMMINS INC. | | $ | 511 | | | $ | 663 | | | | | |
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EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC. | | | | | | | | |
Basic | | $ | 3.42 | | | $ | 4.22 | | | | | |
Diluted | | $ | 3.41 | | | $ | 4.20 | | | | | |
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WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | | | | | | | | |
Basic | | 149.3 | | | 157.2 | | | | | |
Dilutive effect of stock compensation awards | | 0.4 | | | 0.5 | | | | | |
Diluted | | 149.7 | | | 157.7 | | | | | |
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(a) Includes sales to nonconsolidated equity investees of $257 million and $285 million for the three months ended March 29, 2020 and March 31, 2019, respectively. | | | | | | | | |
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
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| | | Three months ended | | | | | | | |
| In millions | | March 29, 2020 | | March 31, 2019 | | | | | |
| CONSOLIDATED NET INCOME | | $ | 528 | | | $ | 669 | | | | | | |
| Other comprehensive income (loss), net of tax (Note 13) | | | | | | | | | |
| Change in pension and other postretirement defined benefit plans | | 2 | | | (11) | | | | | | |
| Foreign currency translation adjustments | | (162) | | | 84 | | | | | | |
| Unrealized loss on debt securities | | | — | | | (1) | | | | | | |
| Unrealized loss on derivatives | | | (79) | | | (1) | | | | | | |
| Total other comprehensive (loss) income, net of tax | | | (239) | | | 71 | | | | | | |
| COMPREHENSIVE INCOME | | 289 | | | 740 | | | | | | |
| Less: Comprehensive income attributable to noncontrolling interests | | — | | | 9 | | | | | | |
| COMPREHENSIVE INCOME ATTRIBUTABLE TO CUMMINS INC. | | $ | 289 | | | $ | 731 | | | | | | |
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
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In millions, except par value | | March 29, 2020 | | December 31, 2019 |
ASSETS | | | | |
Current assets | | | | |
Cash and cash equivalents | | $ | 1,691 | | | $ | 1,129 | |
| | | | |
Marketable securities (Note 7) | | 339 | | | 341 | |
Total cash, cash equivalents and marketable securities | | 2,030 | | | 1,470 | |
Accounts and notes receivable, net | | | | |
Trade and other | | 3,234 | | | 3,387 | |
Nonconsolidated equity investees | | 271 | | | 283 | |
Inventories (Note 8) | | 3,579 | | | 3,486 | |
Prepaid expenses and other current assets | | 676 | | | 761 | |
Total current assets | | 9,790 | | | 9,387 | |
Long-term assets | | | | |
Property, plant and equipment | | 8,578 | | | 8,699 | |
Accumulated depreciation | | (4,450) | | | (4,454) | |
Property, plant and equipment, net | | 4,128 | | | 4,245 | |
Investments and advances related to equity method investees | | 1,304 | | | 1,237 | |
Goodwill | | 1,283 | | | 1,286 | |
Other intangible assets, net | | 965 | | | 1,003 | |
Pension assets | | 989 | | | 1,001 | |
Other assets | | 1,617 | | | 1,578 | |
Total assets | | $ | 20,076 | | | $ | 19,737 | |
| | | | |
LIABILITIES | | | | |
Current liabilities | | | | |
Accounts payable (principally trade) | | $ | 2,648 | | | $ | 2,534 | |
Loans payable (Note 9) | | 121 | | | 100 | |
Commercial paper (Note 9) | | 1,617 | | | 660 | |
Accrued compensation, benefits and retirement costs | | 322 | | | 560 | |
Current portion of accrued product warranty (Note 10) | | 743 | | | 803 | |
Current portion of deferred revenue (Note 3) | | 527 | | | 533 | |
| | | | |
Other accrued expenses (Note 11) | | 971 | | | 1,039 | |
Current maturities of long-term debt (Note 9) | | 33 | | | 31 | |
Total current liabilities | | 6,982 | | | 6,260 | |
Long-term liabilities | | | | |
Long-term debt (Note 9) | | 1,580 | | | 1,576 | |
Pensions and other postretirement benefits | | 588 | | | 591 | |
Accrued product warranty (Note 10) | | 640 | | | 645 | |
Deferred revenue (Note 3) | | 837 | | | 821 | |
Other liabilities (Note 11) | | 1,431 | | | 1,379 | |
Total liabilities | | $ | 12,058 | | | $ | 11,272 | |
| | | | |
Commitments and contingencies (Note 12) | | | | |
| | | | |
EQUITY | | | | |
Cummins Inc. shareholders’ equity | | | | |
Common stock, $2.50 par value, 500 shares authorized, 222.4 and 222.4 shares issued | | $ | 2,335 | | | $ | 2,346 | |
Retained earnings | | 14,728 | | | 14,416 | |
Treasury stock, at cost, 74.9 and 71.7 shares | | (7,744) | | | (7,225) | |
Common stock held by employee benefits trust, at cost, 0.1 and 0.2 shares | | (1) | | | (2) | |
Accumulated other comprehensive loss (Note 13) | | (2,250) | | | (2,028) | |
| | | | |
| | | | |
| | | | |
Total Cummins Inc. shareholders’ equity | | 7,068 | | | 7,507 | |
Noncontrolling interests | | 950 | | | 958 | |
Total equity | | $ | 8,018 | | | $ | 8,465 | |
Total liabilities and equity | | $ | 20,076 | | | $ | 19,737 | |
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | | | | | | | | | |
| | Three months ended | | |
In millions | | March 29, 2020 | | March 31, 2019 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | | |
Consolidated net income | | $ | 528 | | | $ | 669 | |
Adjustments to reconcile consolidated net income to net cash provided by operating activities | | | | |
Depreciation and amortization | | 168 | | | 157 | |
| | | | |
| | | | |
| | | | |
Deferred income taxes | | (11) | | | 11 | |
Equity in income of investees, net of dividends | | (78) | | | (64) | |
Pension and OPEB expense (Note 4) | | 27 | | | 18 | |
Pension contributions and OPEB payments (Note 4) | | (60) | | | (47) | |
Stock-based compensation expense | | 4 | | | 9 | |
| | | | |
Restructuring payments (Note 14) | | (48) | | | — | |
| | | | |
| | | | |
Gain on corporate owned life insurance | | (17) | | | (37) | |
| | | | |
Foreign currency remeasurement and transaction exposure | | 3 | | | 79 | |
Changes in current assets and liabilities | | | | |
Accounts and notes receivable | | 107 | | | (135) | |
Inventories | | (171) | | | (107) | |
Other current assets | | 79 | | | 67 | |
Accounts payable | | 171 | | | 166 | |
Accrued expenses | | (321) | | | (293) | |
Changes in other liabilities | | 28 | | | 64 | |
| | | | |
Other, net | | (30) | | | (145) | |
Net cash provided by operating activities | | 379 | | | 412 | |
| | | | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | | |
Capital expenditures | | (75) | | | (109) | |
Investments in internal use software | | (8) | | | (20) | |
| | | | |
Investments in and advances to equity investees | | (7) | | | (10) | |
| | | | |
| | | | |
Investments in marketable securities—acquisitions | | (116) | | | (121) | |
Investments in marketable securities—liquidations (Note 7) | | 95 | | | 103 | |
| | | | |
| | | | |
Cash flows from derivatives not designated as hedges | | 6 | | | 55 | |
Other, net | | 6 | | | 31 | |
Net cash used in investing activities | | (99) | | | (71) | |
| | | | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | |
| | | | |
Net borrowings (payments) of commercial paper (Note 9) | | 957 | | | (71) | |
Payments on borrowings and finance lease obligations | | (10) | | | (10) | |
Net borrowings under short-term credit agreements | | 25 | | | 15 | |
Distributions to noncontrolling interests | | (13) | | | (13) | |
Dividend payments on common stock | | (195) | | | (179) | |
Repurchases of common stock | | (550) | | | (100) | |
| | | | |
Other, net | | 20 | | | 11 | |
Net cash provided by (used in) financing activities | | 234 | | | (347) | |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | 48 | | | 31 | |
Net increase in cash and cash equivalents | | 562 | | | 25 | |
Cash and cash equivalents at beginning of year | | 1,129 | | | 1,303 | |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | | $ | 1,691 | | | $ | 1,328 | |
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | | | | | | | | | | | | | | | |
In millions, except per share amounts | | Common Stock | | Additional Paid-in Capital | | Retained Earnings | | Treasury Stock | | Common Stock Held in Trust | | Accumulated Other Comprehensive Loss | | Total Cummins Inc. Shareholders’ Equity | | Noncontrolling Interests | | Total Equity |
BALANCE AT DECEMBER 31, 2019 | | $ | 556 | | | $ | 1,790 | | | $ | 14,416 | | | $ | (7,225) | | | $ | (2) | | | $ | (2,028) | | | $ | 7,507 | | | $ | 958 | | | $ | 8,465 | |
Adoption of new accounting standards (Note 16) | | | | | | (4) | | | | | | | | | (4) | | | — | | | (4) | |
Net income | | | | | | 511 | | | | | | | | | 511 | | | 17 | | | 528 | |
Other comprehensive loss, net of tax (Note 13) | | | | | | | | | | | | | (222) | | | (222) | | | (17) | | | (239) | |
Issuance of common stock | | | | | 9 | | | | | | | | | | | 9 | | | — | | | 9 | |
Employee benefits trust activity | | | | 17 | | | | | | | | 1 | | | | | 18 | | | — | | | 18 | |
Repurchases of common stock | | | | | | | | | (550) | | | | | | | | (550) | | | — | | | (550) | |
Cash dividends on common stock, $1.311 per share | | | | | | (195) | | | | | | | | | (195) | | | — | | | (195) | |
Distributions to noncontrolling interests | | | | | | | | | | | | | | — | | | (13) | | | (13) | |
Stock-based awards | | | | (18) | | | | | 31 | | | | | | | | 13 | | | — | | | 13 | |
| | | | | | | | | | | | | | | | | | |
Other shareholder transactions | | | | (19) | | | | | | | | | | | (19) | | | 5 | | | (14) | |
BALANCE AT MARCH 29, 2020 | | $ | 556 | | | $ | 1,779 | | | $ | 14,728 | | | $ | (7,744) | | | $ | (1) | | | $ | (2,250) | | | $ | 7,068 | | | $ | 950 | | | $ | 8,018 | |
| | | | | | | | | | | | | | | | | | |
BALANCE AT DECEMBER 31, 2018 | | $ | 556 | | | $ | 1,715 | | | $ | 12,917 | | | $ | (6,028) | | | $ | (5) | | | $ | (1,807) | | | $ | 7,348 | | | $ | 911 | | | $ | 8,259 | |
| | | | | | | | | | | | | | | | | | |
Net income | | | | | | | | 663 | | | | | | | | | | | | 663 | | | 6 | | | 669 | |
Other comprehensive income, net of tax (Note 13) | | | | | | | | | | | | | | | | | 68 | | | 68 | | | 3 | | | 71 | |
Issuance of common stock | | | | | 1 | | | | | | | | | | | | | | | 1 | | | — | | | 1 | |
Employee benefits trust activity | | | | | 13 | | | | | | | | | 1 | | | | | | 14 | | | — | | | 14 | |
Repurchases of common stock | | | | | | | | | | | (100) | | | | | | | | | (100) | | | — | | | (100) | |
Cash dividends on common stock, $1.14 per share | | | | | | | | (179) | | | | | | | | | | | | (179) | | | — | | | (179) | |
Distributions to noncontrolling interests | | | | | | | | | | | | | | | | | | | | — | | | (13) | | | (13) | |
Stock-based awards | | | | | (11) | | | | | | 17 | | | | | | | | | 6 | | | — | | | 6 | |
| | | | | | | | | | | | | | | | | | |
Other shareholder transactions | | | | | (1) | | | | | | | | | | | | | | | (1) | | | — | | | (1) | |
BALANCE AT MARCH 31, 2019 | | $ | 556 | | | $ | 1,717 | | | $ | 13,401 | | | $ | (6,111) | | | $ | (4) | | | $ | (1,739) | | | $ | 7,820 | | | $ | 907 | | | $ | 8,727 | |
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
CUMMINS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. NATURE OF OPERATIONS
Cummins Inc. (“Cummins,” “we,” “our” or “us”) was founded in 1919 as Cummins Engine Company, a corporation in Columbus, Indiana, and one of the first diesel engine manufacturers. In 2001, we changed our name to Cummins Inc. We are a global power leader that designs, manufactures, distributes and services diesel, natural gas, electric and hybrid powertrains and powertrain-related components including filtration, aftertreatment, turbochargers, fuel systems, controls systems, air handling systems, automated transmissions, electric power generation systems, batteries, electrified power systems, hydrogen generation and fuel cell products. We sell our products to original equipment manufacturers (OEMs), distributors, dealers and other customers worldwide. We serve our customers through a network of approximately 600 wholly-owned, joint venture and independent distributor locations and over 7,600 Cummins certified dealer locations in more than 190 countries and territories.
NOTE 2. BASIS OF PRESENTATION
Interim Condensed Financial Statements
The unaudited Condensed Consolidated Financial Statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of operations, financial position and cash flows. All such adjustments are of a normal recurring nature. The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles in the United States of America (GAAP) pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted as permitted by such rules and regulations.
These interim condensed financial statements should be read in conjunction with the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2019. Our interim period financial results for the three month periods presented are not necessarily indicative of results to be expected for any other interim period or for the entire year. The year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Reclassifications
Certain amounts for prior year periods have been reclassified to conform to the presentation of the current year.
Use of Estimates in Preparation of Financial Statements
Preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts presented and disclosed in our Condensed Consolidated Financial Statements. Significant estimates and assumptions in these Condensed Consolidated Financial Statements require the exercise of judgment. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates.
Reporting Period
Our reporting period usually ends on the Sunday closest to the last day of the quarterly calendar period. The first quarters of 2020 and 2019 ended on March 29 and March 31, respectively. Our fiscal year ends on December 31, regardless of the day of the week on which December 31 falls.
Weighted-Average Diluted Shares Outstanding
The weighted-average diluted common shares outstanding excludes the anti-dilutive effect of certain stock options. The options excluded from diluted earnings per share were as follows:
| | | | | | | | | | | | | | | |
| Three months ended | | | | | | |
| March 29, 2020 | | March 31, 2019 | | | | |
Options excluded | 1,234,188 | | | 783,576 | | | | | |
NOTE 3. REVENUE RECOGNITION
Long-term Contracts
Most of our contracts are for a period of less than one year. We have certain long-term maintenance agreements, construction contracts and extended warranty coverage arrangements that span a period in excess of one year. The aggregate amount of the transaction price for long-term maintenance agreements and construction contracts allocated to performance obligations that had not been satisfied as of March 29, 2020, was $967 million. We expect to recognize the related revenue of $237 million over the next 12 months and $730 million over periods up to 10 years. See Note 10, "PRODUCT WARRANTY LIABILITY," for additional disclosures on extended warranty coverage arrangements. Our other contracts generally are for a duration of less than one year, include payment terms that correspond to the timing of costs incurred when providing goods and services to our customers or represent sales-based royalties.
Deferred and Unbilled Revenue
The following is a summary of our unbilled and deferred revenue and related activity:
| | | | | | | | | | | | | | |
In millions | | March 29, 2020 | | December 31, 2019 |
Unbilled revenue | | $ | 91 | | | $ | 68 | |
Deferred revenue, primarily extended warranty | | 1,364 | | | 1,354 | |
| | | | |
| | | | |
| | | | |
We recognized revenue of $112 million and $109 million for the three months ended March 29, 2020 and March 31, 2019, respectively, that was included in the deferred revenue balance at the beginning of each year. We did not record any impairment losses on our unbilled revenues during the three months ended March 29, 2020 or March 31, 2019.
Disaggregation of Revenue
Consolidated Revenue
The table below presents our consolidated sales by geographic area. Net sales attributed to geographic areas were based on the location of the customer.
| | | | | | | | | | | | | | | | | | |
| | Three months ended | | | | | | |
In millions | | March 29, 2020 | | March 31, 2019 | | | | |
United States | | $ | 2,852 | | | $ | 3,436 | | | | | |
| | | | | | | | |
China | | 522 | | | 573 | | | | | |
| | | | | | | | |
| | | | | | | | |
India | | 170 | | | 224 | | | | | |
| | | | | | | | |
Other international | | 1,467 | | | 1,771 | | | | | |
Total net sales | | $ | 5,011 | | | $ | 6,004 | | | | | |
| | | | | | | | |
| | | | | | | | |
Segment Revenue
Engine segment external sales by market were as follows:
| | | | | | | | | | | | | | | | | | |
| | Three months ended | | | | | | |
In millions | | March 29, 2020 | | March 31, 2019 | | | | |
Heavy-duty truck | | $ | 519 | | | $ | 723 | | | | | |
Medium-duty truck and bus | | 490 | | | 610 | | | | | |
Light-duty automotive | | 327 | | | 330 | | | | | |
Total on-highway | | 1,336 | | | 1,663 | | | | | |
Off-highway | | 243 | | | 321 | | | | | |
Total sales | | $ | 1,579 | | | $ | 1,984 | | | | | |
Distribution segment external sales by region were as follows:
| | | | | | | | | | | | | | | | | | |
| | Three months ended | | | | | | |
In millions | | March 29, 2020 | | March 31, 2019 | | | | |
North America | | $ | 1,245 | | | $ | 1,392 | | | | | |
Asia Pacific | | 192 | | | 220 | | | | | |
Europe | | 135 | | | 123 | | | | | |
China | | 68 | | | 81 | | | | | |
Africa and Middle East | | 51 | | | 55 | | | | | |
Russia | | 41 | | | 35 | | | | | |
Latin America | | 39 | | | 40 | | | | | |
India | | 36 | | | 47 | | | | | |
Total sales | | $ | 1,807 | | | $ | 1,993 | | | | | |
| | | | | | | | |
Distribution segment external sales by product line were as follows:
| | | | | | | | | | | | | | | | | | |
| | Three months ended | | | | | | |
In millions | | March 29, 2020 | | March 31, 2019 | | | | |
Parts | | $ | 783 | | | $ | 841 | | | | | |
Power generation | | 375 | | | 401 | | | | | |
Service | | 327 | | | 362 | | | | | |
Engines | | 322 | | | 389 | | | | | |
Total sales | | $ | 1,807 | | | $ | 1,993 | | | | | |
Components segment external sales by business were as follows:
| | | | | | | | | | | | | | | | | | |
| | Three months ended | | | | | | |
In millions | | March 29, 2020 | | March 31, 2019 | | | | |
Emission solutions | | $ | |