Quarterly report pursuant to Section 13 or 15(d)

OPERATING SEGMENTS (Tables)

v3.10.0.1
OPERATING SEGMENTS (Tables)
9 Months Ended
Sep. 30, 2018
Segment Reporting [Abstract]  
Financial information regarding reportable operating segments Summarized financial information regarding our reportable operating segments for the three months ended is shown in the table below:
In millions
 
Engine
 
Distribution
 
Components
 
Power Systems
 
Electrified Power
 
Total Segments
 
Intersegment Eliminations (1)
 
Total
Three months ended September 30, 2018
 
 

 
 
 
 

 
 

 
 
 
 
 
 

 
 

External sales
 
$
2,082

 
$
1,927

 
$
1,297

 
$
636

 
$
1

 
$
5,943

 
$

 
$
5,943

Intersegment sales
 
644

 
4

 
457

 
471

 
1

 
1,577

 
(1,577
)
 

Total sales
 
2,726

 
1,931

 
1,754

 
1,107

 
2

 
7,520

 
(1,577
)
 
5,943

Research, development and engineering expenses
 
74

 
5

 
71

 
57

 
22

 
229

 

 
229

Equity, royalty and interest income from investees
 
55

 
9

 
12

 
14

 

 
90

 

 
90

Interest income
 
3

 
4

 
1

 
1

 

 
9

 

 
9

Segment EBITDA
 
405

 
155

 
288

 
163

 
(30
)
 
981

 
2

 
983

Depreciation and amortization (2)
 
46

 
27

 
44

 
29

 
2

 
148

 

 
148

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended October 1, 2017
 
 

 
 

 
 

 
 

 
 
 
 
 
 

 
 

External sales
 
$
1,783

 
$
1,748

 
$
1,139

 
$
615

 
$

 
$
5,285

 
$

 
$
5,285

Intersegment sales
 
553

 
5

 
394

 
441

 

 
1,393

 
(1,393
)
 

Total sales
 
2,336

 
1,753

 
1,533

 
1,056

 

 
6,678

 
(1,393
)
 
5,285

Research, development and engineering expenses
 
83

 
6

 
63

 
61

 

 
213

 

 
213

Equity, royalty and interest income from investees
 
58

 
11

 
12

 
14

 

 
95

 

 
95

Interest income
 
1

 
2

 

 
1

 

 
4

 

 
4

Segment EBITDA
 
276

 
120

 
259

 
111

 

 
766

 
22

 
788

Depreciation and amortization (2)
 
47

 
29

 
42

 
30

 

 
148

 

 
148

____________________________________
(1) Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended September 30, 2018 and October 1, 2017.
(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." A portion of depreciation expense is included in "Research, development and engineering expenses."
Summarized financial information regarding our reportable operating segments for the nine months ended is shown in the table below:
In millions
 
Engine
 
Distribution
 
Components
 
Power Systems
 
Electrified Power
 
Total Segments
 
Intersegment Eliminations (1)
 
Total
Nine months ended September 30, 2018
 
 

 
 

 
 

 
 

 
 
 
 
 
 

 
 

External sales
 
$
5,945

 
$
5,762

 
$
4,012

 
$
1,922

 
$
4

 
$
17,645

 
$

 
$
17,645

Intersegment sales
 
1,923

 
16

 
1,382

 
1,505

 
1

 
4,827

 
(4,827
)
 

Total sales
 
7,868

 
5,778

 
5,394

 
3,427

 
5

 
22,472

 
(4,827
)
 
17,645

Research, development and engineering expenses
 
229

 
15

 
195

 
174

 
45

 
658

 

 
658

Equity, royalty and interest income from investees
 
189

 
33

 
42

 
51

 

 
315

 

 
315

Interest income
 
8

 
9

 
4

 
5

 

 
26

 

 
26

Segment EBITDA
 
1,053

 
423

 
752

 
491

 
(61
)
 
2,658

 
(78
)
 
2,580

Depreciation and amortization(2)
 
142

 
81

 
137

 
91

 
4

 
455

 

 
455

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended October 1, 2017
 
 

 
 

 
 

 
 

 
 
 
 
 
 

 
 

External sales
 
$
4,951

 
$
5,101

 
$
3,183

 
$
1,717

 
$

 
$
14,952

 
$

 
$
14,952

Intersegment sales
 
1,715

 
19

 
1,148

 
1,238

 

 
4,120

 
(4,120
)
 

Total sales
 
6,666

 
5,120

 
4,331

 
2,955

 

 
19,072

 
(4,120
)
 
14,952

Research, development and engineering expenses
 
200

 
14

 
171

 
161

 

 
546

 

 
546

Equity, royalty and interest income from investees
 
186

 
35

 
40

 
40

 

 
301

 

 
301

Interest income
 
4

 
4

 
1

 
2

 

 
11

 

 
11

Segment EBITDA
 
872

 
377

 
703

 
286

 

 
2,238

 
19

 
2,257

Depreciation and amortization(2)
 
137

 
90

 
117

 
87

 

 
431

 

 
431

____________________________________
(1) Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the nine months ended September 30, 2018 and October 1, 2017.
(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 was $1 million and $2 million for the nine month periods ended September 30, 2018 and October 1, 2017, respectively. A portion of depreciation expense is included in "Research, development and engineering expenses."
Reconciliation of segment information A reconciliation of our segment information to the corresponding amounts in the Condensed Consolidated Statements of Income is shown in the table below:
 
 
Three months ended
 
Nine months ended
In millions
 
September 30,
2018
 
October 1,
2017
 
September 30,
2018
 
October 1,
2017
Total EBITDA
 
$
983

 
$
788

 
$
2,580

 
$
2,257

Less:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
148

 
148

 
455

 
431

Interest expense
 
30

 
18

 
82

 
57

Income before income taxes
 
$
805

 
$
622

 
$
2,043

 
$
1,769