Quarterly report pursuant to Section 13 or 15(d)

OPERATING SEGMENTS (Tables)

v3.21.2
OPERATING SEGMENTS (Tables)
 6 Months Ended
Jul. 04, 2021
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 New Power Total Segments
Three months ended July 4, 2021    
External sales $ 1,920  $ 1,913  $ 1,556  $ 699  $ 23  $ 6,111 
Intersegment sales 571  7  438  444  1  1,461 
Total sales 2,491  1,920  1,994  1,143  24  7,572 
Research, development and engineering expenses 99  12  79  60  26  276 
Equity, royalty and interest income (loss) from investees 104  15  12  9  (3) 137 
Interest income 1  2  1  1  —  5 
EBITDA 402  201  301  139  (60) 983 
Depreciation and amortization(1)
50  30  46  33  7  166 
Three months ended June 28, 2020        
External sales $ 937  $ 1,601  $ 876  $ 428  $ 10  $ 3,852 
Intersegment sales 486  4  274  349  —  1,113 
Total sales 1,423  1,605  1,150  777  10  4,965 
Research, development and engineering expenses 65  4  55  41  24  189 
Equity, royalty and interest income (loss) from investees 84  11  12  9  (1) 115 
Interest income 1  1  1  1  —  4 
EBITDA 150  160  141  91  (38) 504 
Depreciation and amortization(1)
51  30  47  32  4  164 
(1) 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 Net 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 six months ended is shown in the table below:
In millions Engine Distribution Components Power Systems New Power Total Segments
Six months ended July 4, 2021        
External sales $ 3,815  $ 3,740  $ 3,280  $ 1,311  $ 57  $ 12,203 
Intersegment sales 1,135  15  866  854  2  2,872 
Total sales 4,950  3,755  4,146  2,165  59  15,075 
Research, development and engineering expenses 191  25  154  117  49  536 
Equity, royalty and interest income from investees 217  32  31  21  2  303 
Interest income 4  3  2  2  —  11 
EBITDA 756  361  722  265  (111) 1,993 
Depreciation and amortization(1)
101  60  94  68  12  335 
Six months ended June 28, 2020        
External sales $ 2,516  $ 3,408  $ 1,991  $ 928  $ 20  $ 8,863 
Intersegment sales 1,065  11  661  733  —  2,470 
Total sales 3,581  3,419  2,652  1,661  20  11,333 
Research, development and engineering expenses 145  11  123  95  53  427 
Equity, royalty and interest income (loss) from investees 162  32  33  18  (1) 244 
Interest income 5  2  2  2  —  11 
EBITDA 515  318  420  168  (81) 1,340 
Depreciation and amortization(1)
104  61  95  64  8  332 
(1) 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 Net Income as "Interest expense." The amortization of debt discount and deferred costs was $2 million and $1 million for the six months ended July 4, 2021 and June 28, 2020, respectively. A portion of depreciation expense is included in "Research, development and engineering expenses."
Reconciliation of Revenue from Segments to Consolidated
A reconciliation of our total segment sales to total net sales in the Condensed Consolidated Statements of Net Income was as follows:
  Three months ended Six months ended
In millions July 4,
2021		 June 28,
2020		 July 4,
2021		 June 28,
2020
Total segment sales $ 7,572  $ 4,965  $ 15,075  $ 11,333 
Elimination of intersegment sales (1,461) (1,113) (2,872) (2,470)
Total net sales $ 6,111  $ 3,852  $ 12,203  $ 8,863 
Reconciliation of segment information
A reconciliation of our segment information to the corresponding amounts in the Condensed Consolidated Statements of Net Income is shown in the table below:
  Three months ended Six months ended
In millions July 4,
2021		 June 28,
2020		 July 4,
2021		 June 28,
2020
TOTAL SEGMENT EBITDA $ 983  $ 504  $ 1,993  $ 1,340 
Intersegment elimination (9) 45  (39) 55 
Less:
Interest expense 29  23  57  46 
Depreciation and amortization 166  164  335  332 
INCOME BEFORE INCOME TAXES 779  362  1,562  1,017 
Less: Income tax expense 167  93  339  220 
CONSOLIDATED NET INCOME 612  269  1,223  797 
Less: Net income (loss) attributable to noncontrolling interests 12  (7) 20  10 
NET INCOME ATTRIBUTABLE TO CUMMINS INC. $ 600  $ 276  $ 1,203  $ 787