Quarterly report pursuant to Section 13 or 15(d)

OPERATING SEGMENTS (Tables)

v2.4.0.8
OPERATING SEGMENTS (Tables)
9 Months Ended
Sep. 29, 2013
Segment Reporting [Abstract]  
Financial information regarding reportable operating segments
Summarized financial information regarding our reportable operating segments for the three and nine month periods is shown in the table below:



In millions
 
Engine
 
Components
 
Power Generation
 
Distribution
 
Non-segment
Items (1)
 
Total
Three months ended September 29, 2013
 
 

 
 

 
 

 
 

 
 

 
 

External sales
 
$
2,045

 
$
784

 
$
499

 
$
938

 
$

 
$
4,266

Intersegment sales
 
447

 
288

 
213

 
6

 
(954
)
 

Total sales
 
2,492

 
1,072

 
712

 
944

 
(954
)
 
4,266

Depreciation and amortization(2)
 
53

 
24

 
13

 
15

 

 
105

Research, development and engineering expenses
 
103

 
51

 
18

 
1

 

 
173

Equity, royalty and interest income from investees
 
31

 
5

 
13

 
42

 

 
91

Interest income
 
4

 
1

 
1

 

 

 
6

Segment EBIT
 
272


132


45


86


1

 
536

 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended September 30, 2012
 
 

 
 

 
 

 
 

 
 

 
 

External sales
 
$
2,131

 
$
663

 
$
526

 
$
798

 
$

 
$
4,118

Intersegment sales
 
396

 
275

 
288

 
3

 
(962
)
 

Total sales
 
2,527

 
938

 
814

 
801

 
(962
)
 
4,118

Depreciation and amortization(2)
 
48

 
21

 
12

 
8

 

 
89

Research, development and engineering expenses
 
115

 
51

 
19

 
1

 

 
186

Equity, royalty and interest income from investees
 
25

 
7

 
12

 
50

 

 
94

Interest income
 
2

 
1

 
2

 

 

 
5

Segment EBIT
 
239


89


73


99

(3) 
(4
)
 
496

 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 29, 2013
 
 

 
 

 
 

 
 

 
 

 
 

External sales
 
$
6,139

 
$
2,292

 
$
1,621

 
$
2,661

 
$

 
$
12,713

Intersegment sales
 
1,312

 
915

 
651

 
15

 
(2,893
)
 

Total sales
 
7,451

 
3,207

 
2,272

 
2,676

 
(2,893
)
 
12,713

Depreciation and amortization(2)
 
156

 
71

 
37

 
40

 

 
304

Research, development and engineering expenses
 
310

 
165

 
53

 
4

 

 
532

Equity, royalty and interest income from investees
 
106

 
21

 
30

 
124

 

 
281

Interest income
 
13

 
2

 
5

 
1

 

 
21

Segment EBIT
 
806


387


172


281

(3) 
(52
)
 
1,594

 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30, 2012
 
 

 
 

 
 

 
 

 
 

 
 

External sales
 
$
6,924

 
$
2,147

 
$
1,614

 
$
2,357

 
$

 
$
13,042

Intersegment sales
 
1,303

 
926

 
889

 
13

 
(3,131
)
 

Total sales
 
8,227

 
3,073

 
2,503

 
2,370

 
(3,131
)
 
13,042

Depreciation and amortization(2)
 
142

 
59

 
34

 
23

 

 
258

Research, development and engineering expenses
 
341

 
153

 
56

 
4

 

 
554

Equity, royalty and interest income from investees
 
100

 
23

 
32

 
147

 

 
302

Interest income
 
9

 
3

 
7

 
1

 

 
20

Segment EBIT
 
996


348


243


285

(3) 
(49
)
 
1,823

_________________________________________________________________
(1)Includes intersegment sales and profit in inventory eliminations and unallocated corporate expenses. The three and nine months ended September 30, 2012, included a $6 million gain ($4 million after-tax) related to adjustments from our 2011 divestitures.  The gain has been excluded from segment results as it was not considered in our evaluation of operating results for the corresponding periods.  There were no other significant unallocated corporate expenses for the three and nine months ended September 29, 2013 and September 30, 2012.
(2)Depreciation and amortization as shown on a segment basis excludes the amortization of debt discount that is included in the Condensed Consolidated Statements of Income as "Interest expense."
(3)Distribution segment EBIT for the nine months ended September 29, 2013, included a $7 million gain and $5 million gain on the fair value adjustment resulting from the acquisitions of a controlling interest in Northwest and Rocky Mountain, respectively. Distribution segment EBIT for the three and nine months ended September 30, 2012, included a $7 million gain on the fair value adjustment resulting from the acquisition of a controlling interest in Cummins Central Power.

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 29,
2013
 
September 30,
2012
 
September 29,
2013
 
September 30,
2012
Total EBIT
 
$
536

 
$
496

 
$
1,594

 
$
1,823

Less: Interest expense
 
8

 
9

 
22

 
25

Income before income taxes
 
$
528

 
$
487

 
$
1,572

 
$
1,798