SEC Filings


10-Q
CUMMINS INC filed this Form 10-Q on 10/31/2017
Entire Document
 

Research activities continue to focus on development of new products to meet future emission standards around the world and improvements in fuel economy performance of diesel and natural gas powered engines.
Equity, Royalty and Interest Income from Investees
Equity, royalty and interest income from investees increased $21 million for the three months ended October 1, 2017, versus the comparable period in 2016, primarily due to higher earnings at Dongfeng Cummins Engine Company, Ltd. and Beijing Foton Cummins Engine Co., Ltd.
Equity, royalty and interest income from investees increased $67 million for the nine months ended October 1, 2017, versus the comparable period in 2016, primarily due to higher earnings at Dongfeng Cummins Engine Company, Ltd. and Beijing Foton Cummins Engine Co.
 
 
 
 
 
 
Loss Contingency
In the third quarter of 2016, we recorded an additional accrual of $99 million for an existing loss contingency. For the nine months ended October 2, 2016, we accrued a total of $138 million related to this matter. See Note 9, "COMMITMENTS AND CONTINGENCIES," to the Condensed Consolidated Financial Statements for additional information.

Other Operating Income (Expense), Net
Other operating income (expense), net was as follows:
 
 
Three months ended
 
Nine months ended
In millions
 
October 1,
2017
 
October 2,
2016
 
October 1,
2017
 
October 2,
2016
Royalty income, net
 
$
18

 
$
7

 
$
38

 
$
20

Gain (loss) on sale of assets, net
 
15

 

 
20

 
(1
)
Amortization of intangible assets
 
(4
)
 
(2
)
 
(7
)
 
(7
)
Loss on write off of assets
 

 
(5
)
 
(2
)
 
(14
)
Other, net
 
3

 

 
6

 

Total other operating income (expense), net
 
$
32

 
$

 
$
55

 
$
(2
)
Interest Income
Interest income for the three months ended October 1, 2017, decreased $2 million versus the comparable period in 2016, primarily due to lower investment balances in China and Brazil. Interest income for the nine months ended October 1, 2017, decreased $7 million versus the comparable period in 2016, primarily due to lower investment balances in China and Brazil.
Interest Expense
Interest expense for the three months ended October 1, 2017, increased $2 million versus the comparable period in 2016, primarily due to hedge ineffectiveness on our interest rate swap. Interest expense for the nine months ended October 1, 2017, increased $6 million versus the comparable period in 2016, primarily due to hedge ineffectiveness on our interest rate swap.
Other Income (Expense), Net
Other income (expense), net was as follows:
 
 
Three months ended
 
Nine months ended
In millions
 
October 1,
2017
 
October 2,
2016
 
October 1,
2017
 
October 2,
2016
Change in cash surrender value of corporate owned life insurance
 
$
9

 
$
10

 
$
38

 
$
33

Dividend income
 
1

 
1

 
4

 
3

Foreign currency gain (loss), net
 
(5
)
 

 
(2
)
 
(11
)
Bank charges
 
(2
)
 
(3
)
 
(7
)
 
(7
)
Other, net
 
4

 

 
12

 
16

Total other income (expense), net
 
$
7

 
$
8

 
$
45

 
$
34


33