SEC Filings


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

Components Segment Results
Financial data for the Components segment was as follows:
 
 
Three months ended
 
Favorable/
 
Nine months ended
 
Favorable/
 
 
October 1,
 
October 2,
 
(Unfavorable)
 
October 1,
 
October 2,
 
(Unfavorable)
In millions
 
2017
 
2016
 
Amount
 
Percent
 
2017
 
2016
 
Amount
 
Percent
External sales (1)
 
$
1,139

 
$
824

 
$
315

 
38
 %
 
$
3,183

 
$
2,654

 
$
529

 
20
 %
Intersegment sales (1)
 
394

 
319

 
75

 
24
 %
 
1,148

 
1,005

 
143

 
14
 %
Total sales
 
1,533

 
1,143

 
390

 
34
 %
 
4,331

 
3,659

 
672

 
18
 %
Depreciation and amortization
 
42

 
32

 
(10
)
 
(31
)%
 
117

 
95

 
(22
)
 
(23
)%
Research, development and engineering expenses
 
63

 
54

 
(9
)
 
(17
)%
 
170

 
161

 
(9
)
 
(6
)%
Equity, royalty and interest income from investees
 
12

 
9

 
3

 
33
 %
 
40

 
29

 
11

 
38
 %
Interest income
 

 
1

 
(1
)
 
(100
)%
 
1

 
3

 
(2
)
 
(67
)%
EBIT
 
217

 
148

 
69

 
47
 %
 
586

 
501

 
85

 
17
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage Points
 
 
 
 
 
Percentage Points
EBIT as a percentage of total sales
 
14.2
%
 
12.9
%
 
 

 
1.3

 
13.5
%
 
13.7
%
 
 

 
(0.2
)
____________________________________
(1) Due to the acquisitions of North American distributors, sales previously recognized as external sales are now included in intersegment sales.
In the first quarter of 2017, our Components segment reorganized its reporting structure to move an element of the emission solutions business to the fuel systems business to enhance operational, administrative and product development efficiencies. Prior year sales were reclassified to conform with this change.
In the third quarter of 2017, we completed the Eaton Cummins Automated Transmission Technologies joint venture (ECJV), which was consolidated and included in our Components segment as the automated transmissions business. See Note 11, "ACQUISITION", in the Notes to Condensed Consolidated Financial Statements for additional information.
Sales for our Components segment by business were as follows:
 
 
Three months ended
 
Favorable/
 
Nine months ended
 
Favorable/
 
 
October 1,
 
October 2,
 
(Unfavorable)
 
October 1,
 
October 2,
 
(Unfavorable)
In millions
 
2017
 
2016
 
Amount
 
Percent
 
2017
 
2016
 
Amount
 
Percent
Emission solutions
 
$
696

 
$
522

 
$
174

 
33
%
 
$
1,986

 
$
1,714

 
$
272

 
16
%
Turbo technologies
 
297

 
241

 
56

 
23
%
 
891

 
782

 
109

 
14
%
Filtration
 
287

 
244

 
43

 
18
%
 
855

 
758

 
97

 
13
%
Fuel systems
 
184

 
136

 
48

 
35
%
 
530

 
405

 
125

 
31
%
Automated transmissions
 
69

 

 
69

 
NM

 
69

 

 
69

 
NM

Total sales
 
$
1,533

 
$
1,143

 
$
390

 
34
%
 
$
4,331

 
$
3,659

 
$
672

 
18
%
____________________________________
"NM" - not meaningful information
Sales
Components segment sales for the three months ended October 1, 2017, increased $390 million, across all lines of business, versus the comparable period in 2016. The following were the primary drivers:
Emission solutions sales increased $174 million primarily due to stronger market demand for trucks in North America and China and increased sales of products to meet new emission standards in India.
Automated transmissions had North American sales of $69 million following the consolidation of the ECJV during August and September.
Turbo technologies sales increased $56 million primarily due to higher demand in China and North America.
Fuel systems sales increased $48 million primarily due to higher demand in China, North America and Mexico.
Filtration sales increased $43 million primarily due to higher demand in North America, Australia and Eastern Europe.

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