SEC Filings


10-K
CUMMINS INC filed this Form 10-K on 02/11/2019
Entire Document
 

In millions
 
Engine
 
Distribution
 
Components
 
Power Systems
 
Electrified Power
 
Total Segments
 
Intersegment Eliminations (2)
 
Total
2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
External sales
 
$
5,774

 
$
6,157

 
$
3,514

 
$
2,064

 
$

 
$
17,509

 
$

 
$
17,509

Intersegment sales
 
2,030

 
24

 
1,322

 
1,453

 

 
4,829

 
(4,829
)
 

Total sales
 
7,804

 
6,181

 
4,836

 
3,517

 

 
22,338

 
(4,829
)
 
17,509

Research, development and engineering expenses
 
227

 
13

 
208

 
189

 

 
637

 

 
637

Equity, royalty and interest income from investees
 
148

 
70

 
41

 
42

 

 
301

 

 
301

Interest income
 
10

 
4

 
4

 
5

 

 
23

 

 
23

Loss contingency (6)
 
138

 

 

 

 

 
138

 

 
138

Segment EBITDA
 
849

 
508

(7) 
774

 
378

(8) 

 
2,509

 
17

 
2,526

Depreciation and amortization (3)
 
163

 
116

 
133

 
115

 

 
527

 

 
527

Net assets (4)
 
1,334

 
2,157

 
1,643

 
2,202

 

 
7,336

 

 
7,336

Investments and advances to equity investees
 
427

 
204

 
176

 
139

 

 
946

 

 
946

Capital expenditures
 
200

 
96

 
143

 
92

 

 
531

 

 
531


____________________________________________________
(1) 
Includes Eaton Cummins Automated Transmission Technologies joint venture results consolidated during the third quarter of 2017. See Note 19, "ACQUISITIONS," for additional information.
(2) 
Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the years ended 2018, 2017 and 2016, respectively.
(3) 
Depreciation and amortization as shown on a segment basis excludes the amortization of debt discount and deferred costs that are included in the Consolidated Statements of Income as "Interest expense." The amortization of debt discount and deferred costs were $2 million, $3 million and $3 million for the years ended 2018, 2017 and 2016, respectively. A portion of depreciation expense is included in "Research, development and engineering expense."
(4) 
In 2018, we reevaluated our net asset allocation methodology and realigned it to both simplify and better represent our reportable segments consistent with how the Chief Operating Decision Maker evaluates them. In accordance with the realignment, we reclassified historical segment net assets for 2016 and 2017 to be consistent with our 2018 presentation. Key changes during the realignment were to remove cash equivalents and marketable securities from segment net assets as these corporate items are not managed and evaluated at the segment level.  
(5) 
U.S. tax legislation passed in December 2017 decreased our equity earnings at certain equity investees, negatively impacting our equity, royalty and interest income from investees by $23 million, $4 million and $12 million for the Engine, Distribution and Components segments, respectively. See Note 4, "INCOME TAXES," for additional information.
(6) 
See Note 9, "PRODUCT WARRANTY LIABILITY," for additional information.
(7) 
Distribution segment EBITDA included gains on the fair value adjustment resulting from the acquisition of controlling interests in North American distributors of $15 million for the year ended December 31, 2016. See Note 19, "ACQUISITIONS," for additional information.
(8) 
Power Systems segment EBITDA included a $17 million gain on the sale of an equity investee for the year ended December 31, 2016. See Note 3, "INVESTMENTS IN EQUITY INVESTEES," for additional information.

115