SEC Filings


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

OPERATING SEGMENT RESULTS
Our reportable operating segments consist of the Engine, Distribution, Components, Power Systems and Electrified Power segments. This reporting structure is organized according to the products and markets each segment serves. Effective January 1, 2018, we changed our measure to EBITDA as a primary basis for the Chief Operating Decision Maker to evaluate the performance of each of our reportable operating segments. Segment amounts exclude certain expenses not specifically identifiable to segments. See Note 20, "OPERATING SEGMENTS," to the Consolidated Financial Statements for additional information.
Following is a discussion of results for each of our operating segments.
Engine Segment Results
Financial data for the Engine segment was as follows:
 
 
 
 
 
 
 
 
Favorable/(Unfavorable)
 
 
Years ended December 31,
 
2018 vs. 2017
 
2017 vs. 2016
In millions
 
2018
 
2017
 
2016
 
Amount
 
Percent
 
Amount
 
Percent
External sales
 
$
8,002

 
$
6,661

 
$
5,774

 
$
1,341

 
20
 %
 
$
887

 
15
 %
Intersegment sales
 
2,564

 
2,292

 
2,030

 
272

 
12
 %
 
262

 
13
 %
Total sales
 
10,566

 
8,953

 
7,804

 
1,613

 
18
 %
 
1,149

 
15
 %
Research, development and engineering expenses
 
311

 
280

 
227

 
(31
)
 
(11
)%
 
(53
)
 
(23
)%
Equity, royalty and interest income from investees
 
238

 
219

 
148

 
19

 
9
 %
 
71

 
48
 %
Interest income
 
11

 
6

 
10

 
5

 
83
 %
 
(4
)
 
(40
)%
Loss contingency (1)
 

 
5

 
138

 
5

 
100
 %
 
133

 
96
 %
Segment EBITDA
 
1,446

 
1,143

 
849

 
303

 
27
 %
 
294

 
35
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage Points
 
Percentage Points
Segment EBITDA as a percentage of total sales
 
13.7
%
 
12.8
%
 
10.9
%
 
 
 
0.9

 
 
 
1.9

____________________________________
(1) See respective sections of "RESULTS OF OPERATIONS" for additional information.
Sales for our Engine segment by market were as follows:
 
 
 
 
 
 
 
 
Favorable/(Unfavorable)
 
 
Years ended December 31,
 
2018 vs. 2017
 
2017 vs. 2016
In millions
 
2018
 
2017
 
2016
 
Amount
 
Percent
 
Amount
 
Percent
Heavy-duty truck
 
$
3,652

 
$
2,840

 
$
2,443

 
$
812

 
29
%
 
$
397

 
16
%
Medium-duty truck and bus
 
2,855

 
2,513

 
2,272

 
342

 
14
%
 
241

 
11
%
Light-duty automotive
 
1,819

 
1,727

 
1,581

 
92

 
5
%
 
146

 
9
%
Total on-highway
 
8,326

 
7,080

 
6,296

 
1,246

 
18
%
 
784

 
12
%
Off-highway
 
2,240

 
1,873

 
1,508

 
367

 
20
%
 
365

 
24
%
Total sales
 
$
10,566


$
8,953

 
$
7,804

 
$
1,613

 
18
%
 
$
1,149

 
15
%

41