SEC Filings


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

Sales for our Distribution segment by region were as follows:
 
 
 
 
 
 
 
 
Favorable/(Unfavorable)
 
 
Years ended December 31,
 
2018 vs. 2017
 
2017 vs. 2016
In millions
 
2018
 
2017
 
2016
 
Amount
 
Percent
 
Amount
 
Percent
North America
 
$
5,341

 
$
4,733

 
$
3,973

 
$
608

 
13
 %
 
$
760

 
19
 %
Asia Pacific
 
856

 
767

 
720

 
89

 
12
 %
 
47

 
7
 %
Europe
 
538

 
440

 
440

 
98

 
22
 %
 

 
 %
China
 
320

 
267

 
235

 
53

 
20
 %
 
32

 
14
 %
Africa and Middle East
 
241

 
327

 
366

 
(86
)
 
(26
)%
 
(39
)
 
(11
)%
India
 
194

 
190

 
175

 
4

 
2
 %
 
15

 
9
 %
Latin America
 
169

 
167

 
149

 
2

 
1
 %
 
18

 
12
 %
Russia
 
169

 
167

 
123

 
2

 
1
 %
 
44

 
36
 %
Total sales
 
$
7,828

 
$
7,058

 
$
6,181

 
$
770

 
11
 %
 
$
877

 
14
 %
Sales for our Distribution segment by product line were as follows:
 
 
 
 
 
 
 
 
Favorable/(Unfavorable)
 
 
Years ended December 31,
 
2018 vs. 2017
 
2017 vs. 2016
In millions
 
2018
 
2017
 
2016
 
Amount
 
Percent
 
Amount
 
Percent
Parts
 
$
3,234

 
$
3,040

 
$
2,627

 
$
194

 
6
%
 
$
413

 
16
%
Engines
 
1,634

 
1,369

 
1,100

 
265

 
19
%
 
269

 
24
%
Power generation
 
1,486

 
1,337

 
1,239

 
149

 
11
%
 
98

 
8
%
Service
 
1,474

 
1,312

 
1,215

 
162

 
12
%
 
97

 
8
%
Total sales
 
$
7,828


$
7,058


$
6,181

 
$
770

 
11
%
 
$
877

 
14
%
2018 vs. 2017
Sales
Distribution segment sales increased $770 million. The following were the primary drivers by region:
North American sales increased $608 million, representing 79 percent of the total change in Distribution segment sales, primarily due to increased demand across all product lines.
European sales increased $98 million, primarily due to higher demand for whole goods.
Asia Pacific sales increased $89 million, primarily due to higher volumes in whole goods and service.
These increases were partially offset by decreased sales of 26 percent in Africa and the Middle East.
Segment EBITDA
Distribution segment EBITDA increased $63 million, primarily due to higher gross margin and lower selling, general and administrative expenses, partially offset by the absence of a gain on sale of assets in the third quarter of 2017 and unfavorable foreign currency fluctuations (primarily in the Angolan kwanza and Australian dollar). The increase in gross margin was primarily due to higher volumes and improved pricing, partially offset by increased compensation expense and unfavorable foreign currency fluctuations (primarily in the Australian dollar and Angolan kwanza). Gross margin as a percentage of sales declined primarily due to the increase in compensation expense and unfavorable foreign currency fluctuations. The decrease in selling, general and administrative expenses was primarily due to lower variable compensation expense, partially offset by increased compensation expense.
 
2017 vs. 2016
Sales
Distribution segment sales increased $877 million, primarily due to an increase in organic sales of $684 million (primarily in North America) and $267 million of sales related to the acquisition of a North American distributor in the fourth quarter of 2016.

44