|CUMMINS INC filed this Form 10-K on 02/11/2019|
Distribution segment EBITDA decreased $8 million, primarily due to higher selling, general and administrative expenses, lower equity, royalty and interest income from investees, partially offset by higher gross margin. The increase in gross margin was primarily due to higher organic volumes and the acquisition of a North American distributor in the fourth quarter of 2016, partially offset by increased variable compensation expense. Gross margin as a percentage of sales declined primarily due to the increase in variable compensation expense. The increase in selling, general and administrative expenses was primarily due to higher variable compensation expense, increased compensation expense related to the acquisition of a North American distributor and higher consulting expense. The decrease in equity, royalty and interest income from investees was the result of the acquisition of a North American distributor in 2016 and unfavorable impacts from Tax Legislation related to withholding taxes on foreign earnings of $4 million.
Components Segment Results
Financial data for the Components segment was as follows:
Sales for our Components segment by business were as follows:
"NM" - not meaningful information
2018 vs. 2017
Components segment sales increased $1.3 billion across all lines of business. The following were the primary drivers by business: