SEC Filings


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

Power Systems Segment Results
Financial data for the Power Systems 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
 
$
2,625

 
$
2,375

 
$
2,064

 
$
250

 
11
 %
 
$
311

 
15
 %
Intersegment sales
 
2,001

 
1,683

 
1,453

 
318

 
19
 %
 
230

 
16
 %
Total sales
 
4,626


4,058


3,517

 
568

 
14
 %
 
541

 
15
 %
Research, development and engineering expenses
 
230

 
214

 
189

 
(16
)
 
(7
)%
 
(25
)
 
(13
)%
Equity, royalty and interest income from investees
 
56

 
54

 
42

 
2

 
4
 %
 
12

 
29
 %
Interest income
 
6

 
3

 
5

 
3

 
100
 %
 
(2
)
 
(40
)%
Segment EBITDA
 
614

 
411

 
378

 
203

 
49
 %
 
33

 
9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage Points
 
Percentage Points
Segment EBITDA as a percentage of total sales
 
13.3
%
 
10.1
%
 
10.7
%
 
 
 
3.2

 
 
 
(0.6
)
Sales for our Power Systems 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
Power generation
 
$
2,586

 
$
2,305

 
$
2,256

 
$
281

 
12
%
 
$
49

 
2
%
Industrial
 
1,663

 
1,399

 
941

 
264

 
19
%
 
458

 
49
%
Generator technologies
 
377

 
354

 
320

 
23

 
6
%
 
34

 
11
%
Total sales
 
$
4,626

 
$
4,058

 
$
3,517

 
$
568

 
14
%
 
$
541

 
15
%
 
2018 vs. 2017
Sales
Power Systems segment sales increased $568 million across all product lines. The following were the primary drivers:
Power generation sales increased $281 million, primarily due to higher demand in North America, Middle East and Australia.
Industrial sales increased $264 million, primarily due to higher demand in global mining markets, especially in China, Eastern Europe, Japan and North America, and oil and gas markets in North America.
Segment EBITDA
Power Systems segment EBITDA increased $203 million, primarily due to higher gross margin, partially offset by increased research, development and engineering expenses and higher selling, general and administrative expenses. The increase in gross margin was primarily due to increased volumes, lower warranty expense and reduced material costs, partially offset by higher compensation expense driven by volume growth. The increase in selling, general and administrative expenses was primarily due to higher consulting expense. The increase in research, development and engineering expenses was primarily due to higher compensation expense.
 
2017 vs. 2016
Sales
Power Systems segment sales increased $541 million across all product lines. The following were the primary drivers:
Industrial sales increased $458 million, primarily due to higher demand in global mining markets, especially in Europe, North America and China, and oil and gas markets in North America.

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