SEC Filings


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

CONTRACTUAL OBLIGATIONS AND OTHER COMMERCIAL COMMITMENTS
A summary of our contractual obligations and other commercial commitments, at December 31, 2018, are as follows:
Contractual Cash Obligations
 
Payments Due by Period
 
 
In millions
 
2019
 
2020-2021
 
2022-2023
 
After 2023
 
Total
Long-term debt and capital lease obligations (1)
 
$
152

 
$
242

 
$
692

 
$
2,331

 
$
3,417

Operating leases
 
138

 
190

 
99

 
81

 
508

Capital expenditures
 
165

 

 

 

 
165

Purchase commitments for inventory
 
882

 

 

 

 
882

Other purchase commitments
 
290

 
27

 
6

 
12

 
335

Transitional tax liability
 

 
38

 
149

 
106

 
293

Other postretirement benefits
 
24

 
45

 
43

 
90

 
202

International and other domestic letters of credit
 
124

 
21

 
4

 
2

 
151

Performance and excise bonds
 
41

 
66

 
1

 
2

 
110

Guarantees, indemnifications and other commitments
 
26

 
6

 
9

 
11

 
52

Total
 
$
1,842


$
635


$
1,003


$
2,635

 
$
6,115

___________________________________________________________ 
(1) 
Includes principal payments and expected interest payments based on the terms of the obligations.  
The contractual obligations reported above exclude our unrecognized tax benefits of $71 million as of December 31, 2018. We are not able to reasonably estimate the period in which cash outflows relating to uncertain tax contingencies could occur. See Note 4, "INCOME TAXES," to the Consolidated Financial Statements for additional information.
 
 
 
 
 
 
 
 
 
 
 
APPLICATION OF CRITICAL ACCOUNTING ESTIMATES
A summary of our significant accounting policies is included in Note 1, "SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES," of our Consolidated Financial Statements which discusses accounting policies that we have selected from acceptable alternatives.
Our Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in the U.S. (GAAP) which often requires management to make judgments, estimates and assumptions regarding uncertainties that affect the reported amounts presented and disclosed in the financial statements. Management reviews these estimates and assumptions based on historical experience, changes in business conditions and other relevant factors they believe to be reasonable under the circumstances. In any given reporting period, our actual results may differ from the estimates and assumptions used in preparing our Consolidated Financial Statements.
Critical accounting estimates are defined as follows: the estimate requires management to make assumptions about matters that were highly uncertain at the time the estimate was made; different estimates reasonably could have been used; or if changes in the estimate are reasonably likely to occur from period to period and the change would have a material impact on our financial condition or results of operations. Our senior management has discussed the development and selection of our accounting policies, related accounting estimates and the disclosures set forth below with the Audit Committee of our Board of Directors. We believe our critical accounting estimates include estimating liabilities for warranty programs, accounting for income taxes and pension benefits and assessing goodwill impairments.

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