CMI 2014 CURRENT Q4 8-K DOCUMENT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549


FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report:  February 5, 2015
 
  CUMMINS INC.
(Exact name of registrant as specified in its charter)
Indiana
(State or other Jurisdiction of
Incorporation)
1-4949
 (Commission File Number)
35-0257090
 (I.R.S. Employer Identification No.)

500 Jackson Street
P. O. Box 3005
Columbus, IN  47202-3005
(Principal Executive Office)  (Zip Code)

Registrant's telephone number, including area code:  (812) 377-5000
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
  
 



Item 2.02. Results of Operations and Financial Condition.
 
On February 5, 2015, Cummins Inc. (“Cummins,” “the Company,” “the registrant,” “we,” “our,” or “us”) issued the attached press release reporting its financial results for the fourth quarter and full year of 2014, which is furnished herewith as Exhibit 99.

The information furnished pursuant to this Item 2.02, including Exhibit 99, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.


 Item 9.01. Financial Statements and Exhibits.
 
(d)
The following exhibit is furnished pursuant to Item 2.02 herewith: 
99-Press Release dated February 5, 2015


SIGNATURE

 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: February 5, 2015
 
CUMMINS INC.
 /s/ Marsha L. Hunt
Marsha L. Hunt
Vice President - Corporate Controller
(Principal Accounting Officer)

 


CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (a)



 
 
Three months ended
In millions, except per share amounts
 
December 31, 2014
 
December 31, 2013
NET SALES
 
$
5,090

 
$
4,588

Cost of sales
 
3,817

 
3,451

GROSS MARGIN
 
1,273

 
1,137

 
 
 
 
 
OPERATING EXPENSES AND INCOME
 
 
 
 
Selling, general and administrative expenses
 
568

 
473

Research, development and engineering expenses
 
187

 
181

Equity, royalty and interest income from investees
 
76

 
80

Other operating income (expense), net
 
(13
)
 
(10
)
OPERATING INCOME
 
581


553

 
 
 
 
 
Interest income
 
6

 
6

Interest expense
 
17

 
19

Other income, net
 
42

 
7

INCOME BEFORE INCOME TAXES
 
612

 
547

 
 
 
 
 
Income tax expense
 
145

 
86

CONSOLIDATED NET INCOME
 
467

 
461

 
 
 
 
 
Less: Net income attributable to noncontrolling interests
 
23

 
29

NET INCOME ATTRIBUTABLE TO CUMMINS INC.
 
$
444

 
$
432

 
 
 
 
 
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
 
 
 
 
Basic
 
$
2.45

 
$
2.33

Diluted
 
$
2.44

 
$
2.32

 
 
 
 
 
WEIGHTED AVERAGE SHARES OUTSTANDING
 
 

 
 
Basic
 
181.4

 
185.7

Diluted
 
181.9

 
186.3

 
 
 
 
 
CASH DIVIDENDS DECLARED PER COMMON SHARE
 
$
0.78

 
$
0.625

 
(a)     Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.
 
 







CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (a)


 
 
Years ended December 31,
In millions, except per share amounts
 
2014
 
2013
NET SALES
 
$
19,221

 
$
17,301

Cost of sales
 
14,360

 
13,021

GROSS MARGIN
 
4,861

 
4,280

 
 
 
 
 
OPERATING EXPENSES AND INCOME
 
 
 
 
Selling, general and administrative expenses
 
2,095

 
1,817

Research, development and engineering expenses
 
754

 
713

Equity, royalty and interest income from investees
 
370

 
361

Other operating expense, net
 
(17
)
 
(10
)
OPERATING INCOME
 
2,365

 
2,101

 
 
 
 
 
Interest income
 
23

 
27

Interest expense
 
64

 
41

Other income, net
 
110

 
32

INCOME BEFORE INCOME TAXES
 
2,434

 
2,119

 
 
 
 
 
Income tax expense
 
698

 
531

CONSOLIDATED NET INCOME
 
1,736

 
1,588

 
 
 
 
 
Less: Net income attributable to noncontrolling interests
 
85

 
105

NET INCOME ATTRIBUTABLE TO CUMMINS INC.
 
$
1,651

 
$
1,483

 
 
 
 
 
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
 
 
 
 
Basic
 
$
9.04

 
$
7.93

Diluted
 
$
9.02

 
$
7.91

 
 
 
 
 
WEIGHTED AVERAGE SHARES OUTSTANDING
 
 
 
 
Basic
 
182.7

 
187.0

Diluted
 
183.1

 
187.4

 
 
 
 
 
CASH DIVIDENDS DECLARED PER COMMON SHARE
 
$
2.81

 
$
2.25

 
 
 
 
 
(a)     Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.







CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (a)


 
 
December 31,
In millions, except par value
 
2014
 
2013
ASSETS
 
 
 
 
Current assets
 
 
 
 
Cash and cash equivalents
 
$
2,301

 
$
2,699

Marketable securities
 
93

 
150

Total cash, cash equivalents and marketable securities
 
2,394

 
2,849

Accounts and notes receivable, net
 
2,946

 
2,649

Inventories
 
2,866

 
2,381

Prepaid expenses and other current assets
 
849

 
760

Total current assets
 
9,055

 
8,639

Long-term assets
 
 
 
 
Property, plant and equipment, net
 
3,686

 
3,156

Investments and advances related to equity method investees
 
981

 
931

Goodwill and other intangible assets, net
 
822

 
818

Other assets
 
1,232

 
1,184

Total assets
 
$
15,776

 
$
14,728

 
 
 
 
 
LIABILITIES
 
 
 
 
Current liabilities
 
 
 
 
Loans payable
 
$
86

 
$
17

Accounts payable (principally trade)
 
1,881

 
1,557

Accrued expenses
 
2,054

 
1,794

Total current liabilities
 
4,021

 
3,368

Long-term liabilities
 
 
 
 
Long-term debt
 
1,589

 
1,672

Other liabilities
 
2,073

 
1,818

Total liabilities
 
7,683

 
6,858

 
 
 
 
 
EQUITY
 
 
 
 
Cummins Inc. shareholders’ equity
 
 
 
 
Common stock, $2.50 par value, 500 shares authorized, 222.3 and 222.3 shares issued
 
2,139

 
2,099

Retained earnings
 
9,545

 
8,406

Treasury stock, at cost, 40.1 and 35.6 shares
 
(2,844
)
 
(2,195
)
Common stock held by employee benefits trust, at cost, 1.1 and 1.3 shares
 
(13
)
 
(16
)
Accumulated other comprehensive loss
 
(1,078
)
 
(784
)
Total Cummins Inc. shareholders’ equity
 
7,749

 
7,510

Noncontrolling interests
 
344

 
360

Total equity
 
8,093

 
7,870

Total liabilities and equity
 
$
15,776

 
$
14,728

 
 
 
 
 
(a)     Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.



CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (a)



 
 
Years ended December 31,
In millions
 
2014
 
2013
NET CASH PROVIDED BY OPERATING ACTIVITIES
 
$
2,266

 
$
2,089

 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
Capital expenditures
 
(743
)
 
(676
)
Investments in internal use software
 
(55
)
 
(64
)
Investments in and advances to equity investees
 
(60
)
 
(42
)
Acquisitions of businesses, net of cash acquired
 
(436
)
 
(147
)
Investments in marketable securities—acquisitions
 
(275
)
 
(418
)
Investments in marketable securities—liquidations
 
336

 
525

Purchases of other investments
 
—

 
(40
)
Cash flows from derivatives not designated as hedges
 
(14
)
 
1

Other, net
 
13

 
15

Net cash used in investing activities
 
(1,234
)
 
(846
)
 
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
Proceeds from borrowings
 
55

 
1,004

Payments on borrowings and capital lease obligations
 
(94
)
 
(90
)
Distributions to noncontrolling interests
 
(83
)
 
(75
)
Dividend payments on common stock
 
(512
)
 
(420
)
Repurchases of common stock
 
(670
)
 
(381
)
Other, net
 
(39
)
 
14

Net cash (used in) provided by financing activities
 
(1,343
)
 
52

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
 
(87
)
 
35

Net (decrease) increase in cash and cash equivalents
 
(398
)
 
1,330

Cash and cash equivalents at beginning of year
 
2,699

 
1,369

CASH AND CASH EQUIVALENTS AT END OF PERIOD
 
$
2,301

 
$
2,699

 
 
 
 
 
(a)     Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.



CUMMINS INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)

                                                  
 
In millions
 
Engine
 
Distribution
 
Components
 
Power Generation
 
Non-segment
Items(1)
 
Total
 
Three months ended December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
External sales
 
$
1,988

 
$
1,682

 
$
970

 
$
450

 
$
—

 
$
5,090

 
Intersegment sales
 
851

 
12

 
351

 
310

 
(1,524
)
 
—

 
Total sales
 
2,839

 
1,694

 
1,321

 
760

 
(1,524
)
 
5,090

 
Depreciation and amortization(2)
 
54

 
28

 
27

 
15

 
—

 
124

 
Research, development and engineering expenses
 
103

 
2

 
60

 
22

 
—

 
187

 
Equity, royalty and interest income from investees
 
30

 
28

 
9

 
9

 
—

 
76

 
Interest income
 
3

 
2

 
1

 
—

 
—

 
6

 
Segment EBIT
 
315

 
158

(3) 
160

 
22

(4) 
(26
)
 
629

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment EBIT as a percentage of total sales
 
11.1
%
 
9.3
%
 
12.1
%
 
2.9
%
 
 
 
12.4
%
 
 
 

 
 
 
 
 
 
 
 
 
 
 
Three months ended December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
External sales
 
$
2,131

 
$
1,065

 
$
859

 
$
533

 
$
—

 
$
4,588

 
Intersegment sales
 
431

 
8

 
276

 
226

 
(941
)
 
—

 
Total sales
 
2,562

 
1,073

 
1,135

 
759

 
(941
)
 
4,588

 
Depreciation and amortization(2)
 
49

 
14

 
25

 
13

 
—

 
101

 
Research, development and engineering expenses
 
106

 
2

 
53

 
20

 
—

 
181

 
Equity, royalty and interest income from investees
 
30

 
41

 
7

 
2

 
—

 
80

 
Interest income
 
3

 
1

 
1

 
1

 
—

 
6

 
Segment EBIT
 
235

 
107

 
140

 
46

 
38

 
566

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment EBIT as a percentage of total sales
 
9.2
%
 
10.0
%
 
12.3
%
 
6.1
%
 
 
 
12.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1
)
Includes intersegment sales and profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended December 31, 2014 and December 31, 2013.
(2
)
Depreciation and amortization as shown on a segment basis excludes the amortization of debt discount and deferred costs included in the Condensed Consolidated Statements of Income as "Interest expense."
(3
)
Distribution segment EBIT for the three months ended December 31, 2014 included gains of $35 million on the fair value adjustments resulting from the acquisitions of controlling interests in North American distributors.
(4
)
Power Generation segment EBIT for the three months ended December 31, 2014, included actions taken to reduce its future cost structure. Costs associated with these actions were $32 million and are primarily related to the closure of a plant in Germany. The charge also included $3 million of targeted actions throughout the business including various headcount reductions to better align capacity with current levels of demand.

CUMMINS INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)

 
In millions
 
Engine
 
Distribution
 
Components
 
Power Generation
 
Non-segment Items(1)
 
Total
 
Year ended December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
External sales
 
$
8,437

 
$
5,135

 
$
3,791

 
$
1,858

 
$
—

 
$
19,221

 
Intersegment sales
 
2,525

 
39

 
1,327

 
1,038

 
(4,929
)
 
—

 
Total sales
 
10,962

 
5,174

 
5,118

 
2,896

 
(4,929
)
 
19,221

 
Depreciation and amortization(2)
 
207

 
86

 
106

 
53

 
—

 
452

 
Research, development and engineering expenses
 
438

 
9

 
230

 
77

 
—

 
754

 
Equity, royalty and interest income from investees
 
147

 
148

 
36

 
39

 
—

 
370

 
Interest income
 
12

 
4

 
4

 
3

 
—

 
23

 
Segment EBIT
 
1,225

 
491

(3) 
684

 
168

(4) 
(70
)
 
2,498

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment EBIT as a percentage of total sales
 
11.2
%
 
9.5
%
 
13.4
%
 
5.8
%
 
 
 
13.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year ended December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
External sales
 
$
8,270

 
$
3,726

 
$
3,151

 
$
2,154

 
$
—

 
$
17,301

 
Intersegment sales
 
1,743

 
23

 
1,191

 
877

 
(3,834
)
 
—

 
Total sales
 
10,013

 
3,749

 
4,342

 
3,031

 
(3,834
)
 
17,301

 
Depreciation and amortization(2)
 
205

 
54

 
96

 
50

 
—

 
405

 
Research, development and engineering expenses
 
416

 
6

 
218

 
73

 
—

 
713

 
Equity, royalty and interest income from investees
 
136

 
165

 
28

 
32

 
—

 
361

 
Interest income
 
16

 
2

 
3

 
6

 
—

 
27

 
Segment EBIT
 
1,041

 
388

(3) 
527

 
218

 
(14
)
 
2,160

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment EBIT as a percentage of total sales
 
10.4
%
 
10.3
%
 
12.1
%
 
7.2
%
 
 
 
12.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1
)
Includes intersegment sales and profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the years ended December 31, 2014 and December 31, 2013.
(2
)
Depreciation and amortization as shown on a segment basis excludes the amortization of debt discount and deferred costs included in the Condensed Consolidated Statements of Income as "Interest expense." The amortization of debt discount and deferred costs were $3 million and $2 million for the years ended December 31, 2014 and 2013, respectively.
(3
)
Distribution segment EBIT for the years ended December 31, 2014 and December 31, 2013 included gains of $73 million and $12 million on the fair value adjustments resulting from the acquisitions of controlling interests in North American distributors in each period, respectively.
(4
)
Power Generation segment EBIT for the year ended December 31, 2014, included actions taken to reduce its future cost structure. Costs associated with these actions were $32 million and are primarily related to the closure of a plant in Germany. The charge also included $3 million of targeted actions throughout the business including various headcount reductions to better align capacity with current levels of demand.
 
A reconciliation of our segment information to the corresponding amounts in the Condensed Consolidated Statements of Income is shown in the table below:
 
 
 
Three months ended
 
Twelve months ended
In millions
 
December 31, 2014
 
December 31, 2013
 
December 31, 2014
 
December 31, 2013
Total EBIT
 
$
629

 
$
566

 
$
2,498

 
$
2,160

Less: Interest expense
 
17

 
19

 
64

 
41

Income before income taxes
 
$
612

 
$
547

 
$
2,434

 
$
2,119





NOTE 1.  EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES


CUMMINS INC. AND SUBSIDIARIES
SELECTED FOOTNOTE DATA
(Unaudited)



Equity, royalty and interest income from investees included in our Condensed Consolidated Statements of Income for the reporting periods was as follows:
 
 
Three months ended
 
Years ended
In millions
 
December 31, 2014
 
December 31, 2013
 
December 31, 2014
 
December 31, 2013
Distribution Entities
 
 
 
 
 
 
 
 
North American distributors
 
$
18

 
$
31

 
$
107

 
$
129

Komatsu Cummins Chile, Ltda.
 
7

 
8

 
29

 
25

All other distributors
 
2

 
—

 
4

 
1

Manufacturing Entities
 
 

 
 
 
 

 
 
Dongfeng Cummins Engine Company, Ltd.
 
16

 
18

 
67

 
63

Chongqing Cummins Engine Company, Ltd.
 
12

 
14

 
51

 
58

Beijing Foton Cummins Engine Co., Ltd. (Light-duty)
 
4

 
3

 
28

 
17

Beijing Foton Cummins Engine Co., Ltd. (Heavy-duty)
 
(12
)
 
(7
)
 
(30
)
 
(21
)
All other manufacturers
 
20

 
4

 
74

 
53

Cummins share of net income
 
67

 
71

 
330

 
325

Royalty and interest income
 
9

 
9

 
40

 
36

Equity, royalty and interest income from investees
 
$
76

 
$
80

 
$
370

 
$
361

 
NOTE 2.  INCOME TAXES

U.S. tax legislation was passed in the fourth quarter extending the federal research tax credit to 2014. We recorded a $24 million benefit in the fourth quarter related to this legislation.


CUMMINS INC. AND SUBSIDIARIES
SELECTED FOOTNOTE DATA
(Unaudited)



NOTE 3. ACQUISITIONS
The Distribution segment joint venture acquisitions for the fourth quarter 2014 were as follows:
Entity Acquired
 
Date of Acquisition
 
Additional Percent Interest Acquired
 
Payments to Former Owners
 
Acquisition Related Debt Retirements
 
Total Purchase Consideration
 
Type of Acquisition(1)
 
Gain Recognized(1)
 
Goodwill Acquired
 
Intangibles Recognized
 
Net Sales Previous Fiscal Year Ended
Cummins Bridgeway LLC
 
11/03/14
 
54
%
 
$
22

 
$
45

 
$
77

(3) 
COMB
 
$
13

 
$
4

 
$
15

 
$
331

Cummins Npower LLC
 
09/29/14
 
50
%
 
33

 
34

 
73

(3) 
COMB
 
15

 
7

 
8

 
374

Cummins Power South LLC
 
09/29/14
 
50
%
 
17

 
16

 
35

(3) 
COMB
 
7

 
8

 
1

 
239

____________________________________________________
(1) 
All results from acquired entities were included in Distribution segment results subsequent to the acquisition date. Newly consolidated entities were accounted for as business combinations (COMB) with gains recognized based on the requirement to remeasure our pre-existing ownership to fair value in accordance with GAAP.
(2) Purchase accounting for this acquisition is preliminary awaiting customary adjustment to purchase price in accordance with the purchase agreements.
(3) 
The "Total Purchase Consideration" represents the total amount that will or is estimated to be paid to complete the acquisition. In some instances a portion of the acquisition payment has not yet been made and will be paid in future periods in accordance with the purchase contract. The total outstanding consideration as of December 31, 2014 for these entities was $18 million.



CUMMINS INC. AND SUBSIDIARIES
FINANCIAL MEASURES THAT SUPPLEMENT GAAP
(Unaudited)

Net income and diluted earnings per share (EPS) attributable to Cummins Inc. excluding special items

We believe this is a useful measure of our operating performance for the periods presented as it illustrates our operating performance without regard to special items including tax adjustments and plant closing and other actions. This measure is not in accordance with, or an alternative for, accounting principles generally accepted in the United States of America (GAAP) and may not be consistent with measures used by other companies. It should be considered supplemental data. The following table reconciles net income attributable to Cummins Inc. to net income attributable to Cummins Inc. excluding special items for the following periods:
 
 
 
Three months ended
 
 
 
December 31, 2014
 
December 31, 2013
In millions
 
Net Income
 
Diluted EPS
 
Net Income
 
Diluted EPS
Net income attributable to Cummins Inc.
 
$
444

 
$
2.44

 
$
432

 
$
2.32

Add
 
 
 
 
 
 
 
 
Power Generation segment actions (1)
 
21

 
0.12

 
—

 
—

Less
 
 

 
 

 
 

 
 

Tax items
 
—

 
—

 
70

 
0.38

Net income attributable to Cummins Inc. excluding special items
 
$
465

 
$
2.56

 
$
362

 
$
1.94

 
 
 
 
 
 
 
 
 
 
 
 
 
Years ended
 
 
 
December 31, 2014
 
December 31, 2013
In millions
 
Net Income
 
Diluted EPS
 
Net Income
 
Diluted EPS
Net income attributable to Cummins Inc.
 
$
1,651

 
$
9.02

 
$
1,483

 
$
7.91

Add
 
 
 
 
 
 
 
 
Power Generation segment actions (1)
 
21

 
0.11

 
—

 
—

Less
 
 

 
 

 
 

 
 

Tax items
 
—

 
—

 
74

 
0.39

Net income attributable to Cummins Inc. excluding special items
 
$
1,672

 
$
9.13

 
$
1,409

 
$
7.52

 
 
 
 
 
 
 
 
 
 
(1
)
In the fourth quarter of 2014, we recorded a plant closing and initiated other actions totaling $32 million ($21 million after tax).



CUMMINS INC. AND SUBSIDIARIES
FINANCIAL MEASURES THAT SUPPLEMENT GAAP
(Unaudited)

Earnings before interest, taxes, noncontrolling interests and special items
 
We define EBIT as earnings before interest expense, income tax expense and noncontrolling interests in income of consolidated subsidiaries (EBIT). We use EBIT to assess and measure the performance of our operating segments and also as a component in measuring our variable compensation programs. This measure is not in accordance with, or an alternative for, GAAP and may not be consistent with measures used by other companies. It should be considered supplemental data. Below is a reconciliation of EBIT to “Net income attributable to Cummins Inc.,” for each of the applicable periods:
 
 
Three months ended
 
Years ended
In millions
 
December 31, 2014
 
December 31, 2013
 
December 31, 2014
 
December 31, 2013
Earnings before interest expense, income taxes and special items
 
$
661

 
$
566

 
$
2,530

 
$
2,160

 
 
 
 
 
 
 
 
 
Earnings before interest expense, income taxes and special items as a percentage of net sales
 
13.0
%
 
12.3
%
 
13.2
%
 
12.5
%
 
 
 
 
 
 
 
 
 
Less
 
 
 
 
 
 
 
 
Plant closing and other actions
 
32

 
—

 
32

 
—

Earnings before interest expense and income taxes
 
$
629

 
$
566

 
$
2,498

 
$
2,160

 
 
 
 
 
 
 
 
 
EBIT as a percentage of net sales
 
12.4
%
 
12.3
%
 
13.0
%
 
12.5
%
 
 
 
 
 
 
 
 
 
Less
 
 
 
 
 
 
 
 
Interest expense
 
17

 
19

 
64

 
41

Income tax expense
 
145

 
86

 
698

 
531

Consolidated net income
 
467

 
461

 
1,736

 
1,588

 
 
 
 
 
 
 
 
 
Less
 
 
 
 
 
 
 
 
Net income attributable to noncontrolling interests
 
23

 
29

 
85

 
105

Net income attributable to Cummins Inc.
 
$
444

 
$
432

 
$
1,651

 
$
1,483

 
 
 
 
 
 
 
 
 
Net income attributable to Cummins Inc. as a percentage of net sales
 
8.7
%
 
9.4
%
 
8.6
%
 
8.6
%



CUMMINS INC. AND SUBSIDIARIES
BUSINESS UNIT SALES DATA
(Unaudited)



Engine segment net sales by market:
2014
 
 
 
 
 
 
 
 
 
 
In millions
 
Q1
 
Q2
 
Q3
 
Q4
 
YTD
Heavy-duty truck
 
$
722

 
$
796

 
$
823

 
$
798

 
$
3,139

Medium-duty truck and bus
 
601

 
646

 
631

 
652

 
2,530

Light-duty automotive and RV
 
361

 
336

 
354

 
385

 
1,436

Industrial
 
700

 
757

 
788

 
795

 
3,040

Stationary power
 
179

 
209

 
220

 
209

 
817

Total sales
 
$
2,563

 
$
2,744

 
$
2,816

 
$
2,839

 
$
10,962

 
 
 
 
 
 
 
 
 
 
 
2013
 
 
 
 
 
 
 
 
 
 
In millions
 
Q1
 
Q2
 
Q3
 
Q4
 
YTD
Heavy-duty truck
 
$
654

 
$
723

 
$
690

 
$
638

 
$
2,705

Medium-duty truck and bus
 
448

 
595

 
570

 
572

 
2,185

Light-duty automotive and RV
 
260

 
345

 
330

 
365

 
1,300

Industrial
 
714

 
762

 
709

 
811

 
2,996

Stationary power
 
227

 
231

 
193

 
176

 
827

Total sales
 
$
2,303

 
$
2,656

 
$
2,492

 
$
2,562

 
$
10,013

 
Unit shipments by engine classification (including unit shipments to Power Generation):
2014
 
 
 
 
 
 
 
 
 
 
Units
 
Q1
 
Q2
 
Q3
 
Q4
 
YTD
Midrange
 
118,900

 
118,700

 
117,700

 
115,900

 
471,200

Heavy-duty
 
28,800

 
30,300

 
32,300

 
30,700

 
122,100

High-horsepower
 
3,400

 
3,900

 
3,900

 
3,600

 
14,800

Total units
 
151,100

 
152,900

 
153,900

 
150,200

 
608,100

 
 
 
 
 
 
 
 
 
 
 
2013
 
 
 
 
 
 
 
 
 
 
Units
 
Q1
 
Q2
 
Q3
 
Q4
 
YTD
Midrange
 
94,600

 
121,900

 
113,800

 
115,700

 
446,000

Heavy-duty
 
24,900

 
28,300

 
26,500

 
25,700

 
105,400

High-horsepower
 
4,200

 
3,600

 
3,500

 
3,500

 
14,800

Total units
 
123,700

 
153,800

 
143,800

 
144,900

 
566,200


Distribution segment sales by business:
2014
 
 
 
 
 
 
 
 
 
 
In millions
 
Q1
 
Q2
 
Q3
 
Q4
 
YTD
Parts and filtration
 
$
382

 
$
461

 
$
491

 
$
590

 
$
1,924

Power generation
 
193

 
278

 
279

 
413

 
1,163

Engines
 
174

 
249

 
270

 
368

 
1,061

Service
 
201

 
250

 
252

 
323

 
1,026

Total sales
 
$
950

 
$
1,238

 
$
1,292

 
$
1,694

 
$
5,174

 
 
 
 
 
 
 
 
 
 
 
2013
 
 
 
 
 
 
 
 
 
 
In millions
 
Q1
 
Q2
 
Q3
 
Q4
 
YTD
Parts and filtration
 
$
322

 
$
369

 
$
377

 
$
397

 
$
1,465

Power generation
 
163

 
241

 
234

 
293

 
931

Engines
 
152

 
183

 
170

 
208

 
713

Service
 
141

 
161

 
163

 
175

 
640

Total sales
 
$
778

 
$
954

 
$
944

 
$
1,073

 
$
3,749





CUMMINS INC. AND SUBSIDIARIES
BUSINESS UNIT SALES DATA
(Unaudited)


Component segment sales by business:
2014
 
 
 
 
 
 
 
 
 
 
In millions
 
Q1
 
Q2
 
Q3
 
Q4
 
YTD
Emission Solutions
 
$
543

 
$
582

 
$
598

 
$
620

 
$
2,343

Turbo Technologies
 
313

 
307

 
297

 
305

 
1,222

Filtration
 
265

 
275

 
268

 
267

 
1,075

Fuel systems
 
109

 
116

 
124

 
129

 
478

Total sales
 
$
1,230

 
$
1,280

 
$
1,287

 
$
1,321

 
$
5,118

 
 
 
 
 
 
 
 
 
 
 
2013
 
 
 
 
 
 
 
 
 
 
In millions
 
Q1
 
Q2
 
Q3
 
Q4
 
YTD
Emission Solutions
 
$
400

 
$
444

 
$
458

 
$
489

 
$
1,791

Turbo Technologies
 
266

 
294

 
263

 
292

 
1,115

Filtration
 
255

 
271

 
248

 
254

 
1,028

Fuel systems
 
97

 
108

 
103

 
100

 
408

Total sales
 
$
1,018

 
$
1,117

 
$
1,072

 
$
1,135

 
$
4,342


Power Generation segment sales by business:
2014
 
 
 
 
 
 
 
 
 
 
In millions
 
Q1
 
Q2
 
Q3
 
Q4
 
YTD
Power products
 
$
373

 
$
445

 
$
439

 
$
412

 
$
1,669

Power systems
 
137

 
141

 
159

 
194

 
631

Alternators
 
105

 
126

 
115

 
103

 
449

Power solutions
 
24

 
31

 
41

 
51

 
147

Total sales
 
$
639

 
$
743

 
$
754

 
$
760

 
$
2,896

 
 
 
 
 
 
 
 
 
 
 
2013
 
 
 
 
 
 
 
 
 
 
In millions
 
Q1
 
Q2
 
Q3
 
Q4
 
YTD
Power products
 
$
409

 
$
474

 
$
421

 
$
421

 
$
1,725

Power systems
 
179

 
187

 
122

 
168

 
656

Alternators
 
126

 
125

 
126

 
119

 
496

Power solutions
 
32

 
28

 
43

 
51

 
154

Total sales
 
$
746

 
$
814

 
$
712

 
$
759

 
$
3,031