OPERATING SEGMENTS (Tables)

6 Months Ended

Jul. 04, 2021

Segment Reporting [Abstract]

Financial information regarding reportable operating segments

Summarized financial information regarding our reportable operating segments for the three months ended is shown in the table below:

In millions	Engine		Distribution		Components		Power Systems		New Power		Total Segments
Three months ended July 4, 2021
External sales	$	1,920	$	1,913	$	1,556	$	699	$	23	$	6,111
Intersegment sales	571		7		438		444		1		1,461
Total sales	2,491		1,920		1,994		1,143		24		7,572
Research, development and engineering expenses	99		12		79		60		26		276
Equity, royalty and interest income (loss) from investees	104		15		12		9		(3)		137
Interest income	1		2		1		1		—		5
EBITDA	402		201		301		139		(60)		983
Depreciation and amortization(1)	50		30		46		33		7		166
Three months ended June 28, 2020
External sales	$	937	$	1,601	$	876	$	428	$	10	$	3,852
Intersegment sales	486		4		274		349		—		1,113
Total sales	1,423		1,605		1,150		777		10		4,965
Research, development and engineering expenses	65		4		55		41		24		189
Equity, royalty and interest income (loss) from investees	84		11		12		9		(1)		115
Interest income	1		1		1		1		—		4
EBITDA	150		160		141		91		(38)		504
Depreciation and amortization(1)	51		30		47		32		4		164
(1) 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 Net Income as "Interest expense." A portion of depreciation expense is included in "Research, development and engineering expenses."

Summarized financial information regarding our reportable operating segments for the six months ended is shown in the table below:

In millions	Engine		Distribution		Components		Power Systems		New Power		Total Segments
Six months ended July 4, 2021
External sales	$	3,815	$	3,740	$	3,280	$	1,311	$	57	$	12,203
Intersegment sales	1,135		15		866		854		2		2,872
Total sales	4,950		3,755		4,146		2,165		59		15,075
Research, development and engineering expenses	191		25		154		117		49		536
Equity, royalty and interest income from investees	217		32		31		21		2		303
Interest income	4		3		2		2		—		11
EBITDA	756		361		722		265		(111)		1,993
Depreciation and amortization(1)	101		60		94		68		12		335
Six months ended June 28, 2020
External sales	$	2,516	$	3,408	$	1,991	$	928	$	20	$	8,863
Intersegment sales	1,065		11		661		733		—		2,470
Total sales	3,581		3,419		2,652		1,661		20		11,333
Research, development and engineering expenses	145		11		123		95		53		427
Equity, royalty and interest income (loss) from investees	162		32		33		18		(1)		244
Interest income	5		2		2		2		—		11
EBITDA	515		318		420		168		(81)		1,340
Depreciation and amortization(1)	104		61		95		64		8		332
(1) 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 Net Income as "Interest expense." The amortization of debt discount and deferred costs was $2 million and $1 million for the six months ended July 4, 2021 and June 28, 2020, respectively. A portion of depreciation expense is included in "Research, development and engineering expenses."

Reconciliation of Revenue from Segments to Consolidated

A reconciliation of our total segment sales to total net sales in the Condensed Consolidated Statements of Net Income was as follows:

	Three months ended				Six months ended
In millions	July 4, 2021		June 28, 2020		July 4, 2021		June 28, 2020
Total segment sales	$	7,572	$	4,965	$	15,075	$	11,333
Elimination of intersegment sales	(1,461)		(1,113)		(2,872)		(2,470)
Total net sales	$	6,111	$	3,852	$	12,203	$	8,863

Reconciliation of segment information

A reconciliation of our segment information to the corresponding amounts in the Condensed Consolidated Statements of Net Income is shown in the table below:

	Three months ended				Six months ended
In millions	July 4, 2021		June 28, 2020		July 4, 2021		June 28, 2020
TOTAL SEGMENT EBITDA	$	983	$	504	$	1,993	$	1,340
Intersegment elimination	(9)		45		(39)		55
Less:
Interest expense	29		23		57		46
Depreciation and amortization	166		164		335		332
INCOME BEFORE INCOME TAXES	779		362		1,562		1,017
Less: Income tax expense	167		93		339		220
CONSOLIDATED NET INCOME	612		269		1,223		797
Less: Net income (loss) attributable to noncontrolling interests	12		(7)		20		10
NET INCOME ATTRIBUTABLE TO CUMMINS INC.	$	600	$	276	$	1,203	$	787