(State or other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
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)) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
Exhibit No. | Description | |||||||
Exhibit 104 | Cover Page Interactive Data File (the cover page Interactive Data File is embedded within the Inline XBRL document) |
CUMMINS INC. | ||
/s/ LUTHER E. PETERS | ||
Luther E. Peters Vice President - Controller (Principal Accounting Officer) |
Three months ended | ||||||||||||||
In millions, except per share amounts | September 30, 2022 | October 3, 2021 | ||||||||||||
NET SALES | $ | 7,333 | $ | 5,968 | ||||||||||
Cost of sales | 5,691 | 4,554 | ||||||||||||
GROSS MARGIN | 1,642 | 1,414 | ||||||||||||
OPERATING EXPENSES AND INCOME | ||||||||||||||
Selling, general and administrative expenses | 708 | 571 | ||||||||||||
Research, development and engineering expenses | 348 | 266 | ||||||||||||
Equity, royalty and interest income from investees | 70 | 94 | ||||||||||||
Other operating expense, net | 30 | 5 | ||||||||||||
OPERATING INCOME | 626 | 666 | ||||||||||||
Interest expense | 61 | 28 | ||||||||||||
Other income, net | 43 | 37 | ||||||||||||
INCOME BEFORE INCOME TAXES | 608 | 675 | ||||||||||||
Income tax expense | 199 | 134 | ||||||||||||
CONSOLIDATED NET INCOME | 409 | 541 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 9 | 7 | ||||||||||||
NET INCOME ATTRIBUTABLE TO CUMMINS INC. | $ | 400 | $ | 534 | ||||||||||
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC. | ||||||||||||||
Basic | $ | 2.83 | $ | 3.72 | ||||||||||
Diluted | $ | 2.82 | $ | 3.69 | ||||||||||
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | ||||||||||||||
Basic | 141.1 | 143.5 | ||||||||||||
Diluted | 142.0 | 144.7 | ||||||||||||
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America. |
Nine months ended | ||||||||||||||
In millions, except per share amounts | September 30, 2022 | October 3, 2021 | ||||||||||||
NET SALES | $ | 20,304 | $ | 18,171 | ||||||||||
Cost of sales | 15,404 | 13,793 | ||||||||||||
GROSS MARGIN | 4,900 | 4,378 | ||||||||||||
OPERATING EXPENSES AND INCOME | ||||||||||||||
Selling, general and administrative expenses | 1,945 | 1,745 | ||||||||||||
Research, development and engineering expenses | 945 | 802 | ||||||||||||
Equity, royalty and interest income from investees | 261 | 397 | ||||||||||||
Other operating expense, net | 144 | 17 | ||||||||||||
OPERATING INCOME | 2,127 | 2,211 | ||||||||||||
Interest expense | 112 | 85 | ||||||||||||
Other income, net | 26 | 111 | ||||||||||||
INCOME BEFORE INCOME TAXES | 2,041 | 2,237 | ||||||||||||
Income tax expense | 502 | 473 | ||||||||||||
CONSOLIDATED NET INCOME | 1,539 | 1,764 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 19 | 27 | ||||||||||||
NET INCOME ATTRIBUTABLE TO CUMMINS INC. | $ | 1,520 | $ | 1,737 | ||||||||||
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC. | ||||||||||||||
Basic | $ | 10.74 | $ | 11.96 | ||||||||||
Diluted | $ | 10.68 | $ | 11.86 | ||||||||||
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING | ||||||||||||||
Basic | 141.5 | 145.2 | ||||||||||||
Diluted | 142.3 | 146.5 | ||||||||||||
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America. |
In millions, except par value | September 30, 2022 | December 31, 2021 | ||||||||||||
ASSETS | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | 2,499 | $ | 2,592 | ||||||||||
Marketable securities | 466 | 595 | ||||||||||||
Total cash, cash equivalents and marketable securities | 2,965 | 3,187 | ||||||||||||
Accounts and notes receivable, net | 4,799 | 3,990 | ||||||||||||
Inventories | 5,543 | 4,355 | ||||||||||||
Prepaid expenses and other current assets | 1,091 | 777 | ||||||||||||
Total current assets | 14,398 | 12,309 | ||||||||||||
Long-term assets | ||||||||||||||
Property, plant and equipment, net | 5,201 | 4,422 | ||||||||||||
Investments and advances related to equity method investees | 1,826 | 1,538 | ||||||||||||
Goodwill | 2,229 | 1,287 | ||||||||||||
Other intangible assets, net | 2,602 | 900 | ||||||||||||
Pension assets | 1,536 | 1,488 | ||||||||||||
Other assets | 1,977 | 1,766 | ||||||||||||
Total assets | $ | 29,769 | $ | 23,710 | ||||||||||
LIABILITIES | ||||||||||||||
Current liabilities | ||||||||||||||
Accounts payable (principally trade) | $ | 4,000 | $ | 3,021 | ||||||||||
Loans payable | 217 | 208 | ||||||||||||
Commercial paper | 2,393 | 313 | ||||||||||||
Accrued compensation, benefits and retirement costs | 575 | 683 | ||||||||||||
Current portion of accrued product warranty | 801 | 755 | ||||||||||||
Current portion of deferred revenue | 921 | 855 | ||||||||||||
Other accrued expenses | 1,568 | 1,190 | ||||||||||||
Current maturities of long-term debt | 55 | 59 | ||||||||||||
Total current liabilities | 10,530 | 7,084 | ||||||||||||
Long-term liabilities | ||||||||||||||
Long-term debt | 5,450 | 3,579 | ||||||||||||
Pensions and other postretirement benefits | 678 | 604 | ||||||||||||
Accrued product warranty | 742 | 684 | ||||||||||||
Deferred revenue | 867 | 850 | ||||||||||||
Other liabilities | 1,892 | 1,508 | ||||||||||||
Total liabilities | $ | 20,159 | $ | 14,309 | ||||||||||
Redeemable noncontrolling interests | $ | 252 | $ | 366 | ||||||||||
EQUITY | ||||||||||||||
Cummins Inc. shareholders’ equity | ||||||||||||||
Common stock, $2.50 par value, 500 shares authorized, 222.5 and 222.5 shares issued | $ | 2,214 | $ | 2,099 | ||||||||||
Retained earnings | 17,628 | 16,741 | ||||||||||||
Treasury stock, at cost, 81.5 and 80.0 shares | (9,449) | (9,123) | ||||||||||||
Accumulated other comprehensive loss | (2,013) | (1,571) | ||||||||||||
Total Cummins Inc. shareholders’ equity | 8,380 | 8,146 | ||||||||||||
Noncontrolling interests | 978 | 889 | ||||||||||||
Total equity | $ | 9,358 | $ | 9,035 | ||||||||||
Total liabilities, redeemable noncontrolling interests and equity | $ | 29,769 | $ | 23,710 | ||||||||||
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America. |
Three months ended | ||||||||||||||
In millions | September 30, 2022 | October 3, 2021 | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||
Consolidated net income | $ | 409 | $ | 541 | ||||||||||
Adjustments to reconcile consolidated net income to net cash provided by operating activities | ||||||||||||||
Depreciation and amortization | 216 | 160 | ||||||||||||
Deferred income taxes | (82) | 27 | ||||||||||||
Equity in income of investees, net of dividends | 32 | (36) | ||||||||||||
Pension and OPEB expense | 6 | 21 | ||||||||||||
Pension contributions and OPEB payments | (16) | (18) | ||||||||||||
Share-based compensation expense | 10 | 7 | ||||||||||||
Russian suspension costs, net of recoveries | 1 | — | ||||||||||||
Loss (gain) on corporate owned life insurance | 29 | (1) | ||||||||||||
Foreign currency remeasurement and transaction exposure | (126) | 17 | ||||||||||||
Changes in current assets and liabilities, net of acquisitions | ||||||||||||||
Accounts and notes receivable | (81) | (22) | ||||||||||||
Inventories | (99) | (291) | ||||||||||||
Other current assets | 47 | (27) | ||||||||||||
Accounts payable | (73) | 39 | ||||||||||||
Accrued expenses | 157 | 266 | ||||||||||||
Changes in other liabilities | (30) | (25) | ||||||||||||
Other, net | (18) | (89) | ||||||||||||
Net cash provided by operating activities | 382 | 569 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||
Capital expenditures | (202) | (150) | ||||||||||||
Investments in internal use software | (20) | (14) | ||||||||||||
Investments in and net advances from (to) equity investees | 3 | (7) | ||||||||||||
Acquisitions of businesses, net of cash acquired | (2,763) | — | ||||||||||||
Investments in marketable securities—acquisitions | (305) | (207) | ||||||||||||
Investments in marketable securities—liquidations | 358 | 221 | ||||||||||||
Cash flows from derivatives not designated as hedges | 3 | 7 | ||||||||||||
Other, net | 6 | 18 | ||||||||||||
Net cash used in investing activities | (2,920) | (132) | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||
Proceeds from borrowings | 2,020 | 15 | ||||||||||||
Net borrowings of commercial paper | 1,688 | — | ||||||||||||
Payments on borrowings and finance lease obligations | (999) | (24) | ||||||||||||
Net borrowings under short-term credit agreements | 45 | 9 | ||||||||||||
Distributions to noncontrolling interests | (24) | (15) | ||||||||||||
Dividend payments on common stock | (222) | (207) | ||||||||||||
Repurchases of common stock | (23) | (138) | ||||||||||||
Proceeds from issuing common stock | 17 | 1 | ||||||||||||
Other, net | — | 2 | ||||||||||||
Net cash provided by (used in) financing activities | 2,502 | (357) | ||||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 73 | 27 | ||||||||||||
Net increase in cash and cash equivalents | 37 | 107 | ||||||||||||
Cash and cash equivalents at beginning of period | 2,462 | 2,481 | ||||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 2,499 | $ | 2,588 | ||||||||||
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America. | ||||||||||||||
Nine months ended | ||||||||||||||
In millions | September 30, 2022 | October 3, 2021 | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||
Consolidated net income | $ | 1,539 | $ | 1,764 | ||||||||||
Adjustments to reconcile consolidated net income to net cash provided by operating activities | ||||||||||||||
Depreciation and amortization | 544 | 497 | ||||||||||||
Deferred income taxes | (194) | 44 | ||||||||||||
Equity in income of investees, net of dividends | (30) | (150) | ||||||||||||
Pension and OPEB expense | 23 | 62 | ||||||||||||
Pension contributions and OPEB payments | (71) | (86) | ||||||||||||
Share-based compensation expense | 24 | 25 | ||||||||||||
Russian suspension costs, net of recoveries | 112 | — | ||||||||||||
Asset impairments and other charges | 36 | — | ||||||||||||
Loss on corporate owned life insurance | 114 | 11 | ||||||||||||
Foreign currency remeasurement and transaction exposure | (136) | 27 | ||||||||||||
Changes in current assets and liabilities, net of acquisitions | ||||||||||||||
Accounts and notes receivable | (333) | (353) | ||||||||||||
Inventories | (597) | (919) | ||||||||||||
Other current assets | (18) | (45) | ||||||||||||
Accounts payable | 353 | 416 | ||||||||||||
Accrued expenses | (124) | 435 | ||||||||||||
Changes in other liabilities | (41) | (59) | ||||||||||||
Other, net | (56) | (145) | ||||||||||||
Net cash provided by operating activities | 1,145 | 1,524 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||
Capital expenditures | (453) | (362) | ||||||||||||
Investments in internal use software | (44) | (36) | ||||||||||||
Proceeds from sale of land | — | 20 | ||||||||||||
Investments in and net advances from (to) equity investees | (50) | 3 | ||||||||||||
Acquisitions of businesses, net of cash acquired | (3,008) | — | ||||||||||||
Investments in marketable securities—acquisitions | (738) | (569) | ||||||||||||
Investments in marketable securities—liquidations | 819 | 602 | ||||||||||||
Cash flows from derivatives not designated as hedges | (29) | 19 | ||||||||||||
Other, net | 7 | 45 | ||||||||||||
Net cash used in investing activities | (3,496) | (278) | ||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||
Proceeds from borrowings | 2,076 | 35 | ||||||||||||
Net borrowings (payments) of commercial paper | 2,080 | (123) | ||||||||||||
Payments on borrowings and finance lease obligations | (1,070) | (57) | ||||||||||||
Net borrowings (payments) under short-term credit agreements | 21 | (93) | ||||||||||||
Distributions to noncontrolling interests | (38) | (28) | ||||||||||||
Dividend payments on common stock | (633) | (601) | ||||||||||||
Repurchases of common stock | (370) | (1,228) | ||||||||||||
Proceeds from issuing common stock | 36 | 27 | ||||||||||||
Other, net | 9 | (11) | ||||||||||||
Net cash provided by (used in) financing activities | 2,111 | (2,079) | ||||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 147 | 20 | ||||||||||||
Net decrease in cash and cash equivalents | (93) | (813) | ||||||||||||
Cash and cash equivalents at beginning of year | 2,592 | 3,401 | ||||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 2,499 | $ | 2,588 | ||||||||||
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America. | ||||||||||||||
In millions | Engine | Distribution | Components | Power Systems | New Power | Total Segments | Intersegment Eliminations (1) | Total | ||||||||||||||||||||||||||||||||||||||||||
Three months ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||
External sales | $ | 2,063 | $ | 2,232 | $ | 2,220 | $ | 773 | $ | 45 | $ | 7,333 | $ | — | $ | 7,333 | ||||||||||||||||||||||||||||||||||
Intersegment sales | 716 | 7 | 483 | 576 | 5 | 1,787 | (1,787) | — | ||||||||||||||||||||||||||||||||||||||||||
Total sales | 2,779 | 2,239 | 2,703 | 1,349 | 50 | 9,120 | (1,787) | 7,333 | ||||||||||||||||||||||||||||||||||||||||||
Research, development and engineering expenses | 140 | 13 | 87 | 62 | 46 | 348 | — | 348 | ||||||||||||||||||||||||||||||||||||||||||
Equity, royalty and interest income (loss) from investees | 28 | 20 | 17 | 10 | (5) | 70 | — | 70 | ||||||||||||||||||||||||||||||||||||||||||
Interest income | 3 | 4 | 4 | 3 | — | 14 | — | 14 | ||||||||||||||||||||||||||||||||||||||||||
Russian suspension costs | — | — | 1 | — | — | 1 | — | 1 | ||||||||||||||||||||||||||||||||||||||||||
EBITDA (2) | 363 | 225 | 297 | (3) | 193 | (96) | 982 | (98) | 884 | |||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization (4) | 51 | 29 | 95 | 30 | 10 | 215 | — | 215 | ||||||||||||||||||||||||||||||||||||||||||
EBITDA as a percentage of segment sales | 13.1 | % | 10.0 | % | 11.0 | % | 14.3 | % | NM | 10.8 | % | 12.1 | % | |||||||||||||||||||||||||||||||||||||
Three months ended October 3, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||
External sales | $ | 1,961 | $ | 1,952 | $ | 1,347 | $ | 688 | $ | 20 | $ | 5,968 | $ | — | $ | 5,968 | ||||||||||||||||||||||||||||||||||
Intersegment sales | 617 | 7 | 446 | 476 | 3 | 1,549 | (1,549) | — | ||||||||||||||||||||||||||||||||||||||||||
Total sales | 2,578 | 1,959 | 1,793 | 1,164 | 23 | 7,517 | (1,549) | 5,968 | ||||||||||||||||||||||||||||||||||||||||||
Research, development and engineering expenses | 97 | 10 | 78 | 55 | 26 | 266 | — | 266 | ||||||||||||||||||||||||||||||||||||||||||
Equity, royalty and interest income (loss) from investees | 61 | 15 | 10 | 11 | (3) | 94 | — | 94 | ||||||||||||||||||||||||||||||||||||||||||
Interest income | 3 | 2 | 1 | 1 | — | 7 | — | 7 | ||||||||||||||||||||||||||||||||||||||||||
EBITDA (2) | 391 | 192 | 253 | 134 | (58) | 912 | (50) | 862 | ||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization (4) | 53 | 28 | 44 | 29 | 5 | 159 | — | 159 | ||||||||||||||||||||||||||||||||||||||||||
EBITDA as a percentage of segment sales | 15.2 | % | 9.8 | % | 14.1 | % | 11.5 | % | NM | 12.1 | % | 14.4 | % | |||||||||||||||||||||||||||||||||||||
"NM" - not meaningful information | ||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended September 30, 2022 and October 3, 2021, except for $6 million of filtration separation costs in 2022. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(2) EBITDA is defined as earnings or losses before interest expense, income taxes, depreciation and amortization and noncontrolling interests. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(3) Includes $45 million of costs related to the acquisition and integration of Meritor and $10 million of costs associated with the planned separation of our filtration business. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(4) 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||
In millions | Engine | Distribution | Components | Power Systems | New Power | Total Segments | Intersegment Eliminations (1) | Total | ||||||||||||||||||||||||||||||||||||||||||
Nine months ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||
External sales | $ | 6,204 | $ | 6,590 | $ | 5,214 | $ | 2,190 | $ | 106 | $ | 20,304 | $ | — | $ | 20,304 | ||||||||||||||||||||||||||||||||||
Intersegment sales | 2,103 | 19 | 1,427 | 1,522 | 17 | 5,088 | (5,088) | — | ||||||||||||||||||||||||||||||||||||||||||
Total sales | 8,307 | 6,609 | 6,641 | 3,712 | 123 | 25,392 | (5,088) | 20,304 | ||||||||||||||||||||||||||||||||||||||||||
Research, development and engineering expenses | 365 | 39 | 236 | 184 | 121 | 945 | — | 945 | ||||||||||||||||||||||||||||||||||||||||||
Equity, royalty and interest income (loss) from investees | 131 | (2) | 57 | 54 | 31 | (12) | 261 | — | 261 | |||||||||||||||||||||||||||||||||||||||||
Interest income | 8 | 9 | 7 | 5 | — | 29 | — | 29 | ||||||||||||||||||||||||||||||||||||||||||
Russian suspension costs | 33 | (3) | 55 | 5 | 19 | — | 112 | — | 112 | |||||||||||||||||||||||||||||||||||||||||
EBITDA (4) | 1,177 | 632 | 969 | (5) | 411 | (243) | 2,946 | (252) | 2,694 | |||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization (6) | 151 | 86 | 187 | 92 | 25 | 541 | — | 541 | ||||||||||||||||||||||||||||||||||||||||||
EBITDA as a percentage of total sales | 14.2% | 9.6 | % | 14.6 | % | 11.1 | % | NM | 11.6 | % | 13.3 | % | ||||||||||||||||||||||||||||||||||||||
Nine months ended October 3, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||
External sales | $ | 5,776 | $ | 5,692 | $ | 4,627 | $ | 1,999 | $ | 77 | $ | 18,171 | $ | — | $ | 18,171 | ||||||||||||||||||||||||||||||||||
Intersegment sales | 1,752 | 22 | 1,312 | 1,330 | 5 | 4,421 | (4,421) | — | ||||||||||||||||||||||||||||||||||||||||||
Total sales | 7,528 | 5,714 | 5,939 | 3,329 | 82 | 22,592 | (4,421) | 18,171 | ||||||||||||||||||||||||||||||||||||||||||
Research, development and engineering expenses | 288 | 35 | 232 | 172 | 75 | 802 | — | 802 | ||||||||||||||||||||||||||||||||||||||||||
Equity, royalty and interest income (loss) from investees | 278 | 47 | 41 | 32 | (1) | 397 | — | 397 | ||||||||||||||||||||||||||||||||||||||||||
Interest income | 7 | 5 | 3 | 3 | — | 18 | — | 18 | ||||||||||||||||||||||||||||||||||||||||||
EBITDA (4) | 1,147 | 553 | 975 | 399 | (169) | 2,905 | (89) | 2,816 | ||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization (6) | 154 | 88 | 138 | 97 | 17 | 494 | — | 494 | ||||||||||||||||||||||||||||||||||||||||||
EBITDA as a percentage of total sales | 15.2 | % | 9.7 | % | 16.4 | % | 12.0 | % | NM | 12.9 | % | 15.5 | % | |||||||||||||||||||||||||||||||||||||
"NM" - not meaningful information | ||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the nine months ended September 30, 2022 and October 3, 2021, except for $47 million of filtration separation costs in 2022. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Includes a $28 million impairment of our joint venture with KAMAZ and $3 million of royalty charges as part of our costs associated with the suspension of our Russian operations. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(3) Includes $31 million of Russian suspension costs reflected in the equity, royalty and interest income (loss) from investees line above. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(4) EBITDA is defined as earnings or losses before interest expense, income taxes, depreciation and amortization and noncontrolling interests. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(5) Includes $56 million of costs related to the acquisition and integration of Meritor and $15 million of costs associated with the planned separation of our filtration business. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(6) 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 $3 million and $3 million for the nine months ended September 30, 2022 and October 3, 2021, respectively. A portion of depreciation expense is included in Research, development and engineering expenses. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||||||||||||
In millions | September 30, 2022 | October 3, 2021 | September 30, 2022 | October 3, 2021 | ||||||||||||||||||||||
EBITDA | $ | 884 | $ | 862 | $ | 2,694 | $ | 2,816 | ||||||||||||||||||
EBITDA as a percentage of net sales | 12.1 | % | 14.4 | % | 13.3 | % | 15.5 | % | ||||||||||||||||||
Less: | ||||||||||||||||||||||||||
Interest expense | 61 | 28 | 112 | 85 | ||||||||||||||||||||||
Depreciation and amortization | 215 | 159 | 541 | 494 | ||||||||||||||||||||||
INCOME BEFORE INCOME TAXES | 608 | 675 | 2,041 | 2,237 | ||||||||||||||||||||||
Less: Income tax expense | 199 | 134 | 502 | 473 | ||||||||||||||||||||||
CONSOLIDATED NET INCOME | 409 | 541 | 1,539 | 1,764 | ||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | 9 | 7 | 19 | 27 | ||||||||||||||||||||||
NET INCOME ATTRIBUTABLE TO CUMMINS INC. | $ | 400 | $ | 534 | $ | 1,520 | $ | 1,737 | ||||||||||||||||||
Net income attributable to Cummins Inc. as a percentage of net sales | 5.5 | % | 8.9 | % | 7.5 | % | 9.6 | % | ||||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||||||||||||
In millions | September 30, 2022 | October 3, 2021 | September 30, 2022 | October 3, 2021 | ||||||||||||||||||||||
Manufacturing entities | ||||||||||||||||||||||||||
Dongfeng Cummins Engine Company, Ltd. | $ | 8 | $ | 11 | $ | 35 | $ | 63 | ||||||||||||||||||
Chongqing Cummins Engine Company, Ltd. | 7 | 8 | 23 | 28 | ||||||||||||||||||||||
Beijing Foton Cummins Engine Co., Ltd. | 6 | 23 | 34 | 108 | ||||||||||||||||||||||
Tata Cummins, Ltd. | 5 | 6 | 19 | 13 | ||||||||||||||||||||||
All other manufacturers | 11 | 21 | 14 | (1) | 104 | |||||||||||||||||||||
Distribution entities | ||||||||||||||||||||||||||
Komatsu Cummins Chile, Ltda. | 13 | 8 | 32 | 23 | ||||||||||||||||||||||
All other distributors | 3 | 2 | 8 | 6 | ||||||||||||||||||||||
Cummins share of net income | 53 | 79 | 165 | 345 | ||||||||||||||||||||||
Royalty and interest income | 17 | 15 | 96 | 52 | ||||||||||||||||||||||
Equity, royalty and interest income from investees | $ | 70 | $ | 94 | $ | 261 | $ | 397 | ||||||||||||||||||
(1) Includes a $28 million impairment of our joint venture with KAMAZ and $3 million of royalty charges as part of our costs associated with the suspension of our Russian operations. In addition, on February 7, 2022, we purchased Westport Fuel System Inc.'s stake in Cummins Westport Joint Venture. | ||||||||||||||||||||||||||
Three months ended | ||||||||||||||
In millions | September 30, 2022 | October 3, 2021 | ||||||||||||
Net income attributable to Cummins Inc. | $ | 400 | $ | 534 | ||||||||||
Net income attributable to Cummins Inc. as a percentage of net sales | 5.5 | % | 8.9 | % | ||||||||||
Add: | ||||||||||||||
Net income attributable to noncontrolling interests | 9 | 7 | ||||||||||||
Consolidated net income | 409 | 541 | ||||||||||||
Add: | ||||||||||||||
Interest expense | 61 | 28 | ||||||||||||
Income tax expense | 199 | 134 | ||||||||||||
Depreciation and amortization | 215 | 159 | ||||||||||||
EBITDA | $ | 884 | $ | 862 | ||||||||||
EBITDA as a percentage of net sales | 12.1 | % | 14.4 | % | ||||||||||
Add: | ||||||||||||||
Meritor business and related acquisition and integration costs | 23 | — | ||||||||||||
EBITDA, excluding impact of Meritor business and related acquisition and integration costs | $ | 907 | $ | 862 | ||||||||||
EBITDA, excluding impact of Meritor business and related acquisition and integration costs, as a percentage of net sales excluding Meritor | 13.8 | % | 14.4 | % |
2022 | ||||||||||||||||||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||||||||
Heavy-duty truck | $ | 908 | $ | 1,001 | $ | 972 | $ | — | $ | 2,881 | ||||||||||||||||||||||
Medium-duty truck and bus | 848 | 875 | 868 | — | 2,591 | |||||||||||||||||||||||||||
Light-duty automotive | 498 | 456 | 466 | — | 1,420 | |||||||||||||||||||||||||||
Off-highway | 499 | 443 | 473 | — | 1,415 | |||||||||||||||||||||||||||
Total sales | $ | 2,753 | $ | 2,775 | $ | 2,779 | $ | — | $ | 8,307 | ||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||||||||
Heavy-duty truck | $ | 827 | $ | 839 | $ | 861 | $ | 801 | $ | 3,328 | ||||||||||||||||||||||
Medium-duty truck and bus | 674 | 688 | 713 | 702 | 2,777 | |||||||||||||||||||||||||||
Light-duty automotive | 481 | 484 | 515 | 432 | 1,912 | |||||||||||||||||||||||||||
Off-highway | 477 | 480 | 489 | 491 | 1,937 | |||||||||||||||||||||||||||
Total sales | $ | 2,459 | $ | 2,491 | $ | 2,578 | $ | 2,426 | $ | 9,954 | ||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||||||||
Units | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||||||||
Heavy-duty | 28,600 | 30,900 | 30,200 | — | 89,700 | |||||||||||||||||||||||||||
Medium-duty | 72,600 | 68,800 | 69,800 | — | 211,200 | |||||||||||||||||||||||||||
Light-duty | 66,500 | 60,400 | 58,300 | — | 185,200 | |||||||||||||||||||||||||||
Total units | 167,700 | 160,100 | 158,300 | — | 486,100 | |||||||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||
Units | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||||||||
Heavy-duty | 30,700 | 29,400 | 29,200 | 28,300 | 117,600 | |||||||||||||||||||||||||||
Medium-duty | 73,100 | 67,500 | 65,200 | 68,000 | 273,800 | |||||||||||||||||||||||||||
Light-duty | 68,500 | 68,100 | 73,900 | 62,800 | 273,300 | |||||||||||||||||||||||||||
Total units | 172,300 | 165,000 | 168,300 | 159,100 | 664,700 | |||||||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||||||||
Parts | $ | 924 | $ | 990 | $ | 945 | $ | — | $ | 2,859 | ||||||||||||||||||||||
Engines | 441 | 429 | 449 | — | 1,319 | |||||||||||||||||||||||||||
Power generation | 401 | 441 | 431 | — | 1,273 | |||||||||||||||||||||||||||
Service | 351 | 393 | 414 | — | 1,158 | |||||||||||||||||||||||||||
Total sales | $ | 2,117 | $ | 2,253 | $ | 2,239 | $ | — | $ | 6,609 | ||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||||||||
Parts | $ | 757 | $ | 765 | $ | 800 | $ | 823 | $ | 3,145 | ||||||||||||||||||||||
Engines | 334 | 351 | 377 | 437 | 1,499 | |||||||||||||||||||||||||||
Power generation | 418 | 454 | 438 | 452 | 1,762 | |||||||||||||||||||||||||||
Service | 326 | 350 | 344 | 346 | 1,366 | |||||||||||||||||||||||||||
Total sales | $ | 1,835 | $ | 1,920 | $ | 1,959 | $ | 2,058 | $ | 7,772 |
2022 | ||||||||||||||||||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||||||||
Emission solutions | $ | 910 | $ | 863 | $ | 853 | $ | — | $ | 2,626 | ||||||||||||||||||||||
Filtration | 382 | 391 | 399 | — | 1,172 | |||||||||||||||||||||||||||
Turbo technologies | 346 | 355 | 367 | — | 1,068 | |||||||||||||||||||||||||||
Electronics and fuel systems | 216 | 198 | 193 | — | 607 | |||||||||||||||||||||||||||
Automated transmissions | 134 | 143 | 159 | — | 436 | |||||||||||||||||||||||||||
Axles and brakes | — | — | 732 | — | 732 | |||||||||||||||||||||||||||
Total sales | $ | 1,988 | $ | 1,950 | $ | 2,703 | $ | — | $ | 6,641 | ||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||||||||
Emission solutions | $ | 1,035 | $ | 882 | $ | 793 | $ | 789 | $ | 3,499 | ||||||||||||||||||||||
Filtration | 372 | 374 | 354 | 338 | 1,438 | |||||||||||||||||||||||||||
Turbo technologies | 367 | 351 | 325 | 308 | 1,351 | |||||||||||||||||||||||||||
Electronics and fuel systems | 263 | 241 | 210 | 185 | 899 | |||||||||||||||||||||||||||
Automated transmissions | 115 | 146 | 111 | 106 | 478 | |||||||||||||||||||||||||||
Total sales | $ | 2,152 | $ | 1,994 | $ | 1,793 | $ | 1,726 | $ | 7,665 | ||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||||||||
Power generation | $ | 664 | $ | 657 | $ | 739 | $ | — | $ | 2,060 | ||||||||||||||||||||||
Industrial | 393 | 428 | 483 | — | 1,304 | |||||||||||||||||||||||||||
Generator technologies | 103 | 118 | 127 | — | 348 | |||||||||||||||||||||||||||
Total sales | $ | 1,160 | $ | 1,203 | $ | 1,349 | $ | — | $ | 3,712 | ||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||
In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||||||||
Power generation | $ | 611 | $ | 655 | $ | 664 | $ | 585 | $ | 2,515 | ||||||||||||||||||||||
Industrial | 324 | 399 | 412 | 399 | 1,534 | |||||||||||||||||||||||||||
Generator technologies | 87 | 89 | 88 | 102 | 366 | |||||||||||||||||||||||||||
Total sales | $ | 1,022 | $ | 1,143 | $ | 1,164 | $ | 1,086 | $ | 4,415 | ||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||||||||
Units | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||||||||
Power generation | 2,200 | 2,400 | 2,400 | — | 7,000 | |||||||||||||||||||||||||||
Industrial | 1,100 | 1,200 | 1,200 | — | 3,500 | |||||||||||||||||||||||||||
Total units | 3,300 | 3,600 | 3,600 | — | 10,500 | |||||||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||
Units | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||||||||||||||||||
Power generation | 2,100 | 1,800 | 2,500 | 2,000 | 8,400 | |||||||||||||||||||||||||||
Industrial | 1,000 | 1,200 | 1,900 | 1,300 | 5,400 | |||||||||||||||||||||||||||
Total units | 3,100 | 3,000 | 4,400 | 3,300 | 13,800 | |||||||||||||||||||||||||||
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