OPERATING SEGMENTS (Tables)

9 Months Ended

Sep. 30, 2022

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 September 30, 2022
External sales	$	2,063	$	2,232	$	2,220		$	773	$	45	$	7,333
Intersegment sales	716		7		483			576		5		1,787
Total sales	2,779		2,239		2,703			1,349		50		9,120



Research, development and engineering expenses	140		13		87			62		46		348
Equity, royalty and interest income (loss) from investees	28		20		17			10		(5)		70

Interest income	3		4		4			3		—		14

Russian suspension costs(1)	—		—		1			—		—		1

Segment EBITDA	363		225		297		(2)	193		(96)		982
Depreciation and amortization(3)	51		29		95			30		10		215



Three months ended October 3, 2021
External sales	$	1,961	$	1,952	$	1,347		$	688	$	20	$	5,968
Intersegment sales	617		7		446			476		3		1,549
Total sales	2,578		1,959		1,793			1,164		23		7,517



Research, development and engineering expenses	97		10		78			55		26		266
Equity, royalty and interest income (loss) from investees	61		15		10			11		(3)		94

Interest income	3		2		1			1		—		7
Segment EBITDA	391		192		253			134		(58)		912
Depreciation and amortization(3)	53		28		44			29		5		159










(1) See NOTE 3, "RUSSIAN OPERATIONS," to our Condensed Consolidated Financial Statements for additional information.
(2) 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.
(3) 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 nine months ended is shown in the table below:



In millions	Engine			Distribution		Components			Power Systems		New Power		Total Segments
Nine months ended September 30, 2022
External sales	$	6,204		$	6,590	$	5,214		$	2,190	$	106	$	20,304
Intersegment sales	2,103			19		1,427			1,522		17		5,088
Total sales	8,307			6,609		6,641			3,712		123		25,392



Research, development and engineering expenses	365			39		236			184		121		945
Equity, royalty and interest income (loss) from investees	131		(1)	57		54			31		(12)		261

Interest income	8			9		7			5		—		29
Russian suspension costs(2)	33		(3)	55		5			19		—		112
Segment EBITDA	1,177			632		969		(4)	411		(243)		2,946
Depreciation and amortization(5)	151			86		187			92		25		541


Nine months ended October 3, 2021
External sales	$	5,776		$	5,692	$	4,627		$	1,999	$	77	$	18,171
Intersegment sales	1,752			22		1,312			1,330		5		4,421
Total sales	7,528			5,714		5,939			3,329		82		22,592



Research, development and engineering expenses	288			35		232			172		75		802
Equity, royalty and interest income (loss) from investees	278			47		41			32		(1)		397

Interest income	7			5		3			3		—		18
Segment EBITDA	1,147			553		975			399		(169)		2,905
Depreciation and amortization(5)	154			88		138			97		17		494


(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. See NOTE 3, "RUSSIAN OPERATIONS," to our Condensed Consolidated Financial Statements for additional information.
(2) See NOTE 3, "RUSSIAN OPERATIONS," to our Condensed Consolidated Financial Statements for additional information.
(3) Includes $31 million of Russian suspension costs reflected in the Equity, royalty and interest income (loss) from investees line above.
(4) 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.
(5) 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.

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				Nine months ended
In millions	September 30, 2022		October 3, 2021		September 30, 2022		October 3, 2021
Total segment sales	$	9,120	$	7,517	$	25,392	$	22,592
Elimination of intersegment sales	(1,787)		(1,549)		(5,088)		(4,421)
Total net sales	$	7,333	$	5,968	$	20,304	$	18,171

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				Nine months ended
In millions	September 30, 2022		October 3, 2021		September 30, 2022		October 3, 2021
TOTAL SEGMENT EBITDA	$	982	$	912	$	2,946	$	2,905

Intersegment eliminations and other(1)	(98)		(50)		(252)		(89)

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

(1)Intersegment eliminations and other included $6 million and $47 million of costs associated with the planned separation of our Filtration business for the three and nine months ended September 30, 2022.