COLUMBUS, Ind.--(BUSINESS WIRE)--Cummins Inc. (NYSE: CMI) today reported sharply higher sales and earnings compared to the first quarter of 2010 on continued strength in key international markets, a recovering North American truck market and productivity improvements.
First quarter sales of $3.9 billion were up 56 percent from $2.5 billion in the same period in 2010. Earnings before interest and taxes (EBIT) were $532 million or 13.8 percent of sales, double the Company’s earnings from the same period a year ago. EBIT as a percentage of sales in the first quarter was at its highest level in at least 25 years.
Net income attributable to Cummins Inc. was $343 million ($1.75 per share) compared to $149 million (75 cents per share) in the first quarter of 2010.
“Our outstanding first quarter results demonstrate that we are well positioned to take advantage of our significant growth opportunities as markets around the world continue to recover,” said Tim Solso, Chairman and Chief Executive Officer. “The work we have done over the past two years to keep the Company strong during the global economic recession is paying off today.”
As a result of the Company’s performance in the first quarter and its forecast for the remainder of the year, Cummins today increased both its EBIT and sales guidance for 2011. The Company now expects to earn 14 percent EBIT on $17 billion in sales in 2011.
Engine segment sales of $2.4 billion were up 68 percent compared to the same quarter a year ago, which was artificially weak due to a change in emissions standards and the economic downturn. Segment EBIT of $290 million, or 12.1 percent of sales, was a quarterly record.
Engine shipments in the global heavy-duty truck market more than tripled year-over-year, while medium-duty truck engine shipments increased 114 percent. In addition, shipments to global industrial markets such as construction (up 60 percent) and mining (up 59 percent) also were strong.
Sales in the Components segment, propelled by recovery in Europe, growth in China and India, and higher content of emission controls products on engines in North America, were up 47 percent to a record $924 million. Segment EBIT of $105 million, or 11.4 percent, also was a quarterly record for the Components group.
Power Generation sales increased 54 percent to $795 million on the strength of improved sales in its commercial products. Total segment sales in Western Europe increased 88 percent; 81 percent in the Middle East and 47 percent in India. Segment EBIT was $89 million, or 11.2 percent of sales.
The Distribution segment saw a sales increase of 35 percent to $642 million due to growth in most major markets, especially Europe, North and Central America and Asia Pacific. Segment EBIT of $89 million, or 13.9 percent of sales, was a quarterly record.
The Company’s non- U.S. markets continued showing strong growth as sales were up in every major international region compared to the same period last year. Consolidated sales in China were up 66 percent; India 31 percent; Brazil 39 percent; Africa and Middle East 40 percent. Sales outside the United States accounted for 61 percent of the Company’s revenue in the quarter.
“Our first quarter results reflect strong growth in demand for our products across most of our markets,” said Cummins President and Chief Operating Officer Tom Linebarger. “We expect the growth to continue and are investing significantly in the additional capacity needed to serve our customers around the world.”
The Company’s guidance for 2011 excludes any gains from the previously announced sale of two businesses, which are expected to close later in the year.
The Company continued to return value to shareholders by repurchasing $190 million worth of Company shares in the first quarter. Cummins also announced a new share repurchase program in February that authorizes the acquisition of up to $1 billion in stock.
First quarter details (all comparisons to the same period in 2010)
Engine Segment
- Sales - $2.4 billion, up 68 percent
- Segment EBIT - $290 million or 12.1 percent of sales, compared to $133 million or 9.3 percent
- Strong demand in Brazil contributed to the growth in the medium-duty engine market
- Demand in emerging economies drove a 68 percent growth in heavy and light duty construction
- Industrial sales are up by $278 million primarily due to strong demand in international markets
- Joint venture income was up by $7 million, led by a significant increase in volume from Dongfeng Cummins Engine Company
Power Generation
- Sales - $795 million, up 54 percent from what was the lowest quarter during the economic downturn
- Segment EBIT - $89 million or 11.2 percent of sales, compared to $34 million or 6.6 percent
-
Commercial product sales were up 64 percent
- Strongest sales growth was in the Middle East, Latin America, India, the United Kingdom and North America
- Generator Technologies had sales growth of 43 percent
Components
- Sales - $924 million, up 47 percent
- EBIT - $105 million, or 11.4 percent of sales, compared to $57 million or 9.0 percent of sales
- Higher volumes and increased content on aftertreatment products contributed to the improved results
Distribution
- Sales - $642 million, up 35 percent
- EBIT - $89 million or 13.9 percent of sales, compared to $72 million or 15.1 percent of sales
- Increased sales in engines, generators and parts drove strong performance
Click here to read the financial statements from the first quarter.
Presentation of Non-GAAP Financial Information
EBIT
is a non-GAAP measure used in this release, and is defined and reconciled
to what management believes to be the most comparable GAAP measure in a
schedule attached to this release. Cummins presents this information as
it believes it is useful to understanding the Company's operating
performance, and because EBIT is a measure used internally to assess the
performance of the operating units.
Webcast information
Cummins management will host a
teleconference to discuss these results today at 10 a.m. EDT. This
teleconference will be webcast and available on the Investor Relations
section of the Cummins website at www.cummins.com.
Participants wishing to view the visuals available with the audio are
encouraged to sign-in a few minutes prior to the start of the
teleconference.
About Cummins
Cummins Inc., a global power leader,
is a corporation of complementary business units that design,
manufacture, distribute and service engines and related technologies,
including fuel systems, controls, air handling, filtration, emission
solutions and electrical power generation systems. Headquartered in
Columbus, Indiana, (USA) Cummins employs approximately 40,000 people
worldwide and serves customers in approximately 190 countries and
territories through a network of more than 600 company-owned and
independent distributor locations and approximately 6,000 dealer
locations. Cummins earned $1.0 billion on sales of $13.2 billion in
2010. Press releases can be found on the Web at www.cummins.com.
Forward-looking disclosure statement
Information
provided in this release that is not purely historical are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, including statements regarding the
company's expectations, hopes, beliefs and intentions on strategies
regarding the future. It is important to note that the company's actual
future results could differ materially from those projected in such
forward-looking statements because of a number of factors, including,
but not limited to, general economic, business and financing conditions,
labor relations, governmental action, competitor pricing activity,
expense volatility and other risks detailed from time to time in Cummins
Securities and Exchange Commission filings.
|
CUMMINS INC. AND SUBSIDIARIES |
|||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||
| (Unaudited) (a) | |||||||||||||
| Three months ended | |||||||||||||
| March 27, | December 31, | March 28, | |||||||||||
| In millions, except per share amounts | 2011 | 2010 | 2010 | ||||||||||
| NET SALES | $ | 3,860 | $ | 4,139 | $ | 2,478 | |||||||
| Cost of sales | 2,903 | 3,155 | 1,877 | ||||||||||
| GROSS MARGIN | 957 | 984 | 601 | ||||||||||
| OPERATING EXPENSES AND INCOME | |||||||||||||
| Selling, general and administrative expenses | 389 | 423 | 335 | ||||||||||
| Research, development and engineering expenses | 129 | 123 | 92 | ||||||||||
| Equity, royalty and interest income from investees (Note 1) | 96 | 90 | 76 | ||||||||||
| Other operating (expense) income, net | (6 | ) | (3 | ) | (4 | ) | |||||||
| OPERATING INCOME | 529 | 525 | 246 | ||||||||||
| Interest income | 6 | 7 | 3 | ||||||||||
| Interest expense | 10 | 11 | 9 | ||||||||||
| Other (expense) income, net | (3 | ) | 9 | 17 | |||||||||
| INCOME BEFORE INCOME TAXES | 522 | 530 | 257 | ||||||||||
| Income tax expense (Note 2) | 157 | 139 | 87 | ||||||||||
| CONSOLIDATED NET INCOME | 365 | 391 | 170 | ||||||||||
| Less: Net income attributable to noncontrolling interests | 22 | 29 | 21 | ||||||||||
| NET INCOME ATTRIBUTABLE TO CUMMINS INC. | $ | 343 | $ | 362 | $ | 149 | |||||||
| EARNINGS PER COMMON SHARE ATTRIBUTABLE | |||||||||||||
| TO CUMMINS INC. | |||||||||||||
| Basic | $ | 1.75 | $ | 1.85 | $ | 0.75 | |||||||
| Diluted | $ | 1.75 | $ | 1.84 | $ | 0.75 | |||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | |||||||||||||
| Basic | 195.5 | 195.8 | 198.4 | ||||||||||
| Diluted | 196.1 | 196.4 | 198.7 | ||||||||||
| CASH DIVIDENDS DECLARED PER COMMON SHARE | $ | 0.2625 | $ | 0.2625 | $ | 0.175 | |||||||
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America (GAAP).
| CUMMINS INC. AND SUBSIDIARIES | |||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| (Unaudited) (a) | |||||||||
| March 27, | December 31, | ||||||||
| In millions, except par value | 2011 | 2010 | |||||||
| ASSETS | |||||||||
| Current assets | |||||||||
| Cash and cash equivalents | $ | 779 | $ | 1,023 | |||||
| Marketable securities | 307 | 339 | |||||||
| Accounts and notes receivable, net | 2,570 | 2,243 | |||||||
| Inventories | 2,202 | 1,977 | |||||||
| Deferred income taxes | 307 | 314 | |||||||
| Prepaid expenses and other current assets | 329 | 393 | |||||||
| Total current assets | 6,494 | 6,289 | |||||||
| Long-term assets | |||||||||
| Property, plant and equipment | 5,026 | 4,927 | |||||||
| Accumulated depreciation | (2,962 | ) | (2,886 | ) | |||||
| Property, plant and equipment, net | 2,064 | 2,041 | |||||||
| Investments and advances related to equity method investees | 822 | 734 | |||||||
| Goodwill | 368 | 367 | |||||||
| Other intangible assets, net | 217 | 222 | |||||||
| Deferred income taxes | 187 | 203 | |||||||
| Other assets | 574 | 546 | |||||||
| Total assets | $ | 10,726 | $ | 10,402 | |||||
| LIABILITIES | |||||||||
| Current liabilities | |||||||||
| Loans payable | $ | 82 | $ | 82 | |||||
| Accounts payable (principally trade) | 1,626 | 1,362 | |||||||
| Current portion of accrued product warranty | 435 | 421 | |||||||
| Accrued compensation, benefits and retirement costs | 323 | 468 | |||||||
| Deferred revenue | 189 | 182 | |||||||
| Taxes payable (including taxes on income) | 224 | 202 | |||||||
| Other accrued expenses | 572 | 543 | |||||||
| Total current liabilities | 3,451 | 3,260 | |||||||
| Long-term liabilities | |||||||||
| Long-term debt | 685 | 709 | |||||||
| Pensions | 146 | 195 | |||||||
| Postretirement benefits other than pensions | 435 | 439 | |||||||
| Other liabilities and deferred revenue | 810 | 803 | |||||||
| Total liabilities | 5,527 | 5,406 | |||||||
| EQUITY | |||||||||
| Cummins Inc. shareholders’ equity | |||||||||
| Common stock, $2.50 par value, 500 shares authorized, 222.1 and 221.8 shares issued | 1,949 | 1,934 | |||||||
| Retained earnings | 4,737 | 4,445 | |||||||
| Treasury stock, at cost, 25.8 and 24.0 shares | (1,153 | ) | (964 | ) | |||||
| Common stock held by employee benefits trust, at cost, 2.0 and 2.1 shares | (24 | ) | (25 | ) | |||||
| Accumulated other comprehensive loss | |||||||||
| Defined benefit postretirement plans | (620 | ) | (646 | ) | |||||
| Other | (22 | ) | (74 | ) | |||||
| Total accumulated other comprehensive loss | (642 | ) | (720 | ) | |||||
| Total Cummins Inc. shareholders’ equity | 4,867 | 4,670 | |||||||
| Noncontrolling interests | 332 | 326 | |||||||
| Total equity | 5,199 | 4,996 | |||||||
| Total liabilities and equity | $ | 10,726 | $ | 10,402 | |||||
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America (GAAP).
| CUMMINS INC. AND SUBSIDIARIES | ||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| (Unaudited) (a) | ||||||||||
| Three months ended | ||||||||||
| March 27, | March 28, | |||||||||
| In millions | 2011 | 2010 | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
| Consolidated net income | $ | 365 | $ | 170 | ||||||
| Adjustments to reconcile consolidated net income to net cash provided by operating activities: | ||||||||||
| Depreciation and amortization | 79 | 79 | ||||||||
| Gain on fair value adjustment for consolidated investee | - | (12 | ) | |||||||
| Deferred income taxes | 21 | 13 | ||||||||
| Equity in income of investees, net of dividends | (62 | ) | (53 | ) | ||||||
| Pension contributions in excess of expense | (24 | ) | (93 | ) | ||||||
| Other post-retirement benefits payments in excess of expense | (5 | ) | (1 | ) | ||||||
| Stock-based compensation expense | 5 | 6 | ||||||||
| Excess tax benefits on stock based awards | (2 | ) | (6 | ) | ||||||
| Translation and hedging activities | 4 | (9 | ) | |||||||
| Changes in current assets and liabilities, net of acquisitions and dispositions: | ||||||||||
| Accounts and notes receivable | (306 | ) | 275 | |||||||
| Inventories | (210 | ) | (189 | ) | ||||||
| Other current assets | (2 | ) | 3 | |||||||
| Accounts payable | 251 | 54 | ||||||||
| Accrued expenses | (28 | ) | (154 | ) | ||||||
| Changes in other liabilities and deferred revenue | 24 | 29 | ||||||||
| Other, net | (22 | ) | 14 | |||||||
| Net cash provided by operating activities | 88 | 126 | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
| Capital expenditures | (91 | ) | (47 | ) | ||||||
| Investments in internal use software | (10 | ) | (17 | ) | ||||||
| Proceeds from disposals of property, plant and equipment | 5 | 38 | ||||||||
| Investments in and advances to equity investees | (21 | ) | (11 | ) | ||||||
| Acquisition of businesses, net of cash acquired | - | (71 | ) | |||||||
| Investments in marketable securities—acquisitions | (101 | ) | (133 | ) | ||||||
| Investments in marketable securities—liquidations | 134 | 108 | ||||||||
| Cash flows from derivatives not designated as hedges | 4 | (11 | ) | |||||||
| Other, net | 2 | - | ||||||||
| Net cash used in investing activities | (78 | ) | (144 | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||
| Proceeds from borrowings | 38 | 70 | ||||||||
| Payments on borrowings and capital lease obligations | (45 | ) | (20 | ) | ||||||
| Net borrowings under short-term credit agreements | 1 | 5 | ||||||||
| Distributions to noncontrolling interests | (21 | ) | (1 | ) | ||||||
| Dividend payments on common stock | (51 | ) | (35 | ) | ||||||
| Repurchases of common stock | (190 | ) | (39 | ) | ||||||
| Excess tax benefits on stock-based awards | 2 | 6 | ||||||||
| Other, net | 4 | 7 | ||||||||
| Net cash used in financing activities | (262 | ) | (7 | ) | ||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 8 | (20 | ) | |||||||
| Net increase (decrease) in cash and cash equivalents | (244 | ) | (45 | ) | ||||||
| Cash and cash equivalents at beginning of year | 1,023 | 930 | ||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 779 | $ | 885 | ||||||
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America (GAAP).
|
CUMMINS INC. AND SUBSIDIARIES SEGMENT INFORMATION (Unaudited) |
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| Engine |
Power |
Components | Distribution |
Non-segment |
Total | |||||||||||||||||
| In millions | ||||||||||||||||||||||
| Three months ended March 27, 2011 | ||||||||||||||||||||||
| External sales | $ | 2,006 | $ | 557 | $ | 660 | $ | 637 | $ | - | $ | 3,860 | ||||||||||
| Intersegment sales | 385 | 238 | 264 | 5 | (892 | ) | - | |||||||||||||||
| Total sales | 2,391 | 795 | 924 | 642 | (892 | ) | 3,860 | |||||||||||||||
| Depreciation and amortization(2) | 45 | 10 | 18 | 6 | - | 79 | ||||||||||||||||
| Research, development and engineering expenses | 80 | 11 | 37 | 1 | - | 129 | ||||||||||||||||
| Equity, royalty and interest income from investees | 42 | 8 | 8 | 38 | - | 96 | ||||||||||||||||
| Interest income | 3 | 1 | 1 | 1 | - | 6 | ||||||||||||||||
| Segment EBIT | 290 | 89 | 105 | 89 | (41 | ) | 532 | |||||||||||||||
| Three months ended December 31, 2010 | ||||||||||||||||||||||
| External sales | $ | 2,099 | $ | 690 | $ | 656 | $ | 694 | $ | - | $ | 4,139 | ||||||||||
| Intersegment sales | 398 | 213 | 262 | 5 | (878 | ) | - | |||||||||||||||
| Total sales | 2,497 | 903 | 918 | 699 | (878 | ) | 4,139 | |||||||||||||||
| Depreciation and amortization(2) | 46 | 10 | 18 | 6 | - | 80 | ||||||||||||||||
| Research, development and engineering expenses | 76 | 13 | 33 | 1 | - | 123 | ||||||||||||||||
| Equity, royalty and interest income from investees | 37 | 8 | 6 | 39 | - | 90 | ||||||||||||||||
| Interest income | 5 | 1 | 1 | - | - | 7 | ||||||||||||||||
| Segment EBIT | 256 | 92 | 83 | 82 | 28 | 541 | ||||||||||||||||
| Three months ended March 28, 2010 | ||||||||||||||||||||||
| External sales | $ | 1,173 | $ | 378 | $ | 453 | $ | 474 | $ | - | $ | 2,478 | ||||||||||
| Intersegment sales | 250 | 139 | 177 | 2 | (568 | ) | - | |||||||||||||||
| Total sales | 1,423 | 517 | 630 | 476 | (568 | ) | 2,478 | |||||||||||||||
| Depreciation and amortization(2) | 41 | 10 | 20 | 7 | - | 78 | ||||||||||||||||
| Research, development and engineering expenses | 60 | 7 | 25 | - | - | 92 | ||||||||||||||||
| Equity, royalty and interest income from investees | 35 | 6 | 5 | 30 | - | 76 | ||||||||||||||||
| Interest income | 2 | 1 | - | - | - | 3 | ||||||||||||||||
| Segment EBIT | 133 | 34 | 57 | 72 | (30 | ) | 266 | |||||||||||||||
|
(1) |
|
Includes intersegment sales and profit in inventory eliminations
and unallocated corporate expenses. There were no significant
unallocated corporate expenses for the three |
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|
(2) |
|
Depreciation and amortization as shown on a segment basis excludes
the amortization of debt discount that is included in the
Condensed Consolidated Statements of |
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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 | ||||||||||
| March 27, | December 31, | March 28, | ||||||||
| In millions | 2011 | 2010 | 2010 | |||||||
| Segment EBIT | $ | 532 | $ | 541 | $ | 266 | ||||
| Less: | ||||||||||
| Interest expense | 10 | 11 | 9 | |||||||
| Income before income taxes | $ | 522 | $ | 530 | $ | 257 | ||||
|
CUMMINS INC. AND SUBSIDIARIES SEGMENT INFORMATION (Unaudited) |
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|
Engine segment net sales by market |
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| 2011 | ||||||||||||||||
| In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||
| Heavy-duty truck | $ | 485 | $ | ― | $ | ― | $ | ― | $ | 485 | ||||||
| Medium-duty bus and truck | 474 | ― | ― | ― | 474 | |||||||||||
| Light-duty auto and RV | 296 | ― | ― | ― | 296 | |||||||||||
| Industrial | 855 | ― | ― | ― | 855 | |||||||||||
| Stationary power | 281 | ― | ― | ― | 281 | |||||||||||
| Total sales | $ | 2,391 | $ | ― | $ | ― | $ | ― | $ | 2,391 | ||||||
| 2010 | ||||||||||||||||
| In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||
| Heavy-duty truck | $ | 252 | $ | 340 | $ | 395 | $ | 516 | $ | 1,503 | ||||||
| Medium-duty bus and truck | 217 | 352 | 430 | 436 | 1,435 | |||||||||||
| Light-duty auto and RV | 207 | 296 | 239 | 280 | 1,022 | |||||||||||
| Industrial | 577 | 656 | 700 | 956 | 2,889 | |||||||||||
| Stationary power | 170 | 255 | 305 | 309 | 1,039 | |||||||||||
| Total sales | $ | 1,423 | $ | 1,899 | $ | 2,069 | $ | 2,497 | $ | 7,888 | ||||||
|
Unit shipments by engine classification (including unit shipments to Power Generation) |
||||||||||
| 2011 | ||||||||||
| Units | Q1 | Q2 | Q3 | Q4 | YTD | |||||
| Mid-range | 109,400 | ― | ― | ― | 109,400 | |||||
| Heavy-duty | 20,000 | ― | ― | ― | 20,000 | |||||
| High horsepower | 4,900 | ― | ― | ― | 4,900 | |||||
| Total units | 134,300 | ― | ― | ― | 134,300 | |||||
| 2010 | |||||||||||||||||||||||||
| Units | Q1 | Q2 | Q3 | Q4 | YTD | ||||||||||||||||||||
| Mid-range | 69,100 | 90,500 | 93,500 | 115,800 | 368,900 | ||||||||||||||||||||
| Heavy-duty | 8,700 | 14,500 | 15,200 | 22,800 | 61,200 | ||||||||||||||||||||
| High horsepower | 3,400 | 4,800 | 4,900 | 5,400 | 18,500 | ||||||||||||||||||||
| Total units | 81,200 | 109,800 | 113,600 | 144,000 | 448,600 |
|
Power generation segment sales by business |
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| 2011 | ||||||||||||||||
| In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||
| Commercial products | $ | 505 | $ | ― | $ | ― | $ | ― | $ | 505 | ||||||
| Generator technologies | 153 | 153 | ||||||||||||||
| Commercial projects | 55 | ― | ― | ― | 55 | |||||||||||
| Consumer | 50 | ― | ― | ― | 50 | |||||||||||
| Power electronics | 32 | ― | ― | ― | 32 | |||||||||||
| Total sales | $ | 795 | $ | ― | $ | ― | $ | ― | $ | 795 | ||||||
| 2010 | ||||||||||||||||
| In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||
| Commercial products | $ | 307 | $ | 436 | $ | 519 | $ | 569 | $ | 1,831 | ||||||
| Generator technologies | 107 | 135 | 140 | 167 | 549 | |||||||||||
| Commercial projects | 33 | 57 | 49 | 83 | 222 | |||||||||||
| Consumer | 43 | 49 | 49 | 45 | 186 | |||||||||||
| Power electronics | 27 | 31 | 34 | 39 | 131 | |||||||||||
| Total sales | $ | 517 | $ | 708 | $ | 791 | $ | 903 | $ | 2,919 | ||||||
|
CUMMINS INC. AND SUBSIDIARIES SEGMENT INFORMATION (Unaudited) |
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|
Component segment sales by business |
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| 2011 | ||||||||||||||||
| In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||
| Turbo technologies | $ | 297 | $ | ― | $ | ― | $ | ― | $ | 297 | ||||||
| Emission solutions | 273 | 273 | ||||||||||||||
| Filtration | 255 | ― | ― | ― | 255 | |||||||||||
| Fuel systems | 99 | ― | ― | ― | 99 | |||||||||||
| Total sales | $ | 924 | $ | ― | $ | ― | $ | ― | $ | 924 | ||||||
| 2010 | ||||||||||||||||
| In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||
| Turbo technologies | $ | 200 | $ | 226 | $ | 239 | $ | 283 | $ | 948 | ||||||
| Emission solutions | 137 | 170 | 192 | 251 | 750 | |||||||||||
| Filtration | 228 | 250 | 248 | 285 | 1,011 | |||||||||||
| Fuel systems | 65 | 83 | 90 | 99 | 337 | |||||||||||
| Total sales | $ | 630 | $ | 729 | $ | 769 | $ | 918 | $ | 3,046 | ||||||
|
Distribution segment sales by product |
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| 2011 | ||||||||||||||||
| In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||
| Parts and filtration | $ | 235 | $ | ― | $ | ― | $ | ― | $ | 235 | ||||||
| Power generation | 145 | 145 | ||||||||||||||
| Engines | 140 | ― | ― | ― | 140 | |||||||||||
| Service | 122 | ― | ― | ― | 122 | |||||||||||
| Total sales | $ | 642 | $ | ― | $ | ― | $ | ― | $ | 642 | ||||||
| 2010 | ||||||||||||||||
| In millions | Q1 | Q2 | Q3 | Q4 | YTD | |||||||||||
| Parts and filtration | $ | 193 | $ | 221 | $ | 220 | $ | 248 | $ | 882 | ||||||
| Power generation | 99 | 135 | 125 | 157 | 516 | |||||||||||
| Engines | 83 | 109 | 112 | 162 | 466 | |||||||||||
| Service | 101 | 111 | 116 | 132 | 460 | |||||||||||
| Total sales | $ | 476 | $ | 576 | $ | 573 | $ | 699 | $ | 2,324 | ||||||
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CUMMINS INC. AND SUBSIDIARIES |
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| FINANCIAL MEASURES THAT SUPPLEMENT GAAP | |||||||||||||
| (Unaudited) | |||||||||||||
|
Earnings before interest, taxes and noncontrolling interests |
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|
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|
We define EBIT as earnings or loss before interest expense, income
tax expense and noncontrolling interests in income of consolidated |
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| Three months ended | |||||||||||||
| March 27, | December 31, | March 28, | |||||||||||
| In millions | 2011 | 2010 | 2010 | ||||||||||
| Earnings before interest and income taxes | $ | 532 | $ | 541 | $ | 266 | |||||||
|
EBIT as a percentage of net sales |
13.8 | % | 13.1 | % | 10.7 | % | |||||||
| Less: | |||||||||||||
| Interest expense | 10 | 11 | 9 | ||||||||||
| Income tax expense | 157 | 139 | 87 | ||||||||||
| Consolidated net income | 365 | 391 | 170 | ||||||||||
| Less: | |||||||||||||
| Net income attributable to noncontrolling interests | 22 | 29 | 21 | ||||||||||
| Net income attributable to Cummins Inc. | $ | 343 | $ | 362 | $ | 149 | |||||||
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Net income attributable to Cummins Inc. as a |
8.9 | % | 8.7 | % | 6.0 | % | |||||||
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We believe this is a useful measure of our operating performance
for the periods presented as it illustrates our operating
performance |
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| CUMMINS INC. AND SUBSIDIARIES | |||||||||||||
| SELECTED FOOTNOTE DATA | |||||||||||||
| (Unaudited) | |||||||||||||
|
NOTE 1. EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES |
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Equity, royalty and interest income from investees included in our Condensed Consolidated Statements of Income for the interim reporting periods was as follows: |
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| Three months ended | |||||||||||||
| March 27, | December 31, | March 28, | |||||||||||
| In millions | 2011 | 2010 | 2010 | ||||||||||
| Distribution Entities | |||||||||||||
| North American distributors | $ | 30 | $ | 29 | $ | 23 | |||||||
| Komatsu Cummins Chile, Ltda | 4 | 5 | 3 | ||||||||||
| All other distributors | 1 | 1 | 1 | ||||||||||
| Manufacturing Entities | |||||||||||||
| Dongfeng Cummins Engine Company, Ltd. | 23 | 23 | 18 | ||||||||||
| Chongqing Cummins Engine Company, Ltd. | 12 | 11 | 10 | ||||||||||
| Tata Cummins, Ltd. | 4 | 3 | 4 | ||||||||||
| Shanghai Fleetguard Filter Co., Ltd. | 4 | 3 | 2 | ||||||||||
| Komatsu manufacturing alliances | 2 | 4 | 2 | ||||||||||
| Cummins Westport, Inc. | 1 | 3 | 3 | ||||||||||
| Valvoline Cummins, Ltd. | 2 | 1 | 2 | ||||||||||
| Cummins MerCruiser Diesel Marine, LLC | - | (2 | ) | - | |||||||||
| Beijing Foton Cummins Engine Co., Ltd. |
(2 |
) | (4 | ) | (2 | ) | |||||||
| All other manufacturers |
6 |
5 | 3 | ||||||||||
| Cummins share of net income | 87 | 82 | 69 | ||||||||||
| Royalty and interest income | 9 | 8 | 7 | ||||||||||
| Equity, royalty and interest income from investees | $ | 96 | $ | 90 | $ | 76 | |||||||
NOTE 2. INCOME TAXES
Our effective tax rate for the year is expected to approximate 30 percent, absent any discrete period activity. Our tax rate is generally less than the 35 percent U.S. statutory income tax rate primarily due to lower tax rates on foreign income and research credits. The tax rate for the three month period ended March 27, 2011, was 30 percent.
Our effective tax rate for the comparable prior year period was 34 percent and included a discrete tax charge of $7 million (three percent) related to the enactment of the “Patient Protection and Affordable Care Act”. This rate was less than the 35 percent U.S. statutory income tax rate primarily due to lower tax rates on foreign income.