UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC  20549


FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES EXCHANGE ACT OF 1934


Date of Report: 
April 30, 2013

 

  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 April 30, 2013, Cummins Inc. (“Cummins,” “the Company,” “the registrant,” “we,” “our,” or, “us”) issued a press release announcing its first quarter 2013 results. 
 

Item 9.01. Financial Statements and Exhibits.

 

 

(d)

The following exhibit is furnished pursuant to Item 2.02 herewith:
 

99-Press Release dated April 30, 2013


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: April 30, 2013

 

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

 

 

 

March 31,

 

December 31,

 

April 1,

In millions, except per share amounts

 

2013

 

2012

 

2012

NET SALES

 

$

 3,922

 

$

 4,292

 

$

 4,472

 

Cost of sales

 

 

 2,965

 

 

 3,234

 

 

 3,274

GROSS MARGIN

 

 

 957

 

 

 1,058

 

 

 1,198

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES AND INCOME

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

 444

 

 

 482

 

 

 475

 

Research, development and engineering expenses

 

 

 182

 

 

 174

 

 

 181

 

Equity, royalty and interest income from investees  (Note 1)

 

 

 82

 

 

 82

 

 

 104

 

Other operating income (expense), net

 

 

 1

 

 

 (19)

 

 

 2

OPERATING INCOME

 

 

 414

 

 

 465

 

 

 648

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 5

 

 

 5

 

 

 8

 

Interest expense

 

 

 6

 

 

 7

 

 

 8

 

Other income (expense), net

 

 

 18

 

 

 10

 

 

 2

INCOME BEFORE INCOME TAXES

 

 

 431

 

 

 473

 

 

 650

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense  (Note 2)

 

 

 119

 

 

 75

 

 

 175

CONSOLIDATED NET INCOME

 

 

 312

 

 

 398

 

 

 475

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net income attributable to noncontrolling interests

 

 

 30

 

 

 29

 

 

 20

NET INCOME ATTRIBUTABLE TO CUMMINS INC.

 

$

 282

 

$

 369

 

$

 455

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER COMMON SHARE ATTRIBUTABLE

 

 

 

 

 

 

 

 

 

 

TO CUMMINS INC.

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.50

 

$

 1.96

 

$

 2.39

 

Diluted

 

$

1.49

 

$

 1.95

 

$

 2.38

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 188.4

 

 

 188.4

 

 

 190.4

 

Diluted

 

 

 188.8

 

 

 188.8

 

 

 190.8

 

 

 

 

 

 

 

 

 

 

 

CASH DIVIDENDS DECLARED PER COMMON SHARE

 

$

 0.50

 

$

 0.50

 

$

 0.40

 

(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)

 

 

 

 

 

 

 

 

 

 In millions, except par value

March 31, 2013

 

December 31, 2012

ASSETS

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

$

 1,483

 

$

 1,369

 

Marketable securities

 

 196

 

 

 247

 

 

Total cash, cash equivalents and marketable securities

 

 1,679

 

 

 1,616

 

Accounts and notes receivable, net

 

 2,496

 

 

 2,475

 

Inventories

 

 2,387

 

 

 2,221

 

Prepaid expenses and other current assets

 

 658

 

 

 855

 

 

 

Total current assets

 

 7,220

 

 

 7,167

Long-term assets

 

 

 

 

 

 

Property, plant and equipment

 

 5,942

 

 

 5,876

 

 

Accumulated depreciation

 

 (3,173)

 

 

 (3,152)

 

 

Property, plant and equipment, net

 

 2,769

 

 

 2,724

 

Investments and advances related to equity method investees

 

 944

 

 

 897

 

Goodwill

 

 444

 

 

 445

 

Other intangible assets, net

 

 366

 

 

 369

 

Other assets

 

 1,013

 

 

 946

 

 

 

 

Total assets

$

 12,756

 

$

 12,548

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Loans payable

$

 13

 

$

 16

 

Accounts payable (principally trade)

 

 1,554

 

 

 1,339

 

Current maturities of long-term debt

 

 54

 

 

 61

 

Current portion of accrued product warranty

 

 396

 

 

 386

 

Accrued compensation, benefits and retirement costs

 

 280

 

 

 400

 

Deferred revenue

 

 230

 

 

 215

 

Taxes payable (including taxes on income)

 

 203

 

 

 173

 

Other accrued expenses

 

 527

 

 

 546

 

 

 

Total current liabilities

 

 3,257

 

 

 3,136

Long-term liabilities

 

 

 

 

 

 

Long-term debt

 

 736

 

 

 698

 

Postretirement benefits other than pensions

 

 422

 

 

 432

 

Other liabilities and deferred revenue

 

 1,296

 

 

 1,308

 

 

 

 

Total liabilities

 

 5,711

 

 

 5,574

 

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

Cummins Inc. shareholders’ equity

 

 

 

 

 

 

Common stock, $2.50 par value, 500 shares authorized, 222.2 and 222.4 shares issued

 

 2,064

 

 

 2,058

 

Retained earnings

 

 7,530

 

 

 7,343

 

Treasury stock, at cost, 32.5 and 32.6 shares

 

 (1,827)

 

 

 (1,830)

 

Common stock held by employee benefits trust, at cost, 1.4 and 1.5 shares

 

 (17)

 

 

 (18)

 

Accumulated other comprehensive loss

 

 

 

 

 

 

 

Defined benefit postretirement plans

 

 (775)

 

 

 (794)

 

 

Other

 

 (320)

 

 

 (156)

 

 

Total accumulated other comprehensive loss

 

 (1,095)

 

 

 (950)

 

 

 

Total Cummins Inc. shareholders’ equity

 

 6,655

 

 

 6,603

 

Noncontrolling interests

 

 390

 

 

 371

 

 

 

 

Total equity

 

 7,045

 

 

 6,974

 

 

 

 

 

Total liabilities and equity

$

 12,756

 

$

 12,548

 

(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)

 

 

 

 

 

 

 

 

 

Three months ended

In millions

March 31, 2013

 

April 1, 2012

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Consolidated net income

$

 312

 

$

 475

 

Adjustments to reconcile consolidated net income to net cash provided by operating activities

 

 

 

 

 

 

 

Depreciation and amortization

 

 98

 

 

 85

 

 

Gain on fair value adjustment for consolidated investee

 

 (7)

 

 

 - 

 

 

Deferred income taxes

 

 5

 

 

 (27)

 

 

Equity in income of investees, net of dividends

 

 (36)

 

 

 (59)

 

 

Pension contributions in excess of expense

 

 (54)

 

 

 (27)

 

 

Other post-retirement benefits payments in excess of expense

 

 (8)

 

 

 (4)

 

 

Stock-based compensation expense

 

 7

 

 

 7

 

 

Excess tax benefits on stock-based awards

 

 (7)

 

 

 (11)

 

 

Translation and hedging activities

 

 (5)

 

 

 10

 

Changes in current assets and liabilities, net of acquisitions

 

 

 

 

 

 

 

Accounts and notes receivable

 

 (29)

 

 

 (135)

 

 

Inventories

 

 (177)

 

 

 (209)

 

 

Other current assets

 

 158

 

 

 (28)

 

 

Accounts payable

 

 204

 

 

 148

 

 

Accrued expenses

 

 (142)

 

 

 (196)

 

Changes in other liabilities and deferred revenue

 

 47

 

 

 29

 

Other, net

 

 62

 

 

 (37)

Net cash provided by operating activities

 

 428

 

 

 21

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

Capital expenditures

 

 (114)

 

 

 (126)

 

Investments in internal use software

 

 (12)

 

 

 (16)

 

Investments in and advances to equity investees

 

 (24)

 

 

 (5)

 

Acquisition of businesses, net of cash acquired

 

 (17)

 

 

 (5)

 

Investments in marketable securities—acquisitions

 

 (133)

 

 

 (146)

 

Investments in marketable securities—liquidations

 

 187

 

 

 184

 

Cash flows from derivatives not designated as hedges

 

 (30)

 

 

 11

 

Other, net

 

 - 

 

 

 1

Net cash used in investing activities

 

 (143)

 

 

 (102)

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

Proceeds from borrowings

 

 - 

 

 

 12

 

Payments on borrowings and capital lease obligations

 

 (27)

 

 

 (38)

 

Net borrowings (payments) under short-term credit agreements

 

 15

 

 

 - 

 

Distributions to noncontrolling interests

 

 (19)

 

 

 (22)

 

Dividend payments on common stock

 

 (95)

 

 

 (77)

 

Repurchases of common stock

 

 - 

 

 

 (8)

 

Excess tax benefits on stock-based awards

 

 7

 

 

 11

 

Other, net

 

 16

 

 

 9

Net cash used in financing activities

 

 (103)

 

 

 (113)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

 

 (68)

 

 

 27

Net increase (decrease) in cash and cash equivalents

 

 114

 

 

 (167)

Cash and cash equivalents at beginning of year

 

 1,369

 

 

 1,484

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

 1,483

 

$

 1,317

 

(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

 

Components

 

Power Generation

 

Distribution

 

Non-segment Items(1)

 

Total

 

Three months ended March 31, 2013

 

 

 

 

 

 

 

 

 

 

 

  

 

 

  

 

 

 

 

External sales

 

$

 1,885

 

$

 722

 

$

 539

 

$

 776

 

$

 - 

 

$

 3,922

 

Intersegment sales

 

 

 418

 

 

 296

 

 

 207

 

 

 2

 

 

 (923)

 

 

 - 

 

 

Total sales

 

 

 2,303

 

 

 1,018

 

 

 746

 

 

 778

 

 

 (923)

 

 

 3,922

 

Depreciation and amortization(2)

 

 

 52

 

 

 24

 

 

 12

 

 

 10

 

 

 - 

 

 

 98

 

Research, development and engineering expenses

 

 

 105

 

 

 57

 

 

 18

 

 

 2

 

 

 - 

 

 

 182

 

Equity, royalty and interest income from investees

 

 

 23

 

 

 7

 

 

 7

 

 

 45

 

 

 - 

 

 

 82

 

Interest income

 

 

 2

 

 

 1

 

 

 2

 

 

 - 

 

 

 - 

 

 

 5

 

Segment EBIT

 

 

 195

 

 

 119

 

 

 51

 

 

 95(3)

 

 

 (23)

 

 

 437

 

 

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

  

 

 

 

 

Segment EBIT as a percentage of total sales

 

 

8.5%

 

 

11.7%

 

 

6.8%

 

 

12.2%

 

 

  

 

 

11.1%

 

 

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

  

 

 

 

 

Three months ended December 31, 2012

 

 

 

 

 

 

 

 

 

 

 

  

 

 

  

 

 

 

 

External sales

 

$

 2,177

 

$

 662

 

$

 549

 

$

 904

 

$

 - 

 

$

 4,292

 

Intersegment sales

 

 

 329

 

 

 277

 

 

 216

 

 

 3

 

 

 (825)

 

 

 - 

 

 

Total sales

 

 

 2,506

 

 

 939

 

 

 765

 

 

 907

 

 

 (825)

 

 

 4,292

 

Depreciation and amortization(2)

 

 

 50

 

 

 23

 

 

 13

 

 

 11

 

 

 - 

 

 

 97

 

Research, development and engineering expenses

 

 

 92

 

 

 60

 

 

 20

 

 

 2

 

 

 - 

 

 

 174

 

Equity, royalty and interest income from investees

 

 

 27

 

 

 6

 

 

 8

 

 

 41

 

 

 - 

 

 

 82

 

Interest income

 

 

 2

 

 

 - 

 

 

 2

 

 

 1

 

 

 - 

 

 

 5

 

Segment EBIT

 

 

 252

 

 

 78

 

 

 42

 

 

 84

 

 

 24

 

 

 480

 

Add back restructuring and other charges

 

 

 20

 

 

 6

 

 

 12

 

 

 14

 

 

 - 

 

 

 52

 

 

Segment EBIT excluding restructuring and other charges

 

 

 272

 

 

 84

 

 

 54

 

 

 98

 

 

 24

 

 

 532

 

 

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

  

 

 

 

 

Segment EBIT as a percentage of total sales

 

 

10.1%

 

 

8.3%

 

 

5.5%

 

 

9.3%

 

 

  

 

 

11.2%

 

Segment EBIT excluding restructuring and other

 

 

 

 

 

 

 

 

 

 

 

  

 

 

  

 

 

 

 

 

charges as a percentage of total sales

 

 

10.9%

 

 

8.9%

 

 

7.1%

 

 

10.8%

 

 

  

 

 

12.4%

 

 

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

  

 

 

 

 

Three months ended April 1, 2012

 

 

 

 

 

 

 

 

 

 

 

  

 

 

  

 

 

 

 

External sales

 

$

 2,412

 

$

 774

 

$

 516

 

$

 770

 

$

 - 

 

$

 4,472

 

Intersegment sales

 

 

 447

 

 

 325

 

 

 264

 

 

 5

 

 

 (1,041)

 

 

 - 

 

 

Total sales

 

 

 2,859

 

 

 1,099

 

 

 780

 

 

 775

 

 

 (1,041)

 

 

 4,472

 

Depreciation and amortization(2)

 

 

 47

 

 

 19

 

 

 11

 

 

 7

 

 

 - 

 

 

 84

 

Research, development and engineering expenses

 

 

 111

 

 

 51

 

 

 18

 

 

 1

 

 

 - 

 

 

 181

 

Equity, royalty and interest income from investees

 

 

 38

 

 

 8

 

 

 10

 

 

 48

 

 

 - 

 

 

 104

 

Interest income

 

 

 4

 

 

 1

 

 

 2

 

 

 1

 

 

 - 

 

 

 8

 

Segment EBIT

 

 

 381

 

 

 143

 

 

 76

 

 

 94

 

 

 (36)

 

 

 658

 

 

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

  

 

 

 

 

Segment EBIT as a percentage of total sales

 

 

13.3%

 

 

13.0%

 

 

9.7%

 

 

12.1%

 

 

  

 

 

14.7%

 

 

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

  

 

 

 

 (1)

Includes intersegment sales and profit in inventory eliminations and unallocated corporate expenses.  There were no significant unallocated corporate expenses for the three month periods ended March 31, 2013 and April 1, 2012.  For the three months ended December 31, 2012, unallocated corporate expenses included a $20 million reserve ($12 million after-tax) related to legal matters.  There were no other significant unallocated corporate expenses.

 (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 Income as "Interest expense."

 (3)

Distribution segment EBIT includes a $7 million gain on the fair value adjustment resulting from the acquisition of a controlling interest in Cummins Northwest.


 

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 31,

 

December 31,

 

April 1,

 

In millions

 

2013

 

2012

 

2012

 

Segment EBIT excluding restructuring and other charges

 

$

 437

 

$

 532

 

$

 658

 

Add:  Restructuring and other charges

 

 

 - 

 

 

 (52)

 

 

 - 

 

 

Segment EBIT

 

 

 437

 

 

 480

 

 

 658

 

Less:  Interest expense

 

 

 6

 

 

 7

 

 

 8

 

 

 

Income before income taxes

 

$

 431

 

$

 473

 

$

 650

 


 

CUMMINS INC. AND SUBSIDIARIES

SEGMENT FOOTNOTE DATA

(Unaudited)

 

NOTE 1.  EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES

 

Equity, royalty and interest income from investees included in our Condensed Consolidated Statements of Income for the interim reporting periods was as follows:

 

 

 

 

 

Three months ended

 

 

 

 

 

March 31,

 

December 31,

 

April 1,

 

In millions

 

2013

 

2012

 

2012

 

Distribution Entities

 

 

 

 

 

 

 

 

 

 

North American distributors

 

$

 35

 

$

 32

 

$

 40

 

Komatsu Cummins Chile, Ltda.

 

 

 5

 

 

 6

 

 

 5

 

All other distributors

 

 

 - 

 

 

 1

 

 

 1

 

Manufacturing Entities

 

 

 

 

 

 

 

 

 

 

Chongqing Cummins Engine Company, Ltd.

 

 

 12

 

 

 12

 

 

 18

 

Dongfeng Cummins Engine Company, Ltd.

 

 

 12

 

 

 10

 

 

 16

 

Shanghai Fleetguard Filter Co., Ltd.

 

 

 3

 

 

 3

 

 

 3

 

Valvoline Cummins, Ltd.

 

 

 3

 

 

 2

 

 

 2

 

Tata Cummins, Ltd.

 

 

 1

 

 

 4

 

 

 4

 

Beijing Foton Cummins Engine Co., Ltd.

 

 

 1

 

 

 2

 

 

 (2)

 

Cummins Westport, Inc.

 

 

 - 

 

 

 3

 

 

 5

 

Komatsu manufacturing alliances

 

 

 (1)

 

 

 (2)

 

 

 (1)

 

All other manufacturers

 

 

 2

 

 

 2

 

 

 1

 

 

Cummins share of net income

 

 

 73

 

 

 75

 

 

 92

 

Royalty and interest income

 

 

 9

 

 

 7

 

 

 12

 

 

 

Equity, royalty and interest income from investees

 

$

 82

 

$

 82

 

$

 104

 

 

NOTE 2.  INCOME TAXES

 

Our effective tax rate for the year is expected to approximate 29.5 percent, excluding any one-time items that may arise.  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 tax credits.  The tax rate for the three month period ended March 31, 2013, was 27.6 percent.  This tax rate includes a discrete tax benefit of $28 million attributable to the 2012 research credit as well as a discrete tax expense of $17 million, which primarily relates to the write-off of a deferred tax asset deemed unrecoverable.  On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law and reinstated the research tax credit.  The expiration of this credit resulted in a higher income tax provision of $28 million in 2012.  As tax law changes are accounted for in the period of enactment, we recognized the discrete tax benefit in the first quarter of 2013. 

 

Our effective tax rate for the three months ended April 1, 2012, was 26.9 percent.  The increase in the 2013 effective tax rate compared to 2012 is due primarily to an unfavorable change in the pre-tax mix of income taxed in higher rate jurisdictions, partially offset by $11 million of net discrete tax benefits.


 

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 period presented as it illustrates our operating performance without regard to special items including the one-time income tax items and restructuring charges.  This measure is not in accordance with, or an alternative for, accounting principles generally accepted in the United States of America 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 quarters ended March 31, 2013, December 31, 2012 and April 1, 2012.

 

 

 

  

 

Three months ended

 

 

  

 

March 31, 2013

 

December 31, 2012

 

April 1, 2012

In millions

 

Net Income

 

Diluted EPS

 

Net Income

 

Diluted EPS

 

Net Income

 

Diluted EPS

Net income attributable to Cummins Inc.

 

$

 282

 

$

1.49

 

$

 369

 

$

 1.95

 

$

 455

 

$

 2.38

Add

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring and other charges

 

 

 - 

 

 

 - 

 

 

 35

 

 

 0.19

 

 

 - 

 

 

 - 

Less

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One-time tax benefits(1)

 

 

 11

 

 

 0.05

 

 

 39

 

 

 0.21

 

 

 - 

 

 

 - 

Net income attributable to Cummins Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

excluding special items

 

$

 271

 

$

 1.44

 

$

 365

 

$

 1.93

 

$

 455

 

$

 2.38

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1)

The one-time tax items for the three months ended March 31, 2013, included a discrete tax benefit of $28 million attributable to the 2012 research credit as well as a discrete tax expense of $17 million, which relates to the write-off of a deferred tax asset deemed unrecoverable.  The one-time tax benefits for the three months ended December 31, 2012, related primarily to benefits resulting from transactions entered into and elections made with respect to our U.K. operations.


 

CUMMINS INC. AND SUBSIDIARIES

FINANCIAL MEASURES THAT SUPPLEMENT GAAP

(Unaudited)

 

Earnings before interest expense, income taxes, noncontrolling interests and restructuring and other charges

 

We define EBIT as earnings or loss 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.  Below is a reconciliation of EBIT and EBIT excluding restructuring and other charges, non-GAAP financial measures, to “Net income attributable to Cummins Inc.,” for each of the applicable periods:

 

 

 

 

 

Three months ended

 

 

 

 

 

March 31,

 

December 31,

 

April 1,

 

In millions

2013

 

2012

 

2012

 

Earnings before interest expense, income taxes and

 

 

 

 

 

 

 

 

 

 

special items

$

 437

 

$

 532

 

$

 658

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before interest expense, income taxes and

 

 

 

 

 

 

 

 

 

 

special items as a percentage of net sales

 

11.1%

 

 

12.4%

 

 

14.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less

 

 

 

 

 

 

 

 

 

 

Restructuring and other charges

 

 - 

 

 

 52

 

 

 - 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before interest expense and income taxes

$

 437

 

$

 480

 

$

 658

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBIT as a percentage of net sales

 

11.1%

 

 

11.2%

 

 

14.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 6

 

 

 7

 

 

 8

 

 

Income tax expense

 

 119

 

 

 75

 

 

 175

 

 

 

Consolidated net income

 

 312

 

 

 398

 

 

 475

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests

 

 30

 

 

 29

 

 

 20

 

 

 

 

Net income attributable to Cummins Inc.

$

 282

 

$

 369

 

$

 455

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Cummins Inc. as a

 

 

 

 

 

 

 

 

 

 

percentage of net sales

 

7.2%

 

 

8.6%

 

 

10.2%

 


 

CUMMINS INC. AND SUBSIDIARIES

BUSINESS UNIT SALES DATA

(Unaudited)

 

Engine segment net sales by market

 

2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In millions

 

Q1

 

Q2

 

Q3

 

Q4

 

YTD

Heavy-duty truck

 

$

 654

 

$

 - 

 

$

 - 

 

$

 - 

 

$

 654

Medium-duty truck and bus

 

 

 448

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 448

Light-duty automotive and RV

 

 

 260

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 260

Industrial

 

 

 714

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 714

Stationary power

 

 

 227

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 227

 

Total sales

 

$

 2,303

 

$

 - 

 

$

 - 

 

$

 - 

 

$

 2,303

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In millions

 

Q1

 

Q2

 

Q3

 

Q4

 

YTD

Heavy-duty truck

 

$

 892

 

$

 807

 

$

 656

 

$

 609

 

$

 2,964

Medium-duty truck and bus

 

 

 526

 

 

 512

 

 

 478

 

 

 575

 

 

 2,091

Light-duty automotive and RV

 

 

 286

 

 

 297

 

 

 353

 

 

 343

 

 

 1,279

Industrial

 

 

 861

 

 

 859

 

 

 766

 

 

 747

 

 

 3,233

Stationary power

 

 

 294

 

 

 366

 

 

 274

 

 

 232

 

 

 1,166

 

Total sales

 

$

 2,859

 

$

 2,841

 

$

 2,527

 

$

 2,506

 

$

 10,733

 

Unit shipments by engine classification (including unit shipments to Power Generation)

 

2013

 

 

 

 

 

 

 

 

 

 

Units

 

Q1

 

Q2

 

Q3

 

Q4

 

YTD

Midrange

 

 94,600

 

 - 

 

 - 

 

 - 

 

 94,600

Heavy-duty

 

 24,900

 

 - 

 

 - 

 

 -