CMI
$168.55
Cummins
($1.03)
(.61%)
Earnings Details
3rd Quarter September 2017
Tuesday, October 31, 2017 7:30:00 AM
Tweet Share Watch
Summary

Cummins Beats

Cummins (CMI) reported 3rd Quarter September 2017 earnings of $2.71 per share on revenue of $5.3 billion. The consensus earnings estimate was $2.47 per share on revenue of $4.8 billion. The Earnings Whisper number was $2.51 per share. Revenue grew 26.2% on a year-over-year basis.

The company said it expects 2017 revenue of $19.96 billion to $20.13 billion. The company's previous guidance was revenue of $19.08 billion to $19.43 billion and the current consensus estimate is revenue of $19.44 billion for the year ending December 31, 2017.

Cummins Inc designs, manufactures, distributes and services diesel and natural gas engines, electric power generation systems and engine-related component products.

Results
Reported Earnings
$2.71
Earnings Whisper
$2.51
Consensus Estimate
$2.47
Reported Revenue
$5.29 Bil
Revenue Estimate
$4.79 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Cummins Reports Third Quarter 2017 Results

EBIT of 12.1% of sales, Diluted EPS of $2.71

--Cummins expects full-year 2017 revenues to be up 14% to 15%

--EBIT is expected to be in the range of 11.8% to 12.2%

Cummins Inc. (CMI) today reported results for the third quarter of 2017.

Third quarter revenues of $5.3 billion increased 26% from the same quarter in 2016. Revenues in North America increased 25% due to higher demand in truck, oil and gas and construction markets. International sales grew 28% primarily due to strong truck and construction demand in China, sales of new products in India, and increased demand from global mining customers.

Net income attributable to Cummins in the third quarter was $453 million, or $2.71 per diluted share, compared to $289 million, or $1.72 per diluted share. The tax rate in the third quarter of 2017 was 26.5%.

Earnings before interest and taxes (EBIT) was $640 million, or 12.1% of sales, an increase from $398 million, or 9.5% of sales, a year ago.

"Cummins experienced positive momentum in demand in a number of important markets, resulting in strong sales growth in the third quarter," said Chairman and CEO Tom Linebarger. "Earnings improved over the year-ago period due to stronger volumes and operational improvements that more than offset increased quality costs. Year to date, we have returned $913 million to shareholders in the form of dividends and share repurchases consistent with our plan to return 50% of Operating Cash Flow in 2017."

Outlook

Based on its current forecast, Cummins expects full-year 2017 revenues to grow 14% to 15%, an increase from the company’s previous projection of 9% to 11% growth. EBIT is expected to be in the range of 11.8% to 12.2% of sales, which is unchanged from the prior guidance except for the inclusion of the impact of the new Eaton Cummins Automated Transmission Technologies joint venture. The joint venture, which is consolidated within the Components segment, is expected to report 2017 sales of approximately $150 million and negative EBIT of $25 million due in part to the amortization of intangible assets.

Third quarter 2017 highlights:

The Company entered into an asset purchase agreement with Brammo, Inc., which designs and develops battery packs for mobile and stationary applications. When complete, this will be an important milestone in Cummins’ efforts to become a global electrified power leader.

The Eaton Cummins Automated Transmission Technologies joint venture became fully operational on schedule on August 1. The joint venture will capitalize on the secular shift to more automated transmissions in commercial vehicle markets.

(1) Generally Accepted Accounting Principles

Third quarter 2017 detail (all comparisons to same period in 2016)

Engine Segment

-- Sales - $2.3 billion, up 26%

Segment EBIT - $229 million, or 9.8% of sales, compared to $89 million or 4.8% of sales

EBIT includes a $63 million warranty charge related to a quality campaign

On-highway revenues increased by 25%, and off-highway revenues increased 30% primarily due to increased demand globally in truck and construction markets

Distribution Segment

-- Sales - $1.8 billion, up 17%

Segment EBIT - $91 million, or 5.2% of sales, compared to $96 million or 6.4% of sales

Organic sales increased 12% due to improved sales to off-highway markets

The impact of acquisitions and the disposal of power generation rental assets in North America resulted in a net percent increase in revenues

Components Segment

-- Sales - $1.5 billion, up 34%.

Segment EBIT - $217 million , or 14.2% of sales, compared to $148 million or 12.9% of sales

International revenue increased 45%, primarily due to higher truck demand in China and the sale of new products in India

Sales in North America increased 26% due to stronger orders from on-highway customers

Power Systems Segment

-- Sales - $1.1 billion, up 23%

Segment EBIT - $81 million, or 7.7% of sales, compared to $59 million, or 6.9% of sales

Increased demand for industrial engines from mining and oil & gas customers was the main contributor to the revenue growth

About Cummins

Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service diesel and natural gas engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Headquartered in Columbus, Indiana, (USA) Cummins currently employs approximately 55,400 people worldwide and serves customers in approximately 190 countries and territories through a network of approximately 600 company-owned and independent distributor locations and approximately 7,400 dealer locations. Cummins earned $1.39 billion on sales of $17.5 billion in 2016. Press releases can be found on the Web at www.cummins.com. Follow Cummins on Twitter at www.twitter.com/cummins and on YouTube at www.youtube.com/cumminsinc.

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 our forecasts, guidance, preliminary results, expectations, hopes, beliefs and intentions on strategies regarding the future. These forward looking statements include, without limitation, statements relating to our plans and expectations for our revenues for the full year of 2017. Our 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: the adoption and implementation of global emission standards; the price and availability of energy; the pace of infrastructure development; increasing global competition among our customers; general economic, business and financing conditions; governmental action; changes in our customers’ business strategies; competitor pricing activity; expense volatility; labor relations; and other risks detailed from time to time in our Securities and Exchange Commission filings, including particularly in the Risk Factors section of our 2016 Annual Report on Form 10-K. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this press release and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about factors that may affect our performance may be found in our filings with the Securities and Exchange Commission, which are available at http://www.sec.gov or at http://www.cummins.com in the Investor Relations section of our website.

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. EST. 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.

CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (a)
Three months ended
October 1,
October 2,
In millions, except per share amounts
2017
2016
NET SALES
$
5,285
$
4,187
Cost of sales
3,946
3,108
GROSS MARGIN
1,339
1,079
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses
624
513
Research, development and engineering expenses
213
157
Equity, royalty and interest income from investees
95
74
Loss contingency
--
99
Other operating income (expense), net
32
--
OPERATING INCOME
629
384
Interest income
4
6
Interest expense
18
16
Other income (expense), net
7
8
INCOME BEFORE INCOME TAXES
622
382
Income tax expense
165
82
CONSOLIDATED NET INCOME
457
300
Less: Net income attributable to noncontrolling interests
4
11
NET INCOME ATTRIBUTABLE TO CUMMINS INC.
$
453
$
289
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
Basic
$
2.72
$
1.72
Diluted
$
2.71
$
1.72
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic
166.3
167.8
Diluted
167.0
168.2
CASH DIVIDENDS DECLARED PER COMMON SHARE
$
1.08
$
1.025
(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 INCOME
(Unaudited) (a)
Nine months ended
October 1,
October 2,
In millions, except per share amounts
2017
2016
NET SALES
$
14,952
$ 13,006
Cost of sales
11,236
9,674
GROSS MARGIN
3,716
3,332
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses
1,757
1,527
Research, development and engineering expenses
545
478
Equity, royalty and interest income from investees
301
234
Loss contingency
--
138
Other operating income (expense), net
55
(2 )
OPERATING INCOME
1,770
1,421
Interest income
11
18
Interest expense
57
51
Other income (expense), net
45
34
INCOME BEFORE INCOME TAXES
1,769
1,422
Income tax expense
466
362
CONSOLIDATED NET INCOME
1,303
1,060
Less: Net income attributable to noncontrolling interests
30
44
NET INCOME ATTRIBUTABLE TO CUMMINS INC.
$
1,273
$
1,016
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
Basic
$
7.62
$
5.99
Diluted
$
7.60
$
5.99
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic
167.0
169.5
Diluted
167.6
169.7
CASH DIVIDENDS DECLARED PER COMMON SHARE
$
3.13
$
2.975
(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)
October 1,
December 31,
In millions, except par value
2017
2016
ASSETS
Current assets
Cash and cash equivalents
$
1,290
$
1,120
Marketable securities
154
260
Total cash, cash equivalents and marketable securities
1,444
1,380
Accounts and notes receivable, net
3,810
3,025
Inventories
3,146
2,675
Prepaid expenses and other current assets
656
627
Total current assets
9,056
7,707
Long-term assets
Property, plant and equipment
7,901
7,635
Accumulated depreciation
(4,085 )
(3,835 )
Property, plant and equipment, net
3,816
3,800
Investments and advances related to equity method investees
1,213
946
Goodwill
1,036
480
Other intangible assets, net
964
332
Pension assets
912
731
Other assets
995
1,015
Total assets
$ 17,992
$ 15,011
LIABILITIES
Current liabilities
Accounts payable (principally trade)
$
2,486
$
1,854
Loans payable
64
41
Commercial paper
514
212
Accrued compensation, benefits and retirement costs
674
412
Current portion of accrued product warranty
462
333
Current portion of deferred revenue
528
468
Other accrued expenses
968
970
Current maturities of long-term debt
62
35
Total current liabilities
5,758
4,325
Long-term liabilities
Long-term debt
1,615
1,568
Postretirement benefits other than pensions
319
329
Pensions
328
326
Other liabilities and deferred revenue
1,411
1,289
Total liabilities
$
9,431
$
7,837
EQUITY
Cummins Inc. shareholders’ equity
Common stock, $2.50 par value, 500 shares authorized, 222.4 and
$
2,198
$
2,153
222.4 shares issued
Retained earnings
11,791
11,040
Treasury stock, at cost, 56.4 and 54.2 shares
(4,849 )
(4,489 )
Common stock held by employee benefits trust, at cost, 0.6 and 0.7
(7 )
(8 )
shares
Accumulated other comprehensive loss
(1,504 )
(1,821 )
Total Cummins Inc. shareholders’ equity
7,629
6,875
Noncontrolling interests
932
299
Total equity
$
8,561
$
7,174
Total liabilities and equity
$ 17,992
$ 15,011
(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)
Nine months ended
October 1,
October 2,
In millions
2017
2016
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated net income
$
1,303
$
1,060
Adjustments to reconcile consolidated net income to net cash
provided by operating activities
Depreciation and amortization
433
391
Deferred income taxes
26
60
Equity in income of investees, net of dividends
(166 )
(94 )
Pension contributions in excess of expense
(63 )
(92 )
Other post retirement benefits payments in excess of expense
(4 )
(16 )
Stock-based compensation expense
34
28
Restructuring payments
--
(53 )
Loss contingency
--
138
Translation and hedging activities
61
(39 )
Changes in current assets and liabilities, net of acquisitions
Accounts and notes receivable
(722 )
(112 )
Inventories
(401 )
(150 )
Other current assets
(28 )
138
Accounts payable
567
101
Accrued expenses
369
(279 )
Changes in other liabilities and deferred revenue
177
188
Other, net
(115 )
45
Net cash provided by operating activities
1,471
1,314
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures
(282 )
(312 )
Investments in internal use software
(59 )
(42 )
Proceeds from disposals of property, plant and equipment
104
11
Investments in and advances to equity investees
(71 )
(29 )
Acquisitions of businesses, net of cash acquired
(600 )
(1 )
Investments in marketable securities--acquisitions
(106 )
(447 )
Investments in marketable securities--liquidations
218
291
Cash flows from derivatives not designated as hedges
9
(64 )
Other, net
1
3
Net cash used in investing activities
(786 )
(590 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
4
111
Net borrowings of commercial paper
302
273
Payments on borrowings and capital lease obligations
(38 )
(156 )
Net borrowings under short-term credit agreements
19
25
Distributions to noncontrolling interests
(29 )
(42 )
Dividend payments on common stock
(522 )
(505 )
Repurchases of common stock
(391 )
(745 )
Other, net
55
(6 )
Net cash used in financing activities
(600 )
(1,045 )
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
85
(139 )
Net increase (decrease) in cash and cash equivalents
170
(460 )
Cash and cash equivalents at beginning of year
1,120
1,711
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$
1,290
$
1,251
(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)
Power
Total
Intersegment
In millions
Engine
Distribution
Components(1)
Systems
Segment
Eliminations (2)
Total
Three months ended October 1, 2017
External sales
$ 1,783
$
1,748
$
1,139
$
615
$ 5,285
$ --
$
5,285
Intersegment sales
553
5
394
441
1,393
(1,393 )
--
Total sales
2,336
1,753
1,533
1,056
6,678
(1,393 )
5,285
Depreciation and amortization (3)
47
29
42
30
148
--
148
Research, development and engineering expenses
83
6
63
61
213
--
213
Equity, royalty and interest income from investees
58
11
12
14
95
--
95
Interest income
1
2
--
1
4
--
4
EBIT
229
91
217
81
618
22
640
EBIT as a percentage of total sales
9.8
%
5.2
%
14.2
%
7.7
%
9.3
%
12.1
%
Three months ended October 2, 2016
External sales
$ 1,357
$
1,497
$
824
$
509
$ 4,187
$ --
$
4,187
Intersegment sales
502
7
319
347
1,175
(1,175 )
--
Total sales
1,859
1,504
1,143
856
5,362
(1,175 )
4,187
Depreciation and amortization (3)
42
28
32
29
131
--
131
Research, development and engineering expenses
56
3
54
44
157
--
157
Equity, royalty and interest income from investees
38
19
9
8
74
--
74
Loss contingency
99
--
--
--
99
--
99
Interest income
3
1
1
1
6
--
6
EBIT
89
96
148
59
392
6
398
EBIT as a percentage of total sales
4.8
%
6.4
%
12.9
%
6.9
%
7.3
%
9.5
%
(1)
The 2017 disclosures include Eaton Cummins Automated Transmission
Technologies joint venture results consolidated during the third
quarter of 2017. See "ACQUISITION," footnote for additional
information.
(2)
Includes intersegment sales, intersegment profit in inventory
eliminations and unallocated corporate expenses. There were no
significant unallocated corporate expenses for the three months
ended October 1, 2017 and October 2, 2016.
(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 Income as "Interest
expense."
CUMMINS INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
Power
Total
Intersegment
In millions
Engine
Distribution
Components(1)
Systems
Segment
Eliminations (2)
Total
Nine months ended October 1, 2017
External sales
$ 4,951
$
5,101
$
3,183
$
1,717
$ 14,952
$ --
$
14,952
Intersegment sales
1,715
19
1,148
1,238
4,120
(4,120 )
--
Total sales
6,666
5,120
4,331
2,955
19,072
(4,120 )
14,952
Depreciation and amortization (3)
137
90
117
87
431
--
431
Research, development and engineering expenses
200
14
170
161
545
--
545
Equity, royalty and interest income from investees
186
35
40
40
301
--
301
Interest income
4
4
1
2
11
--
11
EBIT
735
287
586
199
1,807
19
1,826
EBIT as a percentage of total sales
11.0
%
5.6
%
13.5
%
6.7
%
9.5
%
12.2
%
Nine months ended October 2, 2016
External sales
$ 4,350
$
4,493
$
2,654
$
1,509
$ 13,006
$ --
$
13,006
Intersegment sales
1,487
18
1,005
1,076
3,586
(3,586 )
--
Total sales
5,837
4,511
3,659
2,585
16,592
(3,586 )
13,006
Depreciation and amortization (3)
122
85
95
87
389
--
389
Research, development and engineering expenses
166
10
161
141
478
--
478
Equity, royalty and interest income from investees
120
56
29
29
234
--
234
Loss contingency
138
--
--
--
138
--
138
Interest income
8
3
3
4
18
--
18
EBIT
492
270
501
195
1,458
15
1,473
EBIT as a percentage of total sales
8.4
%
6.0
%
13.7
%
7.5
%
8.8
%
11.3
%
(1)
The 2017 disclosures include Eaton Cummins Automated Transmission
Technologies joint venture results consolidated during the third
quarter of 2017. See "ACQUISITION," footnote for additional
information.
(2)
Includes intersegment sales, intersegment profit in inventory
eliminations and unallocated corporate expenses. There were no
significant unallocated corporate expenses for the nine months ended
October 1, 2017 and October 2, 2016.
(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 Income as "Interest expense."
The amortization of debt discount and deferred costs was $2 million
for both of the nine months ended October 1, 2017 and October 2,
2016.

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
Nine months ended
October 1,
October 2,
October 1,
October 2,
In millions
2017
2016
2017
2016
Total EBIT
$ 640
$ 398
$ 1,826
$ 1,473
Less: Interest expense
18
16
57
51
Income before income taxes
$ 622
$ 382
$ 1,769
$ 1,422

CUMMINS INC. AND SUBSIDIARIES SELECT FOOTNOTE DATA (Unaudited)

EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES

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

Three months ended
Nine months ended
October 1,
October 2,
October 1,
October 2,
In millions
2017
2016
2017
2016
Distribution entities
Komatsu Cummins Chile, Ltda.
$
8
$
8
$
23
$
26
North American distributors
--
7
--
18
All other distributors
(1 )
1
(1 )
2
Manufacturing entities
Beijing Foton Cummins Engine Co., Ltd.
24
19
79
59
Dongfeng Cummins Engine Company, Ltd.
15
10
56
32
Chongqing Cummins Engine Company, Ltd.
11
11
30
28
All other manufacturers
27
8
78
40
Cummins share of net income
84
64
265
205
Royalty and interest income
11
10
36
29
Equity, royalty and interest income from investees
$
95
$
74
$
301
$ 234

ACQUISITION

In April 2017, we entered into an agreement to form a joint venture with Eaton Corporation PLC (Eaton), which closed on July 31, 2017 (the acquisition date). We purchased a 50 percent interest in the new venture named Eaton Cummins Automated Transmission Technologies for $600 million in cash. In addition, each partner contributed $20 million for working capital. The joint venture will design, assemble, sell and support medium-duty and heavy-duty automated transmissions for the commercial vehicle market, including new product launches. We consolidated the results of the joint venture in our Components segment as we have a majority voting interest in the venture by virtue of a tie-breaking vote on the joint venture’s board of directors. We do not expect this new venture to have a significant impact on our consolidated results in 2017.

ENGINE SYSTEM LOSS CONTINGENCY

During 2017, the CARB and U.S. EPA began selecting certain of our pre-2013 model year engine systems for additional emissions testing. We have been notified that a portion of the CARB and EPA selected engine systems have failed emissions testing due to the unexpected degradation of an aftertreatment component. Although we have no official notice from the CARB or EPA on these engine systems to date, we are working with the agencies on a resolution of these matters. We are developing and testing solutions to address the technical issues, which could include a combination of calibration changes, service practices and hardware changes. We recorded a charge of $29 million to "cost of sales" in our Condensed Consolidated Statements of Income in the third quarter of 2017 for the expected cost of field campaigns to repair some of these engine systems.

In addition, we are currently evaluating other engine systems for model years 2010 through 2015 that could potentially be subject to similar degradation issues. At this point in time, we have not yet determined the impact to other model years and engine systems or the percentage of the engine system populations affected.

Because this remains under review with a number of yet unresolved variables, we are not yet able to estimate the outcome for these matters. It is possible, however, that they could have a material effect on our results of operations in the periods in which the uncertainties are resolved.

We do not currently expect any fines or penalties from the EPA or CARB related to this matter.

SUBSEQUENT EVENT

On October 12, 2017, we entered into an asset purchase agreement with Brammo Inc., an engineer and manufacturer of lithium ion batteries primarily related to the utility vehicle markets, for approximately $70 million to be paid in cash at closing. In addition to the closing consideration, the agreement contains an earnout based on future results of the acquired business, which could result in a maximum additional $100 million payment to the former owners. The majority of the purchase price will likely be assigned to intangible assets and goodwill. We expect the transaction to close in the fourth quarter of 2017.

CUMMINS INC. AND SUBSIDIARIES FINANCIAL MEASURES THAT SUPPLEMENT GAAP (Unaudited)

Earnings before interest, income taxes and noncontrolling interests

We define EBIT as earnings before interest expense, income tax expense and noncontrolling interests in income of consolidated subsidiaries. We use EBIT to assess and measure the performance of our operating segments and also as a component in measuring our variable compensation programs. This measure is not in accordance with, or an alternative for, accounting principles generally accepted in the United States and may not be consistent with measures used by other companies. It should be considered supplemental data. Below is a reconciliation of "Net income attributable to Cummins Inc." to EBIT for each of the applicable periods:

Three months ended
Nine months ended
October 1,
October 2,
October 1,
October 2,
In millions
2017
2016
2017
2016
Net income attributable to Cummins Inc.
$ 453
$ 289
$ 1,273
$
1,016
Net income attributable to Cummins Inc. as a percentage of net
8.6 %
6.9 %
8.5 %
7.8 %
sales
Add
Net income attributable to noncontrolling interests
4
11
30
44
Consolidated net income
457
300
1,303
1,060
Add
Interest expense
18
16
57
51
Income tax expense
165
82
466
362
Earnings before interest expense and income taxes
$ 640
$ 398
$ 1,826
$
1,473
EBIT as a percentage of net sales
12.1 %
9.5 %
12.2 %
11.3 %

CUMMINS INC. AND SUBSIDIARIES BUSINESS UNIT SALES DATA (Unaudited)

Engine Segment Sales by Market and Unit Shipments by Engine Classification

Sales for our Engine segment by market were as follows:

2017
In millions
Q1
Q2
Q3
Q4
YTD
Heavy-duty truck
$
620
$
714
$
776
$ --
$
2,110
Medium-duty truck and bus
544
701
625
--
1,870
Light-duty automotive
423
429
452
--
1,304
Off-highway
436
463
483
--
1,382
Total sales
$ 2,023
$ 2,307
$ 2,336
$ --
$
6,666
2016
In millions
Q1
Q2
Q3
Q4
YTD
Heavy-duty truck
$
631
$
622
$
625
$
565
$
2,443
Medium-duty truck and bus
549
600
517
606
2,272
Light-duty automotive
433
394
345
409
1,581
Off-highway
363
386
372
387
1,508
Total sales
$ 1,976
$ 2,002
$ 1,859
$
1,967
$
7,804

Unit shipments by engine classification (including unit shipments to Power Systems and off-highway engine units included in their respective classification) were as follows:

2017
Units
Q1
Q2
Q3
Q4
YTD
Heavy-duty
19,200
24,100
28,100
--
71,400
Medium-duty
60,300
71,600
68,500
--
200,400
Light-duty
63,100
65,600
66,300
--
195,000
Total units
142,600
161,300
162,900
--
466,800
2016
Units
Q1
Q2
Q3
Q4
YTD
Heavy-duty
19,700
20,700
20,100
18,500
79,000
Medium-duty
55,400
62,300
53,400
58,000
229,100
Light-duty
61,700
57,100
49,800
60,000
228,600
Total units
136,800
140,100
123,300
136,500
536,700

Distribution Segment Sales by Product Line

Sales for our Distribution segment by product line were as follows:

2017
In millions
Q1
Q2
Q3
Q4
YTD
Parts
$
745
$
759
$
768
$ --
$
2,272
Service
319
320
326
--
965
Power generation
306
329
317
--
952
Engines
275
314
342
--
931
Total sales
$ 1,645
$ 1,722
$ 1,753
$ --
$
5,120
2016
In millions
Q1
Q2
Q3
Q4
YTD
Parts
$
648
$
642
$
643
$
694
$
2,627
Service
299
297
299
320
1,215
Power generation
275
326
291
347
1,239
Engines
241
279
271
309
1,100
Total sales
$ 1,463
$ 1,544
$ 1,504
$
1,670
$
6,181

Component Segment Sales by Business

In the first quarter of 2017, our Components segment reorganized its reporting structure to move an element of the emission solutions business to the fuel systems business to enhance operational, administrative and product development efficiencies. Prior year sales were reclassified to conform with this change.

In the third quarter of 2017, we completed the Eaton Cummins Automated Transmission Technologies joint venture (ECJV), which was consolidated and included in our Components segment as the automated transmissions business.

Sales for our Components segment by product line were as follows:

2017
In millions
Q1
Q2
Q3
Q4
YTD
Emission solutions
$
616
$
674
$
696
$ --
$
1,986
Turbo technologies
287
307
297
--
891
Filtration
277
291
287
--
855
Fuel systems
164
182
184
--
530
Automated transmissions
--
--
69
--
69
Total sales
$
1,344
$
1,454
$ 1,533
$ --
$
4,331
2016
In millions
Q1
Q2
Q3
Q4
YTD
Emission solutions
$
589
$
603
$
522
$
524
$
2,238
Turbo technologies
265
276
241
254
1,036
Filtration
252
262
244
252
1,010
Fuel systems
131
138
136
147
552
Total sales
$
1,237
$
1,279
$ 1,143
$
1,177
$
4,836
2015
In millions
YTD
Emission solutions
$
2,449
Turbo technologies
1,141
Filtration
1,010
Fuel systems
572
Total sales
$
5,172

Power Systems Segment Sales by Product Line and Unit Shipments by Engine Classification

In the first quarter of 2017, our Power Systems segment reorganized its product lines to better reflect how the segment is managed. Prior year sales were reclassified to reflect these changes.

Sales for our Power Systems segment by product line were as follows:

2017
In millions
Q1
Q2
Q3
Q4
YTD
Power generation
$
526
$
570
$
580
$ --
$
1,676
Industrial
275
353
385
--
1,013
Generator technologies
81
94
91
--
266
Total sales
$
882
$ 1,017
$ 1,056
$ --
$
2,955
2016
In millions
Q1
Q2
Q3
Q4
YTD
Power generation
$
518
$
602
$
543
$
593
$
2,256
Industrial
215
236
235
255
941
Generator technologies
75
83
78
84
320
Total sales
$
808
$
921
$
856
$
932
$
3,517
2015
In millions
YTD
Power generation
$ 2,588
Industrial
1,121
Generator technologies
358
Total sales
$ 4,067

High-horsepower unit shipments by engine classification were as follows:

2017
Units
Q1
Q2
Q3
Q4
YTD
Power generation
1,900
2,100
2,200
--
6,200
Industrial
1,300
1,700
1,600
--
4,600
Total units
3,200
3,800
3,800
--
10,800
2016
Units
Q1
Q2
Q3
Q4
YTD
Power generation
1,800
2,200
2,000
1,900
7,900
Industrial
1,000
1,100
1,000
1,300
4,400
Total units
2,800
3,300
3,000
3,200
12,300

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20171031005201r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20171031005201/en/

SOURCE: Cummins Inc.

Cummins Inc.
Carole Casto, 317-610-2480
Vice President - Marketing and Communications
carole.casto@cummins.com