Cummins Reports Strong Third Quarter 2024 Results
-
Third quarter revenues of
$8.5 billion ; GAAP1 Net Income of$809 million , or 9.6% of sales -
EBITDA in the third quarter was 16.4% of sales; Diluted EPS of
$5.86 - The company is maintaining its full year 2024 revenue guidance of down 3% to flat.
- EBITDA is now expected to be approximately 15.5% compared to previous guidance of 15.0% to 15.5%.
“We achieved strong sales and profitability in the third quarter, led by improvement in our Power Systems and Distribution businesses, and have adjusted our full year projection for EBITDA percentage to be at the top end of the prior range,” said
Third quarter revenues of
Net income attributable to
Earnings before interest, taxes, depreciation and amortization (EBITDA) in the third quarter were
2024 Outlook:
Based on its current forecast,
“We solidified our expectations on profitability for 2024 to the top end of our prior range thanks to continued improvements in Power Systems and Distribution segments. Although we faced slowing demand in the North American heavy-duty truck market during the third quarter and anticipate this trend to persist into the fourth quarter,
Third Quarter 2024 Highlights:
-
Cummins increased its quarterly common stock cash dividend from$1.68 to$1.82 per share. The company has increased the quarterly dividend to shareholders for 15 consecutive years.
-
Cummins started full production of the X15N™ natural gas engine at its Jamestown Engine Plant, which celebrated its 50th anniversary in the third quarter. TheCummins X15N is part of the X-series Cummins’ HELM™ lineup, a global engine platform that is derived from a common base and offers multiple fuel types including natural gas, advanced diesel and hydrogen.
-
Cummins attended IAA Transportation 2024 inHannover, Germany , to showcase a diverse portfolio of powertrain and component technologies as part of the company’s Destination Zero strategy to progress industry decarbonization. Highlighted products at the booth includedEuro-7 ready X10 and the X15H hydrogen internal combustion engines, a hydrogen fuel cell engine, next-generation lithium iron phosphate battery solutions, eAxles, eTurbocharger, eCompressor and hydrogen fuel storage solutions, as well as fully integrated powertrains.
-
Accelera™ by
Cummins celebrated the opening of its new electrolyzer manufacturing plant in Guadalajara, Castilla-La Mancha,Spain . The plant has the capacity to produce 500 megawatts (MW) of electrolyzers per year, scalable to more than 1 gigawatt (GW) per year in the future.
-
Cummins was recognized as one of the 2024 100 Best Companies by Seramount, an organization focused on empowering inclusive workplaces; named a Veteran Friendly Employer byU.S. Veterans Magazine ; and ranked #55 on Glassdoor’s Best Places to Work in 2024.
1 Generally Accepted Accounting Principles in the
Third quarter 2024 detail (all comparisons to same period in 2023):
Components Segment
-
Sales -
$2.7 billion , down 16% -
Segment EBITDA -
$351 million , or 12.9% of sales compared to$441 million , or 13.6% of sales, which included the operating results of the Atmus business and$20 million of costs related to its separation -
Revenues in
North America decreased by 14% and international sales decreased by 18% primarily due to the separation of Atmus and lower demand in heavy-duty truck.
Engine Segment
-
Sales -
$2.9 billion , down 1% -
Segment EBITDA -
$427 million , or 14.7% of sales, compared to$395 million , or 13.5% of sales -
Revenues decreased 2% in
North America and increased 4% in international markets due to softening demand in the North American heavy-duty truck market and strength in global medium-duty truck markets.
Distribution Segment
-
Sales -
$3.0 billion , up 16% -
Segment EBITDA -
$370 million , or 12.5% of sales, compared to$306 million , or 12.1% of sales -
Revenues in
North America increased 13% and international sales increased by 25% driven by increased demand for power generation products, particularly for data center applications, and pricing actions.
Power Systems Segment
-
Sales -
$1.7 billion , up 17% -
Segment EBITDA -
$328 million , or 19.4% of sales, compared to$234 million , or 16.2% of sales - Power generation revenues increased 24% driven by increased global demand, particularly for the data center market. Industrial revenues increased 7% primarily due to strong mining demand more than offsetting weaker oil and gas markets.
Accelera Segment
-
Sales -
$110 million , up 7% -
Segment EBITDA loss -
$115 million - Revenues increased due to increased electrolyzer installations. Costs associated with the development of electric powertrains, fuel cells and electrolyzers, as well as products to support battery electric vehicles, are contributing to EBITDA losses.
About
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, EBITDA and the Settlement Agreements to resolve regulatory proceedings regarding our emissions certification and compliance process for certain engines primarily used in pick-up truck applications in the
Presentation of Non-GAAP Financial Information
EBITDA 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, except for forward-looking measures of EBITDA where a reconciliation to the corresponding GAAP measures is not available due to the variability, complexity and limited visibility of the non-cash items that are excluded from the non-GAAP outlook measure.
Webcast information
|
||||||
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME |
||||||
(Unaudited) (a) |
||||||
|
|
Three months ended |
||||
|
|
|
||||
In millions, except per share amounts |
|
2024 |
|
2023 |
||
|
|
$ |
8,456 |
|
$ |
8,431 |
Cost of sales |
|
|
6,285 |
|
|
6,360 |
GROSS MARGIN |
|
|
2,171 |
|
|
2,071 |
OPERATING EXPENSES AND INCOME |
|
|
|
|
||
Selling, general and administrative expenses |
|
|
807 |
|
|
831 |
Research, development and engineering expenses |
|
|
359 |
|
|
376 |
Equity, royalty and interest income from investees |
|
|
99 |
|
|
118 |
Other operating expense, net |
|
|
54 |
|
|
32 |
OPERATING INCOME |
|
|
1,050 |
|
|
950 |
Interest expense |
|
|
83 |
|
|
97 |
Other income, net |
|
|
76 |
|
|
25 |
INCOME BEFORE INCOME TAXES |
|
|
1,043 |
|
|
878 |
Income tax expense |
|
|
200 |
|
|
188 |
CONSOLIDATED NET INCOME |
|
|
843 |
|
|
690 |
Less: Net income attributable to noncontrolling interests |
|
|
34 |
|
|
34 |
NET INCOME ATTRIBUTABLE TO |
|
$ |
809 |
|
$ |
656 |
|
|
|
|
|
||
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO |
|
|
|
|
||
Basic |
|
$ |
5.90 |
|
$ |
4.63 |
Diluted |
|
$ |
5.86 |
|
$ |
4.59 |
|
|
|
|
|
||
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING |
|
|
|
|
||
Basic |
|
|
137.2 |
|
|
141.8 |
Diluted |
|
|
138.1 |
|
|
142.8 |
|
|
|
|
|
||
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in |
|
||||||
CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME |
||||||
(Unaudited) (a) |
||||||
|
|
Nine months ended |
||||
|
|
|
||||
In millions, except per share amounts |
|
2024 |
|
2023 |
||
|
|
$ |
25,655 |
|
$ |
25,522 |
Cost of sales |
|
|
19,250 |
|
|
19,274 |
GROSS MARGIN |
|
|
6,405 |
|
|
6,248 |
OPERATING EXPENSES AND INCOME |
|
|
|
|
||
Selling, general and administrative expenses |
|
|
2,474 |
|
|
2,457 |
Research, development and engineering expenses |
|
|
1,107 |
|
|
1,110 |
Equity, royalty and interest income from investees |
|
|
325 |
|
|
370 |
Other operating expense, net |
|
|
131 |
|
|
78 |
OPERATING INCOME |
|
|
3,018 |
|
|
2,973 |
Interest expense |
|
|
281 |
|
|
283 |
Other income, net |
|
|
1,504 |
|
|
166 |
INCOME BEFORE INCOME TAXES |
|
|
4,241 |
|
|
2,856 |
Income tax expense |
|
|
618 |
|
|
623 |
CONSOLIDATED NET INCOME |
|
|
3,623 |
|
|
2,233 |
Less: Net income attributable to noncontrolling interests |
|
|
95 |
|
|
67 |
NET INCOME ATTRIBUTABLE TO |
|
$ |
3,528 |
|
$ |
2,166 |
|
|
|
|
|
||
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO |
|
|
|
|
||
Basic |
|
$ |
25.47 |
|
$ |
15.29 |
Diluted |
|
$ |
25.31 |
|
$ |
15.19 |
|
|
|
|
|
||
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING |
|
|
|
|
||
Basic |
|
|
138.5 |
|
|
141.7 |
Diluted |
|
|
139.4 |
|
|
142.6 |
|
|
|
|
|
||
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in |
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(Unaudited) (a) |
||||||||
In millions, except par value |
|
|
|
|
||||
ASSETS |
|
|
|
|
||||
Current assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
1,733 |
|
|
$ |
2,179 |
|
Marketable securities |
|
|
518 |
|
|
|
562 |
|
Total cash, cash equivalents and marketable securities |
|
|
2,251 |
|
|
|
2,741 |
|
Accounts and notes receivable, net |
|
|
5,387 |
|
|
|
5,583 |
|
Inventories |
|
|
6,134 |
|
|
|
5,677 |
|
Prepaid expenses and other current assets |
|
|
1,544 |
|
|
|
1,197 |
|
Total current assets |
|
|
15,316 |
|
|
|
15,198 |
|
Long-term assets |
|
|
|
|
||||
Property, plant and equipment, net |
|
|
6,176 |
|
|
|
6,249 |
|
Investments and advances related to equity method investees |
|
|
1,922 |
|
|
|
1,800 |
|
|
|
|
2,412 |
|
|
|
2,499 |
|
Other intangible assets, net |
|
|
2,462 |
|
|
|
2,519 |
|
Pension assets |
|
|
1,208 |
|
|
|
1,197 |
|
Other assets |
|
|
2,556 |
|
|
|
2,543 |
|
Total assets |
|
$ |
32,052 |
|
|
$ |
32,005 |
|
|
|
|
|
|
||||
LIABILITIES |
|
|
|
|
||||
Current liabilities |
|
|
|
|
||||
Accounts payable (principally trade) |
|
$ |
4,206 |
|
|
$ |
4,260 |
|
Loans payable |
|
|
441 |
|
|
|
280 |
|
Commercial paper |
|
|
1,636 |
|
|
|
1,496 |
|
Current maturities of long-term debt |
|
|
654 |
|
|
|
118 |
|
Accrued compensation, benefits and retirement costs |
|
|
1,011 |
|
|
|
1,108 |
|
Current portion of accrued product warranty |
|
|
685 |
|
|
|
667 |
|
Current portion of deferred revenue |
|
|
1,225 |
|
|
|
1,220 |
|
Other accrued expenses |
|
|
1,745 |
|
|
|
3,754 |
|
Total current liabilities |
|
|
11,603 |
|
|
|
12,903 |
|
Long-term liabilities |
|
|
|
|
||||
Long-term debt |
|
|
4,856 |
|
|
|
4,802 |
|
Deferred revenue |
|
|
1,090 |
|
|
|
966 |
|
Other liabilities |
|
|
3,162 |
|
|
|
3,430 |
|
Total liabilities |
|
$ |
20,711 |
|
|
$ |
22,101 |
|
|
|
|
|
|
||||
EQUITY |
|
|
|
|
||||
|
|
|
|
|
||||
Common stock, |
|
$ |
2,612 |
|
|
$ |
2,564 |
|
Retained earnings |
|
|
20,660 |
|
|
|
17,851 |
|
|
|
|
(10,783 |
) |
|
|
(9,359 |
) |
Accumulated other comprehensive loss |
|
|
(2,174 |
) |
|
|
(2,206 |
) |
|
|
|
10,315 |
|
|
|
8,850 |
|
Noncontrolling interests |
|
|
1,026 |
|
|
|
1,054 |
|
Total equity |
|
$ |
11,341 |
|
|
$ |
9,904 |
|
Total liabilities and equity |
|
$ |
32,052 |
|
|
$ |
32,005 |
|
|
|
|
|
|
||||
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in |
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(Unaudited) (a) |
||||||||
|
|
Three months ended |
||||||
|
|
|
||||||
In millions |
|
2024 |
|
2023 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
||||
Consolidated net income |
|
$ |
843 |
|
|
$ |
690 |
|
Adjustments to reconcile consolidated net income to net cash provided by operating activities |
|
|
||||||
Depreciation and amortization |
|
|
266 |
|
|
|
257 |
|
Deferred income taxes |
|
|
(7 |
) |
|
|
(106 |
) |
Equity in income of investees, net of dividends |
|
|
12 |
|
|
|
13 |
|
Pension and OPEB expense |
|
|
9 |
|
|
|
1 |
|
Pension contributions and OPEB payments |
|
|
(13 |
) |
|
|
(12 |
) |
Changes in current assets and liabilities, net of acquisitions |
|
|
|
|
||||
Accounts and notes receivable |
|
|
270 |
|
|
|
188 |
|
Inventories |
|
|
(257 |
) |
|
|
85 |
|
Other current assets |
|
|
(219 |
) |
|
|
(54 |
) |
Accounts payable |
|
|
(236 |
) |
|
|
(22 |
) |
Accrued expenses |
|
|
(67 |
) |
|
|
282 |
|
Other, net |
|
|
39 |
|
|
|
207 |
|
Net cash provided by operating activities |
|
|
640 |
|
|
|
1,529 |
|
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
||||
Capital expenditures |
|
|
(259 |
) |
|
|
(280 |
) |
Acquisition of businesses, net of cash acquired |
|
|
— |
|
|
|
7 |
|
Investments in marketable securities—acquisitions |
|
|
(349 |
) |
|
|
(328 |
) |
Investments in marketable securities—liquidations |
|
|
428 |
|
|
|
382 |
|
Other, net |
|
|
(83 |
) |
|
|
(35 |
) |
Net cash used in investing activities |
|
|
(263 |
) |
|
|
(254 |
) |
|
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
||||
Proceeds from borrowings |
|
|
141 |
|
|
|
42 |
|
Net borrowings of commercial paper |
|
|
55 |
|
|
|
92 |
|
Payments on borrowings and finance lease obligations |
|
|
(163 |
) |
|
|
(163 |
) |
Dividend payments on common stock |
|
|
(250 |
) |
|
|
(238 |
) |
Payments for purchase of redeemable noncontrolling interests |
|
|
— |
|
|
|
(175 |
) |
Other, net |
|
|
(26 |
) |
|
|
(24 |
) |
Net cash used in financing activities |
|
|
(243 |
) |
|
|
(466 |
) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS |
|
|
9 |
|
|
|
1 |
|
Net increase in cash and cash equivalents |
|
|
143 |
|
|
|
810 |
|
Cash and cash equivalents at beginning of period |
|
|
1,590 |
|
|
|
1,802 |
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
|
$ |
1,733 |
|
|
$ |
2,612 |
|
|
|
|
|
|
||||
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in |
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(Unaudited) (a) |
||||||||
|
|
Nine months ended |
||||||
|
|
|
||||||
In millions |
|
2024 |
|
2023 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
||||
Consolidated net income |
|
$ |
3,623 |
|
|
$ |
2,233 |
|
Adjustments to reconcile consolidated net income to net cash provided by operating activities |
|
|
|
|
||||
Gain related to divestiture of Atmus |
|
|
(1,333 |
) |
|
|
— |
|
Depreciation and amortization |
|
|
794 |
|
|
|
760 |
|
Deferred income taxes |
|
|
(106 |
) |
|
|
(238 |
) |
Equity in income of investees, net of dividends |
|
|
(74 |
) |
|
|
(100 |
) |
Pension and OPEB expense |
|
|
28 |
|
|
|
4 |
|
Pension contributions and OPEB payments |
|
|
(72 |
) |
|
|
(115 |
) |
Changes in current assets and liabilities, net of acquisitions and divestiture |
|
|
|
|
||||
Accounts and notes receivable |
|
|
109 |
|
|
|
(447 |
) |
Inventories |
|
|
(726 |
) |
|
|
(318 |
) |
Other current assets |
|
|
(370 |
) |
|
|
(191 |
) |
Accounts payable |
|
|
27 |
|
|
|
43 |
|
Accrued expenses |
|
|
(2,000 |
) |
|
|
543 |
|
Other, net |
|
|
165 |
|
|
|
333 |
|
Net cash provided by operating activities |
|
|
65 |
|
|
|
2,507 |
|
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
||||
Capital expenditures |
|
|
(668 |
) |
|
|
(694 |
) |
Acquisition of businesses, net of cash acquired |
|
|
(58 |
) |
|
|
(127 |
) |
Investments in marketable securities—acquisitions |
|
|
(1,062 |
) |
|
|
(976 |
) |
Investments in marketable securities—liquidations |
|
|
1,113 |
|
|
|
1,002 |
|
Cash associated with Atmus divestiture |
|
|
(174 |
) |
|
|
— |
|
Other, net |
|
|
(220 |
) |
|
|
(65 |
) |
Net cash used in investing activities |
|
|
(1,069 |
) |
|
|
(860 |
) |
|
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
||||
Proceeds from borrowings |
|
|
2,623 |
|
|
|
779 |
|
Net borrowings (payments) of commercial paper |
|
|
140 |
|
|
|
(566 |
) |
Payments on borrowings and finance lease obligations |
|
|
(1,386 |
) |
|
|
(391 |
) |
Dividend payments on common stock |
|
|
(719 |
) |
|
|
(683 |
) |
Payments for purchase of redeemable noncontrolling interests |
|
|
— |
|
|
|
(175 |
) |
Other, net |
|
|
(94 |
) |
|
|
(33 |
) |
Net cash provided by (used in) financing activities |
|
|
564 |
|
|
|
(1,069 |
) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS |
|
|
(6 |
) |
|
|
(67 |
) |
Net (decrease) increase in cash and cash equivalents |
|
|
(446 |
) |
|
|
511 |
|
Cash and cash equivalents at beginning of year |
|
|
2,179 |
|
|
|
2,101 |
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
|
$ |
1,733 |
|
|
$ |
2,612 |
|
|
|
|
|
|
||||
(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in |
|
||||||||||||||||||||||||||||||||
SEGMENT INFORMATION |
||||||||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||||||||
In millions |
|
Components |
|
Engine |
|
Distribution |
|
Power
|
|
Accelera |
|
Total
|
|
Intersegment
|
|
Total |
||||||||||||||||
Three months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
External sales |
|
$ |
2,287 |
|
|
$ |
2,215 |
|
|
$ |
2,942 |
|
|
$ |
912 |
|
|
$ |
100 |
|
|
$ |
8,456 |
|
|
$ |
— |
|
|
$ |
8,456 |
|
Intersegment sales |
|
|
437 |
|
|
|
698 |
|
|
|
10 |
|
|
|
775 |
|
|
|
10 |
|
|
|
1,930 |
|
|
|
(1,930 |
) |
|
|
— |
|
Total sales |
|
|
2,724 |
|
|
|
2,913 |
|
|
|
2,952 |
|
|
|
1,687 |
|
|
|
110 |
|
|
|
10,386 |
|
|
|
(1,930 |
) |
|
|
8,456 |
|
Research, development and engineering expenses |
|
|
85 |
|
|
|
147 |
|
|
|
13 |
|
|
|
57 |
|
|
|
57 |
|
|
|
359 |
|
|
|
— |
|
|
|
359 |
|
Equity, royalty and interest income (loss) from investees |
|
|
12 |
|
|
|
53 |
|
|
|
25 |
|
|
|
20 |
|
|
|
(11 |
) |
|
|
99 |
|
|
|
— |
|
|
|
99 |
|
Interest income |
|
|
4 |
|
|
|
2 |
|
|
|
7 |
|
|
|
1 |
|
|
|
— |
|
|
|
14 |
|
|
|
— |
|
|
|
14 |
|
EBITDA (2) |
|
|
351 |
|
|
|
427 |
|
|
|
370 |
|
|
|
328 |
|
|
|
(115 |
) |
|
|
1,361 |
|
|
|
28 |
|
|
|
1,389 |
|
Depreciation and amortization (3) |
|
|
121 |
|
|
|
62 |
|
|
|
31 |
|
|
|
33 |
|
|
|
16 |
|
|
|
263 |
|
|
|
— |
|
|
|
263 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
EBITDA as a percentage of segment sales |
|
|
12.9 |
% |
|
|
14.7 |
% |
|
|
12.5 |
% |
|
|
19.4 |
% |
|
|
NM |
|
|
|
13.1 |
% |
|
|
|
|
16.4 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Three months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
External sales |
|
$ |
2,780 |
|
|
$ |
2,236 |
|
|
$ |
2,519 |
|
|
$ |
798 |
|
|
$ |
98 |
|
|
$ |
8,431 |
|
|
$ |
— |
|
|
$ |
8,431 |
|
Intersegment sales |
|
|
456 |
|
|
|
695 |
|
|
|
16 |
|
|
|
646 |
|
|
|
5 |
|
|
|
1,818 |
|
|
|
(1,818 |
) |
|
|
— |
|
Total sales |
|
|
3,236 |
|
|
|
2,931 |
|
|
|
2,535 |
|
|
|
1,444 |
|
|
|
103 |
|
|
|
10,249 |
|
|
|
(1,818 |
) |
|
|
8,431 |
|
Research, development and engineering expenses |
|
|
93 |
|
|
|
159 |
|
|
|
14 |
|
|
|
60 |
|
|
|
50 |
|
|
|
376 |
|
|
|
— |
|
|
|
376 |
|
Equity, royalty and interest income (loss) from investees |
|
|
26 |
|
|
|
62 |
|
|
|
22 |
|
|
|
11 |
|
|
|
(3 |
) |
|
|
118 |
|
|
|
— |
|
|
|
118 |
|
Interest income |
|
|
8 |
|
|
|
4 |
|
|
|
9 |
|
|
|
3 |
|
|
|
— |
|
|
|
24 |
|
|
|
— |
|
|
|
24 |
|
EBITDA (2) |
|
|
441 |
|
(4) |
|
395 |
|
|
|
306 |
|
|
|
234 |
|
|
|
(114 |
) |
|
|
1,262 |
|
|
|
(32 |
) |
|
|
1,230 |
|
Depreciation and amortization (3) |
|
|
120 |
|
|
|
59 |
|
|
|
28 |
|
|
|
30 |
|
|
|
18 |
|
|
|
255 |
|
|
|
— |
|
|
|
255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
EBITDA as a percentage of segment sales |
|
|
13.6 |
% |
|
|
13.5 |
% |
|
|
12.1 |
% |
|
|
16.2 |
% |
|
|
NM |
|
|
|
12.3 |
% |
|
|
|
|
14.6 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
"NM" - not meaningful information |
||||||||||||||||||||||||||||||||
(1) Included intersegment sales, intersegment profit in inventory and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended |
||||||||||||||||||||||||||||||||
(2) EBITDA is defined as earnings or losses before interest expense, income taxes, depreciation and amortization and noncontrolling interests. We believe EBITDA is a useful measure of our operating performance as it assists investors and debt holders in comparing our performance on a consistent basis without regard to financing methods, capital structure, income taxes or depreciation and amortization methods, which can vary significantly depending upon many factors. |
||||||||||||||||||||||||||||||||
(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. |
||||||||||||||||||||||||||||||||
(4) Included |
|
||||||||||||||||||||||||||||||||
SEGMENT INFORMATION |
||||||||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||||||||
In millions |
|
Components |
|
Engine |
|
Distribution |
|
Power
|
|
Accelera |
|
Total
|
|
Intersegment
|
|
Total |
||||||||||||||||
Nine months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
External sales |
|
$ |
7,647 |
|
|
$ |
6,923 |
|
|
$ |
8,292 |
|
|
$ |
2,508 |
|
|
$ |
285 |
|
|
$ |
25,655 |
|
|
$ |
— |
|
|
$ |
25,655 |
|
Intersegment sales |
|
|
1,391 |
|
|
|
2,069 |
|
|
|
24 |
|
|
|
2,157 |
|
|
|
29 |
|
|
|
5,670 |
|
|
|
(5,670 |
) |
|
|
— |
|
Total sales |
|
|
9,038 |
|
|
|
8,992 |
|
|
|
8,316 |
|
|
|
4,665 |
|
|
|
314 |
|
|
|
31,325 |
|
|
|
(5,670 |
) |
|
|
25,655 |
|
Research, development and engineering expenses |
|
|
250 |
|
|
|
468 |
|
|
|
41 |
|
|
|
180 |
|
|
|
166 |
|
|
|
1,105 |
|
|
|
2 |
|
|
|
1,107 |
|
Equity, royalty and interest income (loss) from investees |
|
|
51 |
|
|
|
158 |
|
|
|
73 |
|
|
|
65 |
|
|
|
(22 |
) |
|
|
325 |
|
|
|
— |
|
|
|
325 |
|
Interest income |
|
|
21 |
|
|
|
16 |
|
|
|
29 |
|
|
|
7 |
|
|
|
— |
|
|
|
73 |
|
|
|
— |
|
|
|
73 |
|
EBITDA (2) |
|
|
1,230 |
|
(3) |
|
1,286 |
|
|
|
978 |
|
|
|
866 |
|
|
|
(333 |
) |
|
|
4,027 |
|
|
|
1,279 |
|
|
|
5,306 |
|
Depreciation and amortization (4) |
|
|
367 |
|
|
|
181 |
|
|
|
92 |
|
|
|
99 |
|
|
|
45 |
|
|
|
784 |
|
|
|
— |
|
|
|
784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
EBITDA as a percentage of total sales |
|
|
13.6 |
% |
|
|
14.3 |
% |
|
|
11.8 |
% |
|
|
18.6 |
% |
|
|
NM |
|
|
|
12.9 |
% |
|
|
|
|
20.7 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Nine months ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
External sales |
|
$ |
8,747 |
|
|
$ |
6,751 |
|
|
$ |
7,494 |
|
|
$ |
2,271 |
|
|
$ |
259 |
|
|
$ |
25,522 |
|
|
$ |
— |
|
|
$ |
25,522 |
|
Intersegment sales |
|
|
1,471 |
|
|
|
2,154 |
|
|
|
42 |
|
|
|
1,973 |
|
|
|
14 |
|
|
|
5,654 |
|
|
|
(5,654 |
) |
|
|
— |
|
Total sales |
|
|
10,218 |
|
|
|
8,905 |
|
|
|
7,536 |
|
|
|
4,244 |
|
|
|
273 |
|
|
|
31,176 |
|
|
|
(5,654 |
) |
|
|
25,522 |
|
Research, development and engineering expenses |
|
|
287 |
|
|
|
441 |
|
|
|
43 |
|
|
|
189 |
|
|
|
150 |
|
|
|
1,110 |
|
|
|
— |
|
|
|
1,110 |
|
Equity, royalty and interest income (loss) from investees |
|
|
71 |
|
|
|
198 |
|
|
|
70 |
|
|
|
42 |
|
|
|
(11 |
) |
|
|
370 |
|
|
|
— |
|
|
|
370 |
|
Interest income |
|
|
21 |
|
|
|
14 |
|
|
|
24 |
|
|
|
7 |
|
|
|
1 |
|
|
|
67 |
|
|
|
— |
|
|
|
67 |
|
EBITDA (2) |
|
|
1,434 |
|
(3) |
|
1,277 |
|
|
|
940 |
|
|
|
654 |
|
|
|
(322 |
) |
|
|
3,983 |
|
|
|
(88 |
) |
|
|
3,895 |
|
Depreciation and amortization (4) |
|
|
368 |
|
|
|
166 |
|
|
|
84 |
|
|
|
91 |
|
|
|
47 |
|
|
|
756 |
|
|
|
— |
|
|
|
756 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
EBITDA as a percentage of total sales |
|
|
14.0 |
% |
|
|
14.3 |
% |
|
|
12.5 |
% |
|
|
15.4 |
% |
|
|
NM |
|
|
|
12.8 |
% |
|
|
|
|
15.3 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
"NM" - not meaningful information |
||||||||||||||||||||||||||||||||
(1) Included intersegment sales, intersegment profit in inventory and unallocated corporate expenses. The nine months ended |
||||||||||||||||||||||||||||||||
(2) EBITDA is defined as earnings or losses before interest expense, income taxes, depreciation and amortization and noncontrolling interests. We believe EBITDA is a useful measure of our operating performance as it assists investors and debt holders in comparing our performance on a consistent basis without regard to financing methods, capital structure, income taxes or depreciation and amortization methods, which can vary significantly depending upon many factors. |
||||||||||||||||||||||||||||||||
(3) Included |
||||||||||||||||||||||||||||||||
(4) Depreciation and amortization, as shown on a segment basis, excluded 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 |
|
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 Net Income for the reporting periods was as follows:
|
|
Three months ended |
|
Nine months ended |
||||||||
|
|
|
|
|
||||||||
In millions |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
Manufacturing entities |
|
|
|
|
|
|
|
|
||||
|
|
$ |
15 |
|
$ |
7 |
|
$ |
51 |
|
$ |
29 |
|
|
|
14 |
|
|
15 |
|
|
51 |
|
|
52 |
|
|
|
6 |
|
|
8 |
|
|
29 |
|
|
33 |
|
|
|
6 |
|
|
6 |
|
|
22 |
|
|
21 |
All other manufacturers |
|
|
7 |
|
|
18 |
|
|
41 |
|
|
69 |
Distribution entities |
|
|
|
|
|
|
|
|
||||
Komatsu |
|
|
15 |
|
|
13 |
|
|
42 |
|
|
40 |
All other distributors |
|
|
3 |
|
|
3 |
|
|
10 |
|
|
10 |
|
|
|
66 |
|
|
70 |
|
|
246 |
|
|
254 |
Royalty and interest income |
|
|
33 |
|
|
48 |
|
|
79 |
|
|
116 |
Equity, royalty and interest income from investees |
|
$ |
99 |
|
$ |
118 |
|
$ |
325 |
|
$ |
370 |
INCOME TAXES
Our effective tax rate for 2024, excluding discrete items, is expected to approximate 23.5 percent.
Our effective tax rates for the three and nine month periods ended
The three months ended
The nine months ended
The three months ended
The nine months ended
|
FINANCIAL MEASURES THAT SUPPLEMENT GAAP |
(Unaudited) |
Reconciliation of Non GAAP measures - Earnings before interest, income taxes, depreciation and amortization and noncontrolling interests (EBITDA)
We believe EBITDA is a useful measure of our operating performance as it assists investors and debt holders in comparing our performance on a consistent basis without regard to financing methods, capital structure, income taxes or depreciation and amortization methods, which can vary significantly depending upon many factors. We believe EBITDA excluding special items is a useful measure of our operating performance without regard to the impact of the gain recognized and costs associated with the divestiture of Atmus and restructuring actions. This statement excludes forward looking measures of EBITDA where a reconciliation to the corresponding accounting principles generally accepted in
EBITDA is not in accordance with, or an alternative for, GAAP and may not be consistent with measures used by other companies. It should be considered supplemental data; however, the amounts included in the EBITDA calculation are derived from amounts included in the Condensed Consolidated Statements of Net Income. Below is a reconciliation of net income attributable to
|
|
Three months ended |
|
Nine months ended |
||||||||||||
|
|
|
|
|
||||||||||||
In millions |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net income attributable to |
|
$ |
809 |
|
|
$ |
656 |
|
|
$ |
3,528 |
|
|
$ |
2,166 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to |
|
|
9.6 |
% |
|
|
7.8 |
% |
|
|
13.8 |
% |
|
|
8.5 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Add: |
|
|
|
|
|
|
|
|
||||||||
Net income attributable to noncontrolling interests |
|
|
34 |
|
|
|
34 |
|
|
|
95 |
|
|
|
67 |
|
Consolidated net income |
|
|
843 |
|
|
|
690 |
|
|
|
3,623 |
|
|
|
2,233 |
|
|
|
|
|
|
|
|
|
|
||||||||
Add: |
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
|
83 |
|
|
|
97 |
|
|
|
281 |
|
|
|
283 |
|
Income tax expense |
|
|
200 |
|
|
|
188 |
|
|
|
618 |
|
|
|
623 |
|
Depreciation and amortization |
|
|
263 |
|
|
|
255 |
|
|
|
784 |
|
|
|
756 |
|
EBITDA |
|
$ |
1,389 |
|
|
$ |
1,230 |
|
|
$ |
5,306 |
|
|
$ |
3,895 |
|
|
|
|
|
|
|
|
|
|
||||||||
EBITDA as a percentage of net sales |
|
|
16.4 |
% |
|
|
14.6 |
% |
|
|
20.7 |
% |
|
|
15.3 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Less: |
|
|
|
|
|
|
|
|
||||||||
Gain related to the divestiture of Atmus |
|
|
— |
|
|
|
— |
|
|
|
1,333 |
|
|
|
— |
|
Add: |
|
|
|
|
|
|
|
|
||||||||
Atmus divestiture costs |
|
|
— |
|
|
|
26 |
|
|
|
35 |
|
|
|
67 |
|
Restructuring actions |
|
|
— |
|
|
|
— |
|
|
|
29 |
|
|
|
— |
|
EBITDA, excluding the impact of gain recognized and costs associated with the divestiture of Atmus and restructuring actions |
|
$ |
1,389 |
|
|
$ |
1,256 |
|
|
$ |
4,037 |
|
|
$ |
3,962 |
|
|
|
|
|
|
|
|
|
|
||||||||
EBITDA, excluding the impact of gain recognized and costs associated with the divestiture of Atmus and restructuring actions, as a percentage of net sales |
|
|
16.4 |
% |
|
|
14.9 |
% |
|
|
15.7 |
% |
|
|
15.5 |
% |
|
SEGMENT SALES DATA |
(Unaudited) |
Components Segment Sales by Business
Sales for our Components segment by business were as follows:
2024 |
|
|
|
|
|
|
|
|
|
|
|||||
In millions |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
YTD |
|||||
Drivetrain and braking systems |
|
$ |
1,232 |
|
$ |
1,256 |
|
$ |
1,131 |
|
$ |
— |
|
$ |
3,619 |
Emission solutions |
|
|
971 |
|
|
941 |
|
|
864 |
|
|
— |
|
|
2,776 |
Components and software |
|
|
611 |
|
|
623 |
|
|
581 |
|
|
— |
|
|
1,815 |
Atmus (1) |
|
|
353 |
|
|
— |
|
|
— |
|
|
— |
|
|
353 |
Automated transmissions |
|
|
165 |
|
|
162 |
|
|
148 |
|
|
— |
|
|
475 |
Total sales |
|
$ |
3,332 |
|
$ |
2,982 |
|
$ |
2,724 |
|
$ |
— |
|
$ |
9,038 |
|
|
|
|
|
|
|
|
|
|
|
|||||
(1) Included sales through the |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||
2023 |
|
|
|
|
|
|
|
|
|
|
|||||
In millions |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
YTD |
|||||
Drivetrain and braking systems |
|
$ |
1,272 |
|
$ |
1,249 |
|
$ |
1,177 |
|
$ |
1,124 |
|
$ |
4,822 |
Emission solutions |
|
|
1,056 |
|
|
964 |
|
|
893 |
|
|
922 |
|
|
3,835 |
Components and software |
|
|
633 |
|
|
616 |
|
|
583 |
|
|
577 |
|
|
2,409 |
Atmus |
|
|
417 |
|
|
417 |
|
|
396 |
|
|
399 |
|
|
1,629 |
Automated transmissions |
|
|
179 |
|
|
179 |
|
|
187 |
|
|
169 |
|
|
714 |
Total sales |
|
$ |
3,557 |
|
$ |
3,425 |
|
$ |
3,236 |
|
$ |
3,191 |
|
$ |
13,409 |
Engine Segment Sales by Market and Unit Shipments by Engine Classification
Sales for our Engine segment by market were as follows:
2024 |
|
|
|
|
|
|
|
|
|
|
|||||
In millions |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
YTD |
|||||
Heavy-duty truck |
|
$ |
1,059 |
|
$ |
1,184 |
|
$ |
1,021 |
|
$ |
— |
|
$ |
3,264 |
Medium-duty truck and bus |
|
|
995 |
|
|
1,074 |
|
|
1,073 |
|
|
— |
|
|
3,142 |
Light-duty automotive |
|
|
438 |
|
|
461 |
|
|
395 |
|
|
— |
|
|
1,294 |
Off-highway |
|
|
436 |
|
|
432 |
|
|
424 |
|
|
— |
|
|
1,292 |
Total sales |
|
$ |
2,928 |
|
$ |
3,151 |
|
$ |
2,913 |
|
$ |
— |
|
$ |
8,992 |
|
|
|
|
|
|
|
|
|
|
|
|||||
2023 |
|
|
|
|
|
|
|
|
|
|
|||||
In millions |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
YTD |
|||||
Heavy-duty truck |
|
$ |
1,114 |
|
$ |
1,117 |
|
$ |
1,116 |
|
$ |
1,052 |
|
$ |
4,399 |
Medium-duty truck and bus |
|
|
903 |
|
|
942 |
|
|
931 |
|
|
894 |
|
|
3,670 |
Light-duty automotive |
|
|
439 |
|
|
445 |
|
|
455 |
|
|
423 |
|
|
1,762 |
Off-highway |
|
|
530 |
|
|
484 |
|
|
429 |
|
|
410 |
|
|
1,853 |
Total sales |
|
$ |
2,986 |
|
$ |
2,988 |
|
$ |
2,931 |
|
$ |
2,779 |
|
$ |
11,684 |
Unit shipments by engine classification (including unit shipments to Power Systems and off-highway engine units included in their respective classification) were as follows:
2024 |
|
|
|
|
|
|
|
|
|
|
Units |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
YTD |
Heavy-duty |
|
33,600 |
|
37,500 |
|
32,400 |
|
— |
|
103,500 |
Medium-duty |
|
75,800 |
|
79,600 |
|
79,200 |
|
— |
|
234,600 |
Light-duty |
|
54,800 |
|
57,200 |
|
41,400 |
|
— |
|
153,400 |
Total units |
|
164,200 |
|
174,300 |
|
153,000 |
|
— |
|
491,500 |
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
Units |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
YTD |
Heavy-duty |
|
34,700 |
|
36,400 |
|
36,300 |
|
34,500 |
|
141,900 |
Medium-duty |
|
78,900 |
|
76,000 |
|
71,300 |
|
67,900 |
|
294,100 |
Light-duty |
|
55,000 |
|
53,600 |
|
53,300 |
|
49,600 |
|
211,500 |
Total units |
|
168,600 |
|
166,000 |
|
160,900 |
|
152,000 |
|
647,500 |
Distribution Segment Sales by Product Line
Sales for our Distribution segment by product line were as follows:
2024 |
|
|
|
|
|
|
|
|
|
|
|||||
In millions |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
YTD |
|||||
Parts |
|
$ |
1,001 |
|
$ |
990 |
|
$ |
1,004 |
|
$ |
— |
|
$ |
2,995 |
Power generation |
|
|
707 |
|
|
954 |
|
|
1,091 |
|
|
— |
|
|
2,752 |
Engines |
|
|
421 |
|
|
437 |
|
|
402 |
|
|
— |
|
|
1,260 |
Service |
|
|
406 |
|
|
448 |
|
|
455 |
|
|
— |
|
|
1,309 |
Total sales |
|
$ |
2,535 |
|
$ |
2,829 |
|
$ |
2,952 |
|
$ |
— |
|
$ |
8,316 |
|
|
|
|
|
|
|
|
|
|
|
|||||
2023 |
|
|
|
|
|
|
|
|
|
|
|||||
In millions |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
YTD |
|||||
Parts |
|
$ |
1,057 |
|
$ |
1,019 |
|
$ |
995 |
|
$ |
1,000 |
|
$ |
4,071 |
Power generation |
|
|
492 |
|
|
614 |
|
|
606 |
|
|
797 |
|
|
2,509 |
Engines |
|
|
456 |
|
|
531 |
|
|
511 |
|
|
499 |
|
|
1,997 |
Service |
|
|
401 |
|
|
431 |
|
|
423 |
|
|
417 |
|
|
1,672 |
Total sales |
|
$ |
2,406 |
|
$ |
2,595 |
|
$ |
2,535 |
|
$ |
2,713 |
|
$ |
10,249 |
Power Systems Segment Sales by Product Line and Unit Shipments by Engine Classification
Sales for our Power Systems segment by product line were as follows:
2024 |
|
|
|
|
|
|
|
|
|
|
|||||
In millions |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
YTD |
|||||
Power generation |
|
$ |
853 |
|
$ |
987 |
|
$ |
1,055 |
|
$ |
— |
|
$ |
2,895 |
Industrial |
|
|
420 |
|
|
478 |
|
|
508 |
|
|
— |
|
|
1,406 |
Generator technologies |
|
|
116 |
|
|
124 |
|
|
124 |
|
|
— |
|
|
364 |
Total sales |
|
$ |
1,389 |
|
$ |
1,589 |
|
$ |
1,687 |
|
$ |
— |
|
$ |
4,665 |
|
|
|
|
|
|
|
|
|
|
|
|||||
2023 |
|
|
|
|
|
|
|
|
|
|
|||||
In millions |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
YTD |
|||||
Power generation |
|
$ |
770 |
|
$ |
854 |
|
$ |
850 |
|
$ |
866 |
|
$ |
3,340 |
Industrial |
|
|
455 |
|
|
468 |
|
|
475 |
|
|
456 |
|
|
1,854 |
Generator technologies |
|
|
118 |
|
|
135 |
|
|
119 |
|
|
107 |
|
|
479 |
Total sales |
|
$ |
1,343 |
|
$ |
1,457 |
|
$ |
1,444 |
|
$ |
1,429 |
|
$ |
5,673 |
High-horsepower unit shipments by engine classification were as follows:
2024 |
|
|
|
|
|
|
|
|
|
|
Units |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
YTD |
Power generation |
|
3,000 |
|
3,700 |
|
2,900 |
|
— |
|
9,600 |
Industrial |
|
1,300 |
|
1,500 |
|
1,700 |
|
— |
|
4,500 |
Total units |
|
4,300 |
|
5,200 |
|
4,600 |
|
— |
|
14,100 |
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
Units |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
YTD |
Power generation |
|
2,900 |
|
3,300 |
|
2,800 |
|
3,300 |
|
12,300 |
Industrial |
|
1,500 |
|
1,600 |
|
1,800 |
|
1,800 |
|
6,700 |
Total units |
|
4,400 |
|
4,900 |
|
4,600 |
|
5,100 |
|
19,000 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241105615360/en/
812-377-0500
natalie.guzman@cummins.com
Source: