- Record second quarter revenues of $8.8 billion; GAAP1 Net
Income of $726 million
- EBITDA in the second quarter was 15.3% of sales; Diluted EPS
of $5.26
- Full year revenues are expected to range from down 3% to
flat; an improvement from prior guidance of down 2% to 5%.
- EBITDA is now expected to be in the range of 15.0% to 15.5%;
an increase from previous guidance of 14.5% to 15.5%.
Cummins Inc. (NYSE: CMI) today reported results for the second
quarter of 2024.
“We achieved record quarterly sales and solid profitability in
the second quarter, led by significant improvement in our Power
Systems business,” said Jennifer Rumsey, Chair and CEO of Cummins.
“As we shared during our Analyst Day in May, our Destination Zero
strategy is the right strategy for growing our business and meeting
our customers’ needs today and in the future. We continue to
deliver innovative technologies for our customers, execute on our
financial commitments, and strengthen our position in key markets.
I want to thank our talented employees for their continued efforts
to drive business results and make Cummins more competitive across
the globe.”
Second quarter revenues of $8.8 billion increased 2% from the
same quarter in 2023. Sales in North America increased 4% while
international revenues decreased 2%.
Net income attributable to Cummins in the second quarter was
$726 million, or $5.26 per diluted share, compared to $720 million,
or $5.05 per diluted share, in 2023. The second quarter of 2023
included costs related to the separation of Atmus of $23 million,
or $0.13 per diluted share. The tax rate in the second quarter was
23.0% including $9 million, or $0.07 per diluted share, of
favorable discrete tax items.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) in the second quarter were $1.3 billion, or 15.3% of
sales, compared to $1.3 billion, or 15.1% of sales, a year ago.
EBITDA for the second quarter of 2023 included the costs related to
the separation of Atmus noted above.
2024 Outlook:
Based on its current forecast, Cummins is raising its full-year
2024 revenue guidance to be down 3% to flat, due to stronger than
expected demand across several markets, especially in North America
on-highway and power generation. EBITDA is expected to be in the
range of 15.0% to 15.5%, raising the midpoint and narrowing the
range of the previous guidance of 14.5% to 15.5%.
Cummins plans to continue generating strong operating cash flow
and returns for shareholders and is committed to our long-term
strategic goal of returning 50% of operating cash flow back to
shareholders. In the near term, we will focus on reinvesting for
profitable growth, dividends and reducing debt.
“We have raised our expectations on revenue and profitability
for 2024 due to continued demand for Cummins’ products and
services. We still expect slowing demand in the North America
heavy-duty truck market in the second half of the year,” said
Rumsey. “Despite the lower outlook for the second half, Cummins is
in a strong position to keep investing in future growth, bringing
new technologies to customers and returning cash to
shareholders.”
Second Quarter 2024 Highlights:
- Cummins announced an increase in the 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.
- Accelera™ by Cummins, Daimler Trucks & Buses and PACCAR
completed the formation of their joint venture, now known as
Amplify Cell Technologies, to localize battery cell production and
the battery supply chain in the United States. This strategic
collaboration will advance zero-emissions technology for electric
commercial vehicles and industrial applications. Amplify began
construction of a 21-gigawatt hour (GWh) factory in Marshall
County, Miss., with potential for further expansion as demand
grows. The factory is expected to create more than 2,000 U.S.
manufacturing jobs and is targeting the start of production in
2027.
- Cummins and Isuzu announced the launch of a new 6.7-liter
engine designed for use in Isuzu’s new medium-duty truck lineup.
The “Isuzu DB6A” will power on-highway truck applications built for
the Japanese market and will be available for the Asia Pacific
markets and other global markets later this year. Cummins also
announced plans to launch a battery electric powertrain for Isuzu’s
F-series in North America. Availability of the medium-duty truck is
expected in 2026 and will include Accelera’s next generation
lithium iron phosphate (LFP) battery technology.
- Cummins hosted its biennial Analyst Day and shared plans to
raise its long-term financial expectations, relative to its prior
Analyst Day, and deliver increasing returns to shareholders.
- For the third consecutive year, Morgan Stanley Capital
International (MSCI) awarded Cummins a AAA rating – the highest in
the industry – for the ability to manage the most significant
environmental, social and governance risks and opportunities
relative to peers.
- In July, Accelera was awarded $75 million for zero-emissions
manufacturing from the Department of Energy to convert
approximately 360,000 sq. ft. of existing manufacturing space at
our Columbus (Indiana) Engine Plant for zero-emissions components
and electric powertrain systems. The $75 million grant is the
largest federal grant ever awarded solely to Cummins and is part of
the appropriations related to the Inflation Reduction Act.
1 Generally Accepted Accounting Principles in the U.S.
Second quarter 2024 detail (all comparisons to same period in
2023):
Components Segment
- Sales - $3.0 billion, down 13%
- Segment EBITDA - $406 million, or 13.6% of sales compared to
$486 million, or 14.2% of sales, which included the Atmus business
and $18 million of costs related to the separation of Atmus
- Revenues in North America decreased by 10% and international
sales decreased by 17% primarily due to the separation of Atmus and
lower demand in China and Europe.
Engine Segment
- Sales - $3.2 billion, up 5%
- Segment EBITDA - $445 million, or 14.1% of sales, compared to
$425 million, or 14.2% of sales
- Revenues increased 7% in North America and increased 2% in
international markets due to strong demand in the North American
medium-duty truck market and pricing actions.
Distribution Segment
- Sales - $2.8 billion, up 9%
- Segment EBITDA - $314 million, or 11.1% of sales, compared to
$299 million, or 11.5% of sales
- Revenues in North America increased 6% and international sales
increased by 16% driven by increased demand for power generation
products and pricing actions.
Power Systems Segment
- Sales - $1.6 billion, up 9%
- Segment EBITDA - $301 million, or 18.9% of sales, compared to
$201 million, or 13.8% of sales
- Power generation revenues increased 16% driven by increased
global demand, particularly for the data center market. Industrial
revenues increased 2% primarily due to strong mining demand more
than offsetting weaker demand in oil and gas markets.
Accelera Segment
- Sales - $111 million, up 31%
- Segment EBITDA loss - $117 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 Cummins Inc.
Cummins Inc., a global power solutions leader, is comprised of
five business segments – Components, Engine, Distribution, Power
Systems and Accelera by Cummins – supported by our global
manufacturing and extensive service and support network, skilled
workforce and vast technological expertise. Cummins is committed to
its Destination Zero strategy, which is grounded in the company’s
commitment to sustainability and helping its customers successfully
navigate the energy transition with its broad portfolio of
products. The products range from advanced diesel, natural gas,
electric and hybrid powertrains and powertrain-related components
including, aftertreatment, turbochargers, fuel systems, valvetrain
technologies, controls systems, air handling systems, automated
transmissions, axles, drivelines, brakes, suspension systems,
electric power generation systems, batteries, electrified power
systems, hydrogen production technologies and fuel cell products.
Headquartered in Columbus, Indiana (U.S.), since its founding in
1919, Cummins employs approximately 75,500 people committed to
powering a more prosperous world through three global corporate
responsibility priorities critical to healthy communities:
education, environment, and equality of opportunity. Cummins serves
its customers online, through a network of company-owned and
independent distributor locations, and through thousands of dealer
locations worldwide and earned about $735 million on sales of $34.1
billion in 2023. See how Cummins is powering a world that's always
on by accessing news releases and more information at
https://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 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 U.S. 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: any adverse consequences resulting from entering into
the Settlement Agreements, including required additional mitigation
projects, adverse reputational impacts and potential resulting
legal actions; increased scrutiny from regulatory agencies, as well
as unpredictability in the adoption, implementation and enforcement
of emission standards around the world; evolving environmental and
climate change legislation and regulatory initiatives; changes in
international, national and regional trade laws, regulations and
policies; changes in taxation; global legal and ethical compliance
costs and risks; future bans or limitations on the use of
diesel-powered products; failure to successfully integrate and / or
failure to fully realize all of the anticipated benefits of the
acquisition of Meritor, Inc.; raw material, transportation and
labor price fluctuations and supply shortages; aligning our
capacity and production with our demand; the actions of, and income
from, joint ventures and other investees that we do not directly
control; large truck manufacturers' and original equipment
manufacturers' customers discontinuing outsourcing their engine
supply needs or experiencing financial distress, or change in
control; product recalls; variability in material and commodity
costs; the development of new technologies that reduce demand for
our current products and services; lower than expected acceptance
of new or existing products or services; product liability claims;
our sales mix of products; climate change, global warming, more
stringent climate change regulations, accords, mitigation efforts,
greenhouse gas regulations or other legislation designed to address
climate change; our plan to reposition our portfolio of product
offerings through exploration of strategic acquisitions and
divestitures and related uncertainties of entering such
transactions; increasing interest rates; challenging markets for
talent and ability to attract, develop and retain key personnel;
exposure to potential security breaches or other disruptions to our
information technology environment and data security; political,
economic and other risks from operations in numerous countries
including political, economic and social uncertainty and the
evolving globalization of our business; competitor activity;
increasing competition, including increased global competition
among our customers in emerging markets; failure to meet
environmental, social and governance (ESG) expectations or
standards, or achieve our ESG goals; labor relations or work
stoppages; foreign currency exchange rate changes; the performance
of our pension plan assets and volatility of discount rates; the
price and availability of energy; continued availability of
financing, financial instruments and financial resources in the
amounts, at the times and on the terms required to support our
future business; and other risks detailed from time to time in our
SEC filings, including particularly in the Risk Factors section of
our 2023 Annual Report on Form 10-K and Quarterly Reports on Form
10-Q. 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 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 SEC, 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
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.
Cummins presents this information as it believes it is useful to
understanding the Company's operating performance, and because
EBITDA 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.
CUMMINS INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF NET INCOME
(Unaudited) (a)
Three months ended
June 30,
In millions, except per share
amounts
2024
2023
NET SALES
$
8,796
$
8,638
Cost of sales
6,603
6,490
GROSS MARGIN
2,193
2,148
OPERATING EXPENSES AND INCOME
Selling, general and administrative
expenses
828
873
Research, development and engineering
expenses
379
384
Equity, royalty and interest income from
investees
103
133
Other operating expense, net
44
27
OPERATING INCOME
1,045
997
Interest expense
109
99
Other income, net
41
51
INCOME BEFORE INCOME TAXES
977
949
Income tax expense
225
212
CONSOLIDATED NET INCOME
752
737
Less: Net income attributable to
noncontrolling interests
26
17
NET INCOME ATTRIBUTABLE TO CUMMINS
INC.
$
726
$
720
EARNINGS PER COMMON SHARE ATTRIBUTABLE
TO CUMMINS INC.
Basic
$
5.30
$
5.08
Diluted
$
5.26
$
5.05
WEIGHTED-AVERAGE COMMON SHARES
OUTSTANDING
Basic
137.1
141.7
Diluted
137.9
142.5
(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 NET INCOME
(Unaudited) (a)
Six months ended
June 30,
In millions, except per share
amounts
2024
2023
NET SALES
$
17,199
$
17,091
Cost of sales
12,965
12,914
GROSS MARGIN
4,234
4,177
OPERATING EXPENSES AND INCOME
Selling, general and administrative
expenses
1,667
1,626
Research, development and engineering
expenses
748
734
Equity, royalty and interest income from
investees
226
252
Other operating expense, net
77
46
OPERATING INCOME
1,968
2,023
Interest expense
198
186
Other income, net
1,428
141
INCOME BEFORE INCOME TAXES
3,198
1,978
Income tax expense
418
435
CONSOLIDATED NET INCOME
2,780
1,543
Less: Net income attributable to
noncontrolling interests
61
33
NET INCOME ATTRIBUTABLE TO CUMMINS
INC.
$
2,719
$
1,510
EARNINGS PER COMMON SHARE ATTRIBUTABLE
TO CUMMINS INC.
Basic
$
19.53
$
10.66
Diluted
$
19.42
$
10.60
WEIGHTED-AVERAGE COMMON SHARES
OUTSTANDING
Basic
139.2
141.6
Diluted
140.0
142.5
(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
June 30, 2024
December 31,
2023
ASSETS
Current assets
Cash and cash equivalents
$
1,590
$
2,179
Marketable securities
593
562
Total cash, cash equivalents and
marketable securities
2,183
2,741
Accounts and notes receivable, net
5,606
5,583
Inventories
5,857
5,677
Prepaid expenses and other current
assets
1,316
1,197
Total current assets
14,962
15,198
Long-term assets
Property, plant and equipment, net
6,053
6,249
Investments and advances related to equity
method investees
1,828
1,800
Goodwill
2,394
2,499
Other intangible assets, net
2,502
2,519
Pension assets
1,192
1,197
Other assets
2,389
2,543
Total assets
$
31,320
$
32,005
LIABILITIES
Current liabilities
Accounts payable (principally trade)
$
4,405
$
4,260
Loans payable
329
280
Commercial paper
1,581
1,496
Current maturities of long-term debt
167
118
Accrued compensation, benefits and
retirement costs
801
1,108
Current portion of accrued product
warranty
660
667
Current portion of deferred revenue
1,311
1,220
Other accrued expenses
1,890
3,754
Total current liabilities
11,144
12,903
Long-term liabilities
Long-term debt
5,426
4,802
Deferred revenue
1,046
966
Other liabilities
3,128
3,430
Total liabilities
$
20,744
$
22,101
EQUITY
Cummins Inc. shareholders’ equity
Common stock, $2.50 par value, 500 shares
authorized, 222.5 and 222.5 shares issued
$
2,582
$
2,564
Retained earnings
20,101
17,851
Treasury stock, at cost, 85.5 and 80.7
shares
(10,797
)
(9,359
)
Accumulated other comprehensive loss
(2,335
)
(2,206
)
Total Cummins Inc. shareholders’
equity
9,551
8,850
Noncontrolling interests
1,025
1,054
Total equity
$
10,576
$
9,904
Total liabilities and equity
$
31,320
$
32,005
(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
June 30,
In millions
2024
2023
CASH FLOWS FROM OPERATING
ACTIVITIES
Consolidated net income
$
752
$
737
Adjustments to reconcile consolidated net
income to net cash (used in) provided by operating activities
Depreciation and amortization
263
257
Deferred income taxes
(61
)
(94
)
Equity in income of investees, net of
dividends
(8
)
(46
)
Pension and OPEB expense
10
2
Pension contributions and OPEB
payments
(11
)
(11
)
Changes in current assets and liabilities,
net of acquisitions
Accounts and notes receivable
(150
)
(14
)
Inventories
(115
)
(140
)
Other current assets
24
5
Accounts payable
(64
)
(316
)
Accrued expenses
(1,540
)
110
Other, net
49
(7
)
Net cash (used in) provided by operating
activities
(851
)
483
CASH FLOWS FROM INVESTING
ACTIVITIES
Capital expenditures
(240
)
(221
)
Acquisition of businesses, net of cash
acquired
1
(134
)
Investments in marketable
securities—acquisitions
(334
)
(322
)
Investments in marketable
securities—liquidations
254
275
Other, net
(81
)
24
Net cash used in investing activities
(400
)
(378
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from borrowings
84
694
Net borrowings (payments) of commercial
paper
972
(629
)
Payments on borrowings and finance lease
obligations
(475
)
(86
)
Dividend payments on common stock
(230
)
(223
)
Other, net
(43
)
4
Net cash provided by (used in) financing
activities
308
(240
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS
(8
)
(43
)
Net decrease in cash and cash
equivalents
(951
)
(178
)
Cash and cash equivalents at beginning of
period
2,541
1,980
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
$
1,590
$
1,802
(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)
Six months ended
June 30,
In millions
2024
2023
CASH FLOWS FROM OPERATING
ACTIVITIES
Consolidated net income
$
2,780
$
1,543
Adjustments to reconcile consolidated net
income to net cash (used in) provided by operating activities
Gain related to divestiture of Atmus
(1,333
)
—
Depreciation and amortization
528
503
Deferred income taxes
(99
)
(132
)
Equity in income of investees, net of
dividends
(86
)
(113
)
Pension and OPEB expense
19
3
Pension contributions and OPEB
payments
(59
)
(103
)
Changes in current assets and liabilities,
net of acquisitions and divestitures
Accounts and notes receivable
(161
)
(635
)
Inventories
(469
)
(403
)
Other current assets
(151
)
(137
)
Accounts payable
263
65
Accrued expenses
(1,933
)
261
Other, net
126
126
Net cash (used in) provided by operating
activities
(575
)
978
CASH FLOWS FROM INVESTING
ACTIVITIES
Capital expenditures
(409
)
(414
)
Acquisition of businesses, net of cash
acquired
(58
)
(134
)
Investments in marketable
securities—acquisitions
(713
)
(648
)
Investments in marketable
securities—liquidations
685
620
Cash associated with Atmus divestiture
(174
)
—
Other, net
(137
)
(30
)
Net cash used in investing activities
(806
)
(606
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from borrowings
2,482
737
Net borrowings (payments) of commercial
paper
85
(658
)
Payments on borrowings and finance lease
obligations
(1,223
)
(228
)
Dividend payments on common stock
(469
)
(445
)
Other, net
(68
)
(9
)
Net cash provided by (used in) financing
activities
807
(603
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS
(15
)
(68
)
Net decrease in cash and cash
equivalents
(589
)
(299
)
Cash and cash equivalents at beginning of
year
2,179
2,101
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
$
1,590
$
1,802
(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)
REORGANIZATION WITHIN CERTAIN
SEGMENTS
Beginning in the second quarter of 2024, we realigned certain
businesses within our Components segment to be consistent with how
our segment manager now monitors performance. We reorganized the
businesses to combine the engine components and software and
electronics businesses into the newly formed components and
software business. We also renamed our axles and brakes business to
“drivetrain and braking systems.” We began reporting results for
these changes within our Components segment effective April 1,
2024, and reflected these changes in the historical periods
presented. The changes had no impact on our consolidated results.
The adjusted prior period balances for the newly combined engine
components and software business are shown below:
Components Segment
External sales in 2024, 2023 and 2022 for our Components segment
by business, as adjusted, were as follows:
2024
In millions
Q1
Drivetrain and braking systems
$
1,232
Emission solutions
856
Components and software
300
Atmus
289
Automated transmission
165
Total sales
$
2,842
2023
In millions
Q1
Q2
Q3
Q4
YTD
Drivetrain and braking systems
$
1,272
$
1,249
$
1,177
$
1,124
$
4,822
Emission solutions
939
842
803
841
3,425
Components and software
312
312
289
312
1,225
Atmus
342
341
324
338
1,345
Automated transmissions
178
180
187
169
714
Total sales
$
3,043
$
2,924
$
2,780
$
2,784
$
11,531
2022
In millions
YTD
Drivetrain and braking systems
$
1,879
Emission solutions
3,086
Components and software
1,030
Atmus
1,259
Automated transmissions
593
Total sales
$
7,847
Consolidated sales in 2024, 2023, and 2022 for our Components
segment by business, as adjusted, are presented in the segment
sales data section below.
CUMMINS INC. AND
SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
In millions
Components
Engine
Distribution
Power Systems
Accelera
Total Segments
Intersegment Eliminations
(1)
Total
Three months ended June 30,
2024
External sales
$
2,518
$
2,468
$
2,821
$
888
$
101
$
8,796
$
—
$
8,796
Intersegment sales
464
683
8
701
10
1,866
(1,866
)
—
Total sales
2,982
3,151
2,829
1,589
111
10,662
(1,866
)
8,796
Research, development and engineering
expenses
81
167
14
63
54
379
—
379
Equity, royalty and interest income (loss)
from investees
13
48
24
26
(8
)
103
—
103
Interest income
9
7
11
3
—
30
—
30
EBITDA (2)
406
445
314
301
(117
)
1,349
(4
)
1,345
Depreciation and amortization (3)
121
61
30
32
15
259
—
259
EBITDA as a percentage of segment
sales
13.6
%
14.1
%
11.1
%
18.9
%
NM
12.7
%
15.3
%
Three months ended June 30,
2023
External sales
$
2,924
$
2,263
$
2,576
$
794
$
81
$
8,638
$
—
$
8,638
Intersegment sales
501
725
19
663
4
1,912
(1,912
)
—
Total sales
3,425
2,988
2,595
1,457
85
10,550
(1,912
)
8,638
Research, development and engineering
expenses
103
148
15
66
52
384
—
384
Equity, royalty and interest income (loss)
from investees
24
71
24
18
(4
)
133
—
133
Interest income
7
7
8
2
1
25
—
25
EBITDA (2)
486
(4
)
425
299
201
(114
)
1,297
7
1,304
Depreciation and amortization (3)
125
56
28
32
15
256
—
256
EBITDA as a percentage of segment
sales
14.2
%
14.2
%
11.5
%
13.8
%
NM
12.3
%
15.1
%
"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 June 30, 2024 and 2023, except for $5
million of costs associated with the divestiture of Atmus
Filtration Technologies Inc. (Atmus) in 2023.
(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 $18 million of costs
associated with the divestiture of Atmus.
CUMMINS INC. AND
SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
In millions
Components
Engine
Distribution
Power Systems
Accelera
Total Segments
Intersegment Eliminations
(1)
Total
Six months ended June 30, 2024
External sales
$
5,360
$
4,708
$
5,350
$
1,596
$
185
$
17,199
$
—
$
17,199
Intersegment sales
954
1,371
14
1,382
19
3,740
(3,740
)
—
Total sales
6,314
6,079
5,364
2,978
204
20,939
(3,740
)
17,199
Research, development and engineering
expenses
165
321
28
123
109
746
2
748
Equity, royalty and interest income (loss)
from investees
39
105
48
45
(11
)
226
—
226
Interest income
17
14
22
6
—
59
—
59
EBITDA (2)
879
(3
)
859
608
538
(218
)
2,666
1,251
3,917
Depreciation and amortization (4)
246
119
61
66
29
521
—
521
EBITDA as a percentage of total sales
13.9
%
14.1
%
11.3
%
18.1
%
NM
12.7
%
22.8
%
Six months ended June 30, 2023
External sales
$
5,967
$
4,515
$
4,975
$
1,473
$
161
$
17,091
$
—
$
17,091
Intersegment sales
1,015
1,459
26
1,327
9
3,836
(3,836
)
—
Total sales
6,982
5,974
5,001
2,800
170
20,927
(3,836
)
17,091
Research, development and engineering
expenses
194
282
29
129
100
734
—
734
Equity, royalty and interest income (loss)
from investees
45
136
48
31
(8
)
252
—
252
Interest income
13
10
15
4
1
43
—
43
EBITDA (2)
993
(3
)
882
634
420
(208
)
2,721
(56
)
2,665
Depreciation and amortization (4)
248
107
56
61
29
501
—
501
EBITDA as a percentage of total sales
14.2
%
14.8
%
12.7
%
15.0
%
NM
13.0
%
15.6
%
"NM" - not meaningful information
(1) Included intersegment sales,
intersegment profit in inventory and unallocated corporate
expenses. The six months ended June 30, 2024, included a $1.3
billion gain related to the divestiture of Atmus and $14 million of
costs associated with the divestiture of Atmus. The six months
ended June 30, 2023, included $11 million of costs associated with
the divestiture of Atmus.
(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 $21 million and $30 million
of costs associated with the divestiture of Atmus for the six
months ended June 30, 2024 and 2023, respectively.
(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 $7 million and $2 million for
the six months ended June 30, 2024 and 2023, respectively. A
portion of depreciation expense is included in research,
development and engineering expenses.
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 Net Income for the
reporting periods was as follows:
Three months ended
Six months ended
June 30,
June 30,
In millions
2024
2023
2024
2023
Manufacturing entities
Chongqing Cummins Engine Company, Ltd.
$
21
$
13
$
36
$
22
Dongfeng Cummins Engine Company, Ltd.
15
18
37
37
Beijing Foton Cummins Engine Co., Ltd.
10
9
23
25
Tata Cummins, Ltd.
7
7
16
15
All other manufacturers
11
32
34
51
Distribution entities
Komatsu Cummins Chile, Ltda.
14
13
27
27
All other distributors
2
4
7
7
Cummins share of net income
80
96
180
184
Royalty and interest income
23
37
46
68
Equity, royalty and interest income from
investees
$
103
$
133
$
226
$
252
INCOME TAXES
Our effective tax rate for 2024 is expected to approximate 24.0
percent, excluding any discrete items that may arise.
Our effective tax rates for the three and six month periods
ended June 30, 2024, were 23.0 percent and 13.1 percent,
respectively. Our effective tax rates for the three and six months
ended June 30, 2023, were 22.3 percent and 22.0 percent,
respectively.
The three months ended June 30, 2024, contained favorable
discrete tax items of $9 million, or $0.07 per share, primarily due
to share-based compensation tax benefits.
The six months ended June 30, 2024, contained favorable discrete
tax items primarily due to the $1.3 billion non-taxable gain on the
Atmus split-off. Other discrete tax items were $30 million, or
$0.21 per share, primarily due to adjustments related to audit
settlements and share-based compensation benefits.
The three months ended June 30, 2023, contained net unfavorable
discrete tax items of $3 million, or $0.02 per share.
The six months ended June 30, 2023, contained net discrete tax
items of zero, as the result of offsetting amounts for the first
two quarters, primarily due to share-based compensation tax
benefits and other discrete items.
CUMMINS INC. AND SUBSIDIARIES
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 the
United States (GAAP) measures is not available due to the
variability, complexity and limited visibility of non-cash items
that are excluded from the non-GAAP outlook measure.
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 Cummins
Inc. to EBITDA for each of the applicable periods:
Three months ended
Six months ended
June 30,
June 30,
In millions
2024
2023
2024
2023
Net income attributable to Cummins
Inc.
$
726
$
720
$
2,719
$
1,510
Net income attributable to Cummins Inc. as
a percentage of net sales
8.3
%
8.3
%
15.8
%
8.8
%
Add:
Net income attributable to noncontrolling
interests
26
17
61
33
Consolidated net income
752
737
2,780
1,543
Add:
Interest expense
109
99
198
186
Income tax expense
225
212
418
435
Depreciation and amortization
259
256
521
501
EBITDA
$
1,345
$
1,304
$
3,917
$
2,665
EBITDA as a percentage of net sales
15.3
%
15.1
%
22.8
%
15.6
%
Less:
Gain related to the divestiture of
Atmus
—
—
1,333
—
Add:
Atmus divestiture costs
—
23
35
41
Restructuring actions
—
—
29
—
EBITDA, excluding the impact of gain
recognized and costs associated with the divestiture of Atmus and
restructuring actions
$
1,345
$
1,327
$
2,648
$
2,706
EBITDA, excluding the impact of gain
recognized and costs associated with the divestiture of Atmus and
restructuring actions, as a percentage of net sales
15.3
%
15.4
%
15.4
%
15.8
%
CUMMINS INC. AND SUBSIDIARIES SEGMENT
SALES DATA (Unaudited)
Components Segment Sales by Business
Sales for our Components segment by business, adjusted for the
reorganized businesses as noted above, were as follows:
2024
In millions
Q1
Q2
Q3
Q4
YTD
Drivetrain and braking systems
$
1,232
$
1,256
$
—
$
—
$
2,488
Emission solutions
971
941
—
—
1,912
Components and software
611
623
—
—
1,234
Atmus (1)
353
—
—
—
353
Automated transmissions
165
162
—
—
327
Total sales
$
3,332
$
2,982
$
—
$
—
$
6,314
(1) Included sales through the March 18,
2024, divestiture.
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
2022
In millions
YTD
Drivetrain and braking systems
$
1,879
Emission solutions
3,494
Components and software
2,213
Atmus
1,557
Automated transmissions
593
Total sales
$
9,736
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
$
—
$
—
$
2,243
Medium-duty truck and bus
995
1,074
—
—
2,069
Light-duty automotive
438
461
—
—
899
Off-highway
436
432
—
—
868
Total sales
$
2,928
$
3,151
$
—
$
—
$
6,079
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
—
—
71,100
Medium-duty
75,800
79,600
—
—
155,400
Light-duty
54,800
57,200
—
—
112,000
Total units
164,200
174,300
—
—
338,500
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
$
—
$
—
$
1,991
Power generation
707
954
—
—
1,661
Engines
421
437
—
—
858
Service
406
448
—
—
854
Total sales
$
2,535
$
2,829
$
—
$
—
$
5,364
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
$
—
$
—
$
1,840
Industrial
420
478
—
—
898
Generator technologies
116
124
—
—
240
Total sales
$
1,389
$
1,589
$
—
$
—
$
2,978
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
—
—
6,700
Industrial
1,300
1,500
—
—
2,800
Total units
4,300
5,200
—
—
9,500
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/20240731048332/en/
Jon Mills, Director, External Communications 317-658-4540
jon.mills@cummins.com
Cummins (NYSE:CMI)
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