Cummins Announces Results for 2014; Reports Record Revenues; Shares Expectations for Revenue and EBIT Growth in 2015

COLUMBUS, IN--(Marketwired - February 05, 2015) - Cummins Inc. (NYSE: CMI) today reported results for the fourth quarter and full year of 2014.

Fourth quarter revenue of $5.1 billion, increased 11 percent from the same quarter in 2013. The year-over-year increase was driven by higher revenues in North America which more than offset lower demand in Brazil and Europe.

Earnings before interest and taxes (EBIT) were $629 million for the fourth quarter or 12.4 percent of sales. These results include $32 million of expense associated with cost reduction activities in the Power Generation business. Excluding this expense, EBIT was $661 million or 13.0 percent of sales. This compares to $566 million or 12.3 percent of sales a year ago.

Net income attributable to Cummins in the fourth quarter was $444 million ($2.44 per diluted share), or $465 million ($2.56 per diluted share) excluding one-time items, compared to $432 million ($2.32 per diluted share) in the fourth quarter of 2013.

Revenues for the full year were a record $19.2 billion, 11 percent higher than 2013. Acquisitions contributed 3 percent to revenue growth. Revenues in North America increased 20 percent and international sales grew 2 percent. Within international markets, growth in China more than offset weaker demand in Brazil and India.

EBIT for the year was $2.5 billion or 13.0 percent of sales. Excluding one-time items, EBIT was $2.53 billion or 13.2 percent compared to $2.16 billion or 12.5 percent of sales in 2013.

Net income attributable to Cummins for the full year was $1.65 billion ($9.02 per diluted share), or $1.67 billion ($9.13 per diluted share) excluding one-time items, up from $1.48 billion ($7.91 per diluted share) in 2013. The full year tax rate was 28.7 percent.

"We reported record revenues in 2014 despite weak economic conditions in several of our most important international markets," said Chairman and CEO Tom Linebarger. "Revenues grew 11 percent as demand in on-highway markets in North America improved, we continued executing our distributor acquisition strategy, and we delivered strong growth in China driven by new products. We continued to invest in future growth, reflecting our commitment to technology and product leadership, while growing EBIT faster than sales."

Cummins' improvement in profitability was driven by record performance in the Components and Distribution businesses and higher earnings in the Engine business. Results in the Company's Power Generation business fell short of expectations, but the actions the Company has taken to lower costs will improve earnings going forward. Demand in North American on-highway markets is expected to improve again in 2015, but will be partially offset by continued weakness in international markets and the negative impact of the strong U.S. dollar.

Linebarger continued, "We are committed to improving the quality of our products and service for our customers, closely managing costs and further improving our financial performance in 2015. The Company delivered on its commitment to return 50 percent of cash from operations to shareholders in 2014 and will do so again this year."

Based on the current forecast, Cummins expects full year revenues to grow between 2 and 4 percent, and EBIT to be in the range of 13.5 to 14.0 percent.

2014 highlights:

• The Company increased its dividend by 25 percent and repurchased 4.8 million shares

• The Company received credit rating upgrades from Standard & Poor's and Moody's

• For the seventh consecutive year, Cummins was named one of the world's most ethical companies by The Ethisphere Institute

• Cummins received a perfect score in the Corporate Equality Index by the Human Rights Campaign for the 10th consecutive year

• The Company was ranked among the World's Best in Newsweek's 2014 Green Rankings

• Cummins was named one of the Top 50 companies for diversity by Diversity Inc for the seventh consecutive year

Fourth quarter 2014 detail (all comparisons to same period in 2013)

Engine Segment

• Q4 Sales - $2.8 billion, up 11 percent

• Q4 Segment EBIT - $315 million, or 11.1 percent of sales, compared to $235 million or 9.2 percent of sales

• Strong demand in on-highway markets in North America more than offset weakness in Brazil, China and Europe

• Full year sales $11 billion, up 9 percent, EBIT of $1.23 billion compared to $1.04 billion in 2013

Components Segment

• Q4 Sales - $1.3 billion, up 16 percent

• Q4 Segment EBIT - $160 million, or 12.1 percent of sales, compared to $140 million or 12.3 percent of sales

• Higher demand in on-highway markets in North America, Europe and China

• Full year sales $5.1 billion, up 18 percent, EBIT of $684 million compared to $527 million in 2013

Power Generation Segment

• Q4 Sales - $760 million, flat compared to 2013

• Q4 Segment EBIT - $22 million, or 2.9 percent of sales, compared to $46 million or 6.1 percent of sales. EBIT in the fourth quarter of 2014 includes expense of $32 million associated with cost reduction activities

• Higher revenues in Latin America and Africa offset weaker demand in Eastern Europe and India

• Full year sales $2.9 billion, down 4 percent, EBIT of $168 million compared to $218 million in 2013

Distribution Segment

• Q4 Sales - $1.7 billion, up 58 percent, up 7 percent excluding acquisitions

• Q4 Segment EBIT - $158 million, or 9.3 percent of sales, compared to $107 million or 10.0 percent of sales

• Current quarter included gains of $35 million, and amortization costs of $17 million related to acquisitions

• Higher revenues were primarily driven by acquisitions and stronger demand for parts and service in North America

• Full year sales $5.2 billion, up 38 percent, EBIT of $491 million compared to $388 million in 2013

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 54,600 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 7,200 dealer locations. Cummins earned $1.65 billion on sales of $19.2 billion in 2014. Press releases can be found on the Web at www.cummins.com. Follow Cummins on Twitter at @Cummins and on YouTube at 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 2015. 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 2013 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.

The following files are available for download:

• PDF

CUMMINS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (a)
			Three months ended
In millions, except per share amounts			December 31, 2014				December 31, 2013
NET SALES			$	5,090			$	4,588
	Cost of sales			3,817				3,451
GROSS MARGIN				1,273				1,137
OPERATING EXPENSES AND INCOME
	Selling, general and administrative expenses			568				473
	Research, development and engineering expenses			187				181
	Equity, royalty and interest income from investees			76				80
	Other operating income (expense), net			(13	)			(10	)
OPERATING INCOME				581				553
	Interest income			6				6
	Interest expense			17				19
	Other income, net			42				7
INCOME BEFORE INCOME TAXES				612				547
	Income tax expense			145				86
CONSOLIDATED NET INCOME				467				461
	Less: Net income attributable to noncontrolling interests			23				29
NET INCOME ATTRIBUTABLE TO CUMMINS INC.			$	444			$	432
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
	Basic		$	2.45			$	2.33
	Diluted		$	2.44			$	2.32
WEIGHTED AVERAGE SHARES OUTSTANDING
	Basic			181.4				185.7
	Diluted			181.9				186.3
CASH DIVIDENDS DECLARED PER COMMON SHARE			$	0.78			$	0.625

 (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)
		Years ended December 31,
In millions, except per share amounts		2014				2013
NET SALES		$	19,221			$	17,301
	Cost of sales		14,360				13,021
GROSS MARGIN			4,861				4,280
OPERATING EXPENSES AND INCOME
	Selling, general and administrative expenses		2,095				1,817
	Research, development and engineering expenses		754				713
	Equity, royalty and interest income from investees		370				361
	Other operating expense, net		(17	)			(10	)
OPERATING INCOME			2,365				2,101
	Interest income		23				27
	Interest expense		64				41
	Other income, net		110				32
INCOME BEFORE INCOME TAXES			2,434				2,119
	Income tax expense		698				531
CONSOLIDATED NET INCOME			1,736				1,588
	Less: Net income attributable to noncontrolling interests		85				105
NET INCOME ATTRIBUTABLE TO CUMMINS INC.		$	1,651			$	1,483
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
	Basic	$	9.04			$	7.93
	Diluted	$	9.02			$	7.91
WEIGHTED AVERAGE SHARES OUTSTANDING
	Basic		182.7				187.0
	Diluted		183.1				187.4
CASH DIVIDENDS DECLARED PER COMMON SHARE		$	2.81			$	2.25

(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)
								December 31,
In millions, except par value								2014			2013
ASSETS
Current assets
	Cash and cash equivalents							$	2,301		$	2,699
	Marketable securities								93			150
		Total cash, cash equivalents and marketable securities							2,394			2,849
	Accounts and notes receivable, net								2,946			2,649
	Inventories								2,866			2,381
	Prepaid expenses and other current assets								849			760
			Total current assets						9,055			8,639
Long-term assets
	Property, plant and equipment, net								3,686			3,156
	Investments and advances related to equity method investees								981			931
	Goodwill and other intangible assets, net								822			818
	Other assets								1,232			1,184
						Total assets		$	15,776		$	14,728
LIABILITIES
Current liabilities
	Loans payable							$	86		$	17
	Accounts payable (principally trade)								1,881			1,557
	Accrued expenses								2,054			1,794
				Total current liabilities					4,021			3,368
Long-term liabilities
	Long-term debt								1,589			1,672
	Other liabilities								2,073			1,818
					Total liabilities				7,683			6,858
EQUITY
Cummins Inc. shareholders' equity
	Common stock, $2.50 par value, 500 shares authorized, 222.3 and 222.3 shares issued								2,139			2,099
	Retained earnings								9,545			8,406
	Treasury stock, at cost, 40.1 and 35.6 shares								(2,844)			(2,195)
	Common stock held by employee benefits trust, at cost, 1.1 and 1.3 shares								(13)			(16)
	Accumulated other comprehensive loss								(1,078)			(784)
			Total Cummins Inc. shareholders' equity						7,749			7,510
Noncontrolling interests									344			360
					Total equity				8,093			7,870
						Total liabilities and equity		$	15,776		$	14,728

 (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)
			Years ended December 31,
In millions			2014			2013
NET CASH PROVIDED BY OPERATING ACTIVITIES			$	2,266		$	2,089
CASH FLOWS FROM INVESTING ACTIVITIES
	Capital expenditures			(743)			(676)
	Investments in internal use software			(55)			(64)
	Investments in and advances to equity investees			(60)			(42)
	Acquisitions of businesses, net of cash acquired			(436)			(147)
	Investments in marketable securities-acquisitions			(275)			(418)
	Investments in marketable securities-liquidations			336			525
	Purchases of other investments			-			(40)
	Cash flows from derivatives not designated as hedges			(14)			1
	Other, net			13			15
Net cash used in investing activities				(1,234)			(846)
CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from borrowings			55			1,004
	Payments on borrowings and capital lease obligations			(94)			(90)
	Distributions to noncontrolling interests			(83)			(75)
	Dividend payments on common stock			(512)			(420)
	Repurchases of common stock			(670)			(381)
	Other, net			(39)			14
Net cash (used in) provided by financing activities				(1,343)			52
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS				(87)			35
Net (decrease) increase in cash and cash equivalents				(398)			1,330
Cash and cash equivalents at beginning of year				2,699			1,369
CASH AND CASH EQUIVALENTS AT END OF PERIOD			$	2,301		$	2,699

(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America.

CUMMINS INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Unaudited)

In millions		Engine				Distribution							Components			Power Generation							Non-segment Items(1)				Total
Three months ended December 31, 2014
External sales		$	1,988			$	1,682						$	970		$	450						$	-			$	5,090
Intersegment sales			851				12							351			310							(1,524	)			-
	Total sales		2,839				1,694							1,321			760							(1,524	)			5,090
Depreciation and amortization(2)			54				28							27			15							-				124
Research, development and engineering expenses			103				2							60			22							-				187
Equity, royalty and interest income from
investees			30				28							9			9							-				76
Interest income			3				2							1			-							-				6
Segment EBIT			315				158			(3	)			160			22			(4	)			(26	)			629
Segment EBIT as a percentage of total sales			11.1	%			9.3	%						12.1	%		2.9	%										12.4	%
Three months ended December 31, 2013
External sales		$	2,131			$	1,065						$	859		$	533						$	-			$	4,588
Intersegment sales			431				8							276			226							(941	)			-
	Total sales		2,562				1,073							1,135			759							(941	)			4,588
Depreciation and amortization(2)			49				14							25			13							-				101
Research, development and engineering expenses			106				2							53			20							-				181
Equity, royalty and interest income from
investees			30				41							7			2							-				80
Interest income			3				1							1			1							-				6
Segment EBIT			235				107							140			46							38				566
Segment EBIT as a percentage of total sales			9.2	%			10.0	%						12.3	%		6.1	%										12.3	%

(1)	Includes intersegment sales and profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended December 31, 2014 and December 31, 2013.
(2)	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."
(3)	Distribution segment EBIT for the three months ended December 31, 2014 included gains of $35 million on the fair value adjustments resulting from the acquisitions of controlling interests in North American distributors.
(4)	Power Generation segment EBIT for the three months ended December 31, 2014, included actions taken to reduce its future cost structure. Costs associated with these actions were $32 million and are primarily related to the closure of a plant in Germany. The charge also included $3 million of targeted actions throughout the business including various headcount reductions to better align capacity with current levels of demand.

CUMMINS INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Unaudited)

In millions		Engine			Distribution			Components			Power Generation			Non-segment Items(1)			Total
Year ended December 31, 2014
External sales		$	8,437		$	5,135		$	3,791		$	1,858		$	-		$	19,221
Intersegment sales			2,525			39			1,327			1,038			(4,929)			-
	Total sales		10,962			5,174			5,118			2,896			(4,929)			19,221
Depreciation and amortization(2)			207			86			106			53			-			452
Research, development and engineering expenses			438			9			230			77			-			754
Equity, royalty and interest income from investees			147			148			36			39			-			370
Interest income			12			4			4			3			-			23
Segment EBIT			1,225			491	(3)		684			168	(4)		(70)			2,498
Segment EBIT as a percentage of total sales			11.2%			9.5%			13.4%			5.8%						13.0%
Year ended December 31, 2013
External sales		$	8,270		$	3,726		$	3,151		$	2,154		$	-		$	17,301
Intersegment sales			1,743			23			1,191			877			(3,834)			-
	Total sales		10,013			3,749			4,342			3,031			(3,834)			17,301
Depreciation and amortization(2)			205			54			96			50			-			405
Research, development and engineering expenses			416			6			218			73			-			713
Equity, royalty and interest income from investees			136			165			28			32			-			361
Interest income			16			2			3			6			-			27
Segment EBIT			1,041			388	(3)		527			218			(14)			2,160
Segment EBIT as a percentage of total sales			10.4%			10.3%			12.1%			7.2%						12.5%

(1)	Includes intersegment sales and profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the years ended December 31, 2014 and December 31, 2013.
(2)	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 were $3 million and $2 million for the years ended December 31, 2014 and 2013, respectively.
(3)	Distribution segment EBIT for the years ended December 31, 2014 and December 31, 2013 included gains of $73 million and $12 million on the fair value adjustments resulting from the acquisitions of controlling interests in North American distributors in each period, respectively.
(4)	Power Generation segment EBIT for the year ended December 31, 2014, included actions taken to reduce its future cost structure. Costs associated with these actions were $32 million and are primarily related to the closure of a plant in Germany. The charge also included $3 million of targeted actions throughout the business including various headcount reductions to better align capacity with current levels of demand.

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						Twelve months ended
In millions		December 31, 2014			December 31, 2013			December 31, 2014			December 31, 2013
Total EBIT		$	629		$	566		$	2,498		$	2,160
Less: Interest expense			17			19			64			41
	Income before income taxes	$	612		$	547		$	2,434		$	2,119

CUMMINS INC. AND SUBSIDIARIES

SELECTED FOOTNOTE DATA

(Unaudited)

NOTE 1. EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES

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

		Three months ended							Years ended
In millions		December 31, 2014				December 31, 2013			December 31, 2014			December 31, 2013
Distribution Entities
North American distributors		$	18			$	31		$	107		$	129
Komatsu Cummins Chile, Ltda.			7				8			29			25
All other distributors			2				-			4			1
Manufacturing Entities
Dongfeng Cummins Engine Company, Ltd.			16				18			67			63
Chongqing Cummins Engine Company, Ltd.			12				14			51			58
Beijing Foton Cummins Engine Co., Ltd. (Light-duty)			4				3			28			17
Beijing Foton Cummins Engine Co., Ltd. (Heavy-duty)			(12)				(7)			(30)			(21)
All other manufacturers			20				4			74			53
	Cummins share of net income		67				71			330			325
Royalty and interest income			9				9			40			36
	Equity, royalty and interest income from investees	$	76			$	80		$	370		$	361

NOTE 2. INCOME TAXES

U.S. tax legislation was passed in the fourth quarter extending the federal research tax credit to 2014. We recorded a $24 million benefit in the fourth quarter related to this legislation.

NOTE 3. ACQUISITIONS
The Distribution segment joint venture acquisitions for the fourth quarter 2014 were as follows:

Entity Acquired		Date of Acquisition		Additional Percent Interest Acquired		Payments to Former Owners			Acquisition Related Debt Retirements			Total Purchase  Consideration			Type of Acquisition (1)		Gain Recognized (1)			Goodwill Acquired			Intangibles Recognized			Net Sales Previous Fiscal Year Ended
Cummins Bridgeway LLC		11/03/14		54 %		$	22		$	45		$	77(3)		COMB		$	13		$	4		$	15		$	331
Cummins Npower LLC		09/29/14		50 %			33			34			73(3)		COMB			15			7			8			374
Cummins Power South LLC		09/29/14		50 %			17			16			35(3)		COMB			7			8			1			239

____________________________________________________
⁽¹⁾ All results from acquired entities were included in Distribution segment results subsequent to the acquisition date. Newly consolidated entities were accounted for as business combinations (COMB) with gains recognized based on the requirement to remeasure our pre-existing ownership to fair value in accordance with GAAP.
⁽²⁾ Purchase accounting for this acquisition is preliminary awaiting customary adjustment to purchase price in accordance with the purchase agreements.
⁽³⁾ The "Total Purchase Consideration" represents the total amount that will or is estimated to be paid to complete the acquisition. In some instances a portion of the acquisition payment has not yet been made and will be paid in future periods in accordance with the purchase contract. The total outstanding consideration as of December 31, 2014 for these entities was $18 million.

CUMMINS INC. AND SUBSIDIARIES

FINANCIAL MEASURES THAT SUPPLEMENT GAAP

(Unaudited)

Net income and diluted earnings per share (EPS) attributable to Cummins Inc. excluding special items

We believe this is a useful measure of our operating performance for the periods presented as it illustrates our operating performance without regard to special items including tax adjustments and plant closing and other actions. This measure is not in accordance with, or an alternative for, accounting principles generally accepted in the United States of America (GAAP) and may not be consistent with measures used by other companies. It should be considered supplemental data. The following table reconciles net income attributable to Cummins Inc. to net income attributable to Cummins Inc. excluding special items for the following periods:

	Three months ended
	December 31, 2014						December 31, 2013
In millions	Net Income			Diluted EPS			Net Income			Diluted EPS
Net income attributable to Cummins Inc.	$	444		$	2.44		$	432		$	2.32
Add
Power Generation segment actions (1)		21			0.12			-			-
Less
Tax items		-			-			70			0.38
Net income attributable to Cummins Inc. excluding special items	$	465		$	2.56		$	362		$	1.94
		Years ended
		December 31, 2014						December 31, 2013
In millions		Net Income			Diluted EPS			Net Income			Diluted EPS
Net income attributable to Cummins Inc.	$	1,651		$	9.02		$	1,483		$	7.91
Add
Power Generation segment actions (1)		21			0.11			-			-
Less
Tax items		-			-			74			0.39
Net income attributable to Cummins Inc. excluding special items	$	1,672		$	9.13		$	1,409		$	7.52
(1) In the fourth quarter of 2014, we recorded a plant closing and initiated other actions totaling $32 million ($21 million after tax).

CUMMINS INC. AND SUBSIDIARIES

FINANCIAL MEASURES THAT SUPPLEMENT GAAP

(Unaudited)

Earnings before interest, taxes, noncontrolling interests and special items

We define EBIT as earnings before interest expense, income tax expense and noncontrolling interests in income of consolidated subsidiaries (EBIT). We use EBIT to assess and measure the performance of our operating segments and also as a component in measuring our variable compensation programs. This measure 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. Below is a reconciliation of EBIT to "Net income attributable to Cummins Inc.," for each of the applicable periods:

				Three months ended								Years ended
In millions				December 31, 2014				December 31, 2013				December 31, 2014				December 31, 2013
Earnings before interest expense, income taxes and special items				$	661			$	566			$	2,530			$	2,160
Earnings before interest expense, income taxes and special items as a percentage of net sales				13.0		%			12.3	%			13.2	%			12.5	%
Less
	Plant closing and other actions			32					-				32				-
Earnings before interest expense and income taxes				$	629			$	566			$	2,498			$	2,160
EBIT as a percentage of net sales				12.4		%			12.3	%			13.0	%			12.5	%
Less
	Interest expense			17					19				64				41
	Income tax expense			145					86				698				531
Consolidated net income				467					461				1,736				1,588
Less
	Net income attributable to noncontrolling interests			23					29				85				105
		Net income attributable to Cummins Inc.		$	444			$	432			$	1,651			$	1,483
Net income attributable to Cummins Inc. as a percentage of net sales				8.7		%			9.4	%			8.6	%			8.6	%

CUMMINS INC. AND SUBSIDIARIES

BUSINESS UNIT SALES DATA

(Unaudited)

Engine segment net sales by market:

2014
In millions			Q1				Q2				Q3				Q4				YTD
Heavy-duty truck			$	722			$	796			$	823			$	798			$	3,139
Medium-duty truck and bus			601					646				631				652				2,530
Light-duty automotive and RV			361					336				354				385				1,436
Industrial			700					757				788				795				3,040
Stationary power			179					209				220				209				817
	Total sales		$	2,563			$	2,744			$	2,816			$	2,839			$	10,962
2013
In millions			Q1					Q2				Q3				Q4				YTD
Heavy-duty truck			$	654			$	723			$	690			$	638			$	2,705
Medium-duty truck and bus			448					595				570				572				2,185
Light-duty automotive and RV			260					345				330				365				1,300
Industrial			714					762				709				811				2,996
Stationary power			227					231				193				176				827
	Total sales		$	2,303			$	2,656			$	2,492			$	2,562			$	10,013

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

2014
Units			Q1			Q2			Q3			Q4			YTD
Midrange			118,900			118,700			117,700			115,900			471,200
Heavy-duty			28,800			30,300			32,300			30,700			122,100
High-horsepower			3,400			3,900			3,900			3,600			14,800
	Total units		151,100			152,900			153,900			150,200			608,100
2013
Units			Q1			Q2			Q3			Q4			YTD
Midrange			94,600			121,900			113,800			115,700			446,000
Heavy-duty			24,900			28,300			26,500			25,700			105,400
High-horsepower			4,200			3,600			3,500			3,500			14,800
	Total units		123,700			153,800			143,800			144,900			566,200

Distribution segment sales by business:

2014
In millions			Q1				Q2				Q3				Q4				YTD
Parts and filtration			$	382			$	461			$	491			$	590			$	1,924
Power generation			193					278				279				413				1,163
Engines			174					249				270				368				1,061
Service			201					250				252				323				1,026
	Total sales		$	950			$	1,238			$	1,292			$	1,694			$	5,174
2013
In millions			Q1					Q2				Q3				Q4				YTD
Parts and filtration			$	322			$	369			$	377			$	397			$	1,465
Power generation			163					241				234				293				931
Engines			152					183				170				208				713
Service			141					161				163				175				640
	Total sales		$	778			$	954			$	944			$	1,073			$	3,749

Component segment sales by business:

2014
In millions			Q1				Q2				Q3				Q4				YTD
Emission Solutions			$	543			$	582			$	598			$	620			$	2,343
Turbo Technologies			313					307				297				305				1,222
Filtration			265					275				268				267				1,075
Fuel systems			109					116				124				129				478
	Total sales		$	1,230			$	1,280			$	1,287			$	1,321			$	5,118
2013
In millions			Q1					Q2				Q3				Q4				YTD
Emission Solutions			$	400			$	444			$	458			$	489			$	1,791
Turbo Technologies			266					294				263				292				1,115
Filtration			255					271				248				254				1,028
Fuel systems			97					108				103				100				408
	Total sales		$	1,018			$	1,117			$	1,072			$	1,135			$	4,342

Power Generation segment sales by business:

2014
In millions			Q1				Q2				Q3				Q4				YTD
Power products			$	373			$	445			$	439			$	412			$	1,669
Power systems				137				141				159				194				631
Alternators				105				126				115				103				449
Power solutions				24				31				41				51				147
	Total sales		$	639			$	743			$	754			$	760			$	2,896
2013
In millions				Q1				Q2				Q3				Q4				YTD
Power products			$	409			$	474			$	421			$	421			$	1,725
Power systems				179				187				122				168				656
Alternators				126				125				126				119				496
Power solutions				32				28				43				51				154
	Total sales		$	746			$	814			$	712			$	759			$	3,031

Carole Casto
Executive Director - Corporate Communications
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