- Fourth quarter revenues of $8.4 billion; GAAP1 Net Income of
$418 million, or 4.9% of sales
- EBITDA in the fourth quarter was 12.1% of sales; Diluted EPS
of $3.02
- Fourth quarter results include $312 million, or $2.14 per
diluted share, of Accelera strategic reorganization actions, of
which $305 million were non-cash charges
- Full year 2024 revenues of $34.1 billion; GAAP1 Net Income
of $3.9 billion, or 11.6% of sales
- EBITDA for full year 2024 was 18.6% of sales; Diluted EPS of
$28.37
- Full year 2025 revenues expected to range from down 2% to up
3%; EBITDA expected to range between 16.2% and 17.2% of
sales
Cummins Inc. (NYSE: CMI) today reported fourth quarter and full
year 2024 results.
“Cummins delivered strong operational results in the fourth
quarter and achieved record full year revenues, net income, EBITDA
and EPS, despite a decline in heavy duty truck demand in North
America,” said Jennifer Rumsey, Chair and CEO of Cummins. “In the
fourth quarter, we recorded charges related to the reorganization
of our Accelera by Cummins segment. The charges were the result of
a strategic review to streamline operations and focus investments,
as the adoption of certain zero-emissions solutions has slowed in
some regions around the world.”
“2024 marked a transformative year for Cummins as we made
significant progress in advancing our Destination Zero strategy and
delivered record results. I am tremendously proud of our employees
for delivering innovative technologies for our customers,
strengthening our position in key markets and achieving our
financial performance targets,” concluded Rumsey.
Fourth quarter 2024 revenues of $8.4 billion decreased 1% from
the same quarter in 2023. Sales in North America were flat while
international revenues decreased 3%.
Net income attributable to Cummins in the fourth quarter was
$418 million, or $3.02 per diluted share, compared to a net loss of
$1.4 billion, or $(10.01) per diluted share, in 2023. The current
quarter results include Accelera reorganization actions of $312
million, or $2.14 per diluted share, which were primarily non-cash
charges. The fourth quarter of 2023 included the recording of a
charge related to the Settlement Agreements of $2.0 billion, or
$13.76 per diluted share; costs related to the voluntary retirement
and separation programs of $42 million, or $0.22 per diluted share;
and costs related to the separation of Atmus of $33 million, or
$0.17 per diluted share. The tax rate in the fourth quarter was
32.8% due primarily to non-deductible costs related to the Accelera
reorganization actions.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) in the fourth quarter were $1.0 billion, or 12.1% of
sales, compared to a loss of $878 million, or negative 10.3% of
sales, a year ago. EBITDA for the fourth quarter of 2024 and the
fourth quarter of 2023 included the costs noted above.
Full year 2024 revenues of $34.1 billion were flat to 2023.
Sales in North America increased 1% and international revenues
decreased 1% compared to 2023. 2023 included a full year of Atmus
Filtration Technologies revenues, whereas 2024 included Atmus until
final separation on March 18.
Net income for the full year 2024 was $3.9 billion, or $28.37
per diluted share, compared to $735 million, or $5.15 per diluted
share, in 2023. 2024 results included the gain related to the
separation of Atmus, net of transaction costs and other expenses,
of $1.3 billion, or $9.28 per diluted share; charges related to
Accelera reorganization actions of $312 million, or $2.12 per
diluted share; and first quarter restructuring expenses of $29
million, or $0.16 per diluted share. Full year 2023 results
included costs related to the Settlement Agreements of $2.0
billion, or $13.78 per diluted share; costs related to the
separation of Atmus of $100 million, or $0.54 per diluted share;
and costs related to the voluntary retirement and separation
programs of $42 million, or $0.22 per diluted share. The tax rate
in 2024 was 17.0%, primarily due to the non-taxable gain on the
separation of Atmus partially offset by non-deductible costs
related to the Accelera reorganization actions.
EBITDA in 2024 was $6.3 billion, or 18.6% of sales, compared to
$3.0 billion, or 8.9% of sales, a year ago. EBITDA for 2024 and
2023 included the gains and costs noted above.
2025 Outlook:
Based on its current forecast, Cummins projects full year 2025
revenue to be in the range of down 2% to up 3%, and EBITDA to be in
the range of 16.2% and 17.2% of sales.
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 2025, we anticipate that demand will be slightly weaker in
the North America on-highway truck markets, particularly in the
first half of the year, but offset by strength in other key
markets. Despite a relatively flat revenue forecast and relative
weakness in the key North America truck markets, we expect to
improve profitability and cash flow. Cummins remains
well-positioned to deliver strong financial performance, invest in
future growth and return cash to shareholders,” said Rumsey.
2024 Highlights:
- Cummins increased its common stock cash dividend for the 15th
straight year and returned a total of $969 million to shareholders
through dividends.
- Cummins finalized the complete separation of Atmus Filtration
Technologies Inc. through a share exchange offer which reduced
Cummins’ shares outstanding by approximately 5.6 million
shares.
- Cummins introduced the Cummins HELM™ engine platforms. Applied
across Cummins’ legendary B, X10 and X15-series engine portfolios,
the HELM platforms provide customers with the option to choose the
fuel type – either advanced diesel or alternate fuels like natural
gas and hydrogen – that best suits their business needs and offers
the power customers expect – while also reducing emissions. In
September, Cummins began full production of the X15N™ natural gas
engine at the Jamestown Engine Plant in New York, which celebrated
its 50th anniversary in 2024.
- Cummins and Isuzu announced the launch of a new 6.7-liter
engine designed for use in Isuzu’s new medium-duty truck lineup
available in Japan and other global markets. 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.
- Accelera™ by Cummins, Daimler Trucks & Buses PACCAR, and
EVE Energy completed the formation of their joint venture, 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 Power Generation introduced four new generator sets to
the award-winning Centum™ Series, two each powered by Cummins’
QSK50 and QSK78 engines. In response to high market demand, these
new models have been engineered specifically for the most critical
applications such as data centers, healthcare facilities and
wastewater treatment plants. These products build on decades of
experience meeting our customers' needs and deliver a step-change
improvement in power density, assured reliability, sustainability
and low emissions.
- Cummins received several prestigious honors recognizing our
focus on our people and our communities. Of note, we were named
industry leader in the Commercial Vehicle and Machinery category
for America’s Most JUST Companies list and a 2024 Handshake Early
Talent Award winner for our role in shaping the workforce of the
future. For the third consecutive year, Morgan Stanley Capital
International (MSCI) awarded Cummins a rating of AAA – the highest
sustainability rating in the industry. Additionally, we were named
a Veteran Friendly Employer by U.S. Veterans Magazine, a Top
Company for Women to Work in Transportation, and ranked in the top
100 on Glassdoor’s Best Places to work in 2024.
1 Generally Accepted Accounting Principles in the U.S.
Fourth quarter 2024 detail (all comparisons to same period in
2023):
Engine Segment
- Sales - $2.7 billion, down 2%
- Segment EBITDA - $367 million, or 13.5% of sales, compared to
$353 million, or 12.7% of sales, which included $12 million of
costs related to the 2023 voluntary retirement and separation
programs.
- Revenues decreased 2% in North America and 3% in international
markets due to softened demand in global heavy-duty truck markets
and lower North America pickup units.
Components Segment
- Sales - $2.6 billion, down 17%
- Segment EBITDA - $361 million, or 13.7% of sales compared to
$406 million, or 12.7% of sales, which included $28 million of
costs related to the separation of Atmus and $9 million of costs
related to the 2023 voluntary retirement and separation
programs.
- Revenues in North America decreased by 12% and international
sales decreased by 24% primarily due to the separation of Atmus and
lower demand in heavy-duty truck markets.
Distribution Segment
- Sales - $3.1 billion, up 13%
- Segment EBITDA - $400 million, or 13.0% of sales, compared to
$269 million, or 9.9% of sales
- Revenues in North America increased 10% and international sales
increased by 19% driven by increased demand for power generation
products, particularly for data center applications, and pricing
actions.
Power Systems Segment
- Sales - $1.7 billion, up 22%
- Segment EBITDA - $314 million, or 18.0% of sales, compared to
$182 million, or 12.7% of sales
- Revenues in North America increased 42% and international sales
increased by 12% driven primarily by increased power generation
demand, particularly for the data center market.
Accelera Segment
- Sales - $100 million, up 23%
- Segment EBITDA loss - $431 million, which includes $312 million
of costs related to strategic reorganization actions.
- Revenues increased due to higher eMobility demand. Beyond the
expenses associated with the strategic reorganization actions,
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 – Engine, Components, 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 https://www.sec.gov or at
https://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 https://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
December 31,
In millions, except per share
amounts
2024
2023
NET SALES
$
8,447
$
8,543
Cost of sales
6,413
6,542
GROSS MARGIN
2,034
2,001
OPERATING EXPENSES AND INCOME
Selling, general and administrative
expenses
801
876
Research, development and engineering
expenses
356
390
Equity, royalty and interest income from
investees
70
113
Other operating expense, net
215
2,060
OPERATING INCOME (LOSS)
732
(1,212
)
Interest expense
89
92
Other income, net
19
74
INCOME (LOSS) BEFORE INCOME
TAXES
662
(1,230
)
Income tax expense
217
163
CONSOLIDATED NET INCOME (LOSS)
445
(1,393
)
Less: Net income attributable to
noncontrolling interests
27
38
NET INCOME (LOSS) ATTRIBUTABLE TO
CUMMINS INC.
$
418
$
(1,431
)
EARNINGS (LOSS) PER COMMON SHARE
ATTRIBUTABLE TO CUMMINS INC.
Basic
$
3.04
$
(10.08
)
Diluted
$
3.02
$
(10.01
)
WEIGHTED-AVERAGE COMMON SHARES
OUTSTANDING
Basic
137.4
141.9
Diluted
138.4
142.9
(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)
Years ended December
31,
In millions, except per share
amounts
2024
2023
NET SALES
$
34,102
$
34,065
Cost of sales
25,663
25,816
GROSS MARGIN
8,439
8,249
OPERATING EXPENSES AND INCOME
Selling, general and administrative
expenses
3,275
3,333
Research, development and engineering
expenses
1,463
1,500
Equity, royalty and interest income from
investees
395
483
Other operating expense, net
346
2,138
OPERATING INCOME
3,750
1,761
Interest expense
370
375
Other income, net
1,523
240
INCOME BEFORE INCOME TAXES
4,903
1,626
Income tax expense
835
786
CONSOLIDATED NET INCOME
4,068
840
Less: Net income attributable to
noncontrolling interests
122
105
NET INCOME ATTRIBUTABLE TO CUMMINS
INC.
$
3,946
$
735
EARNINGS PER COMMON SHARE ATTRIBUTABLE
TO CUMMINS INC.
Basic
$
28.55
$
5.19
Diluted
$
28.37
$
5.15
WEIGHTED-AVERAGE COMMON SHARES
OUTSTANDING
Basic
138.2
141.7
Diluted
139.1
142.7
(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
2024
2023
ASSETS
Current assets
Cash and cash equivalents
$
1,671
$
2,179
Marketable securities
593
562
Total cash, cash equivalents and
marketable securities
2,264
2,741
Accounts and notes receivable, net
5,181
5,583
Inventories
5,742
5,677
Prepaid expenses and other current
assets
1,565
1,197
Total current assets
14,752
15,198
Long-term assets
Property, plant and equipment, net
6,356
6,249
Investments and advances related to equity
method investees
1,889
1,800
Goodwill
2,370
2,499
Other intangible assets, net
2,351
2,519
Pension assets
1,189
1,197
Other assets
2,633
2,543
Total assets
$
31,540
$
32,005
LIABILITIES
Current liabilities
Accounts payable (principally trade)
$
3,951
$
4,260
Loans payable
356
280
Commercial paper
1,259
1,496
Current maturities of long-term debt
660
118
Accrued compensation, benefits and
retirement costs
1,084
1,108
Current portion of accrued product
warranty
679
667
Current portion of deferred revenue
1,347
1,220
Other accrued expenses
1,898
3,754
Total current liabilities
11,234
12,903
Long-term liabilities
Long-term debt
4,784
4,802
Deferred revenue
1,065
966
Other liabilities
3,149
3,430
Total liabilities
$
20,232
$
22,101
EQUITY
Cummins Inc. shareholders’ equity
Common stock, $2.50 par value, 500 shares
authorized, 222.5 and 222.5 shares issued
$
2,636
$
2,564
Retained earnings
20,828
17,851
Treasury stock, at cost, 85.1 and 80.7
shares
(10,748
)
(9,359
)
Accumulated other comprehensive loss
(2,445
)
(2,206
)
Total Cummins Inc. shareholders’
equity
10,271
8,850
Noncontrolling interests
1,037
1,054
Total equity
$
11,308
$
9,904
Total liabilities and equity
$
31,540
$
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
December 31,
In millions
2024
2023
NET CASH PROVIDED BY OPERATING
ACTIVITIES
$
1,422
$
1,459
CASH FLOWS FROM INVESTING
ACTIVITIES
Capital expenditures
(540
)
(519
)
Investments in and net advances to equity
investees
(81
)
(10
)
Acquisition of businesses, net of cash
acquired
—
(165
)
Investments in marketable
securities—acquisitions
(438
)
(433
)
Investments in marketable
securities—liquidations
347
332
Other, net
(1
)
12
Net cash used in investing activities
(713
)
(783
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from borrowings
97
82
Net payments of commercial paper
(377
)
(213
)
Payments on borrowings and finance lease
obligations
(182
)
(745
)
Dividend payments on common stock
(250
)
(238
)
Payments for purchase of redeemable
noncontrolling interests
(50
)
—
Other, net
25
6
Net cash used in financing activities
(737
)
(1,108
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS
(34
)
(1
)
Net decrease in cash and cash
equivalents
(62
)
(433
)
Cash and cash equivalents at beginning of
period
1,733
2,612
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
$
1,671
$
2,179
(a) Prepared on an unaudited basis in
accordance with accounting principles generally accepted in the
United States of America.
Years ended December
31,
In millions
2024
2023
NET CASH PROVIDED BY OPERATING
ACTIVITIES
$
1,487
$
3,966
CASH FLOWS FROM INVESTING
ACTIVITIES
Capital expenditures
(1,208
)
(1,213
)
Investments in and net advances (to) from
equity investees
(214
)
14
Acquisition of businesses, net of cash
acquired
(58
)
(292
)
Investments in marketable
securities—acquisitions
(1,500
)
(1,409
)
Investments in marketable
securities—liquidations
1,460
1,334
Cash associated with Atmus divestiture
(174
)
—
Other, net
(88
)
(77
)
Net cash used in investing activities
(1,782
)
(1,643
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from borrowings
2,720
861
Net payments of commercial paper
(237
)
(779
)
Payments on borrowings and finance lease
obligations
(1,568
)
(1,136
)
Dividend payments on common stock
(969
)
(921
)
Payments for purchase of redeemable
noncontrolling interests
(50
)
(175
)
Other, net
(69
)
(27
)
Net cash used in financing activities
(173
)
(2,177
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS
(40
)
(68
)
Net (decrease) increase in cash and cash
equivalents
(508
)
78
Cash and cash equivalents at beginning of
year
2,179
2,101
CASH AND CASH EQUIVALENTS AT END OF
PERIOD
$
1,671
$
2,179
(a) Prepared on an unaudited basis in
accordance with accounting principles generally accepted in the
United States of America.
CUMMINS INC. AND
SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
In millions
Engine
Components
Distribution
Power Systems
Accelera
Total Segments
Intersegment Eliminations
(1)
Total
Three months ended December 31,
2024
External sales
$
2,064
$
2,247
$
3,060
$
992
$
84
$
8,447
$
—
$
8,447
Intersegment sales
656
394
8
751
16
1,825
(1,825
)
—
Total sales
2,720
2,641
3,068
1,743
100
10,272
(1,825
)
8,447
Research, development and engineering
expenses
148
78
14
56
60
(2)
356
—
356
Equity, royalty and interest income (loss)
from investees
54
13
17
14
(28
)
(2)
70
—
70
Interest income
1
4
8
—
1
14
—
14
EBITDA (3)
367
361
400
314
(431
)
(2)
1,011
9
1,020
Depreciation and amortization (4)
64
126
31
32
16
269
—
269
EBITDA as a percentage of segment
sales
13.5
%
13.7
%
13.0
%
18.0
%
NM
9.8
%
12.1
%
Three months ended December 31,
2023
External sales
$
2,123
$
2,784
$
2,705
$
854
$
77
$
8,543
$
—
$
8,543
Intersegment sales
656
407
8
575
4
1,650
(1,650
)
—
Total sales
2,779
3,191
2,713
1,429
81
10,193
(1,650
)
8,543
Research, development and engineering
expenses
173
100
14
48
53
388
2
390
Equity, royalty and interest income (loss)
from investees
53
26
27
11
(4
)
113
—
113
Interest income
5
10
10
2
1
28
—
28
EBITDA (3)
353
406
(5)
269
182
(121
)
1,089
(1,967
)
(878
)
Depreciation and amortization (4)
59
123
31
31
16
260
—
260
EBITDA as a percentage of segment
sales
12.7
%
12.7
%
9.9
%
12.7
%
NM
10.7
%
(10.3
)%
"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 December 31, 2024. The three months
ended December 31, 2023, included $2.0 billion related to the
Settlement Agreements, $21 million of voluntary separation and
retirement program charges related to corporate functions and $5
million of costs associated with divestiture of Atmus Filtration
Technologies (Atmus).
(2) Included $2 million of charges in
research and development expenses, $17 million of charges in
equity, royalty and interest income (loss) from investees and $312
million of charges in EBITDA, all related to Accelera strategic
reorganization actions in the fourth quarter of 2024. See footnote
below for additional information.
(3) 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.
(4) Depreciation and amortization, as
shown on a segment basis, excludes the amortization of debt
discount and deferred costs included in our Condensed Consolidated
Statements of Net Income as interest expense. A portion of
depreciation expense is included in research, development and
engineering expenses.
(5) Included $28 million of costs
associated with the divestiture of Atmus for the three months ended
December 31, 2023.
CUMMINS INC. AND
SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
In millions
Engine
Components
Distribution
Power Systems
Accelera
Total Segments
Intersegment Eliminations
(1)
Total
Year ended December 31, 2024
External sales
$
8,987
$
9,894
$
11,352
$
3,500
$
369
$
34,102
$
—
$
34,102
Intersegment sales
2,725
1,785
32
2,908
45
7,495
(7,495
)
—
Total sales
11,712
11,679
11,384
6,408
414
41,597
(7,495
)
34,102
Research, development and engineering
expenses
616
328
55
236
226
(2)
1,461
2
1,463
Equity, royalty and interest income (loss)
from investees
212
64
90
79
(50
)
(2)
395
—
395
Interest income
17
25
37
7
1
87
—
87
EBITDA (3)
1,653
1,591
(4)
1,378
1,180
(764
)
(2)
5,038
1,288
6,326
Depreciation and amortization (5)
245
493
123
131
61
1,053
—
1,053
EBITDA as a percentage of total sales
14.1
%
13.6
%
12.1
%
18.4
%
NM
12.1
%
18.6
%
Year ended December 31, 2023
External sales
$
8,874
$
11,531
$
10,199
$
3,125
$
336
$
34,065
$
—
$
34,065
Intersegment sales
2,810
1,878
50
2,548
18
7,304
(7,304
)
—
Total sales
11,684
13,409
10,249
5,673
354
41,369
(7,304
)
34,065
Research, development and engineering
expenses
614
387
57
237
203
1,498
2
1,500
Equity, royalty and interest income (loss)
from investees
251
97
97
53
(15
)
483
—
483
Interest income
19
31
34
9
2
95
—
95
EBITDA (3)
1,630
1,840
(4)
1,209
836
(443
)
5,072
(2,055
)
3,017
Depreciation and amortization (5)
225
491
115
122
63
1,016
—
1,016
EBITDA as a percentage of total sales
14.0
%
13.7
%
11.8
%
14.7
%
NM
12.3
%
8.9
%
"NM" - not meaningful information
(1) Included intersegment sales,
intersegment profit in inventory and unallocated corporate
expenses. The year ended December 31, 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 year ended December
31, 2023, included $2.0 billion related to the Settlement
Agreements, $22 million of costs associated with divestiture of
Atmus and $21 million of voluntary separation and retirement
program charges related to corporate functions.
(2) Included $2 million of charges in
research and development expenses, $17 million of charges in
equity, royalty and interest income (loss) from investees and $312
million of charges in EBITDA, all related to Accelera strategic
reorganization actions in the fourth quarter of 2024. See footnote
below for additional information.
(3) 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.
(4) Included $21 million and $78 million
of costs associated with the divestiture of Atmus for the year
ended December 31, 2024 and 2023, respectively.
(5) 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 $12 million and $8 million for
the year ended December 31, 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
Years ended December
31,
In millions
2024
2023
2024
2023
Manufacturing entities
Dongfeng Cummins Engine Company, Ltd.
$
15
$
13
$
66
$
65
Beijing Foton Cummins Engine Co., Ltd.
13
14
42
47
Chongqing Cummins Engine Company, Ltd.
9
7
60
36
Tata Cummins, Ltd.
9
8
31
29
All other manufacturers
(16
)
(1)
22
25
(1)
91
Distribution entities
Komatsu Cummins Chile, Ltda.
13
15
55
55
All other distributors
7
6
17
16
Cummins share of net income
50
85
296
339
Royalty and interest income
20
28
99
144
Equity, royalty and interest income from
investees
$
70
$
113
$
395
$
483
(1) Included $17 million of charges in
equity, royalty and interest income (loss) from investees related
to the Accelera strategic reorganization actions in the fourth
quarter of 2024. See footnote below for additional information.
ACCELERA STRATEGIC REORGANIZATION ACTIONS
In the fourth quarter of 2024, our Accelera segment underwent a
strategic review to better streamline operations as well as pace
and re-focus investments on the most promising paths as the
adoption of certain zero emission solutions slows. This review
resulted in decisions to consolidate certain manufacturing efforts,
focus internal development efforts towards areas of differentiation
while continuing to leverage partners and reduce our investments in
certain technologies, joint ventures and markets. In addition,
declining customer demand in certain key product lines caused us to
re-evaluate the recoverability of certain inventory items. As a
result of these actions, we recorded several non-cash charges in
the fourth quarter related to inventory write-downs, intangible and
fixed asset impairments and joint venture impairments. We also
recorded severance of approximately $7 million. The following table
presents the impact of asset write-downs and impairments on our
Condensed Consolidated Statements of Net Income:
Year ended
In millions
December 31,
2024
Statement of Net Income
Location
Inventory write-downs
$
107
Cost of sales
Impairment of other intangible assets
84
Other operating expense, net
Impairment of property, plant and
equipment
61
Other operating expense, net
Impairment of investments in equity method
investees
17
Equity, royalty and interest income from
investees
Severance
7
Cost of sales and research, development
and engineering expenses
Other
36
Other operating expense, net and selling,
general and administrative expenses
Total
$
312
The majority of the $305 million non-cash charge is reflected in
net cash provided by operating activities, as a change in inventory
of $107 million and other, net of $171 million. Of the total
charges, approximately $243 million occurred in jurisdictions where
we receive no tax benefits because of valuation allowances,
resulting in a $50 million unfavorable discrete tax item. In
addition, these actions were considered a triggering event under
GAAP which required us to perform an interim impairment test of our
fuel cell and electrolyzer reporting unit. The results of this
testing indicated that goodwill of this reporting unit was not
impaired.
INCOME TAXES
Our effective tax rate for 2025, excluding discrete items, is
expected to approximate 24.5 percent.
Our effective tax rates for the three and twelve months ended
December 31, 2024, were 32.8 percent and 17.0 percent,
respectively. Our effective tax rates for the three and twelve
months ended December 31, 2023, were negative 13.3 percent and 48.3
percent, respectively.
The three months ended December 31, 2024, contained net
unfavorable discrete tax items of $7 million, or $0.05 per diluted
share, primarily due to $50 million of unfavorable adjustments
related to Accelera strategic reorganization actions, partially
offset by $34 million of favorable return to provision adjustments
and net $9 million of other favorable adjustments.
The year ended December 31, 2024, contained net favorable
discrete tax items primarily due to the $1.3 billion non-taxable
gain on the Atmus split-off. Other discrete tax items were net
favorable by $59 million, or $0.42 per diluted share, primarily due
to $52 million of favorable return to provision adjustments, $22
million of favorable share-based compensation tax benefits, $21
million of favorable adjustments related to audit settlements and
$20 million of favorable adjustments from tax return amendments,
partially offset by $50 million of unfavorable adjustments related
to Accelera strategic reorganization actions and a net $6 million
of other unfavorable adjustments.
The three months ended December 31, 2023, contained net
unfavorable discrete tax items of $402 million, primarily due to
$398 million related to the $2.0 billion charge from the Settlement
Agreements and $4 million of net unfavorable other discrete
items.
The year ended December 31, 2023, contained unfavorable net
discrete items of $397 million, primarily due to $398 million in
the fourth quarter related to the $2.0 billion charge from the
Settlement Agreements, $22 million of unfavorable adjustments for
uncertain tax positions and $3 million of net unfavorable other
discrete tax items, partially offset by $21 million of favorable
return to provision adjustments and $5 million of favorable
share-based compensation tax benefits.
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 the related costs for the divestiture of
Atmus, costs associated with the Accelera strategic reorganization
actions, the Settlement Agreements, voluntary retirement and
voluntary separation programs 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 December
31,
Years ended December
31,
In millions
2024
2023
2024
2023
Net income (loss) attributable to Cummins
Inc.
$
418
$
(1,431
)
$
3,946
$
735
Net income (loss) attributable to Cummins
Inc., as a percentage of net sales
4.9
%
(16.8
)%
11.6
%
2.2
%
Add:
Net income attributable to noncontrolling
interests
27
38
122
105
Consolidated net income (loss)
445
(1,393
)
4,068
840
Add:
Interest expense
89
92
370
375
Income tax expense
217
163
835
786
Depreciation and amortization
269
260
1,053
1,016
EBITDA
$
1,020
$
(878
)
$
6,326
$
3,017
EBITDA, as a percentage of net sales
12.1
%
(10.3
)%
18.6
%
8.9
%
Less:
Gain related to the divestiture of
Atmus
—
—
1,333
—
Add:
Accelera strategic reorganization
actions
312
—
312
—
Settlement Agreements
—
2,036
—
2,036
Voluntary retirement and voluntary
separation programs
—
42
—
42
Atmus divestiture costs
—
33
35
100
Restructuring actions
—
—
29
—
EBITDA, excluding the impact of the gain
recognized and the related costs for the divestiture of Atmus,
costs associated with the Accelera strategic reorganization
actions, the Settlement Agreements, voluntary retirement and
voluntary separation programs and restructuring actions
$
1,332
$
1,233
$
5,369
$
5,195
EBITDA, excluding the impact of the gain
recognized and the related costs for the divestiture of Atmus,
costs associated with the Accelera strategic reorganization
actions, the Settlement Agreements, voluntary retirement and
voluntary separation programs and restructuring actions, as a
percentage of net sales
15.8
%
14.4
%
15.7
%
15.3
%
CUMMINS INC. AND
SUBSIDIARIES
SEGMENT SALES DATA
(Unaudited)
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
$
980
$
4,244
Medium-duty truck and bus
995
1,074
1,073
1,024
4,166
Light-duty automotive
438
461
395
301
1,595
Off-highway
436
432
424
415
1,707
Total sales
$
2,928
$
3,151
$
2,913
$
2,720
$
11,712
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
29,400
132,900
Medium-duty
75,800
79,600
79,200
75,700
310,300
Light-duty
54,800
57,200
41,400
36,000
189,400
Total units
164,200
174,300
153,000
141,100
632,600
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
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
$
1,114
$
4,733
Emission solutions
971
941
864
825
3,601
Components and software
611
623
581
589
2,404
Atmus (1)
353
—
—
—
353
Automated transmissions
165
162
148
113
588
Total sales
$
3,332
$
2,982
$
2,724
$
2,641
$
11,679
(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
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
$
985
$
3,980
Power generation
707
954
1,091
1,220
3,972
Engines
421
437
402
419
1,679
Service
406
448
455
444
1,753
Total sales
$
2,535
$
2,829
$
2,952
$
3,068
$
11,384
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
$
1,090
$
3,985
Industrial
420
478
508
526
1,932
Generator technologies
116
124
124
127
491
Total sales
$
1,389
$
1,589
$
1,687
$
1,743
$
6,408
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
3,200
12,800
Industrial
1,300
1,500
1,700
1,700
6,200
Total units
4,300
5,200
4,600
4,900
19,000
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/20250204545887/en/
Melinda Koski External Communications 812-377-0500
melinda.koski@cummins.com
Cummins (NYSE:CMI)
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Cummins (NYSE:CMI)
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