CUMMINS INCCMI
CUMMINS INC Segments Disclosure
NOTE 24. REPORTABLE SEGMENTS
Reportable segments under GAAP are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (CODM), or decision-making group, in deciding how to allocate resources and in assessing performance. Our CODM is the Chief Executive Officer.
Our reportable segments consist of Engine, Components, Distribution, Power Systems and Accelera. This reporting structure is organized according to the products and markets each segment serves. The Engine segment produces engines (15 liters and smaller) and associated parts for sale to customers in on-highway and various off-highway markets. Our engines are used in trucks of all sizes, buses and recreational vehicles, as well as in various industrial applications, including construction, agriculture, power generation systems and other off-highway applications. The Components segment sells axles, drivelines, brakes and suspension systems for commercial diesel and natural gas applications, aftertreatment systems, turbochargers, fuel systems, valvetrain technologies, automated transmissions and electronics. The Distribution segment includes wholly-owned and partially-owned distributorships engaged in wholesaling engines, generator sets and service parts, as well as performing service and repair activities on our products, maintaining relationships with various OEMs throughout the world and providing selected sales and aftermarket support for our Accelera business. The Power Systems segment is an integrated power provider, which designs, manufactures and sells standby and prime power generators, engines (16 liters and larger) for standby and prime power generator sets and industrial applications (including mining, oil and gas, marine, rail and defense), alternators and other power components. The Accelera segment designs, manufactures, sells and supports electrified power systems with innovative components and subsystems, including battery and electric powertrain technologies. The Accelera segment is currently in the early stages of commercializing these technologies with efforts primarily focused on the development of electrified power systems and related components and subsystems. We continue to serve all our markets as they adopt electrification, meeting the needs of our OEM partners and end customers.
Our CODM uses segment EBITDA as the basis to evaluate the performance of each of our reportable segments. EBITDA provides our CODM with a full picture of the profitability of a segment to drive decisions and resource allocation. EBITDA is used as the key profitability measure when we set our annual operating plan, is the metric with which our CODM assesses results and is a key component of our annual variable compensation plans. Segment amounts exclude certain expenses not specifically identifiable to segments.
The accounting policies of our reportable segments are the same as those applied in our Consolidated Financial Statements. We prepared the financial results of our reportable segments on a basis that is consistent with the manner in which we internally disaggregate financial information to assist in making internal operating decisions. We allocate certain common costs and expenses, primarily corporate functions, among segments differently than we would for stand-alone financial information prepared in accordance with GAAP. These include certain costs and expenses of shared services, such as IT, human resources, legal, finance and supply chain management. We do not allocate gains or losses of corporate-owned life insurance and the gain and certain costs related to the divestiture of Atmus. EBITDA may not be consistent with measures used by other companies.
Summarized financial information regarding our reportable segments at December 31, is shown in the table below:
| In millions | Engine | Components | Distribution | Power Systems | Accelera | Total Segments | ||||||||||||||||||||||||||||||||
| 2025 | ||||||||||||||||||||||||||||||||||||||
| External sales | $ | 8,104 | $ | 8,643 | $ | 12,386 | $ | 4,114 | $ | 423 | $ | 33,670 | ||||||||||||||||||||||||||
| Intersegment sales | 2,771 | 1,506 | 19 | 3,349 | 37 | 7,682 | ||||||||||||||||||||||||||||||||
| Total sales | 10,875 | 10,149 | 12,405 | 7,463 | 460 | 41,352 | ||||||||||||||||||||||||||||||||
| Cost of goods sold (excluding warranty expenses) | 8,260 | 8,138 | 9,842 | 5,081 | 701 | (1) | 32,022 | |||||||||||||||||||||||||||||||
| Warranty expenses | 408 | 120 | 23 | 126 | 95 | 772 | ||||||||||||||||||||||||||||||||
| Selling expenses | 231 | 163 | 613 | 170 | 29 | (1) | 1,206 | |||||||||||||||||||||||||||||||
| Administrative expenses | 570 | 505 | 365 | 410 | 69 | (1) | 1,919 | |||||||||||||||||||||||||||||||
| Research, development and engineering expenses | 624 | 280 | 53 | 253 | 186 | (1) | 1,396 | |||||||||||||||||||||||||||||||
| Equity, royalty and interest income (loss) from investees | 254 | 31 | 105 | 109 | (30) | 469 | ||||||||||||||||||||||||||||||||
Other income (expense) (2) | 70 | (72) | 65 | 22 | (298) | (1) | (213) | |||||||||||||||||||||||||||||||
Add back: Depreciation and amortization (3) | 276 | 496 | 129 | 140 | 52 | 1,093 | ||||||||||||||||||||||||||||||||
| Segment EBITDA | $ | 1,382 | $ | 1,398 | $ | 1,808 | $ | 1,694 | $ | (896) | (1) | $ | 5,386 | |||||||||||||||||||||||||
Interest income (4) | $ | 37 | $ | 29 | $ | 23 | $ | 16 | $ | 1 | $ | 106 | ||||||||||||||||||||||||||
| Net assets | 2,520 | 6,820 | 3,602 | 2,695 | 944 | 16,581 | ||||||||||||||||||||||||||||||||
| Investments and advances to equity investees | 697 | 494 | 409 | 168 | 359 | 2,127 | ||||||||||||||||||||||||||||||||
| Capital expenditures | 518 | 336 | 127 | 222 | 32 | 1,235 | ||||||||||||||||||||||||||||||||
| 2024 | ||||||||||||||||||||||||||||||||||||||
| External sales | $ | 8,987 | $ | 9,894 | $ | 11,352 | $ | 3,500 | $ | 369 | $ | 34,102 | ||||||||||||||||||||||||||
| Intersegment sales | 2,725 | 1,785 | 32 | 2,908 | 45 | 7,495 | ||||||||||||||||||||||||||||||||
| Total sales | 11,712 | 11,679 | 11,384 | 6,408 | 414 | 41,597 | ||||||||||||||||||||||||||||||||
| Cost of goods sold (excluding warranty expenses) | 8,707 | 9,346 | 9,185 | 4,506 | 643 | (5) | 32,387 | |||||||||||||||||||||||||||||||
| Warranty expenses | 420 | 173 | 23 | 101 | 34 | 751 | ||||||||||||||||||||||||||||||||
| Selling expenses | 214 | 184 | 628 | 174 | 33 | (5) | 1,233 | |||||||||||||||||||||||||||||||
| Administrative expenses | 582 | 555 | 382 | 421 | 70 | (5) | 2,010 | |||||||||||||||||||||||||||||||
| Research, development and engineering expenses | 616 | 328 | 55 | 236 | 226 | (5) | 1,461 | |||||||||||||||||||||||||||||||
| Equity, royalty and interest income (loss) from investees | 212 | 64 | 90 | 79 | (50) | (5) | 395 | |||||||||||||||||||||||||||||||
Other income (expense) (2) | 23 | (59) | 54 | — | (183) | (5) | (165) | |||||||||||||||||||||||||||||||
Add back: Depreciation and amortization (3) | 245 | 493 | 123 | 131 | 61 | 1,053 | ||||||||||||||||||||||||||||||||
| Segment EBITDA | $ | 1,653 | $ | 1,591 | (6) | $ | 1,378 | $ | 1,180 | $ | (764) | (5) | $ | 5,038 | ||||||||||||||||||||||||
Interest income (4) | $ | 17 | $ | 25 | $ | 37 | $ | 7 | $ | 1 | $ | 87 | ||||||||||||||||||||||||||
| Net assets | 2,076 | 6,433 | 3,151 | 2,350 | 1,234 | 15,244 | ||||||||||||||||||||||||||||||||
| Investments and advances to equity investees | 653 | 504 | 394 | 145 | 187 | 1,883 | ||||||||||||||||||||||||||||||||
| Capital expenditures | 556 | 339 | 111 | 143 | 59 | 1,208 | ||||||||||||||||||||||||||||||||
| (Table continues on next page) | ||||||||||||||||||||||||||||||||||||||
| In millions | Engine | Components | Distribution | Power Systems | Accelera | Total Segments | ||||||||||||||||||||||||||||||||
| 2023 | ||||||||||||||||||||||||||||||||||||||
| External sales | $ | 8,874 | $ | 11,531 | $ | 10,199 | $ | 3,125 | $ | 336 | $ | 34,065 | ||||||||||||||||||||||||||
| Intersegment sales | 2,810 | 1,878 | 50 | 2,548 | 18 | 7,304 | ||||||||||||||||||||||||||||||||
| Total sales | 11,684 | 13,409 | 10,249 | 5,673 | 354 | 41,369 | ||||||||||||||||||||||||||||||||
| Cost of goods sold (excluding warranty expenses) | 8,825 | 10,717 | 8,239 | 4,173 | 524 | 32,478 | ||||||||||||||||||||||||||||||||
| Warranty expenses | 377 | 138 | 16 | 71 | 29 | 631 | ||||||||||||||||||||||||||||||||
| Selling expenses | 199 | 227 | 642 | 168 | 33 | 1,269 | ||||||||||||||||||||||||||||||||
| Administrative expenses | 587 | 634 | 354 | 399 | 57 | 2,031 | ||||||||||||||||||||||||||||||||
| Research, development and engineering expenses | 614 | 387 | 57 | 237 | 203 | 1,498 | ||||||||||||||||||||||||||||||||
| Equity, royalty and interest income (loss) from investees | 251 | 97 | 97 | 53 | (15) | 483 | ||||||||||||||||||||||||||||||||
Other income (expense) (2) | 72 | (54) | 56 | 36 | 1 | 111 | ||||||||||||||||||||||||||||||||
Add back: Depreciation and amortization (3) | 225 | 491 | 115 | 122 | 63 | 1,016 | ||||||||||||||||||||||||||||||||
| Segment EBITDA | $ | 1,630 | $ | 1,840 | (7) | $ | 1,209 | $ | 836 | $ | (443) | $ | 5,072 | |||||||||||||||||||||||||
Interest income (4) | $ | 19 | $ | 31 | $ | 34 | $ | 9 | $ | 2 | $ | 95 | ||||||||||||||||||||||||||
| Net assets | 930 | 6,965 | 2,348 | 1,938 | 1,159 | 13,340 | ||||||||||||||||||||||||||||||||
| Investments and advances to equity investees | 660 | 582 | 396 | 132 | 25 | 1,795 | ||||||||||||||||||||||||||||||||
| Capital expenditures | 538 | 373 | 103 | 115 | 84 | 1,213 | ||||||||||||||||||||||||||||||||
(1) Included $157 million of charges in cost of goods sold, $2 million of charges in selling, general and administrative expenses, $7 million of charges in research, development and engineering expenses, $292 million of charges in other operating expenses and $458 million of charges in EBITDA, all related to Accelera actions in 2025. See NOTE 22, “ACCELERA ACTIONS,” for additional information. | ||||||||||||||||||||||||||||||||||||||
(2) Other income (expense) includes other operating expense, net and other income, net from our Consolidated Statements of Net Income. | ||||||||||||||||||||||||||||||||||||||
(3) Depreciation and amortization are not considered significant segment expenses but are presented here to reconcile to EBITDA, the measure used by our CODM. Depreciation and amortization, as shown on a segment basis, excludes the amortization of debt discount and deferred costs included in our Consolidated Statements of Net Income as interest expense. The amortization of debt discount and deferred costs were $12 million, $12 million and $8 million for the years ended 2025, 2024 and 2023, respectively. A portion of depreciation expense is included in research, development and engineering expense. | ||||||||||||||||||||||||||||||||||||||
(4) Interest income is a component of other income (expense). | ||||||||||||||||||||||||||||||||||||||
(5) Included $112 million of charges in cost of sales, $10 million of charges in selling, general and administrative expenses, $2 million of charges in research, development and engineering expenses, $17 million of charges in equity, royalty and interest income (loss) from investees, $171 million of charges in other operating expenses and $312 million of charges in EBITDA, all related to Accelera strategic reorganization actions in the fourth quarter of 2024. See NOTE 22, “ACCELERA ACTIONS,” for additional information. | ||||||||||||||||||||||||||||||||||||||
(6) Included $21 million of costs associated with the divestiture of Atmus for the year ended December 31, 2024. | ||||||||||||||||||||||||||||||||||||||
(7) Included $78 million of costs associated with the divestiture of Atmus for the year ended December 31, 2023. | ||||||||||||||||||||||||||||||||||||||
A reconciliation of our segment information to the corresponding amounts in our Consolidated Statements of Net Income is shown in the table below:
| Years ended December 31, | ||||||||||||||||||||
| In millions | 2025 | 2024 | 2023 | |||||||||||||||||
| TOTAL SEGMENT EBITDA | $ | 5,386 | $ | 5,038 | $ | 5,072 | ||||||||||||||
Intersegment eliminations and other (1) | (1) | 1,288 | (2,055) | |||||||||||||||||
| Less: | ||||||||||||||||||||
| Interest expense | 329 | 370 | 375 | |||||||||||||||||
| Depreciation and amortization | 1,093 | 1,053 | 1,016 | |||||||||||||||||
| INCOME BEFORE INCOME TAXES | $ | 3,963 | $ | 4,903 | $ | 1,626 | ||||||||||||||
(1) Intersegment eliminations and other included a $1.3 billion gain related to the divestiture of Atmus and $14 million of costs associated with the divestiture of Atmus for the year ended December 31, 2024. The year ended December 31, 2023, included $2.0 billion related to the Settlement Agreements charge, $22 million of costs associated with the divestiture of Atmus and $21 million of voluntary retirement and voluntary separation charges. See NOTE 14, “COMMITMENTS AND CONTINGENCIES,” and NOTE 21, “ATMUS DIVESTITURE,” for additional information. | ||||||||||||||||||||
A reconciliation of our segment net assets to the corresponding amounts in the Consolidated Balance Sheets is shown in the table below:
| December 31, | ||||||||||||||
| In millions | 2025 | 2024 | ||||||||||||
| Net assets for reportable segments | $ | 16,581 | $ | 15,244 | ||||||||||
| Cash, cash equivalents and marketable securities | 3,609 | 2,264 | ||||||||||||
Net liabilities deducted in arriving at net segment assets (1) | 12,597 | 12,556 | ||||||||||||
| Pension and OPEB adjustments excluded from net segment assets | 136 | 352 | ||||||||||||
| Deferred tax assets not allocated to segments | 1,063 | 1,119 | ||||||||||||
| Deferred debt costs not allocated to segments | 6 | 5 | ||||||||||||
| Total assets | $ | 33,992 | $ | 31,540 | ||||||||||
(1) Liabilities deducted in arriving at net segment assets include certain accounts payable, accrued expenses, long-term liabilities and other items. | ||||||||||||||
See NOTE 2, “REVENUE FROM CONTRACTS WITH CUSTOMERS,” for segment net sales by country.
Long-lived assets include property, plant and equipment, net of depreciation, investments and advances to equity investees and other assets, excluding deferred tax assets, refundable taxes and deferred debt expenses. Long-lived segment assets by country were as follows:
| December 31, | ||||||||||||||
| In millions | 2025 | 2024 | ||||||||||||
| United States | $ | 6,317 | $ | 5,751 | ||||||||||
| China | 1,010 | 968 | ||||||||||||
| India | 598 | 566 | ||||||||||||
| United Kingdom | 580 | 494 | ||||||||||||
| Other countries | 2,054 | 1,932 | ||||||||||||
| Total long-lived assets | $ | 10,559 | $ | 9,711 | ||||||||||
Our largest customer is PACCAR, Inc. Worldwide sales to this customer were approximately $4.4 billion, $5.4 billion and $5.5 billion for the years ended December 31, 2025, 2024 and 2023, representing 13 percent, 16 percent and 16 percent, respectively, of our consolidated net sales. No other customer accounted for more than 10 percent of consolidated net sales.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 10, 2026 | Showing above |
| 2024 | Feb 11, 2025 | |
| 2023 | Feb 12, 2024 | |
| 2022 | Feb 14, 2023 | |
| 2021 | Feb 8, 2022 | |
| 2020 | Feb 10, 2021 | |
| 2019 | Feb 11, 2020 | |
| 2018 | Feb 11, 2019 | |
| 2017 | Feb 14, 2018 | |
| 2016 | Feb 13, 2017 | |
| 2015 | Feb 12, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.