CMI Cummins Inc

• Second quarter revenues of $5.0 billion, EBIT of 14.4 percent of sales
• Full year revenue expected to grow between 2 and 4 percent and EBIT to be in the range of 13.5 to 14.0 percent of sales

Cummins Inc. (NYSE: CMI) today reported results for the second quarter of 2015. Second quarter revenue of $5.0 billion increased 4 percent from the same quarter in 2014. The increase year-over-year was driven by stronger demand in on-highway markets and distributor acquisitions in North America. Currency negatively impacted revenues by 4 percent compared to last year, primarily due to a stronger US dollar.

Revenues in North America increased 12 percent while international sales declined by 6 percent. Within international markets, sales in Brazil fell the most due to the weak economy.

Earnings before interest and taxes (EBIT) increased to $721 million for the second quarter or 14.4 percent of sales, up from $657 million or 13.6 percent of sales a year ago.

Net income attributable to Cummins grew 6 percent in the second quarter to $471 million ($2.62 per diluted share), compared to $446 million ($2.43 per diluted share) in the second quarter of 2014. The tax rate in the second quarter of 2015, including discrete items, was 29.5 percent.

“We delivered strong results in the second quarter, despite challenging economic conditions in a number of international markets, and we increased cash returned to shareholders,” said Cummins Chairman and CEO Tom Linebarger. “Earnings improved as a result of good performance by our manufacturing and supply chain organizations and solid execution on material cost reduction initiatives. We returned $517 million to shareholders in the form of dividends and share repurchases in the second quarter and we recently announced a 25 percent increase in our quarterly dividend.”

Based on the current forecast, Cummins expects full year 2015 revenues to grow between 2 and 4 percent, and EBIT to be in the range of 13.5 to 14.0 percent of sales.

Other recent highlights:

• For the ninth consecutive year, Cummins was named one of the Top 50 Companies for Diversity by Diversity Inc.
• The Company announced new environmental sustainability goals and pledged to reach an annual reduction of 3.5 million metric tons of carbon dioxide (CO2) by 2020, which equates to 350 million gallons of fuel.
• John Wall, Cummins’ Vice President – Chief Technical Officer, was honored by the California Air Resources Board with the Haagen-Smit Clean Air Award, which recognizes outstanding lifetime achievement in air-quality research, science and technology.
• For the fourth consecutive year, Cummins was recognized as a Top 25 Supply Chain company by Gartner.
• Cummins announced that John Wall, Vice President – Chief Technical Officer, will be retiring after nearly 30 years with the Company and that Jennifer Rumsey, Vice President of Engineering for Cummins’ Engine Business, will take Wall’s place.
• Cummins announced a 25 percent increase in its quarterly dividend.

Second quarter 2015 detail (all comparisons to same period in 2014)

Engine Segment

• Sales - $2.8 billion, up 2 percent.
• Segment EBIT - $341 million, or 12.2 percent of sales, compared to $311 million or 11.3 percent of sales.
• Strong demand in North American truck and bus markets was partially offset by weaker demand in global industrial markets and lower truck demand in Brazil.

Distribution Segment

• Sales - $1.5 billion, up 21 percent, down 6 percent excluding acquisitions.
• Segment EBIT - $113 million, or 7.6 percent of sales, compared to $126 million or 10.2 percent of sales.
• Currency movements negatively impacted sales by 6 percent.
• Results in the second quarter of 2014 included a gain of $14 million related to the acquisition of distributors in North America.

Components Segment

• Sales - $1.4 billion, up 9 percent.
• Segment EBIT - $223 million, or 16.0 percent of sales, compared to $185 million or 14.5 percent of sales.
• Stronger demand in on-highway markets in North America, Europe, and China more than offset weakness in Brazil.

Power Generation Segment

• Sales - $747 million, up 1 percent.
• Segment EBIT - $57 million, or 7.6 percent of sales, compared to $61 million, or 8.2 percent of sales.
• Increased international sales in the Middle East, Asia Pacific and India more than offset lower sales in North America and a 4 percent reduction in revenues due to currency movements.

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 www.twittter.com/cummins and on YouTube at www.youtube/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 2014 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.

  CUMMINS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (a)   Three months ended In millions, except per share amounts

June 28, 2015

   

June 29, 2014

NET SALES $ 5,015 $ 4,835 Cost of sales 3,683   3,630   GROSS MARGIN 1,332 1,205   OPERATING EXPENSES AND INCOME Selling, general and administrative expenses 537 513 Research, development and engineering expenses 166 179 Equity, royalty and interest income from investees 94 105 Other operating (expense) income, net —   (6 ) OPERATING INCOME 723 612   Interest income 6 6 Interest expense 17 15 Other (expense) income, net (8 ) 39   INCOME BEFORE INCOME TAXES 704 642   Income tax expense 208   170   CONSOLIDATED NET INCOME 496 472   Less: Net income attributable to noncontrolling interests 25   26   NET INCOME ATTRIBUTABLE TO CUMMINS INC. $ 471   $ 446     EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC. Basic $ 2.63 $ 2.44 Diluted $ 2.62 $ 2.43   WEIGHTED AVERAGE SHARES OUTSTANDING Basic 179.2 182.8 Diluted 179.6 183.2   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)

  Six months ended In millions, except per share amounts

June 28, 2015

   

June 29, 2014

NET SALES $ 9,724 $ 9,241 Cost of sales 7,197   6,937   GROSS MARGIN 2,527 2,304   OPERATING EXPENSES AND INCOME Selling, general and administrative expenses 1,054 998 Research, development and engineering expenses 361 369 Equity, royalty and interest income from investees 162 195 Other operating (expense) income, net (3 ) (7 ) OPERATING INCOME 1,271 1,125   Interest income 11 11 Interest expense 31 32 Other income, net 1   49   INCOME BEFORE INCOME TAXES 1,252 1,153   Income tax expense 352   323   CONSOLIDATED NET INCOME 900 830   Less: Net income attributable to noncontrolling interests 42   46   NET INCOME ATTRIBUTABLE TO CUMMINS INC. $ 858   $ 784     EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC. Basic $ 4.77 $ 4.27 Diluted $ 4.76 $ 4.26   WEIGHTED AVERAGE SHARES OUTSTANDING Basic 179.9 183.5 Diluted 180.3 183.9   CASH DIVIDENDS DECLARED PER COMMON SHARE $ 1.56 $ 1.25

___________________________________________________________

(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)   In millions, except par value

June 28, 2015

December 31, 2014

ASSETS Current assets Cash and cash equivalents $ 1,760 $ 2,301 Marketable securities 89   93   Total cash, cash equivalents and marketable securities 1,849 2,394 Accounts and notes receivable, net 3,422 2,946 Inventories 2,986 2,866 Prepaid expenses and other current assets 746   849   Total current assets 9,003   9,055   Long-term assets Property, plant and equipment 7,151 7,123 Accumulated depreciation (3,498 ) (3,437 ) Property, plant and equipment, net 3,653 3,686 Investments and advances related to equity method investees 995 981 Goodwill 473 479 Other intangible assets, net 339 343 Prepaid pensions 784 637 Other assets 631   595   Total assets $ 15,878   $ 15,776     LIABILITIES Current liabilities Accounts payable (principally trade) $ 1,974 $ 1,881 Loans payable 70 86 Current portion of accrued product warranty 405 363 Accrued compensation, benefits and retirement costs 432 508 Deferred revenue 402 401 Other accrued expenses 739 759 Current maturities of long-term debt 31   23   Total current liabilities 4,053   4,021   Long-term liabilities Long-term debt 1,576 1,589 Postretirement benefits other than pensions 351 369 Pensions 291 289 Other liabilities and deferred revenue 1,393   1,415   Total liabilities $ 7,664   $ 7,683     EQUITY Cummins Inc. shareholders’ equity Common stock, $2.50 par value, 500 shares authorized, 222.3 and 222.3 shares issued $ 2,164 $ 2,139 Retained earnings 10,123 9,545 Treasury stock, at cost, 43.7 and 40.1 shares (3,350 ) (2,844 ) Common stock held by employee benefits trust, at cost, 1.0 and 1.1 shares (12 ) (13 ) Accumulated other comprehensive loss (1,071 ) (1,078 ) Total Cummins Inc. shareholders’ equity 7,854 7,749 Noncontrolling interests 360   344   Total equity $ 8,214   $ 8,093  

Total liabilities and equity

$ 15,878   $ 15,776  

___________________________________________________________

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

  CUMMINS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (a)   Six months ended In millions

June 28, 2015

 

June 29, 2014

CASH FLOWS FROM OPERATING ACTIVITIES Consolidated net income $ 900 $ 830 Adjustments to reconcile consolidated net income to net cash provided by operating activities Depreciation and amortization 254 217 Deferred income taxes (63 ) (88 ) Equity in income of investees, net of dividends (68 ) (108 ) Pension contributions in excess of expense (122 ) (127 ) Other post-retirement benefits payments in excess of expense (15 ) (14 ) Stock-based compensation expense 17 21 Translation and hedging activities 27 (9 ) Changes in current assets and liabilities, net of acquisitions Accounts and notes receivable (426 ) (321 ) Inventories (127 ) (223 ) Other current assets 18 4 Accounts payable 97 289 Accrued expenses (21 ) 120 Changes in other liabilities and deferred revenue 133 116 Other, net (35 ) (6 ) Net cash provided by operating activities 569   701     CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (247 ) (245 ) Investments in internal use software (22 ) (26 ) Investments in and advances to equity investees (17 ) (11 ) Acquisitions of businesses, net of cash acquired (15 ) (193 ) Investments in marketable securities—acquisitions (173 ) (179 ) Investments in marketable securities—liquidations 155 179 Cash flows from derivatives not designated as hedges 5 4 Other, net 14   8   Net cash used in investing activities (300 ) (463 )   CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 12 17 Payments on borrowings and capital lease obligations (31 ) (39 ) Net payments under short-term credit agreements (10 ) (48 ) Distributions to noncontrolling interests (14 ) (32 ) Dividend payments on common stock (280 ) (229 ) Repurchases of common stock (514 ) (430 ) Other, net 8   5   Net cash used in financing activities (829 ) (756 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 19   38   Net decrease in cash and cash equivalents (541 ) (480 ) Cash and cash equivalents at beginning of year 2,301   2,699   CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,760   $ 2,219  

___________________________________________________________

(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

PowerGeneration

Non-segment Items (1)

Total Three months ended June 28, 2015 External sales $ 2,058 $ 1,487 $ 1,017 $ 453 $ — $ 5,015 Intersegment sales 739   8   380   294   (1,421 ) —   Total sales 2,797 1,495 1,397 747 (1,421 ) 5,015 Depreciation and amortization(2) 60 25 28 13 — 126 Research, development and engineering expenses 91 3 57 15 — 166 Equity, royalty and interest income from investees 57 21 8 8 — 94 Interest income 3 1 1 1 — 6 Segment EBIT 341 113 223 57 (13 ) 721   Segment EBIT as a percentage of total sales 12.2 % 7.6 % 16.0 % 7.6 % 14.4 %   Three months ended June 29, 2014 External sales $ 2,178 $ 1,229 $ 953 $ 475 $ — $ 4,835 Intersegment sales 566   9   327   268   (1,170 ) —   Total sales 2,744 1,238 1,280 743 (1,170 ) 4,835 Depreciation and amortization(2) 52 20 26 13 — 111 Research, development and engineering expenses 105 3 53 18 — 179 Equity, royalty and interest income from investees 45 42 9 9 — 105 Interest income 4 — 1 1 — 6 Segment EBIT 311 126

(3)

185 61 (26 ) 657

 

Segment EBIT as a percentage of total sales 11.3 % 10.2 % 14.5 % 8.2 % 13.6 %

 

                       

(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 June 28, 2015 and June 29, 2014.

(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 included gains of $14 million on the fair value adjustments resulting from the acquisitions of the controlling interests in North American distributors for the three months ended June 29, 2014.   In millions   Engine   Distribution Components  

PowerGeneration

 

Non-segment Items (1)

  Total Six months ended June 28, 2015 External sales $ 3,947 $ 2,956 $ 1,948 $ 873 $ — $ 9,724 Intersegment sales 1,446   15   748   554   (2,763 ) —   Total sales 5,393 2,971 2,696 1,427 (2,763 ) 9,724 Depreciation and amortization(2) 118 52 54 29 — 253 Research, development and engineering expenses 205 6 118 32 — 361 Equity, royalty and interest income from investees 87 41 17 17 — 162 Interest income 5 2 2 2 — 11 Segment EBIT 594 201 418 106 (36 ) 1,283   Segment EBIT as a percentage of total sales 11.0 % 6.8 % 15.5 % 7.4 % 13.2 %   Six months ended June 29, 2014 External sales $ 4,268 $ 2,171 $ 1,875 $ 927 $ — $ 9,241 Intersegment sales 1,039   17   635   455   (2,146 ) —   Total sales 5,307 2,188 2,510 1,382 (2,146 ) 9,241 Depreciation and amortization(2) 103 36 52 25 — 216 Research, development and engineering expenses 221 5 106 37 — 369 Equity, royalty and interest income from investees 77 83 18 17 — 195 Interest income 6 1 2 2 — 11 Segment EBIT 580 202 (3) 352 86 (35 ) 1,185   Segment EBIT as a percentage of total sales 10.9 % 9.2 % 14.0 % 6.2 % 12.8 %                          

(1)

 

Includes intersegment sales and profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the six months ended June 28, 2015 and June 29, 2014.

(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 $1 million and $1 million for the six months ended June 28, 2015 and June 29, 2014, respectively.

(3)

 

Distribution segment EBIT included gains of $20 million on the fair value adjustments resulting from the acquisitions of the controlling interests in North American distributors for the six months ended June 29, 2014.  

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 Six months ended In millions

June 28, 2015

 

June 29, 2014

June 28, 2015

 

June 29, 2014

Total EBIT $ 721 $ 657 $ 1,283 $ 1,185 Less: Interest expense 17   15   31   32 Income before income taxes $ 704   $ 642   $ 1,252   $ 1,153  

CUMMINS INC. AND SUBSIDIARIESSELECTED 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   Six months ended In millions

June 28, 2015

 

June 29, 2014

June 28, 2015

 

June 29, 2014

Distribution Entities North American distributors $ 8 $ 30 $ 18 $ 62 Komatsu Cummins Chile, Ltda. 8 8 15 14 All other distributors — 1 1 2 Manufacturing Entities Dongfeng Cummins Engine Company, Ltd. 15 22 29 36 Beijing Foton Cummins Engine Co., Ltd. (Light-duty) 15 8 23 14 Chongqing Cummins Engine Company, Ltd. 11 15 23 26 Beijing Foton Cummins Engine Co., Ltd. (Heavy-duty) 7 (7 ) 6 (13 ) All other manufacturers 21   19   28   34   Cummins share of net income 85 96 143 175 Royalty and interest income 9   9   19   20   Equity, royalty and interest income from investees $ 94   $ 105   $ 162   $ 195    

NOTE 2. INCOME TAXES

The effective tax rate for the three and six month periods ended June 28, 2015, was 29.5 percent and 28.1 percent, respectively. The six month tax rate included an $18 million discrete tax benefit to reflect the release of reserves for uncertain tax positions related to a favorable federal audit settlement.

CUMMINS INC. AND SUBSIDIARIESFINANCIAL 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. 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:

    Six months ended June 28, 2015   June 29, 2014 In millions Net Income   Diluted EPS Net Income   Diluted EPS Net income attributable to Cummins Inc. $ 858 $ 4.76 $ 784 $ 4.26 Less Tax items 18   0.10   —   — Net income attributable to Cummins Inc. excluding special items $ 840   $ 4.66   $ 784   $ 4.26  

Earnings before interest, taxes and noncontrolling interests

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   Six months ended In millions

June 28, 2015

  June 29, 2014 June 28, 2015   June 29, 2014 Earnings before interest expense and income taxes $ 721   $ 657   $ 1,283   $ 1,185     EBIT as a percentage of net sales 14.4 % 13.6 % 13.2 % 12.8 %   Less Interest expense 17 15 31 32 Income tax expense 208   170   352   323   Consolidated net income 496   472   900   830     Less Net income attributable to noncontrolling interests 25   26   42   46   Net income attributable to Cummins Inc. $ 471   $ 446   $ 858   $ 784     Net income attributable to Cummins Inc. as a percentage of net sales 9.4 % 9.2 % 8.8 % 8.5 %  

CUMMINS INC. AND SUBSIDIARIESBUSINESS UNIT SALES DATA(Unaudited)

Engine Segment Net Sales by Market

In the first quarter of 2015, our Engine segment reorganized its reporting structure to include the following markets: heavy-duty truck, medium-duty truck and bus, light-duty automotive (pickup and light commercial vehicle), industrial and stationary power. Sales by market for our Engine segment by business (including 2014 and 2013 reorganized balances) were as follows:

2015           In millions Q1 Q2 Q3 Q4 YTD Heavy-duty truck $ 757 $ 875 $ — $ — $ 1,632 Medium-duty truck and bus 608 674 — — 1,282 Light-duty automotive 381 354 — — 735 Industrial 616 624 — — 1,240 Stationary power 234   270   —   —   504 Total sales $ 2,596   $ 2,797   $ —   $ —   $ 5,393   2014 In millions Q1 Q2 Q3 Q4 YTD Heavy-duty truck $ 718 $ 769 $ 801 $ 784 $ 3,072 Medium-duty truck and bus 575 605 599 652 2,431 Light-duty automotive 391 392 396 388 1,567 Industrial 669 739 768 775 2,951 Stationary power 210   239   252   240   941 Total sales $ 2,563   $ 2,744   $ 2,816   $ 2,839   $ 10,962   2013 In millions YTD Heavy-duty truck $ 2,618 Medium-duty truck and bus 2,064 Light-duty automotive 1,465 Industrial 2,921 Stationary power 945   Total sales $ 10,013    

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

2015             Units Q1 Q2 Q3 Q4 YTD Mid-range 112,400 120,000 — — 232,400 Heavy-duty 28,700 32,800 — — 61,500 High-horsepower 3,500   3,700   —   —   7,200 Total units 144,600   156,500   —   —   301,100   2014 Units Q1 Q2 Q3 Q4 YTD Mid-range 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   Distribution Segment Sales by Business           2015 In millions Q1 Q2 Q3 Q4 YTD Parts and filtration $ 573 $ 598 $ — $ — $ 1,171 Engines 321 318 — — 639 Power generation 298 272 — — 570 Service 284   307   —   —   591 Total sales $ 1,476   $ 1,495   $ —   $ —   $ 2,971   2014 In millions Q1 Q2 Q3 Q4 YTD Parts and filtration $ 382 $ 461 $ 491 $ 590 $ 1,924 Engines 174 249 270 368 1,061 Power generation 193 278 279 413 1,163 Service 201   250   252   323   1,026 Total sales $ 950   $ 1,238   $ 1,292   $ 1,694   $ 5,174  

Component Segment Sales by Business

          2015 In millions Q1 Q2 Q3 Q4 YTD Emission Solutions $ 613 $ 679 $ — $ — $ 1,292 Turbo Technologies 301 307 — — 608 Filtration 255 266 — — 521 Fuel systems 130   145   —   —   275 Total sales $ 1,299   $ 1,397   $ —   $ —   $ 2,696   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  

Power Generation Segment Sales by Business

In the first quarter of 2015, our Power Generation segment reorganized its reporting structure to include the following businesses: power systems, alternators and power solutions. Sales for our Power Generation segment by business (including 2014 and 2013 reorganized balances) were as follows:

2015           In millions Q1 Q2 Q3 Q4 YTD Power systems $ 543 $ 611 $ — $ — $ 1,154 Alternators 98 92 — — 190 Power solutions 39   44   —   —   83 Total sales $ 680   $ 747   $ —   $ —   $ 1,427   2014 In millions Q1 Q2 Q3 Q4 YTD Power systems $ 510 $ 586 $ 598 $ 606 $ 2,300 Alternators 105 126 115 103 449 Power solutions 24   31   41   51   147 Total sales $ 639   $ 743   $ 754   $ 760   $ 2,896   2013 In millions YTD Power systems $ 2,381 Alternators 496 Power solutions 154   Total sales $ 3,031  

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Cummins Inc.Carole Casto, Executive Director - Corporate Communications, 317-610-2480carole.casto@cummins.com