Meritor Acquisition and 2022 Financial Results slide image

Meritor Acquisition and 2022 Financial Results

Table of Contents Sales for our Engine segment by market were as follows: In millions Heavy-duty truck Medium-duty truck and bus Light-duty automotive Total on-highway Off-highway Total sales On-highway sales as percentage of total sales Favorable/(Unfavorable) Years ended December 31, 2022 vs. 2021 2021 vs. 2020 2022 2021 2020 Amount Percent Amount Percent $ 3,847 $ 3,328 $ 2,648 $ 519 16 % $ 680 26 % 3,460 2,777 2,066 683 25 % 711 34 % 1,738 1,912 1,547 (174) (9) % 365 24 % 9,045 8,017 6,261 1,028 13 % 1,756 28 % 1,900 1,937 1,761 (37) (2)% 176 10 % $ 10,945 $ 9,954 $ 8,022 $ 991 10 % $ 1,932 24 % Percentage Points Percentage Points 83 % 81 % 78 % 2 3 Unit shipments by engine classification (including unit shipments to Power Systems and off-highway engine units included in their respective classification) were as follows: Favorable/(Unfavorable) Years ended December 31, 2022 vs. 2021 2021 vs. 2020 2022 2021 2020 Amount Percent Amount Percent Heavy-duty 120,700 117,600 92,500 3,100 3 % 25,100 27 % Medium-duty 283,600 273,800 220,900 9,800 4 % 52,900 24 % Light-duty 227,600 273,300 215,800 (45,700) (17)% 57,500 27 % Total unit shipments 631,900 664,700 529,200 (32,800) (5)% 135,500 26 % 2022 vs. 2021 Sales Engine segment sales increased $991 million across most markets. The following were the primary drivers by market: Medium-duty truck and bus sales increased $683 million mainly due to favorable pricing and higher demand (including higher aftermarket sales), especially in North America. Heavy-duty truck engine sales increased $519 million principally due to favorable pricing and stronger demand (including higher aftermarket sales), especially in North America with shipments up 18 percent. The increases were partially offset by decreased light-duty automotive demand of $174 million primarily due to our indefinite suspension of our operations in Russia and lower sales to Stellantis. Segment EBITDA Engine segment EBITDA increased $130 million, primarily due to favorable pricing and improved mix, partially offset by higher material costs, lower equity, royalty and interest income from investees (principally decreased earnings at Beijing Foton Cummins Engine Co., Ltd. and Dongfeng Cummins Engine Co., Ltd., the $28 million impairment of our investment in our Russian joint venture with KAMAZ and the February 7, 2022, purchase of Westport Fuel System Inc.'s stake in the Westport JV) and increased research, development and engineering expenses. See NOTE 2, "ACQUISITIONS," and NOTE 23, "RUSSIAN OPERATIONS," to our Consolidated Financial Statements for additional information. 42
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