Meritor Acquisition and 2022 Financial Results
Table of Contents
RESULTS OF OPERATIONS
Years ended December 31,
2022 vs. 2021
Favorable/(Unfavorable)
2021 vs. 2020
In millions (except per share amounts)
NET SALES
Cost of sales
GROSS MARGIN
2022
2021
2020
Amount
Percent
Amount
Percent
$
28,074 $
24,021 $
19,811 $ 4,053
17 % $
21,355
18,326
14,917
(3,029)
(17) %
4,210
(3,409)
21 %
(23) %
6,719
5,695
4,894
1,024
18 %
801
16 %
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses
Research, development and engineering expenses
Equity, royalty and interest income from investees
Other operating expense, net
2,687
2,374
2,125
(313)
(13) %
(249)
(12) %
1,278
1,090
906
(188)
(17)%
(184)
(20) %
349
506
452
(157)
(31)%
54
12 %
174
31
46
(143)
NM
15
33 %
OPERATING INCOME
Interest expense
Other income, net
INCOME BEFORE INCOME TAXES
Income tax expense
CONSOLIDATED NET INCOME
2,929
2,706
2,269
223
8 %
437
19 %
199
111
100
(88)
(79) %
(11)
(11)%
89
156
169
(67)
(43) %
(13)
(8) %
2,819
2,751
2,338
68
2 %
413
18 %
636
587
527
(49)
(8)%
(60)
(11) %
2,183
2,164
1,811
19
1 %
353
19 %
Less: Net income attributable to noncontrolling interests
32
33
22
1
3%
(11)
(50) %
NET INCOME ATTRIBUTABLE TO CUMMINS INC.
$
2,151
2,131
$
1,789
$
20
1 %
$
342
19 %
Diluted earnings per common share attributable to Cummins Inc.
$
15.12
14.61 $
12.01
$
0.51
3 % $
2.60
22 %
"NM" - not meaningful information
Percent of sales
Gross margin
Selling, general and administrative expenses
Research, development and engineering expenses
2022 vs. 2021
Net Sales
Net sales increased $4.1 billion, primarily driven by the following:
Favorable/(Unfavorable) Percentage Points
2022
2021
2020
2022 vs. 2021
2021 vs. 2020
23.9 %
23.7 %
24.7 %
0.2
(1.0)
9.6%
4.6%
9.9%
10.7%
0.3
4.5 %
4.6%
(0.1)
0.8
0.1
•
Components segment sales increased 27 percent largely due to axles and brakes sales since the completion of the Meritor acquisition.
•
Distribution segment sales increased 15 percent mainly due to higher demand across all product lines in North America.
.
Engine segment sales increased 10 percent principally due to favorable pricing and stronger medium-duty and heavy-duty on-highway demand (including higher
aftermarket sales) in North America.
Power Systems segment sales increased 14 percent primarily due to favorable pricing and higher demand in power generation markets in Latin America, North America
and India and stronger demand in industrial markets with higher aftermarket sales and increased oil and gas demand in North America and China.
New Power segment sales increased 71 percent principally due to higher electrified components sales, traction sales since the completion of the Meritor and Siemens
CVP acquisitions and improved sales of fuel cells and electrolyzers.
These increases were partially offset by unfavorable foreign currency fluctuations of 2 percent of total sales, primarily in the Euro, Chinese renminbi, British pound and Indian
rupee.
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