SOURCE: Cummins Inc.

Cummins Inc.

April 29, 2014 07:30 ET

Cummins Announces Results for the First Quarter of 2014; Improving Demand in North America Drives Revenue Growth

First Quarter Revenues of $4.4 Billion, EBIT of 12.0 Percent of Sales; Full Year Revenue Expected to Grow Between 6 and 10 Percent and EBIT to Be in the Range of 12.75 to 13.25 Percent of Sales

COLUMBUS, IN--(Marketwired - April 29, 2014) - Cummins Inc. (NYSE: CMI) today reported results for the first quarter of 2014.

First quarter revenue of $4.4 billion increased 12 percent from the same quarter in 2013. The increase year-over-year was driven by stronger demand in on-highway markets and distributor acquisitions in North America.

Revenues in North America increased 25 percent while international sales were flat compared to the first quarter a year ago. Within international markets, weakness in India, Australia, Mexico and Brazil offset higher revenues in China and Europe.

Earnings before interest and taxes (EBIT) were $528 million for the first quarter or 12.0 percent of sales. This compares to $437 million or 11.1 percent of sales a year ago.

Net income attributable to Cummins in the first quarter was $338 million ($1.83 per diluted share), compared to $282 million ($1.49 per diluted share) in the first quarter of 2013.

"We delivered good incremental margins in the first quarter as demand in on-highway markets in North America improved. We are also well on track to deliver the expected benefits from our North American distributor acquisitions as we execute our plans and end market demand improves. Conditions in a number of international markets remain very weak, particularly in India and Australia, leading to lower demand for power generation and mining equipment," said Chairman and CEO Tom Linebarger. "We continue to release exciting new products that will drive future profitable growth and we repurchased 3 million shares in the first quarter, consistent with our commitment to return 50 percent of full year operating cash flow to shareholders through a combination of dividends and share repurchase."

Based on the current forecast, Cummins expects full year 2014 revenues to grow between 6% and 10%, up from its previous forecast of growth of between 4% and 8%, due largely to improving demand in North America. EBIT is expected to be in the range of 12.75 to 13.25 percent of sales.

Other recent highlights:

  • For the seventh consecutive year, Cummins has been named one of the world's most ethical companies by The Ethisphere Institute;
  • FORTUNE magazine named Cummins one of America's Most Admired Companies; and
  • Cummins became the first company to receive EPA Tier4 Final certification for high-horsepower generator sets.

First quarter 2014 detail (all comparisons to same period in 2013)

Engine Segment

  • Sales - $2.6 billion, up 11 percent
  • Segment EBIT - $269 million, or 10.5 percent of sales, compared to $195 million or 8.5 percent of sales
  • Increased demand in on-highway markets in North America offset weakness in global mining and power generation markets

Components Segment

  • Sales - $1.2 billion, up 21 percent
  • Segment EBIT - $167 million, or 13.6 percent of sales, compared to $119 million or 11.7 percent of sales
  • Higher demand in on-highway markets in North America, Europe and China more than offset weaker demand in Brazil

Power Generation Segment

  • Sales - $639 million, down 14 percent
  • Segment EBIT - $25 million, or 3.9 percent of sales, compared to $51 million or 6.8 percent of sales
  • Lower revenues in most markets particularly India, North America and Asia Pacific

Distribution Segment

  • Sales - $950 million, up 22 percent overall and up 1 percent excluding acquisitions
  • Segment EBIT - $76 million, or 8.0 percent of sales, compared to $95 million or 12.2 percent of sales, with currency being the largest driver of the reduction in earnings
  • Higher revenues were primarily driven by acquisitions and stronger demand for parts and service in the North American and Asia Pacific regions.

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 48,000 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 6,800 dealer locations. Cummins earned $1.48 billion on sales of $17.3 billion in 2013. Press releases can be found on the Web at www.cummins.com. Follow Cummins on Twitter at @Cummins and on YouTube at 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 2014. 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 2013 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.

The following files are available for download:

 
CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (a)
     
   Three months ended
In millions, except per share amounts  March 30, 2014  December 31, 2013  March 31, 2013
NET SALES  $ 4,406    $ 4,588    $ 3,922
  Cost of sales   3,290     3,424     2,965
GROSS MARGIN   1,116     1,164     957
                 
OPERATING EXPENSES AND INCOME            
  Selling, general and administrative expenses   502     500     444
  Research, development and engineering expenses   190     181     182
  Equity, royalty and interest income from investees (Note 1)   90     80     82
  Other operating income (expense), net   (1 )   (10 )   1
OPERATING INCOME   513     553     414
                 
  Interest income   5     6     5
  Interest expense   17     19     6
  Other income, net   10     7     18
INCOME BEFORE INCOME TAXES   511     547     431
                 
  Income tax expense (Note 2)   153     86     119
CONSOLIDATED NET INCOME   358     461     312
                 
  Less: Net income attributable to noncontrolling interests   20     29     30
NET INCOME ATTRIBUTABLE TO CUMMINS INC.  $ 338    $ 432    $ 282
                 
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.            
  Basic  $ 1.83    $ 2.33    $ 1.50
  Diluted  $ 1.83    $ 2.32    $ 1.49
                 
WEIGHTED AVERAGE SHARES OUTSTANDING            
  Basic   184.3     185.7     188.4
  Diluted   184.7     186.3     188.8
                 
CASH DIVIDENDS DECLARED PER COMMON SHARE  $ 0.625    $ 0.625    $ 0.50
                       
(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  March 30, 2014  December 31, 2013
ASSETS      
Current assets        
  Cash and cash equivalents  $ 2,178    $ 2,699  
  Marketable securities   129     150  
   Total cash, cash equivalents and marketable securities   2,307     2,849  
  Accounts and notes receivable, net   2,949     2,649  
  Inventories   2,580     2,381  
  Prepaid expenses and other current assets   663     760  
   Total current assets   8,499     8,639  
Long-term assets        
  Property, plant and equipment   6,563     6,410  
  Accumulated depreciation   (3,331 )   (3,254 )
   Property, plant and equipment, net   3,232     3,156  
  Investments and advances related to equity method investees   966     931  
  Goodwill   464     461  
  Other intangible assets, net   357     357  
  Other assets   1,233     1,184  
    Total assets  $ 14,751    $ 14,728  
             
LIABILITIES        
Current liabilities        
  Loans payable  $ 24    $ 17  
  Accounts payable (principally trade)   1,887     1,557  
  Current maturities of long-term debt   37     51  
  Current portion of accrued product warranty   345     360  
  Accrued compensation, benefits and retirement costs   323     433  
  Deferred revenue   295     285  
  Taxes payable (including taxes on income)   69     99  
  Other accrued expenses   575     566  
   Total current liabilities   3,555     3,368  
Long-term liabilities        
  Long-term debt   1,632     1,672  
  Pensions   232     232  
  Postretirement benefits other than pensions   347     356  
  Other liabilities and deferred revenue   1,251     1,230  
   Total liabilities   7,017     6,858  
             
EQUITY            
Cummins Inc. shareholders' equity        
  Common stock, $2.50 par value, 500 shares authorized, 222.3 and 222.3 shares issued   2,101     2,099  
  Retained earnings   8,629     8,406  
  Treasury stock, at cost, 38.4 and 35.6 shares   (2,600 )   (2,195 )
  Common stock held by employee benefits trust, at cost, 1.2 and 1.3 shares   (15 )   (16 )
  Accumulated other comprehensive loss            
   Defined benefit postretirement plans   (607 )   (611 )
   Other   (148 )   (173 )
   Total accumulated other comprehensive loss   (755 )   (784 )
    Total Cummins Inc. shareholders' equity   7,360     7,510  
  Noncontrolling interests   374     360  
     Total equity   7,734     7,870  
      Total liabilities and equity  $ 14,751    $ 14,728  
                           
(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
In millions  March 30, 2014  March 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES      
  Consolidated net income  $ 358    $ 312  
  Adjustments to reconcile consolidated net income to net cash provided by operating activities          
   Depreciation and amortization   105     98  
   Gain on fair value adjustment for consolidated investees   (6 )   (7 )
   Deferred income taxes   22     5  
   Equity in income of investees, net of dividends   (52 )   (36 )
   Pension contributions in excess of expense   (100 )   (54 )
   Other post-retirement benefits payments in excess of expense   (8 )   (8 )
   Stock-based compensation expense   10     7  
   Excess tax benefits on stock-based awards   (5 )   (7 )
   Translation and hedging activities   (3 )   (5 )
  Changes in current assets and liabilities, net of acquisitions            
   Accounts and notes receivable   (232 )   (29 )
   Inventories   (135 )   (177 )
   Other current assets   2     158  
   Accounts payable   302     204  
   Accrued expenses   (95 )   (142 )
  Changes in other liabilities and deferred revenue   50     47  
  Other, net   50     62  
NET CASH PROVIDED BY OPERATING ACTIVITIES   263     428  
             
CASH FLOWS FROM INVESTING ACTIVITIES        
  Capital expenditures   (107 )   (114 )
  Investments in internal use software   (14 )   (12 )
  Investments in and advances to equity investees   (6 )   (24 )
  Acquisitions of businesses, net of cash acquired   (90 )   (17 )
  Investments in marketable securities -- acquisitions   (84 )   (133 )
  Investments in marketable securities -- liquidations   108     187  
  Cash flows from derivatives not designated as hedges   5     (30 )
  Other, net   1     -  
Net cash used in investing activities   (187 )   (143 )
             
CASH FLOWS FROM FINANCING ACTIVITIES        
  Proceeds from borrowings   7     -  
  Payments on borrowings and capital lease obligations   (25 )   (27 )
  Net borrowings (payments) under short-term credit agreements   (39 )   15  
  Distributions to noncontrolling interests   (13 )   (19 )
  Dividend payments on common stock   (115 )   (95 )
  Repurchases of common stock   (419 )   -  
  Excess tax benefits on stock-based awards   5     7  
  Other, net   (3 )   16  
Net cash used in financing activities   (602 )   (103 )
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS   5     (68 )
Net increase (decrease) in cash and cash equivalents   (521 )   114  
Cash and cash equivalents at beginning of year   2,699     1,369  
CASH AND CASH EQUIVALENTS AT END OF PERIOD  $ 2,178    $ 1,483  
(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  Power Generation  Distribution   Non-segment
Items
(1)
 Total
Three months ended March 30, 2014                   
External sales  $ 2,090    $ 922    $ 452    $ 942     $ -    $ 4,406  
Intersegment sales   473     308     187     8      (976 )   -  
  Total sales   2,563     1,230     639     950      (976 )   4,406  
Depreciation and amortization (2)   51     26     12     16      -     105  
Research, development and engineering expenses   116     53     19     2      -     190  
Equity, royalty and interest income from investees   32     9     8     41      -     90  
Interest income   2     1     1     1      -     5  
Segment EBIT   269     167     25     76   (3)  (9 )   528  
                                      
Segment EBIT as a percentage of total sales   10.5 %   13.6 %   3.9 %   8.0 %          12.0 %
                                      
Three months ended December 31, 2013                                     
External sales  $ 2,131    $ 859    $ 533    $ 1,065     $ -    $ 4,588  
Intersegment sales   431     276     226     8      (941 )   -  
  Total sales   2,562     1,135     759     1,073      (941 )   4,588  
Depreciation and amortization (2)   49     25     13     14      -     101  
Research, development and engineering expenses   106     53     20     2      -     181  
Equity, royalty and interest income from investees   30     7     2     41      -     80  
Interest income   3     1     1     1      -     6  
Segment EBIT   235     140     46     107      38     566  
                                      
Segment EBIT as a percentage of total sales   9.2 %   12.3 %   6.1 %   10.0 %          12.3 %
                                      
Three months ended March 31, 2013                                     
External sales  $ 1,885    $ 722    $ 539    $ 776     $ -    $ 3,922  
Intersegment sales   418     296     207     2      (923 )   -  
  Total sales   2,303     1,018     746     778      (923 )   3,922  
Depreciation and amortization (2)   52     24     12     10      -     98  
Research, development and engineering expenses   105     57     18     2      -     182  
Equity, royalty and interest income from investees   23     7     7     45      -     82  
Interest income   2     1     2     -      -     5  
Segment EBIT   195     119     51     95   (3)  (23 )   437  
                                      
Segment EBIT as a percentage of total sales   8.5 %   11.7 %   6.8 %   12.2 %          11.1 %
                                      
(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 March 30, 2014, December 31, 2013 and March 31, 2013.
(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 for the three months ended March 30, 2014, included a $6 million gain on the fair value adjustment resulting from the acquisition of a controlling interest in Cummins Mid-South LLC. Distribution segment EBIT for the three months ended March 31, 2013, included a $7 million gain on the fair value adjustment resulting from the acquisition of a controlling interest in Cummins Northwest LLC.
   

 
 
CUMMINS INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
 
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
In millions  March 30, 2014  December 31, 2013  March 31, 2013
Total EBIT  $ 528  $ 566  $ 437
Less: Interest expense   17   19   6
  Income before income taxes  $ 511  $ 547  $ 431
                     
                     
 
 
CUMMINS INC. AND SUBSIDIARIES
SELECTED 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
In millions  March 30, 2014  December 31, 2013  March 31, 2013
Distribution Entities         
North American distributors  $ 32    $ 31    $ 35  
Komatsu Cummins Chile, Ltda.   6     8     5  
All other distributors   1     -     -  
Manufacturing Entities              
Dongfeng Cummins Engine Company, Ltd.   14     18     12  
Chongqing Cummins Engine Company, Ltd.   11     14     12  
Beijing Foton Cummins Engine Co., Ltd. (Light-duty)   6     3     1  
Shanghai Fleetguard Filter Co., Ltd.   3     2     3  
Tata Cummins, Ltd.   2     1     1  
Cummins Westport, Inc.   1     (1 )   -  
Beijing Foton Cummins Engine Co., Ltd. (Heavy-duty)   (6 )   (7 )   (3 )
All other manufacturers   9     2     7  
  Cummins share of net income   79     71     73  
Royalty and interest income   11     9     9  
   Equity, royalty and interest income from investees  $ 90    $ 80    $ 82  

NOTE 2. INCOME TAXES

Our effective tax rate for the year is expected to approximate 28.5 percent, excluding any one-time items that may arise. The research tax credit expired December 31, 2013 and has not yet been renewed by Congress. Our tax rate is generally less than the 35 percent U.S. statutory income tax rate primarily due to lower tax rates on foreign income. The effective tax rate for the three months ended March 30, 2014, was 29.9 percent. This tax rate includes a $12 million discrete tax expense primarily attributable to state deferred tax adjustments, as well as a $5 million discrete net tax benefit resulting from a $70 million dividend paid from China earnings generated prior to 2012.

Our tax rate for the three month period ended December 31, 2013 was 15.7 percent. We recorded $70 million or $0.38 per share of tax benefits in the fourth quarter of 2013. The income tax provision for the fourth quarter of 2013 was net of the following items:

     
One-time impacts of foreign legal entity restructuring actions $ 16
One-time impacts of reconciliation of state income tax provision to tax return  17
Lower operating rate primarily resulting from recognition of state and federal research and development credits and the recurring impacts of foreign legal entity restructuring actions  37
  Total $ 70
     

Our effective tax rate for the three months ended March 31, 2013, was 27.6 percent. This tax rate included a discrete tax benefit of $28 million attributable to the 2012 research credit reinstated in January 2013 as well as a discrete tax expense of $17 million, which primarily related to the write-off of a deferred tax asset deemed unrecoverable. The increase in the three month effective tax rate from 2013 to 2014 is attributable primarily to one-time discrete tax benefits in 2013 that did not repeat in 2014 and changes in U.S. state tax legislation that unfavorably impacted our 2014 effective tax rate.

NOTE 3. ACQUISITION  

Cummins Mid-South LLC

On February 14, 2014, we acquired the remaining 62.2 percent interest in Cummins Mid-South LLC (Mid-South) from the former distributor principal. The preliminary purchase consideration was $116 million, which included $32 million in cash and an additional $61 million paid to eliminate outstanding debt. The remaining $23 million will be paid in future periods, subject to customary purchase price adjustments. The acquisition was accounted for as a business combination and the results of the acquired entity were included in the Distribution operating segment subsequent to the acquisition date. As a result of this transaction, first quarter 2014 Distribution segment results included a $6 million gain, as we were required to re-measure our pre-existing 37.8 percent ownership interest in Mid-South to fair value. The transaction generated $3 million of goodwill based on the preliminary purchase price allocation. Net sales for Mid-South were $368 million for the year ended December 31, 2013. This amount is not fully incremental to our consolidated sales as the amount would be reduced by the elimination of sales to the previously unconsolidated entity.

CUMMINS INC. AND SUBSIDIARIES
FINANICAL MEASURES THAT SUPPLEMENT GAAP
(Unaudited)

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, accounting principles generally accepted in the United States of America 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
In millions  March 30, 2014  December 31, 2013  March 31, 2013
Earnings before interest expense and income taxes  $ 528    $ 566    $ 437  
                   
EBIT as a percentage of net sales   12.0 %   12.3 %   11.1 %
                   
Less                  
  Interest expense   17     19     6  
  Income tax expense   153     86     119  
Consolidated net income   358     461     312  
                   
Less                  
  Net income attributable to noncontrolling interests   20     29     30  
   Net income attributable to Cummins Inc.  $ 338    $ 432    $ 282  
                   
Net income attributable to Cummins Inc. as a percentage of net sales   7.7 %   9.4 %   7.2 %
 
 
CUMMINS INC. AND SUBSIDIARIES
BUSINESS UNIT SALES DATA
(Unaudited)

Engine segment net sales by market

                     
2014               
In millions  Q1  Q2  Q3  Q4  YTD
Heavy-duty truck  $ 722  $ -  $ -  $ -  $ 722
Medium-duty truck and bus   601   -   -   -   601
Light-duty automotive and RV   361   -   -   -   361
Industrial   700   -   -   -   700
Stationary power   179   -   -   -   179
  Total sales  $ 2,563  $ -  $ -  $ -  $ 2,563
                     
2013                    
In millions   Q1   Q2   Q3   Q4   YTD
Heavy-duty truck  $ 654  $ 723  $ 690  $ 638  $ 2,705
Medium-duty truck and bus   448   595   570   572   2,185
Light-duty automotive and RV   260   345   330   365   1,300
Industrial   714   762   709   811   2,996
Stationary power   227   231   193   176   827
  Total sales  $ 2,303  $ 2,656  $ 2,492  $ 2,562  $ 10,013
                               
                               

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

                     
                     
2014               
Units  Q1  Q2  Q3  Q4  YTD
Midrange  118,900  -  -  -  118,900
Heavy-duty  28,800  -  -  -  28,800
High-horsepower  3,400  -  -  -  3,400
  Total units  151,100  -  -  -  151,100
                
2013               
Units  Q1  Q2  Q3  Q4  YTD
Midrange  94,600  121,900  113,800  115,700  446,000
Heavy-duty  24,900  28,300  26,500  25,700  105,400
High-horsepower  4,200  3,600  3,500  3,500  14,800
  Total units  123,700  153,800  143,800  144,900  566,200
                     
                     

Component segment sales by business

2014               
In millions  Q1  Q2  Q3  Q4  YTD
Emission Solutions  $ 543  $ -  $ -  $ -  $ 543
Turbo Technologies   313   -   -   -   313
Filtration   265   -   -   -   265
Fuel systems   109   -   -   -   109
  Total sales  $ 1,230  $ -  $ -  $ -  $ 1,230
                     
2013                    
In millions   Q1   Q2   Q3   Q4   YTD
Emission Solutions  $ 400  $ 444  $ 458  $ 489  $ 1,791
Turbo Technologies   266   294   263   292   1,115
Filtration   255   271   248   254   1,028
Fuel systems   97   108   103   100   408
  Total sales  $ 1,018  $ 1,117  $ 1,072  $ 1,135  $ 4,342
                               
                               

Power Generation segment sales by business

                     
                     
2014               
In millions  Q1  Q2  Q3  Q4  YTD
Power products  $ 373  $ -  $ -  $ -  $ 373
Power systems   137   -   -   -   137
Alternators   105   -   -   -   105
Power solutions   24   -   -   -   24
  Total sales  $ 639  $ -  $ -  $ -  $ 639
                     
2013                    
In millions   Q1   Q2   Q3   Q4   YTD
Power products  $ 409  $ 474  $ 421  $ 421  $ 1,725
Power systems   179   187   122   168   656
Alternators   126   125   126   119   496
Power solutions   32   28   43   51   154
  Total sales  $ 746  $ 814  $ 712  $ 759  $ 3,031
                               
                               

Distribution segment sales by business

                     
                     
2014               
In millions  Q1  Q2  Q3  Q4  YTD
Parts and filtration  $ 382  $ -  $ -  $ -  $ 382
Power generation   193   -   -   -   193
Engines   174   -   -   -   174
Service   201   -   -   -   201
  Total sales  $ 950  $ -  $ -  $ -  $ 950
                     
2013                    
In millions   Q1   Q2   Q3   Q4   YTD
Parts and filtration  $ 322  $ 369  $ 377  $ 397  $ 1,465
Power generation   163   241   234   293   931
Engines   152   183   170   208   713
Service   141   161   163   175   640
  Total sales  $ 778  $ 954  $ 944  $ 1,073  $ 3,749
                               
                               

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