What was the primary driver for the significant decrease in net income in 2017?

The primary driver for the significant decrease in net income in 2017 was a one-time tax adjustment of $777 million related to the U.S. Tax Cuts and Jobs Act of 2017. This legislation impacted deferred taxes, the transition tax on unrepatriated earnings, and withholding taxes on foreign earnings.

How did the company's operating segments perform in 2017?

All four operating segments saw revenue growth. The Engine segment increased sales by 15%, Distribution by 14%, Components by 22%, and Power Systems by 15%. This growth was driven by improved market demand in North America and key international regions.

What is the company's outlook for 2018 based on this filing?

The company's outlook for 2018 was positive, expecting demand to improve or remain strong in many of its important markets, including North American heavy-duty and medium-duty truck demand and global mining and construction markets. However, a decline in China's truck market was anticipated as a challenge.

What significant investments or strategic moves did Cummins make in 2017?

In 2017, Cummins formed the Eaton Cummins Automated Transmission Technologies (ECJV) joint venture for $600 million, consolidating it into its Components segment. Additionally, the company acquired Brammo Inc., a battery designer, for $68 million, signaling a move into electrification.

CMI 10-K FY2017 Annual Report — Revenue, Net Income, EPS

Summary

Cummins Inc. reported strong revenue growth of 17% in 2017, reaching $20.4 billion, driven by broad-based demand across its four operating segments: Engine, Distribution, Components, and Power Systems. The company's performance was bolstered by improved North American on-highway markets and robust international demand, particularly in China and India, supported by new emission regulations. Despite revenue growth, net income attributable to Cummins Inc. declined by 28% to $999 million, largely due to a significant $777 million charge related to the U.S. Tax Cuts and Jobs Act of 2017. Excluding this one-time tax impact, adjusted net income and earnings per share showed a more favorable picture, indicating underlying operational strength.

Financial Highlights

56 data points

Beta

Revenue

$20.43B

0.2% Gross Margin

Net Income

$999.00M

0.0% Net Margin

EPS (Diluted)

$5.97

Total Assets

$18.07B

Cash & Equivalents

$1.37B

Free Cash Flow

$1.77B

Financial Statements

Beta

Revenue	$20.43B
Cost of Revenue	$15.33B
Gross Profit	$5.10B
R&D Expenses	$754.00M
SG&A Expenses	$2.43B
Operating Income	$2.33B
Interest Expense	$81.00M
Net Income	$999.00M
EPS (Basic)	$5.99
EPS (Diluted)	$5.97
Shares Outstanding (Basic)	166.70M
Shares Outstanding (Diluted)	167.30M

Key Highlights

1Net sales increased by 17% to $20.4 billion in 2017, driven by strong demand across all operating segments.
2The company experienced significant growth in North American on-highway markets and key international markets like China and India.
3Net income attributable to Cummins Inc. was impacted by a $777 million charge related to the 2017 U.S. Tax Cuts and Jobs Act.
4Research, Development, and Engineering (R,D&E) expenses increased by 18% to $752 million, reflecting ongoing investment in future technologies and emission standards compliance.
5Cummins formed a 50/50 joint venture with Eaton Corporation for automated transmissions (ECJV) in July 2017, consolidating it into the Components segment.
6The company repurchased $451 million of its common stock in 2017, continuing its commitment to enhancing shareholder value.
7The company's 2017 outlook projected continued demand improvement or strength in most key markets, with challenges noted in China's truck market.

CUMMINS INC Annual Report, Year Ended Dec 31, 2017

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions