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OPERATING SEGMENTS (Tables) | 12 Months Ended
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Dec. 31, 2021
Segment Reporting [Abstract] |
Schedule of Segment Reporting Information, by Segment | Summarized financial information regarding our reportable operating segments at December 31, is shown in the table below:
In millions |  | Engine |  | Distribution |  | Components |  | Power Systems |  | New Power |  | Total Segments |  |  |  |
2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
External sales |  | $ | 7,589 |  |  | $ | 7,742 |  |  | $ | 5,932 |  |  | $ | 2,650 |  |  | $ | 108 |  |  | $ | 24,021 |  |  |  |  |
Intersegment sales |  | 2,365 |  |  | 30 |  |  | 1,733 |  |  | 1,765 |  |  | 8 |  |  | 5,901 |  |  |  |  |
Total sales |  | 9,954 |  |  | 7,772 |  |  | 7,665 |  |  | 4,415 |  |  | 116 |  |  | 29,922 |  |  |  |  |
Research, development and engineering expenses |  | 399 |  |  | 48 |  |  | 307 |  |  | 234 |  |  | 102 |  |  | 1,090 |  |  |  |  |
Equity, royalty and interest income (loss) from investees |  | 340 |  |  | 63 |  |  | 50 |  |  | 56 |  |  | (3) |  |  | 506 |  |  |  |  |
Interest income |  | 8 |  |  | 7 |  |  | 5 |  |  | 5 |  |  | — |  |  | 25 |  |  |  |  |
Segment EBITDA |  | 1,411 |  |  | 731 |  |  | 1,180 |  |  | 496 |  |  | (223) |  |  | 3,595 |  |  |  |  |
Depreciation and amortization (1) |  | 205 |  |  | 116 |  |  | 183 |  |  | 131 |  |  | 24 |  |  | 659 |  |  |  |  |
Net assets |  | 1,554 |  |  | 2,294 |  |  | 2,938 |  |  | 2,251 |  |  | 602 |  |  | 9,639 |  |  |  |  |
Investments and advances to equity investees |  | 742 |  |  | 329 |  |  | 254 |  |  | 164 |  |  | 49 |  |  | 1,538 |  |  |  |  |
Capital expenditures |  | 341 |  |  | 92 |  |  | 184 |  |  | 80 |  |  | 37 |  |  | 734 |  |  |  |  |
2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
External sales |  | $ | 5,925 |  |  | $ | 7,110 |  |  | $ | 4,650 |  |  | $ | 2,055 |  |  | $ | 71 |  |  | $ | 19,811 |  |  |  |  |
Intersegment sales |  | 2,097 |  |  | 26 |  |  | 1,374 |  |  | 1,576 |  |  | 1 |  |  | 5,074 |  |  |  |  |
Total sales |  | 8,022 |  |  | 7,136 |  |  | 6,024 |  |  | 3,631 |  |  | 72 |  |  | 24,885 |  |  |  |  |
Research, development and engineering expenses |  | 290 |  |  | 31 |  |  | 264 |  |  | 212 |  |  | 109 |  |  | 906 |  |  |  |  |
Equity, royalty and interest income (loss) from investees |  | 312 |  |  | 62 |  |  | 61 |  |  | 21 |  |  | (4) |  |  | 452 |  |  |  |  |
Interest income |  | 9 |  |  | 4 |  |  | 4 |  |  | 4 |  |  | — |  |  | 21 |  |  |  |  |
Segment EBITDA |  | 1,235 |  |  | 665 |  |  | 961 |  |  | 343 |  |  | (172) |  |  | 3,032 |  |  |  |  |
Depreciation and amortization (1) |  | 208 |  |  | 122 |  |  | 192 |  |  | 130 |  |  | 18 |  |  | 670 |  |  |  |  |
Net assets |  | 1,306 |  |  | 2,444 |  |  | 2,878 |  |  | 2,134 |  |  | 504 |  |  | 9,266 |  |  |  |  |
Investments and advances to equity investees |  | 681 |  |  | 313 |  |  | 215 |  |  | 200 |  |  | 32 |  |  | 1,441 |  |  |  |  |
Capital expenditures |  | 202 |  |  | 89 |  |  | 140 |  |  | 79 |  |  | 18 |  |  | 528 |  |  |  |  |
(Table continued on next page)
In millions |  | Engine |  | Distribution |  | Components |  | Power Systems |  | New Power |  | Total Segments |  |  |  |
2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
External sales |  | $ | 7,570 |  |  | $ | 8,040 |  |  | $ | 5,253 |  |  | $ | 2,670 |  |  | $ | 38 |  |  | $ | 23,571 |  |  |  |  |
Intersegment sales |  | 2,486 |  |  | 31 |  |  | 1,661 |  |  | 1,790 |  |  | — |  |  | 5,968 |  |  |  |  |
Total sales |  | 10,056 |  |  | 8,071 |  |  | 6,914 |  |  | 4,460 |  |  | 38 |  |  | 29,539 |  |  |  |  |
Research, development and engineering expenses |  | 337 |  |  | 28 |  |  | 300 |  |  | 230 |  |  | 106 |  |  | 1,001 |  |  |  |  |
Equity, royalty and interest income from investees |  | 200 |  |  | 52 |  |  | 40 |  |  | 38 |  |  | — |  |  | 330 |  |  |  |  |
Interest income |  | 15 |  |  | 15 |  |  | 8 |  |  | 8 |  |  | — |  |  | 46 |  |  |  |  |
Segment EBITDA (excluding restructuring actions) |  | 1,472 |  |  | 693 |  |  | 1,117 |  |  | 524 |  |  | (148) |  |  | 3,658 |  |  |  |  |
Restructuring actions (2) |  | 18 |  |  | 37 |  |  | 20 |  |  | 12 |  |  | 1 |  |  | 88 |  |  |  |  |
Segment EBITDA |  | 1,454 |  |  | 656 |  |  | 1,097 |  |  | 512 |  |  | (149) |  |  | 3,570 |  |  |  |  |
Depreciation and amortization (1) |  | 202 |  |  | 115 |  |  | 222 |  |  | 118 |  |  | 12 |  |  | 669 |  |  |  |  |
Capital expenditures |  | 240 |  |  | 136 |  |  | 191 |  |  | 107 |  |  | 26 |  |  | 700 |  |  |  |  |
(1) Depreciation and amortization, as shown on a segment basis, excludes the amortization of debt discount and deferred costs included in the Consolidated Statements of Net Income as "Interest expense." The amortization of debt discount and deferred costs were $3 million, $3 million and $3 million for the years ended 2021, 2020 and 2019, respectively. A portion of depreciation expense is included in "Research, development and engineering expense."
(2) See Note 21 "RESTRUCTURING ACTIONS," for additional information.
Reconciliation of Revenue from Segments to Consolidated | A reconciliation of our total segment sales to total net sales in the Consolidated Statements of Net Income was as follows:
|  | Years ended December 31,
In millions |  | 2021 |  | 2020 |  | 2019
Total segment sales |  | $ | 29,922 |  |  | $ | 24,885 |  |  | $ | 29,539 |
Elimination of intersegment sales |  | (5,901) |  |  | (5,074) |  |  | (5,968) |
Total net sales |  | $ | 24,021 |  |  | $ | 19,811 |  |  | $ | 23,571 |
Reconciliation of segment information | A reconciliation of our segment information to the corresponding amounts in the Consolidated Statements of Net Income is shown in the table below:
|  | Years ended December 31,
In millions |  | 2021 |  | 2020 |  | 2019
TOTAL SEGMENT EBITDA |  | $ | 3,595 |  |  | $ | 3,032 |  |  | $ | 3,570 |
Intersegment elimination |  | (74) |  |  | 76 |  |  | 42 |
Less: |  |  |  |  |  |
Interest expense |  | 111 |  |  | 100 |  |  | 109 |
Depreciation and amortization |  | 659 |  |  | 670 |  |  | 669 |
INCOME BEFORE INCOME TAXES |  | 2,751 |  |  | 2,338 |  |  | 2,834 |
Less: Income tax expense |  | 587 |  |  | 527 |  |  | 566 |
CONSOLIDATED NET INCOME |  | 2,164 |  |  | 1,811 |  |  | 2,268 |
Less: Net income attributable to noncontrolling interests |  | 33 |  |  | 22 |  |  | 8 |
NET INCOME ATTRIBUTABLE TO CUMMINS INC. |  | $ | 2,131 |  |  | $ | 1,789 |  |  | $ | 2,260 |
Reconciliation of segment information from net assets to total assets | A reconciliation of our segment net assets to the corresponding amounts in the Consolidated Balance Sheets is shown in the table below:
|  | December 31, |
In millions |  | 2021 |  | 2020 |  |  |
Net assets for operating segments |  | $ | 9,639 |  |  | $ | 9,266 |  |  |  |
Cash, cash equivalents and marketable securities |  | 3,187 |  |  | 3,862 |  |  |  |
Net liabilities deducted in arriving at net assets (1) |  | 9,486 |  |  | 8,947 |  |  |  |
Pension and OPEB adjustments excluded from net assets |  | 966 |  |  | 67 |  |  |  |
Deferred tax assets not allocated to segments |  | 428 |  |  | 479 |  |  |  |
Deferred debt costs not allocated to segments |  | 4 |  |  | 3 |  |  |  |
Total assets |  | $ | 23,710 |  |  | $ | 22,624 |  |  |  |
(1) Liabilities deducted in arriving at net assets include certain accounts payable, accrued expenses, long-term liabilities and other items. |
Long-lived assets attributed to geographic areas | Long-lived segment assets by geographic area were as follows:
|  | December 31,
In millions |  | 2021 |  | 2020 |  |
United States |  | $ | 3,978 |  |  | $ | 3,776 |  |  |
China |  | 1,136 |  |  | 1,010 |  |  |
India |  | 573 |  |  | 595 |  |  |
United Kingdom |  | 384 |  |  | 370 |  |  |
Netherlands |  | 314 |  |  | 295 |  |  |
Mexico |  | 195 |  |  | 187 |  |  |
Canada |  | 163 |  |  | 149 |  |  |
Other international countries |  | 554 |  |  | 545 |  |  |
Total long-lived assets |  | $ | 7,297 |  |  | $ | 6,927 |  |  |

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