Cummins, Inc. Business Report FY ended Dec. 2012

Business Highlights

Financial Overview

(in million dollars)
  FY2012 FY2011 Rate of change (%) Factors
Overall 17,334   18,048 (4.0) -
Sales by Segment
Engine segment 10,733 11,307 (5.1) 1)
Components segment 4,012 4,063 (1.3) 2)

-Engine segment sales in FY 2012 decreased by 5 percent due to weakness in industrial demand, especially in international construction markets, and lower volumes in the Brazilian medium-duty truck market, which were partially offset by growth in the North American on-highway markets in the first half of the year, led by the heavy-duty business.

-Components segment sales in FY 2012, excluding acquisitions, decreased by 2 percent due to 126 million dollars of sales in 2011 related to its exhaust business' assets sold in 2011 and lower demand in the turbo technologies, filtration and fuel systems businesses, which were partially offset by higher demand in the emission solutions business, primarily in North America and Brazil.


-The Company announced the production of the 2,000,000th pickup truck engine for Chrysler Group at its Columbus MidRange Engine Plant, in Indiana, the U.S. The 2012 6.7L inline 6-cylinder High Output Cummins Turbo Diesel powers the Ram 2500 and 3500 heavy duty pickup trucks and is also available in Ram 3500/4500/5500 chassis cabs. (From a press release on December 11, 2012)


-The Company has completed the acquisition of the emission control assets of Hilite International in Marktheidenfeld, Germany. The Hilite assets are now part of Cummins Emission Solution (CES). The selective catalytic reduction dosing (SCR dosing) system developed by Hilite will complement existing Cummins aftertreatment technology, which includes controls, sensors, catalysts, substrates and packaging. As part of the acquisition, 133 former Hilite employees have joined Cummins and the business will continue to operate from the plant at Marktheindenfeld for the foreseeable future. (From a press release on July 18, 2012)


-The Company has received the 2012 Sustainability Supplier of the Year from Chrysler Group LLC. (From a press release on June 20, 2012)


R&D Expenditure

(in million dollars)
  FY2012 FY2011 FY2010
Overall 728 629 414
Engine 433 397 263
Components 213 175 114

R&D Structure

-The Company operates 19 technical centers around the world.

Product Development

Mid-range natural gas engine
-Cummins Westport Inc. announced it has begun development on the ISB6.7 G, a mid-range 6.7 liter natural gas engine for school buses, medium-duty trucks, and vocational vehicles. The ISB6.7 G engine will be based on the Cummins ISB6.7 diesel engine and will use Cummins Westport's stoichiometric cooled exhaust gas recirculation (SEGR) technology. The ISB6.7 G is expected to be in production by 2015 and will be designed to meet Environmental Protection Agency (EPA) and California Air Resources Board (CARB) regulations in force at the time of launch. (From a press release on October 4, 2012)

15-liter Heavy-Duty, Spark-ignited Natural Gas Engine
-The Company has begun development of a 15-liter Heavy-Duty, spark-ignited natural gas engine, the ISX15 G. The new engine will be based on the ISX15 diesel engine. The engine will run on compressed natural gas, liquefied natural gas or biomethane. Cummins ISX15 G is expected to be in limited production by 2014. Cummins is already producing on-highway spark-ignited natural gas engines for Cummins Westport. Engines offered by Cummins Westport range in size from 5.9 liters to the recently announced 12-liter ISX12 G, which will begin production in 2013. (From a press release on March 21, 2012)

Investment Activities

Capital Expenditure

(in million dollars)
  FY2012 FY2011 FY2010
Engine 399 339 197
Power Generation 95 87 53
Components 134 141 78
Distribution 62 55 36
Total 690 622 364

Investment Activities

-Capital expenditures were 690 million dollars in 2012 compared to 622 million dollars in 2011. Despite the challenging economies around the world, the Company continue to invest in new product lines and targeted capacity expansions. The Company plans to spend approximately 850 million dollars in 2013 as it continue with product launches and facility improvements and prepare for future emission standards. Over one-half of its capital expenditures will be invested outside of the U.S. in 2013.