Cummins Revises Previously Announced 2012 Pre-Tax Earnings Results by $20 Million

Before you go, we thought you'd like these...
Before you go close icon

Cummins Revises Previously Announced 2012 Pre-Tax Earnings Results by $20 Million

-- Reduces fourth quarter and full year earnings per diluted share by 7 cents --

COLUMBUS, Ind.--(BUSINESS WIRE)-- Cummins Inc. (NYS: CMI) announced today that it has revised its previously announced fourth quarter and full year 2012 operating results to reflect information learned in February related to certain legal matters. The revisions were made to reflect a post-period increase to the Company's contingent legal reserves for a recent adverse court ruling in a commercial contract dispute.


As a result of the new information, Earnings Before Interest and Taxes (EBIT) for the fourth quarter and the full year decreased by $20 million, while net income attributable to Cummins was reduced by $12 million, or $0.07 per diluted share. This matter does not alter operating segment results as previously reported.

The Company's revised fourth quarter EBIT was $532 million excluding $52 million of restructuring costs. Net income attributable to Cummins was $369 million, or $1.95 cents per diluted share, including $0.19 per diluted share of restructuring costs and one-time tax benefits of $0.21 per diluted share.

For the full year, the Company's revised EBIT, excluding special items, was $2.35 billion or 13.6% of sales compared to $2.6 billion or 14.2% of sales in 2011.

Net income for the full year 2012 was $1.65 billion ($8.67 per diluted share) down from $1.85 billion ($9.55 per diluted share) in 2011. Excluding the costs of restructuring ($0.18 per diluted share), and the gain on the sale of the exhaust business ($0.02 per diluted share), the Company reported Net Income for 2012 of $1.68 billion ($8.83 per diluted share).

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 46,000 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 6,500 dealer locations. Cummins earned $1.65 billion on sales of $17.3 billion in 2012. 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 2013. 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 2011 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.

CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) (a)
    
Three months ended
December 31,September 30,December 31,
In millions, except per share amounts201220122011
NET SALES$4,292$4,118$4,921
Cost of sales 3,234 3,076 3,680
GROSS MARGIN1,0581,0421,241
 
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses482456496
Research, development and engineering expenses174186179

Equity, royalty and interest income from investees (Note 1)

8294101
Gain on sale of businesses--53
Other operating income (expense), net (19) (1) 25
OPERATING INCOME465493745
 
Interest income559
Interest expense7910
Other income (expense), net 10 (2) 14
INCOME BEFORE INCOME TAXES473487758
 
Income tax expense (Note 3) 75 117 186
CONSOLIDATED NET INCOME398370572
 
Less: Net income attributable to noncontrolling interests 29 18 24
NET INCOME ATTRIBUTABLE TO CUMMINS INC.$369$352$548
 
EARNINGS PER COMMON SHARE ATTRIBUTABLE
TO CUMMINS INC.
Basic$1.96$1.87$2.87
Diluted$1.95$1.86$2.86
 
WEIGHTED AVERAGE SHARES OUTSANDING
Basic188.4188.6190.9
Diluted188.8189.0191.5
 
CASH DIVIDENDS DECLARED PER COMMON SHARE$0.50$0.50$0.40
 

(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America (GAAP).

CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited (a)
   
For the years ended
December 31,December 31,
In millions, except per share amounts20122011
NET SALES$17,334$18,048
Cost of sales 12,826 13,459
GROSS MARGIN4,5084,589
 
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses1,9001,837
Research, development and engineering expenses728629
Equity, royalty and interest income from investees (Note 1)384416
Gain on sale of businesses6121
Other operating income, net (16) 21
OPERATING INCOME2,2542,681
 
Interest income2534
Interest expense3244
Other income, net 24 -
INCOME BEFORE INCOME TAXES2,2712,671
 
Income tax expense (Note 3) 533 725
CONSOLIDATED NET INCOME1,7381,946
 
Less: Net income attributable to noncontrolling interests 93 98
NET INCOME ATTRIBUTABLE TO CUMMINS INC.$1,645$1,848
 
EARNINGS PER COMMON SHARE ATTRIBUTABLE
TO CUMMINS INC.
Basic$8.69$9.58
Diluted$8.67$9.55
 
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic189.3193.0
Diluted189.7193.6
 
CASH DIVIDENDS DECLARED PER COMMON SHARE$1.80$1.325
 

(a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America (GAAP).

CUMMINS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (a)
       
December 31,December 31,
In millions, except par value20122011
ASSETS
Current assets
Cash and cash equivalents$1,369$1,484
Marketable securities 247 277
Total cash, cash equivalents and marketable securities1,6161,761
Accounts and notes receivable, net2,4752,526
Inventories2,2212,141
Prepaid expenses and other current assets 855 663
Total current assets 7,167 7,091
Long-term assets
Property, plant and equipment, net2,7242,288
Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Gift Finder Promo
More to Explore
Tue, Dec 06
Set Your Location
City, State, or Zip