Cummins (CMI) 10-Q 2 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	3 Months Ended
	Apr. 02, 2017shares
Document and Entity Information
Entity Registrant Name	CUMMINS INC
Entity Central Index Key	26,172
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Apr. 2, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding	167,975,197
Entity Current Reporting Status	Yes

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions		3 Months Ended
		Apr. 02, 2017	Apr. 03, 2016
Income Statement [Abstract]
NET SALES	[1]	$ 4,589	$ 4,291	[2]
Cost of sales		3,461	3,235
GROSS MARGIN		1,128	1,056
OPERATING EXPENSES AND INCOME
Selling, general and administrative expenses		537	490
Research, development and engineering expenses		158	166	[2]
Equity, royalty and interest income from investees (Note 4)		108	72	[2]
Other operating income (expense), net		5	(2)
OPERATING INCOME		546	470
Interest income		2	6	[2]
Interest expense (Note 7)		18	19
Other income (expense), net		18	8
INCOME BEFORE INCOME TAXES		548	465
Income tax expense		143	132
CONSOLIDATED NET INCOME		405	333
Less: Net income attributable to noncontrolling interests		9	12
NET INCOME ATTRIBUTABLE TO CUMMINS INC.		$ 396	$ 321
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.
Basic (in dollars per share)		$ 2.36	$ 1.87
Diluted (in dollars per share)		$ 2.36	$ 1.87
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic (in shares)		167.5	171.8
Dilutive effect of stock compensation awards (in shares)		0.5	0.2
Diluted (in shares)		168	172
CASH DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share)		$ 1.025	$ 0.975
Sales to nonconsolidated equity investees		$ 267	$ 242
[1]	Includes sales to nonconsolidated equity investees of $267 million and $242 million for the three months ended April 2, 2017 and April 3, 2016, respectively.
[2]	In the second quarter of 2016, we realigned our reportable operating segments. The three months ended April 3, 2016, were revised retrospectively to conform with these changes.

CONDENSED CONSOLIDATED STATEME3

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended
	Apr. 02, 2017	Apr. 03, 2016
Statement of Comprehensive Income [Abstract]
CONSOLIDATED NET INCOME	$ 405	$ 333
Other comprehensive income (loss), net of tax (Note 10)
Foreign currency translation adjustments	80	(57)
Unrealized gain (loss) on derivatives	1	(21)
Change in pension and other postretirement defined benefit plans	21	9
Total other comprehensive income (loss), net of tax	102	(69)
COMPREHENSIVE INCOME	507	264
Less: Comprehensive income attributable to noncontrolling interests	22	12
COMPREHENSIVE INCOME ATTRIBUTABLE TO CUMMINS INC.	$ 485	$ 252

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions		Apr. 02, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents		$ 1,322	$ 1,120
Marketable securities (Note 5)		145	260
Total cash, cash equivalents and marketable securities		1,467	1,380
Accounts and notes receivable, net
Trade and other		2,980	2,803
Nonconsolidated equity investees		267	222
Inventories (Note 6)		2,894	2,675
Prepaid expenses and other current assets		551	627
Total current assets		8,159	7,707
Long-term assets
Property, plant and equipment		7,746	7,635
Accumulated depreciation		(3,944)	(3,835)
Property, plant and equipment, net		3,802	3,800
Investments and advances related to equity method investees		1,059	946
Goodwill		482	480
Other intangible assets, net		345	332
Pension assets		785	731
Other assets		1,002	1,015
Total assets		15,634	15,011
Current liabilities
Accounts payable (principally trade)		2,168	1,854
Loans payable (Note 7)	[1]	48	41
Commercial paper (Note 7)	[2]	274	212
Accrued compensation, benefits and retirement costs		334	412
Current portion of accrued product warranty (Note 8)		352	333
Current portion of deferred revenue		498	468
Other accrued expenses		941	970
Current maturities of long-term debt (Note 7)		47	35
Total current liabilities		4,662	4,325
Long-term liabilities
Long-term debt (Note 7)		1,576	1,568
Postretirement benefits other than pensions		317	329
Pensions		325	326
Other liabilities and deferred revenue		1,278	1,289
Total liabilities		8,158	7,837
Commitments and contingencies (Note 9)
Cummins Inc. shareholders' equity
Common stock, $2.50 par value, 500 shares authorized, 222.3 and 222.4 shares issued		2,163	2,153
Retained earnings		11,265	11,040
Treasury stock, at cost, 54.4 and 54.2 shares		(4,524)	(4,489)
Common stock held by employee benefits trust, at cost, 0.6 and 0.7 shares		(7)	(8)
Accumulated other comprehensive loss
Accumulated other comprehensive loss (Note 10)		(1,732)	(1,821)
Total Cummins Inc. shareholders' equity		7,165	6,875
Noncontrolling interests		311	299
Total equity		7,476	7,174
Total liabilities and equity		$ 15,634	$ 15,011
[1]	Loans payable consist primarily of notes payable to various domestic and international financial institutions. It is not practical to aggregate these notes and calculate a quarterly weighted-average interest rate.
[2]	The weighted average interest rate, inclusive of all brokerage fees, was 0.94 percent and 0.79 percent at April 2, 2017 and December 31, 2016, respectively.

CONDENSED CONSOLIDATED BALANCE5

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions	Apr. 02, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 2.50	$ 2.50
Common stock, shares authorized	500	500
Common stock, shares issued	222.3	222.4
Treasury stock, shares	54.4	54.2
Common stock held by employee benefits trust, shares	0.6	0.7

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions		3 Months Ended
		Apr. 02, 2017	Apr. 03, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated net income		$ 405	$ 333
Adjustments to reconcile consolidated net income to net cash provided by operating activities
Depreciation and amortization		139	128
Deferred income taxes		10	(2)
Equity in income of investees, net of dividends (Note 4)		(83)	(48)
Pension contributions in excess of expense (Note 3)		(23)	(50)
Other post-retirement benefits payments in excess of expense (Note 3)		(10)	(8)
Stock-based compensation expense		7	5
Restructuring charges and other actions, net of cash payments		0	(25)
Translation and hedging activities		11	(14)
Changes in current assets and liabilities, net of acquisitions
Accounts and notes receivable		(205)	(98)
Inventories		(202)	(54)
Other current assets		73	188
Accounts payable		296	107
Accrued expenses		(90)	(283)
Changes in other liabilities and deferred revenue		48	78
Other, net		3	10
Net cash provided by operating activities		379	267
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(81)	(71)
Investments in internal use software		(27)	(13)
Investments in and advances to equity investees		(20)	(25)
Investments in marketable securities—acquisitions (Note 5)		(26)	(291)
Investments in marketable securities—liquidations (Note 5)	[1]	147	35
Cash flows from derivatives not designated as hedges		(24)	(26)
Other, net		4	3
Net cash used in investing activities		(27)	(388)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings			105
Net borrowings of commercial paper (Note 7)		62	50
Payments on borrowings and capital lease obligations		(11)	(15)
Distributions to noncontrolling interests		(10)	(10)
Dividend payments on common stock		(171)	(170)
Repurchases of common stock		(51)	(575)
Other, net		17	(21)
Net cash used in financing activities		(164)	(636)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		14	(39)
Net increase (decrease) in cash and cash equivalents		202	(796)
Cash and cash equivalents at beginning of year		1,120	1,711
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$ 1,322	$ 915
[1]	Gross realized gains and losses from the sale of available-for-sale securities were immaterial.

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Millions	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Common Stock Held in Trust	Accumulated Other Comprehensive Loss	Total Cummins Inc. Shareholders' Equity	Noncontrolling Interests
BALANCE at Dec. 31, 2015	$ 7,750	$ 556	$ 1,622	$ 10,322	$ (3,735)	$ (11)	$ (1,348)	$ 7,406	$ 344
Increase (Decrease) in Shareholders' Equity
Net income	333			321				321	12
Other comprehensive income (loss), net of tax (Note 11)	(69)						(69)	(69)	0
Issuance of common stock	2		2					2
Employee benefits trust activity	11		9			2		11
Repurchases of common stock	(575)		(100)		(475)			(575)
Cash dividends on common stock	(170)			(170)				(170)
Distributions to noncontrolling interests	(10)								(10)
Stock based awards, net	1		(6)		7			1
Acquisition of noncontrolling interests	(13)		(7)					(7)	(6)
BALANCE at Apr. 03, 2016	7,260	556	1,520	10,473	(4,203)	(9)	(1,417)	6,920	340
BALANCE at Dec. 31, 2016	7,174	556	1,597	11,040	(4,489)	(8)	(1,821)	6,875	299
Increase (Decrease) in Shareholders' Equity
Net income	405			396				396	9
Other comprehensive income (loss), net of tax (Note 11)	102						89	89	13
Employee benefits trust activity	10		9			1		10
Repurchases of common stock	(51)				(51)			(51)
Cash dividends on common stock	(171)			(171)				(171)
Distributions to noncontrolling interests	(10)								(10)
Stock based awards, net	15		(1)		16			15
Other shareholder transactions	2		2					2	0
BALANCE at Apr. 02, 2017	$ 7,476	$ 556	$ 1,607	$ 11,265	$ (4,524)	$ (7)	$ (1,732)	$ 7,165	$ 311

NATURE OF OPERATIONS

NATURE OF OPERATIONS	3 Months Ended
	Apr. 02, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF OPERATIONS	NOTE 1. NATURE OF OPERATIONS Cummins Inc. (“Cummins,” “we,” “our” or “us”) was founded in 1919 as Cummins Engine Company, a corporation in Columbus, Indiana, as one of the first diesel engine manufacturers. We changed our name to Cummins Inc. in 2001. We are a global power leader that designs, manufactures, distributes and services diesel and natural gas engines and engine-related component products, including filtration, aftertreatment, turbochargers, fuel systems, controls systems, air handling systems and electric power generation systems. We sell our products to original equipment manufacturers (OEMs), distributors and other customers worldwide. We serve our customers through a network of approximately 600 wholly-owned and independent distributor locations and over 7,400 dealer locations in more than 190 countries and territories.

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Apr. 02, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	NOTE 2. BASIS OF PRESENTATION Interim Condensed Financial Statements The unaudited Condensed Consolidated Financial Statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of operations, financial position and cash flows. All such adjustments are of a normal recurring nature. The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles in the United States of America (GAAP) pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial information. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted as permitted by such rules and regulations. These interim condensed financial statements should be read in conjunction with the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 . Our interim period financial results for the three month periods presented are not necessarily indicative of results to be expected for any other interim period or for the entire year. The year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Reclassifications Certain amounts for prior year periods have been reclassified to conform to the presentation of the current year. Use of Estimates in Preparation of Financial Statements Preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts presented and disclosed in our Condensed Consolidated Financial Statements . Significant estimates and assumptions in these Condensed Consolidated Financial Statements require the exercise of judgment and are used for, but not limited to, allowance for doubtful accounts, estimates of future cash flows and other assumptions associated with goodwill and long-lived asset impairment tests, useful lives for depreciation and amortization, warranty programs, determination of discount rate and other assumptions for pension and other postretirement benefit costs, income taxes and deferred tax valuation allowances, lease classification and contingencies. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates. Reporting Period Our reporting period usually ends on the Sunday closest to the last day of the quarterly calendar period. The first quarters of 2017 and 2016 ended on April 2 and April 3, respectively. Our fiscal year ends on December 31, regardless of the day of the week on which December 31 falls. Weighted-average Diluted Shares Outstanding The weighted-average diluted common shares outstanding excludes the anti-dilutive effect of certain stock options since such options had an exercise price in excess of the monthly average market value of our common stock. The options excluded from diluted earnings per share were as follows: Three months ended April 2, April 3, Options excluded 116,535 1,687,666 Accelerated Share Repurchase On February 9, 2016, we entered into an accelerated share repurchase (ASR) agreement with a third party financial institution to repurchase $500 million of our common stock under our previously announced share repurchase plans. Pursuant to the terms of the agreement, we paid the full $500 million purchase price and received approximately 4.1 million shares at a price of $98.43 per share, representing approximately 80 percent of the shares expected to be repurchased. The unsettled portion of the ASR met the criteria to be accounted for as a forward contract indexed to our stock and qualified as an equity transaction. This resulted in a $100 million reduction to additional paid-in capital during the first quarter of 2016. The initial delivery of shares resulted in a reduction to our common stock outstanding used to calculate earnings per share in the first quarter of 2016.

PENSION AND OTHER POSTRETIREMEN

PENSION AND OTHER POSTRETIREMENT BENEFITS	3 Months Ended
	Apr. 02, 2017
Compensation and Retirement Disclosure [Abstract]
PENSION AND OTHER POSTRETIREMENT BENEFITS	NOTE 3. PENSION AND OTHER POSTRETIREMENT BENEFITS We sponsor funded and unfunded domestic and foreign defined benefit pension and other postretirement plans. Contributions to these plans were as follows: Three months ended In millions April 2, April 3, Defined benefit pension plans Voluntary contribution $ 43 $ 48 Mandatory contribution — 12 Defined benefit pension contributions $ 43 $ 60 Other postretirement plans $ 15 $ 13 Defined contribution pension plans $ 29 $ 21 We anticipate making additional defined benefit pension contributions during the remainder of 2017 of $91 million for our U.S. and U.K pension plans. Approximately $133 million of the estimated $134 million of pension contributions for the full year are voluntary. These contributions may be made from trusts or company funds either to increase pension assets or to make direct benefit payments to plan participants. We expect our 2017 net periodic pension cost to approximate $83 million . The components of net periodic pension and other postretirement benefit costs under our plans were as follows: Pension U.S. Plans U.K. Plans Other Postretirement Benefits Three months ended In millions April 2, April 3, April 2, April 3, April 2, April 3, Service cost $ 27 $ 23 $ 6 $ 5 $ — $ — Interest cost 26 28 10 13 3 4 Expected return on plan assets (51 ) (51 ) (17 ) (19 ) — — Recognized net actuarial loss 9 7 10 4 2 1 Net periodic benefit cost $ 11 $ 7 $ 9 $ 3 $ 5 $ 5

EQUITY, ROYALTY AND INTEREST IN

EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES	3 Months Ended
	Apr. 02, 2017
Equity Method Investments and Joint Ventures [Abstract]
EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES	NOTE 4. 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 April 2, April 3, Distribution entities Komatsu Cummins Chile, Ltda. $ 7 $ 10 North American distributors — 5 Manufacturing entities Beijing Foton Cummins Engine Co., Ltd. 33 18 Dongfeng Cummins Engine Company, Ltd. 22 7 Chongqing Cummins Engine Company, Ltd. 9 8 All other manufacturers 24 16 Cummins share of net income 95 64 Royalty and interest income 13 8 Equity, royalty and interest income from investees $ 108 $ 72

MARKETABLE SECURITIES

MARKETABLE SECURITIES	3 Months Ended
	Apr. 02, 2017
Investments, Debt and Equity Securities [Abstract]
MARKETABLE SECURITIES	NOTE 5. MARKETABLE SECURITIES A summary of marketable securities, all of which are classified as current, was as follows: April 2, 2017 December 31, 2016 In millions Cost Gross unrealized Estimated Cost Gross unrealized Estimated Available-for-sale (1) Debt mutual funds $ 130 $ — $ 130 $ 132 $ — $ 132 Bank debentures — — — 114 — 114 Equity mutual funds 12 1 13 12 — 12 Government debt securities 2 — 2 2 — 2 Total marketable securities $ 144 $ 1 $ 145 $ 260 $ — $ 260 ____________________________________ (1) All marketable securities are classified as Level 2 securities. The fair value of Level 2 securities is estimated using actively quoted prices for similar instruments from brokers and observable inputs where available, including market transactions and third-party pricing services, or net asset values provided to investors. We do not currently have any Level 3 securities and there were no transfers between Level 2 or 3 during the first three months of 2017 and for the year ended 2016. A description of the valuation techniques and inputs used for our Level 2 fair value measures was as follows: • Debt mutual funds — The fair value measure for the vast majority of these investments is the daily net asset value published on a regulated governmental website. Daily quoted prices are available from the issuing brokerage and are used on a test basis to corroborate this Level 2 input. • Bank debentures — These investments provide us with a contractual rate of return and generally range in maturity from three months to five years . The counterparties to these investments are reputable financial institutions with investment grade credit ratings. Since these instruments are not tradable and must be settled directly by us with the respective financial institution, our fair value measure is the financial institutions’ month-end statement. • Equity mutual funds — The fair value measure for these investments is the net asset value published by the issuing brokerage. Daily quoted prices are available from reputable third party pricing services and are used on a test basis to corroborate this Level 2 input measure. • Government debt securities — The fair value measure for these securities is broker quotes received from reputable firms. These securities are infrequently traded on a national stock exchange and these values are used on a test basis to corroborate our Level 2 input measure. The proceeds from sales and maturities of marketable securities and gross realized gains and losses from the sale of available-for-sale securities were as follows: Three months ended In millions April 2, April 3, Proceeds from sales and maturities of marketable securities (1) $ 147 $ 35 ____________________________________ (1) Gross realized gains and losses from the sale of available-for-sale securities were immaterial. The fair value of available-for-sale investments in debt securities that utilize a Level 2 fair value measure is shown by contractual maturity below: Contractual Maturity (In millions) April 2, 1 year or less $ 131 5 - 10 years 1 Total $ 132

INVENTORIES

INVENTORIES	3 Months Ended
	Apr. 02, 2017
Inventory Disclosure [Abstract]
INVENTORIES	NOTE 6. INVENTORIES Inventories are stated at the lower of cost or market. Inventories included the following: In millions April 2, December 31, Finished products $ 1,867 $ 1,779 Work-in-process and raw materials 1,145 1,005 Inventories at FIFO cost 3,012 2,784 Excess of FIFO over LIFO (118 ) (109 ) Total inventories $ 2,894 $ 2,675

DEBT

DEBT	3 Months Ended
	Apr. 02, 2017
Debt Disclosure [Abstract]
DEBT	NOTE 7. DEBT Loans Payable and Commercial Paper Loans payable, commercial paper and the related weighted-average interest rates were as follows: In millions April 2, 2017 December 31, 2016 Loans payable (1) $ 48 $ 41 Commercial paper (2) 274 212 ____________________________________ (1) Loans payable consist primarily of notes payable to various domestic and international financial institutions. It is not practical to aggregate these notes and calculate a quarterly weighted-average interest rate. (2) The weighted average interest rate, inclusive of all brokerage fees, was 0.94 percent and 0.79 percent at April 2, 2017 and December 31, 2016 , respectively. Long-term Debt A summary of long-term debt was as follows: In millions April 2, December 31, Long-term debt Senior notes, 3.65%, due 2023 $ 500 $ 500 Debentures, 6.75%, due 2027 58 58 Debentures, 7.125%, due 2028 250 250 Senior notes, 4.875%, due 2043 500 500 Debentures, 5.65%, due 2098 (effective interest rate 7.48%) 165 165 Other debt 69 51 Unamortized discount (55 ) (56 ) Fair value adjustments due to hedge on indebtedness 43 47 Capital leases 93 88 Total long-term debt 1,623 1,603 Less: Current maturities of long-term debt 47 35 Long-term debt $ 1,576 $ 1,568 Principal payments required on long-term debt during the next five years are as follows: In millions 2017 2018 2019 2020 2021 Principal payments $ 34 $ 45 $ 35 $ 10 $ 4 Fair Value of Debt Based on borrowing rates currently available to us for bank loans with similar terms and average maturities, considering our risk premium, the fair value and carrying value of total debt, including current maturities, were as follows: In millions April 2, December 31, Fair value of total debt (1) $ 2,150 $ 2,077 Carrying value of total debt 1,945 1,856 _________________________________________________ (1) The fair value of debt is derived from Level 2 inputs.

PRODUCT WARRANTY LIABILITY

PRODUCT WARRANTY LIABILITY	3 Months Ended
	Apr. 02, 2017
Product Warranties Disclosures [Abstract]
PRODUCT WARRANTY LIABILITY	NOTE 8. PRODUCT WARRANTY LIABILITY A tabular reconciliation of the product warranty liability, including the deferred revenue related to our extended warranty coverage and accrued recall programs was as follows: In millions April 2, April 3, Balance, beginning of year $ 1,414 $ 1,404 Provision for warranties issued 92 93 Deferred revenue on extended warranty contracts sold 48 55 Payments (95 ) (102 ) Amortization of deferred revenue on extended warranty contracts (54 ) (47 ) Changes in estimates for pre-existing warranties 34 — Foreign currency translation (2 ) — Balance, end of period $ 1,437 $ 1,403 Warranty related deferred revenue and the long-term portion of the warranty liability on our April 2, 2017, balance sheet were as follows: In millions April 2, Balance Sheet Location Deferred revenue related to extended coverage programs Current portion $ 224 Current portion of deferred revenue Long-term portion 515 Other liabilities and deferred revenue Total $ 739 Long-term portion of warranty liability $ 346 Other liabilities and deferred revenue

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Apr. 02, 2017
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 9. COMMITMENTS AND CONTINGENCIES We are subject to numerous lawsuits and claims arising out of the ordinary course of our business, including actions related to product liability; personal injury; the use and performance of our products; warranty matters; product recalls; patent, trademark or other intellectual property infringement; contractual liability; the conduct of our business; tax reporting in foreign jurisdictions; distributor termination; workplace safety; and environmental matters. We also have been identified as a potentially responsible party at multiple waste disposal sites under U.S. federal and related state environmental statutes and regulations and may have joint and several liability for any investigation and remediation costs incurred with respect to such sites. We have denied liability with respect to many of these lawsuits, claims and proceedings and are vigorously defending such lawsuits, claims and proceedings. We carry various forms of commercial, property and casualty, product liability and other forms of insurance; however, such insurance may not be applicable or adequate to cover the costs associated with a judgment against us with respect to these lawsuits, claims and proceedings. We do not believe that these lawsuits are material individually or in the aggregate. While we believe we have also established adequate accruals pursuant to GAAP for our expected future liability with respect to pending lawsuits, claims and proceedings, where the nature and extent of any such liability can be reasonably estimated based upon then presently available information, there can be no assurance that the final resolution of any existing or future lawsuits, claims or proceedings will not have a material adverse effect on our business, results of operations, financial condition or cash flows. We conduct significant business operations in Brazil that are subject to the Brazilian federal, state and local labor, social security, tax and customs laws. While we believe we comply with such laws, they are complex, subject to varying interpretations and we are often engaged in litigation regarding the application of these laws to particular circumstances. Loss Contingency Charges Engine systems sold in the U.S. must be certified to comply with the Environmental Protection Agency (EPA) and California Air Resources Board (CARB) emission standards. EPA and CARB regulations require that in-use testing be performed on vehicles by the emission certificate holder and reported to the EPA and CARB in order to ensure ongoing compliance with these emission standards. We are the holder of this emission certificate for our engines, including engines installed in certain vehicles with one customer on which we did not also manufacture or sell the emission aftertreatment system. During 2015, a quality issue in certain of these third party aftertreatment systems caused some of our inter-related engines to fail in-use emission testing. In the fourth quarter of 2015, the vehicle manufacturer made a request that we assist in the design and bear the financial cost of a field campaign (Campaign) to address the technical issue purportedly causing some vehicles to fail the in-use testing. While we are not responsible for the warranty issues related to a component that we did not manufacture or sell, as the emission compliance certificate holder, we are responsible for proposing a remedy to the EPA and CARB. As a result, we have proposed actions to the agencies that we believe will address the emission failures. As the certificate holder, we expect to participate in the cost of the proposed voluntary Campaign and recorded a charge of $60 million in 2015. The Campaign design was finalized with our OEM customer, reviewed with the EPA and submitted for final approval in 2016. We concluded based upon additional in-use emission testing performed in 2016, that the Campaign should be expanded to include a larger population of vehicles manufactured by this one OEM. We recorded additional charges of $138 million in 2016 to reflect the estimated cost of our participation in the Campaign. We continue to work with our OEM customer to resolve the allocation of costs for the Campaign, including pending litigation between the parties. The Campaign is not expected to be completed for some time and our final cost could differ from the amount we have recorded. We do not currently expect any fines or penalties from the EPA or CARB related to this matter. The campaign began in the fourth quarter of 2016. The remaining accrual of $181 million related to the Campaign is included in ''Other accrued expenses'' in our Condensed Consolidated Balance Sheets. Guarantees and Commitments Periodically, we enter into guarantee arrangements, including guarantees of non-U.S. distributor financings, residual value guarantees on equipment under operating leases and other miscellaneous guarantees of joint ventures or third-party obligations. At April 2, 2017, the maximum potential loss related to these guarantees was $43 million . We have arrangements with certain suppliers that require us to purchase minimum volumes or be subject to monetary penalties. At April 2, 2017, if we were to stop purchasing from each of these suppliers, the aggregate amount of the penalty would be approximately $119 million , of which $41 million relates to a contract with a components supplier that extends to 2018 and $35 million relates to a contract with a power systems supplier that extends to 2019. Most of these arrangements enable us to secure critical components. We do not currently anticipate paying any penalties under these contracts. We enter into physical forward contracts with suppliers of platinum, palladium and copper to purchase minimum volumes of the commodities at contractually stated prices for various periods, not to exceed two years. At April 2, 2017, the total commitments under these contracts were $24 million . These arrangements enable us to fix the prices of these commodities, which otherwise are subject to market volatility. We have guarantees with certain customers that require us to satisfactorily honor contractual or regulatory obligations, or compensate for monetary losses related to nonperformance. These performance bonds and other performance-related guarantees were $83 million at April 2, 2017 . Indemnifications Periodically, we enter into various contractual arrangements where we agree to indemnify a third-party against certain types of losses. Common types of indemnities include: • product liability and license, patent or trademark indemnifications; • asset sale agreements where we agree to indemnify the purchaser against future environmental exposures related to the asset sold; and • any contractual agreement where we agree to indemnify the counterparty for losses suffered as a result of a misrepresentation in the contract. We regularly evaluate the probability of having to incur costs associated with these indemnities and accrue for expected losses that are probable. Because the indemnifications are not related to specified known liabilities and due to their uncertain nature, we are unable to estimate the maximum amount of the potential loss associated with these indemnifications. The accrual related to the Campaign which is included in "Other accrued expenses" in our Balance Sheets $ 181

ACCUMULATED OTHER COMPREHENSIVE

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	3 Months Ended
	Apr. 02, 2017
Equity [Abstract]
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	NOTE 10. ACCUMULATED OTHER COMPREHENSIVE LOSS Following are the changes in accumulated other comprehensive income (loss) by component : Three months ended In millions Change in Foreign Unrealized gain Unrealized gain Total Noncontrolling Total other comprehensive income (loss) Balance at December 31, 2015 $ (654 ) $ (696 ) $ (2 ) $ 4 $ (1,348 ) Other comprehensive income before reclassifications Before tax amount — (58 ) — (26 ) (84 ) $ — $ (84 ) Tax benefit (expense) — 1 — 4 5 — 5 After tax amount — (57 ) — (22 ) (79 ) — (79 ) Amounts reclassified from accumulated other comprehensive loss (1)(2) 9 — — 1 10 — 10 Net current period other comprehensive income (loss) 9 (57 ) — (21 ) (69 ) $ — $ (69 ) Balance at April 3, 2016 $ (645 ) $ (753 ) $ (2 ) $ (17 ) $ (1,417 ) Balance at December 31, 2016 $ (685 ) $ (1,127 ) $ (1 ) $ (8 ) $ (1,821 ) Other comprehensive income before reclassifications Before tax amount 8 75 1 (6 ) 78 $ 13 $ 91 Tax benefit (expense) (3 ) (8 ) — 2 (9 ) — (9 ) After tax amount 5 67 1 (4 ) 69 13 82 Amounts reclassified from accumulated other comprehensive loss (1)(2) 16 — (1 ) 5 20 — 20 Net current period other comprehensive income (loss) 21 67 — 1 89 $ 13 $ 102 Balance at April 2, 2017 $ (664 ) $ (1,060 ) $ (1 ) $ (7 ) $ (1,732 ) ____________________________________ (1) Amounts are net of tax. (2) Reclassifications out of accumulated other comprehensive income (loss) and the related tax effects are immaterial for separate disclosure.

OPERATING SEGMENTS

OPERATING SEGMENTS	3 Months Ended
	Apr. 02, 2017
Segment Reporting [Abstract]
OPERATING SEGMENTS	NOTE 11. OPERATING SEGMENTS Operating segments under GAAP are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (CODM), or decision-making group, in deciding how to allocate resources and in assessing performance. Our CODM is the Chief Operating Officer. Our reportable operating segments consist of Engine, Distribution, Components and Power Systems. This reporting structure is organized according to the products and markets each segment serves . The Engine segment produces engines (15 liters and less in size) and associated parts for sale to customers in on-highway and various off-highway markets. Our engines are used in trucks of all sizes, buses and recreational vehicles, as well as in various industrial applications, including construction, agriculture, power generation systems and other off-highway applications. The Distribution segment includes wholly-owned and partially-owned distributorships engaged in wholesaling engines, generator sets and service parts, as well as performing service and repair activities on our products and maintaining relationships with various OEMs throughout the world. The Components segment sells filtration products, aftertreatment systems, turbochargers and fuel systems. The Power Systems segment is an integrated power provider, which designs, manufactures and sells engines (16 liters and larger) for industrial applications (including mining, oil and gas, marine and rail), standby and prime power generator sets, alternators and other power components. We use segment EBIT (defined as earnings before interest expense, income taxes and noncontrolling interests) as a primary basis for the CODM to evaluate the performance of each of our operating segments. Segment amounts exclude certain expenses not specifically identifiable to segments. The accounting policies of our operating segments are the same as those applied in our Condensed Consolidated Financial Statements . We prepared the financial results of our operating segments on a basis that is consistent with the manner in which we internally disaggregate financial information to assist in making internal operating decisions. We allocate certain common costs and expenses, primarily corporate functions, among segments differently than we would for stand-alone financial information prepared in accordance with GAAP. These include certain costs and expenses of shared services, such as information technology, human resources, legal, finance and supply chain management. We do not allocate debt-related items, actuarial gains or losses, prior service costs or credits, changes in cash surrender value of corporate owned life insurance or income taxes to individual segments. Segment EBIT may not be consistent with measures used by other companies. Summarized financial information regarding our reportable operating segments is shown in the table below: In millions Engine Distribution Components Power Systems Non-segment Items (1) Total Three months ended April 2, 2017 External sales $ 1,457 $ 1,637 $ 980 $ 515 $ — $ 4,589 Intersegment sales 566 8 364 367 (1,305 ) — Total sales 2,023 1,645 1,344 882 (1,305 ) 4,589 Depreciation and amortization (2) 44 30 37 28 — 139 Research, development and engineering expenses 54 4 50 50 — 158 Equity, royalty and interest income from investees 72 11 13 12 — 108 Interest income 1 1 — — — 2 Segment EBIT 229 100 179 57 1 566 Three months ended April 3, 2016 (3) External sales $ 1,489 $ 1,458 $ 897 $ 447 $ — $ 4,291 Intersegment sales 487 5 340 361 (1,193 ) — Total sales 1,976 1,463 1,237 808 (1,193 ) 4,291 Depreciation and amortization (2) 39 28 31 29 — 127 Research, development and engineering expenses 57 4 56 49 — 166 Equity, royalty and interest income from investees 36 18 8 10 — 72 Interest income 2 1 1 2 — 6 Segment EBIT 197 87 163 46 (9 ) 484 ____________________________________ (1) Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended April 2, 2017 and April 3, 2016 . (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." The amortization of debt discount and deferred costs were less than $1 million and $1 million for the three months ended April 2, 2017 and April 3, 2016, respectively. (3) In the second quarter of 2016, we realigned our reportable operating segments. The three months ended April 3, 2016, were revised retrospectively to conform with these changes. 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 April 2, April 3, Total segment EBIT $ 566 $ 484 Less: Interest expense 18 19 Income before income taxes $ 548 $ 465

RECENTLY ADOPTED AND RECENTLY I

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	3 Months Ended
	Apr. 02, 2017
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	NOTE 12. RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Accounting Pronouncements Recently Adopted In March 2016, the Financial Accounting Standards Board (FASB) amended its standards related to the accounting for stock compensation which became effective for us beginning January 1, 2017. We adopted certain provisions prospectively in accordance with the standard, while others were required to be adopted retrospectively. The amendment replaced the requirement to record excess tax benefits and certain tax deficiencies in additional paid-in capital (APIC) with prospectively recording all excess tax benefits and tax deficiencies as income tax expense / benefit in the income statement. Excess tax benefits and deficiencies are required to be recorded as discrete items in the period in which they occur and were not material for three months ended April 2, 2017. In addition, the standard impacted our Condensed Consolidated Statements of Cash Flows , as excess tax benefits are now required to be presented as an operating activity (we elected a retrospective presentation) and the cash paid to tax authorities when shares are withheld to satisfy the employer's statutory income tax withholding obligation are required to be presented as a financing activity (requiring retrospective presentation). This resulted in a net reclassification of $4 million from operating to financing activities for the three months ended April 3, 2016. Finally, in accordance with the standard, we elected to continue our historical approach of estimating forfeitures during the award's vesting period and adjusting our estimate when it is no longer probable that the employee will fulfill the service condition. The adoption of the standard was not material to our diluted earnings per common share. Accounting Pronouncements Issued But Not Yet Effective In March 2017, the FASB amended its standards related to the presentation of pension and other postretirement benefit costs in the financial statements. Under the new standard, we will be required to separate service costs from all other elements of pension costs and reflect the other elements of pension costs outside of operating income in our Consolidated Statements of Income . This presentation is required to be reflected retrospectively. In addition, the standard will limit the amount eligible for capitalization (into inventory or self-constructed assets) to the amount of service cost. This portion of the standard will be applied on a prospective basis. The new standard is required to be adopted by us on January 1, 2018. While we are still evaluating the impact of this standard, the change in presentation requirements will likely result in a decrease in operating income primarily due to the requirement to present the effects of expected return on plan assets outside of operating income. In August 2016, the FASB amended its standards related to the classification of certain cash receipts and cash payments. The new standard will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The new standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case it would be required to apply the amendments prospectively as of the earliest date practicable. We are in the process of evaluating the impact this standard will have on our Consolidated Statements of Cash Flows. In June 2016, the FASB amended its standards related to the accounting for credit losses on financial instruments. This amendment introduces new guidance for accounting for credit losses on instruments including trade receivables and held-to-maturity debt securities. The new rules are effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are in the process of evaluating the impact the amendment will have on our Consolidated Financial Statements. In February 2016, the FASB amended its standards related to the accounting for leases. Under the new standard, lessees will now be required to recognize substantially all leases on the balance sheet as both a right-of-use-asset and a liability. The standard will continue to have two types of leases for income statement recognition purposes: operating leases and finance leases. Operating leases will result in the recognition of a single lease expense on a straight-line basis over the lease term similar to the treatment for operating leases under today's standards. Finance leases will result in an accelerated expense similar to the accounting for capital leases under today's standards. The determination of a lease classification as operating or finance will occur in a manner similar to today's standard. The new standard also contains amended guidance regarding the identification of embedded leases in service contracts and the identification of lease and non-lease components of an arrangement. The new standard is effective on January 1, 2019, with early adoption permitted. We are still evaluating the impact the standard could have on our Consolidated Financial Statements ; however, while we have not yet quantified the amount, we do expect the standard will have a material impact on our Consolidated Balance Sheets due to the recognition of additional assets and liabilities for operating leases. In January 2016, the FASB amended its standards related to the accounting for certain financial instruments. This amendment addresses certain aspects of recognition, measurement, presentation and disclosure. The new rules will become effective for annual and interim periods beginning after December 15, 2017. Early adoption is not permitted. We are in the process of evaluating the impact the amendment will have on our Consolidated Financial Statements . In May 2014, the FASB amended its standards related to revenue recognition. This amendment replaces all existing revenue recognition guidance and provides a single, comprehensive revenue recognition model for all contracts with customers. The standard contains principles that we will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that we will recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that we expect to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions include capitalization of certain contract costs, consideration of the time value of money in the transaction price and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendment also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in those judgments and assets recognized from costs incurred to fulfill a contract. The standard allows either full or modified retrospective adoption effective for annual and interim periods beginning January 1, 2018. We are in the process of evaluating the impact the amendment will have on our Consolidated Financial Statements. We expect to adopt the standard using the modified retrospective approach. While we have not yet completed our evaluation process, we have identified that a change will be required related to our accounting for remanufactured product sales that include an exchange of the used product, referred to as core. Revenue is not currently recognized related to the core component unless the used product is not returned. Under the new standard, the transaction will be accounted for as a gross sale and a purchase of inventory. As a result the exchange will increase both sales and cost of sales, in equal amounts, related to core. This will not impact gross margin dollars, but will impact the gross margin percentage. We are still quantifying the amount of this change. We have also identified transactions where revenue recognition is currently limited to the amount of billings not contingent on our future performance. With the allocation provisions of the new model, we expect to accelerate the timing of revenue recognition for amounts related to satisfied performance obligations that would have been delayed under the current guidance. We do not expect the impact of this change to be material, but we are still quantifying the impact.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Apr. 02, 2017
Subsequent Events [Abstract]
Subsequent Events	NOTE 13. SUBSEQUENT EVENT On April 10, 2017, we entered into an agreement to form a joint venture with Eaton Corporation PLC, subject to regulatory approvals. We will purchase a 50 percent interest in the new venture named Eaton Cummins Automated Transmission Technologies, for approximately $600 million in cash. The joint venture will design, assemble, sell and support medium-duty and heavy-duty automated transmissions for the commercial vehicle market, including new product launches. We expect the transaction to close in the third quarter of 2017, at which time we will consolidate the results of the joint venture in our Components segment as we have a majority voting interest in the venture by virtue of a tie-breaking vote on the board of directors.

BASIS OF PRESENTATION (Tables)

BASIS OF PRESENTATION (Tables)	3 Months Ended
	Apr. 02, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Options excluded from diluted earnings per share	The options excluded from diluted earnings per share were as follows: Three months ended April 2, April 3, Options excluded 116,535 1,687,666

PENSION AND OTHER POSTRETIREM22

PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables)	3 Months Ended
	Apr. 02, 2017
Compensation and Retirement Disclosure [Abstract]
Schedule of Defined Benefit Plans Disclosures Cash Contributions [Text Block]	Contributions to these plans were as follows: Three months ended In millions April 2, April 3, Defined benefit pension plans Voluntary contribution $ 43 $ 48 Mandatory contribution — 12 Defined benefit pension contributions $ 43 $ 60 Other postretirement plans $ 15 $ 13 Defined contribution pension plans $ 29 $ 21
Components of net periodic pension and other postretirement benefit cost	The components of net periodic pension and other postretirement benefit costs under our plans were as follows: Pension U.S. Plans U.K. Plans Other Postretirement Benefits Three months ended In millions April 2, April 3, April 2, April 3, April 2, April 3, Service cost $ 27 $ 23 $ 6 $ 5 $ — $ — Interest cost 26 28 10 13 3 4 Expected return on plan assets (51 ) (51 ) (17 ) (19 ) — — Recognized net actuarial loss 9 7 10 4 2 1 Net periodic benefit cost $ 11 $ 7 $ 9 $ 3 $ 5 $ 5

EQUITY, ROYALTY AND INTEREST 23

EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES (Tables)	3 Months Ended
	Apr. 02, 2017
Equity Method Investments and Joint Ventures [Abstract]
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 April 2, April 3, Distribution entities Komatsu Cummins Chile, Ltda. $ 7 $ 10 North American distributors — 5 Manufacturing entities Beijing Foton Cummins Engine Co., Ltd. 33 18 Dongfeng Cummins Engine Company, Ltd. 22 7 Chongqing Cummins Engine Company, Ltd. 9 8 All other manufacturers 24 16 Cummins share of net income 95 64 Royalty and interest income 13 8 Equity, royalty and interest income from investees $ 108 $ 72

MARKETABLE SECURITIES (Tables)

MARKETABLE SECURITIES (Tables)	3 Months Ended
	Apr. 02, 2017
Investments, Debt and Equity Securities [Abstract]
Summary of marketable securities	A summary of marketable securities, all of which are classified as current, was as follows: April 2, 2017 December 31, 2016 In millions Cost Gross unrealized Estimated Cost Gross unrealized Estimated Available-for-sale (1) Debt mutual funds $ 130 $ — $ 130 $ 132 $ — $ 132 Bank debentures — — — 114 — 114 Equity mutual funds 12 1 13 12 — 12 Government debt securities 2 — 2 2 — 2 Total marketable securities $ 144 $ 1 $ 145 $ 260 $ — $ 260 ____________________________________ (1) All marketable securities are classified as Level 2 securities. The fair value of Level 2 securities is estimated using actively quoted prices for similar instruments from brokers and observable inputs where available, including market transactions and third-party pricing services, or net asset values provided to investors. We do not currently have any Level 3 securities and there were no transfers between Level 2 or 3 during the first three months of 2017 and for the year ended 2016.
Schedule of proceeds from sales and maturities and gross realized gains and losses	The proceeds from sales and maturities of marketable securities and gross realized gains and losses from the sale of available-for-sale securities were as follows: Three months ended In millions April 2, April 3, Proceeds from sales and maturities of marketable securities (1) $ 147 $ 35 ____________________________________ (1) Gross realized gains and losses from the sale of available-for-sale securities were immaterial
Summary of fair value of available-for-sale investments with contractual maturities	The fair value of available-for-sale investments in debt securities that utilize a Level 2 fair value measure is shown by contractual maturity below: Contractual Maturity (In millions) April 2, 1 year or less $ 131 5 - 10 years 1 Total $ 132

INVENTORIES (Tables)

INVENTORIES (Tables)	3 Months Ended
	Apr. 02, 2017
Inventory Disclosure [Abstract]
Inventories	Inventories are stated at the lower of cost or market. Inventories included the following: In millions April 2, December 31, Finished products $ 1,867 $ 1,779 Work-in-process and raw materials 1,145 1,005 Inventories at FIFO cost 3,012 2,784 Excess of FIFO over LIFO (118 ) (109 ) Total inventories $ 2,894 $ 2,675

DEBT (Tables)

DEBT (Tables)	3 Months Ended
	Apr. 02, 2017
Debt Disclosure [Abstract]
Schedule of Short-term Debt	Loans payable, commercial paper and the related weighted-average interest rates were as follows: In millions April 2, 2017 December 31, 2016 Loans payable (1) $ 48 $ 41 Commercial paper (2) 274 212 ____________________________________ (1) Loans payable consist primarily of notes payable to various domestic and international financial institutions. It is not practical to aggregate these notes and calculate a quarterly weighted-average interest rate. (2) The weighted average interest rate, inclusive of all brokerage fees, was 0.94 percent and 0.79 percent at April 2, 2017 and December 31, 2016 , respectively.
Summary of long-term debt	A summary of long-term debt was as follows: In millions April 2, December 31, Long-term debt Senior notes, 3.65%, due 2023 $ 500 $ 500 Debentures, 6.75%, due 2027 58 58 Debentures, 7.125%, due 2028 250 250 Senior notes, 4.875%, due 2043 500 500 Debentures, 5.65%, due 2098 (effective interest rate 7.48%) 165 165 Other debt 69 51 Unamortized discount (55 ) (56 ) Fair value adjustments due to hedge on indebtedness 43 47 Capital leases 93 88 Total long-term debt 1,623 1,603 Less: Current maturities of long-term debt 47 35 Long-term debt $ 1,576 $ 1,568
Principal repayments on long-term debt	Principal payments required on long-term debt during the next five years are as follows: In millions 2017 2018 2019 2020 2021 Principal payments $ 34 $ 45 $ 35 $ 10 $ 4
Fair value and carrying value of total debt	Based on borrowing rates currently available to us for bank loans with similar terms and average maturities, considering our risk premium, the fair value and carrying value of total debt, including current maturities, were as follows: In millions April 2, December 31, Fair value of total debt (1) $ 2,150 $ 2,077 Carrying value of total debt 1,945 1,856 _________________________________________________ (1) The fair value of debt is derived from Level 2 inputs.

PRODUCT WARRANTY LIABILITY (Tab

PRODUCT WARRANTY LIABILITY (Tables)	3 Months Ended
	Apr. 02, 2017
Product Warranties Disclosures [Abstract]
Summary of activity in the product warranty account	A tabular reconciliation of the product warranty liability, including the deferred revenue related to our extended warranty coverage and accrued recall programs was as follows: In millions April 2, April 3, Balance, beginning of year $ 1,414 $ 1,404 Provision for warranties issued 92 93 Deferred revenue on extended warranty contracts sold 48 55 Payments (95 ) (102 ) Amortization of deferred revenue on extended warranty contracts (54 ) (47 ) Changes in estimates for pre-existing warranties 34 — Foreign currency translation (2 ) — Balance, end of period $ 1,437 $ 1,403
Warranty related deferred revenue and the long-term portion of the warranty liability	Warranty related deferred revenue and the long-term portion of the warranty liability on our April 2, 2017, balance sheet were as follows: In millions April 2, Balance Sheet Location Deferred revenue related to extended coverage programs Current portion $ 224 Current portion of deferred revenue Long-term portion 515 Other liabilities and deferred revenue Total $ 739 Long-term portion of warranty liability $ 346 Other liabilities and deferred revenue

ACCUMULATED OTHER COMPREHENSI28

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)	3 Months Ended
	Apr. 02, 2017
Equity [Abstract]
Changes in accumulated other comprehensive income (loss) by component	Following are the changes in accumulated other comprehensive income (loss) by component : Three months ended In millions Change in Foreign Unrealized gain Unrealized gain Total Noncontrolling Total other comprehensive income (loss) Balance at December 31, 2015 $ (654 ) $ (696 ) $ (2 ) $ 4 $ (1,348 ) Other comprehensive income before reclassifications Before tax amount — (58 ) — (26 ) (84 ) $ — $ (84 ) Tax benefit (expense) — 1 — 4 5 — 5 After tax amount — (57 ) — (22 ) (79 ) — (79 ) Amounts reclassified from accumulated other comprehensive loss (1)(2) 9 — — 1 10 — 10 Net current period other comprehensive income (loss) 9 (57 ) — (21 ) (69 ) $ — $ (69 ) Balance at April 3, 2016 $ (645 ) $ (753 ) $ (2 ) $ (17 ) $ (1,417 ) Balance at December 31, 2016 $ (685 ) $ (1,127 ) $ (1 ) $ (8 ) $ (1,821 ) Other comprehensive income before reclassifications Before tax amount 8 75 1 (6 ) 78 $ 13 $ 91 Tax benefit (expense) (3 ) (8 ) — 2 (9 ) — (9 ) After tax amount 5 67 1 (4 ) 69 13 82 Amounts reclassified from accumulated other comprehensive loss (1)(2) 16 — (1 ) 5 20 — 20 Net current period other comprehensive income (loss) 21 67 — 1 89 $ 13 $ 102 Balance at April 2, 2017 $ (664 ) $ (1,060 ) $ (1 ) $ (7 ) $ (1,732 ) ____________________________________ (1) Amounts are net of tax. (2) Reclassifications out of accumulated other comprehensive income (loss) and the related tax effects are immaterial for separate disclosure.

OPERATING SEGMENTS (Tables)

OPERATING SEGMENTS (Tables)	3 Months Ended
	Apr. 02, 2017
Segment Reporting [Abstract]
Financial information regarding reportable operating segments	Summarized financial information regarding our reportable operating segments is shown in the table below: In millions Engine Distribution Components Power Systems Non-segment Items (1) Total Three months ended April 2, 2017 External sales $ 1,457 $ 1,637 $ 980 $ 515 $ — $ 4,589 Intersegment sales 566 8 364 367 (1,305 ) — Total sales 2,023 1,645 1,344 882 (1,305 ) 4,589 Depreciation and amortization (2) 44 30 37 28 — 139 Research, development and engineering expenses 54 4 50 50 — 158 Equity, royalty and interest income from investees 72 11 13 12 — 108 Interest income 1 1 — — — 2 Segment EBIT 229 100 179 57 1 566 Three months ended April 3, 2016 (3) External sales $ 1,489 $ 1,458 $ 897 $ 447 $ — $ 4,291 Intersegment sales 487 5 340 361 (1,193 ) — Total sales 1,976 1,463 1,237 808 (1,193 ) 4,291 Depreciation and amortization (2) 39 28 31 29 — 127 Research, development and engineering expenses 57 4 56 49 — 166 Equity, royalty and interest income from investees 36 18 8 10 — 72 Interest income 2 1 1 2 — 6 Segment EBIT 197 87 163 46 (9 ) 484 ____________________________________ (1) Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended April 2, 2017 and April 3, 2016 . (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."
Reconciliation of segment information	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 April 2, April 3, Total segment EBIT $ 566 $ 484 Less: Interest expense 18 19 Income before income taxes $ 548 $ 465

NATURE OF OPERATIONS (Details)

NATURE OF OPERATIONS (Details)	3 Months Ended
	Apr. 02, 2017countrylocation
Nature of Operations
Company Owned and Independent Distributor Locations Number	600
Dealer Locations Number	7,400
Countries and Territories Number | country	190

BASIS OF PRESENTATION (Details)

BASIS OF PRESENTATION (Details) - USD ($) $ / shares in Units, $ in Millions	Feb. 09, 2016	Apr. 02, 2017	Apr. 03, 2016
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Treasury Stock, Value, Acquired, Cost Method		$ 51	$ 575
Options excluded (in shares)		116,535	1,687,666
Accelerated Share Repurchases, Settlement (Payment) or Receipt	$ 500
Treasury Stock, Shares, Acquired	4,100,000
Accelerated Share Repurchases, Initial Price Paid Per Share	$ 98.43
PercentageOfStockRepurchasedAsPercentageOfTotalAmountOfSharesEstimateedUnderAcceleratedShareRepurchaseAgreement	80.00%
Additional Paid-in Capital
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items]
Treasury Stock, Value, Acquired, Cost Method			$ 100

PENSION AND OTHER POSTRETIREM32

PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 02, 2017	Apr. 03, 2016
Pension and other postretirement benefits
Defined Benefit Plan, Contributions by Employer	$ 43	$ 60
Defined Contribution Plan, Cost Recognized	29	21
Defined Benefit Plans, Estimated Future Employer Contributions in Current Fiscal Year	91
Defined Benefit Plan, Expected Contributions in Current Fiscal Year	134
Voluntary contributions
Pension and other postretirement benefits
Defined Benefit Plan, Contributions by Employer	43	48
Defined Benefit Plan, Expected Contributions in Current Fiscal Year	133
Mandatory contribution
Pension and other postretirement benefits
Defined Benefit Plan, Contributions by Employer	0	12
Pension Plan
Pension and other postretirement benefits
Defined Benefit Plan, Future Amortization of Gain (Loss)	83
Pension - U.S. Plans
Components of Net Periodic Benefit Cost
Service cost	27	23
Interest cost	26	28
Expected return on plan assets	(51)	(51)
Recognized net actuarial loss	9	7
Net periodic benefit cost	11	7
Pension - U.K. Plans
Components of Net Periodic Benefit Cost
Service cost	6	5
Interest cost	10	13
Expected return on plan assets	(17)	(19)
Recognized net actuarial loss	10	4
Net periodic benefit cost	9	3
Other Postretirement Benefits
Pension and other postretirement benefits
Defined Benefit Plan, Contributions by Employer	15	13
Components of Net Periodic Benefit Cost
Service cost	0	0
Interest cost	3	4
Expected return on plan assets	0	0
Recognized net actuarial loss	2	1
Net periodic benefit cost	$ 5	$ 5

EQUITY, ROYALTY AND INTEREST 33

EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 02, 2017	Apr. 03, 2016
Equity, royalty and interest income from investees
Cummins share of net income	$ 95	$ 64
Royalty and interest income	13	8
Equity, royalty and interest income from investees	108	72	[1]
Distribution - Komatsu Cummins Chile, Ltda.
Equity, royalty and interest income from investees
Cummins share of net income	7	10
Distribution - North American distributors
Equity, royalty and interest income from investees
Cummins share of net income		5
Manufacturing - Beijing Foton Cummins Engine Company
Equity, royalty and interest income from investees
Cummins share of net income	33	18
Dongfeng Cummins Engine Company Ltd [Member]
Equity, royalty and interest income from investees
Cummins share of net income	22	7
Manufacturing - Chongqing Cummins Engine Company, Ltd.
Equity, royalty and interest income from investees
Cummins share of net income	9	8
Manufacturing - All other manufacturers
Equity, royalty and interest income from investees
Cummins share of net income	$ 24	$ 16
[1]	In the second quarter of 2016, we realigned our reportable operating segments. The three months ended April 3, 2016, were revised retrospectively to conform with these changes.

MARKETABLE SECURITIES (Details)

MARKETABLE SECURITIES (Details) - USD ($) $ in Millions		3 Months Ended
		Apr. 02, 2017	Apr. 03, 2016	Dec. 31, 2016
Schedule of Available-for-sale Securities
Cost		$ 144		$ 260
Gross unrealized gains/(losses)		1		0
Estimated fair value		145		260
Proceeds from sales and maturities of marketable securities (1)	[1]	147	$ 35
Fair value of available-for-sale investments by contractual maturity
1 year or less		131
5-10 years		1
Total		132
Significant other observable inputs (Level 2) | Debt mutual funds
Schedule of Available-for-sale Securities
Cost		130		132
Gross unrealized gains/(losses)		0		0
Estimated fair value	[2]	130		132
Significant other observable inputs (Level 2) | Bank debentures
Schedule of Available-for-sale Securities
Cost		0		114
Gross unrealized gains/(losses)		0		0
Estimated fair value	[2]	0		114
Significant other observable inputs (Level 2) | Equity mutual funds
Schedule of Available-for-sale Securities
Cost		12		12
Gross unrealized gains/(losses)		1		0
Estimated fair value	[2]	13		12
Significant other observable inputs (Level 2) | Government debt securities
Schedule of Available-for-sale Securities
Cost		2		2
Gross unrealized gains/(losses)		0		0
Estimated fair value	[2]	$ 2		$ 2
Minimum | Bank debentures
Schedule of Available-for-sale Securities
Maturities of Time Deposits, Description		three months
Maximum | Bank debentures
Schedule of Available-for-sale Securities
Maturities of Time Deposits, Description		five years
[1]	Gross realized gains and losses from the sale of available-for-sale securities were immaterial.
[2]	All marketable securities are classified as Level 2 securities. The fair value of Level 2 securities is estimated using actively quoted prices for similar instruments from brokers and observable inputs where available, including market transactions and third-party pricing services, or net asset values provided to investors. We do not currently have any Level 3 securities and there were no transfers between Level 2 or 3 during the first three months of 2017 and for the year ended 2016.

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Millions	Apr. 02, 2017	Dec. 31, 2016
Inventory Disclosure [Abstract]
Finished products	$ 1,867	$ 1,779
Work-in-process and raw materials	1,145	1,005
Inventories at FIFO cost	3,012	2,784
Excess of FIFO over LIFO	(118)	(109)
Total inventories	$ 2,894	$ 2,675

DEBT (Details)

DEBT (Details) - USD ($) $ in Millions		Apr. 02, 2017	Dec. 31, 2016
Short-term Debt [Line Items]
Loans payable	[1]	$ 48	$ 41
Commercial paper	[2]	274	212
Long-term debt
Unamortized discount		(55)	(56)
Fair value adjustment due to hedge on indebtedness		43	47
Capital leases		93	88
Total long-term debt		1,623	1,603
Current maturities of long-term debt		47	35
Long-term debt		1,576	1,568
Principal payments required on long-term debt
2,017		34
2,018		45
2,019		35
2,020		10
2,021		4
Fair value
Fair value of total debt	[3]	2,150	2,077
Carrying value of total debt		$ 1,945	$ 1,856
Commercial Paper
Short-term Debt [Line Items]
Short-term Debt, Weighted Average Interest Rate	[2]	0.94%	0.79%
Senior notes, 3.65%, due 2023
Long-term debt
Unsecured Debt		$ 500	$ 500
Debt instrument interest rate (as a percent)		3.65%
Debentures, 6.75%, due 2027
Long-term debt
Unsecured Debt		$ 58	58
Debt instrument interest rate (as a percent)		6.75%
Debentures, 7.125%, due 2028
Long-term debt
Unsecured Debt		$ 250	250
Debt instrument interest rate (as a percent)		7.125%
Senior notes, 4.875%, due 2043
Long-term debt
Unsecured Debt		$ 500	500
Debt instrument interest rate (as a percent)		4.875%
Debentures, 5.65%, due 2098 (effective interest rate 7.48%)
Long-term debt
Unsecured Debt		$ 165	165
Debt instrument interest rate (as a percent)		5.65%
Effective interest rate (as a percent)		7.48%
Other long-term debt
Long-term debt
Other Long-term Debt		$ 69	$ 51
[1]	Loans payable consist primarily of notes payable to various domestic and international financial institutions. It is not practical to aggregate these notes and calculate a quarterly weighted-average interest rate.
[2]	The weighted average interest rate, inclusive of all brokerage fees, was 0.94 percent and 0.79 percent at April 2, 2017 and December 31, 2016, respectively.
[3]	The fair value of debt is derived from Level 2 inputs.

PRODUCT WARRANTY LIABILITY (Det

PRODUCT WARRANTY LIABILITY (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 02, 2017	Apr. 03, 2016	Dec. 31, 2016
Product Warranty Liability:
Balance, beginning of year	$ 1,414	$ 1,404
Provision for warranties issued	92	93
Deferred revenue on extended warranty contracts sold	48	55
Payments	(95)	(102)
Amortization of deferred revenue on extended warranty contracts	54	47
Changes in estimates for pre-existing warranties	34	0
Foreign currency translation	(2)	0
Balance, end of period	1,437	$ 1,403
Product Warranty Liability
Current portion of deferred revenue	498		$ 468
Total deferred revenue related to extended coverage programs	739
Current portion of deferred revenue
Product Warranty Liability
Current portion of deferred revenue	224
Other liabilities and deferred revenue
Product Warranty Liability
Deferred Revenue	515
Long-term portion of warranty liability	$ 346

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Apr. 02, 2017	Dec. 31, 2015	Dec. 31, 2016
Guarantee Obligations
Loss Contingency Accrual	$ 181
Maximum
Guarantee Obligations
Forward Contract, Term	2 years
Other Guarantees and Commitments
Guarantee Obligations
Guarantor obligations, maximum potential loss	$ 43
Long-term purchase commitment, penalty exposure	119
Total commitments under commodity contracts	24
Components Supplier
Guarantee Obligations
Long-term purchase commitment, penalty exposure	41
Power Systems Supplier
Guarantee Obligations
Long-term purchase commitment, penalty exposure	35
Performance bonds and other performance-related guarantees
Guarantee Obligations
Guarantor Obligations, Current Carrying Value	$ 83
Engine
Guarantee Obligations
Loss Contingency, Loss in Period		$ 60	$ 138

ACCUMULATED OTHER COMPREHENSI39

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions		3 Months Ended
		Apr. 02, 2017	Apr. 03, 2016
Changes in accumulated other comprehensive income (loss) by component:
Balance at the beginning of the period		$ (1,821)
Before tax amount		91	$ (84)
Tax benefit (expense)		(9)	5
After tax amount		82	(79)
Net current period other comprehensive income (loss)		102	(69)
Balance at the end of the period		(1,732)
Reclassified out of accumulated other comprehensive income (loss)
Changes in accumulated other comprehensive income (loss) by component:
Amounts reclassified from accumulated other comprehensive loss	[1],[2]	20	10
Change in pensions and other postretirement defined benefit plans
Changes in accumulated other comprehensive income (loss) by component:
Balance at the beginning of the period		(685)	(654)
Before tax amount		8	0
Tax benefit (expense)		(3)	0
After tax amount		5	0
Net current period other comprehensive income (loss)		21	9
Balance at the end of the period		(664)	(645)
Change in pensions and other postretirement defined benefit plans | Reclassified out of accumulated other comprehensive income (loss)
Changes in accumulated other comprehensive income (loss) by component:
Amounts reclassified from accumulated other comprehensive loss	[1],[2]	16	9
Foreign currency translation adjustment
Changes in accumulated other comprehensive income (loss) by component:
Balance at the beginning of the period		(1,127)	(696)
Before tax amount		75	(58)
Tax benefit (expense)		(8)	1
After tax amount		67	(57)
Net current period other comprehensive income (loss)		67	(57)
Balance at the end of the period		(1,060)	(753)
Foreign currency translation adjustment | Reclassified out of accumulated other comprehensive income (loss)
Changes in accumulated other comprehensive income (loss) by component:
Amounts reclassified from accumulated other comprehensive loss	[1],[2]	0	0
Unrealized gain (loss) on marketable securities
Changes in accumulated other comprehensive income (loss) by component:
Balance at the beginning of the period		(1)	(2)
Before tax amount		1	0
Tax benefit (expense)		0	0
After tax amount		1	0
Net current period other comprehensive income (loss)		0	0
Balance at the end of the period		(1)	(2)
Unrealized gain (loss) on marketable securities | Reclassified out of accumulated other comprehensive income (loss)
Changes in accumulated other comprehensive income (loss) by component:
Amounts reclassified from accumulated other comprehensive loss	[1],[2]	(1)	0
Unrealized gain (loss) on derivatives
Changes in accumulated other comprehensive income (loss) by component:
Balance at the beginning of the period		(8)	4
Before tax amount		(6)	(26)
Tax benefit (expense)		2	4
After tax amount		(4)	(22)
Net current period other comprehensive income (loss)		1	(21)
Balance at the end of the period		(7)	(17)
Unrealized gain (loss) on derivatives | Reclassified out of accumulated other comprehensive income (loss)
Changes in accumulated other comprehensive income (loss) by component:
Amounts reclassified from accumulated other comprehensive loss	[1],[2]	5	1
Total attributable to Cummins Inc.
Changes in accumulated other comprehensive income (loss) by component:
Balance at the beginning of the period		(1,821)	(1,348)
Before tax amount		78	(84)
Tax benefit (expense)		(9)	5
After tax amount		69	(79)
Net current period other comprehensive income (loss)		89	(69)
Balance at the end of the period		(1,732)	(1,417)
Total attributable to Cummins Inc. | Reclassified out of accumulated other comprehensive income (loss)
Changes in accumulated other comprehensive income (loss) by component:
Amounts reclassified from accumulated other comprehensive loss	[1],[2]	20	10
Noncontrolling interests
Changes in accumulated other comprehensive income (loss) by component:
Before tax amount		13	0
After tax amount		13	0
Net current period other comprehensive income (loss)		$ 13	0
Noncontrolling interests | Reclassified out of accumulated other comprehensive income (loss)
Changes in accumulated other comprehensive income (loss) by component:
Amounts reclassified from accumulated other comprehensive loss	[1],[2]		$ 0
[1]	Amounts are net of tax.
[2]	Reclassifications out of accumulated other comprehensive income (loss) and the related tax effects are immaterial for separate disclosure.

OPERATING SEGMENTS (Details)

OPERATING SEGMENTS (Details) - USD ($) $ in Millions		3 Months Ended
		Apr. 02, 2017	Apr. 03, 2016
Operating results:
Total sales	[1]	$ 4,589	$ 4,291	[2]
Depreciation and amortization	[3]	139	127	[2]
Research, development and engineering expenses		158	166	[2]
Equity, royalty and interest income from investees		108	72	[2]
Interest income		2	6	[2]
Segment EBIT		566	484	[2]
Less: Interest expense		18	19
INCOME BEFORE INCOME TAXES		548	465
Amortization of Debt Discount (Premium)		0	1
Engine
Operating results:
Total sales		2,023	1,976	[2]
Depreciation and amortization	[3]	44	39	[2]
Research, development and engineering expenses		54	57	[2]
Equity, royalty and interest income from investees		72	36	[2]
Interest income		1	2	[2]
Segment EBIT		229	197	[2]
Distribution
Operating results:
Total sales		1,645	1,463	[2]
Depreciation and amortization	[3]	30	28	[2]
Research, development and engineering expenses		4	4	[2]
Equity, royalty and interest income from investees		11	18	[2]
Interest income		1	1	[2]
Segment EBIT		100	87	[2]
Components
Operating results:
Total sales		1,344	1,237	[2]
Depreciation and amortization	[3]	37	31	[2]
Research, development and engineering expenses		50	56	[2]
Equity, royalty and interest income from investees		13	8	[2]
Interest income		0	1	[2]
Segment EBIT		179	163	[2]
Power Systems
Operating results:
Total sales		882	808	[2]
Depreciation and amortization	[3]	28	29	[2]
Research, development and engineering expenses		50	49	[2]
Equity, royalty and interest income from investees		12	10	[2]
Interest income		0	2	[2]
Segment EBIT		57	46	[2]
Non-segment items
Operating results:
Total sales	[4]	(1,305)	(1,193)	[2]
Segment EBIT	[4]	1	(9)	[2]
External Sales
Operating results:
Total sales		4,589	4,291	[2]
External Sales | Engine
Operating results:
Total sales		1,457	1,489	[2]
External Sales | Distribution
Operating results:
Total sales		1,637	1,458	[2]
External Sales | Components
Operating results:
Total sales		980	897	[2]
External Sales | Power Systems
Operating results:
Total sales		515	447	[2]
Intersegment sales | Engine
Operating results:
Total sales		566	487	[2]
Intersegment sales | Distribution
Operating results:
Total sales		8	5	[2]
Intersegment sales | Components
Operating results:
Total sales		364	340	[2]
Intersegment sales | Power Systems
Operating results:
Total sales		367	361	[2]
Intersegment sales | Non-segment items
Operating results:
Total sales	[4]	$ (1,305)	$ (1,193)	[2]
[1]	Includes sales to nonconsolidated equity investees of $267 million and $242 million for the three months ended April 2, 2017 and April 3, 2016, respectively.
[2]	In the second quarter of 2016, we realigned our reportable operating segments. The three months ended April 3, 2016, were revised retrospectively to conform with these changes.
[3]	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." The amortization of debt discount and deferred costs were less than $1 million and $1 million for the three months ended April 2, 2017 and April 3, 2016, respectively.
[4]	Includes intersegment sales, intersegment profit in inventory eliminations and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended April 2, 2017 and April 3, 2016.

RECENTLY ADOPTED AND RECENTLY41

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Details) $ in Millions	3 Months Ended
	Apr. 03, 2016USD ($)
Accounting Changes and Reclassifications [Abstract]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification	$ 4

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - Eaton Cummins Automated Transmission Technologies [Member] - Estimate $ in Millions	Apr. 03, 2017USD ($)
Subsequent Event [Line Items]
Equity Method Investment, Ownership Percentage	50.00%
Payments to Acquire Interest in Joint Venture	$ 600